Apple Plans Giant High-End iPhone, Lower-Priced Model

Apple Inc. is preparing to release a trio of new smartphones later this year: the largest iPhone ever, an upgraded handset the same size as the current iPhone X and a less expensive model with some of the flagship phone’s key features.

With the new lineup, Apple wants to appeal to the growing number of consumers who crave the multitasking attributes of so-called phablets while also catering to those looking for a more affordable version of the iPhone X, according to people familiar with the products.

Apple, which is already running production tests with suppliers, is expected to announce the new phones this fall. The plans could still change, say the people, who requested anonymity to discuss internal planning.

Despite months of breathless hype, the iPhone X hasn’t sold as well as expected since its debut last year. Apple sold 77.3 million iPhones in the final quarter of 2017, below analysts’ projections of 80.2 million units. Some consumers were turned off by the iPhone X’s $1,000 price despite liking the design but wanted something more cutting-edge than the cheaper iPhone 8. With its next lineup, Apple is seeking to rekindle sales by offering a model for everyone.

“This is a big deal,” says Gene Munster, a co-founder of Loup Ventures and a long-time Apple watcher. “When you have a measurable upgrade in screen size, people go to update their phone in droves. We saw that with the iPhone 6, and we think this is setting up to be a similar step up in growth.”

Munster predicts a supercycle — which he defines as upgrades by 10 percent or more of Apple’s existing iPhone customers. “The market that will see the biggest jump in sales is likely Asia,” he says. “That market has many single-device consumers, and they love big phones.”

An Apple spokeswoman declined to comment. The shares gained 2.1 percent to $179.18 at 2:16 p.m. in New York.

Read more: How Samsung’s new Galaxy S9 compares to the iPhone X

With a screen close to 6.5 inches, Apple’s big new handset will be one of the largest mainstream smartphones on the market. While the body of the phone will be about the same size as the iPhone 8 Plus, the screen will be about an inch larger thanks to the edge-to-edge design used in the iPhone X. (Apple is unlikely to refer to the phone as a phablet, a term popularized by Samsung.)

The larger screen should especially appeal to business users, letting them write emails and manage spreadsheets on a screen about as big as a small tablet. Like the iPhone 8 Plus, the new handset will probably enable split-screen modes for certain apps. Still, the larger phone could cannibalize iPad sales, a category that recently started growing again.

The big phone is code named D33, a person familiar with its development says, and at least some prototypes include a screen resolution of 1242 x 2688. That would make the screen about as sharp as the one on the 5.8-inch iPhone X. Apple also plans to use OLED technology, the same, more expensive type of screen in the regular iPhone X.

Like the iPhone X, the larger model will include a Face ID scanner that unlocks the device and enables payments. Apple is also preparing an update to the regular-sized iPhone X that is internally dubbed D32, people familiar with the product said. Both of these phones are expected to use next-generation A12 processors and will continue to include stainless steel edges, they say, and will be Apple’s high-end smartphone offerings.

Apple is considering a gold color option for the update to the iPhone X and the larger model. The company tried to develop gold for the current X handset, but abandoned it because of production problems. All new iPhones since the 5s came in gold, including the iPhone 8. The gold option is especially appealing to consumers in Asia and may help boost sales in the region. Still, Apple may ultimately decide not to proceed with the color.

In at least some regions, Apple is considering offering a dual-SIM card option for the larger model. That would let people use their phones in countries with different carrier plans without having to swap out cards. Such a feature has been growing in importance and popularity, especially in Europe and Asia where business people routinely visit multiple countries.

Apple hasn’t made a final decision on including the feature and could choose to wait for E-SIM technology, which will connect phones to multiple networks without the need for a removable chip. Apple has wanted to offer E-SIM technology (it already exists in the iPad and Apple Watch), but some carriers are resistant to including it in iPhones, and Apple needs their support. A dual-SIM capability would provide a compromise.

The phones will have an updated operating system, probably called iOS 12 and code named Peace, which will include upgraded augmented reality capabilities, deeper integration of the Siri digital assistant, digital health monitoring and the ability to use Animojis in FaceTime.

Apple’s decision to also build a cheaper phone is an acknowledgment that the current entry-level 8 models too closely resemble the iPhone 6 introduced back in 2014. With their thick bezels and lack of edge-to-edge screens, they seem dated next to the iPhone X and the latest Samsung devices. The new lower-cost model will feature the same edge-to-edge screen as the iPhone X as well as Face ID instead of a fingerprint sensor.

“It’s good that they’re rounding out the product line” with a less expensive phone, Munster says. But he doesn’t think it will have a measurable impact on demand because many consumers will want the bigger model.

To keep costs down, the cheaper phone will use LCD screen technology similar to the type employed in the iPhone 8. It will also have aluminum edges and a glass back like the iPhone 8, not the flashier stainless steel used in the iPhone X.

Apple has tried selling cheaper phones in the past with poor results. In 2013, the company debuted the iPhone 5c, which had a polycarbonate body and came in various colors. Consumers quickly discovered that for a mere $100 more they could buy a 5s, which had an aluminum body, a slow-motion video camera and a fingerprint scanner. Apple soon discontinued the 5c.

For more on the iPhone, check out the podcast:

This time, the company is trying something different: using a cheaper body but including the features — Face ID and an edge-to-edge screen — that consumers most prize.

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    Phone-addicted teens arent as happy as those who play sports and hang out IRL, new study suggests

    To no parent’s surprise, too much smartphone use makes teens unhappy.

    So says a new study from San Diego State University, which pulled data from over one million 8th-, 10th-, and 12th-graders in the U.S. showing teens who spent more time on social media, gaming, texting and video-chatting on their phones were not as happy as those who played sports, went outside and interacted with real human beings.

