TIME Media

Netflix Has a Plan to Take Over the World

ABC's "Good Morning America" - 2014
Kevin Spacey talks about the new season of "House of Cards" on Good Morning America, 2/18/14, airing on the ABC Television Network. Ida Mae Astute—ABC via Getty Images

But it'll likely lose money abroad long before it ever makes it there

Like the conniving Frank Underwood, Netflix’s ambitions only continue to grow.

The streaming service is rolling out in six new European countries this week, including France and Germany, two of the region’s largest markets. The expansion, Netflix’s biggest ever, will expose the company to hundreds of millions of potential new customers who have high-speed Internet access. But the challenges and costs of adapting a U.S.-based service for six different cultures won’t be easy—or profitable—for quite a while.

At home, Netflix is still growing at a healthy clip. The company added 2.82 million streaming subscribers in the first half of 2014, up from 2.66 million additions during the same period last year. But the growth rate abroad is even faster as Netflix continues to come online in more regions. The company added 2.87 million international customers in the first half of the year, compared to 1.63 million last year. It’s projecting that it will add 2.36 million international subscribers in the third quarter alone thanks to the new markets where the service is launching.

While opening in new markets will certainly boost Netflix’s subscriber base, there’s no guarantee the service will perform as well as it has in the United States or the United Kingdom. In Germany, TV is less popular than in other Western nations. Germans watch 230 minutes of TV and video content per person per day, compared to 286 minutes per person in the U.S., according to research firm IHS. And the TV they do watch isn’t necessarily the same as what succeeds elsewhere. Seinfeld was famously a bust in Germany because it was “too American.” More worryingly for Netflix, its own high-budget original show House of Cards failed to net even a million viewers when it debuted on the German network Sat. 1, according to Bloomberg. Episodes from season two averaged less than 100,000 viewers.

“The Germans notoriously have different tastes from the rest of the West,” says Michael Pachter, an equity analyst for Wedbush Secutiries. “All of us . . . make the mistake of thinking that ‘international’ is a place. International is 180 independent, different nations.”

While there are similar cultural concerns in France, there Netflix must also deal with entrenched competitors who want to squash the streaming service before it can gain traction. Canal Plus, France’s largest pay-TV provider, actually owns the broadcast rights to House of Cards and recently announced a deal to stream HBO shows through its own Netflix-like service, Canalplay. Another provider, Numbericable, launched an online service with access to 3,000 episodes of TV shows on the same day Netflix launched in France. Meanwhile, content creators and regulators worry Netflix will try to further Americanize French culture while avoiding paying large taxes because it’s headquartered outside the country.

“People are concerned the emergence of Netflix will damage the local content industry,” says Richard Broughton, an IHS analyst. “They really have to make some partnerships in order to make better headway into the French market.”

Netflix has plans to address these issues. A new House of Cards-like drama called Marseille is set in the south of France and will be helmed by French directors. It should help cast Netflix as a collaborator in the country rather than an invader. The company will also try to buy up streaming rights to locally produced shows in the new countries where it launches, Broughton says. The strategy has been effective in the United Kingdom, where Netflix has the rights for many BBC shows. The company has 3 million customers there, according to one estimate.

But building a curated library for each individual market is expensive, and Netflix often has to negotiate individual rights agreements for each different country where it operates. “They have to replicate the wheel every place they go,” Pachter says.

That’s why Netflix’s international business has been unprofitable since it began. The division lost $15 million in the most recent quarter, and Netflix projects that loss will balloon to $42 million in the third quarter due to marketing and licensing costs in new territories. The price to compete will only grow, especially when other U.S. competitors show up in Europe (Amazon Prime Instant Video is already available in Germany).

Early impressions indicate that Netflix’s library of titles in France is not as robust as in the U.S. But analysts expect the company will eventually work out the kinks. IHS projects that Netflix will have 18 million subscribers across Europe by 2018, up from 5.8 million today. That would be a boon for the world’s most popular streaming service, but it’s hardly guaranteed.

