Einhorn Says Apple’s Next Product Should Be iPrefs

Greenlight Capital founder David Einhorn said his proposed capital allocation strategy for Apple is a “a win-win for everyone,” and in a Thursday afternoon presentation to investors entitled “iPrefs, Unlocking Value,” the longtime Apple bull explained why.

“In contrast with the rest of the business, where innovation is the norm, Apple’s attitude toward its cash is quite conservative,” he said. “We have a solution that allows it to have its cake and eat it too.”

That solution? iPrefs, a perpetual preferred stock that Einhorn argues should be Apple’s next “product.” So what are iPrefs — aside from being “the product Apple doesn’t know it needs.”

Essentially, they’re shares that pay dividends forever.

“An iPref has a base value of $50 and pays a dividend of $2 per year,” Einhorn explained. “Apple can redeem them for face value, shareholders should expect to receive 50 cents per quarter, every quarter, forever.” And for Apple, he said, they won’t cost any of its existing cash stockpile. “iPrefs don’t interfere with whatever Apple’s business plan is. … They are a form of equity, not debt.”

But why does a company like Apple need such a thing? Most other publicly traded companies don’t seem to. Well, Apple isn’t like most other companies.

“Most companies are appropriately capitalized and consequently trade at market valuations commensurate with their intrinsic value,” Einhorn said. “Apple is different, though. … It’s not appropriately capitalized. And it’s not minimizing its cost of capital. This is one reason why we believe Apple’s stock trades at a valuation well below its intrinsic value.”

If iPrefs sound like a bunch of financial engineering, they’re not — according to Einhorn, anyway. “This is not a complicated idea, it’s just unfamiliar,” he said. “[With iPrefs], Apple can keep it’s cake, and the shareholders get to eat it too.”

Apple patents smartwatch with flexible display

On its path to earn back a level of excitement that the company has been missing lately, Apple has been working on a product that combines two of the hottest buzz terms in the technology — wearable electronics and flexible displays.

This much-speculated, but not yet announced product has been known in the media as the “iWatch.” While there had been some degree of rumor about it for months, the US Patent and Trademark Office has made the project semi-official by publishing Apple’s filing for a “Bi-stable Spring with Flexible Display.”

Right now the patent covers something that is more of a wristband than a watch. It supposedly identifies exactly how big your wrist is after you put it on, and adjusts the display accordingly. As for what powers the device and its communications, there is a battery, an integrated circuit, and a wireless antenna. The patent also mentions a “communication link” to a portable electronic device, presumably an iPad or iPhone.

It sounds like the iWatch can’t do much on its own, but it can act as a second display for your iDevice. It also contains a power connector to charge up while you’re at home, but there’s also the ability to charge up, if a bit marginally, via solar power.

In recent years, the traditional wristwatch has fallen out of favor with many people. After all, there is really no need to have a personal device that tells you the time, because everyone has a mobile phone. But that doesn’t mean that the right company can’t make wrist-worn technology relevant again.

In fact, anyone who thinks there isn’t a significant opportunity to reinvent the watch should look no further than the Pebble e-paper watch, which smashed through its $100,000 Kickstarter goal to earn more than $10 million in interested pledgers.

Of course, just as phones are no longer about calling people, the Pebble watch was not at all about checking the time. It was about having a piece of technology strapped to you to allow for always-on access to emails, alerts, music playback, exercise monitoring, and other customized features.

Pebble also drew awe from people because of the e-ink display, something that had never been used in a smart watch before. It was a real hook that drew in technology enthusiasts. The iWatch would no doubt have the same effect because of its flexible display.

Interestingly, Apple never references the word “watch” in its patent, which makes one wonder if the company plans to introduce an entirely new product category like it did with the iPad.

Once they will build, you will buy- A retail strategy launched by Apple

Apple is one of the companies which has enjoyed breakthrough in its almost every product line and as a whole, they are considered as immensely successful. They have marked their name in provision of hardware devices as well as software service providers. Now their retail chain is also showing success, which according to the analysts can be greatest innovation for the company.

In the Goldman Sachs investor conference, Cook has shared retail plans of Apple. He has explained in detail about the growth and success of Apple stores and also shared expansive strategy for 2013. You can also visualise the chart of progress on the keys like store visitors, international distribution, store opening and others on the blog post of Asymco’s Horace Dediu.

The most important graphical comparison done by Dediu is store open Vs store visitors. Apple has encountered more physical presence basing on the average numbers of visitors, for the last two years. Stores of Apple, in every location where they are existing, is about 1 million. The new strategy discussed by Apple is not only about store opening but also about closing existing ones and also replacing the larger outlets.

Apple has launched its own iPod touch inventory system and check out points and has changed their structure of stores for providing EasyPay shopping to the customers. They have come up with in store pick up so to change the thinking about brick and mortar stores.

