MONEY Tech

Why Apple Needs Its New Watch to Be a Huge Success

The pressure is on.

The market may have loved Apple’s APPLE INC. AAPL 1.6737% blowout quarterly report on Tuesday afternoon, but this doesn’t take any of the pressure off of April’s highly anticipated Apple Watch. If anything, the report actually places even more weight on the tech giant’s initial foray into wearable computing.

Let’s go over some of the reasons why Apple needs its new watch to be a smashing success.

1. There is too much riding on the iPhone

Apple’s revenue during the holiday quarter may have soared 30%, but back out the iPhone and sales actually slipped 7%. The iPhone is hot — and that’s awesome — but it’s also 68.6% of the revenue mix at Apple.

Apple needs to earn its innovator wings again. With iPad sales plummeting and the iPod no longer even worthy of being its own line item in Apple’s quarterly summary data table it’s time for something new to take the weight off of the iPhone.

2. The iOS newbies are ripe for the picking

The only thing better than Apple selling a record 74.5 million iPhones is that a record number of them are also new to the tech giant’s mobile platform.

“We had the highest number of customers new to iPhone last quarter than in any prior launch,” CEO Tim Cook boasted on Tuesday night. “The current iPhone lineup experienced the highest Android switcher rate in any of the last three launches.”

In other words, there are a lot of people making their initial investments in Apple products. The long overdue move to introduce larger screens to keep up with the competition is predictably paying off by eliminating their objections to going Apple. This leaves them ripe to to absorb other Apple products, and it’s not iPads or iPods. Mac sales should benefit, but the no-brainer is an accessory that works in cahoots with the phone itself. Yes, we’re talking about the smart watch.

3. Let’s bring back the halo effect

It’s not a coincidence that the Mac experienced a resurgence shortly after the 2001 introduction of the iPod. The media player worked with Macs and PCs, but it made Apple desktops and laptops cool again. Don’t be surprised if we see this happen with the Apple Watch.

Ultimately the purchase of an Apple Watch is a commitment to iOS. It’s unlikely to work with Android or other devices, cementing an iPhone user in place. Wireless carriers make it brutally easy to switch sides every two years, but someone buying an Apple Watch is that much more invested to sticking to the iPhone at the next upgrade cycle.

4. Show Google how wearable computing is done

It’s not a surprise to see Google GOOGLE INC. GOOG -1.3069% backpedalling from Google Glass. The search giant suspended sales of its high-tech specs to developers. They cost too much. They were too creepy. They weren’t fashionable enough.

However, this also opens the door for Apple to make a splash by showing how wearable computing can be fashionable and useful. Skeptics will argue that rival smart watches have failed, but that hasn’t deterred Apple in the past. There’s always time to get it right.

5. Apple can use a new winner

The only two product lines posting improving sales this holiday season were iPhones and Macs. We’re talking about the smartphone that it introduced nearly eight years ago and its legacy computer business that’s obviously even older.

The iPad has been shrinking for a year, joining the iPod that’s been diminishing in popularity for years. Apple TV seems to be holding its own, but it’s not substantial enough to merit being singled out as a category. It’s lumped together with the iPod in the “other products” catchall that posted an overall decline.

Apple can use another winner. The Apple Watch won’t lend itself to the same upgrade cycle as the iPhone. There won’t be too many people buying a new one every two years. However, if it succeeds it will give Apple a more recent product introduction to brag about.

TIME apps

iPhone and Android Finally Have a Full-Featured Outlook App

It's Microsoft's latest move to make cross-platform apps

Microsoft freed Outlook email from the confines of the office PC on Thursday, releasing for the first time fully-featured Outlook apps for iPhones, iPads and Android devices.

The new Outlook apps are now available for download through Apple’s iTunes and the Google Play store. While Microsoft previously offered versions of Outlook for iOS and Android, neither had the power of this new software.

Outlook for iOS and Android Microsoft

Microsoft’s move comes on the heels of its decision to release a motherlode of its flagship software from Word to Excel as mobile-friendly apps that work across a range of devices.

“To date, we’ve seen more than 80 million downloads of Office on iPhone and iPad worldwide,” Microsoft said in a public statement. “We have received tremendous customer request for Outlook across all devices, so we are thrilled to fulfill this for our customers.”

The new Outlook mobile app includes familiar features, such as swipe gestures for rapid archiving and machine learning algorithms that learn which emails the user is most likely to read and pushes them to the top of the inbox. What sets the app apart is a built-in calendar, enabling the user to schedule an appointment within the app, rather than laboriously copy and paste event details in a second, calendar app.

Microsoft on Thursday also released new versions of its Word, Excel and PowerPoint apps for Android tablets.

MONEY

The Most Amazing Thing About Apple? It Still Looks Cheap

Beats headphones are sold along side iPods in an Apple store in New York City.
Beats headphones are sold along side iPods in an Apple store in New York City. Andrew Burton—Getty Images

Despite another blowout quarter, Apple shares are still trading at less than 15 times earnings, which is a bargain for a top-flight tech company.

It’s hard to catch people by surprise when you’re already the center of attention. But with the help of strong holiday sales and another hit iPhone, that’s just what Apple did on Tuesday.

The Cupertino, Calif., gadget maker said sales jumped nearly 30% in its fiscal first quarter to a whopping $75 billion. Wall Street Analysts polled by Fortune had expected an increase of only 20%.

What’s remarkable is that, despite the hype, it’s not hard to make the case that Apple APPLE INC. AAPL 1.6737% shares, up about 8% to $118, are reasonably priced. Here’s our investment case:

The heart of the business: More than 90% of Apple’s revenue last quarter came from hardware sales—69% from iPhone sales alone. But if hardware is what Apple sells, it’s not what the company markets. “Apple’s main product is an experience,” tech analyst Neil Cybart told Money magazine last month. “They look at all of their products as taking away the complicated part of technology so the users can feel like they have more control over their lives.”

Apple aims to build a world in which you’ll own Beats by Dr. Dre headphones, wear an Apple Watch, buy coffee with the Apple Pay payments system, and make hands-free phone calls via Apple CarPlay. With all those products interlinked and running on Apple’s iOS software, you’ll rely on the ecosystem for daily tasks, making it a hassle for you to buy your next phone or tablet from anyone other than Apple.

So what’s the risk? Apple has a hit with the iPhone 6 and 6 Plus, in all selling 74 million smartphones last quarter. Indeed, as TIME recently reported, the iPhone 6’s success has cut into Android’s smartphone market share in the U.S. for the first time since September 2013.

But the company isn’t particularly good at ­enticing the owner of one Apple product to purchase another, says Consumer Intelligence Research Partners’ ­Michael Levin.

For instance, only 28% of iPhone owners have an Apple computer, and less than half of them own a tablet, says CIRP. Sales for the iPad have fallen 22% over the past year, acknowledges Apple. But CEO Tim Cook, noting that the company has sold more than 250 million iPads over the past four years, told investors in October that he’s “very bullish on where we can take the iPad over time.”

Why it’s still a value: Apple enjoyed a banner year in 2014. Spurred by sales of the latest iterations of the iPhone and anticipation of the Apple Watch’s release in April, the company’s stock has risen nearly 50% since the start of 2014.

Despite that gain, Apple’s price/earnings ratio, based on projected profits, is just 14. That means the stock trades at an 11% discount to the S&P 500 technology index, even though the company’s earnings are growing 32% faster than the average big tech stock’s.

Apple’s low valuation stems from factors such as investors’ doubts that a company its size can grow as fast as smaller tech firms, along with uncertainty that Apple will keep making products that are both popular and profitable.

That said, Apple is still the best company by far at creating exciting technology that people want to buy. Plus, signs point to an ever-increasing dividend from the stock, which now yields 1.6%; a larger payout can be easily covered by Apple’s $178 billion cash reserves.

