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Data Sheet—Wednesday, October 28, 2015

October 28, 2015, 1:22 PM UTC

Tim Cook, soft-spoken Southerner that he is, often can be a man of few words. During a conference call with analysts Tuesday afternoon to announce Apple’s strong fourth-quarter results, he dismissed a question from a Goldman Sachs analyst with a terse “I don’t know the answer to that,” followed by silence.

Asked about China, however, the Apple CEO turned positively rhapsodic. In fact he soliloquized a stem-winder so passionate, its content speaks volumes to the country’s place in Apple future.

“We’ve been able to grow without the market growing,” Cook said, after the company announced that sales in what it calls “Greater China” (including Hong Kong and Taiwan) doubled to $12.5 billion in the quarter. “iPhone 6 was the largest-selling phone in mainland China,” he said.

Then, Cook countered the oodles of commentary calling into question China’s economic growth. “Frankly, if I were to shut off my Web and shut off the TV and just look at how many customers are coming into our stores and coming online, I wouldn’t know there was any economic issue at all in China. I think there’s a misunderstanding, particularly in the Western world, which contributes to the confusion.”

In fact, Apple recently opened its 25th retail store in China, on the way to 40 soon. Cook said that no matter the near-term gyrations, Apple is in China for good. “We’re investing in China for the decades ahead,” he said. “China will be Apple’s top market in the world. That’s not just for sales. The developer community is growing faster than any country in the world.” Cook was there last week and said he was impressed with the software developers he met. As for the retail customers he encountered? Their enthusiasm was “infectiously contagious.”

Cook didn’t stop there. “Nobody’s asking me about iPad on the call,” he said, referring to Apple’s tablet computer, whose sales declined 20% from the previous year. “In China, for 68% of the people who bought an iPad, it was the first tablet they had owned, and 40% of those had never owned any Apple product.”

Apple remains a global juggernaut. It’s easy to see why its CEO, who spent years of his life flying back and forth from California to Apple’s partner factories in China, is bullish on the world’s second biggest economy, short-term issues be damned.

A correction: Tuesday’s essay on Workday misstated the software company’s projected annual revenues as $1.5 billion. They will be closer to $1 billion.

Adam Lashinsky


Twitter results disappoint. The social media company reported a relatively healthy revenue growth rate of 58% to $569 million for its third quarter. The growth in new users was less impressive: just 4 million additions for a total of 307 million. Twitter also reduced its revenue guidance to a range of $695 million to $710 million for the fourth quarter, citing unspecified expenses. (Fortune)

SEC scrutinizes IBM's accounting. The agency wants more information about how the company recorded certain transactions in the U.S., U.K., and Ireland, according to a securities disclosure. It's mum on which distractions. An earlier investigation into how IBM books revenue for cloud computing contracts was closed last year. (Re/code)

Goldman Sachs spins out mobile software. The investment bank is creating a new venture with partner Synchronoss Technologies, in which it will own a minority stake. The new company will sell Lagoon, an application that Goldman wrote in-house for accessing corporate email on smartphones, as well as several other mobile apps. (Wall Street Journal)

Cisco places another bet on cybersecurity. It will pay $453 million to buy one of its partners, Lancope, which sells technology that monitors networks for malware, potential hacking attempts, and other suspicious behavior. Cisco is prioritizing technology that can secure the Internet of things. This is the second notable acquisition in five months: In June, Cisco paid $635 million for cloud threat intelligence specialist OpenDNS. (Fortune)

AIG insures drones. New policies cover damages caused by unmanned aerial vehicle technology, as well as injuries to human operators on the ground. They don't protect against hijacking, unlawful seizure, or hacking incidents aimed at stealing drone data. (Fortune)

Toshiba sells sensor business to Sony. The transaction, worth a reported $165 million, involves a manufacturing plant in southern Japan and the transfer of about 1,100 workers onto Sony's payroll. It is the first move in a restructuring plan meant to help Toshiba recover from its $1.3 billion accounting scandal. (Reuters)

Amazon is latest tech company sued by temporary help. The e-commerce giant uses contract drivers to handle one-hour delivery promises for Amazon Prime Now members in about a dozen U.S. cities. The suit, filed by four contractors in Los Angeles, seeks compensation for fuel and workers' compensation insurance, among other things. (Wall Street Journal)


Corporate suggestion boxes meet the digital age

Last year, personal care products giant Unilever premiered a collaboration initiative called Foundry Unilever to solicit ideas for its environmental and sustainability programs. Central to the effort is a website for collecting suggestions from employees, potential partners, and the general public related to thorny business challenges that pose future risks to its businesses. A campaign running through mid-November, for example, seeks ways to "reinvent laundry," with an eye toward prioritizing water conservation.

“We anticipate linking up with people who are budding entrepreneurs who have an idea, but who haven’t much taken it beyond that,” Karen Hamilton, global vice president for sustainability at Unilever, said when the site debuted. “We might also connect with startups that might have a full-fledged solution. … We believe in the power of the crowd.”

Unilever didn't develop the software behind this ideas site. Rather, Spigit, a San Francisco-based collaboration software company, built it.

You can think of the technology as an interactive version of the corporate suggestion boxes of old. It is supposed to spark corporate innovation rather than surfacing random ideas from the general public, although in Unilever's case, the company is looking for ideas from both insiders and outsiders. “We harness large groups of people to collaborate on an issue, to surface actionable ideas,” said Scott Raskin, CEO of San Francisco-based Spigit and its parent company, Mindjet. The company Tuesday received another $13 million in funding to advance that mission. Read more about its relatively unique twist on collaboration.


ADP and Zenefits call truce in defamation suit over 'misinformation'
by Heather Clancy
Oracle talks up a slew of Amazon-like cloud services by Barb Darrow
Square complicates its IPO story by Dan Primack
Meet Google's artificial intelligence chief by Leena Rao
Why Facebook is intentionally giving developers crummy Internet connections by Kia Kokalitcheva


Gamergate reclaims headlines. The popular SXSW technology festival this week cancelled two panels about ethics in the videogame industry and pervasive online harassment against female gamers. The unpopular decision, prompted by bomb threats against the organizers and participants, has sparked a fierce backlash from those on both sides of the issue. (New York Times)

This edition of Data Sheet was curated by Heather Clancy: