Should Apple, Inc. Worry About Subsidy Cuts in China?

Once upon a time, Apple (NASDAQ: AAPL  ) investors were easily rattled by any headlines about carrier subsidy cuts. That made sense because most people still aren't willing to pay full sticker price for an iPhone, but at the same time subsidies played an important role in customer acquisition for carriers.

Well, one of Apple's newest prominent carriers is looking to reduce subsidy costs: China Mobile (NYSE: CHL  ) . Should Apple be worried?

Shifting to the mainstream
Bloomberg first reported last month that China Mobile was looking to reduce subsidies by $2 billion, following up again today with additional details on China Mobile's intentions to cut costs. Government agencies told the state-controlled carrier that it spent too much on subsidies and marketing for devices like the iPhone, among others.

The net result is that the cost for an iPhone 5s could end up doubling, while the iPhone 6 is still in the process of getting regulatory approvals before launching. China Mobile is shifting its focus away from the high-end and toward the mainstream, which inevitably could benefit local smartphone manufacturers like Xiaomi and Huawei, which offer more affordable smartphones.

What's different
Chinese carriers structure subsidies very differently than U.S. carriers do. U.S. consumers are used to paying less upfront in exchange for higher monthly bills, while in contrast Chinese consumers pay more upfront in exchange for lower monthly bills.

Under China Mobile's old structure for an iPhone 5s, consumers would pay 5,288 yuan (~$860) upfront but then receive monthly rebates of 194 yuan (~$32) for two years to offset the cost. Now the upfront cost will be 4,488 yuan (~$730) with the monthly rebate falling to 136 yuan (~$22). After everything is said and done, consumers end up paying nearly twice as much for the phone.

But since the upfront cost is lower and the added cost is spread over the course of two years, the overall impact to Apple's business is unclear, but could even potentially be positive if you consider the behavior of U.S. consumers. We do know that in the U.S., spreading out premiums over time has led to consumers becoming less price sensitive, which ends up shifting Apple's product mix toward higher-priced models.

Other considerations
Additionally, Apple has been making broad pushes in making its devices more affordable in emerging markets, with installment plans being its primary tool. The Mac maker launched installment plans in China in early 2013, partnering with third-party banks -- China Merchants Bank and ICBC -- to handle the financing. These plans do come at a cost, with interest rates that go as high as 10%, but offer lower upfront costs to customers.

Perhaps more importantly, Apple's entry into the phablet market represents an enormous opportunity for the company, since phablets are extremely popular in China. Phablets do cost more, but eager Chinese consumers are already buying iPhone 6 models for upwards of $3,000 in the grey market pending the official launch in mainland China. Of course, early adopters willing to pay exorbitant grey market prices may not be representative of the mainstream market.

China Mobile reducing subsidies isn't exactly good news, but it probably won't put a dent in Apple's business.

Apple Watch revealed: The real winner is inside
Apple recently revealed the product of its secret-development "dream team" -- Apple Watch. The secret is out, and some early viewers are claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see where the real money is to be made, just click here!

The Best Hope for Reducing Taxes… Isn't What You Think

It appears that the move by Warren Buffett-backed Burger King Worldwide Inc. (NYSE: BKW) to buy iconic Canadian fast food chain Tim Hortons Inc. (USA) (NYSE: THI) and relocate to Canada to lower its corporate tax rate was the straw that broke the camel's back when it comes to tax inversion deals.

One has to wonder whether the wily Mr. Buffett was not only trying to make money but doing his best to accelerate much-needed tax reform when he agreed to finance BKW's expansion into the northland...

Why Mergers Are on the Rise... and the Government's Attempt to Slow Them

Year to date, M&A volume has reached $2.4 trillion, the highest year-to-date level since $3.3 trillion in 2007 according to Dealogic. One of the factors that has contributed to this boom in mergers has been a flood of tax inversion deals.

Indeed the inversion pipeline is still strong. To counter the problem, the U.S. Treasury acted to make it much more difficult for U.S. companies to move their legal headquarters to lower-tax countries.

Whether the actual target of the new rules is inversions or tax reform, what happens next will impact us in an unexpected way.

Here is what we need to know to take maximum advantage...

To execute a tax inversion deal, a U.S. company must purchase a foreign company and the shareholders of the non-U.S. company must comprise at least 20% of the combined shareholders of the combined company. U.S. companies engaging in such transactions have been trying to avoid the developed world's highest corporate tax rate.

Recently these deals have been focused on the pharmaceutical and healthcare industries, and stocks in those industries took a dive after the Treasury released its new regulations on Monday. British pharmaceutical giant AstraZeneca Plc. (NYSE ADR: AZN), which had been the target of a failed inversion bid by U.S. drug maker Pfizer Inc. (NYSE: PFE), dropped 3.6%. AbbVie Inc. (NYSE: ABBV), which is involved in a $54 billion deal to buy Irish pharmaceutical giant Shire Plc. (Nasdaq ADR: SHPG), was down 1.9%. Covidien Plc. (NYSE: COV), an Irish company being bought by American medical device maker Medtronic Inc. (NYSE: MDT) was down 3%.

The Obama administration came out harder and faster than many expected. Realizing that it would be unable to get any action through a paralyzed Congress two months before mid-term elections, Treasury Secretary Jacob Lew called on his tax writers to draft regulations that will make tax inversion much harder and less profitable. The rules make several changes to current rules that are effective immediately for any deals that have not yet closed, which includes the Burger King deal.

First, Treasury closed a loophole that allowed a tax-free transfer of cash or property from a foreign subsidiary to the new foreign parent and moved to prevent companies from restructuring foreign units to access deferred earnings without paying taxes.

