Apple becomes first company to hit $3 trillion market value, then slips

Apple Inc on Monday became the first company to hit a $3 trillion stock market value, before ending the day a hair below that milestone, as investors bet the iPhone maker will keep launching best-selling products as it explores new markets such as automated cars and virtual reality.

On the first day of trading in 2022, the Silicon Valley company's shares hit an intraday record high of $182.88, putting Apple's market value just above $3 trillion. The stock ended the session up 2.5 percent at $182.01, with Apple's market capitalization at $2.99 trillion.

The world's most valuable company reached the milestone as investors bet that consumers will continue to shell out top dollar for iPhones, MacBooks and services such as Apple TV and Apple Music.

"It's a fantastic accomplishment and certainly worthy to be celebrated," said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma. "It just shows you how far Apple has come, and how dominant it is seen as in the majority of investors' eyes."

Apple shared the $2 trillion market value club with Microsoft Corp, which is now worth about $2.5 trillion. Alphabet Inc, Amazon.com Inc and Tesla Inc have market values above $1 trillion. Saudi Arabian Oil Co is valued at about $1.9 trillion, according to Refinitiv.

"The market is rewarding companies that have strong fundamentals and balance sheets, and the companies that are hitting these sort of huge market caps have proven they are strong businesses and not speculation,” said Scott Wren, senior global market strategist at Wells Fargo Investment Institute.

Apple's shares have climbed around 5,800 percent since co-founder and former chief executive Steve Jobs unveiled the first iPhone in January 2007, far outpacing the S&P 500's gain of about 230 percent during the same period.

Under Tim Cook, who in 2011 became chief executive following Jobs' death, Apple has sharply increased its revenue from services like video streaming and music. That helped Apple reduce its reliance on the iPhone to about 52 percent of total revenue in fiscal 2021 from over 60 percent in 2018, pleasing investors worried the company relied too much on its top-selling product.

Still, some investors worry Apple is hitting the limits of how much it can expand its user base and how much cash it can squeeze from each user, with no guarantees that future product categories will prove as lucrative as the iPhone.

The rapid embrace of technologies such as 5G, virtual reality and artificial intelligence has also increased the allure of Apple and other Big Tech companies.

In China, the world's largest smartphone market, Apple continued to lead for the second straight month, beating rivals such as Vivo and Xiaomi, recent data from CounterPoint Research showed.

With Tesla now the world's most valuable automaker as Wall Street bets heavily on electric cars, many investors expect Apple to launch its own vehicle within the next few years.

"The icing on the cake, which may turn out to be the cake, is the potential for an EV car," Rhys Williams, chief strategist at Spouting Rock Asset Management said.

Just as Apple's market capitalization hits the $3 trillion milestone, its share price as a percentage of the Nasdaq 100 index's value is bumping up against a key technical level. In recent prior times, the stock price has risen above such a level and then subsequently declined.

-reuters-

Facebook out to loosen Apple's grip on App Store: report

SAN FRANCISCO, United States - Facebook is readying a lawsuit aimed at loosening Apple's grip on the App Store that serves as an exclusive gateway onto iPhones, a tech news outlet reported on Thursday.

The leading social network is preparing an anti-trust civil suit accusing Apple of abusing its control of the App Store by requiring outside developers to abide by rules not applied to its own software, The Information reported.

"As we have said repeatedly, we believe Apple is behaving anti-competitively by using their control of the App Store to benefit their bottom line at the expense of app developers and small businesses," Facebook told AFP, declining to confirm or deny the report.

Apple did not reply to a request for comment.

The dispute between the tech giants centers on changes in the latest version of Apple's iOS operating software, which include a tracking transparency feature that Facebook claims will cripple its ability to serve up targeted ads.

Facebook chief executive Mark Zuckerberg said during a conference call with investors on Wednesday that Apple was becoming one of his company's biggest competitors.

"Apple has every incentive to use their dominant platform position to interfere with how our apps and other apps work, which they regularly do to preference their own," Zuckerberg said.

"Apple may say that they're doing this to help people but the moves clearly track their competitive interests."

Facebook is not alone among those complaining about how Apple rules the App Store, where it collects 30 percent of sales or subscription fees third-party offerings.

Some developers say Apple takes too big a bite of the revenue and maintains rigid policies that may hamstring services competing with those of the iPhone maker. Fortnite-maker Epic Games has taken Apple to court over the practice.

Apple has argued its App Store delivers billions to independent developers, and that its practices are reasonable compared with other digital marketplaces.

Agence France-Presse

Apple announces 'speed' event next week; new iPhones expected

Apple Inc said on Tuesday it would hold a special event on Oct. 13, which most analysts believe will be used to unveil new iPhones with 5G capabilities.

Apple hinted at new, faster networking capabilities in the invitation for the event, which read: "Hi, Speed."

In years past, Apple has announced new iPhones in mid-September and started shipping them to customers before the end of the month. Financial analysts use the number of weeks that Apple has iPhones on sale to help model their predictions for the company's financial results during the holiday shopping season in Western markets, typically Apple's largest sales quarter.

This year, however, Apple executives had warned investors that new iPhones were not likely to ship until October. Apple held an event in September to introduce new Apple Watch and iPad models.

Analysts expect Apple to show a new version of the iPhone with 5G connectivity at the event. Analysts have also highlighted possible new AirPods over-ear wireless headphones and tags for finding lost items using wireless signals.

Apple shares have soared this year even as the coronavirus has crippled economies around the world, thanks in large part to booming sales of work-from-home items.

Even though Apple stock has fallen from a record high on Sept. 2, it remains near a $2 trillion stock market valuation. 

-reuters-

Apple’s app war needs peace

Your tween might be freaking out that she can’t play a new “Fortnite” video game on her iPhone. Or maybe you’ve heard that Spotify, Tinder, Facebook and a small email company are fuming about how Apple treats their apps.

Apple has an iron grip on what apps people can download on their iPhones, and some app makers are complaining loudly about this arrangement as well as the fees that Apple collects from some apps.

This feels like an intractable standoff, with app users caught in the middle. But there are nuts-and-bolts changes that Apple could make to tackle the bureaucracy, unpredictability and unfairness of the app world.

These changes won’t end all of these conflicts, which are starting to deprive people of apps or make them confusing and expensive to use. But the app system could be made better even without a truce.

I asked for ideas on how Apple could improve the app store from Jacob Eiting, a founder of RevenueCat, which helps app makers design in-app purchases and knows what drives developers crazy.

Specify how developers can fix rejected apps: 

Apple says yes or no to each new iPhone app or app update, based on the company’s 12,700-word app rule book — not including addendums.

