fortune

With Apple set to reveal its fiscal Q2 earnings after market close today, analysts are expecting double-digit year-over-year growth in all categories except iPads. Fortune‘s roundup says that analysts predict revenue of $56.84B, up a massive 24.5% year-over-year, and above the top end of Apple’s $52-55M guidance. Earnings per share is predicted to be $2.21, up a third on the previous year, with gross margin just shy of Apple’s top-end guidance at 39.4%.

Double-digit growth is expected in both iPhones and Macs. For iPhones, the prediction includes sales just under 56M, 32.6% higher than the same quarter last year, while Mac sales are forecasted to hit 4.7M, 13.6% up on last year … 
Expand
Expanding
Close

Apple SVP Eddy Cue with Beats founders Dr Dre and Jimmy Iovine

In a new interview with Fortune, Apple’s SVP of Internet and Software Services Eddy Cue opened up about Apple’s ongoing ebooks litigation ahead of the company’s December 15th appearance before a federal appeals court. Apple formally appealed the ebooks antitrust ruling earlier this year after a judge ruled in favor of the Department of Justice in 2013 claiming that Apple conspired with ebook publishers to raise prices.

“We feel we have to fight for the truth,” says Cue. “Luckily, Tim feels exactly like I do,” he continues, referring to Apple CEO Tim Cook, “which is: You have to fight for your principles no matter what. Because it’s just not right.”

Earlier last month, U.S. District Judge Denise Cote approved a $450 million settlement under which Apple will not be forced to pay any fees if it wins the upcoming appeal.
Expand
Expanding
Close

Fortune has somehow named Google CEO Larry Page its 2014 Business person of the Year beating out rival Apple CEO Tim Cook who earns the number 2 spot (despite stock prices) on Fortune’s list of 50 executives.
Expand
Expanding
Close

Someone once said that if you put three analysts in a room and ask them a question, you’ll get four different opinions. This certainly appears to be the case today, with Fortune finding no more consensus on iPad sales than it did on iPhone numbers.

Asked to predict how many iPad sales Apple will announce in next week’s Q3 earnings announcement, the overall average suggested year-on-year sales would be flat at 14.35M. However, no consensus view emerged … 
Expand
Expanding
Close

Yep, it’s that time of the quarter again, when we start hearing analyst predictions for Apple’s quarterly earnings. Asymco analyst Horace Dediu has just tweeted his, forecasting that Apple will hit $38.62B revenue, above the company’s guidance of $36-38M. Wells Fargo’s Maynard Um recently predicted $38.2B … 
Expand
Expanding
Close

As highlighted by Fortune, analysts’ consensus on iPad sales for last quarter suggest that iPad sales will actually decline year-over-year by about 0.7%. Although the expected decline is small, this would represent a big shift in iPad momentum, especially since Apple saw a strong increase in sales for the holiday quarter, going from 22.9M units in the previous year to 26M this year.

If iPad sales have fallen, it wouldn’t be because of different market conditions to last year. Apple introduced the iPad Air at the end of 2014 around a year from the introduction of the iPad 4 at the end of 2012. Last year, Apple dropped the price of the iPad Mini a modest $30 while also introducing the highly anticipated retina iPad Mini. In 2012, it introduced the iPad mini. The product cycles are similar, so the decline isn’t due to any artificial inflation of sales last year.

Expand
Expanding
Close

When Apple reports its quarterly earnings later today, the news will be good, according to the consensus view of 47 Apple analysts compiled by Fortune.

Analysts are expecting the company to report earnings of $58.1B for the final quarter of last year (Apple’s fiscal quarter 1), representing 4 percent earnings growth over the same quarter last year. This would be right at the top end of Apple’s guidance of $55-58B, and the first time in a year that Apple would have reported year-on-year growth … 
Expand
Expanding
Close

Fortune is out today with its annual Businessperson of the Year list and this time around a couple notable Apple connections have made the list. Coming in at #4 behind #1Elon Musk, activist investors, and Tencent CEO ‘Pony’ Ma Huateng, is Apple’s recently hired Head of Retail, Burberry CEO Angela Ahrendts. 
Expand
Expanding
Close

With Apple’s Q3 2013 financial call set to take place later this month on July 23rd and Wall Street expecting near zero revenue growth, today we get a look at what analysts are expecting for iPad sales. With no major product announcements since the  introduction of iPad mini and iPad 4 last fall (and only a minor upgrade with the 128GB iPad 4 in January), it’s not all that surprising the consensus from 48 analysts polled by Fortune is that Apple will experience a big drop in growth year-over-year for iPad during the June quarter.