Second, Treasury banned so-called "hopscotch" loans that allow companies to avoid taxes on repatriated foreign earnings by making loans to a new foreign parent company created in a tax inversion deal.

Third, it attacked techniques that allowed companies to meet the condition that a U.S. business can invert only if the new company has foreign ownership above a 20% threshold. Previously, companies were able to finesse this requirement by reducing their size prior to completing the merger but the new rules prohibit them from doing so.

Fourth, the new rules prevent companies from engaging in "spinversions" whereby they invert themselves and effectively relocate to a lower cost jurisdiction by shifting assets to a foreign entity and then spinning it off to shareholders. Such a spin-off will now be counted as a U.S. company subject to U.S. corporate tax rates.

The new rules are of course meant to temper enthusiasm for tax inversion, but the "tax" problem is more complex. What's needed to stem the inversion flow is a more focused look at our overall corporate tax policies. It's all on the table, but here's what we're missing...

Taking Charge

Five years after the financial crisis, as the U.S. and global economy struggle to grow, it is a sad specter to see investment bankers running around convincing companies to engage in inversion deals to generate big fees and hedge funds betting on these deals in order to try to profit from them. This type of gaming the system is not what capitalism is supposed to be about.

That is why it is incumbent on Congress to take away the temptation for some of the most highly educated and motivated among us to spend their energies in such unproductive activities. The only way for that to happen is for Congress to pass comprehensive corporate tax reform that would lower the corporate tax rate to make it more competitive with those in other developed countries.

While they are at it, our lawmakers need to make it possible for U.S. companies to repatriate the trillions of dollars of cash they are holding offshore in order to be able to put it to work in the U.S. economy. There is now bipartisan agreement that this needs to happen; all that is missing is the leadership to make it happen.

The Obama Administration should be commended for acting quickly to stop the U.S. tax base from being hollowed out. Now it needs to move further and take a leadership role in restructuring the U.S. corporate tax system to help it promote growth and productive investment.

Mr. Buffett may have had more up his sleeve than donuts and burgers when he agreed to finance Burger King's tax inversion deal. Rather than being a hypocrite as some have charged, he was more likely being a patriot.

ESPN suspends Bill Simmons for three weeks

  Why the NFL rules TV NEW YORK (CNNMoney) On Tuesday, ESPN writer and host Bill Simmons called NFL Commissioner Roger Goodell a "liar" and essentially dared his employer to object. On Wednesday, ESPN responded by suspending him for three weeks.

"Every employee must be accountable to ESPN and those engaged in our editorial operations must also operate within ESPN's journalistic standards," the sports network said in a statement.

"We have worked hard to ensure that our recent NFL coverage has met that criteria," the network said. "Bill Simmons did not meet those obligations in a recent podcast, and as a result we have suspended him for three weeks."

The suspension apparently extended to Simmons' social media accounts -- he did not immediately comment on the network's decision. But his fans complained en masse, making the #FreeSimmons hashtag a trending topic on Twitter on Wednesday evening.

On a podcast on Tuesday, Simmons was outspoken about Goodell's handling of the Ray Rice domestic violence scandal. He repeatedly labeled Goodell a "liar" and used expletives to express doubt that other league executives didn't know about the content of the elevator video released by TMZ earlier this month. In the video, Rice was shown striking his now-wife.

During what was widely described as a rant, Simmons also said that if ESPN called or e-mailed him to chastise him for his opinions, "I'm going public."

"You leave me alone," he said, seemingly referring to ESPN, which has employed him since 2001. "The commissioner is a liar, and I get to talk about that on my podcast. Please, call me and say I'm in trouble, I dare you."

There was immediate speculation that ESPN might take action, and on Wednesday, it did. Simmons' implied references to his bosses ("you leave me alone," etcetera) seemed to exacerbate the issue.

Wednesday's action is not the first time that ESPN has suspended Simmons, who is the editor in chief of the ESPN web site Grantland and a contributor to telecasts of "NBA Countdown." He is a vital, vocal, and popular voice for the network -- and a controversial one, as well.

In 2009, he was reportedly suspended from Twitter for two weeks for criticizing ESPN radio affiliate WEEI.

And last year he was suspended after ridiculing ESPN's "First Take" -- he had called a segment between Skip Bayless and Seattle Seahawks' cornerback Richard Sherman "an em! barrassment."

ESPN is controlled by The Walt Disney Company.

Elizabeth Warren: The market is broken

  Elizabeth Warren: 'The game is rigged' NEW YORK (CNNMoney) Senator Elizabeth Warren says she picked up a lot of her feistiness from reading Nancy Drew novels as a kid. Today she believes the most important mystery to solve is how to get the American economy working for someone other than billionaires.

It's a message she's been taking all over the country, and she isn't afraid to call banks, credit card companies and some employers cheats and tricksters.

"The biggest financial institutions figured out they could make a lot of money by cheating people on mortgages, credit cards and payday loans," she told a packed auditorium at the Graduate Center of the City University of New York, where she spoke alongside New York Times (NYT) columnist Paul Krugman.

The Democrat from Massachusetts even said the market is broken in many regards.

"This is about getting markets to work for real people," she said.

The biggest applause of the night was on three issues that come up frequently in Warren's speeches.

1) Financial regulation: Warren was the driving force behind the creation of the Consumer Financial Protection Bureau after the 2008 financial crisis. The agency has returned billions of dollars to Americans who were wronged.

"Traffic works better with traffic lights," she explained.

