Tech wrap: Earnings hit as Apple reigns
Quarterly earnings suffered at major technology and telecoms companies in part because of demand for gadgets made by Apple, one day after core suppliers to Apple savored strong earnings results posted by the iPhone and iPad maker on Tuesday.
AT&T posted a $6.7 billion quarterly loss as it was weighed down by a hefty break-up fee for its failed T-Mobile USA merger and other big charges on top of costly subsidies for smartphones such as Apple’s iPhone. While the wireless provider beat analysts’ expectations for subscriber additions, the growth came at a massive cost as its wireless service margins plummeted. On top of the $4 billion break-up package charge, AT&T also took a big impairment charge for its telephone directory business, which it said it was considering selling.
Nokia reported a 73 percent fall in fourth-quarter earnings as sales of its new Windows Phones failed to dent the dominance of Apple’s iPhone or compensate for diving sales of its own old smartphones. Apple reported earlier this week sales of 37 million iPhones for the December quarter. Nokia has sold over 1 million Windows “Lumia” smartphones since its launch in mid-November. Nokia said it expected its phone business’ underlying earnings to be around breakeven in the first quarter, well below analysts’ forecasts, with sales falling more than usual in the seasonally weaker quarter.
Motorola Mobility posted a quarterly loss after it warned earlier this month that it was having a tough time competing in the smartphone market amid intense competition from rivals such as the Apple iPhone. The company, which is seeking approval to be bought by Google, reported a net loss of $80 million or 27 cents per share compared with a profit of $80 million or 27 cents per share in the same quarter the year before. Revenue rose slightly to $3.436 billion from $3.425 billion in the year ago quarter.
Nintendo posted a sharp drop in quarterly profit and forecast a bigger-than-expected full-year loss, as it battles a strong yen and its games devices lose ground to gadgets such as Apple’s iPhone. Nintendo now expects an annual operating loss of 45 billion yen ($575 million), dwarfing expectations of a 4.2 billion yen loss, based on the average of 21 analyst forecasts.
“To say that (the days of consoles) are over is likely an overstatement, but social network and Internet delivered games are growing and structurally changing the future of the industry, which is a strong wind against Nintendo,” said Shigeo Sugawara, at Sompo Japan Nipponkoa Asset Management.
Lawmakers on the House Energy and Commerce Committee asked Google to provide answers about recent changes to the search engine’s privacy policy. On Tuesday, Google announced that it was unifying its privacy policy across 60 of its Web services, which allows the company to share data between any of those services. In a letter to Google Chief Executive Larry Page, the lawmakers said the company’s announcement “raises questions about whether consumers can opt-out of the new data sharing system either globally or on a product-by-product basis.”
AT&T CEO spoils for fresh fight with FCC
In case you had any illusions about the state of relations between Randall Stephenson and Federal Communications Chairman Julius Genachowski, the AT&T CEO should have put them to rest by now.
Still smarting from his December withdrawal from a $39 billion plan to buy smaller rival T-Mobile USA, Stephenson seems to be gearing up for another big fight with Genachowski, who opposed the deal. The executive wants Genachowski to be banned from setting bidding rules in the next wireless spectrum auction and spent the company’s quarterly earnings call complaining that the FCC’s spectrum ownership policy is inconsistent.
“My interpretation is these rules are so fluid you could drink out of them with a straw right now,” Stephenson told investors.
The FCC “has made it abundantly clear that they will not allow significant M&A” to help operators’ spectrum position he complained, adding that “unfortunately even the smallest and most routine spectrum deals are receiving intense scrutiny from this FCC.”
Specifically, Stephenson accused the FCC of following a new set of spectrum ownership rules to oppose the T-Mobile USA deal before then reverting back to older rules to approve AT&T’s much smaller purchase of spectrum from Qualcomm.
“We’re literally sitting here with a situation where we don’t know what spectrum caps apply,” he said when asked about which potential spectrum deals AT&T might be interested in pursuing.
The FCC and Department of Justice opposition to the T-Mobile USA deal stemmed from concerns that it would harm competition. The deal would have would have vaulted AT&T to a No. 1 position in customer numbers as well as giving it access to more spectrum. Their worry was that the elimination of T-Mobile USA the No. 4 U.S. mobile provider as a competitor would leave the bulk of market power in the hands of AT&T and its biggest rival Verizon Wireless.
How to feel good about scheduling doctor visits on the fly
Scheduling a doctor’s appointment online beats dealing with hold times and back-and-forth on the phone, but it also delivers an important social benefit, argues ZocDoc co-founder and CEO Cyrus Massoumi.
