UPDATE 3-Apple stuns Wall St. with rare miss, shares dive
* CFO blames rumors of new iPhone, customers wait* Shares diveBy Poornima Gupta and Edwin ChanSAN FRANCISCO, Oct 18 (Reuters) - Apple Inc
reported a rare miss in quarterly results after sales of its
flagship iPhone fell well short of Wall Street expectations,
hammering its shares.Shares of the world’s most valuable technology corporation
dived more than 5 percent to below $400 after it said it sold
17.07 million iPhones — well short of the roughly 20 million
expected by analysts.Apple’s CFO said iPhone sales came in ahead of internal
expectations but were hurt in September by customers waiting
for a new version.The September quarterly report was Apple’s first under new
Chief Executive Tim Cook, who took over in August after
co-founder Steve Jobs resigned. The company lost its leading
visionary and co-founder when he died Oct. 5.Cook takes over during a critical juncture for the company,
which is battling a fast-rising Google Inc in the
mobile arena while fending off consumer electronics giants such
as Samsung and Amazon.com Inc .”Expectations for this company were red-hot, that is why we
downgraded it,” said BGC Partners analyst Colin Gillis, who
lowered his rating on the shares days before. “The reality is
their business is not an annuity. They have to sell their
quarter’s worth of revenue every 90 days.”“They had a big upgrade cycle with the iPhone, the numbers
came in weak. They need to set records every time they report
to keep up the momentum.”Apple said its revenue rose to $28.27 billion but that was
also lower than the average analyst estimate of $29.69 billion,
according to Thomson Reuters I/B/E/S.The company reported a net profit of $6.62 billion, or
$7.05 a share. That fell shy of expectations for earnings of
$7.39 per share.”There’s no question this was a transition quarter ahead of
the 4S,” said WP Stewart portfolio manager Michael Walker.
“With the early pace of iPhone 4S sales, my guess is that
disappointment is relatively short-lived.”“I’m not going to call Q3 a throwaway quarter for iPhones,
but it was definitely transition.The company moved 4 million iPhone 4S units — more than
double its predecessor — in its first three days, despite
lukewarm reviews.A PERIOD OF TRANSITIONA large spike in sales of Mac computers during the
September quarter failed to lift earnings. Apple sold 4.89
million Macs, up 27 percent from a year ago. And it moved 11.12
million iPads.Gross margin came to 40.3 percent — a tad higher than Wall
Street’s forecast of 39.74 percent. International sales
accounted for 63 percent of the quarter’s revenue.Some analysts had feared the lack of a new iPhone in more
than 15 months would hurt the September quarter, while arguing
the holiday season would turn out strong after the introduction
of the fifth version of its smartphone.”We expected iPhone sales to decline in the September
quarter from the June quarter as a result of the announcements
we made at WWDC in June, where we said we would launch iOS 5
and iCloud in fall,” Peter Oppenheimer, Chief Financial
Officer, said in an interview with Reuters.”That basically created the rumor of the day across the
September quarter, especially at the end.”Apple said it expected December quarter earnings of $9.30 a
share on revenue of about $37 billion.The forecast for the December quarter far surpassed Wall
Street’s projection for just above $9.00 — a rare instance of
its outlook exceeding expectations. Apple typically guides so
conservatively that investors disregard its forecasts.But that failed to discourage the after-hours sell-off.
Before the numbers, Apple’s shares had climbed to as high as
$425 in extended trade.”What is interesting is the guidance is less conservative
than usual for their next quarter. It’s a timing issue, where
it looks like the business that people thought would be in the
September quarter is occurring in the December quarter,” said
Sterne Agee analyst Shaw Wu.”One of the things obviously is the iPhone 4S just started
shipping a few days ago.”
