RIM faces its day of reckoning with BlackBerry 10 launch

NEW YORK (Reuters) - The innovative line of BlackBerry smartphones that Research In Motion Ltd will formally unveil on Wednesday has already succeeded on one crucial count - getting RIM back in the conversation.

The new BlackBerry 10 has created a buzz among technology watchers and financial analysts, thanks to nifty features that may set it apart in an overcrowded smartphone market. RIM stock has almost tripled over the past four months on hopes the devices can restore RIM to sustained prosperity.

Reviewers like the browser speed and the intuitive keyboard on RIM's new touchscreen. A feature called BlackBerry Balance, which keeps corporate and personal data separate, could help RIM rebuild its traditional base of big business customers.

It's a welcome start for RIM, the smartphone pioneer that has teetered on the brink of irrelevance. But success will come only if consumer and business customers embrace the new technology in the weeks and months after CEO Thorsten Heins takes the wraps off the phone at a glitzy New York launch.

RIM is gambling its survival on the much-delayed BlackBerry 10, hoping to claw its way back into an industry now dominated by Apple Inc's iPhone and Samsung Electronics Co Ltd's Galaxy.

The timing may be just right. The new phone hits the market just as the iPhone's remarkable run is showing some signs of slowing.

"I really do believe that the consumer market as a whole is ready for something new," said Kevin Burden, head of mobility at Strategy Analytics, an industry consulting firm.

"I have to believe that there is some level of user fatigue that plays into the longevity of some of these platforms," he added, referring to Google Inc's Android and Apple's iOS, which are both more than five years old. "RIM is probably timing it right."

U.S. BATTLEGROUND

To be sure, RIM shares are about 90 percent below a 2008 peak near $150 a share and the company still has a tough fight ahead. It may take investors some time to determine whether RIM's big gamble on an untested technology has paid off.

RIM's market share collapsed in the three years ahead of the launch. Strategy Analytics data shows RIM's global share of the smartphone market was about 3.4 percent in the fourth quarter, down from around 20 percent just three years ago.

While RIM has done well in developing markets, it has hemorrhaged customers in the United States, a market that sets technology trends. RIM's fourth-quarter North American market share fell to 2 percent from more than 40 percent three years ago.

Acknowledging that it is crucial to win back U.S. customers, RIM will hold its main BlackBerry 10 launch in New York, although there are simultaneous events in six cities across the globe.

Underscoring the point, RIM is splurging on a costly Super Bowl ad to tout its new devices and attempt to brighten its faded image in the U.S. market.

BIG QUESTIONS

Over 150 carriers already have tested the new devices and RIM has said the launch will be the largest ever global rollout of a new platform.

The two big questions the market expects RIM to answer on Wednesday are when the phones - a full touch-screen device and one with a traditional physical keyboard - will hit store shelves, and how much they will cost.

The company is expected to unveil specifics on pricing and availability in different regions at the launch.

"The Street is expecting mid-February for a launch. Anything earlier than that is a positive, anything later will be viewed as negative," said RBC Dominion Securities analyst Paul Treiber.

That said, there are few mysteries to be cleared up on Wednesday. Leaked photos and specifications of the devices have been splashed across the tech world.

"We've had the beta devices for a few weeks and in terms of the devices, they are right up there with the competition," said Andy Ambrozic, head of IT Infrastructure at Ricoh Canada. "The Balance feature is crucial for corporations that are becoming increasingly concerned about data security."

Scotiabank analyst Gus Papageorgiou feels RIM has a good chance of a comeback. He says the new BB10 operating system outpaces Apple's iOS platform and Google's market-leading Android system in every category except app selection and content.

"There is, we believe, huge potential for the platform and devices to bring people back to BlackBerry or draw entirely new users into the platform," said Papageorgiou, who has a "sector outperform" rating on the stock.

BlackBerry 10 will not be able to compete on the number of apps, but RIM says its operating system will have the largest application library for any new platform at launch, with more than 70,000 apps available.

It has already gathered big-name music and video partners for its BlackBerry 10 storefront, including Walt Disney Studios and Sony Pictures, Universal Music and Warner Music Group.

Wireless carriers already report strong demand for the new devices. Rogers Communications Inc, Canada's top wireless carrier and the first globally to take pre-orders for the new devices, said orders are already in the thousands.

"Our customers are excited," said John Boynton, Rogers' head of marketing, adding that some users are holding off on upgrades in anticipation of the BB10 launch.

(Additional reporting by Alastair Sharp and Allison Martell in Toronto; Editing by Frank McGurty, Janet Guttsman and Andre Grenon)

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Everything You Wanted to Know About Facebook Groups

Click here to view the gallery: Facebook Groups 101

Once upon a time, Facebook users joined groups to self-identify; groups lived in your About section, next to your favorite books, movies and quotes. (Anyone remember "Grab Your Balls... We're Playin' Tennis?")

[More from Mashable: Pinterest Tests New Look — But Will You Even Notice?]

But no more. Now, Pages have replaced traditional groups. And today's groups revolve more around communication, sharing and interaction.

[More from Mashable: Facebook iPhone App Adds Recording and Sharing Video]

Groups help gather with friends around common interests; within groups, you can share updates, photos, documents and more under specific settings of your choosing.

In light of Facebook Pages' popularity, some users may wonder if groups are obsolete. However, Pages are always public, meaning their information and posts are available to all Facebook users, and if they represent a brand or company, they can only be created by official representatives.

Today's groups also enjoy more intuitive privacy settings. There are cons, however -- for instance, you can't avoid being added to groups against your will (though you have the option to leave, of course), and the "Seen by" feature adds another creepy consideration.

We walk you through the process of creating, joining and customizing groups in the gallery above. Tell us why you use Facebook groups in the comments.

Image courtesy of iStockphoto, courtneyk.

This story originally published on Mashable here.

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Microsoft launches new Office for consumers

SEATTLE (Reuters) - Microsoft Corp launched new Office software for home users on Tuesday, featuring constantly updated, online access to documents from all kinds of devices as the world's largest software company attempts to tailor its most profitable product to a mobile generation.

The new Office suite of applications - including desktop staples Outlook email, Excel, Word and PowerPoint - is aimed at home users rather than businesses, and is designed to extend Microsoft's domination of the workplace to the home office and beat back growing competition from Google Inc's free online apps.

"The notion of an always up-to-date streaming version of Office comes directly from how people are using devices today," said Kurt DelBene, head of Microsoft's Office unit, in a phone interview. "You really want all your content to roam with you. We see that as an opportunity to deliver what customers are asking for."

The version of the new software launched on Tuesday, called Office 365 Home Premium, is the first major overhaul of Office since 2010. Big companies, which generally buy Microsoft's software under multi-year contracts, already got the latest features of the new Office in December.

Tuesday was the first look for individual customers, and initial reactions were positive at Microsoft's flagship Seattle store.

"It looks badass. And that whole touch-screen thing now," said Kouichi Armga, 25, who works at Trader Joe's grocery store and studies at the University of Washington in Tacoma, after seeing the new Office run on touch-screen hardware.

"It was actually very impressive," said Jeremy Payne, 26, from Olympia, Washington, who works in retail and is studying public relations at the local Evergreen State College. "The biggest thing was the new PowerPoint. I was really excited to see the new PowerPoint."

Payne, an avowed Apple Inc enthusiast, said the new Office was "really rad," but it might be hard to drag Mac users away from their Apple-centered world.

"They have their work cut out for them pulling people from Apple," he said. "The Apple system is so integrated to my way of thought."

DOWNLOAD UPDATES

After downloading the basic programs online, users can access the latest versions of all Office applications from up to five devices on a subscription basis for $100 a year.

The software will be updated online, marking a change from the past where users had to wait years for upgrades to installed software.

It is the latest step in what Chief Executive Steve Ballmer called Microsoft's "transformation to a devices and services business," making the company more like Apple.

The new Office largely adopts the look of last year's Windows 8, with a cleaner, more modern-looking design and includes touch-screen capability.

The "ribbons" showing commands in Word and Excel are mostly unchanged. For the first time the package includes online calling and video service Skype, which Microsoft bought in 2011.

Users' work can be stored on their devices but also in remote data centers - known as the cloud - and the latest version of a document can accessed from any licensed device with a browser.

GOOGLE KILLER?

Two and a half years in the making, the new Office is designed to extend Microsoft's domination of the business market and counter the growing popularity of Google Apps, a collection of online-only, Office-style applications Google provides free for home users and sells to businesses for $50 per user per year.

Microsoft is hoping its move into online services, alongside its new Surface tablets, will push it into the forefront of mobile computing, which has been led by Google's Android software and Apple's combination of slick hardware and apps.

"Microsoft Office remains the gold standard for productivity applications," said Avi Greengart, research director at Current Analysis. "It is bringing Office fully into today's connected, cloud-based environment. But it still has more work to do to make it fully finger-friendly for use on its own Windows tablets."

The new Office will run natively on Microsoft's own Surface tablets - both the 'RT' and Pro versions running on ARM Holdings and Intel Corp chips respectively - but it will not run natively on Apple's iPad, disappointing some iPad users who are also Office fans.

"We have not said that we will do rich client software on the iPad at this point," said DelBene, although he did not rule out producing such software in the future. "We've been very logical in our approach. I'm pleased with the software we have delivered for the iPad to date," he said.

Microsoft's SkyDrive online storage system and its OneNote note-taking software are available as iPad apps, and iPad users can use limited Web versions of some Office applications.

The iPad issue has been a long-time quandary for Microsoft, which might gain more mobile users by making Office available on the iPad but would have to give Apple a cut of its subscriptions. Availability of Office on iPads would also take away a major incentive to buying its own competing Surface tablet.

Microsoft estimates that 1 billion people worldwide use some part of Office and the unit that produces Office is Microsoft's most profitable, edging out the flagship Windows division for the last few years. It now accounts for more than half of Microsoft's overall profit.

Sales dipped last quarter as consumers held off in anticipation of the new Office, but analysts expects sales to ramp up this quarter.

