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Apple to Require Explicit Permission for iOS Apps Accessing Address Book Data
Feb 15, 7:04PM
Just hours after a pair of U.S. Congressmen sent a letter to Apple requesting information on privacy practices, specifically as they relate to address book data being collected and stored by the apps' developers, Apple has issued a statement to AllThingsD indicating that the issue will be addressed in a forthcoming iOS software update."Apps that collect or transmit a user's contact data without their prior permission are in violation of our guidelines," Apple spokesman Tom Neumayr told AllThingsD. "We're working to make this even better for our customers, and as we have done with location services, any app wishing to access contact data will require explicit user approval in a future software release."Apple has been testing iOS 5.1 for some time, but appears to have slowed development as the company is assumed to be waiting to release it to the public alongside the iPad 3 early next month. The company has not, however, specified whether the new address book permission feature will be included as part of iOS 5.1 or if it will arrive in the form of a separate update, perhaps as an iOS 5.0.2 update to enable a faster turnaround on the fix.
Apple Seeks Bankruptcy Court's Blessing to Sue Kodak over Patents
Feb 15, 6:50PM
With Kodak having filed last-minute patent lawsuits against Apple and HTC as it was heading into bankruptcy last month, Bloomberg reports that Apple is looking to assert itself against the pioneering photography company with a new lawsuit alleging infringement of Apple-held patents.
While Apple says in its filing with the bankruptcy court overseeing Kodak's case that it is not required to seek approval for a lawsuit, Apple notes that it is requesting the court's blessing "out of an abundance of caution".
Apple Inc. asked a bankruptcy judge for permission to sue Eastman Kodak Co. over allegations it's infringing patents that Apple says cover technologies used in printers, digital cameras and digital picture frames. [...]In a separate case, Apple has been contending that it is the rightful owner of a patent currently held by Kodak. Apple claims that through its partnership with Kodak to produce QuickTake digital cameras during the mid-1990s, Kodak misappropriated intellectual property involved in the project and patented it for itself.
While arguing bankruptcy law doesn't prevent the filing of infringement suits against a company in court protection, "Apple requests express authority from this court before it initiates the actions out of an abundance of caution," the company's lawyers wrote in the filing.
Apple QuickTake 100, manufactured by Kodak (Source: Time)
Apple last month filed a petition with Kodak's bankruptcy court requesting that Kodak not be permitted to use the disputed patent to secure loans supporting the company's restructuring until ownership of the patent is resolved. The U.S. International Trade Commission has preliminarily rejected Apple's ownership claims, but the case and a parallel federal lawsuit remain pending.
Congress Weighs in on iOS Apps Collecting Address Book and Other Personal Data
Feb 15, 5:13PM
Last week, controversy erupted when it was discovered that the popular iOS app Path was uploading users' entire address books to the company's servers without alerting users or asking for authorization. While Path quickly deleted all address book data on its servers and updated its app to make the data collection an opt-in service, the issue has cast a fresh light on user privacy issues on iOS. As noted by The Next Web, U.S. Congressmen Henry Waxman and G.K. Butterfield have now weighed on in the issue, sending a letter to Apple requesting information on the company's data collection policies it imposes on App Store developers.
In a letter to Apple CEO Tim Cook, the legislators state:Butterfield and Waxman have requested that Apple provide answers to a series of questions by February 29, with the topics including Apple's definition of user data, how the App Store review process assesses compliance with guidelines on privacy, and data on how many apps transmit "data about a user" in general and address book data in particular. The Congressmen have also asked Apple to explain why it has not instituted a simple toggle setting for address book sharing as it has for location information.
"This incident raises questions about whether Apple's iOS app developer policies and practices may fall short when it comes to protecting the information of iPhone users and their contacts."
Butterfield and Waxman then quote parts of Apple's iOS developer website which states that Apple provides a comprehensive collection of tools and frameworks for storing, accessing and sharing data. It is then questioned whether Apple requires apps to request user permission before transmitting data about a user.
It is not terribly unusual for Congress to request information from companies when issues related to consumer protection and privacy arise, and Apple was subject to a similar process when questions about location information arose last year. In that case, Senator Al Franken contacted Apple with questions about the company's policies, with executives from Apple and Google later testifying in a Senate hearing on the matter.
Fair Labor Association Offers Initial Impressions on Foxconn Audit as iPads Used to Collect Survey Data
Feb 15, 4:24PM
With the Fair Labor Association's independent audit of Foxconn's manufacturing facilities for Apple products having been underway for several days now, Reuters reports on the association's initial impressions as it works to collect and analyze data on working conditions.
According to Fair Labor Association president Auret van Heerden, Foxconn's facilities appear to be "first-class" in comparison to the garment factories the association has typically monitored, with van Heerden suggesting that monotony and boredom associated with repetitive assembly tasks may be among the most significant threats to workers' all-around health at the facilities.
After his first visits to Foxconn, van Heerden said, "The facilities are first-class; the physical conditions are way, way above average of the norm."The report notes that the Fair Labor Association has 30 employees on hand to conduct the audit, with Foxconn employees being surveyed for the audit using iPads to record their responses. Three separate Foxconn factories representing 300,000 workers are being audited over the course of three weeks, with 35,000 employees participating in the group's anonymous assessment surveys.
He spent the past several days visiting Foxconn plants to prepare for the study.
"I was very surprised when I walked onto the floor at Foxconn, how tranquil it is compared with a garment factory," he said. "So the problems are not the intensity and burnout and pressure-cooker environment you have in a garment factory. . It's more a function of monotony, of boredom, of alienation perhaps."
Questions will include:Apple CEO Tim Cook had much to say on the topic of worker safety during an interview at a Goldman Sachs investor conference yesterday, noting that Apple is working closely with the Fair Labor Association and attempting to be as proactive and transparent as possible in addressing the issues.
