Apple increasingly reliant upon success of iPhone

Across the Bay Area and beyond, the Apple faithful rose before dawn Friday, lined up on the cold, hard concrete and then forked over hundreds of dollars — all so they could be first to own the iPhone 6.

What they might not have realized is that Apple needs them just as much as they feel they need the latest versions of its iconic phone.

Seven years after its debut, the iPhone has become the lifeblood of Apple. The pocket-size powerhouse already drives more than half of the company's sales, and that figure is likely heading north. Outfitted with the larger screens that consumers crave, the iPhone 6 and 6 Plus sparked record pre-orders last week and flew off the shelves Friday. With sales for the rest of Apple's gadgets largely flat, the company's fortunes will rise and fall with the iPhone, analysts say.

As Colin Gillis of BGC Financial put it: "Apple is the iPhone company."

It's an ironic turn for a company that began as a computer maker determined to be known for more than its flagship Mac. Apple dropped "Computer" from its name in 2007, the year the original iPhone was released, to cement the shift to a broader array of personal electronics.

To be sure, the iPhone is a great device to lean on — it yields huge profits for Apple, and the global smartphone market is red hot. Nevertheless, analysts say, companies generally try to draw their sales from various products to hedge against risk.

"It's dangerous to have all your eggs in one basket," said Roger May of Endpoint Technologies Associates.

What's more, growth in the smartphone market is increasingly coming from the lower end, but the iPhone is getting pricier. The iPhone 6 Plus starts at $299 with a two-year contract — $100 more than Apple's marquee device last year.

"If the premium space slows down, that would be negative for Apple because they are so dependent on the iPhone," Gillis said.

Yet for some consumers, Apple must simply name its price. The company announced that it received a record 4 million pre-orders for the iPhone 6 and 6 Plus on the first day they were available, twice the volume it reported for the iPhone 5.

Some of those sales may be coming at the iPad's expense. As smartphones expand and tablets shrink, analysts suspect that many consumers will not see the need to lug both devices around. The iPad Mini seems particularly vulnerable, measuring 7.9 inches diagonally, compared with the 5.5-inch display of the iPhone 6 Plus.

Yet Apple probably isn't afraid of cannibalizing sales of the Mini, said analyst Gene Munster, noting that the company gleans much more profit from sales of its premium iPhone.

"They would rather sell you one iPhone 6 Plus than an iPhone and an iPad," said Munster, who is a managing director at research firm Piper Jaffray.

And strong iPhone sales could bode well for other gadgets in Apple's portfolio. The iPhone is designed to work best with other Apple devices, perhaps enticing consumers who start with the smartphone to rack up more products.

After introducing the latest iPhones last week at a flashy event in Cupertino, Apple executives rolled out Apple Pay, a mobile payments service, and the Apple Watch, a timepiece that tracks users' fitness.

Yet despite the new offerings, the iPhone's dominance doesn't seem to be letting up anytime soon. The Apple Pay service is built into the latest iPhones as well as the smartwatch. And Apple Watch users must have an iPhone on their person to take advantage of most of the timepiece's features.

"You can't have either of them without the iPhone, plain and simple," said Ramon Llamas, an analyst at technology research firm IDC.

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Alibaba stock soars in jubilant trading debut

NEW YORK — Alibaba debuted as a publicly traded company Friday and swiftly climbed nearly 40 percent in a mammoth IPO that offered eager investors seemingly unlimited growth potential and a way to tap into the burgeoning Chinese middle class.

The sharp demand for shares sent the market value of the e-commerce giant soaring well beyond that of Amazon, eBay and even Facebook. The initial public offering was on track to be the world's largest, with the possibility of raising as much as $25 billion.

Jubilant CEO Jack Ma stood on the floor of the New York Stock Exchange as eight Alibaba customers, including an American cherry farmer and a Chinese Olympian, rang the opening bell.

"We want to be bigger than Wal-Mart," Ma told CNBC. "We hope in 15 years, people say this is a company like Microsoft, IBM, Wal-Mart. They changed, shaped the world."

The company's online ecosystem stands apart from most e-commerce rivals because it does not sell anything directly, preferring to connect individuals and small businesses. It enjoyed a surge in U.S. popularity over the past two weeks as executives made sales pitches based on Alibaba's strong revenue and big ambitions.

"There are very few companies that are this big, grow this fast and are this profitable," Wedbush analyst Gil Luria said.

