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Tag: Apple Inc

  • Here are Wednesday’s biggest analyst calls: Apple, IBM, Amazon, Tesla, Exxon, Gap, Netflix & more

    Here are Wednesday’s biggest analyst calls: Apple, IBM, Amazon, Tesla, Exxon, Gap, Netflix & more

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  • Tesla video promoting self-driving was staged, engineer testifies | CNN Business

    Tesla video promoting self-driving was staged, engineer testifies | CNN Business

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    CNN
     — 

    A 2016 video that Tesla

    (TSLA)     (TSLA) used to promote its self-driving technology was staged to show capabilities like stopping at a red light and accelerating at a green light that the system did not have, according to testimony by a senior engineer.

    The video, which remains archived on Tesla’s website, was released in October 2016 and promoted on Twitter by Chief Executive Elon Musk as evidence that “Tesla drives itself.”

    But the Model X was not driving itself with technology Tesla had deployed, Ashok Elluswamy, director of Autopilot software at Tesla, said in the transcript of a July deposition taken as evidence in a lawsuit against Tesla for a 2018 fatal crash involving a former Apple

    (AAPL)     (AAPL) engineer.

    The previously unreported testimony by Elluswamy represents the first time a Tesla employee has confirmed and detailed how the video was produced.

    The video carries a tagline saying: “The person in the driver’s seat is only there for legal reasons. He is not doing anything. The car is driving itself.”

    Elluswamy said Tesla’s Autopilot team set out to engineer and record a “demonstration of the system’s capabilities” at the request of Musk.

    Elluswamy, Musk and Tesla did not respond to a request for comment. However, the company has warned drivers that they must keep their hands on the wheel and maintain control of their vehicles while using Autopilot.

    The Tesla technology is designed to assist with steering, braking, speed and lane changes but its features “do not make the vehicle autonomous,” the company says on its website.

    To create the video, the Tesla used 3D mapping on a predetermined route from a house in Menlo Park, California, to Tesla’s then-headquarters in Palo Alto, he said.

    Drivers intervened to take control in test runs, he said. When trying to show the Model X could park itself with no driver, a test car crashed into a fence in Tesla’s parking lot, he said.

    “The intent of the video was not to accurately portray what was available for customers in 2016. It was to portray what was possible to build into the system,” Elluswamy said, according to a transcript of his testimony seen by Reuters.

    When Tesla released the video, Musk tweeted, “Tesla drives itself (no human input at all) thru urban streets to highway to streets, then finds a parking spot.”

    Tesla faces lawsuits and regulatory scrutiny over its driver assistance systems.

    The U.S. Department of Justice began a criminal investigation into Tesla’s claims that its electric vehicles can drive themselves in 2021, after a number of crashes, some of them fatal, involving Autopilot, Reuters has reported.

    The New York Times reported in 2021 that Tesla engineers had created the 2016 video to promote Autopilot without disclosing that the route had been mapped in advance or that a car had crashed in trying to complete the shoot, citing anonymous sources.

    When asked if the 2016 video showed the performance of the Tesla Autopilot system available in a production car at the time, Elluswamy said, “It does not.”

    Elluswamy was deposed in a lawsuit against Tesla over a 2018 crash in Mountain View, California, that killed Apple engineer Walter Huang.

    Andrew McDevitt, the lawyer who represents Huang’s wife and who questioned Elluswamy’s in July, told Reuters it was “obviously misleading to feature that video without any disclaimer or asterisk.”

    The National Transportation Safety Board concluded in 2020 that Huang’s fatal crash was likely caused by his distraction and the limitations of Autopilot. It said Tesla’s “ineffective monitoring of driver engagement” had contributed to the crash.

    Elluswamy said drivers could “fool the system,” making a Tesla system believe that they were paying attention based on feedback from the steering wheel when they were not. But he said he saw no safety issue with Autopilot if drivers were paying attention.

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  • Forget inflation, it’s all about earnings | CNN Business

    Forget inflation, it’s all about earnings | CNN Business

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    New York
    CNN
     — 

    To everything there is a season and now is the time for earnings.

    Over the past few weeks investors have been squarely focused on inflation and Fed policy, but now market reactions are getting bigger for earnings (especially the misses) and smaller for economic data.

    What’s happening: “We expect earnings to take the center stage going forward,” wrote Bank of America strategists Savita Subramanian and Ohsung Kwon in a note on Friday. They noted that over the last three quarters, S&P 500 reactions to earnings beats and misses have soared higher and have now surpassed the one-day market reaction to both CPI inflation and Fed policy meeting decisions.

    Companies that missed on both sales and earnings-per-share during the last quarter underperformed the S&P 500 by nearly six percentage points on average the next day, the largest reaction to earnings misses on record.

    Shares of Disney sank 13.16% last November — their lowest level in more than two years — when they missed earnings estimates. Meta shares plummeted 24% after showing a drop in third-quarter revenue in October, the company’s second consecutive quarterly revenue decline. And shares of Palantir closed down more than 11% in November after it missed estimates only slightly.

    “We see this as a narrative shift in the market from the Fed and inflation to earnings: reactions to earnings have been increasing, while reactions to inflation data and FOMC meetings have been getting smaller,” wrote Subramanian and Kwon.

    So we can expect some serious volatility over the next few weeks as companies report their fourth quarter corporate earnings.

    Bank of America’s predictive analytics team analyzed earnings transcripts to calculate sentiment scores and found that corporate sentiment remained flat in the third quarter, well off its highs, which points to a potential earnings decline ahead.

    Similarly, companies’ references to of better business conditions (specific usage of the words “better” or “stronger” vs. “worse” or “weaker”) remained well below the historical average, and mentions of optimism dropped to the lowest level since the first quarter of 2020.

    So far, swings have been to the downside. S&P 500 fourth-quarter earnings-per-share estimates have dropped by about 7% since October. Early earnings reports from some of the largest financial institutions point to a bleak quarter.

    Bad news ahead: The estimated earnings decline for the S&P 500 in the fourth quarter of 2022 is -3.9%, according to a FactSet analysis. If that is indeed the actual drop, it will mark the first earnings decline reported by the index since the third quarter of 2020.

    Over the past few weeks, reported FactSet, earnings expectations for the first and second quarters of 2023 switched from year-over-year growth to year-over-year declines.

    The latest: JPMorgan beat estimates for fourth-quarter revenue but also increased the amount of money for expected defaults on loans. The bank added a $2.3 billion provision for credit losses in the quarter, a 49% increase from the third quarter.

    The move was driven by a “modest deterioration in the Firm’s macroeconomic outlook, now reflecting a mild recession in the central case,” said the report. On a subsequent call, JPMorgan CFO Jeremy Barnum told reporters that the bank expects a recession to hit by the fourth-quarter of 2023.

    Bank of America

    (BAC)     also beat earnings expectations but CEO Brian Moynihan said Friday that the bank is preparing for rising unemployment and a recession in 2023. “Our baseline scenario contemplates a mild recession,” he said. The bank added a $1.1 billion provision for credit losses, a sharp change from last year when that number was negative.

    What’s next: Hold on to your hats. During the upcoming week, 26 S&P 500 companies are scheduled to report results for the fourth quarter.

    Apple CEO Tim Cook has responded to angry shareholders by recommending that the company cut his pay this year, reports my colleague Anna Cooban.