“You’ve got to spend an awful lot up front,” Broughton says. “You’re gambling on, over the next few years, being able to accrue sufficient subscribers to offset those costs.”

TIME technology

Uber Is Now Legal in Germany Once Again

German Court Bans Uber Service Nationwide
In this photo illustration, a woman uses the Uber app on an Samsung smartphone on September 2, 2014 in Berlin, Germany. Adam Berry—Getty Images

Wunderbar

Updated 1:15 p.m.

Germany’s ban on Uber’s ride-sharing service has been lifted by a local court.

The Franklin Regional Court ruled Tuesday that UberPop, Uber’s cheaper alternative to its well-known black car service, could resume operating freely throughout the country. The ruling comes after Taxi Deutschland, a German taxi union, had successfully sought a nationwide injunction against Uber’s service last month.

The taxi union vowed that it would continue to fight Uber in Germany. “The taxi industry accepts competitors who comply with the law,” the organization said in a statement. “Uber doesn’t do that. Therefore we today announce that we will be appealing without delay.”

UberPop connects drivers and riders via a smartphone app. Critics say drivers are not subject to the same regulations and requirements as licensed German taxi drivers, a common complaint against Uber drivers around the world. The judge who lifted the injunction said that there was likely a legal basis to the taxi union’s complaint, but the organization could not have the issue tried as an expedited case. Therefore, the temporary inunction had to be lifted.

Uber, of course, is happy about the ruling. “We welcome today’s decision by the German court to lift the injunction placed on UberPOP by the incumbents,” Uber Germany spokesman Fabien Nestmann said in an emailed statement. “Demand is so great all across the country that we expect to double in size by the end of the year and plan to bring Uber to more and more cities across Germany.”

[WSJ]

 

TIME Apple

The iPhone 6 Will Make or Break Apple in China

Apple's iPhone 6 (left) and iPhone 6 Plus (right) Apple

The biggest test for the company's biggest phone

When Apple CEO Tim Cook took one of many regular trips to Beijing in January, he wasn’t surveying the company’s many Chinese factories or hobnobbing with government officials. He was at a China Mobile retail store to mark the launch of the iPhone on the world’s largest wireless carrier. The two companies were joining forces to “deliver the best experience in the world,” Cook said.

The iPhone 6 will test how interested Chinese consumers are in the Apple experience. The newly announced phone, along with its big brother the iPhone 6 Plus, has already crashed the servers of Apple’s online store and are on back order for multiple wireless carriers in the U.S. But the launch of the devices is being delayed in China, and it’s not yet clear how the new iPhones will compete with a cadre of homegrown competitors which have rapidly gained market share over the last year.

Apple, no doubt, is on the rise in China. Sales jumped 18% to over $15 billion in the first half of 2014, making China the tech giant’s fastest-growing region by far. With the China Mobile deal now in place, the iPhone is available from all of the country’s wireless carriers, giving Apple access to 1.3 billion potential customers. Cook expects it to eventually overtake the United States as Apple’s biggest market.

But Apple’s competitors are rising too, some at an even faster clip. Xiaomi, often called the “Apple of China,” shipped about 15 million smartphones in the second quarter to surpass Samsung as the country’s largest vendor, according to research firm Canalys. Other Chinese manufacturers, such as Lenovo and Huawei are also beating Apple. There are literally dozens of other phone companies vying for customers’ attention in the highly fractured market. While Apple and Samsung pull in about two-thirds of all smartphone sales in the U.S., the top two manufacturers in China account for just one-fourth of sales, according to research firm IDC. Apple resides outside the top five.

