Filed under: Earnings reports, Forecasts, From the boards, Products and services, Management, Competitive strategy, Apple Inc (AAPL), iPhone

Tech giant Apple Inc. (NASDAQ: AAPL) reported its fiscal second quarter numbers this afternoon, easily beating out Wall Street estimates for the quarter.

Analysts had been expecting the company to report earnings of $1.07 a share, and the company actually reported earnings of $1.16 for its most recent quarter. Sales came in way above estimates as well, with a reported $7.51 billion, exceeding the $6.964 billion analysts had been looking for.

Today’s report should help wipe any concerns that the current economic slowdown in America is negatively affecting the company’s business.

As I noted in our earnings preview, there were three main factors that I wanted to pay attention to today; the Mac, iPod and iPhone. Mac was strong as expected, with shipments up 51% from the same period last year. We knew that the iPod would be a sore subject for the company, and that turned out to be true, as the company saw iPod growth of only 1% on a unit basis, and 8% on a revenue basis. The iPhone had a decent quarter, even though not as good as some had hoped, with 1.7 million units sold in the quarter.

Despite the strong earnings for the quarter, shares of the stock are trading down about 1.6% in after hours trading. The reason is, as we saw last quarter, a weaker-than-expected EPS forecast for the current quarter. The company, which I must say always offers conservative estimates, said that it sees Q3 earnings coming in between $1.00 and $1.10. Wall Street had previously been expecting to see the company bring in $1.10 for its third quarter.

So once again it is like we are reading the same story that we were three months ago. A great quarter, but the stock gets a tiny beaten up due to the conservative guidance. Will we see a repeat of the last three months where the stock tumbled 40 points after its Q1 report, only to rebound and make up all that lost ground in the next three months? I doubt we will see such a massive pullback this time around, but definitely anticipate some selling tomorrow morning.

If you want to follow the company’s conference call this day, CNET is offering a live blog that will give you up-to-the-minute coverage on the call.

Disclosure: Mr. Fowlkes holds a long position in AAPL

Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the on the internet investment advisory service Investor’s Observer.

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Filed under: International markets, Forecasts, Consumer experience, Competitive strategy, General Motors (GM), Toyota Motor Corp. (TM)

Despite a challenging economic environment, Japanese automaker Toyota Motor Corp. (NYSE: TM) has been continuing its strong competition with rival General Motors Corp. (NYSE: GM) for the title of the world’s largest automaker. As results show, the good times are rolling for Toyota which earlier today posted an increase of 2.7% for its global sales, for a total of 2.41 million automobiles during the first-quarter.

On the other side of the coin, GM announced a decline of nearly 1% in its total sales. Last year, General Motors held the crown in global sales, but on the other hand Toyota was the leader in global automobile production. Both companies benefited from strong demand outside the United Says.

General Motors has said that strong overseas sales weren’t enough to overcome a weak North American market. The company saw a 10% drop in first-quarter sales in its home North American market as high fuel prices and worries about housing and the credit crunch pressured consumers. Regardless of the weak results, GM restated its desire to “win, and we’d like to be No. 1 in sales at the end of the year.”

Despite the fact that GM managed to edge Toyota in global sales in 2007, the Japanese auto maker has been gaining steadily on its overseas competitor. The current surge in oil prices helped Toyota to increase sales of its more fuel efficient cars, such as the Corolla model.

Toyota’s plans of global domination have been consolidating over the past months with the company’s goal to improve its capability to run efficient operations in countries outside of Japan. The automaker’s ambitious target to gain ground in new markets proved their efficiency in its overall sales. From this point of view, some analysts believe is just a matter of time before Toyota beats General Motors in both annual global sales and production.

Eliza Popescu is a financial writer for the on the web investment advisory service Investor’s Observer.

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Filed under: Launches, Industry, Consumer experience, Competitive strategy, Microsoft (MSFT), Sony Corp ADR (SNE)

Sony (NYSE: SNE) is building a virtual community for video-game players who buy its PS3 video-game console. It has been delayed again, which might state something about why the Microsoft (NASDAQ: MSFT) Xbox 360 and Nintendo Wii tend to thrash it in the sales department.