Eiting said developers sometimes get rejection letters that simply recite a portion of Apple’s rules. He said it would be more helpful if Apple’s staff offered specific suggestions for what developers could change — sometimes as minor as tweaking a menu — to get the app approved.

Improve Apple’s payments technology:

Eiting said it could take weeks or longer for app makers to write software that links their app to Apple’s proprietary system for people to pay for stuff with a fingerprint or face scan. Creating software hookups with other payments technology is much simpler, he said.

Clarify the gray zone:

Apple has two categories of app purchases: When you buy something virtual, like an e-book, Apple collects from the app maker a fee of up to 30 percent on the purchase. When you buy something to use in the real world, like a physical book or an Uber ride, Apple doesn’t charge a fee.

But an increasing number of apps offer services that are somewhere between real and virtual — personal training or cooking classes conducted over an app, for example.

Eiting said Apple needed to clarify when the company would assess commissions on apps that offer these hybrid activities. Confusion over this question is stopping some apps before they even start, he said.

Consider an independent app review:

There are inevitable questions about conflict of interest between app makers and Apple’s own apps that compete with them. The founders of Blix, an email app maker that has fought with Apple, suggested to me that Apple create an independent app review process to make sure it isn’t unfairly punishing rival apps.

Apple has in the past made changes to its app system to respond to developers’ complaints, and the company told me it’s always open to more. Any tweaks, though, won’t go as far as some app makers want: essentially, to blow up Apple’s control over what apps are allowed on people’s iPhones.

But it’s still possible to revamp the app system in ways that could bring more calm for Apple, developers and our smartphone-dependent lives.

-Shira Ovide, The New York Times-

Apple plans to sell Macs with its own chips from 2021 - Bloomberg

Apple Inc plans to sell Mac computers with its own main processors by next year based on the chip designs currently used in its iPhones and iPads, Bloomberg reported on Thursday.

The iPhone maker is working on 3 Mac processors based on the A14 processor in its next iPhone, suggesting the company will transition more of its Mac lineup away from current supplier Intel Corp, the report added citing people familiar with the matter.

Apple did not immediately respond to a Reuters' request for comment.

-reuters-

How iPhone, Apple Watch can help reshape health research

In 1976, the Harvard School of Public Health and two other major medical institutions started a study on nurses that has become one of the largest and longest research efforts ever conducted on women’s health. They have so far enrolled more than 275,000 participants.

On Thursday, the Harvard school announced an even more ambitious women’s health study, one that aims to enroll 1 million women over a decade.

The new ingredients allowing the huge scale: Apple’s iPhones, apps and money.

Harvard’s new study is just one of three new large research efforts that Apple is working on with leading academic research centers and health organizations. Together, the studies, which Apple is paying for, show how the Silicon Valley giant and its popular products are reshaping medical research.

To enroll in clinical trials, patients have often had to travel to medical centers to be briefed by researchers and fill out the study paperwork in person. Many studies also follow patients only intermittently, in periodic surveys and visits to hospitals.

But Apple tools are enabling large-scale virtual studies that can follow people as they go about their daily lives. The company has developed a research app for iPhones — which participants can download from its app store — that is helping researchers quickly and easily recruit hundreds of thousands of study volunteers.

Researchers at Stanford Medicine, who studied whether an app on the Apple Watch could detect an irregular heartbeat condition, were able to enroll more than 400,000 participants in just 8 months. Apple helped recruit volunteers by promoting the study, which was published Wednesday, in its app store and emailing customers who had bought Apple Watches.

Dr. Ethan Weiss, an associate professor of medicine at the University of California, San Francisco, said he thought there would be many more of these so-called virtual studies, partly because they reduce the burden and costs compared with in-person studies.

He noted, however, that doctors did not yet know whether monitoring people en masse through smartphones and consumer-wearable devices would significantly improve health outcomes. “This is the big question. Is this ‘so what’? Or are we going to learn something meaningful we don’t know yet?”

Michelle A. Williams, dean of Harvard’s T.H. Chan School of Public Health, said she hoped the new study of women, called the Apple Women’s Health Study, would enable researchers to learn much more about how women’s bodies and reproductive health change over time.

Through surveys, she said, women participating in the study may choose to provide qualitative information about their menstrual cycles, pregnancies, menopause and other health issues. Through the study’s app, they may also choose to automatically share fitness, heart rate and other quantitative data gathered by their iPhones or Apple Watches.

“I’m most excited about the fact that we’ll be able to collect women’s menstrual cycle information in ways that we’ve not really done before,” Williams said. “Having this data on a large modern cohort is so relevant to clinical women’s health today because a lot of the decision-making and diagnostic protocols that we’re currently using are from data from 50 years ago, when the social environment was different.”

Apple’s involvement in the research studies is the latest example of how the biggest tech companies are edging their way into the country’s $3.5 trillion health care market. The companies are making inroads in medicine in part by exploiting their scale, along with the technologies that have helped them dominate markets like cloud computing, search, productivity tools and consumer apps.

Microsoft recently began testing an artificial intelligence system for hospitals that records, transcribes and analyzes doctor-patient conversations. Google is working with hospitals to analyze millions of patients’ medical records in the hopes of identifying patterns to improve diagnosis and treatment.

Apple is striking out in a different direction. The company has acquired health and wellness startups and hired prominent medical researchers. It has made health a marketing point of its devices. Last year, it introduced an electrocardiogram app on the Apple Watch Series 4. This year it introduced menstrual cycle tracking and hearing health services for the iPhone and the watch.

In addition to the women’s health study, Apple is sponsoring a study, led by researchers at Brigham and Women’s Hospital in Boston, that will examine physical activity and heart data from the Apple Watch to try to identify early warning signs of declining heart health. Another study, by researchers at the University of Michigan, will collect noise level data from headphones and an iPhone app to examine how long-term sound exposure can affect hearing.

The names of the studies also provide a marketing opportunity: They’re called the Apple Hearing Study, the Apple Women’s Health Study, and the Apple Heart and Movement Study.

Jeff Williams, chief operating officer of Apple, said the company hoped the studies would bolster the understanding of women’s, heart and hearing health. Apple also hopes to use the study data to improve its products or create new ones.

“We have a noise meter on people’s Apple Watches,” Williams said. “If we can help them understand the sound exposure in their environment and help them avoid the problem, or at least mitigate the problem, with hearing loss, that’s a huge contribution to society.”

The Apple studies could also influence how research studies treat health privacy. Apple’s research app allows study participants to granularly choose which types of information — such as heart or physical activity data — they share with researchers. Participants also have the ability to stop sharing their data or change their data-sharing category selections at any time. They can also choose to delete the current day’s data before it is shared with the study.

