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Canadian companies are drastically unprepared for the coming wave of tech change: ‘It is happening now’

TORONTO — A new study by Deloitte has found that most Canadian companies aren’t prepared for how quickly they’ll be affected by major advances in technology such as robotics and artificial intelligence.

The Canadian arm of the international consulting firm says only 13 per cent of the 700 companies in its study scored well, while 87 per cent were partially or completely unprepared for the magnitude and speed of change ahead.

In fact more than one-third — 35 per cent — scored poorly on all four of the key criteria that Deloitte used to measure preparedness: awareness, innovation, agility and the ability to channel resources.

The study’s findings are consistent with other Deloitte research on Canadian productivity, said Terry Stuart, a co-author of the 42-page report released Tuesday.

“Canadian companies are generally risk-adverse,” Stuart said in an interview ahead of the study’s publication.

Disruption is not going to happen in some distant future. It is happening now

“They’re not investing as much as they need to in the technologies and capabilities and we’re seeing that applied directly in these technology areas that we studied.”

The study was especially interested in how Canadian companies were responding to five types of technology with the potential to cause widespread disruption to what has become the usual manner of doing business: robotics, artificial intelligence, communications networks, manufacturing tools such as 3D printers and platforms for collaboration.

Although many of these technologies have been around for decades, they had been advancing at a relatively slow pace — which Deloitte expects will surge exponentially in the very near term.

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“Disruption is not going to happen in some distant future. It is happening now,” the study concludes.
Stuart, who is Deloitte Canada’s chief innovation officer, said the majority of companies in the study weren’t spending enough time thinking about the new technologies, understanding them and preparing for the implications.

“There was no difference between industry segments or size of company. That was a little bit surprising to us,” Stuart said.

But the study did find 74 per cent of the most prepared companies had experienced revenue growth over a five-year period, much higher that among unprepared companies.

The most prepared companies were also spending more on research and development over sustained periods and were more internationally focused.

Stuart said the underlying causes for the Canadian caution are complex and there is a role to be played by the academic and government sectors, although the main audience for the study is business leaders.

“You have to look at a variety of factors. They way that our culture has grown up, how we’re educated and trained, et cetera.”

Apple Inc will hit $1.1-trillion market cap and watch will be its best-selling product every, says analyst

Apple Inc reported another quarter of monster earnings after the market close Monday, with quarterly profit up by 33 per cent on the back of strong iPhone sales in the U.S. and China.

Apple also said that iPhone sales in greater China outpaced those in the U.S. for the first time, putting the firm on pace for its highest annual profit since 2012 — a record — and the company forecast sales in the current period that may exceed analysts’ estimates.

As analysts across Wall Street are sending out new research this morning, some are changing their price targets. The iPhone was a common theme in their notes, with Citi reiterating their buy on a “solid beat on iPhones” and Deutsche Bank maintaining their outperform in a note titled “How about Them Apples; Delivers Robust iPhone Results and US$200 Billion Capital Return Program.”

Shares in Apple Inc were up 1.82% at US$132.65 in premarket trading Tuesday.

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One of the analysts who is raising price targets is Brian White of Cantor Fitzgerald. White gives Apple a new target of US$195 from a previous US$180. The new price is currently the highest among analysts surveyed by Bloomberg and gives Apple a market cap of roughly US$1.1 trillion.

In his note, titled “Powerful iPhone Cycle and Signs of Early Apple Watch Momentum,” White credits the iPhone and a strong outlook for other innovations like the Apple Watch for his increased optimism.

“We believe Apple is in the midst of a transformational, super cycle with a notably stronger iPhone cycle and initial strength around Apple Watch. The momentum of this iPhone cycle is notably stronger compared to those in the past, which we believe is driven by the larger screen sizes of the iPhone 6/6 Plus, combined with strength in emerging markets and the growing attraction of Apple’s robust digital ecosystem. At the same time, recent media reports about an “Apple Car,” combined with the opportunities we see for Apple in the TV and personal robot markets speaks to longer-term innovation opportunities. At the end of the day, we believe Apple is innovating like never before.”

White also said that he believes the watch will become a huge success.

“Adding to the allure of this cycle is the ramp of Apple Watch that we believe will prove to be the best selling new product in Apple’s history (within first 12 months). As such, we are increasing our EPS estimates for Apple and raising our 12- month price target to US$195.00 (from US$180.00).”

Shares of Apple are up more than 50 per cent over the past year.

