iphone

Edward Lee: Copyright Office Rules in Favor of Fair Use and Consumer Freedom

August 3, 2010

It is not everyday that the U.S. government sides with jailbreakers. But, last week, the Librarian of Congress and Copyright Office did just that. Although the “jailbreaking” involved converting one’s iPhone or other mobile device to allow it to run both mobile service and third-party applications of the consumer’s choice, the new law is no less remarkable than a successful escape from a maximum-security prison. The law marks a decisive victory for American consumers and a firm rejection of attempts to use the Digital Millennium Copyright Act (DMCA) to achieve market control that copyright law was never meant to protect. The DMCA was enacted in 1998 at the urging of Hollywood studios and the music industry, which feared piracy of their works on the Internet. The basic theory of the DMCA was simple: copyright holders should get extra legal protection for the technological measures–so called “digital locks”–they use to restrict access to or copying of their copyrighted works. The “anti-circumvention” provision under the DMCA makes it illegal for people to circumvent these digital locks, or to share tools that can be used to unpick the locks protecting copyrighted works. While the theory of the DMCA was justifiable, in practice it hasn’t worked so well. First, in some areas, such as in music, many industry leaders decided on abandoning digital locks altogether. Ironically, it was Apple CEO Steve Jobs who championed the movement to “open” music files in a now famous Feb. 6, 2007 letter titled, ” Thoughts on Music .” The second failing of the DMCA is more worrisome. As critics feared, the DMCA has the potential of undermining people’s ability to engage in legitimate fair use activities. What the Copyright Act permits people to do, the DMCA could just as easily forbid by “locking” them out of lawful activities. Even worse, some companies attempted to use the DMCA as a weapon to seek market power over functional items–such as garage door openers and printer cartridges–that copyright law was never meant to protect. As preposterous as it may sound, companies effectively tried to “copyright” their functional devices and business methods through the backdoor of the DMCA. Luckily, Congress foresaw some of these potential abuses. In enacting the DMCA, Congress set up a rulemaking procedure by which the Librarian of Congress, with consultation with the Register of Copyrights, can create 3-year exemptions to the DMCA anti-circumvention provision. The most recent exemptions , the fourth in the line of rulemakings, are the most significant yet. Two of the six exemptions deal with mobile phones. The Librarian renewed the 2006 exemption that allows people to circumvent encryption on their phones so they can switch to another cellphone service provider–from AT&T to Verizon, to use the Register of Copyrights Marybeth Peters’ specific example. In rejecting Apple’s arguments to use the DMCA to support its exclusive service with AT&T, the Register explained that “mobile phone locks prevent consumers from legally accessing alternative wireless networks with the phone of their choice.” The “jailbreaking” exemption goes even further in protecting consumer choice. It allows people to circumvent the technological measures on their iPhones or other mobile devices, in order to allow the devices to run third-party software applications of the user’s choice–even against the wishes of Apple or the device manufacturer. By using encryption on the iPhone, Apple tries to stop people from running third-party apps that Apple hasn’t approved. However, the Register again rejected Apple’s arguments that the DMCA should be allowed to facilitate Apple’s restrictive efforts. In this case, the argument for fair use in jailbreaking iPhones was “compelling and consistent with congressional interest in interoperability.” For many, it may seem confusing to think of iPhone usage as presenting a copyright issue. After all, people are buying the iPhone to use them, not to pirate their software. So what’s the beef? Well, the beef is really over a business tactic, not the protection of copyrighted works. As the Register of Copyrights noted, “the amount of copyrighted work modified in a typical jailbreaking scenario is fewer than 50 bytes of code out of more than 8 million bytes, or approximately 1/160,000 of the copyrighted work as a whole.” Whether Apple should be allowed to employ restrictive business tactics for its iPhone (or iPad, for that matter) is a much different question than whether Apple should get legal protection under the DMCA for that restrictive end. Put simply, “if Apple sought to restrict the computer programs that could be run on its computers, there would be no basis for copyright law to assist Apple in protecting its restrictive business model.” The other key exemption recognized by the Librarian is a “remix” exemption that expands a prior exemption for circumventing the encryption on movies on DVDs, in order to make a fair use of a film. The new “remix” exemption applies not only to “educational use in the classroom by media studies or film professors,” as was the case under the previous exemption, but now also to documentary filmmaking and noncommercial videos–the latter class popular among “vidders.” The “remix” exemption is limited, though, to “relatively short portions of motion pictures” for use in creating a new work “for purposes of criticism or commentary.” These three DMCA exemptions, which were proposed by the Electronic Frontier Foundation , provide an important reminder: the DMCA was enacted to serve the purposes of copyright law, with all of its checks and balances–and not the other way around.

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Edward Lee: Copyright Office Rules in Favor of Fair Use and Consumer Freedom

August 3, 2010

It is not everyday that the U.S. government sides with jailbreakers. But, last week, the Librarian of Congress and Copyright Office did just that. Although the “jailbreaking” involved converting one’s iPhone or other mobile device to allow it to run both mobile service and third-party applications of the consumer’s choice, the new law is no less remarkable than a successful escape from a maximum-security prison. The law marks a decisive victory for American consumers and a firm rejection of attempts to use the Digital Millennium Copyright Act (DMCA) to achieve market control that copyright law was never meant to protect. The DMCA was enacted in 1998 at the urging of Hollywood studios and the music industry, which feared piracy of their works on the Internet. The basic theory of the DMCA was simple: copyright holders should get extra legal protection for the technological measures–so called “digital locks”–they use to restrict access to or copying of their copyrighted works. The “anti-circumvention” provision under the DMCA makes it illegal for people to circumvent these digital locks, or to share tools that can be used to unpick the locks protecting copyrighted works. While the theory of the DMCA was justifiable, in practice it hasn’t worked so well. First, in some areas, such as in music, many industry leaders decided on abandoning digital locks altogether. Ironically, it was Apple CEO Steve Jobs who championed the movement to “open” music files in a now famous Feb. 6, 2007 letter titled, ” Thoughts on Music .” The second failing of the DMCA is more worrisome. As critics feared, the DMCA has the potential of undermining people’s ability to engage in legitimate fair use activities. What the Copyright Act permits people to do, the DMCA could just as easily forbid by “locking” them out of lawful activities. Even worse, some companies attempted to use the DMCA as a weapon to seek market power over functional items–such as garage door openers and printer cartridges–that copyright law was never meant to protect. As preposterous as it may sound, companies effectively tried to “copyright” their functional devices and business methods through the backdoor of the DMCA. Luckily, Congress foresaw some of these potential abuses. In enacting the DMCA, Congress set up a rulemaking procedure by which the Librarian of Congress, with consultation with the Register of Copyrights, can create 3-year exemptions to the DMCA anti-circumvention provision. The most recent exemptions , the fourth in the line of rulemakings, are the most significant yet. Two of the six exemptions deal with mobile phones. The Librarian renewed the 2006 exemption that allows people to circumvent encryption on their phones so they can switch to another cellphone service provider–from AT&T to Verizon, to use the Register of Copyrights Marybeth Peters’ specific example. In rejecting Apple’s arguments to use the DMCA to support its exclusive service with AT&T, the Register explained that “mobile phone locks prevent consumers from legally accessing alternative wireless networks with the phone of their choice.” The “jailbreaking” exemption goes even further in protecting consumer choice. It allows people to circumvent the technological measures on their iPhones or other mobile devices, in order to allow the devices to run third-party software applications of the user’s choice–even against the wishes of Apple or the device manufacturer. By using encryption on the iPhone, Apple tries to stop people from running third-party apps that Apple hasn’t approved. However, the Register again rejected Apple’s arguments that the DMCA should be allowed to facilitate Apple’s restrictive efforts. In this case, the argument for fair use in jailbreaking iPhones was “compelling and consistent with congressional interest in interoperability.” For many, it may seem confusing to think of iPhone usage as presenting a copyright issue. After all, people are buying the iPhone to use them, not to pirate their software. So what’s the beef? Well, the beef is really over a business tactic, not the protection of copyrighted works. As the Register of Copyrights noted, “the amount of copyrighted work modified in a typical jailbreaking scenario is fewer than 50 bytes of code out of more than 8 million bytes, or approximately 1/160,000 of the copyrighted work as a whole.” Whether Apple should be allowed to employ restrictive business tactics for its iPhone (or iPad, for that matter) is a much different question than whether Apple should get legal protection under the DMCA for that restrictive end. Put simply, “if Apple sought to restrict the computer programs that could be run on its computers, there would be no basis for copyright law to assist Apple in protecting its restrictive business model.” The other key exemption recognized by the Librarian is a “remix” exemption that expands a prior exemption for circumventing the encryption on movies on DVDs, in order to make a fair use of a film. The new “remix” exemption applies not only to “educational use in the classroom by media studies or film professors,” as was the case under the previous exemption, but now also to documentary filmmaking and noncommercial videos–the latter class popular among “vidders.” The “remix” exemption is limited, though, to “relatively short portions of motion pictures” for use in creating a new work “for purposes of criticism or commentary.” These three DMCA exemptions, which were proposed by the Electronic Frontier Foundation , provide an important reminder: the DMCA was enacted to serve the purposes of copyright law, with all of its checks and balances–and not the other way around.

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April Rudin: Reframing Yourself and Your Business: Take a Page from a Master Who Evolved into an App

August 2, 2010

“Constancy is the hobgoblin of little minds,” says Ralph Waldo Emerson. Sometimes we are in need of the “refresh” button. The ability to morph and change our ideas is essential for personal and business growth. For maximum personal growth, it is healthy to evolve and change. Like an unused muscle, we will soon atrophy without evolution. The goal is to keep some of our “old” ideas and integrate some of the “new technology.” We should be open-minded and looking for new ideas which can refresh existing business when it comes to keeping pace with today’s consumers. We must think of increasing revenue by extending our brands and even doing good in the community. It is a “feel-good” experience for our minds, souls and bank accounts. Recently, I had the distinct pleasure of meeting a man who is the epitomizes the sort to whom Emerson was referring. Let me begin by “framing” this man for you. He is an “old master” in the middle of New York City. He is the type of guy who really is a modern-day maverick but in a simple and quiet way. He is a true Renaissance man. For me, he has the vision to take his “old master” expertise and catapult it into the digital age and with a great non-profit spin to boot! He is someone in whom you should be quite interested. His name is Eli Wilner. What man can have one foot planted so firmly in each world so to speak? Read on… Eli Wilner’s fascination with painting began at a very early age. By the time he was 9 years old, he gave his paintings and pastels to his great uncle, who was a prominent collector in New York City. His uncle would frame Eli’s work in antique 17th and 18th century Italian frames. He would then hang Eli’s paintings on his wall next to a collection of masters like Chagall, Modigliani, and Utrillo. When Eli saw his paintings installed in his uncle’s collection, he began dreaming of being a great artist. His “art” evolved into establishing himself as the premiere framer in the world. Probably the most universally recognizable painting ever framed by Wilner is Emanuel Leutze’s iconic Washington Crossing the Delaware for The Metropolitan Museum of Art. At the Museum’s request, Wilner reviewed it continually for many years, seeking a perfect new frame for this masterwork. The opportunity arose in the summer of 2006 when a photograph taken by Mathew Brady in 1864 was discovered in the archives of the New York Historical Society. This photo showed the painting in its original frame! The obvious answer was to copy the original frame. The money for this project was raised very quickly and the work proceeded for 2 years. The frame is now completed and resting safely at the Met. The grand opening is slated for January 2012. Although the exact price for this frame is unknown, Wilner says it would be fair to say that the price would be anywhere from $800,000 — $1,200,000. Eli Wilner is fortunate to have been asked to frame two of the most expensive paintings ever sold at auction: Dora Maar au Chat for Sotheby’s (May 3, 2006), and Nude, Green Leaves and Bust for Christie’s (May 6, 2010). What can we learn from Eli? How did this guy who studies the old master’s paintings, antiques and historical frames get interested in an iPhone app? The story of his iPhone app really began many years ago. According to Wilner, he had originally conceptualized a way in 1988 to “share the joy of his work” with the public. It began with the invention of a magnet frame, a photographic print of a frame from his collection adhered to a magnetized backing. It didn’t pan out. Fast forward to the present, when Wilner read a cover article on “apps” in Business Week in November 2009 which triggered an immediate response. In that instant, he began to understand the value of the 1 billion images which are uploaded to Facebook each day, and the billions of images which are stored in Flickr, etc. He knew that his dream of sharing work with millions of individuals was attainable through this new technology. After much hard work, the app went live on June 19th. Now, Eli Wilner frames are available in an iPhone and iPad app which allows the “masses” to frame their own “masterpieces” or photographs based on over 100 styles which are derived from Eli Wilner’s past and present inventory. This is just as he had dreamed as a little boy. In fact, there is a great enthusiastic boyishness about Eli and his vision for his new brand extension. Outside of this blatant “commercial” for Eli and his frames, what are the business lessons that we can learn? How can we benefit from the brand extensions and forward thinking of Eli Wilner? First, he was able to be focused on a dream and then he achieved it. He imagined and produced a world-class digital product from a world-class “bricks and mortar” product. He takes old antique and historical frames and makes them new again. He continually reinvents and moves easily between the old world and the new. One of the most important lessons to be learned about this app (and Eli’s business model) is the “give back” to non-profit organizations which is essential for someone as passionate as Eli. Eli insisted on creating a way to use this product for viral fund raising by all kinds of groups. The non-profit component to this product is the “feel good” part of the “look good” frame. Successful businesses today must carefully consider their own social responsibility. At the bottom of this blog, there are links for free Wilner iPhone/iPad app products. Tell them April sent you. Free version for the iPhone Free version for the iPad

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Ken Markman: The Advent of Brand Culture

July 29, 2010

Recognizing the Need for Reinvention Whether you work with brands every day or want to develop your own brand, your success lies in a different place than most experts would have you look. We have a tendency to travel the same road, again and again. We talk incessantly about the same problems: The trade, the economy, the licensor, the licensee, the deal. It’s an endless, circuitous, chain of circumstances with little time or effort directed toward understanding the changing consumer. Who is The New Consumer? They are Millennials. They are your strongest advocates. We’re not the first, nor the last to mention them. But, if you don’t know who they are…the short answer is they’re your future. Their values, attitudes and demographic characteristics are different than all previous generations. They are driving digital technologies that are changing media habits; enabling consumers to self-edit, while at the same time, by choice, become advocates of what is meaningful to them. It’s causing brand-marketers and licensors to reconsider how they are reaching the right audience at the right time with the right message in the right place. Like it or not, they are tethered to technology. Successful products offerings enable Millennials to participate in their own experiences. It is tribal; technology is the acoustic rhythm to their narrative. As a result, the convergence of technology (xbox 360 Kinetic, Apple iPad) and the interplay of mobile phones (apps), immersive retail experiences and location based (touch-screen) venues are the new brand media mix. Millennials Millennials, there are about 80 million of them born between 1980 and 19951. They are the prize. They are who you must embrace. They are not just consumers, they are the owners of your brand. They are advocates who dictate purchase patterns and are the voice of authority. Millennials are setting the new social agenda, in a context called BrandCultureTM. We are just beginning to witness the nuances and shifts of their consumer behavior. The real ah-ha will arrive when we unlock the coding of this generation and the hardwiring of their brains. If you know a Cognitive Scientist, hire them; they’ll be your most trusted resource when unraveling the mysteries of your new consumer and the behavior that is driving businesses, brands and culture in the 21st Century. Consumer Attributes They think in pictures: Images are the narrative of culture. 32,000 years ago the earliest of cave paintings served the same purpose. They’re hard wired into our brain. They work like semeiotic messages. Meaning, the images are the language of story-telling. It’s the earliest form of personal and cultural brand messaging. (Consider: Facebook, Flickr and the iPhone). They remember stories; so, don’t repeat facts: Brands are emotional stories. They are experiences, merging interest with intent by igniting curiosity and inviting consumption. “Your brain didn’t retrieve a fact about an experience,” says Douglas Merrill, former Chief Information Officer of Google, “….your brain retrieved the story.” Their brand is their message: Messages are everywhere. They work as reoccurring themes that bond culture. They establish a context and work like scaffolding in your brain. They function in a setting of story-telling and myth-making where symbols are language and images are text. They embrace the “authentic” power of Social Media: Okay. I get it. We know Social Media is important. But, do you really know why? It’s not because of its instantaneous reach or ubiquitous use. Social Media dominates all other media because of its relevance. It’s your story, shared with others, that touches the same core emotions. They use technology: “It’s not just their gadgets, it’s the way technology has been fused into their social lives.” This is the new “collective -connective,” a social dynamic requiring participation — real, authentic participation. It’s that simple. Why We Believe In What We Create? We remember things that are important when they are experienced as stories. Our brains take notice of them. We become conscious of them. They become relevant, take on a purpose and meaning and move to our memory. Cognitive scientists call this process encoding, which means something is being converted from one format into another. Cultural Myth, Story Telling And Recurring Themes Bond Culture It is based upon the uniquely human capacity to symbolically classify experiences, link and then to share them…the process through which an older generation induces and compels a younger generation to reproduce the established lifestyle, consequently a culture that is embedded in a person’s way of life. This multi-generational social condition is called the “Cultural Evolution Theory” which states, “that traits have a certain meaning in the context of evolutionary stages, and they look at relationships between material culture and social institutions and beliefs.” The importance of realism amid such heightened realities in worlds of fantasy make characters, specifically heroes and their powers, when stripped away, real to an audience that wants to believe they really exist. This transformation is a blurring of “reality’s” fantasy. Captured in symbols and an extremely evolved iconography, popular, recurring themes understood completely or not, become folklore…create a suspended disbelief: a new reality for a new generation… borrowing from the past and making them their own…a form of branded history, with its own images indelibly marked on the minds of a new global audience. The images they represent, from myth to folklore, become the legacy that defines a brand. Central to this process is the concept and arch of the Brand…or as we will call it: BrandCulture KKMBRANDS.COM

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BJ Gallagher: Apple and AT&T: Why Monopolies Make People Mad

July 21, 2010

Steve Jobs says that the iPhone antenna problem “has been blown so out of proportion that it’s incredible.” He seems puzzled and annoyed by the intense anger, frustration, and criticism bombarding him. What he doesn’t understand is that whenever you establish a monopoly, you had better make sure that your product or service is perfect – because any glitches or problems will be magnified by customers’ feelings of being trapped. Twenty years ago, when I was a manager at a large metropolitan newspaper, our advertising clients would angrily tell our sales reps: “If you guys weren’t the only game in town, I’d take my business elsewhere!” Our rival newspaper had gone belly up, leaving us with a monopoly on display advertising. Our ad rates were exorbitant and every year our executives raised them. This infuriated advertisers, who felt trapped by our paper’s monopoly on high-income readers. And whenever there was a typo or mistake in an ad, the client would fume helplessly because his hands were tied. Advertisers bitterly complained that our newspaper was arrogant and didn’t care about customers. Ten years later, after I had left the newspaper to become a management consultant, I came across a different sort of monopoly backlash at a Wilmington, California oil refinery. The people who worked there were highly paid with superb benefits. With its generous compensation and benefits, the refinery had, in effect, established a monopoly on the best workers in the area. You’d think that morale would be high and that people would be happy with their employer – but they weren’t. Rank and file workers complained about favoritism in promotions and overtime assignments. They complained about racism and sexism in disciplinary practices. The higher their seniority, the lower their job satisfaction. The employee relations department was up to its eyeballs in grievances, as well as headaches from the union. Why? Golden handcuffs. Workers felt “trapped” by their high pay and great benefits. Most refinery workers had just a high school education and knew there were no other jobs in the Wilmington/Long Beach/San Pedro area where they could earn such high salaries without a college degree. So whenever employees were unhappy with management or their coworkers, they had no place to go – there were no good job options. Their golden handcuffs made them more unhappy over perceived problems at work. Most companies think that having a monopoly in their field would be a good thing. Who wouldn’t like to have a corner on the market for customers … or workers? But a monopoly can easily backfire, as we see with the Apple/AT&T exclusivity. Anytime you cut off people’s options, you make them mad. This is exactly why iPhone customers are livid about the antenna problem and dropped calls. These may seem like small problems to Steve Jobs, but they feel like big problems to customers who are trapped by the monopoly established by Apple and AT&T. Americans like to vote with their feet – and their wallets. They want companies to compete for their business. They want to be wooed and won. They want choices. Jobs may be right when he says that dropped calls are a problem across the board with all service providers, but that is no consolation to customers who feel frustrated because they can’t take their iPhones to Verizon, Sprint, or T-mobile. Jobs tries to justify himself by pointing out that three million people bought the new G4 iPhones in spite of AT&T’s crappy service. What he fails to realize is that he could have sold four or five million phones (maybe more) if he had let customers choose their own service providers. Jobs defensively asserts that less than one percent of customers complained and less than two percent returned their new iPhones to Apple. But he doesn’t understand that complaints are just the tip of the iceberg: 26 out of 27 unhappy customers will NOT complain, for a variety of reasons (“it’s too much hassle;” “it takes too much time;” “it won’t do any good anyway;” etc.). But we can be sure that these unhappy customers DO complain to their family, friends, and coworkers. They blog and tweet their frustration all over the Internet! They may resign themselves to lousy service for the time being, but they stew in resentment. By shackling his customers to AT&T, Jobs brought this fury on himself. When you establish a monopoly, you’d better make sure you treat your customers even better than before , because you’ve taken away their options. Steve, if you love your customers as much as you say you do, take off their handcuffs. Release them from bondage to AT&T. Let your people go.

