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China discounts, cheaper iPhone to cushion Apple from impact of coronavirus on demand – The Globe and Mail

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People pass by an Apple store in New York on March 14, 2020.

Eduardo Munoz/Reuters

Apple Inc’s discounts on the iPhone 11 in China and the release of a new low-price SE model have put the company in a better position than rivals to weather a coronavirus-related plunge in global smartphone demand.

While China, which accounts for roughly 15 per cent of Apple’s revenue, appears to be a rare bright spot, investors will be keen to get a picture of global demand when the Cupertino, California-headquartered company reports second-quarter results on Thursday.

The iPhone maker has shut retail stores in the United States and Europe following the COVID-19 outbreak, and China is the only major market where it has been able to reopen all shops.

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Consumer spending is expected to be muted as the pandemic has crippled economies and Apple, the world’s second-most valuable tech company, is better armed with the launch of its new price-conscious iPhone model, analysts said.

“Apple is better positioned than most to experience a rapid recovery in a post COVID world,” Evercore analyst Amit Daryanani said in a research note. “We see demand as pushed out, not canceled.”

He added that the launch of the $399 iPhone SE suggested that Apple’s supply chain was getting back on its feet after weeks of shutdown earlier this year.

Analysts expect Apple to report a 6 per cent drop in revenue and an 11 per cent fall in net income in its fiscal second quarter, according to Refinitiv data.

On the other hand, Chinese brands such as Oppo and Vivo who have steadily moved to offer high-end models to challenge iPhones, stand to lose marketshare as bargain hunters choose Apple.

Earlier this month, several online retailers in China slashed prices of the iPhone 11 by as much as 18 per cent – a tactic Apple has used in the past to boost demand. And while initial social media reaction to the new iPhone SE was muted, analysts said they were seeing a pick up in demand.

The cheaper iPhone SE could tempt iPhone owners to opt for a newer device, something they might have otherwise delayed in a weak economy, said Nicole Peng, who tracks the smartphone sector at research firm Canalys.

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“People want to avoid uncertainty in a downturn,” she said. “Having a brand like Apple that can showcase quality and make people less worried about breakdowns or after-sales service can bring in buyers.”

CHEAP IS GOOD

Early data suggests that the Chinese smartphone market is recovering rapidly in the aftermath of the virus, and Apple has emerged relatively unscathed.

Sales of iPhones in China jumped 21 per cent last month from a year earlier and more than three fold from February, government data showed, meaning March-quarter sales in the country were likely to have slipped just 1 per cent.

To be sure, a recovery in Chinese demand won’t offset sales lost in the United States and Europe. And the company is yet to launch a smartphone enabled with 5G wireless technology like those offered by Asian rivals, a disadvantage for Apple so far.

But those same expensive 5G models may not sell well in the current climate of frugality, analysts said.

“If there are no massive subsidies (in China), I doubt there will be many smartphone users who will be eager to upgrade to 5G,” said Linda Sui, who tracks the smartphone sector at research firm Strategy Analytics.

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Sui expects iPhone shipments in 2020 to be down 2 percentage points at the most, versus double digit declines at Chinese firms.

Apple also has revenue from its services business to fall back on. It has leveraged its large iPhone customer base to boost services revenue from music, apps, gaming and video. “Apple’s Services segment should remain resilient in today’s work-from-home environment, thereby demonstrating the durability of Apple’s model,” Cowen analyst Krish Sankar said.

Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.

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Ask Andy: How can you tell whether a startup is a good place to work? When is it safe to disclose a mental-health challenge to coworkers?

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As a software developer who would like to work for a startup, what should I look for in a company so that I know it’s legit? If I am putting a lot of work into a product, I want to know that at minimum it’s for a legitimate company and founder—not just another person with an overdone app idea that knows nothing about the tech world. Sarah C.

If you’re learning the startup game, the best bet here is to go later-stage. Focus on a pre-IPO company that is growing quickly, has raised money from blue-chip investors, and is getting positive buzz in the market that it will go public within the next two years.

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Then, don’t believe any of it.

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Network your way into three of the company’s team members on LinkedIn or through your network. Have three virtual or IRL coffees. Have them tell you about the culture: If they’re learning; if the company’s really growing; and most importantly, whether or not they respect and, ideally, admire the leadership.

Keep looking until you find this vetted opportunity.

That’s a systematic, rational approach. But that’s not the only way to go. You could throw it all out the window.

Find a company where you believe in the mission. One where you fall in love with the product or service. You might already be a high LTV customer or a power user. Check your credit card statement and your app home screen to source ideas. Your passion for the mission will make it work for you for some time, even if the company doesn’t work in the long run.

However you get there, once you’re inside for a year or two, you’ll be learning.

You may have to switch horses. That’s okay.

When you do, you’ll know more people, you’ll have more insight, and the path on what to pick next will be clearer. Heck, you might even notice an inflection point and meet a cofounder that leads to you starting a company yourself.

It’s like dating.