Bloomberg.com

Apple Inc ‘working very, very hard’ to catch up with Watch demand, CFO says

Apple Inc. can’t keep up with early demand for its new watch though it’s trying to make sure there are enough products to ship by the end of June.

“The customer response for the watch has been great,” Chief Financial Officer Luca Maestri said Monday in an interview. “We are working very, very hard to catch up from a supply standpoint — keep in mind this is not only a new product but it’s an entirely new category.”

The watch, the company’s first new product in five years, made an unusual debut for Apple, which focused on selling the device online and using its stores for demonstrations of how the gadget works.

Optimism for Apple’s new product lineup has helped push the shares to all-time highs this year. The company on Monday reported record profit for the first three months of 2015. Apple Watch sales may reach almost 14 million units in the fiscal year that ends in September, according to the average estimate of five analysts surveyed by Bloomberg.

Angela Ahrendts, Apple’s retail chief, had told employees in a video that tight inventory and high demand meant the watch initially wouldn’t be available for sale in company stores and urged workers to send shoppers online to make the purchase.

Customers have been able to schedule demonstrations in Apple’s stores since April 10, when online pre-orders began. Shipment times quickly pushed past the official release date of April 24, with some customers promised delivery as late as June, depending on the version. Messages were sent to some buyers last week saying that their orders were shipping earlier than expected.

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Order Estimates

About 376,000 of the 1.7 million Apple Watches ordered were delivered to consumers in the U.S. this past weekend, according to Slice Intelligence. It estimated that 547,000 would ship by June 11.

Without the lines at retail locations that usually accompany an Apple new-product release, the watch’s introduction was more akin to a fashion debut. It won’t always be that way, the Cupertino, California-based company has said.

“We love our iconic, blockbuster launches that we do in the stores and have absolutely no fear you will see those” again, Ahrendts said in her video message.

Bloomberg.com

Apple Inc sells 61.2 million iPhones in latest quarter, blowing past expectations

Apple Inc. posted a 33 per cent jump in profit last quarter, fueled by strong demand for the iPhone and sales growth in China. The company also boosted its capital- return program by US$70 billion.

Net income in the quarter that ended in March was US$13.6 billion, or US$2.33 a share, and revenue rose 27 per cent to US$58 billion, the Cupertino, California-based company said Monday in a statement. IPhone sales in greater China outpaced those in the U.S. for the first time, helped by the Chinese New Year celebration, Apple said.

Booming demand for the larger-screened iPhone 6 and 6 Plus is putting Apple on pace for its highest annual profit since 2012 — a record — and the company also forecast sales in the current period that will exceed analysts’ estimates. That signals enduring demand for the iPhone and optimism for Apple Watch — the company’s first new gadget under Chief Executive Officer Tim Cook — which reached consumers last week.

“If it actually does come in with a strong March number that will make us say, ‘Hey, this does have more staying power, therefore I think there’s going to be less doubt, there’s more to proving that it’s working in China, proving that this has more sustainable momentum than other product cycles,” Alex Gauna, an analyst at JMP Securities LLC, said prior to the release.

Analysts on average had forecast second-quarter profit of US$2.16 a share and sales of US$56 billion, according to data compiled by Bloomberg.
IPhone unit sales jumped 40 per cent to 61.2 million. That topped analysts’ average prediction for 58.1 million, based on data compiled by Bloomberg. Total revenue from greater China surged 71 per cent to US$16.8 billion.

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Third Quarter

Apple forecast the momentum will continue in the third quarter, with revenue projected to rise to US$46 billion to US$48 billion from US$37.4 billion a year ago. Gross margins will be 38.5 per cent to 39.5 per cent, compared with 39.4 per cent a year earlier. Analysts on average had predicted revenue would rise 26 per cent in the current period to US$47 billion, with gross margin at 39.5 per cent.

The shares gained 1.8 per cent to US$132.65 at the close in New York. Renewed investor optimism for new products, including the Apple Watch, has helped boost shares to record levels this year. The company’s market value has surged to more than US$772 billion, making it the world’s largest by that measure.

Cash and marketable securities increased to US$193.5 billion at the end of March, Apple said. That’s driving Apple’s increase to its capital return program, which now totals US$200 billion. The plan unveiled Monday includes boosting its share-buyback authorization by US$50 billion to US$140 billion, and increasing the company’s dividend by 11 per cent.

Higher Dividend

The company will pay a quarterly dividend of 52 cents a share on May 14 to shareholders of record at the close of business May 11. Apple returned more than US$112 billion to investors from August 2012 to March 2015, the company said.

