This week in the Review of Apple Loop

Friday, April 20th 2012. | Gadget News

apple-loopsIs the party over?After soaring above $600 — reaching a high of $644 on April 10 —the shares tumbled for days in a row, prompting all sorts of speculation that Apple’s magic carpet ride is over. Some analysts said concerns were overblown and that folks were taking money off the table. “We have fielded several calls with questions around subsidies, Mac weakness, lofty expectations for iPads and iPhones and others. None of these potential issues are a major near-term concern for us,” said Barclays analyst Ben Reitzes. The shares closed at $572.98 today, down from $603.51 last Friday. Apple reports results April 24 after the market closes. Toni Sacconaghi of Sanford C. Bernstein, the top-ranked computer analyst, thinks Apple will beat the street and says the shares remain attractive, noting “the possibility of exciting new product announcements (iPhone5, additional tablet or living room-centric device, etc) is real.” Piper Jaffray says its expects the iPhone 5 in October — a year after the iPhone 4S was released.

Apple uses some of its cap-ex spend to outfit suppliers. Even after paying a dividend, adding retail stores, setting up server farms and building out a second campus in Cupertino, Apple still has a lot of cash. And with $64 billion or so of its cash sitting overseas, taxed at an attractively low 5% rate but also earning little to no interest, it’s got to do something with it. Any cash Apple chooses to bring back to the States would get hit at the 35% U.S. tax rate. Spending that money on expanding offshore production is far more compelling. Apple keeps the depreciation expense while keeping production costs down. It also means the company will be ready to continue pumping up the volume to feed the seemingly insatiable appetite for iPhones and iPads in the near term and rumored new category-busting products like an interactive TV in the long term. That’s just what Katy Huberty, an analyst at Morgan Stanley, thinks Apple is doing just that, and she calls the plan “frankly ingenious.”

Steve Jobs gets a street named after him — in Brazil. The city council of Jundia, a small city near Sao Paulo, named one of its streets Steve Jobs Avenue. According to Forbes contributor Anderson Antunes, ‘Steve Jobs Avenue’ (Avenida Steve Jobs, in Portuguese) was first formulated and presented as a bill last October, one day after Jobs’ passing, and approved by Jundiaí’s city council on March 27…The avenue is one of the routes that connects Jundiaí to São Paulo. It’s also the address of Foxconn in Brazil, the Taiwan-owned company with giant assembly facilities in mainland China that supply much of Apple‘s most popular products. Foxconn already produces iPhones in Jundiaí and they are already planning to start making iPads there. That should help bring the costs of Apple’s devices down since Brazil has placed a high import tax on the gadgets, putting them out of reach, price-wise, for many Brazilian consumers.

Dude, where’s my script? The film starring Ashton Kutcher as Steve Jobs — which is being called Jobs: Get Inspired — will focus on the Apple co-founder in the years before the iPhone and iPad were introuced, producer Mark Hulme of Five Star Institute said in an interview with “Our movie primarily focuses on the early years of Apple, its founding and the up and down years: 1971 – 2000.” Joshua Michael Stern, who directed the Kevin Costner comedy Swing Vote, will direct the film, which will start filming in May in Los Angeles and be released later this year. As for the choice to cast Kutcher, Hulme said, ” we needed an actor who could carry not only the youthfulness of Jobs at the time but also the psychological complexity. Because of that, and Ashton’s physical similarities to Jobs, he’s perfect for our film.” Apple is not involved in the film in any way, he says. Big surprise there.

What’s Cook-ing? At the beginning of the week, the rumor mill was abuzz with the news that Apple CEO Tim Cook was spotted visiting game developer Valve, maker of popular titles including Portal and Half-Life, and raising speculation that the two were collaborating on — well, all sorts of stuff. By the end of the week, the rumor was a bust. Valve CEO Gabe Newell said he did not meet with Cook, according to an interview he gave to Seven Day Cooldown. ” We actually, we all sent mail to each other, going, “ Who’s Tim Cook meeting with? Is he meeting with you? I’m not meeting with Tim Cook.” So we’re… it’s one of those rumors that was stated so factually that we were actually confused.No one here was meeting with Tim Cook or with anybody at Apple that day. I wish we were! We have a long list of things we’d love to see Apple do to support games and gaming better. But no, we didn’t meet with Tim Cook. He seems like a smart guy, but I’ve never actually met him.”

The iPad goes out to more parts of the world. Apple said this week that its third-generation iPad, released in the U.S. and nine other countries March 16, will start being sold in an additional countries 21 countries this month. Consumers in South Korea, Brunei, Croatia, Cyprus, Dominican Republic, El Salvador, Guatemala, Malaysia, Panama, St Maarten, Uruguay and Venezuela could start buying the tablet on April 20. Users in India, Israel, Colombia, Estonia, Latvia, Lithuania, Montenegro, South Africa and Thailand will have to wait until April 27.

Siri-ously? A new iPhone ad features Samuel Jackson, cooking in the kitchen and asking Apple’s voice recognition software Siri for all sorts of help. “How many ounces in a cup?” “Remind me in an hour to put the gazpacho on ice?” Yeah, because I always cook one-handed, with an iPhone in my other hand. And if you’re not suffering from sugar overdose after watching that one, you can get your fix with the Zooey Deschanel ad asking Siri,”Is that rain?” Siri gets it right: “Yes, it appears to be raining.” Wow, the things you can do with a smartphone.

Career advancement? Zane Rowe, who has been CFO for United Continental, is moving to Apple to become one of its vice presidents of sales, the company said this week. Instead of discounts on airline travel, Rowe will now get discounts on iPhones and iPads. You can decide for yourself if he made the right move.

Instagram loses some love. Apple’s marketing chief Phil Schiller decided to ditch Instagram after the company released a version of the popular photo app for Android, saying in a tweet that Instagram had “jumped the shark” by delivering a version for Google’s mobile OS. Schiller later responded to an email about his comments, saying “Instagram is a great app and community. That hasn’t changed. But one of the things I really liked about Instagram was that it was a small community of early adopters sharing their photographs. Now that it has grow(n) much larger the signal to noise ratio is different. That isn’t necessarily good or bad, it’s just not what I originally had fun with.” Uh, huh.

Thank you to everyone who emailed me suggestions for this weekly feature. I went with “Apple Loop” for a lot of reasons. Enjoy.

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