Monthly Archives: April 2015

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Facebook (FB) Earnings Analysis: By the Numbers

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My 2014 Best Performers, Looking Ahead To 2015

Facebook, Inc. Class A reported preliminary financial results for the quarter ended March 31, 2015 with GAAP diluted EPS of $0.18, down 28% compared to $0.25 in the first quarter of 2014.

Non-GAAP diluted EPS for the first quarter of 2015 was $0.42, up 20% compared to $0.35 in the first quarter of 2014. Non-GAAP income and EPS were adjusted for amortization of intangible assets and share based compensation.

Users

  • Daily active users (DAUs) were 936 million on average for March 2015, an increase of 17% year-over-year.
  • Mobile DAUs were 798 million on average for March 2015, an increase of 31% year-over-year.
  • Monthly active users (MAUs) were 1.44 billion as of March 31, 2015, an increase of 13% year-over-year.
  • Mobile MAUs were 1.25 billion as of March 31, 2015, an increase of 24% year-over-year.

Even though revenue for the first quarter of 2015 totaled $3.54 billion, an increase of 42%, compared with $2.50 billion in the first quarter of 2014, GAAP costs and expenses for the first quarter of 2015 were $2.61 billion, an increase of 83% from the first quarter of 2014. 

Their  R&D and Marketing expenses which is compensated by stock has increased by 212% and 67% respectively indicating that the cost of sustaining the current user volume and increasing the user base is becoming more expensive for Facebook.

We analyze the earnings along side the following peers of Facebook, Inc. – Google Inc., Yahoo! Inc., Microsoft Corporation, IAC/InterActiveCorp. and Twitter, Inc. (GOOGL-US, YHOO-US, MSFT-US, IACI-US and TWTR-US) that have also reported for this period.

Highlights

  • Summary numbers: Revenues of USD 3.54 billion, Net Earnings of USD 509 million, and Earnings per Share (EPS) of USD 0.18.
  • Gross margins widened from 81.53% to 81.54% compared to the same quarter last year, operating (EBITDA) margins now 39.23% from 53.52%.
  • Year-on-year change in operating cash flow of 32.30% is about the same as the change in earnings, likely no significant movement in accruals or reserves.
  • Narrowing of operating margins contributed to decline in earnings.

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income growth:

  2014-03-31 2014-06-30 2014-09-30 2014-12-31 2015-03-31
Relevant Numbers (Quarterly)          
Revenues (mil) 2502 2910 3203 3851 3543
Revenue Growth (%YOY) 71.6 60.51 58.88 48.97 41.61
Earnings (mil) 639 788 802 696 509
Earnings Growth (%YOY) 194.47 138.07 90.05 33.85 -20.34
Net Margin (%) 25.54 27.08 25.04 18.07 14.37
EPS 0.25 0.3 0.3 0.25 0.18
Return on Equity (%) 15.87 17.97 16.21 9.71 5.53
Return on Assets (%) 13.85 15.84 14.27 8.65 4.95

Market Share Versus Profits

Revenues History
Earnings History

FB-US’s change in revenue this quarter compared to the same quarter last year of 41.61% is almost the same as its change in earnings, and is about average among the announced results thus far in its peer group, suggesting that FB-US is holding onto its market share. Also, for comparison purposes, revenues changed by -8.00% and earnings by -26.87% compared to the immediate last quarter.

Revenues Growth Versus Earnings Growth

Earnings Growth Analysis

The company’s earnings declined year-on-year largely because of the increases in operating costs. Its operating margins (EBITDA margins) went from 53.52% to 39.23%. This decline in earnings would have been worse except for the fact that the company showed improvement in gross margins, from 81.53% to 81.54%. For comparison, gross margins were 79.54% and EBITDA margins 40.66% in the immediate last quarter.

Gross Margin Versus EBITDA Margin

Gross Margin Trend

Companies sometimes sacrifice improvements in revenues and margins in order to extend friendlier terms to customers and vendors. Capital Cube probes for such activity by comparing the changes in gross margins with any changes in working capital. If the gross margins improved without a worsening of working capital, it is possible that the company’s performance is a result of truly delivering in the marketplace and not simply an accounting prop-up using the balance sheet.

Gross Margin History
Working Capital Days History

FB-US’s improvement in gross margin has been accompanied by an improvement in its balance sheet as well. This suggests that gross margin improvements are likely from operating decisions and not accounting gimmicks. Its working capital days have declined to 327.53 days from 454.51 days for the same period last year.