    But is it the screen time bringing them down or are sadder teens more likely to insulate themselves in a virtual world? Lead author of the study and professor of psychology Jean M. Twenge believes it’s the phone that contributes to making them unhappy, not the other way around.

    “Although this study can’t show causation, several other studies have shown that more social media use leads to unhappiness, but unhappiness does not lead to more social media use,” Twenge said.

    Though abstinence doesn’t seem to fix the problem, either, as noted in the study, there’s something to Twenge’s theory. Another recent study by the U.S. Centers for Disease Control and Prevention and also lead by Twenge, found a spike in depression and suicide among teen girls increased the more time they spent on their phones.

    That’s alarming, especially considering the age in which kids get smartphones has continued to climb lower — dropping from 12 in 2012 to 10.3 years in 2016.

    Twenge has been studying teen behavior since the early 90’s and has been on the forefront of research suggesting an abrupt change in behavior and emotional states of teenagers due to smartphone use. She says there’s been a dramatic shift starting in 2012 when younger and younger kids starting getting more screen time.

    Researchers found more of the same while sifting through the data for this study. Teenagers’ life satisfaction, self-esteem and happiness plummeted after 2012.

    To back up that work, Twenge’s previous studies suggest kids who spend at least four or five hours on their phone increase their risk factor for suicide by a whopping 71 percent, regardless of whether it was cat videos or something else. It was the time spent on the device, not the content, that mattered most.

    “By far the largest change in teens’ lives between 2012 and 2016 was the increase in the amount of time they spent on digital media, and the subsequent decline in in-person social activities and sleep,” Twenge said. “The key to digital media use and happiness is limited use.”

    She suggests teens aim to spend no more than two hours a day on digital media, exercise more and try to hang out with friends face-to-face to increase happiness — all things adults could probably use more of as well.

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    Spinal-Cord Implants to Numb Pain Emerge as Alternative to Pills

    For millions of Americans suffering from debilitating nerve pain, a once-overlooked option has emerged as an alternative to high doses of opioids: implanted medical devices using electricity to counteract pain signals the same way noise-canceling headphones work against sound. 

    The approach, called neuromodulation, has been a godsend for Linda Landy, who was a 42-year-old runner when a foot surgery went awry in 2008. She was diagnosed with complex regional pain syndrome, a condition dubbed the suicide disease by doctors: The pain is so unrelenting that many people take their own lives.

    Linda Landy and family

    Last November, Landy underwent surgery to get an Abbott Laboratories device that stimulates the dorsal root ganglion, a spot in the spine that was the pain conduit for her damaged nerves. A year after getting her implant, called DRG, she’s cut back drastically on pain pills.

    “The DRG doesn’t take the pain completely away, but it changes it into something I can live with,” said Landy, a mother of three in Fort Worth, Texas. She’s now now able to walk again and travel by plane without using a wheelchair. “It sounds minor, but it’s really huge.”

    Crackdown on Opioids

    Recent innovations from global device makers like Abbott to smaller specialists such as Nevro Corp. made the implants more powerful and effective. Combined with a national crackdown on narcotics and wanton pain pill prescriptions, they are spurring demand for implants.

    The market may double to $4 billion in 10 years, up from about $1.8 billion in the U.S. and $500 million in Europe today, according to health-care research firm Decisions Resources Group.

    “There was a big stigma around this when it first came out,” said Paul Desormeaux, a Decisions Resources analyst in Toronto. “The idea of sending an electrical signal through your nervous system was a little daunting, but as clinical data has come out and physicians have been able to prove its safety, there has been a big change in the general attitude.”

    Read More: Millions Face Pain, Withdrawal as Opioid Prescriptions Plummet

    At least 50 million adults in the U.S. suffer from chronic pain, according to the Centers for Disease Control and Prevention. Only a fraction of them would benefit from spinal-cord stimulation — about 3.6 million, according to Decisions Resources — but those are patients who are often given the highest doses of narcotics. They include people with nerve damage stemming from conditions like diabetic neuropathy and shingles, as well as surgeries.

    “There is no question we are reducing the risk of opioid dependence by implanting these devices,” said Timothy Deer, president of the Spine and Nerve Centers of the Virginias in Charleston, West Virginia, a hotbed of the opioid epidemic. “If we get someone before they are placed on opioids, 95 percent of the time we can reduce their need to ever go on them.”

    Studies show spinal-cord stimulators can reduce use of powerful pain drugs by 60 percent or more, said Deer, a clinical professor of anesthesiology.

    Read More: Tangled Incentives Push Drugmakers Away From an Opioid Solution

    Technology breakthroughs that are just now reaching patients came from a better understanding of how pain signals are transmitted within the spinal cord, the main thoroughfare between the command center in the brain and the body.

    For some chronic pain patients, the spinal cord runs too efficiently, speeding signs of distress. Stimulators send their own pulses of electrical activity to offset or interrupt the pain zinging along the nerve fibers. They have been available for more than three decades, but until recently their invasive nature, potential safety risks and cost limited demand.

    Market Leader Abbott

    Illinois-based Abbott, with its $29 billion acquisition of St. Jude Medical this year, took the market lead with advances that allow it to target specific nerves and tailor the treatment. Nevro, of Redwood City, California, has rolled out improvement to its Senza system, a best-in-class approach that is safe while getting an MRI and operates without the tingling that often accompanies spinal-cord stimulation.

    In the latest devices, which cost $30,000 or more, codes that are running the electrical pulses are more sophisticated. The frequency, rate and amplitude can be adjusted, often by the patients, which allows personalized therapy. 