"In the immediate next year or two, this version of Office should help many of the core small and midsize enterprise customers stay with Office," said Al Hilwa at tech research firm IDC. "The value proposition for the consumer space has always stemmed from synergies with the enterprise. I don't think this is going to change."

(Additional reporting by Eric M. Johnson. Editing by Matt Driskill and Steve Orlofsky)

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Amazon shares set record after strong quarterly profit

SAN FRANCISCO (Reuters) - Amazon.com Inc shares hit a record on Tuesday after it reported better-than-expected quarterly profit, fueled by the growth of higher-margin businesses during the fiercely competitive holiday quarter.

The world's largest Internet retailer said that its cloud computing services, video content sales and its aggressive expansion in e-books helped increase profitability.

In addition, a growing network of warehouses or fulfillment centers closer to customers held down shipping costs as it vied with Wal-Mart Stores Inc and other major retailers for consumer dollars over the holidays.

Chief Executive Jeff Bezos highlighted the Kindle's e-book business, calling it a multi-billion dollar category that grew about 70 percent in 2012. Its traditional physical book business rose about five percent in the same period, he noted.

"We're now seeing the transition we've been expecting," Bezos said in the company's results statement.

Profits have shrunk in recent years as the company invested for longer-term growth, building massive fulfillment centers, developing a Kindle Fire tablet hardware and digital content business in competition with Apple Inc, and expanding into Internet-based cloud services.

The fourth-quarter profit results suggested that Amazon may be able to generate attractive returns from such spending, analysts said.

"The fourth-quarter operating income was up more than expected," said R.J. Hottovy, an equity analyst at Morningstar. "This supports the bull case that Amazon can monetize its growth over the longer term."

The Seattle-based company said operating income jumped 56 percent to $405 million in the fourth quarter, compared with $260 million in the fourth quarter of 2011.

Amazon's stock climbed 9 percent to $284 in after-hours trading and touched $288 earlier in the session. It hit a record of $284.72 in regular trading on January 25.

MARGIN FOCUS

The company also said fourth-quarter revenue rose 22 percent to $21.27 billion as it grabbed a big share of online spending during the holidays. But it was the profit that initially caught Wall Street's eye.

"It was a much better-than-expected gross margin, a strong forward indicator to drive margin expansion. What is really important is gross profit dollars and that line is stronger," said Ken Sena at Evercore Partners.

The gross profit margins were 24 percent in the fourth quarter, compared with Wall Street expectations of about 22 percent.

"Incredibly strong margins," said Jordan Rohan, an analyst at Stifel Nicolaus. Amazon generated the highest quarterly gross margin in its North America business in more than three years, he noted.

Amazon mainly operates as a retailer, buying physical products at wholesale prices, storing them and then selling at a slight mark-up to consumers online.

But the company has expanded into other businesses that are potentially more profitable, including cloud computing, digital content and acting as an online marketplace for other merchants.

These newer businesses are growing faster than the company's original retail operations, boosting profitability.

3P GROWTH

The improved profitability was partly driven by the growth of Amazon's online marketplace for third-party merchants, known as 3P.

This business accounted for 39 percent of total unit sales in the fourth quarter, up from 36 percent a year earlier. Total unit sales rose 32 percent in the holiday quarter, while 3P unit sales climbed more than 40 percent, compared with the fourth quarter of 2011, according to Amazon Chief Financial Officer Tom Szkutak.

When Amazon sells products itself, it reports the total value of the sale as revenue. The cost of that product is then subtracted for a gross profit margin. When a third-party merchant sells products on Amazon's marketplace, the company gets a cut of that sale. That commission is reported as revenue, and most of it falls straight to its bottom line as profit.

"That shift means lower revenue numbers but much higher profit margins," said Rohan.

AWS, ADS, DIGITAL GOODS

Amazon's cloud computing business, Amazon Web Services, or AWS, is also thought to be higher margin than the company's original retail business.

Amazon also runs an online advertising business that is also considered a lot more profitable.

These businesses are in the company's North America Other category, which generated fourth-quarter revenue of $769 million, up 68 percent from a year earlier.

"AWS is growing very fast and that is certainly impacting our operating profit," said CFO Szkutak.

The financial chief also highlighted Amazon's newer digital content businesses, particularly its video streaming offering.

Amazon has invested heavily in TV shows and movies to stream over the Internet. It has partly packaged this as a free service to consumers who have subscribed to its Prime two-day shipping service. But customers can also pay to stream other video, often newer movies.

"The percentage of Prime customers who were watching free content through Prime instant video has gone up dramatically year-over-year," Szkutak said during a conference call with analysts. "We've also increased Prime membership dramatically year-over-year. They are also purchasing paid content."

SHIPPING COSTS FALL

One of Amazon's biggest investments in recent years has been focused on building lots of fulfillment centers closer to shoppers.

It costs a lot to set up these giant warehouses, but over the long term, Amazon hopes they will help the company reduce its shipping costs.

That strategy shows signs of success in the fourth quarter. Net shipping costs were 4.5 percent of sales in the period, down from 5.4 percent a year early, the company reported.

"Over the past few years, we have expanded our fulfillment network to the point where we are closer to customers and you're seeing that reflected in our transportation costs," Szkutak CFO said.

(Reporting By Alistair Barr and Alexei Oreskovic in San Francisco; Editing by Bernard Orr)

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7 Superb Gadgets to Encourage You to Eat More Fruit

Click here to view the gallery: 7 Superb Gadgets to Encourage You to Eat More Fruit

We all know we should eat more fruit, but sometimes it can be a struggle to consume the recommended five servings of fruit (or vegetables) per day.

[More from Mashable: Top 5 Kids Apps You Don't Want to Miss]

To try and encourage us all to get more fructose in our faces, we have taken a look at cool kitchen gadgetry that makes eating fruit easier, quicker and more fun.

SEE ALSO: 9 Cooking Gadgets for Your Geeky Kitchen

[More from Mashable: When the Object of a Search Ad Is a Phone Call]

Take a look through our healthy options in the image gallery above. Share in the comments below any great gizmos you use to help you get your five-a-day.

Thumbnail image courtesy of James

This story originally published on Mashable here.

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Google pledges fight over government access to users' email

WASHINGTON (Reuters) - Google will lobby Washington in 2013 to make it harder for law enforcement authorities to gain access to emails and other digital messages.

In a blog post on Monday, linked to Data Privacy Day, Google's chief legal officer, David Drummond, said the tech giant, in coalition with many other powerful tech companies, will try to convince Congress to update a 1986 privacy protection law.

He cited data showing that government requests for Google's user data increased more than 70 percent since 2009.

In 2012, Google said, it received 16,407 requests for user data affecting 31,072 users or accounts, more than half of them accompanied by a subpoena.

"We're a law-abiding company, and we don't want our services to be used in harmful ways. But it's just as important that laws protect you against overly broad requests for your personal information," Drummond said in the post.

The U.S. Electronic Communications Privacy Act, passed in the early days of the Internet, does not require government investigators to have a search warrant when requesting access to old emails and messages that are stored online, providing less protection for them than, say, letters stored in a desk drawer or even messages saved on a computer's hard drive.

The current system also makes complex distinctions, many disputed in courts, between emails saved as drafts online, in transit, unopened or opened. Some of them are to be released with subpoenas, which have a lower threshold than search warrants as they often do not involve a judge.

A warrant is generally approved by a judge if investigators have "probable cause" to believe that their search is likely to turn up information related to a crime.

Google, Microsoft Corp, Yahoo and popular social media site Twitter - among others - have resisted turning over customer data.

They have put in place policies, based on the constitutional protection from unreasonable searches, that require search warrants for access to content of private communications.

Privacy activists say the outdated law should be reformed to extend the constitutional right to privacy online, but legislation limiting government requests will not face an easy road.

Last year, Democratic Senator Patrick Leahy, who chairs the Senate Judiciary Committee, introduced a bill that would have updated the current law.

It triggered a wave of concerns from the police and FBI that new restrictions would impede crime investigations and possibly endanger victims.

"After three decades, it is essential that Congress update ECPA to ensure that this critical law keeps pace with new technologies and the way Americans use and store email today," Leahy said in a statement on Monday.

His privacy legislation died in Congress last year after his counterpart in the House of Representatives, House Judiciary Committee Chairman Bob Goodlatte, a Republican, drafted another version of that bill, which also tackled other issues but stripped out privacy reform language.

Last year, Goodlatte said he was willing to consider the privacy law reform, but that the timeline then was too short for a "thorough examination."

Leahy has now included the change of privacy laws as one of his top priorities this year.

(Reporting by Alina Selyukh in Washington and Alexei Oreskovic in San Francisco; Editing by Steve Orlofky)

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As world of gadgets grows, online industry tunes in to video ads

SAN FRANCISCO (Reuters) - Internet video ads, long a sideshow in the online advertising market, are gaining in importance to marketers and Web publishers as they look to capitalize on consumers' changing viewing habits and tap a $70 billion (44.5 billion pounds) television market.

The ever-expanding array of gadgets that display online video, from tablets to Internet-connected TVs and DVD players, along with technology such as social media that facilitates distribution, has spurred new interest.

The growing trend means websites like Google Inc's YouTube, Yahoo, AOL and Hulu have a better shot at tapping the mother lode of television advertising budgets, though video ads have a long way to go before they become as dominant a part of the marketing landscape as TV ads.

Research firm eMarketer says video is the fastest growing form of online advertising, with spending increasing 46 percent last year, and outpacing popular formats such as search ads and display ads.

Google does not break out financial results for its YouTube business, but Chief Business Officer Nikesh Arora said on Tuesday that spending among YouTube's top 100 advertisers increased by more than 50 percent in 2012 compared with the year before.

There have been media reports that Facebook is developing a video ad service, and analysts will likely be looking for answers on that avenue when the social networking giant delivers its quarterly results on Wednesday.

At Yahoo, "one of our highest priorities was to create more online video experiences, because that's where the demand is for advertising," said Tim Morse, the former Yahoo finance chief who became CFO of video advertising technology company Adap.TV this month.

Advertisers are increasingly fond of video ads, Morse said, because of the similarities to TV.