You probably won’t marry your first love—but you might. If you don’t, your judgment will iteratively improve. And the good news is unlike a marriage, you can change out your partner every few years. (What I’ve found, though, is that the most successful people professionally, and those who generate the most wealth, have more like 5- to 10-year runs.)

Trust your intuition. Follow your heart on the mission or product. Then, don’t trust yourself.  Study the market. Use the product.  And do at least three off-list references outside of who you interview with. Read every single Glassdoor entry.

And then jump!

You’ll be fine.

Do you think you could have shared your mental health conditions publicly BEFORE you were professionally successful, and still have been successful? Or was the fact that you had already achieved professional success what allowed you to be open? Zack

No, I don’t think I could have shared before we succeeded. I wouldn’t have had the courage to, and I feared it might be career-limiting.

Then again, it was almost seven years ago that I had my I-can’t-deny-this-any-longer moment with my Bonobos colleagues and investors. As of today, I think it’s becoming more possible to be candid about mental health. I hope we can move to a world where I could have been more open, sooner, at least selectively with my leadership team and board.

Some entrepreneurs ask me when to tell their VCs about the mental-health challenge or mental-health diagnosis they wrestle with. I always say the same thing: at a breakfast meeting, four months after you’ve closed the round and hit your numbers. Nobody cares about your neurodivergence if you’re performing—and most VCs actually know enough to know that most founders have more going on than meets the eye.

With your team, I think it’s doable, even now. Perhaps especially now. The truth is, they know. They know you deal with stuff because they’re around you. And the vulnerability you share in disclosing will multiply their respect for you. More importantly, it’ll give those team members the space to reciprocally share their stuff with their colleagues, and potentially you as well, and bring their full selves to work.

Wouldn’t that be cool?

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Take-Two Buys Gearbox And Its New ‘Borderlands’ Game From Embracer

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If you’re a game developer owned by Embracer Group at this point, you are nervous about layoffs, shutdowns or game cancellations after the last few years. But now, there is a somewhat happy ending for one of them, Gearbox.

It’s just been announced that Take-Two, which owns GTA developer Rockstar, will purchase Gearbox for $460 million. This also includes the properties Gearbox owns, the Borderlands and Tiny Tina’s Wonderlands franchises, Homeworld, Risk of Rain, Brothers in Arms and Duke Nukem. The report says Gearbox has six games in development, five sequels, including a new Borderlands game, the not-announced-but-definitely-happening Borderlands 4. Here’s Strauss Zelnick:

“Our acquisition of Gearbox is an exciting moment for Take-Two and will strengthen our industry-leading creative talent and portfolio of owned intellectual property, including the iconic Borderlands franchise,” said Zelnick, Chairman and CEO of Take-Two. “This combination enhances the financial profile of our existing projects with Gearbox and unlocks the opportunity for us to drive increased long-term growth by leveraging the full resources of Take-Two across all of Gearbox’s exciting initiatives.”

Gearbox has been working with 2K and Take-Two for decades, so it was a logical place for them to land. This is, of course, not a great look for Embracer, who only purchased Gearbox three years ago. The price tag back then was “worth up to $1.3 billion” but there were a lot of strings attached to that where it’s not necessarily the case that selling for $$460 million netted them a ~$900 million loss.

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As for what this means for gamers, it would seem something like the Borderlands franchise is now on more stable ground, as it was hard to believe any project at Embracer is fully safe these days. Last year, Embracer quietly cancelled 29 different unannounced games and shut down seven studios in a six month period including Volition and Free Radical Design. That came with around 1,400 layoffs. More recently, Embracer laid off 97 people at Eidos in Janaury and cancelled a Deus Ex game.

Sufficed to say, those at Gearbox probably feel pretty good about this. And as for Take-Two, Borderlands is still a valuable IP, and Tiny Tina’s Wonderland was a surprise hit. There’s a new Homeworld game coming as well. In an era for multi-billion dollar acquisition, Gearbox for $460 million doesn’t seem that bad. That’s probably a third of what GTA 6 will sell on day one next year.

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What's Brewing in the iPhone 16 Rumor Mill? AI, Action Buttons and More – CNET

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As the iPhone 15 settles into the market, the tech community is buzzing with anticipation for Apple’s next-generation handset, which is expected to be named “iPhone 16.” 

We’ve heard whispers about the iPhone 16’s features, which are said to span from a new power-efficient display to larger screens, better zoom lenses, an action button and, perhaps not surprisingly, a suite of new gen-AI powered features.

Read more: Best iPhone of 2024

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However, the iPhone 16 is still presumably six months away and nothing will be confirmed until Apple’s iPhone event in the fall. Still, these rumors could give us an idea of what to expect from the next iPhone.

Here are the most credible rumors for the iPhone 16.

Will the iPhone 16 fold?