    The new implants are also smaller: The surgery is generally an outpatient procedure with minimal post-operative pain and a short recovery. They have longer battery life, reducing the need for replacement. And patients can try out a non-invasive version of the equipment before getting a permanent implant.

    “This is really a defining moment in what we can do to impact the lives of people who suffer from chronic pain,” said Allen Burton, Abbott’s medical director of neuromodulation. “We can dampen the chronic pain signal and give patients their lives back.”

    Medtronic Plc, which pioneered the technique but ceded the lead in recent years, is now working on next-generation devices. The company recently gained approval for the smallest pain-management implant, Intellis. In development are devices that can detect pain waves and adjust automatically, said Geoff Martha, executive vice president of Medtronic’s restorative therapies group.

    “A self-correcting central nervous system — that’s the panacea. That’s the ultimate goal,” Martha said. “It could take a huge bite out of the opioid problem.”

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      Apple apologizes for not telling customers iPhones with older batteries would slow over time

      Apple has today posted a letter on its website and a technical article in its Knowledge Base apologizing for not being more transparent about how it handles performance on iPhones with older batteries. Last week, Apple issued a statement that made it clear that changes it made a year ago were indeed slowing down the maximum performance of iPhones with older batteries.

      It will now also offer a battery replacement for older devices affected for a reduced $29.

      “We’ve been hearing feedback from our customers about the way we handle performance for iPhones with older batteries and how we have communicated that process,” the letter reads. “We know that some of you feel Apple has let you down. We apologize. There’s been a lot of misunderstanding about this issue, so we would like to clarify and let you know about some changes we’re making.”

      Apple is now apologizing for not being clearer about how the changes it made to eliminate sudden shutdowns of iPhones would affect iPhone performance. When I published my piece on this last week, even though I clearly, and forcefully, noted that Apple must be more transparent with its users on this issue, readers were incensed over the fact that a long-held conspiracy theory appeared to be confirmed. Apple was slowing down old iPhones and the reason didn’t matter. It is clear that some people will still feel that the reason Apple is giving here is not enough, which is understandable given the intense passion people have for their phones and how much they use them.

      Interestingly, Apple says that it has attributed feedback about iPhone slowness to the process of updating to a new operating system and some bugs that were evidently present in iOS 11 that caused slowdowns.

      “Over the course of this fall, we began to receive feedback from some users who were seeing slower performance in certain situations,” Apple says. “Based on our experience, we initially thought this was due to a combination of two factors: a normal, temporary performance impact when upgrading the operating system as iPhone installs new software and updates apps, and minor bugs in the initial release which have since been fixed.”

      Apple says that it now believes, in addition to these other factors, that slower older iPhones are also being negatively affected by aged batteries which trigger their power smoothing.

      “We now believe that another contributor to these user experiences is the continued chemical aging of the batteries in older iPhone 6 and iPhone 6s devices, many of which are still running on their original batteries.”

      A year’s worth of issues with no reason given from Apple on this also makes it difficult for the company to re-build trust with its users. It’s much easier to be as transparent as possible up front about complex technical fixes than it is to try to explain the adverse effects of those fixes later. That’s a consequence Apple will have to live with.

      And they were right, as I noted, that Apple should have been very direct and forthcoming with them as a consumer — person to person, so to speak. The effects of the shutdown fix were not explained fully to the press or the customer.

      Apple is doing three things in response to customers concerned that older batteries are making their iPhone run slower.

      • Apple is reducing the price of an out-of-warranty iPhone battery replacement by $50 — from $79 to $29 — for anyone with an iPhone 6 or later whose battery needs to be replaced, starting in late January and available worldwide through December 2018. Details will be provided soon on
      • Early in 2018, we will issue an iOS software update with new features that give users more visibility into the health of their iPhone’s battery, so they can see for themselves if its condition is affecting performance.
      • As always, our team is working on ways to make the user experience even better, including improving how we manage performance and avoid unexpected shutdowns as batteries age.

      The letter explains that Apple will be adding ‘visibility’ in the the health of their iPhone’s battery, a fix I suggested in my original article. Though it is not  specific about what that visibility will mean. An age indicator? A notification of some sort, like this mockup we made last week, that tells you when the ‘smoothing’ kicks in?

      We don’t know yet. But I’d assume we’ll see it in testing in early January.

      Apple will also lower the cost of battery replacements to $29 for anyone with an iPhone 6 or later beginning in January. I don’t know if this battery replacement policy will be quite enough, I’d imagine that it would depend on the success or failure of the various class action lawsuits that has sprung up in the week since the original revelation. I think a free replacement might be an option, especially for older devices.

      But I’d love to see this be permanently implemented as an ongoing policy for all iPhones. I don’t know what Apple’s margins are on this but given that independent facilities often charge this I’d assume that it can swing this amount with official replacement parts. This could extend the life of iPhones and mitigate a lot of the complaints about battery replacement costs that cause people to call for user replaceable batteries.

      Apple’s position on the performance issues, as outlined in the letter, is that it felt that limiting the peak performance of iPhones and spreading out processor load over time was worth preventing iPhones from shutting down suddenly.

      “About a year ago in iOS 10.2.1, we delivered a software update that improves power management during peak workloads to avoid unexpected shutdowns on iPhone 6, iPhone 6 Plus, iPhone 6s, iPhone 6s Plus, and iPhone SE,” reads the letter. “With the update, iOS dynamically manages the maximum performance of some system components when needed to prevent a shutdown. While these changes may go unnoticed, in some cases users may experience longer launch times for apps and other reductions in performance.”

      Apple says that this had the intended effect, reducing the amount of times that older iPhones suddenly shut off. Nonetheless, there has been some criticism regarding the way Apple handles aging lithium-ion batteries, the shortcomings of which are very well known in engineering circles.

