Broadcom fourth-quarter profit, revenue top analysts' forecasts

Apple Inc. sold 37 million iPhones and 15 million iPads during its record holiday quarter. Those are also happy numbers for Irvine-based Broadcom Corp., which makes microchips for the popular Apple devices and many others.

Broadcom reported a better-than-expected fourth quarter Tuesday, beating Wall Street estimates for quarterly revenue and earnings per share despite enduring profit and sales declines from the same period a year earlier.

The company's stock rose 1.98%, or $0.68, to $35.02 in after-hours trading following its earnings announcement. Since Jan. 1, the company's stock has risen 17.44%, a welcome jump after a rough 2011 that saw that company's stock drop 33%, from $43 to $29.

The market for semiconductor chips was bumpy in 2011, and Broadcom saw declining consumer interest in digital television sets, one of the products for which it makes microchips. The industry has also been recovering from major flooding in Thailand that led to a shortage of hard disk drives used by many computing devices.

Still, the company's leadership is optimistic, projecting revenue for the current quarter of between $1.7 billion and $1.8 billion, above the $1.73 billion analysts expect.

"Broadcom delivered solid results in 2011, as we gained significant market share, secured record design wins across our businesses, and delivered record revenue and cash flow from operations," Scott McGregor, Broadcom's chief executive, said in a statement. "We will remain focused on product innovation and engineering execution that position us to grow faster than the industry."

Broadcom has about 20 lines of business, making communications chips for smartphones, tablets, televisions, set-top boxes and large-scale Internet servers. To stay competitive in the fast-moving electronics business, the company often buys smaller firms to acquire their chip design technology and know-how, and wraps the new teams into its main design business to work alongside other engineers from around the globe. It has acquired 46 companies since its founding in 1991.

The company reported $1.82 billion in revenue for the quarter, higher than the Wall Street consensus of $1.8 billion but a 6.4% decrease from the same period a year earlier. Its adjusted earnings per share were 68 cents -- Wall Street expected 65 cents -- a 25% decline from the fourth quarter of 2010.

[Correction, 4:55 p.m., An earlier version of this post said Broadcom saw declining user interest in set-top boxes.  The company mentioned a slide in the demand for its digital televisions as a reason for revenue decline, not set-top boxes.]

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Photo: A Broadcom mobile multimedia circuit board in 2010. Credit: Mark Boster/Los Angeles Times

Obama and Romney campaigns use Square for fundraising

Barack Obama's use of social media is credited with helping him reach out to voters in a groundbreaking way that helped him win the 2008 presidential race. In 2012, the Obama campaign is eying a new way to reach voters and donors too -- Square.

The president's reelection campaign, as first reported by Politico, is outfitting its staff across the U.S. with the small plastic smartphone credit card readers and mobile payment apps from Square, the San Francisco start-up run by Twitter co-founder Jack Dorsey.

But just as the Obama campaign isn't alone in its embracing of social media this year, it too isn't alone in deploying Square for easier, faster fundraising on the campaign trail. On Tuesday, Republican Mitt Romney's campaign announced it too would be using Square for fundraising in Florida, where Romney is facing rivals Newt Gingrich, Ron Paul and Rick Santorum in a Republican primary.

"We have plans to roll it out nationally but right now we're using Square just in Florida as a sort of beta test," said Zac Moffatt, the Romney campaign's digital director. "The challenge on this sort of thing is never with the technology, it's with the compliance. We're making sure everything we're doing follows fundraising rules and is compliant with the FEC [Federal Election Commission] and that it works well. So, for now, were just focusing on making it all work on this smaller scale, but we'd like to scale this out in time, the right way."

Moffatt said the Romney campaign has been talking to Square about how to best implement the company's card reader and app for "probably about six months. This is one of the challenges we face relative to the Obama campaign -- we have only so much manpower. So we've had to plan this out the right way so that we're using the resources we have in an effective way."

