Apple Inc

Apple said yesterday that its legal battle with the FBI has such far-reaching consequences that it should be settled by Congress rather than by the courts – but if that tack is unsuccessful, Bloomberg reports that the company will be putting forward a rather unusual argument in court. Apple will argue that the digital signature it uses to validate code is protected by the First Amendment as free speech, which cannot be compelled in law.

Before you download a new game or messaging app on your iPhone, the device checks for a digital signature tucked within the lines of code on the app. All applications sold through the App Store are approved by Apple and have this cryptographic autograph from the company telling your iPhone it’s safe. In the FBI case, some privacy advocates believe the company has a strong First Amendment case because it’s being asked to add that signature, against its will, to software that would aid the government.

In other words, even if the government could force Apple to write code that would remove the passcode protections, it shouldn’t be allowed to force Apple to sign the code – and if Apple doesn’t sign it, the iPhone won’t accept it …

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Mark Gurman revealed on Friday that Apple has introduced a new reward program designed to boost iPhone sales in Apple Stores.

The program’s goal is to push Apple retail employees to sell more iPhones by promising rewards and all-expense paid vacations to Cupertino, California to employees who sell the most iPhones in their region, according to sources.

I do, of course, recognize the pressure Apple is under following flat iPhone sales last quarter and the company warning that its revenue will this quarter see its first ever year-on-year decline since 2003. But Tim Cook has himself repeatedly claimed that Apple focuses on making great products rather than sales numbers, repeating this line earlier this month.

Offering staff incentives to push iPhone sales strikes me as a mistake with the potential to damage the company’s image …

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A competitor to Apple-acquired camera tech firm LinX has demonstrated the benefits that can be delivered by a twin-camera system like that rumored for the iPhone 7 Plus. A CNET video (below) shows how combining images from two separate cameras can deliver far sharper zoomed-in images compared to the camera in the iPhone 6s/Plus.

Corephotonics said that it had working dual camera systems back in 2014, but the supply chain was not yet able to deliver the volumes needed. That has now changed, it says …

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Victims and families of victims in the San Bernardino shootings have expressed divided views on the Apple vs FBI battle over access to an iPhone used by one of the terrorists.

We noted earlier that the mother of one of those killed in the attack has expressed support for Apple’s position, stating that the constitutional right to privacy “is what makes America great.”

This is what separates us from communism, isn’t it? The fact we have the right to privacy. I think Apple is definitely within their rights to protect the privacy of all Americans.

However, Reuters reports that some victims of the attack plan to file a legal brief in support of the FBI …

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If Tim Cook’s strongly-worded response to the court order instructing it to assist the FBI in breaking into an iPhone left any room for doubt about Apple’s determination to fight the matter all the way to the U.S. Supreme Court, that doubt appears to be removed by further background emerging today.

The NY Times reports that Apple plans to press ahead with plans to increase its use of strong encryption.

Mr. Cook has told colleagues that he still stands by the company’s longstanding plans to encrypt everything stored on Apple’s myriad devices, services and in the cloud, where the bulk of data is still stored unencrypted.

“If you place any value on civil liberties, you don’t do what law enforcement is asking,” Mr. Cook has said.

The piece also reveals that Apple had asked the FBI to make its court application under seal – meaning that the legal arguments could be heard in private – but the FBI chose instead to make it a public fight …

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Update: Apple has since informed us that the comment by a local representative was not an official statement and has been mistranslated from the Chinese by Caixan. The correct information is that the ability to add cards was being made available on a rolling basis throughout the day. 

With many Chinese iPhone owners reporting they they are unable to register for Apple Pay, an Apple spokesman representative has said the issues are due to too many people trying to sign-up a planned gradual rollout throughout the day. Mashable reports that 38 million bank cards had been linked to Apple Pay by 5pm on launch day, 10M of them registered within the first hour.

Chinese site Caixin cited one example.

“It kept telling me the phone ‘cannot connect to Apple Pay’ or the verification for the card is not available when I was linking a bankcard,” said Duan Ge, a 31-year-old employee of a film production company. Duan said he managed to link his debit card after about 30 minutes of trying, but later when he tried to register another credit card, he “could not even open the app.”

