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The Nexus 6 is here, but don't rule out the Nexus 5


There's certainly a lot of excitement buzzing around the new Motorola Nexus 6, the latest in Google's Nexus line of devices. The Nexus 6 is not a phone you want to sneeze at, and is probably Google's most 'flagship' Nexus to date. Last year's Nexus 5 cut it close, but the Nexus 6 goes above and beyond when it comes to performance, features, and specs. With that being said, just because the Nexus 6 is in direct competition with what's available from this year's flagship lineup doesn't mean that the Nexus 5 should be completely forgotten about.


The Nexus 5 might be a year old, but it is by no means (dare I say it) obsolete. With a 2.3GHz quad-core Snapdragon 800 processor, 2GB of RAM, and a 1080x1920 5-inch display, the Nexus 5 is still able to hold its own against many phones released even this year. Maybe it's not necessarily 'flagship' status anymore, but given that the phone still only costs $349, it's a great value.


Aside from the specs, the Nexus 5 still has the privileges that make the Nexus line so great in the first place - stock Android, and one of the first phones in line to get the latest Android updates straight from Google. Most other Android smartphones on the market are going to come with their own 'version' of Android - at least in terms of skins - and those skins are not always the most user-friendly. Samsung, HTC, Sony, and even Motorola have their own skins that go over Android. Probably the most annoying thing about non-Nexus devices is that they also come with bloatware, which a user may or may not want. If you do want the bloatware, great! If not, most of the time you're going to have to jump through hoops in order to get rid of it (read: learn how to gain root access). For some people it's not a big deal, but it's certainly not as easy as just being able to uninstall something you never plan on using. (Thanks, Windows Phone!)


The two biggest things that hold the Nexus 5 back probably comes down to camera and battery life.


The Nexus 5 features an 8-megapixel rear-facing camera, which was acceptable last year but won't get by so easily this year. The phone also only features a 1.3-megapixel front-facing shooter, which is doable, but with the front-facing camera quickly becoming just as important as the rear-facing one it might turn some noses upwards.


As for the battery, a 2300 mAh battery isn't really all that bad - but it's nothing to write home about, either. If anything, the Nexus 5's battery life can be described as 'average' at best. It's no measure to the Nexus 6's 3220 mAh battery, but more importantly the Nexus 5 also doesn't feature that nifty 15-minute charge for 6 hours of battery life feature, either. Still, the Nexus 5 should at least last you a day with average usage.


Despite it's shortcomings, the Nexus 5 is still well worth the $349 price tag. The Nexus 6 might be here, but the price tag of the Nexus 6 ($649) is a lot more expensive than we're used to seeing with Nexus phones over the past couple of years. If big phones (or price tags) aren't your thing, then at least you still have the choice to purchase the Nexus 5. With the Nexus 5 recently coming back into stock on the Google Play Store, the phone seems like it is here to stay - at least for a little while longer.


Readers, between the Nexus 5 and the Nexus 6, which do you prefer? Do you prefer the Nexus 6 with its bigger screen and more powerful specs, or do you prefer the Nexus 5 with its lower price tag and Nexus charm?


Images via Phone Cruncher, AnandTech

Microsoft's Surface turns first profit in 2 years

After two years and nearly $2 billion in losses, Microsoft's Surface turned a profit in the September quarter, the company said Thursday.


For the three months ending Sept. 30, Microsoft recorded $908 million in revenue for the Surface tablet line, an increase of 127% over the same quarter in 2013. The nearly one billion in revenue was a one-quarter record for the Surface, and beat the combined revenue of the previous two quarters.


Using information in Microsoft's filing with the U.S. Securities and Exchange Commission (SEC), as well as data from earlier quarters, Computerworld calculated the quarter's cost of that revenue at $786 million, leaving a gross margin of $122 million. Cost of revenue is the cost to make and sell a product, but excludes expenses such as advertising and R&D.


Microsoft said that the Surface line posted a positive gross margin -- implying that outside estimates of prior losses were correct -- but did not disclose a dollar figure.


According to Computerworld's estimate, the margin was small, about 13.4%. That's more than the average for a Windows personal computer, but less than half or a third of the margins on tablets like Apple's iPad.


It was even smaller by the figuring of Jan Dawson, principal analyst at Jackdaw Research, who has also used Microsoft's SEC filings to estimate the Surface's cost of revenue. He pegged the September quarter's cost of revenue at $825 million, the gross margin at $83 million, and the margin rate at just 9.1%.


'That's a gross margin ... which is not earth-shattering and in fact about half the gross margin of the phone business at Microsoft. But it's progress,' Dawson wrote on his blog, where he published his analysis of Surface's financial performance.


Indeed.


Since its October 2012 introduction, Surface has been a money pit for Microsoft, in the hole to the tune of $1.73 billion through its first seven quarters. With the September quarter in the black, those overall losses have been reduced to about $1.6 billion.


Over the last four quarters, Surface also remained in the red, with losses of $325 million on revenue of $2.7 billion. Put another way, for each dollar Microsoft earned on Surface sales, it lost about 12 cents.


