10 Things $AAPL Won’t Tell You

 

“From customer service to app safety and even how its devices affect our relationships, here are 10 things Apple won’t likely tell you about its products and its business.

1. “Our customers are worn out.”

All that initial excitement over the first iPhone or iPad has quickly given way to what analysts are dubbing “upgrade fatigue”—with even Apple’s most loyal customers upset about the steady stream of newer models. In fact, when people buy Apple’s AAPL +2.34% latest product, the company is usually already preparing its replacement, said technology consultant Patchen Barrs, who has owned 25 Apple products over the past 20 years. “Everything we buy from them is already out of date,” he says. Take a count: Since 2001, there have been six iPods, two iPod minis, six iPod Nanos, four iPod Shuffles and four editions of the iPod Touch. Apple has released five iPhone models since 2007 and has had three iPads since 2010.

Of course, newer models have their upsides: They’re usually slimmer, faster and have additional features like better cameras and improved screen quality. And Apple, which declined to comment for this story, has said that such improvements more than justify the fast pace of their new additions. (In March, for example, Apple spokeswoman Trudy Muller said the latest iPad delivered a “stunning” screen display.) But that argument isn’t enough to appease some cash-strapped consumers. Almost 50% of consumers say they’re increasingly unwilling to buy new products for fear that they will be rendered outdated by even newer versions, according to a recent survey of 2,000 people by Marketing Magazine in the U.K.

It doesn’t stop with devices, said experts: Software upgrades also gently nudge people to buy new hardware. Last month, Apple launched a new version of its Airplay software, which virtually connects Apple gadgets and can beam video from computers to Apple TV. But the new Airplay is not compatible with iMacs and MacBook Air computers bought before mid-2011. Some Mac owners expressed their unhappiness online. One irate Mac customer wrote: “I don’t care how much you plan for obsolescence, there is no way that new software should not be backward compatible for at least a couple years.”

2. “Be careful of that app.”

Smurfberries—that virtual red fruit that’s the primary source of nutrition for Smurfs—may sound like cheap fun, but costs can add up. Madison Kay, an eight-year-old from Rockville, Md., unwittingly spent $1,400 buying Smurfberries while playing the game “Smurfs’ Village” on the family iPad, the Washington Post reported. After complaining, Madison’s mother received a one-time reimbursement. These games are available in the App Store and referred to as “freemium.” They’re free to play, but only for a certain amount of time or before reaching a certain level, says Damon Brown, author of several books on tech culture. Under the tutorship of Papa Smurf, players like Madison are given the option to buy Smurfberries to unlock Smurfs and growth formulas to build their own Smurf Village.

3. “We’re getting in the way.”

Checking an occasional Facebook update via iPhone during dinner is the least of some couple’s worries. One in five people reach for their phone as a 21st Century replacement for the post-coital cigarette, according to a recent report from mobile security company LookOut.It’s just one more extreme example of how the smartphone has become a third wheel in relationships, says Ursula Ofman, a New York-based therapist. “People find all sorts of ways to get back to their own personal space, she says. “But clearly it’s a problem if someone wants to check their iPhone in the bedroom.”

Some people’s relationship with their God is also being interrupted by that familiar buzzing sound in their pocket—or the pockets of their neighbors in the pews. One in 10 people check their phones during religious services, another LookOut survey says. “People don’t even tend to think about any of this as a breach of etiquette anymore,” says Chris Young, executive director of The Protocol School of Washington. “They see their phones as an extension of themselves.”

Personal responsibility and manners aside, there are other theories about why people can’t put their iPhone down. “Apple’s products are addictive,” says Larry Rosen, author of “iDisorder: Understanding Our Obsession with Technology and Overcoming Its Hold on Us.” In fact, many users are aware of their attachment to their iPhones. Some 25% of people see their iPhone as “dangerously alluring” and 41% said losing their iPhone would be “a tragedy,” according to a 2010 Stanford University poll….”

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“Bill Ackman sprinted to an early lead in a MarketWatch poll on Friday’s live billionaire street fight, but as more readers weighed in, the momentum shifted decisively in Carl Icahn’s favor.

More than 4,000 MarketWatch readers took the time to vote.

The informal survey saw early sentiment favoring Ackman, who took out a huge short position on Herbalife  HLF -8.37% in December, calling the company a ponzi scheme.

As more MarketWatch readers voted, however, Icahn took the lead, flipping a 62-38 deficit into a similar lead before the gap tightened again.