Gross Margin Versus Working Capital Days

Cash Versus Earnings – Sustainable Performance?

FB-US’s change in operating cash flow of 32.30% compared to the same period last year is about the same as its change in earnings this period. Additionally, this change in operating cash flow is about average among its peer group. This suggests that the company did not use accruals or reserves to manage earnings this period, and that, all else being equal, the earnings number is sustainable.

Operating Cash Flow Growth Versus Earnings Growth

Margins

The company’s decline in earnings has been influenced by the following factors: (1) Decline in operating margins (EBIT margins) from 42.97% to 26.33% and (2) one-time items that contributed to a decrease in pretax margins from 42.97% to 26.31%

EBIT Margin Versus PreTax Margin
EBIT Margin History
PreTax Margin History

Company Profile

Facebook, Inc. is a social networking service and website. It aims to make the world more open and connected. People use Facebook to stay connected with their friends and family, to discover what is going on in the world around them, and to share and express what matters to them to the people they care about. The company offers advertisers a unique combination of reach, relevance, social context, and engagement to enhance the value of their ads. Its services include timeline, news feed, messages, lists, ticker and mobile apps. Facebook was founded by Mark Elliot Zuckerberg, Dustin Moskovitz, Chris R. Hughes and Eduardo Saverin on February 4, 2004 and is headquartered in Menlo Park, CA.

CapitalCube does not own any shares in the stocks mentioned and focuses solely on providing unique fundamental research and analysis on approximately 50,000 stocks and ETFs globally. Try any of our analysis, screener or portfolio premium services free for 7 days. To get a quick preview of our services, check out our free quick summary analysis of FB-US.

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Tesla Launches Batteries For Homes, Businesses, Utilities

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My 2014 Best Performers, Looking Ahead To 2015

Tesla announces home battery.

Story developing…






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Here’s What It’s Like to Build Hologram Apps for Microsoft’s HoloLens

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My 2014 Best Performers, Looking Ahead To 2015

A big part of Microsoft’s pitch for HoloLens, a headset with glasses designed to project interactive 3-D holograms, is that developers will easily be able to make any Windows program compatible. That would ensure plenty of software available for HoloLens at launch.

On Thursday, Microsoft gave me a chance to experience the latest version of HoloLens (wireless, finally), as well as to try out my limited programming skills on the company’s developer tools. While my expertise in building apps extends as far as one programming class in college (it fulfilled the same requirement as calculus), I was able to, with the help of some very patient Microsoft technicians, create a serviceable app that responded to my voice and touch.

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The demonstration was pegged to Microsoft Build, a developers conference in San Francisco that kicked off April 28. Microsoft decided to undertake the unenviable task of trying to teach a roomful of reporters how to build a holographic app. Call it Coding for Dummies, er, tech journalists. Each pair of us were assigned a “mentor” to keep us from messing up too badly. To condense what is normally a four-hour course into 90 minutes, Microsoft wrote the scripts for us. They also designed the art components ahead of time, which is helpful because I’m about as terrible at art as I am at programming.

First, I was instructed to set up a hologram of a rectangular space containing various origami paper objects. After plopping in two paper airplanes and two spheres, I added a cursor and set it to move based on which way my head faces while wearing the headset. Next, I set the balls to drop when the user taps a finger in the air in front of the glasses, which is a common gesture that controls much of the actions in apps for the upcoming Windows Holographic software. In my app, a voice command will also tell the balls to drop. Just to be a bit fancy, I went into the code and changed it to respond to my own choice of words. Finally, I added an ambient music track to play over the HoloLens’s built-in speakers, which increases in volume as I get closer to the hologram, and programmed the spheres to sound like crumpling paper as they rolled.

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The first version of my app was flawed. When I did my finger tap, the balls would fall and roll out of the holo-world I’d created, gone into the holo-abyss. So I was instructed to go into the spatial mapping settings and turn on the ability for holograms to interact with the real world around them. Suddenly, the whole room I was standing in—the floor, tables, chairs and other people—were part of the field of play. Then I learned how to move my holograms. For example, I could affix one to my mentor’s head. The holograms are incredibly responsive to their surroundings. When I placed mine in the air, one ball dropped and got stuck in a nook on the real-life desk chair underneath. My mentor moved the chair, and voila, the ball dropped to the floor. 