“We believe Apple has a bright future ahead,” Cook said in the statement. “The unprecedented size of our capital return program reflects that strong confidence.”

Financing Buybacks

Apple has also raised the equivalent of more than US$40 billion in debt in less than two years to help finance dividends and buybacks, letting it return more money to investors without incurring U.S. taxes on foreign profits.

While Apple has been praised by activist shareholder Carl Icahn for returning cash, he’s been pushing for more. Icahn has argued that Apple is undervalued and should be trading at US$203 a share, which would give the company a market capitalization of more than US$1 trillion. His optimism for Apple is driven in part by his expectations for the larger-screened iPhone and new products, including the Watch.

Another bright spot for Apple was Mac unit sales, which rose 10 per cent to 4.56 million, as new products have breathed life into the PC line. Analysts had predicted 4.7 million Mac unit sales.

IPad sales dropped 23 per cent to 12.6 million, marking the fifth straight quarter of year-over-year declines. Analysts had predicted a 17 per cent drop.

Bloomberg.com

Facebook Inc adds video call feature to Messenger for Android, iOS

Facebook Inc. is releasing a video-call feature for its Messenger application.

The company said Monday in a blog post that the feature will work for iOS and Android phones, competing with Apple Inc.’s Facetime, which is tailored to Apple devices, and Google Inc.’s Hangouts. Skype, from Microsoft Corp., and WeChat from Tencent Holdings Ltd., also provide video-messaging services.

“Video calling in Messenger is available for calls made from a mobile phone to another mobile phone, even if one person is on iOS and the other person is on an Android device,” the social-media company said.

Messenger, Facebook’s stand-alone chat application, has more than 600 million users and accounts for more than 10 per cent of voice-over-Internet calls made globally, the company said last week during its earnings presentation. Facebook has been adding features to the application, opening it up to outside developers this year so they can create games and functions that increase its popularity.

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Bloomberg News

Google Inc shopping for patents in experiment to limit lawsuits

Google Inc. is shopping for patents.

The largest Internet search company said it’s taking applications next month from patent owners willing to sell. After reviewing submissions, Google will pick the patents it wants, negotiate a sale and shell out the money by August.

The program is an experiment to see if Google can obtain patents that would otherwise fall in the hands of licensing firms that may use them in litigation against tech companies.

While ownership also would free Google to use the technology itself, there’s no indication that the Mountain View, California-based company is looking to be pitched ideas for new products.

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Instead, it is designed to “remove friction from the patent market,” according to the blog posting Monday by Allen Lo, Google’s deputy general counsel for patents.

Patent litigation has become a sore spot for tech companies and retailers who say they are too often targeted by patent owners of relatively trivial ideas looking for big payouts. They are pushing Congress to raise the bar for making such demands.

In many cases, the patents were first obtained by individual inventors who were unable to commercialize their ideas. They sold off their patents to licensing firms that specialize more in litigation than production.

There have been some nascent efforts to help inventors start their own companies. Groups like 1776 in Washington and various angel investors are starting to act as sort of “idea labs” for small businesses.

Bloomberg.com

All signs point to Apple Inc announcing a monster earnings report

Apple reports earnings for the quarter that ended in March after the market closes on Monday, April 27.

Get ready for another monster report.

Analysts are expecting big iPhone sales and think Apple could provide a major update to its cash return program.

According to data compiled by Bloomberg, analysts are looking for $56 billion in revenue, which would represent 23% growth.

Apple’s stock (AAPL) was trading up 1.77% at US$132.59 on the Nasdaq today.

Related BloombergApple Inc shares are up almost 12% on Monday ahead of earnings.

Apple’s revenue growth is expected to be driven by strong iPhone sales. Analysts are anticipating that Apple sold 58.1 million units, which would be an impressive 33% increase.  

If Apple sells 58.1 million iPhones, it will be the second-biggest quarter for iPhone sales in Apple’s history. Apple’s biggest-ever iPhone sales happened during the previous quarter, when it sold 74.5 million iPhones. 

Just a year ago, people were thinking that Apple’s iPhone business might have run its course. Unit growth was down to single digits, and it looked like Apple was going to have to lower prices to reignite growth.

The newest iPhones are proving to be killers for Apple. The iPhone 6 and iPhone 6 Plus have bigger screens than previous models, which is all it took to make Apple’s iPhone sales go nuclear.

