Matt Richman

Apple’s Senate Testimony

Thu, 23 May 2013 17:30:00 -0400

The most interesting part is the part that hasn’t been covered:

Apple has always believed in the simple, not the complex. This is evident in the Company’s products and the way it conducts itself. In this spirit, Apple has recommended to the Obama Administration and several members of Congress — and suggests to the Subcommittee today — to pass legislation that dramatically simplifies the US corporate tax system. This comprehensive reform should:

Be revenue neutral;

Eliminate all corporate tax expenditures;

Lower corporate income tax rates; and

Implement a reasonable tax on foreign earnings that allows free movement of capital back to the US.

Apple recognizes these and other improvements in the US corporate tax system may increase the Company’s taxes. Apple is not opposed to such a result if it occurs in the context of an overall improvement in efficiency, flexibility and competitiveness. Apple believes the changes it proposes will stimulate the creation of American jobs, increase domestic investment and promote economic growth.

Did you catch that? Apple said it’s fine paying more in taxes so long as it’s the result of a complete overhaul of the corporate tax code.

That statement wasn’t in error. In his opening statement, Tim Cook said the same thing:

Apple has always believed in the simple, not the complex. You can see it in our products and the way we conduct ourselves.

It is in this spirit that we recommend a dramatic simplification of the corporate tax code. This reform should be revenue neutral, eliminate all corporate tax expenditures, lower corporate income tax rates and implement a reasonable tax on foreign earnings that allows the free flow of capital back to the U.S. We make this recommendation with our eyes wide open, realizing this would likely increase Apple’s U.S. taxes. But we strongly believe such comprehensive reform would be fair to all taxpayers, would keep America globally competitive and would promote U.S. economic growth.

I can’t think of any other company that would say it’s willing to pay more in taxes. Can you?

Joe Nocera Does It Again

Thu, 23 May 2013 13:47:25 -0400

Joe Nocera Does It Again:

Philip Elmer-DeWitt takes down Joe Nocera’s piece in The New York Times on Tim Cook’s Senate appearance, proving, if nothing else, that Steve Jobs was right.

For U.S. Companies, Money ‘Offshore’ Means Manhattan

Thu, 23 May 2013 13:38:27 -0400

For U.S. Companies, Money ‘Offshore’ Means Manhattan:

David Kocieniewski, reporting for The New York Times:

Like some of the nation’s prominent chief executives, Apple’s Timothy D. Cook has a simple proposal to help spur the economy and encourage corporate tax compliance: give American companies a tax break to bring to the United States untaxed profits parked overseas.

[…]

Apple is one of about 20 major corporations that have been pushing for a fresh tax break, known as a “repatriation holiday,” which would allow them to bring the money to the United States at a drastically reduced rate. John T. Chambers, chief executive of Cisco, has led a sustained lobbying effort for such a policy, promising that it would act as a stimulus to encourage investment and increase jobs in the United States.

Chambers may be lobbying for a repatriation holiday, but Cook isn’t. In his testimony on Tuesday, Cook made clear that he would like to see a complete overhaul of the corporate tax code — even if it resulted in Apple having to pay more in taxes — not a repatriation holiday.

Sloppy reporting.

Stock Analysts Tell All!

Sat, 27 Apr 2013 10:12:49 -0400

Stock Analysts Tell All!:

This explains a lot.

After Apple’s Rise, A Bruising Fall

Fri, 19 Apr 2013 20:00:17 -0400

After Apple’s Rise, A Bruising Fall:

Nathaniel Popper and Nick Wingfield relay some Toni Sacconaghi wisdom through The New York Times:

Toni Sacconaghi, an analyst at Bernstein Research, said that if Apple developed a clear plan to use some of its cash to pay dividends to shareholders it would help the company’s shares, perhaps lifting them 10 percent or more. But that will not return Apple shares to their glory days. He said the bigger problem bearish investors saw with Apple’s shares was more straightforward: growth is stalling.

There are two problems with this analysis. For one thing, dividend payments do not at all correlate with — yet alone directly cause — an increase in share price. As I wrote nearly two years ago:

As Horace Dediu pointed out, when technology companies institute stock buybacks, they don’t create a lot of shareholder value, if any at all. Microsoft has spent a little more than $97 billion on buybacks since 2004 and its share price has gone up less than 10 percent. Over the last 10 years, it has spent over $170 billion on both buybacks and dividends while MSFT has gone down 19.92 percent. At the same time, networking giant Cisco has returned $50.7 billion to shareholders since the beginning of 2004 while its share price has dropped 35.58 percent. Additionally, RIM’s stock price has plummeted 21.16 percent since it announced a share buyback program less than 30 days ago, on June 16th. Though other factors certainly could have played a part in the depreciation of the share prices of the aforementioned companies, using cash for stock buybacks and dividends clearly isn’t the best way to increase shareholder value.

