Monthly Archives: January 2017

Why Apple CEO Tim Cook doesn’t like shady sofa salesmen

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Apple CEO Tim Cook
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Justin Sullivan/ Getty Images

Apple CEO Tim Cook believes Qualcomm has been acting like a shady furniture dealer.

Cook took a shot at Qualcomm, one of the main chip suppliers for the iPhone, during its quarterly earnings call on Tuesday when an analyst asked about the legal fight the two companies are embroiled in.

Apple sued the chipmaker earlier this month, accusing it of withholding $1 billion in rebates it owed Apple, and alleging that Qualcomm charges Apple “at least five times more in” royalty payments than all of Apple’s other patent licensors combined.

“We didn’t see another way forward. They were insisting on charging royalties for technologies that they had nothing to do with,” Cook said on Tuesday, repeating many of the talking points that Apple trotted out when it first sued Qualcomm.

But then, in a seemingly extemporaneous rhetorical flourish, Cook came up with a domestic analogy to drive home the point:

“It’s somewhat like buying a sofa and you charge somebody a different price depending upon the house that it goes into,” he said.

The idea, Cook suggests, is that Qualcomm is charging a higher licensing fee for the wireless chips that go into iPhones than it does when the chips are featured in other products.

A sofa vendor that sells the same couch at different rates would surely raise eyebrows.

But to some observers, a better analogy that Cook might have made was not home furniture vendors but pharmaceutical companies:

The Apple TV is not selling well

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Apple/Business Insider

Apple reported record revenue and profit when it reported first fiscal quarter earnings on Tuesday.

iPhone sales were up. Mac sales were up. Apple had a great quarter.

One notable category, however, that Apple saw significant annual declines in, was in “others,” a catch-all category where Apple lists sales of products like the Apple Watch, various accessories and dongles, Beats headphones, and the Apple TV.

That category got crushed. It was down 8% from the same time last year, despite a recent Apple Watch launch and new headphones that went on sale during the quarter.

Apple Watch wasn’t the reason it fell – Apple CEO Tim Cook said that Apple Watch set company records for unit sales and revenue, although he declined to share either figure.

It turns out at least one reason why Apple’s “others” revenue was down was the Apple TV. The Apple TV saw a year-over-year decline in sales, Apple CFO Luca Maestri told the Financial Times.

My colleague Dave Smith recently outlined why the Apple TV has been a disappointment from a product perspective: While the hardware is capable, the overall experience is muddy, confusing, and bad, he wrote.

It sounds like the general public has had a similar response to the black box. To return the product line to growth, it now looks like Apple will need to release a new version.

Apple CEO Tim Cook hinted at larger television ambitions during the call. “We’ve come a long way in a year and it gives us a platform to build off of,” he said of the $149 device. “We are learning a lot about the original content business and thinking about ways we could play it.”

Read more about Apple’s earnings over at our live blog.

Canadian prime minister’s office asks Fox News to retract ‘misleading’ tweet about Quebec mosque shooting

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Twitter/@FoxNews

The Office of Canada’s Prime Minister requested on Tuesday that Fox News retract or update what it called a “false and misleading” tweet about the nationality of the suspect in the Quebec City mosque shooting that left six dead on Sunday.

The Fox News tweet said the suspect was “of Moroccan origin.” That was later disproved by authorities but not immediately corrected by the outlet on Twitter.

The outlet deleted the tweet Tuesday evening after receiving the office’s request – more than 24 hours after it was posted.

“FoxNews.com initially corrected the misreported information with a tweet and an update to the story on Monday,” Refet Kaplan, managing director of FoxNews.com, told Business Insider in a statement. “The earlier tweets have now been deleted. We regret the error.”

The request, sent by Prime Minister Justin Trudeau’s communications director, Kate Purchase, asked that Fox News either retract or update its tweet “to reflect the suspect’s actual identity.”

“Sadly, this misleading information has been left to stand on the Fox News Channel’s Twitter account and continued to circulate online even now,” Purchase wrote in an email to Fox News.

“These tweets by Fox News dishonour the memory of the six victims and their families by spreading misinformation, playing identity politics, and perpetuating fear and division within our communities,” she added.

Purchase later thanked the outlet for deleting the tweet.

The confusion likely stemmed from early reports from Quebec authorities that two suspects were in police custody after the attack: Alexandre Bissonnette and Mohamed Khadir. Authorities later clarified that Khadir – identified in some reports as Mohamed Belkhadir – was a witness to the attack who had called 911, not a suspect who was charged.

But in tweeting updates of the story as more information became available, Fox News did not clarify the identity of the lone suspect, Bissonnette, who is a white, French-Canadian man. Nor did it explain that its original characterization of the suspect as Moroccan was incorrect.