As of Monday morning, Icahn was viewed as the winner by 54% of those expressing an opinion, while Ackman was viewed as the winner by 46%.

Friday’s “debate” riveted Wall Street traders, and served as a reminder of other great financial battles on Wall Street.”

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“SAN FRANCISCO (MarketWatch) — Once regarded as a weakness, Facebook Inc.’s mobile business is increasingly being viewed as holding the potential to deliver formidable strength for the social media giant.

This much was evident as Raymond James analyst Aaron Kessler raised his rating Monday on Facebook to outperform from market perform, citing “expectation for increasing monetization driven by mobile, new ad formats, and international.”

Shares of Facebook scheduled to report fourth-quarter financial results after the closing bell on Wednesday, traded up nearly 3% in recent action, after Sterne Agee analyst Arvind Bhatia reaffirmed a buy rating.

Both analysts cited Facebook’s mobile momentum — once referred to as “mobile mojo” by another analyst after the company reported that 14% of its total ad revenues were now derived from its mobile business.

That was a big deal since FacebookFB +2.89%  had been taking heat for not having a clear path to growing its mobile advertising.

That was a factor behind a disappointing initial public offering that turned into a big flop last year. While they’ve recovered of late, Facebook’s shares are still down 15% from its IPO price of $38 a share.

The shares’ recent jump — up nearly 50% in the last three months — is mainly due to rising optimism about its online ad business, particularly its ability to make money out of its growing base of mobile users….”

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“Aswath Damodaran, the legendary NYU finance professor, started accumulating shares of Apple in 1997.

And just under a year ago, he dumped the stock.

“I sold because I’m very uncomfortable with the other people who are holding Apple shares right now,” he said in an April 2012 appearance on Bloomberg Television. “The new investors of Apple scare me.  They’re momentum investors.  They’ve shifted the game. Once stocks become a momentum play, intrinsic value goes out the window.”

Apple was trading above $600 per share back then.  And today it’s right around $440.

And in a new blog post, Damodaran has revealed that he is bullish once again.

“Based on my estimates, and they could be skewed by my Apple bias, at its current stock price of $440, there is a 90% chance that the stock is under valued,” he writes….”

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“Caterpillar, a global manufacturing powerhouse, is a reliable bellwether of economic conditions around the world.

This morning, the company announced better-than-expected 4Q financial sales and earnings.

The company also published its detailed outlook for the global economy, commenting on everything from interest rates, commodity prices, central bank policy, and emerging markets.

“Overall, we expect the world economy will begin the year with weak growth and improve as 2013 unfolds,” they write. “We anticipate overall world economic growth of at least 2.5 percent—a small improvement from our estimate of 2.3 percent for 2012.”

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“The S&P 500 has been grinding steadily higher in 2013 as no real bearish catalyst has yet given investors reason enough to sell stocks.

For weeks, while Wall Street strategists have mused that this may be the beginning of a “Great Rotation” out of bonds and into equities, they’ve also warned that a correction is near.

Though we haven’t seen much in the way of selling in the equity market recently, the brief bouts of weakness we have seen in intraday trading have usually been brought about by spikes in the U.S. dollar, which has been mostly weak to start the year.

Today, BofA Merrill Lynch FX strategist Richard Cochinos says his team is seeing “the first signs of a reversal” in a note to the bank’s clients.

“Bottom line,” Cochinos writes, “Several indicators are calling for a risk correction. USD selling has reached previous reversion levels and greater buy-backs are to come.”

Cochinos first points to U.S. dollar selling by “real money” investors (i.e., pension funds, mutual funds, insurance companies, et al.), which has reached extreme levels recently – 1.8 standard deviations from the mean, to be exact….”

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“(Reuters) – A former Jefferies Group Inc managing director has been charged with defrauding investors in mortgage-backed securities in the wake of the 2008 financial crisis so that he could make more money for his employer, U.S. investigators said on Monday.

Jesse Litvak was charged with 16 criminal counts, including 11 counts of securities fraud, one count of fraud on the federal Troubled Asset Relief Program (TARP), and four counts of making false statements to the federal government.

The U.S. Securities and Exchange Commission also filed related civil charges against Litvak.

A lawyer for the defendant did not immediately respond to a request for comment.”