"It's the closest to what they've had offline. They're looking for the same kind of medium where they can connect with consumers," he told Reuters.

TURNING POINT

Chevrolet has been running online video ads for several years, but significantly ramped up its activities and investment in 2012, said Carolin Probst-Iyer, the manager of digital consumer engagement for the General Motors division.

"Last year was a bit of a turning point," she said, as Chevrolet put greater emphasis on creating original video ads and looking for new ways to distribute spots, rather than simply running existing TV ads on YouTube and TV network websites.

One recent ad for the buzz-worthy new Corvette Stingray was viewed more times on mobile devices than it was on PCs, she said.

For Web publishers, video ads are good business. While typical banner ad rates can generate a few dollars per thousand views, video ad rates can reach $20 per thousand views, said eMarketer's David Hallerman.

"All of the Internet advertising to date has come from print sources," such as newspapers, magazines and yellow pages, said RBC Capital Markets analyst Mark Mahaney.

"We're are at a point where television ad budgets are likely to come online."

The explosion of new screens such as smartphones and tablets greatly increases the venues where consumers can watch video, whether they're at their desks or on a bus. And social networking, which makes it easy for users to share favorite videos, has given marketers added incentive to produce video ads that can gain additional exposure by tapping into the social slipstream.

YouTube's head of industry development, Suzie Reider, said marketers are increasingly developing ads that are tailored for specific audiences, making it more likely that Web surfers will actually watch them.

"We're living in a day and age where nobody has to watch an ad that they don't want to watch," said Reider. "You can skip them on the Web, you can skip them on TV."

To make its website more appealing to advertisers, YouTube has helped create hundreds of "premium channels" featuring professionally produced video as opposed to the amateur clips YouTube is famous for. And it's developed a type of video ad that users can skip after five seconds - advertisers only pay if the ad is watched all the way through.

PRICE DEFLATION?

Despite the growth in Web video ad spending, which eMarketer estimates reached $2.93 billion in the United States last year, the firm said the spending still represents only about 10 percent of the broader online advertising market.

And that is a mere drop in the bucket compared with the $68 billion that Kantar Media estimates was spent on television advertising in 2011.

One potential constraint is the way big brands and agencies organize their marketing budgets, says Pivotal Research Group analyst Brian Wieser. Online video ads are typically funded from Web ad budgets rather than a much larger pool set aside for TV.

Analysts also note that the rich rates websites collect for video ads will decrease as more Internet sites open to ads - something that's already happening thanks to technology that automatically pairs ads with videos on websites.

Still, many analysts and industry executives are optimistic about what they see as the bigger picture.

"The number of people watching TV seems to be stagnating or declining, and the number of people turning to the Internet for entertainment is surging," said RBC's Mahaney. "It almost inevitably drives these TV budgets online"

(The story corrects 5th paragaph to show that Nikesh Arora said spending by YouTube advertisers grew in 2012.)

(Reporting By Alexei Oreskovic; additional reporting by Gerry Shih; Editing by Leslie Adler)

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Yahoo sees revenue climb this year, but long road ahead

(Reuters) - Yahoo Inc forecast a modest uptick in revenue for the current year as it revamps its family of websites but Chief Executive Marissa Mayer warned it would be a long journey to revive the Internet company's fortunes.

In Yahoo's first financial outlook since Mayer became CEO in July, the company outlined a plan to trigger a "chain reaction of growth" by overhauling a dozen of its online services to increase the amount of time users spent on its websites.

It also pointed to strength in its search advertising business and progress made in improving its internal operations.

Yahoo's shares were 3 percent higher in after hours trade after the revenue projection was disclosed during an analysts conference call, shedding some ground after earlier rising as much as 4.5 percent.

But weakness in Yahoo's display ad business, which accounts for roughly 40 percent of the company's total revenue, caught some analysts by surprise.

"While the road to growth is certain, it will not be immediate," said Mayer, a former Google Inc executive and Yahoo's third full-time CEO since September 2011.

Yahoo said that revenue, excluding fees it pays to partner websites, will range between $4.5 billion and $4.6 billion in 2013, implying an annual growth rate of 0.7 percent to 3 percent.

Finance Chief Ken Goldman also warned investors to expect "an investment phase" in the first half of the year, which he said would impact profit margins.

"What was clear from the call is that this is a long-term turnaround story," said Macquarie Research analyst Ben Schachter. "We shouldn't expect anything to just snap back and correct itself."

During the fourth quarter, Yahoo's net revenue increased 4 percent year-on-year to $1.22 billion, as search advertising sales offset a 10 percent decline in the number of display ads sold on Yahoo's core properties.

Mayer said the decline was the result of less activity by visitors to its popular websites, such as its Web email service, and to a lesser extent due to users accessing the Web on smartphones, where Yahoo's ad business is not as strong.

Efforts to revamp its mobile properties, begun last year with a redesign of the photo-sharing service Flickr, remain on track, said Mayer, noting that Yahoo now has 200 million monthly mobile users.

"From a monetization perspective this is still a very nascent source of revenue for us. With any platform shift, revenue always followed users and mobile will be no different," she said.

Mayer took over after a tumultuous period at Yahoo in which former CEO Scott Thompson resigned after less than 6 months on the job over a controversy about his academic credentials and in which Yahoo co-founder Jerry Yang resigned from the board and cut his ties with the company.

Yahoo's stock has risen roughly 30 percent since Mayer took the helm, reaching its highest levels since 2008.

Part of the stock's rise has been driven by significant stock buybacks, using proceeds from a $7.6 billion deal to sell half of its 40 percent stake in Chinese Internet company Alibaba Group, said Sameet Sinha, an analyst with B. Riley Caris.

Yahoo said it repurchased $1.5 billion worth of shares during the fourth quarter.

The company's fourth-quarter net income was $272.3 million, or 23 cents per share, versus $295.6 million, or 24 cents per share in the year-ago period.

Excluding certain items, Yahoo said it had earnings per share of 32 cents, versus the average analyst expectation of 28 cents according to Thomson Reuters I/B/E/S.

For the first quarter, Yahoo said it expects revenue, excluding partner website fees, of $1.07 billion to $1.1 billion, trailing the $1.1 billion that Wall Street analysts expect on average.

Shares of Yahoo were up 59 cents at $20.90 in after-hours trading on Monday.

(Reporting by Alexei Oreskovic; Editing by Phil Berlowitz and Edwina Gibbs)

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Japan to start 4K TV broadcast in July 2014: report

TOKYO (Reuters) - The Japanese government is set to launch the world's first 4K TV broadcast in July 2014, roughly two years ahead of schedule, to help stir demand for ultra high-definition televisions, the Asahi newspaper reported on Sunday without citing sources.

The service will begin from communications satellites, followed by satellite broadcasting and ground digital broadcasting, the report said.

The 4K TVs, which boast four times the resolution of current high-definition TVs, are now on sale by Japanese makers including Sony Corp , Panasonic and Sharp Corp . Other manufacturers include South Korea's LG Electronics .

Japan's Ministry of Internal Affairs and Communications had aimed to kick-start the 4K TV service in 2016. That has been brought forward to July 2014, when the final match of the 2014 football World Cup is set to take place in Brazil, the Asahi report said.

In Japan, the development of super high-definition 8K TVs is in progress, and the Ministry of Internal Affairs and Communications plans to launch the test 8K TV broadcast in 2016, two years ahead of schedule, it said.

(Reporting by Osamu Tsukimori; Editing by Paul Tait)

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5 Fascinating Facts We Learned From Reddit This Week

Click here to view the gallery: Reddit Facts 1/26

Did you know that John Wilkes Booth attended Abe Lincoln's second inaugural address? Or that you can work out with Richard Simmons for the low, low price of $12? You do now, thanks to this week's edition of Reddit Facts™.

[More from Mashable: 10 Qualities of an Effective Community Manager]

This story originally published on Mashable here.

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Samsung to invest $1.7 billion in Kunshan plant: Xinhua

BEIJING (Reuters) - South Korean electronics giant Samsung plans to invest $1.7 billion in expanding and fitting out its operations in Kunshan, a fast-growing manufacturing hub west of Shanghai, the Xinhua news agency said on Sunday.

Samsung's expansion comes as the world's largest maker of handsets, memory chips and televisions attempts to diversify its clients and exert greater control over its sprawling manufacturing network, which includes 250 supplier factories in China.

The company is already building a $7 billion chip complex in Xi'an, an industrial city in northwestern China.

The Kunshan investment will be used to build workshops, purchase equipment and set up research institutes operated by Samsung Electro-Mechanics Co., to support a chip carrier related project, Xinhua said, citing sources with the Kunshan municipal government.

Manufacturing in China is rapidly expanding, with electronics assembly lines displacing low-margin producers of textiles and toys.

Samsung's growing presence in China has earned it the attention of labor activists more accustomed to scrutinizing rival electronics manufacturing giant Foxconn.

Foxconn, the trading name of Taiwan's Hon Hai Precision Industry, conducted an internal audit and pledged to address issues at its supplier factories, after a report in 2012 found it had hired underage workers.

The Kunshan plant was originally set up in 2008.

(Reporting By Lucy Hornby; Editing by Alison Birrane)

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In Asia's trend-setting cities, iPhone fatigue sets in

SINGAPORE (Reuters) - Apple Inc's iconic iPhone is losing some of its luster among Asia's well-heeled consumers in Singapore and Hong Kong, a victim of changing mobile habits and its own runaway success.

Driven by a combination of iPhone fatigue, a desire to be different and a plethora of competing devices, users are turning to other brands, notably those from Samsung Electronics Co Ltd, eating into Apple's market share.

In Singapore, Apple's products were so dominant in 2010 that more devices here ran its iOS operating system per capita than anywhere else in the world.

But StatCounter http://gs.statcounter.com, which measures traffic collected across a network of 3 million websites, calculates that Apple's share of mobile devices in Singapore - iPad and iPhone - declined sharply last year. From a peak of 72 percent in January 2012, its share fell to 50 percent this month, while Android devices now account for 43 percent of the market, up from 20 percent in the same month last year.

