Apple

After reaching settlements with just about every publisher involved in the long-running Apple/Amazon e-book price fixing case, The United States Department of Justice today published its proposal to end the case with Apple after finding the company guilty of conspiring to fix ebook prices during trial earlier this month:

“The court found that Apple’s illegal conduct deprived consumers of the benefits of e-book price competition and forced them to pay substantially higher prices,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division.  “Under the department’s proposed order, Apple’s illegal conduct will cease and Apple and its senior executives will be prevented from conspiring to thwart competition in the future.”

Among the key points in the proposal:
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Apple execs working on iWatch

According to Jessica Lessin, Apple has acquired chip development firm Passif. The company’s chip technologies are focused on utilizing low-power and work with low-energy Bluetooth technologies.

As Apple moves towards smaller devices, the talent and resources of Passif will be critical. Apple reportedly tried to buy the firm a few years earlier, but was only able to strike a deal within recent months. We previously reported that Apple has been poaching several employees from other chip makers to work on the upcoming iWatch.

Apple confirmed the Passif acquisition. In recent weeks, Apple has also acquired mapping firms Locationary and HopStop.

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January File Photo

According to a local Chinese report, Apple CEO Tim Cook was recently back in China hoping to jumpstart relations with Chinese carriers this week. Cook met with China Telecom, already a strong Apple partner. The topic of conversation wasn’t revealed but likely on the plate is Apple’s lower cost plastic iPhone, perhaps called the iPhone 5C, and overall flattening growth in Apple’s second biggest market.

Apple CEO Tim Cook in China, visited with China Telecom, possibly to talk about declining iPhone sales, say local reports.

— Michael Kan (@Michael_Kan) July 30, 2013

The article speculates that he probably met with the other local carriers including partner China Unicom and the world’s biggest carrier, China Mobile who has around 700M subscribers – none of which have direct access to Apple’s iPhone yet.

It is Cook’s third known trip to China since he took over as CEO almost two years ago. Other things that may come up include Pegatron’s supposed worker violation issues and perhaps even another Beijing scalping problem.

Rough translation below:
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According to an upcoming report from the China Labor Watch, outlined by the Wall Street Journal, Apple’s China-based manufacturing partner Pegatron has come under fire for worker conditions. The report outlines several claims which shed a negative light on Pegatron:

• Pegatron is claimed to be withholding worker IDs. This means that Pegatron employees are unable to work elsewhere because they lack proper identification.
• The company is also claimed to be providing “poor living conditions” with “30-minute waits to enter their production facility, tight living quarters, and packed cafeterias.” Cold showers and packed dorms are also noted.
• Workers are claimed to be working over 60 hours a week (Apple’s limit), while Apple’s June Supplier Responsibility paper points to a 46-hour work-week average for Pegatron employees.
• At a Pegatron subsidiary, employees are said to be provided gloves that do not sufficiently protect from the materials used to create metal backplates for the iPad.

As for pay, the report claims that some workers are seeing their payment withheld. Within this issue, recruiting companies for Pegatron have come under fire for not paying the workers enough. These recruiting companies, in some situations, are even fining employees:

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After being offline for more than a week, Apple’s Developer Center is back. Access to the portal was removed by Apple after it was discovered that a breach into the system granted individuals access to the names, mailing addresses, and email addresses of registered developers. Apple confirmed that sensitive personal data such as credit card information and developer passwords were encrypted and secure.

The Developer Center looks the same as it was prior to its removal, but we assume Apple has followed through with its promise to overhaul the entire system by updating its server software and rebuilding its databases from scratch so as to prevent another intrusion.

While most of the main developer services have returned, Apple is still in the process of restoring the entire portal to normal. Some areas of the site such as the forums, pre-release documentation, and development videos, are still offline as per Apple’s System Status page.

Apple has also emailed developers with this new information:

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Apple’s new release of Logic Pro X marks the first time in nearly six years that the company has completely overhauled the app’s UI. It’s been a long time coming for pros like myself that rely on the application, and to make things even sweeter, Apple is promising more than just a fresh coat of paint this time around.

There’s no ignoring the backlash Apple experienced just two years ago with its redesign of Final Cut Pro X and the removal of pro features in return for an elegant, streamlined interface. The question is, does Logic’s slick new interface come with compromises for professionals? Or has Apple learned from its mistakes with FCPX?
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Photo: ibtimes.com

The latest numbers from IDC, ABI and Strategy Analytics (the latter not yet online) paint an interesting picture of where the smartphone business currently stands, and where the iPhone sits within it.

The overall picture for smartphones is, of course, strong. IDC reports:

In the worldwide smartphone market, vendors shipped 237.9 million units in 2Q13 compared to the 156.2 million units shipped in 2Q12. This represents 52.3% year-over-year-growth, the highest annual growth rate in five quarters. Second quarter shipments were up 10.0% when compared to the 216.3 million units shipped in 1Q13.

