Tag: Apple Inc

October 28, 2022

An Apple and Tesla exec who quit to build his own startup now has a star-studded list of investors

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The opportunity to work for not just one but two tech giants was “very rewarding” for Sukemasa Kabayama.

After a seven-year stint at Lego Japan, he became Apple‘s director of education and launched the use of the iPad in Japanese schools.

Then came an opportunity Kabayama said he “couldn’t pass up” — to be Tesla‘s first president in Japan, where he directly reported to Elon Musk.

Helming the launch of the electric vehicle maker’s Model S was no small feat, but Kabayama was hungry for more.

He wanted to be an entrepreneur.

I was thinking, it would be much more exciting to really build something from scratch, from the ground up.

Sukemasa Kabayama

Co-founder and CEO, Uplift Labs

“[I was] really in charge of sales and marketing, versus having very little effectiveness on the product,” the 53-year-old told CNBC Make It.

“I was thinking, it would be much more exciting to really build something from scratch, from the ground up.”

In 2016, he moved to Silicon Valley, in the hopes of building “category-defining” products like Steve Jobs and Musk did.

Six years on, Kabayama may be one step closer to that goal. His health startup Uplift Labs, which was founded in 2017, is a platform powered by artificial intelligence that tracks and analyzes movement in 3D.

According to the company, it has since been adopted by some MLB teams and the NBA to improve movement performance of athletes, while minimizing injuries.

Uplift Labs also provides auto-generated reports to allow coaches and physical therapists to track an athlete’s or patient’s progress over time, said Sukemasa Kabayama.

Uplift Labs

“A lot of professional sports teams have these indoor multi-camera labs that allow accurate motion capture,” said the co-founder and CEO of Uplift.

“But, [with Uplift Labs] … all you need at the moment is only two iPhones or two iPads. It’s portable and we can capture the action whether it’s on the field, on the court, or in the batting cage.”

The startup says it has raised $8.5 million, with a star-studded list of investors including NBA star Seth Curry, NFL player David DeCastro and Deepcore, a SoftBank subsidiary.

With more than 17 years of experience under his belt, Kabayama has three tips for running a company. CNBC Make It finds out what they are.

1. Attention to detail

Working for Apple and Tesla has given Kabayama an inside look into what it takes to build successful products.

“While the culture at Apple and Tesla was not exactly the same, [there’s a] commonality, which is the need to really understand your business at a detailed level,” he said.

Kabayama cited one example: the attention to detail in the user experience, which is “exceptional and second to none” for both companies.

“For example, if you buy a new iPhone, the lid of the box is designed for a ‘slow release’ to build the anticipation of the unboxing moment of your new phone,” he said.

“The cellophane wrap is designed to easily use your finger to remove unlike many other products where you struggle with scissors or your nails. That’s just the unboxing.”

2. Relentless focus

For early-stage startups, the key to success is all about product market fit, said Kabayama.

That trusty litmus test is something that he falls back on: “If you were to suddenly take your product or your solution away from them, can they live without it?”

“Relentless focus is so important … really understand which customer segment you’re going after, what are their pain points, and do you really have an effective solution to help address that?”

Being vision-driven really rallies the troops. All that hard work that you do is going towards a common greater good.

Sukemasa Kabayama

Co-founder and CEO, Uplift Labs

Kabayama added that while companies like Apple and Tesla already have “significant market share impact,” it’s having a “big vision” that will push the envelope.

“They’re all very purpose-driven … or better yet, vision-driven. Just take Tesla for example, the company’s vision is to accelerate the world to more sustainable transport.”

“Being vision-driven really rallies the troops. All that hard work that you do is going towards a common greater good.”

3. Accept feedback

Something that Kabayama loves doing for his company? Getting on as many client calls as possible, he said.

“What makes my heart sing is really hearing what they love about the product, but also hearing what we can do better.”

He added, quoting LinkedIn co-founder Reid Hoffman: “There’s nothing like tough love … you’d rather have 10, or even 100 passionate users than 100,000 users that are like, ‘The product’s okay.’”

What keeps Kabayama going is providing “a critical missing piece” in understanding how athletes at all levels move naturally.

Uplift Labs was founded by Sukemasa Kabayama, Jonathan Wills (left) and Rahul Rajan (right).

Uplift Labs

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Apple earnings beat as record back-to-school Mac sales outweigh a slight miss on iPhones

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At the end of a woeful week for Big Tech earnings, Apple Inc. managed to top expectations on revenue and earnings with the help of Macs selling at a record pace during the back-to-school season, which outweighed a slight miss on iPhone sales.

Apple
AAPL,
-3.05%
shares bounced between slight gains and losses in after-hours action Thursday, even as executives projected that revenue growth could slow in the holiday quarter. As has been the case throughout the COVID-19 pandemic, Apple executives declined to offer a traditional financial forecast, but Chief Financial Officer Luca Maestri told investors on a conference call that they expect a sequential slowdown in growth during the December quarter, driven in part by sharp currency impacts, tough comparisons for the Mac business and pressures on the services business.

The smartphone giant’s revenue grew 8% in its fiscal fourth quarter, to $90.1 billion from $83.4 billion a year earlier, and came in ahead of the FactSet consensus of $88.7 billion. Apple generated $42.6 billion in its biggest business, iPhone sales, up from $38.9 billion a year before, but analysts were projecting $43.0 billion.

A big driver of the upside came from Apple’s
AAPL,
-3.05%
Mac segment, which posted a massive beat even as iPhone sales came up light. The Mac business set an all-time quarterly revenue record at $11.5 billion in the back-to-school quarter, up from $9.2 billion a year before and easily above the FactSet consensus, which called for $9.3 billion.

Chief Executive Tim Cook explained on the call that the Mac category benefited from the launch of the MacBook Air with Apple’s custom M2 chip, as well as easing supply constraints that allowed Apple to meet a prior demand backlog. Maestri said he expects that Mac revenue will “decline substantially” on a year-over-year basis in the December quarter, however, as that period faces tough comparisons.

A key question coming into Apple’s report was how demand for the company’s new iPhone 14 line has held up, especially given reports that the company has scaled back earlier production goals. Cook shared that while it was still early, “consumer demand was strong and better than we anticipated that it would be.”

The company is supply-constrained on the iPhone 14 Pro and iPhone 14 Pro Max models, Cook said, adding that it is difficult for the company to “determine the accurate mix” of its phones until it is able to fulfill all of its demand.

