Daily Tech Snippet: Tuesday, April 28

• Apple earnings: revenue $58B (+27% Y/Y), net income $13.6B (+33%). Another monster quarter sends shares modestly up (1.3%):  In total, revenue climbed 27 percent to $58 billion, up from $45.6 billion last year, the company said in its earnings report. Profit was $13.6 billion, up from $10.2 billion a year ago. Mr. Dawson said. Over all, Apple sold 61.2 million iPhones in the quarter, beating analysts’ estimates of roughly 60 million phones. That also far exceeded the 43.7 million iPhones that Apple sold in the period a year ago. Analysts had anticipated that iPhone sales would increase sharply, largely because of the company’s growing presence in greater China. Apple also said it was seeing a higher rate of people switching to iPhones from Android smartphones. Sales of Apple’s iPad declined for the fifth quarter in a row, however. The company sold 12.6 million iPads, compared with 16.4 million tablets a year ago. Over the last year, Apple’s tablet sales have steadily shrunk, partly because people do not upgrade those devices as frequently as they do smartphones. In addition, as smartphone screen sizes increase, some consumers question whether they need both a tablet and a phone. Apple also sold 4.6 million Mac computers in the quarter, up from 4.1 million a year ago. Apple on Monday also said it increased its capital return program by 50 percent, to $200 billion in cash by the end of March 2017. Apple is increasing its share repurchases to $140 billion from $90 billion, and is also raising its dividend to shareholders. The company’s cash and securities pile stood at $193.5 billion as of the end of the quarter.

• Apple's revenue from China this quarter: $16.8B (+71% Y/Y) - sells more iPhones in China than in the US Apple’s growth engine has now shifted unmistakably to China. The company said on Monday that quarterly iPhone sales in greater China, which includes mainland China, Hong Kong and Taiwan, had surpassed those in Apple’s home market, the United States, for the first time. While Apple did not disclose specific numbers, the performance powered the company’s revenue, with sales in greater China rising 71 percent to $16.8 billion in the fiscal second quarter compared with the same period last year. Revenue from greater China also exceeded that from Europe for the first time. The China results punctuated another strong quarter for Apple. Apple has long laid the groundwork to reap big sales in China, and revenue growth from the region has steadily gained momentum. The company in late 2013 struck an important deal to sell iPhones through China Mobile, the world’s largest phone carrier. Apple is also expanding its operations in the region, with 21 retail stores and plans to increase that number to 40 by mid-2016. Add to all that the fact that the Chinese New Year holiday, typically a big retail season, was in February. The latest iPhones also have much bigger screens than past models, another feature that has been especially popular in China. Jan Dawson, an independent technology analyst for Jackdaw Research, said Apple’s performance in China highlighted its advantages against other American technology companies. “It’s hugely important because it shows that Apple continues to be the only major U.S. tech company that is really succeeding in China, in contrast to Google, Microsoft and Amazon,”

• Apple is raising prices, and still managing to sell more units. Apple is pulling off a feat almost unheard of in the history of consumer electronics – as more competitors offer rival products for less, Apple is raising prices and still selling more gadgets. The latest report from the International Data Corporation estimates that Apple held nearly 20 percent of the world’s smartphone market at the end of 2014, an increase from 17.5 percent the previous year. It largely took those sales away from Android-based smartphones, which declined by about the same amount over that period

• Amazon starts Sunday delivery service in India: Global e-commerce giant Amazon has expanded the scope of its logistics services and is now delivering products on Sundays starting with 100 cities of the country, it said. It’s key competitor Flipkart among others already deliver products on Sundays so Amazon’s move is more a catch-up rather than an industry-first initiative. Amazon has already been doing same day, next day, two day and release (or launch) day delivery options for products. However, if consumers ordered the product on a Friday (two-day delivery option) or Saturday (one day delivery option) their deliveries was still rolled over to Monday as the firm was not delivering on Sundays. This changes now. Currently, Amazon has over 700,000 products available for next day delivery across eligible pin codes in several cities and around 75 per cent customer demand is already eligible for next-day shipping on products fulfilled by Amazon.

