Tim Cook congratulates employees on another record quarter during Town Hall Q&A

“Following reporting what CEO Tim Cook referred to as another record-setting quarter, today the Apple executive sent out an email to employees congratulating the team,” Jordan Kahn reports for 9to5Mac. “Within the email, Cook thanked employees for their ‘incredible hard work and focus’ and highlighted that the company sold over 75 million iOS devices during the quarter.”

Kahn reports, “Like last year, when Apple held a Town Hall meeting following its Q1 results, Cook is asking employees to attend an employee communications meeting scheduled for today at 10 a.m. Pacific time. The email sent out last night following Apple's earnings results conference call, and it noted that employees would be able to submit questions via AppleWeb in advance.”

Read more in the full article here.

Apple in danger of losing ‘Most Valuable Company In The World’ crown

On Jan. 25, 2012, Apple Inc. passed Exxon Mobil as the most valuable publicly-traded company in the world. The gap between #1 and #2 had widened to as much as $240 billion by September 2012 as Apple shares hit all-time record highs. You know, back when we all should have sold our AAPL stock (wink).

“That gap alone is greater than the value of some 98% of the companies in the S&P 500,” Steven Russolillo noted for The Wall Street Journal. “Over the summer Apple even gained the title of biggest U.S. company of all-time, surpassing Microsoft's previous peak in 1999.” (See related articles below.)

“But Apple's fall in recent month has been fast and furious. Thursday alone, the company's market cap fell by as much as $59.48 billion, according to WSJ Market Data Group,” Russolillo reports. “At one point, the gap between Apple and Exxon's market cap had narrowed to only about $6.2 billion.”

Read more in the full article here.

MacDailyNews Take: Damn that all-time record performance! Damn it all to hell!

Embrace the lunacy, folks, for calmer, saner heads will someday prevail and this too shall pass.

Google unveils a more beautiful, reliable, and faster image search with inline results and metadata

Google on Wednesday announced a redesign of its image search feature on Google.com that the company claims is faster, more beautiful, and more reliable. Google says you will see the new look “in the next few days” but wouldn’t get any more specific beyond that.

The new design displays images in an inline panel and lets you quickly flip through a set of images by using the keyboard (we assume this will also work on touchscreens eventually with gestures):

Google says that going back to browsing other search results is as simple as just scrolling down and picking up right where you left off. Yet this is more than just a visual update: the company is finally going to show useful information about the images it is surfacing.

Google’s images section will soon display detailed information (the metadata) right underneath it in the search results; more specifically, key information will be shown much more prominently next each image: the title of the page hosting it, the domain name it comes from, and its size. The company also says the source page will no longer load up in an iframe in the background of the image detail view, significantly speeding up the experience for users.

Do you know what that means? It means no more annoying redirects and landing pages.

All those extra clicks just to get basic data about an image has always been one of my biggest pet peeves about the company’s image search so I’m rather excited about it. Google and Bing have played around with including more details by default (but this required a setting to be turned on), hovering over images, and so on, but I’ve still found all of this to be rather unnecessary. We’ll see soon enough if Google has figured out how to address all these shortcomings.

This is great news for users, but Google is also saying it will be a boon for webmasters. With image search ditching iframes that show the image’s original site in the background, Google says it will reduce the load on the source website’s servers and also improve the accuracy of metrics such as pageviews.

This might seem like a bad idea since image search often leads to a lot of click-throughs for many sites. To compensate, Google is making the domain name for each image clickable and is also adding a new button to visit the page the image is hosted on.

With these changes, Google has effectively doubled the number of clickable targets to the source page from two to four. The company says its tests have revealed a net increase in the average click-through rate to the hosting site, but only time will tell if the same holds true once users become accustomed to the new image search.

We’ll keep you posted as Google rolls out the new image search design.

Image credit: AFP/Getty Images

Apple in China Q1 2013: Revenue up 67% to $6.8 billion as iPhone sales double YoY

Apple began breaking out its Greater China operating segment with the release of its Q1 2013 financials on Wednesday, reporting $6.83 billion in revenue in the region, up 26% sequentially and 67% year-over-year.