Trading under the ticker "BABA," shares opened at $92.70 and hit nearly $100 within hours. By the end of the day, the stock rose $25.89, or 38 percent, to close at $93.89.

Some Institutional investors, such as banks or hedge funds, were able to buy the stock at $68 per share, the amount set Thursday evening. Most other investors had to wait until shares started trading publicly, which meant paying a much higher price after adjustments for demand.

Alibaba's Taobao, TMall and other platforms account for some 80 percent of Chinese online commerce. Most of the company's 279 million active buyers visit the sites at least once a month on smartphones and other mobile devices, adding to the stock's attractiveness as online shopping shifts away from laptop and desktop machines.

Online spending by Chinese shoppers is forecast to triple from its 2011 size by 2015. Beyond that, Alibaba has said it plans to expand into emerging markets and, eventually, into Europe and the U.S.

The company does not compete with its merchants or hold inventory, serving instead as a conduit that links buyers and sellers of all kinds.

"The business model is really interesting. It's not just an eBay. It's not an Amazon. It's not a Paypal. It's all of that and much more," said Reena Aggarwal, a professor at Georgetown.

Yet the track record for Chinese stocks in general does not inspire confidence. Over the last two decades, they have earned a reputation for burning investors in both the U.S. and China. Many of those that do post gains fail to keep pace with inflation. Returns have been depressed by a range of factors, including fraud allegations, questionable accounting and cumbersome regulations.

Analysts say the $90-plus price range is a fair valuation for the shares, but one fund manager suggested Friday that the price might not stay that high.

That price "might be at least for the moment the higher end of the trading range as investors get comfortable with the company," said Kathleen Smith, IPO exchange-traded fund manager at IPO research firm Renaissance Capital.

Alibaba's revenue from the quarter ending in June surged 46 percent from last year to $2.54 billion. Its earnings climbed 60 percent to nearly $1.2 billion, after subtracting a one-time gain and certain other items.

In its last fiscal year ending March 31, Alibaba earned $3.7 billion, making it more profitable than eBay Inc. and Amazon.com Inc. combined.

Based in Ma's hometown of Hangzhou in eastern China, Alibaba began in 1999 when Ma and 17 friends developed a fledgling e-commerce business on the cusp of the Internet boom. Today, its main platforms are its original business-to-business service, Alibaba.com, consumer-to-consumer site Taobao and TMall, a place for brands to sell to consumers.

Friday's closing price gave the company a value of $231.44 billion, compared with $150 billion for Amazon and $67 billion for eBay.

Alibaba offered 320.1 million shares for a total offering size of $21.77 billion. Underwriters have a 30-day option to buy up to 48 million more shares.

The IPO easily eclipsed the $16 billion Facebook raised in 2012, the most for a technology IPO. If all of its underwriters' options are exercised, it would also top the all-time IPO fundraising record of $22.1 billion set by the Agricultural Bank of China Ltd. in 2010.

Gartner analyst Andrew Frank said Alibaba's success shows that Chinese Internet companies are beginning to challenge Silicon Valley.

"It's not the first Chinese company we've seen in the Internet space, but it's certainly the biggest one that seems to be resonating," he said. "It's a symbol that the Internet dreams of wealth and power are not just limited to a few small cities in the West Coast in the U.S."

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Moody's backs UK bond rating after Scotland vote

NEW YORK — Moody's Investors Services maintained its rating on United Kingdom government-backed bonds Friday, a day after voters in Scotland decided against national independence.

Moody's affirmed an 'Aa1' rating, its second-highest rating, and a stable outlook on U.K. government bonds. The firm added that it has a stable outlook on the bonds, which means it doesn't believe downgrades are likely in the next year to 18 months, and it said the U.K. has "very high" economic strength.

"While the political process going forward will likely lead to further devolution of powers to Scotland and some changes in the fiscal transfers, the rating agency does not anticipate that these will have a material impact on the quality of the U.K.'s institutions, or its financial strength," said Moody's analyst Sarah Carlson.

The firm said in May that if Scotland chose to become independent, the U.K.'s credit profile would not have changed very much and it probably would not have lowered its rating.

On Thursday 55 percent of Scottish voters voted against breaking away from England, Northern Ireland and Wales to become an independent country.

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iPhone 6 buyers pack Back Bay Apple store

Apple devotees are trying out their new supersized cellphones after they lined up outside the Apple store on Boylston Street early yesterday to be the first to get their hands on the new iPhone 6 and iPhone 6 Plus.

