Apple

Apple appears to be putting its ducks in a row ahead of major Apple TV changes. Alongside last night’s changes to the Apple Online Store to promote Valentine’s Day specials, Apple added an entire Apple TV section.

The Apple TV is now promoted as a full product line alongside Macs, iPads, iPods, and iPhones. Previously, the Apple TV did not have its own section, and it was simply tucked away as an accessory in the dwindling iPod department.

Not only does the Apple TV now have its own section, but it now has promoted and dedicated accessory, AppleCare, refurbished, and community question/answer sections.

Of course, the timing of the Apple TV’s “graduation” is interesting. Last week, we reported that Apple is working on a new version of the Apple TV set-top-box that will integrate new content (such as apps).

If Apple were to launch such a product in the near-future, it would make sense for it to have a dedicated, unhidden spot on Apple’s online store. And, based on what we’re hearing, the new Apple TV will certainly deserve to be called more than a “hobby.”

And we have some more information on why…

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[tweet https://twitter.com/carl_c_icahn/status/428196836860375040]

As Apple opened down nearly 8% following yesterday’s earnings report from the previous quarter, activist investor Carl Icahn announced this morning his third $500 million purchase of Apple stock since the start of the month. Icahn has notably made a lot of noise being vocal toward Apple’s Board of Directors urging a larger buyback program for shareholders, something Apple’s Board has taken a position against, and today’s investment pegs Icahn’s ownership somewhere around $4.1 billion. Icahn’s recent purchases come ahead of Apple’s scheduled shareholder meeting on February 28, 2014.
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In a quiet over-the-air update today, Apple has just added a new Red Bull TV Channel for Apple TV users. The content is similar to what is offered already through the Red Bull TV website and iOS apps with a selection of action sports, music, and lifestyle related video series including both on-demand and live content. That includes clips, full-length episodes, as well as live coverage of events and more.
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While Tim Cook and the rest of the Apple board may be content for Apple to take its time in launching new product categories, investors may be less patient, warns BTIG analyst Walter Piecyk. He also argued that neither the Mac Pro nor a rumored larger-screen iPhone 6 would meet market expectations of innovation.

When we upgraded the stock in March, we assumed Apple could announce a new product that would generate $5 billion of revenue in Fiscal 2014.  That new product never materialized.  We can’t say we are not concerned.  For example, when Apple announced the new Mac Pro at WWDC in June, Phil Schiller proudly boasted, “Can’t innovate, my ass”.  If that is what the company considers to be innovative then there should be some concern for EPS growth.

In the investment note, Piecyk cautions that Tim Cook could face renewed investor scrutiny if he doesn’t deliver … 
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From 9to5Toys.com:

Virgin Mobile is knocking another 20% off their marked down iPhones yielding the lowest prices we’ve ever seen on the unsubsidized phones (that’s another 10% less than this weekend’s mention).

• iPhone 5s is $439.99/519.99/599.99 for the 16/32/64GB.
• iPhone 5c is $359.99/439.99 for 16/32GB.
• Note you can also pick up an iPhone 4 for $159.99 shipped.

Note Apple charges $650 for an unlocked iPhone 5s and $550 for an iPhone 5c so savings is around $200/iPhone. While the iPhones are unsubsidized, Virgin does offer extremely competitive plans on the Sprint 4G LTE network starting at $30/month for unlimited text/data.
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Despite Apple returning to growth for the first time in a year, AAPL stock opened almost 8 percent down, as iPhone sales fell below analyst predictions and Apple’s mid-point guidance on Q2 earnings forecast was for zero growth.

Analysts had predicted 55.3M iPhone sales, while Apple reported sales of 51M. Analysts were also disappointed in Apple’s guidance for Q2 of $42-44B, as the mid-point of $43B would not show any growth over the same quarter last year … 
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[youtube=http://www.youtube.com/watch?v=M5OZMu5u0yU]

Earlier this month we reported that a developer was seemingly able to get Apple’s upcoming iOS in the Car feature running through what we assumed was the iOS Simulator. Today, the same developer, Steven Troughton-Smith, has posted the video embedded above showing the feature actually up and running in a 800×480 Simulator window. Using the iPhone Simulator and iOS 7.0.3, the video shows the Maps app, a crude multitasking tray of sorts, and the ability to search by voice to navigate. No other apps are shown in the video, but it does appear that media controls of some kind are in the multitasking tray like in previous versions of iOS.