The company recorded $54.5 billion in revenue the first fiscal quarter, with $13.1 billion in profit. It sold 47.8 million iPhones and 22.9 million iPads.

Its performance in Greater China, which includes Taiwan and Hong Kong, continues to gain strength, but it did see the region’s share of overall revenue decline sequentially. In Q4 2012, the region accounted for 15% of overall revenue, but it made up just 12.5% in Q1 2013. It is a significant improvement year-over-year, though, as Q1 2012 saw just 8.8% coming from Greater China.

Looking across all of Apple’s operating segments in Q1 2013, Greater China actually had the lowest sequential revenue growth (26%). Japan and the rest of Asia Pacific had the highest with 88% and 89% respectively, and the company’s overall revenue jumped up 52% quarter-over-quarter.

The most likely cause for the lower growth in Greater China is the fact that the mainland didn’t receive the iPhone 5 and the iPad 4 and iPad mini until late in the quarter. The new iPads arrived on December 7th and the iPhone 5 hit the market a week later.

While some naysayers have expressed concerns that Apple’s handset market share in China is under tight pressure from low-priced Android handsets, the iPhone does still appear to be doing well in China. CEO Tim Cook noted during Wednesday’s earnings conference call that iPhone sales grew by triple-digit percentage year-over-year.

“We experienced strong iPhone growth in each of our geographic segments most notably Greater China where iPhone sales more than doubled year-over-year,” he said, as transcribed by Seeking Alpha.

It’s worth noting, though, that the year-ago quarter didn’t have a new iPhone launch on the mainland, as the iPhone 4S didn’t arrive there until January 2012.

Apple reported record iPhone sales of 2 million units in mainland China during its first weekend of sales. The iPad mini also appears to be quite popular in China, as the company has had trouble keeping it in stock since it arrived last month.

Cook himself is optimistic about China, as he told Chinese reporters earlier this month that he expects the region to eventually become its largest market. His recent trip to China included visits with top-ranking government officials and executives at Chinese carriers.

In order to continue its impressive sales growth in China, Apple will eventually need to strike a deal with China Mobile, the country’s largest carrier by a large margin with over 700 million subscribers. Sales on China Unicom and China Telecom are going fine, but the country’s smaller carriers have a much lower ceiling.

China Mobile has said it expects to sell 120 million 3G devices this year, up from 60 million in 2012. By releasing an iPhone compatible with China Mobile’s TD-SCDMA 3G network, Apple could grab a portion of that pie. Though the company might be more inclined to wait for China Mobile’s 4G TD-LTE network to arrive, that’s still a year or two away.

Next quarter will be the quarter to watch for Apple in China, as it will contain the first full quarter of iPhone 5 and iPad mini sales there, as well as the Red Friday shopping event to take advantage of Chinese New Year spending.

Apple’s all-time record quarterly earnings disappoint

Apple Inc.’s “fiscal first quarter marks the first full period to include sales of the iPhone 5, which launched in September. The company, which doesn’t break out sales by models, sold a record 47.8 million iPhone smartphones in the latest period, up 29% from a year earlier,” Nathalie Tadena reports for The Wall Street Journal. “Apple also sold a record 22.9 million iPad touchscreen tablet computers in the most recent quarter, a 49% year-over-year increase.”

“For the quarter ended Dec. 29, Apple reported a profit of $13.08 billion, up 0.1% from $13.06 billion a year earlier [and the most profitable quarter for any tech company in history, narrowly edging out Apple's own $13.06 billion record set in the same quarter last year]. On a per-share basis, earnings fell to $13.81 a share from $13.87 a share as the latest period had slightly more shares outstanding. Revenue jumped 18% to $54.5 billion,” Tadena reports. “In October, the company predicted earnings of about $11.75 a share on revenue of about $52 billion. Analysts most recently projected $13.47 share and $54.73 billion, respectively.”

Tadena reports, “Shares fell 10.4% to $460.66 after hours. The stock, which reached an 11-month low last week following reports that Apple cut production for the iPhone for the current quarter, has fallen 16% over the past three months.”

Read more in the full article here.

