The Big Picture - Macro Perspective on the Capital Markets, Economy, Technology, and Digital Media

Fascinating development in the world of e-Readers, currently dominated by Amazon and Apple, with Google books a distant third.

Microsoft has just put everyone else on notice that they want in, they want to be a major player. They obviously could not offer anything to Apple or Amazon to make it worth their while to joint hem, but Barnes & Noble — well, they needed some help, cash and marketing muscle. They got all three from Mister Softee.

Amazon

Apple

Google books

Microsoft/Barnes & Noble Nook

Who will be the eReader winner int his group?

What say ye?

The third installment in the very insightful and popular NYT iEconomy series is front page of the Sunday NYT.

Part 1: An Empire Built Abroad: How the U.S. Lost Out on iPhone Work

Part 2: A Punishing System: In China, Human Costs Are Built Into an iPad

Part 3: Protecting Profits: How Apple Sidesteps Billions in Global Taxes

Some of the details of Apple’s corporate tax-avoidance maneuvers according to the NYT are:

• Apple’s federal tax bill was $3.3 billion on reported profits of $34.2 billion last year, a tax rate of 9.8%;

• Apple allocates 70% of its profits outside the U.S. note that the value is created in the US, but the low end manufacturing is overseas.

• A Nevada shell company let’s Apple’s U.S. business sidestep California state taxes. California corporate tax rate = 8.84%, while Nevada = 0%.

• California gives tax credits to Apple for conducting R&D in the state worht more  $400 million since 1996;

•  The “Double Irish With A Dutch Sandwich” routes royalties and profits through Ireland and the Netherlands and the Caribbean. On paper, Ireland “generated” one-third of Apple’s revenue last year.

•  Salespeople working in high-tax countries are employed by subsidiaries in low-tax countries.

• iTunes sales “happen” in Luxembourg -- a tax dodge with local incentives. In 2011, iTunes S.à r.l.’s revenue exceeded $1 billion

The full series is Pulitzer bait, and deservedly so.

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Click thru for giant graphics

‘Double Irish With a Dutch Sandwich’

Shrinking Corporate Tax Rates

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Source:
How Apple Sidesteps Billions in Taxes
CHARLES DUHIGG and DAVID KOCIENIEWSKI
NYT, April 28, 2012
http://www.nytimes.com/2012/04/29/business/apples-tax-strategy-aims-at-low-tax-states-and-nations.html

Source Maps is the crazy cool crowdsourced directory of product supply chains and carbon footprints that can help you find out where things come from.

Below we see sourcing for a laptop:

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Lap Top
Click for interactive chart:

Source: Source Map

http://www.startuphire.com/blog/2012/03/whos-creating-jobs-startups-can-show-you/

StartUpHire, with support from the National Venture Capital Association, is releasing a new infographic today depicting 2011 hiring data for startups. What’s the biggest take away? While most of the country is still sluggish on job creation, startups face the opposite problem- a glut of open technical jobs

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Once again, its hard to put the Apple earnings into context. There are 5 key areas to look at: iPhone, iPad, Mac, Retail Stores, and International growth.

The numbers are simply immense:

Earnings:

• Apple had net income of $11.6 billion on revenue of $39.19 billion. Earnings per share were $12.30 (versus Street analysts consensus of $10.06 per share, $9.52 billion in profits on revenue of $36.8 billion);
• Profits rose 94%; revenues gained 58.9%for Q1
• Apple’s cash = $110.2 billion at end of Q1 (up from $97.6 billion at year’s end)
• ~$74 billion of Aple’s cash is held offshore.
• Gross margin rose to 47.4% from 41.4% a year earlier.
• Apple has beaten Wall Street’s consensus estimates in 16 out of its last 17 quarters;
• Apple has 360 million cumulative iOS device sales.

iPhones:

• Apple sold 35.1 million iPhones — up from 18.65 million units a year ago.
• iPhones (+ ecosystem) are 57.9% of Apple’s sales, up from 52.7% prior Q.
• iPhones are now available in more than 100 countries and at 230 wireless carriers (versus 90 countries and 186 carriers a year ago).
• iPhone sales in Asia Pacific doubled.

iPad:

• iPad sales were 11.8 million units — up more than 150% from a year ago.
• Since its launch two years ago, Apple has sold 67 million iPads (Tim Cook: “It took us 24 years to sell that many Macs, and five years to sell that many iPods, and over three years for that many iPhones.”)
• iPad channel inventory was about 2 million at the end of the quarter, which is below the company’s target range of 4-6 weeks of iPad inventory.
• App Store has 600,000 apps, 200,000 of them specifically for iPad.

Everything else:

• China accounted for $7.9 billion of revenue — about 20% of Apple’s total; this is a 300% gain from year ago levels.
• Two years ago, Apple sales in China were 2% pf total.
• Apple sold 4 million Macs during Q, up 7% vs Q1 2011;
• iPod sales were 7.7 million units, down 15% vs Q1 2011;
• iTunes sales = $1.9 billion Q1 — an annual run rate of about $8 billion per year (up 35% year over year).
• Retail store revenues jumped 38% from 2011 Q1;
• 24th straight Q that the Mac has outgrown the broader PC market.
• Non Mac PC shipments in the United States totaled 15.5 million units in the first three months of 2012, representing a 3.5 percent decline from the same period last year

Previously:
Apple +iPad by the Numbers  (March 7th, 2012)

Sources:
Apple 8K
All Things D
WSJ
Bloomberg
NYT
All Things D (2)

by Carmine Gallo on Mar 22, 2012

These principles are based on Carmine Gallo’s book, The Apple Experience. The book shows readers in any industry how to enrich lives, build loyalty, and reimagine the customer experience.

Video after the jump

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“More than twice the strength of Titanium with the processability of plastics, Liquidmetal alloys are poised to render obsolete current materials technology.”

Liquidmetal technologies, is a creator of a new metallic, glass, substance that stores energy much better than stainless steel or Titanium.

See also: Wired: How ‘Liquidmetal’ Could Give the Next iPhone Its Special Swagger

Via the Simple Dollar, we see this interesting Verizon versus AT&T comparo:

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click for full infographic

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Wireless companies say that smartphones are threatening to overwhelm their networks, and are asking the government for help. But some experts maintain that technology already has the answers

Source: NYT