    Cook was granted $99.4 million in total compensation last year. The vast majority of his 2022 compensation — about 75% — was tied up in company shares, with half of that dependent on share price performance.

    But shareholders voted against Cook’s pay package after Apple’s stock fell nearly 27% last year. The vote is nonbinding, but the board’s compensation committee said Cook himself requested the reduction.

    “The compensation committee balanced shareholder feedback, Apple’s exceptional performance, and a recommendation from Mr. Cook to adjust his compensation in light of the feedback received,” the company said in its annual proxy statement released Thursday.

    But don’t cry for Tim Cook just yet. This year, the executive’s share award target is $40 million. About $30 million, or three-quarters, of that is linked to share price performance. The tech boss, who has headed up Apple

    (AAPL)     since 2011, is estimated to have a personal wealth of $1.7 billion, according to Forbes.

    The bottom line: Apple’s share price, like other tech companies, plunged last year as coronavirus lockdowns shuttered some of its factories in China. Supply chain bottlenecks and fears that a global economic slowdown would crimp demand also dragged down its stock.

    Angry investors believe that the person at the helm of the company should also see a drop in pay.

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  • Why Apple may finally be embracing touchscreen laptops | CNN Business

    Why Apple may finally be embracing touchscreen laptops | CNN Business

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    CNN
     — 

    Over the years, Apple has added touchscreens to almost every computing device imaginable, from phones and tablets to smartwatches, but it has refrained from bringing the feature to its Mac product line – even as a long list of rivals did so with their laptops and desktops.

    In 2010, Apple co-founder Steve Jobs described the concept of a computer with a touchscreen – then an emerging trend among the company’s competitors – as “ergonomically terrible.” Two years later, CEO Tim Cook reiterated the sentiment during an earnings call. And Craig Federighi, Apple’s senior VP of software engineering, said in 2018 that “lifting your arm up to poke a screen is pretty fatiguing to do.”

    But now, Apple may be rethinking its stance. On Wednesday, Bloomberg reported Apple engineers are developing a touchscreen for the MacBook Pro with an expected launch date of 2025, citing unnamed sources familiar with the matter. The company did not immediately respond to a request for comment.

    While it’s unclear if the touchscreen laptop will see the light of day, introducing the product could accomplish two important things for Apple: adapting to shifting consumer expectations and supercharging sales for its Mac product line.

    Microsoft, HP, Samsung and Dell, have long offered computers with touchscreens, and more consumers have come to expect they can tap on a computer screen just as they do on their phones. (If you have a MacBook, you may have already had the experience of a friend or relative touching your screen reflexively thinking it would do something.)

    At the same time, interest in Apple computers is booming, thanks in part to Apple’s inclusion of its new in-house processor that improved battery life and offered better performance. Mac revenue increased 14% in Apple’s 2022 fiscal year to $40.1 billion. Apple’s iPad business, on the other hand, saw sales decline from the prior year.

    Apple has previously kept the touchscreen away from its Mac lineup to prevent it from cannibalizing iPad sales. Instead, Apple added a narrow touch bar to its MacBook keyboard to provide easy access to shortcuts, emoji and other features, but ultimately it did away with the tool after it was panned by users and critics.

    Now, however, Apple could use a Mac touchscreen to incentivize consumers to upgrade their computers and keep Mac sales momentum growing.

    David McQueen, research director at ABI Research, said the lines are increasingly blurred between higher-end iPads and Macs, thanks to new chips, battery life and slim design. He noted that when a 12.9-inch iPad Pro is attached to a Magic Keyboard with use of an Apple Pencil, there is “not much to tell it apart from a laptop experience.”

    “The market has embraced 2-in-1 laptop-tablet hybrids and maybe now Apple sees the rationale for also adding one to its armory,” he added.”

    Apple, for its part, has softened its stance on Mac touchscreens more recently. When asked at a conference last fall if Apple will add a touchscreen to Macs, Federighi responded: “Who’s to say?”

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  • Apple’s first US labor union reaches new milestone for tech industry | CNN Business

    Apple’s first US labor union reaches new milestone for tech industry | CNN Business

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    CNN
     — 

    Workers at Apple’s first unionized retail store began collectively bargaining with management on Wednesday, in a milestone moment not only for the iPhone company but for all of Big Tech.

    Apple store workers in Towson, Maryland, who made history in June by voting to form the first union at one of the tech giant’s US stores, started contract negotiations with Apple management on Wednesday morning. The worker group, based out of a mall near Baltimore, is organized with the International Association of Machinists and Aerospace Workers (IAMAW) union.

    Risa Lieberwitz, a professor of labor and employment law at the Cornell University School of Industrial and Labor Relations, said “there’s a lot at stake” for Apple employees at this and other stores as the negotiations commence. “Other Apple workers will be watching this,” she said. “Other workers in the tech industry will be watching this.”

    The success of the Towson Apple store workers’ unionization bid came amid a broader wave of workplace organizing. A tight labor market lent workers new leverage and the Covid-19 pandemic exposed some of the inequities faced by America’s frontline workers. New unionizing efforts emerged among workers in stores and warehouses from companies such as Amazon, Starbucks and Apple.

    The rise of worker organizing efforts has prompted a range of responses from top tech companies. Amazon has so far refused to recognize its first union and engage in negotiations after a landmark union win last spring and continues to fight its legitimacy.

    Microsoft, by contrast, has publicly embraced its first union and said this month it looks “forward to engaging in good faith negotiations as we work towards a collective bargaining agreement.”

    Apple appears to be the first of those three companies to join the negotiating table with its unionized workers, but it comes after some tensions. Apple was previously hit with a complaint from the National Labor Relations Board over allegations that it interrogated employees regarding their support for a union and selectively prohibited the placement of pro-union fliers in a break room at a New York City Apple store. (Apple pushed back at those claims in a filing with the NLRB.)

    An Apple spokesperson told CNN in a statement that the company “will engage with the union representing our team in Towson respectfully and in good faith.” The statement added that the company values the work of its retail team, and touted the company’s compensation and benefits for retail staffers.

    David DiMaria, the lead organizer of the Towson Apple store union campaign with the IAMAW, said excitement was high among the Apple store workers ahead of Wednesday’s first meeting. “First contracts are a lot of prep work, and they’ve been putting in a lot of time doing all that prep,” he told CNN. “And now it all pays off, and they actually get to go to the table and start to negotiate their contracts, so spirits are high. They’re really excited and they can’t wait to get there.”

    Issues that are top of mind for the bargaining unit include pay, working conditions, and, mostly, having a voice at work and “being a part of that decision-making process in the things that affect them on the day-to-day is really important,” according to DiMaria.

    Lieberwitz noted that negotiating a first contract for a union in the United States is “generally difficult” regardless of the industry, as many employers have historically resisted negotiating or have attempted to draw-out the process, as the longer a union goes without a contract, the longer a company will not have to agree to any of worker’s demands. An analysis of Bloomberg Law labor data found that it takes well over a year (465 days) on average for a union that won an election to ratify a first contract.

    For the workers, she said, “it will require patience, a recognition that this may take a long time, and sticking together in that sense of labor solidarity.”

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  • Apple CEO Tim Cook requests and receives a 40% pay cut after shareholder vote

    Apple CEO Tim Cook requests and receives a 40% pay cut after shareholder vote

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    Tim Cook, chief executive officer of Apple Inc., speaks during a “First Tool-In” ceremony at the TSMC facility under construction in Phoenix, Arizona, on Tuesday, Dec. 6, 2022.