Revenue performance across Apple’s product lines was mixed. While Mac sales were strong, iPad revenue fell to $7.2 billion from $8.3 billion, whereas analysts were modeling $7.8 billion in iPad revenue. That category saw “opposite” trends relative to the Mac business in that iPads were up against an “exceptionally strong iPad quarter” from a year before that included a product launch.

The company raked in $9.7 billion in revenue across its wearables, home and accessories category, up from $8.8 billion in the same period a year ago. Analysts had expected revenue of $9.2 billion.

Services revenue climbed to $19.2 billion from $18.3 billion but fell short of the FactSet consensus, which was for $20.0 billion. Maestri shared that while he expects the segment to grow in the December quarter, the business could be impacted by pressures on advertising and gaming, as well as foreign-exchange effects.

For the latest quarter, Apple recorded net income of $20.7 billion, or $1.29 a share, compared with $20.6 billion, or $1.24 a share, in the year-earlier period. Analysts tracked by FactSet were expecting $1.27 a share in earnings.

If Apple’s stock managed to hold gains through Friday’s close, it would likely be the only Big Tech company to see positive post-earnings stock performance this week. Shares of Microsoft Corp.
MSFT,
-1.98%,
Alphabet Inc.
GOOG,
-2.34%

GOOGL,
-2.85%,
and Meta Platforms Inc.
META,
-24.56%
each posted sharp declines in the session after their respective reports, and Amazon.com Inc.
AMZN,
-4.06%
shares were off 12% in late trading Thursday.

Shares of Apple have lost 18% so far this year, as the Dow Jones Industrial Average
DJIA,
+0.61%
— which counts Apple as one of its 30 components — has declined 12%.

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Apple earnings show iPhone sales miss amid questions about smartphone demand; stock dips

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Apple Inc. joined the chorus of Big Tech woes Thursday, falling short of expectations on quarterly iPhone sales and sending its stock lower in late trading.

The smartphone giant delivered $90.1 billion in fiscal fourth-quarter revenue, up from $83.4 billion a year earlier and ahead of the FactSet consensus, which was for $88.7 billion. A big driver of the upside came from Apple’s
AAPL,
-3.05%
Mac business, which posted a massive beat even as iPhone sales came up light.

Apple generated $42.6 billion in iPhone sales during its latest quarter, up from $38.9 billion a year before, while analysts were projecting $43.0 billion.

The stock was down 1% to 4% in after-hours trading immediately following the release of the report Thursday.

As has been the case throughout the pandemic, Apple declined to offer a financial forecast in its release, so investors will need wait for the company’s earnings call to get a sense for how things have fared since the September quarter ended and what expectations are like going into the holiday period.

A key question coming into Apple’s report was how demand for the company’s new iPhone 14 line has held up, especially given reports that the company has scaled back earlier production goals. While the company isn’t likely to offer a traditional quantitative outlook on the call, executives could give some indication of how consumer behavior has played out recently amid the backdrop of economic pressure and more incremental upgrades within the newest family of iPhones.

For the latest quarter, Apple recorded net income of $20.7 billion, or $1.29 a share, compared with $20.6 billion, or $1.24 a share, in the year-earlier period. Analysts tracked by FactSet were expecting $1.27 a share in earnings.

Revenue performance across Apple’s product lines was mixed. The company saw $11.5 billion in Mac revenue, up from $9.2 billion a year prior, along with $7.2 billion in iPad revenue, down from $8.3 billion. Analysts tracked by FactSet were modeling $9.3 billion for the Mac line and $7.8 billion in iPad revenue.

The company raked in $9.7 billion in revenue across its wearables, home and accessories category, up from $8.8 billion in the same period a year ago. Analysts had expected revenue of $9.2 billion.

Services revenue climbed to $19.2 billion from $18.3 billion but fell short of the FactSet consensus, which was for $20.0 billion.

Shares of Apple have lost 18% so far this year, as the Dow Jones Industrial Average
DJIA,
+0.61%
— which counts Apple as one of its 30 components — has declined 12%.

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The biggest tech stocks have lost $3 trillion in market cap the last one year

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FAANG stocks displayed at the Nasdaq.

Adam Jeffery | CNBC

So here’s a good trivia question: Of the “FAANG” megacap tech stocks, which has lost the most market value over the past year?

Amid the earnings-related bloodbath so far this week, there have been huge losses. Alphabet, Microsoft and Meta have already posted their results, and tumbled in the wake of the reports. Thursday afternoon, Amazon and Apple are on tap.

A staggering $3 trillion in combined market cap has been lost in one year. Most of the losses have occurred across six of these stocks, but it’s hard to leave Apple off the list.

Remarkably, Apple shares have basically been flat – losing a measly $35 billion, by comparison.

It’s also worth realizing that the total losses would have been much worse had Netflix shares not rebounded.

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Apple’s new App Store rules over ‘boosted ads’ provoke Facebook again

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Meta Platforms CEO Mark Zuckerberg speaks at Georgetown University in Washington on Oct. 17, 2019.

Andrew Caballero-Reynolds | AFP | Getty Images

Apple recently updated its App Store guidelines with changes that, yet again, impact Facebook’s ad business.

The new rule, introduced Monday, says that companies like Meta, which owns Facebook and Instagram, can offer apps that allow people to buy and manage advertising campaigns in dedicated apps without using Apple’s payment system, but it considers buying an ad in a social media app to be a digital purchase, from which Apple takes a 30% cut.

Meta wasn’t happy with the change. A Meta spokesperson told CNBC, “Apple continues to evolve its policies to grow their own business while undercutting others in the digital economy.”

The episode is the latest skirmish from companies like Meta that feel that Apple has too much power over mobile distribution and the ever expanding and changing rules of Apple’s App Store, which is the only way to install apps on an iPhone.

Meta and Apple have been battling for years, but the rivalry has grown more heated recently after Apple introduced App Tracking Transparency in the iPhone operating system last year. The privacy feature allows users to decline to offer app developers like Meta a unique device ID that can be used to track ad performance. Meta says the change could cost it $10 billion this year.

Meta and Apple also appear poised to compete in the world of consumer hardware, after Meta released the Quest Pro headset and Apple has been developing a competing VR headset for years that could reportedly launch next year.

Apple told CNBC that even before the new guideline the company considered social boosts to be the kind of digital purchase that needed to use Apple in-app purchases, and that the rule is more of a clarification than a new restriction.