To aid its ability to scale-up its use of Square, the Romney campaign is considering developing its own Square-compatibly app that a supporter could download to their smartphone to make a donation or possibly even collect donations on behalf of the campaign -- but that's an idea that hasn't been finalized just yet, Moffatt said.

The campaign looked to Square for fundraising because of the company's ability to turn a smartphone into what is essentially a mobile cash register with a simple app download and a Square card reader in the headphone jack.

"Ease of use is a big part of why we're using Square," he said. "Anything that reduces the barrier for entry is a No. 1 priority for us. Our apps, well that's something to think through. We still have some things to figure out -- whether or not the Apple is going to take 30% of a donation or not, details like that. But we're always looking to get as close to one touch donations as we can."

For the sake of convenience, Moffatt said, all of the Romney's campaign's Square usage will be iPhone based for now, though Android phones may be added in the future. The "beta test" will take place Tuesday night at the Romney campaign's election party in Florida, he said.

"There will be thousands of people there, so we'll be using Square for merchandise sales and fundraising," Moffatt said. "There will be lots of things like this in 2012 and the question always is, does this technology work for us? We have a lot faith this could be something pretty powerful for us moving forward."

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Photo: A demo of Square's card reader and iPhone app in action. Credit: Square

Demand for iPhones in China could skyrocket, analyst says

What do tenacious chief executives dream about during their four nightly hours of fitful sleep?

How about a world in which hundreds of millions of people desperately want to buy your product -- so much so that riots break out in long lines while they wait in front of your stores. Meanwhile, although you're already the world leader when it comes to high-speed, high-efficiency manufacturing, your legions of factories simply cannot churn out enough iPhones to satisfy demand.

Oops, I let the cat out of the bag there. Because yes, there's a good chance Apple Inc. Chief Executive Tim Cook is having a version of this very dream -- a kind of nightmare of success in which you fear that a huge opportunity right under your nose is simply too huge to take advantage of.

For some context, Apple sold 72 million iPhones in its fiscal 2011, a staggering number that required all the muscle of the world's most valuable technology company, as well as a network of Asian factories pumping out the devices at a breakneck pace. The sales came from more than 100 countries.

Now Chinese consumers may want to buy nearly that many iPhones all by themselves.

That may well happen, says Morgan Stanley analyst Katy Huberty, who in a note to investors guessed that Apple may soon be selling 57 million iPhones annually in China, capturing 60% of the projected market for smartphone buyers there. That would be a sixfold increase from the 10 million iPhones Chinese consumers bought in 2011. 

The pent-up demand for the iPhone in China is hard to overestimate. The nation's leading carrier, China Mobile, has 650 million mobile subscribers, according to Huberty (compared with about 200 million for second-place China Unicom, which offers the iPhone). China Mobile does not technically support the iPhone because its network isn't compatible. But that hasn't stopped 10 million of its customers from finding ways to use the device anyway.

Starting this year, China Mobile may flip on its next generation 4G mobile network. If analysts are correct, that upgrade might prove beneficial for the iPhone 5. The next version of the device, which observers guess may hit stores in the summer, is likely to work on the faster 4G networks.

That day may well bring "double happiness" to the folks in Cupertino, Calif.

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Photo: Workers clean the windows of an Apple store in Beijing this month. Customers who had waited overnight for the launch of the iPhone 4S turned angry and pelted the flagship store with eggs after it failed to open. Credit: ChinaFotoPress / Getty Images

Apple's Tim Cook responds to accounts of poor factory conditions

Apple Inc.'s chief executive responded to a wave of negative attention to conditions at overseas factories that make its products, saying the insinuation that Apple doesn't care about the welfare of its workers is "offensive."

"Unfortunately, some people are questioning Apple’s values today," Tim Cook wrote in an e-mail to Apple employees. "Any accident is deeply troubling, and any issue with working conditions is cause for concern."

A series of articles in the New York Times has brought new focus on Apple's highly profitable production strategy, which relies heavily on Chinese workers who live in dormlike factories and spend many hours assembling devices. The safety records and working conditions in those factories have been questioned, and Apple's labor practices received intense scrutiny in 2010, when more than a dozen workers at  Chinese iPhone plants committed suicide. 