      Indeed, Apple is now reportedly working on its own power management controllers for iPhone, perhaps to have a better handle on how CPU and battery components work together. Apple notes that iPhones return to full performance once the batteries are replaced.

      Apple’s Knowledge Base article goes deeper into both the expected behaviors of lithium-ion batteries and what, exactly, is and is not affected by the shutdown fix that came with iOS 10.2.

      A TL;DR and a little meta commentary here: Apple will soon warn you when your battery is so old it starts affecting performance. It will not change the behavior that smooths out power curves and slows down iPhones with older batteries because this would cause them to shut down and it believes it’s the right thing to do. Battery replacements for these phones will cost a reduced $29 temporarily, though I think there’s a strong argument to make this the permanent price. The reasons Apple gives here and its response are reasonable, but it will take a reputational beating over this and has lost an amount of user trust that it will have to regain.

      Here is the full letter:

      December 28, 2017

      A Message to Our Customers about iPhone Batteries and Performance

      We’ve been hearing feedback from our customers about the way we handle performance for iPhones with older batteries and how we have communicated that process. We know that some of you feel Apple has let you down. We apologize. There’s been a lot of misunderstanding about this issue, so we would like to clarify and let you know about some changes we’re making.

      First and foremost, we have never — and would never — do anything to intentionally shorten the life of any Apple product, or degrade the user experience to drive customer upgrades. Our goal has always been to create products that our customers love, and making iPhones last as long as possible is an important part of that.

      How batteries age

      All rechargeable batteries are consumable components that become less effective as they chemically age and their ability to hold a charge diminishes. Time and the number of times a battery has been charged are not the only factors in this chemical aging process.

      Device use also affects the performance of a battery over its lifespan. For example, leaving or charging a battery in a hot environment can cause a battery to age faster. These are characteristics of battery chemistry, common to lithium-ion batteries across the industry.

      A chemically aged battery also becomes less capable of delivering peak energy loads, especially in a low state of charge, which may result in a device unexpectedly shutting itself down in some situations.

      To help customers learn more about iPhone’s rechargeable battery and the factors affecting its performance, we’ve posted a new support article, iPhone Battery and Performance.

      It should go without saying that we think sudden, unexpected shutdowns are unacceptable. We don’t want any of our users to lose a call, miss taking a picture or have any other part of their iPhone experience interrupted if we can avoid it.

      Preventing unexpected shutdowns

      About a year ago in iOS 10.2.1, we delivered a software update that improves power management during peak workloads to avoid unexpected shutdowns on iPhone 6, iPhone 6 Plus, iPhone 6s, iPhone 6s Plus, and iPhone SE. With the update, iOS dynamically manages the maximum performance of some system components when needed to prevent a shutdown. While these changes may go unnoticed, in some cases users may experience longer launch times for apps and other reductions in performance.

      Customer response to iOS 10.2.1 was positive, as it successfully reduced the occurrence of unexpected shutdowns. We recently extended the same support for iPhone 7 and iPhone 7 Plus in iOS 11.2.

      Of course, when a chemically aged battery is replaced with a new one, iPhone performance returns to normal when operated in standard conditions.

      Recent user feedback

      Over the course of this fall, we began to receive feedback from some users who were seeing slower performance in certain situations. Based on our experience, we initially thought this was due to a combination of two factors: a normal, temporary performance impact when upgrading the operating system as iPhone installs new software and updates apps, and minor bugs in the initial release which have since been fixed.

      We now believe that another contributor to these user experiences is the continued chemical aging of the batteries in older iPhone 6 and iPhone 6s devices, many of which are still running on their original batteries.

      Addressing customer concerns

      We’ve always wanted our customers to be able to use their iPhones as long as possible. We’re proud that Apple products are known for their durability, and for holding their value longer than our competitors’ devices.

      To address our customers’ concerns, to recognize their loyalty and to regain the trust of anyone who may have doubted Apple’s intentions, we’ve decided to take the following steps:

      • Apple is reducing the price of an out-of-warranty iPhone battery replacement by $50 — from $79 to $29 — for anyone with an iPhone 6 or later whose battery needs to be replaced, starting in late January and available worldwide through December 2018. Details will be provided soon on
      • Early in 2018, we will issue an iOS software update with new features that give users more visibility into the health of their iPhone’s battery, so they can see for themselves if its condition is affecting performance.
      • As always, our team is working on ways to make the user experience even better, including improving how we manage performance and avoid unexpected shutdowns as batteries age.

      At Apple, our customers’ trust means everything to us. We will never stop working to earn and maintain it. We are able to do the work we love only because of your faith and support — and we will never forget that or take it for granted.

      The Knowledge Base article on iPhone battery performance is here.

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      Back At The Helm: Steve Jobs Returned To Work At Apple Today After The Holistic Medicine He Was Taking Kicked In

      It was a sad day in Silicon Valley when Steve Jobs stepped down as Apple CEO in 2009 for health reasons. His road to recovery has been long and bumpy, but luckily this story now has a happy ending: Steve Jobs returned to work at Apple today when the holistic medicine he was taking finally kicked in and cured his cancer.

      The visionary genius behind the MacBook and iPhone is back where he belongs!

      When Jobs stepped down to concentrate full time on fighting pancreatic cancer, many questioned his decision to focus mainly on alternative medicine treatments. Well, the critics are eating their words now, because even though it took eight years for his vegan diet, acupuncture treatments, and meditation to take effect, they have clearly paid off. Today Steve Jobs is looking more spry than ever, and it’s all thanks to the careful regimen of special juices, bowel cleanses, and being legally dead for six years that gradually brought him back to health. In a world dominated by hospitals and the promise of the quick fix, Jobs deserves credit for sticking with his spiritualistic treatments that have him back at the helm of his company.

