Posts Tagged ‘RIM’

dean-wormeriPhonAsia issues our 2nd Dean Wormer Award


And the co-winners are … drum roll please … Royal Bank of Canada and Canaccord Adams

iPhonAsia comment: Opinion Alert! The following post is just one man’s opinion (yes bias) and our view is unabashedly pro Apple (AAPL). See also related post > Does RBC have a leaky Chinese Wall?

In mid January ’09, two Canadian investment research firms turned negative on Apple (AAPL) and positive on Research in Motion (RIMM). Specifically, on January 18, 2009 the Royal Bank of Canada’s Mike Abramsky placed a sell recommendation on Apple with a $70 price target. AAPL at that point in time was trading at $82.83. Soon after this RBC downgrade, Apple posted Q1 2009 earnings. Apple handily beat Street analysts’ consensus. As of today (2/6/09), Apple (AAPL) is hovering near $100 per share … some 30 points above RBC’s target price. Not long after RBC went negative on Apple (AAPL), Canaccord Adams issued a “pro-blackberry, anti-iPhone” (my characterization) research report. EXCERPT: “Canaccord believes Apple’s earnings suggest that Research In Motion has retaken its market share dominance over Apple” Canaccord placed a buy rating on RIMM with a target of $60 and a hold rating on AAPL with a target of $90.

When will RBC’s Mike Abramsky raise his $70 price target on Apple (AAPL)?

There are far less capable Apple (AAPL) analysts (e.g. Morgan Stanley’s Katie Huberty) than our Canadian friends, yet I have to wonder why a relatively sharp analyst like Mike Abramsky would dare go so negative on Apple (AAPL) and just a day later go so positive on Research in Motion (RIMM). If it’s not ignorance then what is the motivation for RBC’s and Canaccord’s calls?  We suspect that there is a decidedly blackberry odor blowing in the north winds. In my opinion, there may also be biases that leaked through the firewalls that are supposed to separate a firm’s “research” from “investment banking” activities. 

The North Winds Royally Blow it on Apple (AAPL)

The following is an excerpt from a Silicon Alley Insider post on January 18, 2009. The Henry Blodget post was titled: Apple Cut To SELL On Weak Management Team (AAPL). Read > HERE ….

EXCERPT: A Wall Street analyst has said what a lot of folks have been thinking, which is that Apple (AAPL) is a far weaker company without Steve.  Mike Abramsky of RBC cut the stock to SELL with a $70 target–a stark contrast to the near-$200 hallucinations that most of the Street is still maintaining.

The editor of iPhonAsia (Dan B) added a few comments to this post … see below. Note: This is a redacted version … full post/comments can be found > HERE


Dan B (URL) said:
Apple has a superb bench to support Steve Jobs. Apple Chief Operating Officer (COO) Tim Cook is an extremely capable executive who will take the helm at Apple and not miss a beat. As an Apple shareholder, I’ve had responsibility of attending Apple, Inc. shareholder meetings and listening to every Apple (AAPL) quarterly earnings conference call. Tim Cook presides at these events and many others. I am comfortable with Tim Cook running Apple. He is a confident and capable executive who is very much on top of Apple’s business operations, product development path and financials.              

Here are a couple of links re Apple’s executive management team and Tim Cook, Apple COO… 

Anna said:
Abramsky works for RBC (Royal Bank of Canada) Capital. The CEO of RBC sits on RIM’s board, and RBC has a banking relationship with Research in Motion (also HQ’ed in Canada). Apple is giving RIM a run for their money in the smart phone market. Do you think Abramsky’s call is without bias?
dj said:
Oh Anna please grow up….there are 10,000 anal_yst kicking down RIMM everyday just because there Canadian……Mactards are so upset that AAPL is trending down an little (1/10th the size) old RIMM moving up.
Dan B (URL) said:
You need to place a large asterisk on RBC’s AAPL assessment … There are supposed to be firewalls in place to prevent bias from creeping in to analysts’ research opinions due to investment banking business activities of their own firm (Henry is an authority on this subject). However, I rather suspect RBC’s partnership with RIM (RIMM) has had an impact on RBC’s Aramsky’s view of Apple. Read here > http://www.phonecontent.com/bm/news/2053.shtml              

RBC (Royal Bank of Canada) disclosure information: RBC is a major investor in RIMM. In addition, RCB’s Chief Operating Officer, Barbaras Stymiest, sits on the Board of Directors at RIMM. 

