Apple smashes Street views, shares soar

Sales of its iconic products far outpaced forecasts, helping drive a near-doubling of revenue in the fiscal third quarter. Its shares leapt to a high of $405 after a brief after-hours trading suspension.

Apple sold 20.34 million iPhones during the quarter versus an expected 17 million to 18 million, which analysts say helped it vault past Nokia and Samsung Electronics to become the world's biggest smartphone maker.

That "figure may indeed make them the largest smartphone maker by volume, which is somewhat ironic in a quarter that many thought would be about the Mac," said CCS Insight analyst John Jackson. "That they accomplished this without a new model speaks volumes about both their strength and the relative challenges facing competitors."

Apple's earnings beat was spectacular even by its own lofty track record. Its quarterly EPS beat the average forecast by 33 percent, versus beats of about 20 percent in the past two quarters.

The stellar results came as concern over iPad 2 supply constraints eased, with Chief Financial Officer Peter Oppenheimer saying more than 1 million iPads remained in stock at the end of June but demand was still overstripping supply in some markets.

Oppenheimer hinted at an upcoming product launch, saying it would impact the September quarter, but he gave no details.

In coming months, Apple is expected to roll out a new iPhone, which is likely to give the world's most valuable technology company another shot in the arm and offer a stiff challenge to rivals such as Google Inc and Research in Motion.

"They never cease to amaze me, these guys," YCMNET Advisors Chief Executive Michael Yoshikami said. "The numbers are obviously very strong and they seem to be accelerating earnings on all fronts."

ASIA ON FIRE

The Cupertino, California company said its fiscal third-quarter revenue climbed 82 percent to $28.57 billion, trouncing the average analyst estimate of $24.99 billion, according to Thomson Reuters I/B/E/S.

The company posted net income for the fiscal third quarter ended June 25 of $7.31 billion, or $7.79 per share, up from $3.25 billion, or $3.51 per share. Analysts on average had expected Apple to report $5.85 per share, according to Thomson Reuters I/B/E/S.

Oppenheimer attributed the big margin boost to higher sales of the iPhone, particularly in Asia. International sales accounted for 62 percent of the quarter's revenue.

Shares in Apple's Asian suppliers including Taiwan's Hon Hai Precision and Largan Precision jumped 2.6 percent and 3.2 percent respectively, while Japan's Foster Electric, which makes headphones for smartphones, rose 1.7 percent by 0015 GMT.

In Korea, top chipmaker Samsung Electronics Co rose 2.9 percent, while LG Display jumped 4.1 percent, and Hynix Semiconductor were up 2.8 percent by 0015 GMT.

"Apple is doing well, but this does not mean other tech companies are doing well. Tech shares are rising after their recent sharp falls and on expectations that their earnings may not be as bad as previously concerned," said Lee Seon-yeob, an analyst at Shinhan Investment Corp in Seoul.

Apple Chief Executive Tim Cook told analysts they were particularly optimistic about Greater China, which includes mainland China, Hong Kong and Taiwan, where Apple's year-over-year revenue was up sixfold at $3.8 billion. Overall, Asia Pacific revenue more than tripled to $6.3 billion in the quarter.

"I firmly believe that we are just scratching the surface right now," Cook said of China. "I think there is an incredible opportunity for Apple there."

Cooks also remarked on Apple TV, one of the few Apple products that has not really connected with consumers, saying it still had a "hobby status" within the company.

Apple sold 9.25 million iPads and 3.95 million Mac computers. Gross margin for the quarter came to 41.7 percent.

Shares of Apple have emerged from the limbo they had fallen into after Chief Executive Steve Jobs took leave last January for unspecified medical reasons.

Based on a price of $400, Apple would have a market capitalization of $369.90 billion, putting it close to Exxon Mobil, the largest company in the Standard & Poor's 500 index, which has a $411.97 billion market value.

The stock has gained 16.8 percent so far this year and has had only two "down" years in the last 10: in 2002, when it lost 35 percent, and in 2008, when it dropped 57 percent.

On Tuesday, Jobs' health again came to the forefront after the Wall Street Journal reported that several Apple board members had discussed a successor to the Silicon Valley icon, and talked it over with at least one head of a high-profile tech company.

Succession planning at Apple has been a hot topic since Jobs announced his medical leave, with many not expecting him to return to lead the company he founded in 1976.

