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Apple Seeds OS X 10.7.3 Build 11D50 to Developers [Mac Blog]
Jan 25, 3:46AM
Apple has pushed out Build 11D50 of OS X 10.7.3 to registered developers. Apple continues to report no known issues in the seed notes, and asks developers to focus their testing on Address Book, iCal, Mail, Spotlight and Safari.
The previous builds had appeared to be close to a final release, but Apple is clearly still making some final tweaks to the update. The release description has indicated that the main improvements in OS X 10.7.3 will be support for several new languages and fixes for issues related to smart cards, directory services authentication, and Windows file sharing.
Apple Saw No Change in iPad Sales Following Kindle Fire Introduction
Jan 25, 12:45AM
Contrary to some reports, Apple CEO Tim Cook said today that the company hadn't seen any slowdown in iPad sales following the introduction of the much-hyped Kindle Fire tablet.
When asked by an analyst during today's quarterly earnings call about the impact on the iPad from lower priced tablets, Cook noted that the company sold a record 15.4 million iPads and that Apple doesn't consider "limited function tablets and e-readers to be in the same category as the iPad". A big reason for the iPads success, Cook believes, is that the ecosystem for the iPad is "in a class by itself".
We strongly believe in optimizing applications from day one to take advantage of the larger canvas. There are only a few hundred apps designed for the competition, versus more than 170,000 apps designed specifically for iPad. People who want an iPad won't settle for a limited function tablet.Apple execs have said before, and Cook reiterated today, that they believe tablets will pass the PC market in units, and that in the United States according to IDC, tablets outsold desktop PC's last quarter on a unit basis.
Throwing down the gauntlet to other tablet makers -- who thus far haven't been able to mount a significant challenge to the iPad -- Cook finished by saying Apple was going to "continue to innovate like crazy" and that the company will continue to compete with any company currently shipping tablets, or anyone who may enter the market in the future.
The next generation iPad 3 with a high-resolution Retina Display is expected to be introduced in the next few months.
Apple Sold 1.4M Apple TVs in Most Recent Quarter vs. 2.4M Sold in All of Fiscal 2011
Jan 25, 12:44AM
Apple sold 1.4 million Apple TV set-top boxes in the Q1 2012 quarter, Apple CEO Tim Cook disclosed during today's earnings call. Cook also disclosed that Apple sold 2.8 million Apple TVs in all of fiscal 2011, so the last quarter's results seem to represent a significance acceleration of sales for the product.
The current generation Apple TV was released at the beginning of fiscal 2011, which means Apple has sold 4.2 million 2nd Generation (iOS-based) Apple TVs in total. This is fairly impressive, especially considering Google's set-top box efforts have fallen flat thus far. However, even with these numbers, Tim Cook still considers Apple TV a "hobby" simply because on a dollar-for-dollar basis, the device barely makes a dent in Apple's earnings numbers.
Answering an analyst's question about Apple's living room plans for the future, Tim Cook dodged the obvious inference to an Apple-branded television set and instead noted:
We continue to add things to it, and I don't know about you but I couldn't live without it. We continue to pull the strings and see where it takes us.In the past year, Apple has added support to Apple TV for the streaming service from Major League Baseball, the National Basketball Association, and the National Hockey League, among others.
Apple to Hold Company Town Hall Discussing 'Exciting New Things' at Apple
Jan 25, 12:26AM
After today's record breaking results, Apple will be holding a company-wide Town Hall for employees discussing some "exciting new things going on at Apple." Tim Cook sent a company-wide email to employees, as posted by 9to5Mac:Thanks to everyone's hard work, we're off to a great start in 2012. Last week in New York we launched a groundbreaking initiative for education with iBooks textbooks, and today we reported the strongest quarter in Apple's history.Please join me tomorrow morning at 10 a.m. in Town Hall. We'll review our record-setting results and discuss some exciting new things going on at Apple.The meeting will be broadcast live to many sites in Cupertino and other Apple locations. Please check AppleWeb for details.These town hall meetings are restricted to Apple employees and it's unlikely Cook will announce anything too exciting. However, details of the event invariably leak out, and may show Apple's changes and direction internally. The Town Hall is taking place on Wed, Jan 25th at 10am Pacific.
Tim
Apple Reports Best Quarter Ever in Q1 2012: $13.06 Billion Profit on $46.33 Billion in Revenue
Jan 24, 9:36PM
Apple today announced financial results for the fourth calendar quarter of 2011 and first fiscal quarter of 2012. For the quarter, Apple posted revenue of $46.33 billion and net quarterly profit of $13.06 billion, or $13.87 per diluted share, compared to revenue of $26.7 billion and net quarterly profit of $6 billion, or $6.43 per diluted share, in the year-ago quarter. Gross margin was 44.7 percent, compared to 38.5 percent in the year-ago quarter, and international sales accounted for 58 percent of the quarter's revenue. Apple's quarterly profit and revenue were both company records.
Apple shipped 5.2 million Macintosh computers during the quarter, a unit increase of 26 percent over the year-ago quarter. Quarterly iPhone unit sales reached 37.04 million, up 128 percent from the year-ago quarter, and the company sold 15.4 million iPods during the quarter, representing 21 percent unit decline over the year-ago quarter. Apple also sold 15.43 million iPads during the quarter, up 111 percent over the year-ago quarter. Apple set new company records for iPhone, iPad, and Mac sales during the quarter.
"We're thrilled with our outstanding results and record-breaking sales of iPhones, iPads and Macs," said Tim Cook, Apple's CEO. "Apple's momentum is incredibly strong, and we have some amazing new products in the pipeline."Apple's guidance for the second quarter of fiscal 2012 includes expected revenue of $32.5 billion and earnings per diluted share of $8.50.