According to The Wall Street Journal, “The service will let users create avatar characters, decorate homes and interact with other users in a virtual world.” It was supposed to come out in 2007, and now it might be out late this year. Microsoft has had an interactive aspect to the Xbox for more than two years. It grants game-players to compete against each other over broadband connections. The Microsoft product also facilitates online chat and downloads of video games and movies.

Investors would think that Sony would put a higher priority on its PS3 platform. The PS2 was the flagship of Sony’s consumer electronics operations and was a tremendous driver of operating income for the Japanese company. The losses from the company’s game division have been a drag on earnings for over a year because the PS3 has not been a big winner.

Sony still has not gotten the PS3 right. First, it was late to market. Then, it did not have enough new games. Finally, it was too expensive and Sony dropped the price. Now, it is missing something that consumers expect.

Saying ‘oops’ isn’t enough for shareholders.

Douglas A. McIntyre is an editor at 247wallst.com.

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bob charlton from 66 tips us to a ComputerWorld story about FCC Chairman Kevin Martin, who has testified that Comcast’s P2P traffic management occurred even when network congestion wasn’t an issue, contrary to the ISP’s claims. After defending its actions and being investigated by the FCC over the past few months, Comcast has tried to repair its image by making nice with BitTorrent and working towards a P2P Bill of Rights. Quoting: “‘It does not appear that this technique was used only to occasionally delay traffic at particular nodes suffering from network congestion at that time,’ Martin told the Senate Commerce, Science and Transportation Committee. ‘Based on testimony we’ve received thus far, this equipment was typically deployed over a wider geographic area or system, and is not even capable of knowing when an individual … segment of the network is congested.’

Read more of this story at Slashdot.

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mytrip brings us a news.com story about the FBI’s efforts to make records of users’ activities available to law enforcement for a much longer time. Several members of Congress also lent their support to the idea that such data retention should be mandatory for a period of up to 2 years. Quoting: “Based on the statements at Wednesday’s hearing and previous calls for new laws in this area, the scope of a mandatory data retention law remains fuzzy. It could mean forcing companies to store data for two years about what World wide web addresses are assigned to which customers (Comcast said in 2006 that it would be retaining those records for six months). Or it could be far more intrusive. It could mean keeping track of e-mail and instant messaging correspondents and what Web pages users visit. Some Democratic politicians have called for data retention laws to extend to domain name registries and Web hosting companies and even social networking sites.”

Read more of this story at Slashdot.

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Dionysius, God of Wine and Leaf brings news that Sun Microsystems will be removing the last restrictions on Java to make it totally open source. Sun wants Java to be easily available for use in Linux distributions. We’ve discussed the steps Sun has taken to open-source Java over the past couple years. From Yahoo! News: “‘We’ve been engaging with the open-source community for Java to complete off the OpenJDK project, and the specific thing that we’ve been working on with them is clearing the last bits that we didn’t have the rights,’ to distribute, Sands said. ‘Over the past year, we have pretty much removed most of those encumbrances.’ Work still needs to be done to offer the Java sound engine and SNMP code via open source; that effort is expected to be finished this year. Developers, though, may be able to proceed without a component like the sound engine, Sands stated.

Read more of this story at Slashdot.

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captcha_fun writes “Researchers at Penn State have developed a patent-pending image-based CAPTCHA technology for next-generation computer authentication. A user is asked to pass two tests: (1) click the geometric center of an image within a composite image, and (2) annotate an image using a word selected from a list. These images shown to the users have fake colors, textures, and edges, based on a sequence of randomly-generated parameters. Computer vision and recognition algorithms, such as alipr, rely on original colors, textures, and shapes in order to interpret the semantic content of an image. Because of the endowed power of imagination, even without the correct color, texture, and shape information, humans can still pass the tests with ease. Until personal can ‘imagine’ what is missing from an image, robotic programs will be unable to pass these tests. The system is called IMAGINATION and you can try it out.” This sounds promising given how broken current CAPTCHA technology is.

