Apple’s gains make some mutual funds riskier

By David K. Randall
NEW YORK | Mon Mar 26, 2012 5:13pm EDT
(Reuters) – When it comes to Apple, investors could become victims of their own success.

It is a dilemma more mutual fund managers are wrestling with due to the company’s nearly 48 percent gain this year. Those who bought Apple well below its current price have seen the value of their investment balloon, sometimes to more than 10 percent of their fund’s assets.

That effectively turns a brilliant decision into a concentrated stake, undercutting the benefits of diversification and making some mutual funds riskier.

As Apple stock has marched higher, well-timed bets on the company have helped some growth-oriented and blended mutual funds outperform the broad market. But in doing so, many of those funds have now tied investor dollars closer to the performance of a single company.

This isn’t much of an issue when it comes to funds that market themselves as narrow bets on technology. But many funds whose broad holdings could be the core of a (401)k or similar retirement plan – Fidelity’s $14.7 billion Blue Chip Growth and the $28.7 billion T. Rowe Price Growth fund among them – are stocking up on Apple.

Apple makes up nearly 9 percent of Fidelity’s $80.8 billion Contrafund, for instance. The fund is the sixth-most popular holding in 401(k) plans nationwide, according to BrightScope, a firm that ranks company (401)k plans.

A dramatic fall in Apple’s shares, however unlikely that may seem at the moment, would quickly ripple across the retirement accounts of millions of investors who thought they were safer investing in funds than individual shares.

“It adds to the risk profile of a fund to have a significant stake in one stock because it makes them more susceptible to bad news on one or two stocks and they won’t be able to cushion the blow with diversification,” said Todd Rosenbluth, a senior fund analyst at Standard & Poor’s Capital IQ.

Generally in the mutual fund industry, any position over 5 percent of assets is considered a large bet that may influence a fund, said Dan Culloton, a fund analyst at Morningstar.

CONCENTRATED BETS

Shares of Apple have nearly doubled from the $310 they hit in June 2011, and at about $600 a share are up nearly 48 percent in 2012 alone.

Apple, currently the world’s most valuable company by market capitalization, now has a weighting of 4.2 percent in the broad S&P 500 portfolio, the benchmark against which the performance of most U.S. mutual funds are judged. That means 4.2 cents of every $1 invested in a S&P 500 index fund will be allocated to Apple shares, before fees.

By definition, actively managed mutual funds have overweight positions in companies they think will outperform the broad market, but usually not more than 5 or 6 percent.

But 46 funds tracked by Morningstar have stakes in Apple that exceed 9 percent of assets, or roughly double the company’s weighting in the S&P 500 index. This does not include sector funds that focus on technology or other specialized investment.

The $1.5 billion Oppenheimer Main Street Select fund, for instance, blends value and growth stocks in its portfolio of 34 companies. It had 10.5 percent of its assets, or two and half times the benchmark weight, in Apple as of the end of January, according to Morningstar data.

That concentrated bet is one reason that the fund is up 13.9 percent so far this year, or 2.6 percentage points above the broad S&P 500 index. A dip in Apple’s share price and the fund could fall more than the broad market. The fund managers declined to comment.

Fidelity’s Contrafund, meanwhile, focuses on growth stocks. It holds 427 stocks, but 8.6 percent of its portfolio, or a total of $6.6 billion, was concentrated in Apple at the end of January. That stake is more than even Apple’s weighting of 7.6 percent in the narrower Russell 1000 Growth index, which many growth fund managers use as an internal benchmark.

The Contrafund is up 13.7 percent since the start of 2012. Fidelity declined to comment.

Some reluctance on the part of portfolio managers to sell Apple shares is understandable. Trimming exposure could lead to underperformance for a fund.

“We hear about this a lot from portfolio managers. I have no doubt that they’d like to sell it and take their profits, but you have to be in it to win it and right now Apple’s momentum is going up,” said Howard Silverblatt, senior index analyst at S&P.

These fund managers usually realize that they are taking on additional risk, Silverblatt said. “What helped you on the way up kills you on the way down.”

CUTTING RISK

Some fund managers are taking steps to lower the weighting of Apple in their portfolios.