- how the workers were hired
- if they were paid a fee
- if they were offered and signed contracts and whether they understood them
- the condition of their dorm rooms and food
- if complaints are acted upon
- their emotional well being
Apple Pulls Online iPad Sales from Amazon China for Unknown Reasons
Feb 15, 3:21PM
Just as Chinese authorities have indicated that it would be difficult to impose a ban on Apple's iPad over a trademark dispute, Tech in Asia notes that the popular tablet has gone missing from online stores at Amazon China and Suning.com.
The removal is apparently not, however, the result of a request from Proview Technology, which is laying claim to the iPad trademark and which has been seeking to halt both imports and exports of the device in China. The company's efforts earlier this week resulted in local Chinese authorities seizing a small number of iPads from retailers as others removed their stocks from display to avoid the seizures.
M.I.C gadget reports that the removal of the iPad from sale at Amazon China and Suning.com is actually by Apple's request, although the reasons for the move are not entirely clear.
According to an Amazon China spokesman, the withdrawal is on the notice of Apple and also it's the adjustment on its sales strategy [...]The dispute over the iPad trademark in China relates to a deal Apple made with the Taiwanese arm of Proview under which it claims it received the rights to the mark in China. But Proview's Chinese arm has argued that it controls the rights to the trademark in China, and thus Apple's deal with the Taiwanese subsidiary could not have included rights for mainland China. Chinese courts have sided with Proview in the dispute, but Apple is appealing the ruling.
Meanwhile, Apple has not made any comments on the issue, and Apple's staffs in China refuse to reply too. However, as confessed by the lawyer of Proview, Proview did not apply for the administrative ban on the online sale of iPad in Beijing where Amazon China is located; also he has no idea about Apple's demand for the iPad withdrawal from Amazon China.
Chinese Customs Tells Proview That Ban of iPad Exports Would be Difficult
Feb 15, 10:10AM
Reuters reports that Proview Technology will apparently have a hard time blocking Apple iPad exports from China. On Tuesday, we reported that Proview was seeking a block on both Chinese imports and exports of the iPad over a trademark dispute with Apple. Given that Apple's iPad manufacturing is centered in China, such a move would be "catastrophic" for Apple.
However, China's customs authorities told Proview that it would be difficult to execute such a ban due to the popularity of Apple's products:
"The customs have told us that it will be difficult to implement a ban because many Chinese consumers love Apple products. The sheer size of the market is very big," Yang Long-san, chief of Proview Technology (Shenzhen), told Reuters in a telephone interview on Wednesday.As many commenters have noted, China's Foxconn manufacturers many of Apple's products including the iPad, and a ban on exports would negatively impact Foxconn as well.
Apple claims that it purchased the Chinese rights to the trademark several years ago, but the original owner Proview and Chinese courts have disagreed with that assertion. Apple's case is still pending with Chinese courts as it seeks to appeal earlier rulings.
Page 2: NVIDIA Presentation Slide Seems to Show a MacBook Air / Pro Hybrid [Mac Blog]
Feb 15, 8:47AM
Hardware.info points to a presentation slide from NVIDIA showing the range of products the company's graphics chips power. The tagline reads,"From Super Phones to Super Computers". The site also noted a strange looking Mac notebook in the middle of the lineup.
The notebook seems to carry characteristics from both the MacBook Air and MacBook Pro line.
The lower part of the body has a tapered rather than squared off shape like the original MacBook Air. Meanwhile, the screen has the black border of the MacBook Pro line. The MacBook Airs have all had silver borders on their screens ever since their release. NVIDIA also doesn't power any of Apple's Mac laptops at the moment, but is rumored to be powering the next generation MacBook Pros.
Still, we wouldn't read too much into the photo. NVIDIA did power the 2008 MacBook Air which did carry a similar look to the bottom shell with the tapered edges. Our best guess is that the photo is of the 2008 MacBook Air that has been manipulated to include the darkened screen border.
We frequently see ads and slides that seem to depict an upcoming device, though it's rare that they ever amount to anything more than creative artist renditions.
Update: As a number of commenters have noted, NVIDIA has been using this slide for quite some time and the desktop wallpaper on the machine is from Mac OS X Leopard.
'Clear' To Do App Launches on the App Store [iOS Blog]
Feb 15, 4:00AM
Realmac Software and Impending have just released Clear to the App Store. Clear is a simplified list making application that was announced at Macworld. The App's claim to fame is the extremely minimal interface that uses natural touch gestures for all functions. Some of these include:
- Pull down on a list to add an item
- Swipe an item right to complete it
- Swipe an item or list left to delete it
- Pinch apart two items to insert a new one between them
- Pinch vertically together to close the current list and show all the lists
The app is meant to be quick to launch and use. Lists are color coded in priority from top to bottom.
Clear has launched for $0.99 [App Store] and should now be available worldwide.
Siri Admits To Speaking Japanese
Feb 15, 2:43AM
Following up on an earlier rumor that Siri would soon support Mandarin Chinese, Russian and Japanese languages, 9to5Mac noticed that if Siri is actually asked what languages it supports, Japanese is listed as one of the options.
At launch, Siri could converse in the American, UK and Australian dialects of English, German and French.
Contrary to what Siri claims, Japanese is not available as a choice in the Siri preferences pane. It's possible that Siri's additional languages will be launched with the iPad 3 launch next month. That launch is rumored to be set for March 7.
Apple Slashes iAd Minimum Buy-In Fee Yet Again
Feb 14, 11:23PM
Apple has cut its minimum iAd buy-in fee to $100,000 according to a report from Advertising Age. The new lower price, one-tenth the $1 million originally required when iAd launched in July of 2010, dropped to $500k and then $300k per package. Even the $300k level has apparently not been enough to keep existing advertisers on board and bring on new ones to meet the ever-growing number of ad slots available. In addition to the reduced minimum spend, Apple is increasing the cut that developers receive from iAds running within their apps from 60% to 70%. The extra money is expected to cover lower ad rates and encourage developers to include iAds within their applications.
AdAge continues:
Apple is also planning to change the way it charges for ads, which irked some advertisers and agencies. Since it launched in 2010, Apple has charged advertisers twice: a fixed rate for every 1,000 ad impressions plus an additional fee every time a user clicked on the ad. Apple will now only charge the cost-per-thousand rate.Apple recently hired former Adobe executive Todd Teresi to head up the iAds service after Andy Miller departed to join a venture capital firm.
