Last quarter, Amazon, which has been a freight train and Wall Street darling over the last year, surprised analysts by reporting lower-than-expected earnings. Expectations were high considering the holiday shopping season, but Amazon saw net income drop 45 percent to $97 million in Q4, compared to $177 million in 2011, although on the bright side, net sales continued to increase (by 22 percent) to $21.2 billion.

Today, Amazon continued the trend, still finding itself in a bit of a hangover after missing expectations in Q4. The eCommerce giant reported earnings from Q1 after the market closed this afternoon, in which it saw cash flow increase 39 percent to $4.25 billion, compared to $3 billion for the prior year, while net sales increased 22 percent to $16.07 billion in Q1, compared to $13.18 billion in first quarter 2012.

And by mixed results, we mean that Amazon blew away earnings-per-share expectations at $0.18 in Q1 on revenue of $16 billion. Leading up to today’s announcement, Wall Street expectations were much lower for EPS, with analysts expecting $0.08 EPS for the quarter. In turn, the Street expected Amazon to report sales of $16.2 billion, which the company just missed with $16.07 billion in sales.

In spite of the mixed results, as the market has been wont to do over the last year, Amazon’s stock was trending up, closing at $274.70 per share, on rumors that the company could be launching its own TV set-top box this fall, bringing more of the company’s hardware into your living room.

Tellingly, in today’s announcement, Amazon founder and CEO Jeff Bezos didn’t touch on the numbers or falling profits, instead plugging the company’s efforts to take on Netflix with some original programming of its own for Instant Video customers. Last week, the company launched 14 new comedy and kids pilots on Instant Video, which quickly became the “most watched TV shows on Instant Video,” the company said Monday.

“Amazon Studios is working on a new way to greenlight TV shows. The pilots are out in the open where everyone can have a say,” Bezos said in today’s earnings release. “I have my personal picks and so do members of the Amazon Studios team, but the exciting thing about our approach is that our opinions don’t matter. Our customers will determine what goes into full-season production. We hope Amazon Originals can become yet another way for us to create value for Prime members.”

Other points of interest: Amazon’s free cash flow fell 85 percent to $177 million year-over-year, compared to $1.15 billion in the year prior, due in part to dishing out $1.4 billion to purchase new office space in Seattle. Operating income decreased 6 percent to $181 million in Q1, compared to $192 million in the same quarter last year, while net income fell 37 percent to $82 million from $132 million in Q1 2012.

The upside for Amazon continues to rise, thanks to its move into original programming and the expansion of its selection for Prime Instant Video, which is in part due to new licensing agreements with A+E, CBS, FX, PBS And Scripps. This means that shows like Downton Abbey, Justified and Under The Dome, as well as content from Food Network, the Cooking Channel, the Travel Channel and HGTV will all be headed to Amazon. The company said that Prime Instant Video now has 38,000 movies and TV episodes in its collecton.

In addition, Amazon touted the launch of its new MP3 store for Safari, which allow iPhone and iPod touch users to discover and purchase digital music from the company’s catalog. This comes on the heels of reports today that the influence of the company’s Appstore is growing and shows high revenue potential. Amazon also announced its Cloud Player for iPad and iPad Mini this quarter, extended AutoRip to vinyl records and announced the launch of Kindle Fire HD 8.9″.

Good news also came for authors and readers, as Amazon announced that it will start paying its authors their royalties monthly, ahead of the twice-a-year industry standard, along with the acquisition of popular book recommendation hub, Goodreads.

All in all, it was a busy quarter for Amazon, especially for AWS, which launched a slew of new products over the last few months and again lowered its prices. The company said in its announcement today that AWS “has lowered prices 31 times since it launched in 2006, including 7 price reductions so far in 2013.”

Looking forward, Amazon is lowering expectations, however, as it said today that it expects sales to come in between $14.5 billion and $16.2 billion next quarter — equivalent to a 13 to 26 percent increase from Q2 2012. In turn, it expects operating income to be between -$340 million and +$10 million. In other words, a potential loss.

For more, find Amazon’s Q1 earnings announcement here.

Article courtesy of TechCrunch

Netflix reported positive first-quarter numbers, including revenues of $1.02 billion during the first three months of the year. The company also announced that it added 2 million domestic in the quarter, bringing the total number of subscribers to 29.2 million.

The results represent a positive response to Kevin Spacey-led political thriller House of Cards, which just happens to be the first major release in Netflix’s original programming slate this year. And they’re driving investors to jump on the stock in after-hours trading, driving shares up nearly 20 percent.