Apple has long marketed privacy as a feature that distinguishes its products from those of its rivals like Google. Apple has said that it does not have access to consumer data collected by the iPhone Health app, for instance, because the information is stored locally on users’ devices.

For the research studies, Apple said the technology was designed to meet federal standards for safeguarding health information. The company also said its researchers would have access to study participants’ data under pseudonymous ID codes — not their names.

But the studies reliant on Apple devices have inherent limitations because owners of the company’s products are not representative of the general US population. People who use iPhones have a median income of about $89,000 compared with $64,510 for Android users, according to recent data from Comscore. Among the Apple Watch users in the Apple Heart Study, there was a lower percentage of women, African Americans, Latinos and people ages 65 or older than in census data for the general population.

Michelle Williams of Harvard said that the women’s health study would ask participants for demographic information and adapt its methodology to account for any underrepresented groups.

There are also some concerns that Apple, which has already reshaped how people live, communicate and entertain themselves, is pursuing yet another way to influence society, this time through health.

“The broader point here is the fact that Apple has control over the app store, that Apple has connections with all of the people that have Apple iPhones, and that Apple gets to make a lot of decisions about how you collect the data, about how to notify people to be a part of the study,” said Matt Stoller, author of a new book, “Goliath: The 100-Year War Between Monopoly Power and Democracy.”

Whatever the potential health benefits, he said, “it’s still an extraordinary concentration of power in Apple’s hands.”


2019 The New York Times Company

source: news.abs-cbn.com

As iPhone sales sputter, Apple moves toward reinvention, again

WASHINGTON - With its latest financial results, Apple is showing it can move beyond the iPhone with gadgets and services that can help the California tech giant weather the slumping smartphone market.

In the just-ended quarter, Apple took in less than half its revenue from the iPhone, the longtime cash and profit driver for the company, representing a milestone for the company.

Apple managed to grow its overall revenues, albeit by a modest 1 percent, to $53.8 billion, even as iPhone revenues plunged nearly 12 percent in the April-June period.

The company delivered strong growth from digital content and services that include its Apply Pay and Apple Music, along with wearables and accessories like the Apple Watch and Air Pods.

Apple is preparing to launch its branded credit card in August that ties into its digital wallet, as well as its own streaming television service to compete with Netflix and others, with at least $1 billion invested in original content.

The results show Apple is lessening its dependence on the iPhone, analysts said.

"As the smartphone market matures Apple can no longer rely on iPhones alone to power the company forward," said Avi Greengart of the consultancy Techsponential.

"Apple has been signaling for a while that its plan was to diversify into services and we've seen from the latest results that this strategy is working quite well."

Apple's roadmap

Apple's update should allay investor concerns that the company's growth could be hobbled by a sputtering smartphone market, said a research note from Gene Munster and Will Thompson of the equity firm Loup Ventures.

"We believe the Street is systematically undervaluing Apple's ecosystem by focusing on hardware sales instead of revenue and earnings growth plus optionality," Munster and Thompson wrote.

"We believe this quarter's results and the roadmap for the next two years will prove to be a turning point for investors to begin valuing Apple with a more appropriate multiple."

Challenges ahead

But some analysts warn that Apple still faces challenges as rivals chip away at the smartphone market, in which the iPhone's share is less than 12 percent.

Daniel Newman of Futurum Research said it was "an impressively unimpressive quarter" for Apple highlighted by weak iPhone sales.

"I believe the iPhone success is a double-edged sword for Apple, because it has become such a dependency for the company to achieve its growth targets, yet the market is clearly showing a stabilizing or even shrinking demand," Newman said in a research note.

Newman said Apple has no other product as lucrative as the iPhone, which has seen problems in China and has failed to gain traction in low-income countries.

"I believe Apple is floundering a bit more than people want to believe," Newman said.

"The company's strategy seems to be lacking vision. Apple's growth is coming from accessories and services, rather than iPhones and iPads. While diversification is a step forward, the company will need more of it, and fast."

Richard Windsor of the research firm Radio Free Mobile said Apple "is still a one-product company" because its ecosystem revolves around the iPhone.

"I still think that ending its dependence on the iPhone is a very distant dream meaning Apple will continue to live and die with the success of this product," Windsor said in a blog post.

While Apple is showing gains in these new services, Windsor said Apple's trajectory remains somewhat murky.

"If the Apple iPhone suddenly loses its mojo then these businesses which are being dressed up as iPhone independent are also likely to crater."

Greengart said the fears are overblown, pointing out that Apple has a large and loyal base of iPhone users which allows the company to sell more accessories and services.

"They're keeping their existing customers and there's still more switching to iPhone than away from iPhone," he said.

Greengart said Apple has the potential to lead in mobile augmented and virtual reality, health and wellness services through its smartwatch, which has been dominating the segment.

"Satisfaction with the Apple Watch is very high," the analyst said.

"If you want a smartwatch and you have an iPhone, the Apple Watch is compelling, and once you have the Apple Watch, you're not going to switch to Android."

source: news.abs-cbn.com

In inland Chinese province, property bubble haunts dreams of prosperity

ZHENGZHOU, China - Song Jingyi, a paralegal from a family of modest means in the central Chinese region of Henan, had long dreamed of buying a home of her own in Zhengzhou, the sprawling provincial capital of 10 million where she attended college.

But high prices, and hefty downpayment requirements, meant that dream stayed tantalizingly out of reach.

Zhengzhou's property market exploded in 2016, spurred on by Chinese government efforts to boost home ownership and consumer spending in interior provinces like Henan.

While the resulting price surges were a new source of wealth for many in the city, they also excluded people like Song, who is 25 and has plans to marry her long-term boyfriend.

Last November, however, Song was presented with a tempting opportunity: a deal offered by a Chinese developer to circumvent the usual 30% downpayment on an apartment by borrowing the up-front payment itself.

The offer was a risky one for a developer - and a warning sign that the market in Zhengzhou was hitting a wall, caught up in China's slowest economic expansion in nearly three decades.

After two years of breakneck growth, property markets in provincial cities like Zhengzhou finally reached a turning point in late 2018. That has presented a policy challenge for the Chinese government, which has been attempting to spread wealth beyond the country's rich coastal regions to the interior.

It also illustrates how policymakers have struggled to grapple with a property market, the world's largest, that is crucial for growth yet prone to bubbles springing up in unlikely places - including the cities of Henan province.

Despite the warning signs, Song saw the mortgage offer as a golden opportunity to finally get into the Zhengzhou market.

She paid one-third of the usual down payment as deposit on a two-bedroom flat on Zhengzhou's outskirts, where seemingly endless rows of blocks have proliferated in recent years.

However, Song soon noticed that prices were dropping at some developments - including one where a friend had bought a home.