But were the brighter figures for the September quarter an accurate picture of what Microsoft really spent on the Surface? No, said Dawson and others.


'There's a long way to go to get to the kind of gross margins that would lead to true profitability once marketing and other costs are factored in,' Dawson said.


Ben Thompson, the independent analyst behind Stratechery.com, agreed in his subscription-only Daily Update of Friday. 'What is all but certain, though, is that this segment, once you include advertising and channel, was still quite unprofitable, and likely unprofitable by a lot,' Thompson wrote of Microsoft's Computing and Gaming Hardware division, which generates the bulk of it revenue from Surface and Xbox sales.


Microsoft's advertising campaign for the Surface has been substantial, with widespread television spots, and its marketing spending has also been brisk, including a reported $400 million deal with the National Football League (NFL) that put Surface tablets on the sidelines.


Microsoft called out the Surface Pro 3, which went on sale in June -- making the September quarter the first complete quarter that booked Surface Pro 3 revenue -- in its earnings call with Wall Street for sparking the surge.


'Unit sales are pacing at twice the rate of what we saw with [Surface] Pro 2,' said CFO Amy Hood, referring to the now-discontinued model launched in the fall of 2013.


'The release of Surface Pro 3 in June 2014 contributed to a 126% increase [in revenue], reflecting higher premium mix of devices sold,' Microsoft said in the 10-Q filed with the SEC.


Thompson seized on the latter's 'higher premium mix' to make the case for why Surface revenue jumped. He pointed out that the high prices of the Surface Pro 3 -- between $799 and $1,949 -- generated the increase, while the revenue in the comparative quarter of 2013 was fueled by large numbers of Surface RT tablets that Microsoft sold at fire sale prices to unload an overstock. Last year, Microsoft cut the price of the Surface RT to $349 for consumers and to as low as $199 for educational institutions, representing 30% and 60% discounts, respectively, from the original list price of $499.


Both Thompson and Dawson noted that Microsoft did not reveal Surface unit sales, making it impossible to determine which models have sold best or tell if volume was up, flat or down.


'We don't know the number of units sold or average selling price for the Surface, but considering that the Surface Pro 3 starts at more than double the price of last [year's third quarter] Surface RT, it's likely that Microsoft actually sold fewer Surfaces this quarter than they did a year ago,' said Thompson.


'How many Surface devices did Microsoft sell in the quarter? Well, they won't say, but given the new version starts at $800, it's entirely possible that the company sold a million or fewer Surface tablets in total, and likely well under a million Surface Pro 3s in their first full quarter on sale,' added Dawson.


As a comparison -- although Microsoft denies that the Surface Pro 3 is a tablet, preferring to dub it a notebook replacement instead -- Apple sold 12.3 million iPads in the same quarter, producing $5.3 billion in revenue.


Microsoft must do better if Surface is to be a viable business rather than a vanity project. 'The gross margin has to keep moving up at this point,' Dawson said in an email reply to questions. 'It's at a point in its history when it has to get beyond the early losses to a sustainable business.'


Data: Microsoft, SEC filings

Microsoft posted its first positive gross margin for Surface line since it started selling tablets two years ago.



Video game publishers mostly silent on Gamergate


Amid public outcry over cyber bullying of women in the video game industry, many game publishers have hit the mute button.


Companies are staying conspicuously silent about a spate of attacks on women who have been forced to flee for their safety after criticizing gamer culture. The dust-up, known as Gamergate, has put a harsh spotlight on the often macho world of gaming and scary consequences for people who dare to speak out about it.


Game developer Brianna Wu, who has harshly criticized the attacks on women, fled her home in Arlington, Mass. earlier this month after someone posted her address in a chat forum and bombarded her with malicious Tweets. Meanwhile, feminist video game critic Anita Sarkeesian canceled a talk at Utah State University following an emailed death threat.


Their plights spurred the Entertainment Software Association, the gaming industry trade group, to issue a statement calling for an end to these 'personal attacks and threats.' But individual game publishers have largely avoided publicly supporting the women who were attacked or spoken out against the sometimes vicious gamer culture.


Of the seven top game publishers Fortune contacted, just one agreed to comment. The other six declined to speak on the record.


A spokeswoman for the company that would comment, Ubisoft, the Montreal-based publisher behind bestselling games like Assassin's Creed and Watch Dogs, said: 'We echo the recent comment made by the ESA: Harassment, bullying and threats are wrong and have to stop. There should be no place in the video game community for personal attacks of any kind.'


The companies are not alone in wanting to stay out of the fray. A number of industry analysts Fortune contacted who are normally chatty refused to tackle Gamergate.


'Nobody who takes a position gains anything from doing so,' said one analyst, who demanded anonymity. 'It's a story about a lot of people (mostly men) behaving badly, and I prefer not to contribute to the never-ending drama.'


Amanda Marcotte, a feminist commentator who has written extensively about misogyny in video games, attacked game publishers for their silence in a blog post for an opinion site earlier this week. If gaming companies thought keeping quiet would distance themselves from Gamergate, they failed, she argued. Their silence only makes them come across as unsympathetic to female gamers.