Bissonnette, a 27-year-old university student, has since been charged with six counts of first-degree murder and five counts of attempted murder while using a restricted firearm.

Before the shooting, which Canadian authorities have referred to a terrorist attack, Bissonnette had expressed extremist, nationalist, and anti-Muslim views both online and to his friends, The Globe and Mail reported.

Here’s the full email from Purchase to Fox News:

Apple’s CEO sees a way to bring back billions in cash from overseas

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Apple CEO Tim Cook.
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Getty Images, Justin Sullivan

Apple may have a way to bring back to the US some of the billions in cash it’s storing overseas.

CEO Tim Cook said on the company’s earnings call Tuesday that he expects congress to pass tax reform this year. That tax reform could loosen up the taxes Apple would have to pay if it brings back cash from overseas, one of the key reasons it continues to store most of its cash outside the US.

“I am optimistic on what I’m hearing for some tax reform this year,” Cook said on the call. “It seems there are people in both parties that would favor repatriation as part of that,” he added, referring to bringing the overseas cash to the US.

Apple has $230.2 billion in cash overseas, according to its earnings report Tuesday.

Cook was in Washington, D.C. last week meeting with people like Sen. Orrin Hatch and President Trump’s son in law and senior adviser Jared Kushner, although it’s unclear what was discussed.

Even before the election, Cook has said that he was confident tax reform would happen in 2017, regardless of who won the presidency.

Read more about Apple’s earnings over at our live blog.

The X1 crossover SUV is the perfect new entry-level BMW

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Matthew DeBord/BI

BMW used to be easy.

The point of entry for the ultimate-driving-machine experience was the 3-Series, especially in four-door sedan trim. Versatile, quick, with razor-sharp handing and seating for two grown-ups in the back and room for luggage in the trunk.

BMW has been selling the 3-Series for so long that it’s kind of stuck with the thing.

Its excellence is an albatross, as the market has soured on sedans and wants SUVs. What’s BMW to do? The 3-Series wins every car-magazine comparison test and has for decades.

The automaker has tried to craft other points of entry, via the discontinued 1-Series and the 2-Series, but neither has a crossover to sell.

As buyers skip out on sedans, 3-Series sales have been getting clobbered. But it’s not as if BMW can up and say “See ya!” to its most legendary vehicle, so something different is called for.

It’s called the X1, and it’s a subcompact crossover SUV, a bit smaller and cheaper than the very successful X3.

I borrowed one for a few days, a 2016 X1 xDrive28i priced at about $44,000 and nicely equipped. Here’s what I thought:


The X1 is a small crossover, introduced in 2009. Our car was the second generation, around since 2015. The color was a very European “Alpine white.”

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Matthew DeBord/BI

The BMW badge and kidney grille define the front, along with those slightly angry-looking headlights.

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Matthew DeBord/BI

Up close.

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Matthew DeBord/BI

BMW’s overall design language isn’t for everyone, especially fans of the carmaker’s older, more utilitarian approach. But the X1 is, generally speaking, a good-looking car.

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Matthew DeBord/BI

I’ve always thought the “X” and the “1” get a bit lost at the back end.

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Matthew DeBord/BI

The “xDrive 28i” badge is also pretty low-key.

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Matthew DeBord/BI

You buy a crossover like this for versatility, hence the hatchback, which …

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Matthew DeBord/BI

… could easily handle jaunts to the grocery store.

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Matthew DeBord/BI

Though the X1 looks good on the outside, defying some naysayers who like to point out that the vehicle shares a platform with its MINI stablemate, the interior is where it feels as if corners were cut to deliver a more affordable luxury experience.

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Matthew DeBord/BI

The interior of our car was “Canberra beige.” Not very much room in the back seat, but it wasn’t as cramped as some other compact crossovers we’ve sampled.

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Matthew DeBord/BI

This flip-up armrest between the front seats …

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Matthew DeBord/BI

… didn’t feel like a high-quality component.

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Matthew DeBord/BI

The infotainment system’s 6.5-inch screen is operated using this buttons-and-knob cluster. BMW’s iDrive system used be widely loathed, but the carmaker has greatly improved it over the years. It provides all the usual features, including Bluetooth connectivity, GPS navigation, and various media-player options, with USB and AUX inputs.

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Matthew DeBord/BI

A good old-fashioned PRND gearshift. An 8-speed Steptronic automatic transmission (with a manual mode) communicates well with the X1’s 2.0-liter inline turbocharged four-cylinder engine, which makes 228 horsepower and can zip the X1 from zero to 60 mph in a shade over six seconds. The “Sport” mode really peps things up.

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Matthew DeBord/BI

So, is the X1 the ultimate driving machine of small crossovers?

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Matthew DeBord/BI

In a word, no.

