The activist investor disclosed his effort in a tweet — apparently coordinated with a release from Time magazine promoting its new cover story about him where he discusses his proposal. “I’m not against the management of this company,” he told Time. But with $147B “they’ve just got too much money on their balance sheet.” He adds that CEO Tim Cook “is doing a good job with the business. I think he’s good whether he does what I want or not.” But “Apple is not a bank.” Apple told Time that ”As part of our regular review process, we are once again actively seeking our shareholders’ input on our program, and as we said in October, the management team and our board are engaged in an ongoing discussion about it which is thoughtful and deliberate.” Icahn launched his campaign for an Apple buy-back in August. Today’s news did not immediately affect Apple’s trading price, down less than 1% ahead of the close.
Cable companies are notoriously tin-eared when it comes to dealing with consumers. But Comcast hopes to show that it can win movie-lovers’ hearts and cash by selling electronic versions of films and TV shows — a business that’s now dominated by Apple’s iTunes and Amazon. The cable giant should begin to sell a few hundred movies and TV shows movies and TV shows to its 20M Xfinity digital customers by year end, I’m told. (The industry term for this is Electronic Sell-Through, or EST.) The main selling point is that Comcast subs will be able to buy the content via their set top boxes, and watch on their TV sets, without the need for an additional device to link them to the Web. Adding cable or satellite companies to the retail mix is “really going to open up amazing opportunities,” Lionsgate CEO Jon Feltheimer told analysts last week, teasing Comcast’s expected announcement.
Apple CEO Tim Cook probably just disappointed a lot of people who’ve been hoping to see his company unveil a new blockbuster product line such as an iWatch or Apple TV set. He teased the possibility in April when he said that “we have a lot more surprises in the works. … We have some really great stuff coming in the fall and across all of 2014.” But he just told analysts during a conference call that he didn’t necessarily mean a new product line. He simply meant new products. And “you’ve seen that,” he says with the recently refreshed line of iPhones, iPads, and Macs. Analysts also have been hoping for a new, low-priced iPhone that could expand Apple’s market share in developing countries.
Cook said he hopes to satisfy those consumers by continuing to offer the iPhone 4s “as the entry offer” versus the pricier new 5c and 5s models. “Some people were reading rumors that the 5c would be our entry phone,” he said. “That was never our intent.” While he doesn’t worry about flagging demand for his iPhones, Apple may find itself with an insufficient supply over the holidays. There’s already a “significant backlog” for the 5s. And it’s “unclear” whether the …
Here’s more proof that the market looks forward. Apple just disclosed earnings for the quarter that ended in September that should delight investors. But shares fell in initial post-market trading based on sales projections for the current quarter that fell short of expectations. In the last quarter Apple generated net income of $7.5B, -8.7% vs last year’s fiscal Q4, on revenues of $37.5B, +4.2%. The top line beat the consensus forecast for $36.8B. Earnings at $8.26 a share also were well ahead of the Street’s prediction of $7.93. But Apple says it expects revenues in the current quarter to come in between $55B and $58B, with a gross margin between 36.5% and 37.5%. That’s pretty much in line with analyst forecasts — but not the hopes of bulls who helped lift the stock price more than 20% over the last three months. As for specific devices, Apple says that it sold 33.8M iPhones in the September quarter (+25.7% vs last year), 14.1M iPads (+0.7%), 4.6M Macs (-6.1%), and 3.5M iPods (-34.5%). CEO Tim Cook applauded Apple’s “strong finish to an amazing year with record fourth quarter revenue” and says he’s “excited to go into the holidays” with refreshed products including the iPhone 5c and 5s, iPad Air, and new MacBook Pros.
The activist investor isn’t limited to Twitter and CNBC to broadcast his views. Hot off his $800M windfall this week from the sale of half his Netflix shares, today he introduced a site, Shareholders’ Square Table, where he says he’ll “discuss what can be done to change our current, dysfunctional system of corporate governance” that results in CEOs and boards “that are strangling shareholders and the economy.” His first target is Apple: Icahn published a letter he sent yesterday to CEO Tim Cook repeating a plea for the company to spend $150B to repurchase shares. Over the last month Icahn boosted his Apple stake by 22% to 4.7M shares “reflecting our belief the market continues to dramatically undervalue the company.” He adds that he “could not be more supportive of you, the existing management team, the culture at Apple and the innovative spirit it engenders.” But he’s unhappy with the current pace of buy-backs. “Apple’s Board of Directors does not currently include an individual with a track record as an investment professional,” he says. “In my opinion, any further delay in executing the buyback we hereby propose will reflect this lack of expertise on the board.” If Apple follows his advice, then in three years the share price — which closed yesterday at $524.96 — could appreciate to $1,250. To show that he isn’t in this to make a quick profit, Icahn says that he would “withhold my shares from the proposed $150 Billion tender offer. There is nothing short term about my intentions here.”
