Here’s Everything That’s Freaking Out Apple Investors (AAPL)


Barclays put out a note on the eight reasons Apple’s stock has been cratering. In the note is this handy table laying out each concern, and what Barclays thinks is the reason people shouldn’t over react.

AAPL chart

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Wednesday, November 14th, 2012 news No Comments

Japanese Gadget Makers Need To Pull Off A Miracle


90s Sony Ad

Ailing gadget-makers may find it hard to copy Toyota’s turnaround.

JUST over three years ago, Akio Toyoda, then the new boss of Toyota, said that the carmaker founded by his grandfather was on the verge of “irrelevance or death”. Buffeted by bad news ranging from the global economic crisis to product recalls and huge losses, he responded not with a massive shake-up but a simple strategy: to make cars that were fun to drive. From that, he argued, would follow sales and profits.

chartIt has not been an easy road since, but the turnaround seems to be gaining traction. On November 5th Toyota raised its net profit forecast for the current fiscal year to a five-year high of {Yen}780 billion ($9.8 billion). That is well short of record profits, but it contrasted with Honda and Nissan, which slashed their profit forecasts by a fifth. All three have been hurt by slumping sales in China, which is in a territorial row with Japan. But Toyota’s new hybrids as well as its Corolla and Camry models have been flying out of the showrooms.

New bosses at Sharp, Panasonic and Sony must be looking at Toyota enviously, wondering how they too can rebuild Japan’s image as a producer of snazzy high-tech goods. Jointly, their companies are expected to have lost more in the past five years than they have made profits in the past two decades.

Sharp is in the ugliest mess. The maker of TVs and solar panels is so sensitive about its balance-sheet that on November 5th i! t revise d a four-day-old announcement that had said there was “material doubt” about its future. The new version, with no apologies for murdering the English language, said: “There exist conditions which might raise uncertainties about Sharp being an assumed going concern. However, we judge that no uncertainties about Sharp’s ability to continue as a going concern will exist.”

The same day, Standard & Poor’s, a ratings agency, cut Sharp’s creditworthiness further into junk territory. It said two years of huge losses were straining its finances, added to which Sharp was highly dependent on short-term debt. Two banks, Mizuho Corporate and Bank of Tokyo-Mitsubishi UFJ, recently provided it with a {Yen}360 billion syndicated loan, but this expires next June, just before a big convertible-bond issue comes due. S&P said it might downgrade Sharp again in 90 days, if the company’s finances or its relationship with its banks worsens.

S&P believes Panasonic and Sony have stronger balance-sheets. But they are also suffering from chronic overinvestment in loss-making TV and other screen-related businesses that make them look too much like Sharp for comfort. Panasonic shocked its bondholders recently when it said it faced losses of over {Yen}700 billion for the second year in a row. It also skipped its annual dividend for the first time since 1950. Sony, meanwhile, predicted a full-year profit but said that much of its core electronics business remained in decline.

Is there anything they can learn from Toyota? Analysts say their industry is much more commoditised than carmaking. Their empires are so thinly spread across an array of businesses that it is harder to cut costs through economies of scale. They are also too wedded to Japan to move to cheaper manufacturing locations.

Yet Mr Toyoda has one lesson to teach: they could put more energy into making products that consumers enjoy. That’s what their competitors in South Korea and at Apple do. Sadly, they are too busy stanching the wounds of the past to give it much thought.

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Friday, November 9th, 2012 news No Comments


File-Sharers Buy 30 Percent More Music Than Non-SharersA massive public policy study has revealed that on average file-sharers buy 30 percent more music than their non-sharing counterparts. That suggests that the record labels’ self-declared enemies are in fact their best customers.

The study, known as the Copy Culture Survey, was carried out by the non-partisan American Assembly, and the results were teased yesterday. It’s based on thousands of in-depth telephone interviews across the US, and it’s probably one of the most thorough reviews of media sharing habits to be undertaken.

The results, which seem to fly in the face of assumed record label wisdom, show that file-sharers buy 30 percent more music than their non-sharing counterparts. Interestingly, it also points out that offline copying is far more prevalent than online music piracy.

However, it’s also worth pointing out that self-confessed P2P file sharers reported having larger music collections. So, it might not be all too surprising that music lovers, with bigger music collections, also buy more music: a taste for media consumption encourages both file sharing and purchasing.

That, along with the news that offline piracy is a bigger concern, is something the record labels need to wrestle with. [American Assembly via Torrent Freak]

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Tuesday, October 16th, 2012 news No Comments

Yahoo’s Search Business Is Imploding, Taking Yahoo’s Profits With It


Marissa Mayer

Pound the alarm!