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Video: Tavis McCourt Sees IPad Driving Apple Sales Growth: Video

July 21, 2010

July 21 (Bloomberg) — Tavis McCourt, an analyst at Morgan Keegan & Co., discusses Apple Inc.’s third-quarter profit reported yesterday. The maker of the iPhone said net income rose 78 percent to $3.25 billion, or $3.51 a share, beating analysts’ estimates. McCourt, speaking from Nashville, Tennessee, talks with Erik Schatzker on Bloomberg Television’s “InsideTrack.” (Source: Bloomberg)

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Video: Jeronimo Says iPhone 4 May Hurt Apple Growth Outlook

July 20, 2010

July 20 (Bloomberg) — Francisco Jeronimo, a technology research analyst at IDC U.K. Ltd., talks about the outlook for Apple Inc.’s earnings growth. Analysts forecast Apple’s profit more than doubled last quarter reflecting demand for the iPad tablet and early sales of the iPhone 4. Jeronimo speaks with Maryam Nemazee on Bloomberg Television’s “Countdown.”

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Jason Gurwin: Live Sports 2.0: The Digital Revolution

July 19, 2010

So you go to the arena and you’re sitting in the nose bleed seats, there’s a drunk guy sitting next to you who won’t stop shouting expletives or blowing into his vuvuzela, and its only the first quarter. Just wait until you have to spend 25 minutes in line to use the bathroom to dispose of the $8 soda you bought. It’s no wonder that people prefer to stay home and watch the game on their 65″ HDTV than drop a week’s worth of salary to bring their family to cheer on their favorite team. The biggest difficulty with creating a great in-venue experience is that there is no control over whether your team wins or loses. As a marketer for a sports team, your job is to ensure that you have a great time no matter if your team is shutout or wins a “nail biter.” In the past, that meant cheerleaders, video clips on the jumbotron, and random giveaways. Today, there are some pretty innovative pieces of technology that can make the live experience that much better. One of coolest new pieces of live venue technology is a system called Kangaroo TV . It bridges the gap between what’s great about watching sports at home, the access to information, and what’s great about going to the event, the energy of the venue. Last month, I had the pleasure of attending the final round of the US Open at Pebble Beach. Unless you have a rooting interest, live golf is up there with the “National Paint Drying Championship.” You miss 90% of the action and your view is often obstructed. Then comes Kangaroo TV. With just a deposit on the device, the handheld 3G-based system provided access to live video of the NBC’s US Open broadcast, as well as additional video feeds including featured pairings, holes, and even the blimp cam. In addition, you could follow the leaderboard or dig into player stats or scorecards. Golf is just the beginning. This technology will be available starting this fall at Miami Dolphins games. It will give you access to the NFL RedZone channel as well as broadcasts to other NFL games. This isn’t the first handheld device to merge the live event with the digital world. In 2007, the Nintendo Fan Network was launched at Safeco Field in Seattle that allowed Nintendo DS users to access baseball content (stats, scores, video etc.), chat with other fans, and even order concessions directly from the device. The question is – why require proprietary hardware like KangarooTV or a gaming system like Nintendo DS when nearly every tech savvy sports fan has a smartphone? Back in 2004, AT&T Park became the first WiFi-equipped sports venue. They also launched an online platform called “Giants Digital Dugout” that provides WiFi video replays, game content, and venue maps. The iPhone app development community has even begun to take on the problem. At Rupp Arena at the University of Kentucky, an iPhone application called “FanGo” has allowed fans to order food directly from their seats. DirecTV even has an iPhone app called NFL Sunday Ticket To-Go that allows NFL Sunday Ticket subscribers to watch any NFL game directly from their iPhone, Android, or Blackberry device. This is just the beginning. There is a huge opportunity here to innovate on the live game experience. Imagine sitting at a baseball game with the live video stream on your iPad and being able to tap on a player to pull up their virtual trading card. Imagine being able to view the twitter stream of all those tweeting about the game. Imagine after a loss getting the option to purchase a discounted ticket to another game as a special bonus for attending the game. With 3DTV no longer a pipe dream, sports teams will have to find new ways to draw fans to their venues – especially when they’re not winning. I don’t have a solution for the exorbitant costs of going to a sporting event, but there is tremendous room to create a more dynamic live experience. However, the solution is not a fragmented set of technologies. The one that will win is the one that creates the ultimate fan experience in one application on the user’s own hardware. And if it also includes a feature so you never need to wait on line at the bathroom, I think you just might have hit the jackpot.

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Video: Valerio Discusses Steve Jobs’s Appearance at Apple Event: Video

July 16, 2010

July 16 (Bloomberg) — Bloomberg’s Cris Valerio reports on Apple Inc.’s news conference today where Chief Executive Officer Steve Jobs acknowledged the company knew the antenna of the iPhone 4 would weaken if the phone was gripped in a certain way. Kenneth Schapiro, president of Condor Capital Management, also speaks. (Source: Bloomberg)

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Video: Marshall Says Apple Stock Is ‘Extremely Attractive’: Video

July 16, 2010

July 16 (Bloomberg) — Brian Marshall, an analyst with Gleacher & Co., talks about the reaction to the reception problems Apple Inc. is experiencing with the iPhone 4. Marshall, speaking with Deirdre Bolton on Bloomberg Television’s “InBusiness”, also discusses the strategy he expects Steve Jobs to employ to address the issue. (Source: Bloomberg)

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Video: McQueen Says Competitors See `Chink in Apple’s Armor’

July 16, 2010

July 16 (Bloomberg) — David McQueen, principal analyst at Informa Telecoms and Media, talks about Apple Inc.’s options for addressing a design flaw in the newest version of the iPhone. McQueen speaks with Francine Lacqua on Bloomberg Television’s “Countdown.”

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Video: McGinn Says IPhone 4 Flaw Should Be `Warning’ for Apple: Video

July 15, 2010

July 15 (Bloomberg) — Dan McGinn, chief executive officer at TMG Strategies, talks about the antenna design in Apple Inc.’s iPhone 4. Apple’s senior antenna expert voiced concern to Chief Executive Officer Steve Jobs in the early design phase of the iPhone 4 that the antenna design could lead to dropped calls, a person familiar with the matter said. McGinn speaks with Scarlet Fu on Bloomberg Television’s “InBusiness With Margaret Brennan.” (Source: Bloomberg)

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Video: Terry Says Apple Will `Survive’ IPhone Antenna Flaw: Video

July 15, 2010

July 15 (Bloomberg) — Heath Terry, an analyst at FBR Capital Markets, discusses the outlook for Apple Inc. and prospects for Google Inc. in the smartphone market. Apple’s senior antenna expert voiced concern to Chief Executive Officer Steve Jobs in the early design phase of the iPhone 4 that the antenna design could lead to dropped calls, a person familiar with the matter said. Terry talks with Deirdre Bolton on Bloomberg Television’s “InBusiness With Margaret Brennan.” (Source: Bloomberg)

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iPhone Class Action: Judge Approves Lawsuit Against Apple, AT&T

July 12, 2010

SAN JOSE, Calif. — A federal judge says a monopoly abuse lawsuit against Apple Inc. and AT&T Inc.’s mobile phone unit can move forward as a class action. The lawsuit consolidates several filed by iPhone buyers starting in late 2007, a few months after the first generation of Apple’s smart phone went on sale. An amended complaint filed in June 2008 takes issue with Apple’s practice of “locking” iPhones so they can only be used on AT&T’s network, and its absolute control over what applications iPhone owners can and cannot install on the gadgets. The lawsuit also says Apple secretly made AT&T its exclusive iPhone partner in the U.S. for five years. Consumers agreed to two-year contracts with the Dallas-based wireless carrier when they purchased their phones, but were in effect locked into a five-year relationship with AT&T, the lawsuit argued. The actions hurt competition and drove up prices for consumers, the lawsuit claims. Apple and AT&T have not commented on the terms of their deal. In its response to the complaint, Cupertino, California-based Apple said it did not hurt competition. In court documents filed July 8, Judge James Ware of the U.S. District Court for the Northern District of California said parts of the lawsuit that deal with violations to antitrust law can continue as a class action. The class includes anyone who bought an iPhone with a two-year AT&T agreement since the device first went on sale in June 2007. Apple has sold more than 50 million iPhones in the last three years. The company does not specify how many have gone to U.S. customers. Ware dismissed other claims against Apple, among them allegations that the company broke laws when an update to the iPhone’s operating software caused some phones to stop working and deleted programs that users had purchased. The lawsuit seeks an injunction to keep Apple from selling locked iPhones in the U.S. and from determining what iPhone programs people can install. It also seeks damages to cover legal fees and other costs.

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Tony Schwartz: Breaking Your Addiction to Email

July 6, 2010

Do you wake up in the morning and bring your laptop into bed with you, or check it before you brush your teeth? Do you check email while you’re driving, even though you’re four times as likely to have an accident when you do? Are you answering email on your iPhone or BlackBerry when you walk between meetings, or on your way to the parking lot? Do you keep answering while you’re sitting in your car in your driveway or garage when you get home? Do you bring your laptop into bed with you at night, and always make one final check before you turn out the lights? In May, I posted a poll here asking readers about their experience in the workplace. One of the questions was about email. More than 60 percent of you said you spend less than two waking hours a day completely disconnected from email. Twenty percent spend less than a half hour disconnected. Email has become our intravenous feeding tube. Two weeks ago, I gave a talk at a Fortune 100 company about the value of focusing on one thing at a time and the attentional costs of constant interruptions. When I was done, an articulate and ingenuous young man who worked in finance came up to me. “I believe everything you said,” he said, “but I can’t do it. If I get an email, I have to look at it.” “Have you considered just turning it off at certain times during the day?” I asked. “I don’t think I can,” he replied. “As soon as I turn it off, I’d start obsessing about what I’m missing.” It isn’t overload we’re battling anymore, it’s addiction — to action, to information, to connection, but above all to instant gratification. In the late 1960s, the psychologist Walter Mischel began conducting his famous “marshmallow” experiment . He placed a marshmallow in front of a succession of four-year-olds. Mischel told them they were free to eat the marshmallow simply by ringing a bell after he’d left the room. If they were able to wait until he returned, he told them they could have two marshmallows. Seventy percent of the children gave up in less than a minute. Only thirty percent were able to wait 15 minutes. Mischel termed marshmallows a “hot stimulus” – meaning highly seductive – not unlike the ping of an email, or a text. We’re pulled to anything that provides instant gratification, even when we know we’d get a bigger reward for delaying. We’re also quick to take up any excuse to stop working on something that is difficult and requires high concentration. What Mischel found is that the low delayers quickly burned down their limited reservoir of will and discipline by staring directly — and longingly — at the marshmallow. The high delayers found something else entirely to focus on. They never looked at the marshmallow. Mischel came to call this skill “strategic allocation of attention.” It’s a capacity many of us have lost when it comes to the Pavlovian pull of email. Years later, when Mischel redid the experiment with a new group of 4-year-olds, he decided to teach the poor delayers the techniques of the high delayers. He gave them very simple ways to redirect their attention away from the marshmallow. Kids who hadn’t been able to wait more than a minute rapidly learned to hold out for a full 15 minutes. We, too, can strategically train our attention. When it comes to email and the Internet, it’s critical that we learn to do so. In an increasingly complex world, we need to give ourselves more time to think more reflectively, creatively, and deeply. If you’re truly tethered to your email, start small. Choose a specific time each day to turn off your email for a half hour, or an hour, and focus on something that requires your full attention. Then begin adding other times as your focus gets stronger. Here’s one way to start. Take back your lunch. I wrote about this movement last week, and you can find out more about it here: http://www.TakeBackYourLunch.com At lunchtime, get up from computer step outside and leave your Iphone or your Blackberry behind. Instead, use the time to quiet your mind, or to think through a difficult problem, or to truly connect with a friend or colleague. You’ll be building much needed renewal into your day, and you’ll also be retraining your attention. Take back your lunch is a first step in taking back your attention, which is key to taking back your life. If you want to see how you’re doing when it comes to managing your attention, or any other dimension of your energy, take our Energy Audit: A version of this post appeared originally on HBR.org

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Brooke Smith: Hello, I’m a Mac, and Here’s How I Help Fuel the World’s Deadliest Conflict

June 28, 2010

Hello, I’m a Mac, and I’m helping fuel the war in the Congo – currently the deadliest conflict in the world. So are PCs, cell phones, digital cameras and other consumer electronics. That’s what Apple’s famous “I’m a Mac … And I’m a PC” ads don’t tell you. So I (Brooke) and cinematographer Steven Lubensky, with the help of actors Joshua Malina and John Lehr, decided to create a version that does. It is not surprising if you didn’t know that your favorite Apple gadgets — your iPhone, iPad, iPod and Mac — are linked to the conflict engulfing the eastern Democratic Republic of Congo today and for the past dozen years. Most people don’t know – which is in part why the war in Congo has gone on for so long. With more than 5 million people killed, it is the deadliest conflict since World War II. As Nick Kristof wrote in The New York Times yesterday, “Electronics manufacturers have tried to hush all this up. They want you to look at a gadget and think ‘sleek,’ not ‘blood.’” Tech titans — including Nintendo, HP, Dell, Intel, and RIM, the makers of BlackBerry — have made millions from products that use conflict minerals and have gotten off the hook for fueling violence in the Congo, thanks to a tendency in today’s culture not to question where our everyday items come from. That’s not necessarily a criticism; it’s just the way the world works now, where we interact with materials from every corner of the globe on a daily basis. So we tend to think that our new iPhone came from the Mac store down the street or our new digital camera originated from an online camera store. But as you see in our video, the problem arises with all the components inside. Essential parts of our electronic devices are made from minerals found in eastern Congo. Tin, tantalum, tungsten — the 3Ts — and gold serve such necessary functions as making our cell phones vibrate or helping our iPods store electricity. The same armed groups who control most of the mines that supply these essential minerals to the world market are responsible for the epidemic of sexual violence in eastern Congo. Women and girls pay a gruesome price, and the persistent health conditions and severe trauma that linger for years after an attack are leaving communities and families in utter ruin. In addition, the labor conditions in the mines are abysmal. Indentured servitude is common practice, and children as young as 11 are used to squeeze into the tight spaces underground. There are few conflicts in the world where the link between our consumer appetites and mass human suffering is so direct. The lucrative mineral trade — estimated to be worth hundreds of millions of dollars annually — perpetuates the violence because it enables militias and government soldiers to buy weapons to continue the fight for these valuable resources. All along the supply chain that winds its way through central Africa, armed groups and governments benefit immensely from the trade in conflict minerals, making it a very stubborn problem to eradicate. This reality isn’t the result of an elaborate cover-up. Until consumers started asking, electronics companies were satisfied to say that they didn’t know whether their products were made with conflict minerals from Congo. The trade in minerals from eastern Congo is shockingly opaque, hence the easy exploitation. Even now, as the issue of conflict minerals gains traction, companies like Apple continue to tell us that their products do not contain conflict minerals because their suppliers said so . From towns and campuses across the United States to the U.S. Congress, advocates are protesting this inadequate response and pushing to put a system in place to trace, audit, and certify the minerals in our electronic devices, so that ultimately, we as consumers can choose to buy conflict-free. Visit RAISE Hope for Congo, www.raisehopeforcongo.org , and send the message to tech companies that you want them to make their products conflict-free. And please share this video with your friends. Brooke Smith is an actress, writer and director. Brooke has acted in many feature films including Mira Nair’s “The Namesake” and Woody Allen’s “Melinda and Melinda.” On television, Brooke played Dr. Erica Hahn on “Grey’s Anatomy.” The MAC/PC Conflict minerals ad is the third PSA Brooke has directed for The Enough Project’s RAISE Hope for Congo campaign. John Prendergast is Co-Founder of Enough , the anti-genocide project at the Center for American Progress in Washington, D.C., and co-author with Don Cheadle of the forthcoming book The Enough Moment.

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Mark Silver: Why Marketing Is A Critical Part of the Solution to Our Woes

June 27, 2010

At 1:10 p.m. I’m standing in line at the post office. I know it’s 1:10 p.m. because my iPhone prayer app lets loose with a resounding call announcing the time for the midday prayer. The three other people in the post office avoid looking at me. Or maybe it doesn’t bother them. I carry the awareness of the waiting prayer for two hours, until I make it back home to my office. I do the ritual washing of my hands, face, and feet, take out my prayer rug, and face northeast. Then I breathe. My prayer carries me through various positions, my forehead approaching, then touching, the floor, then rising up again. Because the midday prayer is done silently, the silence of the devotion carries me. I’m grateful for this, because my heart is trembling with grief. Struggling to Express Grief The gushing bleeding of oil in the Gulf of Mexico is not anything I can contain. I alternate between numbness, denial and grief. It’s simple: the lifestyle that we’re living, that I’m living, is unsustainable, and it’s killing many things in this world. We know this. It’s not a surprise, but it’s hard to keep that much pain present. I believe that our unexpressed grief is a significant fuel on the fire of our unsustainable lifestyle. Grief for the loss of life, the loss of the hope, the loss of beauty and connection. Have you heard of Farmville? It’s a virtual game within Facebook where you can run a virtual farm. Millions of people are playing this game on a daily basis. Even though it’s a free game, you can spend real money on it if you choose to. And people choose to. More than US$1 billion annually is spent on this game alone. What are we doing? Where are we putting our resources? This is not about blame. I don’t blame anyone for numbing out to what’s going on. Marketing Has Gotten Very Sophisticated Over the years, more and more psychological tricks have been implemented in marketing and product development. Add extra nicotine to cigarettes, put cheap, high-alcohol beer in convenience stores, make porn and video games and violent movies easily accessible. Put marketing messages everywhere so that they are nearly inescapable. And make those marketing messages full of the promise of a wealthy, sexy lifestyle that the vast majority of the world’s population can’t reach. The result? A loss of hope. A disconnection from the true source of our happiness and nourishment. An ever-increasing consumption of material goods. Resources, money and time, end up being funneled to the very things that continue to hurt us all so much. Our economy, our marketplace is deeply dysfunctional. Billions spent on war, chemicals and oil, a small fraction of that spent on things that really make a positive difference in our lives. And the rest spent on numbing out to the powerlessness that we all feel when facing it. Hey, Let Go of That Despair It’s important to face things as they are. Expressing grief is something I highly recommend. But don’t indulge in despair. Despair is just another way of avoiding grief. Despair is a decision that things will never work out, that there is no hope. Instead, think about marketing. Well, first indulge your heart in love, then think about marketing. Yes, I Said Marketing There are so many good people doing good things. Sauvie Island Organics here in Portland has a community-supported agriculture program, which means that up to 400 families buy a share in the farm, and then share in the harvest. Delicious, local, organic food delivered directly from the farm. They have openings. Huh? There are over 1.5 million people in the Portland area, and this farm hasn’t filled all 400 openings? So much of our attention is taken up in distraction by our dysfunctional economy. Fast food instead of fresh, organic vegetables, for instance. The healing work that amazing people are doing in sustainable food, in holistic health, in alternative energy, needs to take up a lot more of the attention and resources. Our local Hollywood Video store is being shuttered because the parent corporation, Movie Gallery, Inc. filed for Chapter 11 bankruptcy. I’m guessing that’s because the entertainment dollars have shifted to online downloads and Farmville, among other things. But wouldn’t it be amazing if they went bankrupt because all of those millions of dollars went to healers, coaches and practitioners of all stripes who were supporting people in regaining wholeness and connecting with each other in meaningful ways instead of zoning out in front of screens? Marketing Is a Piece of the Answer We find ourselves in urgent times. There is a desperate need for love, acceptance, and healing. The grief I feel at the distance between where we are and where my heart so longs to live is profound. If we are going to heal the world, we are going to do it one imperfect step at a time. We need political activism. We need internal healing. We need love and community. And we need the people doing the good work locally, sustainably, beautifully to be visible. To take up space. To be the recipient of the over-abundance of resources flowing through our culture. There is a way to do marketing with integrity. There is a way to do it with love and heart and be very effective. If you struggle with marketing or business even a little bit because of how you’ve seen marketing used, I’m with you. I share that pain.But please don’t abandon the airwaves to those hocking greed and dissatisfaction. Instead, open your heart to marketing. Open your heart to business. Business is in pain, it’s sick. Don’t abandon it. Bring your heart, engage with love and integrity, and let’s see if we can come together to claim the space and bring the healing we are all so desperate for. By the time my forehead has touched the ground for the final time at the end of my prayer, my heart has returned to love. It has found hope and inspiration once more. I remember that the weight of the world is not on my shoulders alone. You and I are in this together. Let’s take up the space the Divine has given us, and bring your good work out into air, where everyone can see it. Form your marketing in love, bring it out in inspired action, and connect with the people who need what you do so much more than the alternatives they’re faced with.