Apple‘s share price fell right after CEO Tim Cook closed today’s new product event without a major surprise such as an update to the Apple TV or an iWatch. We’ll see whether investors warm to the gadgets as they digest the details. As expected, the company upgraded its iPad line: The new iPad Air tablet weighs 1 pound (down from 1.4 pounds) and is 7.5 mm thick (down 2 mm). The 16 GB Wi-Fi version with a Retina display will cost $499; a version that handles cell phone connections will cost $629. They’ll have the A7 chip, also in the iPhone 5S and ship beginning November 1. They’ll come in silver, white, black and “space gray.” The company will keep its iPad 2 which will cost $399. As for the iPad Mini, it will have a Retina display and A7 chip and a battery that’s supposed to last 10 hours. It will be available sometime next month for $399. No touch ID — which some expected to see. The original iPad Mini will remain in the line up for $299.
The company is stuffing its zippiest technology into a new, high-end Mac Pro computer that will cost $2,999 and be available by year end. With its ability to handle real-time 4K video editing, “it will change the way I make movies,” director-producer …
Billionaire Julian Robertson, who created Tiger Management Corp, told CNBC’s Maria Bartiromo that Walter Isaacson’s 2011 biography of the Apple founder changed his view about investing in the company. “How can you create a great organization of people and be that mean a person?…He was really a pretty terrible guy.” Robertson says that Steve Jobs was a “genius,” and concedes that “if he were still there I’d still be in it.” But without him, Robertson says, the company is left with a “bad culture [and] bad principles.”
The stock is up 2.5% in mid-day trading after the billionaire corporate activist turned to Twitter and CNBC to discuss his dinner last night with Apple CEO Tim Cook. Carl Icahn said in a tweet this morning that he had “a cordial dinner with Tim” and “pushed hard” for the stock buyback. “We decided to continue dialogue in about three weeks.” He now controls nearly $2B in Apple stock, and considers a share repurchase “a no-brainer,” he told CNBC. “I can’t promise you the stock will go up and I can’t promise you they will do the buyback. But I can promise you that I’m not going away until they hear a lot more from me concerning this.” The price is right, he says: Apple shares are down 25.9% over the last 12 months as investors questioned whether it can come up with another blockbuster product to rival the iPhone and iPad. In addition, Apple has a lot of cash — although much of it is parked in other countries with unusually low tax rates. Even so, Icahn says Apple can take advantage of today’s low interest rates and borrow money to buy stock.
UPDATE, 9:30 AM: Apple are breaking out their wallet today and breaking good it seems. Just days before Breaking Bad ends forever, the company is refunding the fans over their iTunes purchase of the last episodes of the AMC show. This iTunes $22.99 credit on Apple’s part doesn’t come cheap being that Breaking Bad was one of the most popular TV series on the online store. And it comes over two weeks (see below) after one irate fan began a class action suit against the tech company for its double dipping charges on Season 5 of the drama on iTunes. Back in mid-2012, AMC announced that the final season of Breaking Bad would be split up. However people who had bought a Season Pass to that season of the show on Apple’s music and video service didn’t discover until the second part of the cycle debuted on August 11 this year that they would have to pay another fee on top of their Season 5 Season Pass fee to watch the last 8 episodes. Those shows were now called “The Final Season” on iTunes. Needless to say, the fans were not happy and it looks like Apple or AMC or both heard them loud and clear. Check out the email that Apple sent out today to customers:
We apologize for any confusion the naming of “Season 5″ and “The Final Season” of Breaking Bad might have caused you. While the names of the seasons and episodes associated with them were not chosen by iTunes, we’d like to offer you “The Final Season” on us by providing you with the iTunes code below in the amount of $22.99. This credit can also be used for any other content on the iTunes Store. Thank you for your purchase.