The average estimate of 18.1 million iPad units during Q3 works out to around 6.2% growth compared to 183% and 84% in Q3 2011 and Q2 2012, which some might still consider significant due to the lack of new product announcements and competition from Android tablets:
Expand
Expanding
Close

Yesterday we decided not to run with a story published by Bloomberg that Pegatron’s forecasted 25 percent to 30 percent drop for second-quarter revenue was due to “falling iPad mini demand.” It seemed a little far fetched that an Apple supplier would be giving up specific information on product demand, something we know suppliers in Apple’s circle typically remain tight-lipped on. Today CEO of Pegatron Jason Cheng has confirmed our suspicions in an email to Fortune claiming that Bloomberg reporter Tim Culpan made the iPad mini angle up.

While quoting an analyst’s expectations for iPad mini demand in Q2, Bloomberg’s Tim Culpan offered the following quote from Pegatron Chief Executive Officer Jason Cheng as proof:

A decline in revenue from the iPad Mini “is more on demand, while price has been stable. Not just tablets, also e-books and games consoles, almost every item is moving in a negative direction.”

Pegatron chief Jason Cheng says he wasn’t referring to iPad mini specifically, but rather all of its products including all tablets and game consoles, while noting that “clearly refused” to answer Culpan’s questions related to specific products. Here’s what he had to say about the Bloomberg piece:
Expand
Expanding
Close

Fortune is out today with its annual FORTUNE 500 list ranking the largest corporations in the U.S. by revenue for fiscal 2012 (before expenditures). This year Apple, for the first time, has finally cracked the top 10 of Fortune’s list rising from its 17th place position last year to No. 6 on this year’s list. It’s still well behind Wal-Mart at No.1, as well as Exxon Mobil, which Apple happened to briefly surpass Apple’s market cap back in January to become the world’s most valuable company.

As for tech companies on the list, Facebook just barely made the Fortune 500 for the time this year coming it at number 482, while others include AT&T at No. 11, HP at No. 15, Verizon at No. 16, Microsoft at No. 35, and Amazon at No. 49.

Head below for the top 10 list and check out the full Fortune 500 here. 
Expand
Expanding
Close

Following Apple’s CEO Tim Cook selling off approximately 20,000 shares of company stock in March, new filings with the U.S. Securities and Exchange commission discovered by Fortune’s Philip Elmer-Dewitt show iOS chief Scott Forstall recently sold 64,151 shares worth roughly $38.7 million:

The shares were the remains of a 120,000-share retention bonus that was granted in 2008, vested last month and reduced by 55,849 shares on March 24 to pay taxes. Forstall still holds 2,988 Apple shares worth, at Friday’s closing price, $1.8 million.

Many reported the over 64k shares sold by Forstall represent 95 percent of his current holdings in Apple Inc. However, that is not entirely true, because two new retention bonuses are coming his way in in the years ahead. Those shares could be worth over quarter billion dollars—if Apple continues increasing closer to the $1,000 per share target that many analysts are expecting.

Expand
Expanding
Close

[youtube=http://www.youtube.com/watch?v=tOf_2HCX51w&feature=youtu.be]

Fortune’s Phillip Elmer-DeWitt pointed us to an hour long interview and Q&A session at LinkedIn headquarters with “Inside Apple” author Adam Lashinsky.

The interview is conducted by our former boss and current LinkedIn Executive Editor Dan Roth.  As PED noted, one of the more notable exchanges is with a former Apple employee who thought CEO Tim Cook is charismatic enough to be the United States President.  See the clip below (plus another interview this week at Davos).

Interestingly, the former Apple Engineer discusses how his friends at Apple were put on dummy projects until they could be trusted.