The main issues holding Apple back in China are screen size and price. The company solved at least one issue with the iPhone 6 Plus, which boasts a 5.5-inch screen. The jumbo-sized display will help the latest iPhones be Apple’s most successful yet in China, says Ramon Llamas, a mobile analyst at IDC. “In the Chinese market, this is almost like a status symbol,” Llamas says of large-screen phones, also known as “phablets.” “All of these vendors, they are clearly playing in that phablet space.” Indeed, nearly 40% of smartphones sold in the country now have screens five inches or larger, according to Canalys.

Price may remain a prohibiting factor, though. According to IDC, the average selling price for an iPhone in China in the first half of 2014 was $539. Lenovo’s Android-powered smartphones sold for just $98 and are currently beating the iPhone in sales. The 6 Plus, while appealing to phablet lovers, will cost $100 more than previous iPhone models in the U.S., an extra cost that will likely translate to China.

Chinese carriers are also planning to drastically cut phone subsidies on the orders of the nation’s government. That will likely make consumers more price-conscious just as domestic competitors are figuring out how to make devices with iPhone-like features at a fraction of the cost. “It becomes a little bit more difficult [for Apple] when the specifications are close but the price is not,” says Bill Kreher, an equity analyst at Edward Jones.

There’s also a third, thornier wrinkle: the Chinese government seems less accommodating of Apple than in the past. Following Edward Snowden’s revelations about global surveillance by the National Security Agency, China’s state-run media called the iPhone a “national security concern” over a location-tracking feature in iOS 7. (Apple disputed the report.) Now the iPhone 6’s launch has been delayed in China because it has not yet been approved by the country’s Ministry for Industry and Information Technology, according to the New York Times. It’s part of an overall cooling toward U.S. tech firms in China, which has also included ongoing antitrust investigations into Microsoft and Qualcomm. “U.S. conglomerates will continue to have a difficult time in China, given heightened regulatory concerns,” Kreher says. “But Apple has done a better job than most in respecting the Chinese influence.”

Apple spokeswoman Teresa Brewer wouldn’t comment on exactly when the iPhone 6 might arrive in China. “China is a key market for us and we will get there as soon as possible,” she wrote in an email.

There is at least one broad trend-line moving in Apple’s favor. China’s carriers are racing to expand their high-speed data networks, and the iPhone is one of just a few phones currently on the market that is compatible. China Mobile has racked up more than 20 million 4G subscribers since it launched the speedier network in December in conjunction with the iPhone rollout. Predictably, the vast majority of the first 4G customers were iPhone users. Xiaomi, on the other hand, only just got around to launching a 4G phone last month.

With a wide range of homebred competitiors and a government that may be actively working against it, Apple certainly faces headwinds in China. But the company’s business there is still growing, and devoted fans are still lining up for new iPhones. “From an end-user perspective, a lot of folks in China still want the iPhone,” Llamas says. “We’re still seeing strong demand.”

TIME Solutions for America

Disruptive Technology Is Changing How Kids Learn

Research show new tools can make kids more engaged and more creative

In a few weeks, the halls of a school in Nanuet, N.Y., will teem with mini race cars. The vehicles will sport custom-designed wheels, each set carefully tuned in diameter and thickness to achieve maximum speed.

But the cars’ makers aren’t college-level engineers; they’re middle-school students attempting to learn about physics and technology by using a device that combines both–the school’s 3-D printer. “It’s rewriting what’s possible” in education, says Vinny Garrison, the teacher who organizes the races.

It’s not the only innovation doing so. Nearly three-fourths of U.S. teachers use technology to motivate students to learn, according to a survey by PBS LearningMedia. And that tech is getting smarter: students can now virtually tour ancient worlds to learn history, take quizzes via smartphone and more.

Most of the changes are designed to better prepare U.S. students for careers in fast-growing fields like science and engineering. But they can come at a cost–and not just financially. A $500 million plan to supply Los Angeles students with iPads was recently suspended after students bypassed content filters and some parents complained that the initiative was pulling focus from much needed building repairs.