Some had feared that Apple might face an uphill battle in persuading Chinese nationals to use the service, for two reasons …

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A Bloomberg profile of Apple’s ‘chief chipmaker’ – SVP of hardware technologies Johny Srouji – talks about how the iPad Pro was launched behind schedule, and almost ended up being less powerful than the iPhone 6s.

The original plan was to introduce the iPad Pro with Apple’s tablet chip, the A8X, the same processor that powered the iPad Air 2, introduced in 2014. But delaying until fall meant that the Pro would make its debut alongside the iPhone 6s, which was going to use a newer, faster phone chip called the A9 […]

The iPad Pro would look feeble next to the iPhone 6s. So Srouji put his engineers on a crash program to move up the rollout of a new tablet processor, the A9X, by half a year.

While the piece predictably doesn’t reveal much we didn’t already know, it does contain one surprising fun fact about the original iPhone …

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Civil rights organizations have expressed strong support for Apple’s resistance to a court order instructing it to create special firmware that would allow the FBI to break into an iPhone – with tech companies doing the same, albeit in a weaker fashion.

The Electronic Frontier Foundation (EFF) posted a statement in which it said that it applauded Apple for standing up for the rights of its customers, and would be making its views known to the court.

Essentially, the government is asking Apple to create a master key so that it can open a single phone. And once that master key is created, we’re certain that our government will ask for it again and again, for other phones, and turn this power against any software or device that has the audacity to offer strong security […]

EFF applauds Apple for standing up for real security and the rights of its customers. We have been fighting to protect encryption, and stop backdoors, for over 20 years. That’s why EFF plans to file an amicus brief in support of Apple’s position.

The Verge notes similar support from both the American Civil Liberties Union (ACLU) and Amnesty International …

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Update: The WSJ reports that Apple’s target is to raise $12B, “on the higher side of investor expectations.”

An SEC filing reported by ZeroHedge reveals that Apple has announced plans for a series of new bond issues to raise money for further stock buybacks and dividend payments in what could be a 10-part deal.

General corporate purposes, including repurchases of Apple’s common stock and payment of dividends under the company’s program to return capital to shareholders, funding for working capital, capital expenditures, acquisitions and repayment of debt.

MarketWatch adds that the notes will offer floating-rates maturing in 2018 and 2019, and fixed-rates maturing at a range of dates from 2018 all the way through to 2046. Apple has not yet revealed either the rates to be offered or the total sum it plans to raise, but previous issuances suggest we can expect the amount Apple is borrowing to be substantial …

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No one will be surprised to hear that I greatly prefer Apple’s platform to those of competitors. I’ve often argued that if you want a single ecosystem where everything Just Works across devices, Apple still has a significant lead, even if other platforms are gaining ground.

But that doesn’t mean I think Apple’s own platform is perfect. There are reliability issues that mean the platform doesn’t always live up to that Just Works ideal, and there are annoyingly persistent bugs which the company doesn’t seem in any hurry to fix.

In a podcast interview on Friday, Eddy Cue and Craig Federighi argued that while all software has bugs, the sheer number of users means that complaints are “amplified,” making them appear more prevalent than they are in reality. There may be some truth in this – at least on the iOS side – but I’d argue that Apple allows known bugs to persist through too many platform and app releases …

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Apple is currently on target to start selling its next iPhone and iPad models the same week that the new products are introduced in March. Apple is currently planning to introduce a new 4-inch iPhone dubbed the “iPhone 5se” and a new iPad Air at an event on Tuesday, March 15th, then put the products up for sale online and in retail stores as early as Friday, March 18th, according to sources. Apple is unlikely to offer pre-orders for the new devices, according to sources who cautioned that the plans could still change.

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iPhones could in future automatically sound louder or quieter notification alerts depending on the level of background noise. A patent application published today describes how both an iPhone and Apple Watch could periodically measure ambient sound levels, adjusting notification volumes to an appropriate level.

The patent notes that while users can manually adjust the volume of alerts, many don’t do so because they forget or because it’s too much hassle. The patent suggests that the primary sound reading would be taken from the Apple Watch (aka ‘a wearable device’) …

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Attempts by states like California and New York to ban the sale of encrypted phones could be overruled by federal law. The Verge reports that a cross-party bill is being introduced today in Congress by Rep. Ted Lieu (D-CA) and Rep. Blake Farenthold (R-TX).