In her eyes, a true capitalist system would have transparency so consumers could make informed choices. But in a world of "mice type" with pages and pages of fine print that no one reads or understands, the market breaks down.

2) Reducing student loans: Last summer Warren made headlines for arguing that student loans should have the same interest rates that banks get when they borrow money from the Federal Reserve.

This year she's pushing to allow people to re-finance their student loans at the historically low rates currently in place.

As she likes to remind people, "Student loans issued from 2007 to 2012 are on target to produce $66 billion in profit for the United States government."

3) Raising the minimum wage: "No one should work full time and still live in poverty," Warren said.

She uses her own family story to illustrate how critical it is for workers to make a living wage. Her father had a heart attack when she was 12, and her mother had to go back to work in retail at Sears (SHLD) to support the family.

That would be much harder today ! because a woman working a minimum wage job and trying to support even one child would likely still be in poverty.

Her other big push is for basic worker rights, including allowing workers to talk freely about how much they make and forcing employers that call shift workers in for only a few hours to pay them for at least four hours of work.

Plenty of critics paint Warren as a socialist, but she has her message down.

"We can't have a market that functions unless we have a government that functions. That's the heart of it," she said.

Upbeat Signs for Housing Market, Even as Construction Slows

Daniel Acker/Bloomberg via Getty Images WASHINGTON -- Housing starts and permits fell in August, but upward revisions to the prior month's data suggested the housing market continued to gradually improve. Groundbreaking declined 14.4 percent to a seasonally adjusted annual 956,000-unit pace, the Commerce Department said on Thursday. July's starts were revised to show a 1.12-million unit rate, the highest level since November 2007, instead of the previously reported 1.09-million unit rate. Economists polled by Reuters had forecast starts slipping to a 1.04-million unit rate last month. Housing is clawing back after suffering a setback following a spike in mortgage rates last year. It, however, remains constrained by a relatively high unemployment rate and stringent lending practices by financial institutions. A survey Wednesday showed homebuilder sentiment hit its highest level in nearly nine years in September and builders reported a sharp pick-up in buyer traffic since early summer. Groundbreaking for single-family homes, the largest part of the market, fell 2.4 percent in August to a 643,000-unit pace. That followed a hefty 11.1 percent increase in July. Starts for the volatile multifamily homes segment tumbled 31.7 percent to a 313,000-unit rate in August. Last month, permits fell 5.6 percent to a 998,000-unit pace. July's permits were revised slightly up to a 1.06-million unit rate. Economists had expected them to slip to a 1.05-million unit pace in August. Permits for single-family homes fell 0.8 percent to a 626,000-unit pace in August. Permits in the U.S. South, where more than half of single-family construction occurs, hit their highest level since April 2008. Permits for multifamily housing declined 12.7 percent to a 372,000-unit pace.

Baxter’s Healthy Glow

Health care stocks continue to perform well.

The Health Care SPDR ETF (NYSE: XLV), the largest health care ETF by assets, is up 62% in the past two years, well ahead of the S&P 500's 38% rise.

An increase like that might lead you to think the sector's biggest gains are behind it. Not so, according to Philip Springer, chief investment strategist at our Personal Finance advisory.

"I believe this sector still offers good profit potential, fueled by such factors as aging populations, growing demand for care in emerging markets and impressive medical advances," he wrote in an article in the August 27 issue.

The numbers bear that out. Consider the following: 

Global health spending is surging: According to a recent report from Deloitte, worldwide health spending rose 1.9% in 2012, but accelerated by 2.6% in 2013. Between 2013 and 2017, health care costs will rise by an average of 5.3% a year.

Emerging markets are seeing the fastest growth: Deloitte sees the biggest spending increases in rapidly growing areas like the Middle East and Africa (up 10.0%) and the Asia-Pacific region (up 7.1%).

People are living longer—and need more care: By 2017, average global life expectancy is expected to hit 73.7 years, up from 72.6 in 2013. That's fueling an ongoing increase in the number of people aged 60 and over: in the next 50 years, their numbers will more than triple, to around 2 billion.

Chronic diseases are on the rise: An older population is one factor spurring the spread of chronic conditions like heart disease, cancer and diabetes. Other causes include more sedentary lifestyles, rising obesity rates and changing diets. According to Deloitte, chronic diseases are responsible for 63% of all deaths around the world.

One company Springer believes is particularly well positioned to benefit from these trends is Personal Finance buy recommendation Baxter Internation! al (NYSE: BAX), a maker of medical devices, pharmaceuticals and biotechnology with a global reach.

(See below to discover four more companies Springer sees as poised to reap big profits from the coming boom in health care spending.)

In 2013, Baxter generated 42% of its sales in the U.S. The rest came from Europe (30%), the Asia-Pacific region (16%) and Latin America/Canada (12%).

Baxter boasts 61,500 employees and a $40-billion market cap.

The company operates through two main divisions: 

Medical Products, which supplied 57% of Baxter's 2013 revenue, makes devices that deliver fluids and drugs to patients, including intravenous products and infusion pumps. This business also sells premixed drugs, anesthetics and supplies and services for people with end-stage renal disease.Bioscience (43% of revenue) provides genetically engineered and plasma-based treatments for patients with hemophilia and other bleeding disorders, as well as therapies for immune deficiencies, burns and shock and other blood-related conditions. Its products are also used in regenerative medicine, which aims to heal damaged tissues and organs.

Big Moves Are Reshaping Baxter

Baxter shares have risen 6.8% year-to-date, below the S&P 500's 7.6% gain. But even though the stock hasn't caused a lot of buzz with investors, management has made a number of important moves in the past two years.