This story is adapted from Apple, Amazon, or Google: Who Will Win the Battle of the Tech Titans? in the 2015 Investor’s Guide in the January-Feburary issue of MONEY

MONEY Tech

You’ve Bought a Lot of iPhones Lately

Phone sales drove Apple's revenue to nearly $75 billion in its latest quarter, the most profitable one in the company’s history. Apple's revenue was higher than Microsoft's and Google's combined.

TIME technology

Apple Reportedly Selling More iPhones in China Than in U.S.

Apple Inc. Launches iPhone 6 And iPhone 6 Plus In China
Apple Store employees in Beijing welcome the customers to buy iPhone 6 and iPhone 6 Plus on Oct. 17, 2014 Feng Li—Getty Images

Analysts expect Apple to announce the historic tipping point in its next quarterly-earnings report

Apple may have sold more iPhones in China than the U.S. for the first time on record, according to advanced reports of Apple’s upcoming earnings report.

Analysts expect Apple to announce the historic tipping point on Tuesday, when Apple will unveil its global sales results for the final quarter of last year, the Financial Times reports.

UBS analysts told the Financial Times that China alone accounted for an estimated 36% of global iPhone shipments last quarter, while the U.S. slipped behind with 24% of shipments.

Analysts say a partnership with the country’s largest carrier, China Mobile, combined with the recent release of the iPhone 6, propelled sales growth in the region to a record high.

Read more at the Financial Times.

TIME apps

5 iPhone App Deals You Just Can’t Miss This Weekend

Try 'Scan & Translate' to eliminate the language barrier

Looking to download a few great iPhone apps while saving some money this weekend? Check out these five, all on sale or free right now.

  • Scan & Translate

    Scan to Translate
    Scan to Translate Scan to Translate

    Similar to Google Translate, this app allows you to scan and translate text in another language. That makes it a fantastic tool for traveling (when, for example, you have no idea how to figure out menus and street directions), or for students working with texts in foreign languages. It’s also handy for getting over simple language barriers in day-to-day interactions.

    Scan & Translate is on sale for $1.99 in the App Store.

  • Lost Yeti

    Lost Yeti
    Lost Yeti Lost Yeti

    Very few puzzle games have plots, and the ones that do seem to try a little too hard. However, Lost Yeti seems to strike the perfect balance. The object is simple: Players must free a trapped Yeti (or Bigfoot, as some call him) by completing puzzles that unlock a footpath. It’s the sort of game you can spend a lot of time tinkering around with — but don’t get lost in the woods.

    Lost Yeti is temporarily free in the App Store.

  • Cycloramic

    Cycloramic
    Cycloramic Cycloramic

    Another app that helps you take advantage of your new phone’s advanced photo capabilities, Cycloramic can let take way better panoramic photos. The app can take wide-angle photos, but it also has a hands-free mode allowing it to snap fully 360º shots by rotating your iPhone using its vibration motor. If that sounds confusing, worry not: The app packs very clear instructions on how to get the best results.

    Cycloramic is temporarily free in the App Store.

  • Touch2Face

    Touch2Face
    Touch2Face Touch2Face

    Touch2Face is one of those rare apps that doesn’t sound like it does much of anything, but it will actually change the way your use your iPhone. It’s simple: Touch2Face creates icons in your iPhone’s notification dock or home screen for dialing up your favorite people, which eliminates the need to scroll through your endless list of contacts. There are options to have the buttons make FaceTime calls or stick to regular voice dials.

    Touch2Face is temporarily free in the App Store.

  • Message Art

    Message Art
    Message Art Message Art

    For some reason, this app’s developers have decided to market it to towards children and parents when it’s obvious that 1) very young children shouldn’t have iPhones and 2) that it’s likely to be used and enjoyed by adults. The app allows you to draw pictures, doodle over photos from your library, or even hand-write notes and send them as an image via iMessage. It’s a lot of fun to use, and sometimes more intimate than normal text messages.

    Message Art is temporarily free in the App Store.

TIME Money

Apple CEO Tim Cook Earned $9 Million Last Year, Double His 2013 Pay

Pay hike comes after a stellar 2014 for the tech firm

Apple CEO Tim Cook’s total pay for 2014 was $9.22 million, more than double the financial compensation he received the year before.

