Apple stock takes a 9% dive due to earnings notice

By Gadjo Cardenas Sevilla

We're quickly seeing the market react to Apple's bombshell announcement of a lower stock earnings guidance. Yesterday, Apple CEO Tim Cook issued a letter to Apple investors revising the company's earnings guidance, a move that hasn't happened since 2002.

Cook implied various macroeconomic factors, including less spending in China, a major market for Apple, for the lower earnings in Q1, usually Apple's strongest quarter. As Cook mentioned in a TV interview, there are various reasons for this lower earnings expectation, many of which were out of Apple's control.

The brewing US trade-war with China and less spending from that country, the staggered iPhone release schedule in 2018 (which saw a month's apart launch for iPhone XS and iPhone XR) slower ramping up of product for iPad Pro. Mac mini and MacBook Air, as well as the $29 battery replacement service that took a bite out of potential earnings.

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Fuchsia OS is likely Google's unifying operating system of the future

By Gadjo Cardenas Sevilla

Google is in an interesting place with regards to its various operating systems. Google Android, as we all know, is the dominant mobile OS. Google Chrome is the web-based desktop OS that's become the standard in schools and is poised to expand to the consumer and enterprise segment. Chromebooks can now run Android apps as well as Linux applications, but what is the future?

Google sees Fuchsia OS as its future. This OS is not based on Linux but on a new microkernel and is geared or use on various devices (smartphones, tablets, PCs, laptops). Fuchsia OS is still a few years away from release but it is already trying to solve many of Android's pain points (not scaling well for tablets or laptops, security vulnerabilities, etc). Fuschia OS, if successful, can be the one Google OS to rule them all and will be able to run thousands of Android apps from the get-go. More importantly, users will see a familiar interface no matter what device they are on.

Source: Engadget

Report: Windows 10 surpasses Windows 7 in installs

Net Market Share's latest report states that Windows 10 has finally surpassed Windows 7 in terms of installs. The report says that as of December 2018, Windows 10 now has a usage share of 39.22%, beating Windows 7’s 36.90% usage share.

While this is good news for Microsoft, which has been wanting its user base to upgrade to the latest and greatest OS, moving the needle forward will be challenging since the majority of Windows 7 installs are coporate on enterprise accounts. Windows 10 has been going on two major upgrades a year and while the recent upgrades may have been minor, the company is likely focusing on making Windows 10 more fluid for use in various form factors.

Source: Thurrott.com

Tim Cook pens letter to Apple investors informing them of lower earnings guidance

Apple CEO Tim Cook wrote a letter to Apple investors today informing them of adjustments to the company's earnings expectations. Citing fewer iPhone upgrades and headwinds from currency exchange and weak sales in China, the letter aims to clarify investor expectations.

"Today we are revising our guidance for Apple’s fiscal 2019 first quarter, which ended on December 29. We now expect the following:

• Revenue of approximately $84 billion
• Gross margin of approximately 38 percent
• Operating expenses of approximately $8.7 billion
• Other income/(expense) of approximately $550 million
• Tax rate of approximately 16.5 percent before discrete items."

Cook adds that, "While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China. In fact, most of our revenue shortfall to our guidance, and over 100 percent of our year-over-year worldwide revenue decline, occurred in Greater China across iPhone, Mac and iPad."

Other factors leading to lower earnings are also becaus eof supply constraints for AirPods and recently released products like the iPad Pro, the Apple Watch Series 4 and the all-new MacBook Air. 

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