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Global Stocks Cap Nine-Day Gain Gold Rises, Treasuries Fall

June 18, 2010

By Rita Nazareth and Stephen Kirkland June 18 (Bloomberg) — The MSCI World Index of stocks rose for the ninth day, the longest rally in 11 months, and Spanish bonds jumped on speculation efforts to contain Europe’s debt crisis will succeed. Treasuries fell, while gold climbed to a record. Oil reversed losses to rebound above $77 a barrel. The global index increased 0.2 percent and extended its rally since June 7 to 7.1 percent. The Standard & Poor’s 500 Index rose 0.1 percent to 1,117.51, capping its biggest back-to- back weekly gain since November. The Stoxx Europe 600 Index climbed to a five-week high, while the euro traded near $1.24 after its biggest weekly gain since May 2009. Gold for August delivery rose 0.8 percent to $1,258.30 an ounce. Spain’s 10-year bond yield lost 18 basis points. Spanish banks rallied as European leaders pledged to publish stress tests to boost transparency in the financial industry. Emerging-market equity and bond funds received net inflows in the week to June 16 as concerns over European deficits eased, boosting appetite for higher-yielding assets, EPFR Global data showed. “The stock gains are very comforting,” said David Kelly , who helps oversee $445 billion as chief market strategist for JPMorgan Funds in New York. “They suggest this is still a bull market. There’s a realization that the measures put in place by European governments and the IMF to deal with the debt issues are sufficient to do the job. It’s likely that the global economic recovery will be able to overcome the speed of the European crisis.” One-Month High Shares of commodity producers and financial firms led gains in the S&P 500 among 10 groups, while health-care and telephone companies had the biggest declines. JPMorgan Chase & Co., DuPont Co., Caterpillar Inc. and Cisco Systems Inc. climbed more than 1.3 percent for the top advances in the Dow Jones Industrial Average. Both gauges are trading near their highest levels in a month. U.S. equities closed higher after drifting between gains and losses for most of the day as the expiration of futures and options, coupled with the quarterly rebalancing of the S&P 500, triggered price swings. The S&P 500 rose 2.4 percent this week, building on last week’s 2.5 percent rally. About three stocks rose for every two that fell on Europe’s benchmark Stoxx Europe 600 . Banco Santander SA , Spain’s largest lender, rallied 3.5 percent in Madrid while smaller rival Banco Bilbao Vizcaya Argentaria SA climbed 5.6 percent. Spain’s IBEX 35 Index and Portugal’s PSI-20 increased at least 2.2 percent, the most among western European benchmark gauges. ‘Sentiment Has Changed’ “Sentiment has changed to the positive after investors saw that the European debt crisis hasn’t spiralled out of control,” said Daphne Roth , Singapore-based head of Asian equity research at ABN Amro Private Banking. Spain’s 10-year bond yield dropped to 4.59 percent and the premium investors demand to own the debt instead of benchmark German bunds narrowed by 25 basis points to 186 basis points. European Union leaders agreed yesterday to disclose how banks perform on stress tests, seeking to show investors that the financial system can withstand shocks. The decision came after Spanish officials unexpectedly pledged to publish results on individual banks, the first European government to do so. European Central Bank President Jean-Claude Trichet said broader regional stress tests will be published in the second half of July “at the latest.” Emerging Markets Developing-nation stocks rose for a ninth day, the longest stretch of gains in two months. Emerging-equity funds took in $2.5 billion in the past week, the second-largest inflow this year, while emerging-bond funds received $659 million, EPFR said in a statement. The MSCI Asia Pacific Index gained 0.3 percent. Softbank Corp., the exclusive seller of the iPhone in Japan, climbed 2.7 percent in Tokyo as orders for a new model outstripped supply. Newcrest Mining Ltd., Australia’s biggest gold producer gained 1.7 percent in Sydney. The yen gained for a fifth day to 90.74 per dollar, and appreciated 0.4 percent against the euro after the nation’s leaders pledged to reduce public debt. Japanese Prime Minister Naoto Kan said he would consider an opposition party proposal to raise the consumption tax. Credit-default swaps on the Markit iTraxx Crossover Index of 50 mostly junk-rated European companies dropped 21.5 basis points to a one-month low of 521, according to Markit Group Ltd. Copper fell to a one-week low on concern the U.S. recovery may be weaker than forecast. The metal dropped 0.8 percent to $2.9015 a pound in New York. The Reuters/Jefferies CRB Index of commodities slipped 0.1 percent, paring its five-day advance to 2.7 percent. —-With assistance from Paul Armstrong , Matthew Brown , Claudia Carpenter , David Merritt and Michael Patterson in London. Editor: Michael P. Regan . To contact the reporters on this story: Rita Nazareth at rnazareth@bloomberg.net ; Stephen Kirkland in London at skirkland@bloomberg.net ;

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Global Stocks Rise as S&ampP 500 Fluctuates Gold Reaches Record

June 18, 2010

By Rita Nazareth and Stephen Kirkland June 18 (Bloomberg) — The MSCI World Index of stocks rose for the ninth day, the longest rally in 11 months, and Spanish bonds jumped on speculation efforts to contain Europe’s debt crisis will succeed. Treasuries fell, while gold climbed to a record. Oil reversed losses to rebound above $77 a barrel. The global index increased 0.2 percent at 12:47 p.m. in New York. The Stoxx Europe 600 Index also climbed for a ninth day, rising 0.2 percent to the highest level in five weeks. The Standard & Poor’s 500 Index drifted between gains and losses as the expiration of futures and options triggered price swings. Spot gold rose as high as $1,262.50 an ounce. Spain’s 10-year bond yield lost 19 basis points. Spanish banks rallied as European leaders pledged to publish stress tests to boost transparency in the financial industry. Emerging-market equity and bond funds received net inflows in the week to June 16 as concerns over European deficits eased, boosting appetite for higher-yielding assets, EPFR Global data showed. “The stock gains are very comforting,” said David Kelly , who helps oversee $445 billion as chief market strategist for JPMorgan Funds in New York. “They suggest this is still a bull market. There’s a realization that the measures put in place by European governments and the IMF to deal with the debt issues are sufficient to do the job. It’s likely that the global economic recovery will be able to overcome the speed of the European crisis.” One-Month High Shares of commodity producers and financial firms led gains in the S&P 500 among 10 groups, while health-care and telephone companies had the biggest declines. Cisco Systems Inc., DuPont Co. and Exxon Mobil Corp. climbed more than 1 percent for the top advances in the Dow Jones Industrial Average higher. Both gauges are trading near their highest levels in a month. About three stocks rose for every two that fell on Europe’s benchmark Stoxx Europe 600 . Banco Santander SA , Spain’s largest lender, rallied 3.5 percent in Madrid while smaller rival Banco Bilbao Vizcaya Argentaria SA climbed 5.6 percent. Spain’s IBEX 35 Index and Portugal’s PSI-20 increased 2.2 percent, the most among western European benchmark gauges. “Sentiment has changed to the positive after investors saw that the European debt crisis hasn’t spiralled out of control,” said Daphne Roth , Singapore-based head of Asian equity research at ABN Amro Private Banking. Spain’s 10-year bond yield dropped to 4.58 percent and the premium investors demand to own the debt instead of benchmark German bunds narrowed by 26 basis points to 185 basis points. Stress Tests European Union leaders agreed yesterday to disclose how banks perform on stress tests, seeking to show investors that the financial system can withstand shocks. The decision came after Spanish officials unexpectedly pledged to publish results on individual banks, the first European government to do so. European Central Bank President Jean-Claude Trichet said broader regional stress tests will be published in the second half of July “at the latest.” Developing-nation stocks rose for a ninth day, the longest stretch of gains in two months. Emerging-equity funds took in $2.5 billion in the past week, the second-largest inflow this year, while emerging-bond funds received $659 million, EPFR said in a statement. The MSCI Asia Pacific Index gained 0.3 percent. Softbank Corp., the exclusive seller of the iPhone in Japan, climbed 2.7 percent in Tokyo as orders for a new model outstripped supply. Newcrest Mining Ltd., Australia’s biggest gold producer gained 1.7 percent in Sydney. Yen Gains The yen gained for a fifth day to 90.78 per dollar, and appreciated 0.5 percent against the euro after the nation’s leaders pledged to reduce public debt. Japanese Prime Minister Naoto Kan said he would consider an opposition party proposal to raise the consumption tax. Credit-default swaps on the Markit iTraxx Crossover Index of 50 mostly junk-rated European companies dropped 21.5 basis points to a one-month low of 522, according to Markit Group Ltd. Copper pared earlier losses, slipping 0.3 percent to $2.9155 a pound in New York after earlier sinking as much as 2.1 percent. The Reuters/Jefferies CRB Index of commodities rose 0.3 percent, erasing an early 0.7 percent slump and extending its five-day advance to 3.2 percent, on pace for its best week since the beginning of April. —-With assistance from Paul Armstrong , Matthew Brown , Claudia Carpenter , David Merritt and Michael Patterson in London. Editor: Michael P. Regan . To contact the reporters on this story: Rita Nazareth at rnazareth@bloomberg.net ; Stephen Kirkland in London at skirkland@bloomberg.net ;

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Stocks Climb Worldwide as Spanish Banks Rally Gold Strengthens to Record

June 18, 2010

By Stephen Kirkland June 18 (Bloomberg) — The MSCI World Index of stocks rose for the ninth day, the longest rally in 11 months, and Spanish bonds rallied on speculation efforts to contain Europe’s debt crisis will succeed. The yen strengthened against the dollar and gold climbed to a record. The world index increased 0.1 percent at 9:57 a.m. in New York. The Stoxx Europe 600 Index advanced 0.2 percent to its highest level in five weeks. The Standard & Poor’s 500 Index fluctuated as the expiration of U.S. futures and options triggered greater price swings. The MSCI Emerging Markets Index climbed 0.4 percent. The yen strengthened 0.3 percent versus the dollar, and gold rose as high as $1,258.25 an ounce. Oil fell a second day. Spain’s 10-year bond yield lost 17 basis points. Spanish banks rallied as European leaders pledged to publish stress tests to boost transparency in the financial industry. Emerging-market equity and bond funds received net inflows in the week to June 16 as concerns over European deficits eased, boosting appetite for higher-yielding assets, EPFR Global data showed. “Sentiment has changed to the positive after investors saw that the European debt crisis hasn’t spiralled out of control,” said Daphne Roth , Singapore-based head of Asian equity research at ABN Amro Private Banking. European Shares About three stocks rose for every two that fell on Europe’s benchmark Stoxx 600 . Banco Santander SA , Spain’s largest lender, rallied 2.5 percent in Madrid while smaller rival Banco Bilbao Vizcaya Argentaria SA climbed 4.4 percent. Spain’s IBEX 35 Index increased 1.2 percent, the most among 18 western European benchmark gauges. The cost of protecting against a debt default by Banco Santander dropped, with credit-default swaps tumbling 16 basis points to 170, according to CMA DataVision. Spain’s 10-year bond yield dropped 17 basis points to 4.6 percent and the premium investors demand to own the debt instead of benchmark German bunds tumbled by 23 basis points to 188 basis points. European Union leaders agreed yesterday to disclose how banks perform on stress tests, seeking to show investors that the financial system can withstand shocks. The decision came after Spanish officials unexpectedly pledged to publish results on individual banks, the first European government to do so. European Central Bank President Jean-Claude Trichet said broader regional stress tests will be published in the second half of July “at the latest.” Asian Stocks The MSCI Asia Pacific Index gained 0.3 percent. Softbank Corp., the exclusive seller of the iPhone in Japan, climbed 2.7 percent in Tokyo as orders for a new model outstripped supply. Newcrest Mining Ltd., Australia’s biggest gold producer gained 1.7 percent in Sydney. Developing-nation stocks rose for a ninth day, the longest stretch of gains in two months. Hungary’s BUX Index climbed for the first time in four days, rising 0.2 percent, after Templeton Asset Management Ltd.’s Mark Mobius said in his blog that the nation’s stocks are attractive. Emerging-equity funds took in $2.5 billion in the past week, the second-largest inflow this year, while emerging-bond funds received $659 million, EPFR said in a statement. The yen gained for a fifth day to 90.77 per dollar, and appreciated 0.5 percent versus euro after the nation’s leaders pledged to reduce public debt. Japanese Prime Minister Naoto Kan said he would consider an opposition party proposal to raise the consumption tax. The dollar strengthened 0.2 percent to $1.2365 per euro. Default Swaps Credit-default swaps on the Markit iTraxx Crossover Index of 50 mostly junk-rated European companies dropped 6.3 basis points to a one-month low of 537.3, according to Markit Group Ltd. Copper fell 1.1 percent to $6,375 a metric ton on the London Metal Exchange, the third consecutive decline. Crude oil slid for a second day, dropping 0.7 percent to $76.29 in electronic trading on the New York Mercantile Exchange. —-With assistance from Paul Armstrong , Matthew Brown , Claudia Carpenter , David Merritt and Michael Patterson in London. Editors: Stephen Kirkland , Michael P. Regan To contact the reporter on this story: Stephen Kirkland in London at skirkland@bloomberg.net ;

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Global Stocks Extend 8-Day Gain Euro, Gold, Spanish Bonds Rise

June 17, 2010

By Michael P. Regan and Kelly Bit June 17 (Bloomberg) — Stocks rose, with the MSCI World Index extending its longest advance in 11 months, as a late-day rally in technology shares helped the U.S. market reverse an early drop. The euro gained as a Spanish bond sale eased concern the region’s debt crisis will worsen. Gold rallied. The Standard & Poor’s 500 Index climbed 0.1 percent to 1,116.04 at 4 p.m. in New York, reclaiming its advance for the year along with the Dow Jones Industrial Average. The MSCI World, a gauge of equities in 24 developed markets, increased 0.2 percent for an eighth straight gain. The euro strengthened 0.6 percent to almost $1.24, while gold futures rose 1.5 percent to $1,248.70 an ounce, approaching a record. Treasuries surged. Apple Inc. climbed to a record and paced the advance in technology shares that helped the S&P 500 recover from a 0.8 percent drop spurred by a lower-than-estimated reading in the Federal Reserve Bank of Philadelphia’s factory index and an unexpected jump in jobless claims. Spanish bonds rallied as the nation sold $4.3 billion in debt, the maximum set for the auction, bolstering optimism Europe’s crisis is contained. “Although the initial reaction to the claims numbers and the Philadelphia Fed number was a kneejerk negative, a little bit more thoughtful reflection on the numbers led to a more positive conclusion,” said Hugh Johnson, who oversees $1.85 billion as chairman of Albany, New York-based Johnson Illington. “When investors had a chance to digest and assess the news, they should have reached the conclusion that the economy continues to expand, albeit at a slow pace.” Apple Hits Record Apple rallied 1.7 percent to a record price of $271.87. The customer base for the iPhone may top 100 million users next year, with demand for the soon-to-be-released iPhone 4 helping to persuade more buyers to embrace the smartphone, Morgan Stanley said. First Solar Inc. jumped 3.9 percent to lead industrial shares higher after Credit Suisse Group AG advised buying the stock. The S&P 500 tumbled 14 percent from a 19-month high in April through June 7 amid concern Europe’s debt crisis and the worst oil spill in U.S. history will stifle the economic recovery. The index has risen 6.2 percent since and may extend its rebound to 12 percent, said Ralph Acampora, whose career as a technical analyst began in 1966. “The damage in price and the damage in psychology has set us up on a very short-term basis for a good recovery,” Acampora said. Technical analysts view pessimism as a sign that stocks may rise, because it indicates investors have capacity to buy shares after avoiding the market. 200-Day Moving Average The S&P 500 today remained above its 200-day average for a third day after sinking below it for about a month. Tomorrow’s expiration of stock options, coupled with the S&P’s quarterly index rebalancing on the same day, resulted “in massive technical noise today,” said Peter Boockvar, equity strategist at Miller Tabak & Co. in New York. The late-day rally in stocks came after U.S. bond markets largely closed. Treasuries rose, pushing two-year yields to as low as 0.69 percent, after the increase in jobless claims and a drop in consumer prices spurred bets the Federal Reserve will keep interest rates low. The yield on the 10-year note fell 7 basis points, or 0.07 percentage point, to 3.19 percent. The Federal Reserve Bank of Philadelphia’s general economic index slid to a 10-month low of 8, less than half the median estimate in a Bloomberg survey of economists. Initial U.S. jobless claims rose to 472,000 last week, indicating firings remain elevated even as the economy recovers. The index of leading indicators, a gauge of the outlook for growth, climbed 0.4 percent in May, according to the Conference Board. Consumer prices decreased 0.2 percent in May, the government said. ‘Somewhat Concerning’ “The economic numbers are still somewhat concerning,” said Brett Hryb , part of a group that manages $2.6 billion at MFC Global Investment Management in Toronto. “We have a very long-tailed recovery as opposed to a V-shaped bounce back. The gain in Treasuries and gold fall into the flight to safety. Gold is the net beneficiary every time the market is unsure.” General Electric Co., through its finance arm, sold $850 million of bonds backed by credit-card payments, GE’s biggest such sale in nine months, according to a person familiar with the offering. The top-rated securities, maturing in about three years, yield 75 basis points more than the benchmark swap rate, said the person, who declined to be identified because the terms aren’t public. European Stocks The Stoxx Europe 600 Index rose 0.2 percent, paring a 0.7 percent rally. Spain sold 3.5 billion euros ($4.3 billion) of 10-year and 30-year bonds at yields lower than the prevailing market rates, attracting bids worth as much as 2.45 times the securities on offer, assuaging concern that it would face difficulty meeting bond repayments. Spain’s gauge of 35 stocks increased 0.7 percent. Spanish bonds rose, with the yield on the 10-year note falling from the highest level in almost two years. The yield dropped 11 basis points to 4.77 percent. The difference in yield, or spread, between German and Spanish 10-year government bonds narrowed 10 basis points to 211 basis points. Spain is trying to convince investors it can cut the euro- region’s third-largest deficit, while propping up the country’s savings banks and lifting the economy out of a two-year slump. Spain, which faces 24.7 billion euros of maturing debt in July, had seen the risk premium on its 10-year bonds rise to a decade high on concern it may need to tap a European rescue fund. Hayward Testifies BP Plc, battling to contain the worst oil spill in U.S. history, rallied 6.7 percent in London then lost 0.4 percent in New York. The shares have tumbled more than 45 percent on both exchanges since the April 20 explosion that triggered the spill. The company’s Chief Executive Officer Tony Hayward was denounced by U.S. lawmakers today for stonewalling as he failed to answer questions about the causes of the spill. BP scrapped dividends and pledged asset sales to meet President Barack Obama ’s demand for a $20 billion fund to help victims. The U.S. Chemical Safety and Hazard Investigation Board will look for the causes of the explosion, Chairman John Bresland said. The euro rose 0.6 percent to $1.2389 and earlier topped $1.24 for the first time in almost three weeks as Spain’s bond sale bolstered confidence in the currency. The dollar weakened against 13 of 16 major currencies, led by a 1.7 percent drop versus the Swiss franc. The Swiss franc approached an all-time high against the euro after the central bank softened its stance on fighting franc gains as deflation risks ease. The Swiss National Bank, which has been buying foreign currencies since March 2009 to counter the threat of deflation, said today that those risks have “largely disappeared.” Emerging Markets, Commodities The MSCI Emerging Markets Index rose 0.4 percent, climbing for an eighth day in the longest stretch of gains in two months. Benchmark indexes in Turkey, Indonesia, Egypt and Romania climbed at least 0.9 percent. Crude oil fell for the first time this week, slipping 1.1 percent to $76.79 a barrel. Copper futures for September delivery slid 8.95 cents, or 3 percent, to $2.924 a pound on the Comex in New York. The Reuters/Jefferies CRB Index of commodities retreated for the first time in nine days, losing 0.3 percent and snapping its longest streak of gains in three years. To contact the reporters on this story: Michael P. Regan in New York at mregan12@bloomberg.net ; Kelly Bit in New York at kbit@bloomberg.net

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Stocks Worldwide Extend Eight-Day Gain Euro, Gold, Spanish Bonds Advance