“RIM, RBC and Thomson Reuters share the common belief that mobile applications and services will propel the industry forward and the BlackBerry Partners Fund is being formed to help fuel innovation and activity in the mobile ecosystem.” 

dj said:
ah Dan B..Barbaras Stymiest,has not been with RBC for over 6yrs and does not have seat on the RIMM board…..maybe you should not beleive everything you read on the Net before you do some fact checking…..but so sad for you Mactards
Anna said:
dj —              

“Barbara G. Stymiest, FCA has been the Chief Operating Officer of Royal Bank of Canada (also known as RBC Financial Group) of Liberty Life Insurance Company since November 1, 2004. Ms. Stymiest is responsible at Royal Bank of Canada for its strategic development as well as all corporate functions including risk management, finance and treasury. She is responsible at Liberty Life Insurance Co. for directing enterprise strategy, as well as all corporate functions including …” 


Also, from RBC’s website — somebody better tell them if she’s not the Chief officer, because she’s still listed there: 

Anna said:
Also, the RBC site lists her directorship with RIM:              

“Ms. Stymiest currently serves as a director of RBC Dexia Investor Services Limited, Research in Motion Limited, Symcor Inc., Canadian Institute for Advanced Research, Royal Ontario Museum and Toronto Rehabilitation Institute Foundation. She has also served on a … ” 

from http://www.rbc.com/newsroom/down2-stymiest.html 
(The Royal Bank of Canada website)************

Dan B said:
Gee… What a surprise … RBC just raised estimates for RIM today.
Dan B (URL) said:
The “firewalls” between analysts and their firm’s banking activities are supposed to prevent bias from creeping into reports on companies they follow. Yet this bias does exist. Not only are their BOD conflicts at RBC, there are also direct investments by RBC (RBC Venture Partners) in RIM.              


“Monday, RIM announced the formation of a $150 million fund to invest in services and applications for their rival Blackberry platform. Canadian VC firms JLA Ventures and RBC Venture Partners are lending expertise to manage the fund. The fund will be called the Blackberry Partners Fund. The fund is anchored by capital commitments from RIM, RBC and Thomson Reuters.”

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NOTE: iPhonAsia would like to give a special shout out to Jeff Macke, the recipient of our 1st Dean Wormer Award. Jeff responded through several witty post comments. He can dish out with the best of them and he made a number of excellent points. Thanks for being a good sport Jeff … but you still get the award 8)
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iSuppli: BlackBerry Storm costs $4 more than its purchase price to build > HERE

picture-120In a fiscal climate where profit margin reigns intensely supreme, we’ve got yet another dollop of bad news to heap upon the parfait of pain that is the $199 (after $50 mail in rebate) BlackBerry Storm.Research firm, iSuppli, estimates that the cost for the

Blackberry Storm Teardown

Blackberry Storm Teardown

components and assembly of RIM’s BlackBerry Storm are just shy of $203 — an estimate that does not include software development and uh, bug fixing costs or those attributed to patent licensing, physical distribution, marketing or anything else in the product lifecycle. The most costly component is the $35 Qualcomm MSM7600 processor that gives the Storm its dual GSM / CDMA personality. Now, $203 isn’t that big of a spread compared to the per unit cost of a $175 8GB iPhone 3G, $169 BlackBerry Bold, or $144 T-Mobile G1. However, the lost prophets profits add up quickly when you’ve moved over a million units globally.

P.S. We’re not implying that RIM is losing money here (the price is obviously carrier subsidized), only that the Storm is likely less profitable than its peers.

