Reality Bites
For Transformers, augmented reality allowed us to wear Optimus Prime’s head. For Iron Man 2, the shamefully enjoyable promotion gets better: You can now wear the mask, see yourself in Stark’s HUD and record it. Go forth and daydream. [IronMan2] More »
After tinkering with movie rentals in January, YouTube's added a bunch of movies and TV episodes you actually want to see. We're not just talking art-house Sundance Film Festival flicks—now, you can get a bit of anime too. More »
The company that produced Downfall, the movie that led to the legendary “Hitler finds out…” Internet meme, has explained why after all these years it finally pulled down the successful YouTube parody videos.
By Joe Wilcox, Betanews
Recovering IT spending, robust worldwide PC shipments and strong Windows 7 adoption helped Microsoft to beat the Street. The software giant announced fiscal 2010 third quarter earnings, ended March 31, after the Bell, today.
Microsoft revenue rose 6 percent to $14.5 billion, up from $13.65 billion a year earlier. Operating income: $5.17 billion, up 17 percent. Net income: $4.01 billion, or 45 cents a share. Net income rose by 35 percent and earnings per share by 36 percent year over year. If not for a $305 million deferral related to Office 2010, Microsoft would have reported $14.81 billion revenue.
For about a year, Microsoft provided no guidance to Wall Street analysts, so there was none for fiscal Q3. Analysts’ average consensus was $14.38 billion revenue and 42 cents earnings per share. Revenue estimates ranged from $13.81 billion to $14.75 billion.
“Business customers are beginning to refresh their desktops and the momentum of Windows 7 continues to be strong,” Kevin Turner, Microsoft’s chief operating officer, said in a statement. “We are also seeing tremendous interest in our market-leading cloud services for business.”
Microsoft closed the quarter with $12.3 billion unearned revenue. Annuity license sales grew in the low single digits. The company reported 40 million paid seats for Azure cloud services. During a conference call late this afternoon, Peter Klein, Microsoft’s chief financial officer, predicted “continued strength in hardware shipments,” which would be good for operating system and productivity suite sales. He asserted that across divisions annuity revenue would align with OEM revenue. Klein also emphasized that fiscal fourth quarter is the “season high for our enterprise sales.”
Coming into the quarter, some analysts and armchair pundits started looking more closely at Apple compared to Microsoft. Unthinkable a year ago, Apple has closed a huge earnings and revenue gap separating it from Microsoft. On Tuesday, Apple announced fiscal 2010 second quarter results: $13.5 billion revenue and net profit of $3.07 billion, or $3.33 a share. In the year ago quarter, Microsoft reported $4.4 billion operating income, $2.98 billion net income or 33 cents a share. Apple: $9.08 billion revenue and $1.62 billion net income or $1.79 earnings per share. Apple made enormous revenue and earnings gains against Microsoft in just one year. The question now isn’t so much if Apple might catch or surpass Microsoft but when.
Q2 2010 Revenue by Division
Still, Office and Windows are cash machines, which are getting a boost from recovering PC sales. The really good news came about a week ago from Gartner and IDC, which reported strong double-digit growth in second-quarter worldwide PC shipments. But that wasn’t the big takeaway, particularly for Microsoft. After more than 18 months of sluggish sales, businesses are finally beginning to buy PCs again. For Microsoft, the news likely means an increase in sales of higher-margin professional Windows, which is evident in fiscal Q3 numbers. During the worst of the global economic crisis and the 2008-09 surge in netbook shipments, the sales percentage dramatically shifted to lower-margin consumer Windows.
By Microsoft estimates, worldwide PC shipments grew by 25 percent to 27 percent, which is inline with numbers from both Gartner and IDC. Netbooks, which typically ship with non-Premium Windows, accounted for 10 percent of shipments. according to Microsoft.
“With a relatively positive macroeconomic outlook, business demand was more forthcoming,” Mikako Kitagawa, Gartner principal analyst, said in a statement. “Major PC replacement demand driven by Windows 7 will become more apparent in the second half of 2010 and the beginning of 2011.” That’s exactly the kind of forecast Microsoft executives want to hear.