She had longed for a taste of the middle class lifestyle her friends were flaunting with their apartments packed with consumer goods. But she also didn't want to buy into a bubble that looked set to pop.

She decided to pull out, ultimately filing a lawsuit to get her deposit back.

"I felt that everyone around me had a house and I felt so much pressure from my peers," Song said. "In many ways, that was an illusion of false prosperity."

BACKWATER NO LONGER

Long a quiet provincial capital, Zhengzhou has thrived in recent years thanks to its position as a transport and logistics hub. Taiwan's Foxconn operates a factory in the city employing 230,000 people making Apple iPhones for the world.

And, for two years, the property market boomed.

The skyline is packed with soaring office towers in a newly constructed business district. Flashy malls selling luxury goods jostle for space in the crowded city centre. And freshly minted residential blocks stretch far into the suburbs.

Zhengzhou's property market took off when the Chinese government eased borrowing and credit restrictions in 2015 and 2016, setting off a nationwide home-buying frenzy.

Attracted by cheaper prices in interior provinces like Henan, buyers from across the country piled into Zhengzhou, many paying in full, in cash, to secure flats that often sold out within minutes.

In September 2016, at a new Evergrande apartment complex, a couple in their 40s told Reuters, wiping away tears of disappointment, that they drove from a nearby city only to be told that everything had been sold.

And prices kept soaring.

In the upscale Beilonghu district, overlooking an artificial lake on Zhengzhou's northern fringe, rows of opulent villas decorated with the sweeping roofs of traditional imperial residences went for tens of millions of yuan, rivalling prices in Sydney on a per square foot basis.

But in September last year, the Zhengzhou property market deteriorated rapidly, according to sales agents. Unsold property inventory in Zhengzhou rose 26.5% last year, compared to a 26.9% decline in 2016 at the peak of the boom.

Nationally, property sales by floor area grew 1.3% in 2018 from a year earlier, down from an increase of 7.7% a year earlier. In Henan, the growth slowdown was more dramatic: down to 5.1% last year, from 17.8% in 2017. Henan's real estate investment fell for the first time in 2018.

While the slowing Chinese economy is a key factor in the slump, it is also the result of government efforts to curb rampant property speculation and clean up a chaotic and risky financial system - even as it tried to spur spending and home ownership in places like Henan.

China's housing ministry did not respond to a request for comment.

RIPPLE EFFECTS

The effects of the slowdown in Zhengzhou have been felt by people like Zhang Chenxuan, who has run an interior design business in the city for seven years. Since last year, his income has shrunk by 20-30% as orders from new home buyers fell, he said.

"Clients nowadays only want something practical and simple that saves money instead of going for the luxurious," Zhang said as he fitted out a client's new apartment with contemporary furniture and grey ceramic tiles.

"Eighty percent of my customers now complain that they are very poor, that they don't have the money for proper furnishings," he said.

Zhengzhou's government has eased some purchase restrictions and scrapped price caps for new developments to encourage developers to release inventory, local agents said. But so far, those measures, and similar ones in other cities, have done little to revive the market.

The property slowdown has also been deeply felt in Xuchang, a city of about 4 million people south of Zhengzhou that is the world's wig-making capital.

Like Zhengzhou, the city had been the scene of frantic property development and buying in recent years. To lure builders and buyers, the local government moved wig-making businesses to the city's fringes, spent tens of billions of yuan demolishing shantytown homes, and built a series of lakes and parks, including a gigantic "Central Park" modeled on the one in Manhattan.

Those efforts attracted developers like Evergrande and Country Garden, who built vast complexes overlooking the park.

But the frenzy faded. Property consultancy Tonglitongcheng said in February that the city's housing stock had grown at such "a horrifying rate" that unsold inventory - totalling 9.7 million square metres by its estimates - would take about 55 months to clear.

Xu Boyun, 27, said his family, which owns three properties in Xuchang, was passing on buying a unit in another new development, despite the 20% discount offered to staff at the state-owned company where his parents work.

"It was a really good price but the market has cooled significantly and I've advised them there is not much room for another price spike," he said.

In some developments, prices have been slashed, infuriating those who bought in at higher prices.

In November, angry home owners stormed a Yango Group sales office after the company cut prices by 15% in one development, smashing scale models of the project, sales agents told Reuters.

While Yango hasn't cut prices further, it is now branding its apartments as "cost effective", and touting the market slump as a "rare opportunity" to buy.

It's unclear whether that will be enough to attract buyers to developments in provincial cities like Xuchang.

For Song, the paralegal, safer bets closer to cities like Beijing are a more attractive option for now.

In March, she said her boyfriend made a downpayment - a complete one - on a flat in Zhangjiakou, a ski resort near Beijing that will host some events for the 2022 Winter Olympic Games.

Speculators were eyeing the town, she said, but prices were still just a sixth of the average in Beijing.

"Even if prices fall, how much lower do you think they can go?"

source: news.abs-cbn.com

Intel aims to push beyond phones with 5G infrastructure deals

Intel Corp on Monday announced new chips and partnerships that it hopes will persuade its investors that the billions of dollars in research and development that it has poured into 5G networking technology will pay off.

Intel, the world's second-largest chip maker by revenue, got into the wireless data business with its acquisition of German modem maker Infineon in 2011. Its sole major modem customer is Apple Inc, whose iPhones feature Intel modem chips to connect to mobile data networks.

But the cutthroat modem business, where Intel competes against rivals such as Qualcomm Inc and MediaTek Inc, has lower margins than Intel is accustomed to making on its flagship processor chips that go into personal computers and data centers.

But Bob Swan, Intel's chief executive, said Intel's future in 5G networks, which are expected to roll out this year and next and be much faster than current 4G networks, extends beyond selling modems to phone makers.

Intel plans to also sell modems to automakers for use in connected vehicles, as well as to manufacturers for use in connecting industrial equipment. And Intel also plans to land its other chips - including processors and the so-called programmable chips it gained by acquiring Altera Inc in 2016 - in a variety of networking gear, he said.

"Where investors have been most anxious is, we were catching up for a while. Catching up, in their minds, means not making any money," Swan said at a press event in Palo Alto, California last week ahead of the Mobile World Congress conference being held in Spain this week. "Now we're at a stage where we believe we have products that are as good as anybody in the industry's as we move into 5G."

On Monday at the conference, Intel said it had reached a deal for network gear makers Fibocom Wireless Inc, Arcadyan Technology Corp and others to include Intel modem chips in so-called modules and gateways that will help industrial equipment connect with 5G networks. The company also introduced new programmable chips that will compete against Xilinx Inc, which in its most recent quarter saw a revenue boost from 5G deals.