“We got to the point where it was an inordinate part of our portfolio, and in order to control risk it was only prudent to trim it back,” said Robert S. Bacarella, a Wheaton, Illinois fund manager who runs the $49 million Monetta fund with his son.

Bacarella first bought 10,000 shares of Apple in early 2005 when it traded at around $40 per share. In September 2005, those 10,000 shares were worth $536,100 and accounted for 0.9 percent of his portfolio, according to Morningstar data.

Fast forward to December 2011, and Bacarella again had 10,000 shares of Apple. This time, however, their value was nearly $4.1 million, which accounted for 9.3 percent of his fund’s weight. He trimmed his shares by 5,000 earlier this year. Apple now makes up 5 percent of his assets.

“This is about risk control. You never know what is going to happen,” he said. The sizeable positions built up by other funds would only exacerbate an Apple fall , he added.

“If everyone sees deceleration of earnings growth, what will you do?” Bacarella asks. “I would think that you’re going to bail and that will compound to the downside.”

(Reporting By David Randall; Editing by Walden Siew, Jennifer Merritt and Tim Dobbyn)

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Yahoo sues Facebook for infringing 10 patents

By Dan Levine and Alexei Oreskovic
SAN FRANCISCO | Mon Mar 12, 2012 7:09pm EDT
(Reuters) – Yahoo Inc sued Facebook Inc over 10 patents that include methods and systems for advertising on the Web, opening the first major legal battle among big technology companies in social media.

The lawsuit, filed in a San Jose, California federal court on Monday, marks a major escalation of patent litigation that has already swept up the smartphone and tablet sectors and high-tech stalwarts such as Apple Inc, Microsoft Corp and Motorola Mobility Holdings Inc.

Yahoo’s patent lawsuit follows Facebook’s announcement of plans for an initial public offering that could value the company at about $100 billion.

Facebook spokesman Jonathan Thaw said Facebook learned of the lawsuit through the media.

“We’re disappointed that Yahoo, a longtime business partner of Facebook and a company that has substantially benefited from its association with Facebook, has decided to resort to litigation,” he said.

In an emailed statement, Yahoo said it is confident it will prevail.

“Unfortunately, the matter with Facebook remains unresolved and we are compelled to seek redress in federal court,” the company said in a statement.

Yahoo, one of the Web’s pioneering companies, has seen its revenues decline in recent years at a time when rivals such as Facebook and Google have thrived. In January, Yahoo appointed former PayPal President Scott Thompson as its new chief executive, replacing Carol Bartz, who was fired in September.

Yahoo said late last month it was seeking licensing fees from Facebook over its patents and that other companies have already agreed to such licensing deals.

IPO COMPANIES VULNERABLE

Colleen Chien, a professor at Santa Clara Law in Silicon Valley, said companies are usually more vulnerable to patent suits when they are in the IPO process.

“As a general proposition, when a company is about to go public, the last thing it needs is to get involved in a knock-down, drag out litigation fight,” Chien said.

“So that might make Facebook more willing to resolve its differences with Yahoo.”

Yahoo has used similar timing to its advantage in the past. Google agreed to issue shares to Yahoo nine days before Google went public in 2004 in exchange for a license to Yahoo’s patents. Google later took a $201 million non-cash charge related to the transaction.

In deciding to sue Facebook, Yahoo has retained the same law firm, Quinn Emanuel Urquhart & Sullivan, used by Google and other manufacturers in many Android-related smartphone patent cases. Google is a player in social media with its Google+ service.

Quinn Emanuel also counts social gaming service Zynga Inc as a client, according to the law firm’s website.

Yahoo has not said whether it will bring patent claims against other social networking companies and a Google spokesman declined to comment on Quinn Emanuel’s involvement. Zynga also declined to comment.

In the lawsuit, Yahoo says Facebook was considered “one of the worst performing sites for advertising” prior to adapting Yahoo’s ideas.

“Mr. Mark Zuckerberg, Facebook’s founder and CEO, has conceded that the design of Facebook is not novel and is based on the ideas of others,” the lawsuit said.

ONLINE ADVERTISING

Only two of the 10 patents at issue are directly related to social networking technology. Most focus on online advertising, including methods for preventing “click fraud,” as well as privacy and technology for customizing the information users see on a Web page.