The first came in late 2012, when the company acquired Gambro AB for US$4.0 billion, marking the biggest acquisition in its 83-year history. Sweden-based Gambro makes dialysis products for patients with acute and chronic kidney disease. The company is the world's second-largest manufacturer of dialysis machines, after Germany's Fresenius.

Baxter already had a presence in the dialysis market but mainly focused on in-home equipment, while Gambro's products are mostly used in clinics.

This is a large and growing market for the company: according to the Baxter, approximately two mi! llion peo! ple worldwide are on some form of dialysis, and that number is growing by more than 5% annually due to rising rates of diabetes and hypertension.

Another major move came in March, when Baxter announced that it would break itself into two separate firms along the lines of its current divisions; it aims to complete the split in mid-2015.

"The breakup makes sense because the two units have separate profiles, with the medical devices business being more defensive, while the biopharmaceuticals unit grows faster, albeit with greater risk," wrote Springer.

One of those risks is rising competition. For example, Biogen Idec's (NasdaqGS: BIIB) Eloctate hemophilia A therapy received FDA approval in June. Eloctate could become a significant competitor to Baxter's Advate treatment, which controls about 35% of the market. But Advate has the advantage of being well established: it was approved more than a decade ago and is now used in 64 countries.

Eloctate is expected to cost roughly the same as Advate, but it requires fewer injections. Baxter is currently developing a longer-acting version of Advate in response; it recently reported positive results from a Phase III study and plans to apply for U.S. marketing approval by the end of the year.

A History of Successful Spinoffs

The spinoff will let each company focus on its core business and respond more quickly to new competitors and changing market conditions.

To that end, management sold the Bioscience division's vaccine business to Pfizer (NYSE: PFE) for $635 million, leaving the new firm to better exploit its main hematology and immunology products.

Baxter has a history of successful spinoffs. In the 1990s, it spun off Caremark Corp. and Allegiance Healthcare Corp., which are now part of CVS Health Corp. (NYSE: CVS) and Cardinal Health Inc. (NYSE: CAH), respectively.

A third Baxter spinoff, Edwards Lifesciences (NYSE: EW), has gained over 1,350% since it started trading as a separate firm in 2! 000.
Across-the-Board Strength in Q2

Meanwhile, Baxter continues to see strong revenue growth at home, overseas and across its business segments. In the second quarter, international sales jumped 19% from a year ago, to $2.5 billion, while U.S. sales gained 12%, to $1.7 billion.

The BioScience division's revenue rose 7%, to $1.8 billion, while Medical Products revenue jumped 24%, driven by Gambro. Excluding Gambro's contribution, this business's sales increased 4%.

It all added up to an overall sales gain of $4.3 billion, up 16% from $3.7 billion a year ago.

Without special items, such as costs related to the Gambro purchase and the breakup plan, earnings rose 5% to $692 million, or $1.26 a share, topping the consensus forecast of $1.22 and the company's own guidance.



Baxter raised its full-year revenue growth outlook from between 9% and 10% to 10% and 11%. However, it narrowed the range of its 2014 adjusted earnings per share to $5.10 to $5.20 from a previous estimate of $5.05 to $5.25.

The stock trades at a reasonable 14.4 times the $5.15 midpoint of the 2014 forecast. It also yields a healthy 2.8%, and its payout has jumped 343% over the past eight years.

4 More Ways to Profit From the Coming Health Care Boom

U.S. health care spending is set to skyrocket by 70% between now and 2021—and administrative costs are poised to surge 96.8% by 2018!

Nothing can derail the health industry's incredible momentum. Obamacare guarantees it. The law will trigger the biggest increase in the number of insured Americans since the creation of Medicare in 1965.

It all adds up to a government-legislated windfall for the 4 companies Personal Finance chief strategist Philip Springer is recommending right now.

These 4 terrific stocks are sitting right in the path of the greatest explosion in bureaucratic spending in U.S. history—and we're ready to send you everything you need to know about all of them FREE.

Full details he! re.

If Scotland Goes: 'A Mistake As Big As The Great Depression'

I am a freelance journalist focusing on business and finance, particularly in Asia, the Middle East and Africa. I'm the former editor of Asiamoney magazine in Hong Kong, and former investment editor of the Australian Financial Review newspaper in Sydney, Australia. I live in London but have spent most of my professional life in Asia Pacific. Aside from Forbes, I write for the Financial Times, Euromoney, Institutional Investor, Euroweek and many other business and finance publications. I've won several industry awards, most recently the Citi journalism award for excellence for personal finance in 2013, my third Citi award in three years.Outside of business and finance, I'm a regular feature writer for publications including Discovery Channel Magazine and The Australian Way. My book "No More Worlds to Conquer", based on interviews with Apollo astronauts and other adventurers, and asking how you move on with your life when you've walked on the moon, will be published by The Friday Project, a HarperCollins imprint, in spring 2015.

Contact Chris Wright

The author is a Forbes contributor. The opinions expressed are those of the writer.

