MacRumors

Billionaire activist investor Carl Icahn has published a new letter sent to Apple CEO Tim Cook, addressing his thoughts on an enhanced stock buyback plan for the company. The letter, released on Icahn's new Shareholders' Square Table website and republished by StreetInsider, also notes that Icahn now holds $2.5 billion in Apple stock, having increased his position by over 20% since he met with Cook at the very end of last month.

As he noted in his tweet following the meeting with Cook, Icahn is requesting that Apple undertake an "immediate" $150 billion buyback of its stock, arguing that it would be a terrific use of cash and debt given his belief that Apple's stock is currently severely undervalued. Such a program would mark a major expansion of the current program designed to repurchase $60 billion worth of stock over three years.

When we met, you agreed with us that the shares are undervalued. In our view, irrational undervaluation as dramatic as this is often a short term anomaly. The timing for a larger buyback is still ripe, but the opportunity will not last forever. While the board’s actions to date ($60 billion share repurchase over three years) may seem like a large buyback, it is simply not large enough given that Apple currently holds $147 billion of cash on its balance sheet, and that it will generate $51 billion of EBIT next year (Wall Street consensus forecast).

Icahn lays out his expectations for earnings per share and stock value growth that could be expected from such a move, and notes that Apple could easily manage debt payments if it were to finance the entire $150 billion buyback with debt at 3% interest.

While this would certainly be unprecedented because of its size, it is actually appropriate and manageable relative to the size and financial strength of your company. Apple generates more than enough cash flow to service this amount of debt and has $147 billion of cash in the bank. As we proposed at our dinner, if the company decided to borrow the full $150 billion at a 3% interest rate to commence a tender at $525 per share, the result would be an immediate 33% boost to earnings per share, translating into a 33% increase in the value of the shares, which significantly assumes no multiple expansion. Longer term (in three years) if you execute this buyback as proposed, we expect the share price to appreciate to $1,250, assuming the market rewards EBIT growth of 7.5% per year with a more normal market multiple of 11x EBIT.

Finally, Icahn notes that he would not participate in the buyback he proposes, indicating that there "nothing short term about [his] intentions" as he attempts to convince Apple and his investors that he is not simply pushing an agenda serving his own immediate interests without regard for the company's long-term health.

Microsoft's corporate vice president of communications, Frank Shaw, today took to the Official Microsoft Blog to denounce both Apple's revamped iWork software and the company's well-received decision to distribute it as a free upgrade for existing users.

"Seems like the RDF (Reality Distortion Field) typically generated by an Apple event has extended beyond Cupertino," writes Shaw, before launching into a long-winded rant that positions the Surface and the Surface 2 as better productivity devices, insinuating that Apple doesn't understand productivity.

That’s what Surface is. A single, simple, affordable device that helps you both lean in and kick back. Let’s be clear – helping folks kill time on a tablet is relatively easy. Give them books, music, videos and games, and they’ll figure out the rest. Pretty much all tablets do that.

But helping people be productive on a tablet is a little trickier. It takes an understanding of how people actually work, how they get things done, and how to best support the way they do things already.

The good news is that Microsoft understands how people work better than anyone else on the planet.

Shaw goes on to suggest that since iWork has never "gotten much traction", Apple's decision to provide both free upgrades and free software to new users was insignificant as it was "already priced like an afterthought" and it's difficult to work on a device that "lacks precision input and a desktop for true side-by-side multitasking." He also offers several bullet points that highlight the iPad's shortcomings, following up with a statement that Microsoft has "built a better solution for people everywhere."

- The Surface and Surface 2 are less expensive than the iPad 2 and iPad Air respectively, and yet offer more storage, both onboard and in the cloud.
- … come with full versions of Office 2013, including Outlook, not non-standard, non-cross-platform, imitation apps that can’t share docs with the rest of the world.
- … offer additional native productivity enhancing capabilities like kickstands, USB ports, SD card slots and multiple keyboard options.
- … include interfaces for opening multiple windows, either side by side or layered to fit the way most people actually work.

Shaw's anti-iWork comments follow Apple's own jabs at Microsoft, where Tim Cook took to the stage to question Apple's competitors.

"Our competition is different. They're confused. They chased after netbooks, now they're trying to make PCs into tablets and tablets into PCs. Who knows that they'll do next? I can't answer that question, but I can tell you that we're focused."