In Hong Kong, devices running Apple's iOS now account for about 30 percent of the total, down from about 45 percent a year ago. Android accounts for nearly two-thirds.

"Apple is still viewed as a prestigious brand, but there are just so many other cool smartphones out there now that the competition is just much stiffer," said Tom Clayton, chief executive of Singapore-based Bubble Motion http://www.bubblemotion.com, which develops a popular regional social media app called Bubbly.

Where Hong Kong and Singapore lead, other key markets across fast-growing Asia usually follow.

"Singapore and Hong Kong tend to be, from an electronics perspective, leading indicators on what is going to be hot in Western Europe and North America, as well as what is going to take off in the region," said Jim Wagstaff, who runs a Singapore-based company called Jam Factory http://www.jamfactoryonline.com developing mobile apps for enterprises.

Southeast Asia is adopting smartphones fast - consumers spent 78 percent more on smartphones in the 12 months up to September 2012 than they did the year before, according to research company GfK http://www.gfkrt.com.

IN WITH THE YOUNG CROWD

Anecdotal evidence of iPhone fatigue isn't hard to find: Where a year ago iPhones swamped other devices on the subways of Hong Kong and Singapore they are now outnumbered by Samsung and HTC Corp smartphones.

While this is partly explained by the proliferation of Android devices, from the cheap to the fancy, there are other signs that Apple has lost followers.

Singapore entrepreneur Aileen Sim, recently launched an app for splitting bills called BillPin http://www.billpin.com, settling on an iOS version because that was the dominant platform in the three countries she was targeting - Singapore, India and the United States.

"But what surprised us was how strong the call for Android was when we launched our app," she said.

Indeed, 70 percent of their target users - 20-something college students and fresh graduates - said they were either already on Android or planned to switch over.

"Android is becoming really hard to ignore, around the region and in the U.S. for sure, but surprisingly even in Singapore," she said. "Even my younger early-20s cousins are mostly on Android now."

BillPin launched an Android version this month.

Napoleon Biggs, chief strategy officer at Gravitas Group http://www.gravitas.com.hk, a Hong Kong-based mobile marketing company, said that while Apple and the iPhone remained premium brands there, Samsung's promotional efforts were playing to an increasingly receptive audience.

For some, it is a matter of wanting to stand out from the iPhone-carrying crowd. Others find the higher-powered, bigger-screened Android devices better suited to their changing habits - watching video, writing Chinese characters - while the cost of switching devices is lower than they expected, given that most popular social and gaming apps are available for both platforms.

"Hong Kong is a very fickle place," Biggs said.

Janet Chan, a 25-year-old Hong Kong advertising executive, has an iPhone 5 but its fast-draining battery and the appeal of a bigger screen for watching movies is prodding her to switch to a Samsung Galaxy Note II.

"After Steve Jobs died, it seems the element of surprise in product launches isn't that great anymore," she said.

To be sure, there are still plenty of people buying Apple devices. Stores selling their products in places such as Indonesia were full over the Christmas holidays, and the company's new official store in Hong Kong's Causeway Bay has queues snaking out of the door most days.

But the iPhone's drop in popularity in trendy Hong Kong and Singapore is mirrored in the upmarket malls of the region.

"IPhones are like Louis Vuitton handbags," said marketing manager Narisara Konglua in Bangkok, who uses a Galaxy SIII. "It's become so commonplace to see people with iPads and iPhones so you lose your cool edge having one."

In the Indonesian capital Jakarta, an assistant manager at Coca Cola's local venture, Gatot Hadipratomo, agrees. The iPhone "used to be a cool gadget but now more and more people use it."

There is another influence at play: hip Korea. Korean pop music, movies and TV are hugely popular around the region and Samsung is riding that wave. And while the impact is more visible in Hong Kong and Singapore, it also translates directly to places like Thailand.

"Thais are not very brand-loyal," says Akkaradert Bumrungmuang, 24, a student at Mahidol University in Bangkok. "That's why whatever is hot or the in-thing to have is adopted quickly here. We follow Korea so whatever is fashionable in Korea will be a big hit."

(Additional reporting by Lee Chyen Yee in Hong Kong; Khettiya Jittapong and Amy Sawitta Lefevre in Bangkok, and Andjarsari Paramaditha in Jakarta; Editing by Emily Kaiser)

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Samsung puts lid on capex for the first time since financial crisis

SEOUL (Reuters) - Samsung Electronics Co turned cautious on spending for the first time since the global financial crisis, keeping its annual investment plan unchanged at 2012 levels, as demand for computer chips wanes and the smartphone market slows.

Samsung, one of the industry's most aggressive spenders, has ramped up capital expenditure every year since 2004 except 2009 to meet soaring demand for its array of consumer electronics and mobile devices. It sold a record 700,000 smartphones a day in the last quarter.

But with the personal computer market shrinking for the first time in 11 years, the global smartphone market growing more slowly, and Apple Inc moving to buy fewer of Samsung's microprocessors used in the iPhone and iPad, the South Korean IT giant is now forced to keep a lid on spending.

"Overall its earnings momentum remains intact, and smartphone shipments will continue to grow even in the traditionally weak first quarter, as Samsung's got a broader product line-up and Apple appears to be struggling in pushing iPhone volumes aggressively," said Lee Se-chul, a Seoul-based analyst at Meritz Securities.

Samsung, which reported a record quarterly and annual profit on Friday, said it would keep 2013 capital expenditure unchanged from 2012.

"The key word for us in investment in 2013 is flexibility. We'll decide as the market demand dictates," Robert Yi, head of Samsung's investor relations, told analysts.

Data from the company shows Samsung started to slow down planned investment in the last quarter.

Samsung said it spent 4.4 trillion won in October-December, pushing its 2012 investment to a record 23 trillion won ($21.5 billion). But the company said in October that it was on course to spend 25 trillion won in 2012.

Analysts had expected a 4-20 percent cut in Samsung's 2013 capital spending.

By contrast, Taiwanese rival TSMC is planning to raise its capital expenditure to $9 billion this year, aimed in part at winning Apple orders away from Samsung.

Shares in Samsung fell 2.1 percent as of 0250 GMT, lagging a 1.1 percent decline in the wider market.

RECORD EARNINGS

Samsung had poured money into factories to boost production of chips and panels used in Apple products and its Galaxy range devices, pushing its operating profit to 8.84 trillion won in the last quarter. The 89 percent increase from a year earlier was in line with its earlier estimate.

Profit at its mobile devices division, which makes phones, tablets and cameras, more than doubled to 5.44 trillion won in the quarter from a year earlier, lifted by a broader offering of smartphones - from the very cheap to the very expensive.

The division accounted for 62 percent of Samsung's overall fourth-quarter profit, up from 55 percent a year earlier.

Samsung is also seeing strong sales of its Note phablet, which analysts expect to help Samsung get through any seasonal weakness better than rivals.

Samsung, which doesn't provide a breakdown of smartphone sales, is estimated to have sold around 63 million smartphones in the last quarter, including 15 million Galaxy S IIIs and 7 million Note IIs.

The company also said 2012 operating profit rose 86 percent to an all-time high of 29 trillion won.

SAMSUNG VS APPLE

Samsung sold 213 million smartphones last year and enlarged its share of the global market to 30.4 percent from around 20 percent in 2011, a report by market research firm Strategy Analytics showed on Friday. The sharp increase reflects Samsung's aggressive marketing of its wide product range.

Apple's share of the market rose slightly to 19.4 percent from 19.0 percent in 2011, according to the report.

Globally, sales of smartphones surged 42.7 percent last year to 700 million, Strategy Analytics said.

Samsung said on Friday it expects the global smartphone segment to shrink in January-March from the seasonally strong fourth quarter, and that growth of the overall handset market will slow to the mid single-digits this year.

The forecast is in line with industry estimates, with signs of a slowdown having already emerged.

Apple shipped 47.8 million iPhones in the three months ended December, a record that nonetheless disappointed many analysts accustomed to years of outperformance. The Cupertino, California-based company also missed Wall Street's revenue forecast for a third straight quarter as iPhone sales lagged expectations.

Apple shares have dropped by more than a third since mid-September as investors fret that its days of hyper growth are over and its devices are no longer as 'must-have' as they were.

By contrast, shares in Samsung have risen 12 percent in the same period as the company once seen as quick to copy the ideas of others now sets the pace in innovation.

At the world's biggest electronics show in Las Vegas this month, Samsung unveiled a prototype phone with a flexible display that can be folded almost like paper, and a microchip with eight processing cores, creating a buzz that these may be used in the next Galaxy range.

"It's very probable to us that the Exynos 5 Octa (processor) will find its way into the Galaxy S4," UBS analyst Nicolas Gaudois wrote in a recent note.

"It also looked as if the curved display is close enough to finished product. We came away even more convinced that displays will provide significant differentiation to Samsung devices, and application processors will materially grow over time," Gaudois said. ($1 = 1066.2000 Korean won)

(This story corrects 19th paragraph to show Apple's 2012 smartphone market share rose slightly according to Strategy Analytics.)

(Reporting by Miyoung Kim; Editing by Ryan Woo)

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BlackRock to buy $80 million Twitter stake: source

SAN FRANCISCO (Reuters) - BlackRock, the world's largest asset management company, has taken an $80 million stake in Twitter Inc, a person with knowledge of the deal said Friday.

The six-year old social media company will not raise new capital as part of the private deal that values the firm at more than $9 billion. BlackRock will buy shares directly from early Twitter employees seeking to liquidate their stock holdings and options.

Twitter's new valuation represents a slight rise from late 2011, when the company facilitated a similar tender offer with Prince Alwaleed bin Talal of Saudi Arabia that valued the company at a reported $8.4 billion.

Twitter sought investors for another tender offer last summer in the wake of Facebook Inc's botched initial public offering in May, but did not complete the deal until recently, according to people with knowledge of the situation.

In recent years other tech companies including Facebook, Groupon Inc and SurveyMonkey have used similar transactions to cash out existing employees and delay an initial public offering. Twitter itself is rumored to be a potential IPO prospect within two years.