Gartner analyst Brian Blau explains gaming companies' silence another way, boiling it down to pure economics. 'Maybe it's because they think it doesn't affect their business,' he said.


Earlier this month, Intel seemed to take the side of the attackers when it pulled an ad campaign from the video game news site Gamasutra after some gamers complained about a series it ran emphasizing the role of women in gaming. One story, in particular, argued that the old-school concept of a gamer - 'angry young men,' as the author put it - was dated, and that today's gamers included a large cross-section of the people.


Initially, Intel said it removed the ads to be sensitive to those who felt insulted by the articles. But a week later, under withering criticism, the company tried to make peace by addressing the criticism.


'We recognize that our action inadvertently created a perception that we are somehow taking sides in an increasingly bitter debate in the gaming community,' Intel said. 'That was not our intent, and that is not the case.'


Intel went on to say 'we apologize and we are deeply sorry if we offended anyone.' But it stuck by its decision to suspend the ad campaign.


Regardless, the longer Gamergate rages on, the more everyone stands to lose. Publishers' revenues aren't hurting now, but their silence runs the risk of alienating women - 48% of all gamers - and eventually impacting a $100 billion industry.


A worst-case scenario? Perhaps. But one where no one - Gamegaters, included - wins.


Microsoft's Surface turns first profit in 2 years

After two years and nearly $2 billion in losses, Microsoft's Surface turned a profit in the September quarter, the company said Thursday.


For the three months ending Sept. 30, Microsoft recorded $908 million in revenue for the Surface tablet line, an increase of 127% over the same quarter in 2013. The nearly one billion in revenue was a one-quarter record for the Surface, and beat the combined revenue of the previous two quarters.


Using information in Microsoft's filing with the U.S. Securities and Exchange Commission (SEC), as well as data from earlier quarters, Computerworld calculated the quarter's cost of that revenue at $786 million, leaving a gross margin of $122 million. Cost of revenue is the cost to make and sell a product, but excludes expenses such as advertising and R&D.


Microsoft said that the Surface line posted a positive gross margin -- implying that outside estimates of prior losses were correct -- but did not disclose a dollar figure.


According to Computerworld's estimate, the margin was small, about 13.4%. That's more than the average for a Windows personal computer, but less than half or a third of the margins on tablets like Apple's iPad.


It was even smaller by the figuring of Jan Dawson, principal analyst at Jackdaw Research, who has also used Microsoft's SEC filings to estimate the Surface's cost of revenue. He pegged the September quarter's cost of revenue at $825 million, the gross margin at $83 million, and the margin rate at just 9.1%.


'That's a gross margin ... which is not earth-shattering and in fact about half the gross margin of the phone business at Microsoft. But it's progress,' Dawson wrote on his blog, where he published his analysis of Surface's financial performance.


Indeed.


Since its October 2012 introduction, Surface has been a money pit for Microsoft, in the hole to the tune of $1.73 billion through its first seven quarters. With the September quarter in the black, those overall losses have been reduced to about $1.6 billion.


Over the last four quarters, Surface also remained in the red, with losses of $325 million on revenue of $2.7 billion. Put another way, for each dollar Microsoft earned on Surface sales, it lost about 12 cents.


But were the brighter figures for the September quarter an accurate picture of what Microsoft really spent on the Surface? No, said Dawson and others.


'There's a long way to go to get to the kind of gross margins that would lead to true profitability once marketing and other costs are factored in,' Dawson said.


Ben Thompson, the independent analyst behind Stratechery.com, agreed in his subscription-only Daily Update of Friday. 'What is all but certain, though, is that this segment, once you include advertising and channel, was still quite unprofitable, and likely unprofitable by a lot,' Thompson wrote of Microsoft's Computing and Gaming Hardware division, which generates the bulk of it revenue from Surface and Xbox sales.


Microsoft's advertising campaign for the Surface has been substantial, with widespread television spots, and its marketing spending has also been brisk, including a reported $400 million deal with the National Football League (NFL) that put Surface tablets on the sidelines.


Microsoft called out the Surface Pro 3, which went on sale in June -- making the September quarter the first complete quarter that booked Surface Pro 3 revenue -- in its earnings call with Wall Street for sparking the surge.


'Unit sales are pacing at twice the rate of what we saw with [Surface] Pro 2,' said CFO Amy Hood, referring to the now-discontinued model launched in the fall of 2013.


'The release of Surface Pro 3 in June 2014 contributed to a 126% increase [in revenue], reflecting higher premium mix of devices sold,' Microsoft said in the 10-Q filed with the SEC.


Thompson seized on the latter's 'higher premium mix' to make the case for why Surface revenue jumped. He pointed out that the high prices of the Surface Pro 3 -- between $799 and $1,949 -- generated the increase, while the revenue in the comparative quarter of 2013 was fueled by large numbers of Surface RT tablets that Microsoft sold at fire sale prices to unload an overstock. Last year, Microsoft cut the price of the Surface RT to $349 for consumers and to as low as $199 for educational institutions, representing 30% and 60% discounts, respectively, from the original list price of $499.


