Tag Archives: Apple

The European Commission attacks – again!

Europe are attacking big U.S companies and want more money from them. Last year Europe attacked Google. Now they are attacking Apple. Based on a two-year long investigation, the European Commission has ordered Apple to pay about $14 billion in back taxes for its subsidiaries in Ireland.

$14 billion? Wow!

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Last year, the European Commission EU said that Google was too dominant in three related markets. They also said that Google is using that position to distort competition and the EU claims that Google limits access to key aspects of the Android ecosystem by insisting that phone markers install Google search and Chrome apps.

Not only that. The EU also said that Google block phone makers from producing phones that run alternative versions of Android and that EU also believes that Google has illegally paid makers and other mobile phone companies to preinstall Google search exclusively.

This is not the first time EU has attacked big U.S companies.

In 2001, the European Commission sent a sternly worded missive to Microsoft. EU accused the software maker of having illegally extended its dominance in operating systems for personal computers (PC`s) into adjacent markets, for tying Windows to programs that play music and videos.

The European Commission said Microsoft was too dominant in the market in 2001. Last year they claimed Google was too dominant in the internet search market. Google are now ruling the smart phone market with their Android system.

Now, they are attacking Apple. Not because they are too big, but because they are having a good agreement with Ireland that allows Apple to pay less tax than other businesses. The European Commission has concluded that Ireland must recover the illegal aid.

Commissioner Margrethe Vestager, in charge of competition policy, said: «Member States cannot give tax benefits to selected companies – this is illegal under EU state aid rules. The Commission`s investigation concluded that Ireland granted illegal tax benefits to Apple, which enabled it to pay substantially less tax than other businesses over many years. In fact, this selective treatment allowed Apple to pay an effective corporate tax rate of 1% on its European profits in 2003 down to 0,005% in 2014.

Apple`s provisions for income taxes outside of the United States amounted to «just» about $5 billion in that period. You can imagine what the amount is if Apple paid an effective tax rate ranging from 1% in 2003 to 0,005% in 2014 on its European profits at that time?

For instance, Apple paid an effective tax rate of 26,1% in the U.S in 2014, with income taxes adding up to almost $60 billion in the period between 2003 and 2014.

But Apple has their own tax structure in Europe, which is Apple Sales International and Apple Operations Europe. Both are two Irish incorporated companies that are fully owned by the Apple group.

Apple Sales International and Apple Operations Europe make yearly payments to Apple in the US to fund research and development efforts conducted on behalf of the Irish companies in the US. These payments amounted to about $2 billion in 2011 and significantly increased in 2014.

The European Commission claims that only a fraction of the profits of Apple Sales International were allocated to its Irish branch and subject to tax in Ireland. The remaining vast majority of profits were allocated to the «head office», where they remained untaxed.

If you are too dominant, they will attack you. If you are too big, they will attack you. If you are too popular, they will attack you. If you don`t pay much tax, they will also attack you. The EU system will find something anyway.

Apple and Ireland both said they disagreed with the record penalty and would appeal against it. What is the end of this story if we face a government that don`t want the money? And is it a problem for a company that made a net profit of $53bn in the 2015 financial year?

What is the next US company to be attacked by Europe?

 

asphalt

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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OPPO is growing much faster than its competitors

I remember the first day I bought my first mobile phone. It was in 1992. It was a big black phone and that beast was three times bigger than an ordinary Apple phone. After a few minutes in my conversation, the battery was flat, and I spent hours to fill it up again.

It didn`t take long before I bought a new one; Ericsson from Sweden. Once one of the greatest in the world. I changed the phone onece again, and this time to Nokia from Finland. Also one of the greatest in the world.

 

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Both, Ericsson and Nokia are falling stars. The Americans came into the market and Apple started to rule the world. Not only that. In a short period of time, they became the biggest company in the world. But how is it now?

There is no doubt that China is the largest smartphone market in the world, and Apple is not at the top three. Smartphone shipments in Q2 amounted for 111,2 million units, and top thee vendors in China accounted for 47% of total shipments.

Who are at the top three? Is it Ericsson? Nokia? Or Apple? No, none of them are at the top three. The biggest names are Chineese brands like Huawei, OPPO and Vivo. Its a surprice to see that Apple are fifth in this important market. Its a bigger surpise to see Samsung below top five.

Its a big market, but its also a very important market, and Its also a big surprise to see the low cost company Xiaomi has dropped down about 40%. Its obviously tough for them to grow in the market with so many aggressive competitors.

OPPO is one of the greatest. Up over +124%. The company is founded in 2004 and the brand is a Chinese electronics manufacturer based in Dongguan, Guangdong.

OPPO Digital is based in Mountain View, California, Unitted States. It is known for its universal upconverting DVD and Blu-ray Disc players. Its first product was the OPPO OPDV981H Up-Converting Universal DVD Player.

OPPO entered the mobile market in 2008.

Last year, OPPO signed an agreement with FC Barcelona to become an official partner of the Spanish football club. OPPO has become a stiff competitor in the Chinese market, which is growing faster than any other mobile company.

 

asphalt

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Google will earn billions on Pokèmon`s success

Google is expected to report earnings on Thursday 28, 2016, after market close. The report will be for the fiscal Quarter ending Jun 2016. The Google stock has skyrocketed since June this year, and this company never stop to impress.