Many of them woke up at the crack of dawn, and some even camped out overnight, in a scene that was repeated across the country yesterday. The iPhone 6 has a 4.7-inch screen and the iPhone 6 Plus features a 5.5-inch screen.

More than 4 million pre-orders for the iPhone 6 and 6 Plus were placed the day they became available online last week. And if supplies don't run out, analysts predict that Apple will sell more than 10 million iPhones this weekend.

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BRA backs housing on Mission Hill

City officials this week endorsed a proposed 
$138 million project that stands to transform the lower end of Mission Hill with the redevelopment of two long-vacant lots into 305,750 square feet of apartments and commercial space.

Mission Hill Neighborhood Housing Services' project calls for 88 apartments, 196,000 square feet of office space, 10,000 square feet of retail and parking on Parcel 25, located across from the MBTA's Roxbury Crossing Station.

The Boston Redevelopment Authority on Thursday approved the project, which is expected to be completed in three phases.

"This project will do for the down-slope of Mission Hill what One Brigham Circle has done for the top of Mission Hill," former Boston City Councilor Michael Ross testified at the BRA meeting. One Brigham Circle is a 190,000-square-foot office and retail building, with Stop & Shop as an anchor tenant, that's adjacent to the Longwood Medical Area.

The new project site encompasses nearly two acres bordered by Tremont, Gurney and Station streets. The largest of the two lots, Parcel 25, is former MBTA property that has sat vacant since the 1960s, when it was cleared for an extension of Interstate 95 that was never built.

"This will really activate the area and be a nice new gateway for that neighborhood," BRA spokesman Nick Martin said.

The BRA also gave the go-ahead for Boston University's $140 million, nine-story Center for Integrated Life Sciences and Engineering, which will be constructed on a parking lot at 610 Commonwealth Ave., just outside Kenmore Square.

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Chamber eyes innovator

Expect big changes, including strengthening the connection with innovation businesses, once the Greater Boston Chamber of Commerce finds a new leader, said the head of the search committee looking for a replacement for retiring President Paul Guzzi.

"We're not going to be able to find another Paul Guzzi," said Chamber Chairman John Fish, the CEO of Suffolk Construction. "What we need is to find someone different from Paul that represents where the puck is going in our community, not where it is today."

Fish said the innovation economy is one of the Chamber's priorities for the years ahead, though he stopped short of promising the organization's next president — who would instantly become a major player among the city's power brokers — will come from that sector.

"I wouldn't specifically say that that's a prerequisite, but what I would say is it's a direction the Chamber's going and needs to go to be responsive to the constituency we represent and probably more importantly want to represent," said Fish.

Fish said he expects the search committee — which he and Hill Holliday CEO Karen Kaplan will co-chair — will pick a replacement by its annual meeting in May.

Guzzi, who is expected to stay on until then, told the Herald that infrastructure, innovation and talent retention are the key items the Chamber should push toward in the years ahead.

"I am optimistic about the future, the future of Greater Boston, the future of the Chamber, playing an even more prominent role going forward," Guzzi said yesterday.

The Chamber will back defeat of Question 1, which would repeal the Legislature-passed indexing of the gas tax to inflation, said Guzzi.

It should also work harder to retain young talent and create more college internships, as well as connect more innovation businesses to the Chamber and to other companies, said Guzzi.

He doesn't have anyone in mind to replace him, but added: "I think having some business experience would be very helpful, having knowledge in and about government I think is helpful and having a sense of this region and the state."

Guzzi, 72, is a former Newton state representative and served a single term as secretary of state in 1974.

He ran for U.S. Senate in 1978, but finished second in the five-way Democratic primary to eventual winner, then-Lowell Congressman Paul Tsongas.

He's been Chamber president since 1996.

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Hub’s data chief chats

Boston's chief information officer was in the Innovation District yesterday, talking about technology and city services with constituents.

"Technology is something that is incredibly important to people," said Jascha Franklin-Hodge.

"Issues around connectivity, free Wi-Fi, what we're doing to make sure that we support technology in our schools, these are things that are critically important to people around the city."

Franklin-Hodge said connecting with the city's tech community is part of his job, along with making sure technology in City Hall is running well and up-to-date.

"We have a responsibility around how we engage the technology community, making sure that we're a good partner," he said. "I don't think we can think about the role of the CIO as being solely focused on internal technology initiatives. It's really how do we help make sure that the city stays a leader in technology-driven government and ensuring that the technology that our citizens have access to ... is just top notch."

