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Daily Update for Sept. 19, 2011
It's the TUAW Daily Update, your source for Apple news in a convenient audio format. You'll get all the top Apple stories of the day in three to five minutes, which is perfect for a quick review of what's happening in the Apple world. You can listen to today's Apple stories by clicking the inline player (requires Flash) or the non-Flash link below. To subscribe to the podcast for listening through iTunes, click here. No Flash? Click here to listen.
Apple up 7.2% since Jobs resigned
As last week ended, Apple stock closed above US$400 (as we publish this AAPL is at an all-time high of $410). What's more interesting is that AAPL has climbed 7.2 percent between last Friday, September 16 and August 25, when Steve Jobs announced his resignation. A 7.2% gain in about three weeks is impressive, but even more so on the heels of Jobs's departure. When Steve took a medical leave of absence in 2009, anxiety was high among Apple's investors and customers (not to mention Steve's friends and family). Then COO Tim Cook acted as interim CEO, guiding Apple through several successful product launches. Surely Cook's performance in 2009 has tempered the market's hesitation now that he's working as CEO. It's a nice show of faith in Tim's abilities, and a promising start to the Cook-era Apple.
Shareholder calls for RIM to sell itself or its patents, in critical open letter
Things just keep getting bleaker for RIM. With its revenues stagnating and smartphone market share dwindling, the BlackBerry maker is now facing new financial pressure from Jaguar Financial Group -- a Canadian merchant bank and RIM shareholder that's calling upon the company to do one of two rather unpleasant things: sell itself, or sell its patent portfolio. In an open letter to RIM's board of directors, Jaguar CEO Vic Alboni criticized the manufacturer for failing to "inspire consumer enthusiasm" for its products, and for bringing its devices to market too late. And, as share prices continue to drop, Alboni thinks it's time to make a change: The status quo is not acceptable, the company cannot sit still. It is time for transformational change. The directors need to seize the reins to maximize shareholder value before more market value is lost. Jaguar didn't specify the size of its RIM stake, but claimed to be calling for upheaval on behalf of "other supportive shareholders" who, in total, hold less than five percent of the company. The Ontario-based firm is hoping that a new line of QNX-based smartphones will curtail its slump, but Alboni doesn't sound so optimistic. "You cannot put all your eggs in one basket," he told Bloomberg. "The board should be saying, 'What if these products don't pan out?' You don't want RIM to turn into another Nortel." A RIM spokeswoman, meanwhile, declined to comment on the letter. Hit up the source link below to read it for yourself.
Telefonica iPhone stock being recalled in time for September 12th launch?
Well folks... looks like we're finally getting some meat to all the iPhone 5/4S rumors that have been swirling around for months. We got some interesting news from a vigilant tipster today: beginning August 22nd, Telefonica will begin scaling back its current iPhone stock through September 12th. According to the source, this three week program is a move that "will of course prepare us for the launch of a new smart phone." While the date next month should sound familiar, we've heard recently that the launch will actually take place sometime in October. Either way, a move like this is usually a telling sign that points directly to a new model launch. Keep your eyes pinned here, and prepare yourself, as it appears Mr. Jobs may have something planned for the fall. [Thanks, Anonymous]
Apple stock helping the Alaska Permanent Fund more than oil
The Alaska Permanent Fund sets aside a portion of oil revenue and gives some of that money back to Alaska citizens each year. This pool of money is also used to invest in the stock market, a practice that has proved to be quite lucrative. A recent quarterly report from the company that manages the Fund reveals Apple and not oil revenue is the reason the Fund is growing. The Fund holds over 617,000 shares in Apple which were bought when Apple's stock was much lower than its current US$391 per share. It's initial $73 million investment is now worth $207 million. This jump has helped propel the Fund to a healthy $40.1 billion, its highest level ever. The Fund also owns stock in IBM, EMC, Cisco, GE and others, but Apple is its largest single holding and its best performer. [Via Fortune Apple 2.0]
Disney looking to buy out Faxion Online developer
Disney could become a major player in the future of Faxion Online if it goes ahead with a proposed deal to buy out the rest of UTV Software Communications' stock. Currently, Disney has a majority stake in the company -- 50.4% -- but this move would bring it up to a nice round 100%. The Ignition Entertainment label would fall under this deal, which has already been struggling with numerous layoffs and studio closings. We recently reported that UTV Ignition had to cut a good portion of its programming, maintenance, and customer service staff as part of these problems. Whether or not this deal will prove a boon or a hammer blow to Ignition remains to be seen. Disney has previously closed down developers Black Rock and Propaganda Games, although Mickey's parent company is looking to move in the direction of more social and casual gaming. We'll keep a close eye on this deal to see how it plays out.
