Tag Archives: aapl

Apple Seeks Reversal Of Judge’s Order In iPhone Encryption Case

Apple ( AAPL ) on Thursday asked a federal judge to reverse her order that the company work with the FBI to hack a password-protected iPhone used by one of the shooters in the San Bernardino, Calif., terrorist attack. In a court filing, Apple argued that the government has overstepped its bounds. “The government’s request here creates an unprecedented burden on Apple and violates Apple’s First Amendment rights against compelled speech,” it said. To fulfill the government’s demands, Apple would have to write special software that would create a “backdoor” to bypass the iPhone’s privacy and security protections. Apple CEO Tim Cook has said that complying with the court order would set a “dangerous precedent” that threatens the personal data of all iPhone users. If Apple creates the software that the government wants, it would make iPhones vulnerable to hackers, criminals, and foreign and domestic spies, he said. “This is not a case about one isolated iPhone,” Apple’s legal team wrote. “Rather, this case is about the Department of Justice and the FBI seeking through the courts a dangerous power that Congress and the American people have withheld: the ability to force companies like Apple to undermine the basic security and privacy interests of hundreds of millions of individuals around the globe.” Apple’s motion to vacate says the court order would open the floodgates to other law enforcement and government requests to hack iPhone security. Apple said the Justice Department and FBI are trying to do an end run around Congress and use the courts to set a legal precedent by invoking “terrorism.” Earlier Thursday, FBI Director James Comey told a congressional panel that court approval of the FBI’s request was “unlikely to be a trailblazer” in other cases. While the case “will be instructive for other courts,” larger policy questions about reasonable law enforcement access to encrypted data will need to be resolved by Congress and others, Comey said, according to Reuters . Microsoft ( MSFT ) President and Chief Legal Officer Brad Smith said his company “wholeheartedly” sides with Apple in its fight with the FBI over unlocking a terrorist’s iPhone, the Seattle Times reported . “We at Microsoft support Apple and will be filing an amicus brief next week,” Smith said Thursday during a congressional hearing on laws governing data transfers across borders. An Amazon.com ( AMZN ) spokesperson said that company is looking to file a brief supporting Apple’s position, BuzzFeed reported , and Alphabet ‘s ( GOOGL ) Google is also in support. On Feb. 16, U.S. Magistrate Sheri Pym ordered Apple to provide “reasonable technical assistance” to the FBI to unlock an iPhone belonging to Syed Farook, one of the killers in the San Bernardino shootings. The order calls for Apple to create software that can get around or disable the security option that erases data from an iPhone after 10 unsuccessful attempts to unlock it. Farook and his wife, Tashfeen Malik, shot and killed 14 people on Dec. 2. The radicalized Muslim couple, described in press reports as supporters of terror group ISIS, later died in a gun battle with police. RELATED: Poll Shows Solid Support For Apple In iPhone Encryption Case .

Can Apple Supplier Broadcom Afford Another Shopping Spree?

Apple ( AAPL ) supplier Broadcom ( AVGO ) could follow its $37 billion Avago Technologies merger by shedding $1 billion in assets to launch another M&A charge, says MKM analyst Ian Ing. Ing reiterated his buy rating on Broadcom stock, but cut his price target to 160 from 163, citing wireless seasonality. Broadcom stock rose 1.7% Wednesday and was up a fraction in afternoon trading in the stock market today , near 131. The companies completed their merger on Feb. 1, taking the Broadcom name but keeping the Avago stock ticker. When announced last March, it kicked off a record-busting $100 billion in 2015 chip sector M&A deals. Analysts say the frenzy shows no sign of slowing as organic growth decelerates and costs rise. But the chip sector has been quiet on the M&A front this year. Broadcom will likely sell $500 million in assets to de-lever from its Q1-completed merger, Ing wrote in a research report. “For Broadcom, data center/networking product cycles have become more meaningful,” he wrote. “And the story increasingly revolves around a quick deleverage and return to semiconductor consolidation via accretive deals.” A number of small chipmakers — $2 billion and less market caps — are eyeing Broadcom’s design team and business units, Ing wrote. Although $1 billion would be a fast deleverage, half that is more likely. “We do not expect as significant monetization of Broadcom units as occurred with LSI,” Ing wrote. Avago acquired LSI in May 2014 for $6.6 billion, then sold LSI’s flash unit to  Seagate Technology ( STX )  for $450 million and LSI’s networking business to  Intel ( INTC ) for $650 million. Post-merger, Broadcom is less exposed to Apple, which is experiencing slowing iPhone sales. In January, a Credit Suisse analyst estimated 24% of the former Avago’s sales stemmed from Apple. The former Broadcom was 14% tied to Apple in 2014. Joined, Broadcom-Avago gets about 8%-9% of its sales from Apple, Ing estimated. Broadcom is slated to report fiscal Q1 earnings after the close March 3.

NetEase Dragged Under By Sinking Profit Margin For Online Games

NetEase ( NTES ) stock plunged by double digits Thursday after the China-based gaming and Internet company saw its gross margin shrink in Q4, even as its revenue and earnings beat analyst expectations. After falling after hours Wednesday following the company’s earnings release, NetEase stock was down 16% in midday trading in the stock market today , near 134. Still, NetEase stock is up 31% over the past 12 months and is ranked No. 3 in Wednesday’s midweek update of the IBD 50 list of top-performing stocks. This is despite a tough time for many Asian stocks. Amid ongoing worries about slowing growth in China, the Shanghai composite fell more than 6% Thursday, its biggest drop in more than a month. NetEase posted a gross profit margin for its online games business of 67.2% in Q4, down from 67.9% in Q3 and 76% in Q4 2014, with the declines mainly due to increased revenue contributions from lower-margin mobile games. The company said revenue from online games, its biggest segment, more than doubled, thanks to growth in its original mobile games. The company’s “Westward Journey Online” and “Fantasy Westward Journey” came in as the top two games in the Apple ( AAPL ) iOS China app store in the fourth quarter, NetEase said. NetEase Now Has 80-Plus Mobile Games NetEase has been keeping up “a very good momentum of rolling out the games, especially the mobile games, to the market. And if you look back in the past quarter, which is the fourth quarter of 2015, we have come up to 80-plus mobile games in the market. That’s compared to about 50-plus in the third quarter of 2015,” NetEase acting CFO Onward Choi told analysts during an earnings call late Wednesday. “We saw year-over-year net revenue increases in the fourth quarter of 103.2% from online games, 68.1% from advertising services and 355.5% from email, e-commerce and others,” NetEase CEO William Ding said in a statement. Fourth-quarter revenue jumped 128% in local currency to RMB 7.90 billion ($1.22 billion), above the RMB 7.69 billion analysts polled by Thomson Reuters had forecast. The company said earnings per American Depositary Receipt were RMB 16.34 ($2.52), up 69% in local currency. Analysts had expected RMB 14.79. NetEase did not provide Q1 guidance. Analysts polled by Thomson Reuters expect net revenue to rise 126% in local currency to RMB 8.27 billion ($1.26 billion). Analysts expect adjusted earnings per share to rise 45% to RMB 13.97 ($2.14). NetEase is best known for its desktop PC games and has had a lucrative exclusive license for Activision Blizzard ’s ( ATVI ) “World of Warcraft” in mainland China since 2009. The company also develops its own games, mostly the multiplayer variety played on desktop PCs and mobile devices. NetEase is a home-field favorite on China’s gaming scene, ranking a close second to Internet titan Tencent Holdings ( TCEHY ). Looking to bring its most popular titles to more English speakers, Beijing-based NetEase opened its first U.S. office, in the San Francisco suburb of Redwood Shores, Calif., early last year. Among other Chinese names, online-discount retailer Vipshop Holdings ( VIPS ) was down 12% in midday trading Thursday after reporting better-than-expected fourth-quarter earnings but weaker first-quarter revenue guidance. Vipshop is facing more competition in the flash discount sales category from Alibaba Group ( BABA ) and JD.com ( JD ). Alibaba’s U.S. stock was down 1.5% midday Thursday, while JD.com was down 3.5%.