Here’s how: in coming years, the U.S. will likely have a significant shortfall of doctors– perhaps 125,000 fewer than needed by 2025, estimates the Association of American Medical Colleges, one of several agencies predicting a shortage. Already, wait times to see doctors can range into the months for some specialties or areas of the country.
So if cancelled appointments can be reallocated to another patient rather than going unused, it helps all patients see doctors– and with luck get cured– faster, boosting overall levels of wellness. “It’s adding supply to the healthcare pipeline,” Massoumi said. (If he sounds more MBA than MD, that’s because he is– he holds degrees from Columbia Business School and Wharton, and honed that consultant-speak with a stint at McKinsey.)
His online medical-appointment company allows patients to book visits to doctors’ offices at the last minute– often into slots cancelled by others. Almost half of ZocDoc appointments are scheduled within 24 hours, with some patients landing appointments just hours ahead of time.
Finding a way to use what would otherwise become wasted time helped land ZocDoc $95 million in venture backing from firms including DST Global, Goldman Sachs and Khosla Ventures. The firm is using that cash to expand into more cities–Seattle launched Monday–bringing its total to 14. In the next 18 months, ZocDoc hopes to cover the whole country, Massoumi said.
Participating doctors pay $250 a month for the service.
Setting appointments does save a lot of time and money. ZocDoc is on the brink of breaking through the administrative side of medicine.
What I’m concerned about is what if you can’t set an appointment? Or what if you really need to see a doctor but you’re an On-The-Go type of corporate person who doesn’t have time to step into a doctor office?
Do we think that the world of tele-medicine and the realm of ZocDoc can coexist? Where patients can be connected to a doctor immediately and it would be free for a doctor to sign up. The patient pays a small fee (probably the same or less than a co-pay). What happens to appointment setting then?
Tech wrap: Netflix gets subscribers back
Netflix’s fourth-quarter revenue outpaced Wall Street’s expectations as the video rental website reversed subscriber losses to sign up more than 600,000 new U.S. customers in the period, pushing its shares up. Netflix posted a 47 percent leap in fourth-quarter revenue to $876 million, outpacing an average forecast for $857.9 million, according to Thomson Reuters I/B/E/S.
Symantec took the rare step of advising customers to stop using one of its products, saying its pcAnywhere software for accessing remote PCs is at increased risk of getting hacked after blueprints of that software were stolen. The announcement is the company’s most direct acknowledgement to date that a 2006 theft of its source code put customers at risk of attack. Also on Wednesday, Symantec reported a higher quarterly profit and issued an outlook in line with Wall Street estimates.
Europe proposed strict new data privacy rules, putting greater responsibility on companies such as Facebook to protect users’ information, and threatening those who breach the code with hefty fines. But the move, which legislators say is designed to better defend children against predators, has rattled major technology and Internet-based companies, with executives concerned the legislation will be almost impossible to implement in full or will do serious damage to their business models.
Apple’s customer service plan for the iPhone makes them more appealing to thieves because the phone’s warranty applies to the phone and not the owner, Mitch Lipka writes. This approach thrills many Apple owners, who have boasted on message boards of how generous some stores have been in replacing broken iPhones. But that same approach has apparently rewarded a lot of thieves, Lipka adds.
You are aware that NFLX actually lost over 300K paid streamers and 2M paid DVD users.
The total gains were around 13K, nowhere near the 600K your article is touting.
Free subscribers are not actual subscribers– this is a VERY misleading report by Netflix. Borderline fraudulent.
Tech wrap: Apple earnings lay waste to expectations
Apple’s fiscal first-quarter results blew past Wall Street expectations, fueled by robust holiday sales of its iPhones and iPads. Apple sold 37.04 million iPhones and 15.43 million iPad tablets, outpacing already heightened expectations for a strong holiday season. Sales of iPhones and iPads more than doubled from a year ago. Revenue leapt 73 percent to $46.33 billion, handily beating the average Wall Street analyst estimate of $38.91 billion, according to Thomson Reuters I/B/E/S. Apple reported a net profit of $13.06 billion, or $13.87 a share. Analysts had expected Apple to earn $10.16 per share.
“This is all about innovation, you have to out-innovate and delight the customer. Apple is the only company that knows how to do that. The guidance is phenomenal,” said Trip Chowdry at Global Equities Research.
Yahoo’s net revenue and profit fell slightly in the fourth quarter, the struggling Internet company’s last quarter before new Chief Executive Scott Thompson took the reins. Yahoo said it earned $296 million in net income in the three months ended Dec. 31, or 24 cents a share, compared with $312 million, or 24 cents a share, in the year-ago period. Yahoo, which fired former CEO Carol Bartz in September and appointed Thompson in January, projected that its net revenue in the first quarter would range between $1.025 billion and $1.105 billion.