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“(Reuters) – Retail sales should rise 3.4 percent this year, down from 4.2 percent growth in 2012, as higher payroll taxes cut into discretionary spending for consumers, the world’s largest retail trade association said on Monday.
The National Retail Federation forecast includes sales at most traditional retail categories including non-store, auto parts and accessories stores, discounters, department stores, grocery stores, and specialty stores, and excludes sales at automotive dealers, gasoline stations, and restaurants.”

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Market Update

[youtube://http://www.youtube.com/watch?v=_WI_VFERxOo 450 300]

Link for iPhone users: http://www.youtube.com/watch?v=_WI_VFERxOo

 

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“The 2010 Dodd-Frank Act, intended to reform banks, hasn’t eliminated the issue of “too big to fail,” says former FDIC Chairman Bill Isaac, now a senior managing director at FTI Consulting.

Banks’ inordinate size represented one of the biggest problems surrounding the recent financial crisis, experts agree.

“The Dodd-Frank Financial Reform Act purported to fix too big to fail, but it really didn’t,” Isaac tells Newsmax TV in an exclusive interview. “There are five or six banks in this country that control over half the banking assets, and they are as a practical matter just too big and too important to the economy to be allowed to fail.” ”

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“Towers Watson’s M&A practice recently published the results of Quarterly Deal Performance Monitor (QDPM), which is conducted in partnership with Cass Business School, and has examined the data on all deals over $100 million completed in 2012. The results are really interesting, especially when you look at what was happening in the public markets. In 2012, there were 94 deals in the tech sector with an average value of $717 million. In 2012, there were 768 M&A deals across all sectors above $100 million.

Compare this to 2011 which saw 75 tech M&A deals with an average value of $512 million. Why the jump? One theory is that it’s a combination of the softening of IPO opportunities for large companies, as well as some of the effects of the rise in valuations over the past year.

Amid Facebook’s surprising negative performance on the public markets, and the plummet in value of other tech stocks like Groupon and Zynga, going public at a billion-plus valuation wasn’t as appealing as exiting at a fairly high valuation….”

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“Lenovo has downplayed reports that the company plans to buy Research In Motion, saying that it is instead looking at acquisition opportunities in general, reports Sina Tech(link via Google Translate).

If Lenovo does indeed decide it wants to court RIM, it may face significant regulatory hurdles. Canadian Minister of Finance Jim Flaherty said last week that a Lenovo-RIM deal is something the government “would look at carefully.” Flaherty also responded “absolutely” when asked whether some local technologies are off-limits to potential overseas buyers.

Canada has stopped international buyers from purchasing Canadian companies before. In 2008, thegovernment blocked a $1.32 billion bid from U.S. Alliant Techsystems for British Columbia-based MacDonald Dettwiller & Associate’s satellite business, which marked the first time it had prevented a foreign takeover since at least 1985. On the other hand, Chinese oil company CNOOC received government approval for a $15.1 billion acquisition of Nexen in December.

Reports of a potential deal helped RIM shares jump to their highest price in a year, though other factors include the upcoming launch of BlackBerry 10 smartphones, as well as the company’s disclosure that it is considering licensing its software or selling RIM’s hardware unit.

Lenovo, which purchased IBM’s personal computer business in 2005, is focusing on acquisitions to continue growing its mobile business as it faces down competition from other tablet and cellphone makers.”

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“They’d make unhappy bedfellows but — taken together — Google’s Android platform and Apple’s iOS accounted for a record 92 per cent of global smartphone shipments in Q4 last year, according to new figures from analyst Strategy Analytics. The analyst estimates that 152.1 million Android smartphones were shipped globally in the quarter, nearly double the amount shipped in the year ago quarter (80.6 million) — taking Android’s global smartphone share from 51 per cent at the end of 2011 to 70 per cent at the end of 2012. Meanwhile, global smartphone shipments for the full year 2012 reached a record 700.1 million units — increasing “robustly” from 490.5 million units in 2011.

Commenting on the results, Neil Mawston, Executive Director at Strategy Analytics, described Google’s platform as the “undisputed volume leader” of the smartphone industry. ”Android’s share of the global smartphone market has surged… crushing Symbian, Bada and other platforms in its wake,” he said in a statement. “Android’s challenge for 2013 will be to defend its leadership, not only against Apple, but also against an emerging wave of hungry challengers that includes Microsoft, Blackberry, Firefox and Tizen.”