But that’s the future. The business recovery is still modest compared to consumer sales. In the United States, business PC shipments grew by 10 percent year over year compared to 30 percent for consumers, according to Gartner. There Windows 7, along with aggressive pricing, contributed to unseasonably strong shipments. “Although the first quarter is not typically a strong quarter for the consumer market, growth in the consumer segment was strong,” Kitagawa said in the statement. “The positive economic outlook and affordable system prices drove US consumers to buy more PCs. These purchases either replaced aging PCs or became additions to buyers’ households.”
Q2 2010 Income by Division
Segment by Segment Results
Microsoft reports revenue and earnings results for five divisons: Windows & Windows Live, Server & Tools, Business, Online Services and Entertainment & Devices.
Windows & Windows Live. Revenue rose 29 percent year over year, or by $781 million. The division derives about 80 percent of its Windows revenue from license sales to PC OEMs. OEM license sales increased by 30 percent. OEM premium license mix was 72 percent — 44 percent consumer and 28 percent business. Consumer license sales increased by 35 percent year over year and business licenses by 15 percent.
Server & Tools. The division is most insulated against economic maladies, because about 50 percent of revenues come from contractual volume-licensing agreements. Product revenue grew 2 percent, or $50 million, buoyed by Windows Server and Enterprise Client-Access License sales. Because of corporate layoffs, Microsoft has seen customers renewing license contracts at lower levels. Annuity license sales were flat year over year, which is somewhat surprising with new products in the pipeline. The division’s services revenue grew by 5 percent, or $34 million. Microsoft put year-over-year server hardware shipment growth in the high teens.
Business. Microsoft’s other cash cow division reported yet another quarter of revenue declined. Two mitigating factors: 1) A 1 percent decline, or $37 million, in Office 2007 licensing. 2) Deferral of $305 million related to Office 2010 upgrade guarantees. Annuity licensing was flat year over year. However, Microsoft is launching Office 2010 this quarter, which should positively affect Office sales. Incidentally, Office consumer revenue rose 11 percent, or $77 million, buoyed by strong PC shipments.
Online Services Business. The division’s loss widened, despite ad sales increases. Online advertising revenue rose 19 percent, or by $81 million, to $502 million. Much of the ad sales increases came from search gains.
Entertainment & Devices. Microsoft shipped 1.5 million Xbox consoles during the quarter, down 12 percent from 1.7 million a year earlier. Non-gaming revenue increased by 14 percent, or $77 million, driven by sales of PC hardware and Windows embedded devices.
Today marks the six month anniversary of the launch of Windows 7 on October 22, 2009. Six months on and Windows 7 is a winner for Microsoft. Some organizations are also claiming the success of Windows 7 has seen a massive uptake of 64-bit computing.
Microsoft’s success with Windows…
Microsoft announced the Windows 7 Touch Pack back in May 2009 but originally it was meant for OEMs only. Today the company released the Touch Pack download for the masses.
Microsoft’s Brandon LeBlanc confirmed the release in a company blog posting. LeBlanc said that Microsoft took the decision to distribute…
Hot damn, people. The mother of all Dell leaks just dropped into our laps, and the absolute highlight has to be the Lightning, a Windows Phone 7 portrait slider. That's right — a portrait slider. The renders on these slides look slick as hell, but they're no match for the spec sheet, which looks even better: 1GHz QSD8250 Snapdragon processor, WVGA 4.1-inch OLED display, AT&T and T-Mobile 3G, five megapixel autofocus camera, 1GB of flash with 512MB RAM plus 8GB of storage on a MicroSD card (non-user-replaceable, we're assuming), GPS, accelerometer, compass, FM radio, and full Flash support including video playback. We'll see what happens with that — the ship date is pegged at Q4, indicating this is a WP7 launch device, and Microsoft's told us Flash won't make it into the OS initially. Here's the real kicker, though — other slides in the deck indicate this thing is getting an upgrade to LTE in Q4 of 2011. Are we stoked? Yes, you might say that. Check out all the slides in the gallery below, and check out the rest of this storm of leaks right here.
Dell Lightning: the ultimate Windows Phone 7 device leaks out originally appeared on Engadget on Wed, 21 Apr 2010 23:55:00 EST. Please see our terms for use of feeds.
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The House of Commons has rejected a Bloc Québécois MP’s legislation to permit assisted suicide in Canada under strict conditions.
Cypress Semiconductor is a company that makes the TrueTouch capacitive touchscreen. As reported by Slashgear, the company is now working to add hover support to their finger controlled touchscreens. This would allow a screen to recognize the presence of a user’s finger before it actually makes contact with the screen.