    Caitlin O’Hara | Bloomberg | Getty Images

    Apple CEO Tim Cook will receive a pay cut in 2023 to $49 million in total compensation, the company said in a filing with the SEC.

    Cook requested the change, Apple said in the filing, following a shareholder vote on his pay package. The company also reduced the number of restricted stock units Cook would receive if he retires before 2026.

    In 2022, Cook made just under $83 million in stock awards, $12 million in incentives and $3 million in salary. He also got benefits including retirement plan contributions, security, personal air travel and more than $46,000 in vacation cash-out.

    Apple’s compensation committee said it made the change in response to last year’s say-on-pay vote, in which 64% of shareholders approved of Cook’s compensation, down from 95% who approved it for Apple’s 2020 fiscal year.

    Still, Apple’s board praised Cook’s performance, and said it has confidence in the CEO’s long-term strategic decisions.

    Executive compensation has come under increasing pressure from institutional shareholders of late. Institutional Shareholder Services recommended that Apple shareholders vote against Cook’s pay package at last year’s annual meeting.

    The compensation committee, comprised of Art Levinson, Al Gore and Andrea Jung, said it reached out to institutional shareholders to gauge how they felt about Cook’s pay.

    “Based on these important conversations, we have made changes to the size and structure of Tim’s 2023 compensation,” the committee wrote.

    More alterations could be in store.

    “Taking into consideration Apple’s comparative size, scope, and performance, the Compensation Committee also intends to position Mr. Cook’s annual target compensation between the 80th and 90th percentiles relative to our primary peer group for future years,” the committee said.

    Cook is paid mostly in restricted stock units. The number of actual shares of Apple stock that Cook vests depends on the company’s performance versus the S&P 500. Apple’s stock has done well enough that Cook typically vests the maximum amount.

    Since Cook took over as CEO in 2011, Apple stock has returned 1,212% versus 290% for the S&P 500, Apple said.

    In addition to reducing the total target, 75% of Cook’s vesting shares will be tied to Apple’s stock performance in 2023, instead of 50%.

    Apple announced a stock grant for Cook in September 2020 running through 2025. Cook received it on the first day of Apple’s fiscal 2021, which started at the end of September. When it was approved, Cook’s stock grant would have given him 1 million shares worth about $114 million at the time if Apple were to hit all its targets.

    Cook’s previous stock grant from 2011 ended up being worth more than $900 million at Apple’s September 2020 share price.

    Cook said in 2015 that he plans to donate his fortune to charity.

    WATCH: Apple sees slowing growth in app store performance

    Apple sees slowing growth in app store performance

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  • Tim Cook agrees to a massive pay cut | CNN Business

    Tim Cook agrees to a massive pay cut | CNN Business

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    London
    CNN
     — 

    Apple CEO Tim Cook has agreed to cut his pay this year after shareholders rebelled.

    The world’s largest tech company said it would reduce Cook’s target pay package to $49 million, 40% lower than his target pay for 2022 and about half Cook’s $99.4 million total compensation that he was granted last year.

    The vast majority of Cook’s 2022 compensation — about 75% — was tied up in company shares, with half of that dependent on share price performance.

    But shareholders voted against Cook’s pay package after Apple’s stock fell nearly 27% last year. The vote is nonbinding, but the board’s compensation committee said it took the vote into consideration.

    “The compensation committee balanced shareholder feedback, Apple’s exceptional performance, and a recommendation from Mr. Cook to adjust his compensation in light of the feedback received,” the company said in its annual proxy statement released Thursday.

    This year, the executive’s share award target has been cut to $40 million. About $30 million, or three-quarters, of that is linked to share price performance.

    Cook’s base salary of $3 million will stay the same, the company said, as well as a $6 million bonus.

    The board said it believes Cook’s new pay package is “responsive to shareholder feedback, while continuing both to align pay with performance and to recognize Mr. Cook’s outstanding leadership.”

    The tech boss, who has headed up Apple since 2011, is estimated to have a personal wealth of $1.7 billion, according to Forbes.

    Apple’s share price, like other tech companies, plunged last year as coronavirus lockdowns shuttered some of its factories in China. Supply chain bottlenecks and fears that a global economic slowdown would crimp demand also dragged down its stock.

    In January last year, the tech giant became the first publicly traded company to notch a $3 trillion market capitalization, yet has has shed nearly $1 billion of that value since.

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  • Starbucks CEO Howard Schultz tells corporate workers to return to the office 3 days a week

    Starbucks CEO Howard Schultz tells corporate workers to return to the office 3 days a week

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    Howard Schultz

    David Ryder | Reuters

    Starbucks corporate employees will be returning to the office at least three days a week by the end of the month.

    Starting Jan. 30, employees within commuting distance will be required to report to the coffee giant’s Seattle headquarters on Tuesdays, Wednesdays and a third day decided on by their teams. The memo didn’t specify what qualified as commuting distance.

    Workers closer to regional offices will also be required to come in three days a week, although the specific days aren’t mandated.

    The coffee giant’s corporate workforce has been working remotely since the start of the pandemic. In September, Starbucks asked those workers to work from the office one to two days a week. But CEO Howard Schultz wrote in a memo to employees on Wednesday that badging data showed employees weren’t adhering to that directive.

    The new policy is meant to “rebuild our connection to each other and synchronize teams and efforts,” said the memo from Schultz, who is departing the company this spring. He also compared corporate workers’ continued remote work to baristas, who have never had that option.

    Schultz stepped in as interim chief executive in April after former CEO Kevin Johnson retired. In his third stint at the company, he has announced a $450 million plan to reinvent Starbucks and fix what he called “self-induced mistakes.”

    Starbucks isn’t the only company that has recently mandated a stricter return-to-office policy. CEO Bob Iger, who has returned for his second leadership stint at Disney, told employees on Monday that they must return to the office.

    Elon Musk set even higher expectations for in-office attendance at Twitter after he acquired the social media company. And Apple mandated employees return to work three days a week back in September.

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  • Global spending on mobile games falls 5% as high inflation causes market to cool

    Global spending on mobile games falls 5% as high inflation causes market to cool

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    The Candy Crush Saga logo displayed on a phone screen.

    Jakub Porzycki | NurPhoto via Getty Images

    Spending on mobile games declined last year as consumers got more frugal with their purchasing decisions in response to rising inflation, according to a report from app analytics firm Data.ai.

    Mobile game spending fell 5% globally in 2022, to $110 billion, Data.ai, which was formerly known as App Annie, said in its “State of Mobile” report Wednesday. The report also looks at the broader state of sectors like mobile ads, retail and social media apps.

    Nevertheless, first-time installs of mobile titles rose 8% to a record 90 billion, with so-called “hypercasual” titles leading the gains.

    “We are seeing this major theme emerge of people being more price sensitive and financially more conservative,” Lexi Sydow, head of insights at Data.ai, told CNBC, adding that the “biggest hit” to spending on apps was in gaming.

    Faced with economic headwinds such as higher prices and borrowing costs, people are cutting back on discretionary purchases. Gaming especially has come under pressure.

    Global sales of games and services, including console and PC games, were expected to contract 1.2% year-on-year to $188 billion in 2022, according to a July research note from market data firm Ampere Analysis.

    In recent years, growth in mobile gaming has been the dominant story in the games industry, with major publishers making big bets on mobile game developers.

