Bigger Screens, Smaller Profit for Apple?

Jul 22, 2013 8:13am

Morning Business Memo

Apple may be late to the dance but in recent months the company is reported to have tested larger smartphone and tablet screens. It’s not clear if Apple will bring them to market, but according to The Wall Street Journal, the company “has asked for prototype smartphone screens larger than four inches and has also asked for screen designs for a new tablet device measuring slightly less than 13 inches diagonally,” according to sources. The current iPhone 5 has a 4″screen, while the iPad has a 9.7″ screen. Samsung’s large-screen phones have proved popular with consumers.

Apple reports quarterly profit this week and they’re expected to be lower than this time last year. The company’s more aggressive move in maps buying the online firms HopStop and Locationary is of interest to investors.

Apple’s website for developers is shut down after hackers tried to steal sensitive information. The company says an intruder tried to gain access to developer information, which is encrypted on the site. Apple says no customer information has been compromised.

American motorists are bracing for further increases in gas prices. Last week the US Energy Department reported a sharp increase in average costs, and another rise is likely when the latest weekly survey comes out today. West Texas crude oil futures rose again this morning. At $108 a barrel they are now at their highest price in 16 months. AAA says retail gas prices are likely to rise more in the coming weeks.

Hasbro’s second-quarter earnings fell 16 percent, hurt by cautious consumer spending and a steep drop in sales of boys’ toys. The number two toymaker earned $36.5 million as revenue dropped 5 percent. Sales of boys’ toys declined 35 percent against tough year-ago comparisons. But girls’ toys jumped 43 percent and board game sales climbed 19 percent. Last week rival Mattel’s second-quarter net income fell, hurt by softness in Barbie sales and a write-down on the Polly Pocket line.

Yet another big bank has come out with strong second quarter earnings. This time it’s the Swiss giant UBS. Profit rose more than 50 profit compared with the year before. These numbers come hard on the heels of other better-than-expected results from Citigroup,  Bank of America and Wells Fargo. The health of the banking sector is strong, and ironically strong results may weaken the industry’s case against regulators’ demands for stronger capital requirements to prevent the likelihood of future problems.

Richard Davies Business Correspondent ABC News Radio abcnews.com Twitter: daviesabc

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