Over the course of 2013, Microsoft has unsuccessfully attempted to position its Surface tablets as ideal productivity tools, continually highlighting the iPad's inability to run multiple apps at once, its lack of accessories, its high price, and of course, its less popular productivity software.

Following a series of price cuts, Microsoft revealed that its Surface lineup had earned just $853 million for the company, less than the $900 million writedown the company took for the Surface RT. Nevertheless, Microsoft forged ahead to release a second Surface tablet, announcing the Surface 2 and Surface 2 Pro in September.

In his lengthy and ultra-detailed review of Mavericks, John Siracusa of Ars Technica conducts battery benchmark tests to measure Mavericks' power saving features on both a 2007 MacBook Pro and a 2013 13.3-inch MacBook Air.

While both systems saw notable battery gains going from Mountain Lion to Mavericks, the 2013 MacBook Air in particular saw impressive improvements of up to 30 percent, lasting for more than 15 hours in some instances.

For his battery tests, which were conducted using OS X 10.8.5 and the GM build of Mavericks, Siracusa created a light Web browsing and text-editing automation script, including websites that used Flash. In his tests, battery life varied significantly, but provided, on average, an increase of two hours of work time.

I suspect the aggressiveness of the auto-playing Flash ads that happen to be on specific websites on a particular day may partly explain the huge variability in Mountain Lion's numbers. Some of the lower-scoring Mountain Lion trials may have also had the bad luck to coincide with energy-intensive periodic jobs—jobs that are prevented from running on Mavericks due to AC power or battery-level restrictions as part of centralized task scheduling.

These tests may or may not be representative of how you use your Mac, but regardless, it's clear that Apple's efforts have not been in vain. Mavericks really does consume less energy than Mountain Lion when performing the same tasks.

Since its debut at WWDC, Apple has touted the power saving features bundled into Mavericks, poising improved battery life as the keystone of the operating system. Mavericks is designed to cut down on CPU activity using Timer Coalescing, Compressed Memory, and App Nap.

While Timer Coalescing bundles low-level operations into a single batch action that reduces CPU utilization by up to 72 percent, App Nap cuts down on the power usage of apps that are not running in the foreground, reducing their overall power draw by up to 23 percent. Compressed Memory also works in conjunction with these two features, compacting the least used processes so less time is spent reading and writing virtual memory swap files on disk, which improves power consumption.

There's also a new power saving feature built directly into Safari, called Power Saver. With Power Saver, Safari intelligently detects plug-in content playing in the margins of a website and pauses it, preserving battery life.

During Apple's October 22 event, Apple's senior vice president of Software Engineering Craig Federighi also highlighted Mavericks' battery saving capabilities on the new 13-inch MacBook Air, noting that the operating system provides an extra hour of web browsing and an hour and a half of extra video time.

Mavericks is available for free from the Mac App Store and is a one-step update for all Mac users running OS X Snow Leopard and above. It can be installed on most computers produced after 2007. As of this morning, total Mavericks adoption hovered at approximately seven percent.

Apple debuted a number of videos at its special event yesterday and it has now posted a number of them on YouTube.

Before introducing the company's newest iPads, Tim Cook ran this 'Life on iPad' spot "to celebrate our customer's creativity and genius in using their iPads." The two-minute film shows the iPad being used in a wide variety of different situations, including in a surgery suite, by musicians, firefighters, tourists, football players, and many more.

It's an extremely simple tool, but also extremely powerful. It can be used to start a poem, or finish a symphony.

It has transformed the way we work, learn, create, share. It's used to illustrate things, solve things, and think of new things.

It's used by scientists and artists, scholars and students. It's been to classrooms, boardrooms, expeditions, even to space.

And we can't wait to see where you'll take it next. Introducing the thinner, lighter, more powerful iPad Air.

[Update]: As pointed out by Mashable, the narrating voice of the "Pencil" TV ad for the iPad Air is none other than Breaking Bad star Bryan Cranston.

During yesterday's media event, Apple played a video highlighting the production process for the upcoming Mac Pro, a machine that will see Apple bring Mac production back to the United States and is already seeing over 2,000 people in 20 states working on the project.

The video showed a number of steps in the production process, taking an initial chunk of aluminum and sculpting it into the shape of the Mac Pro enclosure before subjecting it polishing, anodizing, and other steps. Brief segments also provided glimpses of the massive heat sink in production and chips being placed on boards to be installed in the machine.