Apple job posting seeks hire to improve Siri’s wit, zeal, and overall banter

“Apple's virtual assistant Siri may have its roots in a Pentagon-funded artificial intelligence research project, but algorithms aren't everything and the Cupertino company is now turning to writers to make Siri smarter,” Tom Simonite reports for MIT Technology Review.

Simonite reports, “A job ad posted by Apple on LinkedIn appeals for: ‘[S]omeone who combines a love for language, wordplay, and conversation with demonstrated experience in bringing creative content to life within an intense technical environment.’ They'll need ‘experience in writing character-driven dialog,’ a good vocabulary, and ideally knowledge of more than one language. The end result, says the ad, will ‘evolve and enrich Siri... known for ‘her’ wit, cultural knowledge, and zeal to explain things in engaging, funny, and practical ways.’”

Read more in the full article here.

All eyes on Apple as company readies Q113 earnings release this Wednesday

“Apple this Wednesday is expected to report record iPhone and iPad sales from the 2012 holiday season,” Neil Hughes reports for AppleInsider.

“This Wednesday’s earnings conference call has already been declared Apple’s most important in a decade,” Hughes reports. “The report arrives as AAPL stock has taken a significant hit in recent months, dipping below the $500 threshold.”

Hughes reports, “The timing of Apple’s selloff is particularly interesting, as the company just completed a holiday quarter that was likely the strongest in its history. Consensus calls for Apple to report $54.58 billion in revenue, which would be up from its previous record of $46.33 billion set in the holiday 2011 period... Particular attention will also be paid to Apple’s guidance for the March quarter. Any potential decreases in demand are expected to be seen in the company’s second quarter of fiscal 2013, which is currently underway.”

Read more, including the analysts’ consensus estimates for Apple Inc. and Apple product unit sales, in the full article here.

MacDailyNews Note: Today is Martin Luther King Day in the U.S. and the markets are closed. As usual on such trading holidays, we will have limited posting today.

There are only two mapping companies that could possibly make sense for Apple to buy

“We've seen a great deal of speculation in the past week about Apple buying a company to help it solve its nagging mapping headache. The big rumor, both started and squashed by TechCrunch, was Waze, the crowdsourced mapping and traffic app,” John Koetsier reports for VentureBeat. “The only problem with that theory? Waze would only slow Apple down.”

“At least, according to Skobbler's Marcus Thielking. He's the cofounder of Skobbler, a spinoff from Navigon that sells one of the top mapping solutions in the world: GPS Navigation 2 (US$0.99 for iPhone and iPad). It's got a No. 1 sales ranking in app stores in 20 countries and has sold more than three million copies. It's also based on OpenStreetMap, the crowdsourced ‘Wikipedia of maps,’” Koetsier reports. “‘There are only two companies that could possibly make sense for Apple to buy,’ Thielking said this morning from Europe. ‘There's Garmin, which doesn't use TomTom, on which Apple Maps is built, and there's TomTom itself. TomTom would be my bet.’”

Read more in the full article here.

Apple paid $6 billion in U.S. federal income taxes, 1/40th of all corporate income taxes collected by U.S. government in 2012

“Congressional investigators are wrapping up an inquiry into the accounting practices of Apple and other technology companies that allocate revenue and intellectual property offshore to lower the taxes they pay in the United States,” Charles Duhigg and David Kocieniewski report for The New York Times. “The Senate Permanent Subcommittee on Investigations inquiry now drawing to a close began more than a year ago and involves at least a half dozen technology companies, according to people with firsthand knowledge of it, who declined to be identified.”

“Those people said the subcommittee had subpoenaed or otherwise asked the companies to explain methods they used to avoid domestic taxes,” Duhigg and Kocieniewski report. “They said Apple had become a focus of the inquiry and was cooperating with the subcommittee, which is expected to issue wide-ranging recommendations that are likely to play a significant role in Congressional tax code negotiations. Tech companies are able to easily shift ‘intellectual property, and the profit that goes along with it, to tax havens,’ said a former Treasury Department economist, Martin A. Sullivan. ‘Apple went out of its way to try and ensure that its tax savings didn't attract too much public attention, because tax avoidance of that magnitude - even though it's legal and permissible - isn't in keeping with the image of a socially progressive company.’”