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    Early last year, Take-Two bought mobile gaming firm Zynga for $12.7 billion. In 2016, the maker of Candy Crush Saga, King, was purchased by Activision Blizzard for $5.9 billion. U.S. tech giant Microsoft, meanwhile, is banking on continued growth in mobile gaming with its proposed $69 billion takeover of Activision Blizzard.

    That growth has been challenged lately by a number of macroeconomic headwinds, however, including a rise in the cost of living and higher interest rates.

    In 2020, Microsoft and Sony launched their respective next-generation gaming consoles, giving mobile more competition.

    Last year also saw a return to in-person activities and a normalization of travel rules from the height of the Covid-19 pandemic in 2020, when much of the world was hunkering down at home.

    Non-gaming apps proved more resilient in 2022, according to Data.ai’s research, with the value of purchases in such apps rising 6% year-over-year to $58 billion. The growth was driven mainly by subscriptions and in-app purchases in streaming platforms, dating apps and short-form video services like TikTok.

    Downloads of non-gaming apps grew 13% from the previous year, to 165 billion.

    That did little to offset the slump in mobile game spending, however, with spending across app stores slipping 2% to $167 billion. The figures include installs on third-party Android marketplaces in China, where Google’s official Play app store is banned.

    The market faces further headwinds in 2023, with recently introduced privacy measures from Apple expected to place greater strain on app makers.

    Apple launched its App Tracking Transparency feature, which gives users a prompt asking whether they wish to be targeted by advertisers, in 2021.

    Data.ai expects global app spend on games specifically to drop a further 3% to $107 billion this year as a result of decreased disposable income and changes to privacy.

    Google plans to adopt privacy curbs similar to Apple’s that would limit tracking across Android apps.

    “With limitations on your targeting capabilities from an advertiser standpoint, it becomes harder to attract the big whales who spend the most in games,” Sydow explained.

    The changes spell trouble for Meta, owner of the Facebook and Instagram social media platforms. Meta Chief Financial Officer David Wehner warned previously that Apple’s ATT could decrease its 2022 sales by $10 billion. The company made most of its $117.9 billion revenue in 2021 from advertising sales.

    Meta faces tense competition from rival firm TikTok. The Chinese-owned short video app last year reached $6 billion in overall lifetime spending and is only the second non-game app to achieve that milestone after Tinder, according to Data.ai.

    Sydow said the effects of Apple’s privacy measures hadn’t yet appeared in the 2022 numbers — with total spend dropping across both iOS and Google Play — but was likely to have a much greater impact this year.

    Despite the overall spending slowdown in 2022, there was still “more demand for mobile service than ever before,” Sydow added. First-time app downloads grew 11% to 255 billion, Data.ai said, while hours spent in apps climbed 9% to a record 4.1 trillion.

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  • Apple’s App Store growth is slowing down

    Apple’s App Store growth is slowing down

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    Tim Cook at WWDC21 on June 7th, 2021.

    Source: Apple

    Every January, Apple releases the total amount of money that App Store developers have earned since 2008, a data point that allows analysts and Apple investors to get an idea of how much money the App Store makes.

    This year’s disclosure suggests that Apple’s App Store growth has plateaued.

    On Tuesday, Apple said it has paid $320 billion to developers, up from $260 billion as of last year, a jump of $60 billion. Developers receive between 70% and 85% of gross sales, depending on if they qualify for Apple’s reduced rate.

    If all developers paid a 30% cut to Apple, Apple’s App Store grossed more than $85 billion in 2022, based on a CNBC analysis. If Apple’s commissions were all 15%, the App Store’s estimated gross would come in lower, around $70 billion.

    It’s the same amount of sales as Apple suggested with its data point last year, when the company said it had paid developers $60 billion in 2021.

    This is a rough estimation that could vary because it’s unclear how many developers pay the lower 15% cut, versus the 30% cut, and because the stats Apple shares are rounded.

    Attempts to extrapolate the size of the App Store business from developer earnings are inaccurate, Apple said, because the commission ranges from 15% to 30%, and the vast majority of developers pay the lower commission under the App Store Small Business Program that gives a lower cut to app makers who gross under $1 million per year.

    Apple said in its release that 2022 was a “record” year for the App Store, and revealed 900 million subscriptions, up from 745 million subscriptions in 2021. Apple’s stat includes anyone who subscribes to a service through Apple’s App store, not just its own first-party services like Apple TV+ and Music.

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    But Tuesday’s data point underscores that App Store growth slowed last year, which is important for investors because the App Store is a major part of Apple’s services business, and is a profit engine for the company.

    Apple’s services business grew in fiscal 2022 to $78.1 billion, a 14% increase. But that was a significant slowdown from the 27% growth rate the division posted in fiscal 2021.

    Apple is dealing with tough comparisons to elevated 2021 and 2020 app use and sales as people bought games and software while riding out the Covid pandemic. Apple is also facing consumer uncertainty around the world as interest rates rise and economists worry about a possible recession.

    Morgan Stanley analyst Erik Woodring has been following slowing App Store growth. App Store net revenue decreased for six straight months from June to November, according to his data, before growing again in December.

    Woodring wrote in a note this month that app sales will grow in 2023 because the year-over-year comparisons will be easier and as some app price increases in international markets late last year will start to benefit Apple.

    “While App Store growth remains near its lowest levels in history, and we acknowledge the global consumer remains challenged, we are encouraged to see growth trajectory continue to improve after bottoming in September,” Woodring wrote.

    Correction: Apple said in its release that 2022 was a “record” year for the App Store, and revealed 900 million subscriptions, up from 745 million subscriptions in 2021. An earlier version misstated a year.

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  • Deere gives farmers long-sought ability to repair their own tractors | CNN Business

    Deere gives farmers long-sought ability to repair their own tractors | CNN Business

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    Washington
    CNN
     — 

    US farmers will have the right to repair tractors and other agricultural equipment from John Deere without having to use the manufacturer’s own parts and facilities, under an agreement the company signed Sunday with farm industry representatives.

    The agreement marks a major victory for farmer and consumer advocacy groups, who have complained for years about the repair limitations Deere has imposed on its products and technology, from software locks to requirements to use official dealers for repairs. The restrictions have inspired multiple lawsuits against the company and created a high-profile public relations headache in which farmers have accused Deere of interfering with their ability to plant and harvest crops on a timely basis.

    The memorandum of understanding with the American Farm Bureau Federation (AFBF) gives farmers access to the same Deere documentation, data and diagnostic tools used by the company’s authorized repair shops. Farmers will be able to diagnose and fix broken down equipment on their own or by choosing an independent repair facility, which will also have access to the proprietary tools and data on the same fair and reasonable terms, according to the MOU.

    In exchange, AFBF officials agreed not to push for state or federal legislation promoting users’ right to repair products they’ve leased or purchased. Under the MOU, farmers and third-party repair shops may not disable on-board safety features or use their access to Deere’s technology to illegally copy the software controlling their equipment.

    The voluntary deal safeguards Deere’s intellectual property while giving farmers more control of their own business, said Zippy Duvall, president of AFBF.

    “A piece of equipment is a major investment,” Duvall said in a statement. “Farmers must have the freedom to choose where equipment is repaired, or to repair it themselves, to help control costs.”