“If what Yahoo is saying is literally true, then it seems like a lot of companies would be liable,” said Shubha Ghosh, a professor who specializes in intellectual property at The University of Wisconsin Law School. But he added, much would depend on whether a judge defines the patents broadly or narrowly.

Several social networking companies, including Facebook, have seen an uptick in patent claims asserted against them as they move through the IPO process.

However, most of those lawsuits have been filed by patent aggregators that buy up intellectual property to squeeze value from it via licensing deals and none by a large tech company such as Yahoo.

The lawsuit is a change for Yahoo because the company has never initiated offensive patent litigation against such a large publicly traded company, according to a search of federal court dockets on legal database Westlaw, a Thomson Reuters unit.

A classic defense for companies targeted with patent claims is to threaten a countersuit using its own patents. But Yahoo possesses far more patents than Facebook. According to a U.S. government database, Yahoo has over 3,300 patents and published patent applications, while Facebook has 160.

The case in U.S. District Court, Northern District of California is Yahoo Inc. v. Facebook Inc., 12-cv-1212.

(Reporting By Dan Levine and Alexei Oreskovic; editing by Andre Grenon)

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Nokia sells media advertising business

HELSINKI | Fri Jan 27, 2012 4:39am EST
(Reuters) – Finnish group Nokia (NOK1V.HE) has sold its media advertising business to a U.S. startup Matchbin as it focuses on core businesses, a company spokesman said on Friday without disclosing detail of the deal.

Matchbin renamed itself as Radiate Media after acquiring the Nokia business, which employed 180 staff at a time of the deal.

Nokia, the world’s largest cellphone maker by volume, entered the mobile advertising business through its 2007 acquisition of U.S. company Enpocket.

It has focused on phone business and location based services under new chief executive Stephen Elop, and has been cutting back on its extensive foray into services like games and music.

(Reporting By Tarmo Virki; Editing by Dan Lalor)

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Dealtalk: In twist, blocking AT&T deal could hurt rivals

By Nicola Leske

NEW YORK | Fri Nov 25, 2011 6:15pm EST

(Reuters) – Driven by antitrust concerns, U.S. regulators are fighting hard to block AT&T’s (T.N) $39 billion deal to buy Deutsche Telekom’s (DTEGn.DE) T-Mobile USA. But, in an ironic twist, smaller U.S. wireless rivals may suffer more if the deal is blocked than if it is approved.

T-Mobile USA would emerge as a stronger, scrappier competitor thanks in large part to the hefty breakup fee it is entitled under the AT&T deal. And on its own, it is likely to fight harder for the low end of the market that is currently the playing ground for the likes of Sprint Nextel Corp, MetroPCS Communications Inc (PCS.N) and Leap Wireless International (LEAP.O), analysts said.

T-Mobile USA will “emerge as a stronger, more formidable competitor once the uncertainty of the merger has elapsed and its network quality is enhanced via the acquisition of the AT&T spectrum assets,” said Jim Breen, an analyst at William Blair.

The AT&T deal — the largest transaction announced this year — has run into serious obstacles both at the Department of Justice and at the Federal Communications Commission, which worry about the antitrust implications of a merger of the No. 2 and No. 4 U.S. wireless carriers.

AT&T has said it would withdraw its application to the FCC to focus on persuading the Justice Department. The company also said it would take a $4 billion charge to account for a breakup fee in case the takeover fails.

Under the terms of the merger agreement, a failed deal would entitle T-Mobile USA to $3 billion in cash plus spectrum and roaming agreements.

In a research note, Moody’s said that could also lead to a network sharing deal between the two companies, reasoning that it “would make sense given the spectrum that AT&T will have to cede to T-Mobile and the 3G roaming agreement between the two.”

That would make life especially hard for No. 3 U.S. carrier Sprint, which has been one of the most vocal opponents of the AT&T/T-Mobile deal, going so far as to file a lawsuit.

William Blair’s Breen predicts that because Sprint and T-Mobile serve similar segments of the market, Sprint will have to try and match T-Mobile’s aggressive pricing to win postpaid customers, thereby diluting its average revenue per user.

“In terms of recruiting new subscribers, Sprint will no longer have the luxury of being the only value postpaid carrier in the market,” Breen said.