U.S. Budget Deficit Falls to $128.7 Billion in August

J. Scott Applewhite/AP WASHINGTON -- The federal government ran a lower budget deficit this August than a year ago, remaining on track to record the lowest deficit for the entire year since 2008. The August deficit was $128.7 billion, down 13 percent from the $147.9 billion deficit recorded in August 2013, the Treasury Department said Thursday in its monthly budget report. With just one month left in the budget year, the deficit totals $589.2 billion, 22 percent below last year's 11-month total. The Congressional Budget Office expects the government to run a sizable surplus in September that will allow the government to close out the budget year with a deficit of $506 billion, the lowest since 2008. The improvement this year has occurred because of a 7.7 percent increase in tax revenues that offset a smaller 0.8 percent increase in spending. Revenues have been boosted by an improving economy and a tax increase that started taking effect in January 2013 that raised taxes on upper income individuals and eliminated a tax break workers had been getting on their Social Security taxes in the aftermath of the Great Recession. On the spending side, outlays have been restrained by efforts to get control of soaring budget deficits and by an improving economy which has cut spending in such areas as unemployment benefits and food stamps. With one month remaining in this budget year, outlays total $3.25 trillion while revenues total $2.66 trillion. If the deficit comes in at $506 billion as CBO is forecasting, that would be 26 percent below last year's imbalance and the lowest annual total since the 2008 deficit of $458.6 billion. The 2007-2009 recession and efforts to deal with the financial crisis sent deficits soaring above $1 trillion for four straight years. The deficit hit $1.4 trillion in 2009 and remained above $1 trillion for each of the next three years, finally falling to $680.2 billion last year. The CBO's latest forecast, released last month, sees the deficit declining to $469 billion next year before starting to rise again. The CBO forecast has the deficit climbing above $800 billion in 2021 and above $900 billion in 2022 and beyond. The big driver of those deficits will be the rising cost of Social Security and Medicare for the 78 million retiring baby boomers. Republicans blame President Barack Obama for failing to propose significant cuts to reduce soaring entitle costs. Democrats counter that Republicans would rather slash needed government benefit programs than impose higher taxes on the wealthy. Neither side has shown any desire to make major concessions in this congressional election year. Republicans controlling the House have unveiled a short-term spending bill that would keep the government open until Dec. 11. That would buy time to negotiate a catchall, $1 trillion-plus spending bill after the November midterm elections. There is little expectation that there will be a repeat of last year's tea party uprising when conservatives forced a budget standoff over implementing the new health care law that sparked a 16-day partial government shutdown.

Apple and Samsung Should Fear Sony's PlayStation 4 Dominance

As an electronics giant, Sony (NYSE: SNE  ) has certainly seen better days: Once industry-leading, many of its most well-known products have long been outclassed.

Sony's Walkman was overtaken by Apple's (NASDAQ: AAPL  ) iPod a decade ago -- its TV business has been a consistent source of red ink for just as long. Unable to run it profitably, Sony sold off its Vaio PC division earlier this year.

There is, however, one bright spot among Sony's many struggling electronics: Its latest video game console. Sony's PlayStation 4 has set sales records, and consistently outsold its competition, often by a ratio of three-to-one.

Now Sony is looking to extend its video game dominance into other product categories -- its newest mobile devices interface directly with the PlayStation 4. Given the popularity of Sony's console, this unique feature could give Sony's products a leg up in a market that's thus far been dominated by Apple and Samsung (NASDAQOTH: SSNLF  ) .

Sony adds remote play to Xperia
Like a DVD player, video game consoles have traditionally required a connected TV to function. That's understandable, but somewhat of a major limitation -- as long as that console is in use, the TV it's attached to is fully occupied. At the same time, (and perhaps even more limiting) games can only be enjoyed while sitting directly in front of that TV.

Sony's PlayStation 4, though, is an exception: Using remote play, PlayStation 4 games can be streamed wirelessly to a compatible device. In other words, a PlayStation 4 owner can, if they so choose, enjoy their games while someone else watches a movie on the TV, or play their PlayStation 4 in a different room of the house -- perhaps one that lacks a TV entirely.

Right now, the only remote play-compatible device is Sony's Vita -- a $200 handheld console that's largely been a commercial failure. But that's about to change: Later this year, Sony's next-generation mobile devices will go on sale -- and all will offer remote play functionality.

This list includes Sony's flagship Xperia Z3 smartphone, as well as the slightly smaller Xperia Z3 compact and the Xperia Z3 tablet. Paired with a controller, these devices offer PlayStation 4 owners the ability to play their games without a dedicated TV.

Sony's mobile division has been struggling
Sony's mobile division hasn't been a total failure, but it has fallen short of the company's expectations, and has largely been overshadowed by Apple and Samsung.

When Sony reported its first quarter results in July, it cut its outlook for smartphone sales -- Sony now expects to sell just 43 million smartphones this year, fewer than the 50 million it had anticipated in May. Worse, Sony said its mobile division lost money and will only break-even in 2014 -- it had previously been a source of profit amid otherwise poor results.

In contrast, Apple and Samsung sold more than 150 million and more than 300 million smartphones, respectively, last year. Both firms have consistently generated billions in profits in recent quarters, with the bulk of their earnings coming from sale of smartphones and tablets.

80 million reasons to believe in Sony
Can Sony's mobile division overtake Apple and Samsung? In the near-term it doesn't seem likely, but remote play functionality could help Sony poach many of both companies' best customers.

Last month, Sony said that it had sold more than 10 million PlayStation 4 consoles to end-consumers -- a stunning achievement given that the console had been on the market for fewer than nine months. Its predecessor, the PlayStation 3, initially struggled, but went on to sell more than 80 million units worldwide. Given its impressive early sales, the PlayStation 4 could ultimately sell as well as, or much better than, the PlayStation 3.

With the added perk of remote play, many PlayStation 4 owners could opt for Sony's mobile devices over rival products from Apple and Samsung.