“For many years now, the App Store guidelines have been clear that the sale of digital goods and services within an app must use In-App Purchase,” an Apple spokesman told CNBC. “Boosting, which allows an individual or organization to pay to increase the reach of a post or profile, is a digital service — so of course In-App Purchase is required. This has always been the case and there are many examples of apps that do it successfully.”

This individual restriction has long been a sticking point, and Meta, back when it was still named Facebook, negotiated with Apple over social media boosts and whether they would fall under Apple’s digital purchase rules, according to The Wall Street Journal.

Boosting features are offered by several social media companies. But most, like Twitter, already use Apple’s in-app purchase mechanism that lists boosted posts for $9.99 on Apple’s App Store. TikTok sells coins, or a currency used to promote posts, through in-app purchases as well.

For Meta, it thinks Apple’s recent clarification crosses a line in taking a piece of advertising revenue, not just app sales. Meta points to previous Apple executive statements, some made as part of the Epic Games trial over App Store rules, where it said it didn’t take a cut of ads.

“Apple previously said it didn’t take a share of developer advertising revenue, and now apparently changed its mind. We remain committed to offering small businesses simple ways to run ads and grow their businesses on our apps,” the Meta spokesperson told CNBC.

Apple isn’t asking for a cut of every ad served through the Facebook or Instagram apps. But Meta clearly feels targeted by Apple’s increasing power over its platforms, and worries that the company could argue that it deserves a piece of Meta’s total ad sales through its ads manager app, according to The Verge, which first reported Meta’s complaint.

It’s unclear how big the boost market is. Most big advertisers use dedicated portals or apps to buy ads. Eric Seufert, an ads industry watcher and the founder of Mobile Dev Memo, wrote Monday that he suspects it is a “negligible proportion of revenue” to the social media companies.

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October 26, 2022

Is Meta a broken stock? Earnings will help answer some lingering questions

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October 26, 2022

Apple raises prices for music and TV streaming services | CNN Business

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CNN Business
—

Apple on Monday raised the price of its music and video streaming services, in the latest example of streaming products getting more expensive in recent months.

An Apple Music subscription for individuals will now cost $10.99 per month, up from $9.99, and a family plan supporting up to five people is now $16.99 per month, up from $14.99.

The price of Apple TV+ will increase to $6.99 per month, a 40% increase from the $4.99 it cost previously, the company said Monday.

In a statement to CNN Business, Apple

(AAPL) said the change in Apple

(AAPL) Music’s cost is “due to an increase in licensing costs, and in turn, artists and songwriters will earn more for the streaming of their music.”

The company also said Apple TV+ was introduced “at a very low price because we started with just a few shows and movies.” Apple has since expanded its slate of offerings and won the best picture award at the Oscars this year for the movie “CODA.”

But the new price hikes could be the latest test of how much consumers are willing to spend on streaming products at a time when rising inflation has more broadly driven costs up for Americans across a wide range of services.

In August, Disney announced that the price of the premium tier of Disney+ would jump $3 to $10.99 per month, its largest price increase since the streaming service launched nearly three years ago. Hulu, which is majority owned by Disney, raised its subscription prices earlier this month.

Apple’s price increase also comes as macroeconomic pressures have hit the tech sector especially hard, pushing companies to scramble for new ways to generate revenue. Apple, which has seen its stock decline nearly 18% so far this year, has increasingly bet on revenue from its subscription services to bolster its bottom line in recent years at a time when iPhone sales growth has slowed.

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October 24, 2022

EU formally adopts law requiring Apple to support USB-C chargers | CNN Business

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Washington
CNN Business
—

A landmark law requiring Apple and other electronics makers to adopt USB-C as a universal charging standard in the European Union has cleared its final procedural hurdle, after EU member states voted to approve the legislation on Monday.

The new law, which is targeted at smartphones, tablets, digital cameras, portable speakers and a wide array of other small devices, is the first of its kind anywhere in the world. It aims to streamline the number of chargers and cables consumers must contend with when they purchase a new device, and to allow users to mix and match devices and chargers, even if they were produced by different manufacturers.

Apple could be among the most affected by the legislation. The iPhone maker has historically required users to charge its mobile devices using a proprietary charging connector known as Lightning; under the new rules, Apple would be forced to migrate away from Lightning in its devices sold in the EU. That change, which Apple is reportedly testing for iPhones, could potentially extend to devices Apple sells in other markets as well.

The EU law must still be signed by the presidents of the EU parliament and European Council, according to a release, but those are considered formalities. Earlier this month, the legislation received final approval from EU lawmakers.

In addition to covering new, small electronics going on the market at the end of 2024, the rules will also extend to larger electronics such as laptops beginning in 2026. It will also commit European officials to streamlining standards for wireless charging, a technology that is only just becoming more widespread.

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October 24, 2022

Apple’s industrial design chief to depart company three years after Jony Ive | CNN Business

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CNN Business
—

Apple’s industrial design chief who most recently oversaw the design of products including the iPhone, Apple Watch and Mac computers is leaving the company.

Evans Hankey was one of two people promoted to oversee the design team after the departure of Apple

(AAPL)’s longtime product designer, Jony Ive, in June 2019. Apple

(AAPL) told CNN that Hankey will remain at the company for a temporary period.

“Apple’s design team brings together expert creatives from around the world and across many disciplines to imagine products that are undeniably Apple,” a spokesperson said. “The senior design team has strong leaders with decades of experience. Evans plans to stay on as we work through the transition, and we’d like to thank her for her leadership and contributions.”

The departure, which was first reported by Bloomberg, comes at a time when many of Apple’s best-known products are mostly receiving incremental design updates while long-rumored products such as a mixed reality headset — a wearable device that’s said to be capable of both virtual and augmented reality — have yet to launch.

Hankey stepped into the role after Ive left to start his own design company, LoveFrom. (At the time of his departure, Apple said it would become one of his clients but reportedly stopped working together earlier this year.) Ive worked closely with Apple co-founder Steve Jobs on a remarkable run of products, ranging from candy-colored iMacs to the iPod and the original iPhone, that revived Apple’s fortunes and eventually made it the most valuable company in the world. His work earned him design awards, a knighthood and the company of celebrities like U2’s Bono.

In December 2021, Hankey and Dye offered Wallpaper, a design and lifestyle publication, a rare look inside how Apple’s design team approaches new products. Hankey detailed the methods Apple took to refine notifications and the “tap” on the Apple watch, and how it scanned thousands of ears to perfect the shape of AirPods.