Read more of this story at Slashdot.

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Filed under: Internet, Web services, Social Software, web 2.0

There are two interesting Twitter stories making the rounds this morning. First up is the launch of a localized version of Twitter for Japan. The fact that the microblogging service is branching out to other countries isn’t particularly surprising. But what is significant is the fact that the Japanese version of Twitter features advertisements, something which the English language version of the site lacks.

It’s likely that Twitter will roll out English ads at some point. The site has no other source of revenue. But whenever you roll out an ad-free service and then begin placing display ads on the interface, people will complain. So it’s probably a smart move to include advertisements from the get go in Japan.

In other news, an apparent Twitter privacy breach turned out to be a bit of a false alarm. But only a bit. Blogger and Twitter user Orli Yakuel discovered that many of her Twitter direct messages, which were supposed to be private communications between two users, were showing up on her public timeline. This is basically the same thing as posting your private emails on your blog. Not good.

It turns out that Twitter probably wasn’t responsible. Rather, Orli was testing a new service called GroupTweet, and entered her account info instead of setting up a new account. But this raises another issue. There are a massive number of third celebration tools for Twitter. And many require you to enter your login information. While we’ve been pretty happy to do this in the past, figuring the worst that could happen would be that someone would start sending out Tweets in our name and we’d delete our account, the possibility of our private messages being made public hadn’t really occurred to us. There really needs to be a superior way for third celebration applications to access your Twitter data without requiring your username and password.

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Filed under: Internet, Web services, Microsoft, Beta, web 2.0

Microsoft has launched a technical preview of its new Live Mesh service, which is basically combines remote desktop, on the internet storage, and file synchronization services. Right now the service is available for Windows XP and Vista, but eventually support will be added for OS X, mobile phones, and other devices. And when we state “available,” we mean Microsoft allowed 10,000 people to sign up for the first round of testing. All of those slots are full, but you can sign up for the waiting list.

Live Mesh lets you choose folders and files on your computer that you want to synchronize with other personal, and with an on the internet desktop called your Live Desktop. The system gives you a lot of control over which folders to share, and which personal and devices you can use to access those folders. You can also share folders with other Live Mesh users, see when those users are on the web, and even when they’re accessing your files.

Right now there are basically two separate interfaces for Live Mesh: the desktop version and the web version. From either interface you can see a list of updates to your files and folders, access those documents, or initiate a remote desktop connection.

Ultimately, developers will be able to write applications for Live Mesh that you can also synchronize across platforms. In other words, you’ll be able to sync more than files. Say you’ve developed a household budget tracking application. You can share access to the application with other members of your household, and every time someone makes buys groceries or pays a utility bill, they have the ability to enter the amount on their own personal and the updates will be available on everyone’s system.

We’ve embedded a video from the Live Mesh blog explaining the service after the jump. You’ll need to have Microsoft Silverlight installed to watch.

Continue reading Microsoft Live Mesh Tech Preview launches

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Filed under: Earnings reports, Analyst reports, Consumer experience, Competitive strategy, Apple Inc (AAPL), Amazon.com (AMZN)

One of the things the press and analysts think will come out of Amazon’s (NASDAQ:AMZN) earnings is a look at whether its digital music store is gaining any ground on Apple’s (NASDAQ:AAPL) iTunes. Not likely.

According to The Wall Street Journal, “With information on the efforts’ results hard to come by, analysts are prone to look closely for data on how they’re faring when Amazon reports quarterly earnings.” While some research shows that the Amazon product has made a bit of headway, over 80% of music downloads in the US come from iTunes.

Amazon’s problem is remarkably simple and nearly impossible to solve. No only was Apple in the music download business five years ago, it also has a device to go with the service. By most estimates Apple has sold more than 120 million iPods and that figure goes up by the millions as each new quarter passes.

Apple, essentially, has a matched pair, a device and a software service to supply the content which the iPod uses. Until Amazon has tens of millions of its own MP3 players in the market, it needs to stick to selling books.

Douglas A. McIntyre is an editor at 247wallst.com.

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