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The Eye of the (BlackBerry) Storm


iSuppli took apart Research In Motion’s BlackBerry Storm to determine the cost of its components. Guess what? The iPhone parts are cheaper

bw_255x54EXCERPT: As the battle for the smartphone market heats up, comparisons abound between Research In Motion’s BlackBerry Storm, released in November, and Apple’s iPhone. For starters, both devices boast a touchscreen, forgoing the buttons found on more conventional phones. But the more important comparison, from the bottom-line perspective, lies in which device carries a fatter margin. And on a cost-per-unit basis, the advantage for the moment appears to belong to Apple (AAPL). A new analysis of the BlackBerry Storm by market research firm iSuppli indicates the cost of components and manufacturing for RIM (RIMM) is slightly less than $203. By comparison, those costs for Apple’s iPhone 3G, the second iteration of the device, are less than $175. iSuppli’s estimates factor in only the cost of components and assembly and don’t include estimates for the cost of software, licensing of patents, or distribution. But they do help fill in the blanks on how profitable a device may be. 

Though it has yet to disclose official sales data on the Storm, published reports say RIM sold half a million during its first month on the market. In August-September 2007, the first two months the first-generation iPhone was on the market, Apple sold 1.1 million units. Apple quickly ramped up sales and moved more than 2.3 million during the following quarter. RIM declined to comment for this story.


Rapid-fire sales are bringing the iPhone to within spitting distance of the BlackBerry, which has been on the market for about a decade. During the quarter that ended on Dec. 2, RIM added 2.6 million new accounts and sold 6.7 million devices, bringing the total of subscriber accounts worldwide to 21 million. In its most recent quarter, Apple sold 4.4 million iPhones, bringing its total to more than 17 million.

Verizon Wireless, a joint venture of Verizon Communications (VZ) and Vodafone (VOD), sells the Storm for $249 in the U.S. and then offers a $50 mail-in rebate, reducing the purchase price to $199 for customers who agree to a two-year wireless plan. AT&T (T), Apple’s exclusive partner in the U.S., sells the iPhone for $199 with a two-year plan.

While the iPhone has a unique multi-touch screen that lets users use two fingers at once for various gestures when using applications like the Web browser, a common criticism among its users is that typing on the iPhone is tricky because there’s no tactile feedback. In RIM’s case, the Storm’s screen is “clickable,” essentially one big button, creating the tactile sensation that makes virtual on-screen buttons more like real buttons. On the other hand, Apple’s screen boasts multi-touch capabilities that mean it can register as many as 10 touches simultaneously, giving the software applications a lot of flexibility.


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Excerpts from Apple’s Q4 earnings call on Oct. 21, 2008 – Steve Jobs: .“iPhone business has grown to about $4.6 billion, or 39% of Apple’s total business, clearly too big for Apple management or investors to ignore. 

 adjusted sales for the quarter were $11.68 billion, 48% higher than the reported revenue of $7.9 billion, while adjusted income was $2.44 billion — if this isn’t stunning, I don’t know what is, all due to the incredible success of the iPhone 3G.

I would like to now highlight two remarkable milestones resulting from iPhone’s outstanding performance last quarter. The first is that Apple beat RIM. In their most recent quarter, Research in Motion, or RIM, reported selling 6.1 million BlackBerry devices. Compared to our most recent quarter sales of 6.9 million iPhones, Apple outsold RIM last quarter and this is a milestone for us. RIM is a good company that makes good products and so it is surprising that after only 15 months in the market, we could outsell them in any quarter.

But even more remarkable is this — measured by revenues, Apple has become the world’s third-largest mobile phone supplier. I know this sounds crazy, but it’s true — as measured in revenues, not units, Apple has become the third largest mobile phone supplier. Let’s look at the ranking — Nokia is clearly number one at 12.7 billion; Samsung number two at 5.9 billion; Apple is number three at 4.6 billion; Sony Ericsson, number four at 4.2; LG, number five at 3.4 billion; Motorola, number six at 3.2; and RIM number seven at 2.1. Pretty amazing.”

iPhone Death Watch


“There’s no chance that the iPhone is going to get any significant market share. No chance. It’s a $500 subsidized item. They may make a lot of money. But if you actually take a look at the 1.3 billion phones that get sold, I’d prefer to have our software in 60% or 70% or 80% of them, than I would to have 2% or 3%, which is what Apple might get.”
Steve Ballmer, Microsoft CEO, 30 April 2007 




“We’ve learned and struggled for a few years here figuring out how to make a decent phone. PC guys are not going to just figure this out. They’re not going to just walk in.”
Palm CEO Ed Colligan, commenting on then-rumored Apple iPhone, Nov. 16, 2006