    John Deere’s SVP of agriculture and turf marketing, David Gilmore, said in a statement that the agreement reflects the “longstanding commitment Deere has made to ensure our customers have the diagnostic tools and information they need to make many repairs to their machines. We look forward to working alongside the American Farm Bureau and our customers in the months and years ahead to ensure farmers continue to have the tools and resources to diagnose, maintain and repair their equipment.”

    The MOU aims to resolve longstanding claims that the requirement to use authorized dealerships can interfere with agricultural production, harming farmers and disrupting the food supply chain. Farmers have said having to wait days or weeks for an official repair can undermine planting and harvesting schedules. Some advocacy groups have blamed the delays on consolidation in tractor dealerships, the majority of which are controlled by Deere, according to the US Public Interest Research Group (PIRG).

    “There is one John Deere dealership chain for every 12,018 farms and every 5.3 million acres of American farmland,” the group wrote in a report last year.

    The agricultural industry has become a battleground in the wider movement for the so-called right to repair movement, which focuses not only on farm equipment but also on consumer electronics such as smartphones, tablets, computers and even household appliances. A notable target of complaints has been Apple, which is known for shipping ultra-thin devices sealed with special glue or with unremovable components including batteries and memory chips. Apple has said for years that customers should rely on authorized repair facilities, citing potential dangers to users and their devices if they attempt their own maintenance.

    The issue has won the attention of the Biden administration: In 2021, a White House executive order called on the Federal Trade Commission to develop new rules to promote the right to repair. In response, the FTC vowed to “root out” illegal repair restrictions. Months later, Apple announced a self-service repair program allowing users to fix their own iPhones and Macs using Apple-made tools and parts.

    Last month, New York became the first US state to enact a right-to-repair law. Since 2000, US lawmakers have introduced more than a dozen bills dealing with the right to repair, focusing on automobiles, farm equipment and repairs of medical devices during the Covid-19 pandemic.

    With Sunday’s MOU, however, the tension between farmers and Deere has been resolved without the need for regulation or legislation, the agreement said.

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  • More mainland Chinese firms will take away market share from Taiwan iPhone suppliers: Investment firm

    More mainland Chinese firms will take away market share from Taiwan iPhone suppliers: Investment firm

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    “Chinese companies are getting pretty competitive for iPhone assemblers. China is doing quite well in pretty much everything, except semiconductors,” Kirk Yang, chairman and CEO of Kirkland Capital, told CNBC’s “Squawk Box Asia” Friday.

    CFOTO | Future Publishing | Getty Images

    More mainland Chinese electronics manufacturing companies are set to take away market share from Taiwanese counterparts such as Foxconn and Pegatron, an investment fund manager said.

    “Chinese companies are getting pretty competitive for iPhone assemblers. China is doing quite well in pretty much everything, except semiconductors,” Kirk Yang, chairman and CEO of Kirkland Capital, told CNBC’s “Squawk Box Asia” Friday.

    “So that’s why eventually, you are going to see more and more Chinese companies taking market share away from Taiwanese electronic companies,” Yang added.

    Apple‘s largest supplier Foxconn, also known as Hon Hai, is facing competition from China’s Luxshare, which was reportedly awarded a contract to produce premium iPhone models in China.

    That comes after Foxconn posted record unaudited revenue in 2022 and reported that output at its iPhone plant in China had “basically returned to normal.”

    Read more about tech and crypto from CNBC Pro

    Luxshare has been producing a small quantity of the iPhone 14 Pro Max model at its Kunshan plant, the Financial Times reported, as Foxconn’s Zhengzhou factory faced Covid restrictions and labor unrest last year.

    Founded in 2004 by a former Foxconn worker, Luxshare makes connector cables for the iPhone and MacBook, and also manufactures AirPods.

    Yang added that with China-Taiwan geopolitical tensions, Taiwanese companies on the mainland have seen a lot of pressure in the last five years. “A lot of them are moving out of China,” Yang said.

    That’s why Apple has to diversify, he said, adding that the U.S.-China tech war is also prompting companies to move even faster out of mainland China.

    Furthermore, Chinese companies such as Luxshare have the Hong Kong advantage, Yang said.

    “They can probably hire people [more easily than non-Chinese companies] and get better tax incentives. After local companies learn how to make products in a similar quality, at a cheaper price, they will be taking market share.”

    In mid-2021, Nikkei Asia reported that mainland China overtook Taiwan to become Apple’s biggest source of suppliers.

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  • Cramer: This market is split in two and only one part is worth owning right now

    Cramer: This market is split in two and only one part is worth owning right now

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    Jim Cramer at the NYSE, June 30, 2022.

    Virginia Sherwood | CNBC

    Hardly a day goes by without someone asking me, “Why do you like Jay Powell so much?” He will question whether I am somehow buddies with the Federal Reserve chair, or assume I knew him before he got the job.

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  • Did the market already show its hand in the first week of 2023? What we’ve learned so far

    Did the market already show its hand in the first week of 2023? What we’ve learned so far

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  • Vince McMahon is back at WWE to ensure a smooth sale process. Here’s who might want to buy it

    Vince McMahon is back at WWE to ensure a smooth sale process. Here’s who might want to buy it

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    World Wrestling Entertainment Inc. Chairman Vince McMahon is introduced during the WWE Monday Night Raw show at the Thomas & Mack Center August 24, 2009 in Las Vegas, Nevada.

    Ethan Miller | Getty Images

    Vince McMahon has returned to the World Wrestling Entertainment board of directors to facilitate potential sale talks ahead of the company’s media rights renewal.

    The notion of WWE selling isn’t new. CNBC reported it looked like a sale target in April and that it appeared only more attractive in July after a sexual misconduct scandal. The rationale is fairly straightforward: WWE is valuable intellectual property.

    Owning IP allows streaming services to exclusively offer content without the annoyance of winning licensing rights in an auction every few years. WWE also has value to offer in merchandising and theme park businesses.

    WWE has hired JPMorgan to help the company advise on a potential sale, according to people familiar with the matter. JPMorgan declined to comment. A WWE spokesman couldn’t immediately be reached for comment.

    If a deal occurs, it would likely occur in the next three to six months, said the people, who asked not to be named because the discussions are private. WWE plans to talk to potential buyers before it makes a decision on TV rights renewal agreements.

    Facilitating a sale

    McMahon’s return should help a sale process go smoothly, though there could still be hiccups.

    The former CEO and chair is 77 years old and the controlling shareholder of WWE. He stepped down after an investigation found that he had paid nearly $15 million to four women over 16 years to quell claims of alleged sexual misconduct and infidelity. Returning to the board will give potential buyers confidence he’s supportive of the details of any transaction.

    “My return will allow WWE, as well as any transaction counterparties, to engage in these processes knowing they will have the support of the controlling shareholder,” McMahon said in a statement Thursday.

    McMahon’s return doesn’t affect current leadership. McMahon’s daughter, Stephanie, and former CAA agent Nick Khan are co-CEOs. But it remains unclear what type of role, if any, McMahon would want at WWE if he sold the company. WWE has told investors that McMahon’s role at the company is essential in “our ability to create popular characters and creative storylines.” Currently, McMahon doesn’t have a formal say in the company’s creative direction.

    Mansoor (bottom) competes with Mustafa Ali during the World Wrestling Entertainment (WWE) Crown Jewel pay-per-view in the Saudi capital Riyadh on October 21, 2021.

    Fayez Nureldine | AFP | Getty Images

    Whether a buyer would be comfortable with McMahon taking a more hands-on role at the company is unknown. But WWE is McMahon’s life work. It’s possible a sale may only happen with at least some strings attached.