We noted before that the design had changed quite significantly since Apple first showed off the feature on stage at WWDC last year. The first set of screenshots posted showed a horizontal navigation bar, but the new video shows a design that’s much closer to what Apple showed on stage and what it is currently displaying on its website. Smith also made some notes of his own after playing with the simulator:
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When Touch ID was first rumored, there had been much speculation about whether the iPhone 5s would act as an electronic wallet, with payments to retailers authorized by fingerprint. While that hasn’t yet happened, it does now seem clear that it’s on the way.

Asked about mobile payments during yesterday’s earnings call, CEO Tim Cook gave what is, in Apple terms, a surprisingly direct response.

The mobile payments area in general is one we’ve been intrigued with. It was one of the thoughts behind Touch ID […] it’s a big opportunity … 
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Just a few days later after Apple CEO Tim Cook expressed his thoughts about the NSA and data collection transparency, Apple has posted an update to its website with new information regarding account data requests. The company’s press release comes as US Department of Justice comes to a settlement with technology companies over how they are allowed to disclose information about government data requests.

A statement from the DOJ explains the agreement will allow “detailed disclosures about the number of national security orders and requests issued to communications providers, and the number of customer accounts targeted under those orders and requests including the underlying legal authorities.” Due to these new guidelines, Apple has now been able to report FISA and National Security Letters separate from law enforcement requests as show in its graphics above and below.  It also notes the new data released today replaces the U.S. data from its Feb. 5 2013 Report on Government Information Requests.

As expected, Apple just announced its fiscal year 2014 first quarter results for the all-important holiday quarter. It’s Q3 report only included less than a month of sales for the new iPhone 5s, 5c and revamped MacBooks, making today’s report the first to include a full three-month period of sales for the new devices on top of the expected boost in revenue leading into the holidays. It’s also the first report since Apple shipped the new Retina iPad mini, iPad Air, and Mac Pro.

Apple reported record quarterly revenue of $57.6 billion, which lands between its guidance for the quarter of $55-$58B and estimates by analysts averaging approximately $58.1B. It also reported net quarterly profit of $13.1 billion, or $14.50 per diluted share. Those numbers compare to the revenue of $54.5 billion and net profit of $13.1 billion reported in the same quarter last year.

Break down of device sales for Q1 2014 include 51 million iPhones, 26 million iPads (both all-time quarterly highs), 6 million iPods and 4.8 million Macs. Prior to today’s report the consensus from an average of analyst estimates predicted Apple would sell approximately 55M iPhones, 25M iPads, and 4.6M Macs.
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Among the hoopla surrounding the 30th anniversary of the Mac last week, Macworld‘s Jason Snell had an excellent interview with Apple’s Phil Schiller, Craig Federighi, and Bud Tribble about both the past and the future for the Mac. While the entire interview is well worth a read, the talk from Apple executives about iOS and OS X convergence being a “waste of energy” stood out to me the most.

“It’s obvious and easy enough to slap a touchscreen on a piece of hardware, but is that a good experience?” Federighi said. “We believe, no.”

“We don’t waste time thinking, ‘But it should be one [interface]!’ How do you make these [operating systems] merge together?’ What a waste of energy that would be,” Schiller said. But he added that the company definitely tries to smooth out bumps in the road that make it difficult for its customers to switch between a Mac and an iOS device—for example, making sure its messaging and calendaring apps have the same name on both OS X and iOS.

