AMITIAE - Monday 28 January 2013

Cassandra - Monday Review: It will soon be Friday

apple and chopsticks


By Graham K. Rogers


Opening Gambit:

Apple, Financial results and the attacks from Wall Street. Who sold 800,000 shares to trigger the Apple share collapse? My own comments on Wall Street's intentions. Apple is not dead: new products rumoured coming soon. iMac production problems solved. The iPhone as a medical device. Having released the Stuxnet worm and had it delivered back the US wants more cyber-security laws after shooting itself in the foot.

Apple Stuff

The fallout from the Apple financial results kept me occupied for part of the weekend and I was so annoyed by the nonsensical drop in Apple share prices that I began to wonder about the motivation behind it. For months now, whatever Apple does either brings forth a barrage of criticism or, if there is a positive story, it is buried several paragraphs down with a weak or negative headline.

It has also been clear that a lot of Wall Street analysts have been making much of any negatives they can find - supply chain, predicted figures - and so much was made of the Maps app data (note that the app was the same, it was that data was sourced differently) that one would think the entire survival of the company had hinged on that app alone.

As a side note, the Bukkhalo branch of the Bangkok Bank is still shown in the river beside Rama 3 bridge here and I was able to use this when making a vocabulary point about river banks.

I had already begun a lengthy analysis of the analysts and their boot-licking blogger pals who copy most of their input, don't check facts and don't issue error corrections. As I mentioned Friday, I wonder if the real motivation is taking the share price to such a low level that the fruit is ripe for picking. That may have been helped at the end of the week when in the last second of trading, someone (as yet unknown, but see below) dropped 800,000 shares for sale Tyler Durden on ZeroHedge reports, calling it a premeditated flash dump. [My source for this was MacDaily News.]

The intent would be destructive and my thesis that the reason is to ripen the fruit, may well have some legs.

I wrote this in three parts:

There is also a full text of the entire three sections, and a print ready version (no pics).

With the number of shares, and the timing, there is litte doubt that the intent was to send the share price lower. When it is known who dumped those shares, the "why" may be clearerxs.

Another useful examination of the events of the last few days comes from Kate MacKenzie who seems to have changed the colour of her web pages on PixoBebo. She also rails at the stock market gamblers and the way they ignore what these companies really do. I am also pleased to see that she has some acid comments for certain others who do not examine the whole picture but just want hits: negativity is so much easier for headlines.

As one of the problems highlighted by many Apple watchers (and Apple) is that the company always meets or exceeds its guidance, but does not meet the estimates that the analysts come up with (voodoo economics, literally) so the share prices fall. And in a big way this time. Daniel Eran Dilger on AppleInsider reports that - in an attempt to head these guys off at the pass - Peter Oppenheimer announced that he was changing the way Apple gave guidance. For the future Apple was to issue a range of figures, rather than a specific number.

With the share price being pushed down, you would think that Apple were in the same state as companies like Dell or HP, but there is a different picture if you are actually following the company and don't have your nose glued to a Stock Exchange chart: new iPhones for example.

I know this is a rumour, but as rumours go, there seem to be some interesting observations in an item by Kevin Bostic on AppleInsider who reports on a French source who claim they have photos of new components for an iPhone 5S and an iPhone 6.

The idea of two products per year has some legs since the iPad had a refresh a couple of months back: why not the iPhone to keep it in the public eye (and break that tension as we all wait for "the announcement"?) The same photos were also shown in an item by Lily on AppleBitch who adds that "the iPhone 5S is an improved version of the iPhone 5 and that the iPhone 6 would be an entirely new device."

Another interesting rumour, and one that I can work with, is the appearance in a recent iOS 6.1 beta of code that suggests a 128 GB iPhone, Rene Ritchie reports on iMore. As we move more and more to these mobile devices (and the iPad) they will have to get larger. The 32 GB phone was the largest, now it is 64 GB. This also makes sense, Rene explains, from a component point of view.

Coming as fallout from the financial report and subsequent changes, Daniel Eran Dilger on AppleInsider, reports the views of Trip Chowdhry - who was one of those a few months back who was pushing the idea that Apple's innovation was waning.

Chowdhry has a new meme concerning the way Apple (and Samsung) profit from an allegedly shrinking market and while Samsung warns of future profit risks, this is not the case for Apple. Nonetheless, he feels that changes are afoot and Apple will move more to software because of a side comment from Peter Oppenheimer.

Chowdhry got it very wrong over innovation so beware his comments this time: he is not on the home team. He does not seem to have noticed that Apple already has a range of consumer and pro software in the same way that he missed the innovation under the surface. An analyst that myopic should be considered not safe.