Intel is also aiming to sell versions of its flagship processors for use in 5G base stations, which help carry mobile phone signals back to core networks and said it reached deals with Ericsson and ZTE Corp to use Intel processors in their 5G networking gear.

source: news.abs-cbn.com

Apple, Samsung fined millions for slowing phones in Italy

ROME - Italy's competition authority on Wednesday said it was fining Apple and Samsung 10 and five million euros ($11.5 and $5.7 million) respectively for the "planned obsolescence" of their smartphones.

The ruling is believed to be the first against the manufacturers following accusations worldwide that they encourage operating system updates for older phones which slow them down, thereby encouraging the purchase of new phones.

An investigation by the anti-trust authority revealed that "Apple and Samsung implemented dishonest commercial practices", a statement said.

Operating system updates "caused serious malfunctions and significantly reduced performance, thus accelerating phones' substitution."

Samsung told owners of its Note 4 phone to install a new version of Google's Android operating system intended for the more recent Note 7 but which rendered the old model sluggish.

Likewise, Apple told iPhone 6 owners to install an operating system designed for the iPhone 7, leading to problems for owners of the older model.

Apple was also found to have failed to tell customers about "essential" characteristics of its phones' lithium batteries, including their average life and how to prolong that life, resulting in a bigger fine than for Samsung.

The Italian anti-trust authority opened its investigation in January following customer complaints around the same time as a similar probe in France.

The US company was forced to admit last year that it intentionally slowed down older models of its iPhones over time, sparking concerns it was unfairly nudging consumers to upgrade.

At the time, Apple denied it intentionally shortened the life on any of its products. It said it slowed models to extend the performance of the phone, which uses less power when running at slower speeds, and prevent unexpected shutdowns.

The California-based group also faces a class-action suit in the United States.

source: news.abs-cbn.com

Apple to pay $38-B in taxes on repatriated profits

Apple announced Wednesday it would pay some $38 billion in taxes -- likely the largest payment of its kind -- on profits repatriated from overseas as it boosts investments in the United States.

The iPhone maker said in a statement it plans to use some of its foreign cash stockpile, which qualifies for reduced tax rates under a recent bill, to invest in new projects.

Apple, which claims to be the largest US taxpayer, is also one of the largest beneficiaries of a tax bill passed by Congress in December which lowers the rate of repatriated profits to around 15 percent and cut the corporate tax rate to 21 percent from 35 percent.

The tech giant had built a stockpile of more than $250 billion in overseas holdings, claiming it was not in the interests of shareholders to repatriate the money with a 35 percent tax rate.

Apple said it will now use a large chunk of the overseas cash for US investments.

It said it expects to invest over $30 billion in direct capital expenditures in the US over the next five years, creating some 20,000 new jobs, and claimed the move would contribute $350 billion in economic activity in the US.

"Apple is a success story that could only have happened in America, and we are proud to build on our long history of support for the US economy," said Apple chief executive Tim Cook.

"We believe deeply in the power of American ingenuity, and we are focusing our investments in areas where we can have a direct impact on job creation and job preparedness. We have a deep sense of responsibility to give back to our country and the people who help make our success possible."

Second campus 

Apple planned to spend more than $10 billion on US data centers, which play an increasingly important role as the California-based iPhone maker focuses on increasing revenue from services and content based in the internet 'cloud.'

The company also said it will establish a second Apple campus, at a location to be disclosed later this year, that will initially house technical support for customers.

Apple already spent billions of dollars on a new 'space ship' campus in its home city of Cupertino in Silicon Valley.

Apple reported that it currently employs 84,000 people in the US.

As is the case with Apple's other US facilities, the new campus will be entirely powered by renewable energy, the company vowed.

Shares see highs

Apple will also boost the size of its Advanced Manufacturing Fund fivefold, to $5 billion, with the money earmarked to back expansion projects of suppliers in the US.

Apple investing in high-tech manufacturing in the United States was considered rare common ground with US President Donald Trump, who hammered away at the theme during his campaign for office.

Apple shares flirted with record highs through the day, trading at $178.76 as the close of the Nasdaq neared.

It was revealed late last year in leaked financial documents known as the Paradise Papers that Apple shifted much of its offshore wealth from Ireland to a tax haven in the British Isles.

After the US technology colossus stated publicly in 2013 that it was paying its proper share of taxes, it moved the bulk of its untaxed overseas cash to Jersey, a British dependency in the Channel Islands, various media organizations reported, based on the once-secret cache of documents.

The documents shared with some media outlets by the US-based International Consortium of Investigative Journalists have exposed tactics the wealthy and powerful have used to avoid taxes.

The world's most valuable company noted at the time that it has earmarked $36 billion to cover deferred US taxes.

Prior to 2014, Apple had taken advantage of tax rules to route overseas revenue through Irish subsidiaries to minimize taxes.

Apple said at the time that reforming the international tax system to make it simpler is "essential" and needed to "remove the current tug of war between countries over tax payments."

source: news.abs-cbn.com

Apple CEO 'deeply' sorry for slowing iPhones

Apple CEO Tim Cook said he was apologizing "deeply" for slowing older iPhones, saying it was necessary to prevent the devices form shutting down unexpectedly.

The company is preparing a software update to allow iPhone owners to better monitor the health of their device batteries following public uproar. It also offered replacement batteries at a discount.

"We deeply apologize for anybody that thinks we had some kind of other motivation," Cook told US broadcaster ABC on Wednesday (Thursday in Manila).

"All batteries age over time and they become unhealthy at a point in time. An unhealthy battery has a probability that it will create an unexpected restart," Cook said.

With the update, users will know when Apple is "reducing performance" of their iPhone "by some amount," he said.

"If you don't want it, you can turn it off. We don't recommend it," he said.

"Our actions were all in service of the user. I can't stress that enough. Maybe we should be clear at a point in time, but our actions were always the purest," he said.

source: news.abs-cbn.com

China group seeks answers from Apple on slowing iPhones

SHANGHAI - A Chinese consumer group has asked Apple for information about the slowing of older iPhones after operating system updates, demanding a reply before Friday, state news agency Xinhua reported.

The query from the Shanghai Consumer Council came in response to consumer feedback that old iPhones became sluggish after upgrading the software to iOS 10.2.1, it said.

In a letter to Apple on Monday, the council requested an explanation for the slowdown and information about what Apple planned to do to rectify the problem, Xinhua reported.

The California-based company acknowledged in December that iPhone software can slow down some phones with battery problems and apologized for the issue. It also cut battery replacement costs and said it would change its software to show users whether their phone batteries were working well.

