Saturday, July 30, 2011
As of today, Apple boss Steve Jobs is richer than Uncle Sam.
While the world's most powerful government has just $73.76 billion in its reserves, the world's top technology company has a neat cash pile of $75.87 billion on Thursday.
The US Treasury Department Thursday warned that it has now only this much operating budget as Republicans and Democrats fight over raising the nation's debt ceiling. With only that much reserve at its disposal, the Obama White House has warned the Republicans that the US government won't be able to meet its obligations as of Aug 2.
Facing a government default, Obama can definitely turn to Steve Jobs to give him a very brief breathing space.
The failure by the Republicans and Democrats to come to a compromise to raise the current $14.3 trillion debt ceiling by Aug 2 could lead to a hike in interest rates. The already battered dollar may also plunge further.
With its market capitalisation of $363.25 billion, Apple is the second largest company on the planet after American oil giant Exxon Mobil. The Cupertino-based Apple started rising suddenly in 2007 when it entered the smart phone market with the launch of its first version of the iPhone.
Within three years, Apple went on to overhaul BlackBerry company Research In Motion (RIM) which invented the smart phone and dominated the market.
But its fortunes skyrocketed last year with the launch of the iPad tablet which has sold in millions. In fact, the iPhone and the iPad have made Apple the czar of mobile computing technology as rivals play up catch-up.
The stock of the company, which doesn't pay dividends, has now touched $400.
After Apple, another non-financial company sitting on a huge cash reserve is Microsoft whose own pile is about $40 billion.
Wednesday, July 27, 2011
Billionaire investor George Soros is closing his nearly $26 billion hedge fund to outside investors so that it will be managed solely for the Soros family, according to a letter obtained by The Associated Press on Tuesday. (Watch: George Soros speaks to NDTV)
The letter, sent to investors in the Quantum Endowment Fund, says Soros Fund Management LLC is making the change because of new rules that will expand hedge fund disclosure requirements.
About $750 million of the total $25.5 billion in the fund is invested for outsiders, rather than the family, according to a person familiar with the matter. The person declined to be identified because he was not authorized to disclose details about the private company.
The $750 million is expected to be returned to outside investors by year's end.
Chief Investment Officer Keith Anderson is leaving as the fund closes to outsiders, according to the letter from Soros' sons, Jonathan and Robert, who are deputy chairmen of the New York-based, family run company. Anderson joined Soros Fund Management in early 2008.
The developments were reported earlier by Bloomberg News.
The fund has delivered average annual returns of about 20 percent a year since its inception in 1969. Soros, now 80, amassed a fortune betting on global currency markets, including his successful speculation in 1992 that the British government would devalue the pound.
The fund closed to investments from new outside clients in 2000, and the cash that will be returned is from longtime clients who invested before that change.
The fund's latest move comes as hedge funds face closer scrutiny from regulators. Hedge funds are lightly regulated investment pools. Investors in them are primarily wealthy individuals and institutional clients such as pension funds and endowments.
The financial overhaul law that Congress passed last year requires hedge funds to open their books to periodic inspections by the Securities and Exchange Commission. The funds also will be forced to disclose information about their operations, finances and investors.
To continue managing money for outside investors, Soros' fund would be required to register with the SEC by March, said the letter.
"An unfortunate consequence of these new circumstances is that we will no longer be able to manage assets for anyone other than a family client as defined under the regulations," said the letter, dated Tuesday.
Until now, the letter said, the company has managed outsiders' investments "on other exemptions from registration which allowed outside shareholders whose interests aligned with those of the family investors to remain invested in Quantum."
In the future Soros Fund Management's investment advisory services "will only be available to Soros family accounts and related entities," the letter said.
George Soros is a philanthropist who has donated more than $8 billion during his lifetime. He has become a lightning rod for conservative critics because some of his donations involved causes such as climate change and legalized recreational use of marijuana.
Born in Hungary, Soros emigrated to Britain as a youth after surviving the Nazi occupation of his country and later moved to the United States.