So far, however, research shows that using next-gen tech in the right ways can make students smarter, more engaged and more creative. Here is a look at six new technologies that are shaping the classrooms of the future.

TO SEE MORE SOLUTIONS, GO TO time.com/solutionsforamerica

TIME technology

These Are the Products the Apple Watch and Apple Pay Must Defeat

Samsung Electronics Co.'s Galaxy Gear wearable devices for KDDI Corp.'s "au" brand sit on display during a product launch event in Tokyo on Oct. 2, 2013.
Samsung Electronics Co.'s Galaxy Gear wearable devices for KDDI Corp.'s "au" brand sit on display during a product launch event in Tokyo on Oct. 2, 2013. Kiyoshi Ota—Bloomerg/Getty Images

A look at Apple's main competitors in the worlds of wearables and mobile payments

Apple made waves Tuesday by entering two new business sectors at once: wearables and mobile payments.

The company announced the Apple Watch, a long-rumored smartwatch that will synch up with iPhones and offer new fitness-tracking feature, and Apple Pay, a mobile payments service that will let users pay for things in physical stores with a tap of their phone or watch.

Wearables and mobile payments are tech sectors that already have plenty of competitors, including heavyweights like Google and Samsung, but have yet to reach true mainstream adoption. Apple will look to recreate the magic it found with portable music players, smartphones and tablets, but its foes aren’t likely to just accept being pushed to the sidelines.

Here’s a look at the current players in wearables and payments and how their efforts have fared so far:

Wearables

Samsung

The Product: Samsung has already bet big on smartwatches with its line of Galaxy Gear. The original Galaxy Gear, released in fall 2013, served as an accessory to Samsung tablets and smartphones, offering a way to read texts and other info relayed from the phone. The watch also sported a camera, an unusual smartwatch feature that the Apple Watch doesn’t have.

Success So Far: The original Galaxy Gear was widely panned in reviews, but the Gear 2 left a more favorable impression. Samsung claimed that it shipped 800,000 of the original Gear in its first two months on the market, but it’s not clear how many of them actually sold to customers. According to market research group NPD, 500,000 total smartwatches were sold in the U.S. between October 2013 and June 2014, and Samsung generated about $75 million in revenue from its portion of those sales.

Pebble

The Product: Startup Pebble proved that the smartwatch could be a viable product line when its 2012 Kickstarter project became the most successful endeavor in the crowdfunding site’s history back in 2012, generating more than $10 million in donations. Now Pebble has grown from a clever idea into a well-established business that offers smartwatches in a variety of styles. The company’s watches link up with both iPhones and Android devices and are fairly affordable with a starting price of $150.

Success So Far: Pebble says it has sold more than 400,000 smartwatches so far and has 15,000 developers making apps for the device. According to NPD, the startup is second to only Samsung in smartwatch sales in the U.S. But these numbers are paltry compared to the scale that Apple likely envisions for the Apple Watch.

Google

The Product: As with phones, Google will mainly take the fight to Apple in the smartwatch space via software. Earlier this year the search giant unveiled Android Wear, a version of its Android operating system tailored specifically for wearables. So far three watches make use of the software: the Moto 360, the LG G Watch and the Samsung Gear Live.

Success So Far: The LG G Watch has earned solid reviews, but the sleeker Moto G disappointed critics when it launched earlier this month. No word yet on sales of these products. Google may have higher aspiration for Google Glass, its computerized glasses that are currently being beta tested in the U.S.

Fitbit

The Product: With Apple positioning the Apple Watch as a lifestyle device, the company will have to take on the current juggernaut of life-improving wearables, the Fitbit. The popular electronic bracelets and clip-on devices can track everything from miles jogged to quality of sleep. The products are cheap too, starting at just $60.

Success So Far: Fitbit has managed to fend off apparel giant Nike in the fitness wearables category and now easily leads the market with almost 50% market share, according to research firm Canalys. Apple will have to convince health nuts that its product is worth three to four times the cost of a regular health-tracking device.