While ABI pegged the year-on-year growth at a significantly lower 44 percent, it’s clear that much of the traditional featurephone market is switching to smartphones.

The high-end also remains strong, with both the iPhone and Samsung S4 outpacing the smartphone market as a whole, though both sets of figures show iPhone growth at a long-time low … 
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Previously, we covered Apple’s announcement that it had won a large contract to supply iPads to LA Unified School District. The program will equip students across the nation’s second biggest school district with iPads that include the Pearson Common Core System of Courses delivered via a new app as part of the integrated solution. Additionally, each iPad will come preloaded with Apple’s iWork (Pages, Keynote, Numbers) and iLife (iMovie, iPhoto, GarageBand) suites in addition to a range of educational third-party apps. Apple noted that the $30 million commitment is only the first phase of a larger roll out for Los Angeles schools.

In a new report today, we see how big that buy really is.

The first 31,000 iPads are only the initial phase of the program, which plans to buy and distribute iPads to all 640,000 students in the nation’s second-largest school district by late 2014, Mark Hovatter, the chief facilities executive for the LAUSD, told CITEworld.

“The most important thing is to try to prepare the kids for the technology they are going to face when they are going to graduate,” said Hovatter. “This is phase one, a mix of high school, middle school, and elementary students. We’re targeting kids who most likely don’t have their own computers or laptops or iPads. Their only exposure to computers now is going to be in their schools.”

That’s a huge number to add to Apple’s iPad numbers over the next year. As it stands, if Apple reaped $400 of revenue from each iPad, it would receive $256M for the deal. More importantly, it lays the groundwork for other school districts that may want to emulate this adoption.

Best of all, it exposes a massive amount of children to Apple’s technology that might not already have access to it.

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[youtube=http://youtu.be/mSsXrPxJ2rc]

“How can we create high quality, easy-to-use software for both professional and novice DJs?”

That’s the question that inspired co-founders Karim and Christoph to make Algoriddim’s djay, the award-winning music production software. At the time, DJ software was extremely expensive and complex, but the pair were determined to create meaningful change in an industry they were both tremendously passionate about. While they both enjoyed the art of scratching, in between attending classes and studying for exams at college, the two had vastly different skill levels.

Karim was the expert. With ten years of experience under his belt, Karim had his fair share of knowledge about the industry and had used some of the most popular DJ software available. But with every gig he played, Karim found each solution clunky and downright confounding. He could manage, as digital software proved to have a superior functionality compared to his old analog favorites, but the situation wasn’t even close to ideal.

Christoph, on the other hand, had an extraordinary admiration for DJing, but didn’t have the experience or expertise of his buddy Karim. No matter what software he tried, Christoph was often puzzled as most professional software featured an overwhelming set of controls and required an insanely high level of manual skill, which made performing all the more difficult.

As such, the duo wanted to make something new; software that they and similar people could both use.
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As planned, Apple today announced its earnings results for the Q3 2013 quarter.

CUPERTINO, Calif.–(BUSINESS WIRE)–Apple® today announced financial results for its fiscal 2013 third quarter ended June 29, 2013. The Company posted quarterly revenue of $35.3 billion and quarterly net profit of $6.9 billion, or $7.47 per diluted share. These results compare to revenue of $35 billion and net profit of $8.8 billion, or $9.32 per diluted share, in the year-ago quarter. Gross margin was 36.9 percent compared to 42.8 percent in the year-ago quarter. International sales accounted for 57 percent of the quarter’s revenue.

The Company sold 31.2 million iPhones, a record for the June quarter, compared to 26 million in the year-ago quarter. Apple also sold 14.6 million iPads during the quarter, compared to 17 million in the year-ago quarter. The Company sold 3.8 million Macs, compared to 4 million in the year-ago quarter.

Apple’s Board of Directors has declared a cash dividend of $3.05 per share of the Company’s common stock. The dividend is payable on August 15, 2013, to shareholders of record as of the close of business on August 12, 2013.

Apple reported revenues for Q3 of $35.3 billion, which is within Apple’s estimates for the quarter of between $33.5 billion and $35.5 billion. This compares to $35 billion in revenues in the year-ago Q3.

Apple also reported net profit of $6.9 billion. This compares to $8.8 billion in profit during the year-ago Q3 quarter.

In terms of product sales, Apple reports that it sold 31.2 million iPhones, 14.6 million iPads, 3.8 million Macs, and 4.57 million iPods. This compares to the 2012 Q3 quarter in which Apple sold: 26 million iPhones, 17 million iPads, and 4 million Macs, and 6.8 million iPods.