The ENCRYPT Act of 2016, or by its longer name, the Ensuring National Constitutional Rights of Your Private Telecommunications Act, would preempt state and local government encryption laws. The two men said today they are “deeply concerned” that varying bills surrounding encryption would endanger the country as well as the competitiveness of American companies. The argument is that it wouldn’t be easy or even feasible to tailor phone encryption capabilities for specific states.

New York last month kicked off the attempt to ban the sale of encrypted phones in the state unless the manufacturer built in a back door, with a virtually identical bill proposed in California later the same month. The moves – which would effectively outlaw the sale of current iPhones in both states – followed similar proposals in the UK last year …

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The Guardian reports that Apple has acknowledged growing complaints that third-party repairs to the Touch ID home button of an iPhone 6 can brick the device when iOS is updated, and that it is a deliberate security feature.

There have been growing reports of an ‘error 53‘ following an iOS update to an iPhone 6, leaving the phone dead. A Guardian freelancer was one of those affected.

Freelance photographer and self-confessed Apple addict Antonio Olmos says this happened to his phone a few weeks ago after he upgraded his software. Olmos had previously had his handset repaired while on an assignment for the Guardian in Macedonia […]

He says he thought no more about it, until he was sent the standard notification by Apple inviting him to install the latest software. He accepted the upgrade, but within seconds the phone was displaying “error 53” and was, in effect, dead. When Olmos […] took it to an Apple store in London, staff told him there was nothing they could do, and that his phone was now junk … 

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Apple has been talking about the post-PC era ever since the original iPad launch in 2010, with Steve Jobs suggesting that PCs would be the ‘trucks’ of the computing world while most people would be happy with ‘cars’ aka iPads.

Tim Cook picked up the post-PC baton the following year, and has more recently presented himself as proof of the idea and argued the point more aggressively following the launch of the iPad Pro.

I think if you’re looking at a PC, why would you buy a PC anymore? No really, why would you buy one? Yes, the iPad Pro is a replacement for a notebook or a desktop for many, many people. They will start using it and conclude they no longer need to use anything else, other than their phones.

It’s a stance I agree with … to some extent …

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An intriguing Apple patent application published today describes how the Touch ID home button could gain additional functionality, allowing it to perform different actions in response to different fingerprints, as well as adding pressure sensors to provide it with 3D Touch type functionality.

The patent goes into a great deal of detail about the technology, with little information as to what it might be used for, but Apple does give a couple of clues. One use of different fingerprints described is to allow someone else to use your iPhone or iPad, but restrict their access to particular apps and for a limited time. The obvious application here would be allowing a child to use only specific apps and/or limit the time they are allowed to use a device …

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BlackBerry phones were once the default choice for enterprise, the combination of physical keyboard and secure messaging facility the two key selling-points. Those days are long gone.

The company dismissed the iPhone when it was launched in 2007, claiming that touchscreen phones could never compete with physical keyboards – before doing a U-turn by launching its own touchscreen phone less than a year later. A series of major service outages and a failure to deliver the promised BlackBerry 10 in 2011 sealed the company’s fate as a major player, and it today appears set to completely cede the secure messaging space to Apple.

BlackBerry CEO John Chen effectively admitted in December that the company had a ‘backdoor’ into its supposedly secure messaging system, and the company has now stated that it will this year make only Android phones – a platform not noted for its security credentials. This shortly after Microsoft’s Windows Phone looked even more irrelevant, the company reporting that revenues had halved year-on-year …

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After literally years of analysts claiming that we’ve reached ‘peak iPhone’ – that Apple’s year-on-year growth had gone as far as it could go – that day has finally arrived. iPhone sales last quarter were essentially flat (up just 0.4% year-on-year), and the company yesterday forecast that this quarter will see its first ever year-on-year decline in revenue since 2003.

If Apple hits the midpoint of its projected revenue for the current quarter, it will suffer a year-on-year fall in income of 11%. For the first time in 13 years, the ‘Apple is doomed’ merchants can cite real-life numbers as support for their position.

The reality, of course, is far more nuanced. There are some very specific reasons why the current quarter will be such a tough one, and why ‘peak iPhone’ is likely to be temporary, and I’ll get to those in a moment. But there’s also a bigger picture that suggests that Apple may have to be willing to think the unthinkable when it comes to the huge margins it has been able to enjoy to date …

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