In…
The BBC is reporting that Zeus, a virus that steals your online bank account information is on the rise. Trusteer says of the 5.5 million computers that they monitor, one in 3,000 is infected with the Zeus virus.
Zeus 1.6 can infect users using both Internet Explorer and Firefox. Once infected…
Akamai released a State of the Internet report for each quarter of the year. Their most recent report for Q4 of 2009 is now available. It shows that the average broadband speed in the US is 3792Kbps with just 57% broadband adoption.
Delaware has typically held the highest average speed over…
Confirmed: a bad McAfee update for Windows XP has shut down thousands, possibly millions, of computers around the world. That’s big trouble. UPDATED: More »
Microsoft has announced today that they are prepping for the Wave 4 rollout. In a blog post on the official Windows Blog, they stated that internal testing of Live Wave 4 has been going on for some time and that they will soon begin to roll out the beta to…
UPDATE: Apple has responded to Adobe’s move: “Someone has it backwards–it is HTML5, CSS, JavaScript, and H.264 (all supported by the iPhone and iPad) that are open and standard, while Adobe’s Flash is closed and proprietary,” said spokeswoman Trudy Miller in a statement.
Adobe yesterday announced that they would cease work…
Fellow arm sleepers, a new dawn is upon us. For just $100, we can alleviate the several tons of pressure that our massive craniums place upon our arms. That, or our pillows now have a hoagie compartment. [HammacherSchlemmer via NerdApproved] More »
Down for a solid spate of updates? Wipe that sleep from your eye and listen up, then. HP‘s pushing out a list of updates tonight across a rather strange combination of desktops, so we won’t waste any time breaking it down. The standouts of the bunch are the revamped TouchSmart PCs, with both the TouchSmart 300 and 600 getting a dose of Core i3 / i5, some sort of “Beats Audio” inclusion and a suite of software that you may or may not wish to keep loaded on. Starting tags on these are listed at $799 and $1,099, respectively. Moving on, there’s the All-in-One 200-5020, a $699 (and up) machine with a 21.5-inch 1080p display, Windows 7, built-in WiFi, an optional keyboard / mouse, DVD burner, integrated webcam and MediaSmart software bundle. For the suits in attendance, there’s the HP Compaq 6005 Pro Ultra Slim, which measures 10-inches high and 2.6-inches wide, includes ATI’s Radeon 4200 GPU and sports a $599 starting point. The whole lot should be available by the month’s end if you find something you like.
HP stuffs Core i3 / i5 into TouchSmart PCs, gently revamps other desktops originally appeared on Engadget on Wed, 21 Apr 2010 01:16:00 EST. Please see our terms for use of feeds.
It’s no secret that Mozilla is planning some major UI overhauls for their next major release of Firefox. The new theme is designed to reflect a modernized web browser to illustrate its “power, simplicity, and customizability.” The design team has outlined 4 main goals for the refresh:
Streamline UI elements and…
Avatar director-turned-activist James Cameron says Alberta’s oilsands are a “black eye” to his native country’s image as an environmental leader.
By Joe Wilcox, Betanews
Can nothing stop Apple?
The Cupertino, Calif.-based company’s quarterly earnings again rose high above Wall Street consensus, which already was $600 million to $1 billion above guidance. Today, after the bell, Apple reported $13.5 billion revenue and net profits of $3.07 billion, or $3.33 a share, under the new reporting method implemented last quarter. A year earlier, Apple reported revenue of $9.08 billion and $1.62 billion net quarterly profit, or $1.79 per share. Fiscal 2010 second quarter ended March 27, 2010.
Three months ago, Apple forecast revenue between $11 billion and $11.4 billion, with earnings per share ranging between $2.06 and $2.18. Analyst estimates were much higher than Apple guidance: $12.04 billion average revenue consensus and $2.45 earnings per share. Apple blew past the Street. Again.
In a statement, Apple CEO Steve Jobs said: “We’re thrilled to report our best non-holiday quarter ever, with revenues up 49 percent and profits up 90 percent.”
For fiscal 2010 third quarter, Apple forecasts between $13 billion and $13.4 billion in revenue, with earnings per share ranging between $2.28 and $2.39. Gross margins are projected to be 36 percent, a substantial decline. Apple expects sales of iPad to account for about 25 percent of the gross margins decline. “Customers are loving the iPad,” Apple CFO Peter Oppenheimer said during a conference call late this afternoon. Apple expects to have iPad in nine countries by end of May.