“You could look at Apple and the iPhone as something that’s come out of nowhere, essentially, and changed the dynamics of the smartphone space–there’s every opportunity to do that in our case as well,”
Palm CEO Ed Colligan, May 28, 2008

“[iPhone] just doesn’t matter anymore. There are now alternatives to the iPhone, which has been introduced everywhere else in the world. It’s no longer a novelty.”
Eamon Hoey, Hoey and Associates, April 30, 2008 




“We are not at all worried. We think we’ve got the one mobile platform you’ll use for the rest of your life. [Apple] are not going to catch up.”
Scott Rockfeld, Microsoft Mobile Communications Group Product Manager, April 01, 2008

“Microsoft, with Windows Mobile/ActiveSync, Nokia with Intellisync, and Motorola with Good Technology have all fared poorly in the enterprise. We have no reason to expect otherwise from Apple.”
Peter Misek, Canaccord Adams, March 07, 2008

“[Apple should sell 7.9 million iPhones in 2008]… Apple’s goal of selling 10 million iPhones this year is optimistic.”
Toni Sacconaghi, Bernstein Research, February 22, 2008

eb_xpromo_stone_120x1201“What does the iPhone offer that other cell phones do not already offer, or will offer soon? The answer is not very much… Apple’s stated goal of selling 10 million iPhones by the end of 2008 seems ambitious.”
Laura Goldman, LSG Capital, May 21, 2007

“How do you deal with that? How do they deal with us?”
Ed Zander, Motorola CEO/Chairman May 10, 2007

“The iPhone is going to be nothing more than a temporary novelty that will eventually wear off.”
Gundeep Hora, CoolTechZone Editor-in-Chief, April 02, 2007

“Apple should pull the plug on the iPhone… What Apple risks here is its reputation as a hot company that can do no wrong. If it’s smart it will call the iPhone a ‘reference design’ and pass it to some suckers to build with someone else’s marketing budget. Then it can wash its hands of any marketplace failures… Otherwise I’d advise people to cover their eyes. You are not going to like what you’ll see.”
John C. Dvorak, Bloated Gas Bag, March 28, 2007

“Even if [the iPhone] is opened up to third parties, it is difficult to see how the installed base of iPhones can reach the level where it becomes a truly attractive service platform for operator and developer investment.”
Tony Cripps, Ovum Service Manager for Mobile User Experience, March 14, 2007

“I’m more convinced than ever that, after an initial frenzy of publicity and sales to early adopters, iPhone sales will be unspectacular… iPhone may well become Apple’s next Newton.”
David Haskin, Computerworld, February 26, 2007

“Consumers are not used to paying another couple hundred bucks more just because Apple makes a cool product. Some fans will buy [iPhone], but for the rest of us it’s a hard pill to swallow just to have the coolest thing.”
Neil Strother, NPD Group, January 22, 2007

“The iPhone’s willful disregard of the global handset market will come back to haunt Apple.”
Tero Kuittinen, RealMoney.com, January 18, 2007

“[Apple’s iPhone] is the most expensive phone in the world and it doesn’t appeal to business customers because it doesn’t have a keyboard which makes it not a very good email machine… So, I, I kinda look at that and I say, well, I like our strategy. I like it a lot.”
Steve Ballmer, Microsoft CEO, January 17, 2007

“The iPhone is nothing more than a luxury bauble that will appeal to a few gadget freaks. In terms of its impact on the industry, the iPhone is less relevant… Apple is unlikely to make much of an impact on this market… Apple will sell a few to its fans, but the iPhone won’t make a long-term mark on the industry.”
Matthew Lynn, Bloomberg, January 15, 2007

“iPhone which doesn’t look, I mean to me, I’m looking at this thing and I think it’s kind of trending against, you know, what’s really going, what people are really liking on, in these phones nowadays, which are those little keypads. I mean, the Blackjack from Samsung, the Blackberry, obviously, you know kind of pushes this thing, the Palm, all these… And I guess some of these stocks went down on the Apple announcement, thinking that Apple could do no wrong, but I think Apple can do wrong and I think this is it.”
John C. Dvorak, Bloated Gas Bag, January 13, 2007

