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Carl Icahn withdraws $50B buyback proposal as institutional advisory firms side with Apple [Updated]

Ben Lovejoy Feb 10 2014 - 6:03 am PT

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Update: Carl Icahn has now withdrawn his proposal in the light of the ISS recommendation against it.

Prominent institutional advisors Institutional Shareholder Services (ISS) and smaller firm Egan-Jones have both advised shareholders to vote against billionaire investor Carl Icahn’s resolution calling for Apple to buy back an additional $50B of its own stock, reports Reuters.

“(The Apple board) has returned the bulk of its U.S.-generated cash to shareholders via aggressive stock buybacks and dividends payouts,” the ISS report said. “In light of these good-faith efforts and its past stewardship, the board’s latitude should not be constricted by a shareholder resolution that would micromanage the company’s capital allocation process.”

Carl Icahn has been buying large blocks of AAPL stock, with his current holding now totalling around $4.1B, giving him roughly a 1 percent stake in the company. He repeatedly called for increased stock buy-backs by Apple before submitting a formal proposal for a minimum $50B. Stockholders will vote on the proposal on 28th February.

Apple has argued that having large cash reserves gives it flexibility, noting in particular that it may at some stage wish to make a very large acquisition.

“You want to be able to adjust for the long-term interest of the shareholders, not for the short-term shareholder, not for the day trader,” Mr. Cook said. “We may see a huge company tomorrow that we want to acquire or something may happen in the stock market that’s unpredictable.”

ISS did, however, still describe the size of Apple’s cash reserves – which now stand at almost $160 billion – as an “excess,” and said that an urgent resolution was needed.

Apple recently repurchased $14B of its own stock, bringing it to a record $40B over the past year. Tim Cook has stated that it would discuss further buybacks in March/April.

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Unverified: Flappy Bird pulled by Apple after copyright complaint from Nintendo? [Updated: Not true]

Ben Lovejoy Feb 10 2014 - 3:50 am PT

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Update: Nintendo has sent an email to the WSJ denying that it has made any complaint about the app’s similarity to Super Mario Bros.

Apple’n’Apps,  a relatively unknown site without much of a track record, is suggesting that Flappy Bird may have been pulled by Apple after Nintendo complained about copyright infringement regarding the graphics used in the game. Those pipes do look “Super Mario-esque”. The developer Dong Nguyen had claimed he was withdrawing it voluntarily, and that there were no legal issues. But there’s some gray area there we suppose.

A person familiar with the App Store review process tells Apple’N’Apps that Flappy Bird wasn’t removed voluntarily by Mr. Nguyen, as he claims. It turns out that Nintendo got in touch with Apple regarding the art assets in Flappy Bird claiming that they’re in direct violation of their copyrights. Apple contacted Mr. Nguyen regarding the copyright claim, and that’s why we saw the new updated version with graphic changes to the pipes [as well as fewer ads]. Nintendo already decided that they had seen enough, and Apple is the one who pushed Mr. Nguyen to remove Flappy Bird (with 24 hour notice).

We’ve asked Apple for a comment, and will update if we receive a response, though the version arguably makes more sense than a developer voluntarily forsaking around $50,000 a day in revenue due to the attention the game was receiving. Dong Nguyen’s two other games remain on the App Store, currently ranking #4 and #18.

Apple is know to err on the side of caution where copyright complaints are concerned.

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Apple currently plans to release iOS 7.1 in March

Mark Gurman Feb 7 2014 - 6:50 am PT

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While recent reports are pegging a launch sooner than later, reliable sources say that Apple is currently planning to ship iOS 7.1, the first significant update to iOS 7, in March. The iOS 7.1 update is said to not have any “secret features,” and it will basically be what we have been told to expect by the past five betas: some user-interface tweaks in the Phone app, an improved Calendar app, speed improvements, and numerous bug-fixes. It wouldn’t be surprising for Apple to talk iOS 7.1 at an event in March (a month in which Apple has held events in the past), which would possibly be centered around the next-generation Apple TV.

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Apple seeds OS X Mavericks 10.9.2 build 13C53 to developers

Mark Gurman Feb 6 2014 - 3:54 pm PT

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One week after the previous beta, Apple has provided registered Mac developers with OS X Mavericks 10.9.2 build 13C53 to developers. Previous 10.9.2 builds added FaceTime Audio functionality to the Mac’s Messages and FaceTime applications. Other new functionality includes the ability to block contacts/phone numbers in both FaceTime and Messages.