The later New York Times article quoted former Apple and Foxconn employees saying that Apple prioritized profit and production speed above worker welfare. 

The company was trying to address problems in its factories, one of the sources said, “but most people would still be really disturbed if they saw where their iPhone comes from.”

In Cook's note, first published by 9to5Mac, he said that Apple was a world leader in improving overseas working conditions, and will continue to work hard to find and fix problems.

"We will continue to dig deeper, and we will undoubtedly find more issues," Cook wrote.  "What we will not do — and never have done — is stand still or turn a blind eye to problems in our supply chain. On this you have my word."

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Image: A person injured by an explosion at the Foxconn factory in May 2011 arrives at the Sichuan People's Hospital in Chengdu in southwest China. Credit: Associated Press.

IPad down to 58% of tablet sales as Android catches up

When asked if the emergence of new, lower-cost tablets was affecting the success of the iPad this week, Apple Inc. Chief Executive Tim Cook said he wasn't seeing it.

"I looked at the data, particularly in the U.S., on a weekly basis after Amazon launched the Kindle Fire, and I wouldn't -- in my view there wasn't an obvious effect on the numbers plus or minus," Cook said.

But one clear minus was Apple's declining share of the growing tablet market. Despite gang-buster sales last quarter, the iPad has lost more than 10 percentage points of market share to rival Android tablets since the fourth quarter of 2010, according to a new report from research firm Strategy Analytics.

The iPad dropped to 57.6% of the tablets sold during the most recent fourth quarter, from 68.2% a year earlier, while Android rose to 39.1% from 29.0% a year ago, the report said. While Apple shipped 15.4 million iPads during the quarter, Android makers shipped 10.5 million tablets, more than tripling the 3.1 million they shipped a year earlier.

The Android surge was led primarily by tablets from Amazon and Samsung, according to Strategy Analytics' Neil Mawston.

"Android is so far proving relatively popular with tablet manufacturers despite nagging concerns about fragmentation of Android’s operating system, user-interface and app store ecosystem,” Mawston wrote in a release attached to the report.

The report also noted that global tablet shipments rose to 66.9 million units in 2011, nearly quadrupling the 18.6 million shipped in 2010.  Devices "shipped" are those that manufacturers sell to retailers, and do not always represent final consumer sales numbers, especially when tablet makers overestimate the demand for their products.  But Mawston said the tablet shipment numbers in this case were a fair representation of the number consumers bought.

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Image: Tim Perkins checks out the $199 tablet from Amazon.com at a Best Buy store in L.A. Credit: Lawrence K. Ho / Los Angeles Times

Motorola sues Apple over patents, probably with Google's blessing

The power of mobile technology: Never before have consumers been able to hold so many lawsuits in their hand.

Motorola Mobility Holdings Inc. has just thrown another baton in the smartphone lawsuit parade that has stretched to courtrooms across the globe, as phone-makers sue one another over similarities in their mobile devices, which are packed with patent-protected circuits and widgets from dozens of companies.

Motorola has  filed suit against Apple Inc., purveyor of the mega-blockbuster iPhone (the device lifted Apple to $46 billion in sales in its most recent quarter).  Apple is an increasingly bitter rival of Google Inc., which agreed to buy Motorola in August, a deal that is still awaiting regulatory clearance.

As patent observer Florian Mueller noted, Google probably had to approve Motorola's lawsuit, given that part of the buyout terms appear to forbid Motorola from filing lawsuits without Google's explicit permission.  Google has not directly sued or been sued by Apple in this matter -- the two compaies are fighting their legal war by proxy.

Phones that run Google's Android operating system have collectively outsold the iPhone, and Apple is none too happy about that.  The Cupertino electronics maker has initiated a flurry of lawsuits against Android phone manufacturers, including Samsung Electronics and HTC Corp., alleging that the companies "slavishly copied" the iPhone's signature look.

