Explaining Southern California's economy

Apple misses on earnings, but just wait for the iPhone 5

Asia Reacts to the Death of Steve Jobs

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An Apple store in Shanghai, China. The company made plenty of money in its fiscal third quarter but still disappointed Wall Street.

Is it a lull? That's the easiest way to read Apple's not-unexpected fiscal third-quarter earnings miss, which was announced after markets closed today. For the record, profits were actually up year-over-year — by over a billion dollars — but Wall Street wanted more for one of the most expensive stocks on the entire stock market. Analysts were looking for $10.37 per share, but they got more than a buck less: $9.32 per share.

AAPL was duly pummeled in after-hours trading, dropping by more than 5 percent.

Blame for this just appalling performance (kidding, obviously) goes to some bumpy issues with various products, but really falls squarely in the impending launch of the iPhone 5. Apple is selling more iPads — 17 million in its fiscal Q3 — but the iPhone still accounts for the lion's share of Apple's profits. Consumers eagerly await the iPhone 5, which is technically the sixth generation of the smartphone. The consensus view is that this anticipation, this delayed gratification, is cutting into iPhone 4S sales, which while nothing to sneeze at didn't enable Apple to achieve enough growth to clear that $10.37/share hurdle.

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Microsoft unveils Surface tablet in Hollywood

Microsoft Surface

Microsoft

The new Microsoft Surface tablet PC was unveiled today in Hollywood. Should Apple and the iPad be worried?

As expected, Microsoft unveiled its new tablet, called "Surface," in Hollywood today. The device is designed to attack the market-leading iPad's only real weakness: the perception that it's a device for consumption rather than creation — for reading and watching rather than getting things done.

Unlike the iPad, Surface is less a pure tablet than a sort of collapsible PC. It runs Windows 8, the latest version of Microsoft's well-known operating system. There's an integrated stand and two covers that double as full keyboards, one of which provides a more conventional, tactile typing experience. The whole thing weighs in at about a pound and a half. It's sleek and black and has a ultrabook-esque selection of ports. (Covers come in a range of colors.)

A relatively subdued but kind of intense Steve Ballmer, Microsoft's CEO, called the tablet "a tool to surface you passions, ideas and creativity." He also stressed that it's all about Windows 8, a piece of software that "deserved its own hardware innovation."

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Debate hath ended: iTV coming from Apple this year

Apple's New iPhone 4s Goes On Sale

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Coming soon to an Apple Store near you: iTV?

Will they or won't they? That's been the burning debate in tech/Appleology circles over whether Cupertino will roll out a high-end, thoroughly Apple-ized high-def TV. I've been pondering this question pretty regularly, given that I think Apple is at the tail end of an innovation cycle that started with the iPod (reinvented music), then moved on to the iPhone (an iPod with a phone, re-invented mobile), and then brought out the iPad (a big iPod, poised to decimate the low-cost PC market). What's next?

A TV set — versus the current AppleTV box — seems obvious. The reinvention factor will be the delivery of TV content. And therein lies the challenge: Apple has put, in sequence, the music industry, the wireless industry, and the publishing industry at its feet. Will Hollywood and the cable companies agree to play by Apple's terms?

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Apple collapse? What Apple collapse? Company beats earnings expectations

Customers test new IPad, on April 4, 201

JEFF PACHOUD/AFP/Getty Images

Customers test new the IPad at an Apple store. Apple beat quarterly earnings expectations today by a very decent margin.

If you've been hiding in your bomb shelter, you probably missed Apple's precipitous stock-price drop last week and this, bottoming at $560 per share today and giving up, like, $100 billion in market cap. But then the magic of shattered earnings expectations hit and hit HARD. The company made $11.6 billion in its second fiscal quarter and earned $12.30 per share. That killed the expectation of $10.06 per share, according to Business Insider.

More importantly, the "weakness" in iPhone sales didn't materialize — Apple sold 35.1 million, nearly five million more than expected. This was one of the possible negatives driving Apple share price down, as analysts speculated on what remains the core of Apple's business.

There is a hint of bad news amid all this boffo good news, which has pushed Apple right back up to $600 per share in after-hours trading (a whopping 7.35-percent increase). The theoretically revolutionary iPad sold "only" 11.8 million units, below the 13 million that were anticipated. 

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Apple speaks on e-books price-fixing lawsuit

Apple Unveils Updated iPad In San Francisco

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Apple CEO Tim Cook speaks during an Apple product launch event at Yerba Buena Center for the Arts on March 7, 2012 in San Francisco, California.

Apple has made its position known in an e-books price-fixing lawsuit that the Department of Justice filed against it and, originally, five big publishers, but now just two (three have already settled). And its position is pretty clear:

The DOJ's accusation of collusion against Apple is simply not true. The launch of the iBookstore in 2010 fostered innovation and competition, breaking Amazon's monopolistic grip on the publishing industry. Since then customers have benefited from ebooks that are more interactive and engaging. Just as we've allowed developers to set prices on the App Store, publishers set prices on the iBookstore.

The DOJ claims that Apple and various publishers colluded to get the industry to switch from retail pricing (where book sellers like Amazon set ebook prices) to the agency model, where the publishers themselves determine ebook prices. The DOJ alleges that the publishers and Apple made the switch in tandem to combat Amazon's dominance and its $9.99 price point for the vast majority of ebooks it sold.

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