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TECH SPACE
China enjoying fruit of Apple's labor
by Staff Writers
San Francisco (AFP) April 25, 2012


People in China are not only making coveted Apple gadgets, they are snapping them up as the booming nation becomes a top market for the trend-setting California company.

Aftershocks of blockbuster Apple earnings powered by demand for iPhones in China echoed in rising stock markets on Wednesday.

Demand was "mind-boggling" in China, where revenue for the quarter was a record-high $7.9 billion, according to Apple chief executive Tim Cook.

Sales in China during the first three months of this year were triple what they were during the same period in 2011.

Apple took in $12.4 billion in China in the first half of the current fiscal year, putting the company easily on course to eclipse the $13.3 billion in Chinese sales it accrued in the prior 12 month period.

"China has an enormous number of people moving into higher income groups, middle-class if you will, and this is creating a demand for goods," Cook said.

"There is tremendous opportunity for companies that understand China, and we are doing everything we can to understand it."

Cook said that Apple had the "mother of all Januaries" that included launching the iPhone 4 in China.

Apple is hustling to open more stores in China and said it was thrilled with its freshly-minted relationship with China Telecom to provide service for iPhones.

"The China market should really scare Apple competitors," said Creative Strategies lead analyst Tim Bajarin. "They have only been there a very short time and it is already 12 percent of their total business."

The number of retail outlets selling Apple gadgets is about 11,000, a number expected to double within two years.

"Apple will clearly invest a lot of money in the China market," said NPD analyst Stephen Baker. "They will do what they have to do to localize and invest in China."

While China has been daunting for Silicon Valley firms such as Google or Yahoo! that specialize in services offered on the heavily-controlled Internet, Apple's hip gadgets give it an edge there.

"To own an iPhone is a status symbol in China," Bajarin said. "That is a huge issue that Apple can tap into."

Status value could account for iPhone popularity in China despite starting prices of about $800 without service contract subsidies.

Apple has also done well at tailoring software for the China market.

"The key to Apple success in recent years is the ability to design products for global markets," said Gartner analyst Michael Gartenberg. "The stakes in China are very high; but it shows that Apple is not just a US phenomenon."

Apple's cache has even trumped the loyalty that consumers in China have long shown to local brands, according to Baker.

"Other brands have had trouble penetrating China, whether TVs or PCs or whatever," Baker said. "It is different for Apple."

Chinese shoppers may take consolation from the fact that Apple gadgets are made in China, where the company has made much of efforts to improve working conditions.

While treatment of workers cranking out iPhones or iPads has gotten an international spotlight, it is not likely playing into decisions by Chinese shoppers, Bajarin said.

A teenage high-school student in China sold his kidney for an illicit transplant operation and used the proceeds to buy an Apple iPhone and iPad, state press reported early this month.

The 17-year-old boy, who was paid 22,000 yuan ($3,500), was recruited from an online chatroom, the Xinhua news agency said.

A surgeon and four others have been arrested and are facing charges of illegal organ trading and intentional injury.

Apple is selling its newest version of the iPad tablet computer in Hong Kong but not in Mainland China, where it is in a legal battle there with local firm Proview over the rights to the product name.

Apple reported on Tuesday that it made a profit of $11.6 billion on revenue of $39.2 billion in the quarter ended March 31.

Sales of iPads more than doubled from the same quarter the previous year and iPhone sales surged 88 percent. Apple sold more than 35 million iPhones and almost 12 million iPads, thanks to an "incredible quarter" in China, Cook said.

China is second only to the United States in demand for Apple gadgets and is expected to go top soon.

"China is a fast-growing market with a fast-growing middle-class," Baker said. "That is a place you want to be because there are a lot of people to sell to."

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Industry kingpins predict stunning growth in online video
Washington (AFP) April 24, 2012 - Consumer demand and technological change will drive stunning growth in online video for years to come, so long as Internet access is widely available to all, a Senate committee heard Tuesday.

"Online video is just beginning," Barry Diller, at 70 still a titan of the US entertainment industry, testified before the Senate's commerce, science and transportation committee.

"In the end, there is no stopping technical innovation," said Diller, who foresaw the rise of "many new competitors" and more consumer choice that would both enrich American culture and advance the economy.

"It is the promise of a la carte programming that is, I think, the greatest opportunity there is," he said.

But he urged Congress to ensure that "the rules of the game favor entry and innovation" and not the financial interests of "incumbents" -- his code word for cable, telephone and satellite providers keen to guard profitable turf.

Diller -- a former Hollywood studio and television boss who now oversees Aereo, which relays local TV channels to Internet viewers for a monthly fee -- also lamented the relatively poor state of the US broadband network.

"We cannot compete in the world with the 16th or 18th best communications infrastructure," he said.

Committee chairman Jay Rockefeller, a Democrat from rural West Virginia, convened the hearing -- the first of its kind on Capitol Hill, he said -- to reflect on how online video might lead to better content for less cost.

Susan Whiting, vice chair of television ratings organization Neilsen, said Americans on average watch five hours of video a day -- most of it still in real time on traditional television sets.

But with the number of Americans with Internet access doubling since 2000, and video now available on smartphones and tablets, Whiting said more and more viewing is taking place on both computers and mobile devices.

"Consumers watch their favorite content on the best screen available at that moment -- and they watch from more locations, and on more devices, than ever before," she explained.

Microsoft's vice president for media and entertainment, Blair Westlake, cited the software giant's Xbox evolution from a gaming console to a video entertainment hub as an example of how fast technology is changing.

"I think we are only in the early innings of the beneficial changes that consumers have yet to see and experience," said Westlake, who predicted "more change in the next 18 months ... than we did in the past five years."

But he stressed that universal access to high-speed broadband was "the single most important issue shaping the future of video."

Paul Misener, vice president for global public policy at Amazon.com, the online bookseller that now also offers streaming video, said consumers were in the driver's seat when it came to establishing new ways to watch video.

"They are on the move, and thus they want access to digital video not just anytime, but also anywhere," he said, brandishing one of Amazon's popular Kindle Fire tablets.

But "this assumes the Internet will remain a non-discriminatory, open platform," he said, urging "vigilance" against "immutable or unrealistically priced" ceilings on how much data subscribers can download.



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TECH SPACE
Apple profit soars on rocketing iPhone-iPad sales
San Francisco (AFP) April 24, 2012
Apple's coffers continued to swell in the first three months of the year due to record sales of iPhones and iPad tablet computers, particularly in China and other parts of Asia. Apple reported on Tuesday that it made a profit of $11.6 billion on revenue of $39.2 billion in the quarter ended March 31. The amount of cash Apple had on hand grew $12 billion to $110.2 billion. Sales of iPads ... read more


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