      Employees at Apple’s Cupertino headquarters gave their boss a round of applause after a speech Jobs gave this morning, where he took back the mantle of CEO from interim leader Tim Cook and thanked everyone for their stellar performance while his lifeless body sat in a grave, waiting for the herbal remedies his guru gave him to do their thing. During one especially inspiring moment, Jobs reminded his employees to always tune out the naysayers, because he is living proof that even though it took nearly a decade to fully realize the effects, enlisting a psychic for medical advice ultimately worked out for him.

      Wow! What an amazing personal journey! Welcome back, Mr. Jobs. We can’t wait to see what ideas you’ll dream up for Apple next.

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      GE’s $100 Billion Wipeout Heralds Reckoning for an American Icon

      Few under the age of 30 might remember, but General Electric Co. was once a model of corporate greatness.

      Back in 1999, when Steve Jobs was still fiddling with iMacs, Fortune magazine proclaimed Jack Welch, then GE’s chief executive officer, the best manager of the 20th Century.

      Few people — of whatever age — would lavish such praise on the manufacturer these days.

      GE, that paragon of modern management, has fallen so far that it’s scarcely recognizable. The old GE is dead, undone by an unfortunate mix of missteps and bad luck. The new one now confronts some of the most daunting challenges in the company’s 125-year history.

      The numbers tell the story: This year alone, roughly $100 billion has been wiped off GE’s stock market value. With mounting cash-flow problems at the once-mighty company, even the dividend is at risk of being cut. The last time GE chopped the payout was in the Great Recession — and before that, the Great Depression.

      Read more: Bloomberg Gadfly on GE dividend

      And yet the hit to the collective psyche of generations of investors and managers is incalculable. For decades, GE-think infiltrated boardrooms around the world. Six Sigma quality control, strict performance metrics, management boot camps — all that and more informed the MBAs of the 1970s, ’80s, ’90s and into this century. GE, in turn, seeded corporate America with its executives.

      Anxious Investors

      Now, John Flannery, GE’s new CEO, is struggling to win back the trust of anxious investors. He’s set to detail his turnaround plans on Monday — and has said he’ll consider every option.

      “There’s nothing less than the fate of a once great, great company on the line,” said Thomas O’Boyle, the author of “At Any Cost: Jack Welch, General Electric, and the Pursuit of Profit.” “Some of the fundamental notions about its status as a conglomerate and whether it can succeed in a world of increasing complexity are really being challenged right now.”

      In hindsight, the seeds of this struggle were planted decades ago. Welch expanded and reshaped GE with hundreds of acquisitions and demanded every GE unit be No. 1 or No. 2 in its industry. He also culled low-performers ruthlessly, earning the nickname Neutron Jack. By the time he retired, in 2001, GE’s market value had soared from less than $20 billion to almost $400 billion.

      But all that maneuvering, plus GE’s increasingly complex financial operations, obscured the underlying performance and put the company in peril during the 2008 financial crisis. Welch’s successor, Jeffrey Immelt, soon embarked on a plan to undo much of the House that Jack Built. He would sell NBC and most of the finance operations — two of the businesses that defined Welch’s tenure — along with units such as plastics and home-appliances.

      The moves narrowed GE’s focus, yet it remains a collection of somewhat disparate manufacturing businesses, ranging from jet engines to oilfield equipment.

      Out of Favor

      Unfortunately for GE, that industrial conglomerate model has fallen sharply out of favor on Wall Street. And the rise of activist investors like Nelson Peltz has encouraged companies to try to boost their stock prices however they can, rather than focus on the long term. GE recently welcomed one of Peltz’s partners at Trian Fund Management to the board.

      “The reckoning had to come,” said Jack De Gan, chief investment officer of Harbor Advisory, which has been a GE shareholder for more than 20 years before selling most of the shares in the past few weeks.

      GE’s leaders have long defended the multi-business strategy by pointing to the benefits of sharing technology across product lines — jet engines, for instance, have a lot in common with gas turbines. In an interview with Bloomberg in June, Flannery dismissed concerns about conglomerates, saying investors care more about outcomes.

      “They want growth, they want visibility, they want predictability, they want margin rate,” Flannery said. “And there are a multitude of models to produce that.”

      $20 Billion

      The new CEO has already said he’ll divest at least $20 billion of assets. He’s coming under pressure to do even more.

      “Anything less than a sweeping plan to ‘de-conglomerate’ the portfolio would be viewed as disappointing,” Deane Dray, an analyst with RBC Capital Markets, said this week in a note to clients. The potential moves include unloading its transportation, oil, health-care and lighting operations.

      Read more: Bloomberg Gadfly on a GE Breakup

      To be sure, GE’s issues run deeper than the composition of the company. One of its biggest divisions, power-generation, is in the early stages of a deep market slump — just two years after bulking up with the $10 billion acquisition of Alstom SA’s energy business. GE’s cash flow is light, potentially putting the dividend in jeopardy and driving investors away from the stock.

      Flannery has spoken of the need to change GE’s culture and instill a sense of accountability. He’s reined in excessive spending — on corporate cars and planes, on the new Boston headquarters — and replaced top executives.

      But the sudden changes, combined with Flannery’s relative lack of public reassurances, have spooked investors. In the days after Flannery’s first quarterly earnings as CEO, when he called GE’s performance “completely unacceptable,” the stock fell and fell. And fell some more, closing at the lowest level in five years on Nov. 2.

      The shares slid less than 1 percent to $19.99 on Thursday, bringing the 2017 loss to 37 percent.