Tim Cook, Apple’s COO, responded to analyst concerns that either iPad volumes would be higher than expected or margins substantially less than projected. “We priced it very aggressively,” he said. “We think the market size of the iPad is very large, and we want to capitalize on our first-mover advantage.”
My interpretation: Apple could be anticipating that iPad will cannibalize some Mac sales and/or high iPad sales volume during the back-to-school buying season. “There was nothing obvious in the iPod numbers or the Mac numbers to suggest cannibalization,” Cook said. However, he observed that iPad’s announcement in January may not have affected sales the way the released product might. “That part of the equation, we don’t know yet.”
Q2 2010 Revenue by Product
Apple shipped 2.94 million Macs during the quarter, for 33 percent year-over-year growth. Wall Street consensus was around 2.7 million.
While Apple posted strong year-over-year results, units and revenue sequentially declined in nearly every segment — not surprising given the holiday quarter’s strong sales. However, Oppenheimer said sequential declines were smaller than is typical.
Apple’s gross margin was 41.7 percent, up from 39.9 percent a year earlier. International sales accounted for a stunning 58 percent of revenue. Apple ended the quarter with $41.7 billion in cash, up from $39.8 billion three months earlier. Priority for cash is “preservation of capital,” Oppenheimer told financial analysts today.
Q2 2010 Unit Shipments by Product
iPhone. Apple shipped — what company executives really mean by sold — 8.75 million iPhones worldwide during fiscal second quarter. A year earlier, Apple shipped 3.8 million iPhones. Apple shipments into the channel are usually several million units higher than numbers released by Gartner, which measures actual sales. During the quarter, iPhone was available from 151 carriers in 88 countries.
Wall Street analyst estimates ranged from about 6 million to nearly 9 million units. Revenue rose 124 percent year over year, giving the biggest boost to Apple’s quarter. The smartphone and supporting services accounted for about 41 percent of total Apple revenue.
Computers. Apple shipped 2.94 million Macs during the quarter, up from 2.6 million units a year earlier. Wall Street consensus ranged from about 2.78 million to 3.4 million shipments worldwide, with consensus around 2.7 million. Oppenheimer said Apple ended the quarter with about three-to-four weeks of inventory in the channel.
Last week, Gartner and IDC released preliminary first calendar quarter PC shipment data. In the United States, Apple shipped 1.4 million computers, for 34 percent year-over-year growth, according to Gartner. However, IDC put Apple shipments lower, at 1.1 million, with growth a much lower 8.3 percent.
Q2 2010 Revenue by Geography
Apple ranked fifth in the United States, falling yet another place, with 8 percent market share, down 7.2 percent year over year, according to Gartner. But IDC reported that Apple’s market share declined to 6.4 percent, from 7.2 percent. Just two years ago, Apple had risen to third place in US PC shipments. However, despite all the hoopla about increasing Mac sales, Apple US ranking declined, with risk the company might fall back out of the top five in some future quarter.
Gartner and IDC won’t tabulate Apple’s worldwide ranking until the final figures are released, and generally the information is not publicly available. But the last time I could get data, Q3 2009, Apple ranked No. 7 in worldwide PC market share, according to IDC.
iPod. Apple shipped 10.9 million iPods during fiscal second quarter, down from 11 million a year earlier. Analyst consensus for Q2 was around 9.4 million units. While units declined, revenue rose 12 percent from a year earlier. Oppenheimer described iPod growth as the strongest in two years. Apple ended the quarter with about four-to-six weeks of inventory, on par with projections. The iTunes Store ended the quarter with a library of 12 million songs.
Q2 2010 Unit Shipments by Geography
Retail. Revenue rose 22 percent year over year, with Apple retail stores selling 606,000 units, compared to 434,000 a year earlier. Apple opened three new stores in the quarter, for a total of 286 retail outlets worldwide. There was an average 284 stores open in the quarter, with average revenue of $5.9 million compared to $5.5 million a year earlier. Sales rose by average 8 percent per store. Apple retail stores had 47 million visitors during the quarter up 20 percent from 39.1 million a year earlier. Apple expects to open 40-50 new stores during fiscal 2010.