• Facebook Adds Free Video Calls to Messenger App: Facebook is adding free video calls to its Messenger communications app, showing how quickly it is raising its game in a battle with other global tech behemoths to dominate every form of mobile communications. Just last month, the company introduced a feature that lets Messenger users to send money to each other. A few days later, it opened up Messenger to outside developers, and now users can download dozens of apps to send funny GIFs, personalized emoji and other enhanced messages. Video calling fills a major hole in the Messenger service, which has about 600 million users worldwide and has evolved from instant messages sent within the Facebook social network into a standalone app. Competitors such as Google’s Hangouts, Microsoft’s Skype, Apple’s Facetime, and Tencent’s WeChat have all offered video calling for some time. The company said in a blog post Monday that it has begun rolling out the Messenger upgrade to Android and iOS users in about 18 countries, including the United States, Mexico and much of Europe, and it should be available across the globe within the next few weeks. Facebook hopes to replicate the success it had with free voice calling in Messenger, which was first offered in 2013 but really took off a year ago after a major update to the software made it easier to use. Since then, Messenger calls have grown to about 10 percent of all mobile voice calls globally, Mark Zuckerberg, Facebook’s chief executive, told investors on Wednesday when reporting the company’s first-quarter financial results. The video calling feature is a way to spontaneously upgrade from a text conversation when the participants think video is necessary, said Stan Chudnovsky, Facebook’s head of product for messaging, in an interview. That contrasts with the typical use of other video messaging services such as Skype or Hangouts, which are more oriented towards planned video calls. “We just think we are serving different use cases,” he said. The calls are encrypted and Facebook cannot eavesdrop on them, Mr. Chudnovsky said. Facebook designed the video feature to adapt to the connection on each side, so calls in places with weak cellular data networks will be at lower resolution than those on a fast Wi-Fi network.

• Sources: Amazon Plans ‘Prime For Business,’ Folding AmazonSupply Into Big B2B Play: TechCrunch has been told by sources that Amazon is now doubling down on its B2B supply marketplace. The focus will be on Amazon for Business, complete with extra features that will be offered only to registered business customers. Think of it as “Prime for Business.” According to sources briefed on the matter, as a consequence of this, Amazon plans to shutter AmazonSupply, its existing B2B portal for hardware, lab & scientific, health & safety, sanitation and office supplies that Amazon dubs “The store for business and industry.” One source says the closure of AmazonSupply will happen by the end of this year, with the products that it offers there instead folded into Amazon.com and the bigger Amazon for Business offering, not unlike Amazon’s closure of Endless in the shoe and fashion category and folding that into its fashion category in 2012. Aside from our own sources, it seems others have also been hearing similar murmurs of AmazonSupply getting folded into Amazon.com. And in other markets, like India, Amazon is launching B2B supply services doing away with the AmazonSupply brand altogether, opting instead for Amazon for Business. Whether it’s called AmazonSupply or Amazon for Business, it’s a big opportunity for the company. A Forbes article profiling AmazonSupply and the opportunity of B2B wholesale sales noted that in the U.S. alone there was $7.3 trillion worth of goods sold to businesses according to the last U.S. Census, compared to $4 trillion for retail sales (the area we know Amazon for best these days). “Our goal is to supply everything needed to rebuild civilization,” Amazon notes rather ambitiously on its job openings page for the B2B effort. The “Prime”-style tier that our sources tell us is being planned — we don’t know what actual name it will have or whether it will just be called “Amazon for Business” — for registered users will have various perks. They will include special pricing for items; bulk discounts; medical and lab registration; and items available only to business customers (for example, chemicals and medical devices available only for registered hospitals and labs). As with the Prime badge for retail consumers, items with special B2B features will be highlighted in a special color.

• US data center consolidation continues: Telx Group Inc, a private equity-owned provider of data centers and network solutions to companies, is exploring a sale that could value it at around $2 billion, including debt, according to people familiar with the matter. U.S. businesses' burgeoning demand for data and video is fueling a revival in fiber optic services and data centers. New York-based Telx manages 1.3 million square feet of data center space and more than 50,000 network connections. The company owns 20 data centers, including three major ones in New York City. Its customers range from small businesses that only need half of a cabinet in data centers to global companies requiring a full-floor lease. Telx is just the latest data center company to hit the auction block. Zayo Group Holdings ZAYO.O bought data center company Latysis in February for $675 million, while AT&T has been pursuing a sale of its data centers worth $2 billion. Earlier on Monday, Lightower Fiber Networks, a fiber company that is also owned by Berkshire Partners and ABRY partners, bought Fibertech Networks from Court Square Networks for $1.9 billion.