Several hundred Twitter employees, including many who joined the company before 2009, will be eligible to sell their shares as part of the transaction.

(Reporting By Gerry Shih; editing by Andrew Hay)

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Pinterest Introduces 'News' Feature to Improve Content Discovery

In place of Pinterest's activity feed, the company has installed a new tool called "News." The feed displays boards where your recent pins have been repinned, creating a feed of potentially relevant content that users can peruse from their own profiles or those of others.

According to a blog post introducing News, Pinterest explains the tool is meant to foster content discovery. "To make relevant and interesting content easier to find, we are introducing News," Pinterest writes. "We think this will help pinners like you find more relevant boards and pins more easily."

[More from Mashable: 10 Awesome Pranks to Play On Your Facebook Friends]

Pinterest began rolling out News to a gradual population of users on Jan. 16. It is unclear precisely when News will reach the entire network, although the company's blog anticipates "over the next few weeks." Pinterest could not be reached for comment.

[More from Mashable: The 25 Most Buzzed-About Universities of 2013]

Users can access News from two places: See a preview of News in the left-hand column of the Pinterest homepage, or head to any user profile and click "News," an option next to follower count.

Although users can access a "News" tab on Pinterest's mobile app, the feed only displays repins (akin to the old activity feed) and does not steer users to related boards like its web counterpart. Nor does a user's mobile profile contain a News option.

Should a user still wish to track information found in the old activity feed (i.e. likes and new followers), he or she can configure notifications settings to receive the news via email.

BONUS: 10 Simple DIY Gift Ideas on Pinterest

Click here to view the gallery: 10 DIY Gift Ideas on Pinterest

Image composite courtesy of Pinterest, iStockphoto, samxmeg

This story originally published on Mashable here.

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Hackers claim attack on Justice Department website

WASHINGTON (Reuters) - Hackers sympathetic to the late computer prodigy Aaron Swartz claimed on Saturday to have infiltrated the website of the U.S. Justice Department's Sentencing Commission, and said they planned to release government data.

The Sentencing Commission site, www.ussc.gov , was shut down early Saturday.

Identifying themselves as Anonymous, a loosely organized group of unknown provenance associated with a range of recent online actions, the hackers voiced outrage over Swartz' suicide on January 11.

In a video posted online, the hackers criticized the government's prosecution of Swartz, who had been facing trial on charges that he used the Massachusetts Institute of Technology's computer networks to steal more than 4 million articles from JSTOR, an online archive and journal distribution service.

Swartz had faced a maximum sentence of 31 years in prison and fines of up to $1 million.

The FBI is investigating the attack, according to Richard McFeely, of the bureau's Criminal, Cyber, Response, and Services Branch.

"We were aware as soon as it happened and are handling it as a criminal investigation," McFeely said in an emailed statement. "We are always concerned when someone illegally accesses another person's or government agency's network."

(Reporting by Deborah Zabarenko; Editing by Vicki Allen)

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BlackRock to buy $80 million Twitter stake: source

SAN FRANCISCO (Reuters) - BlackRock, the world's largest asset management company, has taken an $80 million stake in Twitter Inc, a person with knowledge of the deal said Friday.

The six-year old social media company will not raise new capital as part of the private deal that values the firm at more than $9 billion. BlackRock will buy shares directly from early Twitter employees seeking to liquidate their stock holdings and options.

Twitter's new valuation represents a slight rise from late 2011, when the company facilitated a similar tender offer with Prince Alwaleed bin Talal of Saudi Arabia that valued the company at a reported $8.4 billion.

Twitter sought investors for another tender offer last summer in the wake of Facebook Inc's botched initial public offering in May, but did not complete the deal until recently, according to people with knowledge of the situation.

In recent years other tech companies including Facebook, Groupon Inc and SurveyMonkey have used similar transactions to cash out existing employees and delay an initial public offering. Twitter itself is rumored to be a potential IPO prospect within two years.

Several hundred Twitter employees, including many who joined the company before 2009, will be eligible to sell their shares as part of the transaction.

(Reporting By Gerry Shih; editing by Andrew Hay)

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Hands On With Twitter's Social Video App, Vine

Twitter launched Vine on Thursday -- an app that lets you share 6-second video clips.

Currently iOS-only, the stop-motion videos can include as many scenes as you can fit in. Video stops and starts when you press on your device's screen. Your finished product can then be shared just on Vine, or with friends on Twitter or -- in theory -- Facebook.

[More from Mashable: Twitter Can Help Health Officials Track Outbreaks]

Still in its infancy, the service isn't without drawbacks. Sharing for instance can only be done with the video is initially uploaded/. So if you forget to select that Twitter button when you upload your followers will be out of luck forever.

Thursday at least, uploading those videos to social networks also takes a bit of time. Some of our videos went up immediately, while others took close to an hour.

[More from Mashable: How to Use Twitter's Vine to Create and Share Videos]

Sound is also recorded along with each video clip. While that's not a huge deal if you're recording in a quiet location, video recorded where there's a lot of noise can sound choppy and be jarring for viewers. (Videos play automatically in Twitter, but the default setting appears to be on mute.)

And then there's Twitter's relationship with Facebook. A few hours after the app's launch Thursday Facebook blocked the service from being able to access your friends lists.

Knowing which of your Facebook friends are using Vine isn't essential to the service, but it does tend to make finding those friends – who you might not be connected to on Twitter – that much harder.

Have you tried Vine out yet? Let us know what you think about the app in the comments.

Click here to view the gallery: How To Use Vine

Mashable Thumbnail, Emily Price

This story originally published on Mashable here.

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Apple's China dilemma: market share or cachet?

HONG KONG (Reuters) - Apple Inc's third straight disappointing quarter signals an urgent need for the global technology leader to drum up new revenue - and China may provide the answer.

Now more than ever, analysts say, Apple needs to get it right in the world's most populous country, where it ranks only sixth in annual smartphone sales and Samsung Electronics remains the runaway leader.

Apple's best plan of attack remains securing a deal with the country's top mobile carrier by far, China Mobile Ltd. It also needs to push the development of more localized apps and extend installment financing to bring its pricey smartphones within the reach of an urban populace with an average annual income of just $3,500.

But it should resist the temptation to just put out a cheaper iPhone, some analysts say. Introducing a long-rumored lower-cost version of the gadget could backfire by diluting Apple's premium brand - one of its most valuable assets.

"If you think of Apple, it's like a bright star in the galaxy, shining so brightly and everyone is looking at it. But it might have dimmed a bit as other stars such as Samsung have popped up," said TZ Wong, an analyst at research firm IDC.

"I don't think it's in Apple's interest to further dim its star power by stepping into the low-end segment."

With Apple's product pipeline guarded with the same zeal accorded state secrets, some analysts are focusing instead on what the world's largest technology company needs to do to finally become a major player in the world's No. 2 economy.

While iPhone sales leapt 60 percent last quarter, investors worry that, in the longer term, the company may be pricing itself out of a golden opportunity while Samsung and local rivals from Huawei Technologies Co Ltd to ZTE blanket the market with cheaper phones that rival the iPhone in quality and usability.

A deal with China Mobile, the world's largest mobile phone carrier with more than 700 million users, will prove instrumental but analysts say that may not happen until the issuance of 4G wireless licenses, which could take place later this year or even in 2014.

"The competitive landscape has definitely cranked up a few notches from a year ago. So there is more urgency for Apple to explore its ways to grow," IDC's Wong said.

CEO Tim Cook has made it no secret that China is an area of intense focus for the iPad and iPhone maker, especially given the still-low penetration across the country of smartphones and tablets. Apple has said it will continue to expand its retail network there, and in January, Cook flew to Beijing for at least the second time in a year, to meet with pivotal carrier China Mobile.

A STAR IS DIMMED

On Wednesday, Apple missed revenue forecasts for the third straight quarter after iPhone sales came in below expectations, fanning fears that its dominance of consumer electronics is slipping.

Apple's revenue in China, including neighboring Hong Kong and Taiwan, totaled $7.3 billion in the December quarter, up 60 percent from a year earlier.

But there are signs that Apple's vaunted cachet in the world's most populous nation is waning.

Recent product launches for the mini-iPad and the iPhone 5 have drawn a relatively subdued response from Chinese consumers, in stark contrast to the fist-fights and egg-hurling at its Beijing store a year ago when sales of the iPhone 4S were delayed.

Since the iPhone 5 went on sale in mid-December, transactions have fallen by half, according to the Taobao Index, the consumer research data website of Internet giant Alibaba Group.

The iPhone is also losing out as consumers opt for bigger screens to watch Chinese soap operas while travelling on trains, or affordable smartphones in the sub-1,000 yuan ($160) category made by local vendors.

"When I started using a bigger screen, there was no turning back for me. Small screens don't work anymore," said a business executive surnamed Wen, as he swiped the screen on his Samsung Galaxy Note during lunch in Beijing.

Around half of the more than 60 million smartphones shipped in China in the third quarter last year had screens that were bigger than 4 inches, based on IDC's latest figures. The iPhone 5 comes with a 4-inch screen, while the Galaxy Note II's screen is 5.5 inches.

Also, local vendors such as Coolpad smartphone maker Yulong Computer Telecommunication Scientific (Shenzhen) Co Ltd, which offers cheaper alternatives, and Meizu Technology Co Ltd, known for its minimalist designs, have seen its legion of fans grow.

Price is a key factor, especially in the Chinese market where around 80 percent of the more than one billion mobile phone users are still on 2G networks.

On the online Taobao website, Coolpads and low-end models made by Huawei Technologies Co Ltd and ZTE Corp are selling at below 1,000 yuan, a sweet spot for many consumers switching from basic phones to smartphones.

Apple has moved to address that, partnering with China Merchants Bank to offer financing and installment options so that buyers can pay with the bank's credit card when they shop online, media reports said.

Finally, expanding the number of applications customized for China will help grow Apple's market share but that might need tighter collaboration with Chinese companies, such as Baidu Inc and Tencent Holdings Ltd.