Netflix announced net additions of 2.03 million subscribers in the U.S. compared to 2.05 million in the fourth quarter — which historically is its strongest period of subscriber growth — and 1.74 million in last year’s first quarter. As a result, it said that it’s growing its subscriber base and revenues faster than its content spend in the streaming business. It reported that its domestic streaming contribution margin increased to 20.6 percent in the quarter, which was up 140 basis points from the previous quarter.

Analysts estimated that the company would report about $1 billion in revenue, as well as earnings of 18 cents a share. But the number everyone is looking at is Netflix’s subscriber number, which Wall Street forecast would be around 29 million streaming subscribers in the U.S.

Netflix is betting big on the release of exclusive shows like House of Cards as a way to differentiate its service from the syndicated content that it’s licensed from existing TV networks. It’s investing hundreds of millions of dollars in these series, and hoping that investment will be paid back with greater subscriber interest.

While Netflix had released its first original show, the Steve Van Zandt-led Norwegian mob comedy Lillyhammer last year, this quarter marks the introduction of House of Cards. That series debuted to strong reviews and a huge marketing push by Netflix, which was hoping to capitalize on the acting of Kevin Spacey, producer David Fincher, and the popularity of the original British miniseries of the same name.

So far, that strategy appears to be working, as House of Cards very quickly became Netflix’ most-watched program. More importantly, more subscribers than expected signed up for the service since the launch of the new series. In its analyst comments, Netflix noted:

“Some investors worried that the House of Cards fans would take advantage of our free trial, watch the show, and then cancel. However, there was very little free-trial gaming – less than 8,000 people did this – out of millions of free trials in the quarter.”

That’s a great response to House of Cards — but Netflix has even more exclusive content in its pipeline. Netflix just introduced Hemlock Grove, a 13-part horror series from Hostel director Eli Roth. Next month, there’s the return of offbeat comedy Arrested Development, which will be available only on Netflix. Later, Weeds creator Jenji Kohan’s new series Orange Is The New Black will also be released.

In addition to its domestic streaming numbers, Netflix reported 1 million new subscribers in its international business, growing that number to 7.1 million total. That compares to 1.8 million international subscribers added during the holiday quarter, and 1.2 million a year previous. While those numbers might seem low compared to previous quarters, Netflix said it benefitted from launches in new markets in earlier quarters. The company plans to continue its expansion overseas, with a new international market to be added in the second half of the year.

To no one’s surprise, Netflix DVD membership continued to decline, but just modestly. The total DVD subscriber base fell by about 250,000 users, to 8 million total. But contribution profit continued to hold strong at $113 million, despite higher usage in the quarter and a small USPS price increase.

Netflix reported that its first-quarter net income was $3 million, or 5 cents a share, but that included a $16 million loss on the extinguishment of debt related to refinancing of a loan from February. Without that, the company would have reported net income of $19 million, or 31 cents per share, well above guidance.

Going into the second quarter, Netflix is forecasting slower growth in streaming subscribers — most likely due to Q2 seasonality — to end the quarter with between 29.40 and 30.05 million subscribers. That will amount to about $665 million to $673 million in U.S. subscriber revenue and between $139 million and $149 million in contribution profit. All in all, it expects earnings between $14 million and $29 million during the second quarter, or 23 to 48 cents per share.

Article courtesy of TechCrunch

Apple’s primary manufacturing partner Foxconn is said to be increasing its staff, shortly after a freeze on new hires following the holiday season, in order to get ready for a big push come summer when Apple debuts its next iPhone. That’s the latest from the Wall Street Journal, which reported today that Foxconn is adding around 10,000 new assembly line workers a week to its iPhone production facility, with unnamed executives at the company confirming that it’s in preparation for a new iPhone launch.

The Apple partner will begin mass production of the iPhone “very soon,” according to the Wall Street Journal’s sources, which fits perfectly with the anticipated early summer launch of an iPhone 5 successor. We’ve heard previously that manufacturers are preparing for a June 2013 launch, which suggests that we’ll see the device introduced at or around WWDC 2013. Apple has introduced new iPhones at its annual developer’s conference in the past, with the exception of the last two iPhones, which were revealed and put on sale in fall instead.