The fate of Apple is tied to how the iPhone and iPad maker handles the eventual departure of its iconic chief. Chief Operating Officer Tim Cook is overseeing day-to-day operations.

Shareholders representing almost a third of Apple's stock voted in February in favor of a proposal to disclose a succession plan for Jobs, underscoring worries over who will replace the visionary leader at the helm.

Apple, notorious for its conservative forecasts, estimated earnings for the September quarter of $5.50 a share on revenue of $25 billion, below analysts' average estimate of $6.45 a share on revenue of $27.7 billion.

Apple might be readying Mini iPhone

We are all looking forward to Apple’s next generation iPhone ie the iPhone 5. But now it seems that Apple is more busy preparing a Mini iPhone.

We’ve heard of such rumours ever since the launch of the iPhone 2G when people said Apple will announce a smaller device like they did for the iPod line.

This time though it seems Apple is really thinking of producing a smaller and cheaper variant of their popular iPhone to combat Google which seems to be slowly making it’s way on to devices of all price ranges.

A source has reportedly seen a prototype version of the mini iPhone firsthand. The phone is said to be around two thirds the size of the iPhone 4 and lacks a Home button.

The phone is planned to be launched in mid 2011 and it’s information is only shared among a few Apple employees. The price is said to be 200 US$ without the obligation to sign a 2 year contract.

The device will be cheaper as it will be using nearly the same components as the iPhone 4 rather than the new components of the iPhone 4 successor.

The source also said that though Apple is currently planning to launch it in mid 2011, it might even be delayed or cancelled finally since Apple often works on products that don’t get released.

4G-enabled Apple iPad 3 launching in Q4 2011

Apple’s iPad 3 will reportedly be launching in Q4 2011, according to a Hong Kong-based research company.

The tech world may be busy speculating about tonight’s WWDC keynote, but CLSA is claiming that the Apple iPad 3 will launch ahead of the holidays this year. According to the research fim, it’ll arrive touting a Retina Display – one thing that was sadly omitted on Apple’s iPad 2 – alongside an all-new “4G LTE radio”.



The firm states: “While most vendors appear fixated on matching the specs and features of iPad 2, our checks suggest Apple will release iPad 3 in time for the holiday season, sporting a better display and LTE capabilities.”

It’s not all good news, however. CLSA’s research suggests that Apple has no intention of releasing a 4G-enabled iPhone device in the near future, so we’re likely to be kept waiting until the iPhone 6.

If previous rumours are anything to go by, Apple‘s next-gen iPad could also arrive sporting a three-dimensional screen. That’s according to a “Hollywood insider”, which last month claimed that a naked-eye 3D display is a “dead cert” for the iPad 3. Or maybe even the iPad 3D.

WWDC 2011: Apple iCloud will be free, iTunes Match replaces pirated songs

Ever since it was announced last week that Apple CEO Steve Jobs would present iCloud at WWDC 2011, there has been a deluge of rumors and guesses as to what it might be. Now, we have the answers.

Jobs noted at the keynote that the cloud has “demoted” the PC and Mac to just mere devices, and iCloud will step in as the “center of your digital life” and digital hub. Those are some lofty goals, but that is where Apple thinks computing is headed these days.



MobileMe, which Jobs noted was not Apple’s “finest hour” (to say the least), is basically being reworked from the ground up and turned into iCloud. Actually, it doesn’t really even exist anymore (at least in Jobs’ memory).

The idea behind iCloud is simple: iCloud stores content and then pushes it wirelessly to all of a user’s devices. That goes for contacts, calendars, new emails, etc. Basically almost everything you sync in iTunes via USB can be done via the cloud now. Users can only backup data using Wi-Fi connections, which might seem limiting but it should save anyone from outrageous data costs.

The big focus on iCloud centered around music. For days, weeks, whatever - everyone has been wondering what Apple was going to announce regarding a cloud-based music streaming service. However, we didn’t get what most people expected.

The first surprise was that there will be no charge for multiple downloads to multiple devices. The key word is “multiple,” not unlimited. Users can just hit a “Purchased” button in iTunes on their various devices and push what is already purchased and downloaded to nine other iCloud-enabled gadgets.

Secondly, iTunes for iCloud isn’t actually a competitor for Google Music, Amazon’s music service or anything else like that. There isn’t a subscription-based model involved here, but rather the usual purchase model that already exists. The only difference now is that users can just push the songs to multiple devices wirelessly and much easier.

