- Amazon Expands Drone Testing in Britain: Amazon has partnered with the British government to significantly expand drone testing, a move that could allow the devices to deliver packages to British homes far earlier than in the United States. Under the partnership, Britain’s aviation regulator will let Amazon test several aspects of drone technology — such as piloting the machines beyond the line of sight of its operators — that the Federal Aviation Administration in the United States has not permitted. The tests, which are an important sign of confidence in Britain after its historic vote last month to leave the European Union, are to begin immediately.The move puts pressure on the F.A.A., which had recently rebuffed requests by Amazon, Google and other drone makers to advance their delivery plans. The tech behemoths and other drone makers have aggressively lobbied the F.A.A. to authorize the devices to significantly reduce costs to transport goods by airplane, freight and trucks. Amazon said it hoped success with the drone trials in Britain would encourage more hesitant regulators in the United States and elsewhere to loosen restrictions. The trials will “help identify what operating rules and safety regulations will be needed to help move the drone industry forward,” the company said in a statement. Amazon will work with British regulators to test drones that fly beyond the line of sight of operators in rural and suburban areas. It will also test whether a single operator can safely command multiple drones at once, as well as technology that lets the machines automatically detect and avoid other planes, buildings and people.
- Analyst Downgrades Apple and Says It Has 'Peaked': With Apple Inc's earnings report just a day away, Wall Street analysts are more at oddsthan ever, and one of them in particular anticipates tough times for the tech giant. "Our opinion [is] that Apple has peaked under the leadership of CEO Tim Cook," Colin Gillis of BGC Financial L.P. said in a note this week. "Our view that that there is risk that the upgrade rate for the next iPhone may slow even more than the upgrade rate cycle of 6s, which has been materially lower than the upgrade rate of the iPhone 6 as per the company." However, others disagree and say that while things haven't been great as of late, things will get better next year. "Amid pervasive investor fear and negativity, we see results/guidance as not great but good enough to start swinging the tide from near-term fear to cautious optimism about the future," Timothy Arcuri of Cowen and Company LLC said in a note. "Given our installed base work, we see a "super-cycle" in '17 and iPhone 7 could even sell a little better than bearish expectations." Even Gillis acknowledges that shares could see a move higher after earnings due to the low expectations. After that bounce, though, his pessimism continues. "[W]hen we ask ourselves 'Do we see Apple gaining or losing its next $100 billion of value,' the answer is losing."
- Sprint says to be cash-flow positive next year, shares soar: Sprint Corp (S.N) reported better-than-expected first-quarter revenue as big discounts attracted more postpaid subscribers, and the No. 4 U.S. wireless carrier said it expected to be cash flow positive next fiscal year after breaking even this year. The company's shares surged more than 28 percent to $5.93 on Monday - their biggest intraday percentage gain ever - after it also said it had enough money to fund its business this year. Some analysts and investors had raised questions about Sprint's financial position after majority owner SoftBank Corp (9984.T) agreed earlier this month to buy UK chipmaker ARM Holdings for $32 billion. Sprint had negative cash flow of $3.17 billion in the financial year ended March 31. "We expect that we will have adequate sources to provide all the capital necessary to fund the business and repay the debt maturities due in FY 16," Chief Financial Officer Tarek Robbiati said on a conference call with analysts.Sprint, in which Japan's SoftBank holds a more than 80 percent stake, said its net operating revenue fell marginally to $8.01 billion. Up to Friday's close, Sprint's shares had risen 27.6 percent since the start of the year.
- Investors realize Nintendo didn’t develop Pokémon Go and shares plummet: Nintendo’s shares plunged after the company said late Friday that the worldwide success of Pokémon Go will not significantly impact its financial results. Nothing Nintendo disclosed about the ownership of the game was new information, but markets were shocked anyway. The stock sank 18 percent to 23,220 yen at the close in Tokyo, the maximum one-day move allowed by the exchange, noted Bloomberg. After the drop, Nintendo’s stock remained flat. In morning trading today, the Kyoto-based company’s shares were down $2.36, or 8.14 percent, at $26.64.On Friday, Nintendo put out a statement pointing out that it owns only 32 percent of the voting power of The Pokémon Company, an affiliated company that holds the ownership rights to Pokémon. Nintendo also owns 13 percent of Niantic, the San Francisco-based mobile developer spun out of Google last year who developed and distributed the game. “Because of this accounting scheme, the income reflected on the company’s consolidated business results is limited,” Nintendo wrote in a notice. Also, Nintendo said that “Pokémon Go Plus,” its peripheral device for use with the application, is scheduled for release and it’s already reflected in the financial forecast. Following Pokémon Go’s release in the U.S. at the beginning of July, Nintendo’s market valuation soared to more than $40 billion, passing Sony.
