FinancialEdge: Is Someone Listening To Your Phone Messages?

Most of us put a premium on our privacy, but as the News Corp/News of the World scandal in the U.K. has shown again, we cannot always assume that our privacy is secure. In fact, this current scandal is not all that exceptional. Paris Hilton was subjected to a similar violation about six years ago, and numerous celebrities (including Sienna Miller and Scarlett Johansson) have had their cellphones hacked - often in an attempt to garner some salacious bit of information or compromising photo that can go straight to newstands and websites. (For some ways to keep your information safe, check out Tips For Keeping Your Financial Data Safe Online.)


Not surprisingly, many people are wondering just how safe their technology is and whether or not someone may be listening to their phone messages. So, what steps can people take to minimize the risks that their own information can be stolen from them?

Use a Little Common Sense and Originality
According to a study by Daniel Amitay, and assuming that Apple (Nasdaq:AAPL) iPhone users are basically as smart and security-savvy as anybody else, I can dial my way into any iPhone user's voice mail and have about a 5% chance of accessing their voice mail simply by assuming that they used "1234" as their PIN number. Add "0000" and "2580" (which is straight down the middle of a keypad) and the odds jump to almost one-in-10.

To read the complete column, please follow the link below:
http://financialedge.investopedia.com/financial-edge/0711/Is-Someone-Listening-To-Your-Phone-Messages.aspx

FinancialEdge: The Apple Ecosystem

No company is an island; even the most integrated manufacturer or service provider relies upon a cooperative ecosystem of other companies. In the case of Apple (Nasdaq:AAPL) and its multi-billion dollar successes, the iPhone and the iPad, there is a long list of companies that are involved in the process. Consider the fact that Apple logged over $16 billion in costs of goods sold for the December quarter - an amount that on an annualized basis is larger than the GDP of Ecuador. (We look at a retailer's inventory turnaround times, its receivables as well as its collection period. See Measuring Company Efficiency.)

That is a large amount of money by any measure, and a sign of the value of being tapped as a supplier to Apple. As Apple shows no sign of slowing down anytime soon, it is worth examining who else directly benefits from Apple's successes. Here is a quick rundown of the Apple ecosystem.

Readers should note, though, that Apple's ecosystem is not static - the company sources certain components from multiple suppliers and will occasionally replace suppliers when price and performance dictate a change. Once such change has taken place relatively recently, as Linear Technology (Nasdaq:LLTC) no longer supplies the DC/DC converter or USB controller for the iPad2.

Please read the full piece here:
http://financialedge.investopedia.com/financial-edge/0211/The-Apple-Ecosystem.aspx

Is RIMM Losing The War?

Research In Motion (Nasdaq:RIMM) would not be the first company to largely invent a market, only to see latecomers take the business away from them. Although it is absolutely fair to debate whether RIMM's Blackberry "invented" the market that Apple (Nasdaq:AAPL), Google (Nasdaq:GOOG) and Motorola (NYSE:MOT) are profitably exploiting now, the more relevant question is whether RIMM can withstand the battles in the market and remain a top competitor. After all, Nokia (NYSE:NOK) was seen as a leader once, too. 

A Bright Quarter With A Dark Shadow
In many respects RIMM delivered a fine quarter. Revenue rose 40% from last year (and 19% sequentially) to almost $5.5 billion, with handset revenue and shipments increasing by similar degrees. Given that RIMM surpassed the average estimate and was close to the high end of the range, that would normally be good news. On the other hand, U.S. revenue dropped 16% sequentially despite an aggressive promotion of Torch at AT&T (NYSE:T) and channel inventory ticked up - while either of these events on their own may be no problem, the combination is a valid reason for concern.

Nevertheless, profitability at RIMM is still good. Gross margin improved almost a full point from last year (though declined more than that sequentially), and operating margin was modestly better. All in all, operating income rose 42% from last year (and 16% from last quarter), while net profits rose 45%. RIMM also did well from a cash perspective, adding about $450 million in cash to the balance sheet. 


The link below leads to the full article:
http://stocks.investopedia.com/stock-analysis/2010/Is-RIMM-Losing-The-War-RIMM-AAPL-GOOG-NOK-MOT-VZ-MRVL1220.aspx

Linear Technology - Rodney Dangerfield In Semiconductor Form

I used to own Linear Technology (Nasdaq: LLTC) and today is sort of a microcosm as to why I eventually sold at a small profit (much smaller than it should have been) - the company just cannot catch a break.

Revenue was up 18% sequentially due in part to strong "iX" demand at Apple (Nasdaq: AAPL), as LLTC provides AAPL with battery charge chips and DC converters for the iPhone and iPad. Gross margins climbed 50bp to 78.4%, operating margins also rose, and operating profits jumped almost 26% sequentially. On top of all that, the company raised its guidance for the back half of the year.

And yet, the stock is still down.

Linear has always been hounded over the "certainty" that their high margins will eventually dissolve under competition. Never mind the fact that they are an innovative leader in the high-performance analog market, have a small army of researchers, and almost always manage to stay ahead of the game. Never mind the fact that Linear has always been smart about balancing the trade-offs of growth and profitability. Nope, apparently less innovative growth-at-any-cost companies are going to beat them.

I mean, honestly, it gets a little depressing. Even Craig Berger, an analyst I respect a lot at FBR, has them at an Underperform ... even while praising them as an exceptionally well-run company.

Okay, I get that Linear's plays in markets that can be low-growth *and* volatile (autos, industrial). But c'mon ... they sell 7,000 products to 15,000+ customers and they were good enough to earn the blessing of St. Steven of Jobs.

Oh well, I should practice what I preach I suppose. I mean, I do not own LLTC anymore and my only semi holding is Microsemi (Nasdaq: MSCC), though I would happily add ON Semi (Nasdaq: ONNN) as well. I can also relate to people who would rather own Analog Devices (NYSE: ADI) or Marvel (Nasdaq: MRVL). But even still ... LLTC feels like a company and a stock that struggles to get its due.

Disclosure - I own shares of Microsemi

Can Apple Stay Fresh?

Me writing a positive story on Apple ... Folks, check your local farms to see whether there are any reports of flying pigs today. 

I've recently read that Katy Huberty, an analyst at Morgan Stanley, has put a price target on shares of Apple (Nasdaq:AAPL) of between $310 and $400. For those of us who remember the tech bubble, there may be a shiver of remembrance at the $1,000 price target put on Qualcomm (Nasdaq:QCOM) by a PaineWebber analyst in late 1999. That pretty much marked the beginning of the end to that run. The question is, does this signal a similar high-water mark for Apple? 

For the full article, please continue on to:
http://stocks.investopedia.com/stock-analysis/2010/Can-Apple-Stay-Fresh-AAPL-QCOM-NOK-DIS-AMZN-GOOG-HPQ0526.aspx