Of course, it appears that the Apple executives are taking shots at Microsoft, Windows 8, the Surface line of products, and Google’s new Touch-enabled Chromebooks. Microsoft is well known to believe that computer operating systems should be the same regardless of devices. On the other hand, Apple has two complete different operating systems: one for the iPad and iPhone, and the other for the Mac. Federighi explains why:

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Guests at two boutique hotels in Manhattan and Cupertino will soon be able to skip the check-in desk and go directly to their room, using an iPhone app to unlock the door. The WSJ reports that the Aloft Hotel will launch the new service this quarter.

Guests at these properties will receive a message on a Starwood app containing a virtual key, which will unlock the door with a tap or twist of their phone through the use of Bluetooth technology. The company says the iPhone 4s or newer models and the Android phones running 4.3 or newer will be compatible … 
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When Apple reports its quarterly earnings later today, the news will be good, according to the consensus view of 47 Apple analysts compiled by Fortune.

Analysts are expecting the company to report earnings of $58.1B for the final quarter of last year (Apple’s fiscal quarter 1), representing 4 percent earnings growth over the same quarter last year. This would be right at the top end of Apple’s guidance of $55-58B, and the first time in a year that Apple would have reported year-on-year growth … 
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While Android reaching almost 70 percent of smartphone sales across 12 key markets is the headline, with iOS falling to just under 24 percent, it is Samsung feeling the pressure, says Kantar, reporting sales figures for the final quarter of 2013.

After years of accelerated growth, Samsung is now coming under real pressure in most regions, with European share down by 2.2 percentage points to 40.3% and in China its share ended the year flat at 23.7% […]

Apple has lost share in most countries compared with this time last year, but importantly it has held strong shares in key markets including 43.9% in USA, 29.9% in Great Britain and 19.0% in China … 
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(Head to 37:40 in the video to see the telphone comparison)

Harry McCracken tracked down this video from the launch of the Macintosh that hasn’t been seen since 1984. It turns out there was a second ‘launch demo’ a week after the original launch at the shareholder meeting and the videographer forgot he had the video of that (woops!) in his garage. The audience this time wasn’t wasn’t Apple shareholders but actually members of the  Boston Computer Society and the general public, which made for a different type of presentation. The quality and tone of the video is often much different than the one given a week earlier at the Flint Center on the De Anza College campus near Apple’s then HQ.

Over at YouTube, you can watch the Cupertino presentation, along with a sort of a rough draft held as part of an Apple sales meeting in Hawaii in the fall of 1983. As for the BCS version, all 90 minutes of it are there in the video at the top of this post, available for the first time in their entirety since they were shot on January 30, 1984.

The Cupertino and Boston demos may have been based in part on the same script, but the audience, atmosphere and bonus materials were different. In Cupertino, Jobs spoke before investors, towards the end of a meeting which also included dreary matters such as an analysis of Apple’s cash flow.

What’s particularly interesting to me and not part of any other videos I’ve seen was Jobs’ comparison of the Mac (and eventually by extension GUI interfaces) to the invention of the telephone. Fast forward the video above to about 37:40 to see it. As McCracken puts it, the Mac wasn’t necessarily competing with IBM machines but competing with no computer at all.  This metaphor is striking in hindsight.

The video also has a Q&A with the original Mac team which is also pretty interesting if you are into that kind of thing.

McCracken has much more on the video here which is definitely worth a read.

The transcript of the Telephone/Telegraph bit pasted below:

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<a href="https://twitter.com/saschasegan/status/421117388235358208/photo/1">Image via Sascha Segan</a>

Earlier this year, World Wrestling Entertainment (WWE) held a press conference to announce that it will be bringing its wrestling content to television and mobile devices via a new WWE Network. At the event, WWE Chief Revenue and Marketing officer Michelle Wilson announced hardware partners and that the network will provide its content via a 24/7 stream that costs $9.99 per month.

As shown in the video below (5:30 in), Wilson said that the network would become available on a slew of devices, including iOS devices, Android devices, Rokus, Amazon Kindle devices, Xbox hardware, and PlayStations. Rounding out the list of supported devices, Wilson said, is “a connected device that I am not allowed to mention at this press conference…”

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