Linked List: January 14, 2013

Monday, 14 January 2013

Strong iPhone Sales at Verizon (and AT&T) ★

One last bit for the day on this “iPhone 5 demand is lower than expected” thing. Last week, Verizon made a preliminary announcement on its holiday quarter:

Verizon this morning said in a filing with the SEC that its Verizon Wireless unit expects to report Q4 retail postpaid subscriber net adds of 2.1 million, with 9.8 million smartphone activations, and “a higher mix of Apple smartphones”.

Now, it’s possible that:

The iPhone 4S could be cannibalizing iPhone 5 sales. Verizon said “Apple smartphones”, not the iPhone 5 in particular. It’s possible that “iPhone” sales are up but that iPhone 5 sales are disappointing.
Verizon could be an outlier. Seems unlikely, given how hard Verizon pushes its own Droid-branded phones.
AT&T is reporting “best-ever quarterly sales of Android and Apple smartphones”, so maybe it’s the U.S. that’s the outlier, and iPhone demand is weak elsewhere around the world.

But I don’t think any of the above are likely. Keep in mind that Verizon’s statement is in a legally binding filing with the SEC. The WSJ’s report of “weaker-than-expected demand” for the iPhone 5 was from “people familiar with the situation”.

NYT on the iPhone 5 Component Thing ★

Brian X. Chen, reporting for the NYT:

Apple does appear to be cutting back on orders for its latest iPhone from its manufacturing partners, as Nikkei of Japan and The Wall Street Journal reported earlier. Paul Semenza, an analyst at NPD DisplaySearch, a research firm that follows the display market, said that for January, Apple had expected to order 19 million displays for the iPhone 5 but cut the order to 11 million to 14 million. Mr. Semenza said these numbers came from sources in the supply chain, the companies that make components for Apple products.

The reduction in orders for screens could be related to excess inventory, or because consumer demand for the iPhone 5 just was not as strong as Apple had predicted, Mr. Semenza said. “Certainly, demand from Apple to the display makers seems to have been corrected pretty significantly,” he said.

A few differences between this report and yesterday’s from the WSJ and Nikkei (all in the NYT’s favor):

Specific numbers.
A named source.
A range for the drop, which, even in the worst case scenario, is not “half”.
No assumption that the drop is definitely attributable to lower than expected consumer demand for the iPhone 5. It could be, but might be inventory or something else.

Bloomberg: ‘Dell Said to Be in Buyout Talks With Private-Equity Firms’ ★

“I’d shut it down and give the money back to the shareholders.”

Apple Can’t Respond to Rumors of iPhone 5 Cuts Even if It Wanted To ★

Jim Dalrymple:

I’ve been asked a lot today why Apple hasn’t responded to the Wall Street Journal article saying that there have been massive cuts to iPhone 5 orders. The simple fact is, they can’t.

SEC rules prohibit Apple from talking publicly about the company. This is known as a quiet period and all publicly traded companies must adhere to these rules.

Aaron Swartz’s Lawyer: Prosecutor Stephen Heymann Wanted ‘Juicy’ Case for Publicity ★

The Huffington Post:

In a phone interview Monday, Swartz’s attorney Elliot Peters accused Massachusetts assistant U.S. attorney Stephen Heymann of pursuing federal charges against Swartz to gain publicity.

Heymann was looking for “some juicy looking computer crime cases and Aaron’s case, sadly for Aaron, fit the bill,” Peters said. Heymann, Peters believes, thought the Swartz case “was going to receive press and he was going to be a tough guy and read his name in the newspaper.”

Despicable. A betrayal of the word “justice”.

Passing It Along as Established Fact ★

Eric Zeman, writing for Information Week, states the WSJ’s and Nikkei’s unattributed stories that iPhone 5 component orders have been slashed as fact:

Apple, responding to weak market demand, has sliced orders for iPhone 5 parts by as much as 50%.

One way or the other, there’s going to be a lot of crow to be eaten come two weeks when Apple releases their holiday quarter results.

The design of the iPhone 5 may be quite good, but Apple has handicapped itself by offering only one new phone each year. Samsung, by way of comparison, offers dozens of models each year. Samsung covers every price point, every screen size and every feature.

Whether or not Apple has in fact cut orders for iPhone 5 parts, it may need to step up the number of devices it introduces each year if it wants to continue to compete against Samsung in particular, and Android in general.

Sure, makes total sense that the company that has been generating more than two-thirds of the entire industry’s profits is the one that should consider acting more like its competitors.