A Dutch appeals court dismissed Apple’s appeal to have Samsung tablets banned in the Netherlands, confirming a Dutch lower court’s ruling. Apple and Samsung have been suing one another as the two technology giants jostle for the top spot in the booming smartphone and tablet markets.
Verizon may miss analyst expectations for 2012 earnings after posting disappointing fourth quarter results as it was hurt by hefty subsidies for the Apple’s iPhone. The company reported a fourth-quarter net loss of $2.02 billion, or 71 cents per share, compared with a profit of $2.64 billion, or 93 cents a share, a year earlier.
About one in five workers around the globe, particularly employees in the Middle East, Latin America and Asia, telecommute frequently and nearly 10 percent work from home every day, according to a new Ipsos/Reuters poll. Telecommuting is particularly popular in India where more than half of workers were most likely to be toiling from home, followed by 34 percent in Indonesia, 30 percent in Mexico and slightly less in Argentina, South Africa and Turkey. But the job option is the least popular in Hungary, Germany, Sweden, France, Italy and Canada, where less than 10 percent of people work from home. Despite the obvious benefits of telecommuting, 62 percent of people said they found it socially isolating and half thought that the daily lack of face-to-face contact could harm their chances of a promotion.
Tech wrap: New RIM CEO says no drastic change needed
RIM’s new CEO Thorsten Heins, who joined RIM in 2007 and previously served as a chief operating officer, said during a conference call that he would hone the current strategy rather than abandon it. “I don’t think that there is some drastic change needed. We are evolving … but this is not a seismic change,” Heins said. RIM’s U.S.-traded shares tumbled as investors wondered whether Heins could reverse the BlackBerry maker’s decline, closing the day down 8.5 percent.
The founder of file-sharing website Megaupload was ordered to be held in custody by a New Zealand court, as he denied charges of Internet piracy and money laundering and said authorities were trying to portray the blackest picture of him. U.S. authorities want to extradite Kim Dotcom, a German national also known as Kim Schmitz, on charges he masterminded a scheme that made more than $175 million in a few short years by copying and distributing music, movies and other copyrighted content without authorization. Megaupload’s lawyer has said the company simply offered online storage.
The Supreme Court ruled that police cannot put a GPS device on a suspect’s car to track his movements without a warrant. The high court ruled that placement of a device on a vehicle and using it to monitor the vehicle’s movements was covered by U.S. constitutional protections against unreasonable searches and seizures of evidence. “A majority of the court acknowledged that advancing technology, like cellphone tracking, gives the government unprecedented ability to collect, store, and analyze an enormous amount of information about our private lives,” Steven Shapiro of the American Civil Liberties Union said.
YouTube is streaming 4 billion online videos every day, a 25 percent increase in the past eight months, according to the company. Roughly 60 hours of video is now uploaded to YouTube every minute, compared with the 48 hours of video uploaded per minute in May, Google said. The jump in video views comes as Google pushes YouTube beyond the personal computer, with versions of the site that work on smartphones and televisions, and as the company steps up efforts to offer more professional-grade content on the site.
The number of Americans owning a tablet computer or e-reader nearly doubled over the holiday period as Kindles, Nooks and iPads proved to be popular gifts, a new study found. In early January, 19 percent of Americans surveyed by Pew owned an e-reader, up from 10 percent in December, with identical results for tablets, according to a report released by the Pew Internet and American Life Project.
Analysts to new RIM CEO: Just launch better phones already
Research in Motion has appointed a new CEO in an effort to appease investors who clamored for the ouster of its co-CEO’s Mike Lazaridis and Jim Balsillie, the architects of the Blackberry. Analysts described the appointment as a step in the right direction but they were still anxious after Thorsten Heins’ first presentation to Wall Street as CEO.
The executive vowed to improve RIM’s marketing to help win over consumers particularly in the U.S. market where it has lost out to Apple and others . That’s all very well, according to Wall Street analysts but what about its’ much delayed launch of its next generation of BlackBerrys?
“That’s not going to make a difference. What they have is not a messaging problem but a product and market structure problem,” said Pacific Crest analyst James Faucette. “They have to have products better than the iPhone or Android. They don’t have products that are competitive with those let alone better.”
Another analyst Hudson Square analyst Daniel Ernst was also focused on products such as the BlackBerry 10 smartphones due out later this year.
“RIM is behind. Those issues go deeper than having Co-CEO’s,” Ernst said. ”Nothing they can do is as important as having Blackberry 10 out there and working.”
Some analysts were disappointed that Heins did not announce any intentions to look for big strategy changes. But others just want new stand-out phones to that turn consumers’ heads and they want them NOW. In comparison, a whole host of competitors – Apple, Samsung, Nokia, HTC to name a few – seem to be able to churn out popular phones far faster than RIM.
