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122.71

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Open 123.08
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Apple increasing R&D spending by $1.5B as it cuts capital expenditure

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An SEC filing by Apple shows that the company plans to increase this year’s spend on product development by $1.5B, reaching a total of $5.9B by the end of September, reports Business Insider. At the same time, Apple is cutting its forecast capital expenditure by $1B, which the company told the WSJ was due to efficiency savings.

A company spokeswoman said Apple lowered the forecast because it was able to spend more efficiently for tooling equipment and facilities. “There are no changes in our product plans,” she said.

Apple explores a great many potential new product ideas, and the increased spend on product development could conceivably indicate that the company is choosing to invest more heavily in one of these, BI speculating that it may be the long-rumored Apple car …  Read more

Tim Cook believes China will be Apple’s biggest market – and it’s not hard to see why

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One of the most remarkable numbers revealed yesterday by Apple was that revenue in Greater China – the term used to describe mainland China plus Hong Kong, Macau and Taiwan – more than doubled in the past year. Year-on-year revenue in the region more than doubled, compared to Apple’s already impressive worldwide growth of 33% …  Read more

Apple announces Q3 2015 revenue of $49b: 47m iPhones, 10.9m iPads, 4.7m Macs

Tim Cook Apple Watch Apple Store

Right on schedule, Apple has shared its Q3 2015 earnings results reporting revenue of $49 billion and $10.7 billion in profit during the April to June period. Notably, the company’s Q3 period is the first that includes initial Apple Watch sales as the device first launched on April 24th.

Apple® today announced financial results for its fiscal 2015 third quarter ended June 27, 2015. The Company posted quarterly revenue of $49.6 billion and quarterly net profit of $10.7 billion, or $1.85 per diluted share. These results compare to revenue of $37.4 billion and net profit of $7.7 billion, or $1.28 per diluted share, in the year-ago quarter. Gross margin was 39.7 percent compared to 39.4 percent in the year-ago quarter. International sales accounted for 64 percent of the quarter’s revenue.

While Apple isn’t specifically breaking out Apple Watch sales (or iPod sales for that matter), the company does disclose iPhone, iPad, and Mac sales by unit:

  • iPhone: 47 million units
  • iPad: 10.9 million units
  • Mac: 4.7 million units

While Apple isn’t breaking out Apple Watch or Beats numbers, the ‘other services’ which includes those categories as well as iPods and Apple TV reports $2.6 billion in revenue.

Apple CEO Tim Cook said this about the company’s Q3 results:

“We had an amazing quarter, with iPhone revenue up 59 percent over last year, strong sales of Mac, all-time record revenue from services, driven by the App Store, and a great start for Apple Watch,” said Tim Cook, Apple’s CEO. “The excitement for Apple Music has been incredible, and we’re looking forward to releasing iOS 9, OS X El Capitan and watchOS 2 to customers in the fall.”

Luca Maestri, Apple’s chief financial officer, added this:

“In the third quarter our year-over-year growth rate accelerated from the first half of fiscal 2015, with revenue up 33 percent and earnings per share up 45 percent,” said Luca Maestri, Apple’s CFO. “We generated very strong operating cash flow of $15 billion, and we returned over $13 billion to shareholders through our capital return program.”

Today’s Q3 results follow last quarter’s $58 billion in revenue and 61.1 million iPhones sold, 12.6 million iPads sold, and 4.5 million Macs sold globally. During the same quarter a year ago with the iPhone 5s at the top of the lineup, Apple reported $37.4 billion in revenue and 35.2 million iPhones sold, 13.2 million iPads sold, and 4.4 million Mac sales. Apple reported $13.6 billion in profit last quarter and $7.7 billion during the same quarter a year ago.

The company’s quarterly conference call is scheduled for 2 PM Pacific/5 PM Eastern to discuss today’s results. Stay tuned for our live coverage of the call. Both Cook and Maestri usually review the quarterly results before fielding questions from analysts. With the first Apple Watch sales included in today’s report, the new device is sure to be a major topic of the call.

Apple’s complete Q3 earnings report is below: Read more

Fortune: AAPL earnings likely to beat analyst expectations for 9th straight quarter

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With Apple due to report its fiscal Q3 (calendar Q2) earnings later todayFortune notes that the company has beaten Wall Street expectations for eight straight quarters – and strong iPhone sales mean that today’s earnings report is likely to make it nine.

iPhone sales typically drop in June as consumers hear more rumors about the next model and many decide to wait. But with Q3 sales estimated at close to 50M phones, representing a massive 40% year-on-year increase, that would put Apple’s revenue well in excess of the company’s own guidance of $47B and above the Wall Street consensus estimate of $49.5B …  Read more

Large tech companies side with Samsung in its appeal against award for infringing Apple’s patents

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In the latest news in the patent case that feels like it will never end, a number of tech giants have taken Samsung’s side in its appeal against the damages it was ordered to pay for infringing Apple’s patents.