Smaller rivals such as MetroPCS and Leap Wireless may be affected even more because T-Mobile is eyeing similar customer segments.

A failure to close the AT&T deal will turn T-Mobile into an even more aggressive competitor for urban prepaid users from these rivals.

MetroPCS and Leap would also lose an opportunity to buy T-Mobile USA assets that AT&T would have had to divest to overcome antitrust objections from regulators.

There has been speculation that AT&T — in a move to assuage the DoJ’s concerns — could bolster MetroPCS’ position to ensure that there is a fourth national competitor in the market but MetroPCS has made it clear that it has no ambitions to become a national carrier.

Representatives for MetroPCS, Leap Wireless and Sprint were not immediately available for comment.

The one winner from the uncertainty over the deal is the largest U.S. wireless carrier, Verizon Communications (VZ.N), Moody’s said. Verizon gets room to execute its strategy while competitors try to salvage the transaction, Moody’s said.

(Reporting by Nicola Leske; Editing by Paritosh BansalBernard Orr)

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Motorola stockholders approve acquisition by Google

Thu Nov 17, 2011 8:02pm EST

(Reuters) – Motorola Mobility Holdings Inc said late on Thursday that its stockholders approved the $12.5 billion deal to be acquired by the search giant Google Inc.

Motorola, which was one of the two parts split from Motorola Inc, said that 99 percent of the shares that were voted, voted in favor of the $40 per share deal. The shares represented about 74 percent of the company’s total outstanding shares.

In August, Google said it will buy the handset device manufacturer in its biggest deal ever, paying a steep premium of 63 percent.

Libertyville, Illinois-based Motorola’s shares closed at $38.94 on Thursday on the New York Stock Exchange while shares of Google closed at $600.87 on Nasdaq.

(Reporting by Kavyanjali Kaushik in Bangalore; editing by Carol Bishopric)

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BlackBerry problems hit four continents

By Georgina Prodhan and Alastair Sharp

LONDON/TORONTO | Tue Oct 11, 2011 8:23pm EDT

(Reuters) – Millions of BlackBerry customers across four continents are without email, messaging and browsing service on their smartphones after a series of failures in Research In Motion’s private network.

Extensive delays hit Europe, the Middle East, Africa and India on Monday and the problems spread to Brazil, Chile and Argentina on Tuesday in the latest headache for the Canadian smartphone maker.

The disruption piles pressures on RIM, which is fending off investor calls for a management shake-up and possible sale or split of the company as it shifts its phone lineup to new software first used in the widely panned PlayBook tablet.

“The messaging and browsing delays being experienced … were caused by a core switch failure within RIM’s infrastructure,” the company said in an emailed update late on Tuesday afternoon in Toronto.

RIM’s BlackBerry service has long been prized by executives and politicians who rely on its security and reliability to deliver email and other messaging to mobile workers.

But problems with the service may hasten corporate moves to allow rivals such as Apple Inc’s iPhone and iPad and devices running Google Inc’s Android software to access data kept behind company firewalls, one analyst said.

“The current situation with the BlackBerry outages couldn’t come at a worse time for RIM, following some harsh criticism in recent months,” Informa Telecoms & Media analyst Malik Saadi said in a statement.

“Some businesses may see this as a good reason to reevaluate

their reliance on centralized servers and instead look to investing in more corporately controlled servers.

“Not only would this enable IT departments to minimize the risk of unforeseen collapses, but it could also give employees more flexibility to use their own devices,” he said.

The Canadian company manages its BlackBerry service via servers parked within enterprises and hooked up to a proprietary network carried by wireless operators.

“Although the system is designed to failover to a back-up switch, the failover did not function as previously tested,” RIM said. Failover refers to the automatic switching of service to a standby server in the case of a failure of a main system.

“As a result, a large backlog of data was generated and we are now working to clear that backlog and restore normal service as quickly as possible,” RIM noted.

RIM hosts a number of network operating centers, including one at its headquarters in Waterloo, Ontario, and another in southern England, which manage the massive amounts of data that flow through its system.

RIM has suffered outages before. Its BlackBerry Messenger service went offline in Canada and Latin America last month and a massive disruption hit North American customers in April 2007, but the disruptions are usually contained within one continent or region.