RIM investor says directors canceled meeting
* Firm is leading drive for shake-up at BlackBerry maker* RIM not available immediately for commentTORONTO, Oct 18 (Reuters) - Jaguar Financial , a
Research In Motion investor agitating for a shake-up,
said two independent RIM directors canceled meetings called
this week to discuss complaints about the BlackBerry maker.Jaguar, a Canadian merchant bank that targets
underperforming companies, wants RIM to hire a chief executive
to replace Mike Lazaridis and Jim Balsillie. It also wants RIM
to consider putting itself up for sale, either as a whole or in
parts.Jaguar Chief Executive Vic Alboini said on Tuesday meetings
with directors David Kerr and John Richardson were canceled by
RIM’s counsel.”This incident clearly demonstrates the control that
management has over the independent directors,” said Alboini.The current co-CEOs have presided over a steady decline in
the BlackBerry’s share of the smartphone market and have failed
to keep pace with innovations by Apple and others,
Alboini and other critics say. Balsillie and Lazaridis, who
share the role of chairman, exert too much power over the
board, they say.Jaguar says shareholders representing 8 percent of RIM’s
stock back its demands, and investment bankers say that figure
could grow if RIM fails to address their concerns.Shares of RIM were down more than 2 percent at $22.93 in
Nasdaq trade on Tuesday, as the BlackBerry maker launched a
three-day developers conference in San Francisco.At the event, RIM said it would soon launch a new operating
system to power both its smartphones and the PlayBook tablet
computer.
UK-U.S. extradition review deals blow to hacker
Britain launched the review in September following complaints the 2003 treaty made it easier to extradite people from Britain to the United States than vice versa.Gary McKinnon has been battling for six years to avoid extradition to the U.S. over what American officials called the “biggest military computer hack of all time.”McKinnon, 45, suffers from Asperger’s syndrome, a form of autism, and his supporters say he is too ill to be sent for trial in the United States. He faces charges that could lead to a 70-year jail sentence.Britain’s Home Secretary (interior minister) Theresa May has been waiting for medical reports on McKinnon before making a final decision on his extradition.The review, led by retired judge Scott Baker, said criticism of the treaty was based on a misunderstanding of how the legislation operated in practice.”The UK-U.S. extradition arrangements were examined in great detail and the panel concluded that the widespread perception that they operate in an imbalanced manner is not justified,” it said.”There is no ‘practical difference’ between the information required of both countries when requesting extradition.”The panel also rejected calls for the government to implement legislation that would allow a suspect wanted for extradition to be tried in Britain when the alleged crime was committed in the UK — as was the case with McKinnon’s computer hacking from his home in London.McKinnon was arrested in 2002 after U.S. prosecutors charged him with illegally accessing computers, including systems at the Pentagon and NASA, and causing $900,000 worth of damage.He says he became obsessed with looking through military data networks for evidence of aliens and secret technology.The extradition review’s finding is politically difficult for British Prime Minister David Cameron and his coalition deputy Nick Clegg, who raised McKinnon’s case with President Barack Obama during his state visit this year.The British leaders have backed criticism of the treaty, drawn up after the September 11, 2001 attacks to allow the quick transfer of suspects. Whilst in opposition, Clegg had called the treaty “lopsided.”
UPDATE 4-Google jumps as investors cheer mobile growth
* JP Morgan ups price target to $705 from $685* Shares up nearly 6 pctBy Alexei OreskovicSAN FRANCISCO, Oct 14 (Reuters) - Google Inc’s
free Android smartphone software, already a big hit with
consumers, is starting to win the hearts of investors.The world’s No. 1 Internet search company offered a peek at
its mobile business during quarterly results on Thursday,
revealing that the business was generating revenue at an annual
run rate of $2.5 billion, up from $1 billion last year.That helped Google sail past third-quarter financial
targets set by analysts, sending its shares up nearly 6 percent
to $591.68 on Friday and easing some of Wall Street’s concerns
that mobile returns might not justify the investment.”People just haven’t given them any credit for that
division. I think it could be a huge part of the overall
company,” said Pat Adams, portfolio manager at the Dunham Loss
Averse Growth Fund, which owns Google shares.”There are so many more mobile devices out there than there
are PCs,” Adams said. “What they did was brilliant to give that
operating system away to get the search part of it,” he added.Google lets phone makers such as Samsung Electronics , LG Electronics and HTC Corp
use its Android software for free, banking on consumers using
those phones to visit Google’s advertising-supported website to
search for information.The booming popularity of smartphones has frustrated many
of the established giants of the computer industry, from
Microsoft Corp to Hewlett-Packard Co .For Google, whose business is built upon people using its
search engine, making the transition from the personal
computers to mobile devices is crucial.The company has stepped up investments in its mobile
business, which competes with iPhone-maker Apple Inc .