BMW has constructed the X1 on the same undergirdings as the MINI Countryman, a front-wheel-drive platform that can also get all-wheel drive. (Our test car was AWD.) A front-drive-based BMW is heresy to many.

So while the X1 is perfectly fine to drive as an urban/suburban runabout or a small family hauler, it can at best emulate that razor-sharp German driving vibe we know so well from, say, the 3-Series. The emulation is effective. But it isn’t the real deal.

True, it isn’t fair to compare the two vehicles. But if “BMW-ness” is what you want when you slip behind the wheel, the X1 isn’t going to deliver. It has some snap and whistle, but so does a Mazda CX-3.

That wouldn’t be a bother if the interior were nicer. Yes, it is pretty nice. But for $45,000, I expected better. The combined fuel economy of 26 miles a gallon helps matters somewhat. But the overall impression is of a decent vehicle that has endured some compromise to fit into the segment.

The X1 does overcome all that, of course, by being a reasonably appealing entry point to the brand. It looks OK. It drives OK. It’s a BMW. And it isn’t a sedan.


Verdict? Honestly, I struggled to enjoy the X1, though when I put it through its paces it performed just fine. My problem is that I think of it only barely as a BMW. Make no mistake: The X1 is far from a bad car. But even though it has been popular, I think you can get a little more excitement in the segment from other vehicles, including some that don’t have a luxury badge.

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Matthew DeBord/BI

Ford’s CEO reveals how his relationship first started with Donald Trump

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Ford CEO Mark Fields.
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Rebecca Cook/Reuters

Ford’s relationship with President Donald Trump had a rocky start.

When Trump announced his candidacy for president in June 2015, he attacked Ford’s plan to build a manufacturing plant in Mexico, using it as a jumping-off point to discuss how he would crack down on companies that moved jobs out of the US by building plants abroad.

It was that attack that prompted Ford’s first correspondence with Trump.

“I got a hold of his email, and I wrote him a note and said, ‘Congratulations on running for president,’ and gave him some facts,” Ford CEO Mark Fields said during a recent visit to Business Insider’s headquarters.

Trump sent a handwritten note back, Fields said.

That’s because Trump is known to use email on a very limited basis. His aides often handle his online presence for him – for example, The Washington Post reported in July 2015 that despite being an avid Twitter user, Trump usually dictates them to a communications director, who then has aides post them.

Still, Trump had a war of words with Ford for a while.

In November, Trump incorrectly credited himself with persuading Ford to keep a manufacturing plant in the US instead of moving it to Mexico.

Ford said it had never planned to move its Louisville, Kentucky, plant there, but rather shift production of one of its vehicles from Louisville to Mexico. That move wouldn’t have resulted in any job cuts, Ford said at the time.

“We were just always coming back with the facts, because that’s what you do as a company – you set the record straight,” Fields said of his correspondence with Trump at the time.

The relationship between Ford and Trump seems to have strengthened since then. Fields attended two meetings this month at the White House about US manufacturing, and he’s part of the president’s Manufacturing Jobs Initiative.

“I’m really glad we now have a productive relationship and he’s prioritized manufacturing and automotive,” Fields said.

Facebook is building its own TV app to show longer videos

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Facebook CEO Mark Zuckerberg.
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Facebook

Facebook is building its own TV app to work with set-top boxes like the Apple TV, according to a report in The Wall Street Journal on Tuesday.

The app would give Facebook a way to encourage its users to watch longer videos, a goal the company has already signaled in conversations with content creators and recent tweaks to the Facebook News Feed.

Facebook is currently testing mid-roll ads that play during the middle of videos on its network, and the Journal notes that Facebook plans to show those ads in its unreleased TV app as well.

A Facebook spokesperson declined to comment.

Facebook’s Sheryl Sandberg thinks Trump’s immigration ban defies ‘the heart and values that define’ America

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Sheryl Sandberg.
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Allison Shelley/Getty Images

Facebook COO Sheryl Sandberg came out against President Trump’s immigration ban on Tuesday in a post saying that the executive order defies “the heart and values that define the best of our nation.”

“Families have been separated,” Sandberg wrote on Facebook. “Frightened children have been detained in airports without their parents. People seeking refuge have been turned away and sent back to the danger they just managed to flee. This is not how it should be in America.”

Sandberg is the latest in a string of tech executives to publicly speak out in recent days against Trump’s order, which bans people from seven predominantly Muslim countries from entering the US for 90 days and the admission of all refugees for 120 days.

On Monday, Google cofounder Sergey Brin told a rally of employees that he was “outraged” by the order, while Netflix CEO Reed Hastings has called it “un-American.” Facebook CEO Mark Zuckerberg has said he was “concerned” by the order.