MacDailyNews Take: Apple “went out of its way” to legally fulfill their fiduciary duty to their millions upon millions of shareholders worldwide. If you don’t like the laws, change them. How about lawmakers ignore special interests, lobbyists, and campaign contributions and do what’s right for a change? (We know: Ridiculous pipe dream.)

Don’t blame people for following the laws as scribbled, crossed-out and re-scribbled by a decades-long parade of chuckleheads; run through with loopholes into loopholes on top of loopholes.

The problem isn’t Apple Inc. The problem is the tax code.

Duhigg and Kocieniewski report, “In its statement, Apple said it paid ‘an enormous amount of taxes’ to local, state and federal governments. ‘In fiscal 2012 we paid $6 billion in federal corporate income taxes, which is 1 out of every 40 dollars in corporate income taxes collected by the U.S. government,’ it said.”

Read more in the full article here.

MacDailyNews Take: In 2012, Apple paid $6 billion in U.S. federal income taxes, 1/40th of all corporate income taxes collected by the U.S. government.

The New York Times: How Apple sidesteps billions in global taxes – The New York Times, April 28, 2012

[Thanks to MacDailyNews readers too numerous to mention individually for the heads up.]

Microsoft attempts to lure Apple iOS developers to its Windows 8 and Windows Phone platforms

“On a rainy day last week, the scene at Microsoft's campus in Mountain View, California, looked rather incongruous: several dozen developers sat in an auditorium, many of them taking notes on Apple laptops, while another programmer, also using a Mac, stood behind a podium flanked with Microsoft's blocky logo,” Rachel Metz reports for MOT Technology Review.

“This wasn't a secret meeting of Microsoft rebels; it was Microsoft's attempt to lure developers who have been building apps for Apple's incredibly popular iOS platform, which runs on the iPad and iPhone, over to its Windows 8 and Windows Phone platforms,” Metz reports. “...With many developers building apps for Apple's gadgets and smartphones and tablets running Android software, the Redmond, Washington-based software giant finds itself in the unfamiliar position of needing to get developers' attention.”

Metz reports, “Microsoft's Windows Phone Store has over 120,000 apps, and the company has said it expects to have 100,000-plus apps in the Windows Store by January. Apple's App Store, by comparison, offers over 700,000 apps for the iPhone and iPad.”

Read more in the full article here.

MacDailyNews Take: Pfft.

U.S. ITC judge wants Samsung to post a bond of 88% of its U.S. smartphone sales due to Apple patent case

“An October 24, 2012 preliminary ruling that held Samsung to infringe four Apple patents could have more drastic consequences for Samsung’s U.S. business than previously known,” FLorian Mueller reports for FOSS Patents. “If the U.S. trade agency affirms the judge’s findings of violations (which the ITC staff supports across the board) and adopts his recommended remedies, Samsung faces the following draconian combination of sanctions.”

a U.S. import ban that would enter into effect after the 60-day Presidential review period following a final ITC decision,

a simultaneous cease-and-desist order that would prohibit the sale of any commercially significant quantities of the imported infringing accused products in the United States (this remedy was denied against HTC), and

the requirement to post a bond of 88% of the value of all mobile phones, 32.5% of the value of all media players, and 37.6% of the value of all tablet computers found to infringe Apple’s patents-in-suit during the Presidential review period.

Much more in the full article here.

2011 Leahy-Smith America Invents Act made it easier to tentatively review Apple’s patents

“On Wednesday, Samsung informed a federal court — and the Wall Street Journal dutifully reported — that the U.S. Patent Office had ‘rejected’ all claims of an Apple (AAPL) patent (the so-called ‘pinch to zoom’ patent, or ’915) that the Journal described as ‘a cornerstone of its case against Samsung,’” Philip Elmer-DeWitt reports for Fortune. “In October, the Patent and Trademark Office tentatively concluded that all 20 claims of another Apple patent (’381) — the so-called ‘rubber-banding’ (or over-scroll bounce) patent — were invalid.”

