Daily Tech Snippet: Wednesday, August 5

Apple Denies Planning to Sell Mobile Services Directly to Consumers: Apple, the world’s most profitable mobile phone maker, has denied a report that it is working on a plan to market communications services directly to consumers that would bypass telecom operators on which it now relies. Business Insider on Monday reported that the iPhone maker was testing a so-called mobile virtual network operator (MVNO) service in the United States, which would involve it renting capacity from one or more network operators to sign up its own customers. The mobile phone maker is also in talks with European operators about such an arrangement, the website reported. “We have not discussed nor do we have any plans to launch an MVNO,” said an Apple spokeswoman in a statement on Tuesday.

Facebook Mobile App Advertisers Won't Lose Their Device-Level Data After All As Social giant switches gears: Facebook said three months ago it planned to take away mobile app-install advertisers' ability to collect device-level data. But money talks, and ad-buying marketers evidently protested enough for the social media giant to reverse course. The Menlo Park, California-based company said in an email statement: "We advise our advertisers to apply people-based measurement solutions so they can determine when they're reaching multiple people, not just multiple devices. While we believe device-level reporting is not the most accurate way to properly determine advertising effectiveness, we want to provide advertisers with the choice to measure ads based on what is important to them. In order to provide that choice, we will continue giving advertisers the option to receive device-level reporting from our mobile measurement partners for mobile app ads." For nearly two years, Facebook has allowed app-install marketers to grab information that helped them determine—among other things—how their ads performed on devices such as iPhones, Samsung Galaxies and HTC Ones. Advertisers have to agree to keep that device-level data to themselves, as Facebook wants brands to focus on other metrics and is wary of privacy concerns. When Facebook revealed to marketers its plans to cut off such data while making them focus on campaign-based statistical results, they pushed back, according to a VentureBeat story last month.

Hackers Exploit ‘Flash’ Vulnerability in Yahoo Ads: For seven days, hackers used Yahoo’s ad network to send malicious bits of code to computers that visit Yahoo’s collection of heavily trafficked websites, the company said on Monday. The attack, which started on July 28, was the latest in a string that have exploited Internet advertising networks, which are designed to reach millions of people online. It also highlighted growing anxiety over a much-used graphics program called Adobe Flash, which has a history of security issues that have irked developers at Silicon Valley companies. “Right now, the bad guys are really enjoying this,” said Jérôme Segura, a security researcher at Malwarebytes, the security company that uncovered the attack. “Flash for them was a godsend.” The scheme, which Yahoo shut down on Monday, worked like this: A group of hackers bought ads across the Internet giant’s sports, news and finance sites. When a computer — in this case, one running Windows — visited a Yahoo site, it downloaded malware code. From there, the malware hunted for an out-of-date version of Adobe Flash, which it could use to commandeer the computer — either holding it for ransom until the hackers were paid off or discreetly directing its browser to websites that paid the hackers for traffic.

Crafts website operator Etsy's loss doubles; shares tumble: Crafts shopping website operator Etsy's quarterly loss doubled due to higher marketing expenses and the company said these costs would only increase in the current quarter. Etsy's shares fell more than 15 percent to $16.27 in after-hours trading on Tuesday. The company's marketing costs jumped 77 percent in the second quarter ended June 30 due in part due to higher spending on product listing ads. Total costs rose 49.3 percent. Etsy said it plans to spend more on marketing in absolute dollars in the third quarter than it did in the second quarter or the year-earlier quarter. It also said it expects to increase the pace of hiring in the current quarter compared with both the second quarter and the year-earlier quarter. The company said the strengthening dollar could hurt demand for dollar-denominated goods in the current quarter, which could slow the pace of growth of gross merchandise sales. Gross merchandise sales, a measure of total value of goods sold, rose 24.6 percent in the second quarter, driven by a 24.6 percent growth in active sellers and a 31.6 percent jump in active buyers on Etsy's website. Revenue rose 44.4 pct to $61.4 million in the quarter.

Apple's momentum 'meltdown' bites investors: Has the "curse of the Dow" finally caught up with Apple? Shares of the iPhone maker have been in a rut since posting disappointing quarterly results in late June, falling to a six-month low of $113.25 on Tuesday. The recent declines have wiped out nearly $100 billion of Apple's market value - about as much as fellow Dow components Boeing and McDonald's are worth in total. For CEO Tim Cook, it means his stake of more than 111 million shares is now worth about $12.76 billion, compared with nearly $15 billion at the peak in late April. The dropoff represents a notable bout of weakness for a stock basically impervious to pain for the better part of two years. Strategists pinned the sell-off on the steady run in the shares, as the stock has gained more than 137 percent since hitting a low in April of 2013. In addition, more than 5,700 different funds already own the shares, according to Morningstar data. With Tuesday's declines, the shares have dropped 13 percent over the last 11 trading days. "When you get a stock that is over-owned it’s difficult to find that incremental buyer," said Art Hogan, chief market strategist at Wunderlich Securities in New York. "It’s having its own momentum meltdown."

Apple Doing Own Cellular Service Doesn’t Make Sense, at Least Not Today: The appeal is tempting, of course. Apple would then fully own the relationship with the customer rather than leaving that job to one of the “orifices,” as Steve Jobs famously labeled the wireless providers. Google is in fact doing just this with its Google Fi effort, where it offers service starting at $20 per month using the networks of both Sprint and T-Mobile. But the service is fairly limited. It’s offered only on a single Nexus 6 phone and its designed to keep the service more of a test than a true national rival. It doesn’t make sense for Apple for a number of reasons. First it has a tough time doing things small — Apple currently represents a huge part of the carriers’ business, and some of the carriers’ most lucrative customers are its iPhone owners. So the carriers aren’t going to be eager to hand that over to Apple. Even if Apple could convince them to do so, it might not be in Apple’s long-term interest. First of all, consumers today are benefitting from four carriers heavily competing against one another, with a resurgent T-Mobile and an increasingly desperate Sprint both putting price pressure on AT&T and Verizon. Also, carriers spend a fortune to keep their networks strong enough to handle increasing demands and to swiftly upgrade to faster technologies. If they become truly a dumb pipe just selling gigabytes to Apple, the incentive to differentiate on customer service or speed is reduced, as would be the amount of capital they would have to invest. Over time, that could mean both Apple and consumers would lose. Plus, if it is Apple’s name attached to the service, it would have to take on the role of customer support and the perceived blame when the service doesn’t meet customer expectations. “That’s a lot to bite off, and I can’t see Apple wanting to do it,” said Jackdaw Research analyst Jan Dawson. Now, that doesn’t mean Apple isn’t interested in seeing more value come to it over time. With iMessage, for example, Apple took something that consumers value — their text messages — and made it a feature of their phone rather than something tied to their carrier and phone number. There are reports Apple would like to do the same thing with voicemail. Apple also introduced on the latest iPads a SIM card that works across different cellular networks so customers don’t have to choose a carrier when choosing a device. Apple could do something similar with the next iPhone. These moves make sense. Whether Apple has dreams of eventually offering cell service or not, it is to their advantage that consumers are more tied to their iPhone than they are to being a customer of AT & T or T-Mobile. Do such moves also open the door to Apple offering its own cell service some day? Sure. And it would be foolish for Apple not to constantly consider whether such a move makes sense. But, at least for now, the downsides likely outweigh the benefits.