Apple will provide live streaming of its Q1 2012 financial results conference call at 2:00 PM Pacific, and MacRumors will update this story with coverage of the conference call highlights.
Conference Call Highlights
- Highest quarterly revenue and earnings in Apple history.
- Numerous new records for quarterly iPhone, iPad, and Mac Sales
- Extremely pleased with momentum of the business
- Sales aided by inclusion of 14th week in the quarter.
- Net income increased 118% year-over-year, equal to half of net income generated over all of fiscal 2011
- Set new records for desktops and portables, up 26% year-over-year versus 0% growth for entire PC industry
- Mac sales outgrew the market in all geographies, particularly in Asia-Pacific
- Very strong growth of MacBook Pro and MacBook Air
- 3-4 Weeks of Mac Channel Inventory
- Mac App Store a great success, 100 million downloads in the first year
- 15.4 million iPods vs 19 million in year-ago quarter. iPod Touch accounts for more than half of iPods sold. iPod market share remains over 70% according to NPD.
- Ended quarter with 4-6 weeks of iPod channel inventory.
- iTunes Store generated $1.7b of revenue. 20 million song catalog. iTunes customers "amazingly busy" on Christmas, more than 140 million downloads on December 25
- iPhone represented 124% year-over-year growth vs 40% growth for industry according to IDC.
- Royal Dutch Shell, Credit Suisse, Covidian, Nike, Facebook, among others, rolling out iPhone across the enterprise.
- iPad revenue up 99% year-over-year.
- iPad sales exceeded expectations, sell through exceeded sell-in by 200,000 units. 4-6 weeks of channel inventory.
- Enterprise actively using iPad with custom apps.
- 1.5 million iPads are in use across educational institutions.
- 315 million cumulative iOS device sales. 62 million in December quarter.
- 85 million iCloud customers signed up.
- App Store is "incredible successful" - 550,000 apps total, 170,000 iPad apps.
- $4 billion to developers cumulatively, $700 million in december quarter.
- $6.1 billion for retail, large growth for iPhone, iPad and Mac sales.
- iPhone sales doubled year-over-year thanks to iPhone 4S.
- 1.1 million Macs sold vs 851,000 year-over-year.
- 4 new stores including Grand Central and 3 stores in Europe. 361 stores total.
- 358 stores open, avg $17.1 million in revenue up from $12 million last year.
- Store traffic reached 110 million vs 76 million year-over-year, up 45%.
- 22,000 visitors per store per week.
- EasyPay checkout process enhanced ability to handle high traffic levels.
- Total company gross margin was 44.7%, 4.7% higher than guidance. Lower commodity costs, better than expected iPhone mix, among other items.
- $370 million in stock based compensation expense.
- 25.25% tax rate for the quarter.
- $97.6 billion in cash and marketable securities, up $16 billion from prior quarter. $64 billion of cash is offshore.
- "Actively discussing" uses of cash balance, have nothing to disclose today. "Not letting it burn a hole in our pocket."
- Next quarter's expectations: $32.5 billion in revenue, 42% gross margin with $60 million in stock based compensation, $3.05 billion in CapEx, 25.25% tax rate. EPS of $8.50.
Q&A;
Q: iPhone momentum as the quarter ended? What's included in guidance for first half of the year?
A: Thrilled with 37 million iPhones sold. Substantially above the 20 million unit-record previously. "Breathtaking customer reception to the iPhone 4S" and Siri and camera. Customers "absolutely love" the phone. Attribute it to a bold bet as to what the demand would be, as it turns out, with it being a bold bet, we were short of supply throughout the quarter. Did end with a significant backlog on the iPhone. Situation has alleviated some, but still short in some key geographies.
Attribute performance to delayed purchases from the prior quarter as well. Made the correct decision to go with a broad range of iPhone models, was the benefit we thought it would. 14th week helps as well, though everyone knew that.
Geographically we saw strength in every key region, but in particular the US and Japan which got going early in the quarter. Had more sales days than most countries. No iPhone 4S sales in mainland China last quarter, either.
Q: Was pent-up demand at the end of December in countries like the US and Japan that had the phone all quarter? Or was it other countries that didn't have the phone? How are component pricing to help rebuild inventory and other issues?
A: Don't want to comment on current sales trends. We've included that in our guidance. We've just launched in China and the demand there has been "staggering". We are selling through our online store -- not currently selling in retail store -- demand is off the charts. Very happy with demand response in China. Other countries that we launched earlier this quarter were much smaller. We'll see how things go from a supply/demand perspective. We've made progress from the end of the quarter through today. Some countries where we aren't caught up.
Component environment is favorable, one of the reasons we could overachieve on gross margin. Would predict this would continue on most components except for hard drives which are still affected by Thailand. Don't anticipate having a material supply issue this quarter, though we will pay more for supply to make sure we have enough.
Q: Did hard drive situation in Thailand have an impact on Mac sales?
A: For the December quarter there was not a material supply or cost impact as a result of the flood. For the March quarter, we're not expecting any material supply impact. We included expected increases in hard drive prices in our guidance.
Q: Saw some price declines in DRAM and NAND flash. How favorable to you expect pricing to be for those commodities in March quarter?
A: We did receive better costs than we had rolled into our guidance last quarter, particularly on NAND flash and DRAM and displays. Those price trends should continue to be favorable this quarter. We reflected that in our guidance. Big exception is the hard drive which is constrained on an industry-wide basis. We can navigate the supply issue by paying more for HD's.