T-Mobile G2x sheds 'out of stock' badge, immediately goes on sale
All of your G2x-toting friends are gleefully downloading the long-awaited Gingerbread update, while you sulk in the corner because they've been out of stock for over two months. Time to don that party hat, Sir Frowny, because it's now your turn to share in the joy and have the last laugh. T-Mobile's online store not only has the G2x in stock, they're free -- at least until Thursday, that is. The price tag seems to be a generous olive branch extended by the carrier for those who've been immeasurably patient in buying the fanciful device. Sure, you may be a tad late to the celebration, but think of it instead as making a grand entrance.
HTC sales up nearly 88-percent from last year, analysts still skeptical on stock
Despite having moved into the number five slot on IDC's list of the top handset makers world wide -- beating out RIM and just behind Apple -- HTC has actually seen its share prices drop 19-percent since June 7th. The stock did rebound slightly following news that the company's sales for June were a staggering 87.8-percent higher than the same time last year. Surprisingly, that's actually a drop from May's figures which were 116-percent higher than the same month in 2010. Even though the company continues to break its own sales and profit records, some analysts don't think the company is out of the woods just yet -- a rather confusing outlook to us but, then again, we're not financial analysts.
RIM shares hit a five-year low: oh, how the mighty have fallen
There was a time when RIM owned the smartphone space with its revolutionary push email-equipped BlackBerrys. And there are still plenty of folks who can't live without a good physical keyboard and BBM. But, despite the company's $4.9 billion in revenue and $695 million in profits from Q1 2011, RIM's stock has tumbled to its lowest price in five years. What's changed since those heady days when it seemed like there was a Pearl in every pocket? As many of you know, Androids and iPhones have carved out a big chunk of the smartphone market, largely at RIM's expense. Sure, Blackberry 7 OS is coming and the PlayBook is rolling out to help the company gain ground on Android and iOS, but only time will tell if these latest efforts from Waterloo can stem the rising tide of iPhones and little green bots.
Storyboard: The stock
So there I was, sitting down and preparing to play through Mass Effect for the third time, except this time it was with the intent of playing a character straight through to the end of the franchise. That meant going through the list of regular roleplaying characters I had, trying to decide who made sense in context. I had already played through twice, which meant my options were a bit more limited, but I was willing to bet that I could find someone in my stable of characters worth playing. How is this relevant to roleplaying with MMOs? Simple: These are characters whom I'd played and generally created via MMOs, heroes and villains alike. And the lure of sticking to a strong character is seductive because you know whom you'll be playing and how to play the character for maximum impact. But you run a very real risk of being locked into a narrow range of character possibilities, and after a while, having stock characters built up becomes limiting rather than liberating.
HP TouchPad available at OfficeMax on July 17th?
Here's something to add to your long list of webOS-related rumors: OfficeMax may be getting the HP TouchPad this July. If the above document is to be believed, HP's new 9.7-inch tablet will be available at the retailer on July 17th in both 3G and 4G versions -- which is a bit puzzling, considering the company hasn't made any mention of WiMAX or LTE compatibility. As for that earlier Walmart gossip, another tipster provided PreCentral with a screenshot of the big box's database (after the break), which corroborates the $600 price tag we've been hearing about for the 32GB model. If this proves true, it'll be another month before we find out whether the slate truly lives up to HP's exceedingly high expectations. Update: We received a note from a reliable source inside Office Max that not all details in the above sheet are correct -- specifically the talk of 3G / 4G versions are a little unreliable, given the sheet currently lists a 4G version of the PlayBook that OfficeMax does not have. Our source expects the OfficeMax TouchPad to be WiFi-only, but at least that July 17th date is looking accurate.
LA Noire boosts Take-Two stock
Now here's a pretty open-and-shut case. What do you think could have caused Take-Two's share price to rise almost 18 percent yesterday? The company had the release of a little game called LA Noire to thank for that. On Monday, Take-Two shares were hovering around $15 a pop, but shot up yesterday as LA Noire launched and closed at $17.10 -- the highest valuation since the proposed takeover by EA. As of the market's close today, shares were still trading in that range, hitting as high as $17.28 this afternoon.
