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Why the iPhone should tank
Doctor Macenstein has a very good commentary up: even though he's a happy iPhone owner, he wants the iPhone to fail. Fail miserably. In fact, he was cheering on the news during the earnings announcement yesterday that Apple completely missed their analysts' fever dream-induced goal for iPhone sales. Why would a man (woman? Did we ever find out what the Doc's gender was?) who's invested $600+ in a phone want it to not sell well? If you're like me, you might answer that, "because he's crazy." Everyone knows success is always good for a product-- if the iPod had failed, we'd never have had the Nano, the Shuffle, or, for that matter, the iPhone. So if Doc Mac wants to wish the iPhone wrong, he's a loony.Or is he? He makes good points-- lower-than-expected iPhone sales might make Apple nervous enough to get in gear on pushing new software features and updates out, and get that price point dropping for the rest of us. And on the price point Doc's especially got a point-- when Apple was asked if there was going to be a lowered price point, they actually cited customer satisfaction as the reason not to drop it. In other words, if people are happy with the iPhone (and Apple is convinced that they are), there's no reason to change it.With AAPL doing so well, Apple has a chance to sit back on their laurels and let the AT&T payments roll in. But any self-respecting iPhone user shouldn't let them take it. With a happy customer base, Apple has less incentive to fix those "little" problems like copy and paste and a missing iChat Mobile.Update: My good colleagues point out that the iPhone missed analysts' goals, not Apple's.
Boost in earnings makes Nintendo Japan's fifth-biggest company
It looks like the folks at Nintendo HQ have cause to bake a celebratory Wii cake, as Reuters reports that the company is now Japan's fifth-biggest in terms of market value after word of solid earnings performance pushed shares higher in trading today. According to Reuters, the company's market value now stands at ¥8.69 trillion (or about $72 billion), which places it ahead of both NTT and Honda Motor Co. The jump, of course, is largely due to demand for the Wii and Nintendo DS, which has also caused the company to up its operating profit forecast by a hefty 37 percent to ¥370 billion ($3.1 billion) for the year to March 2008. Unsurprisingly, Nintendo doesn't see that demand letting up anytime soon either, with it now saying it expects to sell 16.5 million Wiis in the current business year, along with 26 million DSs -- both numbers of which are 18 percent higher than previous forecasts by the company.
Sony profits soar despite PS3 losses -- PS2 hot as ever
Sony is reporting that its overall net profits more than doubled during the past quarter, bolstered by the success of films such as Spider-Man 3, and snappy sales of its traditional electronics. Things in the company's PS3 camp, however, still looked a little bleaker than the Japanese giant had probably hoped for. Losses for the game system rose from 26.8 billion yen to 29.2 billion yen, with 710,000 units sold worldwide -- not real impressive when compared to competitor Nintendo's Wii sales of 3.43 million. In a somewhat ironic aside, Nielsen GamePlay Metrics, a division of Nielsen Co. which tracks video game activity, says that the most played game system last month was Sony's seven-year-old PS2. The report shows the aging system leading other consoles with 42 percent of use, followed by the original Xbox at 17 percent, and Xbox 360 at 8 percent. The Wii and PS3 fall at 4 and 1.5 percent, respectively. Should be food for thought for everyone at Sony who doesn't think backwards compatibility is a big deal.Read -- Sony net profit doubles despite PS3 lossesRead -- PS2 most-played console in June
AAPL opens strong after earnings report
Even as the market at large turned downward at the open today, AAPL moved up in a big way. With overnight trading taking the stock on a roller-coaster ride (up over $150, settling down at about $145, almost $8 over the closing price Wednesday), the stock opened this morning at 146, a record high open and intraday record high.If you listened to yesterday's earnings call (or followed the highlights on our liveblog) you heard a lot of interest about the initial days of iPhone sales, which barely made it into the June quarter numbers; Apple's not even recognizing revenue from AT&T subscription sharing until the September quarter. Meanwhile, the Mac and iPod businesses are, as they say in Pittsburgh, "ahn fahr" -- 32% Mac unit sales growth over the year-ago quarter, and nearly 10 million iPods sold in the quarter. Check out Georges Yared and his colleagues over at our sister shop BloggingStocks for more on the earnings story.Disclaimer: I am long on AAPL, and short on temper.