Gross margin will drop next quarter because of a loss of leverage and non-recurrence of one-time items and the stronger US dollar. Two of those items represented a quarter of upside to gross margin. Half from commodity costs and one-quarter from better mix in iPhone sales.
Q: Any impact on iPads from lower priced tablets on the market? How do you feel about the Amazon Fire?
A: We are really happy with 15.4 million iPads, did take down channel inventory slightly so sell-through was slightly higher than that. Consistent with our long-term belief that this is a huge opportunity for Apple over time. I really believe that there will come a day when the tablet market in units is larger than the PC market. It's interesting to note that in the US it's clear from the IDC data on desktop PC's in the US that tablets exceeded desktop sales last quarter in the US.
You can see different indicators that there is significant momentum in the space. The ecosystem for iPad is in a class by itself, we strongly believe in optimizing applications from day one to take advantage of the larger canvas from day-one. Only a few hundred apps designed for the competition versus 170,000 apps for the iPad. Don't see limited function tablets and e-readers in the same category as the iPad. People who want an iPad won't settle for a limited function tablet. Last year was supposed to be the year of the tablet. I think most people would agree it was the year of the iPad for the second year in a row.
We're going to continue to innovate like crazy and we think we can continue to compete with anyone that is currently shipping tablets or that might enter the market in the future.
Q: What are you learning about price elasticity with the iPhone with offering the 3GS for free postpaid and the prepaid market? How are you thinking about that now that you've had a quarter with the lower price points?
A: Each model of iPhone were important in achieving the 37 million total units. We're glad to cover the broad range with great products. The iPhone 4S was clearly the most popular among those. In the postpay market, there is a much smaller difference in what a customer pays than the prepay market. Thrilled with the total result.
Q: You're "actively discussing" the use of cash. Is this the same as the discussion historically, or is this something new?
A: We have always discussed our cash and we recognize that our cash is growing for all the right reasons. I would characterize our discussions as "active" about what makes the most sense to do with the cash balance. We don't have anything specifically to announce today.
Q: Is there a time-frame or will you tell us when you've finished those discussions?
A: We will let you know when we decide something. Until then, we are actively discussing.
Q: Gross margin has been rising from Q1 to Q2 traditionally. Now it's bucking that trend with a drop of 270 basis points. Is the loss of leverage that significant, or what am I missing?
A: Factors that will affect sequential decline are three things: the loss of leverage from revenue -- reported $46.3 billion this quarter with a 14th week. Fixed costs will have some impact, some one-time items that won't repeat, and the strong US dollar will have the biggest affect. 44.7% is the highest gross margin we've ever had, now we have different currency levels and different product cycles from before -- did have a sequential increase in iPhones last year, don't see that happening again this year.
Q: How should we be thinking about your strategy in the living room?
A: Apple TV is doing very well. Last fiscal year we sold a bit above 2.8 million units. In the past quarter, we set a new quarterly record at more than 1.4 million. In the scheme of things, this is still classified as a "hobby". We continue to add things to it, and I don't know about you but I couldn't live without it. We continue to pull the strings and see where it takes us.
Q: You've been CEO for 4 months now. I wonder what your early read on the new job is. Have you come across things that you didn't expect?
A: I love Apple and it's a reminder every day what a privilege it is to work with people who are so incredible. How lucky I am. You can see our results and I think our team is doing a fantastic job.
Q: Some perspective on how you're framing your thoughts about dividends and buybacks?
A: We're examining all possibilities for our cash balance. What we can do from a supply chain or acquisition perspective. I don't have any comment about buybacks or anything. We're actively discussing our cash balance.
Q: Thoughts on iCloud?
A: It's not a product. It's a strategy for the next decade.
Q: Where are you on distribution of the iPhone, in particular China for the next few quarters?
A: 130,000 points of sale throughout the world, up 35% year-over-year. Consistently adding points of distribution. Adding both carriers and key retailers. Added carriers last quarter, adding KDDI in Japan and Sprint in the US. Extremely pleased with both companies. Incumbents did incredibly well, but in terms of China, China Unicom continues to be a key partner. Nothing to announce on expansion there.
Q: Why the steep revenue drop for next quarter?
A: 5 reasons we will be down greater sequentially this quarter. December quarter included a 14th week this year. That week accounted for roughly 1/14th of December's revenue. That week fell within the March quarter last year and will not be included this year. Sales in that week are greater than the average for the March quarter. Last year, we increased iPhone channel inventory by 1.7 million units in the March quarter. December quarter results benefitted from the launch of the iPhone 4S. There was significant pent-up demand and it was our fastest iPhone rollout ever. US dollar has strengthened in recent weeks, particularly against the Euro. Last year the dollar was relatively flat within the time period. We feel very good about the momentum for our business.
Q: Thoughts on acquisitions, in particular Anobit?
A: We aim for smaller or medium-sized companies with engineering or technology or talent or IP. That's the acquisitions that we've done. We tend to do several per year but we're very disciplined.
Q: Can you talk about how they're integrated with the company? Do they become encompassed within Apple or do they remain as standalone divisions?
A: We don't believe in lots of divisions. We run the company as "one" rather than lots of mini-companies. The semiconductor team works for Bob Mansfield who does all the hardware engineering for the company. Bob and his team are integrating Anobit into that team. Anobit has some fantastic technical talent and we're really fortunate to have them join us.
Q: You say you're at 235 carriers, but there are 500 carriers in the world. What is your strategy about adding more of them? And on a country-rollout, you've addressed part of China on the retail side, and Brazil is next. What about addressing India or Russia more aggressively with your retail presence?
