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Posts Tagged ‘Rob Price’

THE $1,000 PHONE: The huge problem Apple must solve before it launches the new iPhone

iphone gold 6 plusGeorge Frey/Getty Images

  • Analysts are highly optimistic about the next iPhone, which is expected to be a radical reset of the entire line.
  • It’s the 10th anniversary of the device, so there’s a huge amount riding on it.
  • It may cost £1,000 in the UK and $1,000 in the US — sums many shoppers would balk at.
  • These are significant challenges Apple needs to overcome.

Apple is gearing up to launch what may well be the most hotly anticipated smartphone ever.

2017 is the 10th anniversary of the unveiling of the original iPhone. Smartphones and mobile apps have since transformed business and the global economy — propelling Apple to become the world’s most valuable company.

But as the iPhone turns 10, the pressure is on Apple to deliver a genuinely new, innovative phone. People want to see Apple launch a significant new device after several years of merely incremental improvements to iPhone. Rumours are swirling that the California tech company plans to release a special, high-end iPhone alongside the expected “7s” refresh this year, with augmented-reality features.

The prevailing mood among analysts is positive. Some are giddily expecting a “super-cycle” — a massive, record-breaking year for sales, driven by the ever-increasing numbers of older iPhones in the wild that need upgrading and by a particularly compelling product offering this time around.

So a lot is riding on this. And a lot that could go wrong. From pricing risks to hardware costs, Apple has to get several crucial calculations just right.

A radically new design would push up Apple’s costs, squeezing its margins. Apple could protect its margins by raising its prices. Some people think a new, high-end iPhone could retail for over $1,000. (Apple tends to sell its products at about the same number in dollars and pounds, which would make the price £1,000 in the UK). That may restrict sales and would make the rest of Apple’s iPhones look like cheap deals by comparison.

The price of failure is steep. The Apple Watch, for instance, was supposed to open a new category of consumer wearables, but the devices have appealed to only a small niche.

No one wants the Apple Watch of phones.

Business Insider spoke with Gene Munster, a prominent Apple analyst turned venture capital investor at Loup Ventures, to discuss the risks facing Apple this autumn.

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Amazon is eating away at Google’s core business

jeff bezos amazon ceo happy laughing smilingJeff Bezos, the founder and CEO of Amazon.Alex Wong/Getty Images

Current Prices

For more and more people, Amazon is the first port of call when it comes to researching potential purchases — and that’s bad news for Google.

Over half of Americans now go to Amazon to carry out their first search for products, turning away from search engines and other online retailers, according to a new study from the marketing company BloomReach. (The research was previously reported on by Bloomberg.)

Fifty-five percent of those surveyed made their first search on Amazon, up from 44% a year ago. At the same time, just 27% of people began at search engines, down from 34%. Retailers also saw a decline, dropping to 16% from 21%.

(The study took place on Labor Day, May 1, and surveyed 2,000 US consumers. There’s no word on data from other countries, but it seems reasonable to assume that the data might be similar in Western markets where Amazon has a similar presence as in the US.)

It’s a yet another sign of how fully Amazon is dominating online shopping — but it’s also particularly bad news for Google.

Google’s original, core business is a search engine. But more and more consumers are now opting to bypass it in favor of heading straight to the ultimate destination.

A customer pushes her shopping cart through the aisles at a Walmart store in the Porter Ranch section of Los Angeles November 26, 2013. REUTERS/Kevork Djansezian Shopping IRL is so passé.Thomson Reuters

The ads Google can serve next to product or shopping searches are especially lucrative (as they can be highly targeted at users clearly intending to spend money), making this trend more damaging than if Google’s search market were eroding in a different sector (educational searches, for example).

A Google representative declined to comment.

There’s still no guarantee, however, that people who visit Amazon first will definitely buy from there — something BloomReach acknowledges. “Just because consumers start on Amazon, that doesn’t mean they ultimately buy from Amazon,” marketing head Jason Seeba said in a statement. “Instead, they’re often comparing and researching products on search engines and other retailers.”

