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Apple on Thursday disclosed its iPhone sales dipped slightly during the holiday-season quarter, signaling a sluggish start to the trendsetting company’s effort to catch up to the rest of Big Tech in the race to bring artificial intelligence to the masses.The iPhone’s roughly 1% drop in revenue from the previous year’s October-December period wasn’t entirely unexpected, given the first software update enabling the device’s AI features didn’t arrive until just before Halloween, and the technology still isn’t available in many markets outside the U.S.The countries still awaiting Apple’s AI suite include China, a key market where the company continued to lose ground. Although he didn’t mention China, Apple CEO Tim Cook told investors on a conference call that a software upgrade enabling the AI features in more European markets, as well as Japan and Korea will be rolling out in April.But in the past quarter Apple also was only able to eke out a modest revenue gain across its entire business, although the results came in ahead of the analyst projections that guide investors. The Cupertino, California, company earned $36.3 billion, or $2.40 per share, a 7% increase from the previous year. Revenue edged up from the previous year by 4% to $124.3 billion.Those numbers included iPhone revenue of $69.1 billion. In China, Apple’s total revenue registered $18.5 billion, an 11% decrease from the previous year.Part of that erosion in China reflected the iPhone’s shrinking market share in that country, where homegrown companies have been making more headway. Apple’s iPhone year-over-year shipments in China declined nearly 10% in the most recent quarter, while native companies Huawei and Xiaomi posted year-over-year increases of more than 20%, according to the research firm International Data Corp.“While China is a potential risk, we think the appeal of Apple products as a luxury product and the potential of AI innovations will keep demand steady in the country,” Edward Jones analyst Logan Purk wrote in a research note assessing the company’s quarterly report.The holiday-season results served to confirm bringing AI to the iPhone and Apple’s other products may not boost the company’s recently lackluster growth as much as investors initially thought it might after Cook unveiled the technology before a rapt crowd last June.The anticipation that an AI-infused iPhone would prod hordes of consumers to ditch their current devices and splurge on an upgrade is the main reason Apple’s stock price surged by 30% last year. But the sinking realization that an uptick in demand may take longer than expected has caused Apple’s shares to backtrack by 5% during the first month of the new year. The stock initially slipped slightly in extended trading after the numbers came out, but later reversed course and rose by more than 3% after Cook said Apple is seeing a record number of people upgrading their iPhones.“I could not feel more optimistic about our product pipeline,” Cook said during the conference call. “So I think there’s a lot of a lot of innovation left on the smartphone.”A management forecast calling for revenue that will at least match or exceed analyst projections for the January-March quarter also seemed to bolster investor confidence in the company.The concerns hovering around Apple’s weakening iPhone sales come against broader worries about whether AI will be as lucrative for U.S. tech companies as once envisioned after Chinese startup DeepSeek released a version of the technology that was built at a far lower cost than had been previously thought possible.Unlike tech peers such as Microsoft, Google corporate parent Alphabet Inc., and Facebook corporate parent Meta Platforms, Apple hasn’t been investing as heavily in AIone of the reasons it has been seen as an industry laggard. But that restraint could work to its advantage if DeepSeek’s early breakthroughs in driving down AI costs gains momentum.Apple’s services division remained the company’s biggest moneymaker outside the iPhone, with revenue of $26.3 billion in the past quarter, a 14% increase from the previous year. Although the services division has been thriving for years, it generates more than $20 billion annually by locking in Google as the automatic search engine on the iPhone and other products. That deal is now under threat of being banned as part of the proposed punishment for Google’s search engine being declared an illegal monopoly. Michael Liedtke, AP Technology Writer