The closest it gets to the streaming service is the new iTunes Match. Users who have pirated MP3s on their computers can try to go back to the honest and good side of things by using this software that scans the hard drive and then matches the titles to 256Kbps AAC, DRM-free tracks. (That must be where Apple’s latest deal with the music industry came in.) Jobs promised this scan would take only “minutes” and that it costs $24.99 per year “regardless” of the amount of songs.



Some of the other tidbits included in iCloud include a @me.com account, a no-ads promise, and a new feature in the App Store that shows the user its previous purchases (i.e. mobile apps, iBookstore items, etc.) that are waiting to be pushed down to other devices.

Apple also appears to be targeting a more business-minded bunch with the new Documents in the Cloud function. This feature incorporates the iWork suite (Pages, Numbers, and Keynote) and follows the idea of the cloud: users can work on projects using one of these apps using an iPad and then pick up where one left off using a PC. iCloud will also sync up the Camera library among multiple devices using Photo Stream, which pushes the last 1,000 photos taken on any of the iCloud-enabled devices to the rest. These images will be stored to their own album, but they’ll only be kept there for 30 days. If a user wants to keep them, then the selected images must be moved to a different, specified album.

Although it was widely rumored that Apple would charge $25 per year for iCloud usage (versus the $99 MobileMe yearly subscription fee), Jobs said that iCloud will be free. Yes, free - except for that whole iTunes Match fee if you opt into it.



Like iOS 5, the developer preview will be available starting today, and the full version will launch this fall. iCloud will offer 5GB of storage space, but purchased music, e-books and photos don’t count towards that total.

5 practical steps to keep your data secure in the cloud

Apple’s announcement of iCloud today is yet more evidence of the unstoppable migration of data and assets to the cloud. Despite the shocking recent breaches of security at a variety of organizations, including the multiple breaches that have afflicted millions of Sony customers, more and more of us are entrusting personal or business assets to the cloud. This is an irreversible trend. It’s not going to stop.

Yet many of us remain naive about the necessary steps we should take to keep our online assets secure. I’m not talking about excessively geeky ways to preserve your online safety. Just following these five simple guidelines will go a long way towards helping the average man or woman at work and play to keep online threats at bay.

1. Don’t take security for granted

There are two routes to your online assets. One is through the cloud provider’s infrastructure, and as the headlines constantly remind us, even household names don’t always do everything they should to keep your secrets safe. But the second route is even more potent, and it’s much closer to home. The easiest and most prevalent route for an intruder to access your online records is through your login details. Of course you need your provider to be secure, but don’t let that make you careless about your own login details.

2. Use strong, memorable passwords

The trouble with making up strong passwords is that they’re not memorable. The trick is to start with something memorable and then turn it into a strong password — which means mixing numbers, letters, lower and upper case, maybe a few symbols as well. What do you already know from memory that jumbles up all these different types of characters? Start with addresses, car license numbers, telephone numbers, dates of birth. But don’t use your own — use people you know; friends, employers, parents, partners, previous addresses; or old addresses of your own and cars you sold a decade ago. Anything that can’t be linked to your online persona but always jumble it up — half a zipcode, a name with part of a birthdate, segments of an address. Then add in a dash, an exclamation mark or an @ sign to spice it up some more.

3. Guard the crown jewels of your inbox

Of course you’re going to reuse passwords, especially for sites where you’re not storing crucial data like your credit card numbers, date and place of birth, address or social security number. But there’s one site where you should always use a unique and strongest possible password — your email inbox. Because this is the one place where all your other logins redirect to when you reset a password. This one location is the passport to all your other online assets.

Although it’s a hassle to do so, you should consider double-protecting your inbox with two-factor authentication, which means you have to enter a secondary code (for example a code sent by SMS to your mobile phone) to get access. This is especially important if you have a habit of visiting malicious websites, you never remember to keep your anti-malware software up to date, or you have a track record of failing to recognize phishing emails.

4. Don’t leave the password recovery back door ajar

Very often, people take all kinds of precautions to protect their login information but make it really easy to reset their password through the password recovery mechanism. If your user ID is totally easy to guess (it’s often your email) then don’t use something obvious or easy to discover for your password reset, such as your date or place of birth, mother or wife’s maiden name or some other readily sourced personal information. That’s as lame as leaving your doorkey under the front doormat.