Plus, it’s not as if Google is dependent solely on search: Its revenue now comes from everything from its DoubleClick ad network to its Google Play purchases.

But even so, Amazon has become the unrivalled go-to destination to start Americans’ search for products — and that has to worry the world’s largest search engine.

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10 things in tech you need to know today

no mans sky The PlayStation 4 game “No Man’s Sky.” Hello Games / wanderon1

Good morning! Here’s the tech news you need to know to start your week:

1. Lyft reportedly tried to sell itself to Uber and several other companies, but failed. The ride-hailing startup is refusing to comment on the report.

2. Facebook has made a surprising move that could save its one shrinking business. Revenue from payments and fees has been trending downward, but its new “all-new PC gaming platform” could help to reverse that.

3. The National Security Agency hack proves Apple was right to fight the NSA. Some security experts view the recent leak of NSA spying tools as a vindication of Apple’s stance on user privacy.

4. The CEO of $3.8 billion (£2.9 billion) Slack has a smart idea to help people get off work early. Stewart Butterfield thinks chat bots will help Slack become “the browser and the command line for enterprise.”

5. We interviewed the Microsoft exec who made a computer so good that even Apple wanted to copy it. Panos Panay, Microsoft’s corporate vice president of devices, is behind the Surface Pro 4 and the Surface Book.

6. Lyft made a huge bet on Apple’s secret smash hit, Swift, and it paid off in a big way. The ride-hailing startup rewrote its app in Swift, a programming language created by Apple.

7. Samsung is closing down Milk Music, its music streaming service. Variety reports it will shutter on September 22.

8. Photos of what looks like a new, smaller PlayStation 4 have appeared online. Sony is expected to launch the the PS4 “Neo” in the coming weeks.

9. A Chinese selfie app is getting ready for a $1 billion (£770 million) initial public offering, The Wall Street Journal reports. Meitu is going to go public on the Hong Kong stock exchange.

10. Apple is losing its lead in smartphones. Samsung is outdesigning and outperforming Apple’s iPhone.

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Analysts are going gaga for Facebook’s earnings beat

mark zuckerberg facebook happy smiling virtual reality oculusFrank Zauritz – Pool /Getty ImagesFacebook CEO Mark Zuckerberg.
Facebook-A $118.84

 

Facebook smashed it.

The social-network giant beat expectations when it reported its first-quarter earnings on Wednesday, sending stock soaring in after-hours trading by 8% to an all-time high. The growth comes off the back of the company’s strong mobile business.

CEO Mark Zuckerberg is also proposing a new share structure that will allow him to give away the majority of his fortune to charity while retaining voting control of the company.

Analysts are responding uniformly positive to the news, raising their price targets for the company as they reiterate overweight/buy ratings across the board.

We’ve rounded up a selection of reactions from analysts — but first, here are the key numbers, via Business Insider’s Jillian D’Onfro:

  • Earnings per share: $0.77 versus $0.62 expected.
  • Revenue: $5.38 billion versus $5.25 billion expected, up 52% year-over-year. Ad revenue is up 57% year-over-year.
  • Monthly active users: 1.65 billion versus 1.62 billion expected.
  • Daily active users: 1.09 billion on average for March. This quarter, 66% of Facebook’s monthly active users were daily active users, which is up from 65% during the same period last year.
  • Total costs and expenses were $3.37 billion, up 29% year-over-year, and capital expenditures were $1.13 billion.
  • Free cash flow for the first quarter of 2016 was $1.85 billion.
  • Facebook has 13,600 employees, up 35% from the same time last year.
  • Most of Facebook’s revenue comes from North America and Europe, with only about 24% ($1.3 billion) coming from Asia-Pacific and the rest of the world. But those areas account for 66% of its monthly active users. The average revenue per user in those regions is still tiny, compared to in the US: $1.56 and $0.91, respectively, versus $12.43 and $3.98 in the US and Europe.

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