In September, Yahoo’s search business shrank 25 percent from last year’s number.

That’s according to ComScore numbers analyzed by Ben Schachter of Macquarie Securities.

Yahoo’s share of search queries dropped from 15.5% in September 2011 to 12.2 percent last month. In August, its share stood at 12.2 percent.

Over the past year, Google has gone from 65.3 percent to 66.7 percent. Microsoft went from 14.7 percent to 15.9 percent. 

“[T]he downward trend remains very well-established and supports our view that the long-term trajectory of YHOO’s search share is a significant concern,” Schachter wrote. “Most importantly, and unfortunately for YHOO, we see no obvious structural bottom for YHOO’s search share.  This is a significant problem in our view given the fact that search is a very high-margin business for YHOO and likely represents the significant majority of the company’s EBITDA.” 

The ComScore numbers don’t include mobile, which is an area where Yahoo is likely even weaker than on desktop searches.

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Thursday, October 11th, 2012 news No Comments

Mark Zuckerberg Just Said Several Important Things… (FB)


Mark Zuckerberg

In Mark Zuckerberg’s interview at Disrupt yesterday, he said several things that Facebook investors should find encouraging.

Most importantly, he suggested that:

  • Facebook’s mobile opportunity is much bigger than people think
  • Facebook is going to go into the search business
  • Everyone is now “underestimating” Facebook

One of the big concerns about Facebook is that, as its users migrate to mobile, the company’s ability to monetize the users will drop precipitously, thus clobbering Facebook’s revenue. Zuckerberg said explicitly, for the first time, that he thinks Facebook will ultimately make money money per user on mobile than it makes on the desktop. If this proves true–and, importantly, if it happens because mobile revenue per user soars instead of desktop revenue collapsing–Facebook’s revenue growth should soon reaccelerate and then stay strong for years.

Zuckerberg also said that search is a huge opportunity for the company and that Facebook is “uniquely positioned” to go after it. A few weeks ago, we suggested that Facebook could quickly generate an incremental $3 billion of revenue if it jumped into the search business. If Facebook really does aggressively go after the search opportunity, therefore, this could create a major new growth engine.

Lastly, Zuckerberg made several comments about how everyone is now “underestimating” Facebook. Reading between the lines, this is encouraging both for the near-term and the long-term. With respect to the near-term, Zuckerberg knows exactly how Facebook is doing this quarter, and we suspect he would have been very hesitant to use the word “underestimating” i! f Facebo ok were likely to blow the quarter. Longer term, the word choice suggests that Facebook thinks investors are, in fact, underestimating Facebook’s revenue potential.

Now, of course, none of this changes the fact that Facebook’s stock is still expensive (~30X next year’s estimated earnings), which means the market is counting on revenue reaccelerating this quarter and remaining strong for the next several quarters. And none of it changes the concern that, in October and November, employee lock-up releases will likely lead to additional insider selling–possibly a lot of it.

But it does suggest that a new bull story for Facebook could start to emerge.

SEE ALSO: Dear Facebook Employees: Here’s The Truth About Your Stock Price

Here’s what a few smart Wall Street analysts had to say about Zuckerberg’s remarks:


  • We thought his comments regarding search over the longer-term were the most noteworthy of the presentation and will drive more discussion about a potential search revenue stream for FB while reigniting some concern about increased competition for GOOG

    1) FB’s long-term focus: Nothing new here, but FB is clearly focused on the longterm and creating value over nexthree-fiveyears.

    2) Mobile – Clearly wanted to publically highlight his belief that mobile is fundamentally good for FB. He discussed a number of interesting notions:
        – mobile is absolutely the key and focus for the company

        – on mobile they see more engagement and time spent per user versus desktop, mobile users more likely to be DAU’s and twice as likely to use it six out of seven days a week.
        – over time, he believes that they can make more money per mobile time spent than desktop
        – new iOS app already seeing much improved engagement
        – over time, thinks that mobile monetization is more tv-like than desktop.
        – mobile ads performing better than desktop already and new product on the way, highlighted a few times that mobile is a “huge opportunity”
        – have made mistakes on mobile. Most notably, too early a focus on HTML 5 as opposed to native apps. Correcting that now, though he did note that currently more time spent on mobile web FB than on apps.
        – talked about recent product for mobile app installs. (developers/publishers pay for an install) – not a full public launch, but testing. – intersection of platform and distribution…
    4) Search – Perhaps the most notable comments of the presentation were in regards to search and their long-term view that FB has unique assets to help answer questions.
        – already doing 1 billion search queries per day (and not even trying).
        – most searches are to find other people, but many! also fo r pages/brands and apps.
        – stated that search represents a “big opportunity” and that search is one obvious thing they could do in the future.
        – there is already a team working on search, but wouldn’t say how big or clarify if it is doing anything beyond the current search functionality. However, we thought his search comments were the most interesting of the presentation and that he clearly thinks that FB and its social graph are uniquely positioned to improve search in the future.    
    5) FB phone/hardwareStrongly stated that a FB phone is the wrong strategy and wouldnt move the needle. Wants to be on all phones…
    7) FB’s mission – Reiterated the long term mission is to connect everyone on the planet and make the world more open and connected. Stated that making money goes hand in hand with this mission and that they need to do both in order to do either.
    8) Company morale – When asked about company morale, stated that stock price doesn’t help, but focused on the fact that FB has always been controversial and that there is cyclicality in terms of how people think about FB. Right now seems to be on the downside, but he likes that, as he thinks it is when people underestimate the company.
        – When they are underestimated, it gives them latitude to take big bets.