June 17, 2010

By Michael P. Regan and Kelly Bit June 17 (Bloomberg) — Stocks rose, with the MSCI World Index extending its longest advance in 11 months, as a late-day rally in technology shares helped the U.S. market reverse an early drop. The euro gained as a Spanish bond sale eased concern the region’s debt crisis will worsen. Gold rallied. The Standard & Poor’s 500 Index climbed 0.1 percent to 1,116.04 at 4 p.m. in New York, reclaiming its advance for the year along with the Dow Jones Industrial Average. The MSCI World, a gauge of equities in 24 developed markets, increased 0.2 percent for an eighth straight gain. The euro strengthened 0.6 percent to almost $1.24, while gold futures rose 1.5 percent to $1,248.70 an ounce, approaching a record. Treasuries surged. Apple Inc. climbed to a record and paced the advance in technology shares that helped the S&P 500 recover from a 0.8 percent drop spurred by a lower-than-estimated reading in the Federal Reserve Bank of Philadelphia’s factory index and an unexpected jump in jobless claims. Spanish bonds rallied as the nation sold $4.3 billion in debt, the maximum set for the auction, bolstering optimism Europe’s crisis is contained. “Although the initial reaction to the claims numbers and the Philadelphia Fed number was a kneejerk negative, a little bit more thoughtful reflection on the numbers led to a more positive conclusion,” said Hugh Johnson, who oversees $1.85 billion as chairman of Albany, New York-based Johnson Illington. “When investors had a chance to digest and assess the news, they should have reached the conclusion that the economy continues to expand, albeit at a slow pace.” Apple Hits Record Apple rallied 1.7 percent to a record price of $271.87. The customer base for the iPhone may top 100 million users next year, with demand for the soon-to-be-released iPhone 4 helping to persuade more buyers to embrace the smartphone, Morgan Stanley said. First Solar Inc. jumped 3.9 percent to lead industrial shares higher after Credit Suisse Group AG advised buying the stock. The S&P 500 tumbled 14 percent from a 19-month high in April through June 7 amid concern Europe’s debt crisis and the worst oil spill in U.S. history will stifle the economic recovery. The index has risen 6.2 percent since and may extend its rebound to 12 percent, said Ralph Acampora, whose career as a technical analyst began in 1966. “The damage in price and the damage in psychology has set us up on a very short-term basis for a good recovery,” Acampora said. Technical analysts view pessimism as a sign that stocks may rise, because it indicates investors have capacity to buy shares after avoiding the market. 200-Day Moving Average The S&P 500 today remained above its 200-day average for a third day after sinking below it for about a month. Tomorrow’s expiration of stock options, coupled with the S&P’s quarterly index rebalancing on the same day, resulted “in massive technical noise today,” said Peter Boockvar, equity strategist at Miller Tabak & Co. in New York. The late-day rally in stocks came after U.S. bond markets largely closed. Treasuries rose, pushing two-year yields to as low as 0.69 percent, after the increase in jobless claims and a drop in consumer prices spurred bets the Federal Reserve will keep interest rates low. The yield on the 10-year note fell 7 basis points, or 0.07 percentage point, to 3.19 percent. The Federal Reserve Bank of Philadelphia’s general economic index slid to a 10-month low of 8, less than half the median estimate in a Bloomberg survey of economists. Initial U.S. jobless claims rose to 472,000 last week, indicating firings remain elevated even as the economy recovers. The index of leading indicators, a gauge of the outlook for growth, climbed 0.4 percent in May, according to the Conference Board. Consumer prices decreased 0.2 percent in May, the government said. ‘Somewhat Concerning’ “The economic numbers are still somewhat concerning,” said Brett Hryb , part of a group that manages $2.6 billion at MFC Global Investment Management in Toronto. “We have a very long-tailed recovery as opposed to a V-shaped bounce back. The gain in Treasuries and gold fall into the flight to safety. Gold is the net beneficiary every time the market is unsure.” General Electric Co., through its finance arm, sold $850 million of bonds backed by credit-card payments, GE’s biggest such sale in nine months, according to a person familiar with the offering. The top-rated securities, maturing in about three years, yield 75 basis points more than the benchmark swap rate, said the person, who declined to be identified because the terms aren’t public. European Stocks The Stoxx Europe 600 Index rose 0.2 percent, paring a 0.7 percent rally. Spain sold 3.5 billion euros ($4.3 billion) of 10-year and 30-year bonds at yields lower than the prevailing market rates, attracting bids worth as much as 2.45 times the securities on offer, assuaging concern that it would face difficulty meeting bond repayments. Spain’s gauge of 35 stocks increased 0.7 percent. Spanish bonds rose, with the yield on the 10-year note falling from the highest level in almost two years. The yield dropped 11 basis points to 4.77 percent. The difference in yield, or spread, between German and Spanish 10-year government bonds narrowed 10 basis points to 211 basis points. Spain is trying to convince investors it can cut the euro- region’s third-largest deficit, while propping up the country’s savings banks and lifting the economy out of a two-year slump. Spain, which faces 24.7 billion euros of maturing debt in July, had seen the risk premium on its 10-year bonds rise to a decade high on concern it may need to tap a European rescue fund. Hayward Testifies BP Plc, battling to contain the worst oil spill in U.S. history, rallied 6.7 percent in London then lost 0.4 percent in New York. The shares have tumbled more than 45 percent on both exchanges since the April 20 explosion that triggered the spill. The company’s Chief Executive Officer Tony Hayward was denounced by U.S. lawmakers today for stonewalling as he failed to answer questions about the causes of the spill. BP scrapped dividends and pledged asset sales to meet President Barack Obama ’s demand for a $20 billion fund to help victims. The U.S. Chemical Safety and Hazard Investigation Board will look for the causes of the explosion, Chairman John Bresland said. The euro rose 0.6 percent to $1.2389 and earlier topped $1.24 for the first time in almost three weeks as Spain’s bond sale bolstered confidence in the currency. The dollar weakened against 13 of 16 major currencies, led by a 1.7 percent drop versus the Swiss franc. The Swiss franc approached an all-time high against the euro after the central bank softened its stance on fighting franc gains as deflation risks ease. The Swiss National Bank, which has been buying foreign currencies since March 2009 to counter the threat of deflation, said today that those risks have “largely disappeared.” Emerging Markets, Commodities The MSCI Emerging Markets Index rose 0.4 percent, climbing for an eighth day in the longest stretch of gains in two months. Benchmark indexes in Turkey, Indonesia, Egypt and Romania climbed at least 0.9 percent. Crude oil fell for the first time this week, slipping 1.1 percent to $76.79 a barrel. Copper futures for September delivery slid 8.95 cents, or 3 percent, to $2.924 a pound on the Comex in New York. The Reuters/Jefferies CRB Index of commodities retreated for the first time in nine days, losing 0.3 percent and snapping its longest streak of gains in three years. To contact the reporters on this story: Michael P. Regan in New York at mregan12@bloomberg.net ; Kelly Bit in New York at kbit@bloomberg.net

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Nokia Lowers Forecasts Amid IPhone Competition in Smartphones, Weaker Euro

June 16, 2010

By Diana ben-Aaron June 16 (Bloomberg) — Nokia Oyj , the world’s biggest maker of mobile phones, cut its second-quarter and full-year forecasts, citing a lack of high-end devices and a weaker euro. Second-quarter handset revenue and margins will be “at the lower end of or slightly below” the range forecast, the Espoo, Finland-based company said in a statement today. Nokia has struggled to come out with a touchscreen model that meets user expectations raised by Apple Inc. ’s iPhone. The company is losing high-end customers to the iPhone, Research in Motion Ltd.’s BlackBerry, and phones running Google Inc.’s Android software, while increasing sales of cheaper smartphones with smaller profits. Nokia fell as much as 55 cents, or 7 percent, to 7.37 euros, the most in more than a month. It was trading down 6.6 percent at 7.40 euros as of 3:07 p.m. in Helsinki. Sales in the devices and services division may fall below 6.7 billion euros ($8.2 billion) as the company’s product mix shifted toward less-profitable midrange and low end phones, Nokia said. The adjusted operating margin in handsets may fall below 9 percent in the second quarter and 11 percent for the year, it said. The company lowered its devices margins forecasts on April 22 to 9 to 12 percent for the quarter and 11 to 13 percent for the year. To contact the reporter on this story: Diana ben-Aaron in Helsinki at dbenaaron1@bloomberg.net

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Brett King: Mobile Data Plans are wrong…

June 15, 2010

The greatest competitive differentiation a mobile operator can give me today is an always on data plan across devices. Right now I have an iPhone, a Blackberry, an iPad and a Mac and I effectively have to manage different data plans for each device. This sucks. I also maintain a broadband connection at home, although I would abandon that gladly if my wireless data deal were better. Not only does multi-device connectivity cost me more than I believe it should, but I actually have different plans with different providers for different devices. Some are monthly WiFi deals, others are mobile data deals that actually limit my downloads on a monthly basis, and others are pre-paid deals that I pick up when I am visiting other countries. My best deal is a great 3.5G solution through CSL in Hong Kong, where I pay around US$50 a month for 21Mbps access speeds and unlimited downloads. Unfortunately when I am working in the United States, UK and Australia on my iPhone or iPad, I can’t get a deal even remotely close to this sort of value for money. Firstly, 21Mbps isn’t available on AT&T, Telstra or many of the UK providers.  Secondly, unless you are Sprint 4G in the US, there’s not one provider who gives an unlimited download deal. In the US, UK and Australia on my mobile plans I am restricted to downloading between 6 Gb and 10 Gb per month. You might think that sounds like a lot, but I’ve recently been conducting webinars and Skype teleconferences frequently, and I can chew through 1 Gb of data in a single day. If you exceed the monthly download limit, then that’s where you start to singlehandedly make an sizeable direct contribution to the profits of the telco themselves. Normally this manifests itself as overage charges that resemble the budget of a mid-size multinational. Plans need to be for access, not data I understand the need and right of an operator to make margin from their business. To some extent with fixed line business I understand the cost of running cable and the fact that as a user of the infrastructure I must pay a penalty. But let’s face it, when it’s wireless data of the 3G or 4G network, essentially the operator is providing this over cell tower infrastructure that was installed in most cases over 10 years ago, and has just undergone successive upgrades of antenna and firmware to operate at the new frequencies. Unless you are a VNO (Virtual Network Operator) the data is costing you nothing. In any case, the cost of the infrastructure is a sunk cost, and regardless of how much data I suck down the pipe, I should be paying for the size of the pipe, not for the data because the operator most certainly isn’t paying for the data. To illustrate the great digital divide let’s compare the more progressive countries with US, UK and Australia based on 12 month contracts. The great digital divide Pricing plans should get cheaper a lot faster than they do You’ve heard of Moore’s Law right? Well there’s a law for the telecoms sector in respect to bandwidth too. It’s called Gilder’s law . Gilder’s law effectively states that the capacity of a pipe to carry data will increase by at least 3 times Moore’s law. Moore’s law says that computing capacity/power will increase at 200% per 2 years, so that means bandwidth will increase 600% in carrying capacity every 2 years. So the cost of data over a 7Mb Next-G modem, if it is $50 today, should be $8 in 2 years time for the same deal. From my experience, this is extremely unlikely. So what is happening is operators are getting increasingly cheaper pipes, and are maximizing the profit of those pipes over more years than they need to. If South Korea can provide 1 Gbps broadband in the home for the same price as Australia charges for a 2.5Mbps connection, you know something has to give eventually. So what is the great equalizer? 4G – Herein lies the problem The next generation of mobile standards (4G) allows for much faster download speeds, infact, when 4G taps out the upper end will allow 1 Gbps download speeds. The problem is that when Australian, UK and US providers move to the next generation of technology, capping downloads with limits just won’t make any sense whatsoever. What would you cap it at? 100 Gb? It gets a little ridiculous. I could download a DVD quality movie every day and still not exceed my download limit. But more importantly, once in place, the whole benefit in 4G is the fact that I become permanently unwired as a consumer. To understand where we are going means that we will move from one device to another seamlessly. This is already happening with the iPad, iPhone and your HD TV. I am looking for a data provider that allows me access to connectivity as a bundle, not by Mb. Conclusion In a Wired article back in 1993 George Gilder predicted that Bandwidth would eventually be free. I believe that bandwidth will eventually be so cheap that it is effectively free, but right now operators need to understand that charging for the pipe, and not the data is how they can both enable business and future revenue.

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Stocks, Oil Rally on Economic Optimism Treasuries Retreat

June 14, 2010

By Rita Nazareth and David Merritt June 14 (Bloomberg) — Stocks rose for a fifth day, the longest streak since October for the MSCI World Index, and commodities rallied as growth in European industrial production added to signs the global economic rebound is strengthening. The euro appreciated, the yen weakened and Treasuries fell. The MSCI World gauge of stocks in 24 developed nations gained 1.3 percent at 1:17 p.m. in New York, paring a rally of as much as 1.8 percent after Moody’s cut Greece’s credit rating. The Standard & Poor’s 500 Index, which is trading near its lowest valuation in 15 months compared with estimated earnings, increased 0.6 percent to 1,098.01 after surging as much as 1.3 percent. Copper advanced for a fifth day, headed for the longest rally in five months. Oil trimmed its advance to 1 percent. Ten- year Treasury yields increased 6 basis points to 3.29 percent and the euro strengthened to more than $1.22. Eighteen of 19 industries in the Stoxx Europe 600 Index rose after industrial production increased more than economists forecast in April, rising 0.8 percent for an 11th month of gains, the European Union said. The Federal Reserve may say on June 16 that output at U.S. factories, mines and utilities grew 0.9 percent last month after a 0.8 percent increase in April, according to economists surveyed by Bloomberg. “Stocks are so oversold it doesn’t take a whole lot to a get a rebound,” said E. William Stone , who oversees $104 billion as chief investment strategist at PNC Wealth Management in Philadelphia. “The U.S. economic recovery is in place. In Europe, we got positive industrial production data. On a day lacking negative news, it won’t be that hard to get a positive move.” Rally Extended The S&P 500 climbed for a third day and added to gains from last week’s 2.5 percent rally, its best since March. A Thomson Reuters/University of Michigan report last week showed improving U.S. consumer sentiment. Apple Inc., maker of the iPhone and iPad, rallied 1.8 percent and Chevron Corp. climbed 1.3 percent to pace gains in technology and energy companies. JetBlue Airways Corp. jumped 6.3 percent and American Airlines parent AMR Corp. rallied 3 percent after Deutsche Bank AG advised buying the shares. The Dow Jones Transportation Average rose 1.8 percent today and is up 7.3 percent in 2010, compared with a 1.3 percent year-to-date drop in the Dow Jones Industrial Average. Some traders watch the performance of airlines, railroads and trucking companies to gauge the outlook for the overall economy. U.S. equities and commodities trimmed gains today as Moody’s Investors Service downgraded Greece’s government bond ratings by four levels to Ba1 from A3. The outlook is stable, Moody’s said. Earnings Estimates Analysts have raised their average 2010 earnings growth forecasts for the S&P 500 to 32 percent from 26 percent at the end of March, according to data compiled by Bloomberg. The improving forecasts came even as the benchmark measure of U.S. equities retreated 13 percent between April 23 and June 4 amid concern some European nations will struggle to finance deficits. The S&P 500 is trading at about 13.5 times analysts’ earnings estimates for the next 12 months, near the lowest level since March 2009, the month the benchmark index slumped to a 12- year low. “What we see is corporate profit growth in a very low- inflation, low-interest-rate environment,” David Bianco , head of U.S. equity strategy at Bank of America-Merrill Lynch, said in a Bloomberg Radio interview today with Tom Keene . “By year- end, we’ll be at 1,300” for the S&P 500. Interest Rate Watch Federal Reserve Bank of St. Louis President James Bullard , speaking in Tokyo today, said Europe’s debt crisis shouldn’t cause the Fed to postpone raising interest rates as the economy recovers. The central bank has kept its benchmark lending rate at a record-low range near zero since December 2008 to foster growth. The Stoxx Europe 600 Index rallied 1.2 percent, while the MSCI Asia Pacific Index climbed 1.6 percent to the highest in almost four weeks. BHP Billiton Ltd. and Rio Tinto Group climbed more than 2.4 percent in London. Axa SA, Europe’s second-biggest insurer, rose 3.7 percent in Paris after saying it’s in talks to sell part of its U.K. life insurance unit to Clive Cowdery ’s Resolution Ltd. for 2.75 billion pounds ($4 billion). BP Plc , struggling to contain its oil spill in the Gulf of Mexico, slipped 9.3 percent to a 13-year low of 355.45 pence in London. The company faces a U.S. deadline today for a plan to raise oil-containment capacity as President Barack Obama demands an escrow account for damages claims related to the worst environmental disaster in the nation’s history. Developing-nation stocks rose for a fifth day, the longest winning streak in two months, with the MSCI Emerging Markets Index gaining 1.7 percent. Benchmark gauges in Taiwan, South Africa, Thailand and Qatar advanced at least 1.2 percent. Won Rallies South Korea’s won strengthened 2 percent against the dollar after policy makers said they will give banks time to meet a new ceiling on forward contracts, holding off from imposing controls on capital flows. Copper futures for July delivery rose 7.5 cents, or 2.6 percent, to $2.979 a pound on the Comex in New York, poised for the fifth straight gain, the longest rally since early January. The metal climbed 3 percent last week. Crude oil futures for July delivery increased 1 percent to $74.54 a barrel on the New York Mercantile Exchange after jumping 3 percent earlier. The yield on the two-year Treasury note increased four basis points to 0.77 percent, and the 30-year bond yield rose seven basis points to 4.22 percent. German 10-year bunds fell, with the yield advancing seven basis points to 2.63 percent. Belgian Bonds The Belgian 10-year yield jumped 11 basis points to 3.46 percent. Flemish nationalists took the lead in Belgium ’s general elections, setting up coalition talks with French-speaking Socialists who face demands from Dutch-speaking voters to give more powers to the nation’s regions. The cost of protecting corporate bonds from default fell in the U.S. and Europe. The Markit CDX North America Investment Grade Index Series 14, which investors use to hedge against losses or speculate on creditworthiness, declined 3 basis points to a mid-price of 122.4 basis points, according to Markit Group Ltd. In Europe, the Markit iTraxx Crossover Index of credit- default swaps on 50 mostly junk-rated companies fell 21 basis points to 575, the lowest in 1 1/2 weeks. The yen dropped 0.1 percent to 91.76 per dollar, and weakened 1.5 percent against the euro to 112.64. The euro strengthened 1.4 percent to $1.2276. To contact the reporters on this story: Rita Nazareth in New York at rnazareth@bloomberg.net ; David Merritt in London on dmerritt1@bloomberg.net

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Apple Under Pressure to Ease Software Limits as Jobs’s Influence Increases

June 14, 2010

By Dina Bass and Adam Satariano June 14 (Bloomberg) — Apple Inc. , under growing scrutiny from antitrust regulators, may have to loosen restrictions on software developers and music labels to avoid legal wrangling with the government and prevent damage to how its brand is perceived by the public, lawyers and analysts said. Federal Trade Commission officials are preparing to review allegations that Apple is trying to trammel rivalry in mobile advertising, people familiar with the matter said last week. Regulators were already weighing a probe of Apple’s treatment of Adobe Systems Inc., and the U.S. Justice Department has made preliminary inquiries into Apple’s behavior in the music market. The heightened scrutiny may prompt the company to give programmers more leeway in how they build applications for Apple products, said Andrew Gavil , who teaches antitrust law at Howard University in Washington. The inquiries indicate government concern that Chief Executive Officer Steve Jobs may be trying to exert too much control over industries as varied as digital music, software development and mobile advertising. “Apple needs to be prepared that all of their actions will be put under a microscope,” said Michael Gartenberg, a partner at the Altimeter Group in San Mateo, California. “They need to make sure they don’t cross the line.” Apple spokesman Steve Dowling didn’t respond to a request for comment. FTC spokesman Peter Kaplan declined to comment. Apple, based in Cupertino, California, gained $3 to $253.51 on the Nasdaq Stock Market on June 11, capping a year-to-date gain of 20 percent. Apple’s Advance As Apple enters new markets, it’s trying to maintain control not only over its products but also the applications made by third-party developers that run on those machines. For instance, it issues guidelines that limit the use of outside software in creating tools and games for its iPad tablet computer, or ads that appear in apps on the iPhone. While the company competes aggressively, it’s probably not violating antitrust laws, Gartenberg said. Still, problems arise if Apple gives the impression it’s trying to hamper competition, said Gavil at Howard University. The latest flap involves a set of instructions for developers building applications for use on Apple’s iPhone. Google Inc. unit AdMob said this week that the rules, if enforced, bar the use of Google and AdMob advertising software. The rules were proposed June 7. ‘Hamper Competition’ “It does really look like these agreements are designed to hamper competition,” Gavil said. “The question really becomes, do they have any legitimate business justifications for that? It’s not hard to see how that can disadvantage a rival.” Omar Hamoui , founder of Google’s newly acquired AdMob mobile-ad service, wrote in a June 9 blog posting that the prohibitions jeopardize the revenue AdMob gets from the iPhone and hurts software developers. Already, some programmers are shunning Google tools as they tailor apps for Apple products. Bill Predmore, president of POP , which builds mobile applications and ads for companies including Target Corp. and Microsoft Corp., said his company will avoid using AdMob until Google and Apple work out a solution. Antitrust enforcers in early May were said to be weighing an investigation of Apple after Adobe Systems Inc. complained that Apple is stifling competition by barring developers from using Adobe’s software to create applications for iPhones and iPads, people familiar with the matter said then. Three weeks later, the Justice Department was said to be looking at how Apple runs its iTunes digital music service. ‘Peek Under Hood’ The inquiries may not yield the kinds of lawsuits that plagued Microsoft Corp. in the 1990s because Apple’s share of markets is smaller, Gavil said. Yet, the deeper the government probes, the more leverage it gains in shaping Apple’s behavior, said analysts at Baltimore- based Stifel, Nicolaus & Co. in a June 11 research note. “Every time a company comes before DOJ or the FTC, staff get to peek under the hood and acquire information that they can later connect with additional information to develop a theory of harm,” wrote Rebecca Arbogast and George Askew. FTC officials can issue a so-called consent decree that details the behavior a company needs to avoid, Gavil said. In some instances, a company will change tack before the government forces its hand, said Jonathan Potter, an attorney and former executive director of the Digital Media Association . Apple is a board member of the trade group. ‘Lawyer Up’ Any investigation “will be of concern and will obligate one to lawyer up, as they say on the TV cop shows, in a very significant way, and will cause at least consideration of one’s business practices,” said Potter, who’s based in Washington. In mobile advertising, Gavil said Apple may have to soften the rules that developers say prevent applications for Apple devices from using Mountain View, California-based Google or its AdMob unit to track and display advertising. Apple is preparing to start showing ads from its rival iAd network in July. “I can’t live on iAd alone,” said Greg Woock, CEO of Pinger Inc. , a San Jose, California-based maker of a free texting app. “I need Google too.” He said his products generate 800 million ad views a month and only Google has enough ads available to fill that. Changes may also be in order in the way Apple operates in music, said Gregory Weston, founder of the Weston Firm , a San Diego-based law firm that represents small businesses. As the top music retailer, Apple can press music companies to agree to terms. Apple has told some labels if they promote an album through Amazon.com Inc.’s “Deal of the Day” it won’t market the music as prominently on iTunes, a music industry executive who declined to be identified said last month. Meanwhile, as regulatory actions concerning Apple mushroom, the company’s days as a scrappy upstart that can compete as it sees fit may be ending, Gartenberg said. “This is the end of the age of Apple’s innocence, it will be harder and harder for them to maintain that image of the underdog,” he said. “They have achieved a certain degree of success, and with that success comes scrutiny.” To contact the reporter on this story: Dina Bass in Seattle at dbass2@bloomberg.net ; Adam Satariano in San Francisco at asatariano1@bloomberg.net