Wednesday, July 20, 2011
The iPhone is conquering Asia, the home of its strongest competitors. Sales there nearly quadrupled from a year ago and helped Apple Inc. trump analyst expectations for yet another quarter.
Apple also said iPad sales worldwide nearly doubled from a quarter ago, a sign that it has left the worst of its supply problems behind.
Apple's stock surged nearly 5 percent after the results came out.
Net income in the fiscal third quarter, which ended in June, was $7.31 billion, or $7.79 per share. That's more than double the $3.25 billion, or $3.51 per share, a year ago.
Analysts polled by FactSet were expecting earnings of $5.82 per share.
Revenue was $28.6 billion, up 82 percent from $15.7 billion a year ago. Analysts were expecting $24.8 billion.
The results were lifted by the sale of 20.3 million iPhones, millions more than analysts had expected. The phone's popularity in Asia, particularly in China, is helping. So is the fact that Apple keeps expanding the number of carriers that sell the phone. It was the first full quarter in which the phone was sold by Verizon Wireless, the largest carrier in the U.S. Before, only AT&T sold the phone in the U.S.
Apple usually has the year's new iPhone model out by early July. That hasn't happened this year, and analysts expect the new model to come in September instead. Apple executives didn't provide any specifics on a call with analysts.
Executives also resisted questions on whether Apple will produce a cheaper iPhone to compete against phones powered by Google Inc.'s Android software. Asian competitors like Samsung Electronics, LG Electronics and HTC Corp. are selling tens of millions of Android phones every quarter at prices that undercut the iPhone.
"We will only make products that we are proud of, that are the best in the world. And if we can do that, and the price is lower, then we are great with that," Chief Operating Officer Tim Cook told analysts on the call.
iPad sales came in at 9.25 million units, also above analyst expectations. Last quarter, the company was struggling to make enough of the new iPad 2. Apple has sold nearly 29 million iPads since they first went on sale in April 2010.
In other product categories, trends were less impressive. Sales of Mac computers were 3.95 million, up 14 percent from a year ago. That's the lowest quarterly growth rate in two years.
Cook said some people were probably buying iPads instead of Macs in the quarter, but he said more people were buying iPads over Windows PCs. He said he was pleased with 14 percent growth compared with overall PC market growth of 2.6 percent, as measured by research firm IDC.
Some buyers may also have been holding off while waiting for Lion, the new version of the Mac OS X operating system. Apple had said it would go on sale this month, and Apple confirmed on the call that it will go on sale Wednesday. Lion will cost $29.99 and mimics some of the features of the iPhone and iPad interface.
IPod sales were down 20 percent at 7.5 million, as the music and video players continue to lose out to iPhones and iPads. It was the fastest quarterly decline yet.
Cook is running day-to-day operations while CEO Steve Jobs is on indefinite medical leave. The quarter was the first full one since Jobs went on leave in January. Jobs remains involved in major decisions, including announcements of new products. Analysts don't expect Jobs' leave to affect the company much in the short term. All the company's major products have still been shepherded by Jobs.
Chief Financial Officer Peter Oppenheimer said he expects earnings of $5.50 per share and revenue of $25 billion in the quarter that just started. Both figures point to a decline from the third quarter. However, the company usually lowballs its financial forecasts, and analysts are unlikely to take the forecast seriously.
Apple's stock surged $18, or 4.8 percent, to $394.85 in extended trading after the company announced results late Tuesday. In the regular session, it hit a 52-week high of $378.65, before closing at $376.85, up nearly 1 percent.
Venezuela is now the country with the most proven crude oil reserves on the planet, 296.5 billion barrels, according to the Annual Statistical Bulletin of the Organization of the Oil Exporting Countries.
The South American country's known reserves grew between 2009 and 2010 by 40 percent, compared with the stagnation of Saudi Arabia's reserves, which OPEC figures to be 264.52 billion barrels.
Ecuador, the other Latin American member of OPEC, in 2010 had reserves of 7.2 billion barrels, 10 percent more than it possessed the previous year.
In all, OPEC calculates that the planet had 1.46 trillion barrels of known crude oil reserves as of 2010, of which the 12 members of the petroleum cartel hold 81.3 percent.