A: We're selling in Brazil through carrier partners and online. We're selling in Russia through carrier partners and reseller partners. We're selling in India through carrier partners and reseller partners. I've tried to be clear in the past that we have our time and energy in China at the moment. We're not ignoring others, but we're spending less time in the others. Brazil is the next country, we've begun to go deeper in that country. We don't envision Apple Retail in the near-term. In India, where we're small, revenue was up 3x last quarter but that's on a small base. We're beginning to see traction in most of these countries. We recognize that we have some work to get to a large revenue figure like China is.
Nothing specific to announce on carriers, but you can bet we're looking at the same list you are. For major carriers, the numbers are very small versus the smaller carriers. The same is true of smaller countries but we'd like to get into all of them over time.
Q: iPhone was great, but iPad growth outpaced our expectations too. Do you think Apple benefitted from lower-cost, reduced feature-set tablets? People coming in and saying "well this is OK" but then trading up to the iPad?
A: We've looked at the data on a weekly basis after Amazon launched the Fire. There wasn't an obvious effect on the numbers either plus nor minus. We've heard from customers who looked at the Fire and decided to buy an iPad, but whether that's happening on a large basis, I don't know. Looking at our data in the US, there was no obvious change in the data for what it's worth. There is cannibalization of the Mac by the iPad but we continue to believe there is much more cannibalization of Windows PC's by the iPad and there are many more to cannibalize. We love that trend, we think it's great for us. The thing that's different for the iPad is that you can continue to see it emerging virtually everywhere. Large percentage of the Fortune 500, is still large looking at Global 500. In education and K-12 we sold twice the number of iPads as Macs. Education traditionally adopts technology slowly, so that's surprising. Consumer has adopted the iPad very quickly as well.
It's winning market by market. Consumers that look at it and think about the ecosystem and huge advantages and the overall customer experience, I think we will win a fair number of those. The results speak for themselves. We sold 55 million iPads since April of 2010 when we launched it, which we feel is incredible.
Q: Are you seeing accelerated refresh rates within your customer base? Are customers buying an iPhone faster or buying a MacBook Air faster?
A: iPhone has been a catalyst in enterprise. The iPad follows the iPhone and in some cases the Mac follows that. One product pulls the other, pulls the other, pulls the other. How much it's happening is difficult to put our finger on. Many customers across consumer or education or enterprise are pointing that out. We've seen this before with the halo the iPod created for the Mac back in the 2002-2004 range. It's not a phenomenon that's new to us.
Q: Android vs iPhone, is this becoming a two-horse race like Mac vs Windows? How is your integrated model vs the OEM market like Windows?
A: Don't view it like Mac/Windows. Mac has outgrown the market 20 quarters in a row, but still single digits in worldwide market. In iOS, we've sold 315 million devices and this comparison is very favorable for us. 62 million of those were done in the last quarter alone. I haven't found a way to get very crisp quarterly reporting for Android like we do, that is transparent and reliable. If you look at NPD data, in the US for October/November, just for phones, the iPhone is 43% and Android is 47%. Nielsen data shows iPhone for Oct/Nov/Dec at 45% vs Android at 47%. ComScore data for Oct/Nov with iPhone at 42% vs Android at 41%. All the data in the US shows it is a very close race on iPhone. On iPad side, I think that all of us inherently believe that iPad is way ahead there. There is really no comparable product to the iPod Touch either. iOS is doing extremely well. I wouldn't say it's a two horse race. There's a horse in Redmond that will always get up and keep running and there are other players that we won't count out.
We focus on innovating and making the world's best products and ignore how many horses there are. We just want to stay ahead and be the lead one.
Q: 4G and larger screens are growing in the market. Has popularity of larger screens on Android phones changed or impacted your view? And 4G, obviously some phones have battery life issues, but what do you think?
A: We just sold 37 million iPhones and could have sold more with the supply. There are a lot of people out there who like what we're doing.
iPhone Represents 55% of Verizon's 4Q 2011 Smartphone Sales
Jan 24, 6:09PM
Earlier this month, Verizon Wireless Chief Financial Officer Fran Shammo noted that the carrier had activated 4.2 million iPhones during the fourth quarter of 2011, more than doubling the previous quarter's sales on the momentum of the iPhone 4S launch and potentially signaling a blockbuster quarter for Apple in the iPhone market.
Verizon today officially announced its earnings for the fourth quarter of 2011, revealing in a conference call that the company actually activated 4.3 million iPhones during the quarter. With the carrier reporting total smartphone sales of 7.7 million units, the iPhone represented approximately 55% of the carrier's smartphone sales for the quarter.
Verizon wireless profit margins and net growth in retail customers
Smartphones now account for 44% of Verizon's postpaid customer phone base, up from 39% in the previous quarter. That strong growth in smartphones such as the iPhone significantly reduced the carrier's margins in its wireless business during the quarter as absorbed the heavy upfront subsidies paid to manufacturers for the devices. Verizon will recover those costs over the length of customers' contracts, making carriers willing to take short term hits to profitability to lock in smartphone customers on lucrative service contracts.
Apple Ranked as World's Top Semiconductor Customer in 2011
Jan 24, 5:16PM
Back in June of last year, IHS iSuppli reported that Apple had become the world's largest buyer of semiconductors in 2010, jumping past HP and Samsung to top the list with $17.5 billion in spending. Apple's lead was expected to grow in 2011 on continued strength of the iPhone, iPad, and MacBook Air, all of which contain substantial NAND flash memory, which has become a primary driver of semiconductor markets due to the booming mobile device landscape.