Both Thompson and Dawson noted that Microsoft did not reveal Surface unit sales, making it impossible to determine which models have sold best or tell if volume was up, flat or down.


'We don't know the number of units sold or average selling price for the Surface, but considering that the Surface Pro 3 starts at more than double the price of last [year's third quarter] Surface RT, it's likely that Microsoft actually sold fewer Surfaces this quarter than they did a year ago,' said Thompson.


'How many Surface devices did Microsoft sell in the quarter? Well, they won't say, but given the new version starts at $800, it's entirely possible that the company sold a million or fewer Surface tablets in total, and likely well under a million Surface Pro 3s in their first full quarter on sale,' added Dawson.


As a comparison -- although Microsoft denies that the Surface Pro 3 is a tablet, preferring to dub it a notebook replacement instead -- Apple sold 12.3 million iPads in the same quarter, producing $5.3 billion in revenue.


Microsoft must do better if Surface is to be a viable business rather than a vanity project. 'The gross margin has to keep moving up at this point,' Dawson said in an email reply to questions. 'It's at a point in its history when it has to get beyond the early losses to a sustainable business.'


Data: Microsoft, SEC filings

Microsoft posted its first positive gross margin for Surface line since it started selling tablets two years ago.



Video game publishers mostly silent on Gamergate


Amid public outcry over cyber bullying of women in the video game industry, many game publishers have hit the mute button.


Companies are staying conspicuously silent about a spate of attacks on women who have been forced to flee for their safety after criticizing gamer culture. The dust-up, known as Gamergate, has put a harsh spotlight on the often macho world of gaming and scary consequences for people who dare to speak out about it.


Game developer Brianna Wu, who has harshly criticized the attacks on women, fled her home in Arlington, Mass. earlier this month after someone posted her address in a chat forum and bombarded her with malicious Tweets. Meanwhile, feminist video game critic Anita Sarkeesian canceled a talk at Utah State University following an emailed death threat.


Their plights spurred the Entertainment Software Association, the gaming industry trade group, to issue a statement calling for an end to these 'personal attacks and threats.' But individual game publishers have largely avoided publicly supporting the women who were attacked or spoken out against the sometimes vicious gamer culture.


Of the seven top game publishers Fortune contacted, just one agreed to comment. The other six declined to speak on the record.


A spokeswoman for the company that would comment, Ubisoft, the Montreal-based publisher behind bestselling games like Assassin's Creed and Watch Dogs, said: 'We echo the recent comment made by the ESA: Harassment, bullying and threats are wrong and have to stop. There should be no place in the video game community for personal attacks of any kind.'


The companies are not alone in wanting to stay out of the fray. A number of industry analysts Fortune contacted who are normally chatty refused to tackle Gamergate.


'Nobody who takes a position gains anything from doing so,' said one analyst, who demanded anonymity. 'It's a story about a lot of people (mostly men) behaving badly, and I prefer not to contribute to the never-ending drama.'


Amanda Marcotte, a feminist commentator who has written extensively about misogyny in video games, attacked game publishers for their silence in a blog post for an opinion site earlier this week. If gaming companies thought keeping quiet would distance themselves from Gamergate, they failed, she argued. Their silence only makes them come across as unsympathetic to female gamers.


Gartner analyst Brian Blau explains gaming companies' silence another way, boiling it down to pure economics. 'Maybe it's because they think it doesn't affect their business,' he said.


Earlier this month, Intel seemed to take the side of the attackers when it pulled an ad campaign from the video game news site Gamasutra after some gamers complained about a series it ran emphasizing the role of women in gaming. One story, in particular, argued that the old-school concept of a gamer - 'angry young men,' as the author put it - was dated, and that today's gamers included a large cross-section of the people.


Initially, Intel said it removed the ads to be sensitive to those who felt insulted by the articles. But a week later, under withering criticism, the company tried to make peace by addressing the criticism.


'We recognize that our action inadvertently created a perception that we are somehow taking sides in an increasingly bitter debate in the gaming community,' Intel said. 'That was not our intent, and that is not the case.'


Intel went on to say 'we apologize and we are deeply sorry if we offended anyone.' But it stuck by its decision to suspend the ad campaign.


Regardless, the longer Gamergate rages on, the more everyone stands to lose. Publishers' revenues aren't hurting now, but their silence runs the risk of alienating women - 48% of all gamers - and eventually impacting a $100 billion industry.


A worst-case scenario? Perhaps. But one where no one - Gamegaters, included - wins.


Apple to merge Beats Music with iTunes for a new music streaming service

Last month, there were rumors surfaced about the shutting down of Beats Music by Apple Inc., but the rumors haven't become the truth as the reports of anti-shutdown surfaced later. Now, Apple seems to be very much interested in merging the Beats Music digital subscription service with its iTunes.


When Apple acquired the Los Angeles-based Beats by Dr. Dre for $3 billion, it was widely believed that the company could use Beats Music as much as the high-end Beats by Dr. Dre headphones. But, now the company's real intention is coming to light. According to an insider who is close to the company's plans, Apple will be shutting down the separate Beats Music app and will be merging the digital subscription service with its iTunes in early 2015.