Apple CEO Tim Cook on the results:

“We are especially proud of our record June quarter iPhone sales of over 31 million and the strong growth in revenue from iTunes, Software and Services,” said Tim Cook, Apple’s CEO. “We are really excited about the upcoming releases of iOS 7 and OS X Mavericks, and we are laser-focused and working hard on some amazing new products that we will introduce in the fall and across 2014.”

Apple CFO Peter Oppenheimer on the results:

“We generated $7.8 billion in cash flow from operations during the quarter and are pleased to have returned $18.8 billion in cash to shareholders through dividends and share repurchases,” said Peter Oppenheimer, Apple’s CFO.

Apple’s guidance for next quarter (Q3 2013) is revenue between $34 billion and $37 billion.

At 2 PM Pacific time, Apple will hold a broadcasted earnings call. We will conduct a live blog of the call with interesting notes in a separate post. Full press release below:

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http://www.youtube.com/watch?v=wE7AQY5Xk9w&feature=youtu.be

Despite Microsoft’s disastrous quarterly earnings report, in which it took a $900M writedown on discounted Surfaces, the company has just pushed out a new ad for its Surface v. iPad campaign.

As with its previous advertisements, Microsoft bashes the iPad’s inability to perform certain tasks that the Surface is specifically designed to handle. This particular ad highlights the iPad’s lack of built-in back stand, USB port, and keyboard accessory, all of which are not built-in to or included with the iPad.

Interestingly, in this ad, the Siri-inspired voiceover says, “This isn’t going to end well for me, is it? Nope definitely not ending well,” which is particularly intriguing given yesterday’s financial results. As evidenced by these results, it would appear that Microsoft’s Surface is  in a precarious position, and not Apple’s iPad.
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From 9to5toys.com:

Best Buy is having a significant College Student sale this week on MacBook Airs, Retina/Pros and iMacs and Students or anyone with a .edu email address get another $100 off the sale prices signing up here. For instance, the entry level Haswell MacBook Air is now $949 and another $100 drops it down to $849, the lowest price we’ve seen by $100.

Haswell MacBook Air prices:

• MacBook Air – 11.6″ Display/4GB Memory/128GB Flash Storage:$949.99-$100 students=$849.99 ($150 off)
• MacBook Air – 11.6″ Display/4GB Memory/256GB Flash Storage:$1139.99-$100 students=$1039.99 ($170 off)
• MacBook Air – 13.3″ Display/4GB Memory/128GB Flash Storage:$1,044.99-$100 students=$944.99 ($155 off)
• MacBook Air – 13.3″ Display/4GB Memory/256GB Flash Storage:$1,234.99-$100 students=$1134.99 ($165 off)

Retina MacBook Pro prices:

• MacBook Pro Retina 13.3″/8GB Memory/128GB Flash Storage:$1399.99-$100 students=$1299.99 ($200 off)
• MacBook Pro Retina 15.4″/8GB Memory/256GB Flash Storage:$2044.99-$100 students=$1944.99 ($255 off)

iMac Prices save $100 across the board and another $100 for students = $200 savings starting at $1100

The MacBook Student $100 off promotion starts today, and will end July 27.
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There are a few snippets of AppleTV related news popping up today. The first we take with the usual grain of salt as it comes to us from the often unreliable DigiTimes. The publication has been reporting some more believable stories as of late, but today’s rumor of Apple purchasing 55 and 65-inch Ultra HD TV panels from LG seems to be more rumor than anything else.

Apple has of course been rumored several times to be building a full fledged HDTV to go along with the much expected revamped AppleTV service coming in the the near future. The latest from the usual lineup of analysts points to a launch as early as the end of this year or early 2014. LG and Sharp– two of Apple’s regular display suppliers– would be obvious choices to source panels, but there’s no proof at this point that Apple is beyond the experimenting stage and we’ve heard rumors from more reliable sources ranging from 40-inch to 60-inch in the past.

Next up for today’s AppleTV news is a bit more insight into the company’s current negotiations with cable and media companies. We heard previously that Apple is working with TimeWarner to bring AppleTV integration in the coming weeks, but, according to the NYTimes, its recent hire of Hulu SVP Pete Distad will also come in handy as it negotiates with others for similar apps:
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With Apple’s Q3 2013 financial call set to take place later this month on July 23rd and Wall Street expecting near zero revenue growth, today we get a look at what analysts are expecting for iPad sales. With no major product announcements since the  introduction of iPad mini and iPad 4 last fall (and only a minor upgrade with the 128GB iPad 4 in January), it’s not all that surprising the consensus from 48 analysts polled by Fortune is that Apple will experience a big drop in growth year-over-year for iPad during the June quarter.

The average estimate of 18.1 million iPad units during Q3 works out to around 6.2% growth compared to 183% and 84% in Q3 2011 and Q2 2012, which some might still consider significant due to the lack of new product announcements and competition from Android tablets:
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