It is important to bear in mind that Apple’s new retail leadership has recently entered into the turmoil. The success and creation of Apple’s retail division is attributed to the former retail operator, Mr. Rob Johnson who has left Apple in June 2011. He has been replaced by Mr. Dixons which was CEO of John Browett in January 2012. This person is being hired after six months of first left over and his hiring was quite controversial. In October 2012, this person was also dismissed from his job and Apple is still in search to replace Browett.

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Apple claimed that it was hit by same hackers which targeted Facebook- A new protection software is going to be released

Apple claimed that they have been targeted by the same group of hackers which has attacked Facebook in an attempt to break its network security. Apple further shared that only small numbers of Mac employees have been affected by this attempt, yet there is no evidence that any data is left. This report is shared by Reuters’ analysts and they have further added that Apple will be releasing software for preventing the customers from such attacks.

Apple’s sharing of report against hacker’s attack is followed by Facebook complained done on last Friday. Facebook also claimed in their report that none of their users’ data is being compromised in this attempt to demolish security.

Apple has therefore started working with the law enforcement agencies to figure out the actual source of hacking and as well they have introduced their software tool to protect users of Macs against malware employed by unidentified assailant.

Both Apple and Facebook has shared their report to assure the users that they are making every possible step in order to secure the data of the users and to warn the hackers that they are moving ahead in data security issue. Also this data breach sharing is done to ensure transparency from the companies facing threats from the cyber security.

Apple however has claimed that this type of security breaches rarely occurs in their company. Company has reported such type of breach in which 400 iTunes accounts were hacked in 2010. The adopted preemptive move has indicated that company is being dealing with different level of security issues. The good news is, data of both companies is not leaked and thus the both tech giants are considering resources to track the culprits.

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Mac Pro 2013 & iMac 2012 Refresh: Apple Weekly 67

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Steve Jobs Wanted to Create an Apple iCar Before his Death

Italian industrial designer Franco Grassi had a few ideas about what an Apple-branded automobile would look like and he pulled them together into the mockup shown above. Is it beautiful? Absolutely. Is it practical? Not in the slightest. Unless and until we see an actual iCar, who knows what it would look like… One certainty with Apple is that they appreciate form, but it has to follow function (at least when Steve Jobs was at the reigns).

Steve Jobs would have loved making an iCar. Apparently he even said so in an interview with the New York Times prior to his death.

This isn’t the first time a car-related rumor has surfaced in relation to Apple, and it probably isn’t any more likely now than it was years ago. Making vehicles isn’t exactly a core-competency over at Apple, and it’s a very difficult industry to casually toss yourself into. This alone isn’t reason enough to keep Apple away from it though, especially when you consider that they enjoy crazy amounts of brand loyalty and strive to be an integral part of your day-to-day life.

Plus – Google and Microsoft are dipping their toes in that water…
Plus, Plus – Eddy Cue sits on the board at Ferrari and Phil Schiller is a well-known enthusiast.

What seems far more probable is that Apple would create a joint-venture with an existing car manufacturer and load up something (or everything) from their line-up with every piece of Apple technology and styling they can throw at it. There is a lot of automobile integration across many of the vehicles on the road already (particularly by way of Bluetooth technology), but it could definitely be made a little more elegant. Some models have nice places to rest and dock smartphones and tablets, but none do enough to make the late Steve Jobs proud. Yet.

So if the iCar ever sees the light of day, do you think it will be available in anything other than a silver-aluminum finish?

[via Business Insider]

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Why Credit Card Companies Need Some Madison Avenue Style

Image copyright Gregory James Van Raalte

In 2012, companies like PayPal, Google and Apple made major announcements in the mobile wallets and offers space. Credit card companies were not nearly as noisy, but 2013 could be the year that all changes.

Financial institutions are embracing digital offers out of necessity because revenue from current sources is in decline. The future of the payments industry is shifting quickly to monetizing consumer relationships — particularly through mobile devices — and away from extracting new value from the payments value chain.

What many do not know is that credit card companies have experienced significant pain as a result of the capping of their lucrative interchange fees by the Durbin Amendment, which became effective in 2011. Faced with declines in what had previously been a significant form of revenue, credit card companies know that they need to open new sources of revenue. This need is becoming ever more urgent with companies like Google and Paypal joining the mix and leveraging their unique assets — novelty, retailer relationships, and extensive technology infrastructure.

The opportunity here is massive — total real-world (not online) retail commerce is $4 trillion a year in the U.S., and eMarketer just reported that mobile advertising is expected to increase by 180 percent in the coming year to reach $4 billion. Credit card companies looking to take their fair share of this revenue need to figure out how to leverage their great relationships with consumers to open up new sources of revenue.

Here are my suggestions for strategies that will help credit card companies come out ahead in 2013:

Stop chasing Chase. Instead, start acting like a media company.
To open new sources of revenue through media and technology, banks need to add new DNA that is not focused on traditional banking concerns such as regulatory compliance, security and fraud. Of course, I am not suggesting that they stop complying with regulations, or that they abandon security. But banks must become more nimble at attacking new revenue opportunities — particularly in consumer offers. At Google and other companies in Silicon Valley, teams still pull all-nighters to release alpha versions of products for consumers and partners in a matter of days to test an experience, an approach that is antithetical to the banking world. Yet if banks want to succeed in the media world, they have to figure out how at least part of their organization can play in an API-driven ecosystem that encourages collaboration and rapid product releases. First test for the C-suite at banks: Have you developed and released anything new to consumers in a single quarter?