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Incipio’s NFC-enabled iPhone case for ISIS payments now available to Verizon customers

Jordan Kahn Feb 6 2014 - 10:46 am PT

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First launched by AT&T at the end of last month, Verizon announced today that it too will be selling Incipio’s Cashwrap iPhone case that builds in an NFC chip for using the ISIS mobile wallet service. The Google Wallet competitor was previously only available to Android users and is backed by a number of major mobile carriers and credit card companies. It’s supported at around 200k contactless payment locations in the US so far and, like Google’s Wallet app, also supports loyalty reward programs. To go with the case, the ISIS Mobile Wallet for Verizon app is also now available on the App Store.

To celebrate the national launch of the new Isis Mobile Wallet, Verizon Wireless customers will receive $10 when they download Isis Mobile Wallet and activate a new American Express Serve Account, as well as an additional $10 after their first tap-to-pay transaction at a Verizon Wireless location.

The Incipio Cashwrap ($69) is available now through Verizon for iPhone 4, 4S, 5, and 5s in Black and requires the ISIS mobile app for Verizon from the App Store. It’s also available in several other colors for the same price through AT&T.

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Former WSJ Apple reporter has a dreary take on life at Apple after Steve Jobs in this excerpt

Seth Weintraub Feb 6 2014 - 9:33 am PT

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Former WSJ Apple reporter/scoopster Yukari Iwatani Kane is coming out with a new book called Haunted Empire: Apple After Steve Jobs ($12.74 Amazon/$14.99 iBookstore). 

We’re not sure how the book reads quite yet but this excerpt of her New Yorker piece via Fortune, doesn’t take on a very optimistic tone for the company where she once had some solid sources:

When Jobs was ousted in 1985, the impact of his absence on Apple’s business was not immediately obvious. After a slow start, Macintosh sales began rising. Two years after Jobs left, Apple’s annual sales had almost doubled compared to three years earlier, and its gross profit margin was an astonishing fifty-one per cent. Outside appearances suggested that Apple hadn’t missed a beat.

Inside Apple, employees knew differently. Something had changed. “I was let down when Steve left,” Steve Scheier, a marketing manager at Apple from 1982 to 1991, recalled. “The middle managers, the directors, and the vice presidents kept the spirit alive for a long time without his infusion, but eventually you start hiring people you shouldn’t hire. You start making mistakes you shouldn’t have made.” Scheier told me that he eventually grew tired and left. The company had “become more of a business and less of a crusade.”

So what about now? Apple’s supporters point to the company’s billions of dollars in quarterly profit and its tens of billions in revenue as proof that it continues to thrive. But Apple’s employees again know differently, despite the executive team’s best efforts to preserve Jobs’s legacy. People who shouldn’t be hired are being hired (like Apple’s former retail chief, John Browett, who tried to incorporate big-box-retailer sensibilities into Apple’s refined store experience). People who shouldn’t leave are leaving, or, in the case of the mobile-software executive Scott Forstall, being fired.

Mistakes, in turn, are being made: Apple Maps was a fiasco, and ads, like the company’s short-lived Genius ads and last summer’s self-absorbed manifesto ad, have been mediocre. Apple’s latest version of its mobile operating system, iOS 7, looks pretty but is full of bugs and flaws. As for innovation, the last time Apple created something that was truly great was the original iPad, when Jobs was still alive. Although the company’s C.E.O., Tim Cook, insists otherwise, Apple seems more eager to talk about the past than about the future. Even when it refers to the future, it is more intent on showing consumers how it hasn’t changed rather than how it is evolving. The thirtieth anniversary of the Macintosh—and the “1984” ad—is not just commemorative. It is a reminder of what Apple has stopped being.

It is tough to replace the legend, but hopefully this is just the pessimistic take. We’ll have more from Kane and the book as it becomes available. It debuts March 18th from HarperCollins.

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Post-PC era in full swing, as Sony exits PC business and Apple leads in combined devices

Ben Lovejoy Feb 6 2014 - 4:58 am PT

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Sony has confirmed earlier rumors that it is exiting the PC business, selling both its computer division and the VAIO brand to a Japanese investment fund which plans to use the brand only within Japan, at least initially.

Once the coolest laptop brand around, VAIO notebooks were admired even by Steve Jobs for their slim form factors and sleek designs, and it was to Sony that Apple turned for help in designing its early PowerBook models. Sony, however, failed to maintain its design momentum, and found itself increasingly overtaken by smaller companies.

We described yesterday how Sony in 2001 turned down an offer from Steve Jobs to run Mac OS on Vaio laptops.

Sony is also restructuring its TV business, announcing that it will be focusing much more on high-end models. Sony is the current market leader in 4K TVs, a market Apple is expected to enter.

The news coincides with a report by Canalys that if you measure PC and tablet sales as a single category, considering both to amount to personal computers, then Apple is the leading computer manufacturer, with a 19.5 percent market share – more than HP and Dell combined.

Combining Macs and iPads, Apple sold just over 87 million personal computing devices last year (excluding iPhones).