“So much of what we value for the team and for the company, really started in the early days of design at Apple,” Hankey said. “We cannot overstate how lucky we are to be at a company with such a rich and deep foundation. From the very early ‘think different’ mantra to Steve and Jony’s collective focus on craft, care and making tools, to their reverence for the creative process, this is what still drives us.’

Apple has not yet announced Hankey’s replacement.

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October 21, 2022

Tech earnings are coming and they probably won’t be pretty | CNN Business

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New York
CNN Business
—

After months of layoffs, hiring freezes and other cost-cutting measures, big tech companies are set to provide the most detailed look yet at just how bad things have gotten for their businesses amid fears of a looming recession.

Snapchat’s parent company, which tanked much of the tech sector in May with a warning about a worsening economy, is set to report third-quarter earnings on Thursday. Apple

(AAPL), Amazon

(AMZN), Facebook

(FB)-parent Meta, Microsoft

(MSFT), Twitter

(TWTR) and Google-parent Alphabet

(GOOGL) will each report earnings results the following week.

“People probably should be bracing themselves for these results,” said Scott Kessler, technology global sector lead at research firm Third Bridge Group.

For years, the giants of Silicon Valley seemed almost immune to swings in the global economy. Even amid a pandemic, a trade war and other geopolitical uncertainty, the biggest names in tech only seemed to grow bigger and richer. But like other sectors in recent months, they have faced a variety of new challenges.

Rampant inflation is eating away at consumers’ paychecks and reducing their ability to spend freely on tech products and services. Increased costs and recession fears have cut down on demand for online advertising and enterprise tech services. And other macroeconomic issues such as continued supply chain snarls and higher interest rates are stunting growth, analysts say.

To make matters worse, tech companies must also confront the growing strength of the US dollar, which is currently trading at its highest level in two decades. That can mean sales made overseas are not worth as much, according to Angelo Zino, senior industry analyst at CFRA Research. A stronger US dollar may also make hardware products from companies like Apple less affordable for foreign consumers, which, as Zino points out, is problematic given “most of these companies are generating more than half their revenue outside the United States.”

In a striking shift, most of the big tech companies are now expected to report slowing profit and revenue growth, or even year-over-year declines, for the three months ending in September, according to analyst estimates.

Amazon

(AMZN), which is projected to be in the best shape, is expected to post essentially flat sales from the year prior. Meta’s revenue is projected to fall 5% year-over-year, marking the company’s second consecutive quarterly revenue decline. Net income at Meta, Amazon

(AMZN), Google and Snap is also expected to be down from the year prior.

These dour projections come after many tech businesses were already showing signs of weakness in the prior quarter. Meta in July posted its first year-over-year quarterly revenue decline since going public in 2012 in large part due to decreased demand in the online advertising market that fuels its core business. Twitter

(TWTR), Snap, Google, Apple and Microsoft all also reported that shrinking ad budgets had taken some toll on their June quarter earnings.

“We compare investor negative sentiment on tech today to what we have seen only 2 other times in our decades of covering tech stocks: 2008 and 2001,” Wedbush analyst Dan Ives said in a note to investors this week, referring to two prior recessionary periods.

Many of the issues currently weighing on tech companies are unlikely to let up anytime soon, which is why industry watchers will be paying close attention to the guidance these companies offer for the rest of 2022.

“More than anything, people really want a good understanding about what to expect” from the final three months of this year, which has “historically been the most important quarter for these companies,” Kessler said. Investors will likely want to know, for example, whether the online ad market has begun to stabilize ahead of the crucial holiday season.

Negative results or future outlook could lead to increased pressure on tech firms to focus on their core businesses and cut back on big bets that aren’t expected to quickly product returns. Some of that is already underway.

In recent weeks, Google announced it would shut down its gaming service Stadia, Amazon said it would stop testing a home delivery robot and Meta shut down its newsletter product, Bulletin.

Meta may be in a uniquely difficult position. Last October, Facebook rebranded as Meta and ramped up investments to build a future version of the internet called the metaverse, which isn’t expected to be fully realized for years, if ever. But the Wall Street Journal reported last month the company was quietly reducing staff — and some analysts expect more cuts to come.

“I do think you’ll see them announce cost cuts. I think they’ll reduce the workforce,” Zino said. “Meta is really boxed in a corner here. Their core business is in an environment where they’re not going to see much growth at all … and they don’t have any major revenue center outside of advertising.”

What a difference a year makes.

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October 20, 2022

Take note: Utah Jazz may have lost their hashtag to Apple

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SALT LAKE CITY — Take note: The Utah Jazz evidently need a new hashtag.

The team’s long-used hashtag — #TakeNote — was used by Apple CEO Tim Cook in a tweet on Tuesday, accompanied by an Apple logo emoji. It raises questions about how the phrase will be used in the team’s marketing plans going forward.

“That was weird. I saw that when you all did,” Jazz owner Ryan Smith said Tuesday at a Salt Lake City news conference unrelated to hashtag matters. “Got to look into it.”

Cook and Smith are friends; Cook has even sat courtside with Smith for at least one Jazz game.

Apple Inc. unveiled the latest innovations with its iPad and Apple TV products on Tuesday, and Cook’s early morning tweet with the hashtag and a short video that also made use of the “Take Note” phrase was basically the kickoff to his company’s announcements.

The Jazz have “#TakeNote” on multiple displays in their arena, plus they have used it on merchandise. The team started using the hashtag in 2016, got away from it briefly and began using it again in 2019.

And just last week, the Jazz announced a partnership with Utah-based company Chatbooks — including a promotion where Chatbooks would “display a collage of fans’ social media photos” on the video boards hanging over center court.

The plan was to tell fans to post photos on social media with the #TakeNote hashtag to have them considered for those collages.

———

AP NBA: https://apnews.com/hub/nba and https://twitter.com/AP—Sports

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October 18, 2022

Goldman’s pivot away from money-losing Marcus shows that disrupting retail banking is hard

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David Solomon, Goldman Sachs, at Marcus event

Goldman Sachs CEO David Solomon is reining in his ambition to make the 153-year-old investment bank a major player in U.S. consumer banking.

After product delays, executive turnover, branding confusion, regulatory missteps and deepening financial losses, Solomon on Tuesday said the firm was pivoting away from its previous strategy of building a full-scale digital bank.