Mobile Payments

PayPal

The Product: eBay-owned PayPal has been inching its way into physical stores for a few years now. PayPal has services that allow you to easily split a restaurant check or buy a new outfit at Abercrombie & Fitch via its smartphone app. The company also recently announced a new service called One Touch which will allow people to buy products with a single button click across a wide variety of programs.

Success So Far: PayPal processed $27 billion in mobile payments in 2013, a 99% increase from from the year before. The company has more than 150 million active accounts supplying a trove of credit card and banking info. That’s a big number, but it pales in comparison to the 800 million iTunes accounts Apple users have created, most of which include credit card information.

Google

The Product: Google came up with a service very similar to Apple’s three years ago. Called Google Wallet, the app allows users to tie information for multiple credit, debit and gift cards to their phones, then use the mobile device to pay for items at participating retail locations.

Success So Far: The Google Wallet app has been downloaded at least 10 million times from the Android store, but the even the service’s creators have admitted that it’s not exactly setting the world on fire. The company’s latest strategy to introduce people to Google Wallet is linking it up with Gmail accounts to allow people to send money to each other via email. With more than 425 million Gmail accounts currently active, the popular service could serve as a trojan horse to to hook users on Google’s payment platform.

Square

The Product: Square is best known for its credit card readers that are popular with small businesses, but the company has designs on eliminating the credit card altogether with Square Wallet, an app that would allow for purchases made without even the press of a button. The phone in your pocket would be able to communicate with a retailer’s payment equipment, and you’d just have to say your name to complete an order. The disruptive concept received a lot of attention, partially because Twitter founder Jack Dorsey is Square’s CEO.

Success So Far: Square gave up on the hands-free payment option earlier this year when it removed Square Wallet from the Google Play and App Stores and replaced it with Square Order, a less ambitious app that basically works like Seamless for grabbing take-out food. The company has reportedly postponed plans for an IPO as it racks up losses, though Square has denied these claims.

 

TIME Gadgets

Apple Watch: 10 Things to Know

It's coming out early next year

The rumors were true—Apple is indeed releasing a smartwatch. The Apple Watch (sorry, “iWatch” fans) will be the first big new product line Apple has introduced since the iPad in 2010, and the first under the leadership of Tim Cook as CEO.

Like the iPad, iPhone and iWatch before it, the Apple Watch will enter a market where other tech companies have tried and failed to reach a mass audience. As with those earlier products, Apple hopes that a mixture of sleek hardware design and easy-to-use software will convince millions to buy a device they never even knew they needed.

Here’s everything you need to know about the Apple Watch:

You Need an iPhone to Use It

Like many smartwatches, the Apple Watch is meant to be used in conjunction with a smartphone. Think of it as as an easier-to-reach display that can relay information from your phone—when someone sends you a text, for instance, the Apple Watch can display the message on its screen for easier access. Though the watch was unveiled along with the iPhone 6, it will also be compatible with the iPhone 5, iPhone 5s and iPhone 5c.

It’s Expensive and It Won’t Be Out Soon

Shocker—Apple is introducing a gadget at the very high end of the category’s price range. The Apple Watch’s retail price will start at $349 when it launches early next year. Samsung’s Galaxy Gear retailed for $299 last fall, while the Kickstarter-funded Pebble smartwatch costs $150. Apple products typically sell at a premium, which helps the company maintain its huge margins.

It Has Animated Emojis

Everyone’s favorite yellow emoticons will have more verve on the Apple Watch. Users will be able to customize the facial expressions of emojis by touching different portions of the figure’s face. For instance, users can touch the emoji’s mouth to widen its smile or tap its eyebrows to raise them higher. The 3D figures spring to life before being texted off to a friend also using an Apple Watch. The redesigned emojis are a way to compensate for the fact that the Apple Watch screen is prohibitively small for sending traditional text message to friends. In addition to animated emojis, Apple Watch will analyze incoming texts and present a selection of potential responses that might make sense in context. Users can also use the phone’s microphones to dictate text.