Tim Cook at Goldman Sachs: Worker Safety, iPhone and iPad Growth, and Financial Strategy
Feb 14, 9:54PM
Apple CEO Tim Cook has just completed a Q&A; session with analyst Bill Shope at the Goldman Sachs Technology and Internet Conference. While we liveblogged the event with a rough transcript of Cook's comments, here are a few of the highlights: - Worker safety: Addressing ongoing publicity about working conditions at Apple's suppliers' facilities, Cook reiterated his position that no company is doing more or being more transparent about the issue than Apple. Cook specifically addressed Apple's efforts to address underage labor, safety, and excessive overtime. Apple has also partnered with the Fair Labor Association to conduct what is likely the largest and most extensive audit in manufacturing history. Apple will also be continuing to collect its own data and will be releasing it monthly on the company's website.
- iPhone growth: Dryly noting that Apple's record-smashing sales of 37 million iPhones during the holiday quarter led to "a decent quarter", Cook noted that 90% of mobile phone purchasers and 75% of smartphone purchasers are still choosing something other than an iPhone. Consequently, Apple still has remarkable room to grow.
- Emerging markets: Cook noted that Apple has placed significant energy on emerging markets, with China being the primary focus but Brazil and Russia also receiving attention. While the iPod created a halo for the Mac and other Apple products in developed markets, that didn't work for emerging markets. It took the iPhone to generate that momentum in those countries. In China, Mac grew 100% year-over-year compared with 10% for the broader industry. The Mac growth was from a small base, but still demonstrates significant momentum. Revenue across Apple's emerging markets has grown from $1.4 billion in 2007 to $22 billion in 2011.
- iPad growth: Cook noted that no one could have predicted 55 million units at this point, by far the fastest growth ever for an Apple product. The iPad benefited significantly from an established base of users familiar with the iPhone and iPod and from the established infrastructure of the iTunes Store and App Store.
- Competing tablets: Addressing the Kindle Fire and other cheaper competitors, Cook noted that price is rarely the most important thing for consumers. Long-term, people aren't happy about getting a good deal on a terrible product. Cook noted that he loves competition (as long as other companies "invent their own stuff") and that he believes Apple's innovation will drive things forward.
- Stock buybacks/dividends: Cook noted that Apple is judicious with its cash, and acknowledged that the company currently has much more cash on hand than it needs to run its day-to-day business. He acknowledged that discussions on the topic at board meetings have ramped up as Apple's cash hoard has grown, but asked for patience as Apple considers its options and works to make the best decision for shareholders.
- Apple TV: Cook reported that Apple still considers the Apple TV to be a "hobby", in the sense that it shouldn't be thought of as a major pillar of Apple's business. That said, Apple has always felt that if it kept "pulling the string", there would be something there. Consumer satisfaction is reportedly off the charts and sales are growing quickly.
- Siri and iCloud: Cook's belief is that iCloud is the strategy for the next decade, enabling users to access their content from anywhere. iCloud already has over 100 million users just months after launching. Siri, on the other hand, is a profound change in input methods in Cook's view, and he notes that never before had he considered a beta product to be indispensable.
- Cook's legacy: In a question that seemed to have caught Cook a bit off-guard, Shope asked what Cook believes his stamp on Apple will be and what he will seek to maintain. Cook seemed to very much be speaking from the heart as he focused on the latter portion, outlining the culture of Apple and how important a factor it has been in Apple's success.
The most important is the second part. Apple is this unique culture and unique company. You can't replicate it. I'm not going to witness or permit the slow undoing of it. I believe in it so deeply.Cook has participated in this Goldman Sachs event a number of times in the past, but this was his first time as CEO and provided a rare opportunity outside of the company's earning conference calls for him to address questions from those who follow the company from the outside.
Steve grilled in all of us over many years, the company should revolve around great products. We should stay extremely focused on a few things, rather than try to do so many that we did nothing well. We should only go into markets where we can make a significant contribution to society, not just sell a lot of products. These things, along with keeping excellent as an expectation, these are the things that I focus on.
Apple CEO Tim Cook Speaks at Goldman Sachs Technology Conference
Feb 14, 8:10PM
Apple CEO Tim Cook will speak at the Goldman Sachs Technology Conference today at 3:30PM Eastern / 12:30PM Pacific. Cook's presentation will be broadcast via Quicktime on Apple's website and MacRumors will be liveblogging the event on this page. Cook has spoken at the annual conference a number of times (2007, 2008, 2010), but this will be his first time at the event in the role of Apple CEO. While he has not made any major announcements at the venue in the past, he has at times offered an interesting perspective into Apple's business.
Tim Cook is on-stage. Opens with "safe harbor" statement noting that his speech may include "forward-looking statements." Goldman Sachs analyst Bill Shope is conducting the interview.
What should investors know about Apple's relationship with the supply chain and the workers within it?
First thing I would want everyone to know is that Apple takes working conditions very seriously, and we have for a very long time. Whether workers are in Europe or Asia or the United States, we care about every worker. I've spent a lot of time in factories, personally. Not just as an executive. I worked at a paper mill in Alabama and an aluminum plant in Virginia. Many of our top executives visit factories on a regular basis. We have hundreds of employees based there full time.
We are very connected to the process and we understand working conditions at a very granular level. I realize that the supply chain is complex and I'm sure that you realize this. The issues around it are complex. Our commitment is simple: every worker has the right to a fair and safe work environment, free of discrimination, where they can earn competitive wages and they can voice their concerns freely. Apple's suppliers must live up to this to do business with Apple.
We also believe that education is the great equalizer and that if people are provided the skills and knowledge, they can improve their lives. We've put a lot of effort to supplying educational resources to our workers throughout our supply chain. We supply free classes in many place thoroughout our supply chain. More than 60,000 employees have attended these classes, which is pretty amazing when you think about it.