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Last years election came with a Greek chorus: rampant speculation about what a second Trump term might actually look like. Would it be a leaky ship once again? Would a team of loyalists turn it into the well-oiled machine Trump boasted of at the time, but whose true lubrication was debatable? Or would it be more like the dystopia that Trumps harshest critics warned about? If the first 10 days are any indication, what Trumps second administration most closely resembles is . . . Twitter just after Elon Musk took it over. Ever since Trump first announced the Musk-led Department of Government Efficiency (DOGE) last November, it was clear the Tesla impresario would play a role in Trumps second term. Musk contributed over $250 million to Trumps campaign and boosted the candidate in other ways. Now he would have a seat at the table. Or thats how it looked on paper, anyway. In practice, Musk appears to now occupy several seats. His influence has been unmistakable in the rocky early days of the new administration, and many of its familiar messes. We the tweeple A grinning Musk famously barged into the Twitter offices in October 2022 carrying a kitchen sinka punny nod to the meme “let that sink in.” Days later, he laid off roughly half the staff. Although Trumps return to the White House was thankfully devoid of any visual puns, it has a similarly disruptive focus on efficiency. At least 240 employees of the federal government have reportedly already been fired, reassigned, or designated to be laid off so far. And just as Musk offered Twitter workers in 2022, Trumps administration on Tuesday presented two million government employees with what seemed to be a buyout option: eight months pay now, if they resign by next week. (Details of the murky ultimatum and its legality seem up for interpretation.) As if the two propositions werent similar enough, the language in the new memo echoes that of the one Musk once sent to Team Twitter. According to the New York Times, the email carrying the respective memos even bore the same subject line: Fork in the Road. Back in 2022, Musk shook up the lives of the Twitter workers who didnt accept his buyout. He demanded a companywide return to office, ending pandemic-era remote work practices; made those remaining employees commit to an extremely hardcore work ethic, which translated to long hours at high intensity; and implemented a broad series of cost-cutting measures around everything from infrastructure to real estate and content moderation. Each of these aspects of Musks Twitter takeover has a counterpart in the new administration. One of Trumps 26 day-one executive orders was a return to office mandate; many roles have new performance benchmarks; some employees have been made to justify their current projects in ambush meetings; and the cost-cutting-at-all-costs ethos has manifested in widespread funding freezes and budget cuts of dubious legality. As if all these initiatives didnt smack of Musk already, helping to enforce them are a collection of loyal acolytes from Musks various businesses, similar to the crew he assembled years ago to hollow out Twitter. But why is that effort something the worlds sole superpower would ever want to emulate? Why what happened to Twitter matters Twitters transformation into X is not the typical aspirational business story. Musk bought the microblogging platform for $44 billion in 2022; as of last September, its estimated value was $9.4 billion. Ad revenue has reportedly plummeted amid eased content moderation and Musks erratic behavior, while subscription revenue for premium tiers of X has not brought in nearly enough to make up the shortfall. In a recent email to X staff, Musk reportedly described the companys financial situation bluntly: Were barely breaking even. Given the companys tumultuous recent history, that gloomy assessment seems charitable. Beyond the financial decline, Twitter sustained even more grievous damage to its reputation over the past severalyears. While Musk claimed that part of his motivation for buying Twitter was to correct an alleged bias against conservatives, by any metric, he overcorrected. During last years election, X had become an atmosphere where the right-wing echo chamber thrives, and where legacy media accounts are throttled. While X remains something of a hub for news junkies, it no longer attracts the same heady mixture of athletes, artists, journalists, comedians, and scientists as it did during Twitters 2010s heyday. The United States of X The same chaos and confusion that engulfed Twitter in November 2022 has spread throughout the federal government since Trumps inauguration. Beyond the flood of sweeping executive orders, the bedlam peaked earlier this week when a memo from the White House Office of Management and Budget paused all federal grants and loanswithout clarifying the extent of who might be affected. Although the memo was eventually rescinded 36 hours later, amid an onslaught of lawsuits, the freeze is still ongoing. According to language in the memo, the freeze is meant to root out programs that have anything to do with the broadly defined concepts of DEI or gender identity. However, just about everything beyond a shortlist that includes Medicaid and food stamps is potentially on the chopping block. Anyone