"Consumers will definitely welcome closer cooperation between Apple and Chinese tech firms to customize the iPhone for the use of apps such as Tencent's WeChat," said Frederick Wong, executive director of Avant Capital Management (Hong Kong) Ltd, a fund that invests in Apple-related options.

(Editing by Edwin Chan and Richard Chang)

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Samsung puts lid on capex for the first time since financial crisis

SEOUL (Reuters) - Samsung Electronics Co turned cautious on spending for the first time since the global financial crisis, keeping its annual investment plan unchanged at 2012 levels, as demand for computer chips wanes and the smartphone market slows.

Samsung, one of the industry's most aggressive spenders, has ramped up capital expenditure every year since 2004 except 2009 to meet soaring demand for its array of consumer electronics and mobile devices. It sold a record 700,000 smartphones a day in the last quarter.

But with the personal computer market shrinking for the first time in 11 years, the global smartphone market growing more slowly, and Apple Inc moving to buy fewer of Samsung's microprocessors used in the iPhone and iPad, the South Korean IT giant is now forced to keep a lid on spending.

"Overall its earnings momentum remains intact, and smartphone shipments will continue to grow even in the traditionally weak first quarter, as Samsung's got a broader product line-up and Apple appears to be struggling in pushing iPhone volumes aggressively," said Lee Se-chul, a Seoul-based analyst at Meritz Securities.

Samsung, which reported a record quarterly and annual profit on Friday, said it would keep 2013 capital expenditure unchanged from 2012.

"The key word for us in investment in 2013 is flexibility. We'll decide as the market demand dictates," Robert Yi, head of Samsung's investor relations, told analysts.

Data from the company shows Samsung started to slow down planned investment in the last quarter.

Samsung said it spent 4.4 trillion won in October-December, pushing its 2012 investment to a record 23 trillion won ($21.5 billion). But the company said in October that it was on course to spend 25 trillion won in 2012.

Analysts had expected a 4-20 percent cut in Samsung's 2013 capital spending.

By contrast, Taiwanese rival TSMC is planning to raise its capital expenditure to $9 billion this year, aimed in part at winning Apple orders away from Samsung.

Shares in Samsung fell 2.1 percent as of 0250 GMT, lagging a 1.1 percent decline in the wider market.

RECORD EARNINGS

Samsung had poured money into factories to boost production of chips and panels used in Apple products and its Galaxy range devices, pushing its operating profit to 8.84 trillion won in the last quarter. The 89 percent increase from a year earlier was in line with its earlier estimate.

Profit at its mobile devices division, which makes phones, tablets and cameras, more than doubled to 5.44 trillion won in the quarter from a year earlier, lifted by a broader offering of smartphones - from the very cheap to the very expensive.

The division accounted for 62 percent of Samsung's overall fourth-quarter profit, up from 55 percent a year earlier.

Samsung is also seeing strong sales of its Note phablet, which analysts expect to help Samsung get through any seasonal weakness better than rivals.

Samsung, which doesn't provide a breakdown of smartphone sales, is estimated to have sold around 63 million smartphones in the last quarter, including 15 million Galaxy S IIIs and 7 million Note IIs.

The company also said 2012 operating profit rose 86 percent to an all-time high of 29 trillion won.

SAMSUNG VS APPLE

Samsung sold 213 million smartphones last year and enlarged its share of the global market to 30.4 percent from around 20 percent in 2011, a report by market research firm Strategy Analytics showed on Friday. The sharp increase reflects Samsung's aggressive marketing of its wide product range.

Apple's share of the market rose slightly to 19.4 percent from 19.0 percent in 2011, according to the report.

Globally, sales of smartphones surged 42.7 percent last year to 700 million, Strategy Analytics said.

Samsung said on Friday it expects the global smartphone segment to shrink in January-March from the seasonally strong fourth quarter, and that growth of the overall handset market will slow to the mid single-digits this year.

The forecast is in line with industry estimates, with signs of a slowdown having already emerged.

Apple shipped 47.8 million iPhones in the three months ended December, a record that nonetheless disappointed many analysts accustomed to years of outperformance. The Cupertino, California-based company also missed Wall Street's revenue forecast for a third straight quarter as iPhone sales lagged expectations.

Apple shares have dropped by more than a third since mid-September as investors fret that its days of hyper growth are over and its devices are no longer as 'must-have' as they were.

By contrast, shares in Samsung have risen 12 percent in the same period as the company once seen as quick to copy the ideas of others now sets the pace in innovation.

At the world's biggest electronics show in Las Vegas this month, Samsung unveiled a prototype phone with a flexible display that can be folded almost like paper, and a microchip with eight processing cores, creating a buzz that these may be used in the next Galaxy range.

"It's very probable to us that the Exynos 5 Octa (processor) will find its way into the Galaxy S4," UBS analyst Nicolas Gaudois wrote in a recent note.

"It also looked as if the curved display is close enough to finished product. We came away even more convinced that displays will provide significant differentiation to Samsung devices, and application processors will materially grow over time," Gaudois said. ($1 = 1066.2000 Korean won)

(This story corrects 19th paragraph to show Apple's 2012 smartphone market share rose slightly according to Strategy Analytics.)

(Reporting by Miyoung Kim; Editing by Ryan Woo)

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'Temple Run 2' Arrives For Android

Temple Run 2 has arrived for Android.

The app launched for iOS last week, and quickly rose to the top of the App Store charts, securing an astounding 20 million downloads in just four days. Within that time, fans played the game a mind-boggling 210 million times -- that's 1,775 years of gameplay.

[More from Mashable: Swipp Wants To Know What The World Thinks About Everything]

"The response from fans has been overwhelming," Keith Shepherd, co-founder of Imangi (Temple Run's creators), said in response to the game's popularity on iOS. "We are thrilled players want more of the Temple Run universe, and we hope to grow and expand the game over the coming months."

Shepherd launched the app's Android version at 12 a.m. ET on Thursday.

[More from Mashable: Google Removes 'Make Me Asian' App After Protests of Racism]

I pushed the publish button for Temple Run 2 on Google Play about 10 minutes ago.It should start showing up on the market soon! Exciting!

— Keith Shepherd (@kshepherd) January 24, 2013

The original Temple Run was a runaway success, and has been downloaded more than 170 million times on iOS and Android since its launch in 2011.

Temple Run 2 is available now as a free download from Google Play.

Are you excited about Temple Run 2 launching for Android? Let us know in the comments below.

Click here to view the gallery: 'Temple Run 2'

Image courtesy Temple Run 2

This story originally published on Mashable here.

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Apple's China dilemma: market share or cachet?

HONG KONG (Reuters) - Apple Inc's third straight disappointing quarter signals an urgent need for the global technology leader to drum up new revenue - and China may provide the answer.

Now more than ever, analysts say, Apple needs to get it right in the world's most populous country, where it ranks only sixth in annual smartphone sales and Samsung Electronics remains the runaway leader.

Apple's best plan of attack remains securing a deal with the country's top mobile carrier by far, China Mobile Ltd. It also needs to push the development of more localized apps and extend installment financing to bring its pricey smartphones within the reach of an urban populace with an average annual income of just $3,500.

But it should resist the temptation to just put out a cheaper iPhone, some analysts say. Introducing a long-rumored lower-cost version of the gadget could backfire by diluting Apple's premium brand - one of its most valuable assets.

"If you think of Apple, it's like a bright star in the galaxy, shining so brightly and everyone is looking at it. But it might have dimmed a bit as other stars such as Samsung have popped up," said TZ Wong, an analyst at research firm IDC.

"I don't think it's in Apple's interest to further dim its star power by stepping into the low-end segment."

With Apple's product pipeline guarded with the same zeal accorded state secrets, some analysts are focusing instead on what the world's largest technology company needs to do to finally become a major player in the world's No. 2 economy.

While iPhone sales leapt 60 percent last quarter, investors worry that, in the longer term, the company may be pricing itself out of a golden opportunity while Samsung and local rivals from Huawei Technologies Co Ltd to ZTE blanket the market with cheaper phones that rival the iPhone in quality and usability.

A deal with China Mobile, the world's largest mobile phone carrier with more than 700 million users, will prove instrumental but analysts say that may not happen until the issuance of 4G wireless licenses, which could take place later this year or even in 2014.

"The competitive landscape has definitely cranked up a few notches from a year ago. So there is more urgency for Apple to explore its ways to grow," IDC's Wong said.

CEO Tim Cook has made it no secret that China is an area of intense focus for the iPad and iPhone maker, especially given the still-low penetration across the country of smartphones and tablets. Apple has said it will continue to expand its retail network there, and in January, Cook flew to Beijing for at least the second time in a year, to meet with pivotal carrier China Mobile.

A STAR IS DIMMED

On Wednesday, Apple missed revenue forecasts for the third straight quarter after iPhone sales came in below expectations, fanning fears that its dominance of consumer electronics is slipping.

Apple's revenue in China, including neighboring Hong Kong and Taiwan, totaled $7.3 billion in the December quarter, up 60 percent from a year earlier.

But there are signs that Apple's vaunted cachet in the world's most populous nation is waning.

Recent product launches for the mini-iPad and the iPhone 5 have drawn a relatively subdued response from Chinese consumers, in stark contrast to the fist-fights and egg-hurling at its Beijing store a year ago when sales of the iPhone 4S were delayed.

Since the iPhone 5 went on sale in mid-December, transactions have fallen by half, according to the Taobao Index, the consumer research data website of Internet giant Alibaba Group.

The iPhone is also losing out as consumers opt for bigger screens to watch Chinese soap operas while travelling on trains, or affordable smartphones in the sub-1,000 yuan ($160) category made by local vendors.

"When I started using a bigger screen, there was no turning back for me. Small screens don't work anymore," said a business executive surnamed Wen, as he swiped the screen on his Samsung Galaxy Note during lunch in Beijing.

Around half of the more than 60 million smartphones shipped in China in the third quarter last year had screens that were bigger than 4 inches, based on IDC's latest figures. The iPhone 5 comes with a 4-inch screen, while the Galaxy Note II's screen is 5.5 inches.