As of now, Apple Inc hasn't commented on the reports, so we have no clue whether the company will retain the Beats Music brand along with the digital subscription service inside the iTunes or not. Most probably, there won't be a trace of Beats inside the iTunes, but the company might transfer all subscribers to its iTunes digital music subscription service. The technology giant also has the ability to either reduce or increase the subscription charges along with premium features.


First by the Wall Street Journal which cites an insider familiar with Apple Inc.'s plans, TechCrunch also confirmed the news. The WSJ predicts the reason for the move by Apple, as iTunes music download sales have started declining since the beginning of this year. Apple Inc. saw a 13 percent to 14 percent down in global iTunes download sales in 2014.


Now that the digital track sales is cratering, Apple would seriously consider introducing its own streaming service in near future. Beats Music has approximately 250,000 subscribers on board, but it seems like, Apple doesn't want to invest big in this service to challenge its biggest rivals in music streaming service such as Google Music, Deezer, Spotify and Pandora. As of now, Spotify has over 10 million paid users and 30 million free users subscribed to its digital music streaming service.


Merging Beats Music with Apple iTunes would be an added advantage for the company, because iTunes has over 800 million users already (including 400 million users with credit cards). If Apple chooses to shut down the service and integrate it into iTunes, the company will be left with Beats technology, the staff and the range of Beats headphones.


When iPhones Ring, the Economy Listens

Gloomy economic news and the wild swings of the stock market may be getting you down. But at least you can count on this: We've entered the sweet spot of the iPhone cycle.


Since Sept. 19, when the iPhone 6 and its larger sibling, the iPhone 6 Plus, went on sale, consumers have been ordering the gadgets faster than Apple can deliver them. The ripple effects are being felt throughout the economy - and they have been moving the stock market.


'The iPhone is having a measurable impact,' said Michael Feroli, the chief United States economist for JPMorgan Chase. 'It's a little gadget, but it costs a lot and it seems that everybody has one. When you do the multiplication, it's going to matter.' He estimates that iPhone sales are adding one-quarter to one-third of a percentage point to the annualized growth rate of the gross domestic product.


You may not think of the iPhone as a financial powerhouse. After all, it's just a consumer good - albeit a highly functional, high-end one that you can carry in your pocket or your purse. Sales typically surge every two years when, as now, Apple does a major iPhone upgrade. You may have the warm and personal relationship with the iPhone that Timothy D. Cook, Apple's chief executive, described on Monday to Wall Street analysts during a conference call. Apple's next three months will be 'incredibly strong,' he said. And he spoke enthusiastically about the principal reason for this performance: 'These iPhones are the best we have ever created and customers absolutely love them.'



Whether you love them or not, though, it's a good moment to recognize their significance as a financial force.


The iPhone's financial impact starts, of course, with Apple, which is reaping enormous profit from it. As the company disclosed in data embedded in a Securities and Exchange Commission filing on Monday, it has been selling a broad mix of iPhone models at an average price of $603.


That's not remotely close to the 'starting price of $199' that Apple advertises, as I wrote last month. The full price is embedded in service agreements that many customers in the United States reach with phone carriers. And many of those carriers are stating that full price quite openly. The real starting price for a new, basic iPhone is $649, and models with more memory and bigger screens cost much more.


This price structure is lucrative for Apple. 'The cost of building a basic phone has stayed at about $200 for years,' said Andrew Rassweiler, senior director for cost benchmarking services, at IHS Technology.


That estimate doesn't include many expenses, like research and marketing costs. But it's a rough guidepost, and it helps explain how, as Apple disclosed in a court filing two years ago, its profit margins for the iPhone are roughly double those for iPads, which tend to be priced more cheaply.


Toni Sacconaghi, an analyst at Sanford C. Bernstein, says the gross profit margin for the iPhone is close to 50 percent. Because the iPhone is Apple's most popular product - with more than 39 million sold in the last quarter - it accounts for a disproportionately large percentage of Apple's overall profit, somewhere between 60 and 70 percent, Mr. Sacconaghi said.


'Apple is now so big that it takes a lot to make it grow appreciably,' Mr. Sacconaghi said. It's producing an impressive interrelated ecosystem of products and services, including its forthcoming digital watches, its new digital payment system, its revived Mac line, refreshed iPads and new software operating systems. Even if all of its ventures succeed, none are likely in the next year or two to rival the financial impact of the iPhone. 'The iPhone is the core of Apple right now,' he said.


In a sense, it's the core of the stock market as well. Apple is the biggest company, by market capitalization, in the world. Apple accounts for about 3.5 percent of the weighting of the Standard & Poor's 500-stock index. And, through Thursday, because its stock has performed magnificently while the overall market has not, Apple accounted for 18 percent of the entire rise of the S.&P. 500 index this year, according to calculations by Paul Hickey, co-founder of the Bespoke Investment Group. And the engine driving Apple shares is the iPhone.


'The market is obviously counting on another strong sales performance for the new iPhone,' he said. So far, it's getting that performance. And, he said, Apple's invigorating effect is likely to continue.