Deep drawing is a process that very efficiently produces a "net shape" part. Apple could have just chucked a giant hunk of aluminum in a lathe and created the same part, but that amount of metal removal is extremely inefficient. Deep drawing efficiently creates a hunk of metal that is very close to the final shape of a Mac Pro in just a couple of operations. After that, the Mac Pro enclosure is lathe turned to clean up the surface and achieve desired tolerance, polished, placed back in a machining center to produce the I/O, power button and chamfer features and finally anodized.

Koenig goes on to share a number of stills from the video with captions explaining what is going on in each step, including lathing, polishing, grinding, protective film application, I/O cutout milling, and anodizing.

Other stills capture production on some of the other parts of the new Mac Pro, including bead blasting of the main triangular heat sink, pick-and-place assembly of circuit boards, and parts delivery for final hand assembly of the machines themselves.

Earlier this month, it was revealed that Flextronics is in the process of hiring 1,700 workers at its facilities in Austin, Texas to work on a "next generation desktop computer". That computer is presumed to be the Mac Pro, given that Apple had previously revealed the machine would be assembled in Texas, Apple and Flextronics had previously been reported to be working together on the project, and Flextronics' Austin facilities are only a mile from Apple's large and growing operations campus in the area.

Less than 24 hours after OS X Mavericks launched for free in the Mac App Store, roughly 7% of Mac traffic is already coming from machines upgraded to the new operating system, according to a live tracker hosted by analytics firm GoSquared. The tracker shows adoption sitting at around 0.5-0.7% yesterday until beginning its upward march upon the public release.

While analytics data is difficult to compare between services, last year Chitika found 3% of Mac traffic coming from OS X Mountain Lion as of 48 hours after its launch. Unsurprisingly, GoSquared's data hints that Mavericks may be seeing significantly faster adoption compared to Mountain Lion due to the free nature of the new upgrade.

GoSquared CEO James Gill tells MacRumors that his firm currently provides analytics for over 40,000 sites, allowing it to monitor billions of page views per month. That base allows the firm to offer a reasonable snapshot of activity at any given time.

While Mavericks is growing rapidly, it still represents a small fraction of the Mac user base, with GoSquared's numbers showing just under 50% of traffic coming from OS X Mountain Lion and almost all of the remainder split nearly evenly between OS X Lion and OS X Snow Leopared. Users on any of those systems can upgrade directly to Mavericks at no cost through the Mac App Store.

Following yesterday's introduction of new Retina MacBook Pro models, the machines have already begun showing up in Geekbench benchmarks, offering the opportunity to see how their raw performance compares to the previous generation.

While several of the entries appear to be fakes, there are enough legitimate results to begin to get a sense of the new machines' performance, which arrive with the following 32-bit Geekbench 3 averages so far:

15-inch with quad-core CPU:
- i7-4750HQ @ 2.0 GHz: Single-Core 2844, Multi-Core 10887
- i7-4850HQ @ 2.3 GHz: Single-Core 3100, Multi-Core 11771
- i7-4960HQ @ 2.6 GHz: Single-Core 3379, Multi-Core 12813

13-inch with dual-core CPU:
- i5-4258U @ 2.4 GHz: Single-Core 2613, Multi-Core 5248
- i5-4288U @ 2.6 GHz: Single-Core 2856, Multi-Core 5954
- i7-4558U @ 2.8 GHz: Single-Core 3000, Multi-Core 6189

As is fairly typical for updated machines, most of the benchmarks come in at approximately 4-10% higher than their predecessors, while the increased efficiency of Intel's Haswell chips has allowed Apple to improve overall battery life. Apple has also made the 13-inch Retina MacBook Pro thinner, matching the thickness of its larger sibling but at the cost of a slight decrease in battery capacity from 74 Whr to 71.8 Whr.

The base 13-inch Retina MacBook Pro had shown up back in June in results from Geekbench 2 benchmarking software, which uses different baseline scores than the current Geekbench 3. A 15-inch model also showed up in early July, but with a chip that Apple ultimately elected not to use in yesterday's update. The chip in that early machine was Intel's i7-4950HQ at 2.4 GHz, but Apple bumped the high-end chip in the released lineup to the i7-4960HQ at 2.6 GHz, a new chip that was officially launched just last month.