“Two weeks ago, the office tentatively invalidated the broader ‘touchscreen heuristics’ patent (’949, A.K.A. the Steve Jobs patent),” P.E.D. reports. “From the headlines, you’d think that the foundations on which a jury awarded Apple $1.05 billion last August were crumbling.”

“The truth is a little more complicated,” P.E.D. reports. “All three rulings flow from changes in U.S. patent law that Congress passed last year as part of the Leahy-Smith American Invents Act... Key provisions of that act make it substantially easier to challenge a patent after it has been approved. For a filing fee of $17,750, anybody can anonymously demand that the Patent Office initiate a post-grant review on any invalidity ground.”

Read more in the full article here.

Related article:
USPTO tentatively - and likely temporarily - declares Apple's 'pinch-to-zoom' patent invalid – December 20, 2012

It’s Triple Witching Friday

“Triple Witching Friday is an event that occurs when the contracts for the stock index futures, stock index options and stock options all expire on the same day,” Golden Hammer writes for Seeking Alpha. “Triple witching days happen four times a year on the third Friday of March, June, September and December. It just so happens that today is that day.”

“Today I expect to see large volumes of buying and/or selling as investors try to cover their open positions,” Hammer writes. “I expect those who sold the naked calls to take large short positions this morning in an attempt to drive the prices lower before covering. This typically can allow for 2%-3% swings on a day like today.”

Hammer writes, “I expect all of the indexes to open approximately 1% lower tomorrow as the shorts begin to initiate their positions. Given the extreme caution surrounding this fiscal cliff, I doubt the bulls will have enough positive momentum to beat out the bears early in the day. I do believe however we can expect to see a sharp rise going into the final hour before the market closes. I base this option on the fact that next week holds potential for both a “Santa Claus rally week” as well as a possible cliff resolution. This would grant those who are willing to hold out a very happy new year.”

Read more in the full article here.

MacDailyNews Take: And, rumors of today’s apocalypse were greatly exaggerated.

Procedural review of Apple patents limits leverage of rivals for years; Apple patents remain valid and enforceable during review

“Apple Inc.’s patents behind the pinch-to-zoom, bounce-back and multitouch features of its iPhone aren't invalid, at least not yet,” Susan Decker reports for Bloomberg News.

“The U.S. Patent and Trademark Office's initial rejections in recent weeks were consistent with a process in which most patents challenged over the past three decades, including ones rejected at some point, survived in original or modified forms, according to data compiled by the office,” Decker reports. “That process can take years. In the meantime, Apple's patents will be considered valid and enforceable in the global smartphone-patent litigation among it, Samsung Electronics Co. and Google Inc.’s Motorola Mobility unit.”

Decker reports, “‘It has to weigh on the judge's mind on how much damages to award,’ said Scott Daniels, a patent lawyer with Westerman Hattori in Washington who specializes in re-examinations, as the reviews are called. ‘If these are patents of questionable validity, can the judge in good conscience drop the hammer on Samsung?’”

MacDailyNews Take: Wouldn’t a patent lawyer know the simple-to-grasp fact that anybody with $17,750 can anonymously demand that the Patent Office initiate a post-grant review? These procedural, anonymous $17,750 USPTO “reviews” won’t weigh on any even semi-competent judge’s mind.

“The ITC is scheduled to end its investigation by March 13, and it has ruled in other cases that it won't wait for the patent office to complete its work,” Decker reports. “The patent office has sought to speed up the process. Even so, it would probably take at least two years, and possibly longer, before reaching a point where the Federal Circuit could rule on whether to cancel any of the patents, Daniels said.”

Decker reports, “According to patent office statistics from 1981 through June, owners get all of their patent confirmed in 22 percent of re-examinations, and all of the claims canceled 11 percent of the time. The rest involve modifications of the patent, which in some instances means the patent owner changes the wording of the patent, removes elements, or even gets to add more claims.”

MacDailyNews Take: In other words, 89% of patent reviews do not get canceled outright and 78% of patent reviews are modified, including the possibility of adding more claims, thereby strengthening the patent.

Read more in the full article here.