There’s an option to create an underworld, essentially a hologram land beneath your feet. In January, Microsoft demonstrated HoloLens with a version of the computer game Minecraft, which the company acquired last year. In it, I was able to blast through a coffee table and see the Minecraft layer below. I added a similar feature to my own app, where users could use the spheres to blow a hole in the floor, revealing a world of green field, river, clouds and red origami birds flying around. Those in the room without a headset on got to see a bunch of journalists crawling on their hands and knees.

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The good: It’s really cool, and I can already see the potential for what kinds of inventive worlds real developers can create. Unlike the headsets and glasses from the January demo, the new wireless version means Microsoft employees no longer have to follow me around, trying to keep me from tripping over the wires while carrying on a holographic Skype conversation. The headsets Microsoft showed on Thursday are closer to the final version, which we still don’t have a release date for.

The bad: The field of vision on the glasses is still somewhat narrow. Move your head too much, and your hologram disappears. There is no holographic peripheral vision. The headsets are also pretty sensitive to the movement of your head. Since your head controls the cursor, moving slowly and fluidly took some getting used to.

But the product has shown significant progress just over the last three months. Walt Disney and Unity Technologies, a game engine developer, are among the big names creating software for it. “HoloLens is real. This isn’t fiction. This is science fact, not science fiction,” says Terry Myerson, executive vice president of Microsoft’s operating systems group. “We have to get the price down; we have to get the form factor right for it to be a large-scale breakthrough.”

More from Bloomberg.com

  • Microsoft






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-1x-1

Here’s What It’s Like to Build Hologram Apps for Microsoft’s HoloLens

This post was originally published on this site



My 2014 Best Performers, Looking Ahead To 2015

A big part of Microsoft’s pitch for HoloLens, a headset with glasses designed to project interactive 3-D holograms, is that developers will easily be able to make any Windows program compatible. That would ensure plenty of software available for HoloLens at launch.

On Thursday, Microsoft gave me a chance to experience the latest version of HoloLens (wireless, finally), as well as to try out my limited programming skills on the company’s developer tools. While my expertise in building apps extends as far as one programming class in college (it fulfilled the same requirement as calculus), I was able to, with the help of some very patient Microsoft technicians, create a serviceable app that responded to my voice and touch.

The demonstration was pegged to Microsoft Build, a developers conference in San Francisco that kicked off April 28. Microsoft decided to undertake the unenviable task of trying to teach a roomful of reporters how to build a holographic app. Call it Coding for Dummies, er, tech journalists. Each pair of us were assigned a “mentor” to keep us from messing up too badly. To condense what is normally a four-hour course into 90 minutes, Microsoft wrote the scripts for us. They also designed the art components ahead of time, which is helpful because I’m about as terrible at art as I am at programming.

First, I was instructed to set up a hologram of a rectangular space containing various origami paper objects. After plopping in two paper airplanes and two spheres, I added a cursor and set it to move based on which way my head faces while wearing the headset. Next, I set the balls to drop when the user taps a finger in the air in front of the glasses, which is a common gesture that controls much of the actions in apps for the upcoming Windows Holographic software. In my app, a voice command will also tell the balls to drop. Just to be a bit fancy, I went into the code and changed it to respond to my own choice of words. Finally, I added an ambient music track to play over the HoloLens’s built-in speakers, which increases in volume as I get closer to the hologram, and programmed the spheres to sound like crumpling paper as they rolled.

The first version of my app was flawed. When I did my finger tap, the balls would fall and roll out of the holo-world I’d created, gone into the holo-abyss. So I was instructed to go into the spatial mapping settings and turn on the ability for holograms to interact with the real world around them. Suddenly, the whole room I was standing in—the floor, tables, chairs and other people—were part of the field of play. Then I learned how to move my holograms. For example, I could affix one to my mentor’s head. The holograms are incredibly responsive to their surroundings. When I placed mine in the air, one ball dropped and got stuck in a nook on the real-life desk chair underneath. My mentor moved the chair, and voila, the ball dropped to the floor. 

There’s an option to create an underworld, essentially a hologram land beneath your feet. In January, Microsoft demonstrated HoloLens with a version of the computer game Minecraft, which the company acquired last year. In it, I was able to blast through a coffee table and see the Minecraft layer below. I added a similar feature to my own app, where users could use the spheres to blow a hole in the floor, revealing a world of green field, river, clouds and red origami birds flying around. Those in the room without a headset on got to see a bunch of journalists crawling on their hands and knees.

