AMITIAE - Wednesday 25 April 2012
Cassandra - Wednesday Review - The Week in Full Swing
By Graham K. Rogers
Opening Gambit:Apple financial report Q2: 2012. Some interesting points there. Share price manipulations and comments from the pundits. iPad news: coming here this week; Proview in China; another novel use. Apple and publishers: DoJ barking up the wrong tree says WSJ publisher. Rumours on new Macs. There is no internet economy say UK experts: not in the UK, anyway. After Instagram will Apple buy Twitter. After Instagram are movie apps the next big thing? Oracle and Google: oh dear. Microsoft: loses Xbox patent case; a lousy place to work; buys $1 billion patents from AOL then sells half to Facebook.
Apple Q2: 2012While I was asleep, Apple's Q2 2012 financial report was announced and the basics from the press release are here.
Apple reported a quarterly revenue of $39.2 billion and quarterly net profit of $11.6 billion, or $12.30 per diluted share. These results compare to revenue of $24.7 billion and net profit of $6.0 billion, or $6.40 per diluted share, in the year-ago quarter. Gross margin was 47.4 percent compared to 41.4 percent in the year-ago quarter. International sales accounted for 64 percent of the quarter's revenue.
Apple StuffSo, income is up, profits are up, sales of iPhones are up, sales of iPads are up, sales of Macs are up. The share price dropped.
A few other points were made in the delivery and I have used the feed from Steven Sande on TUAW for the information:
I would also suggest the feed from Rene Ritchie on iMore.
These guys are magic. The moment super sales are reported, or a great new product is announced, out come the naysayers determined to drag the Apple chicken back to the bottom of the barrel. Before the figures were announced, Neil Hughes on AppleInsider wrote about the recent profit taking and that the figures were expected to be strong. That did not stop the share price being taken down a few more notches and when I checked pre-market on Tuesday evening, it had lost another $10, reaching $562.
Jim Cramer who is nowadays more benign when it comes to Apple, hit the nail right on the head when Drew Sandholm reports he said that "Apple needs to beat not just the consensus estimates, but the highest estimates on Wall Street." As before, even though Apple beats its own predictions, the analysts may pull some silly figure out of a hat and if Apple misses that, they are wrong. My original link for the item was MacDaily News.
Forbes and Chambers manage to spread this to three pages and, surprise, surprise, start with the point that there is no more Steve Jobs: game over, right? This has a remarkable similarity to that item by Rocco Pendleton on The Street we mentioned on Monday. Then Chambers complains that Apple is a "toy company", making devices for our pleasure. I guess he was out of the room whe the enterprise guys started to come aboard; but as a toy company, it has been the only company making IT products that has been forging ahead in a recession. I actually agree with Chambers' third point: if you are an investor, keeping all your eggs in one basket is not a good idea. He makes clever use of charts: what goes up, must come down. And the fifth point? Predictions are never a guarantee.
Some perhaps better advice comes from Nigam Arora on Market Watch who comments in 6 bullet points (expanded in his article) about what to watch for:
That last point is particularly useful when examining Apple.
I had a phone call Tuesday morning: what colour iPad do you want? My usual source has these coming in this week and they will be available Friday morning. With the recent tight space I experienced when trying to use the iPad2 as an on the road photography tool, I am also going for the 64GB version. Late to Thailand as usual, but better late than never.
Of course I like the iPad and part of that is down to the ways in which people are using them for a variety of tasks that were probably not initially considered by Apple at the time of that first announcement. Like the iPhone, this has grown out out of all proportion. While there are medical uses, and the FAA has approved the use of the device by pilots, I saw somewhere this week the release of the first iPad app written entirely on an iPad. Another use, as reported by Steven Sande, is as an IT professional's tool (which is sure to confuse many Thai IT staff who have only been able to work in Windows for the last few years).