- Verizon to Pay $4.8 Billion for Yahoo’s Core Business: the internet is an unforgiving place for yesterday’s great idea, and on Sunday, Yahoo reached the end of the line as an independent company. The board of the Silicon Valley company agreed to sell Yahoo’s core internet operations and land holdings to Verizon for $4.8 billion, according to people briefed on the matter, who were not authorized to speak about the deal before the planned announcement on Monday morning. After the sale, Yahoo shareholders will be left with about $41 billion in investments in the Chinese e-commerce company Alibaba, as well as Yahoo Japan and a small portfolio of patents.That’s a pittance compared with Yahoo’s peak value of more than $125 billion, reached in January 2000. Founded in 1994, Yahoo was one of the last independently operated pioneers of the web. Many of those groundbreaking companies, like the maker of the web browser Netscape, never made it to the end of the first dot-com boom. But Yahoo, despite constant management turmoil, kept growing. Started as a directory of websites, the company was soon doing much more, offering searches, email, shopping and news. Those services, which were free to consumers, were supported by advertising displayed on its various pages. For a long time, the model worked. It seemed like every company in America — and across much of the world — wanted to reach people using the new medium, and ad revenue poured in to Yahoo.In the end, the company was done in by Google and Facebook, two younger behemoths that figured out that survival was a continuous process of reinvention and staying ahead of the next big thing. Yahoo, which flirted with buying both companies in their infancy, watched its fortunes sink as users moved on to apps and social networks. Verizon, one of the nation’s biggest telecommunications companies, plans to combine Yahoo’s operations with AOL, a longtime Yahoo competitor acquired by Verizon last year. The idea is to use Yahoo’s vast array of content and its advertising technology to offer more robust services to Verizon customers and advertisers.
- Google Races to Catch Up in Cloud Computing: When it comes to cloud computing, Google is in a very unfamiliar position: seriously behind. Google is chasing Amazon and Microsoft for control of the next generation of business technology, in enormous cloud-computing data centers. Cloud systems are cheap and flexible, and companies are quickly shifting their technologies for that environment. According to analysts at Gartner, the global cloud-computing business will be worth $67 billion by 2020, compared with $23 billion at the end of this year.For Google, a loss in cloud computing would be a rare misstep for a company that revolutionized media with its advertising business, and then made the world’s leading smartphone operating system.But it will be an uphill climb. Amazon Web Services, which began its cloud product a decade ago, remains the leader. The company took in $2.6 billion, 9 percent of Amazon’s sales, in the first quarter of 2016. Profits from the service made up 56 percent of Amazon’s operating income. Those numbers may well be higher when Amazon reports its second-quarter earnings on Wednesday. Microsoft styled itself a cloud company, too, and the company said last week that revenue from Azure, its cloud business, which was founded in 2010, rose 100 percent over the last year. Cloud technology also figures in crucial businesses like Office 365. In contrast, Google Cloud Platform does not even figure in the earnings reports of Alphabet, Google’s parent company. That has to sting, since the company owns perhaps the largest network of computers on the planet, spending close to $10 billion a year to handle services like search, Gmail and YouTube.the company said it has used artificial intelligence to cut the power use in its data centers 15 percent, a huge decrease considering how efficient these data factories were already. Power is probably the largest single cost for all three of the cloud companies. Google is almost certain to use its savings to reduce prices, much the way it won in search advertising by figuring out its competitors’ costs, then undercutting them. That ability to find energy efficiency may be a powerful tool to sell to others over Google Compute.
- Apple Watch Sales Fall 55% in Second Quarter, IDC Report Says: Apple Watch sales fell 55 percent in the second quarter of 2016, dragging the global market for such devices lower, as potential customers hold off for an update coming later this year, according to a report from market intelligence firm IDC. Apple Inc. sold 1.6 million watches in the second quarter of this year, down from 3.6 million units a year earlier, IDC said. Global smartwatch sales fell 32 percent to 3.5 million units. While Apple held on to its position as the industry leader, with 47 percent of the market, it was the only company in the top five to see a decline. Samsung Electronics Co. saw its market share more than double to 16 percent.“Consumers have held off on smartwatch purchases since early 2016 in anticipation of a hardware refresh, and improvements in WatchOS are not expected until later this year, effectively stalling existing Apple Watch sales," IDC analyst Jitesh Ubrani wrote in the report. “Apple still maintains a significant lead in the market and unfortunately a decline for Apple leads to a decline in the entire market.”
