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Archive | March, 2013

Apple Receiving the Flak from Investors

The first major challenge to Apple post Steve Jobs era was fired off by David Einhorn of Greenlight Capital when the hedge fund manager filed suit against the tech firm for a bigger slice of its US$137 billion retained cash earnings to its investors.

This is a surprising move amidst the current issues the world’s most valuable company is facing, such as falling share prices, increased competition in its niche smartphone and tablet markets and doubt as to the company’s ability to create new innovations on its product line.

For his part, Einhorn, who is a well-known industry short seller of interests and shares, intimated in an interview with CNBC that Apple’s current management has a “Depression-era mentality”, leading it to hoard cash and invest in safe securities with low yields.

This is but a response to Apple’s history, as it went broke back in the 1990s before the return of Steve Jobs. With Jobs at the helm again, the company went into its now historical run with the launch of market standard products such as the iPhone and the iPad. This meteoric rise from ruin is what has guided the company in its very conservative activities with its earnings.

Now after the demise of Jobs, Apple has come under fire from its investors because of this large cash hoarding with a quarterly cash dividend and a share buy back option that would cost US$45 billion in the next three years while having US$98 billion in money available.

The lawsuit is targeting Apple’s moves to eliminate the preferred stock shares from its coffers. Einhorn urged fellow shareholders to vote against this proposal from the Apple board on its annual meeting to be held on February 27. In its stead, Einhorn proposed that the company issue preferred stock that has a perpetual four percent dividend return. Many investors have supported this move, though just in principle.

The share stock prices of Apple in the market has tumbling as of late, with a fall of 35% to US$468.22. Einhorn continued to criticize the company’s ‘cash problem’ and adding, “It has the sort of a mentality of a depression. In other words, people who have gone through traumas and Apple has gone through a couple of traumas in its history, they sometimes feel they can never have enough cash.”

In another interview, this time with Reuters, Einhorn said, “When I discussed this with Tim Cook and actually, the conversation has been going on for the last couple of weeks, he said that he wasn’t familiar with my previous conversations with Peter Oppenheimer and whoever Peter Oppenheimer’s advisers were. I was surprised by that.”

For its part, Apple has called Einhorn’s lawsuit over its shareholder proposal was ‘misguided’. In an official communiqué, Apple said, “Contrary to Greenlight’s statements, adoption of Proposal #2 would not prevent the issuance of preferred stock. Currently, Apple’s Article of Incorporation provide for the issuance of a ‘blank check’ preferred stock by the Board of Directors without shareholder approval. If Proposal #2 is adopted, our shareholders would have the right to approve the issuance of preferred stock.”

Blackberry Opens to Lukewarm Reception

The new Blackberry featuring its latest Operating System was without any fanfare or other attention grabbing events. Blackberry, a Canadian firm now known as Research in Motion, was unveiled on February 5, 2012 in Canada but it did not even create a ripple in the highly competitive smartphone market.

The Z10 is the latest offering from the company and was subjected to intense media scrutiny before being made available to the market. Blackberry is one of the pre-eminent technology corporations in Canada and there was more than average media marketing involved in this model compared to previous ones from the company.

This new model from Blackberry has the following features to look out for:

  1. Hardware. There is a 4.1 inch display with a 1280 x 768 resolution and screen density of 365 pixels per inch. The processor is a Qualcomm dual-core 1.5 GHz processor having a 2GB RAM. It also features an 8 megapixel camera at the back and a 2 megapixel at the front. It has an expanded 16 GB storage capacity with connectivity options such as Bluetooth, WiFi, GPS, NFC and Micro SD slot.
  2. Keyboard. This is the first device from BB that does not have a QWERTY keyboard. Instead, it has a physical keyboard with a near perfect word prediction processor that combines accuracy to prevent embarrassing words being sent.
  3. Hub. This is the new messaging center for the Z10, where all communication details, texts, IMs, accounts and emails would be synchronized into one area in the unit itself. This would result in an efficient manner in controlling all messages, customizing and sorting the space to suit the user’s needs and requirements.
  4. Screen Sharing. This is one feature unique to the Z10 as fellow model owners can share their screen with one another. Here, the users can share space and allow each other a glimpse of where they are situated, a definite first for the smartphone world.
  5. Other Upgrades. These improved features include the Browser, which supports mobile-optimized HTML websites without issues while allowing multiple page and private browsing. There is also the Blackberry App World for new apps, music and digital content, the Blackberry Hub to access messages, notifications, contacts and calendars without changing used applications, the Blackberry Flow allowing users to go back to tasks done and return to their current tasks and Blackberry Balance allowing for easy transition between work and personal apps.

Despite tepid acceptance, Blackberry is well on its way to become a major force in the smartphone market.