The ‘New iPhone in Early 2013’ Theory ★

Michael Grothaus, writing for TUAW:

Do the component cuts, if true, mean iPhone 5 demand is weak? It’s possible. But it could also hint at another number of things. Apple usually reduces component orders when they are getting ready to ramp up for a new product. There have been rumors that Apple will move to a six-month release schedule for its iOS devices to keep up with competition. The lower component orders could signal that an “iPhone 5S” can be expected sooner rather than later.

But an iPhone 5S would almost certainly use the same display as the iPhone 5. The previous “S” iPhones — the 3GS and 4S — used not only the same display as their non-S predecessors, but also sported the same form factors.

If Apple’s component orders for the iPhone 5 really were cut by half, there’s no way to see it as anything but weak demand for the iPhone. My skepticism is all about that “if”.

The Strange Math of Apple’s Purported Massive iPhone 5 Component Cuts ★

Tero Kuittinen, writing for BGR, says exactly what I thought when I saw the WSJ’s story last night:

So if the most likely number of 4-inch screens Apple is reasonably expected to sell in March quarter is around 30 to 40 million units, why did Nikkei publish a report stating that Apple had halved its display orders for the quarter from 65 million units? Nikkei was quite specific about the 65 million number. And it clearly tied it to iPhone 5 component orders, not total iPhone or iPhone 5 and iPod touch orders.

In what world did Apple expect to order components for 65 million iPhone 5 handsets in the seasonally soft March quarter?

Perhaps the weirdness of the math is why the current version of the WSJ article no longer cites the 65 million unit figure. Sometime between Sunday at 8:00 p.m. EST and Monday at 7:00 a.m., the Journal decided to drop the number from its article. But if the 65 million number is not right, is the estimate for halving March orders correct, either?

The reports claiming 65 million displays for next quarter make little sense; the reports that claim component orders have been “halved” but without any specific numbers can’t be verified three months from now when Apple reports its actual iPhone sales for the coming quarter. In the meantime, of course, Apple’s stock took a beating today on these reports. If you don’t smell stock manipulation here, I have a bridge to sell you.

The Truth About Aaron Swartz’s ‘Crime’ ★

Alex Stamos:

In short, Aaron Swartz was not the super hacker breathlessly described in the Government’s indictment and forensic reports, and his actions did not pose a real danger to JSTOR, MIT or the public. He was an intelligent young man who found a loophole that would allow him to download a lot of documents quickly. This loophole was created intentionally by MIT and JSTOR, and was codified contractually in the piles of paperwork turned over during discovery.

Greg Sandoval Resigns From CNet ★

With his talent and integrity, I bet Sandoval is already fielding offers from CNet competitors.

CBS Forced CNet Staff to Recast Vote After Hopper Won ‘Best in Show’ at CES ★

Josh Topolsky, reporting for The Verge:

Apparently, executives at CBS learned that the Hopper would win “Best of Show” prior to the announcement. Before the winner was unveiled, CBS Interactive News senior-vice president and General Manager Mark Larkin informed CNET’s staff that the Hopper could not take the top award. The Hopper would have to be removed from consideration, and the editorial team had to re-vote and pick a new winner from the remaining choices. Sources say that Larkin was distraught while delivering the news — at one point in tears — as he told the team that he had fought CBS executives who had made the decision.

Apparently the move to strike the Hopper from the awards was passed down directly to Larkin from the office of CBS CEO, Leslie Moonves. Moonves has been one of the most outspoken opponents of the Hopper, telling investors at one point, “Hopper cannot exist... if Hopper exists, we will not be in business with (Dish).”

Disgraceful. This, from the company that was once the pinnacle of journalistic integrity.

Defining the Gram ★

The Economist:

Science moves on. Time is now defined by readily available clocks that use caesium atoms as their pendulums, while distance is specified in terms of the speed of light in metres per second (the caesium atoms having already provided the value of a second), and these days that speed can be measured with great accuracy using easily purchased equipment. Mass, however, remains stubbornly stuck in Paris, under three concentric glass lids (pictured) strangely reminiscent of cheese covers, which are intended to stop it either absorbing or shedding matter and thus changing in value.

Unfortunately, the cheese covers have not worked.

Star Wars: Machete Order ★

Speaking of Star Wars, this essay by Rod Hilton is one of the best and most insightful pieces I’ve ever read regarding the relationship between the two film trilogies.

ABC to Look at ‘Star Wars’ Live-Action Series ★

I have a bad feeling about this.