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Apple Under Pressure to Ease Software Limits as Jobs’s Influence Increases

June 14, 2010

By Dina Bass and Adam Satariano June 14 (Bloomberg) — Apple Inc. , under growing scrutiny from antitrust regulators, may have to loosen restrictions on software developers and music labels to avoid legal wrangling with the government and prevent damage to how its brand is perceived by the public, lawyers and analysts said. Federal Trade Commission officials are preparing to review allegations that Apple is trying to trammel rivalry in mobile advertising, people familiar with the matter said last week. Regulators were already weighing a probe of Apple’s treatment of Adobe Systems Inc., and the U.S. Justice Department has made preliminary inquiries into Apple’s behavior in the music market. The heightened scrutiny may prompt the company to give programmers more leeway in how they build applications for Apple products, said Andrew Gavil , who teaches antitrust law at Howard University in Washington. The inquiries indicate government concern that Chief Executive Officer Steve Jobs may be trying to exert too much control over industries as varied as digital music, software development and mobile advertising. “Apple needs to be prepared that all of their actions will be put under a microscope,” said Michael Gartenberg, a partner at the Altimeter Group in San Mateo, California. “They need to make sure they don’t cross the line.” Apple spokesman Steve Dowling didn’t respond to a request for comment. FTC spokesman Peter Kaplan declined to comment. Apple, based in Cupertino, California, gained $3 to $253.51 on the Nasdaq Stock Market on June 11, capping a year-to-date gain of 20 percent. Apple’s Advance As Apple enters new markets, it’s trying to maintain control not only over its products but also the applications made by third-party developers that run on those machines. For instance, it issues guidelines that limit the use of outside software in creating tools and games for its iPad tablet computer, or ads that appear in apps on the iPhone. While the company competes aggressively, it’s probably not violating antitrust laws, Gartenberg said. Still, problems arise if Apple gives the impression it’s trying to hamper competition, said Gavil at Howard University. The latest flap involves a set of instructions for developers building applications for use on Apple’s iPhone. Google Inc. unit AdMob said this week that the rules, if enforced, bar the use of Google and AdMob advertising software. The rules were proposed June 7. ‘Hamper Competition’ “It does really look like these agreements are designed to hamper competition,” Gavil said. “The question really becomes, do they have any legitimate business justifications for that? It’s not hard to see how that can disadvantage a rival.” Omar Hamoui , founder of Google’s newly acquired AdMob mobile-ad service, wrote in a June 9 blog posting that the prohibitions jeopardize the revenue AdMob gets from the iPhone and hurts software developers. Already, some programmers are shunning Google tools as they tailor apps for Apple products. Bill Predmore, president of POP , which builds mobile applications and ads for companies including Target Corp. and Microsoft Corp., said his company will avoid using AdMob until Google and Apple work out a solution. Antitrust enforcers in early May were said to be weighing an investigation of Apple after Adobe Systems Inc. complained that Apple is stifling competition by barring developers from using Adobe’s software to create applications for iPhones and iPads, people familiar with the matter said then. Three weeks later, the Justice Department was said to be looking at how Apple runs its iTunes digital music service. ‘Peek Under Hood’ The inquiries may not yield the kinds of lawsuits that plagued Microsoft Corp. in the 1990s because Apple’s share of markets is smaller, Gavil said. Yet, the deeper the government probes, the more leverage it gains in shaping Apple’s behavior, said analysts at Baltimore- based Stifel, Nicolaus & Co. in a June 11 research note. “Every time a company comes before DOJ or the FTC, staff get to peek under the hood and acquire information that they can later connect with additional information to develop a theory of harm,” wrote Rebecca Arbogast and George Askew. FTC officials can issue a so-called consent decree that details the behavior a company needs to avoid, Gavil said. In some instances, a company will change tack before the government forces its hand, said Jonathan Potter, an attorney and former executive director of the Digital Media Association . Apple is a board member of the trade group. ‘Lawyer Up’ Any investigation “will be of concern and will obligate one to lawyer up, as they say on the TV cop shows, in a very significant way, and will cause at least consideration of one’s business practices,” said Potter, who’s based in Washington. In mobile advertising, Gavil said Apple may have to soften the rules that developers say prevent applications for Apple devices from using Mountain View, California-based Google or its AdMob unit to track and display advertising. Apple is preparing to start showing ads from its rival iAd network in July. “I can’t live on iAd alone,” said Greg Woock, CEO of Pinger Inc. , a San Jose, California-based maker of a free texting app. “I need Google too.” He said his products generate 800 million ad views a month and only Google has enough ads available to fill that. Changes may also be in order in the way Apple operates in music, said Gregory Weston, founder of the Weston Firm , a San Diego-based law firm that represents small businesses. As the top music retailer, Apple can press music companies to agree to terms. Apple has told some labels if they promote an album through Amazon.com Inc.’s “Deal of the Day” it won’t market the music as prominently on iTunes, a music industry executive who declined to be identified said last month. Meanwhile, as regulatory actions concerning Apple mushroom, the company’s days as a scrappy upstart that can compete as it sees fit may be ending, Gartenberg said. “This is the end of the age of Apple’s innocence, it will be harder and harder for them to maintain that image of the underdog,” he said. “They have achieved a certain degree of success, and with that success comes scrutiny.” To contact the reporter on this story: Dina Bass in Seattle at dbass2@bloomberg.net ; Adam Satariano in San Francisco at asatariano1@bloomberg.net

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AT&ampT Network Security Hole May Have Exposed IPad Owners’ E-Mail Addresses

June 10, 2010

By Greg Bensinger and Peter Burrows June 10 (Bloomberg) — A security breach in AT&T Inc. ’s wireless network may have exposed the e-mail addresses of some owners of Apple Inc.’s iPad 3G. AT&T, the second-largest U.S. mobile phone provider, corrected the flaw, the company said yesterday in an e-mailed statement. The New York Times Co. told its staff to shut off iPad wireless access after learning of a breach involving AT&T, according to a memo confirmed yesterday by the New York Times. A group called Goatse Security said it found a breach that let it uncover information based on a unique code on iPad SIM cards. It then released addresses of iPad owners, including New York Times Co. Chief Executive Officer Janet Robinson and New York Mayor Michael Bloomberg , to Gawker Media’s Valleywag. “This issue was escalated to the highest levels of the company and was corrected by Tuesday, and we have essentially turned off the feature that provided the e-mail addresses,” Dallas-based AT&T said in the statement. AT&T declined to comment further, spokesman Fletcher Cook said in an e-mail. The vulnerability adds to Apple’s chagrin two months after an unreleased prototype of the iPhone, lost by an Apple engineer, was disassembled and photographed by Gawker’s technology blog Gizmodo.com. “This breach is obviously embarrassing for AT&T and for Apple, but knowing the names of the people who bought the first iPads is more intriguing than dangerous,” Joris Evers, a spokesman for security-software maker McAfee Inc., said in an interview from Santa Clara, California. 2 Million IPads Apple has sold more than 2 million iPads since releasing the device in April. Some models of the iPad tablet work with AT&T’s third-generation wireless network, and other versions only work on Wi-Fi networks. Apple doesn’t say how many of each model it has sold. AT&T said it continues to investigate and found no evidence that any other customer data was revealed. Apple representatives Steve Dowling and Natalie Kerris didn’t respond to requests for comment. New York’s mayor is founder and majority owner of Bloomberg LP, parent of Bloomberg News. Mark LaVorgna , a spokesman for Bloomberg’s office, had no immediate comment. To contact the reporters on this story: Greg Bensinger in New York at gbensinger1@bloomberg.net ; Peter Burrows in San Francisco at pburrows@bloomberg.net .

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Apple Unveils Thinner IPhone With Video-Chat Features

June 7, 2010

By Connie Guglielmo June 7 (Bloomberg) — Apple Inc. Chief Executive Officer Steve Jobs introduced a thinner iPhone today with a sharper screen and video-chat features, an attempt to ward off competition from devices running Google Inc.’s Android software. The iPhone 4 will go on sale in the U.S. and four other countries on June 24, Jobs said at the company’s Worldwide Developers Conference in San Francisco. A 16-gigabyte model will cost $199 and a 32-gigabyte version will sell for $299. The iPhone has emerged as Apple’s top product, raking in 40 percent of revenue last quarter — more than the Macintosh computer or iPod. The latest device has a new camera system, capable of videoconferencing and recording high-definition video. The iPhone 4 comes to market as HTC Corp. and Motorola Inc. ready rival products based on Android, the mobile-operating system software created by Google . “The biggest deal is the video calling,” said Michael Yoshikami , chief investment strategist at YCMNET Advisors in Walnut Creek, California. He owns Apple shares. “That will drive traffic to the phone.” Jobs, 55, counts on iPhone updates to entice new customers and persuade current owners to trade up to the latest model. Cupertino, California-based Apple has upgraded the iPhone each summer since the smartphone’s debut in June 2007. It released the iPhone 3G in July 2008, which added support for third-generation wireless networks. A faster version, called the iPhone 3GS, went on sale in June 2009. Apple has sold more than 50 million iPhones in the past three years. Android Challenge Android-based smartphones threaten to top the iPhone in 2013 in market share, according to IDC. Shipments of Android devices may reach 68 million that year, making it the second most popular operating system after Nokia Oyj -owned Symbian, according to Framingham, Massachusetts-based IDC. AT&T Inc. remains the exclusive U.S. carrier for the iPhone and buyers will need to sign a two-year service contract, Jobs said. The iPhone 4 has a so-called retina display that has four times as many pixels as previous models, Jobs said. It is 24 percent thinner than the 3GS and has improved battery life with seven hours of 3G talk. The phone will come in black and white. ‘Star Trek’ “It’s the biggest leap we’ve taken since the original iPhone,” Jobs said. After growing up with TV shows like “The Jetsons” and “Star Trek,” he said he has been “dreaming about video calling, and it’s real now.” The video-calling app, named FaceTime, will only work on Wi-Fi this year, rather than phone carriers’ networks, he said. The company also updated its iMovie program, which lets users record, edit and share video on the handset. “The iPhone is taking share from non-phone devices” because it has features that users could previously only access on their computers, said Gene Munster , an analyst at Piper Jaffray Cos. in Minneapolis, who is attending the conference. “It will have enough razzle-dazzle,” said Munster, who rates Apple shares “overweight” and doesn’t own any. Jobs, in his trademark jeans and black turtleneck, was briefly unable to demonstrate some of the features because he couldn’t get a wireless connection. He asked attendees to shut off the wireless connections on their computers and mobile hot spots because of interference, saying, “I’d like you to look around and police each other.” ‘Guitar Hero’ There are now more than 225,000 tools, games and other applications available for downloading, Jobs said. That compares with about 50,000 for Android, according to Toni Sacconaghi , an analyst at Sanford C. Bernstein & Co. in New York. More than 5 billion programs have been downloaded from Apple’s App Store, Jobs said. Activision Blizzard Inc. released an iPhone application for its “Guitar Hero” game today for $2.99, and Netflix Inc. , the online movie subscription service, plans to unveil a free program for the iPhone this summer. As Jobs walked onto the stage to applause, one of the 5,200 conference attendees yelled out, “We love you, Steve!” His response drew applause too: “Thanks, I think.” Speculation about what the fourth-generation iPhone would include escalated in April after an unreleased prototype, lost by an Apple engineer at a bar in March, was disassembled and photographed by technology blog Gizmodo.com . “Believe me, you ain’t seen this,” Jobs said today. The iPhone 4 will first be released in the U.S., Japan, France, Germany and the U.K. By the end of September, it will be available in 88 countries. Cheaper Model Apple will sell a new, 8-gigabyte 3GS model for $99 this month, making it the company’s lowest-priced model. It previously sold for $199. Apple fell $5.03, or 2 percent, to $250.94 today in Nasdaq Stock Market trading . The stock has gained 19 percent this year. Today’s drop mirrored a 1.9 percent decline in the Standard & Poor’s 500 information-technology index. Apple’s new device will be powered by an updated version of the iPhone operating system. Called iOS 4, it adds more than 100 features, including multitasking — the ability to run more than one third-party program at the same time. Developers will get a near-final release of the software today, Jobs said. It will be available “soon” for users, he said. It also supports an advertising platform called iAd, designed to give developers a new way to make money from their apps. Apple has received commitments of more than $60 million in iAds for the second half from companies such as Nissan Motor Co. , General Electric Co. and Target Corp., Jobs said. “The question now is what’s next,” said Michael Obuchowski , managing director at First Empire Asset Management Inc. in Hauppauge, New York, which oversees $3.8 billion in assets including Apple shares. “Just improving it every year enables competitors to catch up to it very quickly.” To contact the reporter on this story: Connie Guglielmo in San Francisco at cguglielmo1@bloomberg.net

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Apple’s Jobs Unveils $199 IPhone 4 to Fend Off Android-Based Rival Models

June 7, 2010

By Connie Guglielmo June 7 (Bloomberg) — Apple Inc. ’s Steve Jobs introduced a new iPhone today with a thinner design, a sharper screen and video-chat features, giving the company fresh ammunition against rival devices running Google Inc. Android software. The iPhone 4 will go on sale in the U.S. and four other countries on June 24 and retail for $199 for the 16-gigabyte model and $299 for the 32-gigabyte version, Jobs, Apple’s chief executive officer, said at the company’s Worldwide Developers Conference in San Francisco. “It’s the biggest leap we’ve taken since the original iPhone,” Jobs said. He called the new model, which has higher resolution and a front-facing camera capable of video calling, the “most precise, beautiful thing.” The iPhone is now one of Apple’s most important products, raking in more sales than the Macintosh computer last quarter. The new model comes to market as HTC Corp. and Motorola Inc. work to deliver iPhone rivals based on Android, the mobile- operating system software created by Google . The iPhone accounts for 40 percent of Apple’s revenue. Apple has sold more than 50 million iPhones in the past three years. Jobs, 55, counts on updates to entice new customers as well as persuade current owners to trade up to the latest model. Cupertino, California-based Apple has updated the iPhone each summer since the smartphone’s debut in June 2007. It released the iPhone 3G in July 2008, which added support for third-generation wireless networks. A faster version, called the iPhone 3GS, went on sale in June 2009. AT&T Inc. remains the exclusive U.S. carrier for the iPhone and buyers will need to sign a two-year service contract, Jobs said. ‘Razzle Dazzle’ The iPhone 4 has a so-called retinal display that has four times as many pixels as previous models, Jobs said. It is 24 percent thinner than the 3GS and has improved battery life with seven hours of 3G talk. The phone will come in black and white. The device has a new camera system, capable of video calling and recording high-definition video, Jobs said. The video-calling app called FaceTime, will be enabled this year only on Wi-Fi devices, he said. Jobs said he grew up with TV shows like “The Jetsons” and “Star Trek,” “dreaming about video calling, and its real now.” The company also updated its iMovie program that lets users record, edit and share video on the handset. “The iPhone is taking share from non-phone devices” because it has features that users could previously only do on their computers, said Gene Munster , an analyst at Piper Jaffray Cos. in Minneapolis, who is attending the conference. “It will have enough razzle-dazzle,” said Munster, who rates Apple shares “overweight” and doesn’t own any. 225,000 Applications Jobs, in his trademark jeans and black turtleneck, was briefly unable to demonstrate some of the features because he couldn’t get a wireless connection. He asked attendees to turn off their computers, saying, “I’d like you to look around and police each other.” There are now more than 225,000 tools, games and other applications available for downloading, Jobs said. That compares with about 50,000 for Android, according to Toni Sacconaghi , an analyst at Sanford C. Bernstein & Co. in New York. More than 5 billion programs have been downloaded from Apple’s App Store, Jobs said. Activision Blizzard Inc. released an iPhone application for its “Guitar Hero” game today for $2.99, and Netflix Inc. , the online movie subscription service, plans to unveil a free program for the iPhone this summer. ‘Thanks, I Think’ Speculation about what the fourth-generation iPhone will include escalated in April after an unreleased prototype, lost by an Apple engineer at a bar in March, was disassembled and photographed by technology blog Gizmodo.com . As Jobs walked onto the stage to applause, one of the 5,200 conference attendees yelled out, “We love you, Steve!” His response drew applause too: “Thanks, I think.” The iPhone 4 will first be released in the U.S., Japan, France, Germany and the U.K. By the end of September, it will be available in 88 countries. Apple said it will sell a new, 8-gigabyte 3GS model for $99 this month, making it the company’s lowest-priced model. It previously sold for $199. Apple fell $5.03, or 2 percent, to $250.94 at 4 p.m. in Nasdaq Stock Market trading . It has gained 19 percent this year. Android-based smartphones threaten to top the iPhone in 2013 by number of shipments, according to IDC. Shipments of Android devices may reach 68 million that year , making it the second-most popular operating system after Nokia Oyj-owned Symbian, according to Framingham, Massachusetts-based IDC. Operating System The new device will be powered by an updated version of the iPhone operating system. Called iOS 4, it adds more than 100 features, including multitasking, or the ability to run more than one third-party program at the same time. Developers will get a near-final release of the software today, Jobs said. It will be available “soon” for users, he said. It also supports an advertising platform called iAd, designed to give developers a new way to make money from their apps. Apple has received commitments of more than $60 million in iAds for the second half from companies including Nissan Motor Co. , General Electric Co. and Target Corp., Jobs said. “The question now is what’s next,” said Michael Obuchowski , managing director at First Empire Asset Management Inc. in Hauppauge, New York, which oversees $3.8 billion in assets including Apple shares. “Just improving it every year enables competitors to catch up to it very quickly.” To contact the reporter on this story: Connie Guglielmo in San Francisco at cguglielmo1@bloomberg.net

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Apple’s Jobs Unveils $199 IPhone 4 to Fend Off Android-Based Rival Models

June 7, 2010

By Connie Guglielmo June 7 (Bloomberg) — Apple Inc. ’s Steve Jobs introduced a new iPhone today with a thinner design, a sharper screen and video-chat features, giving the company fresh ammunition against rival devices running Google Inc. Android software. The iPhone 4 will go on sale in the U.S. and four other countries on June 24 and retail for $199 for the 16-gigabyte model and $299 for the 32-gigabyte version, Jobs, Apple’s chief executive officer, said at the company’s Worldwide Developers Conference in San Francisco. “It’s the biggest leap we’ve taken since the original iPhone,” Jobs said. He called the new model, which has higher resolution and a front-facing camera capable of video calling, the “most precise, beautiful thing.” The iPhone is now one of Apple’s most important products, raking in more sales than the Macintosh computer last quarter. The new model comes to market as HTC Corp. and Motorola Inc. work to deliver iPhone rivals based on Android, the mobile- operating system software created by Google . The iPhone accounts for 40 percent of Apple’s revenue. Apple has sold more than 50 million iPhones in the past three years. Jobs, 55, counts on updates to entice new customers as well as persuade current owners to trade up to the latest model. Cupertino, California-based Apple has updated the iPhone each summer since the smartphone’s debut in June 2007. It released the iPhone 3G in July 2008, which added support for third-generation wireless networks. A faster version, called the iPhone 3GS, went on sale in June 2009. AT&T Inc. remains the exclusive U.S. carrier for the iPhone and buyers will need to sign a two-year service contract, Jobs said. ‘Razzle Dazzle’ The iPhone 4 has a so-called retinal display that has four times as many pixels as previous models, Jobs said. It is 24 percent thinner than the 3GS and has improved battery life with seven hours of 3G talk. The phone will come in black and white. The device has a new camera system, capable of video calling and recording high-definition video, Jobs said. The video-calling app called FaceTime, will be enabled this year only on Wi-Fi devices, he said. Jobs said he grew up with TV shows like “The Jetsons” and “Star Trek,” “dreaming about video calling, and its real now.” The company also updated its iMovie program that lets users record, edit and share video on the handset. “The iPhone is taking share from non-phone devices” because it has features that users could previously only do on their computers, said Gene Munster , an analyst at Piper Jaffray Cos. in Minneapolis, who is attending the conference. “It will have enough razzle-dazzle,” said Munster, who rates Apple shares “overweight” and doesn’t own any. 225,000 Applications Jobs, in his trademark jeans and black turtleneck, was briefly unable to demonstrate some of the features because he couldn’t get a wireless connection. He asked attendees to turn off their computers, saying, “I’d like you to look around and police each other.” There are now more than 225,000 tools, games and other applications available for downloading, Jobs said. That compares with about 50,000 for Android, according to Toni Sacconaghi , an analyst at Sanford C. Bernstein & Co. in New York. More than 5 billion programs have been downloaded from Apple’s App Store, Jobs said. Activision Blizzard Inc. released an iPhone application for its “Guitar Hero” game today for $2.99, and Netflix Inc. , the online movie subscription service, plans to unveil a free program for the iPhone this summer. ‘Thanks, I Think’ Speculation about what the fourth-generation iPhone will include escalated in April after an unreleased prototype, lost by an Apple engineer at a bar in March, was disassembled and photographed by technology blog Gizmodo.com . As Jobs walked onto the stage to applause, one of the 5,200 conference attendees yelled out, “We love you, Steve!” His response drew applause too: “Thanks, I think.” The iPhone 4 will first be released in the U.S., Japan, France, Germany and the U.K. By the end of September, it will be available in 88 countries. Apple said it will sell a new, 8-gigabyte 3GS model for $99 this month, making it the company’s lowest-priced model. It previously sold for $199. Apple fell $5.03, or 2 percent, to $250.94 at 4 p.m. in Nasdaq Stock Market trading . It has gained 19 percent this year. Android-based smartphones threaten to top the iPhone in 2013 by number of shipments, according to IDC. Shipments of Android devices may reach 68 million that year , making it the second-most popular operating system after Nokia Oyj-owned Symbian, according to Framingham, Massachusetts-based IDC. Operating System The new device will be powered by an updated version of the iPhone operating system. Called iOS 4, it adds more than 100 features, including multitasking, or the ability to run more than one third-party program at the same time. Developers will get a near-final release of the software today, Jobs said. It will be available “soon” for users, he said. It also supports an advertising platform called iAd, designed to give developers a new way to make money from their apps. Apple has received commitments of more than $60 million in iAds for the second half from companies including Nissan Motor Co. , General Electric Co. and Target Corp., Jobs said. “The question now is what’s next,” said Michael Obuchowski , managing director at First Empire Asset Management Inc. in Hauppauge, New York, which oversees $3.8 billion in assets including Apple shares. “Just improving it every year enables competitors to catch up to it very quickly.” To contact the reporter on this story: Connie Guglielmo in San Francisco at cguglielmo1@bloomberg.net