“There’s a lot to do and there’s little time for them to do it,” said Gartner analyst Michael Gartenberg. “They’re going to have to come up with the answer to the question the consumer is asking. Why should I buy your stuff instead of anybody else’s?”
Hear RIM’s new CEO. Then speak your mind.
For many BlackBerry users and smartphone industry pundits, this Youtube video was their first close-up look at new Research in Motion CEO Thorsten Heins.
RIM, which announced Heins’ elevation and the resignations of co-CEOs Jim Balsillie and Mike Lazaridis on Sunday night, no doubt posted the clip in hopes of introducing the world to their new frontman, and getting their message out there.
Judging by the torrent of biting comments that followed, being “on track” might not have been the best message to relay. Many investors and consumers have been calling for a new strategy to stem the BlackBerry’s market share slide.
“This is a bad joke on a Sunday night. Quote from the video “if we continue doing well what we are doing” Is he out of his mind?” offers RSPRATAS.
Others also took umbrage at Heins’ upbeat comments.
“I feel bad for this guy…I don’t think anyone at RIM told him the research has stopped…” quipped zachgosteady.
Several investment analysts admitted to knowing little about the former Siemens CTO and four-year RIM veteran, preferring to reserve their judgement until a Monday morning conference call. But Youtube’s denizens were not so circumspect.
Fourth ‘Underworld’ film leads domestic box office
Vampires and werewolves lured moviegoers to theaters this weekend as the fourth “Underworld” film topped domestic box office charts and brought in an estimated $38.8 million around the world.
“Underworld: Awakening” stars Kate Beckinsale as a vampire leading the charge in a battle against humans trying to drive her species and the werewolves to extinction.
The fourth movie opened stronger than two of the three earlier films in the franchise, which opened in 2003. ”Awakening” pulled in $25.4 million at North American (U.S. and Canadian) theaters from Friday through Sunday, plus $13.4 million from 36 international markets, distributor Sony said on Sunday.
Playing in 3,078 domestic locations, the film’s weekend sales finished “at the high end of where we hoped,” said Rory Bruer, president of worldwide distribution for Sony Pictures. Audiences were eager to see Beckinsale return to the lead role, he said. She had starred in the first two films but skipped the third.
“Awakening” is the first “Underworld” movie in 3D and cost about $70 million to produce. The movie fell flat with critics as just 24 percent gave a positive review on aggregation website Rotten Tomatoes. But audiences polled by survey firm CinemaScore awarded the movie an A-.
In second place, World War Two story “Red Tails” far exceeded studio forecasts with $19.1 million domestically. “Red Tails” stars Terrence Howard and Cuba Gooding Jr. in a drama about Tuskegee Airmen — a black pilot group in the U.S. Army Air Corps during World War Two. Producer George Lucas paid the film’s $58 million production cost plus marketing expenses, and distributor 20th Century Fox had forecast $8 million to $10 million in domestic ticket sales for weekend.
“Never in our wildest dreams did we think we could pull off a number like this,” said Chris Aronson, senior vice president for domestic distribution at 20th Century Fox. He said audiences clearly enjoyed the film, giving it an A grade in polling by CinemaScore. Critics’ reviews on Rotten Tomatoes came in at 34 percent positive. Last weekend’s winner, thriller “Contraband” starring Mark Wahlberg, finished its second weekend in theaters in third place, grabbing $12.2 million domestically.
Could Zynga gamble with friends?
Investors were salivating on Friday at the prospect of Zynga breaking into online gambling. The company said it is in “active conversations with potential partners” to try and figure out the market, which sent its shares up 7 percent.
Last month, the U.S. Justice Department declared that only online betting on sports is unlawful, setting the stage for some U.S. states to legalize online gambling.
Melissa Riahei, general counsel at the online gaming company, U.S. Digital gaming, said Zynga would not be able to enter the $35 billion online casino market on its own. If Internet gaming is legalized, Zynga would have to partner with an operator that could get a license for Internet gambling, like a casino, and have to figure out which states it can work in.
Still, “the opportunity is huge. Zynga has a very good chance of being a big player in this market because of the player base it can bring”, she said.
Zynga has 30 million monthly players of its poker game and it could also could jump into gambling on the go–on a smartphone or tablet.
Paul Bettner, who leads the Zynga studio behind top mobile games like “Words with Friends” said he is monitoring the new industry closely but nothing has been decided yet.
“I can’t speak to whether there will be ‘A Gamble with Friends’ game in the future. I think some of those mechanics are interesting and could be very fun in mobile games. I am very intrigued by that,” Bettner said.