Amar Bose donates majority of Bose Corporation shares to MIT, says thanks for the education
If you haven't heard of Dr. Amar Bose directly, you've surely heard of his eponymous audio equipment company. Late last week, the 81-year old founder and chairman of Bose Corporation announced that he's donating the majority of shares in the privately held company to his alma mater, the Massachusetts Institute of Technology. A member of that college's graduating class of 1951 and its electrical engineering faculty all the way until 2001, Bose felt compelled to give something back and he's opted for the most grandiose of gestures. MIT won't be able to sell its shares in Bose Corp. nor have any say in the way it is run, but it'll receive dividends as and when they're paid out, which will then be reinvested in its research and education programs. In making this perpetual endowment public, Amar Bose took the time to credit Professors Y. W. Lee, Norbert Wiener and Jerome Wiesner as his mentors -- in the image above, you can see him pictured with Lee (left) and Wiener (right) back in 1955. Chalkboards, that's where it all began.
Apple hardware VP sells 99% of AAPL holdings
Apple's senior vice president of Mac and iPhone hardware engineering, Bob Mansfield, has sold 99 percent of his Apple holdings, leaving him with only 501 shares. The news comes from a recent SEC Form 4 filing, which lists Mansfield as selling 38,863 shares of AAPL at $351.89 each; total proceeds from the sale are in excess of $13.6 million. There are two things to take away from Mansfield's sale: 1. It in no way reflects his belief in the future of the company. Mansfield is just a smart investor. Sell high, buy back low. That's just his style and always has been. Plus he gets the usual 15 percent off employee stock purchase plan shares when he does buy through the ESPP. 2. Don't feel sorry for Mansfield because he only has 501 shares left. He's still got a fully vested option to buy 30,000 shares of AAPL at $36.54 -- that's a discount of almost 90 percent on today's prices –– and he also has 100,000 restricted stock units that will fully vest in 2014. Drinks are on Bob at WWDC, everyone. [via Apple 2.0]
DS Lite discontinued at GameStop
We caught wind of an internal GameStop memo this morning announcing the discontinuation of Nintendo's DS Lite. The memo (pictured above) asks employees to remove displays of Crimson, Black, and Metallic Rose models, once they've burned through their stock -- we've since confirmed the fact with an employee of the gaming chain. Not a huge shocker, of course, given the fact that the five-year-old system has since been eclipsed by 2009's DSi and, more recently, the company's glasses-free 3D portable, the 3DS. We have reached out to Nintendo for comment on the matter and will update this post with official word once received. Update: We heard back from Nintendo, receiving the usual "Nintendo doesn't comment on rumor and speculation."
Apple will be the first $1 trillion company
"A million dollars isn't cool. You know what's cool? A billion trillion dollars." If there's one company that will hit a trillion dollar market cap, it will be Apple, according to USA Today. Apple could do it in the next three years. USA Today came up with Apple's trillion dollar market cap based on its five-year geometric mean average increase of 59% a year. So given today's market value of about $310 billion, if Apple continues to increase in value by 59% each year, in 2014, we'll have the first trillion dollar company. How huge is that? The most valuable company ever was Microsoft in 2000. That year it hit a $604 billion market cap. So, could Apple beat Microsoft's value in its best year by more than 65%? My money is on Apple (and has been since November of 2002 when I started buying the stock). The way I look at it is that Apple has its hands in three primary markets: computers, smartphones and tablets. The first market is fairly maxed out -- there's not a lot of room for the market as a whole to grow -- but since Apple only has around 10% of that market, it still has lots of space to grow in it. The inverse is true for smartphones and tablets. Apple is a key player in both those markets, but each of those markets still has decades of growth in front of them, which means that even if Apple doesn't hold a lead spot, it still has tremendous room for the growth of its products in those markets.
Forbes: China growth will propel AAPL shares to $547 in the next nine months
Eric Jackson at Forbes has written a piece with some astounding numbers about Apple's business in China. Most impressively, Jackson thinks that because of Apple's China business, Apple shares will hit $547 per share by January 2012, which is only nine months away. That's an impressive upswing from AAPL's closing price of $348.51 yesterday. Jackson opines that Apple's four current Chinese Apple stores bring in US$1.3 billion per year, per store. With Apple set to open as many as 25 retail stores in China, and the Chinese "gaga for Apple," that means Apple's Chinese retail stores alone could draw in another US$32bn a year for the company. That's not counting iPhone sales through carrier stores, Apple's online China store or Cybermart, Apple's largest third-party retailer (owned by Foxconn). Cybermart has only 34 retail outlets today, but it's planning on building up to 500 locations in the future, each with its own special Apple Shop within the store (much like Best Buy's Apple Shop store-within-a-stores). With the second largest economy on the planet, it's no wonder that Jackson sees China as key to Apple's future growth. And it's likely that China will propel Apple to its first $100bn+ net revenue fiscal year ever when Apple's fiscal year ends in September. Disclaimer: The author holds a position in AAPL. TUAW does not provide investment advice; consult an expert before buying or selling equities.