RIM has more than 70 million subscribers worldwide, with much growth in recent years coming from emerging markets.

At 10:25 p.m. Monday Eastern Time, RIM said it had resolved problems disrupting its services in Europe, the Middle East and Africa (EMEA). This was some 20 hours after users in EMEA and India first reported problems with email and BlackBerry Messenger.

In its latest update, RIM did not say when it expected the outage to be fully resolved or how many customers had been affected.

The outages are just another headache for RIM, which has less margin for error as rivals encroach on the corporate email market it once took for granted. Employees increasingly push to use their personal devices, typically iPhones and iPads and to a lesser extent Android devices, in the workplace.

It is also facing growing calls from investors for a break-up, sale or change of management following recent dismal results, slipping market share for its phones and a lacklustre reception for its PlayBook tablet, designed to challenge Apple’s iPad.

Network operators and users in EMEA tweeted that email and BlackBerry Messenger services were not working from Monday morning in London. Network operator T-Mobile said on its website that the problems were due to a European-wide outage on the BlackBerry network.

It said: “RIM has apologized for the interruption to services and said it’s working to restore normal operations.”

Vodafone sent a message to its British BlackBerry customers on Tuesday evening that noted “you may still be experiencing issues with BlackBerry services” and saying RIM was working to resolve this urgently.

(Additional reporting by Paul Sandle in London and Devidutta Tripathy in New Delhi; Editing by Will Waterman, David Holmes and Richard Chang)

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Apple employee celebration of Jobs next week

SAN FRANCISCO | Mon Oct 10, 2011 3:13pm EDT

(Reuters) – A celebration of Steve Jobs’ life by Apple Inc will be held next week, Chief Executive Tim Cook said in a memo to employees on Monday.

The event will be held at an outdoor amphitheater at Apple’s headquarters in Cupertino, California, on Wednesday, October 19, Cook said in the memo, a copy of which was obtained by Reuters.

“Like many of you, I have experienced the saddest days of my lifetime and shed many tears during the past week,” Cook said. “And I’ve found comfort in both telling and listening to stories about Steve.”

Jobs died last Wednesday at the age of 56 after a long battle with a rare form of pancreatic cancer.

(Reporting by Poornima Gupta; Editing by Gary Hill)

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Steve Jobs “may never be equaled”

By Poornima Gupta and Peter Henderson

SAN FRANCISCO | Wed Oct 5, 2011 11:10pm EDT

(Reuters) – Passionate, prickly, and deemed irreplaceable by many Apple fans and investors, Steve Jobs made a life defying conventions and expectations.

And despite years of poor health, his death on Wednesday at the age of 56 prompted a global gasp as many people remembered how much he had done to transform the worlds of computing, music and mobile phones, changing the way people communicate and access information and entertainment.

“The world rarely sees someone who has had the profound impact Steve has had, the effects of which will be felt for many generations to come,” said Microsoft co-founder and long-time rival Bill Gates.

“For those of us lucky enough to get to work with him, it’s been an insanely great honor.”

The founder of Apple Inc died on Wednesday in Palo Alto, surrounded by his family. The circumstances of his passing were unclear, but Jobs has had a long battle with cancer and other health issues.

Jobs’ family thanked many for their prayers during the last year of Steves illness.

A college dropout, Jobs floated through India in search of spiritual guidance prior to founding Apple – a name he suggested to his friend and co-founder Steve Wozniak after a visit to a commune in Oregon he referred to as an “apple orchard.”

With his passion for minimalist design and marketing genius, Jobs changed the course of personal computing during two stints at Apple and then brought a revolution to the mobile market.

The iconic iPod, the iPhone – dubbed the “Jesus phone” for its quasi-religious following – and the iPad are the creation of a man who was known for his near-obsessive control of the product development process.

“Most mere mortals cannot understand a person like Steve Jobs,” said bestselling author and venture capitalist Guy Kawasaki, a former Apple employee, in a recent interview. He considers Jobs “the greatest CEO in the history of man”, adding that he just had “a different operating system.”

Charismatic, visionary, ruthless, perfectionist, dictator – these are some of the words that people have used to describe Jobs, who may have been the biggest dreamer the technology world has ever known, but also was a hard-edged businessman and negotiator through and through.