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A couple of days ago we saw Apple go straight up after their earnings report. It is forecasted that Apple could see $3 billion in revenue over the next one to two years generated exclusively by Pokèmon Go.

So is it for Google.

The success of Pokèmon seems to give a huge bonus for both Apple and Google. Google Play are the base for any successful games running on Google`s platform, and so is it for the App Store at Apple.

The huge difference between Apple and Google are their system like iPhone and Android, but the amount of money consumers are spending on both platforms will benefit them both.

Nintendo jumped from 15,000 (TYO: 7974) in June to 32,000 on 19 July this year on their success Pokèmon Go. But it peaked at about 32,000. It plunged 14% yesterday on bad results. Earnings of $0,65 per share from a year ago plunge to a net loss of $1,93 per share.

Nintendo`s Wii U system also fell over 50% YoY. This is why Nintendo is going down and Google up.

Keep in mind that Nintendo is not the producer of the Pokèmon go app. Nor do they sell it.

The Pokèmon Company is a joint venture between Nintendo and two other Japanese companies, and they receives license fees from Pokèmon Go`s in-game purchases. Most of all these fees goes to former Google subsidiary Niantic Labs.

It`s funny when games like this has huge success. They will all profit from it, but for how long will the trend continue? Once it is over, it will drop like a stone.

We all know the story of fresh games like Mario, Zelda and Donkey Kong, and we also know that this is not the end of the gaming era. Nintendo are about to finish its next-generation video games console, code-named Nintendo NX.

Maybe Google will profit from that to.

EPS forecast for the quarter is 6,47 compared to $4,93 at the same time last year.

 

asphalt

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Alphabet can be the largest company very soon

The most valuable company in terms of market capitalization is Apple with a market cap of 523,90. Alphabet`s market cap is 508,76, which means there is only 15,14 that separates them, which means Alphabet can be the largest company very soon.

66% of Apples sales comes from iPhone and Apples new release for iPhone 7 is in September. That is a very long time to wait. Before that, the sales can slow down, and so can the stock. It can go in the other direction for Alphabet.

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Alphabet will come out with a new report after the bell close today. Wall Street`s estimates for EPS is expected to come in at $8,17, with revenue of $16,9B.

Last summer, they changed the name to Alphabet Inc, but Google will continue as the company`s legacy business and include core properties such as search and advertising. Alphabet will continue to invest in self-driving cars, health care, Google-X and smart homes.

So, this will be the first quarter to see how both segments are doing it. Alphabet`s shares rose 46% last year after cost cutting initiatives and a lot of reorganizing. We will probably hear more about that later today.

Alphabet is focusing on innovation and growth and their search division has contributed to the recent robust growth. They introduced YouTube Red and will continue with acquisitions. They succeeded with their strategic mobile initiatives, so it should be a good quarter for Alphabet (GOOGL).

Alphabet can be the largest company very soon.

 

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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Is Apple falling down from the tree?

I had two American favorite stocks in 2005. Google was one of them. Apple is the other one. As you may know, it has been ten great years while Apple went to be the biggest company in the world. Now, it is the darling of Wall Street. How long will that continue?

Apple will report FQ1 2016 earnings Tuesday January 26th, after the bell and it is a critical moment for Apple right now. The coming report will be highly scrutinized by investors because they are concerned about Apple`s iPhone sale.

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When I launched Apple in my portfolio in 2005, they didnt have iPhone at all. Since then the sale of iPhone has skyrocketed. But what now? There are signs that iPhone sales is slowing. We can see that many of Apples suppliers are declining and so are Apple`s orders.

Apple is also attacked by Qualcomms new weapon. Apples A10 chip for Iphone 7 will be built on TSMC`s 16-nanometer FinFET Plus technology, but it seems like Android devices will be built on more advanced 10-nanometer technology.

Qualcomm`s next-generation Snapdragon 830 processor (the successor to the Snapdragon 820 that is slated to appear in devices over the next couple of months) is planned to be launched in the beginning of 2017.

Its not only Apples suppliers that is concerning Apple`s investors. China is a big market for Apple and a slowdown in Asia in addition to a slowdown globally can hit the company hard. Not only that. It is estimated that the global demand for smartphones will decline and fall below 10%, and so will the iPhone sales. In other words it seems like we has reached a top.

But thats for iPhone. Apple has more than iPhone. Despite the fact that iPhone is Apples biggest money-maker, they also have Apple Watch, Apple TV and Apple Music in the same lineup. They are all new in Apples portfolio and Im most exited about Apple Watch, because I think it will be hard to replace iPhone with Apple Watch.

Apple`s revenue from smart phone was 66% in 2015 and their sales jumped 28% in its latest fiscal year. Apple Watch is a new product so it is expected to see that sale to increase. The price for Apple in 2005 was only $5. Now it is $100! Experts expect it will rise 40% in 12 months.

The stock is down about 30% since the top last year, with an EPS of 9,20. Market Cap is 556,72B with an P/E of 10,92. Estimize consensus calls for FQ1 EPS of $3,27 and revenue of $77,138 Billion, which is slightly higher than corporate guidance and Wall Street`s estimates.

Apple is still a profitable company and a popular brand among the younger generation, and with $200 billion in cash and manageable debt obligations, Apple will still be a popular brand.

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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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