It’s almost three years since Apple was awarded $1B in damages after a jury found that Samsung infringed five of its patents. $450M of that award was later vacated and a retrial ordered to determine a revised sum, with Apple awarded a lower sum of $290M – for a revised total of $930M. The US appeals court later ruled that while Samsung did indeed copy iOS features, it should not have been penalised for copying the general look of the iPhone. The court now needs to once again revise the amount awarded.

The amount awarded in part reflected the profits Samsung was deemed to have made by infringing the patents, and it is this aspect that Google, Facebook, Dell, HP, eBay and other tech companies say is unreasonable …  Read more

Opinion: Seven reasons I think Apple may become a bank within the next five years

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I first speculated that Apple might one day become a bank almost a year before the launch of Apple Pay. What triggered that thought was the use of Touch ID for iTunes purchases and the depth of security involved in the secure enclave used by Apple’s fingerprint system. It was clear even then that Apple had big ambitions in the mobile payment field.

Now that Apple Pay has launched, and already proven a big success, I think the argument for Apple to make the move are even stronger. So here are seven reasons I think Apple may become a bank within the next five years …  Read more

Apple ranks in at number 5 on latest Fortune 500 list

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Apple ranks in at number 5 on the latest Fortune 500, the annual list that ranks US companies by revenue, this time for fiscal year 2014. The company maintains its same position as last year behind Berkshire Hathaway (no. 4), Chevron (no. 3), Exxon Mobil (no. 2), and Wal-Mart Stores (no. 1).

While Apple comes in at fifth place for revenue, Fortune notes that it “boasts both the biggest profits of any company on the list ($39.5 billion) and the highest market value (more than $700 billion).” Read more

Millward Brown explains why Apple retook #1 slot as world’s most valuable brand

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Millward Brown’s full report on its 10th annual brand equity ranking sheds light on why Apple regained its #1 ranking from Google. The company bases its rankings on the perceptions of more than 3 million consumers across 50 countries.

With a 67 percent rise in Brand Value to $247 billion, Apple returned to number one in the BrandZ™ Top 100 Most Valuable Global Brands ranking. Success of the iPhone 6 and the related excitement surrounding the Apple brand drove the increase. Apple also led in the rate of brand value growth over 10 years – 1,446 percent.

The company noted that Apple’s remarkable growth in long-term brand equity was evident in the fact that it didn’t even make the top 100 brands when Millward Brown began its BrandZ measurements just ten years ago …  Read more

Icahn pumps AAPL stock w/ predictions of Apple HDTVs, electric vehicle batteries

High-profile investor and AAPL shareholder Carl Icahn has published yet another open letter to Apple CEO Tim Cook, this time giving his thoughts on new product categories that he expects Apple to enter alongside his usual advice for the company on share repurchases, valuation, and more.

As for his product predictions, Icahn highlights two new big categories, both of which have been reported in detail and rumored for the last year, including TV and electric vehicles. Icahn thinks Apple will release full-fledged UHD TV sets sometime next year…

Read more

UBS matches KGI’s upbeat forecast for Q2 iPhone sales of 51M, well above consensus

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UBS has matched the upbeat iPhone forecast made last month by KGI for Q2 (Apple’s fiscal Q3), both analysts estimating sales of 51M – well above the consensus expectation of 45M.

KGI’s Ming-Chi Kuo predicts 51.4M, saying that while he believes iPhone sales have peaked, demand will remain higher than the normal seasonal pattern. UBS forecast 51.1M, noting that Apple’s “continued surge” in China is a key factor, where the premium market remains strong despite reports of the country approaching saturation point in smartphones.

Both analysts have strong track-records, Ming-Chi Kuo being our go-to guy for supply-chain rumors, and UBS producing a graph to show the accuracy of its past predictions (below) …  Read more

Apple announces major new bond sale to finance increases in capital return program

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At its last earnings call, Apple announced that it is expanding its capital return program by more than 50%. This means the company is now looking to repurchase over $140 billion worth of shares and a larger dividend for shareholders.

To fund this activity however, it is cheaper for the company to sell domestic company debt than repatriate its ever-increasing cash hoard that is ‘trapped’ overseas. Therefore, Apple has today announced it will issue a new 7-part bond to raise the funds.

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Apple accused of stifling streaming music competition as DOJ joins EC in antitrust investigation

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Allegations that Apple is engaging in anti-competitive practices in the run-up to the launch of its rebranded Beats streaming music service are now being investigated by the Department of Justice, according to “multiple sources” cited by The Verge.

The claim is that Apple has been attempting to use its influence to persuade music labels to pull out of deals with free, ad-supported services like Spotify and YouTube in order to reduce competition and increase demand for its own paid service. The European Commission launched an investigation into these same allegations last month …

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