Google’s Android mobile software — already the world’s
most-used smartphone platform — powers 190 million devices, up
from 135 million in mid-July.The explosion of Android devices, as well as the
availability of Google search on Apple’s iPhones, has made
Google even more dominant in mobile search than on the desktop
PC, according to JP Morgan analyst Doug Anmuth who pegged
Google’s mobile search market share at 90 percent.That strong position accounts for the sharp, 28 percent
uptick in paid clicks on search ads that Google experienced
during the third quarter, Anmuth said in a note to investors.Those ads appear to command lower rates than PC search ads,
analysts noted. But some analysts said they expect that to
change over time, especially as Google creates new forms of
advertising that take advantage of a user’s location.Mobile advertising sales is but one component of what
analysts believe could be a broader wireless opportunity for
Google. The company has begun offering coupon deals, and could
make money through retailer loyalty programs and its recently
launched Google Wallet, a free service which allows shoppers to
use their mobile phones to pay for purchases.MOTOROLA BETMore concerning for some investors is Google’s plan to
acquire mobile phone maker Motorola Mobility Holdings for $12.5
billion.The deal will give Google access to one of the largest
patent libraries in the wireless industry, as well as hardware
manufacturing operations that will allow it to develop its own
line of smartphones.But some worry that Google is entering a low-margin
hardware business in which it has no experience, and that the
move could jeopardize its relationships with other phone makers
that use Android.BGC Partners analyst Colin Gillis said he did not think
Google’s increase in mobile ad revenue would make investors
feel any better about the Motorola deal, which is expected to
close this year or early in 2012.”You could argue the Motorola deal puts some of that
revenue at risk,” he said, noting that some current Android
phone makers might see Google as a competitor once it acquires
Motorola and reduce their support for Google products. Google
has said it plans to operate Motorola as a separate business.Gillis also noted that the $2.5 billion annual run rate in
Google’s mobile business, while impressive, remains less than
10 percent of the company’s overall revenue.And he added that Google may not necessarily have based the
$2.5 billion run rate on one quarter’s worth of revenue, which
would have suggested that Google made $625 million in mobile
revenue in the third quarter.”They probably took the last month and multiplied it by 12.
It could be the last day,” he noted. “We have no idea what that
number really is.”Whatever the number though, Google’s mobile revenue is
clearly growing quickly, and for many on Wall Street, that’s
good enough for now. Many brokerages raised their price targets
on Google on Friday, some by as much as 10 percent.”We think mobile is near a massive volume inflection
point,” wrote Susquehanna Financial Group analyst Herman Leung
in a note to investors on Friday.”At these growth rates, we think mobile revenue could be
larger than display (advertising revenue) by 2012.”