  • Positive comments on Mobile. Zuckerberg indicated that ! Facebook and its mobile potential are being underestimated. Mobile users are spending more time per person on Facebook than desktop users and are 2x as likely to use Facebook in 6 of the past 7 days (L6/7). We also believe mobile DAUs are likely higher than web DAUs. In terms of mobile monetization, Zuckerberg indicated that Facebook can make more money from a mobile user per time spent than a desktop user, and that mobile ads in their early days are already performing better than ads on the right rail of the desktop. As published in our recent Facebook report from 9/4/12, we estimate Facebook’s mobile ad revenue could be more than $200M this year and above $900M in 2013 driven by higher CTRs and CPMs. Our analysis also suggests mobile ad revenue/user/month could ultimately be higher than on the web as higher engagement and pricing offset the lower number of impressions per visit. See page 2 for our proprietary model, which segments Facebook’s ad business into Mobile SS, Web SS, and Web Marketplace.

  • Search on Facebook’s radar. Facebook currently generates ~1B search queries a day—the majority attributed to people search, but also a meaningful portion related to brand pages and apps. In late August Facebook launched Sponsored Results—ads displayed in the search dropdown bar—to capitalize on this opportunity. However, Zuckerberg indicated that Facebook could do more with search in terms of providing users with direct answers to their questions, likely based on information derived from the social graph. This is likely more headline risk for Google than a real, near-term fundamental concern, but the two companies could ultimately overlap more in search down the line.


1) He’s working on Open Graph – this is very impt as it is the! revenue optty I’ve cited (subscription services, app center, gaming).  This is a big part of the potential revenues / upside
2) Search is impt and they are working on it.  Once again, this can be very lucrative if done correctly. New revs.
3) the reason they are behind on mobile was a wrong bet on technology.  They bet heavily on Html5 and it was a mistake, their mobile apps can be better when native (ie integrated with apple / android)
4) he’s very focused on mobile and realizes how impt it is.  Interestingly, he thinks it monetizes better than desktop.  
5) no phone – and I agree with his view they don’t need one
6) he alluded to a model where developers pay for app install as part of app center – once again, impt new revs
7) Instagram – he explained how  buying it sped up development of its platform and improved user experience
8) lastly, he seemed more poised than usually and that isn’t easy given the stock performance
9) also, I like the continued focus on the long term (much like Jeff Bezos of amzn)
10) I was disappointed that there was no discussion about the insider selling….

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Wednesday, September 12th, 2012 news No Comments

Burger King uses ‘musical shower’ as latest trick to entice Japanese clientele


A new Burger King eatery opening up in Japan isn’t usually something we concern ourselves too much with, but this one comes with an interesting new twist. Those umbrella-aping translucent cones hanging over the tables are known as “musical showers,” and their function is to deliver music in an isolated fashion to you and your significant — but not too significant, it’s still BK, after all — other. All you’ll need to do is plug your portable media player into the provided receptacle and the tunes you know and love will literally shower down upon you. To be honest, if the audio channeling is sufficiently precise not to disturb nearby punters, we’re loving this idea. Now just give it a name that won’t make teenagers giggle and bring it westwards.

Burger King uses ‘musical shower’ as latest trick to entice Japanese clientele originally appeared on Engadget on Thu, 08 Jul 2010 07:39:00 EDT. Please see our terms for use of feeds.