Also, local vendors such as Coolpad smartphone maker Yulong Computer Telecommunication Scientific (Shenzhen) Co Ltd, which offers cheaper alternatives, and Meizu Technology Co Ltd, known for its minimalist designs, have seen its legion of fans grow.

Price is a key factor, especially in the Chinese market where around 80 percent of the more than one billion mobile phone users are still on 2G networks.

On the online Taobao website, Coolpads and low-end models made by Huawei Technologies Co Ltd and ZTE Corp are selling at below 1,000 yuan, a sweet spot for many consumers switching from basic phones to smartphones.

Apple has moved to address that, partnering with China Merchants Bank to offer financing and installment options so that buyers can pay with the bank's credit card when they shop online, media reports said.

Finally, expanding the number of applications customized for China will help grow Apple's market share but that might need tighter collaboration with Chinese companies, such as Baidu Inc and Tencent Holdings Ltd.

"Consumers will definitely welcome closer cooperation between Apple and Chinese tech firms to customize the iPhone for the use of apps such as Tencent's WeChat," said Frederick Wong, executive director of Avant Capital Management (Hong Kong) Ltd, a fund that invests in Apple-related options.

(Editing by Edwin Chan and Richard Chang)

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Microsoft profit dips ahead of Office revamp

SEATTLE (Reuters) - Microsoft Corp's quarterly profit edged lower as Office software sales slowed ahead of a new launch, offsetting a solid but unspectacular start for its Windows 8 operating system and sending the company's shares down 1.4 percent.

The results mark a stark change from the 1990s, when Microsoft was the unchallenged king of computing and the release of a new Windows operating system would supercharge sales, generate excitement and generally boost its stock.

None of that appears to be true now, as Microsoft has been overtaken by Apple Inc and Google Inc in the rush toward mobile computing, while sales of traditional desktop computers are in decline.

"There's still no sign that Windows 8 is a gangbuster," said Andrew Bartels, an analyst at Forrester Research. "Compared to prior periods, where you saw a big increase when a new one came out, you're not seeing that."

Profit at the world's largest software company slid to $6.4 billion, or 76 cents per share, in the fiscal second quarter, from $6.6 billion, or 78 cents per share, in the year-ago quarter.

Wall Street had expected 75 cents per share, on average, according to Thomson Reuters I/B/E/S.

Overall sales rose 3 percent to $21.5 billion, Microsoft said on Thursday, in line with analysts' estimates.

The biggest factor weighing on Microsoft was a 10 percent decline in sales at its Office unit to $5.7 billion, which took into account the loss of deferred revenue relating to discounted upgrades to the new version of the software, expected shortly.

"It's a pause before a product launch, which is typical," said Josh Olson, an analyst at Edward Jones.

WINDOWS SHRUG

Windows sales jumped 24 percent to $5.9 billion, slightly ahead of analysts' average expectations, which had been gradually lowered over the last few months. That also included some deferred revenue relating to discounted upgrades.

Microsoft said it has sold more than 60 million Windows 8 licenses since its late-October launch, an unexceptional start for a product which has not gripped the public's imagination in the way of Apple's iPad.

The company already announced 60 million Windows 8 sales two weeks ago, broadly in line with Windows 7 sales three years before.

"Windows 8 continues to have an uphill battle in convincing investors this is going to be the key to the growth story for Microsoft," said Daniel Ives, an analyst at FBR Capital Markets. "It continues to be a major prove-me product cycle."

Microsoft did not detail sales of its new Surface tablet - a direct competitor to the iPad - although chief financial officer Peter Klein said the company was expanding production and distribution.

Windows executives suggest that Windows will win more people over when new touch-screen devices start hitting the shelves in coming months.

"Demand is stronger than supply across a number of key device types, whether Windows tablets, convertibles, or all-in-ones," Tami Reller, chief financial officer of Microsoft's Windows unit, told Reuters earlier this month. "Most of the opportunity is still ahead of us."

Analysts seem prepared to give Microsoft more time to prove its point.

"It's been disruptive but the PC market is far from dead," said Colin Gillis, an analyst at BGC Financial. "Even if they have minimal success with Surface, they don't need much to move the needle."

Microsoft shares have fallen 2 percent since Windows 8 was launched on October 26, compared to a 5 percent gain in the tech-heavy Nasdaq composite index. They fell to $27.06 in after-hours trading, after closing at $27.23 on Nasdaq.

(Additional reporting by Jennifer Saba; Editing by Richard Chang and Bob Burgdorfer)

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Samsung puts lid on capex for first time since financial crisis

SEOUL (Reuters) - Samsung Electronics Co turned cautious on spending for the first time since the global financial crisis, keeping its annual investment plan unchanged at 2012 levels, as demand for computer chips wanes and the smartphone market slows.

Samsung, one of the industry's most aggressive spenders, has ramped up capital expenditure every year since 2004 except 2009 to meet soaring demand for its array of consumer electronics and mobile devices. It sold a record 700,000 smartphones a day in the last quarter.

But with the personal computer market shrinking for the first time in 11 years, the global smartphone market growing more slowly, and Apple Inc moving to buy fewer of Samsung's microprocessors used in the iPhone and iPad, the South Korean IT giant is now forced to keep a lid on spending.

"Overall its earnings momentum remains intact, and smartphone shipments will continue to grow even in the traditionally weak first quarter, as Samsung's got a broader product line-up and Apple appears to be struggling in pushing iPhone volumes aggressively," said Lee Se-chul, a Seoul-based analyst at Meritz Securities.

Samsung, which reported a record quarterly and annual profit on Friday, said it would keep 2013 capital expenditure unchanged from 2012.

"The key word for us in investment in 2013 is flexibility. We'll decide as the market demand dictates," Robert Yi, head of Samsung's investor relations, told analysts.

Data from the company shows Samsung started to slow down planned investment in the last quarter.

Samsung said it spent 4.4 trillion won in October-December, pushing its 2012 investment to a record 23 trillion won ($21.5 billion). But the company said in October that it was on course to spend 25 trillion won in 2012.

Analysts had expected a 4-20 percent cut in Samsung's 2013 capital spending.

By contrast, Taiwanese rival TSMC is planning to raise its capital expenditure to $9 billion this year, aimed in part at winning Apple orders away from Samsung.

Shares in Samsung fell 2.1 percent as of 0250 GMT, lagging a 1.1 percent decline in the wider market.

RECORD EARNINGS

Samsung had poured money into factories to boost production of chips and panels used in Apple products and its Galaxy range devices, pushing its operating profit to 8.84 trillion won in the last quarter. The 89 percent increase from a year earlier was in line with its earlier estimate.

Profit at its mobile devices division, which makes phones, tablets and cameras, more than doubled to 5.44 trillion won in the quarter from a year earlier, lifted by a broader offering of smartphones - from the very cheap to the very expensive.

The division accounted for 62 percent of Samsung's overall fourth-quarter profit, up from 55 percent a year earlier.

Samsung is also seeing strong sales of its Note phablet, which analysts expect to help Samsung get through any seasonal weakness better than rivals.

Samsung, which doesn't provide a breakdown of smartphone sales, is estimated to have sold around 63 million smartphones in the last quarter, including 15 million Galaxy S IIIs and 7 million Note IIs.

The company also said 2012 operating profit rose 86 percent to an all-time high of 29 trillion won.

SAMSUNG VS APPLE

Samsung sold 213 million smartphones last year and enlarged its share of the global market to 30.4 percent from around 20 percent in 2011, a report by market research firm Strategy Analytics showed on Friday. The sharp increase reflects Samsung's aggressive marketing of its wide product range.

Apple's share of the market shrank slightly to 19.4 percent from 19.0 percent in 2011, according to the report.

Globally, sales of smartphones surged 42.7 percent last year to 700 million, Strategy Analytics said.

Samsung said on Friday it expects the global smartphone segment to shrink in January-March from the seasonally strong fourth quarter, and that growth of the overall handset market will slow to the mid single-digits this year.

The forecast is in line with industry estimates, with signs of a slowdown having already emerged.

Apple shipped 47.8 million iPhones in the three months ended December, a record that nonetheless disappointed many analysts accustomed to years of outperformance. The Cupertino, California-based company also missed Wall Street's revenue forecast for a third straight quarter as iPhone sales lagged expectations.

Apple shares have dropped by more than a third since mid-September as investors fret that its days of hyper growth are over and its devices are no longer as 'must-have' as they were.

By contrast, shares in Samsung have risen 12 percent in the same period as the company once seen as quick to copy the ideas of others now sets the pace in innovation.

At the world's biggest electronics show in Las Vegas this month, Samsung unveiled a prototype phone with a flexible display that can be folded almost like paper, and a microchip with eight processing cores, creating a buzz that these may be used in the next Galaxy range.

"It's very probable to us that the Exynos 5 Octa (processor) will find its way into the Galaxy S4," UBS analyst Nicolas Gaudois wrote in a recent note.

"It also looked as if the curved display is close enough to finished product. We came away even more convinced that displays will provide significant differentiation to Samsung devices, and application processors will materially grow over time," Gaudois said. ($1 = 1066.2000 Korean won)

(Reporting by Miyoung Kim; Editing by Ryan Woo)

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ITC to review Apple patent complaint against Samsung

WASHINGTON (Reuters) - A U.S. trade panel that specializes in patent disputes will review a potentially key decision in the patent fight between Samsung Electronics and Apple Inc over smartphones and tablets.

The panel, the International Trade Commission, also sent part of the dispute back to judge, who ruled in October that Samsung, the world's top maker of smartphones, infringed four Apple patents but did not violate two others.

The full commission said on Wednesday it would review the judge's decision, and asked the agency judge to take a second look at portions of two patents where he had found that Samsung infringed.

One of the patents in question allows the use of a headset with the smartphone while the other allows the device to show an image on a screen with a second, translucent image over it.

Apple had filed a complaint in mid-2011, accusing Samsung of infringing its patents in making its Captivate, Transform and Fascinate smartphones, as well as the Galaxy Tablet.

Apple is waging war on several fronts against Google, whose Android software powers many of Samsung's devices. The battles between Apple and Samsung have taken place in some 10 countries as they vie for market share in the booming mobile industry.