Hynix boldly plans to topple Intel, AMD within a decade
In a fairly tame show of initiative, Hynix, a South Korean company you've probably never heard of, has announced its plan to become the world's leading chip producer over the next ten years. The company, currently the world's fifth largest memory chipmaker, claims it will boost sales from last year's $7.7 billion to $18 billion in 2010 (the year we make contact), and to $25 billion by 2012 (when the Mayan calendar ends and we're all supposed to eat it). Hynix plans to gain ground by eagerly developing new technologies, and with the introduction of a new type of memory chip called Phase-change Random Access Memory (PRAM, but not of Apple fame). Analysts say PRAM will become the industry's main memory source, replacing flash storage over the next decade. Meanwhile, architects in Korea are working feverishly to design a room in the new Hynix headquarters large enough for president Jong-Kap Kim's head.
Liveblogging the Apple earnings call
We're on the line live for the Apple FY07 Third Quarter earnings call, starting up in just a few minutes at 5pm Eastern. Apple is expected to announce some big numbers, and we should get an idea of what they expect from the iPhone in the next quarter or so. More updates as we post them.If you want to join in, Apple's got a quicktime link, so hit it and let the big numbers hit your ears at the same time they do us.5:08pm: Welcome to the conference call. Here we go.5:10pm: Peter Oppenheimer: record-breaking max sales and continued strong demand for iPod. Net income up 73%, huge numbers overall.5:11pm: Apple's growth rate more than 2 1/2 times the predicted growth rate for the quarter. Mac notebooks up 42%. 9.8 million iPods, 31% growth over the quarter.5:12pm: 71.5% share of MP3 players are iPods. iTunes surpassed Amazon and Target.5:13pm: 270,000 iPhones sold, 146,000 iPhones activated. Some problems during the first week, and we would like to apologize. Since then, AT&T has corrected the cause, and we are experiencing high percentage of problem-free activation.More after the break.
AT&T activates 146k iPhones in Q2, Wall Street frowns
While earlier estimates suggested that AT&T would make out like gangbusters considering just how many iPhones it reportedly moved as Q2 came to a close, investors aren't reacting fondly to the firm's latest report. Even though the telco posted a $2.9 billion increase in net income and sales of $29.5 billion, it "only" managed to activate 146,000 iPhones -- which sent Apple's stock tumbling up to 6% (read: billions). Notably, some 40-percent of those iPhone buyers were new to AT&T, which helped to slash customer turnover to a record low, but it's not surprise with previous estimates as high as 1m+ iPhones sold, these numbers didn't exactly impress Wall Street; Piper Jaffray & Co. analyst Gene Munster even went so far as to call the amount of iPhone activations "a disappointment."Update: We went back and edited this post to present a better sense of what's going on in this story.[Via mocoNews]
Disney sells 2 million movies, 23.7 million TV shows on iTunes
Forbes reports that Disney's iTunes sales have been doing especially well. Net profits for the quarter ending March 31st this year were up 27%, boosted by strong iTunes sales including about 23.7 million TV episodes and 2 million movies. The article doesn't say but I'm pretty sure that those numbers reflect total historic iTunes sales rather than just sales for this past quarter. If they were, they'd deserve a fully upper case WOOT rather than the modest woot I issue on this news.
Helio drags Earthlink earnings down, gets more cash from SKT
Alright, we've got good news and bad news. Which do you want first? The bad, you say? Well, it seems Helio's losses in the first quarter amounted to a $29.3 million equity loss for parent Earthlink in the same timespan, which ultimately accounts for over 97 percent of Earthlink's Q1 losses -- though in the earnings report, the company still seems pretty optimistic and committed to its MVNO lovechild with Korea's SK Telecom. Speaking of SK Telecom, the good news: Helio's other corporate parent said this week that it would be injecting additional capital to help out with marketing efforts (though would maintain the same equity balance in Helio with Earthlink that it does now). Like Earthlink, SK Telecom sounds optimistic about Helio's future, saying that despite falling short of initial expectations, ARPU (average revenue per user) and subscriber count are both looking up for 2008 and 2009. Something tells us the upcoming Ocean is going to help with those efforts significantly.Read - Earnings release [Via mocoNews]Read - SK Telecom's plans
Apple Financials Q2 2007
Curious as to how Apple is doing? Want to know how many Apple TV units they will admit to having sold? Need to know about product refreshes and the latest state of Leopard and the iPhone? Mark your calendar. Apple's 2nd Quarter 2007 Financial Results conference call webcast will begin at 2PM PT on Wednesday 25 April 2007. All you need to join in and listen is a copy of QuickTime. The Apple Financial Results web page will provide a link on the day of broadcast.