The good: It’s really cool, and I can already see the potential for what kinds of inventive worlds real developers can create. Unlike the headsets and glasses from the January demo, the new wireless version means Microsoft employees no longer have to follow me around, trying to keep me from tripping over the wires while carrying on a holographic Skype conversation. The headsets Microsoft showed on Thursday are closer to the final version, which we still don’t have a release date for.

The bad: The field of vision on the glasses is still somewhat narrow. Move your head too much, and your hologram disappears. There is no holographic peripheral vision. The headsets are also pretty sensitive to the movement of your head. Since your head controls the cursor, moving slowly and fluidly took some getting used to.

But the product has shown significant progress just over the last three months. Walt Disney and Unity Technologies, a game engine developer, are among the big names creating software for it. “HoloLens is real. This isn’t fiction. This is science fact, not science fiction,” says Terry Myerson, executive vice president of Microsoft’s operating systems group. “We have to get the price down; we have to get the form factor right for it to be a large-scale breakthrough.”






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Facebook Expects Currency Issues to Have a Larger Impact in 2Q15

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Year-To-Date Winners: We Have Found The Market And It's Apple

APPLE – THE BEST OPPORTUNITY EVER?

I SEE APPLE GOING BACK ABOVE $300, SOONER RATHER THAN LATER

Facebook Announces Mixed 1Q15 Earnings (Part 5 of 5)

(Continued from Part 4)

Facebook’s expenses grew much faster than its revenue

Facebook (FB) considers 2015 to be big investment year for itself. In 1Q15, Facebook’s total non-GAAP (generally accepted accounting principles) operating expenses grew by 83% YoY (year-over-year), while its GAAP expenses grew by 57%.

This is much more than the 42% YoY growth that it achieved for its revenue in 1Q15. The revenue growth was largely impacted by the strong US dollar (UUP) during the last quarter. Facebook mentioned that its revenue growth could have been 49% instead of 42% if there hadn’t been currency issues.

Facebook derives more than half of its revenue from international markets, as the above chart show. This makes currency issues prominent. The concern for Facebook is that the currency issues could play an even larger role going forward. According to Facebook, in March, currency headwinds negatively impacted the YoY revenue growth by 10%. Based on this, Facebook believes that the currency headwinds in 2Q15 will be greater than 1Q15.

Facebook is also looking to increase its spending for the rest of the year. The company expects its spending on operating expenses to increase by 55%–65% this year compared to last year. Facebook also expects a YoY increase of 64% for its capital expenditures. This will mainly be used to build data centers and infrastructure.

Currency issues impact the overall large cap sector

However, it isn’t just Facebook. The whole large cap tech sector has been impacted by the strengthening US dollar. Google (GOOG) (GOOGL) announced its earnings on April 23. It mentioned that currency headwinds shaved off 5% from its overall YoY revenue growth in 1Q15. eBay (EBAY) also announced its earnings on April 22. It mentioned that currency issues impacted its YoY revenue growth by 5%. Apple (AAPL) will announce its earnings on April 27. It also expects 5% revenue growth.

For the latest updates, visit Market Realist’s Tech, Media, and Telecom page.

Browse this series on Market Realist:

  • Information Technology
  • Facebook






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witch-cry-2

Square Enix Unveils Impressive WITCH CHAPTER 0 DirectX 12 Tech Demo At Microsoft BUILD

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My 2014 Best Performers, Looking Ahead To 2015

For enthusiasts and PC gamers, one of Windows 10’s most anticipated features is support for DirectX 12. Like AMD’s Mantle, DirectX 12 is a “close to the metal” API, that makes more efficient use of CPU and GPU hardware resources, which can result in improved performance, enhanced visuals, or both. In an impressive display of what DirectX 12 can do with the right hardware, makers of the Final Fantasy series of games, Square Enix, in collaboration with NVIDIA and Microsoft, unveiled a real-time CG tech demo dubbed WITCH CHAPTER 0 [cry] at Microsoft BUILD that looks absolutely stunning.

WITCH CHAPTER 0 [cry]

The WITCH CHAPTER 0 [cry] demo was rendered in real-time.

WITCH CHAPTER 0 [cry] models a human crying, which is considered one of the more difficult things to render in real time, and make it look real. WITCH CHAPTER 0 [cry] does it, however, with a level of detail that has to be seen to be appreciated—there is a video of the demo posted here. The graphics fidelity in the scene shown at BUILD is as close to photo-realistic as I’ve seen a real-time CD demo look.  Pre-rendered videos can offer higher quality imagery, but WITCH CHAPTER 0 [cry] was working in real-time during the demo. That’s an important distinction.