Cook earned a salary of $1.75 million and his non-equity incentive compensation was $6.7 million, reports Bloomberg. His 2013 pay package was $4.25 million, according to files sent to the U.S. Securities and Exchange Commission on Thursday.

The pay increase comes after a highly successful 2014 in which Apple’s company value exceed $700 billion and the price of stocks rose above $119 per share, according to Bloomberg.

The boost comes amid optimism surrounding new products such as the iPhone 6 Plus and Apple Pay.

Cook succeed Steve Jobs as head of Apple just months before the company’s enigmatic founder died of pancreatic cancer.

[Bloomberg]

TIME apps

5 iPhone Apps You Just Can’t Miss This Week

TIME.com stock photos iPhone Apps Uber
Elizabeth Renstrom for TIME

Try Chrome Remote Desktop, which lets you access your desktop from your mobile phone

It seems like hundreds of new iPhone apps pop up every week, but which ones should you bother trying? We explored the App Store and found five apps actually worth downloading.

Chrome Remote Desktop

This app is as straightforward as it is useful. Every developer or software company seems eager to cram every device you can possibly own into a single tool, but Google has found a way to do it best. Remote Desktop lets you use your phone to access your computer desktop; you can choose to access one of several different desktops from your mobile device. And on an iPad, this app eliminates the need to carry your laptop everywhere.

Chrome Remote Desktop is free in the App Store.

Power Nap HQ

The danger of napping is that complacency, exhaustion, laziness, and snoozing will get the best of us almost every time we try to shut our eyes for 20 minutes. We might set our timers for 20 minutes, but by the time they go off, we’ve only been asleep for a few short minutes.

This new app tracks users’ movements to see when they have fallen asleep, and then uses this data to wake them up after a desired amount of time. It keeps us from falling into a frustrating five-minute nap or from a midday slumber so long our regular sleep pattern will be disrupted.

Power Nap HQ is available for $0.99 in the App Store.

Cat Facts Extreme

Perhaps one of the most brilliantly inane apps ever created, Cat Facts Extreme is the perfect way to bring a smile to your cat-loving friends — or drag everyone else into an abyss of frustration. Go through your contact list and choose which friends deserve to have cat facts texted to them. It’s really the simpler pleasures of technology that can be the most meaningful.

Cat Facts Extreme is free in the App Store.

Stayful

Stayful not only searches multiple databases in order to find you the best hotel rates in a given city, but it will actively negotiate the best price for you with the hotel. How exactly it works is something of a mystery, but so long as the result is cheaper rates, then Stayful has done its job. Not only is the idea itself incredibly useful, but the interface is easy to use and takes the headache out of online booking.

Stayful is available for free in the App Store.

Flush Toilet Finder

What happens when nature calls but you can’t answer? It’s a place we’ve all been, and as it happens, resentful restaurant owners aren’t terribly gracious when you ask to use their bathrooms. Flush Toilet Finder is rather self-explanatory: The app uses your GPS to locate all the public restrooms in your area, which can make a critical difference when you’re on the move and won’t be home for a while.

Flush Toilet Finder is available for free in the App Store

TIME apps

The 5 Best iPhone Games To Play This Week

Try 1+2=3, a deceivingly difficult game of quick calculations

Looking for some fun new games to play on your iPhone? Here are five favorites TIME rounded up this week. Enjoy!

  • Shadowmatic

    Shadowmatic
    Shadowmatic Shadowmatic

    Shadowmatic is one of the most challenging puzzle games around, not necessarily because the puzzles themselves are impossible to solve, but because the game requires players to think differently. The goal is to contort objects in order to match a shadow cast on a wall. Use objects from your surroundings in order to solve the puzzle. It’s like a mind-bending shadow-puppet spectacle.

    Shadowmatic is available for $2.99 in the App Store.