The Shanghai Consumer Council, a non-government organization approved by the Chinese authorities, said it had received 2,615 complaints about Apple products and services in 2017, compared with 964 complaints in 2015.

source: news.abs-cbn.com

Paris prosecutors probe Apple over 'planned obsolescence'

Paris prosecutors have launched a probe of US tech giant Apple over suspected "planned obsolescence" in some of its iPhone models, a judicial source told AFP on Monday.

It comes after a complaint by the association Stop Planned Obsolescence (HOP or Halte a l'Obsolescence Programmee) that followed Apple's admission last month that it intentionally slowed down older models of its iPhones over time.

The investigation into possible "planned obsolescence" or "fraud" was opened on Friday and is being led by anti-trust and consumer protection specialists in the French economy ministry, the source said.

When contacted by AFP, Apple France gave no comment on the matter.

Planned obsolescence is a widely criticised commercial practice in which manufacturers build in the expiry of their products so that consumers will be forced to replace them.

It is decried by consumer groups as being unethical and is suspected of being particularly prevalent in the electronics industry, which produces mountains of unrecyclable waste each year.

To tackle the problem, France passed landmark legislation in 2015 known as "Hamon's law" which made the practice illegal and -- in theory -- obliged retailers to say whether replacement parts were available.

The law, named after former Socialist minister Benoit Hamon, stipulates that a company found to be deliberately shortening the life of its products can be fined up to five percent of its annual sales while executives can face up to two years in jail.

HOP praised the decision of French authorities to dig into Apple's practices.

"It is the first criminal procedure in the world against a company on the basis of planned obsolescence," Emile Meunier, a lawyer for the group, told AFP.

'WIDE-SCALE TAX EVASION'

Last month Apple confirmed what critics had suspected for years: that it intentionally slows performance of older iPhones as their batteries weaken with age.

The company said this was to extend the performance of the phone, which uses less power when running at slower speeds, and was to prevent unexpected shutdowns due to a low battery charge.

It denied incorporating planned obsolescence.

However in late December the company issued an apology for slowing older models and said it would discount replacement batteries for some handsets.

"We know that some of you feel Apple has let you down. We apologize," Apple said in a message to customers on its website on December 28.

"We've always wanted our customers to be able to use their iPhones as long as possible. We're proud that Apple products are known for their durability, and for holding their value longer than our competitors' devices."

Critics have accused Apple of nudging iPhone users to upgrade to newer models by letting them think it was the handsets that needed replacing, rather than just the battery.

HOP believes Apple could be liable for a fine in line with the value of all of its iPhone sales in France since Hamon's law came into force on August 17, 2015.

The California-based group also faces a class-action suit in the United States.

In another headache for Apple in France, the company announced last week that it has filed a lawsuit against the Attac activist group after about 100 of its supporters occupied the tech giant's flagship store in Paris last month, protesting alleged "wide-scale tax evasion" by the firm.

French prosecutors have also launched a probe into Japanese printer maker Epson for alleged planned obsolescence in its products.

source: news.abs-cbn.com

Wall Street hits record high - without help from Apple

NEW YORK - Wall Street edged up to a record high on Wednesday as gains in consumer discretionary and energy stocks offset losses in technology heavyweight Apple Inc.

Shares of Apple dropped 0.8 percent on concerns that the company's newly launched iPhone X is too expensive and because its availability starting in November was later than expected. With the widely held stock up 37 percent so far this year, some analysts said it was time to cash in gains.

"Apple to a certain extent is a 'sell the news' event," said Art Hogan, chief market strategist at Wunderlich Securities in New York. "A great deal of expectation has been built into the stock."

Even with Apple's losses, the S&P 500, Dow Jones industrial average and the Nasdaq all closed at record levels, helped by other consumer stocks.

The S&P energy index rose after the International Energy Agency said that a global surplus of crude was starting to shrink.

The Dow Jones Industrial Average rose rose 39.32 points, or 0.18 percent, to 22,158.18 The S&P 500 edged upgained 1.89 points, or 0.08 percent, to 2,498.37, and the Nasdaq Composite added 5.91 points, or 0.09 percent, to 6,460.19.

The indexes have hit several records this year, despite setbacks caused by turmoil in the White House, the timing of US interest rate hikes, doubts about President Donald Trump's ability to push through his pro-business reforms, and lately, tensions over a nuclear-weapons-capable North Korea.

The S&P 500, up 11.6 percent in 2017, is trading at 17.6 times expected earnings, expensive compared with its 10-year average of 14.3, according to Thomson Reuters Datastream.

Shares of credit score provider Equifax tumbled 14.6 percent and hit a more than 1-1/2-year low after an apology by company Chief Executive Richard Smith for a massive data breach failed to appease investors.

"Of course it should be getting pounded and the situation is only getting worse," said Ken Polcari, director of the NYSE floor division at O’Neil Securities in New York. "They have a huge problem on their hands. The fact the (CEO) has been so cavalier – it took him five days to write a response – it’s a disaster."

Target Corp rose 2.8 percent after the retailer said it would hire 100,000 workers for the holiday season, 43 percent more than last year.

Chevron Corp climbed 1.5 percent, boosting the Dow, while a 1.7 percent rise in Amazon.com Inc boosted the Nasdaq.

Nordstrom Inc gained 6.0 percent after the company's founding family selected private equity firm Leonard Green & Partners to help take it private.

Advancing issues outnumbered declining ones on the NYSE by a 1.10-to-1 ratio; on Nasdaq, a 1.20-to-1 ratio favored advancers.

The S&P 500 posted 31 new 52-week highs and one new low; the Nasdaq Composite recorded 103 new highs and 17 new lows.

About 6.2 billion shares changed hands on U.S. exchanges, above the 5.8 billion 20-day average.

source: news.abs-cbn.com

iPhone X shipping delay may dampen Apple's holiday quarter

Apple Inc's highly anticipated iPhone X features a slew of innovations but delayed availability could hurt holiday-quarter sales.

The much-hyped event on Tuesday unveiled three new phones, an advanced watch that can take calls and a new Apple TV, but die-hard fans will not be able to get their hands on the iPhone X until Nov. 3 - much later than iPhone 8's shipping date of Sept. 22.

The delay in shipping of the iPhone X could hurt Apple's seasonally-strong fiscal first quarter as orders get pushed to the following quarter. The phone will start at $999 for the 64 GB version.

Apple's shares were down 1 percent at $159.35 in early trading on Wednesday.

Although decked out with facial recognition technology, front and back glass, a 5.8-inch edge to edge display, wireless charging and animated emojis, some analysts said the delay tempers near-term sales and a few adjusted their estimates.

"Given one month less sales for the iPhone X during the December quarter, we have reduced our December quarter iPhone sales estimates from 84 million to 79 million units," Canaccord Genuity analysts wrote in a client note.