To help power the demo, Square Enix turned to NVIDIA. A typical scene in WITCH CHAPTER 0 [cry] features approximately 63M polygons, which is 6-12x more than is realistically possible with today’s hardware with DirectX 11. The demo also uses high quality 8Kx8K textures and over 50 different shaders on the hair effects alone.

Digital Storm Quad SLI

A Digital Story system with quad GeForce GTX Titan X cards powered the demo.

To render the demo in real time, a Digital Storm system, packing a Haswell-E processor and a quartet of NVIDIA GeForce GTX Titan X graphics cards running in quad-SLI was used. That’s basically the most powerful desktop system someone could put together today, so the kind of graphics quality shown is probably a couple of years out before it’s possible on more affordable mainstream hardware with smooth framerates, but the framework is obviously there.

There are a lot of subtle—and obvious—details to check out in the WITCH CHAPTER 0 [cry] demo. As good as it looks, it’s still unmistakably CG. There are some jumpy shadows here and there and other queues like the sharp color variances in the hair that give it away (among other things). But the skin tones, the softness of the feathers, and realistic reflections and refraction on the skin and through the tears is fantastic. The eyebrows, runny mascara, eyelashes, subtle blemishes in the skin, and myriad of other details also look great.

WITCH CHAPTER 0 [cry]

The main character in the WITCH CHAPTER 0 [cry] demo looks ultra-realistic.

In the past few weeks alone, between this demo, the Star Wars: Battlefront trailer, GTA V running at 4K, and the Just Cause 3 trailer, it seems like game developers are really stepping up their game—at least in terms of graphics quality. Good graphics don’t equate to good games, but as a tech geek the sheer beauty of the pixels being put up on screen lately makes be quite optimistic for what’s coming in the not too distant future.






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engdaily-01

Daily Roundup: Apple Watch review, Windows 10 and more!

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My 2014 Best Performers, Looking Ahead To 2015

Ready to get caught up on some of today’s top stories? Find out what we thought about the Apple Watch in our review, learn about what’s changed in Windows 10 from Microsoft’s design lead and read why Secret is shutting down. Get all the details about these stories and more in the Daily Roundup.

Apple Watch review: a status symbol for iOS devotees

Mankind’s fascination with watches capable of more than simply telling the time is nothing new. But recently, our collective interest in intelligent timepieces has spiked, and we have more and more powerful wrist-worn computers to choose from than ever – whether made by startups with record-setting Kickstarter campaigns or the biggest names in consumer electronics. Of course, the biggest name of all, Apple, had yet to release one of its own. Well, the Watch has arrived, and its maker has loftier aspirations for it than the smartwatches preceding it.

Windows 10 design lead explains what’s changed (and what hasn’t)

Albert Shum, the design team lead for Microsoft’s OS team, has outlined through some of the decisions made in its new OS. He reiterates that – especially now Windows 10 is out in the open – the work here isn’t yet done, with the blog post focusing on where the team’s received the most.. “feedback”, including the new menu options found on mobile iterations.

Secret’s out: The rise and fall of the anonymous social app

Secret, the app that was practically synonymous with the anonymous-app movement, is shutting down. David Byttow, Secret’s co-founder and CEO, explained in a Medium post yesterday that the reason for the shuttering is that the app no longer represents the vision he had when he started it in January last year. And if the lackluster activity in my Secret feed of late is any indication, I’m guessing the severe decline in users is a reason too.

Jeff Bezos’ first proper test rocket has successfully launched

Elon Musk may be the most famous tech billionaire with an interest in spaceflight, but he’s certainly not the only one. Amazon founder Jeff Bezos also has a company, Blue Origin, which is doing similar research into reusable craft to get us to-and-from the heavens. The normally secretive outfit has just revealed that its first test vehicle, New Shepard, made arguably its most important, partially successful test flight yesterday.

Living with Samsung’s Galaxy Note Edge in an S6 world

I was torn this past winter. I knew the Galaxy S6 was imminent and that there’d likely be a model with a curved screen, but I was dying to see what it was like to live with its bigger precursor, the Galaxy Note Edge. Would I feel a twinge of regret when the shiny new Samsung handset arrived, even if the older phone still had some advantages? There was only one way to find out. I spent a few weeks with the Note Edge to see not just whether I would enjoy that uniquely shaped screen on its own terms, but whether it would still hold its own against the faster, curvier Galaxy S6 Edge.