But Apple is finding that big legal wins are hard to come by.

Now Motorola is trying to make things even more difficult for its rival. In its second action against Apple in the U.S. District Court in the Southern District of Florida, the company wants the court to ban iPhone sales.  Motorola alleges that Apple devices infringe on six of its patents, including one for a phone with a "concealed antenna," and another about keeping data on "multiple pagers" synchronized.  Motorola, as children of the 1990s will recall, made a lot of pagers -- they still do.

For updates in this saga, make sure to keep your pagers on.

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Apple earnings: $97.6 billion in the bank, and other highlights

Apple just reported its best quarter of all time, as covered by my colleague David Sarno here on the Technology blog.

The Cupertino tech giant reported a boost in sales of iPads, iPhones and Mac computers (but not iPods), pushing it into a record quarterly revenue of $46.33 billion and $13 billion in profit for the first quarter of the company's 2012 fiscal year.

Let's take a closer look at Apple's huge numbers for the quarter ended Dec. 31, which showed strong holiday sales and sent shares in the company up 8% after the markets closed Tuesday.

Cash balance -- One major number to note from Apple's earnings report, as mentioned in its earnings call, is that the company has a cash balance of $97.6 billion, up from $81 billion a year ago.

That's a massive amount to be sitting in the bank and it's a sum Apple will spend in part on developing new products that will help it remain competitive against rivals such as Samsung, Sony, HTC and Motorola.

Revenue -- Apple racked up $46.33 billion in sales in the 14-week quarter, which is up from $26.74 billion in the same quarter a year ago.

Profit -- The tech giant reported a $13-billion profit last quarter, which is more than double the profit the company reported for its first fiscal quarter of 2011.

IPhones -- Apple sold 37.04 million iPhones in the last three months of 2011, which marks 128% growth from a year earlier, when the company sold 16.25 million iPhones.

IPads -- Sales of the ever-popular Apple tablet grew 111% when compared to the year-earlier quarter, with 15.43 million iPads sold for the company's fiscal 2012 first quarter  versus 7.33 million iPads sold in the first quarter of 2011.

IPods -- The iPod isn't dead yet, but it is on the decline. Apple sold 15.4 million iPods last quarter, down 21% from 19.45 million iPods sold a year earlier.

Mac computers -- Apple's Mac line of desktop and laptop PCs -- which includes MacBooks, iMacs, Mac Minis and the Mac Pro -- saw a 26% increase in sales from the year-ago quarter, with 5.2 million Macs sold in the first fiscal quarter of 2012 and 4.13 million Macs sold in the first fiscal quarter of 2011.

"Portables," which would include the MacBook Air and MacBook Pro laptops, made up the majority of Macs purchased, with 3.71 million units sold last quarter, up from 2.9 million sold a year ago. Apple sold 1.48 million desktops last quarter, up from 1.23 million sold a year earlier.

Looking ahead, Apple said Tuesday that it is projecting it will record about $32.5 billion in revenue in the second quarter of its fiscal year.

[Updated: An earlier version of this post incorrectly stated that Apple's profit for the first quarter of its fiscal year was $6 billion. Apple reported a $13 billion profit last quarter and recorded $6 billion in profit a year earlier.]

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Photo: An Apple Store in San Francisco. Credit: Justin Sullivan/Getty Images

Apple reports record sales of iPhones, iPads and Macs

Apple Inc. is selling a whole lot of just about every product it makes -- and investors are loving it.

The company's stock shot up more than 8% after it announced that the holiday quarter was its best ever, with revenue and profit setting all-time records. Apple sold more iPhones, iPads and Mac computers than in any three-month period in its history.

The company smashed Wall Street projections with revenue of $46.33 billion in the three-month period ended Dec. 31, more than $7 billion more than analysts had expected and a 74% increase over its quarterly revenue from a year earlier. Profit was just as strong: Apple's $13.06 billion in earnings beat analysts' expectations by $3 billion, and the number more than doubled from the same quarter a year earlier.  