Research firm Gartner is out today with a new report that appears to utilize a somewhat different methodology in calculating semiconductor expenditures but which now comes to the same conclusion as IHS Suppli's earlier report. According to Gartner, Apple became the world's largest semiconductor customer in 2011 as measured by total silicon content in all products designed by Apple and its competitors, known as Design TAM.
Gartner pegs Apple's year-over-year growth for 2011 at 34.6%, easily topping the growth of other top semiconductor customers and allowing it to leapfrog Samsung and a sliding HP for the top spot in the rankings. According to the report, semiconductor purchases for Apple's products came in at $17.3 billion in 2011, ahead of Samsung's $16.7 billion and HP's $16.6 billion purchases.
iSuppli's report from last year highlighted the vast differences in Apple's and HP's markets, with Apple's semiconductor usage being driven by mobile devices and HP's by traditional computer products. Gartner notes that mobile devices and solid-state drives are indeed now the major drivers of semiconductor usage.
"The major growth drivers in 2011 were smartphones, media tablets and solid-state drives (SSDs)," said Masatsune Yamaji, principal research analyst at Gartner. "Those companies that gained share in the smartphone market, such as Apple, Samsung Electronics and HTC, increased their semiconductor demand, while those who lost market share in this segment, such as Nokia and LG Electronics, decreased their semiconductor demand.Gartner distinguishes Design TAM from Purchasing TAM, which would attribute to a given company only the amount actually purchased by the company. As an example of the difference between the two metrics, semiconductors purchased by a third-party manufacturing partner would generally count toward the primary company's Design TAM but not its Purchasing TAM.
'Apple University' Trains Future Apple Executives with Focus on Missteps of Apple and Others
Jan 24, 3:19PM
Details of Adam Lashinsky's new Inside Apple book set to debut tomorrow continue to surface, and while some of the ideas behind the company's "Apple University" program for training the next generation of executives were previously disclosed in Lashinsky's original Fortune piece on the topic and in a Los Angeles Times article last October, the new book takes a more extensive look at the concept. As had been previously disclosed, Apple in 2008 hired Yale School of Management dean Joel Podolny to head up the Apple University initiative on management training. Several other professors, including Harvard business historian Richard Tedlow, came on board in consulting roles to help develop the curriculum. Classes were primarily taught by Apple executives, with guidance offered by Podolny and the other professors.
Examples of the case studies being taught at Apple University include the story of how Apple crafted its retail strategy from scratch and Apple's approach to commissioning factories in China. Wherever possible the cases shine a light on mishaps, the thinking being that a company has the most to learn from its mistakes.Tedlow quietly retired from Harvard last year, and is now working full-time for Apple to add his expertise on U.S. business history to the Apple University curriculum. His lectures reportedly draw upon crises and missteps experienced by other major businesses, events which offer lessons to help Apple's future leaders avoid similar pitfalls and learn how to respond when faced with adversity.
[H]e is teaching them business lessons about other companies that the Apple executives can apply to their own situations. For instance, Tedlow has lectured Apple's PR staff on the Tylenol tampering crisis of 1982 and how the McNeil Consumer Products unit of Johnson & Johnson responded. He taught a class for executives about the fallen grocery store chain A&P; as an example of what happened to a company that once dominated its field. Quipped an attendee: "We were all trying to figure out what A&P; had to do with Apple."Lashinsky notes it that will be interesting to watch how the company that shunned traditional business school business practices under Steve Jobs evolves over time now that academics have been brought in to help mold the next generation of Apple leaders. That evolution will, however, likely take years before it becomes apparent to the public.
Apple Has an Unboxing Room to Test Hundreds of Variants of their Product Packaging
Jan 24, 9:11AM
iPod nano packaging photo by iLounge
>From an advance copy of Adam Lashinsky's upcoming Inside Apple book, NetworkWorld notes an interesting bit of information about how Apple approaches retail packaging.
Perhaps it should be no surprise, given the elegance of some of Apple's product packages, but Apple is said to have a secretive packaging room where a package designer goes through hundreds of iterations to find the right combination:
One after another, the designer created and tested an endless series of arrows, colors, and tapes for a tiny tab designed to show the consumer where to pull back the invisible, full-bleed sticker adhered to the top of the clear iPod box. Getting it just right was this particular designer's obsession.NetworkWorld also points back to an old internal video created by Microsoft's own packaging team as a humorous look at branding and packaging issues for marketers. The video imagines if Microsoft were to redesign the iPod retail packaging:
What's more, it wasn't just about one box. The tabs were placed so that when Apple's factory packed multiple boxes for shipping to retail stores, there was a natural negative space between the boxes that protected and preserved the tab.
Apple's obsession with even the product packaging is a reflection on Steve Jobs' views of the matter. Both Steve Jobs and Jonathan Ive are known to have spent time on the packaging of their products. From Walter Issacson's Steve Jobs biography:
"Steve and I spend a lot of time on the packaging," said Ive. "I love the process of unpacking something. You design a ritual of unpacking to make the product feel special. Packaging can be theater, it can create a story."
EFI Firmware Update Brings Lion Internet Recovery to Mid-2010 13-Inch MacBook Pro [Updated] [Mac Blog]
Jan 24, 4:30AM
As noted in our forums, Apple today pushed out a new firmware update specifically targeting users of the company's Mid-2010 13-inch MacBook Pro model. The new MacBook Pro EFI Firmware Update 2.5 brings compatibility with Lion Internet Recovery, allowing users of OS X Lion to reinstall the operating system from scratch on a brand-new hard drive without the need for physical recovery media.
