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Data Sheet—Wednesday, July 27, 2016

Gosh, the hardware business is hard, isn’t it?

That much was clear during Apple’s quarterly earnings call yesterday. The tech darling surprised investors (in a good way!) by posting better-than-expected per-share earnings of $1.42 on revenues of $42.4 billion. Apple stock jumped 6% or so on the news—but the real highlight for me was the Cupertino, Calif., company’s continued emphasis on services. In the span of about a minute CEO Tim Cook mentioned the “s” word five times, a sign that the iPhone maker—long insistent that it’s a hardware company; don’t get it twisted—is pushing strongly into software as device growth dries up.


Meanwhile in the Nevada desert, billionaire entrepreneur/executive/Bond villain Elon Musk finally unveiled his new Gigafactory, Tesla Motors’ multibillion-dollar bet on lithium-ion batteries. Investors have been tough on Tesla recently, thanks to Musk’s proposed tie-up with SolarCity. But if you scrutinize the numbers you’ll see that what investors really like is all that potential value packed into what appears to be the world’s largest building. The running joke? Tesla is the world’s most valuable battery company with an automotive business attached to it.

It’s clear that Apple and Tesla are moving in opposite directions: One’s pushing into software; the other’s doubling down on hardware. But the takeaway is about commonality. When faced with uncertain growth prospects, both companies are pushing strongly, passionately, and purposefully into adjacent businesses that will help reinforce their core. No promises that their bets will work out, of course. But if they do they have the potential to lift up the entire company.

And hey—if it doesn’t work out, I know a fabulous casino in Montenegro where both companies can recoup their losses.

Andrew Nusca is a deputy digital editor at Fortune. Reach him via email.


Twitter disappoints, stakes future on live video. Its lackluster second-quarter financial results weren’t that surprising: revenue growth slowed to 20% (compared with the 50-100% numbers it used to post). But deals with the big sports leagues could revitalize its advertising business. (Fortune)

Another day, another multibillion-dollar chip merger. Analog Devices is paying $14.8 billion for Linear Technology. Both specialize in processors that measure light, temperature, sound, and other environmental inputs, then turning them into digital “signals” that can be interpreted by computers, smartphones, and Internet of things devices. (Reuters)

Meeting of the minds, as LogMeIn buys Citrix service. The combined web conferencing business should generate about $1 billion in revenue, competing more effectively with rival services like Cisco WebEx and Microsoft Skype for Business. (Fortune)

In case of cyberattack, do this. The White House issued the first-ever emergency response manual for handling major threats to the nations technology infrastructure. (Reuters, Wall Street Journal)

Tesla and self-driving tech supplier call it quits. Mobileye provides sensors and software that anticipate collisions. It supplies close to two dozen automakers, including BMW, Ford, and General Motors. But its work with Tesla won’t extend behind EyeQ3, the platform used in the Model S sedan and Model X SUV. (Fortune)


Remembering the inventor of timesharing. Robert Fano, 98, was one of the first computer science professors at MIT. His ideas were instrumental in making it possible for early mainframes to handle more than one user at once. Two MIT students inspired by his work, Dan Bricklin and Bob Frankston, went on to invent Visicalc spreadsheet. (New York Times)

Qualcomm will pay almost $20 million over sex discrimination. The deal, which still requires court approval, will settle claims that female employees receive lower pay and fewer chances to move up the ranks. (Wall Street Journal)

Meet SAP’s new chief innovation officer. Juergen Mueller, who is just 34, joined the business software company three years ago after working at SAP co-founder Hasso Plattner’s research institute. His mandate includes strategies for machine learning and blockchain encryption. (SAP)

Pinterest hires Snapchat advertising guru. Gunnard Johnson is joining the digital pinboard company as head of measurement science and insights, leading a new team of 12 employees. (Fortune)

Marissa Mayer’s exit package is more insane than you think. Outraged over the $55 million the Yahoo CEO will collect if she doesn’t survive the sale to Verizon? She’s actually entitled to compensation worth more than double that amount. (Fortune)


Expect bang-up results from Facebook. The social media company is projected to record $6 billion in revenue for its second quarter. The numbers to watch: mobile advertising growth, plus commentary on how the company plans to monetize Messenger and Instagram. Plus, analysts will probably be curious about its ongoing refusal to cooperate with an IRS investigation into its offshore tax strategy. (MarketWatch, Bloomberg)

Up tomorrow: Reports from Amazon and Google.

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Plus, grab your coffee and headphones, and find out why social media guru Gary Vaynerchuk treats children like prospective clients. He’s part of our new weekly podcast, Fortune Unfiltered. (Subscribe to weekly updates here.) 


Verizon’s Q2 Results Are Too Messy to Evaluate Growth Moves, by Aaron Pressman

Chinese Apple Rival Xiaomi Just Introduced Its First Laptop, by David Meyer

Here’s Why Chinese Tech Group LeEco Is Paying $2 Billion for TV Maker Vizio, by Scott Cendrowski

Tumblr’s Bloggers Will Soon Be Able to Cash In, by Kia Kokalitcheva

Absolut Vodka’s New Virtual Reality Game Is All About Marketing, by Jonathan Vanian

Time Is Running Out for This Popular Online Security Technique, by David Meyer

How Olympic Athletes Are Using High-Tech Gear to Train Their Brains, by Barb Darrow


What Michelle Obama and Elton John have in common. Both were guests of James Corden’s viral “Carpool Karaoke” skit series, now exclusive to Apple Music. (Fortune)

This edition of Data Sheet was curated by Heather Clancy.