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Tech wrap: iPod Nano, Shuffle are dead; Facebook creep; Twitter loss; Amazon hiring; Samsung soars; Nokia woes

Bulldog Bulletin

Jul, 27 2017, 12:34 PM

In today's Bulldog wrapup of technology news:

The details:

The iPod Nano and iPod Shuffle have played their final notes for Apple.

The company discontinued sales of the two music players Thursday in a move reflecting the waning popularity of the devices in an era when most people store or stream their tunes on smartphones.

The iPod product line still remains alive, though. Apple plans to continue selling its internet-connected iPod Touch.

In a show of its commitment to the iPod Touch, Apple doubled the storage capacity of its top-of-line model to 128 gigabytes. That version costs $300. An iPod Touch with 32 gigabytes of storage sells for $200.

The Nano and Shuffle came out in 2005 as less expensive and smaller alternatives to Apple's standard iPod. The Cupertino, California, company stopped updating the Nano and Shuffle several years ago.

Apple has long predicted iPods would gradually fade away as more people bought iPhones or other smartphones capable of playing music.

The company's sales of iPods peaked in its fiscal year 2008 when the devices generated revenue of $9.2 billion. The then-nascent iPhone accounted for $1.8 billion in revenue that same year.

Last year, the iPhone generated revenue of nearly $136 billion. Sales of iPods have plunged by so much that Apple no longer provides specifics about the devices in its financial statements.

Scrolling through an ad-free Instagram is now a distant memory, much like the once ad-free Facebook itself. Soon, users of its Messenger app will begin to see advertisements, too — and WhatsApp may not be too far behind.

Welcome to the Facebook ad creep.

The world's biggest social media company has squeezed about as many ads onto its main platform as it can. The fancy term for this is "ad load," and Facebook warned investors back in 2016 that it has pretty much maxed it out . Put any more ads in front of users and they might start complaining — or worse, just leave.

As such, Facebook, a free service that relies almost completely on ads to make money, has to keep finding new and creative ways to let businesses hawk their stuff on its properties.

One solution is to spread ads beyond Facebook itself, onto the other popular messaging and photo-sharing apps it owns.

So far, it's working. On Wednesday, Facebook posted a 71 percent increase in net income to $3.89 billion, or $1.32 per share, from $2.28 billion, or 78 cents a share, a year ago.

Revenue for the three months that ended on June 30 rose 45 percent to $9.32 billion from $6.44 billion. The Menlo Park, California-based company's monthly active user base grew 17 percent to 2.01 billion.

Twitter on Thursday reported a loss of $116.5 million in its second quarter.

On a per-share basis, the San Francisco-based company said it had a loss of 16 cents. Earnings, adjusted for one-time gains and costs, came to 8 cents per share.

The results beat Wall Street expectations. Beginning with the April-June quarter, Twitter changed the way it calculated adjusted earnings. Under the old method, it would have been 12 cents per share. The average estimate of 12 analysts surveyed by Zacks Investment Research was for earnings of 5 cents per share.

The short messaging service posted revenue of $573.9 million in the period, also topping Street forecasts. Ten analysts surveyed by Zacks expected $536.8 million.

Twitter said its monthly average user base in the April-June quarter grew 5 percent from the previous year to 328 million, but it was unchanged from the previous quarter. Twitter's stock fell more than 9 percent to $17.75 in pre-market trading Thursday after the numbers came out.

Twitter shares have increased 20 percent since the beginning of the year. The stock has risen slightly more than 6 percent in the last 12 months.

Amazon plans to make thousands of job offers in just one day as it holds a giant job fair next week at nearly a dozen warehouses across the U.S.

Those offered jobs on the spot will pack or sort boxes and help ship them to customers. Nearly 40,000 of the 50,000 jobs will be full time. Most of these jobs will count toward Amazon's previously announced goal of adding 100,000 full-time workers by the middle of next year.

The hiring spree is yet another sign of Amazon's massive growth at a time when traditional retailers are closing stores and cutting jobs.

It's also a way for Amazon to lock in employees before the start of the busy holiday shopping season, when other retailers look to hire seasonal workers. Retailers are facing a tighter job market; the nation's unemployment rate is 4.4 percent, near a 16-year low.

Same-day job offers, like Amazon is promising, are "extremely unusual," said Andrew Chamberlain, the chief economist at job site Glassdoor.

He said a shortage of workers, plus Amazon's rapid growth, is likely why the company is trying to scoop up workers quickly.

"There are just not as many available bodies," Chamberlain said. "It can be a real challenge to hire."

No leader and scorched Note 7 smartphones? No problem.

After a tumultuous year of surreal corruption scandals involving exotic horses and the jailed billionaire scion and one of the most embarrassing recalls in the consumer electronics history, Samsung stunned investors with another improbable record: the South Korean tech giant may have earned more than Apple and ended Intel's quarter century dominance in the semiconductor industry.

Seemingly invincible Samsung Electronics appears set to log record annual profit this year as exploding use of data in mobile devices and the "memory supercycle" help it surmount the jailing of its de facto leader and sidestep losses from its fire-prone Galaxy Note 7s.

South Korea's largest company reported Thursday record high quarterly profit and sales that likely will help it nudge aside Intel as the leading maker of semiconductors.

Samsung also likely outstripped Apple in quarterly earnings for the first time as soaring use of connected devices and mobile data fueled demand for computer chips.

Samsung's bottom line is better than ever, even with its vice chairman and de facto chief Lee Jae-yong jailed as part of a corruption scandal that unseated former South Korean president, Park Geun-hye.

Nokia continued to be hit by a decline in its core networks sector in the second quarter with almost flat sales, and cautioned Thursday that a weakening in networks would be greater than previously expected.

The Finland-based networks company, however, managed to trim net loss in the period to 423 million euros ($493 million) from 667 million euros a year earlier. Sales in the quarter grew 1 percent from 2016 to 5.6 billion euros.

Networks sales fell 5 percent to 4.9 billion euros with an 8 percent decline in the broadband sector.

CEO Rajeev Suri said he was pleased with the overall result, but that "headwinds" had caused problems in the period and he predicted a further fall in networks.

"We now expect a decline in the market in the range of 3 to 5 percent, versus our earlier view of a low-single-digit decline," Suri said in a statement. "We expect our networks sales to perform in line with the market."

He said he was "confident of an operating margin of 8 to 10 percent" in networks in the full year.

In May, Nokia signed a patent license and business collaboration agreement with Apple, settling all litigation between the companies, which helped the second-quarter earnings from technology patents grew by 90 percent to 175 million euros, which Suri described as an "excellent performance."





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