WRAPUP 1-BlackBerry co-CEOs seek to control the damage
* Says full service back, but cause still unknownBy Alastair SharpTORONTO, Oct 13 (Reuters) - Research In Motion has fixed the root cause of a global disruption of
BlackBerry services and is still working to clear a backlog of
delayed messages, its co-CEOs said on Thursday, hoping to
control the damage to RIM four days after the outage began.The chief executives - Mike Lazaridis and Jim Balsillie -
apologized for the system-wide failure that left millions of
BlackBerry users without email, instant messaging and browsing
and said the company would work to regain their customers
trust.”Our inability to quickly fix this has been frustrating,”
Lazaridis said, sounding contrite. “We are taking immediate and
aggressive steps to minimize risk of this happening again.”Asked about whether RIM would pay compensation to carriers
or enterprises that pay a monthly fee for its gold-standard
messaging services, Balsillie suggested the company would
consider that question in the coming days.”Our focus has been 100 percent on getting the systems up
and running. … That’s been our focus throughout the night and
we have SLAs (service level agreements) with customers and
that’s something we’re going to focus on now.”A number of network providers around the world have
already said they would compensate their customers over the
lost service.The outage - and RIM’s sluggish communications with its
customers - have fanned rising dissatisfaction with Lazaridis
and Balsillie, who made an unusual joint appearance on the
conference call.Even before the latest outage, critics have called for a
shake-up at RIM, saying the top managers have let the company
fall too far behind Apple and other rivals in a
rapidly changing market.The session was only the second call that RIM has held
since the crisis began on Monday.Earlier on Thursday the company posted a video clip of
Lazaridis apologizing for the incident. He repeated that
message in his opening remarks at Thursday’s conference call.Public relations specialists have wondered why it took the
company so long, saying its response to the crisis has been
slow and poorly communicated.”I think a statement of empathy that wouldn’t cost anybody
anything could have been made within hours,” said Allan Bonner,
a leading public relations crisis management consultant in
Toronto.”They’re doing crisis response the way they’re designing
their software these days — it’s outdated, slow and not being
well-received by their customers,” said Gene Grabowski, senior
vice president at Levick Strategic Communications.FULL SERVICE RESTORED, RIM SAYSThe Waterloo, Ontario-based company said it had restored
full service, even as it acknowledged that the backlog caused
by the outage was still working its way through system.It said it determined that the outage - the most extensive
in the company’s history - was caused by a malfunctioning
switch at a data center in Slough, England, and the subsequent
failure of a backup to operate properly.That triggered a massive reservoir of data that jammed up
other data centers, spreading the disruption to most regions.Lazaridis said it would take some time to pinpoint why the
switch and back-up both failed, setting off the crisis.
US defends deal to boost auto fuel efficiency
By John CrawleyWASHINGTON, Oct 12 (Reuters) - The Obama administration on
Wednesday pledged transparency in setting standards to boost
auto fuel efficiency and cut tailpipe emissions, countering
claims that a landmark agreement securing automaker support for
its environmental initiative was secretive.The agreement reached in July is the foundation of a
planned rule requiring that new cars sold in the United States
nearly double average fuel efficiency by 2025 to 54.5 miles per
gallon. The administration said the formal regulation was a
work in progress and would provide opportunity for outside
input.”The deal is not done,” David Strickland, an administration
pointman on the rules told a congressional committee
investigating how White House, transportation and environmental
officials came up with a plan with auto companies for a 40
percent gain in fuel efficiency by the middle of the next
decade.Regina McCarthy, a senior Environmental Protection Agency
(EPA) official who appeared with Strickland before a House
Oversight subcommittee, also said her agency and Strickland’s
National Highway Traffic Safety Administration (NHTSA) were
involved in an “extensive public process” supported by auto
industry executives and others.NHTSA and EPA have delayed a joint formal proposal of new
fuel rules until mid-November. They hope to finalize the
standards in mid-2012, giving automakers the regulatory
certainty they want in order to craft product plans.The Oversight panel has sought documents and other
information from the two agencies and automakers involved in
negotiations that produced the agreement with automakers.If met, that target beginning in 2017 would require a 5
percent annual fuel efficiency improvement for cars and yearly
gains of 3.5 to 5 percent for light trucks, which include sport
utilities, pickups and vans.U.S. automakers traditionally have favored heavier, bigger
trucks and truck-like vehicles and have lagged in fuel
efficiency, while Japanese rivals have concentrated on smaller
cars and got a jump on gasoline/electric hybrid technology.Congressional investigators led by Republican Oversight