Apple appeals Judge Lucy Koh’s refusal to bar Samsung’s patent infringing smartphones from U.S. market

“Apple is appealing a judge’s refusal to bar Samsung smartphones from the U.S. market after a jury found Samsung used some Apple technology without permission,” Paul Elias reports for The Associated Press.

“Apple’s lawyers notified U.S. District Court Judge Lucy Koh on Thursday that the company would try to overturn her order with the appeal to the San Francisco-based 9th U.S. Circuit Court of Appeals,” Elias reports.

Read more in the full article here.

Beleaguered RIM posts loss of $114 million; sales tumble 47%; 1 million subscribers lost last quarter

“Research In Motion reported a smaller-than-expected quarterly loss on Thursday, but recorded the first-ever drop in its subscriber base barely a month before the crucial launch of the new BB10 smartphone line,” Euan Rocha reports for Reuters.

“Excluding one-time items related to restructuring and other issues, the struggling BlackBerry maker reported a loss of $114 million or 22 cents a share,” Rocha reports. “The company said its subscriber base in the quarter fell to about 79 million from about 80 million in the period ended September 1.”

Read more in the full article here.

“BlackBerry maker Research In Motion reported that sales fell through the floor last quarter,” David Goldman reports for CNNMoney.

“RIM said it is likely to report another loss next quarter as it ramps up its marketing campaign for its new BlackBerry 10 operating system and smartphones, which are slated to go on sale Jan. 30,” Goldman reports. “The company said its sales until then will likely take a hit.”

MacDailyNews Take: Yeah, “until then.” The RIM zombie’s got some magical thinking going on.

“Sales during the quarter fell 47% to $2.7 billion,” Goldman reports. “RIM said it shipped just 6.9 million BlackBerry phones and 255,000 PlayBook tablets over the past three months.”

MacDailyNews Take: To where did they ship those PlayBooks, the Waterloo landfill?

Goldman reports, “Hopes aren’t high for the future of the platform. After dominating the smartphone market for years, RIM controlled less than 5% of smartphone sales in 2012, and it will own just 4% of the market in 2016, according to IDC forecasts.”

Read more in the full article here.

MacDailyNews Take: “RIM. Dead Company Walking.” – MacDailyNews, August 5, 2010

Related article:
Beware the sucker's rally in beleaguered RIM, Nokia – December 18, 2012

Apple’s has their iPad cannibalization perfectly timed

“Ever since the iPad Mini launched, Apple watchers wondered how long it would take for the Mini to cannibalize the iPad's sales,” Erika Morphy reports for Forbes. “Not long, as various figures are showing.”

“Not that Apple was likely surprised or even dismayed by the turn of events,” Morphy reports. “As Azita Arvani of the Arvani Group told me recently, Apple has never shied away from cannibalizing its own products.”

Morphy reports, “Other statistics, this time from IDC, suggest that Apple made its move downstream in the tablet market just in time.”

Read more in the full article here.

Millennial Media: iPad mini is a game changer, must have gift’ of the year; impressions grew 28% per day in November

“Every holiday season there seems to be one particular item that stands out as the ‘must have gift’ of the year, and in 2012, early figures lead us to believe that this could be the iPad mini. Truth be told, don't tell my kids but there are already two sitting under our tree at home,” Matt Gillis reports via the Millennial Media blog.

“While we expect a massive amount of iPad minis to be received as gifts (and not opened until the end of the month), it appears that many folks couldn't wait for the holidays to come and have rapidly embraced the newly sized iPad,” Gillis reports. “Specifically, we have already seen a noticeable number of impressions on our platform.”

“In the first weeks after the iPad mini went on sale, we saw an average daily growth in impressions of 28 percent,” Gillis reports. “Last holiday season, Amazon launched the Kindle Fire to much anticipation. As a comparison, we saw Kindle Fire impressions grow at an average daily rate of 19 percent in the first two weeks after it went on sale last year. So, by our math it looks like Apple could have itself another massive holiday season.”