If you take all these employees and move them to one location, it would be larger than Arizona State -- which is the largest college in the United States. This is a powerful stepping stone for workers looking to enhance their careers and their lives.
You can read the details on problems we're looking to fix on our website, but I can tell you that no one in our industry is doing more to improve working conditions than Apple. We are constantly auditing facilities going deep into the supply chain, looking for problems, finding problems and fixing problems. We report everything because we believe transparency is so very important in this area. I am so incredibly proud of the work that our teams are doing in this area. They focus on the most difficult problems and they stay with them until they fix them. They are truly a model for the industry.
We think the use of underaged labor is abhorrent. It's extremely rare in our supply chain, but our top priority is to eliminate it totally. We've done that with our final assembly and we're now working with vendors farther down in the supply chain. If we find a supplier that intentionally hires underage labor, it's a firing offense.
We don't let anyone cut corners on safety. If there is a problem on safety, we seek out the foremost experts and set a new standard and apply that to the entire supply chain. We focus on the details. If there is a fire extinguisher missing from a cafeteria, that facility doesn't pass inspection until that fire extinguisher is in place.
We are continuing to focus on problems endemic to our industry like excessive overtime. Our code of conduct has a cap of 60 hours per workweek. We have consistently found violations of this code over the course of our time, so at the beginning of this year we announced that we are determined to drive widespread change. We have begun to manage working hour at a very micro basis.
In January, we collected weekly data on over a half million workers in our supply chain. We had 84% compliance. This is significantly improved from the past, but we can do better. We're taking the unprecedented step of reporting this monthly on our website, so it's transparent to everyone what we're doing.
The Fair Labor Association began an audit of our final assembly vendors. We started with this last year and in January we were the first technology company to be welcomed into their assembly. Their audit is probably the biggest audit in manufacturing in history. I'm looking forward to seeing the results. We know that people have a very high expectation of Apple. We have an even higher expectation of ourselves. Our customer expect us to lead and we will continue to do so. We are blessed to have the smartest and most innovative people on earth. We put the same kind of effort and energy into supplier responsibility as we do with our new products.
That is what Apple is all about.
37 million units of iPhones shipped. When do we run into the Law of Large Numbers? What are the growth opportunities coming up?
37 million is a big number. It was a decent quarter. It was 17 million more than we'd ever done before. We were pretty happy with that, but let me give you the way I look at the numbers. As I see it, that 37 million for last quarter represented 24% of the smartphone market. There's 3 out of 4 people buying something else. 9 out of 10 phone buyers are buying something else.
Handset market is projected to go from 1.5 to 2 billion units. Take it in the context of these numbers, the truth is that this is a jaw-dropping industry with enormous opportunity. Up against those numbers, the numbers don't seem so large anymore. What seems so large to me is the opportunity.
What we're focusing on is the same thing we've always focused on. Making the world's best products. We think if we stay laser-focused on that, and continue to develop the ecosystem around the iPhone, that we have a pretty good opportunity to take advantage of this enormous market.
The biggest opportunity is the emerging markets. Large portion of that is the prepaid market. Apple has done very well but the wholesale iPhone price point is nowhere near what we would expect in the prepaid market. How do you make it more affordable to those markets?
Those markets are critical. The smartphone market is projected to be 1 billion units in 2015, 3 years from now. 25% of that is projected to come from China and Brazil. Just two of those markets -- 25% -- obviously those are very critical markets, but there are others as well.
We've been very focused on China. We've had incredible success with iPhone -- we've gone from a few hundred million in revenue to last year with $13 billion. We've been really focused on trying to understand there market there and taking those earnings to other markets. As it turns out, not very many people agree with me on this, probably.
What I see is that there is a lot of commonality in what people around the world want. Everyone in every country wants the best product as it turns out. They're not looking for a cheap version of the best product -- they're looking for the best product.
In the emerging markets there are very big differences in go-to-market. In most of the developed market, the carrier owns most of the distribution. In emerging markets, the retailer has most of the distribution. The whole go-to-market has to be changed significantly. Last year, we covered price points in the subsidized markets from $0 on up. That doesn't translate to zero in the prepaid market, but we're covering more price points there.
The paramount thing is the product. It is the focus. Of course distribution, we've recognized the difference there and in purchasing power. Unlike many people, I don't subscribe to the premise that prepay is prepay is prepay. We convinced China Unicom to try postpay. It wasn't big there but they tried it and it's working really well. Postpay is great for everyone because customer gets a cheaper phone and the carrier locks in a customer. It's a different way to look at the issue and it's been successful in China.
When Apple introduced the iPod in 2001, when we launched the iTunes Music Store and launched that on Windows, the iPod created a halo for the Mac. For 23 straight quarters -- 6 years -- we've outgrown the market on the Mac.
The halo that was created by iPod for the Mac, was created in developed markets. It was created in the US, Western Europe, Japan, Australia, Canada. It didn't work nearly to the same level in Eastern Europe, Middle East, Africa, China, Latin America. People were already getting music from their phones. The world changed for us when the iPhone was launched.
The iPhone introduced Apple to millions of people -- our brand -- to people who had never met Apple before. Now, it's interesting to look -- take China as an example -- last year the Macintosh grew more than 100% in China, year-over-year. Not on a big base, but 100% is pretty good. The market grew 10%, so we outgrew the market 10x.
The iPhone is creating a halo for the Macintosh. iPhone has also created a halo for iPad. You can definitely see the synergistic effect of these products, not only in developed markets, but also in emerging markets where Apple wasn't resonant for most of its life.
In 2007 -- we didn't launch the iPhone until 2008. In 2007, the revenue combined from Greater China, several other parts of Asia, India, Latin America, Eastern Europe, Middle East, Africa, was $1.4 billion. Revenue last year for that same group of countries was $22 billion. We're only on the surface. That's how I feel. We focused mainly in China. Last year we began to focus increasingly more in Brazil and Russia.