Apple has effectively raised prices on the iPhone. The iPhone 6 Plus costs $100 more than previous models. The iPhone 6 costs just as much as prior models, but many people are gravitating towards the mid-tier storage model, which costs $100 more than the entry-level phone.

BI Intelligence

The average price of the iPhone hit a new high in the holiday quarter.

iPhone sales are all that really matter for Apple’s success. However, people will keep an eye on iPad sales, which have tanked in the past year. Analysts are expecting that Apple sold 13.6 million iPads, which would be down 17% on a year-over-year basis.

Apple has failed to provide any sort of clear explanation for why the iPad business has cratered. The best explanation seems to be that people are skipping the iPad in favor of iPhones with large screens. The Mac business is also doing well. Analysts expect Apple to sell 4.7 million Macs, which would be up 15%. (So an iPhone + a Mac seems to cutting into iPad sales.)

BI Intelligence

The biggest question surrounding Apple is the Apple Watch. Apple released the Apple Watch on Friday. Preorders looked strong. There are reports Apple is aiming for 20 million units in year one, which would be the biggest Apple product launch in history.

However, Apple has already said it’s not going to break out Apple Watch sales. Apple may be willing to make a one-time announcement about how many watches it sold, but we aren’t expecting anything.

As for Apple’s cash program, there’s been chatter that Apple could provide an updated plan on what it’s doing with dividends and buybacks. 

Last year, Apple announced a $130 billion program to return cash to shareholders. Credit Suisse analyst Kulbinder Garcha thinks that plan gets increased to $200 billion this year. Apple had $155 billion in cash on hand last quarter, so it makes sense to enact a massive share buyback/dividend plan. 

We’ll be covering it live as it happens, so tune in around 4 p.m. NYC time on Monday. 

Until then, here are the key numbers to watch, via Bloomberg:

  • EPS: $2.14
  • Revenue: $55.96 billion
  • iPhone units: 58.1 million
  • iPad units: 13.6 million
  • Mac units: 4.7 million
  • iPhone ASP: $656
  • iPad ASP: $418
  • Q3 revenue: $46.93 billion

Being involved in which games your kids play doesn’t mean you need to sit on the couch with them for 50 hours

I spend a lot of time thinking about the age appropriateness of various types of video game content.

I do this not only because it’s my job – in addition to covering games for Post Arcade I also contribute to an American outlet that focuses on evaluating media and technology with parents in mind – but also because I am a dad.

Up until last year, I had the sense that most of my daughter’s peers generally played age-appropriate games – Minecraft, Mario Kart, what have you. But as soon as she hit the fourth grade her schoolyard chums were suddenly talking to her about playing Grand Theft Auto and Saint’s Row – games with heaping amounts of violence, sex, drugs, and profanity, not to mention heroes with serious morality handicaps that are never rectified.

This probably shouldn’t have shocked me, yet it did. I’m all for moms and dads deciding what their kids can and can’t handle, but I felt like asking her teacher for a list of parents’ email addresses so I could send out a subtly scolding missive informing these kids’ folks in no uncertain terms of what they’re letting their kids – all of whom are of an age that can still be counted on the fingers of two hands – consume.

Still, I’ll allow that it can be hard – especially for non-gaming parents – to determine when kids are mature enough to properly process things like simulated violence and intercourse.

The key, it seems to me, lies in being involved and interested in what your kids are doing so you can see their reactions, interpret them, and talk about difficult concepts as they come up.

A recent article in Wired magazine asks the question: When is the right time for my kid to watch Star Wars? The answer – wonderful in its simple, inarguable truth – is that age isn’t as important as the person sitting on the couch beside them when they do.

Granted, games are different than movies. Most parents aren’t likely to sit beside their kids for 50 hours while they play through a giant role-playing game. But there are other ways in which they can be meaningfully involved with their kids’ interactive entertainment.

Activision

Back in 2009 a story made its way around the web about a 13-year-old boy who was dying to play Call of Duty – one of the earlier iterations set during the Second World War. The game was rated for players 18 and up due to its gritty violence, and his father wasn’t sure it was a good idea. But he also knew his son, and he understood him to be a mature and reasonable kid. So he made a deal with him: His son had to read the Geneva Conventions before he played the game and then discuss them with his dad. When the kid started playing he needed to take note of whether characters in the game followed the rules of war, then talk to his dad if they didn’t.

It’s a terrific example of a responsible father understanding his kid and taking an interest in his hobby. More than that, it made the son think critically about what he saw while playing – certainly more than the majority of kids who play Call of Duty.