Sandberg explained how her great-great-grandmother immigrated from Lithuania, adding that, “Her courage – and the fact that this country welcomed her – created my family’s future.”

“Something that hasn’t gotten enough attention is how this harsher immigration climate is particularly unforgiving for women,” said Sandberg, a well known women’s rights activist and “Lean In” author. “Anything that pulls families apart and traumatizes kids has a huge impact on women and their children.”

You can read Sandberg’s full post on Facebook.

Apple’s iPad business is experiencing major shrinkage

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People play the augmented reality mobile game “Pokemon Go” at Kennedy park in Lima, Peru, August 6, 2016.
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REUTERS/Guadalupe Pardo

Apple reported earnings today for the all-important holiday quarter of 2016, with a clean beat on the top and bottom lines.

But according to Apple’s quarterly report, Apple shipped about 13 million iPads, which is down 19% from the same period in 2015. Revenue from the iPad business is down 22% year-on-year to $5.5 million, too.

That’s not an encouraging result for the biggest gift-giving time of the year, and it just continues the steady decline of the iPad business.

In 2016, Apple introduced a new model of iPad, too, with the 9.7″ iPad Pro – a device designed to be used with a keyboard, intended to be somewhere between a tablet and a laptop, similar to Microsoft’s Surface computers. Meanwhile, Apple fans are impatiently waiting for the company to release a Mac with a full touchscreen.

A possible explanation is that, as we’ve seen in the past, iPad owners tend to hold on to their devices much longer before trading it in for a new model, compared with the iPhone. It means there’s unlikely to be a huge rush to buy any new models.

It’s possible there’s light at the end of the tunnel, however: Apple is reported to be working on a total iPad redesign, to launch as soon as this year, which could maybe spur a big upgrade cycle.

Here’s the chart:

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Business Insider Intelligence

‘The United States is not naive’: Nikki Haley slams Iran over ballistic missile tests

The US’s new ambassador to the United Nations, Nikki Haley, on Tuesday slammed Iran for testing a long-range ballistic missile on Sunday, calling the act unacceptable and a violation of Iran’s nuclear accord with world powers.

“I will tell the people across the world that is something you should be alarmed about,” Haley told reporters after the UN Security Council’s consultations on Iran.

“The United States is not naive,” she added. “We are not going to stand by. You will see us call them out, as we said we would, and you are also going to see us act accordingly.”

According to Behnam Ben Taleblu, an expert on Iran’s missile program at the Foundation for Defense of Democracies, Iran’s latest missile test “definitely violates the spirit, if not the letter” of the UN resolution on Iran’s nuclear program.

The UN attempt to curb Iran’s nuclear program forbids Iran from developing nuclear warheads and buying or transferring missile technology from foreign countries. But “the missile-testing language has been watered down,” and now Iran has a clear path toward developing nuclear-capable missiles, Taleblu said in an interview with Business Insider.

Furthermore, no clear line exists between conventional missiles and nuclear missiles – something that Iran has used to its advantage. A conventional ballistic missile, like the kind the White House confirmed Iran tested on Sunday, could easily be repurposed to fit a nuclear warhead.

Taleblu says the lack of precision in the language of the Iran deal is because of a failure of Barack Obama’s administration in negotiating.

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US Secretary of State John Kerry, far left, and Secretary of Energy Ernest Moniz, second from left, meet with Iranian officials in 2015.
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REUTERS/Brendan Smialowski

Iran Foreign Minister Mohammed Javad Zarif neither confirmed nor denied the launching of the missile, but said that his country would never use ballistic missiles against another nation.

But according to Taleblu, Iran doesn’t need to use its ballistic missiles to achieve its military goal.

“Lots of analysts tend to believe that Iran’s military strategy is deterrent in nature” said Taleblu. He said Iran’s military is “conventionally weak and asymmetrically strong,” meaning that while its formal forces are low in numbers and not advanced, Tehran’s strength lies in backing regional non-state allies like Hezbollah and Hamas.

Iran has the biggest ballistic missile arsenal in the Middle East and “parades them around, develops them, refines them, just so the whole world knows: Do not attack Iran,” said Taleblu.

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A Revolutionary Guard missile, the Shahab-3, under a picture of Ayatollah Ali Khamenei, Iran’s supreme leader.
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Hasan Sarbakhshian/AP

“There’s a clear strategic use for these missiles – maybe not to commence a war, but to threaten a war. … Even if they don’t plan on using them offensively, by reaping the deterrent dividend from these missiles they’re already getting their money’s worth,” said Taleblu. “I don’t think anyone takes Zarif’s statement seriously here.”

A US official said on Monday that Iran had on Sunday test-launched a medium-range ballistic missile that exploded after 630 miles. The UN Security Council recommended the matter be studied by a committee.

Reuters contributed to this report.