Wednesday, August 26, 2015

Apple’s Market Cap Loses $60 Billion After iPhone Sales Disappoint

You know, I was totally wrong about Apple. I failed to see how dumbing down the device and making it a luxury statement would continue earnings. Aivars Lode

Shares slide as company’s revenue guidance falls short of Wall Street views

By Daisuke Wakabayashi
After a series of blockbuster earnings that blew past even the most optimistic of Wall Street expectations, Apple Inc. felt the pain of falling short of elevated expectations.

Apple said Tuesday its profit surged 38%, aided again by strong demand for the company’s latest iPhones and robust growth in China where sales more than doubled. The gains lifted Apple’s cash reserves to a record $203 billion.
But while Apple sold 35% more iPhones in the fiscal third quarter compared with a year earlier, those sales missed some analysts’ estimates. Apple also indicated its revenue in the current quarter could come in below Wall Street projections.
Within minutes of the earnings report, Apple’s shares fell as much as 7% in after-hours trading Tuesday, erasing about $60 billion in market value. Shares fell 5.2% in early trading Wednesday. 

Swings in Apple’s shares can spark big moves in the U.S. stock indexes. As the largest company by market capitalization in the S&P 500 and Nasdaq, Apple has an outsize impact on the two market-cap weighted indexes. Apple is among the companies with the highest stock prices in the Dow, which gives it major sway over the price-weighted blue-chip index.
The iPhone is Apple’s most important product, accounting for nearly two-thirds of Apple’s revenue in the quarter ended June 27 versus less than half three years ago. Any signs that iPhone growth is reaching a peak is a major cause of concern for investors.
In an interview with The Wall Street Journal, Apple Chief Executive Tim Cook said he has heard repeatedly that the company can’t sustain its growth rates, but it has proved doubters wrong in the past.
“I refuse to accept that type of thinking,” Mr. Cook said. “I don’t see the ceiling being very close.”
Strong sales of the larger-screen iPhone 6 and 6 Plus are driving Apple to record earnings, while defying a sales-growth slowdown in the smartphone industry. Apple has pried open the door to largely untapped markets like China and enticed consumers to switch from smartphones running Google Inc.’s Android operating system. 
The fiscal third quarter is traditionally weaker for iPhones as consumers hold off on purchasing new models until the fall when Apple typically introduces them. Analysts noted that iPhone unit sales of 47.5 million fell by about 23% from its fiscal second quarter, a steeper rate of decline than the previous two years when quarter-on-quarter sales fell by 19% and 17% respectively. 
Apple said part of the shortfall was the result of it lowering iPhone inventory by 600,000 units during the quarter, a sign that it sold more phones than it manufactured.
Abhey Lamba, a senior technology analyst at Mizuho Securities, said iPhone sales falling short of some analysts’ estimates hurt the bullish view of some investors that the iPhone 6 and 6 Plus could defy seasonal slowdowns the iPhone had experienced in the past.
“It deals a blow to that thesis,” Mr. Lamba said.
The iPhone now overshadows the rest of Apple’s businesses. While Apple has refreshed several product lines in the past year and introduced an entirely new category with a smartwatch, the iPhone accounts for an increasingly larger share of Apple’s revenue.
On a call with analysts, Mr. Cook brushed off a question as to whether Apple needs to move beyond its reliance on the iPhone. “We think the phone has a lot of legs to it,” he said.
In the latest quarter, iPhone sales made up about 63% of Apple’s overall sales, compared with 53% in the year ago period and less than half three years ago. Apple has benefited from selling its iPhones at high prices at a time when smartphone prices are sliding. The average selling price of iPhones rose by more than $100 to $662.42.
The latest iPhones are especially popular in China. In greater China—defined by Apple as China plus Hong Kong and Taiwan—revenue more than doubled to $13.23 billion. For the iPhone, sales rose 87% in greater China compared with 5% growth in the overall market, according to Apple.
Mr. Cook said the company had the highest rate of switchers from Android phones ever during the quarter. “The gap is widening between us and our competitors,” he said. 
It isn’t yet clear whether Apple’s sales will greatly benefit from the Apple Watch, the company’s first all-new hardware product since it introduced the iPad in 2010. Apple didn’t provide a breakdown of the Watch’s sales, which began during the June quarter, lumping the product’s sales in with the iPod, Apple TV and Beats accessories in the “other products” category. Sales of that segment rose 49% to $2.64 billion.
Mr. Cook said the Watch’s sales beat the company’s own internal projection, although he didn’t provide those estimates. He said the “sell-through” of the Watch was better than the iPad and iPhone at the same period of time. He also noted the Watch is still only available in 680 retail locations, or less than 1% of the locations where the iPhone is sold.
Apple’s profit in the quarter rose to $10.7 billion from $7.74 billion in the year-ago period. Revenue jumped 33% to $49.61 billion.
Gross margin—a closely watched measure of profitability reflecting the percentage of revenue that remains after manufacturing costs—was 39.7%, above its estimated range of 38.5% to 39.5%.
Apple’s forecast for revenue in the current quarter came in slightly below Wall Street’s expectations. For the current quarter ending September, Apple said it expects a gross margin of between 38.5% and 39.5%. It sees revenue coming in between $49 billion and $51 billion. Analysts had expected revenue of $51.13 billion, according to a consensus of estimates compiled by Thomson Reuters.
In contrast to the iPhone’s success, iPad sales continued to slump. Apple’s tablet sales fell about 18% in unit terms, marking a sixth-straight quarter of year-over-year declines. 
The iPad and tablet computers, in general, are facing an existential crisis: They aren’t quite as essential as the smartphone but not quite as functional as a notebook computer. Moreover, early iPad users don’t see a huge reason to upgrade to more recent models.
Apple has struck deals with International Business Machines Corp.and other companies to position the iPad as a device for the workplace. So far, those efforts have done little to stem the iPad’s slide.
Another bright spot is the Mac business. Apple said Mac sales rose 9% in units, compared with a 9.5% decline in shipments for PCs globally in the second quarter, according to research firm Gartner. While still one of the smaller players in terms of shipments, Apple has steadily gained market share on competitors.