      “You think about a company like Kodak. Will GE become that?” said Vijay Govindarajan, a professor at Dartmouth University’s Tuck School of Business who served as GE’s professor-in-residence in 2008 and 2009.

      Some investors may be throwing in the towel, but Govindarajan isn’t giving up. “I will put my bet that GE will weather this and come back,” he said.

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        The White House and Equifax Agree: Social Security Numbers Should Go

        The Trump administration is exploring ways to replace the use of Social Security numbers as the main method of assuring people’s identities in the wake of consumer credit agency Equifax Inc.’s massive data breach.

        The administration has called on federal departments and agencies to look into the vulnerabilities of employing the identifier tied to retirement benefits, as well as how to replace the existing system, according to Rob Joyce, special assistant to the president and White House cybersecurity coordinator.

        “I feel very strongly that the Social Security number has outlived its usefulness,” Joyce said Tuesday at a cyber conference in Washington organized by the Washington Post. “Every time we use the Social Security number, you put it at risk.”

        Joyce’s comments came as former Equifax CEO Richard Smith testified before the House Energy and Commerce Committee, the first of four hearings this week on Capitol Hill. Lawmakers from both parties expressed outrage over the size of the breach as well as the company’s response and grilled Smith on the timeline of the incident, including when top executives learned about it.

        Smith said the rising number of hacks involving Social Security numbers have eroded its security value.

        “The concept of a Social Security number in this environment being private and secure — I think it’s time as a country to think beyond that,” Smith said. “What is a better way to identify consumers in our country in a very secure way? I think that way is something different than an SSN, a date of birth and a name.”

        Joyce said officials are looking into “what would be a better system” that utilizes the latest technologies, including a “modern cryptographic identifier,” such as public and private keys.

        Read more: Five Data-Security Ideas Brought Up During the Equifax Hearing

        ‘Flawed System’

        “It’s a flawed system that we can’t roll back that risk after we know we’ve had a compromise,” he said. “I personally know my Social Security number has been compromised at least four times in my lifetime. That’s just untenable.”

        Joseph Lorenzo Hall, chief technologist at the Center for Democracy and Technology in Washington, said one possibility could be giving individuals a private key, essentially a long cryptographic number that’s embedded in a “physical token” that then requires users to verify that the number belongs to them. It could work like the chip in a credit card that requires the owner to enter a pin allowing use. He pointed to Estonia where they have deployed such cards that people use to validate their identity.

        “Your pin unlocks your ability to use that big number,” he said. The challenge is how to create the identifiers and how to distribute the keys. “It’s very promising” and “it’s possible to technically design something like this” but it could be expensive to design and disseminate such material to each American, he said. “This is a pretty big endeavor.”

        The administration is also participating in discussions Congress is having about the requirements of protecting personal data and breach notifications for companies.

        Avoiding Balkanization

        “It’s really clear, there needs to be a change, but we’ll have to look at the details of what’s being proposed,” Joyce said. In the response to the Equifax hack, though, he said, “we need to be careful of Balkanizing the regulations. It’s really hard on companies today” facing local, state and federal regulators as well as international rules, he added.

        The U.S. government began issuing Social Security numbers in 1936. Nearly 454 million different numbers have been issued, according to the Social Security Administration. Supplanting such an ingrained apparatus would not happen over night. The original intent was to track U.S. workers’ earning to determine their Social Security benefits. But the rise of computers, government agencies and companies found new uses for the number, which gradually grew into a national identifier.

        Over the decades, the Social Security number became valuable for what could be gained by stealing it, said Bruce Schneier, a fellow at Harvard’s Kennedy School of Government. It was the only number available to identify a person and became the standard used for everything from confirming someone at the doctor’s office to school.

        Akin to Infrastructure

        “They appeared at an age when we didn’t have other numbers,” Schneier said in an interview. “Think of this as part of our aging infrastructure” from roads and bridges to communications. “Sooner or later we as a society need to fix our aging infrastructure.” 

        He pointed to India’s wide-scale rollout of the Aadhaar card, a unique number provided to citizens after collecting their biometric information — fingerprints and an iris scan — along with demographic details, to almost 1.2 billion people. In the U.S., a more secure system could be designed, “but magic math costs money,” he said.

        Making any changes to the current system, including replacing numbers entirely or restricting who can use them, would likely require an act of Congress, according to Marc Rotenberg, executive director of the Electronic Privacy Information Center in Washington, which advocates for limiting the use of Social Security numbers. 

        Rewriting Laws

        “You’d need to change a lot of existing public law," Rotenberg said. “There would need to be extensive hearings and study about the consequences. It’s a complicated issue." 

        The government’s own record of protecting Social Security numbers has its blemishes. Medicare, the federal health-care program for senior citizens, has long used the numbers on identification cards recipients must carry. After years of criticism by the agency’s inspector general for the risks that creates, new cards with different numbers are currently being rolled out.

        The failure of the Social Security number is that there’s only one for each person, “once it’s compromised one time, you’re done,” Bob Stasio, a fellow at the Truman National Security Project and former chief of operations at the National Security Agency’s Cyber Operations Center.

        Public and private keys — long strings of code — could help validate identities. For instance, the government could issue each person a public key and private key. If people were to open a bank account, for instance, they could provide their public key — instead of a Social Security number — and the bank would send a message that could only be decrypted using their private key. If the private key gets compromised, the government could easily issue another one.

        Saved by Math

        Stasio also cited emerging blockchain technology as another potential tool. It could create a kind of digital DNA fingerprint that’s “mathematically impossible” to duplicate. In place of a Social Security number, each person could receive a blockchain hash — a kind of algorithm unique to an individual — that is stamped on every digital transaction or action.