“Steve was the best of the best. Like Mozart and Picasso, he may never be equaled,” said Marc Andreessen, venture capitalist and co-founder of Netscape Communications.

Microsoft’s Gates had called Jobs the most inspiring person in the tech industry and President Barack Obama held him up as the embodiment of the American Dream.

It’s hard to imagine a bigger success story than Steve Jobs, but rejection, failure and bad fate were part and parcel of who he was. Jobs was given away at birth, driven out of Apple in the mid-80s and struck with cancer when he finally had regained the top of the mountain.

He resigned as CEO of Apple Inc on August 24 – saying he could no longer fulfill the duties – and briefly served as chairman before his death.

Jobs grew up with an adopted family in Silicon Valley, which was turning from orchards to homes for workers at Lockheed and other defense and technology companies.

Electronics friend Bill Fernandez introduced him to boy engineer Wozniak, and the two Steves began a friendship that eventually bred Apple Computer.

“Woz is a brilliant engineer, but he is not really an entrepreneur, and that’s where Jobs came in,” recently remembered Fernandez, who was the first employee at Apple.

Wozniak earlier this year said that his goal was only to design hardware and he had no interest in running Apple.

“Steve Jobs’ role was defined — you’ve got to learn to be an executive in every division of the company so you can be the world’s most important person some day. That was his goal,” joked Wozniak, who is still listed as an employee, even though he has not worked at Apple for years.

AWFUL-TASTING MEDICINE

Jobs created Apple twice – once when he founded it and the second time after a return credited with saving the company, which now vies with Exxon Mobil as the most valuable publicly traded corporation in the United States.

Every day to him was “a new adventure in the company,” Jay Elliot, a former senior vice president at Apple who worked very closely with Jobs in the eighties, said earlier this year, adding that he was “almost like a child” when it came to his inquisitiveness.

He was highly intolerant of company politics and bureaucracy, Elliot noted.

But the inspiring Jobs came with a lot of hard edges, oftentimes alienating colleagues and early investors with his my-way-or-the-highway dictums and plans that were generally ahead of their time.

Elliot was a witness to the acrimony between Jobs and former Apple Chief Executive John Sculley who often clashed on ideas, products and the direction of the company.

The dispute came to a head at Apple’s first major sales meeting in Hawaii in 1985 where the two “just blew up against each other,” Elliot said.

Jobs left soon after, saying he was fired.

“It was awful-tasting medicine, but I guess the patient needed it. Sometimes life’s gonna hit you in the head with a brick. Don’t lose faith,” Jobs told a Stanford graduating class in 2005.

He returned to Apple about a decade after he left, working as a consultant. Soon he was running it, in what has been called Jobs’ second act.

Jobs reinvented the technology world four or five times, first with the Apple II, a beautiful personal computer in the 1970s; then in the 1980s with the Macintosh, driven by a mouse and presenting a clean screen that made computing inviting; the ubiquitous iPod debuted in 2001, the iPhone in 2007 and in 2010 the iPad, which a year after it was introduced outsold the Mac.

LESS IS MORE

How did he do it? Design fans, Apple employees and Jobs acquaintances credit a natural design-sense drive to simplify. Jobs’ return to Apple was a study in reduction.

Ed Niehaus, who was wooed and hired by Jobs to do public relations for resurgent Apple, remembers an elevator ride that everyone in Silicon Valley has heard of, but seemed more myth than reality. It was soon after Jobs’ triumphant return and he was axing product plans — and people.

Niehaus recalled: “I once rode down an elevator, not that many floors. We got in the elevator and the next floor a young woman got in, and I could see her go, ‘oops, wrong elevator.’ And Steve said, ‘Hi, who are you?’ and introduces himself to her – ‘I’m Steve Jobs’ and turned on the charm and said, ‘What do you do?’ and all this sort of thing. And the door of the elevator opens at the bottom, and he says, ‘We are not going to need you.’ And we walk away.”

Apple was bloated, Niehaus added, and Jobs was bringing back simplicity and focus.