Not everyone is going to make a fortune of course but 10,000 apps at $0.99, less Apple's 30% is $6930 and I would be happy to have that in my bank account. Note also the success of the 3-person team at Socialcam who added 4 million users in 2 days (see below). As I was reading the article one thing crossed my mind: when was the last time I had seen a stunning app from the UK? Many lack features or are overpriced: or both.
I did look at one app this week that gave me live TV feeds on the iPad or the iPhone: it seems it was either one or the other for some reason. I reviewed it, but a thought in the back of my mind concerned copyright: how did they do it? The answer came about 24 hours later when it was pulled from the app store and is no longer available. But why did Apple let it go through in the first place as thousands of people may have paid (albeit only $0.99) for an app that probably breached a lot of laws.
But there could be more. I have noticed on Facebook in the last couple of weeks the number of users who are sharing videos via a couple of apps and these appear to have lifted off in a similar way to Instagram. Jon Russell on TNW (who liked my mention on Monday, but pointed out that there was no mention of Internet censorship in Thailand because it did not feature in the news last week) discusses Socialcam which picked up 4 million users in 2 days -- with a team of just 3 people. He also mentions Viddy.
There is also one I see on Facebook called Metacafe. I am put off by the occasional appearance of that panel that asks me for space on my computer (I never allow this) and by the point made by Socialcam and Metacafe that my information and selections will be shared. If I click on a video that one of my students has linked to for a laugh, that is zero indication of what I like. I avoid these sharing apps like the plague.
Other MattersWe have been following the Oracle v Google case fairly closely with the help of Foss Patents and other sources, but this week with some of the admissions in court, it appears things may not be going Google's way at all. Aside from copyright problems, Jay Yarrow on Business Insider has some comments on the potential for Android -- handset makers and users included. To put things in context, Yarrow brings in the Instagram-Facebook deal, points out how Android has been a disaster for tablet use and outlines a number of other factors that suggest a bumpy road for the future.
On that Oracle/Google case, Andy Rubin was giving evidence this week and could not quite manage the Murdoch defence (both father and son -- he was misled -- are back in front of the Leveson Inquiry this week). Rubin was able to remember something, although expressed some confusion despite being reminded by what was in some old emails. He does now admit that he thinks that those Java APIs were copyrighted, Electronista reports, which seems to parallel what was in those emails that Google tried to have ruled inadmissible.
While Motorola is battling Apple on patent issues, it has had some success in its fight with Microsoft and a judge has ruled that the Xbox infringes on some patents, Reuters reports. Although a final ruling will come in August, the wireless technology involved is significant and could mean the Xbox is banned from the US, although Redmond is not about to give up.
In a guest posting on TechCrunch, former Microsoft employee Max Zachariades writes about his five years working at Microsoft, which were not happy times he tells us. While Microsoft does give out toys and pens, and the occasional reward, the staff "were box tickers and pen pushers. Any original thinking was sacrificed at the altar of time-proven, common sense process. Efforts to break the mould were all but punished" I have worked at places like that. And those places also had the same types of committees that Zachariades mentions. Like him, I have seen much time lost to committees and meetings where punctuation is more important than ideas. He adds that MS is becoming the McDonalds of computing, which sounds about right: "Cheap, mass products, available everywhere. No nutrients, no ideas, no culture. Windows 8 is a fine example."
In that context, the sale of patents to Facebook makes an interesting context point. The patents came from a deal Redmond made with AOL for $1 billion. More than half (70%$) of the patents were sold on to Facebook for $550 million in a move which is seen as being against the interests of Google, Nick Wingfield. writes on Bits (NYTimes blog). Not only does Microsoft get the $550 million, but also keeps the license, which is a shrewd move.
Late NewsAn interesting overnight report from Brooke Crothers tells us that Intel is buying some key components from the famous supercomputer maker, Cray and some 74 employees are expected to join Intel.
Graham K. Rogers teaches at the Faculty of Engineering, Mahidol University in Thailand. He wrote in the Bangkok Post, Database supplement on IT subjects. For the last seven years of Database he wrote a column on Apple and Macs.
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