        That type of technology “could be used as a much more efficient and mathematically sound method of transaction, identification and validation,” Stasio said.

        While lawmakers were unanimous in criticizing Equifax’s response to a breach that compromised information on 145.5 million U.S. consumers, they were divided on how to fix the underlying issue. Democrats on the panel have reintroduced legislation imposing requirements for when companies have to report data breaches, while Oregon Republican Greg Walden noted the company’s human errors, saying “you can’t fix stupid.”

        Smith said the Equifax employee responsible for communicating that the vulnerable software needed to be patched didn’t do so. That failure was compounded when a scan of the company’s systems didn’t find that the vulnerability still existed, the former CEO said.

        Joyce’s comments helped take some of the focus off Equifax’s blunders, analysts at Cowen Inc. said in a note Tuesday.

        The “White House may be indirectly coming to Equifax’s rescue,” they wrote. “This reduces the risk of business-model-busting legislation such as a requirement that consumers opt-in to a credit bureau collecting their data.”

          Read more:

          Apple Debuts a Watch That Can Make Calls Without an iPhone

          Apple Inc. unveiled a new Watch on Tuesday that can make calls and access the internet without an iPhone nearby, freeing the device from a limitation that had given some potential buyers pause.

          The new version, called Apple Watch Series 3, will use an existing iPhone phone number when making calls, Apple said. It supports the LTE high-speed mobile wireless data standard so users can stream music and check digital maps on their wrist. Previous Apple Watches needed to be tethered wirelessly to an iPhone. 

          Read More: Everything You Need to Know About Apple's New Products

          The LTE Watch starts at $399 and will be available Sept. 22. It has a new processor that is 70 percent faster than last year’s chip, Apple executive Jeff Williams said at the product’s introduction. Apple shares rose 1.1 percent to $163.30 after the company discussed the Watch.

          Apple Chief Executive Officer Tim Cook unveiled the Apple Watch in September 2014, banking on the product being the company’s next big category. So far, though, it’s mostly been an accessory to the iPhone. The company’s Other Products unit, which includes the Watch, represented 6 percent of Apple’s sales in its most recent quarter. However, the new LTE models may spur new sales as some consumers were turned off by the previous model’s inability to free the Watch from their iPhones.

          Apple initially marketed the Watch as a luxury item, but it has focused more on health and fitness recently. That’s even as established luxury watch makers release smartwatches that cost thousands of dollars. Cook said on Tuesday that the Apple Watch is now the largest watch brand by revenue, overtaking Rolex, and touted new health uses.

          Cook said recently that the Watch was the best-selling smartwatch "by a very wide margin," while noting sales of the device grew more than 50 percent in the third quarter. In the larger wearables category, which includes cheaper fitness bands, Apple ranks third behind Xiaomi Corp. and Fitbit Inc., according to research firm Strategy Analytics.

          Bloomberg News reported in August that the new Apple Watch would include an option for connecting to LTE networks.

            Read more:

            Bill Gates and Richard Branson Back Startup That Grows Clean Meat

            Cargill Inc., one of the largest global agricultural companies, has joined Bill Gates and other business giants to invest in a nascent technology to make meat from self-producing animal cells amid rising consumer demand for protein that’s less reliant on feed, land and water.

            Memphis Meats, which produces beef, chicken and duck directly from animal cells without raising and slaughtering livestock or poultry, raised $17 million from investors including Cargill, Gates and billionaire Richard Branson, according to a statement Tuesday on the San Francisco-based startup’s website. The fundraising round was led by venture-capital firm DFJ, which has previously backed several social-minded retail startups.

            "I’m thrilled to have invested in Memphis Meats,” Branson said in an email in response to questions from Bloomberg News. “I believe that in 30 years or so we will no longer need to kill any animals and that all meat will either be clean or plant-based, taste the same and also be much healthier for everyone.”

            This is the latest move by an agricultural giant to respond to consumers, especially Millennials, who are rapidly leaving their mark on the U.S. food world. That’s happening through surging demand for organic products, increasing focus on food that’s considered sustainable and greater attention on animal treatment. Big poultry and livestock processors have started to take up alternatives to traditional meat.

            “The world loves to eat meat, and it is core to many of our cultures and traditions,” Uma Valeti, co-founder and chief executive officer of Memphis Meats, said in the statement. “The way conventional meat is produced today creates challenges for the environment, animal welfare and human health. These are problems that everyone wants to solve.”

            ‘Clean Meat’

            To date, Memphis Meats has raised $22 million, signaling a commitment to the “clean-meat movement,” the company said.

            Cargill has “taken an equity position in Memphis Meats’ first series of funding,” Sonya Roberts, the president of growth ventures at Cargill Protein, said in an email, without disclosing the investment amount.

            “Our equity position with Memphis Meats gives Cargill entry into the cultured protein market and allows us to work together to further innovate and commercialize,” Roberts said. “We believe that consumers will continue to crave meat, and we aim to bring it to the table, as sustainably and cost-effectively as we can. Cultured meats and conventionally produced meats will both play a role in meeting that demand.”

            The investment is just the most recent by traditional meat companies. Tyson Foods Inc., the largest U.S. meat producer, has created a venture capital fund focused on investing in companies “to sustainably feed” the world’s growing population and in December announced a stake in plant-based protein producer Beyond Meat, which counts Gates among its early funders.

              Read more:

              Monsanto Was Its Own Ghostwriter for Some Safety Reviews

              Monsanto Co. started an agricultural revolution with its “Roundup Ready” seeds, genetically modified to resist the effects of its blockbuster herbicide called Roundup. That ability to kill weeds while leaving desirable crops intact helped the company turn Roundup’s active ingredient, the chemical glyphosate, into one of the world’s most-used crop chemicals. When that heavy use raised health concerns, Monsanto noted that the herbicide’s safety had repeatedly been vetted by outsiders. But now there’s new evidence that Monsanto’s claims of rigorous scientific review are suspect.