Shifting to the iPad, it's been around 7 quarters of iPad shipments. You've shipped 55 million units and it's the fastest product ramp for any Apple device in history. What is it about that item that has caused that ramp to occur so quickly and what does that tell you about the tablet market long term?
This 55 million is something no one would have guessed. It took us years to sell iPhones, Macs and iPods. This thing is on a trajectory that's off the charts. The product is incredible, the pace of innovation on the product has been incredible. We went from iPad 1 to iPad 2 in fairly short order. The ecosystem is 170,000 apps that are optimized for iPad.
The reason that it is so large in my view is that the iPad has stood on the shoulders of everything that came before it. The iTunes Store was already in play, the App Store was already in play. People were trained on iPhone. They already knew about multitouch. Lots of things that became intuitive when you used a tablet, came from before. I gave one to my mother and she knew how to use it from watching the commercial.
It's amazing how the product has captured so many people. My mother uses it, my 7-year-old nephew uses it, at Starbucks everyone is using one, in education it's being used, in the enterprise it's being used in big numbers.
>From my point of view, it's the fastest adoption across a wide range that I've ever seen before.
You expect it to be larger than the PC market over time.
We started using it at Apple well before it was launched. We had our shades pulled so no one could see us, but it quickly became that 80-90% of my consumption and work was done on the iPad. From the first day it shipped, we thought that the tablet market would become larger than the PC market and it was just a matter of the time it took for that to occur. I feel that stronger today than I did then. As I look out and I see all of these incredible usages for it, I see the incredible rate and pace of innovation, and the developers -- If we had a meeting at this hotel, and we invited everyone doing cool stuff on PC, we wouldn't have anyone here.
If you invited everyone working on iOS or on that other operating system, you wouldn't be able to fit everyone! That's where the innovation is! That doesn't mean the PC is going to die. I love the Mac and it's still growing and I believe it can still grow. But I believe that tablet market can replace the unit sales of the PC market, and it's just a matter of the speed at which that happens. It's too much of a profound change in things for that to not happen. That's just my opinion.
Now, just about every company is launching a tablet. When we look at the competitive landscape, no one really made a dent in Apple's market. We see some innovative models, Amazon for instance. Companies undercutting the iPad. I know it's not all about price, but what do you think about that?
Price is rarely the most important thing. A cheap product might sell some units. Somebody gets it home and they feel great when they pay the money, but then they get it home and use it and the joy is gone. The joy is gone every day that they use it until they aren't using it anymore. You don't keep remembering "I got a good deal!" because you hate it!
What happened last year, everybody that was in the PC industry and everybody in the phone industry decided they had to do a tablet. There was 100 tablets put on the market last year! They aimed at iPad 1 and by the time they came out with something we were on iPad 2. We wound up with 170,000 apps and I'm not sure there is 100 yet on the other platform. At the end of the day, people want the great product. Amazon is a different competitor. They have different strengths. They'll sell a lot of units. They have and they will.
But, the customers that we're designing our products for are not satisfied with limited function types of products. I think the real catalyst of the tablet market will be innovation and pushing the next frontier. Honestly, we'll compete with everybody. I love competition. As long as people invent their own stuff, I love competition.
How cannibalistic are tablets on PCs? We want to figure out how quickly the PC market falls down on tablets. As a company that offers general purpose computers and the iPad, how do you feel about it?
iPad has cannibalized some Mac sales. The way that we view cannibalization is that we prefer to do it to ourselves than let someone else do it. We don't want to hold back one of our teams from doing the greatest thing, even if it takes some sales from another product area. Our high-order bid is "we want to please customers and we want them buying Apple stuff."
I don't predict the demise of the PC, I don't subscribe to that. Given what we've seen, I believe the iPad is cannibalizing some Macs but more PCs. There are more of them to cannibalize than Macs so thats a plus to us. Tablets in general will cannibalize the PC. I think what it will do largely is that when you're competing with someone -- maybe politicians do this, I'm not big in politics -- it forces you to sharpen your message and tell who you are.
It'll be good for the PC industry because there will be this strong competitor and tablets will innovate like crazy and customers will decide which to buy. There will be a strong PC industry but tablets will be stronger in units.
Shifting to your balance sheet, you have just under $98 billion in cash and liquid investments. In the past you've used your cash very sparingly. Why has there been a reluctance to buy back stock and/or to issue a dividend? Do we expect that to change?
I disagree with your use of the word sparingly. We've spent billions in the supply chain. We've spent billions in acquisition including on IP. We've spent billions on retail, the infrastructure of the company, the data centers et cetera.
Yes, we still have a lot. I would say we're judicious and deliberate. We spend our money like it's our last pennies. I think shareholders want us to do that. They don't want us to act like we're rich. We've never felt that way. It may sound bizarre but that's the truth. In terms of our approach to cash, I've said since becoming CEO that I'm not religious about this. I'm not religious about holding it or not holding it. We're in very active discussions at the board level on what we should do.
I think everyone would want us to be deliberate and really think it through. That's what we're doing. We're not going to go have a toga party and do something outlandish. People don't have to worry that it's burning a hole in our pocket.
Have the discussions become more active? The point I'm getting to, is the cash balance is so large, is there a point that it becomes inefficient to carry?
It's not new that we're discussing it. We are discussing it more and in greater detail. The balance has risen to the point you've made and I think it's clear to everyone and I'd be the first to admit that we have more cash than we need to run the business on a daily basis.
I only ask for a bit of patience so we can do this in a deliberate way and make the best decision for the shareholders.
Looking at the living room, you've said Apple TV is still on the hobby stage. What has the challenges been saying it's on the hobby stage or going into the future?
In terms of existing product, we sold just shy of 3 million Apple TVs in the past year. It's very cool product and I can't live without it. We sold 1.4 million last quarter. It's clearly ramping, but the reality -- the reason we call it a hobby -- we don't want to send a message to our shareholders that we think the market for it is the size of our other businesses. The Mac, the iPad, the iPod, the iPhone. We don't want to send a signal that we think the length of that stool is equal to the others. That's why we call it a hobby.