“He always believed the most important decisions you make are not the things you do – but the things that you decide not to do. He’s a minimalist,” former CEO Sculley – who was recruited by Jobs, watched him build the Mac, and then helped throw out the Apple founder in a boardroom battle – told the CultofMac news website in 2010.

A few steps in the Apple design process have leaked out over the years, despite the obsessive secrecy that is part of the company culture. An Apple engineer outlined a long development process at a conference blogged by Businessweek in 2008.

A new product or feature begins with 10 ideas — good ideas, no also-rans, which are presented as “pixel-perfect” mockups. Apple culls the 10 to three, which are tried out for months more, before a final star is chosen.

Meanwhile, the design team meets for two types of weekly meetings — one to brainstorm with no limits, and one to focus on getting the product out the door, BusinessWeek described.

When Steve Jobs weighed in, it was with a simple set of verdicts: “insanely great,” “really, really really great,” and “shit,”, Niehaus recalled.

“Basically Steve tells you exactly what he wants and you just go build it,” said one former iPhone engineer, who declined to give his name.

He remembers working on one project for two months. “Steve said ‘What is this shit? Why are you wasting my time?'” he recalled.

Being chewed up and spat out by Jobs is an experience most Apple employees who have come in contact with Jobs can relate to. And Jobs was known to like people who stood up to him.

“I never asked you to start, so why should I ask you to stop?” Jobs told another former Apple employee, who wanted to know whether he should continue to work on a project that was being questioned by the forceful CEO.

Jobs liked to push. From the very start, people told tales of him putting his – often dirty – feet on the table in meetings. Others tell of Jobs putting down their company, making them defend themselves in interviews.

“He was clearly looking for someone who could stand up to him,” said another former member of the top team. He remembers Jobs and Tim Cook, who is taking over as CEO, as the “metronome” of the company, with vastly different personal styles and exactly the same “insane” attention to detail.

Jobs, in fact, reveled in details, many a time irking everyone around him with his obsessiveness.

Apple’s first CEO Michael Scott has said that Jobs spent weeks contemplating how rounded the edges of the Apple II case should be.

“He put white earbuds in the ears of everyone on the planet, and shut us all in to our own little pods of experience,” said Niehaus, who is in awe of Jobs’ taste and talent.

Jobs, given a Gulfstream jet by his appreciative board, probably didn’t fly commercial in years, and anyone who sits down with an iPod next to someone they don’t want to acknowledge gets a little bit of that experience.

He understood envy “as well as anybody on the planet” and carried it around with him, triple parking his car because he could, said Niehaus, adding that part of what he sold was envy.

THE REAL STEVE JOBS

Even Jobs’ appearance simplified over the years. When he returned to Apple after his decade away, he wore fancy white shirts and vests and even a pin stripe suit to introduce new products.

The black mock turtleneck and jeans that became the defining Jobs outfit showed up at more comfortable settings, when Jobs wooed developers, in the late 1990s. But he pulled the iPod out of a jeans pocket to introduce the music player in 2001. From then on, he barely seemed to take off the outfit.

The jeans and running shoes flashed under his academic gown when he gave the Stanford commencement speech in 2005, and he wore a black mock turtleneck sitting next to President Obama at a 2011 dinner with Silicon Valley titans. On Obama’s other side was Facebook founder Mark Zuckerberg, who wore a jacket to the event.

Jobs himself described his world as very simple.

“For the past 33 years I have looked in the mirror every morning and asked myself, ‘if today were the last day of my life, would I want to do what I am about to do today?’ And whenever the answer has been ‘no’ for too many days in a row, I know I need to change something,” he told Stanford University students in the soul-baring commencement address.

“Remembering that you are going to die is the best way I know to avoid the trap of thinking you have something to lose. You are already naked. There is no reason not to follow your heart,” he said.

That kind of earnest, almost naive hope, combined with ruthless dismissal of whatever missed his lofty standards, were a potent mix for those around him.

His approval was “an addictive drug,” said Niehaus. “I think that most people would knock themselves out to have that experience again, once they’ve had it. It’s that defining. It is a really tremendous experience.”

APPLE 3.0

Jobs had been on leave three times since 2004, and he clearly thought about an Apple without him. Jobs had a liver transplant and a rare form of pancreatic cancer.

His own mortality was a major driver in his life and work.

