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SATURDAY, MARCH 19, 2016
MARKET EXQUISITE WATCH A ‘Grandmaster Chime’ luxury wristwatch, produced by Patek Philippe, is on display at the company’s booth during the 2016 Baselworld luxury watch and jewellery fair in Basel, Switzerland. Almost 1,500 companies from the watch, jewellery and gem industries will display their latest innovations and products to more than 150,000 visitors at this year’s luxury show. – Bloomberg News.
Apple is gearing up to unveil smaller iPhone The 4-inch iPhone won’t be packed full of technological innovations. It is meant to woo those still clinging to the more than two-yearold 5S or 5C, the last models with the more compact screen
SAN FRANCISCO: Since Apple introduced the first iPhone in 2007, mobile handsets have only gotten bigger. Chief executive officer Tim Cook will buck that trend on Monday when he presents a smaller iPhone, seeking to entice holdouts to upgrade to a new smartphone even if they don’t want a larger device. The ambitions for the new phone may be commensurate to its diminutive size. Unlike previous new iterations of the device, the 4-inch iPhone won’t be packed full of technological innovations intended to send hordes of Apple fans queuing around the block on launch day to snap it up. Instead, it’s meant to woo those still clinging to the more than two-year-old 5S or 5C, the last models with the more compact screen. “It will really just replace the 5S at the low end of the lineup,” said Chris Caso, a New Yorkbased Susquehanna International R E A L E S TAT E
NEW SMARTPHONE: Apple chief executive officer Tim Cook is expected to present a smaller iPhone, The new smartphone will boast a faster processor than the 5S, a person familiar with the details has said. – Bloomberg News
Group analyst with a positive rating on Apple shares. “The 5S is getting a bit old now and won’t run the operating system that well for much longer.” Quarterly sales dip The company is rolling out the new phone two months after saying quarterly sales were likely to decline for the first time in more than a decade, highlighting concern that iPhone growth has reached its limits. While analysts from UBS Group to RBC Capital Markets predict that shipments of the iPhone SE — the expected name of the new model — will be about 15 million annually, its smaller size and lower price could encourage existing customers to step up at a time of year when sales often decelerate. Apple sold more than 231 million iPhones in 2015, with sales dipping between April and September, as has been the case in previous years.
Though the event is focused on the new products, Apple followers may pay more attention to anything Cook says about the company’s legal fight with the United States government over an order that it help the FBI unlock a terrorist’s iPhone. After more than a month of sparring — in court filings, Congressional hearings and on national television — the two sides will present their cases on Tuesday before a magistrate judge in Riverside, California. Upgrade slowdown Cook may use the stage on Monday at the company’s headquarters in California to reiterate Apple’s argument that creating software to degrade the phone’s security features would inevitably endanger the privacy of hundreds of millions of users. The company is introducing the new, smaller iPhone at a time when customers are holding onto
their handsets longer. Wireless carriers such as AT&T and Verizon Wireless are no longer subsidising new iPhone purchases like they once did, making customers question whether the improvements warrant the expenditure on new models. A slowing upgrade cycle is something Apple has experienced with the iPad, which has seen sales steadily decline for several quarters. “The replacement cycle for iPhones has stretched to 27 months,” compared to the 23 months of two years ago, RBC analyst Amit Daryanani wrote in a note to clients this week. The new handset will “ensure that consumers who have a three-year- old 5S or 5C don’t switch to Android for lack of new iPhone products.” App Store An older iPhone owner who’s looking to upgrade can currently either spend $549 on the basic version of the iPhone 6 — the 2014 edition — or buy a less-expensive Android-based phone. Apple’s new lower-end model may persuade customers to stick with the company’s products, allowing it to sell services through the App Store or subscriptionbased products such as Apple Music and iCloud. The new smartphone will boast a faster processor than the 5S, a person familiar with the details has said. Like the iPhone 5C, it may also be available in a variety of colours, analysts have said. Cook will wield a new iPad at Monday’s event. - Bloomberg News
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C O R P O R AT E
China home prices increase BEIJING: China’s home prices rose at their fastest clip in almost two years in February thanks to red-hot demand in big cities, but risks of overheating in some places combined with weak growth in smaller cities threaten to put more stress on an already slowing economy. Average new home prices in 70 major cities climbed 3.6 percent in February from a year ago, quickening from January’s 2.5 percent rise, according to Reuters calculations based on data released by the National Statistics Bureau (NBS) on Friday. That was the quickest year-onyear increase since June 2014, and encouragingly, 32 of 70 major cities tracked by the NBS saw annual price gains, up from 25 in January. Ordinarily, that should be welcome news for policymakers who have rolled out a raft of stimulus measures to support an economy
growing at its slowest pace in a quarter of a century. Supply glut But the divergence in home prices — surging values in bigger cities and depressed markets in smaller cities plagued by a supply glut — makes Beijing’s job harder as it looks to reanimate growth without inflating asset bubbles. “The government’s all-out encouragement of housing sales seems to be working, but at the cost of surging prices in big cities,” said Rosealea Yao, an economist at Gavekal Dragonomics in Beijing.
“These surges in big cities are not sustainable and would increase uncertainties and instability in the overall housing market.” The data showed tier 1 cities, including Shenzhen, Shanghai and Beijing, remained the top performers, with prices surging 56.9 percent, 20.6 per cent and 12.9 per cent respectively. “Prices in first-tier cities are very expensive now, it’s hard for new families to afford a home,” said Tan Huajie, vice president China’s biggest property firm Vanke. The trouble is that speculators and ordinary investors, who have been shaken by the summer crash in mainland stock markets, are increasingly ploughing their money into the housing market — most of it going to the frothy sector in big centres. A slowing economy has also meant most jobs are in the biggest cities, drawing more people into these places. - Reuters
Toshiba eyes improved profit as it scales back on products TOKYO: Toshiba said its profitability will improve in the next fiscal year as it scales back on products such as personal computers and home appliances. Operating profit will be ¥120 billion ($1.1 billion) and revenue ¥4.9 trillion in fiscal 2016, the electronics maker said on Friday, in a presentation titled “A road map to a new Toshiba.” Analysts were projecting, on average, a profit of ¥145.5 billion on sales of ¥5.77 trillion, according to data. Toshiba, which makes everything from computers to nuclear power equipment, is seeking to revive profits by narrowing the scope of its business lines. An accounting scandal has left the Japanese conglomerate in tatters, facing record losses, job cuts and potential spinoffs. The com-
pany is selling its medical unit to Canon, home-appliance business to China’s Midea Group and is considering letting go of its PC operations. “The trust we’ve lost won’t be regained overnight,” President Masashi Muromachi said at a briefing at Toshiba’s Tokyo headquarters. “We must transform into a company that can deliver consistent growth.” Nuclear power operations For the current fiscal year, which ends this month, Toshiba kept its operating loss forecast intact, at 430 billion yen, on revenue of ¥6.2 trillion. Still, the company is re-testing the value of its nuclear power operations. That business is at the center of an investigation by the United States over al-
legations that it hid $1.3 billion in losses, according to two people familiar with the matter. Toshiba now expects the goodwill on its Westinghouse Electric to be ¥351 billion, from an originally anticipated ¥385 billion. Toshiba, which said it’s cooperating with U.S. authorities on inquiries, disclosed in November that the Westinghouse unit booked writedowns on new construction projects and automation services in fiscal 2012 and 2013. The value of Westinghouse wasn’t impaired by the writedowns and the accounting was accurate, Yu Takase, a spokeswoman for the company, told Bloomberg News at the time of the disclosure. Toshiba is also cutting back on hiring. – Bloomberg News