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Apple to ¨brighten everyone´s day¨

Apple´s invitation to an event at its Cupertino headquarters on Tuesday promises to "brighten everyone's day". Shown via
satellite link in Europeit will, for the first time, also be shown to a select group of guests inChina.
Even though the iPhone maker has said nothing about what is ahead, its vast supply chain in China has leaked enough
details over the past few months that seasoned observers feel sure about what Apple has in store. There will be a top-end
"iPhone 5S", looking like last year's iPhone 5, in black, white and "champagne" – a cross between gold and beige – which
may include a fingerprint sensor for unlocking, and double-speed video capture.
And then there will be a cheaper "iPhone 5C" – with the same screen size as the iPhone 5, but with a tough plastic back,
and in multiple colours, including strawberry red, blue, lime green, yellow and white. Those colours are how it aims to
"brighten"; that, and the new iOS 7software, designed by Sir Jonathan Ive, which brings more primary colours to the fore.
It will be the first time Apple has introduced more than one phone at a time. But Apple is at a crossroads. The share price
is down from $700 a year ago to $500 (£320) with its arch-rival Samsung eating into its profits.
Only two central details have not been leaked: the price of the so-called 5C, and whether Apple has finally tied up a deal
with China Mobile, the world's largest mobile telecoms company with 745 million subscribers. (The US has 254m in total.)
Those two details, analysts think, will decide whether Apple actually has bright or dark days ahead.
"Whatever they do, they aren't going to offer a cheap iPhone," said Ben Wood of the analysts CCS Insight. "That isn't
compatible with the brand. But I think that if you look at the price of the iPhone 4 in the UK, it will probably be the same as
that." The iPhone 4, introduced in June 2010, is still selling well in the US and UK because carriers can offer it free with a
contract.
On "prepay" – without a contract – the cheapest iPhone 4 is £319 in Britain, or $450 in the US. Compared to the average
price ofsmartphones around the world, that is high. Outside the US, prepay is about half of all phone sales; but Apple is in
effect locking itself out of that market by its pricing.
That leaves Apple with a dilemma, according to Benedict Evans of Enders Analysis. "The US contract phone pricing
structure today effectively puts a lower limit on the viable price for a contract smartphone. The iPhone 4 and similar high-
mid range Android phones are sold as 'free' on contract; phones whose list price is actually much lower are sold at the
same price. A $200 phone is sold to consumers at the same price as a $400 phone – and hence is uncompetitive."
If Apple sold a $300 iPhone in the US, the carriers would simply keep the extra $100 that they charge customers for
themselves – and Apple's margins are eroding already, with the average selling price of the iPhone dropping to $581 in
the second quarter of this year, from $613 in the previous quarter and an average of $634 since 2009. But a $300 iPhone
could sell in huge numbers outside the US and boost profits.
For Apple, maintaining or growing its market share matters not just for profits, but to keep third-party developers writing
apps for the iPhone before others. That leads to a virtuous circle where people buy iPhones because they can get early
access to popular apps, and developers see fast take-up.
But the rise of Android, used on 52% of the smartphones in the US, against 40% for the iPhone according to ComScore,
means that some developers are considering writing apps for Google's platform first, making Apple second choice – a
status it wants to avoid.
Though Apple's sales are rising annually and the iPhone is still profitable, the whole market is growing faster, especially in
China, where Android phones (without Google's services) have about 90% of the market. The world market for
smartphones will increase 40% to pass 1bn this year, according to research company IDC. The more Android phones
there are, the more likely developers are to write apps for it first.
Nor is Android the only threat. Windows Phone, from Microsoft, is also winning first-time smartphone buyers, who are
upgrading from "feature phones" which do not have internet capability. Data from Kantar WorldPanel ComTech last week
suggested that Android made up about 70% of sales across Europe and Asia, while Apple has strongholds in Britain,
France and Australia. Microsoft is winning new users in lower-cost countries such as Mexico, where it outsold iPhone in
the past 12 weeks.
And Microsoft is sure to renew its focus on business customers, where it could offer Windows software for the desktop,
mobile and backroom systems.
A China Mobile deal could make much of that less relevant. Until now, the carrier's unique signal encoding and demands
on revenue shares have stymied a deal. Rumours that Tim Cook has been to the country, and the fact that Tuesday's
announcement will be shown in Beijing as well, suggests that Apple is making a deal – and that the next iPhones will be

on sale there before Christmas. "There used to be a wait of a few months before Apple launched their latest products in
China, but nowadays, China is too important for Apple and so it will be the first batch of markets," a source at one Chinese
carrier told Reuters.
"It's a very good direction that Apple is launching its latest model so soon in China when its brand attraction is on the
decline," Nicole Peng, an analyst at Canalys, told Reuters. "It is a sign that they value the Chinese consumers."The bright
colours of the new iOS 7 software, shown off to Apple developers in June, are expected to be popular with Asian
customers. But another Asian trend – towards larger screens dubbed "phablets" because they are a cross between a
phone and a tablet – is unlikely to be followed. While Apple is reported to be testing iPhones with larger screens, and
developer sources say that the iOS 7 software is suitable for larger screens, nobody is expecting an Apple "phablet" on
Tuesday. "I think that there's enough pent-up demand for 'new' iPhones even if they're the same price as the old iPhone
4," said CCS Insight's Wood. "It will feel like a new device. And that's what people want."