  • Flockers

    Flockers
    Flockers Flockers

    Flockers is shockingly similar to the yesteryear gaming hit Lemmings, in which players must lead a flock of animals over a series of obstacles and, hopefully, not to one of many violent deaths. It’s a puzzle game in action. Take your sheep through 60 levels and see if they can survive the gruesome machines and pitfalls designed to pulp your clueless herd.

    Flockers is available for $1.99 in the App Store.

  • Lowlander

    Lowlander
    Lowlander Lowlander

    In a world full of retro games, Lowlander is so retro that it’s nearly analog. It’s a throwback to a time of pixels the size of a quarter, and game movement as simple and as straightforward as the arrow keys. Actions are selected from a drop down menu as you try to battle your way through the Amazon. Imagine the RPG Tom Hanks plays in Big, but colorful, and on your iPhone.

    Lowlander is available for $1.99 in the App Store.

  • 1+2=3

    1+2=3
    1+2=3 1+2=3

    There’s a level of inanity to this game that’s hard to stomach, were it not for the fact that it’s been near the top of the iTunes chart for the last week. Clearly players are responding to the idea that basic math equations thrown at them at top speed are not only a lot of fun, but strangely challenging. It’s literally single digit operations, and yet, it’s not hard to make mistakes. Not really a brain teaser as much as a puzzle game, 1+2=3 is a great way to spend a few minutes of free time.

    1+2=3 is free in the App Store.

  • Hexxy Snake

    Hexxy Snake
    Hexxy Snake Hexxy Snake

    A lot like the classic game Snake, Hexxy Snake is a game in which players control a growing snake, navigate it towards food and around obstacles, and, more importantly, away from its ever-growing tail. The added challenge to this game is anticipating the slightly fractal element of guessing the precise angle at which your snake will turn when it comes to a fork in the hex background.

    Hexxy Snake is $2.99 in the App Store.

TIME apps

Don’t Miss These iPhone App Deals This Weekend

TIME.com stock photos Social Apps iPhone
Elizabeth Renstrom for TIME

Try City Maps 2Go, which lets you download maps for offline viewing

It seems like hundreds of new iPhone apps pop up every week, but which ones should you bother trying? We explored the App Store and found five apps actually worth downloading.

1. City Maps 2Go Pro

City Maps 2Go is an incredibly useful iPhone app, not only because it offers users maps on their phones with a level of detail that Google Maps cannot match, but because it also allows you to use those maps offline. It’s a great tool for road trips where signal service might be spotty, or when you’re traveling and hoping to conserve data.

City Maps 2Go Pro is on sale for $0.99 in the App Store.

2. Goat Simulator

We’ve written about Goat Simulator before, but for those that are still out of the loop, it’s essentially Grand Theft Auto, but with a goat and without sexual violence/gun violence. Use the goat’s tongue to fling him around an interactive universe and destroy your surroundings with the force of an airborne animal. Few games make you laugh out loud, but Goat Simulator definitely will.

Goat Simulator is on sale for $2.99 in the App Store.

3. Marvel Pinball

A game for those who enjoy comic books but lament the disappearance of arcades, Marvel Pinball is an amazing distraction and doesn’t feel out of place on a small screen. Play your way through levels decorated with your favorite heroes and villains, and upgrade to unlock new maps. Changing maps means accessing new structures and obstacles in order to change gameplay in ways real pinball machines never could.

Marvel Pinball is temporarily free in the App Store.

4. 5coins

If you’re someone who not only has trouble budgeting, but also has trouble juggling a high number of functions in a single app, then 5coins may be a useful tool for you. It allows you to focus on the most essential components of your budget, which feels like the most responsible and least constructive way to watch how much you spend. In short, it helps you watch what you spend where it matters most.

5coins is temporarily free in the App Store.

5. Super Lemonade Factory

Another iOS gem with the feel of a Game Boy game, Super Lemonade Factory throws you into a pixelated world of faceless characters in which players must infiltrate an inherited Lemonade Factory full of menacing villains. Work your way through a post-World War II storyline while enjoying a classic-style video game with an interesting premise.

Super Lemonade Factory is temporarily free in the App Store.

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