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Video: Pandora’s Westergren Discusses New Apple IPhone 4: Video

June 7, 2010

June 7 (Bloomberg) — Tim Westergren, founder of Pandora Media Inc., talks with Bloomberg’s Cris Valerio about Apple Inc.’s new iPhone. Apple’s Steve Jobs introduced the iPhone 4 today which has a thinner design, a sharper screen and video-chat features, giving the company fresh ammunition against rival devices running Google Inc. Android software. Bloomberg’s Lori Rothman also speaks. (Source: Bloomberg)

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Video: Garrity Sees Apple Ending AT&T Exclusive IPhone Contract: Video

June 7, 2010

June 7 (Bloomberg) — David Garrity, principal at GVA Research LLC, talks with Bloomberg’s Lori Rothman about the outlook for Apple Inc.’s new iPhone and the device’s carriers. Apple’s Steve Jobs introduced the iPhone today, delivering a thinner design with 100 more features as mobile competitors including Google Inc. work to usurp the device’s popularity. (Source: Bloomberg)

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Video: Garrity Sees Apple Ending AT&T Exclusive IPhone Contract: Video

June 7, 2010

June 7 (Bloomberg) — David Garrity, principal at GVA Research LLC, talks with Bloomberg’s Lori Rothman about the outlook for Apple Inc.’s new iPhone and the device’s carriers. Apple’s Steve Jobs introduced the iPhone today, delivering a thinner design with 100 more features as mobile competitors including Google Inc. work to usurp the device’s popularity. (Source: Bloomberg)

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Apple’s Jobs Unveils IPhone 4 to Fend Off Gains of Google’s Android System

June 7, 2010

By Connie Guglielmo June 7 (Bloomberg) — Apple Inc. ’s Steve Jobs introduced a new iPhone today, delivering a refashioned chassis and 100 added features as mobile competitors including Google Inc. work to usurp the device’s popularity. “Believe me, you ain’t seen this,” Jobs said today at Apple’s Worldwide Developers Conference in San Francisco. Apple has updated the iPhone each summer since the smartphone’s debut in June 2007. He called the device the “most precise, beautiful thing.” The iPhone is now one of Apple’s most important products, raking in more sales than the Macintosh computer last quarter. The new model comes to market as HTC Corp. and Motorola Inc. work to deliver iPhone rivals based on Android, the mobile- operating system software created by Google . The iPhone accounts for 40 percent of Apple’s revenue. Apple has sold more than 50 million iPhones in the past three years. Jobs, 55, counts on updates to entice new customers as well as convince current owners to trade up to the latest model. Cupertino, California-based Apple released the iPhone 3G in July 2008, which added support for third-generation wireless networks. A faster version, called the iPhone 3GS, went on sale in June 2009. The company now has more than 225,000 tools, games and other applications available for downloading, Jobs said today. That compares with about 50,000 for Android, according to Toni Sacconaghi , an analyst at Sanford C. Bernstein & Co. in New York. More than 5 billion programs have been downloaded from Apple’s App Store, Jobs said. Apple rose 96 cents to $256.92 at 1:37 p.m. in Nasdaq Stock Market trading. The shares had gained 21 percent this year before today. Lost Prototype The new iPhone 4 adds a front-facing camera and is about 25 percent thinner than the previous 3GS model, Jobs said. Jobs said Activision Blizzard Inc. released an iPhone application for its “Guitar Hero” game today for $2.99 and that Netflix Inc. , the online movie subscription service, will unveil a free program for the iPhone this summer. Speculation about what the fourth-generation iPhone will include escalated in April after an unreleased prototype, lost by an Apple engineer at a bar in March, was disassembled and photographed by technology blog Gizmodo.com . That prototype showed a front-facing camera that enables video conferencing, a camera flash, a higher-resolution screen, longer battery life and a boxier design than the iPhone 3GS, according to Gizmodo’s analysis. As Jobs, 55, dressed in his trademark jeans and black turtleneck appeared at the conference, an attendee yelled out “We love you, Steve!” His response drew applause too: “Thanks, I think.” To contact the reporter on this story: Connie Guglielmo in San Francisco at cguglielmo1@bloomberg.net

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Brett King: Bad Service is Killing Bank Share Valuations

May 31, 2010

No one can deny that banks have had a tough time of it when it comes to stock market valuations over the last couple of years. The global financial crisis, massive debt and NPL issues along with punishing public opinion led to a massive collapse in banking stocks and company valuations in recent times. It would be simple to blame the sub-prime and global financial crisis as the sole cause of all the ills of the banking sector, but I have a different theory which explains a large part of the picture. In the last 5 years the S&P 500 has experienced incredible volatility. On October 9, 2007 the S&P 500 hit its all time record of 1,565.15, but it was followed by the biggest annual loss in the S&P’s history, losing 37% in 2008 (the previous record being -22% in 2002 at the end of the dot com boom). As a result you’d expect any participants in the US market to have suffered similarly, and they have. Volatility, or the range/spread of buy and sell trades in the US markets is at an all time high and according to many analysts this volatility is here to stay . The certainty in the market has largely disappeared, and with it, the status quo in respect to valuations. In the last 5 or 6 years, however, a new component has come into valuation metrics for listed companies. We still have revenue, we still have market share, branding and so forth, but innovation is clearly an increasingly significant part of the story. Let me illustrate: Comparative Performance – S&P 500, Tech and Banking Stocks Below is a graph (source: Yahoo Finance , Bloomberg ) showing the comparative performance of a selection of key stocks from the US market, the S&P500 Index being the dotted yellow line. Innovation is being rewarded like never before in market valuations Clearly Apple and Google have differentiated themselves. What has made the difference? Why have Google and Apple performed so much better over the last 5 years in market terms? Let’s examine the facts and see what conclusions we can draw. Microsoft’s Revenue in 2005 exceeded Apple’s by more than 300%, and Google’s by almost 600%. In the last 5 years Microsoft’s Revenue has increased from $39B in 2005 to close to $60B in 2009 , certainly not a bad performance. Google’s revenue certainly has increased, but in the years 2007-2009 it has only jumped from $16.5B to $23.7B. Since 2005 Apple has increased their revenue from $13.9B (2005) to $36.5(2009). Apple has certainly benefited from the popularity of the iPhone (Released June 29th, 2007) and more recently the iPad (Released April, 2010). But if we compare the top 4 US banks we see that their revenue makes the tech companies look fairly ordinary. If revenue was the key driver, then we’d expect to see that the banks would have better comparative valuations. Given that Microsoft’s revenue is still close to double that of Apple’s revenue, and more than double that of Google – if the answer was that ‘tech’ revenue was valued at a premium then we’d expect Microsoft to be fairing better. 2009 data Assets ($B) Revenue ($B) Bank of America (BAC) $2,300 $113 J P Morgan Chase (JPM) $2,000 $101 Citigroup (C) $1,800 $106 Wells Fargo (WFC) $1,200 $51.7 On this basis, revenue, while a critical component of a company’s valuation, would seem to not correlate cleanly with the exceptional performance of Apple and Google recently. Well before the GFC started to impact company valuations, they were already being hurt by something… So is it future revenue potential? P/E Ratios show somewhat the expectation of the market in respect to future revenue potential. For the ‘blue chip’ performers like Microsoft, JP Morgan Chase, Wells Fargo – P/E Ratio (Price/Earnings Ratio) are all performing in the range of 15-17, whereas Apple and Google are at 21.8 and 22.1 respectively. Certainly expectations are that Google and Apple have not yet hit their peak in earnings capability because their valuations show a higher multiple. Indeed, the S&P 500 typically tracks at around 15 – so Google’s and Apple’s performances are something special. Future earnings might account for a higher valuation today, but this is not necessarily the sole factor in their comparative performance which, over the last 5 years, has been much better than Microsoft, the top banks and industrials. In fact, you have to look very hard globally to find better performing stocks in respect to either new or established companies in terms of growth in both revenue and share price over the last 5 years. So future revenue is a factor, but not the sole factor. If it was, then you’d expect Microsoft would get some of the joy too as part of the ‘tech’ clique, but they’ve not received as much optimism as their tech buddies have. What differentiates Apple and Google’s revenue from the rest of the pack? You might attribute Apple’s success in respect to valuations from their great products. But if you compare market share both Google and Apple really still are minority players when compared with Microsoft, purely from a product perspective. While Google’s Android and Apple’s OS-X are taking some share of the mobile market, Windows is still a force to be reckoned with. So where is the differentiation? Google’s strength to date, and Apple’s more recent success with great new device technologies has centered around one key area. Their ability to create great, but simple and intuitive, propositions. Google.com as a search engine is the perfect representation of search (at least for now). When Google launched their search engine in 1997, there was really no one that could touch them in terms of simplicity of experience and validity of results, and today, although many have attempted to copy Google’s formula, (read Bing.com) we still see Google maintaining a 65.6% market share of the SE space. What Google bought to the table, their foundation or core, was innovating the customer experience and making technology really simple to use. The simplicity and user experience differentiate Apple devices Apple has done the same. User Experience is at the heart of why the iPod, iPhone and iPad have captured not only the imagination of the consumer market, but why Apple and its products are increasingly part of the common vernacular. Sure Apple’s stuff looks great, cool and is about as aspirational as branded products get in the Y-Gen/Digital Natives space today. But this stuff just works. Innovating the customer experience is the ‘secret sauce’ Innovating the customer experience is at the heart of why Apple and Google are outperforming the market today. It’s also at the heart of why traditional banks are suffering. As market analysts, consumers and as media commentators we just see more of the same. While there has been pressure on the banking market, bankers seem content to ‘wait it out’ until more sane, normal times return. Banking is an old and traditional industry and it doesn’t take kindly to change. But that is problematic – because right now their lack of adaptability is hurting bank valuations significantly. There’s nowhere for banks to go from here if they can’t innovate around the customer. The lack of innovation means less future revenue and reduced earnings potential. In fact, as of today it’s more likely that a Google, Apple, PayPal or new start up like Square will innovate the customer experience in banking, rather than banks themselves. This is where banks need to take a good hard look at themselves. The lack of capability to innovate the customer experience is costing them, and it’s only going to get worse.

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Stocks in U.S. Drop as Stall in Personal Spending Spurs Recovery Concern

May 28, 2010

By Esme E. Deprez and Sarah Jones May 28 (Bloomberg) — U.S. stock-index futures rose, indicating the benchmark Standard & Poor’s 500 Index may extend yesterday’s rally, as more reports showed the economy may be strong enough to weather the debt crisis in Europe. Apple Inc., the computer maker turned producer of mobile gadgets, climbed 1.8 percent in pre-market trading as its iPad tablet computer went on sale outside of the U.S. Exxon Mobil Corp. and Chevron Corp. climbed as crude oil rose above $75 a barrel for the first time in two weeks. June contracts on the S&P 500 gained less than 0.1 percent to 1,101.8 as of 9 a.m. in New York after the index jumped 3.3 yesterday. Dow Jones Industrial Average futures rose less than 0.1 percent to 10,242 and Nasdaq-100 Index futures climbed 0.1 percent to 1,866. “It’s encouraging that personal income continues to go up and was revised higher,” said Eric Green , senior money manager at Penn Capital Management in Philadelphia, which oversees about $5 billion. “The consumer is in pretty good shape, and the job markets and housing markets are improving.” Consumer spending in the U.S. unexpectedly stalled in April, staying even as Americans used growing wages to rebuild savings. The pause in purchases compared with a 0.3 percent increase projected by the median forecast of economists surveyed by Bloomberg News, Commerce Department figures showed today in Washington. Incomes climbed 0.4 percent and the savings rate rose for the first time in four months. Stocks Rebound U.S. stocks rebounded from a three-month low yesterday, sending Dow rallying above 10,000, after China committed to investing in Europe and BP Plc temporarily stopped the flow of oil from a Gulf of Mexico leak. The S&P 500 is on course for its worst month since February 2009 after amid concern that European nations will have difficulty reducing their budget deficits without harming the economic recovery. U.S. equity markets are closed on May 31 for Memorial Day. Economic data today may show the slump in stocks this month has not strained the economy. The Institute for Supply Management-Chicago Inc.’s business barometer, due at 9:45 a.m. New York time, probably fell to 61 from a five-year high of 63.8 in April, according to the survey median. Figures greater than 50 signal expansion. Another report from Thomson Reuters/University of Michigan may show its consumer sentiment index climbed to 73.3 this month from 72.2 in April, according to an economist survey. Apple Advances Apple rose 1.5 percent to $257.91 in early New York trading. The iPad is now available in Australia, Canada, Japan and six European countries following the sale of one million of the devices within a month of its April 3 debut in the U.S. The maker of the iPhone and iPod has popularized a new category of computer between a smartphone and a laptop. Apple may sell 8 million iPads this year, according to Royal Bank of Canada. Crude oil for July delivery gained as much as 1.6 percent to $75.72 a barrel in New York as U.S. data yesterday signaled that the economic recovery is gathering pace and may revive fuel demand. To contact the reporters on this story: Esmé E. Deprez in New York at edeprez@bloomberg.net ; Sarah Jones in London at sjones35@bloomberg.net

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U.S. Stocks Drop as Dow Erases May 21 Rally on Europe Concern

May 24, 2010

By Rita Nazareth and Esme E. Deprez May 24 (Bloomberg) — U.S. stocks sank, dragging the Dow Jones Industrial Average to its lowest level in three months, as the seizure of a Spanish bank and increase in bank borrowing costs spurred concern Europe’s debt crisis has further to go. Bank of America Corp. and JPMorgan Chase & Co. declined at least 3.5 percent to lead losses in the Dow Jones Industrial Average , while Wells Fargo & Co. sank 4.7 percent after being downgraded at Goldman Sachs Group Inc. Apple Inc. jumped 1.8 percent after Morgan Stanley raised its share-price estimate and added the stock to its list of “best ideas.” The Standard & Poor’s 500 Index fell 1.3 percent to 1,073.65 at 4 p.m. in New York. The Dow retreated 126.82 points, or 1.2 percent, to 10,066.57, its lowest close since Feb. 10. Stocks extended losses in the final 15 minutes of trading, with the Dow wiping out its 125-point rally on May 21 and the S&P 500 erasing most of its 1.5 percent advance that day. About five stocks fell for every two that rose on U.S. exchanges. “We have more selling to go,” said Peter Jankovskis , who helps manage about $1.8 billion as co-chief investment officer at Oakbrook Investments in Lisle, Illinois. “There are too many uncertainties about Europe suggesting that the global economic growth may not continue. Get ready for more volatility.” Banks posted the biggest drop among 24 industries in the S&P 500, slumping 4 percent as a group, after the London interbank offered rate , or Libor, for three-month dollar loans advanced today to 0.51 percent, the highest level since July 16, from 0.497 percent at the end of last week, according to data from the British Bankers’ Association. Financial Stress Bank of America Corp. slid 3.7 percent to $15.40, while JPMorgan fell 3.6 percent to $38.62. Evidence is mounting that some financial institutions are facing stress. Four Spanish savings banks plan to combine to form the nation’s fifth-largest banking group with more than 135 billion euros ($168 billion) in assets. Caja de Ahorros del Mediterraneo, Grupo Cajastur, Caja de Ahorros de Santander y Cantabria and Caja de Ahorros y Monte de Piedad de Extremadura have submitted their proposal to Spain’s central bank, they said today in a filing . The Bank of Spain is stepping up efforts to buttress or combine the weakest of Spain’s “cajas,” mutually owned banks that boosted lending more than fivefold during Spain’s economic boom and account for about half the country’s loans. The Bank of Spain put CajaSur, a lender based in Cordoba, under a provisional administrator two days ago. The bank lost 596 million euros ($739 million) on 426 million euros in revenue last year. Wells Fargo, Janus Wells Fargo dropped 4.7 percent to $28.71. The largest U.S. home lender was cut to “neutral” from “buy” at Goldman Sachs, which said there is “more relative value” in peers. Janus Capital Group Inc. had the biggest decline in the S&P 500, slumping 7.5 percent to $10.51. The owner of the Janus, Intech and Perkins funds was cut to “sell” from “neutral” at Goldman Sachs. DreamWorks Animation SKG Inc. tumbled 11 percent to $31.05. The company’s “Shrek Forever After” took in $71.3 million in U.S. and Canada as it opened over the weekend. The film was expected to take in $105 million, according to Gitesh Pandya , editor of Box Office Guru LLC. Benchmark indexes rebounded on May 21 from their biggest drop in a year as investors speculated losses in equities stemming from concern about Europe’s debt crisis may have gone too far. The S&P 500 has fallen 12 percent from its 2010 high in April even as economic reports including U.S. retail sales beat estimates and European governments committed as much as 860 billion euros ($1.1 trillion) to support weak economies. Entering a Correction The S&P 500 has entered a correction, defined as a decline of more than 10 percent from a peak, on average 421 days after the start of 12 bull markets since 1932, according to HSBC Holdings Plc. The selloffs on average took the measure 15 percent lower. The benchmark has climbed 59 percent since entering its latest bull run on March 9, 2009. Asian stocks gained today on speculation Chinese policy makers will rein in efforts to cool the economy. The Stoxx Europe 600 Index rose 0.4 percent, rebounding from last week’s 4.6 percent decline. Apple rallied 1.8 percent to $246.76. The stock may rise 28 percent from last week’s close as investors embrace market share gains for the iPhone and demand for its iPad computer, according to Morgan Stanley. Analyst Kathryn Huberty raised her share forecast to $310 from $275 and put the company on a list of “best ideas,” according to a note to clients today. She kept the shares as “overweight,” a rating she’s held September. Valuation Watch “People are willing to consider the value of stocks that have fallen in prices,” said Peter Kenny , a managing director in institutional sales at Knight Equity Markets LP in Jersey City, New Jersey. “Apple, for instance, is cheap relative to projected growth.” Apple has fallen 9 percent since April 23 and is trading at less than 19 times estimated earnings, compared with about 32 times in September. Citigroup Inc. gained 0.8 percent to $3.78. The bank was raised to “buy” from “neutral” at Goldman Sachs, which cited an improvement in consumer credit and a better environment for capital markets as volatility increases. Sprint Nextel Corp. advanced 8.6 percent to $4.79. The third-largest U.S. mobile-phone carrier was raised to “buy” from “neutral” at Goldman Sachs. Home Sales Stocks pared declines in early trading after the National Association of Realtors said sales of U.S. previously owned homes rose in April to the highest level in five months as buyers took advantage of the last weeks of a government tax credit. Purchases increased 7.6 percent to a 5.77 million annual rate. The housing sales numbers are “a reassurance that the fundamentals of the economy are still reasonable and going in a positive direction,” said Lon Erickson , a managing director at Santa Fe, New Mexico-based Thornburg Investment Management. U.S. stock volatility that surged to the highest level since March 2009 may persist as Europe’s debt crisis defies resolution, Relational Investors LLC’s Ralph Whitworth said. The VIX, as the Chicago Board Options Exchange Volatility Index is known, dropped 4.4 percent to 38.32 today and is down 16 percent from its 14-month high on May 20 after more than doubling since April 23. “Volatility sent a strong message that we’re not out of the woods globally,” said Whitworth , who helps oversee $6.5 billion at San Diego-based Relational Investors. “I expect the modest recovery that’s under way to have resilience, with the major caveat being a big blow-up in Europe. That could spread like an infection.” More Volatility Rising volatility is spurring Whitworth to favor companies with strong cash flow and low debt, he said. Relational’s co- founder is bullish on Baxter International Inc ., a maker of treatments for immune system disorders in Deerfield, Illinois. Baxter International surged 2.8 percent to $41.82, for the third-biggest gain in the S&P 500. Tenet Healthcare Corp. had the second-biggest gain, rallying 3.2 percent to $5.54. The Dallas-based hospital operator was raised to “overweight” from “neutral” at JPMorgan Chase. Odyssey HealthCare Inc. surged 39 percent to $26.75. Gentiva Health Services Inc., the second-largest U.S. home- nursing company, agreed to buy Odyssey for about $1 billion in cash, creating the biggest U.S. hospice and home health-care provider, according to company statements today. Gentiva advanced 13 percent to $29.17. To contact the reporters on this story: Rita Nazareth in New York at rnazareth@bloomberg.net ; Esmé E. Deprez in New York at edeprez@bloomberg.net .