It’s Compatible With Apple Pay

The new device is part of Apple’s broader scheme to replace your physical credit card through Apple Pay, a service that allows people to buy products through the press of a button on their iPhone 6 or Apple Watch. Utilizing Near Field Communication (NFC) technology, the devices will be able to communicate with payment systems at participating retailers using credit card information they already have tied to their iTunes accounts.

So far, McDonald’s, Staples, and Macy’s are among the companies that have agreed to accept Apple Pay.

It’s Using the Watch Dial in a Creative Way

The iPod’s click wheel was an innovation that simplified the chore of navigating through a thousand songs on an MP3 player. Apple hopes it’s hit on similar design magic by turning the traditional watch dial—now the “Digital Crown,” in Apple PR-speak—into a button that can be used to navigate the watch face. Through the dial, users will be able to zoom in and out on the screen, as well as scroll up and down, without obscuring the watch’s small surface. It also serves as the home button and the way to call up Siri, who will return as the Apple Watch’s digital assistant.

It’s Got a Boatload of Fitness Features

Fitness apps are seen as key to gaining a foothold in the wearables market. At the Apple Watch unveiling, Apple heavily promoted the ability of the watch to be a personal trainer as well as a communications device. The Apple Watch will use an accelerometer and GPS technology to constantly track the activities of its wearer, whether he or she is jogging, cycling or on a leisurely walk. The watch will also encourage users to meet basic fitness standards like standing up a bit during each hour and getting at least 30 minutes of physical activity per day.

It Has Three Different Models in Two Sizes

The Apple Watch will come in three different styles. There’s the basic Apple Watch, the Apple Watch Sport, which will have a sweat-resistant wrist strap and the Apple Watch Edition, which will come in an 18-karat gold watch case. All of them will be available in two different sizes of either 38 mm or 42 mm for the watch face. The watches will all be customisable with easily changeable wrist straps. Expect these colorful straps to become the iPhone cases of the wearables era.

You Can Send Someone Your Heartbeat

Apple spent a lot of time at its press event talking about how the Apple Watch is the most personal device it’s ever created. Case in point: a user can “send” someone else their heartbeat by pressing two fingers to the Apple Watch screen to allow it to measure a pulse. Users can also share sketches, sound recordings and wrist-based love-taps for other forms of 21st-century flirtation.

It’s Extremely Sensitive

Apple claims that the technology inside its watch will allow it to both give and receive tactile feedback with quite a bit of subtlety. The vibration system, called Taptic Engine, provides haptic feedback that varies based on the context—for instance, the device would vibrate differently depending on whether you needed to make a right or a left turn while using a navigation app. The Apple Watch’s touch screen will also be able to differentiate between a tap and a press, which would should present more control options on the very small amount of available real estate.

Apple Still Hasn’t Revealed a Bunch of Important Information

With the Apple Watch not slated for release until 2015, Apple still has a lot of questions to answer. How’s the battery life? The fact that the company crowed about the iPhone 6’s improved battery life but was silent on Apple Watch may not be a good sign. We also want to know whether it’s water resistant, whether there will be a version for lefties and which app developers will be on board at launch.

TIME Gadgets

The Apple Watch Will Have Animated Emojis

Apple Unveils iPhone 6
Apple CEO Tim Cook talks about the Apple Watch during an Apple special event at the Flint Center for the Performing Arts on September 9, 2014 in Cupertino, California. Justin Sullivan—Getty Images

Everybody’s favorite yellow emoticons will have even more verve on the new Apple Watch.

Apple has devised new animated emoticons that allow users to devise customized facial expressions by touching different portions of the figure’s face. For instance, users can touch the emoji’s mouth to widen his smile or tap his eyebrows to raise them higher. The 3D figures spring to life before being texted off to a friend also using an Apple Watch.