One reason for poor Mac sales in that last quarter was that the iMac with its innovative assembly technology was actually harder to build in the Chinese factories than the Jony Ive video suggested. Electronista, among others, reports however that the problems have been fixed and more iMacs will be heading to the customers real soon now.

In the Thai online Apple Store, the 21.5" shipping times are now down to 2 - 3 weeks, while the 27" versions remain the same at 3 - 4 weeks. Another report with similar information comes from Kevin Bosic on AppleInsider.

One of the problems Apple has had in recent times concerned labor relations and conditions in China. From the reports that are available for download, it is clear that efforts have been made, particularly with regard to under age employment. But what can you do when a supplier picks up loads of kids on the cheap and the agency supplying them forges documents to make it appear to bureaucrats that all is wonderful.

Apple dumped the supplier and as it has in previous discoveries of violations reports the incident in its annual Supplier Responsibility Report Mikey Campbell writes.

We wonder how long it will be before the NYTimes or another source issues an article about Apple's use of children to make its iPhones.

Over in Japan Apple has decided to move its local headquarters from Tokyo Opera City Tower to the upmarket Roppongi Hills complex AppleInsider reports: the price is an estimated $2.2 billion. Ah, the sense of keeping some of the cash reserves outside the US and in hand rather than giving it away.

I have looked at the iPhone over the last couple of years as a device that has a number of abilities, depending on what apps are installed and used. One of the earliest apps I downloaded was MIMs which allowed the viewing of medical image files in a number of formats: useful perhaps as part of a remote diagnosis. Kevin Bostic reports on AppleInsider of a lifesaving act on a recent flight from Washington, D.C., to San Diego.

A doctor had hardware linked to the iPhone that allows monitoring of a patient's heart condition and he helped a passenger on the flight. As the software reported a critical condition, the pilot was asked to land and the patient survived. This is part of an increasing armoury of apps and connected devices that are becoming useful (perhaps critical) for patient support.

It has been in development for a while but another beta of 10.8.3 was seeded last week and Fairer Platform (among other sources) thinks that the release is imminent. This source has an unusual style.

Half and Half

A new tactic by Samsung in the litigation with Apple that it has ongoing in Korea has me scratching my head and gives me real doubts as to the honesty of the company - as if I did not have doubts already. Eectronista reports that as it has sued Apple in Korea for infringing a patent it needs to see the iOS6 source code for verification. Apple is not going to give this on up lightly, but this is Korea where many people think that Samsung already owns the government and has too much influence in other areas as well.

Other Matters

Apple is not the only tech giant in the bad news columns this week as Microsoft also reported its quarterly results and included in that report is information about the Surface launch and the middling Windows 8 launch. Users should not worry as they can downgrade to Windows 7 for $125 (or put that towards an iPad). Kevin Bostic has some information on Microsoft's report and he writes that while no figures have been released, Redmond is "estimated to have sold around a million units since its launch". Wow. I think.

So why didn't the share prices of Microsoft collapse with this - part of a series of unspectacular reports.

Last week I mentioned a breakup of a malware ring in Russia, and the same source, H-Security this week reports on the fate of some of those who were British members of the Anonymous collective who attacked a number of sites including PayPal, Visa and MasterCard after they froze payments of the Wikileaks organisation. Two if those sentenced received terms of 18 months and 7 months, with a third given 6 months, suspended for 2 years.

In another malware case, the US has brought charges against three Europeans with regard to the development and release of the Gozi Trojan which "is believed to have infected more than a million computers worldwide". We are told by H-Security that it "harvested online banking information for its creators on a large scale."

Interesting that the authorities get upset most when banks and financial sites are affected.

And right on cue, the US is wringing its hands over a possible cyber 9/11 and asking Congress to pass new security legislation that will just happen to make it easier to monitor the citizenry: but to keep safe we must give up some freedom, right? Not according to Ben Franklin: "Those who would give up Essential Liberty to purchase a little Temporary Safety, deserve neither Liberty nor Safety".

Every few months it seems one of the Echelon nations (a group founded to monitor transmissions across the world) come up with another suggestion that we need more laws to protect us from criminals, terrorists, child molesters, but not from Rupert Murdoch's henchmen (and women).

Usually those putting these ideas forward suggest some impending Doom as in the current report from Dara Kerr who manages to get through the entire report without mentioning the Stuxnet worm that the US released into Iran, nor the attacks in the US from the same worm as it has gone out of control and is now floating about many parts of the world, including known attacks in Indonesia, India and Malaysia. And the USA.

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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