Apple doesn't do hobbies as a general rule. We believe in focus and only working on a few things. So, with Apple TV however, despite the barriers in that market, for those of us who use it, we've always thought there was something there. If we kept following our intuition and kept pulling the string, we might find something that was larger. For those people that have it right now, the customer satisfaction is off the chart. We need something that could go more main-market for it to be a serious category.
If you don't have one, you should get one because it's a really cool product.
Wanted to touch on Siri and iCloud. How important is Siri and iCloud to Apple going forward?
Siri and iCloud are profound. If you take iCloud -- rewind 10 years. Steve announced the strategy for Apple as the hub for someone's digital life. Out of that we developed iLife. You could connect many gadgets off of this and sync all of your music and photos. You can edit photos and movies. The Mac becomes the repository.
iCloud turns that on its head. It recognizes that in the last 2-3 years, we live off multiple devices. It's no longer a great customer experience to have to sync your iPad to your Mac and then your iPhone to your Mac and then resync your iPad to your Mac. This is a hair-pulling exercise. iCloud recognizes the Mac or PC as just another device and now your life is a lot easier. We have 100 million users of iCloud -- we just launched it in October! This is unbelievable.
I view iCloud not as something with a year or two product life -- it's a strategy for the next decade or more. It's truly profound.
Siri... for years if you were a PC or Mac user, you used a physical keyboard and mouse for input. You pretty much did that for a long, long time. There wasn't a great deal of revolution. Evolution, yes. All of a sudden, Apple comes out with Multitouch on the MacBook Pro and then extended that into phones and tablets and has completely changed those industries.
Siri is another profound change in input. All of us wanted this to work, it's sort of having a video call with FaceTime -- AHA! It can work! -- Siri is still a beta product, but now I feel like I can't live without it. They're not something we run P&L;'s on, we don't believe that. We run the company from the top and don't worry about the iCloud team or Siri team making money. Measuring things at that level wouldn't achieve anything.
Both of these things go in the profound category. They're things that you'll talk to your grandkids about that are profound changes.
Obviously you've stated several times that you want to preserve on Apple's culture and strategy. When we look back at CEO changes, every CEO leaves their mark on strategy and culture. What do you think your leadership will change at Apple? What are you determined to maintain?
The most important is the second part. Apple is this unique culture and unique company. You can't replicate it. I'm not going to witness or permit the slow undoing of it. I believe in it so deeply.
Steve grilled in all of us over many years, the company should revolve around great products. We should stay extremely focused on a few things, rather than try to do so many that we did nothing well. We should only go into markets where we can make a significant contribution to society, not just sell a lot of products. These things, along with keeping excellent as an expectation, these are the things that I focus on.
Those are the things that make Apple this magical place that really smart people want to work in, and do not just their life's work, but their life's best work. I want to look out at an audience and see people using iPhones and see people using iPods at the gym, or going to Starbucks and seeing people use the iPad. These are the things that bring a smile to my face. There is no substitute for that.
We're always focused on the future. We don't sit and think about how great things were yesterday. I love that trait, I think it's the thing that drives us all forward. Those are the things that I'm holding on to and it's a privilege to be a part of it.
Samsung Underestimating Apple's Potential Impact on Television Market?
Feb 14, 7:51PM
Soon after rumors of Apple's plans for entering the television market began to gain significant momentum late last year, analysts noted that the industry's existing players were already "scrambling" to react to Apple's likely entry and its chances of remaking the industry.
But perhaps not all television manufacturers are sweating Apple's arrival, as Pocket-lint reports on comments from a Samsung product manager indicating that his company is confident that its massive investment in picture quality improvements will trump anything Apple might be able to put together in other areas.
"We've not seen what they've done but what we can say is that they don't have 10,000 people in R&D; in the vision category," [Samsung product manager Chris Moseley] said.As a product manager, Moseley's words carry less weight than if they had come from a senior executive with broader responsibility for the company's overall direction, and so it remains unclear whether Moseley's lack of concern about Apple's plans is a personal perspective or a broader indication of the company's thinking on the matter. Moseley is also obviously charged with promoting his company's products and thus would be expected to position them as industry leaders.
"They don't have the best scaling engine in the world and they don't have world renowned picture quality that has been awarded more than anyone else.
"TVs are ultimately about picture quality. Ultimately. How smart they are...great, but let's face it that's a secondary consideration. The ultimate is about picture quality and there is no way that anyone, new or old, can come along this year or next year and beat us on picture quality.
"So, from that perspective, it's not a great concern but it remains to be seen what they're going to come out with, if anything."
Nevertheless, Moseley's comments leave him open to comparisons with other representatives of Apple's competitors who underestimated the company as it entered new markets. Executives at Microsoft and Research in Motion famously panned Apple's iPhone announcement, while others scoffed at Apple's plans to completely reinvent the tablet market with the iPad.
Apple's ultimate plans for a television set are unknown, and its ability to drive a revolution in the well-established and low-profit television industry remains to be seen, but the company's success over the past 10-15 years has proven that competitors would be wise to keep an eye on Apple's efforts.
Apple Switching Back to NVIDIA Graphics for Upcoming Mac Pro Update? [Mac Blog]
Feb 14, 6:26PM
M.I.C gadget reports that it has received information from sources indicating that Apple is "close to finally updating" its aging Mac Pro line. As we detailed in a report last month, the window for a potential Mac Pro update is approaching as Intel prepares to launch its Sandy Bridge E Xeon processors and AMD is pushing out its new "Tahiti" family of graphics cards. But M.I.C gadget reports that Apple may be planning to switch back to NVIDIA for its stock graphics options in the next Mac Pro instead of sticking AMD as on the current models. The move, which would line up with a rumored similar shift for the MacBook Pro, could open the door to improved performance on a number of applications such as those from Adobe that embrace NVIDIA's CUDA architecture.