Now, rather than “seeking to acquire customers on a mass scale” for the business, Goldman will instead focus on the Marcus customers it already has, while aiming to market fintech products through the bank’s workplace and wealth management channels, Solomon said.

The moment is a humbling one for Solomon, who seized on the possibilities within the nascent consumer business after becoming CEO four years ago.

Goldman started Marcus in 2016, named after one of the bank’s cofounders, to help it diversify revenue away from the bank’s core trading and advisory operations. Big retail banks including JPMorgan Chase and Bank of America enjoy higher valuations than Wall Street-centric Goldman.

Scrutiny from analysts

Instead, after disclosing the strategic shift and his third corporate reorganization as CEO, Solomon was forced to admit missteps Tuesday during an hour-plus long conference call as analysts, one after another, peppered him with critical questions.

It began with Autonomous analyst Christian Bolu, who pointed out that other new entrants including fintech startup Chime and Block’s Cash App have broken through while Goldman hasn’t.

“One could argue that there’s been some execution challenges for Goldman in consumer; you’ve had multiple leadership changes,” Bolu stated. “Looking back over time, what lessons have you guys learned?”

Another analyst, Brennan Hawken of UBS, told Solomon he was confused about the pivot because of earlier promises related to coming products.

“To be honest, when I speak with a lot of investors on Goldman Sachs, very few are excited about the consumer business,” Hawken said. “So I wouldn’t necessarily say that a pulling back in the aspirations would necessarily be negative, I just want to try and understand strategically what the new direction is.”

After Wells Fargo‘s Mike Mayo asked whether the consumer business was making money and how it stacked up against management expectations, Solomon conceded that the unit “doesn’t make money at the moment.” That is despite saying in 2020 that it would reach breakeven by 2022.

Troubles with Apple

Even one of the bank’s successes — winning the Apple Card account in 2019— has proven less profitable than Goldman executives expected.

Apple customers didn’t carry the level of balances the bank had modeled for, meaning that it made less revenue on the partnership than they had targeted, Solomon told Morgan Stanley analyst Betsy Graseck. The two sides renegotiated the business arrangement recently to make it more equitable and extended it through the end of the decade, according to the CEO.

With his stock under pressure and the money-losing consumer operations increasingly being blamed, internally and externally, for its drag on operations, Solomon appeared to have little choice than to change course.

Selling services to wealth management customers lowers customer acquisition costs, Solomon noted. In that way, Goldman is mirroring the broader shift in fintech, which occurred earlier this year amid plunging valuations, as growth-at-any cost changed to an emphasis on profitability.

Despite the turbulence, Goldman’s adventure in consumer banking has managed to collect $110 billion in deposits, extend $19 billion in loans and find more than 15 million customers.

“There’s no question that the aspirations probably got, and were communicated in a way, that were broader than where we’re now choosing to go,” Solomon told analysts. “We are making it clear that we’re pulling back on some of that now.”

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October 18, 2022

Apple to launch a foldable iPad rather than iPhone in 2024, analyst predicts

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Apple CEO Tim Cook speaks at an event at the Apple Park campus in Cupertino, California, on Sept. 7, 2022. At a presentation dubbed Far Out, Apple is set to unveil the iPhone 14 line, a fresh slate of smartwatches and new AirPods.

Nic Coury | Bloomberg | Getty Images

Apple will likely launch an iPad with a folding screen in 2024, analyst firm CCS Insight said on Tuesday, forecasting the U.S. technology giant will begin experimenting with foldable technology soon.

CCS Insight published its annual predictions report on Tuesday in which the group’ analysts make forecasts about future products and trends.

In the latest report, CCS Insight predicted Apple would launch a foldable iPad in two years’ time rather than start with a foldable iPhone.

This is contrary to other smartphone makers like Samsung which have launched foldable smartphones rather than tablets.

“Right now it doesn’t make sense for Apple to make a foldable iPhone. We think they will shun that trend and probably dip a toe in the water with a foldable iPad,” Ben Wood, chief of research at CCS Insight, told CNBC in an interview.

“A folding iPhone will be super high risk for Apple. Firstly, it would have to be incredibly expensive in order to not cannibalize the existing iPhones,” Wood added.

Apple to combine 5G and processor in chip

CCS Insight also predicts that Apple will continue investing in its own chip design.

Currently, the Cupertino giant designs its own custom chips for iPhone and iPad. It relies on U.S. chipmaker Qualcomm for modems that allow these devices to connect to mobile internet networks for 5G connectivity.

However, CCS Insight said that Apple is likely to integrate its own 5G modem into the A series of processor for a “single-chip” solution for iPhones in 2025.

Apple acquired Intel’s modem business in 2019. That led to speculation that the tech giant would very quickly ditch Qualcomm and use its own modems in its devices. However, that hasn’t happened yet.

Kuo of TF International Securities said in June he expects the company to continue to use Qualcomm chips for iPhones released in 2023.

Wood said that Apple has been “ramping up in-house capabilities” so it can use its own modems in iPhones.

“They (Apple) have been shooting for this target for years. They acquired the assets from Intel of the modem unit, they have been working hard to ramp that up, they are very keen to make sure they keep growing their control points they have,” Wood said.

“They don’t want to have to keep paying a third party supplier for their technology.”

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Why smartphones deflated 22% while almost everything else is becoming more expensive

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Shoppers queue in like outside the Apple store during the launch day of the new iPhone 14 series smartphones in Hong Kong, on September 16, 2022.

Miguel Candela | Anadolu Agency | Getty Images

The closely-watched consumer price index continues to show headline inflation in the U.S. hovering at levels last seen in the mid-1980s.

Prices for a wide variety of goods and services, including food, airfare, and gasoline rose in the latest reading released last week. All told, on a 12-month basis, headline inflation was up 8.2%, according to the Bureau of Labor Statistics, which publishes the CPI.

But one product category monitored by the CPI recorded a 22% plunge, showing deflation: Smartphones.

That might seem counterintuitive. Most phones are expensive and prices for the best ones aren’t going down. Apple released new iPhones in September at the same U.S. prices as last year’s options, for example. And Samsung’s high-end devices cost as much as $1,800 this year. Average selling prices for smartphones continue to climb in markets around the world.

It turns out, smartphones aren’t getting cheaper. They’re getting better. And that’s why CPI shows them deflating instead of inflating like lots of other goods.