Franklin-Hodge was in the Innovation District with the City Hall To Go truck — which offers basic services such as birth certificates and dog licenses — as part of the city's "Chief Chats."

"City Hall to Go allows Boston residents to utilize various city services in their own neighborhoods and our Chief Chats are an opportunity for residents to take this a step further, and directly engage with leaders in the Walsh Administration," said spokeswoman Gabrielle Farrell.

Other chief chats have included Chief of Staff Daniel Koh and Sheila Dillon, head of the Department of Neighborhood Development.

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Mansion in fantasy league of its own

This 7,000-square-foot Tudor home on five acres in South Easton has been extensively upgraded, including a "greening" that added solar panels and hot water storage, a pellet stove and blown-in insulation, which have substantially cut utility expenses.

Originally built for former Patriots defensive back Ronnie Lippett in 1988, the property has a football field-sized grass side yard — 95 yards long to be precise.

The current owners have made major upgrades since buying the home nine years ago.

The six-bedroom home has a brick exterior with ­Tudor stucco-style Hardie­Plank along the second floor, along with a 10-zone Buderus high-­efficiency boiler. Two years ago they added eight solar roof panels and two ­solar hot water storage tanks.

This year they installed Croatian marble with embedded seashell fossils in the entry foyer, redid the roof and refinished hardwood floors throughout the house.

The double-height family room, with a pellet stove set inside a Tennessee marble rear wall, has been opened up on both sides. An adjacent kitchen redone in 2004 has oak cabinets and high-end appliances. Off the kitchen is a formal dining room with paneled wainscoting and crown molding redone in 2005 and a newly recarpeted living room with a marble fireplace.

Behind the kitchen sits a sunroom built in 2000 with windows, skylights and glass doors leading out to an in-ground heated pool with an outdoor shower built in 2001.

There's even a bedroom suite on the first floor with a redone bathroom, but it pales in comparison to the second floor master bedroom suite. This large space has oak flooring with a quartz fireplace, Bose surround-sound, four large closets and a master bathroom redone in 2005 with slate floors, a walk-in shower and granite-topped vanities with custom cherry cabinetry.

The signature space on the second floor is a large game room with a built-in granite bar, an electric fireplace and an iron spiral staircase down to the backyard.

The 1,900-square-foot base­­ment, finished in the 1990s, has a full kitchen, full bathroom, bedroom, living and exercise rooms, making it ideal for an au pair or in-law suite, but it could use some freshening.

There's an attached three-car garage, and the current owners just added a 30-­kilowatt generator and propane tanks that can power the entire home for two weeks.

Home Showcase

• Address: 430 Depot St., South Easton
• Bedrooms: Six
• Bathrooms: Four full, one half
• List price: $1,150,000
• Square feet: 7,000
• Price per square foot: $164
• Annual taxes: $11,379
• Location: About a mile and a half from shopping along Route 138 in Easton
• Built in: 1988; upgraded 2005-2014
• Broker: Chris Mather of Tri Town Associates at 508-644-2900

Pros

• Green additions including solar panels, vents and hot water tanks, pellet stove, blown-in insulation, HardiePlank exterior
• Five-acre lot with 95-yard-long grass side yard
• Large master bedroom suite with four closets and redone slate bathroom
• Second-floor game room with built-in bar

Cons:

• Finished basement could use some freshening up
• Large property to maintain

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Outlander no stranger to good value

When you decide to jump into the small crossover utility vehicle field, what you want at the end of the day is a car that is dependable, inexpensive to run and fun to drive.

I think the 2105 Mitsubishi Outlander Sport SE with all-wheel control fits the bill and it does it without fanfare.

Mitsubishi is a longtime manufacturer and has delivered simple, well-made and often option-rich cars for years. The SE spins on a dime and can be parked in a snap, making this a nifty around-town car. Good gas mileage (24 city, 30 highway) and decent performance from the 2-liter, 148-horsepower engine will have you driving by more gas pumps than stopping, but it could use more giddy-up on the highway. Once up to highway speed it cruised along pretty happily, particularly in gas sipping ECO mode.

The four-wheel-drive option is when the car performed the best. The car felt twitchy in two-wheel drive, but settled nicely for a more secure feeling once I rolled into four-wheel mode. ECO, without a doubt, squeezes better mileage, but predictably the performance suffers.

There's a pro and con to the shorter body on the original wheelbase. On the plus side, the interior passenger space remains roomy and comfortable for five, but the con is that cargo space gets sacrificed. So if you need the big deck, stick with the original Outlander.