In the years since that story came out I’ve occasionally received emails from parents wondering about the age appropriateness of certain games – as well as kids who have petitioned me to contact their parents because they decided not to allow them to play a particular game based on one of my reviews.

Both types of correspondence make me happy. The former reassure me that not all parents let their kids play whatever games they like without considering what might be in them, while the latter are generally written by smart kids who are as passionate about the medium as I was at their age – a possible indication that they may, in fact, be ready to play a given game even if they aren’t of its ESRB-approved age.

I always start my responses to parents by telling them that they know their kids best, then try to give them a sense of what their son or daughter will encounter in the game. Then, in the creative spirit of the dad who made his son read the Geneva Conventions before playing Call of Duty, I sometimes attempt to come up with a way to satisfy both sides. Give the kid a chance to play, but in a way that makes him or her think about the experience in a mature way.

A young teen recently asked me to explain to his parents why ought to be allowed to play The Elder Scrolls V: Skyrim, an open-ended fantasy role-playing game in which the player has complete control over the protagonist’s personality and actions. He or she can be noble champion who always quests to do the honourable thing, or a duplicitous villain, killing innocents and stealing anything that captures their eye.

Bethesda SoftworksThere are a lot of dragons in Skyrim

My suggestion to the teen’s father – assuming he thought his son was prepared for the game’s graphic violence, which is unavoidable no matter the player’s decisions – was to instruct his son to play the game as though he were the hero, to make the same decisions he himself would make in the real world. Then he was to have chats with his dad, who would ask questions like: Are there appropriate consequences to criminal actions? Did situations come up in which doing the right thing was notably less appealing than doing the wrong thing? What did you choose to do?

There’s a world of difference, I think, between mindlessly performing actions in a game and being forced to think about what those actions mean. Adults tend to think about significance and symbolism naturally, but kids often get caught up in the giddy spectacle of the action. They internalize what they see without considering what it means. Having a conversation with an adult to dissect the substance of the experience can help change that.

I received another email from a parent a few years ago about the appropriateness of Assassin’s Creed: Brotherhood for her early-teens son.

I’ve always thought the Assassin’s Creed games’ incredibly detailed recreations of period locations (in this case Rome circa 1499) were so impressive that they could serve as viable supplements to a social studies course. So I described its mature content – bloody melee combat, some language and sexuality – and suggested to the mom that if she thought her son could handle that, she should consider having him dig deeper into the experience by researching the accuracy of specific landmark buildings, the social customs of the time as described in the game, and some of the actual historical characters that pop up in the narrative.

My thought was to create a dialogue between the mother and her son. He could talk to his mom about what he was passionate about and maybe even learn something, and she would have an opportunity to better understand what her son was doing with his free time.

MicrosoftYou can create your own worlds in Minecraft

Thankfully, my own daughter is still quite satisfied playing Minecraft and Mario Kart, which is fine by me. There’s a world of entertaining games without blood and sex and profanity that even adults can have fun playing. No need for kids to get to games with more mature themes until they’re good and ready.

But even in games appropriate for her age I’ve still found opportunities to discuss concepts like consumerism (Skylanders), the depiction of female characters (Disney Infinity), and even cruelty to animals (Pokemon).

Point being, it’s important to know what your kids are playing – not just in order to ensure they can properly process it, but also to discuss what it means, make them think critically about it, and simply show them you’re interested in what they’re doing.

When you’re beside them, guiding them in even the subtlest of ways, you’re helping ensure that your kids will eventually be able to make smart decisions about what they choose to play and how they think about it when the day eventually comes that you aren’t there.

BlackBerry Ltd considers pulling out of Sweden and cutting 100 jobs in the process

BlackBerry Ltd. is considering closing its offices in Sweden, a move that would result in the loss of up to 100 jobs, a company spokesperson told Reuters.

“At this time, we are considering the closure of our offices in Sweden. Since this may impact approximately 100 employees, we are now initiating consultations with the employees’ trade unions,” the spokesperson said in an email.

BlackBerry had about 7,000 people as of Sept. 2014, according to the its website.

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© Thomson Reuters 2015

Police-taunting Facebook selfie poster jailed

Aaron Bee started posting the nyah-nyah images on Facebook after police put out an appeal asking for his whereabouts. Cue lots of pictures of Bee gesturing at police, their cars and a police station and a misspelled hashtag of #theystillcarntcatchme.

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