“Remembering that I’ll be dead soon is the most important tool I’ve ever encountered to help me make the big choices in life,” Jobs said in the commencement speech. “Because almost everything — all external expectations, all pride, all fear of embarrassment or failure — these things just fall away in the face of death, leaving only what is truly important.”

Jobs and the Apple board had a succession plan — put Cook in charge — and he has left a well-respected team. Jobs put extraordinary effort into finding people who he said are 10, 20, 50 times better than average, he told Time magazine, adding that there were no prima donnas when great people got together.

“Having a close circle of people was really important to him,” Elliot said.

Many Apple watchers and investors say that the company has a deep bench, led by Cook. But for others, that just doesn’t ring true.

The former engineer whose months of works was dismissed by Jobs with a single curse doesn’t see much strength in the ranks, saying that it was always a case of “Steve is the visionary,” and if something happened it was always a case of “Let’s ask Steve”.

Apple itself marked the death of Jobs by placing a simple black-and-white picture of the founder on the front page of its Web site, with his name and the dates 1955-2011.

(Editing by Tiffany WuTed Kerr and Martin Howell)

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Samsung Elec aims to sell up to 250,000 mirrorless cameras

SEOUL | Wed Sep 28, 2011 11:22pm EDT

(Reuters) – Samsung Electronics said on Thursday that it aimed to sell this year up to 250,000 compact, interchangeable-lens cameras, a nascent but growing segment joined recently by Japan’s Nikon.

“We expect our mirrorless camera sales to reach 170,000 to 250,000 units this year,” Han Myoung-sup, a senior vice president at Samsung, told reporters at a launching event for its new mirrorless camera, the NX200.

Samsung said the global mirrorless camera market was forecast to grow to 3 million units this year, citing IDC data.

(Reporting by Hyunjoo Jin; Editing by Jonathan Hopfner)

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Price of new Amazon tablet could be big attraction

By Alistair Barr

Tue Sep 27, 2011 6:56pm EDT

(Reuters) – Amazon.com Inc is expected to launch its long-awaited tablet computer on Wednesday, sporting a low-enough price to give Apple Inc’s iPadsome serious competition for the first time.

At a news conference Wednesday morning in New York, Amazon will likely unveil a seven-inch tablet that will let users read e-books, download digital music and video games and stream movies and TV shows.

Analysts expect the tablet to be priced around $250, roughly half the price of Apple’s dominant iPad, which starts at $499.

“If Amazon prices the Kindle Fire at $250, it has the potential to become the most successful competitor to the iPad,” Gene Munster, an analyst at PiperJaffray, said on Tuesday.

Having its own tablet is important for Amazon because the company has amassed a mountain of digital goods and services that could be sold through such a device. As the world’s largest Internet retailer, a tablet might also encourage Amazon customers to shop online for physical products more often.

Munster surveyed 410 consumers last week, asking whether they would buy a 10-inch iPad for $599 or a seven-inch Amazon tablet at $249.

Just over 60 percent of those surveyed said they would purchase the Amazon device, while 21 percent said they would likely buy the iPad, Munster reported. The analyst used a $599 price because he said that is the average price of the iPad.

“It all comes down to price point,” said Colin Gillis, an analyst at BGC Parnters. “To crack into the tablet market, that’s really the only variable where you can truly compete right now.”

A lower price on Amazon’s tablet will likely mean the device will have fewer bells and whistles than the iPad.

Amazon outsourced the hardware design and manufacture to Quanta Computer Inc, a big Taiwan-based firm that makes computers and tablets for other PC companies, according to consumer-electronic news website gdgt.com.

Mary Osako, a spokeswoman at Amazon, did not return a phone message and email sent seeking comment.

The Kindle Fire may have a slower processor than Research in Motion Ltd’s PlayBook, which was also made by Quanta, gdgt.com reported this week. TechCrunch said the Kindle Fire will not have cameras, unlike the iPad.

Still, Munster said a lack of high-end features might not deter most tablet users.

PiperJaffray’s survey found the top four uses of tablets were Internet browsing, reading, watching movies and playing games.

“If Amazon can do these four things at the $249 price point, we believe there will be strong interest in the tablet,” Munster added.

(Editing by Andre Grenon)

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