The company's iPhone 8 and 8 Plus did not veer far away from previous models, sporting modest new features such as a glass body, wireless charging, better camera and a faster processor. This could lead consumers to wait for the iPhone X.

"None of the features in the version 8 product will likely accelerate demand," Mizuho analysts wrote in a note.

Apple typically launches new iPhones in September and a big jump in sales usually follows in the holiday quarter, as users tend to upgrade devices when new phones sport significant design changes.

Apple last saw a significant uptick in sales with the introduction of iPhone 6 in 2015.

While the delay of the iPhone X could hurt near-term sales, analysts still think Apple's loyal and hungry fans would lap up the new phone, boosting sales for fiscal 2018.

Brokerage UBS said it continues to estimate 246 million phones in fiscal 2018 – up 15 percent.

Apple, which is trying to energize sales in China, could hit a wall selling the pricey new phones there. The 8 and 8 plus start at $699 and the iPhone X is Apple's most expensive phone.

The high price of the iPhone X may not affect sales in the United States, where telecom carriers subsidize phone ownership, but it might dent sales in China and India.

But even with the lack of major surprises, Apple's phones are still expected to sell well.

"It will still sell in enormous volumes because Apple has repeatedly demonstrated its ability to persuade consumers to shift their overall spending to place a greater share of their disposable income towards a smartphone purchase," IHS Markit analyst wrote in a note.

(Reporting by Supantha Mukherjee in Bengaluru; Editing by Bernard Orr and Saumyadeb Chakrabarty)

source: news.abs-cbn.com

Apple's iPhone turns 10, bumpy start forgotten

Apple Inc's iPhone turns 10 this week, evoking memories of a rocky start for the device that ended up doing most to start the smartphone revolution and stirring interest in where it will go from here.

Apple has sold more than 1 billion iPhones since June 29, 2007, but the first iPhone, which launched without an App Store and was restricted to the AT&T Inc network, was limited compared to today's version.

After sluggish initial sales, Apple slashed the price to spur holiday sales that year.

"The business model for year one of the iPhone was a disaster," Tony Fadell, one of the Apple developers of the device, told Reuters in an interview on Wednesday. "We pivoted and figured it out in year two."

The very concept of the iPhone came as a surprise to some of Apple's suppliers a decade ago, even though Apple, led by CEO Steve Jobs, had already expanded beyond computers with the iPod.

"We still have the voicemail from Steve Jobs when he called the CEO and founder here," said David Bairstow at Skyhook, the company that supplied location technology to early iPhones. "He thought he was being pranked by someone in the office and it took him two days to call Steve Jobs back."

The iPhone hit its stride in 2008 when Apple introduced the App Store, which allowed developers to make and distribute their mobile applications with Apple taking a cut of any revenue.

Ten years later, services revenue is a crucial area of growth for Apple, bringing in $24.3 billion in revenue last year.

NEW MODEL

Fans and investors are now looking forward to the 10th anniversary iPhone 8, expected this fall, asking whether it will deliver enough new features to spark a new generation to turn to Apple.

That new phone may have 3-D mapping sensors, support for "augmented reality" apps that would merge virtual and real worlds, and a new display with organic LEDs, which are light and flexible, according to analysts at Bernstein Research.

A decade after launching into a market largely occupied by BlackBerry and Microsoft devices, the iPhone now competes chiefly with phones running Google's Android software, which is distributed to Samsung Electronics and other manufacturers around the world.

Even though most of the world's smartphones now run on Android, Apple still garners most of the profit in the industry with its generally higher-priced devices.

More than 2 billion people now have smartphones, according to data from eMarketer, and Fadell, who has worked for both Apple and Alphabet, sees that as the hallmark of success.

"Being able to democratize computing and communication across the entire world is absolutely astounding to me," Fadell said. "It warms my heart because that's something Steve tried to do with the Apple II and the Mac, which was the computer for the rest of us. It's finally here, 30 years later."

source: news.abs-cbn.com

Tech breakthroughs take a backseat in upcoming Apple iPhone launch

SAN FRANCISCO - When Apple Inc. launches its much-anticipated 10th anniversary iPhone this fall, it will offer an unwitting lesson in how much the smartphone industry it pioneered has matured.

The new iPhone is expected to include new features such as high-resolution displays, wireless charging and 3-D sensors. Rather than representing major breakthroughs, however, most of the innovations have been available in competing phones for several years.

Apple's relatively slow adoption of new features both reflects and reinforces the fact smartphone customers are holding onto their phones longer. Timothy Arcuri, an analyst at Cowen & Co, believes upwards of 40 percent of iPhones on the market are more than two years old, a historical high.

That is a big reason why investors have driven Apple shares to an all-time high. There is pent-up demand for a new iPhone, even if it does not offer breakthrough technologies.

It is not clear whether Apple deliberately held off on packing some of the new features into the current iPhone 7, which has been criticized for a lack of differentiation from its predecessor. Apple declined to comment on the upcoming product.

Still, the development and roll-out of the anniversary iPhone suggest Apple’s product strategy is driven less by technological innovation than by consumer upgrade cycles and Apple’s own business and marketing needs.

"When a market gets saturated, the growth is all about refresh," said Bob O’Donnell of Technalysis Research. "This is exactly what happened to PCs. It's exactly what happened to tablets. It's starting to happen to smartphones."

Apple is close-mouthed about upcoming product features, but analysts and reports from Asian component suppliers and others indicate that high-resolution displays based on OLED technology -- possibly with curved edges -- are likely to be part of the anniversary phone. A radical new design is not expected, according to analysts.

Some of the anticipated new technologies, notably wireless charging, remain messy. Samsung Electronics Co Ltd phones, for example, feature wireless charging but support two different sets of standards, one called Qi and the other AirFuel.

Apple recently joined the group backing Qi. But there are still at least five different groups working on wireless charging technology within Apple, according to a person with knowledge of the matter.

As to 3-D sensors, there is already one hiding in the iPhone 7. The front camera features what is known as a time-of-flight sensor, which helps it autofocus and is used in numerous phones including the Blackberry, according to TechInsights, a firm that examines the chips inside tech devices.

That sensor could be upgraded to a higher-resolution version that could handle 3-D mapping for facial recognition, said Jim Morrison, vice president at TechInsights.

Some analysts also speculate the company could remove the phone's home button, placing it and a fingerprint sensor beneath the front display glass, based on patents the company has filed.

SLOW GROWTH

Global smartphone sales were up only 2.3 percent to 1.47 billion units in 2016, according to IDC. Many carriers in the United States have stopped subsidizing phones, causing phone buyers to think harder about their next purchase.