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Google’s $750 Million AdMob Purchase Approved by U.S. Antitrust Regulator

May 21, 2010

By Jeff Bliss May 21 (Bloomberg) — The U.S. Federal Trade Commission unanimously approved Google Inc. ’s $750 million acquisition of AdMob Inc., rejecting claims the purchase would reduce competition in the fledgling market for advertising on mobile devices. The deal “is unlikely to harm competition in the emerging market for mobile advertising networks,” the FTC said in a statement on its website today. Google, owner of the world’s most popular web search engine, is the leader in Internet advertising. With San Mateo, California-based AdMob, it would form the largest mobile- advertising company. The FTC said its decision was influenced by Apple Inc.’s recent inroads in the market, indicating there may be more competition than originally thought. Regulators’ concerns were allayed by the introduction of iAd, a program that generates revenue from ads placed on Apple’s handheld devices. Google and AdMob combined had 21 percent of the U.S. market in 2009 — a market that has been doubling in size annually — according to Karsten Weide , an analyst with researcher IDC in San Mateo. Delaying Decision In recent weeks, the FTC delayed its decision on the deal to examine the developments involving Cupertino, California- based Apple, said two people familiar with the matter. The FTC was concerned with conditions Apple is placing on software developers and advertisers for the iAd system, the two people said. “As a result of Apple’s entry into the market, AdMob’s success to date on the iPhone platform is unlikely to be an accurate predictor of AdMob’s competitive significance,” the FTC statement said today. Steve Dowling , a spokesman for Apple, declined to comment immediately. Today’s 5-0 decision by the FTC’s commissioners suggests a shift in thinking following earlier signals from the agency that it was preparing to oppose Google’s acquisition of AdMob. Earlier this year, the agency indicated it may challenge the combination when it sought sworn declarations from Mountain View, California-based Google’s competitors and advertisers, according to people with direct knowledge of the matter. Challenge Recommended The FTC staff had recommended a challenge, according to people familiar with the case who spoke on condition of anonymity in advance of today’s announcement. Some attorneys said it would have been difficult for the FTC to show Google’s dominance because the market is still in its early stages of development. One of the FTC’s considerations in bringing a case should be “evaluating whether the firms involved in the transaction are likely to be the key players down the road,” Barry Nigro, former deputy director of the agency’s Bureau of Competition, said before the FTC’s decision was announced. Advertisers said they were concerned the acquisition would lead to higher rates. “We want it to be competitive,” said Simon Buckingham, chief executive officer of Appitalism Inc., a New York-based software developer. “I’m not going to have any choices” if the deal goes through. Building Scrutiny Antitrust scrutiny of Google began building before the company announced the AdMob purchase in November. Google dropped plans for an agreement with Yahoo! Inc. in 2008 after the Justice Department signaled it would try to block the deal. Google and Yahoo are the leading search-engine companies and a combination might give them power to raise ad rates. Three companies — Foundem, Ejustice.fr and a Microsoft Corp. service called Ciao from Bing — in February filed antitrust complaints against Google with the European Union. The FTC has been monitoring Google since at least 2007, when the company bought Internet advertising company DoubleClick Inc. In voting 4-1 not to block the DoubleClick deal, FTC commissioners warned that “we will closely watch these markets and, should Google engage in unlawful” conduct, “the commission intends to act quickly.” To contact the reporter on this story: Jeff Bliss in Washington jbliss@bloomberg.net .

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Apple’s Jobs Asked Gizmodo to Return `Stolen’ IPhone, Court Documents Show

May 15, 2010

By Connie Guglielmo and Joel Rosenblatt May 15 (Bloomberg) — Steve Jobs asked technology blog Gizmodo.com to return a secret iPhone prototype that Apple Inc. says was stolen after a company engineer lost it in a bar, according to court documents released yesterday. The lost iPhone is being investigated as a possible trade- secret theft, according to California state court documents made public after media organizations including Bloomberg News asked that they be unsealed. Apple reported the phone stolen in April. The legal wrangling is over a product that, at $13 billion, accounted for more than 30 percent of 2009 sales for Apple, which closely guards details about unreleased products. An Apple lawyer said publicity about the “invaluable” prototype was “immensely damaging to Apple” because it would hinder iPhone sales, according to an April 23 affidavit by Detective Matthew Broad of the San Mateo County Sherriff’s Office. “I want to get this phone back to you ASAP and I want to not hurt your sales when the products themselves deserve love,” Gizmodo editor Brian Lam said in an e-mail to Jobs, Apple’s chief executive officer. “But I have to get this story of the missing prototype out and how it was returned to Apple with some acknowledgment it is Apple’s.” Lam sent the e-mail after Jobs contacted Gizmodo on about April 19 seeking return of the prototype after the blog dissected it and posted pictures and video detailing its features. Lam said he would return the phone only if Apple provided him with confirmation that it belonged to the company, according to Broad’s affidavit. “Gimzodo lives and dies like many small companies do,” Lam said in his April 19 e-mail. “When we get a chance to break a story, we have to go with it or we perish.” Sales ‘Hurt’ “By publishing details about the phone and its features, sales of current Apple products are hurt,” Broad said, recounting a conversation with Apple lawyer George Riley of O’Melveny & Myers LLP. “Riley could not provide an estimated loss, but he believed it was huge. I asked Riley what the value of the missing iPhone was. He stated that it was invaluable.” Gizmodo posted a copy of a letter from Apple’s General Counsel Bruce Sewell , dated April 19, asking for return of “a device that belongs to Apple.” Gizmodo said it gave back the prototype to Cupertino, California-based Apple that day. Sewell picked up the prototype at the home of Gizmodo editor Jason Chen , according to Broad. Gizmodo, which is owned by Gawker Media, said it purchased the phone for $5,000 after it was found at Gourmet Haus Stadt, a German beer hall in the San Francisco suburb of Redwood City. The phone was lost on March 25 by Apple engineer Gray Powell, according to the affidavit. Revealed by Roommate Apple and law enforcement learned the identity of the man who sold the iPhone to Gizmodo, 21-year-old college student Brian Hogan, after his roommate contacted Apple, concerned that she might be implicated in the theft because Hogan had hooked up the prototype to her computer and it might be traced to her, Broad said in his affidavit. The roommate, Katherine Martinson, said Hogan reached out to several publications and websites “in an attempt to start bidding for the iPhone prototype,” according to Broad. “Martinson said Hogan understood that he possessed a valuable piece of technology and that people would be interested in buying it.” Martinson said she and other friends tried to talk Hogan out of selling the prototype, arguing it would ruin the career of the Apple engineer who lost it, Broad said in the affidavit. “Hogan’s response to her was that it ‘Sucks for him. He lost his phone. Shouldn’t have lost his phone.’” Gizmodo Bonus Hogan was to receive a cash bonus from Gizmodo in July if and when Apple makes an official product announcement about the new iPhone, Martinson said, according to Broad’s affidavit. Hogan’s lawyer, Jeffrey Bornstein , said his client continues to cooperate with authorities and has provided evidence to help them. In a phone interview yesterday, Bornstein repeated an earlier statement that while Hogan regrets he didn’t do more to return the phone to its owner, he believed that Gizmodo was compensating him so the blog could review the phone and that there was nothing wrong with sharing the phone with the press. Apple has released a new iPhone every summer since its debut in June 2007. Charlie Wolf , an analyst at Needham & Co., expects Jobs to unveil a new model at Apple’s Worldwide Developers Conference on June 7 and to put it on sale starting in July. New IPhones Based on Apple’s claim that the iPhone prototype was stolen, the county’s computer crimes task force, the Rapid Enforcement Allied Computer Team, last month broke down the front door of Chen’s home and seized computers and other electronics, court filings show. Gawker Media is challenging the taking of Chen’s equipment, citing laws that protect online journalists from having newsroom equipment seized. “The goal of the investigation is to find out every single person who came in contact with that phone from the moment it left the restaurant and ended up back in the hands of Apple, and to find out every person who handled it, what they knew and in the course of that if there was any crime committed,” Deputy District Attorney Steve Wagstaffe said in a May 13 phone interview. Broad said in his affidavit seeking a judge’s permission to search Chen’s home that there was reason to believe a crime was committed. ‘Evidence of the Theft’ “I believe that evidence of the theft of the iPhone prototype, the vandalism of the iPhone prototype and the sale of its associated trade secrets will be found in” Chen’s home, Broad wrote in the document. Chen’s lawyer, Thomas Nolan , didn’t immediately return a call seeking comment. The search warrant affidavit indicates that the iPhone 4G prototype was disguised to look like an iPhone 3GS, the latest- generation model available in retail stores. Apple fell $4.54 to $253.82 yesterday in Nasdaq Stock Market trading. The shares have more than doubled in the past year. According to Broad’s statement, Hogan, with the help of another roommate, packed up his computer and other equipment and moved it out of his home before law enforcement officials arrived. Hogan and some of the equipment were discovered at his father’s home in Redwood City, according to Broad’s affidavit. A Hewlett-Packard Co. desktop computer belonging to Hogan was found at a nearby church, while two portable storage devices were located “in a bush” in Redwood City, according to a search warrant made public yesterday. Judge’s Ruling Judge Clifford V. Cretan in Redwood City ruled yesterday against the San Mateo County District Attorney’s office, which argued that unsealing the documents will reveal identities of potential witnesses and compromise the investigation. Media organizations argued they should have access to the documents based on constitutionally protected free-speech rights. “It’s a great victory for the people’s right to know about the evidence and information that was available to law enforcement and the court when a search warrant was issued to search the house and seize the computer of a journalist,” Roger Myers, a lawyer for the media organizations, said in an interview after yesterday’s court hearing. Media organizations sought to have the documents unsealed to determine whether the county had a legal basis for the warrant used to break into Chen’s home. “Otherwise, there is no way for the public to serve as a check on the conduct of law enforcement officers, the prosecutors and the courts in this case,” the organizations argued in court filings. No Special Influence Chris Feasal, a San Mateo County deputy district attorney, said he’s disappointed with the ruling though he respects the judge’s decision. He declined to discuss the contents of the warrant documents or any names contained in them. Apple had no special influence in the investigation or getting it started, he said. “We are investigating it just as we are any other criminal investigation,” he said. “We are looking for evidence of criminal behavior.” Feasal said he’s not sure whether release of the warrant documents will impede the investigation. “We are just going to have to wait and see,” he said. Myers represents the First Amendment Coalition , a San Rafael, California-based group, and six media organizations, including Bloomberg News, CBS Corp.’s CNet News and the Los Angeles Times. Apple declined to comment, spokeswoman Amy Bessette said. The case is In Re Sealed Search Warrant Records, 2010-0034, San Mateo County Superior Court (Redwood City, California). To contact the reporters on this story: Connie Guglielmo in San Francisco at cguglielmo1@bloomberg.net ; Joel Rosenblatt in San Francisco at jrosenblatt@bloomberg.net .

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U.S. Stocks Rise on Speculation Incoming U.K. Government Will Cut Deficit

May 11, 2010

By Elizabeth Stanton May 11 (Bloomberg) — U.S. stocks rose, with the Dow Jones Industrial Average recovering from a 100-point drop, as speculation a new British government will cut the U.K. budget deficit eased concern that Europe’s debt crisis will worsen. Walt Disney Co., Home Depot Inc. and American Express Co. climbed at least 1 percent for the top gains in the Dow Jones Industrial Average. Consumer and technology shares led the advance in the Standard & Poor’s 500 Index, with Gannett Co. and Apple Inc. climbing. The S&P 500 rose 0.7 percent to 1,167.28 at 12:53 p.m. in New York. The Dow climbed 55.09 points, or 0.5 percent, to 10,840.23 after surging 405 points yesterday. “The closer we get to any form of clarity surrounding the various issues and uncertainty in Europe will help to stabilize the markets and ease selling pressure,” said Mark Turner , head of U.S. sales trading at Instinet LLC, which handles about 4 percent of U.S. equity trading volume. Earlier losses in stocks came amid growing skepticism that an almost $1 trillion emergency lending program will be enough to halt Europe’s debt crisis. The Stoxx Europe 600 Index slipped 0.5 percent after losing as much as 2.2 percent. The S&P 500 yesterday surged 4.4 percent and the VIX, the benchmark for U.S. stock options, had a record drop after European policy makers unveiled an unprecedented loan package and a program of bond purchases to contain the region’s sovereign-debt crisis. ‘Encouraging Close’ “We had a pretty encouraging close yesterday,” said Craig Peckham, equity trading strategist at Jefferies & Co. in New York. “The market was actually able to rally in the last hour and hold the gains. A lot of people watched the massive short- covering rally with much trepidation, not sure it was going to hold, so that was a very positive message.” In the U.K. today, talks between the Liberal Democrats and Prime Minister Gordon Brown’s Labour Party on forming a coalition collapsed, the British Broadcasting Corp. reported, without citing sources. “In this situation the best option is a Conservative- Liberal Democrat coalition and that’s what we’re going to get,” said Marc Ostwald, a fixed-income strategist at Monument Securities Ltd. in London. Liberal Democrat leader Nick Clegg said earlier today that talks to form a government were entering their endgame after his Conservative counterpart, David Cameron, pressed for a decision on a coalition offer. Concern About Europe Yesterday’s advance for the S&P 500 followed an 8.7 percent slide since April 23 and the biggest weekly retreat since the start of the bull market in March 2009 as concern grew that European leaders weren’t doing enough to keep indebted nations from defaulting. Walt Disney rose 1.6 percent to $35.87. The world’s biggest media company is scheduled to report fiscal second-quarter results after the market closes. Better-than-estimated first- quarter results by 77 percent of the S&P 500 companies that have reported helped drive the benchmark to a 19-month high on April 23. Home Depot, the largest U.S. home-improvement retailer gained 1.9 percent to $35.95. American Express, the biggest U.S. credit-card issuer by purchases, climbed 2.6 percent to $44.20. Gannett , the owner of USA Today and television stations, rose 6.9 percent to $17.14 for the second-biggest advance in the S&P 500. Legg Mason Inc. rose 15 percent to $34.45, the most in the index, after the money manager outlined plans to cut costs and buy back as much as $1 billion of stock. Apple, Gold Apple, the maker of MacIntosh computers, iPod music players and the iPhone, contributed most to the index’s advance, rising 2.2 percent to $259.56. Gold futures for June delivery rose $18.10, or 1.5 percent, to $1,218.90 on the Comex in New York, as safe-haven demand rose amid concerns about European debt. Earlier it reached $1,225.20, just short of the record $1,227.50 an ounce on Dec. 3. Newmont Mining Corp. , the largest U.S. gold producer, rose 5.4 percent to $58.46. Priceline.com Inc. dropped 12 percent, the most in the S&P 500, to $220.09. The second-biggest online travel agency said second-quarter profit will fall short of analysts’ estimates after the euro weakened and a political crisis in Greece threatened consumers’ travel plans. To contact the reporters on this story: Elizabeth Stanton in New York at estanton@bloomberg.net .

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Nokia Shareholders Lose Patience in Third Year Without Response to IPhone

May 6, 2010

By Diana ben-Aaron May 6 (Bloomberg) — Nokia Oyj has had three years to come up with a rival to the iPhone. Investors say that’s long enough. Chief Executive Olli-Pekka Kallasvuo tried to convince shareholders today at the Finnish company’s annual meeting that Nokia, the world’s largest mobile-phone maker, will have new smartphones this year that will “help close the gap” with Apple Inc. , Research In Motion Ltd.’s BlackBerry and devices based on Google Inc.’s Android software. “Patience is running out and people are starting to worry about eroding brand value,” said Max Jul Pedersen , who helps manage $95 billion at Danske Capital in Copenhagen and is considering selling his Nokia shares. “Nokia has very little to show for their big research and development budget.” Nokia, based in Espoo, Finland, spent almost six times as much as Apple on R&D last year, yet has failed to develop a device with the same mass appeal as the multi-application iPhone. The company’s shares have tumbled about 20 percent in the two weeks since it reported first-quarter earnings that missed analysts’ estimates, wiping out 8.2 billion euros ($10.5 billion) in market value. Now 34 billion euros, or $44 billion, the company’s market capitalization compares with Cupertino, California-based Apple’s $230 billion, and is a shadow of its 1999 peak of 203 billion euros, the highest of any European company. Scattered Ownership Nokia came in 43rd in a brand-ranking study released last week by Millward Brown Optimor , tumbling 30 places in a year. It lost 58 percent of its brand value, the biggest plunge in the top 100 brands, according to the study. Nokia fell as much as 1.3 percent to 8.97 euros and was down 0.2 percent as of 4:36 p.m. in Helsinki. Ownership in Finland’s largest company is scattered around the globe. The company had 156,000 shareholders at the end of 2009, with 38 percent of shares owned in the U.S., where investors see few Nokia phones on store shelves alongside Apple and other competitors. In a push to defend market share, Nokia slashed prices and sold cheaper models, sacrificing profit as the average smartphone price fell 18 percent in the last nine months. Even with the price cuts, its share of the global handset market fell almost 2 percentage points in the first quarter to 36.6 percent, International Data Corp. said April 30. Nokia’s sinking fortunes have prompted some investors to call for management changes. Kallasvuo’s Task “If there were new management, depending on who it was, people could be impressed and it could be a positive catalyst,” said Leon Cappaert , who helps manage 360 million euros of investments at KBC Asset Management in Brussels and sold his Nokia shares a few days after the results. Nokia Chairman Jorma Ollila said at the AGM today that while shareholders have reason to be dissatisfied, the board supports the company’s management on its current strategy, which he said will show results this year. Kallasvuo, who over a span of 30 years has held a multitude of posts at Nokia including general counsel and chief financial officer, became CEO in 2006. Nokia’s downward trajectory began on his watch, soon after Apple unveiled the iPhone in 2007. Last month, Kallasvuo, 56 vowed to fight back with products that are “more intuitive, fun and faster.” “We are working hard to reclaim leadership in high-end smartphones and mobile computers,” he said today. “It’s critical that we improve the customer experience with the usability of both our devices and our services.” ‘May Be Too Late’ Nokia on April 27 announced the N8, its first phone using a rewritten software platform designed to improve usability. The touchscreen phone will be shipped in the third quarter. Yesterday, Nokia and Microsoft Corp. released the first software component from their partnership, seeking to challenge RIM, the Canadian maker of BlackBerry handsets. Still, Nokia will have to be swifter and more nimble to keep up with rivals, investors said. Nokia’s annual R&D budget of about $7.7 billion is 14 percent of revenue, compared with Apple’s spending of $1.3 billion, or 3 percent of sales. Nokia’s expenditure also includes figures for its networks division. “The high-end user they’ve lost to the iPhone has signed up for iTunes and put their information on Apple; Nokia won’t get them back or not without an enormous amount of pain,” said Stuart O’Gorman of Henderson Investors Ltd. in Edinburgh, who sold his shares the day Nokia announced first-quarter results. “You have to run so fast to stay still in this market. It may be too late.” Dividend Payout Nokia’s average selling price for all models has plummeted 44 percent in the last five years to 62 euros. Nokia charged, on average, 155 euros in the first quarter for a smartphone, down from 190 euros nine months ago. “Nokia is cutting prices because it’s the only way they can keep market share,” said Francisco Jeronimo , a London-based analyst at IDC. He expects the company’s share of global shipments and profits to decline further, and says Nokia may lose its European market leadership to Samsung Electronics Co. as early as this year. “The best way to leverage Nokia’s strengths is to be a mass producer of cheaper, good quality products, which would rapidly lower their R&D costs,” said Pedersen. One thing Nokia still offers investors is a dividend. The company plans to pay 40 cents per share for 2009, the same as in 2008 even though earnings fell 78 percent. Apple CEO Steve Jobs hasn’t paid a dividend since 1996, preferring to preserve money. Apple had $23 billion in cash and short-term investments as of the end of March compared to Nokia’s $12.4 billion. Analysts question how long Nokia can maintain a dividend of the current size. Listening to Investors Nokia replaced its finance chief last year after posting the first loss since the company began reporting quarterly in 1996. Sales chief Timo Ihamuotila took over from Rick Simonson , who now runs the low-end phone unit. Kallasvuo was selected by previous CEO Ollila . “If they change the CEO or something, that could be a trigger to the stock price performance,” said Niklas Lund , a fund manager at Alandsbanken Asset Management in Helsinki. “That’s not likely. He was handpicked by the chairman and you would have to change them both. Investors don’t really get heard on the board.” To contact the reporter on this story: Diana ben-Aaron in Helsinki at dbenaaron1@bloomberg.net

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Apple Profit Rises 90% on Demand for Macintosh PCs, IPhones; Shares Climb

April 20, 2010

By Connie Guglielmo April 20 (Bloomberg) — Apple Inc. reported net income and sales that soared past analysts’ estimates as Chief Executive Officer Steve Jobs promised to release “several more extraordinary products” this year. The shares surged. Second-quarter profit rose 90 percent to $3.07 billion, or $3.33 a share, from $1.62 billion, or $1.79, a year earlier, Cupertino, California-based Apple said today in a statement. Sales gained 49 percent to $13.5 billion, topping the $12 billion average of analysts’ estimates compiled by Bloomberg. Jobs, 55, won consumers over to the iPhone while persuading more PC users to embrace the Mac. Results for the period ended March 27 don’t include the iPad, which went on sale April 3. Investors and analysts anticipate the tablet computer will spur sales after Apple said last week it couldn’t make enough of the gadgets to satisfy demand. “Incredible numbers,” said Michael Obuchowski , managing director at First Empire Asset Management Inc. in Hauppauge, New York, which oversees $3.8 billion in assets including Apple shares. “With the improving global economy lifting all the boats, Apple will benefit more than most.” Apple jumped as much as 8.3 percent to $265 in after-hours trading after falling $2.48 to $244.59 at 4 p.m. New York time on the Nasdaq Stock Market . The shares have doubled in the past year. Buoyed by optimism for the iPad, the stock closed at a record high of $248.92 on April 15. Analysts on average estimated profit of $2.46 a share. Product Performance The company said it shipped 8.75 million iPhones, 2.94 million Macs and 10.9 million iPods last quarter. Toni Sacconaghi , an analyst at Sanford C. Bernstein & Co. in New York, estimated shipments of 7.3 million iPhones, 3.1 million Macs and 9.9 million iPods. Sacconaghi, who rates the stock “outperform,” is the top-ranked computer analyst by Institutional Investor magazine. “It’s another monster quarter,” said Gene Munster , an analyst at Piper Jaffray & Co. in Minneapolis. “The iPhone is on fire right now.” Sales this quarter will be $13 billion to $13.4 billion and profit will be $2.28 to $2.39 a share, Chief Financial Officer Peter Oppenheimer said today. Analysts on average anticipated third-quarter sales of $13 billion and profit of $2.70 a share. “We have several more extraordinary products in the pipeline for this year,” Jobs said in the statement. He said the second period was the company’s best outside a holiday quarter. Apple said in January that revenue typically drops after the holiday season, one of its biggest quarters for sales. IPad Boost Sales this quarter will be boosted by the iPad, a mobile gadget for surfing the Web, playing music, watching video and reading electronics books. Apple said it sold more than 500,000 iPads in the first week after its U.S. debut. Because demand has been “far higher” than the company predicted, Apple said it delayed the device’s international release by a month to the end of May. The iPad’s initial release only included models that start at $499 and run on Wi-Fi networks. The iPad 3G, which can tap into Wi-Fi and 3G systems, starts at $629 and will be released April 30. Apple said yesterday that U.S. customers who ordered 3G models starting April 19 won’t receive them until May 7. The company may sell as many as 900,000 iPads this quarter, said Shaw Wu , an analyst with Kaufman Bros. in San Francisco. Updates to the MacBook notebooks, announced April 13, should also lift Mac sales this quarter, said Wu, who recommends buying the shares and doesn’t own any. Gross margin , the percentage of sales after deducting product costs, was 41.7 percent, compared with 40.9 percent in the first quarter. Sacconaghi predicted second-quarter gross margin of 40 percent. To contact the reporter on this story: Connie Guglielmo in San Francisco at cguglielmo1@bloomberg.net .