If so, it could be particularly devastating to the South Korean tech giant, as Samsung's mobile products, like Sony's, are powered by the Android operating system. Apple, with its control of iOS, is a bit more insulated, but dedicated gamers could still find the added functionality too enticing to pass up. Obviously, there are many more smartphone and tablet owners than there are PlayStation 4 owners, but remote play could still conceivably convert millions of buyers -- and given the PlayStation 4's relatively high price tag ($399), more valuable buyers at that.

Only time will tell if remote play emerges as a must-have feature, but with Sony's new hardware-based ecosystem, continued strong PlayStation 4 sales should be seen as a positive for its mobile business -- and a slight negative for its rivals like Apple and Samsung.

Leaked: Apple's next smart device (warning, it may shock you)
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!

GE Finally Strikes the Chord With Electrolux

General Electric (GE) has ultimately decided to sell its Appliances unit to one of the bidders – the Swedish consumer durables company, Electrolux (ELUXY) for a cash deal of around $3.3 billion. GE is exiting the kitchen floor to focus completely on its core industrial business segments. And Electrolux is hoping to add popularity to its brand name through this latest acquisition. This deal will combine Electrolux's Frigidaire; one of the best known brands for refrigerators with GE's stable of products including the monogram line of luxury appliances. So, let's dive into the details of the Electrolux-GE deal for further understanding.

Inside the deal

General Electric, which commercialized the electric toaster and the self-cleaning oven, is spinning off the Appliances unit to Electrolux with the motive of reframing the company as a core industrial company. The shift is the work of Chief Executive Jeff Immelt, who wants to turn GE into a high-tech infrastructure company. The management of GE is interested in reaping nearly 75% of their earnings from the industrial businesses by 2016, while becoming less reliant on the Appliances section.

As GE's CEO wants to sever all ties with middle-class American consumers, the sell-off to Electrolux is expected to get completed by end of 2015. However, Electrolux has signed an agreement with GE for continuing usage of GE appliances brand name for a term of around 40 years, for which it would be paying an annual royalty fee.

This deal is, however, still subject to regulatory approval and carries a $175 million termination fee if Electrolux fails to win regulatory approval.

The Electrolux-GE agreement also includes selling off the 48.4% stake of GE Appliances in Mexican appliance maker Mabe, which has aided to develop and manufacture GE appliances through a joint venture for almost 30 years.

Electrolux emerges the final winner

Soon after the acquisition news hit the market yesterday, Electrolux shares rose by 5.1%. Analysts have opined that this latest move by Electrolux will give it more exposure to the premium appliance segment in the U.S. and will help to pull up its revenue after the amalgamation is completed since the U.S. economy is in a revival phase in terms of consumer spending power.

Last year, Electrolux, already one of the world's largest manufacturers of home appliances and industrial appliances, posted revenue of about $15 billion, while GE Appliances generated revenue of around $5.7 billion during the same period. Sales of major appliances in North America accounted for nearly 29% of Electrolux's revenue for the year.

Now, if GE Appliances and Electrolux sales were combined for the previous year, sales in North America would have accounted for about 47% of the latter's revenue. And the best part for Electrolux is that this acquisition could place it at par with the market honcho, Whirlpool Corporation (WHR), which posted revenue of $18 billion last year.

Thus this acquisition of GE Appliances represents a major opportunity for Electrolux to expand its business in North America, one of the largest markets for home appliances. Electrolux CEO, Keith R McLoughlin said, "We think its transformational for us." He stated that by nearly doubling the North American business through this venture, it would offer stronger purchasing power in negotiations with suppliers.

The company even expects to achieve a yearly cost savings close to $300 million, if the transaction finally gets a green signal during the regulatory approval phases.

To conclude

The deal marks the end of the era for GE as a household name as the company looks eager to eliminate its ties with its iconic business division- one that gave birth to the washing machine and the dryer and the toaster oven. And it is the largest ever transaction for Electrolux, which began as a maker of vacuum cleaners in 1910 and then expanded into home appliances in 1920. So, let's stay tuned to find out how this major transformation affects Electrolux in the long-run and how GE adapts to the change in business approach down the years. But as of now, the deal is yet to pass through a series of approvals and there might be something new to catch upon within the stipulated timeframe set for the acquisition. Let's keep watching!

