Robert's Feed
Oct 25, 2012
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Apple results shrink iPad mini’s relevance

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By Robert Cyran The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Apple’s results have shrunken the iPad mini’s relevance to size. Hawking nearly 27 million iPhones last quarter dwarfs all the hoopla earlier this week surrounding the launch of the tinier tablet, which may sell about the same amount in a year. Moreover, iPad profit margins don’t compare – and the mini’s will be smaller still. The phone still energizes the Apple ecosystem.

Impressive growth came through again despite Apple missing what analysts had been expecting the bottom line to be. Sales increased 27 percent and earnings per share 23 percent. Most of it can be attributed to the iPhone, which accounts for just under half the company’s revenue. While unit sales of the handset rose 58 percent from a year ago, iPad sales grew at less than half that pace, to 14 million. The difference in growth rates is also only half the story.

Oct 24, 2012
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Why do investors prefer Amazon to Apple?

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By Robert Cyran The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Why do investors prefer Amazon to Apple? Sure, the gadget maker’s market capitalization is far larger. Yet investors are willing to pay almost nine times as much for the retailer’s estimated earnings. That looks expensive in any case. But it’s also odd, because Amazon perpetually promises more jam tomorrow, while Apple delivers it.

Both companies are growing revenue at similar rates – just under 30 percent a year. But it’s no contest when it comes to the bottom line. Amazon runs at about break-even – it scraped out a measly $7 million of income from $12.8 billion of sales last quarter. Apple’s 25 percent net margin, meanwhile, generated $8.8 billion of black ink.

Oct 24, 2012

Breakingviews – Apple takes lower-priced tablet fight to Amazon

By Robert Cyran

NEW YORK (Reuters Breakingviews) – Apple (AAPL.O: Quote, Profile, Research) is taking the tablet fight to Amazon (AMZN.O: Quote, Profile, Research). The Cupertino tech company’s new iPad mini takes it closer to the price point for the online retailer’s devices. The new hardware rivalry could pressure Amazon into price cuts.

Investors didn’t seem to see it quite that way. They knocked some 3 percent, or about $20 billion, off Apple’s market value despite a slew of product updates and the unveiling of the smaller iPad on Tuesday afternoon. Perhaps at an entry-level $329, Apple’s widely anticipated new product wasn’t seen as competitive enough with Amazon’s $199 Kindle Fire HD.

Oct 20, 2012
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Is everything sacred in Canada?

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By Robert Cyran

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Is everything sacred in Canada? At first it was a hole in the ground. Then it was the stock exchange and a DIY chain. This week, regulators blocked two more big deals, including a $5.2 billion bid for Progress Energy by Petronas of Malaysia. Taken as a whole, these actions signal the market for corporate control in Canada – especially when it comes to foreign buyers – is effectively closed.

Oct 20, 2012
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Internet parasitism powers Barry Diller’s returns

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By Robert Cyran

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Barry Diller is abandoning Newsweek magazine’s print edition as the media mogul’s web businesses are thriving. But his IAC conglomerate seems to be powered by a risky form of internet parasitism. The $4.6 billion company’s stock rallied some 20 percent this year on a boom in online search largely driven by customers unwittingly downloading IAC toolbars. That’s no way to build a lasting business.

Oct 18, 2012
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Google’s hardware ambitions proving costly

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By Robert Cyran

The author is a Reuters Breakingviews journalist. The opinions expressed are his own.

Google’s hardware ambitions are proving surprisingly costly. The search giant paid $12.5 billion for Motorola’s handset business. The division lost another $527 million in the third quarter and the mistaken early release of unexpectedly weak earnings knocked over $20 billion off Google’s market capitalization in afternoon trade. A bigger concern is the risk of long-term management distraction.

Oct 2, 2012

Super-voting stock hardly super in terms of value

(The author is a Reuters Breakingviews columnist. The opinions expressed are his own.)

By Robert Cyran

NEW YORK, Oct 2 (Reuters Breakingviews) – Super-voting stock is hardly super in terms of value. Facebook (FB.O: Quote, Profile, Research), Groupon (GRPN.O: Quote, Profile, Research) and Zynga (ZNGA.O: Quote, Profile, Research) are among the growing number of companies using multiple classes of shares. Yet their returns are worse than for simpler ownership structures over most time periods, new research finds. Investors should consider they’re often giving up more than just control.

Sep 24, 2012
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iPhone 5 will live up to the hype – in time

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Robert Cyran The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The iPhone 5 will live up to the hype – in time. Apple sold 5 million of the new handset, or about $3 billion worth, during its three-day debut. That fell short of Wall Street’s whisper number, which was up to twice as high. Yet the latest sales outpaced those of its predecessor and the company couldn’t meet demand. Supply-chain glitches and map-app hysteria won’t derail Apple’s smartphone train.

Apple sold 4 million of its last phone, the 4S, on its opening weekend in October last year, and 1.7 million of the previous iteration 16 months earlier. Though investors fixate on these openings, they aren’t as indicative as the Hollywood box-office premiere tallies they’ve come to resemble. Apple shares tumbled 2 percent on Monday, knocking about $13 billion off the company’s market value.

Sep 20, 2012
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Real estate wave helps an IPO avoid tech wipeout

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By Robert Cyran The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

A real estate wave helped an initial public offering avoid a tech wipeout. Newly listed shares of Trulia, an online property listing service, popped by over 40 percent in their debut on Thursday. That defies the dire dot-com market evidenced by the likes of Facebook and Groupon. The U.S. housing recovery is a good story but Trulia is also still hitched to the Web.

For the first time in years, home prices, new construction and completed residences are slowly increasing across America. The rebound is helping many boats rise. Since the start of the year, Home Depot shares are up 43 percent, those of paint maker Sherwin-Williams have gained 67 percent and builder Lennar have rocketed 87 percent.

Sep 19, 2012
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Obama may find an exceptional friend in Facebook

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By Robert Cyran The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

U.S. President Barack Obama might find an exceptional friend in Facebook. The social network’s second-in-command, Sheryl Sandberg, should be on the short list for a top economic job if he wins a second term in office. Yet she’d potentially give up some $130 million in unvested equity to take the job. Her boss Mark Zuckerberg could bridge the gap. But it may cost Facebook shareholders dearly.

Sandberg certainly is qualified to assist the Obama administration. She worked at the Treasury from 1996 to 2001, serving as chief of staff. Since then her star has soared, first with success as a Google executive, and for the past four years as the adult in the room at fast-growing Facebook. The growing importance of technology in the U.S. economy could easily make her look like an inspired choice for an administration that has been criticized for not understanding the private sector.