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BCE Will Sell More Assets to Fund IPhone, Fiber-Network Upgrades, CFO Says

April 14, 2010

By Hugo Miller April 14 (Bloomberg) — BCE Inc. Chief Financial Officer Siim Vanaselja plans to sell venture-capital investments and assets partly to raise money for network upgrades that can help ease the strain from devices like Apple Inc.’s iPhone. The assets are worth “a few hundred million dollars,” Vanaselja said in an interview yesterday in Toronto. He didn’t give a time frame for the sales. BCE, Canada’s largest phone company by subscribers, first offered the iPhone in November, more than a year after rival Rogers Communications Inc. BCE will put some of the money into overhauling its fiber network, said Vanaselja, 53, who has overseen the carrier’s finances for almost a decade. BCE rolled out a new network in November to support the iPhone. While the device uses twice the network capacity of a typical smartphone, according to Sanford C. Bernstein & Co., it also generates more revenue.      “The market is rewarding them for being more aggressive for ploughing more money into capital spending,” said Maher Yaghi , an analyst at Desjardins Securities in Montreal. He rates the shares “hold” and doesn’t own any.      BCE, which had climbed 15 percent in the past year before today, fell 9 cents to C$29.43 at 1:07 p.m. in Toronto Stock Exchange trading. BCE still faces the challenge from four new wireless carriers this year and lags behind Rogers and Telus Corp. in smartphone adoption, said Dvai Ghose , an analyst at Genuity Capital Markets. He also has a “hold” rating on BCE stock and doesn’t own it himself. The company had gained 1.8 percent this year before today, less than the 3.9 percent gain for Toronto-based Rogers, Canada’s biggest wireless carrier, and Telus’ 9.8 percent advance. Asset Sales BCE’s 15 percent stake in CTVglobemedia Inc. the publisher of The Globe and Mail newspaper and CTV television network, may be among those put up for sale, said Ghose, who is based in Toronto. He estimated it might fetch about C$150 million ($150 million). Mark Langton , a spokesman for BCE, said the company is “happy with its investment in CTVglobemedia.” CTV spokeswoman Bonnie Brownlee declined to comment. BCE, based in Montreal, said this month it sold its stake in satellite-services company SkyTerra Communications Inc. for C$111 million. Its C$110 million holding in Clearwire Corp. was sold in December. The carrier is focusing on the wireless business, its most profitable with C$1.28 billion in earnings last year . “By and large I think we’ve achieved our objective of eliminating the holding company, conglomerate structure of what BCE has been,” said Vanaselja. What remains are “isolated niche parts of the business that have been around for many years and just aren’t part of the core and just aren’t profitable.” Dividend Growth Assets still to be sold include venture-capital investments, some businesses and potentially real estate, Vanaselja said. He declined to be more specific. While it’s too early to say whether the company will raise its dividend again this year, returning cash to shareholders is a priority for BCE, Vanaselja said. The company boosted its annual dividend to C$1.74 a share in December. It has the fifth- highest dividend yield of the 178 companies on the S&P/TSX Equity Index, according to Bloomberg data . “A clear component of our capital market strategy is to look to sustainable increases in our dividend,” Vanaselja said. “That word sustainable is critically important.” To contact the reporter on this story: Hugo Miller in Toronto at hugomiller@bloomberg.net

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Video: FT’s Lex Columnist O’Connor on Apple’s Mobile Ad Push: Video

April 9, 2010

April 9 (Bloomberg) — Sarah O’Connor of the Financial Times’ Lex commentary team talks with Bloomberg’s Scarlet Fu about Apple Inc.’s push into mobile advertising and its impact on Google Inc. Apple Chief Executive Officer Steve Jobs yesterday unveiled new software designed to make the iPhone more appealing to mobile users and developers. (Source: Bloomberg)

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Video: Apple Updates IPhone Software for Multitasking, Ads: Video

April 9, 2010

April 8 (Bloomberg) — Apple Inc. has unveiled a new software designed to make the iPhone more appealing to mobile users and developers. The new iPhone operating system software adds support for multitasking and advertising. The software escalates the company’s rivalry with Google Inc. for customers and application developers. Bloomberg’s Gigi Stone reports. (Source: Bloomberg)

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Apple Says It Sold More Than 300,000 IPads First Day

April 5, 2010

By Connie Guglielmo and Ari Levy April 5 (Bloomberg) — Apple Inc. , trying to ignite demand for tablet-style computers with its iPad, said it sold more than 300,000 of the devices on the first day of their debut weekend. The number includes preorders, sales at Apple stores and deliveries to retail partners on April 3, the company said today in a statement. Users downloaded more than 1 million iPad applications from Apple’s site and bought more than 250,000 electronic books from its online store during the first day. With the iPad, Apple is trying to build on the success of its iPhone and iPod music player and popularize computers in the middle ground between smartphones and laptops. The company is betting the iPad design is enticing enough to prompt consumers to pay a premium over low-cost notebooks and netbooks. Rivals such as Microsoft Corp. have failed to turn tablets into must- have consumer devices. “It was a good number,” said Jeff Fidacaro , an analyst at Susquehanna Financial Group in New York, who recommends buying Apple shares and doesn’t own any. He said the initial sales were in line with his estimate. The company may sell 850,000 iPads in the quarter ending in June as developers start to build “apps ported specifically for this platform,” Fidacaro said. The company said there were already more than 1,000 applications, or apps, written specifically for the iPad. Apple , based in Cupertino, California, rose $2.52 to a record $238.49 at 4 p.m. New York time on the Nasdaq Stock Market. The shares have more than doubled in the past year. Few Estimates Few analysts had published their sales estimates for the debut weekend, underscoring how difficult it is to predict demand for what Apple Chief Executive Officer Steve Jobs said is a new mobile-device category. Analysts had said they didn’t have a good sense of how consumers would respond to the iPad, an untested computer type. “What you’re looking at here is a brand-new category,” said Yair Reiner , an analyst with Oppenheimer & Co. in New York. “A lot of people in line on Saturday morning weren’t sure what they were in line for.” Users can surf the Internet, peruse digital books, watch video and play games on the touch-screen iPad. Tablets have been available in one form or another since the 1990s, without ever catching on. They account for less than 1 percent of the personal-computer market, according to researcher Gartner Inc. Hewlett-Packard Co. , the world’s largest PC maker, also has ambitions in the market. The company released a video teaser today showing off its touch-screen slate device, which it plans to start selling this year. Meeting Demand Apple began selling on April 3 just three of the six iPad versions it plans to offer, with first buyers getting models that connect to the Web via Wi-Fi. IPads that support so-called third-generation mobile-phone networks will go on sale later this month. The initial sales suggest that Apple didn’t have any glitches with producing enough iPads to meet demand, Reiner said. While it will take time before the iPad can be labeled a success, the device should help push up Apple shares, he said. “If the iPad winds up being a significant product and does wind up being the third leg of the PC revolution, as I think it will be, I think that’s all upside,” he said. Sanford C. Bernstein & Co.’s Toni Sacconaghi had projected sales of 300,000 to 400,000 for the weekend. Piper Jaffray & Co.’s Gene Munster projected initial sales of as many as 300,000 units last week before boosting his forecast to at least 600,000 after surveying buyers at Apple outlets on April 3. Some of Apple’s stores were closed yesterday for Easter Sunday. Long Lines The device, which starts at $499, drew crowds to stores across the U.S., rivaling the frenzy seen when the iPhone was introduced in 2007. Lines at five stores surveyed by Piper Jaffray were longer than expected, yet Apple had iPads available late in the opening day, signaling the company was able to fulfill demand, Munster said. Munster said today that his tally was off because he “misgauged” the number of iPads customers had preordered. Apple started accepting orders on March 12. “We originally estimated online sales to be about 75 percent of all iPad sales,” Munster said. “However, it appears that online pre-orders made up about 50 percent of the sales, resulting in a significant unit difference.” ‘Game Changer’ The iPad had a better opening day than the iPhone, which went on sale in June 2007. Customers took home 270,000 iPhones at its debut. “It’s going to be a game changer,” Jobs said in today’s statement. “IPad users, on average, downloaded more than three apps and close to one book within hours of unpacking their new iPad.” Apple also said today that it will hold an event on April 8 to demonstrate the next generation of the operating system used in the iPhone. That software runs on the more than 70 million iPhones and iPod Touch players Apple has sold in the past three years. There are more than 100,000 iPhone developers, who have created 150,000 programs offered through Apple’s App Store. The new software may include multitasking — the ability to run several programs at once — and new support for advertising, Munster said. To contact the reporters on this story: Connie Guglielmo in San Francisco at cguglielmo1@bloomberg.net ; Ari Levy in San Francisco at alevy5@bloomberg.net

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Apple Says It Sold More Than 300,000 IPads in First Day on the U.S. Market

April 5, 2010

By Ville Heiskanen April 5 (Bloomberg) — Apple Inc. , trying to revive demand for tablet-style computers with its iPad, said it sold more than 300,000 of the devices on the first day of their debut weekend. The number includes preorders, sales at Apple stores and deliveries to channel partners, the company said in a statement today. Users downloaded more than 1 million iPad applications from Apple’s site and bought more than 250,000 electronic books from its online store during the first day. The product builds on the success of Apple’s iPhone and iPod, staking out the middle ground between smartphones and laptop computers. Apple is betting the design is enticing enough that consumers are willing to pay a premium over low-cost notebooks. Rivals such as Microsoft Corp. have failed to turn tablet computers into popular consumer devices. “It’s going to be a game changer,” Apple Chief Executive Officer Steve Jobs said in the statement. “iPad users, on average, downloaded more than three apps and close to one book within hours of unpacking their new iPad.” Apple rose 23 cents to $236.20 in trading before U.S. exchanges opened. The stock, which has more than doubled in the past year, closed at a record $235.97 April 1 in Nasdaq Stock Market trading. U.S. markets were closed April 2 for the Good Friday holiday. Analysts’ Estimates The iPad sales may have fallen short of some analysts’ estimates. Sanford C. Bernstein & Co.’s Toni Sacconaghi had projected sales of 300,000 to 400,000 for the first weekend. Piper Jaffray & Co.’s Gene Munster projected initial sales of at least 600,000 units, after boosting his forecast from as many as 300,000 over the weekend. As of March 30, Munster was one of the few analysts with a projection for iPad sales. Rivals had said they didn’t have a good sense of how consumers would respond to the iPad, an untested category of computer. The device, which starts at $499, went on sale April 3, drawing crowds to stores across the U.S. and rivaling the frenzy seen when the iPhone was introduced in 2007. Lines at five stores surveyed by Piper Jaffray were longer than expected, yet Apple had iPads available late in the opening day, signaling the company was able to produce enough devices to fulfill initial demand, Munster said in an interview yesterday. To contact the reporter on this story: Ville Heiskanen in New York at vheiskanen@bloomberg.net

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Apple Says It Sold More Than 300,000 IPads in First Day on the U.S. Market

April 5, 2010

By Ville Heiskanen April 5 (Bloomberg) — Apple Inc. , trying to revive demand for tablet-style computers with its iPad, said it sold more than 300,000 of the devices on the first day of their debut weekend. The number includes preorders, sales at Apple stores and deliveries to channel partners, the company said in a statement today. Users downloaded more than 1 million iPad applications from Apple’s site and bought more than 250,000 electronic books from its online store during the first day. The product builds on the success of Apple’s iPhone and iPod, staking out the middle ground between smartphones and laptop computers. Apple is betting the design is enticing enough that consumers are willing to pay a premium over low-cost notebooks. Rivals such as Microsoft Corp. have failed to turn tablet computers into popular consumer devices. “It’s going to be a game changer,” Apple Chief Executive Officer Steve Jobs said in the statement. “iPad users, on average, downloaded more than three apps and close to one book within hours of unpacking their new iPad.” Apple rose 23 cents to $236.20 in trading before U.S. exchanges opened. The stock, which has more than doubled in the past year, closed at a record $235.97 April 1 in Nasdaq Stock Market trading. U.S. markets were closed April 2 for the Good Friday holiday. Analysts’ Estimates The iPad sales may have fallen short of some analysts’ estimates. Sanford C. Bernstein & Co.’s Toni Sacconaghi had projected sales of 300,000 to 400,000 for the first weekend. Piper Jaffray & Co.’s Gene Munster projected initial sales of at least 600,000 units, after boosting his forecast from as many as 300,000 over the weekend. As of March 30, Munster was one of the few analysts with a projection for iPad sales. Rivals had said they didn’t have a good sense of how consumers would respond to the iPad, an untested category of computer. The device, which starts at $499, went on sale April 3, drawing crowds to stores across the U.S. and rivaling the frenzy seen when the iPhone was introduced in 2007. Lines at five stores surveyed by Piper Jaffray were longer than expected, yet Apple had iPads available late in the opening day, signaling the company was able to produce enough devices to fulfill initial demand, Munster said in an interview yesterday. To contact the reporter on this story: Ville Heiskanen in New York at vheiskanen@bloomberg.net

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Apple IPad Debut Sales May Be Beating Estimates, Signaling Tablet Revival

April 4, 2010

By Connie Guglielmo April 5 (Bloomberg) — Apple Inc. probably sold more than twice as many iPads in its debut weekend than some analysts estimated, an early sign that Chief Executive Officer Steve Jobs may succeed at reviving demand for tablet-style computers. The iPad’s initial sales may have reached 700,000 units, Piper Jaffray & Co.’s Gene Munster said in an interview yesterday. The Minneapolis-based analyst had predicted sales of 200,000 to 300,000, while Sanford C. Bernstein & Co.’s Toni Sacconaghi had projected 300,000 to 400,000. The device went on sale April 3, drawing crowds to stores across the U.S. and rivaling the frenzy seen when the iPhone was introduced in 2007. Lines at five stores surveyed by Piper Jaffray were longer than expected, yet Apple had iPads available late in the opening day, signaling the company was able to produce enough devices to fulfill initial demand, Munster said. “Sales held relatively steady during the day,” said Munster, who bought a $499, 16-gigabyte model for himself. “I have high expectations.” The iPad is Apple’s bid to turn tablet computers into popular consumer devices, something rivals such as Microsoft Corp. have failed to do. The product builds on the success of Apple’s iPhone and iPod, staking out the middle ground between smartphones and laptop computers. Apple is betting the design is enticing enough that consumers are willing to pay a premium over low-cost notebooks. It starts at $499. ‘Unique, Sexier’ “It’s ridiculously expensive, way overpriced,” said Josh Klenert, a 36-year-old graphic designer, who still went ahead and bought one. “You may call it a dumb computer or a smart telephone –it’s in between. It’s a unique, sexier device.” Klenert, whose one-bedroom apartment in Tribeca has “more Macs than people,” pre-ordered the iPad as soon as it was available and came down to Apple’s SoHo store in New York to be one of the first to buy it. He plans to use it for reading newspapers and magazines. Hundreds of shoppers lined up to wait for stores to open, though crowds didn’t camp out for days this time, as they did when the iPhone debuted. Many of the buyers identified themselves as early adopters and Apple enthusiasts, making it harder to tell if the iPad will win over mainstream customers. “I love it,” said Jacob Arentoft, a 37-year-old digital business developer from Copenhagen. After exiting Apple’s Fifth Avenue store in Manhattan, he unpacked the brand-new silver gadget and waved it at the crowd. “The size fits, the design fits, everything fits.” Positive Reviews Jobs made an opening-day appearance at his hometown store in Palo Alto, California, chatting with shoppers. Apple retail chief Ron Johnson was at the Fifth Avenue store and addressed employees before it opened. Users can surf the Internet, peruse digital books, watch video and play games on the iPad. What it lacks is a built-in camera or support for Adobe Systems Inc. ’s Flash software, which runs much of the video on the Web. The device also doesn’t let users carry out multiple tasks at once. The iPad’s first wave of reviews praised its ability to deliver digital books and video quickly, saying it measures up well against other devices, including Amazon.com Inc.’s Kindle e-book reader. Bloomberg columnist Rich Jaroslovsky said it may change the way people relate to computers, requiring users to learn a “new language” that Apple has made “both elegant and very easy to master.” USA Today’s Edward Baig called the iPad “fun, simple, stunning to look at and blazingly fast.” TV Shows Tablets have been available in one form or another since the 1990s, without ever catching on. They account for less than 1 percent of the personal-computer market, according to research firm Gartner Inc. The iPad’s success will depend partly on the attractiveness of applications that run on it. CBS Corp., the most-watched U.S. TV network, announced plans last week to offer episodes of shows such as “Survivor” and “CSI” on the iPad. Walt Disney Co . will release iPad applications for ABC shows and ESPN games. And Netflix Inc. , the movie-rental company, will let subscribers watch programming streamed to the iPad. Apple , which has more than doubled in the past year, rose 97 cents to close at a record $235.97 April 1 in Nasdaq Stock Market trading. U.S. markets were closed April 2 for the Good Friday holiday. Like the iPhone, the iPad will test Apple’s ability to conquer new markets. Since returning to the company in 1997, Jobs revived the Macintosh computer business, reshaped digital music with the iPod and pushed Apple into the mobile-phone field. Adding those products propelled revenue and profit to record levels . Sales Estimates When the iPhone debuted, Apple struggled to keep it in stock. Most of its stores quickly sold out, and resellers on EBay and Craigslist hawked the device to desperate shoppers for as much as $12,000. Apple sold about 270,000 iPhones in its 2007 debut weekend. Apple may sell about 5 million iPads in the first 12 months, compared with 6.1 million iPhones in its first year on the market, according to Sacconaghi. Researcher ISuppli Corp. says full-year sales may reach 7.1 million globally. Apple declined to comment, said Natalie Kerris , a spokeswoman for the Cupertino, California-based company. At the outset, iPads will connect to the Web through localized hot spots that use Wi-Fi technology. Some shoppers may wait for a version with 3G, which lets the iPad connect to mobile-phone networks. It’s due later this month. Luis Martinez, a 30-year-old from Brooklyn who repairs computers, bought a Wi-Fi iPad on April 3 and already put in an order for the 3G version. “People who criticize iPad are basically saying it doesn’t fit their lifestyle. It fits mine,” Martinez said. “Overall, I’m sold.” To contact the reporter on this story: Connie Guglielmo in San Francisco at cguglielmo1@bloomberg.net

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