The Wall Street Journal’s report doesn’t specifically mention a launch window for the iPhone, only that it will begin mass production shortly. We know from watching Apple’s production cycles in the past, however that the company typically starts large-scale production for a launch somewhere between 3 and 4 months ahead of a product going on sale. This time around, Apple is expected to introduce an iPhone 5S-type device according to most early reports, retaining design elements of the iPhone 5 but with under the hood improvements.

Also accompanying a new flagship phone will be a lower-cost offering, which sources including the WSJ suggest could be introduced around the same time as this next-gen model. This would use plastic in its construction, and also come in a variety of different colors, early leaks suggest.

Apple recently launched the iPhone 5 on T-Mobile, which early indications suggest has spurred ample renewed interest in the device. A mid-year upgrade for their flagship smartphone could make this the most successful year yet in terms of iPhone device sales, depending on how attractive any new features introduced are to prospective buyers, especially given the impact a low-cost device might have on pre-paid and emerging markets.

Article courtesy of TechCrunch

Roku just announced via its blog that it has sold 5 million of its streaming Internet media players since its launch back in 2008. The devices have managed to stream a total of 8 billion pieces of content in that time, impressive for a device that started out as essentially a dedicated Netflix box. Roku recently introduced its third-generation hardware to market with the Roku 3, which went on sale in March.

The milestone is significant, since it indicates that there’s a very real and growing market out there for a device that essentially just acts as a service layer for bringing web-based content to televisions, independent of what TV manufacturers themselves are doing with their own built-in Smart TV services. Roku announced that it reached 2.5 million streaming devices in sales back in January of 2012, after having sold 1.5 million during all of 2011. That means it managed to sell somewhere close to 2.5 million devices in the U.S. between then and now, which is a marked increase from its previous yearly high.

We’ve seen how this 5 million milestone compares with Roku’s performance to date, but how about vs. the rest of the market? Despite the fact that Apple still isn’t driving massive amounts of sales with its Apple TV products (especially when compared to its iOS devices), it still sold 2 million in total during the holiday quarter last year, up from 1.3 million in the quarter before that, and up from 1.4 million year over year.

Apple’s sale totals are global, but that still adds up to more than 10 million sales since the device’s introduction, and it sold as many devices as the Roku did in a whole year at home in the U.S. in a single quarter. Still, for a company without Apple’s marketing clout and ecosystem of devices, Roku is definitely holding its own.

The Roku 3 is receiving high praise so far, and has simplified things on the product side, as well as narrowed Roku’s product line to a single device, which is probably best in terms of helping it focus its marketing efforts and avoid consumer confusion. But it will face new competition from Panasonic, which introduced two new streaming media players this week, both of which plug into the popular new Miracast tech, essentially AirPlay for Android, being built into many of today’s smartphones.

Article courtesy of TechCrunch

Unknown to most, April 3rd is Cheese Weasel Day, the holiday where the Cheese Weasel brings dairy goodness to all the good boys and girls in the tech industry. While the origins are murky, it seems to have started around 1992 when a weasel was spotted carrying a Kraft Single. This, they assumed, must be the Cheese Weasel, and therefore, that it must be Cheese Weasel Day. What was the weasel going to do with the cheese? He must be off to put it under the keyboards of good tech workers everywhere and that’s just what we expect you to do today! Huzzah!

The practice of the holiday seems to spread through word of mouth. I first heard of it when I showed up to work on April 3rd many years ago and a fantastic spread of exotic cheeses was laid out in the middle of the office. It wasn’t until a few hours later, after the food coma had started to wear down, that I started to think about the legend, “The Cheese Weasel leaves cheese under the keyboards of good tech workers… cheese under the keyboards… keyboards.” I looked, and there was a cheese single, still wrapped. I wonder how long it would have lasted had I not found it.

The holiday does seem to be growing. Each year, more and more sites show up with a reference to the holiday or the song (yes, there is a song). One site even offers Cheese Weasel Day (CWD) ecards. The methods of celebration vary. Some prefer to celebrate with the best cheeses and freshest baguettes, while others eschew that practice and insist on keeping with the tradition of cheese food singles. Whichever way you go today, remember that the Cheese Weasel is watching so be kind to your programmers, developers, and system architects.

Article courtesy of TechCrunch

Google’s Doodles on the Google.com search page don’t frequently stir up too much controversy, but today many users are outraged by the search giant’s choice in featuring Cesar Chavez, an American farm worker, labor leader and civil rights activist. Of course, today is also Easter, which is one of the most observed and celebrated religious holidays for Christians around the world.

