Verne Kopytoff is a senior editor at Fortune.
Apple is in a funk. Whether it’s short-term or the new normal is anyone’s guess.
The latest sign came on Thursday when Apple temporarily lost its title as the most valuable U.S. company to Google’s parent, Alphabet. Their market capitalizations—a byproduct of their stock prices—briefly swapped in ranking at just below $500 billion because of Apple’s increasingly depressed shares.
For sure, the most valuable company crown is more psychology than substance. But still, Apple’s losing it—even if only for a few hours before its stock recovered—still stings.
Wall Street, in its typical what-have-you-done-for-me-lately attitude, is worried. Never mind that Apple had $10.5 billion in profits in the most recent quarter and $50.6 billion in sales. Most any CEO would be giddy to report similarly “worrisome” results. But growth, which Apple lacks because of falling demand for iPhones and iPads, is what investors crave.
Ben Schachter, an analyst with Macquarie Securities, echoed the sentiment of many on Wall Street about what Apple must do to reignite its business. In a recent research note, he pointed to the possibility, based on Apple’s reported hiring of a large number of auto industry veterans, of Apple changing gears entirely and building a car.
“The bottom line is that AAPL needs new innovation either in its current categories or in entirely new products (car?) in order to drive consumer and investor excitement,” he wrote.
Late on Thursday, Apple did manage to pull off a surprise. Although it wasn’t some splashy new gadget, it did announce that it had invested $1 billion in Chinese ride-sharing service Didi Chuxing. Why would Apple plow money into an Uber rival? Maybe Apple wants to lock in a buyer of its would-be iCar. Or maybe it really is chasing innovation, no matter what it is.
In fact, Apple is ramping up spending on research and development, signaling that it may be interested in more than merely creating updated iPhones and smartwatches. It doubled R&D spending from $4 billion in 2013 to $8 billion in 2015, and is on track to spend $10 billion this year, according to Neil Cybart, a financial analyst who tracks Apple on his blog, Above Avalon.
Patient Apple investors, it looks like, will eventually get those new products they’re hoping for. Whether that’s enough to jolt the company from its funk is another matter.
BITS AND BYTES
Intel refinances debt with $2.75 billion bond sale. The chipmaker offered the notes in three batches, with the first set to mature in 2017. Intel sold $7 billion in bonds last July to finance its $16.7 billion takeover of Altera. It will use proceeds from this latest sale to repay notes due in October and next year. (Bloomberg)
Struggling AMD gets new chairman. Board member John Caldwell is taking over for Bruce Claflin, who has held the position since 2009. Like Intel, the chipmaker has been hard-hit by the industrywide decline in personal computer sales—for its latest quarter it lost $109 million on revenue of $832 million. Sales slipped 15% over the previous year, although they were actually better than anticipated. Claflin is staying on as a director. (Fortune)
Google gives away more artificial intelligence software. The software giant is opening up the code for technology that helps machines interpret written English. Google uses the software, called Parsey McParseface (I’m not kidding), for tasks such as suggesting short canned responses to emails based on the words contained in them. (Wall Street Journal)
Donald Trump thinks Amazon has an antitrust problem. The presumptive Republican presidential candidate attacked Jeff Bezos during a Fox News interview, calling the online retailer a monopoly. Plus, he thinks Amazon should pay more taxes. Bezos owns The Washington Post, which is investigating Trump’s past real estate dealings. (Fortune)
Verizon strike escalates with armed confrontation in Philippines. Union organizers intended to protest at one of the third-party call centers near Manila that the telecommunications company uses to handle some U.S. customer service duties. Those plans backfired when the group was chased by private security guards and, later, by armed police. (Fortune)
Symantec restructures. The cybersecurity software company plans to cut about 10% of its workforce, remove several layers of management, and close several facilities. The reorganization, discussed during Symantec’s earnings call on Thursday, will cost about $280 million. (Wall Street Journal)
Bank messaging network SWIFT warns of second cyberattack. The case, which involved an unnamed commercial bank, is said to be similar to the February incident involving the central bank in Bangladesh. More than $81 million was stolen in that break-in, during which the thieves pilfered an account at the Federal Reserve Bank of New York. (Reuters)
Why Alibaba’s bookkeeping is as alarming as Enron’s. Hedge fund manager Jim Chanos, one of the first to detect problems at now-defunct energy company Enron, says the accounting at Alibaba Group is equally as problematic. Like Enron, the Chinese e-commerce giant uses off-balance-sheet entities that make it impossible to know how much money it is actually making. (Fortune)
How biometrics are worse than passwords. The idea of biometric security, if you’re unfamiliar, is that people use some distinct body attribute—such as a fingerprint, iris, or heart rate—to prove one’s identity instead of a password. Such features are already common in everyday devices like Apple’s iPhone, which allows its owner to authorize a payment with a fingerprint.
