Apple CEO Tim Cook is up soon in front of a US Senate committee. First though, Professor Stephen E. Shay of Harvard, who knows both his tax and his bow-ties:
Click through the pic for the C-Span stream.
Alternatively, join our colleagues over at the FT’s Tech blog, where the action is being discussed in detail. Read more
Compare (Apple’s testimony to the Senate permanent subcommittee on investigations, on Monday):
Apple pays an extraordinary amount in US taxes. Apple is likely the largest corporate income tax payer in the US, having paid nearly $6 billion in taxes to the US Treasury in FY2012. These payments account for $1 in every $40 in corporate income tax the US Treasury collected last year. The Company’s FY2012 total US federal cash effective tax rate was approximately 30.5%. The Company expects to pay over $7 billion in taxes to the US Treasury in its current fiscal year. In accordance with US law, Apple pays US corporate income taxes on the profits earned from its sales in the US and on the investment income of its Controlled Foreign Corporations (“CFCs”), including the investment earnings of its Irish subsidiary, Apple Operations International (“AOI”)… Read more
Now that we have Chinese socialites engaging in public cat fights over who is richer, posting snapshots of their bank accounts “Rich Kids of Instagram style“, one has to wonder if it may be worth revisiting John Hempton’s prediction last year that the Chinese authorities will finally crack down on this sort of over-the-top gratuitous wealth display, and when that happens the luxury brands — among them Swiss watches — will begin to suffer.
(*We should note the “I’m really richer than you” meme possibly applies to Prince Alwaleed bin Talal as well). Read more
The WSJ talks of “iPhone-like hype” around the next Samsung smartphone model. And Bloomberg notes that in China, iPhones are way behind. It must be that time again!
Yep, Apple reports its first-quarter earnings at 5pm EDT, so feast your eyes on this five-year chart in the meantime : Read more
Citi declared a few weeks ago it had three equity analysts focused solely on Apple, which generated a bit of intrigue and also some ridicule (some traders thought it was “just a marketing ploy” by Citi, according to CNBC). Those analysts came out with a ‘buy’ recommendation, though with a target price of $675, below consensus.
But now in the depths of December, Citi’s Glen Yeung, Walter Pritchard and Jim Suva have cut the rating to ‘neutral’ and the target price to $575. Investors in Hon Hai Precision (aka Apple’s biggest supplier, Foxconn) did not like it one bit:
He might also be able to explain why Apple shares continued to struggle at the US open on Thursday. (Market cap below $500bn at pixel time, huge opening volume) Read more
But Mr. Smith said the company has used the same technology to resurrect several late executives.
“We’ve brought past CEOs and things that like that back to life,” Mr. Smith said, without getting more specific, citing non-disclosure agreements. Read more
The WSJ had it first, we think:
The U.S. filed an antitrust lawsuit Wednesday against Apple Inc and five of the nation’s largest publishers, alleging they conspired to limit competition for the pricing of e-books. Read more
Dean Curnutt at Macro Risk Advisors believes the following is anything but a healthy sign for the market:
Alternative title: BATS in the belfry…
Or: When one stale share price quote gets out and triggers a circuit-breaker in the world’s biggest stock. Read more
We know, you’re tired of hearing about Apple’s $97bn wad of cash and whether the company will ever reward its thankless shareholders by instituting a dividend or buying back shares.
But Moody’s has just finished its update of US non-financial corporate cash piles through the end of last year, and truthfully we were surprised by the extent to which Apple is behind the bigger trend from the last couple of years (emphasis ours): Read more
Apple has made a bid to consolidate its huge lead in the fast-growing tablet market by launching a new iPad with improved screen technology and more powerful networking capabilities, the FT reports. Tim Cook, Apple chief executive, unveiled the device at a San Francisco event taken straight from the playbook of Steve Jobs, the company’s late founder. The new iPad is Apple’s first device launched since Jobs died last October. Its $499 starting price is the same as its predecessor and Apple will start shipments on March 16. The new iPad uses the same high-definition display as the most recent iPhones and is the first tablet with the capacity to connect to so-called 4G wireless networks, based on next-generation LTE technology. LTE is a wireless broadband technology which is specifically designed to support mobile Internet access via cell phones and handheld devices. Seperately, the WSJ also reports that the Justice Department has warned Apple and five of the biggest US publishers that it plans to sue them for allegedly colluding to raise the price of electronic books, according to people familiar with the matter. Read more
*COOK IN ‘ACTIVE DISCUSSIONS’ ABOUT WHAT TO DO WITH APPLE CASH
Caption cash competition! Read more
The FT reports that Apple levelled a new legal threat on Monday against the struggling electronics company that has claimed it owns the iPad name in China, as a court in southern China ordered a large retailer to stop sales of the gadget. The festering dispute, which has cast a cloud over Apple’s sales in one of its biggest potential markets, is expected to come to a head in the next two weeks, with a court in Guangdong due to hear the US company’s appeal against an earlier ruling that found against it. Reuters reports that Apple’s troubles in the country will give tablet rivals such as Lenovo and Samsung a chance to gain market share in the country. Read more
A Chinese court has ordered a retail chain to stop selling Apple’s iPad in the city of Guangdong, ruling that the rights of an electronics company in a trademark dispute have been infringed, the FT reports. While limited to one city and subject to appeal, Proview has struck a victory against Apple in its legal battle, which is under way in other Chinese cities where retailers sell the iPad. Apple enjoys a 76 per cent share of China’s tablet market, but the Proview affair could embolden its rivals Lenovo and Samsung, Reuters says. Read more
Verizon and AT&T will sell Apple’s latest tablet on their next-generation 4G wireless networks, after Apple unveils the third version of its iPad tablet in the first week of March, reports the WSJ. Suppliers in Asia are also helping Apple test a tablet with a smaller screen than the current iPad. The move would challenge Samsung’s and Amazon’s smaller tablets although Apple could decide not to proceed with the product, the WSJ adds. The rise in Apple stock beyond $500 on Monday meanwhile shows how important the company’s earnings have become, the FT reports. Were Apple’s results stripped out, Barclays Capital estimates earnings growth at S&P 500 companies that have reported fourth-quarter results would be 2.9 per cent rather than 7 per cent. Read more
In a further twist in the global legal battle waged by technology giants around the use of patents, Samsung Electronics is to be investigated by the European Union to assess whether it breached antitrust rules by refusing to provide rivals access to its technology at reasonable prices. Brussels will be looking into whether the South Korean technology giant, the world’s biggest smartphone manufacturer but also a key supplier to rivals such as Apple, had distorted the market by withholding “standard essential patent rights”, reports the FT. The European Commission, acting as the EU’s antitrust enforcer, said its investigation stems from Samsung’s lawsuits against competing groups, notably Apple, launched in several EU member states in 2011. Read more
Apple has finally named a successor to Ron Johnson as head of its retail store operation, choosing John Browett, chief executive of the British electronics retailer Dixons, the FT reports. Mr Browett will join in April as senior vice-president of retail, reporting to Tim Cook, Apple’s chief executive. Mr Johnson was named last June as the new chief executive of JC Penney, the US department store chain. His successor has been chief executive of Dixons since December 2007 and will take responsibility for Apple’s retail strategy and the expansion of its retail stores worldwide. “Our retail stores are all about customer service, and John shares that commitment like no one else we’ve met,” Mr Cook said in a statement. According to the Wall Street Journal, the company considered a range of executives from the US and Europe, including Steve Cano, an Apple retail executive who was one of Mr. Johnson’s lieutenants. Read more
It’s been a gruesome week in the mobile phone market. The almost embarrassing dominance of Apple (ideas for spending $90bn of spare cash, anyone?) provided a cruel contrast to the desperate plight of the opposition. The maker of Blackberrys ditched its founders. Nokia, the one-time rubber-boot manufacturer, tried to stay positive, boasting that it had sold a million Windows-based Lumia phones in the last three months. During that time Apple shipped 37m iPhones. It has sold 315m of them worldwide.