Watch Tesla’s souped-up Model S beat the world’s fastest sedan

Tesla’s Model S P85D is quick. Or is it fast? Can it be both? Ever since Elon Musk unveiled the company’s speediest car ever, it’s become the fashionable thing to take the P85D to a drag strip and pit it against some old-school gas-powered muscle. Motor Trend did the same, choosing the all-American Dodge Charger Hellcat (the world’s fastest sedan) as the Model S’ opponent. Now, it’s not the first time that these cars have gone head-to-head over a quarter mile, but when they first met, the 707-horsepower Hellcat had such a dismal run that it needed an official rematch with a better driver behind the wheel.

Play classic MS-DOS games without even leaving Twitter

Although they went live at the very start of the year, it was like all of our Christmases had come at once when Archive.org added 2,400 playable MS-DOS games to its website. Retro titles like Maniac Mansion, Oregon Trail and Doom are all available, with the only downside being that you have to visit each specific game’s page to play them. However, the eagle-eyed folk at Wired noticed these have recently started working on Twitter, meaning you can get all of your social networking done while simultaneously saving Sandy Pantz from the evil Dr Fred.






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Apple Watches and wrist tattoos not meshing well

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Year-To-Date Winners: We Have Found The Market And It's Apple

APPLE – THE BEST OPPORTUNITY EVER?

I SEE APPLE GOING BACK ABOVE $300, SOONER RATHER THAN LATER

Well, that inks.

The newly released Apple Watch may be problematic for people with dark tattoos on their wrist, the company acknowledged after complaints from customers.

“Permanent or temporary changes to your skin, such as some tattoos, can also impact heart rate sensor performance. The ink, pattern, and saturation of some tattoos can block light from the sensor, making it difficult to get reliable readings,” according to the official Apple Watch support page, updated on Wednesday.

Apple did not respond to requests for comment.

The issue comes down to light.

The Apple Watch’s green light sensor that tracks the wearer’s heartbeat needs to be bounced off blood flow for measurement, said Steven LeBoeuf, president of Valencell, which develops biometric sensor technology — though not specifically for the Apple Watch.

“The key to obtaining accurate biometric data in the wrist lies in the sensor’s ability to measure pulsatile blood flow in blood vessels less than 1 to 2 millimeters from the surface of the skin, while also rejecting noise,” he said.

Green light is considered safer because it does not penetrate deep into the skin. “But that’s its blessing and its curse,” LeBoeuf said. The green light, while less harsh, is easily absorbed by the dark ink.

“The darker the ink and the deeper the tattoo, the more problems you will have,” he said. Scars may also be a problem for some users because they pose a thicker layer to penetrate, he added.

A combination of green and yellow light wave sensors, and amplified blood flow detection, probably would fix the tattoo hurdle, LeBoeuf said. But until a new edition comes out, tattooed enthusiasts may be out of Apple time.

Follow Ryan Parker on Twitter, Facebook and Instagram

Copyright © 2015, Los Angeles Times






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This Microsoft website will detect people’s age in photos

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My 2014 Best Performers, Looking Ahead To 2015

If you ever wondered if you look your age in photos, or how old that one aunt in your family really is, there’s now a website for that, thanks to none other than…Microsoft?

It’s true. The technology company MSFT recently released a tool for facial recognition, and one of its internal teams decided to have fun by using it to build a website that predicts people’s age in photos. It’s aptly named “how-old.net.”

Sure, it’s fun to guess the ages of your friends and family, but we at Fortune wondered—could Microsoft’s technology detect the ages of the industry titans we feature on the cover of our magazine? Could the tool accurately determine the age of Disney CEO Bob Iger? Pope Francis? Theranos founder Elizabeth Holmes?

You can see the results in the image above.

All fun aside, the website is actually a great example of how powerful this type of “machine learning” technology can be. The tool is really a collection of advanced algorithms paired with application program interfaces, or APIs, which allow those smarts to be used in different ways and applications—such as the website in question. As more data are fed into computer-generated models, those models “learn” and become more accurate.

Microsoft’s tool is not novel, of course—Facebook FB used a similar approach to recognize and tag people in photos, and Google GOOG does the same in its Image Search, among other places. But the API aspect makes those capabilities accessible to third-party software developers who in turn unleash them on a world of possible new applications, from criminal investigations to family history. Or, in the case of the corporate world, marketing messages, inventory estimates, and equipment maintenance.






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