- Nintendo shares plunge, company says Pokemon GO's earnings impact limited: Shares of Nintendo Co (7974.T) tumbled as much as 18 percent early on Monday after the company said smash-hit mobile game Pokemon GO would have only a limited impact on its earnings. Nintendo said after the market closed on Friday that it had already factored in anticipated revenues from its Pokemon GO Plus device - an accessory worn on the wrist to alert players of nearby monsters to catch - and that it had no plans to revise its annual earnings forecasts for now. Nintendo said its affiliate Pokemon Co receives licensing and fees from the game's developer, Niantic Inc, and that profits at Nintendo from those revenues would be limited. The company, which owns 32 percent of Pokemon Co, is due to report first-quarter earnings on Wednesday. The phenomenal success of Pokemon GO has triggered massive buying in Nintendo shares and even with Monday's decline, the shares are still up some 60 percent compared with levels prior to the game's July 6 launch in the United States, Australia and New Zealand.
- What is Pokémon Go and why is everybody talking about it?: This new Pokémon game is bringing augmented reality mainstream.It’s a new mobile game, free on both iOS and Android, that lets you create an avatar that can catch, train, trade and battle Pokémon characters inside the game. That sounds familiar. Isn’t that the premise of virtually every other Pokémon game? Yes, kinda. What makes this game unique is that it uses your phone’s location services and camera so that you can catch Pokémon in real life. That is, when you walk around the streets of whatever city or town you live in, your avatar moves inside the game. So finding new Pokémon and checkpoints for the game actually requires you to get off the couch and walk down the block. How does this work? The game uses Google Maps technology to place your avatar on a virtual world that mirrors your real life surroundings. When you find a Pokémon, the game uses augmented reality (AR) to make it look like whatever Pokémon you’ve stumbled across is indeed standing right there in front of you. Who created Pokémon Go? Nintendo and the other creators of Pokémon teamed up with Niantic Labs to create the game. The former company was born inside Google; its founder, John Hanke, was a key leader of its Geo products (Google Maps, Earth). After moving to leave Google in 2010, Hanke was lured to stay with funding for Niantic, a skunkworks project to build mobile AR tools using Google Maps technology. Niantic’s first effort, Ingress — an augmented-reality, massively multiplayer, location-based online game — cultivated a small but very dedicated following. Niantic spun out of Google in the fall, yet the search giant stayed involved, participating in a $30 million investment for developing Pokémon Go.
- Nintendo shares surge on Pokemon mobile game hopes: Shares of Japan's Nintendo Co soared more than 20 percent in early Tokyo trading on Monday, extending last week's gains, on hopes that the popularity of its new Pokemon GO smartphone game will boost its results. Pokemon GO was launched in the United States last week and shot to the No. 1 free app in Apple Inc's U.S. iTunes store. It was also launched in Australia and New Zealand, and is expected to be rolled out in Japan soon. Nintendo shares were up 23.5 percent at 20,085 yen ($199.32) each after earlier rising as high as 20,190 yen, their highest since November.
- Elizabeth Holmes of Theranos Is Barred From Running Lab for 2 Years: Federal regulators have barred Elizabeth Holmes, chief executive of Theranos, from owning or operating a medical laboratory for at least two years, raising new questions about the future of the embattled blood-testing start-up and its founder, once a Silicon Valley phenomenon. In a letter sent to Theranos that was made public on Friday, regulators said they were revoking the certification of its flagship laboratory in Newark, Calif., effective Sept. 5. They also said the laboratory would be prohibited from taking Medicare and Medicaid payments. The government scrutiny stemmed from questions about the effectiveness of Theranos’s technology and the way the company operated its labs. The company faces a fine of $10,000 for every day it is out of compliance with regulations, effective July 12. Such stern sanctions are “virtually unheard-of in my 40 years’ experience in the industry,” said David Nichols, president of the Nichols Management Group, a consultant to and operator of clinical laboratories. “I don’t see a path forward for the company.” What Theranos and Ms. Holmes will do next is not clear. The company said in its statement that it would continue to operate a laboratory it owns in Arizona, at least for now. But if the license of the California lab is indeed revoked, then Ms. Holmes and Theranos could not own or operate any laboratory, and the Arizona facility would also have to be shut, according to both Theranos and a spokesman for the regulator.