Buy the book at Amazon here or free at Audible.
Expand
Expanding
Close

Fortune just published a long, fascinating excerpt from an upcoming book about Apple called “Inside Apple: How America’s Most Admired and Secretive Company Really Works“ by author Adam Lashinsky, Fortune’s senior editor-at-large. It reveals how far the company is willing to go to ensure its secretive culture. It also tells a tale of Apple’s organizational structure and what makes them tick. Interestingly, Lashinsky writes that Apple’s design guru Jonathan Ive is among the “untouchables,” corroborating claims laid out in the official Jobs biography book by Walter Isaacson. Apple’s late CEO told his biographer that he made sure nobody can touch his “spiritual partner” Ive at Apple. “That’s the way I set it up,” he told Isaacson. Speaking of Apple’s famous culture of secrecy and lack of corporate transparency (at Apple, everything is a secret!), Lashinsky writes it takes two basic forms —external and internal. Needles to say, many employees can hardly stomach security policies focused on preserving internal secrets:

Apple employees know something big is afoot when the carpenters appear in their office building. New walls are quickly erected. Doors are added and new security protocols put into place. Windows that once were transparent are now frosted. Other rooms have no windows at all. They are called lockdown rooms: No information goes in or out without a reason.

As you could imagine, this is “disconcerting” for employees. Organization charts are nowhere to be seen at Apple. There are no open doors as folks use badges to access areas that sometimes even their boss cannot. Only few people at Apple are allowed into Jonathan Ive’s industrial design bunker. People working on hot projects are required to sign “extra-special agreements acknowledging that you were working on a super-secret project and you wouldn’t talk about it to anyone – not your wife, not your kids.” Even former employees do not talk to press and some were reprimanded for talking too much. Apple goes to great lengths to prevent secrets from leaking and maintain discipline culminates with carefully orchestrated media events akin to a blockbuster Hollywood movie-opening weekend.

People working on launch events will be given watermarked paper copies of a booklet called Rules of the Road that details every milestone leading up to launch day. In the booklet is a legal statement whose message is clear: If this copy ends up in the wrong hands, the responsible party will be fired.

Expand
Expanding
Close

An interesting occurrence happened this morning: In a run up to Apple’s Q1 2012 earnings call, and amid a steady flow of 2012 Consumer Electronics Show announcements where Apple traditionally does not exhibit, the company’s share reached an all-time high by passing $427 a share for a market valuation of $398 billion (Exxon Mobile is at $408.86 billion). As noted by Fortune’s Philip Elmer-Dewitt, the company passed the $426.70 mark it hit briefly one day in mid-October

Interestingly, several analysts boosted their iPhone estimates for the December quarter. Goldman most notably upped their iPhone estimate to 31 million quarterly units, up from the previous 30.2 million estimate. Needham significantly increased their previous 28 million units projection to 32 million units.

By the way, the Apple iPhone turned 5-years-old today. On this very day five years ago, Steve Jobs took the stage at MacWorld Expo to announce the original iPhone. The rest, as the saying goes, is history…

Expand
Expanding
Close

When author of the official ‘Steve Jobs’ bio, Walter Isaacson, sat down for an interview with Fortune earlier this month, we learned that Steve Jobs had three key industries he wanted to reinvent: the television, textbooks, and photography. We’ve certainly heard a lot of rumors about an iTV in the works, and Apple has arguably already done a lot for the textbook business, despite Jobs having loftier goals for the industry as a whole. While the iPhone 4S’s redesigned camera might be good enough to get an endorsement from photographer Annie Leibovitz, the guys at ADR Studios have created this new ‘iCam’ concept imagining a separate accessory that would turn the iPhone 5 into a full-fledged point-and-shoot.

Keeping rumored iPhone 5 specs in mind, ADR’s concept would include a 10.1 megapixel sensor and provide an “ISO range from 100 to 3200 (extendable up to 6400 equivalent)” for full HD at 60fps. Imagined specs for the accessory include an aluminum unibody, interchangeable lenses, a small touch-screen on the front, LED flash, pico-projector, SD UHS-i slot, motion sensor, and bluetooth. We’re guessing a few companies are already at work on a similar accessory after seeing these gorgeous mock ups.