The case at the International Trade Commission is No. 337-796.

(Reporting By Diane Bartz; Editing by Bernard Orr and Steve Orlofsky)

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10 Dogs That Are Better at Winter Than You

Winter is the worst. The nippy temperatures, leg-breaking ice patches and booger icicles -- no matter how many layers of fleece you pile on, you can't escape Jack Frost's favorite season.

As humans grumble and shiver through January and February, our best furry friends delight in winter's chilly offerings. Be it snow or ice, dogs find a way to have fun and make winter look easy.

[More from Mashable: Inauguration Interview Fail Will Leave You With No Hope]

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BONUS: Woof! These 15 Slush Puppies Are Crazy About Snow

Click here to view the gallery: Snow Dogs

Image courtesy of Flickr, brucemckay

This story originally published on Mashable here.

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Apple's iPhone disappointment fans doubt on growth

SAN FRANCISCO (Reuters) - Apple Inc missed Wall Street's revenue forecast for the third straight quarter after iPhone sales came in below expectations, fanning fears that its dominance of consumer electronics is slipping.

Shares of the world's largest tech company fell 10 percent to $463 in after-hours trade, wiping out some $50 billion of its market value - nearly equivalent to that of Hewlett-Packard and Dell combined.

On Wednesday, Apple said it shipped a record 47.8 million iPhones in the December quarter, up 29 percent from a year earlier. But that lagged the 50 million that analysts on average had projected.

Expectations heading into the results had been subdued by news of possible production cutbacks by some component suppliers in Asia, triggering fears that demand for the iPhone, which accounts for half of Apple's revenue, and the iPad could be slowing.

But some investors clung to hopes for a repeat of years of historical outperformance, analysts said.

"It's going to call into question Apple's dominance in the space. It's still one of the strong players, the others being Samsung and Google. It's still a two-horse race, but Android continues to grow rapidly," said Sterne Agee analyst Shaw Wu.

"If you step back a bit, it's clear they shipped a lot of phones. But the problem is the high expectations that investors have. Apple's conservative guidance highlights the concerns over production cuts coming out of Asia recently."

Apple is forecasting revenue of $41 billion to $43 billion in the current, second fiscal quarter, lagging the average Wall Street forecast of more than $45 billion.

Fiscal first-quarter revenue rose 18 percent to $54.5 billion, below the average analyst estimate of $54.73 billion, though earnings per share of $13.81 beat the Street forecast of $13.47, according to Thomson Reuters I/B/E/S.

Apple also undershot revenue targets in the previous two quarters, and these results will prompt more questions on what Apple has in its product pipeline, and what it can do to attract new sales and maintain its growth trajectory, analysts said.

Net income of $13.07 billion was virtually flat with $13.06 billion a year earlier on higher manufacturing costs. The year-ago quarter also had an extra week compared to this year.

Gross margins consequently slid to 38.6 percent, from 44.7 percent previously.

"You can't just keep rolling out iPhones and iPads and think that everybody needs a new one," said Jeffrey Gundlach, who runs DoubleLine Capital LP, the $53 billion bond firm. "The mini? What is that all about? It is a slightly smaller iPad — so what? So that is our new definition of innovation?"

"There are plenty of competitors like Samsung and other legitimate competitors like them," added Gundlach, one of the highest-profile Apple bears. He maintains a $425 price target.

Taking into account the drop in shares in Wednesday's after-hours trading, Apple's stock is now down 34 percent from its September record high and the company has lost about $227 billion in market value.

Shares of several of Apple's suppliers crumbled. Chip suppliers Skyworks and Cirrus Logic both fell more than 6 percent. Qualcomm Inc slipped 1.8 percent.

CHINA IS NEXT BIG GROWTH DRIVER

Intense competition from Samsung's cheaper phones - powered by Google's Android software - and signs that the premium smartphone market may be close to saturation in developed markets have also caused a lot of investor anxiety.

Meanwhile, sales of the iPad came in at 22.9 million in the fiscal first quarter, roughly in line with forecasts.

On the brighter side, Chief Financial Officer Peter Oppenheimer told Reuters that iPhone sales more than doubled in greater China - a region that Apple Chief Executive Tim Cook has vowed to focus on as its next big growth driver.

The company will begin detailing results from that country going forward. Revenue from the region totaled $7.3 billion, up 60 percent from the year-ago December quarter.

"These results were OK, but they definitely raised a few questions," said Shannon Cross, analyst with Cross Research. "Gross margin trajectory looks fine so that's a positive and cash continues to grow. But I think investors are going to want to know what Apple plans to do with growing cash balance."

"And other questions are going to be around innovation and where the next products are coming from and what does Tim Cook see in the next 12 to 18 months."

ADDRESSING PRODUCTION RUMORS

In an unusual move for Apple, which typically does not respond to speculation, Cook addressed the production cutback rumors at length on the conference call and questioned the accuracy of rumors about its plans.

Media reports earlier this month said the company is slashing orders for iPhone 5 and iPad screens and other components from its Asian suppliers.

"Even if a particular data point were factual, it would be impossible to accurately interpret the data point as to what it meant for our overall business, because the supply chain is very complex," he said, adding that Apple has multiple sources for components.

"Yields might vary. Supplier performance can vary. The beginning inventory positions can vary. There's just an inordinately long list of things that would make any single data point not a great proxy for what's going on," he said.

Apple's initial iPhone and iPad mini sales were hurt by supply constraints, but Cook expects supply to balance demand for the iPad mini this quarter. He also acknowledged that iPad was cannibalizing its high-margin Macintosh computers, but said it was a huge opportunity for the company.

"On iPad in particular, we have the mother of all opportunities here, because the Windows market is much, much larger than the Mac market is," he said. "And I think it is clear that it's already cannibalizing some."

In another departure from tradition, Apple intends to tweak the way it both reports results and publishes forecasts.

Apart from breaking out results from China, the company also will no longer provide a single revenue or gross margin outlook. From Wednesday, it began providing the range it expects to hit, rather than the often-ludicrously conservative estimates that Apple was once notorious for.

The new policy took many by surprise.

"Before people could always ignore the guidance," said Dan Niles, Chief Investment Officer of AlphaOne Capital Partners, LLC. "Apple is telling investors that they need to pay attention to the guidance and you can't ignore it, which is basically what we all did in the past."

(Additional reporting by Alistair Barr and Alexei Oreskovic in San Francisco and Jennifer Ablan in New York; Editing by Bernard Orr, Edwin Chan and Ryan Woo)

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Netflix in surprise holiday-driven profit, shares jump 35 percent

(Reuters) - Netflix Inc surprised Wall Street on Wednesday with a quarterly profit after the video subscription service added nearly 4 million customers in the United States and abroad, sending its shares 35 percent higher in after-hours trading.

The dominant U.S. video rental and streaming company had warned three months ago a letter to investors that it was likely to see a loss for the October to December period, attributing it to startup costs for its expansion into Scandinavia.

But Netflix underestimated the impact of the busy holiday season, when sales of tablets, phones and Internet-connected TVs helped boost subscriptions even as the company faced competition from companies such as Hulu and Amazon.com Inc.

Netflix reported $8 million in net income for the fourth quarter, or 13 cents per share. Revenue rose 8 percent to $945 million from the same quarter a year earlier.

"We just saw tremendous growth over the holidays," Netflix CEO Reed Hastings said in an interview.

The company also forecast it will add 1.7 million members in the first three months of 2013, though it predicts net income will be "relatively flat" due to declining DVD profits and higher global operating costs.

Shares of the company surged 35 percent to $139.80 in after-hours trading. They closed at $103.26, up nearly 6 percent before its earnings announcement.

"They did surprisingly well with subscriber growth and profitability," Lazard Capital Markets analyst Barton Crockett said. "It was a very good quarter."

Wall Street analysts on average had expected Netflix to report a quarterly loss of 13 cents per share, according to Thomson Reuters I/B/E/S. A year ago, Netflix had earnings of $41 million, or 73 cents per share, on revenue of $876 million.

Activist investor Carl Icahn, who holds an almost 10 percent stake in Netflix and who has said that he felt the company was an attractive takeover target, has seen the value of his shares increase by $445.3 million to $768.9 million since he started buying them in September.

"We have no further news about his intentions, but have had constructive conversations with him about building a more valuable company," Hastings and CFO David Wells said in a quarterly letter to investors.

Netflix reported full-year net income of $17 million in 2012, a 92 percent decrease from a year earlier as the company's costs increased, on revenue of $3.6 billion.

SEEKING ORIGINAL CONTENT

Skeptics have questioned Netflix's ability to keep writing large checks to Hollywood TV and movie studios for the rights to their content. In addition to Amazon and Hulu, competitors also include Redbox Instant by Verizon, a joint venture between Coinstar Inc's Redbox and Verizon, plus video-on-demand offerings from cable TV providers.

But the Los Gatos-based company said it added 2.1 million customers during the fourth quarter to its U.S. streaming business, its largest segment, for a total of 27.2 million at the end of 2012. In international markets, the company signed up 1.8 million new customers.

Netflix said it expects more U.S. streaming growth in the first three months of 2013 compared with a year ago. The company next week will release the first 13 episodes of its political drama "House of Cards" starring Kevin Spacey, part of its push into exclusive original series that it hopes will bring in new customers.

"The fact that our growth remains this strong despite intensifying competition, and our already substantial U.S. market penetration, underlines the large opportunity ahead," the letter said.

In December, Netflix signed a deal for exclusive rights to new Walt Disney Co movies starting in 2016. Hastings said he would like to strike the same type of arrangement to stream movies from Sony Corp's movie studio, though he added that "there's no specific piece of content we must have."

With Sony, "our appetite's just like it was for Disney. It's strong. We're interested," he said.

The U.S. DVD-by-mail service, which Netflix is moving away from, shrunk by 380,000 customers in the fourth quarter to 8.2 million.

(Reporting by Lisa Richwine in Los Angeles and Sinead Carew in New York; Editing by Phil Berlowitz and Edwina Gibbs)

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