Apple will likely make a heavy marketing push around the phone’s 10th anniversary. “IPhone set the standard for mobile computing in its first decade and we are just getting started. The best is yet to come,” Chief Executive Officer Tim Cook said in a statement Jan. 8, the date the iPhone was announced by then-CEO Steve Jobs in 2007.

In 2015, the last year it disclosed the figure, Apple spent $1.8 billion on advertising, up 50 percent from the year before and nearly four times the $467 million it spent in 2007 when it first released the iPhone.

And the company continues to excel at selling higher-priced phones. Chief Financial Officer Luca Maestri attributed the most recent quarter's record-setting 78.3 million iPhones sold to the iPhone 7 Plus, which for the first time included a new dual camera feature not found in other models.

The iPhone 7 Plus tops out at $969 with memory upgrades and a jet black finish. O'Donnell of Technalysis Research believes that with the next iPhone, Apple might even introduce a $1,000-plus “ultra-premium device for the real Apple-crazed folks out there who want to stand out."

source: news.abs-cbn.com

Nintendo shares jump on Super Mario app for iPhones

TOKYO - Nintendo shares surged more than five percent on Wednesday after the game giant said it would release a Super Mario app for iPhones next month.

The stock price rose as much as 5.5 percent to 26,215 yen before closing the morning session on the Tokyo Stock Exchange up 4.38 percent at 25,950 yen.

Shares in Nintendo, creator of the Pokemon franchise, have been on a tear since the July release of Pokemon Go -- making the company more valuable than Sony at one stage.

The stock has gained more than 50 percent this year on the phenomenal success of the mobile app for iOS and Android developed by San Francisco-based Niantic.

Kyoto-based Nintendo said it would release Super Mario Run worldwide for Apple's iPhone and iPad on December 15.

Customers can download it from the App Store for free to try some limited elements of the game.

An optional one-time payment, which will be $9.99 in the United States, grants unlimited access, the company said.

Neil Campling, an analyst at Northern Trust Capital Markets, hailed the company's approach of enticing gamers in the same way as other mobile game successes as "a great strategy".

"To set a low incentive and then a low total cost when engaged could set Nintendo on a differentiated path, which ultimately could be a game changer," Campling said.

Super Mario Run will also be introduced for Android-based devices at a later date.

Nintendo is also to release a new game console early next year.

source: www.abs-cbnnews.com

Apple sells more iPhones than expected, shares jump after hours

SAN FRANCISCO - Apple Inc. sold more iPhones than Wall Street expected in the third quarter and estimated its revenue in the current period would top many analysts' targets, soothing fears that demand for the company's most important product had hit a wall.

Its shares rose 7 percent in after-hours trading.

The world's most valuable publicly traded company said it sold 40.4 million iPhones in the third quarter, down 15 percent from the year-ago quarter but slightly more than the average analyst forecast of 40.02 million, according to research firm FactSet StreetAccount.

IPhone sales dropped for the second straight quarter, pushing down Apple's total revenue 14.6 percent in the fiscal third quarter, ended June 25.

Demand for Apple's phones has waned in China, partly because of economic uncertainty there, and has also slowed in more mature markets as people tend to hold on to their phones for longer. The sales slump has stoked concerns about whether the tech leader can continue to deliver profits at the level Wall Street has come to expect.

"China was a major letdown," said Patrick Moorhead, an analyst at Moor Insights & Strategy. "Samsung and Huawei are much more competitive now than a year ago and the Chinese economy is not doing well at all."

Moorhead said, however, that increased services revenue - which includes the App Store and iCloud - was a "very big bright spot for Apple."

Chief Financial Officer Luca Maestri told Reuters in an interview that Apple's performance had topped his expectations in a quarter weighed down by tough foreign exchange rates and difficult comparisons with blockbuster iPhone 6 sales from the previous year.

Apple reduced channel inventory by $3.6 billion, exceeding the $2 billion expected reduction, meaning sales were better than they appeared, Maestri said.

Customer demand "was better than what is implied in our results and better than we had anticipated," he said.

Sales of the iPhone fell last quarter for the first time since the gadget's release in 2007, dropping 16.3 percent. Maestri projected the gadget's average selling price to rise in the September quarter.

The iPhone drives about two-thirds of Apple's total sales. Apple Chief Executive Tim Cook said during a call with analysts that the iPhone SE, a cheaper, four-inch (10 cm) phone released this year, was extending the range of people able to buy Apple phones.

"It's opening the door to customers we weren't reaching before," he said.

Apple's quarterly net profit fell 27 percent to $7.8 billion, while revenue of $42.36 billion beat analysts' average estimate of $42.09 billion, according to Thomson Reuters I/B/E/S.

CHINA WORRIES

Sales in Greater China, once touted as Apple's next growth engine, decreased 33.1 percent, compared with a 112.4 percent growth in the year-earlier quarter and a near 26 percent fall in the second quarter.

Maestri attributed the drop to channel inventory reduction in the nation, foreign exchange headwinds and a general downturn in the Chinese economy.

"It is very clear that there are some signs of economic slowdown in China, and we will have to work through them," he said.

Adding to Apple's woes in China, the company's stores for books and movies went dark earlier this year. Cook said Apple was working with regulators to restore the services but played down the financial impact of the outage, saying the stores yielded less than $1 million in revenue during the short time they were on the market.

"It’s not a revenue-related issue," he said. "This is a service we want to provide our customers."

Apple's services business, which includes the App Store, Apple Pay, iCloud and other services, generated nearly $6 billion in revenue, up 18.9 percent from the previous year.

As iPhone sales level off, Apple is attempting to use such services to wring more revenue out of its existing base of users. The business emerged as Apple’s second largest after the iPhone for the first time in the second quarter, eclipsing gadgets such as the iPad and the Mac.

That shift bodes well for Apple because gross margins on services are better than the average for the rest of the company, Maestri said.

"It’s a great business because it is recurring in nature and more linked to our installed base," he said.

Maestri touted music as an example of one successful service, saying the growth of the Apple Music streaming service had more than made up for declines in digital downloads. To redouble its momentum in music, Apple purchased rights to the next season of popular series Carpool Karaoke, CBS Television Studios announced on Tuesday.

Apple forecast fourth-quarter revenue of $45.5 billion to $47.5 billion, largely above Wall Street's average estimate of $45.71 billion, according to Thomson Reuters I/B/E/S.

The forecast, covering the quarter ending in September, will likely include at least the first weekend of sales of the iPhone 7 range, which Apple is expected to launch in September.

Up to Tuesday's close, Apple's shares had fallen about 8.2 percent since the start of the year. Shares rose 7 percent to $103.47 in after-hours trade following publication of results.

source: www.abs-cbnnews.com