“I am pretty skeptical. I don’t think [iPhone] will meet the fantastic predictions I have been reading. For starters, while Apple basically established the market for portable music players, the phone market is already established, with a number of major brands. Can Apple remake the phone market in its image? Success is far from guaranteed.”
Jack Gold, J. Gold Associates, January 11, 2007

“Apple will launch a mobile phone in January, and it will become available during 2007. It will be a lovely bit of kit, a pleasure to behold, and its limited functionality will be easy to access and use. The Apple phone will be exclusive to one of the major networks in each territory and some customers will switch networks just to get it, but not as many as had been hoped. As customers start to realise that the competition offers better functionality at a lower price, by negotiating a better subsidy, sales will stagnate. After a year a new version will be launched, but it will lack the innovation of the first and quickly vanish. The only question remaining is if, when the iPod phone fails, it will take the iPod with it.”
Bill Ray, The Register, December 26, 2006

“The economics of something like [an Apple iPhone] aren’t that compelling.”
Rod Bare, Morningstar, December 08, 2006

“Apple is slated to come out with a new phone… And it will largely fail…. Sales for the phone will skyrocket initially. However, things will calm down, and the Apple phone will take its place on the shelves with the random video cameras, cell phones, wireless routers and other would-be hits… When the iPod emerged in late 2001, it solved some major problems with MP3 players. Unfortunately for Apple, problems like that don’t exist in the handset business. Cell phones aren’t clunky, inadequate devices. Instead, they are pretty good. Really good.”
Michael Kanellos, CNET, December 07, 2006

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CNBC’s Jim Goldman interviews Research in Motion CEO Jim Balsillie. See VIDEO and Read Jim Goldman’s post > HERE

More important background via > Boy Genius Report 

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Rex Crum interview with Creative Strategies President Tim Bajarin.  Discussion covers SDK, iPhone for enterprise, impact on RIM, VC Kleiner Perkins $100 million iFund to foster iPhone applications. 

“I’ve know John Doerr for a long time and he knows how bet on winning horses … and the fact that he is the one behind this [iFund] is a very big deal.”

> Watch this. You can’t fake this kind of enthusiasm. 



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Smart mobile devices one of fastest growing segments in tech industry, says Canalys

Canalys – February 7, 2008

Smart mobile device shipments hit 118 million in 2007, up 53 percent on 2006 levels, according to Canalys. The analyst firm’s latest market data shows how much the converged device market, which includes all smart phones and wireless handhelds, has grown over the past year. These, typically high-end, devices represented around 10 percent of the global mobile phone market by units in 2007, with annual growth of 60 percent — making them one of the fastest growing segments of the technology industry.


Annual highlights

v    Converged device shipments (smart phones and wireless handhelds) rose 60% to hit 115 million in 2007

v    Shipments of handhelds fell 47% to 3.0 million, from 5.6 million in 2006

v    APAC is the largest region by volume — 47.9 million units in 2007, ahead of EMEA at 45.9 million

v    North America is growing fast — shipments doubled to 20.9 million, from 10.3 million in 2006

v    Nokia remained global market leader, shipping 60.5 million smart phones

v    RIM shipments grew 112% year-on-year to 12.2 million, strengthening its second place position

v    By OS provider, Symbian leads on 67% share, followed by Microsoft on 13%, with RIM on 10%.

Q4 highlights — converged devices

v    Converged device shipments rose 72% year-on-year in Q4 2007, the highest growth seen all year

v    Nokia and RIM retained their number one and two positions

v    Apple achieved third place despite its limited geographic coverage, with 7% share

v    APAC converged device shipments rose 23%, EMEA 79%, and North America 222%

v    Symbian leads with 65% share, ahead of Microsoft on 12%, RIM on 11%, Apple on 7%, and Linux at 5%



Apple’s entry into this market in 2007 with the iPhone sparked a lot of media attention and speculation about how much it could disrupt the status quo and take share away from companies such as Nokia, RIM, Palm and Motorola.