Strategy Analytics said Apple’s iOS grew in terms of shipment units — rising from an estimated 37 million units in Q4 2011 to 47.8 million in Q4 2012 (29 per cent annual growth) — but iOS’ marketshare declined slightly, as Android increased its lead, with iOS taking 22 per cent marketshare in Q4 2012, down slightly from 23.6 per cent in Q4 2011.

The analyst estimates that global smartphone shipments as a whole grew 38 per cent annually….”

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“Barnes & Noble has put up an excellent fight over the past few years against the rising tide of digital competitors like iPad, Kindle Fire, etc.

But it would seem that the bookseller has still come up a bit short, as the Wall Street Journalreports that the company has plans to shut down nearly 20 stores per year over the course of the next decade.

Just last week, we learned that B&N had a rough holiday sales season with a 10.9 percent sales decrease over last year’s holiday season.

Barnes & Noble currently has around 689 retail stores in operation, but the cuts would eliminate around a third of those stores, leaving the total somewhere between 450 to 500 stores.

However, Barnes & Noble’s Mitchell Klipper, who delivered the news to the WSJ, explains that less than 3 percent of B&N stores lose money. Still, shutting down stores is expected to strengthen B&N’s hardware business, including the Nook HD and Nook HD+, which has been a growing focus at the company.

In the face of such a digital shift, it would appear that the bookseller expects its brick-and-mortar business to become more and more of a liability over the coming years.”

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“A graphene research initiative has been selected by the European Commission as one of two winners of its Future and Emerging Technologies (FET) multi-billion euro research excellence award competition. Each project will receive €1 billion to fund 10 years of research “at the crossroads of science and technology” — the biggest research grant ever awarded by the Commission. The second winner of the FET award is a project that aims to develop a model of the human brain.

The Graphene project will “investigate and exploit the unique properties of a revolutionary carbon-based material” — exploring the physical and chemical properties of a material that is just one atom thick; conducts electricity much better than copper; is 100 to 300 times stronger than steel; and has “unique optical properties”.

Researchers have already been looking at how graphene could improve battery capacity and exploring its water-repelling properties. But the EC is betting on graphene becoming “the wonder material of the 21st Century” — replacing silicon in ICT products and becoming as important as plastics were to the 20th Century:

Graphene: this material looks to become as important as steel or plastics in the long-term. Research on graphene is an example of an emerging translational nanotechnology where discoveries in academic laboratories are rapidly transferred to applications and commercial products. Graphene and related materials have the potential to make a profound impact in ICT in the short and long term: integrating graphene components with silicon-based electronics, and gradually replacing silicon or enabling completely new applications. Beyond ICT, graphene research will significantly impact energy and transport, and also health.

The Graphene FET flagship project will be led by Professor Jari Kinaret, from Sweden’s Chalmers University, and will involve more than 100 research groups, with 136 principal investigators, including four Nobel laureates.

The consortium of research partners also includes industry members from a variety of sectors. One industry partner in the graphene consortium, mobile maker Nokia, said it is “flying the flag for the electronics corner, as well as the mobile one, with realistic dreams of improving the industry”. Writing on the Nokia Conversations blog, Henry Tirri, EVP, CTO of Nokia, said the company started researching graphene in 2006, adding: “Since then, we have come to identify multiple areas where this material can be applied in modern computing environments. We’ve done some very promising work so far, but I believe the greatest innovations have yet to be discovered.”

Nokia’s Tapani Ryhänen, Head of the Sensor and Material Technologies Laboratory at Nokia, added that graphene’s impact will not just be in the future, through the development of new materials, but that graphene will be able to improve existing materials and products in the near term. “We have kept our eyes open, and believe that this will bring immediate impact to our products over the coming years in some way or another,” he wrote….”

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“New Apple product rumors from reliable sources have been few and far between lately, but this weekend the generally dependable 9t05Mac reported that a new iPad model is in the works. It’s not a brand new device, but rather a new SKU in the fourth generation iPad with Retina Display lineup. 9to5Mac’s source is saying that this will be offered in both black and white, with both Wi-Fi and cellular options, and that it will join the existing models rather than replace them.

While the source didn’t specify storage capacity as the differentiating factor, there is evidence that a 128GB iPad is in the works. References to such a device exist in iOS 6.1, the beta of which is already in developer hands, and in iTunes 11. Another possibility is that this will be a SKU aimed solely at education and government customers, 9t05Mac points out, since their source says it will be available in special 10-packs for educational institutions, but the higher capacity device theory makes sense for a number of reasons beyond just evidence found in software code….”