- Japan's Line sets top price for up to $1.3 billion IPO: Line Corp set the price for its initial public offering at the top of its marketing range, raising up to $1.3 billion, a regulatory filing showed on Monday, reflecting robust appetite for the Japanese messaging app firm. The company set the IPO price at 3,300 yen per share, compared with its book-building range of 2,900-3,300 yen. It had initially set the range at 2,700-3,200 yen but bumped it up last week. Including an over-allotment arrangement, Line will sell up to 132.8 billion yen ($1.3 billion) of shares. Line, owned by South Korea's Naver Corp, plans to list in New York on July 14 and in Tokyo the following day.
Facebook is giving select brands exclusive access to qualitative user insights based on information gleaned from its 1.3 billion users, letting high-rolling advertisers find out what consumers really think based on comments and other telling social activities, according to industry insiders familiar with the special program. The brands and their marketing teams get to dive deeper into Facebook and its unprecedented ability to gauge public sentiment thanks to the marketing program called Grapevine, according to sources. Which brands get invited to the program depends on their bankroll, one industry source said. "The advertisers spending in the millions on campaigns or a half-million dollars for one ad, that's who has access," this person said. Industry insiders said data analysis from Grapevine was "qualitative not just quantitative." For instance, a shampoo brand could get insights into what Facebook users are saying about frizzy hair and then tailor ads based on that sentiment. The tool is similar to what Twitter does with its "firehose" of tweets, sifting through the torrent of information to track public sentiment. Twitter bought Gnip earlier this year to get a better handle on that data for marketers, and it licenses access to the full stream of information to a select few firms.
In-store location targeting is going mainstream this US Holiday Season: Beginning this week, shoppers at Tysons Corner Center with the right app may see a welcome message pop up on their smartphones as they walk into the mall. An hour into their shopping spree, they are likely to receive another text message, this time asking if they’d like their purchases delivered to their home. And if they have questions along the way — does Nordstrom offer gift wrapping or when does California Pizza Kitchen open — they can get instant answers via text messaging. The property is one of a handful of shopping centers around the country experimenting with mobile apps and Bluetooth technology to communicate with customers as they move through the mall. Ugg this month opened its first high-tech store at the Tysons Galleria, where it uses the same wireless sensors that are in E-Z Passes to help shoppers customize boots and find related products on large in-store touch screens. At Burberry’s new outpost at CityCenterDC, which opened in August, company iPads are available for online shopping. And at Inspirato, a luxury vacation company with a new “experience center” at the Tysons Galleria, passersby can use a number of on-site computers and touch screens to browse lodges in Jackson Hole, Wyo., or chateaus in Bordeaux, France.
Watch out Facebook - Apple is finally showing serious intent about mobile advertising: Its iAd business has gone through several iterations and struggled, and the company is now tapping the ad tech community to open the service widely so marketers can get access to its iPhones, iPads and computers. AdRoll CMO Adam Berke said the new iAd system is going to reshape the mobile advertising landscape, opening access to consumer data Apple had walled off for a long time. Here's how: Berke expects the new iAd to reach massive numbers of users quickly. Apple is using standard format ads to make it easy—mobile banners and video already in use across the industry. App-install ads will immediately be in demand and give mobile developers a new edge in the App Store, which can be a tough environment because of the sheer volume of apps. Apple iTunes and App Store consumer data will finally be open for use to target ads. This is tremendous information about which apps every user has downloaded and which media each one consumes. This knowledge has been locked away within Apple, untouched by marketers until now. "They have App Store behavioral data, and we'll be able to target based on the types of apps that people like," Berke said. The ads will show up in apps that use iAds, and the App Store has hundreds of millions of them, opening up never-before used ad space. "Any app developer using iAd will suddenly have a lot more demand and a lot more advertisers buying their inventory," Berke said. Apple Pay, the new payment service, will feed into the advertising. This is the final piece of information marketers need to know for certain if their ads worked—did the user buy their product? This purchasing behavior is something only Apple will have access to through its control of its mobile ecosystem. "It [could eventually] allow us to track from the mobile ad impression to the App Store behavior of the user to the app install to eventually someone buying with Apple Pay," Berke said.
After Disney and Activision, now Nintendo launches physical toys that can interact with digital games via NFC: Toy companies had been trying for years to bridge the gap between physical and digital toys, applying different strategies but finding limited success. Like recent physical-virtual crossover hits from Disney and Activision, Nintendo figurines use the technology known as near-field communication to send signals to a device connected to the game console. For Disney and Activision, the toys are required to play the related games. Starter kits are about $75, and figures start at about $13. The Nintendo toys are not required to play the related games, but instead offer bonus features. Each character is $13. Activision’s approach has been to add new features and types of toys to each installment. This fall, the company released Skylanders Trap Team, in which players can insert a physical crystal-shaped item in a base to trap virtual villains.