[slideshow]

Expand
Expanding
Close

[youtube=http://www.youtube.com/watch?v=Np2_pysQzpU]

The blurb from CBS seems to eerily echo a Quora post by a Harvard Cancer Doctor Ramzi Anri that basically said that his cancer was mild and treatable but spread while he was trying to treat it holistically.

While Mr. Jobs was trying all sorts of alternative [medicine] his tumor grew, and grew, and grew…

… and then it somehow grew beyond control.

• Jobs waited so long before seeking normal treatment that he had to undergo a Whipple procedure, losing his pancreas and whole duodenum in 2004. This was the first alarming sign that his disease had progressed beyond a compact primary to at least a tumor so large his Pancreas and duodenum could not be saved.
• Jobs seemingly waited long enough for the disease revealed to have spread extensively to his liver. The only reason he’d have a transplant after a GEP-NET would be that the tumor invaded all major parts of the liver, which takes a considerable amount of time. Years, in most neuroendocrine tumors. It could be that this happened before his diagnosis, but the risk grows exponentially with time.
• We then saw the tumor slowly draining the life out him. It was a horrible thing to see him lose weight and slowly turn into a skin and bones form of himself.

Yet it seems that even during this recurrent phase, Mr. Jobs opted to dedicate his time to Apple as the disease progressed, instead of opting for chemotherapy or any other conventional treatment.

Isaacson also seems to imply that it spread during that time and obviously in hindsight, Jobs was regretful for not choosing to operate on it sooner. Isaacson said,

“I’ve asked [Jobs why he didn’t get an operation then] and he said, ‘I didn’t want my body to be opened…I didn’t want to be violated in that way,'” Isaacson recalls. So he waited nine months, while his wife and others urged him to do it, before getting the operation, reveals Isaacson. Asked by Kroft how such an intelligent man could make such a seemingly stupid decision, Isaacson replies, “I think that he kind of felt that if you ignore something, if you don’t want something to exist, you can have magical thinking…we talked about this a lot,” he tells Kroft. “He wanted to talk about it, how he regretted it….I think he felt he should have been operated on sooner.”

As Ryan Tate said,

In the end, may prove the most compelling reason to forgive the brilliant CEO his many faults: Of all the people who suffered on the dark side of his headstrong, iconoclastic decisionmaking, it was Jobs himself who appears to have paid the biggest price.

Jobs also told Isaacson:

Jobs had actually met the man who turned out to be his biological father before he knew who he was. He also talks about the discussion he had with Jobs about death and the afterlife, explaining that for Jobs, the odds of there being a God were 50-50, but that he thought about the existence of God much more once he was diagnosed with cancer. Another aspect of Jobs’ character revealed was his disdain for conspicuous consumption. He tells Isaacson in a taped conversation how he saw Apple staffers turn into “bizarro people” by the riches the Apple stock offering created. Isaacson says Jobs vowed never to let his wealth change him.

The full interview will air on Sunday.

Fortune just released a new Kindle eBook entitled All about Steve: The Story of Steve Jobs and Apple from the Pages of Fortune…

Steve Jobs’ legacy is clear: The most innovative business leader of our time, the man FORTUNE named CEO of the Decade in 2009. Now from the pages of FORTUNE comes an anthology of 17 classic stories spanning the years 1983 to 2011 about the cultural icon who revolutionized computing, telephones, movies, music, retailing, and product design. The stories lay out in unparalleled detail the career of a man with relentless drive and a single underlying passion—to carry out his vision of how all of us would use technology. Writes managing editor Andy Serwer in the book’s foreward: “In the end he was proved right a billion times over, and his company Apple became one of the most successful enterprises on the planet.” All these stories are the product of deep reporting. In many cases FORTUNE’s writers spent hours interviewing Jobs and delving into his mind. The result is a singular journalistic collection, which will leave you with a comprehensive picture of Steve Jobs and Apple, a picture that is complex in the making yet simple in its triumph.

The report includes Adam Lashinsky’s recent investigative piece, Inside Apple, which gives a behind-the scenes look at how the company really works. Lashinsky is also writing a standalone book on Apple due later.

Full Press Release and blown up ‘book cover’ follows:

Expand
Expanding
Close