Here’s why: Normally, the CPI likes to compare prices for identical items which don’t change much from year-to-year. So, it might compare eggs against eggs, for example. But in the case of smartphones, BLS has to control for devices that get better each year. If smartphones are improving and the price is staying the same, then BLS records a price decline.

“There’s been a lot of declines in the [smartphone] index. And that’s really just in large part dealing with the quality improvements,” said Jonathan Church, an economist at BLS.

Twice a year, BLS looks at the new smartphone models and measures how they’ve improved — whether they have better cameras, displays, or other new methods.

“For smartphones, we’re talking about things like screen size, RAM, processor speed, phone camera or rear camera, whether it’s foldable, or things like that,” Church said.

Then, BLS makes a “quality adjustment.” If the price of the new iPhone didn’t rise, but it received new features, then the CPI would consider that device to be more valuable than the old one, and it assumes consumers get more value for the same money.

Estimating the size of the quality adjustments is done with a hedonic modeling method and BLS uses data from a third-party dataset that includes smartphone specs.

Or, as BLS puts it: “If a replacement smartphone is different from its predecessor and the value of the difference in quality can be accurately estimated, a quality adjustment can be made to the previous item’s price to include the estimated value of the difference in quality.”

BLS has indexed smartphone technologies to a starting point in late 2019, when Apple’s newest device was the iPhone 11 and Samsung’s best was the Galaxy S10. In fact, smartphone prices have been deflating since 2019, according to the CPI.

Eventually, Church said, smartphones may mature into the kind of product that would see price increases and inflation. But the rate of improvement would have to slow down.

“It’s really only that a certain mature point in the cycle that their price will start to go up again,” Church said. “It seems pretty early in the lifecycle still, smartphones in general.”

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These 11 stocks can lead your portfolio’s rebound after the S&P 500 ‘earnings recession’ and a market bottom next year

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This may surprise you: Wall Street analysts expect earnings for the S&P 500 to increase 8% during 2023, despite all the buzz about a possible recession as the Federal Reserve tightens monetary policy to quell inflation.

Ken Laudan, a portfolio manager at Kornitzer Capital Management in Mission, Kan., isn’t buying it. He expects an “earnings recession” for the S&P 500
SPX,
+2.78%
— that is, a decline in profits of around 10%. But he also expects that decline to set up a bottom for the stock market.

Laudan’s predictions for the S&P 500 ‘earnings recession’ and bottom

Laudan, who manages the $83 million Buffalo Large Cap Fund
BUFEX,
-2.86%
and co-manages the $905 million Buffalo Discovery Fund
BUFTX,
-2.82%,
said during an interview: “It is not unusual to see a 20% hit [to earnings] in a modest recession. Margins have peaked.”

The consensus among analysts polled by FactSet is for weighted aggregate earnings for the S&P 500 to total $238.23 a share in 2023, which would be an 8% increase from the current 2022 EPS estimate of $220.63.

Laudan said his base case for 2023 is for earnings of about $195 to $200 a share and for that decline in earnings (about 9% to 12% from the current consensus estimate for 2022) to be “coupled with an economic recession of some sort.”

He expects the Wall Street estimates to come down, and said that “once Street estimates get to $205 or $210, I think stocks will take off.”

He went further, saying “things get really interesting at 3200 or 3300 on the S&P.” The S&P 500 closed at 3583.07 on Oct. 14, a decline of 24.8% for 2022, excluding dividends.

Laudan said the Buffalo Large Cap Fund was about 7% in cash, as he was keeping some powder dry for stock purchases at lower prices, adding that he has been “fairly defensive” since October 2021 and was continuing to focus on “steady dividend-paying companies with strong balance sheets.”

Leaders for the stock market’s recovery

After the market hits bottom, Laudan expects a recovery for stocks to begin next year, as “valuations will discount and respond more quickly than the earnings will.”

He expects “long-duration technology growth stocks” to lead the rally, because “they got hit first.” When asked if Nvidia Corp.
NVDA,
+6.14%
and Advanced Micro Devices Inc.
AMD,
+3.69%
were good examples, in light of the broad decline for semiconductor stocks and because both are held by the Buffalo Large Cap Fund, Laudan said: “They led us down and they will bounce first.”

Laudan said his “largest tech holding” is ASML Holding N.V.
ASML,
+3.79%,
which provides equipment and systems used to fabricate computer chips.

Among the largest tech-oriented companies, the Buffalo Large Cap fund also holds shares of Apple Inc.
AAPL,
+3.09%,
Microsoft Corp.
MSFT,
+3.88%,
Amazon.com Inc.
AMZN,
+6.63%
and Alphabet Inc.
GOOG,
+3.91%

GOOGL,
+3.73%.

Laudan also said he had been “overweight’ in UnitedHealth Group Inc.
UNH,
+1.77%,
Danaher Corp.
DHR,
+2.64%
and Linde PLC
LIN,
+2.25%
recently and had taken advantage of the decline in Adobe Inc.’s
ADBE,
+2.32%
price following the announcement of its $20 billion acquisition of Figma, by scooping up more shares.

Summarizing the declines

To illustrate what a brutal year it has been for semiconductor stocks, the iShares Semiconductor ETF
SOXX,
+2.12%,
which tracks the PHLX Semiconductor Index
SOX,
+2.29%
of 30 U.S.-listed chip makers and related equipment manufacturers, has dropped 44% this year. Then again, SOXX had risen 38% over the past three years and 81% for five years, underlining the importance of long-term thinking for stock investors, even during this terrible bear market for this particular tech space.

Here’s a summary of changes in stock prices (again, excluding dividends) and forward price-to-forward-earnings valuations during 2022 through Oct. 14 for every stock mentioned in this article. The stocks are sorted alphabetically:

Company	Ticker	2022 price change	Forward P/E	Forward P/E as of Dec. 31, 2021
Apple Inc.	AAPL, +3.09%	-22%	22.2	30.2
Adobe Inc.	ADBE, +2.32%	-49%	19.4	40.5
Amazon.com Inc.	AMZN, +6.63%	-36%	62.1	64.9
Advanced Micro Devices Inc.	AMD, +3.69%	-61%	14.7	43.1
ASML Holding N.V. ADR	ASML, +3.79%	-52%	22.7	41.2
Danaher Corp.	DHR, +2.64%	-23%	24.3	32.1
Alphabet Inc. Class C	GOOG, +3.91%	-33%	17.5	25.3
Linde PLC	LIN, +2.25%	-21%	22.2	29.6
Microsoft Corp.	MSFT, +3.88%	-32%	22.5	34.0
Nvidia Corp.	NVDA, +6.14%	-62%	28.9	58.0
UnitedHealth Group Inc.	UNH, +1.77%	2%	21.5	23.2
Source: FactSet

You can click on the tickers for more about each company. Click here for Tomi Kilgore’s detailed guide to the wealth of information available free on the MarketWatch quote page.