The other problem with Sacconaghi’s analysis is that, contrary to what he asserted, Apple’s growth is not “stalling”. In the last year, Apple’s bottom line — it’s profit — has grown at 0 percent, 24 percent, 21 percent, and 93 percent compared to their corresponding previous-year quarters. And the no growth quarter doesn’t count, because, as Apple itself stressed, its first quarter of fiscal 2013 was 13 weeks long whereas its first quarter of fiscal 2012 was 14 weeks long. You can’t properly compare the two.

Revenue growth is the same story: 18 percent, 27 percent, 22 percent, and 59 percent.

I seem to remember that the rate at which Apple was growing was itself growing at a few points in time. That may no longer be the case, but just because the rate at which the company is growing is itself not growing anymore does not mean that Apple’s growth is “stalling”.

Some quick back-of-the-envelope math reveals that the company is still growing.

The Media Doesn’t Own The Story Anymore

Fri, 19 Apr 2013 18:58:32 -0400

The Media Doesn’t Own The Story Anymore:

For a while now, I’ve been meaning to write a piece about old media (e.g. The New York Times) and how it will have to change in order to survive going forward. But I think John Herrman and Ben Smith sum it up extraordinarily well:

The media’s new and unfamiliar job is to provide a framework for understanding the wild, unvetted, and incredibly intoxicating information that its audience will inevitably see — not to ignore it.

Intel Tries To Find A Foothold Beyond PCs

Wed, 17 Apr 2013 20:01:00 -0400

Intel Tries To Find A Foothold Beyond PCs:

Quentin Hardy of The New York Times aptly summarizes Intel’s problem:

PC sales are now collapsing, as users are relying more on mobile phones and tablets that rarely contain Intel chips.

There’s one problem with the article, though: ARM isn’t mentioned, not even once. How any reputable publication — let alone The New York Times — published an article about Intel’s dilemma without mentioning ARM is truly beyond my comprehension.

How Samsung Became The World’s No. 1 Smartphone Maker

Thu, 28 Mar 2013 13:46:21 -0400

How Samsung Became The World’s No. 1 Smartphone Maker:

The title of this piece is misleading. Samsung doesn’t actually report how many smartphones it sells. There are estimates from outside firms, but they’re never actually confirmed by Samsung itself. Without more data, it is impossible to prove, as the headline asserts, that Samsung sells more smartphones than any other company. It’s simply not possible.

This event backs up John Gruber’s theory that “The desire for the ‘Oh, how the mighty Apple has fallen’ narrative is so strong that the narrative is simply being stated as fact, evidence to the contrary be damned”. A publication like BusinessWeek should know better. That it doesn’t simply proves Gruber’s point.

ARM Holdings CEO To Retire In July

Wed, 20 Mar 2013 13:55:52 -0400

ARM Holdings CEO To Retire In July:

This seems similar to Apple’s Jobs-to-Cook transition. Obviously this has been planned out, and the incoming CEO obviously has the support of the outgoing one.

News, but not really.

LinkedIn Is Going To Buy Pulse

Mon, 11 Mar 2013 20:00:00 -0400

LinkedIn Is Going To Buy Pulse:

Kara Swisher has the scoop:

According to several sources close to the situation, the nifty news reading app Pulse is in advanced talks to be acquired by a major “platform” company.

[…]

But sources close to the situation tell me that the winner for Pulse is likely to be one that has emerged as a content powerhouse of late: LinkedIn. The business networking site has been aggressively adding a range of very impressive content to its fast-growing repertoire. In addition, CEO Jeff Weiner, who used to run content offerings at Yahoo, knows a thing or two about the arena and — if I might be familiar — this is just like him. Lastly, the stock has performed strongly, and it’s in a good position to shop.

Pulse is an incredible app. I hope LinkedIn doesn’t screw it up.

The $160,000 Card Trick

Sat, 23 Feb 2013 11:48:00 -0500

On December 8th, I tweeted a picture of a DVD with the caption “The $160,000 card trick”. I got more than a few questions about the picture, so let me take the opportunity to properly explain everything.

I applied to, and was accepted at, Tulane University. Tulane offers a full tuition scholarship for already-accepted students called the Deans’ Honor Scholarship. In a nutshell, I had to use a 3 inch by 3 inch box in a way that would “give further evidence of [my] depth of thought, imagination, and expression of creativity”. The Deans of all of the undergraduate schools at Tulane get together and award approximately 75 scholarships to 1000 applicants.

Naturally, I used the box in a magic trick.

Since I wouldn’t be able to perform anything live, I had to invent a trick that could be done via DVD.

What I created goes like this: The DVD I burned is inserted, and the Deans select “Part One”. A video pops up asking the Deans to nominate one person who will be the “primary spectator”. Though all of the Deans will be able to watch the trick, this selected person will be the only one who actually participates in it. After they have chosen someone, they give him or her the sealed black pouch that came inside of the DVD case. This person is instructed only to hold it — not open it.

After Part One ends, the Deans advance to Part Two. It is in this section of the DVD that the magic really happens. I ask the nominated person to think of a card and to tell everyone else in the room what the card is.

The card is said aloud, and I snap my fingers. Then, slowly, I deal the cards face-up, counting each one aloud. There are only 51 cards, and the one that is missing is the card that was thought of.