5. Have an alternate to fall back on

Security is all about risk mitigation, and however careful your planning, you can’t eliminate all risk. So give yourself a fallback. Don’t put all your cash in one online account, have a separate emergency email address, make sure you’ve got a 3G card or local Starbucks you can resort to if your main Internet connection goes down. Knowing that you’ve got a second option if the worst happens helps you keep a cool head in an emergency, which gives you a better chance of surviving a crisis.

Is the iCloud the end of the Linux & Windows desktop?

I think a cloud-based operating system, like Google’ Chrome OS, has a bright future. But, when I look at Apple’s Lion, which will only be available as an upgrade by a 4GB download, and iCloud plans I begin to wonder just how much any fat-client operating system-Linux, Mac OS X, or Windows-have if Apple and Google have their way.

As Jobs put it, the PC centric data model is broken. And, so the digital hub will move from being the PC to the iCloud and the Mac will be “demoted.”

What did he mean by that? My fellow ZDNet writer, Andrew Nusca, put it well, “Mac vs. PC vs. Linux argument from the early days of consumer computing has lost a great deal of its luster in recent years with the development of cloud computing on the open web.” The operating system wars are far from over though. Nusca continued, “Concept of platform wars is quickly making up for lost ground with the development of cloud computing in the closed mobile space.”

I’ve always thought that thin-client computing has its place in technology. That’s one reason why I think Google’s Chrome OS has a real shot in dethroning the Window desktop in the office. By making the iCloud the center of everything, instead of the Mac, Apple is trying to wean consumers away from the fat-client PC model that’s served us so well since the day the first IBM PC rolled off the assembly line.

This worries me. If you had fast bandwidth and enough room on your data cap, cloud-based computing is fine. Many of us are already using every day. Oh, you may not think of using Gmail or Google Docs as being on the cloud, but it is and you are.

It’s so darn easy when all you really need to get work done from anywhere is an Internet connection and a Web browser. Forget your file at the office? Just grab your copy from Dropbox, and you’re good to go. But, Jobs takes it even farther. All your data will be on the iCloud and it’s automatically pushed to any of your devices.

It sounds great doesn’t it? I think it sound great too, but, and this is a big one, do you really want to trust Apple or Google with all your data? What happens if you don’t pay your fee to Apple? What happens if the Recording Industry Association of America (RIAA) demands a copyright audit of all my music on iTunes Match?

You see, I rather like the idea of owning all my media and having it on my servers and PC. This leads me to my other point: I like owning my operating system and applications.

Microsoft will sell me a system, with caveats, but at the end of the day I own it. I have a friend who’s still running Windows XP Media Center 2002. It still works for her and she’s happy with it. That’s great. I’m a big believer in the idea that if something works for you, you should keep using it.

But, as I sit here my with my first generation iPod Touch and Apple TV, neither of them work well with the latest Apple software offerings. Do I want to be forever having to upgrade my Apple hardware to get the most from Apple’ newest features?

At least with Google, the plan is to support the lowest common denominator. If you can use the Chrome Web browser or afford an inexpensive Chromebook, you can use the full-range of Google’s cloud-based services. My friend, for example, uses Chrome 11 on her almost ten-year old PC without a problem.

The problem extends beyond just “owning” an operating system, your application and your data. With Linux, it’s about having control of your operating system.

Richard M. Stallman, creator of the GNU Public License (GPL), developer, and leader of the Free Software Foundation and I disagree on many points. But, when he recently disparaged cloud computing. I had to agree.

Stallman said that in cloud-computing you’re letting “any Tom, Dick and Harry hold your data, let any Tom, Dick and Harry do your computing for you (and control it). Perhaps the term ‘careless computing’ would suit it better.” Stallman fears, “many people will continue moving towards careless computing, because there’s a sucker born every minute. The US government may try to encourage people to place their data where the US government can seize it without showing them a search warrant, rather than in their own property. However, as long as enough of us continue keeping our data under our own control, we can still do so. And we had better do so, or the option may disappear.”

He’s right. With a Linux desktop computer, I own my data, I control my processes. While I can see the cloud having its place for some people and in some situations, I hate this trend we’re seeing of putting everything into someone else’s hands outside of our sight, and all too soon out of mind.

Thin-clients and cloud-computing do have their place, but it’s not a place where I want my data, my work, to live under the control of corporate strangers. For all the ease of use of these methods, I’d prefer to see fat-client desktops like Mint 11 Linux, and, yes, even Windows 7, to continue on for so long as we continue to use computers.