Tuesday, August 25, 2015

Sea Ice Might Be More Resilient Than Thought

Who knows if this is true or not. Sea ice might be more resilient than thought, study finds. Both sides are trying to justify positions; we should be good stewards and we should focus on fusion as our power source period, everything else is a distraction. Aivars Lode

Single cool summer briefly reversed decline in ice cap around the North Pole, study reports

Arctic sea ice is so sensitive to changing temperatures that a single cool summer briefly reversed the decline in the ice cap around the North Pole, says a new study released Monday. 
Using new satellite data, researchers at University College London reported in Nature Geoscience on Monday that the total volume of sea ice in the Northern Hemisphere was well above average in the autumn of 2013, traditionally the end of the annual melt season, after an unusually cool summer when temperatures dropped to levels not seen since the 1990s. 
“We now know it can recover by a significant amount if the melting season is cut short,” said the study’s lead author Rachel Tilling, a researcher who studies satellite observations of the Arctic. “The sea ice might be a little more resilient than we thought.”
A steady decline in the extent of Arctic sea ice since the late 1970s has been taken as a barometer of longer-term warming trends in the Northern hemisphere. The U.S. Navy last year predicted that by 2030 the Arctic’s northern sea route could be ice-free and navigable for nine weeks every year. 
Miss Tilling and her colleagues used new data from the European Space Agency’s Cryosat-2 radar satellite, launched in 2010. For the first time, they measured changes in the overall volume of seasonal sea ice across the Arctic and Greenland. Until now, researchers have been able to track the extent of ice, but not its thickness.
In 2013, summer temperatures were about 5% cooler than the previous year and the volume of autumn ice jumped 41%, they said.
As temperatures warmed again after 2013, the decline in annual sea ice resumed, according to the U.S. National Snow and Ice Data Center in Boulder, Colo. At its greatest expanse this past winter, the Arctic sea ice was the lowest since satellite measurements began.

'Mini ice age' coming in next fifteen years, new model of the Sun's cycle shows

Solar changes mean a mini ice age coming? Aivars Lode

There will be another Little Ice Age in 2030, according to solar scientists – the last one was 300 years ago

By Alice Harrold 

There will be a "mini ice age" in 2030, solar scientists have said.
We are now able to predict solar cycles with far greater accuracy than ever before thanks to a new model which shows irregularities in the sun’s 11-year heartbeat.
The model shows that solar activity will fall by 60 per cent between 2030 and 2040 causing a "mini ice age".
The conditions predicted have not been experienced since the last "mini ice age" which lasted from 1645 to 1715, called the Maunder Minimum.

Frozen fountain at Trafalgar Square in London in January 1963 The findings are being presented by Professor Valentina Zharkova at the National Astronomy Meeting in Llandudno.
In 1843 scientists first discovered that the sun's activity varies over a cycle of 10 to 12 years.
Fluctuations within that cycle have been difficult to predict, although many solar physicists new that the variations were caused by a dynamo of moving fluid deep inside the sun.

Professor Zharkova’s team of researchers has found that adding a second dynamo close to the surface of the sun, creates a far more accurate model.
The scientists found magnetic waves in two different layers of the sun’s interior which fluctuate between the northern and southern hemispheres of the sun.

“Combining both waves together and comparing to real data for the current solar cycle, we found that our predictions showed an accuracy of 97 per cent," Professor Zharkova said.
The magnetic wave patterns show that there will be fewer sunspots in the next two solar cycles. Cycle 25, which peaks in 2022 and Cycle 26, from 2030 to 2040 will both have a significant reduction in solar activity.