Chairman Darrell Issa of California want to know whether
closed-door negotiations with auto executives on fuel and
emissions standards skirted the law.”This is not how the process is supposed to work,” Issa
said in a Sept. 30 letter to Transportation Secretary Ray
LaHood, whose agency oversees NHTSA.Issa also questioned an agreement by automakers to not
challenge any final rule in court, and the role played by
regulators from his home state in forging an agreement.California can exert leverage over environmental rulemaking
because of its size, potent consumer market and political
strength, and powerful drive to curb greenhouse emissions.Jeremy Anwyl, chief executive of online auto research group
Edmunds.com, told the panel that the administration was
heavy-handed with industry in the fuel negotiations.”The expression I hear repeatedly is that they had a gun to
their head,” Anwyl said.Strickland said he could “not speak to the state of mind”
of industry executives but said meetings with automakers,
suppliers, environmental groups and the United Auto Workers
(UAW) were critical for developing the outline for a new rule.Thirteen auto companies, including General Motors Co , Ford Motor Co , Chrysler , Toyota Motor
Corp and Honda Motor Co , agreed to the
plan.Automakers have said they were not pressured by the Obama
administration to reach an agreement although they resisted an
initial push for a 62 mpg standard.The U.S. government at the time had unique leverage over GM
and Chrysler, having bailed out both companies in 2009. The
administration also has approved substantial loans for Ford and
Nissan to retool factories for making more fuel
efficient vehicles.
WRAPUP 1-Obama faces jobs bill roadblock in Congress
* Obama says economy needs a “jolt”By Laura MacInnisPITTSBURGH, Oct 11 (Reuters) - President Barack Obama
conceded on Tuesday he may have to break up his jobs bill in
the face of political paralysis in Washington that could thwart
major action to spur hiring before the 2012 elections.Obama has tried to put his Republican opponents on the spot
by highlighting their opposition to his $447 billion proposal
to create jobs at a time when high unemployment is becoming the
dominant issue in early election campaigning.But the plan looks set to to fail in the U.S. Senate later
on Tuesday with Republicans refusing to buckle and some
Democrats signaling their opposition.”If they don’t pass the whole package we’re going to break
it up into constituent parts,” Obama said in Pittsburgh in his
most frank acknowledgment to date that the plan will not pass
in its entirety.Among measures which might be salvaged are a payroll tax
cut which Obama wants to extend to avoid imposing an effective
tax increase at a time wages have not been rising much. Obama’s
bill would also extend unemployment benefits for the long-term
unemployed.The U.S. unemployment rate has been above 9 percent since
May.Obama’s visit on Tuesday to the industrial city of
Pittsburgh, once a thriving steel center, was the latest stop
in his tour to promote the jobs plan of swing states in advance
of next year’s election.Republicans say the tour is aimed at saving his own job.Obama’s so-called Jobs Council, under the chairmanship of
GE Chief Executive Officer Jeffrey Immelt, earlier
delivered a report in which they proposed steps to foster U.S.
innovation and make the country more attractive to foreign
investment.The suggestions include ramping up infrastructure spending,
streamlining visa applications to keep science graduates in the
United States, and changing student loans to encourage
graduates to work for start-up companies.But many of the recommendations would require support from
Republicans to become law — a potentially tall order in a
divided Congress in which Republicans control the House of
Representatives and Democrats hold the Senate. The Council made
some of these proposals in its report in June.LIKELY DEFEATObama’s 2012 re-election chances depend on his ability to
spur the sluggish economic recovery and revive the nearly
stagnant job market.The president launched the jobs bill last month to try to
persuade Americans that he had a plan to get them back to work
after a string of gloomy economic data that has raised concerns
the country could dip back into recession.Even Wall Street is feeling the pinch, with a report from
the New York State Comptroller showing that banker bonuses are
likely to drop for the second year in a row.”Right now, our economy needs a jolt,” Obama said in later
remarks in Pittsburgh.”The Senate of the United States has a chance to do
something about jobs — right now — by voting for the American
Jobs Act. This is a moment of truth for the U.S. Senate.”However, the bill was headed for likely defeat, as his
Democrats were expected to fall short of the 60 votes needed to
clear a procedural hurdle in the Senate.White House National Economic Council Director Gene
Sperling said that the vote would highlight Republican
obstructionism despite a public alarmed by high unemployment.He, however, made clear the Obama administration’s fallback
option would be to offer the jobs plan piecemeal.”If they (Republicans) choose not to give the support that
will allow this to get 60 votes, if they choose to do that,
then we’ll come back piece after piece,” Sperling told CNBC.Several Democrats and nearly every Republican are expected
to vote against the bill when it comes up for consideration in
the Senate around 6 p.m. EDT (2200 GMT).