That percentage grew from 79.6 percent in 2009, mainly thanks to Venezuela's increase in reserves.
Two other OPEC nations, Iran, with 151.17 billion barrels, and Iraq with 143.1 billion barrels, are ranked third and fourth, respectively, in terms of known crude oil reserves.
Next on the list are non-OPEC members Russia, with 79.43 billion barrels, and Kazakhstan, with 39.8 billion barrels.
Brazil, with reserves of 12.86 billion, and Mexico, with 11.69 billion barrels, are also not part of OPEC.
Although Venezuela has the largest reserves, with regard to the capacity to exploit its oil Saudi Arabia continues to be the world's undisputed main producer with the ability to pump more than 8 million barrels per day.
Venezuela, meanwhile, extracts about 2.8 million bpd.
The Andean nation is the world's No. 5 oil exporter and a key supplier to the US.
Sunday, July 17, 2011
After its Rs. 1-lakh wonder car 'Nano', Tata Group is all set to launch a house for nearly Rs. 32,000 aimed at rural market by the end of next year.
"At present, the housing project is in the pilot stage at 30 locations spread across the country and we are in discussions with various agencies like Coir Board, Jute Board and also state governments," Sumitesh Das, head of global research programme of Tata Steel, said.
The houses will be made in pre-fabricated, or 'prefab', format, under which the company will provide a kit consisting of roofs, doors, windows, etc, which can be erected or assembled.
"It is quick house built in seven days if you have a patch of land. Basic model of 20 square metres, with flat roof will cost around 500 euros (around Rs. 32,000). Upgraded model with 30 square metres, which is the Indira Awas Yojana model, will cost 700 euros," Das said on the sidelines of Conference on Best Practices of Intellectual Property Management.
"Similarly there are other models which may come with a solar panel on the roof of the house," Das added.
The 2001 Census places the rural housing shortage figure in India at 1.48 crore and the situation may prove to be a big bonanza for the Tatas. Giving details of the project, Das said by the end of this year, they will get feedback from all the stakeholders like manufacturers, suppliers and various Panchayats.
"In the first pilot project, we saw interest of people in verandah, which we have incorporated, though it was not there earlier. We thought if we incorporate verandah, buying will be much higher. We need feedback from Panchayats, who are our final customers," he added.
He, however, refused to draw parallels between Nano car manufactured by Tata Motors and the 500-euro house by Tata Steel, saying that the market segments are different.
Replying to a question on the challenges that the project might face Das said, "The main challenge it may face is supply chain management due to shortage of production of panels".
"We are in touch with Coir Board and Jute Board also. The pilot is also to see the supply chain arrangements. If a coir manufacturer cannot meet the demands, then we will have to think of some other product to replace. We have technology but we do not have entrepreneurs. That's what we are looking for, people who can invest and make products for us," Das said.
The life of the house will be 20 years at this stage and may go up as research continues, he added.
Sunday, July 10, 2011
Apple today announced that over 15 billion apps have been downloaded from its revolutionary App Store by the more than 200 million iPhone, iPad and iPod touch users worldwide. The App Store offers more than 425,000 apps and developers have created an incredible array of over 100,000 native iPad apps.
"In just three years, the revolutionary App Store has grown to become the most exciting and successful software marketplace the world has ever seen," said Philip Schiller, Apple's senior vice president of Worldwide Product Marketing. "Thank you to all of our amazing developers who have filled it with over 425,000 of the coolest apps and to our over 200 million iOS users for surpassing 15 billion downloads."
"iPad provides us with an unparalleled mobile device for creating gorgeous, immersive games," said Mark Rein, vice president and co-founder of Epic Games. "Infinity Blade has been a runaway hit with customers around the world and we couldn't be more excited about our success on iOS devices."
More than 15 billion apps have been downloaded from the revolutionary App Store and more than 425,000 apps are available, including more than 100,000 native iPad apps, to consumers in 90 countries. Users of the more than 200 million iOS devices around the world can choose from an incredible range of apps in 20 categories, including games, business, news, education, sports, health, reference and travel. Apple has paid developers over $2.5 billion to date.