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“Economists are increasingly, but still cautiously, optimistic about growth in the year ahead with the hiring expected to pick up in coming months.

A quarterly survey by the National Association for Business Economists released Monday shows half of the economists polled now expect real gross domestic product _ the value of all goods and services produced in the United States _ to grow between 2 and 4 percent in 2013. That’s up from 36 percent of respondents who felt the same way three months earlier.

About half expect sluggish or negative performance, down from 65 percent in October.

The latest survey was conducted between Dec. 20 and Jan. 8 and asked 65 economists and others who use economics in the workplace about conditions at their firms or industries. It found that 34 percent of firms now expect to expand their payrolls in the next six months, the highest percentage since April of last year. Meanwhile, 2 percent said they expect their companies to cut payrolls through layoffs, while 14 percent see payrolls trimmed through attrition….”

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“A bipartisan group of leading senators has reached agreement on the principles of sweeping legislation to rewrite the nation’s immigration laws.

The deal, which was to be announced at a news conference Monday afternoon, covers border security, guest workers and employer verification, as well as a path to citizenship for the 11 million illegal immigrants already in this country.

Although thorny details remain to be negotiated and success is far from certain, the development heralds the start of what could be the most significant effort in years toward overhauling the nation’s inefficient patchwork of immigration laws.

President Barack Obama also is committed to enacting comprehensive immigration legislation and will travel to Nevada on Tuesday to lay out his vision, which is expected to overlap in important ways with the Senate effort.

The eight senators expected to endorse the new principles Monday are Democrats Charles Schumer of New York, Dick Durbin of Illinois, Robert Menendez of New Jersey and Michael Bennet of Colorado; and Republicans John McCain of Arizona, Lindsey Graham of South Carolina, Marco Rubio of Florida and Jeff Flake of Arizona.

Several of these lawmakers have worked for years on the issue. McCain collaborated with the late Democratic Sen. Edward M. Kennedy on comprehensive immigration legislation pushed by then-President George W. Bush in 2007, only to see it collapse in the Senate when it couldn’t get enough GOP support.

Now, with some Republicans chastened by the November elections which demonstrated the importance of Latino voters and their increasing commitment to Democrats, some in the GOP say this time will be different.

“What’s changed, honestly, is that there is a new, I think, appreciation on both sides of the aisle — including maybe more importantly on the Republican side of the aisle — that we have to enact a comprehensive immigration reform bill,” McCain said Sunday on ABC’s “This Week.”

“I think the time is right,” McCain said.

The group claims a notable newcomer in Rubio, a potential 2016 presidential candidate whose conservative bona fides may help smooth the way for support among conservatives wary of anything that smacks of amnesty. In an opinion piece published Sunday in the Las Vegas Review-Journal, Rubio wrote that the existing system amounts to “de facto amnesty,” and he called for “commonsense reform.”

According to documents obtained by The Associated Press, the senators will call for accomplishing four goals:

—Creating a path to citizenship for illegal immigrants already here, contingent upon securing the border and better tracking of people here on visas.

—Reforming the legal immigration system, including awarding green cards to immigrants who obtain advanced degrees in science, math, technology or engineering from an American university.

—Creating an effective employment verification system to ensure that employers do not hire illegal immigrants.

—Allowing more low-skill workers into the country and allowing employers to hire immigrants if they can demonstrate they couldn’t recruit a U.S. citizen; and establishing an agricultural worker program.

The principles being released Monday are outlined on just over four pages, leaving plenty of details left to fill in. What the senators do call for is similar to Obama’s goals and some past efforts by Democrats and Republicans, since there’s wide agreement in identifying problems with the current immigration system. The most difficult disagreement is likely to arise over how to accomplish the path to citizenship.

In order to satisfy the concerns of Rubio and other Republicans, the senators are calling for the completion of steps on border security and oversight of those here on visas before taking major steps forward on the path to citizenship.

Even then, those here illegally would have to qualify for a “probationary legal status” that would allow them to live and work here — but not qualify for federal benefits — before being able to apply for permanent residency. Once they are allowed to apply they would do so behind everyone else already in line for a green card within the current immigration system.

That could be a highly cumbersome process, but how to make it more workable is being left to future negotiations. The senators envision a more streamlined process toward citizenship for immigrants brought here as children by their parents, and for agricultural workers….”

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