Counting Angry Birds before they hatch: dev talks US IPO, analysts need track record
Angry Birds developer Rovio has been on a roll: raking in millions of unit sales, breaking through to the mainstream and recently receiving another $42 million from investors. Now the company is talking about going public on the Nasdaq with an IPO in the next five years. "At an estimated value of nearly $300 million, it would still be considered a relatively small company," EEDAR's Jesse Divnich explained when we asked about the company's chances. "Gameloft, for example has a current market cap of $344 million (the cost for someone to own every share of the company), this is compared to Activsion which has a market valuation of over $12 billion, and Google at $185 billion. In fact, most large mutual funds typically don't invest in anything with a market cap under $1 billion. If they do, they typically classify them as 'high-risk' or 'aggressive plays.'" Wedbush Morgan's Michael Pachter had similar reservations about the company telling Joystiq, "Any company can go public, but the rule of thumb is that the company has at least $50 million of annual revenue before they try to sell stock. That revenue has to be recurring, and I think that is an obstacle for Rovio, which so far is a one-hit wonder. If they can replicate what they've done with Angry Birds, there might be some interest." Pachter also mentioned that the administrative costs of being public is about $5 million annually, which is why small companies don't usually take the stock route.
Credit Suisse initiates AAPL coverage on up and down day
AAPL shares got slapped silly before market open this morning after a JMP Securities analyst initiated a rare downgrade on AAPL stock yesterday. The downgrade was due to assumed problems with Apple's ability to manage the supply chain for its iOS devices in the wake of the disaster in Japan. But not soon after the AAPL sell-off, many other analysts came to Apple's defense, including Barclays Capital's Ben Reitzes. Reitzes stated that the perceived effects of the troubles in Japan were overblown in relation to how Apple's supply chain would be affected. In a research note, Reitzes stated, "While still a fluid situation, we believe the comments made by QCOM [Qualcomm] may alleviate at least some concerns for Apple given uncertainty around the iPhone supply chain for both current and future products (QCOM chips are used in Verizon iPhone 4s and iPad 2s, and we believe QCOM will be a major supplier for the iPhone 5)." "The comments made by QCOM" is referring to a statement by the company in which it said it foresees no significant effects on its ability to deliver products because of the earthquake and tsunami in Japan. That statement, along with that fact that this morning Credit Suisse initiated coverage on shares of Apple with an outperform rating and a massive $500 price target, led APPL to regain some of its earlier losses and close at $334.64 a share. Disclaimer: The author holds a position in AAPL. TUAW does not provide investment advice; consult an expert before buying or selling equities.
What if you had bought AAPL stock instead of Apple products?
Since 2003, the rise of Apple's stock has been stratospheric. Currently AAPL sits at US$346, but many analysts expect it to be at $450 or higher in the next 12 months. The growth of the stock over the years is attributed to Apple's bottom line, its creative and business teams, the fact that it has zero debt, tens of billions of dollars in the bank, and of course, the fact that it sells the hottest consumer electronics on the planet. But what if instead of buying Apple's products, like a PowerBook or original iPod, those who are most responsible for the stock's increase -- you, the consumer -- bought AAPL stock? Software engineer Kyle Conroy has compiled a list of how much money you would have today if, for example, instead of spending $5700 on a Apple PowerBook G3 250 when it was released on November 10, 1997 you'd spent that same amount on AAPL stock. The answer? Instead owning of a laptop that's probably worth all of twenty bucks today, you'd own $330,563 of AAPL stock. Makes you cringe, doesn't it? For those of you who bought an original 5 GB iPod for $399 on October 23, 2001, your money, had you purchased AAPL stock, today would be worth $11,914. Spending $1599 on Apple's original iBook G3 on July 21, 1999 would net you $32,031 in AAPL stock today. The list goes on and on. The good news is that Apple is one of the strongest, healthiest companies on the planet, which controls many emerging markets that still have a decade or more of growth (smartphones, tablets, etc.). In three years today's closing price of $346 is going to make AAPL stock look cheap.