Probably not. The newest rumors suggest Apple has been working on iPhone Flip models in two different sizes, though there have been difficulties in making the devices to Apple’s standards. The company may also be working on a folding tablet with a screen around the size of an iPad Mini. Even though virtually every major phone-maker — from Google to Oppo to OnePlus and Samsung — have launched their own bendable handsets, Apple has been characteristically quiet about whether there will ever be an iPhone Flip or an iPhone Fold.

Prior rumors said Apple may not launch its own flexible screen device until 2025. Samsung hasn’t let phone fans forget it — by releasing an app that will let Apple phone owners experience a Z Fold-esque experience by placing two iPhones side-by-side.

iPhone 16 Pro models to get bigger screens?

Apple has maintained the two screen sizes for iPhone Pro models since 2020 when it launched the 6.1-inch iPhone 12 Pro and the 6.7-inch iPhone 12 Pro Max. However, that’s rumored to change with the iPhone 16 Pro models, which might get bigger screens.

Display analyst Ross Young suggested earlier this year that the iPhone 16 Pro models will have larger screens, putting the sizes at 6.3 inches for the iPhone 16 Pro and 6.9 inches for the iPhone 16 Pro Max. That rumor was later corroborated by Bloomberg’s Mark Gurman, who said the iPhone 16 Pro models could grow by “a couple tenths of an inch diagonally.”

The iPhone 16 and iPhone 16 Plus models are believed to be sticking with the current 6.1-inch and 6.7-inch sizes. If the size increase is accurate, it would be yet another move from Apple to distinguish its Pro iPhone models from its regular ones.

iPhone 15 screen sizes

  • iPhone 15: 6.1 inches.
  • iPhone 15 Plus: 6.7 inches.
  • iPhone 15 Pro: 6.1 inches.
  • iPhone 15 Pro Max: 6.7 inches.

Rumored iPhone 16 screen sizes

  • iPhone 16: 6.1 inches.
  • iPhone 16 Plus: 6.7 inches.
  • iPhone 16 Pro: 6.3 inches.
  • iPhone 16 Pro Max: 6.9 inches.

iPhone 16 gets more AI tricks

One of the most salient selling points of Samsung’s Galaxy S24 series and Google’s Pixel 8 lineup were each of their souped-up AI tips and tricks, and it wouldn’t be a major shock if Apple went in the same direction. Apple CEO Tim Cook has gone on the record this year confirming Apple sees “a huge opportunity for Apple with gen AI and AI.”

According to Gurman’s Power On newsletter, iOS 18 will feature generative AI technology that “should improve how both Siri and the Messages app can field questions and auto-complete sentences.”

A September report from the Information says Apple plans to use large language models, a crucial part of generative AI, to make Siri smarter. The report said this feature is expected to be released with an iPhone software update next year. 

Read More: iPhone iOS 18: A Possible Big Leap In AI

iPhone 16 design: New action button?

In March, AppleInsider published a collection of photographs purportedly displaying 3D-printed dummy models of the rumored iPhone 16 and iPhone 16 Pro. The images revealed that the iPhone 16 may have a vertical camera stack as opposed to a diagonal one and an action button, similar the one on last year’s iPhone 15 Pro.

iPhone 16 gets more power-efficient display?

Another change that could make its way to iPhone 16 displays is greater power efficiency. Samsung Display is apparently developing a new material set, dubbed M14, specifically for Apple, according to a TheElec report, which says the new technology should arrive on iPhones launching next year. M14 will replace the blue fluorescent technology that’s used now with blue phosphorescence technology, creating an even more power-efficient screen than the current LTPO ones used on Pro models, the report says.

Andrew Lanxon/CNET

iPhone 16 gets better zoom?

Both the iPhone 16 Pro and the iPhone 16 Pro Max could both have 5x telephoto lenses next year. According to Apple analyst Ming Chi Kuo, a tetraprism lens will make its way to both Pro models next year, as opposed to just the Pro Max model. Apple equipped the iPhone 15 Pro with a 12-megapixel 3x optical zoom, while the iPhone 15 Pro Max has a 12-megapixel 5x optical zoom camera, which is the equivalent of 120mm lens on a full-frame camera.

If this rumor is true, it could mark a breakthrough in design. When Apple launched the 15 Pro Max with its 5x telephoto lens, it cited the phone’s bigger body as to why the Pro Max had it, but the Pro didn’t.

iPhone 16 processors: A18 chip for all models?

In a break with the past two years, all four iPhone 16 models will apparently get a next-generation Apple chipset, which will all receive A18 branding. According to a MacRumors report citing Jeff Pu, an executive analyst for Haitong International Securities, all four models will have an A18 series chip with Pro iPhone models getting an A18 Bionic Pro and base models getting a regular A18.

The iPhone 15 and 15 Plus currently have an A16 Bionic, which debuted on the 2022 iPhone 14 Pro and 14 Pro Max, while the 15 Pro and 15 Pro Max run on the A17 Pro processor. Pu says the A18 chip will be manufactured with TSMC’s cutting-edge 3 nanometer process.

Read more: Apple iPhone SE 4 Rumors: iPhone 14 Design, Face ID and More



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