    WWE has a market capitalization of more than $6 billion after rising nearly 17% percent on Friday, buoyed by heightened sale speculation.

    There are three categories of likely buyers for WWE — the legacy media companies, the streamers and the entertainment holding companies. Here’s who might be interested.

    Comcast

    Comcast, which owns NBCUniversal, is a potential fit as a buyer for WWE. McMahon’s company already has an exclusive streaming deal with Comcast’s streaming service, Peacock, and a cable TV deal with NBCUniversal’s USA Network. Comcast has a market capitalization of more than $160 billion and can easily afford the company — especially with a $9 billion (or more) check coming as soon as January 2024 from Disney for a 33% stake in Hulu.

    Comcast can lock up WWE in perpetuity without having to pay upcoming rights renewal increases and can use the company’s IP for theme parks, movies and other spinoff series.

    Still, Comcast CEO Brian Roberts said in October “the bar is the highest it’s been in terms of M&A” and has repeatedly said the company isn’t in a rush to pursue an acquisition.

    Fox

    Disney

    Returning CEO Bob Iger may want to make a splashy acquisition as he retakes the throne at Disney. WWE fits Disney in the same ways that it fits Comcast. It would bolster Disney’s streaming ambitions (perhaps ESPN+), it would support the linear network business, and it would add some heft to merchandizing and theme park businesses.

    Comcast didn’t want Disney walking away with Fox in 2019 and drove up the price by tens of billions by topping Iger’s initial bid. Could Iger see WWE as the next IP battle between Disney and his rival Comcast?

    Disney CEO, Bob Iger attends the European film premiere of ‘Star Wars: The Rise of Skywalker’ at Cineworld Leicester Square on 18 December, 2019 in London, England.

    Wiktor Szymanowicz | Future Publishing | Getty Images

    Warner Bros. Discovery

    Netflix

    Netflix has long shied away from sports and other live events, but it’s recently become open to the idea of owning a league outright or taking an ownership stake. Owning a sports league would give Netflix the ability to create video games and spinoff series without friction. Netflix found success in its Formula 1 “Drive to Survive” documentary series, giving co-CEO Reed Hastings faith that certain sports properties will resonate with Netflix’s huge global audience. But Netflix doesn’t own Formula 1, limiting its future options.

    Acquiring WWE or another sports league would be a path toward offering live entertainment without renting content — similar to Zaslav’s thinking.

    “We’ve not seen a profit path to renting big sports,” said co-CEO Ted Sarandos last month at the UBS Global TMT Conference. “We’re not anti-sports; we’re just pro-profit.”

    Amazon

    Endeavor Group Holdings

    Endeavor, run by superagent Ari Emanuel, could add WWE to its stable of assets after agreeing to buy 100% of UFC in 2021.

    Emanuel bought UFC to increase the scope of the talent agency’s business to live events. WME-IMG, now just a part of Endeavor, represents many UFC athletes — as well as WWE superstars. The UFC deal has been a success for Endeavor, which paid about seven times 2016’s $600 million revenue in 2016. UFC generated more than $1 billion in revenue in 2022.

    Ari Emanuel speaks onstage during the 2017 LACMA Art + Film Gala Honoring Mark Bradford and George Lucas presented by Gucci at LACMA on November 4, 2017 in Los Angeles, California. 

    Stefanie Keenan | Getty Images Entertainment | Getty Images

    Endeavor’s enterprise value of just about $11 billion makes WWE a huge swing for the company. The company’s relatively small balance sheet would likely prevent Endeavor from winning a bidding war against media giants. But McMahon’s outsized personality may fit with the brash Emanuel and UFC President Dana White.

    Selling to a third party would also allow WWE to increase rights renewals every few years. That may or may not be a positive for the long-term future of the company as the media distribution ecosystem changes.

    Liberty Media

    While Endeavor owns UFC, Liberty’s Formula One Group owns Formula 1. John Malone, Liberty’s controlling shareholder, and CEO Greg Maffei, along with Formula 1 CEO Stefano Domenicali, have figured out how to globally market the car racing league, including cracking American culture after decades of obscurity.

    Malone and Maffei have extensive track records at maximizing media valuations and acquiring media assets for less than $10 billion, including Formula 1, Sirius XM and Pandora. The global success of Formula 1 could provide a roadmap for a future WWE strategy.

    Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.

    WATCH: Jim Cramer gives his take on how Disney could perform this year

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  • California forces companies to show pay on job listings, revealing big tech salaries

    California forces companies to show pay on job listings, revealing big tech salaries

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    Steve Proehl | Corbis Unreleased | Getty Images

    A new law that went into effect this week requires most California employers to disclose salaries on job listings.

    The law affects every company with more than 15 employees looking to fill a job that could be performed from the state of California. It covers hourly and temporary work, all the way up to openings for highly paid technology executives.

    That means it’s now possible to know the salaries top tech companies pay their workers. For example:

    Notably, these salary listings do not include any bonuses or equity grants, which many tech companies use to attract and retain employees.

    California is the latest and biggest of the states and cities that have enacted pay transparency laws, including Colorado and New York City. But more than 20% of Fortune 500 companies are based in California, including leaders in technology and media, and advocates hope that California’s new law will be the tipping point that turns posting salary information into standard practice.

    In the U.S., there are now 13 cities and states that require employers to share salary information, covering about 1 in 4 workers, according to Payscale, a software firm focusing on salary comparison.

    California’s pay transparency law is intended to reduce gender and race pay gaps and help minorities and women better compete in the labor market. For example, people can compare their current pay with job listings with the same job title and see if they’re being underpaid.

    Women earn about 83 cents for every dollar a man earns, according to the U.S. Census.

    “You’re going to need a lot of different elements in place in order for men and women to get paid the same for the same amount of work and the same experience,” said Monique Limón, the California state senator who sponsored the new law. “And one of those is transparency around salary ranges.”

    But the new disclosures under the law might not tell the whole story of what a job pays. Companies can choose to display wide pay ranges, violating the spirit of the law, and the law doesn’t require companies to reveal bonuses or equity compensation.

    The law could also penalize ambitious workers who are gunning for more money because of their experience or skills, the California Chamber of Commerce said last year when opposing the bill. Some employers might be wary of posting pay to prevent bidding wars for top talent.

    In a comment to CNBC, a Meta spokesperson said, “To ensure fairness and eliminate bias in our compensation systems, we regularly conduct pay equity analysis, and our latest analysis confirms that we continue to have pay equity across genders globally and by race in the US for people in similar jobs.” The firm also noted that it generally pays full-time employees in equity as well as cash.

    Apple and Google did not immediately respond to requests for comment.

    The new law

    There are two primary components to California Senate Bill No. 1162, which was passed in September and went into effect Jan. 1.

    First is the pay transparency component on job listings, which applies to any company with more than 15 employees if the job could be done in California.

    The second part requires companies with more than 100 employees to submit a pay data report to the state of California with detailed salary information broken down by race, sex and job category. Companies have to provide a similar report on the federal level, but California now requires more details.

    Employers are required to maintain detailed records of each job title and its wage history, and California’s labor commissioner can inspect those records. California can enforce the law through fines and can investigate violations. The reports won’t be published publicly under the new law.