The advantage of biometric security features is that they are very hard to copy, and consumers don’t have to remember them. Contrast this with passwords, which hackers can break because they are obvious (many people still use standbys like “12345”) or through the guessing power of a computer. Unfortunately, biometric data can still be hacked—and the damage is long-lasting, since you can’t exactly change your fingerprint if it’s “breached.” (Fortune)
IN CASE YOU MISSED IT
Fran Drescher’s husband, self-declared inventor of email, sues Gawker for defamation by Jeff John Roberts
Facebook and the news: trends, filter bubbles, and algorithmic bias
by Mathew Ingram
Lenovo’s shares are plunging—they’ve lost one-third of their value this year by Laura Lorenzetti
Amazon touts success of its Etsy killer, Handmade by Leena Rao
uBeam is not the next Theranos by Dan Primack
Google cloud goes to the farm by Barb Darrow
Nordstrom discovers it’s no Amazon by Phil Wahba
Evernote gets leg up from Google by Heather Clancy
Apple speeds app approval process by Kia Kokalitcheva
No, Apple isn’t killing iTunes music downloads by Don Reisinger
ONE MORE THING
Silicon Valley jargon gets its own dictionary. Struggling to explain “viral loops”? Looking for a synonym for “dogfooding”? A husband-and-wife consulting team has “crowdfunded” a new guide. (Wall Street Journal, Time)
MARK YOUR CALENDAR
Knowledge16: ServiceNow’s service management conference. (May 15-20; Las Vegas)
SuiteWorld: NetSuite annual customer gathering. (May 16-20; San Jose, Calif.)
Fortune Brainstorm E: The intersection of technology, energy, and sustainable business. (May 16-17; Carlsbad, Calif.)
SAPPHIRE Now: SAP’s annual conference. (May 17-19; Orlando)
Gartner Digital Marketing: How to move from vision to execution. (May 17-19; San Diego)
Gartner Supply Chain Executive: Creating a value chain. (May 17-19; Phoenix)
Google I/O: For creative software coders. (May 18-20; Mountain View, Calif.)
MuleSoft Connect: Enable your digital transformation. (May 21-25; San Francisco)
Twilio Signal: The developer conference for communications. (May 24-25; San Francisco)
Cloud Identity Summit: The world’s leading identity industry event. (June 6-9; New Orleans)
Bullhorn Engage: New models for business-to-business relationships. (June 8-10; Boston)
Apple Worldwide Developer Conference: The Apple developer ecosystem. (June 13-17; San Francisco)
Information Builders Summit: Business intelligence and analytics trends. (June 13-17; Reno, Nev.)
Red Hat Summit: The premier open source technology event. (June 27-30; San Francisco)
MongoDB World: For giant ideas. (June 28-29; New York)
NewVoiceMedia Connect: Rethink sales and service. (June 30; San Francisco)
Inforum: Infor’s annual user conference. (July 10-13; New York)
Fortune Brainstorm Tech: The world’s top tech and media thinkers, operators, entrepreneurs, innovators, and influencers. (July 11-13; Aspen, Colo.)
Sage Summit: For fast-growth businesses. (July 25-28; Chicago)
Oracle OpenWorld: The future of the cloud is now. (Sept. 18-22; San Francisco)
Gigaom Change: 7 transformational technologies. (Sept. 21-23; Austin)
Workday Rising: Talent management in the cloud. (Sept. 26-29; Chicago)
Microsoft Ignite: Product road maps and innovation. (Sept. 26-30; Atlanta)
Dreamforce: The Salesforce ecosystem gathers. (Oct. 4-7; San Francisco)
Grace Hopper Celebration of Women in Computing: The world’s largest gathering of women technologists. (Oct. 19-21; Houston)
TBM Conference: Manage the business of IT. (Nov. 7-10; San Diego)
Drone World Expo: Commercial apps for unmanned aircraft. (Nov. 15-16; San Jose, Calif.)
AWS re:Invent: Amazon’s annual cloud conference. (Nov. 28-Dec. 2; Las Vegas)
|This edition of Data Sheet was curated by Heather Clancy.|