The forward P/E ratio for the S&P 500 declined to 16.9 as of the close on Oct. 14 from 24.5 at the end of 2021, while the forward P/E for SOXX declined to 13.2 from 27.1.

Don’t miss: This is how high interest rates might rise, and what could scare the Federal Reserve into a policy pivot

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With product innovation lagging, Silicon Valley bets on a fresh coat of paint | CNN Business

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CNN Business
—

When Google unveiled its new Pixel 7 smartphone lineup earlier this month, the devices looked largely the same as the year prior. But there was at least one subtle change: the colors.

Whereas the Pixel 6 had come in sorta seafoam (a light blue) and kinda coral (a pale pink), the Pixel 7 now comes in lemongrass (a green) and snow (off-white). Google has also swapped the stormy black (a stormy black) option on the Pixel 6 for obsidian (still black) on the Pixel 7.

The emphasis on a new color palette for devices isn’t unique to Google. As tech companies showed off their latest smartphones, tablets and laptops at splashy press events over the last two months, many of the products had only limited changes on the outside but boasted elaborately named color options.

Microsoft launched its Surface Pro 9 tablet in shades such as sapphire (blue) and forest (green), and its Surface Laptop 5 comes in metal (silver), sage (green) and sandstone (tan). Apple’s new iPhone 14 lineup comes in Starlight (a champagne color) and midnight (black), and the company has previously unveiled two shades of green (“green” and “alpine green”) and purple (“purple” and “deep purple”).

Purple, in particular, has been having a moment in tech. Earlier this summer, Samsung unveiled a “bora purple” color for its flagship Galaxy S22 smartphone — the word “bora” in Korean translates to “purple,” effectively dubbing the color “purple purple.”

At a time when many of the biggest upgrades to smartphones and other gadgets are under the hood, drumming up consumer interest with a fresh coat of paint may be easier in some ways than getting people excited about faster processors.

“The quality of all phones is so high, it’s getting difficult for consumers to even notice what ‘better’ is anymore,” said Kelly Goldsmith, professor of marketing at Vanderbilt University. “As a result, tech brands need to adopt new strategies. Introducing different, niche colors is just one way to do it.”

For consumers, there can be a real value to a broader range of colors. “Devices — whether they’re smartphones, wearables, PCs, or tablets — are an extension of the user’s persona, both in terms of who they are and who they aspire to be,” said Ramon Llamas, an analyst at IDC Research. “Introducing a different color is a way for devices and their owners to distinguish themselves.”

But just as basic black, white, gray and silver are the top colors in the automobile industry, these colors tend to resonate most with smartphone owners, according to Peggy Van Allen, a color anthropologist for the Color Marketing Group. Still, she noted, a shift has been underway toward stronger colors.

The Pixel 7 comes in obsidian, snow and lemongrass. The Pixel 7 Pro is available in obsidian, snow and hazel.

Apple famously brought “Bondi Blue” to its Mac line in the late 1990s after Steve Jobs’ return to the company (it was a huge success). More recently, it created a splash with the introduction of the rose gold iPhone in 2015.

“Warm metallics went away and then came back in style, and rose gold really reached mass appeal,” Van Allen said. “It peaked at a time when social media influencers were gobbling it up, and the popularity of Millennial Pink also helped to usher it in.”

Both pinks lasted longer than most forecasters would have predicted, she said. “It was carried along by other trends of the time that enforced the desire for personalization and female empowerment.”

The names of more recent colors have become increasingly esoteric in the last year or so. This is also likely a strategic play, according to Barbara Kahn, a professor of marketing at the University of Pennsylvania’s Wharton School.

“Color names that are descriptive but odd can spark positive reactions because the consumer likes being able to ‘solve the puzzle,’” she said. “Color names that are ambiguous also spark attention and customers work to figure out what the meaning might be.”

But for all the varied colors out there, it’s important to remember customers still overwhelmingly keep their phones in a case, essentially covering up the color that once helped entice them to upgrade.

“There are some transparent cases available from both first and third parties,” said Eric Abbruzzese, research director at market research firm ABI Research, “but at least anecdotally, they don’t seem as popular as regular cases.”

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Workers at second Apple store vote to join union | CNN Business

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CNN Business
—

Apple workers in Oklahoma City have voted to form the second-ever labor union at one of the company’s US stores, in the latest sign that organizing efforts are gaining traction inside and outside the tech and retail industries.

In a preliminary tally by the National Labor Relations Board on Friday evening, 56 workers, or 64% of those casting ballots at the Penn Square Mall Apple store, voted to be represented the Communication Workers of America, and 32 voted against it. Turnout was strong, with 88 of a potential 95 workers participating in the vote.

The union victory comes four months after Apple store workers in Towson, Maryland, made history by voting to form Apple’s first US unionized location. In late June, the NLRB officially certified the union election win.

Workers at both locations have said they’re looking to unionize in an effort to have more of a say in how their stores are run. Some also said they were inspired by union pushes this year at Amazon and Starbucks.

Apple did not directly address the vote results when asked for comment Friday.

“We believe the open, direct and collaborative relationship we have with our valued team members is the best way to provide an excellent experience for our customers, and for our teams,” said the company’s statement. “We’re proud to provide our team members with strong compensation and exceptional benefits. Since 2018, we’ve increased our starting rates in the US by 45% and we’ve made many significant enhancements to our industry-leading benefits.”

The vote was roughly in line with what employees leading the organizing effort were expecting, according to Leigha Briscoe, one of the members of the organizing committee at the store.

“We felt like we had the majority support, and as long a people got out and cast their vote, we would win,” Briscoe told CNN Business late Friday after the vote tally.

Briscoe has been an employee at the store for six years. She said the employees who wanted to form a union approached CWA, rather than CWA trying to organize the store on its own.

Briscoe, 28, is typical of many of the younger workers leading successful union organizing drives nationwide in the wake of the pandemic. Many of the successful efforts, such as at an Amazon warehouse in Staten Island, New York, and at more than 200 Starbucks stores nationwide, have been led by workers in their twenties or early thirties.

Between January and July of this year there were 826 union elections, up 45% from the number held in the same period of 2021, according to a CNN analysis of data from the NLRB. And the 70% success rate by unions in those votes is far better than the 42% success rate in the first seven months of 2021.

But only 41,000 potential union members were eligible to vote in the 2022 elections. Even if the unions had won all those votes — NLRB data don’t break down how many workers worked at each company holding a vote — it would be a small fraction of the more than 100 million workers at US businesses who don’t belong to a union, according to Labor Department statistics.

The retail sector has a far lower rate of unionization than some other industries. Labor Department data show only 4.4% of retail workers nationwide are members of unions, compared to 6.1% of employees working at businesses overall.

When including government employees, only 10.3% of workers nationwide are union members, roughly half the rate of union membership in 1983, the first year it was tracked by the Labor Department, when union membership made up 20.1% of the nation’s workers.

Oklahoma is not particularly fertile ground for union efforts. The Labor Department data show only 5.6% of workers overall are union members, barely more than half of the 10.3% national rate.

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October 14, 2022

Apple workers in Oklahoma vote for company’s second U.S. union store

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A shopper looks at a wall fully occupied with iPhone case covers at the American multinational technology company Apple store in Hong Kong. China’s consumer prices rose at a slower-than-expected pace in August amid heatwaves and Covid-19 flare-ups, while producer inflation eased to the lowest since February 2021, official data showed.

Budrul Chukrut | Lightrocket | Getty Images

Employees at an Apple store in Oklahoma City voted on Friday to join a union, marking the second unionized Apple store in the U.S.

The vote is a defeat for Apple, which has opposed unionization efforts around the country. It’s a win for Communications Workers of America, which now represents the workers at an Apple store after separate unionization efforts at stores in Georgia and New York City stalled.

The tally was 56 votes in favor and 32 opposed. Approximately 94 employees were eligible to join CWA. Voting took place earlier this week.

“The Penn Square Apple retail workers are an amazing addition to our growing labor movement, and we are thrilled to welcome them as CWA members,” CWA Secretary-Treasurer Sara Steffens said in a statement.

“We believe the open, direct and collaborative relationship we have with our valued team members is the best way to provide an excellent experience for our customers, and for our teams,” Apple said in a statement, adding that since 2018 it has increased its starting wages in the U.S. by 45%.

The National Labor Relations Board will certify the votes in the coming week. After that, Apple is required to bargain with the union over working conditions.

Apple has opposed the union, according to a CWA filing earlier this month, which alleged that Apple management held anti-union meetings and threatened to withhold perks from stores that unionized.

Apple’s first unionized U.S. store, represented by the International Association of Machinists and Aerospace Workers in Maryland, is preparing to begin formal negotiations with Apple. According to Bloomberg News, Apple told staff there that it would not get some perks such as tuition pre-payment or access to online courses, because it would need to be negotiated with the union.

Apple is one of the most valuable companies in the world, reporting over $365 billion in global sales in 2021. It has about 270 stores in the U.S.

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October 14, 2022

Apple store workers in Oklahoma to vote on labor union | CNN Business

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CNN
—

Apple workers in Oklahoma City are set to vote this week on whether to form the second-ever labor union at one of the tech giant’s US stores.

The Apple store workers in Oklahoma are seeking to gain representation with the Communication Workers of America union. Voting is set to take place on Thursday and Friday, with the vote-tally scheduled for Friday evening. Just under 100 employees at the Apple store in the Penn Square Mall are eligible to vote in this union election.

Earlier this year, Apple store workers at a mall in Towson, Maryland, made history when they voted to become the first unionized Apple store in the United States. The move was lauded by President Joe Biden, among others. In late June, the National Labor Relations Board officially certified the union election win, paving the way for the workers and Apple management to negotiate their first contract.

The organizing efforts at Apple stores come amid the backdrop of a tidal wave of workplace activism emerging at major companies from Amazon to Starbucks after the pandemic exposed new pressures on frontline workers and a tight labor market gave these workers new leverage.

Leigha Briscoe, a worker at the Oklahoma Apple store, said that their group was inspired to organize after “seeing what was happening in the labor movement across the United States with other large corporations.”

“Particularly watching Amazon and Starbucks has been the two that really stuck out to me,” she said. “That really kind of brought to light the possibility of us being able to do that in our store.”

Watching these other workers seize new power via organizing also helped in “shifting my view of what a labor union was, and seeing that, ‘Hey, this is something that can still be done in the modern workforce,’” Briscoe added. “That’s really what kind of helped me see that this was going to be valuable for our team, and I think it’s safe to say that a lot of our other team members were also watching that happen as well, and that kind of inspired them in the same way as it has me.”

“Fundamentally, what we’re looking for is being able to have a seat at the table and negotiate what our experience looks like,” she said.

An Apple spokesperson did not respond to a request for comment on the Oklahoma City vote. Ahead of the union election at the Maryland store earlier this year, Apple said in a statement that it deeply values its retail team members and emphasized that it offers a “very strong compensation and benefits for full time and part time employees.”

One of the worker organizers at the Maryland location previously told CNN that “compensation is important” but “the most important” goal was “having a say” in store policies that impact staff.

Patrick Hart, another worker at the Oklahoma City Apple store, echoed that sentiment. Hart said he was tired of hearing from his managers that “that’s just how it is” when he raised concerns or brought feedback to them about their workplace experiences. He said they are seeking more of a voice in their workplace with their unionization efforts.

Hart also emphasized that he was inspired by the resurgence of the organized labor movement, and especially efforts to unionize Amazon warehouses. The new labor push comes as union membership overall in the United States has plummeted in recent decades. The unionization rate for all wage and salary workers in the United States last year was some 10.3%, Bureau of Labor Statistics’ data indicates, compared to 20.1% in 1983, which was the first year comparable data was available.

After taking inspiration from others, Hart said he hopes that their efforts in Oklahoma can similarly embolden fellow workers to band together – no matter what industry they may be in.

“I want everyone to realize unions aren’t just for those bad and hard workplaces, it is for everyone in America, we have the right to unionize,” Hart said. “I just want people to realize that, because it can do a lot of good for a lot of people who feel they’re stuck in their workplace.”

Hart continued: “They don’t have to leave their job, they can just make their current one a better place.”

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