Six things you didn´t know about Angela Merkel
If Angela Merkel is re-elected on 22 September, she stands to become Europe's longest serving elected female head of
government, eclipsing Margaret Thatcher along the way. And yet there is still plenty of mystery about a woman who
charted an unlikely course from research science in the former GDR to the leader of Europe's most powerful nation.
Not only has she fought off all (male) competitors in her party, she has mastered the German political system, wrestled
down two parties in coalition governments and seems to get only stronger in Europe. But behind the exterior lie secrets
that are only now coming to light.
1. Angela Kazmierczak?
Angela Merkel is indeed "a quarter Polish". Now we know: Not only was her grandfather of Polish origin, the chancellor
almost was born Angela Kazmierczak. Her grandfather was a Ludwig Kazmierczak, born 1896 in Poznan – then part of
the German Reich. The family was proud of its Polish roots. Obviously not grandpa Ludwig who emigrated to Berlin when
Poznan became Polish again after the first world war. He married a Berlin woman, and they had a son – Horst
Kazmierczak, Angela's father. The family decided to cut their Polish roots in the early 30s. The Kazmierczaks followed a
common fashion and Germanised their family name to Kasner. Father and son converted from Catholicism to the
Protestant church – something Merkel didn't know until recently. That was a puzzling discovery for a woman who grew up
in a rectory and whose Protestantism is key to understanding her personality. When Merkel's Polish past became public, a
second cousin immediately invited her for dinner. Watch out, she might show up one day in the Alley of the Cosmonauts
in Poznan.
2. Plum cake

In her early public life, Angela Merkel loved to brag about her cooking and baking qualities. Indeed, there is a lot of praise
for her potato soup, her beef loaf and especially her plum cake. The cake soon became a measure of how much time she
was able to afford her private life and her husband. He loved the cake, she really didn't. As a junior minister under Helmut
Kohl, she was still able to have two or three baking weekends each plum season. The plum cake stories trickled away
when she became chancellor. Now there are the occasional pictures of the most powerful woman in Europe queuing at
the cashier at her neighbourhood grocer. The shopping list is eagerly investigated, but butcher and the fishmonger keep
stumm.
3. Dog days

Merkel and Vladimir Putin go back further than you might think. He was a KGB agent in East Germany when the wall fell
and he certainly wasn't happy about it. Perhaps the rivalry has its roots in the dark shadows of the cold war. Merkel, the
greatest benefactor of the 89-revolution, got a taste of his intimidatory tactics very early. When she visited the Kremlin for


the first time as chancellor, Putin gave her a plush toy dog as a gift. Merkel became deeply afraid of dogs after she was
bitten in the mid 90s. But Putin didn't stop there. The next meeting, at his summer residence on the Black Sea, he let in
his black Labrador Kony, an intimidating species. Merkel sat frozen, and pictures show Putin with a sardonic grin on his
face, legs widely stretched.
4. Inca hoots
After a meeting with Merkel, a prime minister from a small south-eastern European country told the stunned media, that
the chancellor sees similarities between the EU and the ancient Inca. The European value system too could suddenly
disappear without trace. Merkel sometimes uses the Inca story to shock, although nobody expects to see tourists climbing
the savaged ruins of Brussels in the near future. But the chancellor does indeed worry about the strength of the western
system. Democracy, liberal market-economies, the western legal system are battling the modern version of the cold war
against authoritarian, non-democratic but economically strong systems. Merkel has seen a state collapsing in her lifetime,
and she wants to spare her beloved west the same fate. That's the reason for her call to competitiveness and recovery in
Europe – and she's afraid that Europe doesn't get it.
5. Easy Cameron, easy go
David Cameron sees himself as a close ally of Merkel. But the feeling might not be reciprocated. Cameron wouldn't be the
first male politician to misread the chancellor – a dangerous mistake. Merkel's path is marked with the corpses of those
males getting her wrong. And Cameron is the third prime minister she has to deal with in her time in office. So for
clarification: Yes, she likes his policies, his global vision, his stands on competitiveness and the Asian challenge. She
even admires his debating skills as she generally loves the British political system. But she is also keen on changing the
treaties, but only if there is need for a change. Losing the entire EU system in one of those many referendums in the
aftermath of a treaty change would be too dangerous. So Merkel is a fan of the newly discovered intergovernmentalism –
treaties between the member states instead of ever more integration favouring the commission. Cameron got a taste
when he was asked to join the fiscal pact at the height of the euro crisis. He decided against. No Britain is out. And Merkel
couldn't care less.
6. Euro plan
So, how does Merkel really want to get out of the euro mess? Does Germany have to pay for it? Get rid of Greece? More
power to Brussels? Definitely not. Merkel is famous for her step-by-step tactics. She never would give a speech outlining
a vision for Europe or at least a two year plan. This woman is not for benchmarking. She doesn't want to leave any traces
of her political game plan since this would only help her opponents. But she has a plan, written down in summer 2011 by
one of her advisors, a scribble on a single sheet of paper. In this plan she accepts that key policies within the EU member
states have to be watched, governed and controlled more closely and jointly in order to keep the currency alive: budgets,
spending, education and research, retirement, social benefits. After all a joint currency will not work without a joint fiscal
and economic policy. Will that mean more Brussels? The opposite is true. Merkel is aware of the European public being
tired of the commission and the lack of accountability. So for the time being, she'd prefer national governments writing the
rules and sticking to them. If someone wants more Europe, they have to come up with a pretty good idea. Merkel might
even be willing to talk about a new architecture for all this coordinating – but certainly not before the German elections.
And probably not even before the European elections next May.


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