Because the iPhone is made mainly overseas and sold worldwide, it is stimulating the economy in other regions, particular in East Asia, Mr. Feroli observed, and it keeps a substantial amount of its cash abroad. Such factors make it harder to assess the company's impact domestically.


'It's not like G.M. having a great quarter,' Mr. Feroli said. 'It doesn't translate directly into employment in the United States. It's a more complex world today, and, in that sense, Apple is representative of that world.'


Apple, though, is having a powerful impact in the United States. Last month, for example, electronic and consumer appliance store sales jumped 3.4 percent while clothing sales fell 1.2 percent, according to Commerce Department figures. 'People are buying iPhones, partly as a status symbol,' Mr. Feroli said. 'They're not buying as much clothing.'


Even people who don't buy iPhones and don't own Apple shares have a stake in the company. I don't own any Apple stock, for example, but I do have a stake indirectly through my 401(k) account. That's because mutual funds in my portfolio own Apple shares as their biggest holdings. Nearly every pension fund holds some stock, and these days, there's a good chance the biggest holding is Apple. And the most important financial lever at Apple is the iPhone.


All of that helps explain why Apple is such a formidable force, especially at this stage in its product cycle. And as the holiday shopping season approaches, and iPhones keep flying off the shelves, Apple may well keep moving the world.


FCC Pushes Back 'Airwaves Auction' to 2016


(Photo : Reuters / Jonathan Ernst) U.S. Federal Communications Commission's Tom Wheeler at a separate hearing.


The Federal Communications Commission announced Friday that despite having made 'consistent progress', the much-debated auction of low-frequency airwaves will be put off until early 2016. The agency cited complexity of the pursuit and court challenges filed by broadcasters.


The announcement came through a blog post published by Gary Eipstein, chair of the FCC's Incentive Auction Task Force.


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'Crafting the right policy decisions and designing a novel two-sided auction are important, but those decisions by themselves are not sufficient to ensure the auction's success,' he wrote. 'We also need broadcasters to participate.'


The delay allows the FCC more time to convince TV network owners to take part by selling their airwaves for wireless use.


Originally scheduled for 2015, the FCC's auction was contested by the National Association of Broadcasters (NAB) over possible adverse effects to its members' businesses.


The success of this undertaking is seen to boost the services of smaller mobile broadband providers like Sprint and T-Mobile, in a market dominated by AT&T and Verizon Wireless. For the broadcasters, however, this can mean reduced coverage area and affected viewership. The FCC has maintained that the auction remains voluntary.


For those who will participate, the FCC has posed several options including going off-air, enter into a channel-sharing agreement with another broadcaster, or be moved to a lower frequency channel at a lower bid.


Reports say the court has issued a briefing schedule that sees the deadline of the final briefs moved up to January 2015, with oral arguments to follow at a later date.


Eipstein has expressed confidence over the rulings, saying: 'Despite this brief delay, we remain focused on the path to successfully implementing the incentive auction.'


The NAB immediately rejected FCC's statement citing the lawsuit as the cause of delay.


'As NAB has said repeatedly, it is more important to get the auction done right than right now,' said the official response on the group's website.


Tags airwaves auction , Federal Communications Commission , Mobile broadband , National Association of Broadcasters


FCC delays 600MHz TV spectrum auction until 2016


The FCC has decided to delay the 600MHz TV spectrum auction initially planned for 2015, due to an impending court case. Gary Epstein, Chair of the FCC's incentive auction task force, announced the move in a blog posted just a short while ago.


Earlier this week, the court issued a briefing schedule in which the final briefs are not due until late January 2015. Oral arguments will follow at a later date yet to be determined, with a decision not likely until mid-2015. We are confident we will prevail in court, but given the reality of that schedule, the complexity of designing and implementing the auction, and the need for all auction participants to have certainty well in advance of the auction, we now anticipate accepting applications for the auction in the fall of 2015 and starting the auction in early 2016. Despite this brief delay, we remain focused on the path to successfully implementing the incentive auction.

Epstein notes that there are 'undeniable impediments' to the Commission's efforts to push a successful auction. TV broadcasters are concerned that the stations being pushed closer together will result in a the viewership being decreased.


As reported by Fierce Wireless:


The NAB sued the FCC in August, arguing that the agency's rules would diminish broadcasters' coverage areas and could result in a loss in viewership. One of the broadcasters' main arguments against the FCC is that the commission has changed how it calculates TV station coverage areas, using a methodology known as OET-69, referencing the FCC's Office of Engineering and Technology.

This could all play in to T-Mobile's hands. Only yesterday, the carrier's chief of regulatory affairs submitted a petition to the FCC, asking that spectrum reserve rules be changed to make it easier for carriers without substantial amounts of low-band spectrum to get their hands on some. With the auction's expected date being pushed back, it gives T-Mo more time to petition, lobby and argue for a fairer set of rules.


Source: FCC Via: Re/code, Fierce Wireless


Android 5.0 Lollipop to launch November 3

A purported note to app developers obtained by Android Police claims Google's mobile OS will lick its way to devices next month.