Currently 4.00/51 Sunday, September 7, 2014 H.D. Vest Rolls Out Financial Planning Software for Advisors H.D. Vest Investment Services has launched a new financial-planning software program that lets its nearly 5,000 affiliated advisors work with information on client assets, including those not held at the independent broker-dealer. The program, VestVision, also shows the progress clients are making toward their financial goals, “stress-tested against the simulation of 1,000 potential market environments,” H.D. Vest said Thursday. Such details, the firm says, can help advisors and clients make portfolio and other adjustments as the financial markets shift and changes occur in clients’ professional and personal lives. “Today, the overwhelming concern of most financial advisory clients is not how well their investments are performing against any particular index or market-related benchmark, but rather, on a personal level, whether they will have the money they need in order to meet their life goals and how they can best achieve that objective,” explained Scott Rawlins, managing sales director, in a press release. The VestVision software, he says, “is completely oriented to respond to those concerns, and to assist our advisors in keeping their clients fully focused on their individual financial plans and avoid being distracted by extraneous developments.” In a pilot program, H.D. Vest advisors using VestVision boosted their productivity by 20% to 30% and gained a higher share of client assets over a 12-month period, according to the privately owned independent broker-dealer.  VestVision works with H.D. Vest’s other platform tools, such as V4 Client Experience and 1040 Analyst, which let advisors develop financial plans based on clients’ tax returns. H.D. Vest introduced V4 Client Experience at CONNECT2014, its annual conference, in June. “We recognize that tax-savvy wealth management can add appreciably to a client’s overall financial health, and that no professional understands the totality of a client’s financial picture as completely as his or her tax advisor,” Rawlins said in a statement at the time. V4 gives H.D. Vest’s financial advisors “a competitive advantage by being unique, indispensable and repeatable,” he noted. Each year, clients receive an updated 1040 Analyst report, “renewing the process to identify important issues as a client’s financial situation, family dynamics and goals continue to evolve.”  Last year, H.D. Vest tapped Ruth Papazian, a former executive of LPL Financial (LPLA), as the firm’s chief marketing officer and head of business development/recruiting. It also named Adi Garg, previously with Cash America (CSH), as its chief information officer. In addition, it selected Socialware as its advisor social-media platform in early 2013. --- Check out 10 Things to Know About How Investments Are Taxed on ThinkAdvisor. Saturday, September 6, 2014 Blended Families Must Weigh Extra Factors in Estate Planning Kristian Sekulic state planning with one family is hard enough. For families with a mix of biological children and stepchildren, first spouses and second spouses, making out an equitable will can seem impossible. Here's a look at the top six things to remember when you're estate planning for a blended family. 1. Consider How Long Your Family Has Been Together If you and your second spouse married when your children were still young, or if you had your own children together, your family is really one big family, says Dan Mielnicki, an estate and trust attorney with Florida-based Berger Singerman. "If you think of all of your family's kids as 'our' kids, then your will should reflect that," Mielnicki says. "In these situations, you truly have a blended family, and you should proceed with your will as if all your children were your biological children and your second spouse is your first spouse." If, however, your children were adults or teenagers when you remarried, the dynamics will differ. You will need to make separate provisions for your biological children and stepchildren. "If the family hasn't been together that long, it's unfair to think that everyone should be treated the same," says Jeff Fishman, founder and managing member of JSF Financial, a concierge wealth management firm in Los Angeles. "How do you expect someone with three kids in their 30s to treat their new spouse's daughter the same as their own children?" If you still want to make provisions for your stepchildren, the most common way to do that is by giving a bequest to your spouse to delegate as he or she pleases rather a direct bequest to the child, Fishman explains. 2. Don't Make Your Children Wait You should absolutely make provisions for your second spouse, but don't structure your will so your children have to wait for your spouse to die before they get their inheritance, Mielnicki says. "They are adults. In the normal scheme of things, they would inherit property when you died. Don't make them wait on the death of a much younger spouse to receive their inheritance," he says. Unfortunately, this can create a lot of tension in families. "Your children may think, 'My dad's wife is spending too much,' but then the wife may say she's not getting enough. You can see where this could cause so much tension and stress," he says. 3. Make a Plan for Your Home The family home often opens up a Pandora's box, Fishman says. "If it's the family home where your children grew up, are they going to be OK with their stepparent living there for the next 30 years? How do you provide for that?" he asks. If your children never grew up in the home where you and your spouse live, clearly the home belongs to your spouse. But if your children are still young and think of your home as their home, the situation must be evaluated. "Should the surviving spouse be required to leave? They can't be left homeless," Mielnicki says. "If you give the house to your kids, you have to make provisions for your spouse to move out and purchase a new residence. Otherwise you could end up in a situation your kids are saying, 'Dad's dead. Out you go, lady.' I've seen that, and it's bad." 4. Worry More About Family Harmony When you're making out your will, don't let taxes become a greater priority than equal distribution, Mielnicki says. For example, some lawyers encourage their clients to minimize taxes on their estate by leaving everything to their spouse. Unfortunately, that may not make your children very happy. "Yes, if you leave things to your kids, you run the risk of increasing the tax burden on your estate, but it's all going to be taxed eventually," he says. "Imagine how much more of your money will be wasted in litigation if your children end up fighting your spouse for what's theirs. Sometimes it's better to pay a little tax and have everyone content with what they're getting. If people are happy, in the long run it's cheaper." 