“When you consider that it launched part way through the year, with limited operator and country coverage, and essentially just one product, Apple has shown very clearly that it can make a difference and has sent a wakeup call to the market leaders,” said Pete Cunningham, Canalys senior analyst. “What it must demonstrate now is that it can build a sustainable business in the converged device space, expanding its coverage and product portfolio. It will also need to ensure that the exclusive relationships that got it so far so quickly do not prove to be a limit on what it can achieve. Apple’s innovation in its mobile phone user interface has prompted a lot of design activity among competitors. We saw the beginnings of that in 2007, but we will see a lot more in 2008 as other smart phone vendors try to catch up and then get back in front. Experience shows that a vendor with only one smart phone design, no matter how good that design is, will soon struggle. A broad, continually refreshed portfolio is needed to retain and grow share in this dynamic market. This race is a marathon, but you pretty much have to sprint every lap.” iphone.png

Canalys estimates that Apple took 28% share of the fast growing US converged device market in Q4 2007, behind RIM’s 41%, but a long way ahead of third placed Palm on 9%. This was also enough to put Apple ahead of all Windows Mobile device vendors combined, whose share was 21% in the quarter according to Canalys figures.

In EMEA, where the iPhone officially launched part way through the quarter in only three countries, Apple took fifth spot behind Nokia, RIM, HTC and Motorola, but ahead of several established smart phone providers such as Sony Ericsson, Samsung and Palm.

Asia Pacific leads

For the full year 2007, as in 2006, the Asia Pacific region was the biggest in volume terms for converged device shipments. Apple has of course not yet launched the iPhone in the region, and many vendors who are successful in other parts of the world, such as RIM and Palm, have also made relatively little impact there so far. 

 060926_1f.jpg  nokia_logo2.jpg

Nokia continues to lead in the region, with more than 50% share in converged devices, ahead of Japanese smart phone vendors Sharp and Fujitsu. Motorola, despite enjoying fourth place, has seen its Linux-based smart phone shipments in the region fall 28% from their high in 2006.

Linux opportunity lingers

“The mobile Linux opportunity remains just that — an opportunity,” added Rachel Lashford, manager of Canalys in APAC, “Total Linux-based phone shipments in 2007 were almost flat on 2006. There is still too much fragmentation and not enough momentum for any single open standard around which the energy of developers, manufacturers and operators can coalesce.”

Nokia’s recent announcement of its intention to acquire Trolltech will no doubt have raised questions among some of Trolltech’s mobile phone producing partners about their Linux implementation strategy going forward. Meanwhile Google’s Android initiative, like others before it, remains an idea yet to turn into viable commercial products widely accepted by both mobile network operators and the mass market. Although off to a slow start, Canalys expects Linux will account for a significant proportion of mobile phone shipments within the next few years.

Lashford continued: “Rising consumer interest in having a rich, high-speed browsing experience on a mobile device, and the demand for visually sophisticated navigation and location applications will attract more companies into this arena. Flattening mobile data costs, and the advertising-funded possibilities generated by location-based services, will help reduce usage barriers. Improvements in the underlying technologies and innovation in user interfaces will lead to more usable devices. All these factors will help push the high-end mobile phone and smart phone segments forward. Meanwhile supply-side concerns around time to market and build and support costs will drive the industry to look for economies of scale. Mobile Linux can have a big part to play in this future, but at the moment the maturity of the other mobile operating systems puts them a long way ahead.”


In Q4 2007, Canalys estimates that Symbian had a 65% share of worldwide converged device shipments, ahead of Microsoft on 12% and RIM on 11%. By region, Symbian led in APAC and EMEA with 85% and 80% shares respectively, while in North America RIM was the clear leader on 42%, ahead of Apple on 27% and Microsoft at 21%.

About this data

The Canalys “Smart Mobile Device Analysis” services provide a coherent view of the total market for smart phones, handhelds and wireless handhelds. Clients receive quarterly market updates, regular reports, trends presentations and forecasts, and direct access to the Canalys analysts. Canalys offers services looking at the smart mobile device markets by country in Asia Pacific, North and Latin America and EMEA, as well as providing global market overviews. It also has services focusing specifically on the rapidly developing markets for mobile navigation and Linux-based mobile phones, and survey-based analysis of consumer and enterprise attitudes and preferences toward mobile applications, products and services.

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