Google

Android Lollipop 5.0 will reportedly start rolling out on November 3.


The launch date for the latest version of Google's mobile operating system was apparently revealed in a note to app developers obtained by Android Police. The note tells developers that the Software Development Kit for Android 5.0 is now available. Google further advises developers that they can start developing and testing their apps via the Android 5.0 platform and publish apps that target the latest version to the Google Play store.


The note concludes by revealing that Android 5.0 will be available to consumers starting November 3.


The date doesn't come as a huge surprise as Google has said that its new Nexus 6 phone and Nexus 9 tablet would be available in early November. Both devices will be outfitted with Android 5.0, so the next logical step would be to start the launch of Lollipop for existing devices around the same time.


Of course, not all eligible Android owners will receive Lollipop first thing November 3. Given the number of players involved in pushing out an Android OS update, the rollout will instead play out overtime. Typically, Google sends the latest Android update to its own Nexus devices. Then the other mobile device makers start to prep the updates for their own devices. And that may take some time.


Google announced that its Nexus 4, Nexus 5, Nexus 7 and Nexus 10 will be updated to Android 5.0 in 'the coming weeks.' HTC has already said that it will start rolling out Android 5.0 to its HTC One M8 and HTC One M7 worldwide 'within 90 days of receiving final software from Google,' meaning sometime before February. Motorola said it plans to update its first- and second-generation Moto X and Moto G and other devices with Android 5.0 later this year. Other device makers have so far been mum about their plans for Lollipop but will likely reveal specific time frames before too long.


Google gave us a taste of Android 5.0 Lollipop at its June I/O conference when the operating system was known simply as Android 'L.' But the latest details reveal a new look for Android courtesy of a concept called Material Design, which paints in richer colors, adds more depth and transparency, and includes more white space. Android 5.0 also adds a new notification setup, tweaks the way you multitask apps and throws in a new battery saving mode.


Google did not immediately respond to CNET's request for comment.


Tearaway leads Joystick nominations


The 32nd annual Golden Joystick awards are due to take place


The video game industry's answer to the Oscars takes place in London tonight, with the 32nd annual Golden Joystick awards.

The biggest names in the industry will be present, with comedian Ed Byrne overseeing proceedings as big name titles like Grand Theft Auto V and Call of Duty are among the franchises up for awards.


2014 has been a big year for the games industry, with Bungie and Activision title Destiny launching in September with a reported budget of 500 million US dollars (£310 million), bigger than a Hollywood blockbuster. The game is up for the Best Visual Design award, but will face stiff competition from the likes of Assassin's Creed IV and Metal Gear Solid V - two existing powerhouse franchises.


Mobile gaming on smartphones and tablets has also had an impressive year, and Device 6 is the perfect example of how far this segment of the industry has come - with six nominations to its name at the ceremony. The game uses the text and images on-screen as a puzzle to be solved as you move through the pages, as well as narrating and guiding you through the action.


Platform game Tearaway leads the nominations, with seven.


Sixteen of the categories have been voted for by the public, with a selection of further awards to be handed out that have been decided by a panel.


Andy Robinson, editor of industry magazine CVG, and one of the panel of judges for the awards said: 'The Golden Joysticks are the world's longest-running games awards, but more importantly they're the only annual awards voted for by the public. Building on 2013's hugely successful revamp, which saw 10 new categories amass more than 10 million votes, we hope this year's ceremony will deliver the most relevant and exciting awards yet, and showcase the passion and innovation that's ripe across the games industry.'


Publishers Sony and Ubisoft lead the way in terms of publisher nominations, with both having more than 20 nominations between them for their games. Sony's Playstation 4 remains the top selling games console in Europe, ahead of the Xbox One.


The Most Wanted award will also be handed out to the game that fans are most looking forward to in the coming 12 months, with nominees including the next Batman game, Batman: Arkham Knight, and Rise of the Tomb Raider, the sequel to the Lara Croft franchise that was rebooted in 2013.


Streaming Music Service Deezer Expands Into Talk Radio With Stitcher Deal


Online music service Deezer is acquiring radio and podcasting app Stitcher, adding a vast catalog of talk radio programs that the company hopes will make it stand out in a crowded streaming music market.


Deezer said the acquisition will give it access to roughly 35,000 radio shows and podcasts, including popular talk radio programs such as This American Life and BBC.


Deezer did not disclose financial terms of the deal for Stitcher, which was founded in 2008 and has raised nearly $19 million in funding, according to media reports. Stitcher's service is built-in to 50 different car models, according to Deezer.


Digital music is attracting a growing number of consumers and companies as sales of physical compact discs decline.


Earlier this week, Google Inc updated its Play Music service with new recommendation features that the company acquired through its purchase of startup Songza. Apple Inc , Amazon.com Inc , Spotify and Pandora Media Inc are all vying to attract consumers to their streaming music services.


Deezer, which is based in Paris, has said it has 5 million paying subscribers.