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Friday, July 9th, 2010 news No Comments

US consumers purchase $55 million worth of 3D TVs and Blu-ray players, despite the glasses


It’s early days yet, but NPD claims that revenue from US sales of 3D TVs and standalone 3D-capable Blu-ray players has exceeded $55 million in the first three months of availability. Mind you, this steady growth comes despite the absence of some major players. While that number might sound big, it’s tiny in comparison to the total number of TVs sold each month in the US and, according to our friend Ross Rubin, executive director of industry analysis at NPD, sales are expected to remain small throughout 2010. Regarding those much maligned 3D glasses, only 10% of those surveyed by NPD cited “looking silly” as a main concern. Instead, the biggest concern was not having enough glasses on hand for everyone looking at the set. A concern driven by cost, undoubtedly, and a dearth of survey participants from New York’s trendy Lower East Side.

Disclaimer: NPD’s Ross Rubin is a contributor to Engadget.

Continue reading US consumers purchase $55 million worth of 3D TVs and Blu-ray players, despite the glasses

US consumers purchase $55 million worth of 3D TVs and Blu-ray players, despite the glasses originally appeared on Engadget on Fri, 25 Jun 2010 06:58:00 EDT. Please see our terms for use of feeds.

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Friday, June 25th, 2010 news No Comments

Is Android fragmented or is this the new rate of innovation?


Entelligence is a column by technology strategist and author Michael Gartenberg, a man whose desire for a delicious cup of coffee and a quality New York bagel is dwarfed only by his passion for tech. In these articles, he’ll explore where our industry is and where it’s going — on both micro and macro levels — with the unique wit and insight only he can provide.

A few weeks ago I sat down with the father of Android, Andy Rubin. Andy’s a super smart person, having done stints at Apple, General Magic, WebTV and Danger before starting the Android project. We talked about a lot of things, and we particularly spent time discussing Android fragmentation. I’ve written in the past about my concern that the Android platform is fragmenting much like desktop Linux has over the years, and the potential for the platform to turn into a patchwork of devices and vendor specific modifications that bear little relationship with each other. I’ve spent a lot of time thinking about my conversation with Andy, and I’ve rewritten this column more than a few times as a result.

Today, there are at least five different versions of Android on the market. Many of them are highly customized to allow for new features and device differentiation, but that same customization also makes it harder for vendors to update them to the latest versions. New releases and versions of Android are often outdated by newer versions in the span of just a few weeks. For example, the Nexus One when released was capable of running apps like Google Earth that devices such as the Droid could not, because it ran Android 2.0, not 2.1.Tablet vendors complain their Android offerings lack features such as Android Market because Google forbids them to install the marketplace app, forcing them to create proprietary alternatives. It would appear Android is indeed fragmenting — but perhaps there are other forces at work.

When I spoke with Andy, he pointed out there are several classical symptoms of platform fragmentation. First, older APIs no longer work and break in new releases. Second, multiple application marketplaces offer different applications that lack uniformity across platforms. Both of these are true when you look at desktop Linux. Neither are true of Android.

Continue reading Entelligence: Is Android fragmented or is this the new rate of innovation?

Entelligence: Is Android fragmented or is this the new rate of innovation? originally appeared on Engadget on Sat, 22 May 2010 20:21:00 EDT. Please see our terms for use of feeds.

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Sunday, May 23rd, 2010 news No Comments

Do you know where your ads are being shown?

Protecting brand reputation is the #2 top concern among advertisers, according to a 2009 Aberdeen Group study. And yet, there is still not much they can do to see where, next to what, or in what context their ads are being shown.

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Monday, April 26th, 2010 display advertising 1 Comment

A Predictable Failure: Kimberly-Clark Offering Kleenex Hand Towels


Kleenex hand towels

“Kimberly-Clark’s Kleenex brand is offering an at-home version of a product that people take for granted in public restrooms: disposable hand towels. The new Kleenex Hand Towels are intended to address consumers’ growing concern with hand hygiene.

The product is on sale now with a retail price of about $3 for a box of 60 towels, per the company.

The Kleenex Hand Towels come in box packaging, with pop-up delivery. The product is intended to complement bathroom décor and space limitations — i.e., it can go on a towel bar or countertop.

Kleenex Hand Towels performed well in preliminary testing with consumers, the company says: Approximately two-thirds said they would use Kleenex Hand Towels as a substitute for cloth towels, and more than 90% reacted favorably to how the product and package design looked in their bathrooms.”

They used FOCUS GROUPS! And 2/3 said they would use! But think about it: $3 a box versus cloth towels I already have at home. At home, I don’t use disposable hand towels and at home I am not concerned about “hand hygiene” as I am in a public bathroom.

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Thursday, March 11th, 2010 digital No Comments

Dr. Augustine Fou is Digital Consigliere to marketing executives, advising them on digital strategy and Unified Marketing(tm). Dr Fou has over 17 years of in-the-trenches, hands-on experience, which enables him to provide objective, in-depth assessments of their current marketing programs and recommendations for improving business impact and ROI using digital insights.

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