"They just demolished it," said analyst Peter Misek of Jefferies & Co. "Everyone thought they were too big -- that there was too much information out there and they couldn't pull off a surprise like this, but boy did they ever."

Apple's bestselling product continued to be its iPhone. The company sold 37.04 million of the devices, by far eclipsing its iPhone sales record of 20.3 million set in the April to June quarter. It also took a leap forward with its iPad, selling 15.43 million units of the tablet computer -- more than 4 million more than it had sold last quarter in its previous quarter. Apple sold 5.2 million Mac computers, beating its mark of 4.9 million, also set last quarter.

“We’re thrilled with our outstanding results and record-breaking sales of iPhones, iPads and Macs,” said Chief Executive Tim Cook in a statement. “Apple’s momentum is incredibly strong, and we have some amazing new products in the pipeline."

Analysts expect that Apple will have a strong year of new products, possibly announcing a new iPad in March, a newly redesigned iPhone during the summer and potentially an Apple-branded television set later in the year.

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Photo: Philip Schiller, Apple's senior vice president of worldwide marketing, discusses a new textbook initiative in New York last week. Credit: Mark Lennihan / Associated Press

Origami stroller charges iPhone, has headlights but no airbags

A digital stroller? It's happening, people.

A company called 4moms has just released the Origami, a baby stroller packed with features that you never knew you needed.

Power folding with the push of a button? Done.

Daytime running lights and special pathway lights to help you see at night? Yup.

A digital dashboard that displays temperature, speed, miles covered during your current trip, total miles covered, and whether or not a baby is actually in the stroller? It's got that too.

The Origami debuted at CES 2012 and is already available at some fancy baby stores like Giggle and Right Start. A 4moms spokeswoman said it will be available at diapers.com and buybuybaby.com in the next few days, and at target.com in the next few weeks.

The stroller costs a cool $849, which may sound expensive to normal people, but is actually comfortably within the range of higher-end strollers. The standard Bugaboo Chameleon, for example, will set you back $880.

The power for the power-folding feature, the lights and even the cellphone charging is produced by an onboard generator that charges the stroller as you push it. You do have the option to plug the stroller into the wall if you need to, and to fold and unfold the stroller manually if you're desperate, but the company says even a short walk is enough to keep the stroller powered for days.

One drawback is that it is kind of heavy for a stroller -- it weighs 32 pounds in toddler mode -- but you know, it's got that onboard generator. You can't have everything.

 

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Photo: The new Origami stroller by 4moms comes equipped with an online generator that allows parents to charge their cellphones while strolling with their baby. Credit: Courtesy of 4moms. 

Start-up spotlight: Capsule aims to be group events' one-stop app

Capsule, an event-based sharing platform, launched out of private beta with a website and free iPhone and Android apps this week.

The Manhattan Beach start-up provides a suite of tools to help users capture the "entire life-cycle of group events," including invites and RSVPs, group texting, instant photo-sharing in real time and archiving. 

During a demo for The Times, co-founders Cyrus Farudi, who is chief executive, and Omri Cohen, who is chief technology officer, said they were trying to create a central location for events that would enable participants to better plan and share their experiences together. Before Capsule, they said, the process was much more disjointed -- for instance, receiving an invite through Evite, texting friends individually before and tweeting during the event, and checking each participant's individual Facebook accounts afterward to see photos. 

"No one has that complete solution over the marketplace, and I think that's one thing that sets us apart," said Farudi, formerly of Flipswap. Capsule "solves the event life-cycle management problem."

Farudi, 31, and Cohen, 29, said they came up with the idea after having to attend 14 weddings and nine bachelor parties in one year. Founded less than a year ago, the start-up is angel-funded and joins a fast-growing group of emerging tech companies in the Los Angeles area, which some people have dubbed Silicon Beach.

On Friday, a day after Capsule was released to the public, Farudi declined to say how many people had joined but said the launch was "going really well." Capsule can be found at www.trycapsule.com.

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Image: Screen shot of Capsule's home page. Credit: Capsule