    Limón said the bill helps narrow pay gaps by giving information to people so they can negotiate their pay better or determine if they are being underpaid for their experience and skills. It will also help the state make sure companies are following existing equal pay laws.

    “The reason this is important is that we are not able to address problems that we cannot see,” she said.

    Limón said she also hopes that the requirement will help California companies recruit the best talent and compete against other states that don’t require employers to post salaries.

    Pay transparency laws could also spur companies to raise wages after they see that rivals are offering higher salaries. Some companies could even choose to post salary ranges on job listings where it’s not required.

    Ultimately, she said, helping to ensure women and people of color are getting paid equally will help California’s economy.

    “The consequence is not just for an individual; there are economic consequences for the state for people being underpaid,” Limón said. “That means that their earning power and how they’re able to contribute to this economy in California, whether it’s through a sales market, a housing market, through investment, is limited, because they are not being paid equitably.”

    Loopholes

    The new law doesn’t require employers to post total compensation, meaning that companies can leave out information about stock grants and bonuses, offering an incomplete picture for some highly paid jobs.

    For high-paying jobs in the technology industry, equity compensation in the form of restricted stock units can make up a large percentage of an employee’s take-home pay. In industries such as finance, bonuses make up a big portion of annual pay.

    “Especially for tech employees, ultimately people want to know how much they’re getting in total compensation,” said Zuhayeer Musa, co-founder of Levels.fyi, a firm focused on recruiting and coaching for technology workers which crowdsources compensation. “Sometimes stock compensation can be more than 50% of your actual total comp.”

    Musa said stock from big tech companies is basically liquid because it can be immediately sold on the stock market.

    The new law also allows companies to provide wide ranges for pay, sometimes ranging over $100,000 or more between the lowest salary and the highest salary for a position. That seemingly violates the spirit of the law, but companies say the ranges are realistic because base pay can vary widely depending on skills, qualifications, experience and location.

    Companies may be open to hiring candidates with a range of experience — starting from entry level to a more senior person — for a particular opening, said Lulu Seikaly, senior corporate attorney at Payscale.

    Seikaly said she recommends clients post job listings with a specific seniority level to narrow the potential pay range.

    “When we talk to customers, and they ask what do you think is a good-faith range, we tell them that’s a business decision, but the way we would do it, especially from the legal side, if you post by levels, that’s going to cover you a lot more than posting one wide range,” Seikaly said.

    Some California companies are not listing salaries for jobs clearly intended to be performed in other states, but advocates hope California’s new law could spark more salary disclosures around the country. After all, a job listing with an explicit starting salary or range is likely to attract more candidates than one with unclear pay.

    “I was telling some folks this morning that pay transparency right now is kind of the exception,” Seikaly said. “Give it five to 10 years, I think it’ll end up being the norm.”

    Gender pay gap remains despite more women entering the work force

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  • Apple is raising the price of iPhone battery replacements | CNN Business

    Apple is raising the price of iPhone battery replacements | CNN Business

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    CNN
     — 

    Apple is raising the price of battery replacements for all out-of-warranty iPhone models prior to the current iPhone 14 lineup, the company confirmed on its website.

    Starting March 1, Apple

    (AAPL)     will charge $89 for battery replacements for iPhone X through iPhone 13 models, a $20 increase from the current price of a new battery. Battery replacements for other models, such as the iPhone SE and iPhone 8, will jump from $49 to $69.

    Apple is also raising the cost of replacing batteries for other products. Batteries for newer iPad models will cost $20 more, while it will cost $30 more for a new MacBook Air battery and $50 more for MacBook Pro models.

    Apple devices typically come with one year of warranty. The changes only apply to customers who are not part of its AppleCare+ repair service program, which provides up to two or three years of coverage and varies in cost depending on product.

    Apple first lowered the price of iPhone battery replacements from $79 to $29 in 2018, after it was discovered that the company deliberately slowed down the performance of older iPhones to prevent sudden battery shutdowns. In response to the controversy, dubbed batterygate, Apple also issued a rare apology and agreed to a $113 million settlement with dozens of states.

    In raising prices now, Apple may be responding to an uptick in the cost of products amid rising inflation and supply chain issues. By taking this step, Apple could also make it less attractive for customers to delay upgrading their devices or drive them to pay for the repair service program.

    The news comes as Apple’s market cap fell below $2 trillion in trading on Tuesday for the first time since early 2021 and one year to the day after the company became the first public tech company valued at $3 trillion.

    Like other tech companies, Apple has grappled with supply chain hiccups and concerns that recession fears could weigh on advertiser and consumer spending, including for pricier products like the iPhone.

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  • Inflation fears fade as geopolitical risks rise | CNN Business

    Inflation fears fade as geopolitical risks rise | CNN Business

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    A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here. You can listen to an audio version of the newsletter by clicking the same link.


    New York
    CNN
     — 

    Inflation fears roiled the markets in 2022. Now, investors may have scarier things to worry about in 2023, according to a report from global research and consulting firm Eurasia Group. Most notable? Concerns about the increasingly chaotic geopolitical landscape.

    “Inflation shockwaves” still feature as one of Eurasia’s top political risks for 2023 in a new report.

    But perhaps surprisingly, inflation ranks fourth on the list, behind worries about a rogue Russia under the leadership of Vladimir Putin and Xi Jinping’s consolidation of power in China.

    Eurasia’s third biggest fear — the increased use of artificial intelligence technology to wreak havoc on the global economy — only adds to jitters about disruption from Russia and China. Eurasia called AI “a gift to autocrats.”

    Eurasia, led by political scientist and author Ian Bremmer, pointed out that Russia’s war with Ukraine may become an even bigger problem for the United States and Europe.

    “Nuclear saber-rattling by Moscow will intensify. Putin’s threats will become more explicit,” Eurasia said in its report. It is also concerned that “Kremlin-affiliated hackers will ramp up cyberattacks on Western firms and governments.”

    That could mean attempts to disrupt oil pipelines, American and European satellites and other telecom and tech infrastructure, as well as further efforts to influence and sabotage global elections.

    “Moscow will step up its rogue behavior…with newly empowered influence operations targeting NATO countries,” Eurasia said in the report.

    Eurasia pointed to upcoming Polish elections in 2023 as “the most obvious target” but that other Western nations “will be vulnerable, too.”

    Autocracy in China is a potential economic and market headache as well.

    “Xi’s drive for state control will produce arbitrary decisions and policy volatility. China’s economy is in a fragile state after two years of harsh Covid-19 controls,” Eurasia noted, pointing out that “plummeting homebuyer and market sentiment have ground growth in the critical real estate sector to a halt, depleting local government revenue.”

    Eurasia added that the “backdrop of weakening global growth and deepening domestic challenges demands competent economic management from Beijing.” Instead, “the Chinese leadership is delivering opacity and unpredictability.”

    Chinese officials announced in October that they were delaying the release of key economic data, news that Eurasia said “was an ominous sign of things to come for global markets.”

    All of this uncertainty comes as China continues to face the growing Covid outbreak in the country. Eurasia fears that “if a severe new strain of Covid were to emerge,” it is “more likely that it would spread widely in China and beyond.

    “China would be unlikely to identify the new variant because of reduced testing and sequencing, to recognize more severe disease due to an overwhelmed health system, and to let news of a more severe variant get out given Xi’s track record on transparency,’ Eurasia said. “The world would have little or no time to prepare for a deadlier virus.”