The 2015 sees improvements on the simple clean lines by adding larger wraparound headlights and a better CVT transmission that more closely resembles a traditional seven-speed. It shifts smoothly without hesitation when you hit the gas.

The 710-watt Rockford Fosgate sound system included in the upgraded Touring Package absolutely rocks. It seems funny to hear this big sound in a low- to mid-price-point car. But since I found the road noise in the cabin to be elevated, the sound system simply overpowered it. I did find the interface for the entire system to be dated.

The interior is clean and decked out in well-fitted plastics. The Touring Package kicked in power adjustable leather seating surfaces that were comfortable and supportive. I also liked the optional panoramic sunroof, keyless entry and backup camera.

Although you can get a base Outlander for about $22,000, our Touring Package-rigged SE rang the register at $29,945. This is a worthy contender for cars like the Nissan Juke, Subaru Crosstrek and the VW Tiguan.

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Astronauts getting 3-D printer at space station

CAPE CANAVERAL, Fla. — The 3-D printing boom is about to invade space.

NASA is sending a 3-D printer to the International Space Station in hopes that astronauts will be able to one day fix their spacecraft by cranking out spare parts on the spot.

The printer, made by a Northern California company called Made in Space, is among more than 5,000 pounds of space station cargo that's stuffed into a SpaceX Dragon capsule that was supposed to lift off before dawn Saturday. Rainy weather forced SpaceX to delay the launch until Sunday.

Besides real-time replacement parts at the station, NASA envisions astronauts, in the decades ahead, making entire habitats at faraway destinations like Mars.

"If we're really going to set up shop on Mars," we have to do this, Jeff Sheehy, NASA's senior technologist, said Friday. "We really can't afford to bring everything we need for an indefinite amount of time. We'll need to get to the point where we can make things that we need as we go."

At Kennedy Space Center, the company showed off a number of objects made by its 3-D printers. On display was a scaled-down model of an air filter that the Apollo 13 astronauts devised to survive their aborted moon mission in 1970. It took five hours to print the model in a lab.

SpaceX is making the supply run for NASA, the same California company that just won a huge contract to deliver U.S. astronauts to the space station. Its Falcon 9 rocket with an unmanned Dragon is scheduled to blast off at 1:52 a.m. Sunday; slightly better weather is expected.

Other Dragon payloads high on the cool or curious factor: a mouse X-ray machine and 20 mice; 30 fruit flies expected to have a population explosion in orbit, metal plating samples for a private research effort to build stronger golf clubs, and a $30 million instrument to measure the surface wind over Earth's oceans and improve hurricane forecasting.

The small 3-D printer on board is a demo unit meant to churn out sample items made from the same type of plastic used for Lego bricks.

It was designed to operate safely in weightlessness inside a sealed chamber. The printing process is the same as on Earth, creating an object with layer upon layer of plastic.

Once returned to Earth, the little 3-D creations will be "pulled and twisted and peeled and subjected to a lot of tests to determine the quality of the parts," said Sheehy.

Combined with efforts on the ground to make 3-D rocket parts out of metal — even entire engines — the space demonstrations "will give us confidence that the stuff we make by this method, even though it's new and innovative" does, indeed, have the durability of traditional parts, he said.

The space 3-D printer is barely a foot tall, 9½ inches wide and 14½ inches deep, counting the knobs on the front. A commercial 3-D printer — twice the size and dubbed "big brother" — will fly up next year, followed by a grinding machine for recycling discarded 3-D pieces.

"This is a huge, huge time for us," said Brad Kohlenberg, business development engineer for Made in Space.

The Mountain View, California, company has a staff of fewer than 25; most of them traveled to Cape Canaveral for the launch attempt.

This will be the fifth space station shipment for SpaceX, counting the 2012 test flight. The space agency also is paying Orbital Sciences Corp. of Virginia to make periodic deliveries.

SpaceX, along with Boeing, won huge contracts Tuesday for delivering U.S. astronauts to the space station beginning in 2017. That will enable NASA to stop relying so heavily on Russia, currently the only space station partner able to send crews up and down.

The Hawthorne, California, company founded by billionaire Elon Musk is shooting for its first crewed launch in 2016. The flight test crew will be a mix of NASA and SpaceX employees, confirmed Hans Koenigsmann, vice president of mission assurance for SpaceX. He said the company is still working out the details on whom to send up.

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Online:

Made in Space: http://www.madeinspace.us/

SpaceX: http://www.spacex.com/

NASA: htttp://www.nasa.gov

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