About MacBook Pro EFI Firmware Update 2.5The update has not yet appeared on Apple's support downloads site, but weighs in at a small 2.9 MB for the user who posted the Software Update screenshot.
This update enables Lion Recovery from an Internet connection on MacBook Pro (13-inch, Mid 2010) models.
For more information about Lion Recovery, please visit this website: http://www.apple.com/macosx/recovery/.
Lion Internet Recovery debuted alongside OS X Lion on new MacBook Air and Mac mini models introduced last July. The feature adds a minimal bootable install onto a machine's firmware to allow it to connect the Internet and download the full Lion operating system for installation. OS X Lion by default installs a recovery partition on the machine's hard drive for this purpose, but for users who are installing a blank hard drive or whose recovery partition becomes inaccessible, Internet Recovery provides yet another fallback option for Lion installation.
Following the July introduction of Internet Recovery on the current MacBook Air and Mac mini models, Apple extended the feature in mid-September to the then-current Early 2011 MacBook Pro models that had been released in February 2011. One month later Apple brought the feature to Apple's current-generation iMac line, leaving only the aging Mac Pro without support for Internet Recovery.
With today's firmware update, Apple has for the first time reached back to a previous-generation model to bring Lion Internet Recovery to the 13-inch MacBook Pro that was offered from April 2010 through February 2011.
Update: Users are also reporting that similar EFI firmware updates are available for the Mid-2010 white MacBook and the Mid-2010 Mac mini.
Steve Jobs Met with Light Field Camera (Lytro) Company's CEO
Jan 24, 4:20AM
In the upcoming Inside Apple book by Adam Lashinsky, it's revealed that Steve Jobs had expressed interest and subsequently met with the CEO of Lytro, the makers the first light field camera. The relevant book quote posted by 9to5Mac states:
The company's CEO, Ren Ng, a brilliant computer scientist with a PhD from Stanford, immediately called Jobs, who picked up the phone and quickly said, "if you're free this afternoon maybe we would could get together." Ng, who is thirty-two, hurried to Palo Alto, showed Jobs a demo of Lytro's technology, discussed cameras and product design with him, and, at Jobs's request, agreed to send him an email outlining three things he'd like Lytro to do with Apple.Lytro received a lot of press last year when the first of its light field cameras went on sale in October. The product even received Popular Science's 2011 Innovation of the Year.
Light field cameras are a different take on photography by capturing "the entire light field" and saving all that information into a single file. Photographers can then edit the file afterwards in a number of unique ways -- including refocusing the image. This video walks through this unique ability:
One of the limitations in the early light field cameras is a relatively low resolution. The first Lytro camera produces final photos of only 1.2 megapixels (1,080x1,080). The cameras also don't take any video and start at $399 for an 8GB model. The camera carries an elongated form factor that seems to be a result of the unusual optics required.
Given the hype surrounding the technology, it's perhaps no surprise that Steve Jobs found interest in meeting with the young company. That meeting, however, is getting special attention due to the fact that Walter Isaacson had said that Jobs wanted to reinvent television, textbooks and photography.
Apple just released their first digital textbooks for the iPad, and is expected to get into the television space. Apple's future goals for photography, however, remain unclear. Apple includes a digital camera its iPhones and has made progressive improvements in camera quality over the past few generations. While Apple no longer makes a standalone digital camera, they were one of the first to product a consumer targeted digital camera back in 1994.
Given the popularity of smartphones and the subsequent decline of point and shoot camera popularity, we'd expect any future Apple movement into photography would be centered around the iPhone.
Virgin America Names Jet After Steve Jobs [Mac Blog]
Jan 23, 9:49PM
Virgin America has named one of its fleet after Apple co-founder Steve Jobs, emblazoning a popular Jobs quote "Stay Hungry, Stay Foolish" on the side of this Airbus A320.
Steve mentioned the phrase in his 2005 commencement address at Stanford University, noting that it was originally used in The Whole Earth Catalog in the 1970's:
On the back cover of their final issue was a photograph of an early morning country road, the kind you might find yourself hitchhiking on if you were so adventurous. Beneath it were the words: "Stay Hungry. Stay Foolish." It was their farewell message as they signed off. Stay Hungry. Stay Foolish. And I have always wished that for myself. And now, as you graduate to begin anew, I wish that for you.A Virgin America spokesperson explained to MacRumors that the name was chosen as part of an internal plane naming competition. The plane, with tail number N845VA, first flew last fall.
Virgin America is the only airline based in Silicon Valley, with 2,200 employees based in Burlingame.
(Photo courtesy Virgin America)
Apple's Legal Fees Rumored to Top $100M on HTC Patent Dispute Alone
Jan 23, 8:43PM
In his biography, Steve Jobs was so infuriated by Android's similarities to the iPhone that he swore to spend all the money Apple had in the bank to defeat the platform. Newsweek columnist Dan Lyons passes along a rumor that Apple has spent $100 million in legal fees on just its first set of claims against HTC. Who knows if it's true, but if so, Apple didn't get a lot for its money.But, Lyons notes, HTC, Samsung and Motorola are all countersuing Apple with their own patent claims and Apple already lost a major lawsuit to Nokia and had to pay the Finnish company not insignificant royalties its own patent infringement.
[...]
[Against HTC,] Apple started out with 10 patents — presumably its best ones — and ended up with a tiny victory on just one. Was that worth $100 million?
Apple certainly can afford the legal fees, and shows no sign of letting up.
[...]
HTC has two claims pending against Apple with the ITC as well, the first one due for a decision next month and the second in April 2013. And then there are other claims, all over the world, against HTC, Samsung and Motorola.