Facebook is the most download app on the app store inspite of it not being available on the iPad. Some of the other widely downloaded apps on the apps store are Angry Birds, Infinity Blade and Apple's Pages, Numbers and Keynote office applications.
In comparison Google's Android Market has only hit the 4.5 billion mark as of May. While Apple has seen an exponential growth in the apps space Google is quickly catching up. Google's Android Market is the second largest app store in world and it is expected to overtake Apple's app store by August in terms of number of apps available.
Thursday, July 7, 2011
Rupert Murdoch's decision to close the 168-year-old weekly British tabloid at the center of a phone-hacking scandal is an example of what the controlling shareholder of News Corp. does best — seize the news agenda, and when necessary, cut his losses.
He's also got his eye on a much bigger prize.
The surprisingly bold move to shutter News of the World, a financial pipsqueak, is the best way to stem the flow of damaging headlines at rival newspapers and clear regulatory hurdles that stand in the way of News Corp.'s pending multi-billion-dollar acquisition of British Sky Broadcasting, a cash cow that will boost earnings of the media giant.
"This is, to me, Murdoch taking back control," said Louise Cooper, a markets analyst at London-based BGC Partners. "The whole thing is an utter mess. He's trying to make the best of it he can."
Murdoch, 80, has a long history of daring business decisions. He was born in Australia, the son of a newspaper magnate, and started his own newspaper empire there. He's purchased assets, like Wall Street Journal owner Dow Jones & Co., and created others from scratch, like the Star tabloid and Fox broadcast network.
As the company's chief executive, Murdoch presides over an empire with a wide array of media assets, including the Fox broadcast network, cable channels such as FX and Fox News, TV stations, the 20th Century Fox movie studio and newspapers around the world, including The New York Post and The Sun in the U.K. Murdoch controls 40 percent of News Corp.'s voting stock, mostly through a family trust.
News of the World's value as an enterprise is "a drop in the bucket" compared to News Corp.'s overall $46 billion market capitalization, said Collins Stewart analyst Thomas Eagan. Closing the paper is a small sacrifice to try to save News Corp.'s $12 billion proposal to takeover BSkyB, which still needs U.K. government approval.
"I think it assuages some of the concern over ongoing problems at 'News of the World,'" Eagan said. "It's unclear what it means for the actual (BSkyB) deal approval."
The Sunday-only publication averaged 2.66 million readers per issue in May, according to U.K. auditing organization ABC. Eagan pegged the tabloid's value at an optimistic $650 million, or 25 cents per share. That's far less than the 70 cents that News Corp. shares have fallen since Wednesday when it was revealed the tabloid hacked into the voicemail of a murdered girl, potentially harming a police investigation and provoking the outrage of British politicians.
Shutting a newspaper amid an industry-wide decline in print advertising revenue and increasing its stake in a profitable and expanding pay TV company will actually improve News Corp.'s profitability.
Most analysts have a "buy" rating on the shares, thanks in part to an improving TV ad market, the recent decision to sell off money-losing social network Myspace, and its thriving cable channels such as Fox News.
Its TV channels, stations and 20th Century Fox movie studio accounted for practically all of the company's $1.06 billion in operating profits in the third quarter through March. The publishing division containing newspapers such as The Wall Street Journal contributed $36 million, or less than 3 percent of the total, while Myspace and related Internet businesses lost $165 million.
News Corp. shares closed down just 4 cents at $17.43 on Thursday after being up most of the day following the announcement of the paper's closure.
"At some point when the smoke clears, we're optimistic that investors will ultimately return to analyzing News Corp. on the merits of its high-quality media business, which first and foremost include its TV businesses," said Barclays Capital analyst Anthony DiClemente.
Still, the disposal of the paper is seen as a painful decision for Murdoch, a renowned news junkie. Several observers speculated that he will try to re-start a new British Sunday paper under a different name.
Murdoch evaded reporters' questions at an executive retreat in Sun Valley, Idaho, on Thursday.
Some observers made note of the fact that his son James was the one who broke the news to News of the World's some 200 staff. The elder Murdoch is seen as too attached to the newspaper business to shed it for good even though it is not core to the company's profits.