Nvidia has their "Kepler" platform due out around the same time as Intel is making their changes, and our sources within the company indicate that they have chosen to have Nvidia lead the charge so to speak on the graphics front. This is good for all our compatriots who want to use the special graphics engine in Adobe products, as it supports Nvidia only, or for those who wish to do CUDA based programs as well, again only supported by Nvidia.The report cites "rumblings" that Apple may be targeting a Mac Pro update "near the end of quarter three", although that timeframe may be subject to change. The report's definition of "end of quarter three" is a bit unclear, as that would equate to September as measured by calendar quarters or June as measured by Apple's fiscal calendar. But with Intel pushing out Sandy Bridge E chips in "spring" and NVIDIA reportedly launching Kepler in April, Apple would likely be able to follow fairly closely on the heels of those releases with a Mac Pro update if it elects to do so.
But curiously, the report also claims that Apple will be looking to jump directly to Ivy Bridge, Intel's successor processor family to Sandy Bridge, for the revised Mac Pro. Intel's Sandy Bridge E processors have seen significant delays but are now close to shipping, and it is unclear how Apple's Mac Pro plans would line up with any Ivy Bridge server chip plans from Intel.
Unfortunately, M.I.C gadget does not have a terribly accurate record on hardware rumors, particularly on the Mac Pro front where last year the site was one of those sources claiming that Apple would issue a mid-year Mac Pro update using a custom processor from Intel. So while a switch to NVIDIA for graphics cards in the next Mac Pro may make sense given the timeline for availability on NVIDIA's Kepler lineup, we hesitate to place too much faith in this report's claims for the time being.
North Carolina School District Has Success With MacBook Air Initiative
Feb 14, 5:57PM
The Mooresville, North Carolina district is one of a handful in the country to issue laptops, the MacBook Air in this case, to each student. Mooresville is attempting to turn the public school education on its head, using technology to change the culture of instruction. The district was profiled in the New York Times on Monday.
The Times says the district has "quietly emerged as the de facto national model of the digital school."
[Superintendent of schools Mark] Edwards spoke on a White House panel in September, and federal Department of Education officials often cite Mooresville as a symbolic success. Overwhelmed by requests to view the programs in action, the district now herds visitors into groups of 60 for monthly demonstrations; the waiting list stretches to April. What they are looking for is an explanation for the steady gains Mooresville has made since issuing laptops three years ago to the 4,400 4th through 12th graders in five schools (three K-3 schools are not part of the program).
The district's graduation rate was 91 percent in 2011, up from 80 percent in 2008. On state tests in reading, math and science, an average of 88 percent of students across grades and subjects met proficiency standards, compared with 73 percent three years ago. Attendance is up, dropouts are down. Mooresville ranks 100th out of 115 districts in North Carolina in terms of dollars spent per student — $7,415.89 a year — but it is now third in test scores and second in graduation rates.
Each MacBook Air notebooks is leased from Apple for $215 per year, including warranty. The total cost for the computers is around $1 million per year, plus an additional $100K for software. Families pay a $50 fee
The Mooresville Graded School District paid for the initiative by eliminating 65 jobs, including 37 teaching positions, and accepting larger class sizes. At the same time, schools could get rid of computer labs and antiquated teaching materials like hanging wall maps.
Steve Jobs biographer Walter Isaacson wrote about Jobs' feelings towards American public education. Jobs felt the system was "hopelessly antiquated and crippled by union work rules." Particularly galling to Jobs was that classrooms were led by teachers standing at a blackboard, using textbooks. He felt that "all books, learning materials, and assessments should be digital and interactive." Feedback should be tailored to each student and provided in real time.
Instead of simply throwing technology dollars at the problem, hoping it can fix itself, Mooresville is using technology as a tool to help students learn.
Mooresville frequently tests students in various subjects to inform teachers where each needs help. Every quarter, department heads and principals present summary data to Mr. Edwards, who uses it to assess where teachers need improvement. Special emphasis goes to identifying students who are only a few correct answers away from passing state proficiency standards. They are then told how close they are and, Mr. Edwards said, "You can, you can, you can."Apple made its biggest stride yet into the digital classroom at an education-focused event last month. At that event, Apple launched a new digital textbook initiative for the iPad, plus easy-to-use authoring tools to help educators collaborate and share knowledge across school districts and disciplines.
Jobs' vision for the digital school may be turning to reality in Mooresville, North Carolina.
(Image via Jeremy M. Lange/New York Times)
Apple Reportedly Planning Orders for 65-70 Million iPad 3 Displays in 2012 [iOS Blog]
Feb 14, 3:46PM
Electronista reports on a new article [Google translation] from Taiwan's Commercial Times claiming that Apple is planning for production of 65-70 million iPad 3 displays in 2012, paving the way for a significant boost to Apple's tablet sales.
Shipments for the new LCD panel, believed designed by Sharp but being manufactured by LG Display and Samsung, were said by the Commercial Times to be already booked to the order of 65 million to 75 [70] million units for the year. Versus production of about 40.5 million in 2011, it would represent 60 to 73 percent higher shipments than last year.That 65-70 million number includes only iPad 3 displays, and with Apple having nearly one quarter's worth of iPad 2 sales ahead of the iPad 3 introduction and the company being rumored to continue offering the iPad 2 as a lower-cost option following the iPad 3's introduction, Apple's total iPad sales projections for the year appear to b even higher.
Apple's Architectural Contributions Examined in New Magazine [Mac Blog]
Feb 14, 3:29PM
CLOG, a new quarterly architecture magazine, has opted to cover Apple in its just-published February 2012 issue. The magazine offers nearly 150 pages of stories and images about Apple and architecture, with coverage ranging from Steve Jobs' boyhood Eichler home to the company's forthcoming "spaceship campus" to Apple's network of over 350 retail stores around the world.With one of the largest American office projects in history underway in Cupertino, CLOG : APPLE introduces the first comprehensive discussion of Apple's architecture.The issue is a collection of brief essays, photos, illustrations, and other materials examining Apple from an architectural perspective. Among the features:
CLOG : APPLE showcases over 50 international contributors, including architects, designers, cartoonists, comedians, engineers and other industry leaders. Highlights include an examination of Steve Jobs's Eichler-designed childhood home; the evolution of Apple's store designs; its leading role in innovative glass engineering; the symbolism and urban implications of the new Cupertino headquarters design; reactions to Apple Campus 2 by notable architects and critics; and an interview with one of Apple Computer's original three founders, Ronald Wayne.