Users have taken to Twitter, expressing anger over the fact that the Doodle features the labor leader instead of a drawing honoring the holiday (Google search engine rival Bing did feature Easter Eggs on its homepage).

Why Cesar Chavez? In 2011, U.S. President Barack Obama proclaimed March 31 as “Cesar Chavez Day.” That being said, since the company frequently celebrates major U.S. and international holidays through the Doodles, it is a little bizarre that Google wouldn’t include an Easter Egg-type of Doodle. But if you do a search of Google Doodles that celebrate Easter, it appears the search giant hasn’t created an Easter Doodle since 2000.

It would be easy to say Google doesn’t commemorate religious holidays. But there have been Doodles that have honored Christmas.

Article courtesy of TechCrunch

Samsung Electronics topped China’s smartphone market for the first time in 2012, according to data from Strategy Analytics (reported by Yonhap News Agency). The Korean tech behemoth nearly tripled its sales in the world’s largest market for smartphones: in 2012, it sold 30.06 million smartphones in China, up from 10.9 million handsets a year earlier. According to Strategy Analytics, Samsung now holds a 17.7 percent market share–an astonishingly rapid climb considering that the company only started selling mobile devices in China in 2009.

Chinese company Lenovo took the second spot with market share of 13.2 percent, up four percent from 2011, while Apple came in third with an 11 percent market share, followed by China’s own Huawei Technologies with 9.9 percent and Coolpad with 9.7 percent. Samsung’s fast ascent mirrors Nokia’s quick plummet–the Finnish company is now number seven in China, with 3.7 market share, compared to 29.9 percent in 2011.

Despite Samsung’s dominance in China and its current position as the world’s top smartphone maker, it’s still too early for the company to rest on its laurels. Data from Strategy Analytics showed that Samsung’s fourth-quarter sales lagged behind Apple due to stronger demand for the iPhone 5. In Q4 2012, Samsung Electronics took 28.7 percent of the global smartphone market, much less than Apple’s 42.7 percent–but it’s important to note that a direct sales comparison is difficult because the iPhone 5 launched in September, allowing it to take advantage of the holiday buzz, while Samsung’s Galaxy SIII debuted back in May and sales may be dwindling because users are waiting for their first look at the Galaxy SIV on March 14.

In China, however, Samsung will have to ward off ambitious competitors like Xiaomi, which is busy building up its brand cachet and plans to sell 15 million smartphones this year and Lenovo, which recently declared that it’s their “aspiration” to overtake Samsung as China’s top smartphone maker.

Article courtesy of TechCrunch

Apple’s iPhone made up some ground in the most recent comScore smartphone OEM market share numbers, covering the three-month period ending in January 2013. Apple’s share rose from 34.3 percent curing the previous quarter to 37.8 percent, a point change of 3.5. Samsung’s share also rose, going from 19.5 percent to 21.4 percent, growth of 1.9 percentage points. HTC and Motorola shed share, maintaining their third and fourth-place spots but each losing nearly as much share Samsung gained.

ComScore also measured smartphone platform share, and found that Google’s Android accounted for 52.3 percent of overall U.S. smartphone subscribers aged 13 or older, a drop of 1.3 percentage points vs. the previous quarter. Apple’s iOS gained ground, adding 3.5 percentage points to its share, going from 34.3 percent share in the quarter ending October 2012, to 37.8 percent in the one that just ended in January.

In other words, according to comScore’s number, Apple was the big winner for the holiday season. Which makes a lot of sense, given that it released the iPhone 5 in September, and the device continued to see supply constraints through October and November leading into the holiday sales season. Samsung’s flagship device, the Galaxy S III, had been on the market since June 2012.

In terms of platforms vying for third place, BlackBerry shed nearly 2 percentage points of its share during the quarter, but a lot of that was likely due to the imminent release of BB10. The first BB10 devices didn’t go on sale anywhere in the world until the end of the month, and they have yet to arrive officially at any U.S. carriers. Next quarter results should be a better indicator of how BlackBerry will fare alongside Microsoft in the U.S. in the war for a third modern smartphone platform.

Apple’s share of the smartphone market was also up from the three-month period ending in December, when comScore pegged it at 36.3 percent, with Samsung up to 21.0 percent, representing growth of 2.0 and 2.3 percentage points respectively. These two continue to slug it out at the top, but the most recent numbers show Apple pulling ahead at a faster rate. We’ll see if the Galaxy S IV launch, likely coming sometime next week, has any influence on consumer buying choices when it comes to the U.S. smartphone market.