Take Two mulling sale of company
The financial news from video game mega-publisher Take Two Interactive has run the gamut from bad to horrible over the past month or so. First there was a report from analyst Michael Pachter that suggested selling the company's stock. Then there was a disappointing earnings restatement and a shareholder coup that sought to overthrow CEO Paul Eibler. Now comes word that Take Two is considering selling the company to pacify the group of angry shareholders.Gamasutra is reporting that the Grand Theft Auto publisher has postponed its annual meeting from March 23 to March 29 to come up with alternative plans to present to the shareholders, which own a combined 46 percent of the company. One of the main alternatives mentioned in the official notice is "a possible sale of the Company." There's no guarantee such a sale will actually take place, but the fact that they're even considering it shows just how bad things are getting at Take Two HQ. Wall street seems to support the idea -- shares of the company were up 5.47 percent to $22 in early-morning trading.[Via Xbox360Fanboy]
Estimated 1.8 Million Macs sold during Q4 '06
Forget about iPods, for a moment. MacDailyNews reports that Apple sold a healthy 1.8 million Macs during the "holiday quarter" ending 2006 and of that number, about 1.1 million units were laptops. This apparently beat Apple's "already aggressive targets", with strong sales at the Apple store. Due to these strong sales Goldman Sachs estimates the fiscal 2007 per share earnings at $2.85, slightly higher than the "Street consensus" of $2.76. Let's pause for a moment for a hearty fanboy squee at the news of Apple's further progress towards total world domination. And, oh yes, the iPod sold very nicely too.
Surprise: EA is profitable
Reuters has a report on Electronic Arts' recent earnings statement, which showed a surprising profit of seven cents per share for the quarter. This is much better than the loss of 23 cents per share analysts expected, but still worse than the 16 cents per share profit the company showed a year ago. EA shares shot up 8 percent on the news, reversing a 12 percent fall over the last year. Not surprisingly, EA Sports was behind much of the good news -- Madden 07 sold 5 million copies, while NCAA Football 07 and Fifa 07 both sold 2 million copies in the quarter. But the results also reflected an unexpected rise in overall U.S. game sales, which tend to lag in the run up to major console launches. This year might be different for publishers, though. As EA president Larry Probst told Reuters, "the tough times are over."
Earnings reports: Sony slumps, Nintendo, Microsoft surge
A trio of publicly filed financial reports for the most recent quarter (July through Sept. '06) have shed some light on the fiscal fates of the three major consoles makers going into the critical holiday period.First up is Sony, which posted massively reduced earnings as expected. The ongoing laptop battery recall accounted for much of the 94 percent reduction in profits, but slow sales of the PSP and Playstation 2 accounted for a 43.5 billion yen operating loss in the games division. Research and development costs for the PS3 also cut into Sony's bottom line for games. Sony is still predicting sales of 6 million Playstation 3 units by March '07.Nintendo's financial situation is much rosier, with profits rising 72 percent on strong sales of DS hardware and software. The company is shipping 100,000 DS units a week and is still unable to meet demand in some Japanese stores. Nintendo expects to sell 20 million DS units and 6 million Wii units this fiscal year (ending March 2007), helping pad down an net income forecast of 100 billion yen.Spurred on by higher software sales, Microsoft announced game revenue for the 360 and PC increased 107 percent ($319 million) in the past quarter. Microsoft's Entertainment and Devices Division (which includes the games unit) grew by 70 percent over the same period last year. The Xbox 360 sold 900,000 units in the quarter, pushing it over 6 million units sold worldwide, and putting it well on its way to selling an expected ten million systems by the end of 2006, according to Microsoft.Read: Sony reportRead: Nintendo reportRead: Microsoft report
TUAW Podcast #13
This week's podcast involves Dan Pourhadi and the C4 developer shindig he attended, those exclusive Leopard screenshots we nabbed, iPod viruses and the corporate blame game, and we round off with Apple's preliminary 4th quarter earnings results. Dan and I kept things short this time around, as the podcast rounds off at just over 20 minutes and 18.6MB.As usual, you can grab the podcast via a direct link, our podcast RSS feed or in the iTunes Store podcast directory. Enjoy the show.Update: It seems there's a bug in our iTS feed preventing from getting this latest episode, though our other links for accessing the podcast are working just fine. We'll keep you posted.