Apple has hired some of the best -- and most expensive -- patent litigators in the world and, after several years of legal wrangling (and many more to come), doesn't have much to show for it.
Lyons points out that whether the $100 million figure is accurate doesn't really matter. Apple and all the other cell makers are simply jockeying for position and trying to gain leverage for what is likely an inevitable legal settlement. "In that sense, whatever Apple is spending on legal fees is probably money well spent," notes Lyons.
Tomorrow, Apple will announce the most recent quarter's additions to its cash pile, which totaled more than $80 billion three months ago. Apple can easily afford many more years of massive legal bills.
Roundup of Analyst Expectations Ahead of Apple's Q1 2012 Earnings Call
Jan 23, 8:02PM
Philip Elmer-Dewitt has assembled his list of analyst expectations ahead of Apple's quarterly earnings report Tuesday afternoon. The list includes estimates from 17 "independent" analysts and 34 "affiliated" analysts who work for large investment houses or research organizations.
As usual, the independent analysts are much more bullish than the affiliated analysts. The independent consensus expects earnings per share (EPS) of $12.01 on revenue of $43.14 billion. The institutional consensus is EPS of $10.19 on $39.23 billion in revenue.
Click through to Elmer-DeWitt's post at Fortune to see the full-size chart.
Last quarter Apple announced it had broken $100 billion in sales for fiscal 2011, the first time it had breached that figure, and posted $6.62 billion in profit on revenue of $28.27 billion. For the first fiscal quarter of 2012, Apple has issued guidance of $37 billion in revenue with profits of $9.30 per diluted share.
Apple's best quarter ever was fiscal Q311 when it posted $7.31 billion in profit on sales of $28.57 billion. It appears Apple will solidly beat those numbers this quarter, posting its best results ever.
Apple will announce its earnings for the first fiscal quarter of 2012 (fourth calendar quarter of 2011) and host a conference call regarding the release on Tuesday January 24th at 5:00 PM Eastern / 2:00 PM Pacific. The earnings release itself typically comes in around 4:30 PM Eastern.
Apple's First Dutch Retail Store to Open in Amsterdam on February 18?
Jan 23, 7:27PM
We've been following the development of Apple's first Dutch retail store for some time now, as issues over historic preservation have slowed the timetable for construction at the landmark Hirsch building in Amsterdam. But things now appear to be coming together as iPhoneclub.nl [Google translation] and One More Thing [Google translation] offer a number of details on plans for the store, which seems to be headed for a February 18 opening.
According to reports, much of the store staff is currently in training at the Amsterdam Hilton, while Geniuses have been trained at a number of UK stores. A third-party company responsible for the maintenance services on the store once it is opened is reportedly set to begin work in mid-February, with One More Thing specifically claiming that the opening will take place on February 18.
Among the interesting developments in recent days was a windstorm over the weekend that pulled away some of the coverings from the exterior of the store to reveal the spiral glass staircase that customers will see front and center upon entering the two-level store.
Floor plans obtained by One More Thing show product displays and a massive 20-seat Genius Bar on the first level of the store, with additional product displays, third-party accessories, training and set-up, and a Briefing Room filling out the second floor. The store is topped with a pyramid-shaped glass roof over a portion of the sales floor, with the second floor left open as a void to allow the light to filter down to the first floor and increase the store's openness. Offices for Apple's operations in the region will be located on upper floors of the building.
Comic Writer Tries Out iBooks Author [iOS Blog]
Jan 23, 6:52PM
Apple's new iBooks Author application enables users to make interactive iBooks on their Mac. Apple says the software allows authors to make "stunning iBooks textbooks, cookbooks, history books, picture books, and more for iPad." Richard Stevens, author of the Diesel Sweeties webcomic, has expanded that list of possibilities to include comic strips.
Diesel Sweeties author Robert Stevens writes of the project:
I had a few insomniac hours this weekend and did a little experiment:Stevens is offering the iBook free via download from his website, not via the iBookstore, but it is fairly simple to acquire the book:
Waking Up With the Diesel Sweeties is a tiny little free ebook for the iPad. It contains all my comics from last month with a few tweaks, formatted in iBooks Author. This version only works on the iPad. It's not in the iBookstore, so you'll need to download the file and sync it to your iPad.
- Click the book link while using Mobile Safari on your iPad.
- Download to your desktop machine and email it to yourself to open in iBooks.
- Toss it in your Dropbox and open it in iBooks from there.
- Add it to your iTunes library and sync the book to your iPad
The author says he is considering how to combine his twelve years of comics into one huge collection, and appears to be interested in iBooks Author as a potential production device for his ongoing comic collections as well.
The Waking Up With the Diesel Sweeties iBook is available from the Diesel Sweeties website. [Direct Link]
iBooks Author is available free in the Mac App Store. [App Store]
'Evi' Arrives as Potential Challenger to Siri [iOS Blog]
Jan 23, 6:34PM
TechCrunch reports on Evi, a new Siri-like offering from True Knowledge that has launched for iOS devices [App Store] and as a beta for Android devices. While Siri provides a fair amount of integration with Apple apps and services such as reminders and calendaring, it is currently limited to the iPhone 4S, while Evi is compatible with all iPhone, iPad, and iPod touch devices running iOS 4.0 or later.She – we'll call this Artificial Intelligence a she – returns amazing results when consulted. Given that Siri is just not very good at giving answers which aren't about the US, Evi might just be the Siri for the rest of the world, especially since Evi wil run on any Andoid or iPhone, and not just the 4S. I've seen her in action and Evi is very, very smart.