Apple shares are up more than 6% in pre-market trading after its announcement about the weekend sales — the first that included its new iPhone 5C and 5S. Analysts expected as many as 8M units to be sold worldwide. That would have handily beat the previous opening weekend record of 5M set last year with the release of the iPhone 5. With the new sales figures, Apples says in an SEC filing that it expects its fiscal Q4 revenues to come in “near the high end of the previously provided range of $34 billion to $37 billion” with gross margins “near the high end of the previously provided range of 36% to 37%.” Demand for the iPhones was “incredible,” CEO Tim Cook says, “and while we’ve sold out of our initial supply of iPhone 5S, stores continue to receive new iPhone shipments regularly. We appreciate everyone’s patience and are working hard to build enough new iPhones for everyone.” Unlike last year, people served by T-Mobile and Japan’s DoCoMo were able to buy the new iPhones on the opening weekend. China also was in on the action; last year customers had to wait 90 days for the iPhone 5 outside of the gray market. In addition to the iPhone news, Apple says that more than 200M iOS devices run its new iOS 7 operating system. That makes it …
The company has to sell more than 5M iPhones globally to beat the first-weekend record it set last year when it introduced the iPhone 5. And Apple watchers are optimistic that will happen, with estimates ranging from 6M to close to 8M, after seeing the long lines of customers in major markets eager to lay their hands on the latest models: the iPhone 5C and 5S. A 7M-to-8M result appears “doable”, Cowen and Co. analyst Timothy Arcuri says — largely because the new iPhones are available to a broader array of consumers. Unlike last year, people served by T-Mobile and Japan’s DoCoMo can buy the new iPhones on the opening weekend. There’s also China, where customers had to wait 90 days for the iPhone 5 outside of the gray market. Initial sales likely will favor the lower-priced iPhone 5C, the analyst says, estimating that the there are about twice as many units of that model available vs the top-of-the-line (and more expensive) 5S. Apple likely will change the mix in December to favor the 5S leading to combined sales of about 50M.
EXCLUSIVE: Shiri Appleby is set as the lead in Lifetime’s drama pilot Unreal, inspired by Sarah Gertrude Shapiro’s award-winning independent short Sequin Raze. Marti Noxon and Shapiro wrote Unreal, which goes behind the scenes of a hit competition dating show to follow the experiences of a young staffer (Appleby) whose sole job is to manipulate her relationships with (and among) the contestants to get the vital dramatic and outrageous footage the program’s producers demand. What ensues is a humorous yet vexing look at what happens in the world of unscripted television, where being a contestant can be vicious and producing it is a whole other reality. Appleby, repped by Gersh and manager John Carrabino, has recurring roles on HBO comedy Girls and NBC drama Chicago Fire.
Steve Jobs never did it but today Apple’s current boss Tim Cook made his social media presence official. Right now let’s just say Rupert Murdoch doesn’t have to worry about the executive Twitter competition. Unlike the wide ranging and often highly opinionated tweets the News Corp boss blasts out to his almost 470,000 followers, Cook, as you can see from his tweet on the left, kept it all very bland. His inaugural tweet Friday was about Apple and how proud he is of the company’s commitment to its customers. Still that didn’t prevent Cook form racking up followers. Within a couple of hours of the verified account’s first activity, Cook had over 85,000 followers on Twitter. More were joining him by the minute. Currently, the CEO himself is only following 11 people on Twitter including Job’s widow Laurene, who has yet to tweet herself, NBC’s Jimmy Fallon and CNN’s Anderson Cooper. Cook’s not the only new Twitter presence from Apple – there’s an @iTunes account that started tweeting on September 18. The newly announced iPhones and iOS Update are not yet on Twitter, but give them time.