"If history is a guide, the decision to reduce newspaper exposure dramatically will be a post-Rupert decision," wrote Ken Doctor, a newspaper industry analyst at Outsell Inc., in a blog post Thursday.
The British government on June 30 already gave its qualified approval of News Corp. purchasing the 61 percent of BSkyB that it doesn't already own, on the condition it spins off Sky News as a separate company.
News Corp. made an initial offer of 700 pence per share to buy the 61 percent of the shares it doesn't already hold, valuing BSkyB at 12.3 billion pounds ($19.8 billion).
Analysts believe News Corp. may have to go as high as 900 pence per share to persuade shareholders to sell out.
At the time of the qualified approval, the tabloid's headline-grabbing hacks appeared to be limited to celebrities and politicians, to whom it was prepared to pay compensation.
But public sentiment was inflamed anew after it was revealed this week that the paper's targets included missing children, the relatives of soldiers slain in Afghanistan and the families of victims of London's 2005 terror attacks.
The outrage prompted the U.K. media regulatory body, The Office of Communications, to release an unusual statement on Wednesday, confirming that "it has a duty to be satisfied on an ongoing basis that the holder of a broadcasting license is 'fit and proper.'"
An investigation into whether News Corp. would pass this subjective standard of propriety was seen as potentially derailing Murdoch's BSkyB bid.
Analysts see the BSkyB deal approval being delayed until at least September, as Culture Minister Jeremy Hunt is not expected to give his final go-ahead before the U.K. Parliament goes into recess on July 18.
Despite the public outcry, many analysts think Britain will still sanction the takeover, since officials have already said that threats to competition will be resolved with Sky News' spin-off.
Tuesday, July 5, 2011
A year and a half after Google pulled its popular search engine out of mainland China, partly over concerns about censorship, its rival Microsoft has struck a deal with the biggest Chinese search engine, Baidu.com, to offer Web search services in English.
Baidu, previously primarily a Chinese-language search engine, made the announcement Monday afternoon, saying Microsoft's search engine, Bing, was expected to appear on Baidu's Web pages by the end of this year.
Baidu, which dominates Chinese-language search services here with about 83 percent of the market, has been trying for years to improve its English-language search services because English searches on its site are as many as 10 million a day, the company said. Now it has a powerful partner.
"More and more people here are searching for English terms," Kaiser Kuo, the company's spokesman, said Monday. "But Baidu hasn't done a good job. So here's a way for us to do it."
Baidu and Microsoft did not disclose terms of the agreement. But the new English-language search results will undoubtedly be censored, since Beijing maintains strict controls over Internet companies and requires those operating on the mainland to censor results the government deems dangerous or troublesome, including references to human rights issues and dissidents.
A Microsoft spokeswoman said, "Microsoft respects and follows laws and regulations in every country where we run business. We operate in China in a manner that both respects local authority and culture and makes clear that we have differences of opinion with official content management policies."
Microsoft seems to be betting it can get access to what is already the world's largest Internet population of about 470 million users.
Google continues to be available on the mainland, though its search engine, which operates in English and Chinese, was moved last year to Hong Kong, where Beijing's censorship rules do not apply. But lately, Google's search engine and its e-mail service, Gmail, have become more difficult to connect to on the mainland. The company, which is based in Mountain View, California, has blamed the Chinese government for interfering with its operations.
For Microsoft, it could be an opportunity. In a statement released Monday, Shen Xiangyang, Microsoft's senior global vice president, said: "Bing's cooperation with Baidu will allow the vast Baidu users to receive better English search experiences and results" and allow more Chinese users to experience Bing.
Google declined to comment on the partnership between Baidu and Microsoft. But Google says that search is not its biggest business opportunity in China. Instead, it is betting on selling ads to Chinese companies to show users outside China and selling display ads to run on non-Google Web sites, neither of which is dependent on search. Chinese advertisers spent $1.7 billion on display ads last year, one of the highest such spends in the world, according to Google. The company continues to employ 500 people in China and says revenue there is growing year over year.