The redesigned emojis are a way to compensate for the fact that the Apple Watch screen is prohibitively small for sending traditional text message to friends. In addition to animated emojis, Apple Watch will analyze incoming texts and present a selection of potential responses that might make sense in context.

 

TIME Smartphones

The iPhone 6 Will Have Apple’s Most Advanced iPhone Camera Yet

Phil Schiller
Phil Schiller, Apple's senior vice president of worldwide product marketing, discusses the camera features on the new iPhone 6 and iPhone 6 plus on Sept. 9, 2014, in Cupertino, Calif. Marcio Jose Sanchez—AP

The iPhone 6 and iPhone 6 Plus will boast even more advanced cameras than Apple’s previous phones.

The new phones will have an eight megapixel camera, 1.5 micron pixels and a f/2.2 aperture. A new feature called Focus Pixels will automatically determine the direction of the phone’s focus and the distance to move the lens, leading to sharper images. Apple says the phones will be better at detecting faces than previous models, and the more advanced iPhone 6 Plus will boast optical image stabilization, which compensates for pictures taken with shaky hands.

In terms of video capability, the new camera will be able to shoot videos in 1080p at 30 frames per second and 60 frames per second. The camera will also expand on the iPhone 5s’s slow-motion capability by allowing users to film at 240 frames per second rather than just 120.

The front-facing camera for FaceTime has also been overhauled, with a new aperture that allows in 80% more light. The camera will also feature a burst mode that will take 10 photos in a single second and let the user pick the one that looks the best (the one with no blinking eyes, for instance). Apple marketing head Phil Schiller said the feature would be perfect for “burst selfies.”

TIME Markets

Facebook Is Now Worth $200 Billion

Facebook Holds f8 Developers Conference
Facebook CEO Mark Zuckerberg Justin Sullivan—Getty Images

The record-setting figure is still just one-third of Apple's market cap

Facebook’s valuation passed the $200 billion mark for the first time Monday. The company’s stock closed at $77.6, a new all-time high, giving it a market capitalization of $200.26 billion, according to Google Finance.

The social network has consistently impressed Wall Street analysts in its quarterly earnings reports over the last year thanks to robust growth in mobile usage and advertising revenue. Many analysts believe future prospects for the company are extremely high because Facebook has not yet begun to monetize acquisitions like Instagram and WhatsApp or place a significant number of pricey video ads in users’ News Feeds.

Facebook is also continuing to grow its user base quickly outside the U.S. The company announced today that it now has 100 million users in Africa, which it says is half the total number of Internet-connected people on the continent.

By comparison, Apple, the most valuable company in the world, had a market cap of $590 billion at the close of trading today. Google’s market cap was about $400 billion.

TIME technology

Amazon’s Fire Phone Is Now Just 99 Cents

AN AT&T worker holds the new Amazon Fire phone at an AT&T store on July 25, 2014 in San Francisco.
AN AT&T worker holds the new Amazon Fire phone at an AT&T store on July 25, 2014 in San Francisco. Justin Sullivan—Getty Images

Critics turned off by an over-emphasis on selling the user Amazon products

Amazon’s first-ever smartphone now costs under a buck, the company announced Monday, after less than two months on the market. The Fire phone’s price has been cut to just 99 cents under a two-year contract with AT&T.

The online retailer is notoriously reticent to divulge sales figures for its specific products, but the fact that the Fire phone has tumbled nearly $200 in price in a matter of weeks implies that its sales were not up to Amazon’s expectations.

The device, Amazon’s latest ambitious foray into the world of electronics, launched during the summer to middling reviews. Critics praised its high-quality camera and 3D screen but were turned off by the limited app store offerings and over-emphasis on selling the user Amazon products.

Amazon’s price-drop comes one day before Apple is expected to launch two new, larger iPhones and a smartwatch.

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