I then ask the nominated person to open up the sealed black pouch. Inside is the 3 inch by 3 inch white box. And inside of the box is a folded up playing card.

The thought of card.

From 1,000 miles away, without ever even being in their presence, I make a thought-of card disappear from a deck and reappear inside of something a spectator is holding.

I find out whether or not I won the scholarship within a week. Wish me luck!

This Is A Really Dumb Article

Thu, 07 Feb 2013 20:42:55 -0500

This Is A Really Dumb Article:

This is one of the dumbest things I’ve read in a long time. Titled “Apple’s 128GB iPad Defends Against Intel’s Haswell Assault On ARM”, the piece is predicated on the ideas that Apple released the 128GB iPad in response to an “onslaught” of something that hasn’t been released yet, and that people decide to purchase a tablet based on the architecture of the microprocessor it runs on.

Read that last sentence again. It’ll make you smile.

Intel 4th-Quarter Earnings Are Sharply Lower

Fri, 18 Jan 2013 10:33:26 -0500

Intel 4th-Quarter Earnings Are Sharply Lower:

Quentin Hardy, writing for The New York Times:

Over the last six months, shares of Intel have fallen about 18 percent, while Qualcomm’s stock is up almost 20 percent. ARM Holdings, which sells designs for low-power chips popular in mobile devices, is up almost 90 percent in that time.

As I said more than a year and a half ago, Intel is done. ARM is the future.

Lieberman, Democrats Want Ban On Assault Weapons

Tue, 18 Dec 2012 20:59:00 -0500

Lieberman, Democrats Want Ban On Assault Weapons:

Anne Flaherty, writing for the AP:

Gohmert also argued that violence is lower in cities with lax gun laws, and higher in cities with stricter laws.

“The facts are that every time guns have been allowed — conceal-carry (gun laws) have been allowed — the crime rate has gone down,” Gohmert said.

Gun control advocates say that isn’t true. A study by the California-based Law Center to Prevent Gun Violence determined that seven of the 10 states with the strongest gun laws — including Connecticut, Massachusetts and California — are also among the 10 states with the lowest gun death rates.

“If you look at the states with the strongest gun laws in the country, they have some of the lowest gun death rates, and some of the states with the weakest gun laws have some of the highest gun death rates,” said Brian Malte of the Brady Campaign to Prevent Gun Violence.

This exemplifies what’s wrong with modern journalism. Why would you leave the reader hanging like that? Do states with stricter gun regulation have more or less gun violence? The question is never definitively answered.

And why not ask Mr. Louie Gohmert what statistics he has to back up his assertion? He’s a U.S. Representative; surely he has something to back up his claim.

Right?

“The Monetization Is At An Early Stage”

Sat, 15 Dec 2012 18:05:44 -0500

“The Monetization Is At An Early Stage”:

Translation: It doesn’t make any money.

Lack of Distribution Is “Killing” Surface

Wed, 05 Dec 2012 18:48:53 -0500

Lack of Distribution Is “Killing” Surface:

John Paczkowski, writing for AllThingsD:

Detwiler Fenton, a Boston-based brokerage firm, said in a research note today that Microsoft is likely to sell just 500,000 to 600,000 Surface RTs in the December quarter, far below its previous expectation of one million to two million. The reason: Microsoft’s tablet strategy is in “disarray.”

Right. The reason the Surface is selling badly is because Microsoft’s strategy is poor. Exactly. Duh. No other explanation.

(Regarding the idea that if only the Surface had a better distribution network it would be selling much better: I’d be willing to bet that if you were to put a functioning Surface next to every functioning iPad currently on display, and customers were forced to consciously choose one over the other, they’d choose the iPad more than 85 percent of the time. The problem has nothing to do with distribution.)

Intel Wants To Cut The Power Consumption Of Its Future Chips

Mon, 03 Dec 2012 15:34:00 -0500

Intel Wants To Cut The Power Consumption Of Its Future Chips:

Ummm… duh?

184 Seconds

Thu, 29 Nov 2012 18:20:57 -0500

184 Seconds:

Zachary Pincus-Roth for LA Weekly, writing about magician Derek DelGaudio:

In another routine, called 184 Seconds, he asks someone to set a timer for a minute. He then deals as many cards as he can, one at a time, going through four different decks. Unbeknownst to the audience, each is a second deal — he deals the second card instead of the top one. At the end of a minute, he writes down the number of cards he’s dealt.

Then he exits. The end.

Hilarious. (For those that don’t know, I’m also a magician.)

Microsoft Prices Pro Version Of Surface At $899

Thu, 29 Nov 2012 16:47:00 -0500

Microsoft Prices Pro Version Of Surface At $899:

“$899 and up”.

(Ballmer, one year from now: “We’re selling them twice as fast as we were last year!”)

Ballmer: Windows Phone Sales Have Quadrupled

Wed, 28 Nov 2012 20:24:04 -0500

Ballmer: Windows Phone Sales Have Quadrupled:

If Microsoft was willing to give a specific number for Windows 8 sales but only willing to give it’s selling four times as well as it was for Windows Phone, then I’d guess Windows Phone isn’t selling very well.