Nasdaq warns Apple of non-compliance
Following reports of possible stock option improprieties by Apple executives and continuing internal and external investigations of these concerns, Apple has announced that it will delay the filing of its Q3 quarterly earnings reports until it is satisfied that the issues have been properly accounted for and addressed. Delay of the filing puts Apple out of compliance with Nasdaq regulations, and continued non-compliance without taking proper measures are grounds for Nasdaq to cease listing of Apple shares. Apple has said it's stock will remain listed pending a hearing and decision by the Nasdaq listing qualifications board. Despite these issues, perhaps because Apple itself–and not a third party, uncovered the irregularities, Apple stock has remained fairly stable.
Sprint's earnings call reveals Motorolas; Q included
We're sure Verizon's been having a blast with their American exclusivity on the Motorola Q, but the fun and games are about to come to an end -- and another domestic carrier's Windows Mobile-loving customers have cause to celebrate. COO Len Lauer spilled the beans during Sprint's earnings call Thursday, revealing that the company is planning to pick up the honorary RAZR of smartphones (the Q, that is) sometime in the fourth quarter of this year. Speaking of RAZRs, the Moto love continues with a SLVR and RAZR (the V3m, perhaps?) coming down the pike. Between this and the announcement that their Rev. A deployment is ahead of schedule, the good news nearly outweighs the bad stemming from the "earnings" part of the earnings call -- not surprisingly, some analysts are speculating that profits fell short due to Sprint's failure to offer a RAZR thus far.[Thanks to everyone who sent this in]
Apple reports second highest earnings in its history
That's right, boys and girls, Apple reported their earnings for their third quarter today, and things are looking good. Apple had its second highest earnings and sales ever this quarter, which is very impressive if you think back to Apple's meteoric climb early in its history. Apple posted a revenue of $4.37 billion with a profit of $472 million. That's a lot of iPods, about 8,111,000 iPods, with sales of 1,327,000 Macs (75% of which were Intel Macs). This represents a 12% growth in the sales of Macs and a 32% increase in iPod sales.Check out the press release for full details.
Vivendi Games earnings see 109% increase
According to Next Generation, World of Warcraft is a nice little cash cow for publisher Vivendi. With first-quarter earnings of $30m this year, an increase of 109% from the same period last year, Vivendi's financials have beaten analyst expectations.A report from Vivendi says that "this dramatic improvement was driven by a growth in revenues, with an increased proportion relating to the higher margin of World of Warcraft business". While increased development costs are also cited, it seems clear that a fair amount of the money pouring into Vivendi's pockets is staying there. While players suffer from server and infrastructure problems, is this entirely fair? Well, publishers don't get into the MMO business to make losses. Without seeing a complete breakdown of where our subscription money is going, we're not placed to judge.
High definition affects Sony, Comcast quarterly reports
It's that time of year, as companies report their results for the first quarter, already we've seen two benefit from high definition. Comcast reported growth as a result of adding customers in phone video and high speed internet, as well as adding DVR's and high definition for existing digital cable customers.Sony beat expectations due to investments and gained marketshare in the flat screen TV market, but still had a loss over the quarter.As the market of HDTV owners and interested buyers continues to grow, it will be interesting to see how it affects the various device and content providers' businesses. We'll probably keep an eye on the Time Warner blog to see if they have any updates.[Note: I am a Comcast employee and stockholder. I don't own stock in Sony, but I did love my Betamax player in what some would consider an inappropriate fashion.][Oh yeah, and Time Warner owns AOL, who owns this blog, I think I'm disclaimered up now, but you never know, so watch for updates.]