Based on the same Nuance voice recognition technology found in Siri and the licensing of which accounts for Evi's $0.99 price tag in the App Store, Evi draws upon a database of nearly a billion facts as well as integration with Yelp and other services to deliver an array of information that seems to compare favorably to Siri's abilities.
Install Evi on an iPhone 4S and compare it to Evi. Ask "How do I make apple pie?". Siri is unable to provide a direct answer and so asks whether you want to search the web. Evi provides a list of recipes with web links.Evi offers the option of voice or text input, local results for the United States and United Kingdom, and a built-in browser view for quick access to web links from results.
Ask "Who was President when Queen Elizabeth II was born". Siri is unable to provide an answer and suggests performing a web search. Evi determines who Queen Elizabeth II is, when she was born, the dates when she will have been a teenager and then compares this against which US presidents were in office over that time, delivering the results of both serving US presidents during those years. Not bad huh.
Sony Introduces Next-Generation Image Sensor to Advance Mobile Device Cameras
Jan 23, 5:19PM
Sony today announced (via Macworld UK) the launch of new image sensor technology that the company expects will help improve performance and shrink the size of cameras on mobile devices by later this year. The new back-illuminated complementary metal–oxide–semiconductor (CMOS) image sensor utilizes a pixel section layered directly onto the sensor's circuitry, significantly reducing the sensor size from the previous design that utilized pixel and circuit sections side-by-side on a substrate layer.
This image sensor layers the pixel section containing formations of back-illuminated structure pixels onto chips containing the circuit section for signal processing, which is in place of supporting substrates for conventional back-illuminated CMOS image sensors. This structure achieves further enhancement in image quality, superior functionalities and a more compact size that will lead to enhanced camera evolution.With sampling set to begin in March, the new stacked CMOS sensor includes built-in signal processing technology and utilizes the company's "RGBW Coding" that adds white-light sensors to the traditional red, green and blue, offering better low-light camera performance. Enhanced high dynamic range (HDR) technology will also improve the sensor's movie capabilities in bright-light situations.
Apple had utilized OmniVision Technologies as its image sensor supplier on its mobile devices, but Sony was able attract at least part of Apple's business with the new 8-megapixel sensor on the iPhone 4S. With its new image sensor technology, which is set to enter mass production in the fall and begin appearing in products late this year or early next year, Sony is clearly looking to remain at the forefront of the booming mobile device camera market.
U.S. Tablet Ownership Nearly Doubles over Holiday Season
Jan 23, 3:38PM
According to new survey data from the Pew Internet & American Life Project (via VentureBeat), the share of U.S. adults owning a tablet device nearly doubled during the most recent holiday season, moving from 10% to 19% between mid-December and early January. While the introduction of Amazon's Kindle Fire certainly played a significant role in the tablet growth, the news still bodes well for Apple's iPad performance during the quarter.
These findings are striking because they come after a period from mid-2011 into the autumn in which there was not much change in the ownership of tablets and e-book readers. However, as the holiday gift-giving season approached the marketplace for both devices dramatically shifted. In the tablet world, Amazon's Kindle Fire and Barnes and Noble's Nook Tablet were introduced at considerably cheaper prices than other tablets.Apple's iPad dominated tablet sales following its early 2010 debut as competitors struggled to find traction in the marketplace, but the Kindle Fire has been seen as perhaps the best-equipped product to take on the iPad given its much lower pricing ($199) and its integration with Amazon's significant services and large customer base. But while the Kindle Fire is selling well according to estimates, its effect on iPad sales has been the subject of considerable debate given the significant differences in hardware and target markets between the two devices.
Apple is of course rumored to be introducing the iPad 3 in the coming months, amid reports that it will continue to offer the iPad 2 at a lower entry-level price. Even so, Apple will be unlikely to match or closely approach the Kindle Fire's $199 pricing given the iPad's larger size and differences in the two companies' approaches to the tablet market. Apple focuses on profitability for its hardware products with content providing a supporting role at much smaller margins, while Amazon is willing to sell hardware essentially at cost in order to support profitability in its massive shopping and content offerings.
Apple is also pushing for greater adoption of the iPad in the education market with its just-launched iBooks Textbooks initiative. Envisioning a future in which students carry all of their textbooks in the form of interactive iBookstore downloads on iPads, the company is seeking to drive innovation and engagement in education while making the iPad the tablet of choice for students of all ages.
Early iBooks Textbooks Downloads Estimated at 350,000
Jan 23, 2:27PM
AllThingsD reports on a new research note from Global Equities Research analyst Trip Chowdhry claiming that customers downloaded approximately 350,000 iBooks Textbooks from the iBookstore over the first three days of availability. That performance was accompanied by over 90,000 downloads of Apple's iBooks Author app from the Mac App Store.
If those numbers are accurate, Apple's textbook effort would seem to be off to a good start. Which is good news for everyone involved — particularly textbook publishers, who stand to make more money on books sold through iBooks than those sold at retail.With only eight iBooks Textbook titles available at launch, Apple and publishers are only beginning to scratch the surface of the digital textbook market. But it is unclear just how many of those 350,000 downloads were paid purchases, with seven of the eight titles carrying Apple's maximum $14.99 price tag.
The eighth title, E.O. Wilson's Life on Earth, is available for free, although it currently contains only the first two chapters of the book, and presumably the title accounted for a significant number of the total downloads as curious users looked to test drive the new offering. Paid titles are also required to offer free samples, and Chowdhry apparently did not mention whether these are counted as "downloads" by his tracking method.
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