Millennial Media: Apple iPad mini 2012 vs. Amazon Kindle Fire 2011 Impressions

 
Gillis reports, “Rather than cannibalizing other tablet sales, we see the iPad mini as a device that will simply expand the overall tablet market. Based on Nielson data from November - kids are asking for Apple products this holiday season. The number one requested gift is the iPad and 48% of American kids want one for Christmas. The iPod Touch and the iPad mini are close behind with 36% of American kids hoping they find one under their tree. If these numbers hold true, Santa could be very busy this holiday season - and there could be a lot of happy kids, and happy [iOS] developers.”

Read more in the full article here.

MacDailyNews Take: Boom! (Meanwhile, the incongruent Apple sale continues on Wall Street...)

The mystery of Apple’s crashing stock price

“It is not unusual for investors to find the markets moving in ways that seem to defy common sense. Companies often feel the same way. They announce good results, they have a great product pipeline and plenty of cash in the bank, and the stock price falls off a cliff. The directors throw up their hands and wonder what on earth the markets expect from them,” Anthony Harrington writes for Seeking Alpha.

“However, what looks to be irrational or at best understandable as a wild amplification of a minor negative — something markets can do from time to time as investors overreact and ‘herd behavior’ sets in — can occasionally have a more rational explanation,” Harrington writes. “Apple (AAPL) provides an excellent case in point. The stock has a long history of soaring rallies and massive sell-offs. Why is this important? As arguably the most successful and iconic company in America, and as a company that has a reputation for rewarding buy-and-hold investors if they can ride out its price troughs, Apple is a major component in the portfolios of big institutional funds across advanced markets. Fund managers know that by maximizing their allocation to Apple, they are giving themselves a very good chance of outperforming over the medium term.”

Harrington writes, “In an excellent article featured in Seeking Alpha, Jason Schwarz points out that the key to understanding Apple’s huge sell-offs from time to time lies in the fact that most fund managers will have a rule that says that any single stock cannot be more than a certain percent of their total portfolio. The reason for this is to honor the idea of diversification as the best way of protecting capital. If you follow this idea of a restriction on the percentage any one stock can have allocated to it, then it follows that when Apple is doing one of its major run-ups, adding very substantially to its price, as happened when it went from $500 to $700, the total value of Apple holdings in many fund portfolios rapidly exceeded the allowed allocation. So the fund managers have to rebalance their portfolios by selling off a chunk of Apple stock to bring the allocation to Apple back within their policy constraints.”

Read more in the full article – recommended – here.

MacDailyNews Take: You can define “crashing” however you’d like, but while Apple is certainly down from its September 21st all-time high of $705.07, one year ago, on December 9, 2012, AAPL shares closed at $393.62.

[Thanks to MacDailyNews Reader "Arline M." for the heads up.]

iPads continue to vanish at the airport thanks to thieving TSA workers

“A TSA agent caught stealing iPads and numerous other electronic devices was arrested this week following a sting operation at New York City's John F. Kennedy Airport,” Killian Bell reports for Cult of Mac. “Sean Henry, 32, joins the growing list of TSA workers who have been accused of stealing from passengers as they pass through airport checkpoints across the United States.”

“Henry's arrest follows an ABC News investigation carried out back in September, which revealed that 381 TSA officers had been fired for theft since 2003,” Bell reports. “Henry will be the latest, after Transportation Security Administration spokesman David Castelveter confirmed that the TSA has ‘taken the steps to begin processing [Henry] for termination.’”

Bell reports, “Apple's iOS devices - the iPad, in particular - appear to be a popular target for some TSA agents, who believe it's okay to take passengers' belongings home with them. Unfortunately for them, they're also the easiest to track... Officers used the Find My iPad feature to track the two devices that had been intentionally left behind, and they found them with Henry as they left JFK on the airport's AirTrain system. And that's not all Henry was carrying. In Henry's backpack, investigators found a MacBook Pro, a pair of Beats by Dr. Dre headphones - still boxed, an iPad mini, an iPod, and an iPhone. A subsequent search of his home also uncovered a stolen MacBook. Needless to say Henry was charged with grand larceny and possession of stolen property.”

Read more in the full article here.

The ABC News report is here.

Related article:
ABC News tracks missing iPad to Florida home of TSA officer – September 28, 2012