5. Communicate With Everyone "Communicate with all the parties involved and let them know what you want to do and how you want to do things," Fishman says. "Some people say, 'I don't want to deal with this confrontation while I am alive,' and to me that is the most selfish, unfair perspective to adopt." You have to manage your family's expectations. You could sit everyone down in a big family meeting, or pull everyone aside individually. The important thing is that you tell them your perspective and ask their opinion. "You can say, 'This is how things are structured. If there are any issues, let me know now.' Then give them a few days to think it over and let you know if it's something they can live with," Fishman says. 6. Consult the Experts Friday, September 5, 2014 4 Stocks Under $10 to Trade for Breakouts DELAFIELD, Wis. (Stockpickr) -- At Stockpickr, we track daily portfolios of stocks that are the biggest percentage gainers and the biggest percentage losers. Read More: 10 Stocks Billionaire John Paulson Loves in 2014 Stocks that are making large moves like these are favorites among short-term traders because they can jump into these names and try to capture some of that massive volatility. Stocks that are making big-percentage moves either up or down are usually in play because their sector is becoming attractive or they have a major fundamental catalyst such as a recent earnings release. Sometimes stocks making big moves have been hit with an analyst upgrade or an analyst downgrade. Regardless of the reason behind it, when a stock makes a large-percentage move, it is often just the start of a new major trend -- a trend that can lead to huge profits. If you time your trade correctly, combining technical indicators with fundamental trends, discipline and sound money management, you will be well on your way to investment success. With that in mind, let's take a closer look at a several stocks under $10 that are making large moves to the upside. Read More: 5 Stocks Insiders Love Right Now WPCS International WPCS International (WPCS) provides low-voltage communication infrastructure services in the public services, health care, energy and corporate enterprise markets worldwide. This stock closed up 2.7% to $1.14 a share in Thursday's trading session. Thursday's Range: $1.10-$1.17 52-Week Range: $0.45-$4.95 Thursday's Volume: 557,000 Three-Month Average Volume: 962,406 From a technical perspective, WPCS trended modestly higher here right above some near-term support at $1 with lighter-than-average volume. This stock has been uptrending over the last two months and change, with shares moving sharply higher from its low of 49 cents per share to its recent high of $1.32 a share. During that uptrend, shares of WPCS have been making mostly higher lows and higher highs, which is bullish technical price action. This spike to the upside on Thursday is now starting to push shares of WPCS within range of triggering a major breakout trade. That trade will hit if WPCS manages to take out some key near-term overhead resistance levels at $1.29 to $1.32 and then above its 200-day moving average of $1.36 with high volume. Traders should now look for long-biased trades in WPCS as long as it's trending above some key near-term support at $1 or at 95 cents per share and then once it sustains a move or close above those breakout levels with volume that hits near or above 962,406 shares. If that breakout materializes soon, then WPCS will set up to re-test or possibly take out its next major overhead resistance levels at $1.75 to $1.92. Read More: 5 Low-Priced Stocks to Trade for Big Gains Guanwei Recycling Guanwei Recycling (GPRC) manufactures and distributes low density polyethylene and other recycled plastics products primarily in the People's Republic of China and internationally. This stock closed up 11.3% to 84 cents per share in Thursday's trading session. Thursday's Range: $0.75-$0.89 52-Week Range: $0.37-$3.88 Thursday's Volume: 90,000 Three-Month Average Volume: 72,492 From a technical perspective, GPRC ripped sharply higher here right off some near-term support at 74 cents per share with above-average volume. This large spike to the upside on Thursday is quickly pushing shares of GPRC within range of triggering a major breakout trade. That trade will hit if GPRC manages to take out some key near-term overhead resistance levels at 90 to 94 cents per share and then above more resistance at $1 to its 50-day moving average of $1.03 with high volume. Traders should now look for long-biased trades in GPRC as long as it's trending above some key near-term support at 74 cents per share and then once it sustains a move or close above those breakout levels with volume that hits near or above 72,492 shares. If that breakout develops soon, then GPRC will set up to re-test or possibly take out its next major overhead resistance levels at $1.25 to $1.51. Read More: 5 Breakout Stocks Under $10 Set to Soar Skullcandy Skullcandy (SKUL) designs, markets and distributes performance audio and gaming headphones, earbuds, speakers, apparel and other accessories under the Skullcandy, Astro Gaming and 2XL by Skullcandy brands in the U.S. and internationally. This stock closed up 2.3% to $8.32 in Thursday's trading session. Thursday's Range: $8.09-$8.38 52-Week Range: $5.30-$11.40 Thursday's Volume: 212,000 Three-Month Average Volume: 197,420 From a technical perspective, SKUL trended higher here right above some near-term support at $7.85 with above-average volume. This spike higher on Thursday is starting to push shares of SKUL within range of triggering a big breakout trade. That trade will hit if SKUL manages to take out some key overhead resistance levels at $8.45 to $8.94 with high volume. Traders should now look for long-biased trades in SKUL as long as it's trending above some near-term support at $7.85 or above its 50-day at $7.58 and then once it sustains a move or close above those breakout levels with volume that hits near or above 197,420 shares. If that breakout starts soon, then SKUL will set up to re-test or possibly take out its next major overhead resistance levels at $9.30 to $9.69, or even $10. Read More: Warren Buffett's Top 25 Stocks for 2014 Yingli Green Energy Yingli Green Energy (YGE), together with its subsidiaries, designs, develops, manufacture, markets, sells and installs photovoltaic products in the People's Republic of China. This stock closed up 6.4% to $3.66 in Thursday's trading session. Thursday's Range: $3.47-$3.70 52-Week Range: $2.68-$8.77 Thursday's Volume: 7.81 million Three-Month Average Volume: 4.08 million From a technical perspective, YGE ripped higher here right off its 50-day moving average of $3.46 with strong upside volume flows. This stock has formed a bottoming chart pattern over the last two months, with shares finding buying interest each time it's pulled back to close to $3 a share. Shares of YGE are now starting to trend higher off those support levels and it's quickly moving within range of triggering a big breakout trade. That trade will hit if YGE manages to clear some key overhead resistance levels at $3.83 to $3.85 and then above $4.04 with high volume. Traders should now look for long-biased trades in YGE as long as it's trending above some key near-term support levels at $3.21 or at $3.08 and then once it sustains a move or close above those breakout levels with volume that hits near or above 4.08 million shares. If that breakout hits soon, then YGE will set up to re-test or possibly take out its next major overhead resistance levels at $4.65 to $4.88, or even $5 to $5.50. Read More: 7 Stocks Warren Buffett Is Selling in 2014 To see more stocks that are making notable moves higher, check out the Stocks Under $10 Moving Higher portfolio on Stockpickr. -- Written by Roberto Pedone in Delafield, Wis. RELATED LINKS: >>Hedge Funds Love These Consumer Stocks -- Should You? >>3 Stocks Spiking on Big Volume >>5 Hated Earnings Stocks You Should Love Follow Stockpickr on Twitter and become a fan on Facebook. At the time of publication, author had no positions in stocks mentioned. Roberto Pedone, based out of Delafield, Wis., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. 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