Investors continued to hammer Apple after it made clear yesterday that it will continue to try to keep profit margins high on its iPhones, and not release a budget-priced model that might help it expand into developing markets. Shares dropped 5.4% to $467.83 today following downgrades from firms including Bank of America, UBS and Credit Suisse. On top of yesterday’s price drop, it translates into a $34.8B decline in the company’s market value since Monday. While investors love the iPhone’s high profit margin, estimated at about 40%, they also wanted the company to go after new buyers overseas, especially in China and India, who might be enticed by a device that costs about $400 (not including a carrier subsidy). Instead, the 5C came with a $549 price tag in the U.S., and about $733 in China. A budget phone was “nowhere to be found” as Apple maintained its focus on “profit share over unit share,” with the 5C expected to generate margins of about 50%, says Cowen and Company’s Timothy Arcuri. Hopes for a big deal with China Mobile at an event today also came to naught: China certified the new iPhones to run on the company’s network, but so far there’s no deal. At an event today the companies played a video of yesterday’s iPhone unveiling in California. But Apple still …
Investors were hoping that a low-priced iPhone would help Apple to expand in developing countries. But shares are -2.8% following a presentation where Apple CEO Tim Cook played up the features of his new iPhone 5C and 5S, but with higher prices than some analysts had anticipated. The company calls the 5S — available in silver, gold, and gray but not black — “the most forward-thinking phone ever made.” It will be the first mobile phone with a 64-bit chip, the A7, which the company says is 40 times faster than the one in the first iPhone and great for gamers. It will have a separate chip to handle an accelerometer to help the iPhone record the kinds of fitness information others provide on dedicated devices. It also boasts an improved battery that can power 10 hours of talk time, 10 hours of LTE browsing, and 250 hours standby. The new camera has a larger sensor, two LED flashes, and automatic image stabilization. A “burst mode” can shoot 10 pictures in a second, and video also can handle 120 frames per second for replay in slo-mo. The company confirmed that the phone will have a fingerprint security sensor, called Touch ID, that’s in the home button. It can learn multiple fingerprints — …
That’s the way things look ahead of tomorrow’s long-awaited product announcement. Just about everybody anticipates two new iPhone models — as well as an updated iOS 7 operating system, and perhaps a Pandora-like Internet music service and a software upgrade for Apple TV — that plug holes in Apple‘s business model but probably won’t dazzle fans who expect the company to dance on technology’s cutting edge. One year after it introduced the iPhone 5, Apple’s iPhone 5S is expected to offer high-end users some modest improvements. It likely will have a more powerful processor, a better camera, fingerprint recognition for security, near field communications, and some new colors. In other words, it will have just enough to reassure iPhone fans that they don’t have to envy Android users who’ll approach the holiday shopping season with several improved choices from manufacturers including Samsung, Motorola, and Sony. But investors will be more interested in the second model, expected to be called iPhone 5C, that Cowen and Co. analyst Timothy Arcuri predicts will be little more than “a glorified iPod Touch with a cellular radio.”
Apple and Microsoft have added new channels to their streaming video devices that boost their available content. It’s a step forward for both gadgets but doesn’t break the a la carte wall just yet. Apple TV was upgraded today to include apps for Disney channels – pay TV subscription required — Vevo and the Weather Channel, while Microsoft’s Xbox 360 console added a subscription-contingent Time Warner Cable app. The latter offers access to 300 TV channels including CNN, AMC and Comedy Central. Blair Westlake, corporate VP of Microsoft’s media and entertainment group, told the Wall Street Journal’s Digits blog that his company had considered licensing channels directly from media companies to create a service similar to the kinds of online cable TV products planned by Intel and Sony. “We looked at it and said if we can deliver an app or apps like the one we are lighting up today” with Time Warner Cable, that’s “really what people expect.”
Billionaire investor Carl Icahn again took to Twitter to chat up Apple — just more than a week after he tweeted he has “a large position” in the computer giant, believes it to be “extremely undervalued” and spoke with CEO Tim Cook about it all. Today, he tweeted: “Spoke to Tim. Planning dinner in September. Tim believes in buyback and is doing one. What will be discussed is magnitude.” Icahn last week had told Reuters that Apple should repurchase $150 billion worth of its shares after borrowing the funds at an interest rate of 3%, saying the stock should trade at $700 if earnings increase as little as 10% and his advice was followed. Last week’s tweet helped boost Apple stock — down 23.4% over the last 12 months — by 5%; today Apple is mostly flat and is trading at $502.73 a share, up about 13 points since Icahn confirmed his stake rumored to be worth about $1 billion. In March, Apple announced plans to buy $100B of its shares by the end of 2015, calling it the largest share buyback of any company in history. At the time, it raised its dividend 15% to $3.05 a share. Of course famed corporate raider Icahn has played less nice with media-centric companies before including Blockbuster Video and more famously Lionsgate.
About 14% of all households have a streaming media device, twice the number that had one two years ago, research firm Parks Associates says today. But the most interesting finding in its new report on trends in connected TV is that relatively tiny Roku handily beats the mighty Apple among people who own a streaming video media device. Some 37% go with Roku vs 24% who “primarily use” Apple TV, the company found in a survey of 10,000 U.S. broadband households early this year. The company expects worldwide sales of 330M connected TV devices — including smart TVs, gaming consoles, Blu-ray players, and streaming video media devices — in 2017, twice the number it says likely will be sold this year. Even though more TV sets will include Internet connectivity, Parks’ Barbara Kraus says that people will still buy separate devices including ones from Roku, Apple TV, and Google’s $35 Chromecast because they “offer innovations such as streaming video at low prices.” But with the average price for these devices likely to plummet, manufacturers and service providers will have to pick up the slack with “new and recurring revenue streams in advertising and content placement.”