Play ball with the competitors.
Consider the value of the ecosystem in growing your mobile offers initiative. In order to succeed in delivering a great mobile rewards program, the key is having a rich supply of merchant offers upon which to layer targeting. No one company is going to assemble enough, so think instead about collaborating with all the other players and getting the network effects of a larger audience and a bigger pool of offers. An interesting model for this kind of collaboration is WEVE in the UK, in which three mobile operators — EE, Telefonica UK (O2) and Vodafone UK — have banded together to form a large consortium. The individual companies behind the consortium still compete to acquire subscribers, but they now collaborate with a common platform for monetizing those subscribers through marketing.

Turn that marketing focus inside out.
Now that you have a great offers program, the biggest challenge is getting enough customers into it to move the needle. Each card provider today has marketing teams that focus solely on signing up new customers for their credit cards. Yet somehow, these are not the folks developing new digital offerings. These customer acquisition teams are digital media experts. Imagine focusing that valuable marketing experience on getting consumers to opt into new and sophisticated customer reward programs, and to download their new rewards apps. It is customer acquisition, pure and simple.

Don’t wait for big data.
My last and most controversial suggestion for 2013 is to let go of the obsession with big data! Many banks are building huge databases for micro-targeting customers with niche offers. Microtargeting is cool, but believe me, media is a war of attrition and all of that big data-based targeting will yield a customer segment of just a few people. Brands do not want to target only a select handful of people with their offers; they need to reach a million people in order for their investment in creating and distributing that offer to make economic sense. Silicon Valley has managed to convince enterprises that massive amounts of data will build a program that really performs in terms of offers and sales; but ultimately, microtargeting is not monetizable at scale until there are an equally large set of available offers. The real way to success is to provide a great experience with lots of offers for your entire customer base. Yes, there are a handful of important variables that should be considered, including location, time of day, gender, interests and even retargeting; but other data on top is gravy and too much is at odds with reaching a large enough number of people with relevant offers. The “big picture” is not always based on big data. (Hint: You might derive as much value from customers by asking them what they want instead.)

The Long View
As Bob Dylan said, “you don’t need a weatherman to know which way the wind blows.” Credit card companies can no longer hesitate while other companies race forward to make a profit on this kind of consumer spending. If credit card companies employ the strategies I propose, they will be real contenders against the likes of Paypal, Google, Apple and the mobile operators. The weather forecast is clear for mobile offers: Sunny, with billions of dollars blowing in the wind. It’s up to each financial institution to figure out how to get to market faster and catch some of it.

Alistair Goodman is the CEO of Placecast, where he leads a team of mobile, technology and marketing experts who have created the most scalable, proven, location-based marketing system currently available. Alistair has more than 20 years of experience working in marketing and product development efforts for media and technology companies.

Apple Debuts New AppStore.com Vanity URLs for Developers during Super Bowl

Apple has released a product during the Super Bowl for App Store developer’s vanity URLs. This domain was advertised in the new Star Trek movie within a huge public. The advertisement shows to the viewers as Appstore.com/StarTrekApp instead of Facebook.com/StarTrekMovie.

The advertisement was first seen by CNET. The domain “AppStore.com” is a personal gift from Steve Jobs Salesforce CEO Marc Benioff back in 2008. According to the Apple Developer documentation posted on January 31, developers can shortened the name of URL in iTunes App Store or the Mac App Store. The user can create easy links by App Store Short Link by the particular form of app or company name. This simple way can ease users to search your application in the App Store directly from your website or marketing campaigns. These links are helpful in offline communication like print ads, TV spots, trailers app, radio ads and billboards.

According to Apple, Domain names can also point to either the company itself (e.g. http://appstore.com/ gameloft) or the app (e.g. http://appstore.com/wheresmyperry).

New URL can quickly turn into a land grab in crowded App Store where more than 800,000 mobile applications are available on the App Store iOS. Apple is prepared for this competition. In case of conflict of names or URLs with multiple outcomes, for example appstore.com/airhockey, direct the user to a search the page. These developers are encouraged to generate unique names for their applications instead of prevent this problem from occurring.

The http://www.appstore.com domain redirects users to Apple.com but without the “www” opens the iTunes App Store or the Mac App Store. In the past, short links are available using the URL itunes.com. Now changes the AppStore.com are itunes.com in this case.

Update Information:

Analysis of several sources and App Store developers inside Apple shows that, the new vanity URLs will not configured according to developer’s need, it will be provided by Apple on the behalf of developer. Due to this, a conflict was raised between CNET and our original report. This is confusing because of developer documentation perception.

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