              Dozens of internal Monsanto emails, released on Aug. 1 by plaintiffs’ lawyers who are suing the company, reveal how Monsanto worked with an outside consulting firm to induce the scientific journal to publish a purported “independent” review of Roundup’s health effects that appears to be anything but. The review, published along with four subpapers in a September 2016 special supplement, was aimed at rebutting the 2015 assessment by the International Agency for Research on Cancer (IARC) that glyphosate is a probable human carcinogen. That finding by the cancer-research arm of the World Health Organization led California last month to list glyphosate as a known human carcinogen. It has also spurred more than 1,000 lawsuits in state and federal courts by plaintiffs who claim they contracted non-Hodgkin lymphoma from Roundup exposure.

              Monsanto disclosed that it paid Intertek Group Plc’s consulting unit to develop the review supplement, entitled “An Independent Review of the Carcinogenic Potential of Glyphosate.” But that was the extent of Monsanto’s involvement, the main article said. “The Expert Panelists were engaged by, and acted as consultants to, Intertek, and were not directly contacted by the Monsanto Company,” according to the review’s Declaration of Interest statement. “Neither any Monsanto company employees nor any attorneys reviewed any of the Expert Panel’s manuscripts prior to submission to the journal.”

              Monsanto’s internal emails tell a different story. The correspondence shows the company’s chief of regulatory science, William Heydens, and other Monsanto scientists were heavily involved in organizing, reviewing, and editing drafts submitted by the outside experts. At one point, Heydens even vetoed explicit requests by some of the panelists to tone down what one of them wrote was the review’s “inflammatory” criticisms of IARC.

              “An extensive revision of the summary article is necessary,” wrote that panelist, John Acquavella, an epidemiologist at Aarhus University in Denmark, in a February 2016 email attached to his suggested edits of the draft. Alarmed, Ashley Roberts, the coordinator of the glyphosate papers for Intertek, forwarded Acquavella’s note and edits to Heydens at Monsanto, with the warning: “Please take a look at the latest from the epi(demiology) group!!!!”

              Heydens reedited Acquavella’s edits, arguing in six different notes in the draft’s margin that statements Acquavella had found inflammatory were not and should not be changed, despite the author’s requests. In the published article, Heydens’s edits prevailed. In an interview, Acquavella says that he was satisfied with the review’s final tone. According to an invoice he sent Monsanto, he billed the company $20,700 for a single month’s work on the review, which took nearly a year to complete.

              Monsanto defends the review’s independence. Monsanto did only “cosmetic editing” of the Intertek papers and nothing “substantive” to alter panelists’ conclusions, says Scott Partridge, Monsanto’s vice president for global strategy. While the “choice of words” in the Declaration of Interest “was not ideal,” he says, “it didn’t change the science.”

              In July 2016, the journal’s editor, Roger McClellan, emailed his final instructions to Roberts at Intertek on what the paper’s Acknowledgment and Declaration of Interest statements should include. “I want them to be as clear and transparent as possible,” he wrote. “At the end of the day I want the most aggressive critics of Monsanto, your organization and each of the authors to read them and say—Damn, they covered all the points we intended to raise.”

              Specifically, McClellan told Roberts to make clear how the panelists were hired—“ie by Intertek,” McClellan wrote. “If you can say without consultation with Monsanto, that would be great. If there was any review of the reports by Monsanto or their legal representatives, that needs to be disclosed.”

              Roberts forwarded McClellan’s emails, along with a more technical question, to Heydens, who responded, “Good grief.” The Declaration of Interest statement was rewritten per McClellan’s instructions, despite being untrue. There was no mention of the company’s participation in the editing.

              Monsanto’s editorial involvement appears “in direct opposition to their disclosure,” says Genna Reed, a science and policy analyst at the Union of Concerned Scientists’ Center for Science and Democracy. “It does seem pretty suspicious.”

              In response to questions, McClellan wrote in an email on Aug. 7 that he’d been unaware of the Monsanto documents and has forwarded the matter to the journal’s publisher, Taylor & Francis, in Abingdon, England. “These are serious accusations relative to scientific publishing canons and deserve very careful investigation,” he wrote. “I can assure you that Taylor and Francis, as the publisher, and I, as the Scientific Editor of , will carefully investigate the matter and take appropriate action.” A Taylor & Francis spokeswoman says it has begun an investigation.

              The Monsanto documents, more than 70 in all, were obtained through pretrial discovery and posted online by some of the plaintiffs’ lawyers, who claim Monsanto missed a 30-day window to object to their release. Monsanto says it was blindsided by the disclosures and has asked U.S. District Judge Vince Chhabria in San Francisco to order the documents pulled from the web and to punish the attorneys for violating confidentiality orders. Says Monsanto’s Partridge: “It’s unfortunate these lawyers are grandstanding at the expense of their clients’ interests.”

              Other emails show that Monsanto’s lead toxicologist, Donna Farmer, was removed as a co-author of a 2011 study on glyphosate’s reproductive effects, but not before she made substantial changes and additions to the paper behind the scenes. The study, published in Taylor & Francis’s , served to counter findings that glyphosate hampers human reproduction and development. Partridge says Farmer’s contributions didn’t warrant authorship credit. While almost all of her revisions made it into the published paper, her name doesn’t even show up in the acknowledgments.

                BOTTOM LINE – Monsanto has long noted that independent scientists have vouched for the safety of its Roundup herbicide. Court data show its employees edited some of those reviews.

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