Apple's iCloud like 'new iTunes'

Apple is set to launch its iCloud service which will allow the users stream data stored on Apple servers to their devices including iPhones, iPads and iPods. Don’t think of iCloud as the new MobileMe, think of iCloud as the new iTunes.


The service will be directly competing against similar services launched by Google and Amazon. Cloud computing is going to prove crucial because the mobile devices battle is no more a battle between devices.

What is Cloud Computing?

Let’s say you’re an executive at a large corporation. Your particular responsibilities include making sure that all of your employees have the right hardware and software they need to do their jobs. Buying computers for everyone isn’t enough you also have to purchase software or software licenses to give employees the tools they require.

Whenever you have a new hire, you have to buy more software or make sure your current software license allows another user. It’s so stressful that you find it difficult to go to sleep on your huge pile of money every night.

Soon, there may be an alternative for executives like you. Instead of installing a suite of software for each computer, you’d only have to load one application. That application would allow workers to log into a Web-based service which hosts all the programs the user would need for his or her job.

Remote machines owned by another company would run everything from e-mail to word processing to complex data analysis programs. It’s called cloud computing, and it could change the entire computer industry.



The iCloud has the potential of changing the very basic pattern of media consumption, which in turn may increase demand for more Apple devices among the masses. The iCloud itself may not be something revolutionary, but the forthcoming gadgets designed around it may indeed turn out to be a million dollar opportunity for Apple.

At a time, when Google and Amazon went ahead and launched their cloud services without taking music labels into confidence, Apple took a different route and successfully negotiated with the major music labels. The iCloud service from Apple, however, is much more than just music based service. Users can store almost any type of data in the cloud and access it from almost all of their Apple devices including iPhone and iPad.



It’s not the first foray of Apple in the cloud. It’s earlier web based service, MobileMe — a platform for online services and software from Apple – did not exactly take off at the start, and the service had several breakdowns in its life. Despite its shortcomings, MobileMe in the end ramped up three million users, not bad indeed, but it still is just a fraction of the total number of users iCloud is expected to bring to the Apple.

Apple’s iCloud agreement with major US labels worth $100M+ in upfront cash payments

The New York Post is reporting that Apple will pay more than $100M in up-front payments to the four major music labels (Sony, Universal, EMI and Warner) in a licensing deal for their new iCloud service. Apple has confirmed the announcement of their iCloud service will be made at their Worldwide Developer’s Conference on June 6.

The labels get between $25-50M each, with the variations coming from how many tracks from each label users are storing with Apple’s service. Apple has more than $60B in cash reserves, so a $100M+ investment for a service that could conceivably sell more iPads and iPhones seems to be a no-brainer.



The upfront fees were a major issue stalling the Google negotiations. Now that Apple has set a precedent, Google could realistically have a similar licensing agreement implemented by September.

Apple is expected to implement the cloud service for free, with plans to change to paid subscriptions in the future; seemingly once users are sufficiently hooked. The Cupertino tech giant’s cut of future subscription fees will be 18 percent. 12 percent will go to publishers and the remainder given to the labels. The LA Times also reports that Apple will also subsidize the cost of implementing the service with advertising.

Apple, Jobs to talk iCloud at WWDC

Apple is kicking off its Worldwide Developers Conference next week with the unveiling of its cloud-based service, iCloud.

Next Monday, Apple will hold its keynote address before a packed house at the Worldwide Developers Conference in San Francisco. In addition to iCloud, Apple said that it will detail its next-generation desktop operating system,Mac OS X Lion, as well as iOS 5, the next version of the mobile operating system running on its iPhone, iPad, and iPod Touch.

The company also indicated in its press release that CEO Steve Jobs, who is on an indefinite medical leave, will participate in WWDC.

Apple stopped short of providing specifics about Cloud in this morning's announcement. However, details and intimations surrounding the launch of such an offering have been cropping up for quite some time, at the very least since Apple acquired online music-streaming service Lala a year and a half ago.

In January, music industry sourced told that they were in talks with Apple for a cloud-based, streaming music service that would allow users to listen to their tracks over the Web on computers and Apple's mobile devices.

Apple had signed a cloud music licensing agreement with EMI music and was closing in on deals with Universal Music Group and Sony Music Entertainment. The company had already reached a cloud deal with Warner Music.

In today's annoucement, Apple did not specifically say that its iCloud service will resolve around music, referring to it tersely as a 'cloud services offering," more than one function.