    Meanwhile, Eurasia also is worried that Beijing “will deploy new technologies not only to tighten surveillance and control of its own society, but also to spread propaganda on social media and intimidate Chinese language communities overseas.”

    None of this is to suggest that worries about rising prices have dissipated.

    While inflation is listed as the fourth-biggest risk, Eurasia is still concerned that “rising interest rates and global recession will raise the risk of emerging-market crises.”

    Energy prices in particular will remain a sticking point for the global markets and economy as Eurasia notes that “higher oil prices will also increase frictions between OPEC+ and the United States.”

    And Eurasia also listed concerns about instability in Iran, shrinking water levels and economic inequality as major global challenges.

    Then there’s another new and distinctly 21st century worry: the rise of social media.

    “Gen Z has both the ability and the motivation to organize online to reshape corporate and public policy, making life harder for multinationals everywhere and disrupting politics with the click of a button,” Eurasia said, referring to the phenomenon as the “Tik Tok Boom.”

    Sam Bankman-Fried, the disgraced founder of bankrupt crypto exchange FTX, had another day in court on Tuesday.

    Bankman-Fried, more commonly referred to by his initials, SBF, plead “not guilty” to charges ranging from wire fraud and conspiracy to commit money laundering to conspiracy by misusing customer funds.

    SBF appeared in a Manhattan court Tuesday after he was arrested last month in the Bahamas, extradited to the United States and then released by a judge on a $250 million bail package. But as my colleague Kara Scannell reports, the legal drama for SBF is only beginning. The judge set a trial date of October 2.

    Prosecutors allege that SBF was in charge of “one of the biggest financial frauds in American history.” They claim that he moved (or stole) billions of dollars from FTX customers to cover losses at the firm’s companion hedge fund, Alameda Research.

    The cryptocurrency world was already in turmoil before FTX imploded. The prices of bitcoin, ethereum and other digital coins all plummeted in 2022. But FTX and Alameda were each forced to file for bankruptcy in December after investors rushed to pull deposits.

    FTX was once valued at $32 billion, based on funding from private investors. The company was expected to be one of the hottest initial public offerings of 2023 as recently as the middle of last year. Not any more.

    Covid woes hurt Apple

    (AAPL)     last year, as the world’s largest iPhone factory in China faced production disruptions since October due to the pandemic.

    But the giant campus, owned by top Apple supplier Foxconn, is reportedly now back at 90% production capacity following worker protests and Covid-related restrictions.

    Apple needs to get more of its latest smartphones into people’s pockets. Delays with the various iPhone 14 models have cost the company — and its investors — dearly.

    Wedbush Securities analyst Dan Ives estimated in November that disruptions in China led to about $1 billion a week in lost revenue.

    And analysts at UBS also said in November that wait times for the new iPhone 14 Pro and 14 Pro Max in the US were more than a month long due to supply chain woes. That couldn’t have come at a worse time since it was just before Christmas and other winter holidays.

    Apple’s stock had a tough 2022, like the rest of Big Tech, and it didn’t start off 2023 in a festive fashion either. Shares of Apple hit a new 52-week low Tuesday. Apple’s market value dipped below $2 trillion in the process. Just a year ago, Apple was the first company in the world to reach a $3 trillion market valuation.

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  • Tesla stock wipes out three-day bounce, falls to lowest price in more than 2 years

    Tesla stock wipes out three-day bounce, falls to lowest price in more than 2 years

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    It has taken just one day for Tesla Inc.’s stock to erase the entire bounce it enjoyed over the last three days trading sessions of 2022, as disappointing deliveries data helped trigger the biggest selloff in more than two years.

    The stock’s
    TSLA,
    -12.24%
    Tuesday drop knocked the electric vehicle maker’s market capitalization to 15th on the list of most valuation S&P 500 index companies.

    On Tuesday, Tesla’s market cap fell below that of consumer products company Procter & Gamble Co.
    PG,
    +0.01%    ,
    with a current market cap of $359.18 billion, and was just below Nvidia Corp.
    NVDA,
    -2.05%
    at $352.15 billion, according to FactSet data. Tesla sat just above Chevron Corp.
    CVX,
    -3.06%    ,
    which was at $336.43 billion. (See list of S&P 500’s 20 most valuable companies as of Tuesday’s closing prices below.)

    Tesla’s stock took a $15.08, or 12.2% dive, to $108.10 on Tuesday, to lead the S&P 500’s
    SPX,
    -0.40%
    decliners, after the company reported over the weekend that fourth-quarter deliveries that came up short of expectations for the third quarter in a row. It suffered the biggest one-day decline since it plummeted 21.1% on Sept. 8, 2020, and closed at the lowest price since Aug. 13, 2020.

    Don’t miss: Tesla delivery-target miss shows ‘demand cracks clearly happening’ that mean ‘numbers could be materially reset’ for coming years, analysts write.

    With about 3.16 billion shares outstanding as of Oct. 18, the stock’s decline shaved about $47.62 billion off Tesla’s market cap, to bring it down to $341.35 billion. That’s a far cry from the peak market cap of $1.24 trillion reached exactly one-year ago.

    After the stock hit the deepest oversold reading in its history based on the widely followed Relative Strength Index momentum indicator on Dec. 27, following the longest losing streak in more than four years, it ran up $14.08, or 12.9%, over the past three days.

    If there’s a bright side to Tuesday’s stock selloff, it’s that even though the price fell below the Dec. 27 closing price, the RSI ended the day at 24.86, which is up from the Dec. 27 record low of 16.56.

    That could be a preliminary sign of what chart watchers call “bullish technical divergence,” which is when prices make lower lows while the RSI makes a higher low. It’s still rather early to make that determination, however, as the stock needs to start bouncing again to see if RSI bottoms above the previous low.

    Market caps of the Top 20 most valuable S&P 500 companies:

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  • Apple valued below $2 trillion for the first time in more than 21 months as stock slides

    Apple valued below $2 trillion for the first time in more than 21 months as stock slides

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    Apple Inc. finished Tuesday with a valuation below $2 trillion for the first time in more than 21 months amid a continued slide in its stock that reflects concerns about the impact of production issues and the sustainability of consumer demand.

    The smartphone giant was valued at $1.990 trillion as of the end of Tuesday trading. Prior to that, Apple hadn’t closed with a valuation south of $2 trillion since March 8, 2021, according to Dow Jones Market Data, and its stock price hasn’t implied an intraday valuation below that level since March 30, 2021.

    The slide in Apple shares
    AAPL,
    -3.74%
    over the past year has shaved $996.5 billion from the company’s peak closing market capitalization.

    The smartphone giant peaked with a closing valuation of $2.986 trillion exactly a year ago, on Jan. 3, 2022. More recently, the company has been dogged by questions about the impact of manufacturing issues in China, where COVID-19 curbs forced production disruptions late last year.

    While the company is typically thought to have durable demand on the assumption that customers will delay purchases or put up with long delivery times in order to obtain desired Apple products, some analysts have questioned whether Apple will be able to make up for all of its lost demand in future quarters.

    A Nikkei Asia report from earlier this week hinted at demand challenges. The report, which cited anonymous sources, said that Apple has told some of its suppliers to make fewer components for AirPods, Apple Watches and MacBook computers in the first quarter.

    Apple didn’t respond to a MarketWatch request for comment.

    Apple’s stock was the biggest loser in the Dow Jones Industrial Average
    DJIA,
    -0.03%
    Tuesday.

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