Well, look who’s behind bars!
Blog Guy, I know you cover all the big fashion shows, and my sister-in-law’s ventriloquist told me there were some HUGE celebs at Lisbon Fashion Week this year. Can you give us some names?
I can do much better than that, I can show you pictures. Here is you-know-who, above, making a very rare public appearance…
Wait a minute, Blog Guy. You’ve put one of those rectangular censorship bars over her face, so I’m not quite sure who that is.
No, that’s not my style. My readers know that I always use the salmon-colored censorship bars, as you can see here on the right. I’m afraid that black bar is an actual accessory.
So she’s really wearing that?
Of course! She wore it just in case nobody recognizes her anymore. The very, very famous often do that in public, to draw attention to themselves so they can complain about not having privacy.
Gosh, you know so much about how these things work, Blog Guy. So, the woman behind those rectangles is…
Er, I was hoping you would know. I’m leaning toward Amelia Earhart.
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A visitor poses for a portrait during Lisbon Fashion Week October 7, 2011.
More stuff from Oddly Enough
A parka with windows, a big box in the sky
Could you find domestic happiness living in an angular white parka with windows? A big box set on top of an apartment building? A turtle-shaped shell? A modular Y filled with triangles?
At the U.S. Energy Department’s Solar Decathlon, visitors can try on — OK, tour — these avant garde houses, knowing at least that they’re supremely energy efficient. And with the solar power industry on the defensive after the Solyndra bankruptcy, it’s a decent showcase for new technologies.
Set up along the Potomac River on a slightly out of the way corner of Washington’s National Mall, the village of 19 solar-powered homes represents the work of collegiate designers from New York to New Zealand, the University of Tennessee to Tongji University in China. The requirements are strict: each house must be between 600 and 1,000 square feet, and no taller than 18 feet, and be powered by the sun. Any power taken from the grid must be offset by solar energy produced by the house. No fireplaces, fire pits or candles allowed.
Officially opened on September 22, the contest judges the homes’ affordability, appliances, architecture, comfort zone, communications, energy balance, engineering, home entertainment, hot water and market appeal.
The CHIP house — the one that looks a bit like a parka or a big down quilt heaped into a mound — was standing room only on opening day, with a waiting line for visitors. It wears its insulation on the outside, swathed in white vinyl, and its unusual shape is meant to help channel cool air in and hot air out, easing fuel costs. Most electric devices in the home are controlled by a system using an iPad and XBOX 360′s Kinect, which means they can be controlled with a wave or a pointed finger. Solar panels cover most of the roof. CHIP (short for compact hyper-insulated prototype) is the work of students from Caltech and the Southern California Institute of Architecture.
The City College of New York decided to build a house suitable for the underutilized urban space on top of mid-sized residential or commercial buildings. The team from the University of Calgary in Canada constructed a tortoise like TRTL house — “technological residence, traditional living” — with solar cells standing in for the turtle’s shell. China’s team featured a modular Y-shaped house dominated by triangles, from the floor to the furniture. The Empowerhouse, by Parsons The New School for Design and Stevens Institute of Technology, has a known future: after the competition ends, it will become home for a family in Washington DC’s Deanwood neighborhood.
Photo credits: SCI-Arc/Caltech’s CHIP house, September 23, 2011; Parsons The New School for Design/Stevens Institute for Technology’s entry, September 22, 2011; Team China’s Y house, September 23, 2011 (all photos by Stefano Paltera/U.S. Department of Energy)