© Thomson Reuters 2014

Nest acquires Revolv, adds a slew of new products to its smart home ecosystem

It's been nearly five months since Nest launched it's Works With Nest developer program, and in that time, the company has been adding outside companies to its ecosystem at a feverish pace. There's already a handful of different gizmos -everything from washing machines and fitness trackers, to security cameras and light bulbs- that work with the Nest's products, and today it's adding even more to the list. Here's a quick rundown of the latest additions:


Iro - Designed by Denver-based startup Rachio, Iro is a smart sprinkler controller that allows you to control your lawn irrigation system from anywhere in the world via smartphone. It can also tap into local weather data and intelligently adjust your watering schedule if a storm just rolled through and did the job for you - thus saving you water. With this new integration, Iro will be able to turn on your sprinklers if Nest Protect detects smoke inside the house.


Ivee - This gizmo is a voice-activated home assistant that, with this new Nest compatibility, will enable users to control connected devices with spoken commands. Too cold in the living room? Just shout out the temperature you'd prefer, and Nest will obey your command.


WallyHome - These guys make a line of wireless moisture/climate sensors that help you detect leaks before they get too serious, and now that the sensors work inside the Nest ecosystem, the sensors can work with your thermostat to give it a more detailed read on the climate inside your home.


Pebble - Arguably one of the most notable addition is the infamous Pebble smartwatch. Leaf, a Pebble app that's been around since earlier this year, is finally supported by Nest itself, which means users will now be able to monitor/control the temperature in their homes via their Pebble watches.


Life360 - Life360 is a free app that helps housemates keep track of each other via cellphone location tracking. With this new integration, the app will be able to tell your Nest thermostat when everyone is gone so it can turn off the heat


In addition to all these new gizmos in the ecosystem, Nest also announced today that it has acquired Revolv, a smart home company best known for its multi-protocol home automation hub. The news is still fairly recent at this point, but early reports suggest the move was more about acquiring Revolv's employees than it was about getting the company's technology or user base. It appears that Nest plans to leverage Revolv's high-caliber team to expand the Works With Nest program even further, and work with more developers to add compatibility and capability between Nest and third-party products.


'Dark Souls II' grabs top gaming award


The free copies of X-Com: Enemy Unknown have been handed out and the votes have been tallied, all culminating in a Golden Joysticks awards ceremony that crowned the unforgiving Dark Souls II as the Game of the Year.


From Software's Dark Souls II brings the refinement in controls and graphical freedom that hampered the original's transition from consoles to PC. With the game on par across all platforms, Dark Souls II rises beyond the fanboyism and continues with brutal play that made both Demon Souls and Dark Souls cult hits.


In Dark Souls II, as is the case with its predecessors, the gameplay is tough and the game refuses to hold the hands of players as they make their way through its moody environments. Its the sort of game that makes players feel like they're good enough to progress, but just barely.


While Dark Souls II won Game of the Year, another third-person RPG may be in line to take that honor at the 2015 Golden Joysticks. With a sequel that was everything most people missed from the original, The Witcher II has helped propel The Witcher III: Wild Hunt to the most-wanted game of 2014.


A combined effort from ComputerAndVideoGames and GreenmanGaming, the Golden Joystick awards held its 32nd event in London on Oct. 24. The awards are often deemed the people's choice awards of gaming -- organizers even hand out digital keys to video games for each vote submitted.


'The Joysticks are the people's awards and 2014's winners entirely reflect the creativity and diversity of modern gaming,' Andy Robinson, editor of industry magazine CVG. 'I'd like to thank everyone who voted for again joining us in celebration of a passionate and innovative medium that we all love.' Organizers said gamers cast 9 million votes. said


The rest of the 2014 Golden Joystick Awards winners are as follows:


Best Original Game: DayZ


Best Online Game: Hearthstone: Heroes of Warcraft


Best Storytelling: The Last of Us: Left Behind


Best Visual Design: Assassin's Creed IV: Black Flag


Best Audio: Assassin's Creed IV: Black Flag


Playfire Most Played Game of the Year: Rust


Best Multiplayer: Battlefield 4


Best Indie Game: DayZ


Innovation of the Year: Oculus Rift DK2


Best Gaming Moment: The Last of Us: Left Behind - 'The kiss'


Best Handheld Game: Pokemon X & Y


Best Mobile Game: Hearthstone: Heroes of Warcraft


Gaming Personality of the Year: PewDiePie


Studio of the Year: Ubisoft Montreal


Gaming Platform of the Year: Steam


Lifetime Achievement: Hideo Kojima


Game of the Year: Dark Souls II


Samsung Galaxy S5 will get Android Lollipop in December

Nice little Christmas treat

Android 5.0 Lollipop will hit the Samsung Galaxy S5 this December.


Sources speaking to Sam Mobile have confirmed as much, but the update could take up to a month to roll out to devices across all regions. Hopefully we'll have it in time for Christmas though.


Networks can delay rollouts further, as they do their own checks on the new software, so there's always a chance it's not released for your phone until early 2015.


Android Lollipop was revealed earlier in the year but only got its official name this month. It'll bring a new, flatter design, as well as Project Vault which should give batteries a major improvement.


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