Article courtesy of TechCrunch

Last year, Onswipe noticed that despite considerable growth for the Kindle Fire during its first holiday sales season, interest seemed to drop off pretty quickly a month or so after all the gifts were unwrapped. This year, it wanted to see if the same held true for two leading Android-based tablet platforms, to see if it couldn’t back up the Apple claim that most tablets using Google’s mobile OS quickly fall into disuse.

The results saw a considerable jump for both Kindle Fire and Nexus 7 tablet devices during the year’s peak shopping season, with Onswipe traffic from Fire tablets jumping 51.84 percent immediately following the holiday, and the Nexus 7 experiencing a 136.77 percent increase in share. One month later, the Nexus 7 had already shed 25.68 percent of the traffic it gained from the holiday, however, a number which Onswipe CEO Jason Baptiste called “significant.”

The Kindle Fire, however, actually gained traffic, adding 18.01 percent on top of its existing growth one month after its holiday bump. Baptiste says this is a sign that consumers are responding better to the latest generation of Kindle Fire hardware, in part because of new device designs like the Kindle Fire HD, and in part because of an improved software experience and media ecosystem from Amazon. Google, he says, needs to learn from the Kindle Fire’s example and focus on improving its next-gen Nexus slates, both in terms of hardware specs and software experience, in order to accomplish the kind of sustained traffic increase next year that the Fire managed this time around.

The big winner remains the Apple iPad, however, as despite growth by Android tablets from major rivals, the iPad retains a massive 91.96 percent of overall tablet traffic, meaning it has “nothing to worry about” in the foreseeable future in terms of challenges from other makers, according to Baptiste.

Article courtesy of TechCrunch

Kantar Worldpanel, the WPP firm that analyses how well smartphones are selling with consumers (not shipping to sales channels) across key worldwide markets, has picked the week of a major mobile show in Europe, Mobile World Congress, to shift some of the focus back to the U.S., today releasing numbers on smartphone sales for the 12 weeks to the end of January, which show that Android was the top smartphone platform, beating out previous leader Apple’s iOS, and that Verizon has ousted AT&T as the top smartphone operator.

This represents a change over a year ago, as evidenced by the tables below, but also last month’s rolling, 12-week sales chart, where iPhone topped sales in the U.S.

The figures come at a timely moment, with news breaking earlier that Samsung has chosen New York for the launch of the newest version of its best-selling Galaxy S IV flagship device, scheduled for March 14. The U.S. has long been a stronghold for Apple, although Android, led by Samsung, has been steadily chipping away at that lead.

Android, Kantar says, took 49.4% of smartphone sales, a growth of 6.4 percentage points over the same period last year. Apple’s 45.9% of sales was 4.7 percentage points down on one year ago. It sources these numbers by extrapolating from data collected from 240,000 consumers annually.

And when you add those two numbers together you can see how ridiculously big the challenge is for others to get a look in. Number three, Windows Phone, just barely breaks 3% of sales, although that’s an improvement on 2.1% last year.

As has been the case for Android’s strength worldwide, the platform is being used by a number of handset makers, and those phones are being offered at a number of price points. Samsung, which plays in the full spectrum, from low-end smartphones up to its highest Galaxy S devices, is leading the market. Specifically, Android devices were priced especially agressively on number-three carrier Sprint. iOS-based iPhones cost $130 on average, Android $127 back in October 2012, but by this last three-month period iOS cost $95 and iPhones cost $146. The SIII from Samsung cost only $99 over the holiday season.

When you look at how individual carriers have performed this shows where some of the shifts have occurred: specifically, AT&T, traditionally the leader in iPhone sales, accounted for 28.2% of sales, more than 8 percentage points lower than a year ago. Verizon rose by less, but it rose, and is now at 35.2%. Ironically, it sold more iPhones as well, but the balance between those and Android handsets is more even. (At AT&T it’s 70:24 in favor of iPhones; at Verizon it’s only 57:40.)

Meanwhile, Sprint, Kantar points out, remained in third with a 14.2% share of smartphone sales in the period, but its mix is 49:72 favoring Android, and that tipped the balance set out by the two leaders. ”Part of Android’s increase in the latest period can be attributed to its large gain in share within Sprint’s smartphone sales,” writes Kantar Worldpanel ComTech analyst Mary-Ann Parlato. Worth noting that Samsung alone accounted for 60.3% of all smartphone sales on the number-three carrier.

Article courtesy of TechCrunch