whose well-being or livelihood depends on government funding now knows what its like to work in an office where heavy layoffs are imminent. Except more than jobs are at stake. There are plenty of reasons why the U.S. government should not be run like a company. The objective of a businessprofits, profits, profitsis fundamentally at odds with the government objective of serving the public interest and keeping people safe. The same cost-cutting measures that seem to please investors, for instance, can lead to crises like the 2014 water contamination in Flint, Michigana result of the city trying to save money by switching sources for its drinking water. Citizens are more than just a user base. A company like Twitter might troubleshoot how lean it can run without degrading its offering so much that users flee in mass, but the U.S. government has a slimmer margin of error. When its offering is degraded, the results can get far more catastrophic than soft quarterly profits. And sometimes its unclear exactly what or who is keeping degradation at bay until after theyre gone. When Musk took over Twitter in 2022, he fired and laid off so many workers the company actually couldnt afford to lose, the HR team had to create an accidental termination category to re-onboard them all. How many layoffs and firings will he initiate in the new administration before learning the hard way which government employees were important after all? Perhaps theres one bright spot in the ongoing efforts to pare down the government. Some of the former Twitter employees who took the buyout offer in 2022 ended up suing Musk for the severance he never paid. This time around, politicians like Senator Tim Kaine and Congresswoman Alexandria Ocasio-Cortez are warning anyone tempted not to take the bait. Some of them hardly seem to need the encouragement, however. Employees have been posting on Reddit about how this whole episode has only made them more fired up to stick around and see to the business of keeping the government functioning.
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The Chinese artificial intelligence app DeepSeek could not be accessed on Wednesday in Apple and Google app stores in Italy, the day after the country’s data protection authority requested information on its use of personal data. Ireland’s Data Protection Commission said it had also requested information from DeepSeek about data processing in relation to Irish users. DeepSeek last week launched a free AI assistant that it says uses less data at a fraction of the cost of incumbent services. By Monday, the assistant had overtaken U.S. rival ChatGPT in downloads from Apple’s App Store, sparking panic among tech stock investors. “The news of the withdrawal of the app was only a few hours ago, I cannot say whether it is due to us or not,” the head of the Italian data regulator, Pasquale Stanzione, was quoted as saying by news agency ANSA. “Our office will launch an in-depth investigation to see if GDPR rules are being respected,” Stanzione added, according to ANSA, referring to European Union data protection regulation. The Italian regulator, known as the Garante, said on Tuesday it wanted to know what personal data is collected, from which sources, for what purposes, on what legal basis, and whether it is stored in China. It gave DeepSeek and its affiliated companies 20 days to respond. Stanzione also said the regulator was seeking reassurances on safeguarding for underage users of the app, on the avoidance of bias and avoiding electoral interference. A notice displayed to Italian customers on Apple’s App Store said the app was “currently not available in the country or area you are in.” A message on the Google app platform said the download “was not supported” in Italy. DeepSeek seemed to be still operational for Italian users who had previously downloaded the application, and was available for download and working on Wednesday in other European Union countries and in Britain. In Germany, an interior ministry spokesperson said the government was monitoring AI applications for potential interference before the February 23 national election. “Of course, the security authorities are concerned with AI applications and possible manipulation, possible influence on the formation of public opinion through AI applications, especially now in view of the Bundestag elections,” the spokesperson said, without naming any specific models. Italy’s Garante is one of Europe’s most active watchdogs on the use of AI. Two years ago it briefly banned the use of Microsoft-backed ChatGPT over suspected breaches of EU privacy rules. Ireland’s Data Protection Commission is the lead EU regulator for most of the top U.S. internet firms due to the location of their EU operations in Ireland, but DeepSeek has not designated Ireland as its EU headquarters. ($1 = 0.9618 euros) Elvira Pollina, Reuters
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