The eclipse of Nokia is one of the wonders of the age, providing fodder for business school studies for decades to come. At the turn of the century, its position in the burgeoning mobile phone market seemed unassailable. Its combination of market dominance and mouth-watering margins meant that it could outspend and out-develop any competitor who came up with a better product. It sold its billionth phone in 2005, and in late 2007, deemed the world’s fifth most valuable brand, the business was valued at €100bn. Read more
This is one of those quintessential CNBC factoids but we may as well note it…
Apple’s market cap, just after the open on Wednesday (both charts via Google Finance): Read more
Forecast-busting results from technology behemoth Apple triggered a bounce in US stock futures and sparked a return to bullish form for global risk assets after a brief hiatus on worries about tortured Greek debt negotiations, the FT reports. The FTSE All-World equity index was up 0.3 per cent, copper was higher by 0.7 per cent to $3.83 a pound, a four-month high, while gold was edging forward 0.2 per cent to $1,668 an ounce. The FTSE Eurofirst 300 was up 0.1 per cent in early action after Asia rose 0.9 per cent, despite Shanghai and Hong Kong remaining closed for the lunar new year holiday. S&P 500 futures pointed to Wall Street opening Wednesday’s cash session with a gain of 0.3 per cent after Apple, now the world’s biggest company by market capitalisation, reported record quarterly revenues of $46.3bn. Read more
Apple’s quarterly results blew past Wall Street’s expectations after US consumers snapped up near-unprecedented numbers of iPhones and iPads, reports Reuters. Revenue leapt 73 per cent to $46.33bn, beating Reuters’ calculation of average Wall Street analyst estimate of $38.91bn. Apple’s sales in the US were particularly strong, with revenue rising 90 per cent in the Americas region. Sales in Europe were up 55 per cent despite the region’s poor consumer confidence due to the debt crisis. It sold 37.04m iPhones and 15.43m iPad tablets, doubling from a year earlier and easily outpacing already heightened expectations for a strong holiday season. That helped swell its cash hoard to almost $100bn – more than enough to plug December’s US budget deficit. Sales of models including the 4S in the December quarter were up 128 per cent on a year earlier, while Apple also sold 15.43m iPads, representing sales growth of 111 per cent, reports the FT. The company’s shares rose as much as 10 per cent into record territory on the results. Apple tends to be conservative in its guidance but it missed analyst expectations for the first time in years in October, blaming the later release of the new iPhone. Read more
Would-be Apple customers in Beijing, who had endured an overnight wait in below-freezing temperatures, reacted with fury after the company’s main store in Beijing’s Sanlitun district failed to open, Bloomberg reports. Apple had advertised that the store would open at 7am. At 7.15am, people began chanting “Open the door!” and “Liars!” after a man said over a bullhorn that the phone wouldn’t go on sale on Friday, without giving an explanation. Beijing police temporarily cordoned off the store after it was pelted with eggs from the crowd. Carolyn Wu, a Beijing-based Apple spokeswoman, didn’t immediately respond to telephone calls and e-mails. Beijing police didn’t immediately respond to a fax seeking comment. Read more
A British academic, Ian Tonks of Bath university, suffered a vicious TED attack this week regarding this post — a summary of Tonks’ research into links between bankers’ bonuses and the financial crisis.
Tonks finds that there is (to him) a surprisingly weak link between executive pay and performance across all industries, not just banks. In other words, bankers high pay doesn’t actually appear to be linked to performance. However, he thinks politicians should go ahead and reform executive remuneration in any case because bonuses should be fully transparent and the various corporate governance initiatives in the UK have so far failed to stem the dramatic increase in executive rewards. Read more
HTC has claimed victory over Apple in a closely watched intellectual property case for the smartphone industry, despite a US court ruling that imposes a ban on the import of some of HTC’s handsets into the US. The Taiwanese company said the final ruling by the US International Trade Commission “declared an actual victory for HTC” because it found that HTC had only infringed on one patent out of 10 complaints made by Apple, and rejected two of the four claims on the patent that had been upheld in an earlier decision. The court also gave HTC until April 19 next year to comply with the ruling, reports the FT. The Apple patent that was infringed about related to data-detection technology and HTC will completely remove it from their handsets, Reuters reports.
Samsung Electronics has won a months-long legal battle with Apple in Australia, allowing it to sell its Galaxy tablet computers there in the crucial pre-Christmas sales period, reports the WSJ. The country’s Federal Court in October placed a temporary sales ban on the Galaxy 10.1 ahead of a hearing that’s expected to take place next year. Apple applied to the High Court after the ban was overturned on appeal, but Apple’s application was dismissed with costs on Friday. The two companies are suing and counter-suing each other in numerous countries including the US, Germany, Japan, Italy, and France.
Older entries
1About China's capacity to absorb more capital
2Japan's mini crash: Blame China, not just Ben
3Spain's awful unemployment
4S&P 2,100, by Goldman Sachs
5The Nikkei: a market abducted by retail
Show more6Everlasting credit, the long view
7Measure it however you like: inflation has been low and falling
8Buyback to enrich
9Apple Operations International, facts (?) du jour
10Bernanke's testimony to the Joint Economic Committee
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