- An interview with Apple's third founder, Ron Wayne, addressing a number of topics including Wayne's design of the original Apple logo, Jobs' ambitions in his early days, and Wayne's thoughts on Apple's design and engineering work.
- A humor piece from Colbert Report writer Frank Lesser in which he examines what it would be like if Apple had to purchase a retail store design from a company like itself. In a letter from the fictional architecture firm responding to Apple's request for proposal for a store at the bottom of the Grand Canyon, Lesser promotes store features drawn from Apple's own mystique, including a staircase known as "FeetTime", rubberized covers to product the store's glass panels, and an Apple Store Care extended warranty program.
- A visual size comparison of Apple's planned "spaceship campus" in Cupertino to a number of landmarks around the world.
- An illustrative view of Apple's prototype store facade and how that facade is modified at certain locations to respond to site-specific constraints to provide a customized and yet still-familiar look for most of its stores.
- Two pieces from ifoAppleStore's Gary Allen discussing the evolution of Apple's retail store designs and using the sample of the company's 4th Street store in Berkeley, California as an example of the company's attention to detail.
- A number of redacted response letters from people and companies who refused to comment for the CLOG issue, primarily due to confidentiality agreements with Apple.
CLOG : APPLE is available from a handful of bookstores, or directly from the magazine's site at a price of $15 plus shipping ($5 U.S. and $10 international).
Proview Seeking to Cut Off Apple's Worldwide Supply of iPads
Feb 14, 2:49PM
Earlier this week, we noted that Chinese authorities had begun seizing iPad stocks from a small number of retailers over Apple's alleged infringement of a disputed "iPad" trademark. Apple claims that it purchased the Chinese rights to the trademark several years ago, but the original owner Proview and Chinese courts have disagreed with that assertion.
Bloomberg now notes that Proview is seeking to go beyond local enforcement and is asking Chinese customs officials to block both imports and exports of the iPad over the issue. With iPad production taking place in China, a successful bid by Proview could cut off Apple's supplies of the device throughout the world.
"We are applying to customs to stop any trademark- infringing products from imports to China and also for exports," said [Proview lawyer Roger] Xie, who is based in Shenzhen. "Apple wants to postpone and continue infringement of the iPad in China."Calling a potential export ban "catastrophic" for Apple, one Chinese legal expert notes that pressure on Apple to settle the case has dramatically increased.
A halt to exports from China would be "catastrophic" for Apple because it would mean a global halt to iPad sales, said Stan Abrams, an intellectual property lawyer and a law professor at the Central University of Finance and Economics in Beijing. The threat of an export ban increases the pressure on Apple to settle the case, he said.Apple continues to maintain that it acquired "worldwide" rights to the iPad in ten countries, including China, as part of an earlier deal. Apple's case is still pending with Chinese courts as it seeks to appeal earlier rulings.
"There's got to be a settlement, and fairly soon," Abrams said. "I can't see how much more incentivized to settle Apple could be."
Apple Unveils Striking New Window Coverings at Forthcoming Amsterdam Store
Feb 14, 2:33PM
We've been covering Apple's forthcoming Amsterdam retail store with interest for some time now, as it will be the company's first location in the Netherlands. While development has been slowed by historic preservation issues, rumors last month suggested that the store could open on February 18.
Photo from One More Thing
Apple indeed appears to be getting closer to opening the store, as today it unveiled striking new orange window coverings announcing that the location will be "opening soon". Several Dutch sites including One More Thing [Google translation] and iPhoneclub.nl [Google translation] have posted photos of the store.
Photo from iPhoneclub.nl
Orange is the national color of the Netherlands, while the three vertically-stacked Apple logos are a play on the three crosses found in Amsterdam's coat of arms and which are popularly used to represent the city.
An opening date for the new store remains unknown, with hiring plans and glimpses of the store's interior suggesting that it will not quite meet the previously-rumored February 18 date.
Apple Working with Suppliers on 8-Inch iPad
Feb 14, 8:20AM
The Wall Street Journal reports that Apple is working with suppliers on a smaller iPad carrying a display in the range of 8 inches on the diagonal, down from the 9.7-inch display in the current iPad but still larger than the 7-inch display found in the Kindle Fire.
Officials at some of Apple's suppliers, who declined to be named, said the Cupertino, Calif.-based company has shown them screen designs for a new device with a screen size of around 8-inches, and said it is qualifying suppliers for it. Apple's latest tablet, the iPad 2, comes with a 9.7-inch screen. It was launched late last year.The report does caution, however, that Apple is continually testing new designs with its suppliers and could ultimately decide not to bring the smaller iPad to market.
One person said the smaller device will have a similar resolution screen as the iPad 2. Apple is working with screen makers including Taiwan-based AU Optronics Co. and LG Display Co. of South Korea to supply the test panels, the person said.
According to the report, Apple has played with various tablet sizes in the past, but has so far stuck with a single form factor with a 9.7-inch display, a size Steve Jobs argued was the minimum to meet Apple's standards for usability.
An "iPad mini" has been rumored for quite some time, with reportedly having tested a variety of different screen sizes. A number of the rumors have pinpointed a 7.85-inch iPad that could be released late this year.
Mockup of 7.85" iPad on left, 9.7" (current) iPad on right
Back in December, we published mockups and "actual size" PDFs demonstrating how the device would appear and fit in the hand at that size. Our printable PDFs included home screen (6 MB) and keyboard (18 MB) views, and we also included an actual size image for viewing on a current iPad.
Squeezing the current iPad's resolution down to a smaller screen would also reduce the size of the interface elements on the device, and Apple is indeed said to be planning to move the current iPad's 1024x768 resolution to the smaller iPad in a move that would allow current iPad apps to "just work" on the new device. Testing with our "iPad mini" mockup suggests that interface elements would remain usable even at the smaller size.
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