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Get watching: Apple finally brings TV show downloads to Apple TVs in Canada (Australia and UK too)

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While TV shows have been available through iTunes in Canada, the Apple TV has not been a source of TV show downloading. Now, Apple appears to have sent an over-the-air update to Apple TV boxes in Canada, and TV show downloading is now available. Episode downloads cost between free and $2.49 a pop and are actually full downloads, not rentals. Apple recently traded single TV show episode rentals for a TV show downloads service. Episodes you purchase will be streamed with no limit from the iCloud storage locker. More photos after the breakThanks, iH8Sn0w!

Update: We’re also starting to receive multiple tips from Australia and UK as well.

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Analyst: First Apple HDTV will be integrated into next-gen iMacs (unlikely)

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There has been no shortage of analyst reports regarding an Apple branded HDTV that the company is rumored to have already started work on. Some are calling for a late 2012 launch, but up until now, all have imagined the device as a standalone HDTV. Wedge Partners analyst Brian Blair offers up another concept, claiming Apple will introduce a next-gen iMac with TV capabilities that will act as a transitional device before jumping head first into the TV business. The device would essentially integrate iCloud and Apple TV features, in addition to traditional TV hardware, into the larger 27-inch iMac design. Blair explains (via Forbes):

We think this makes sense because while we typically think about the newest TV’s hanging on the wall in large form factors, Apple could effectively start with what they already have on the manufacturing line and slowly push their offering from 27 inches and scale up from there to 32 inches and then move on to the 42, 50 and 55 inch market. In short, we believe the initial Apple TV is their iMac computer that can function as a TV, over the iCloud platform.

While this appears to be entirely speculation at this point, he makes much of his case based on the fact Apple already has the 27-inch iMac in production. We know Apple killed Front Row in Lion, while at the same time introducing iOS-like functionality like Launchpad. The 27-inch iMac is already an excellent display for consuming video content, but how conventional TV features might be baked into Lion is yet to be seen.

We’re pretty sure the Apple HDTV, if it comes to pass, will be based in iOS.  It will also be a living room experience unlike the up-close experience of an iMac.  Also, Apple seems to be going away from using its Mac Hardware as a TV device killing both Front Row and the included remote on many of its products.  Therefore we think this speculation is off.
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Apple’s next-generation Apple TV moves closer to reality, assigned J33 codename

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iOS release history tells us that as a product in development moves even closer to release, it is assigned a proper codename. Not only an identifier like “3,1” but a codename such as N94 (iPhone 4S) or K48 (original iPad). The next-generation Apple TV has reached that stage. Thanks to today’s beta release of iOS 5.1, we have on our hands the codename for this new Apple TV (3,1).

As you can see above, the new Apple TV is rocking a the J33 codename, the second JXX product we’ve seen from Apple. The first was the J2 – a new iPad – that we discovered just last week. Apple’s iPad 2 almost reached the peak of Apple’s KXX options with the CDMA version dubbed as K95, so Apple’s move to JXX nomenclature is something that would have to happen sooner or later. With Apple recently beefing up their flagship tablets and phones with dual-core A5 chips, we think this new Apple TV represents an A5 dual-core model that packs in 1080P playback abilities. As to whether this thing has a display on it, it is too early for us to tell.

Thanks, as always, iH8Sn0w!


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aTV Flash (black) hack from FireCore goes 1.0, on sale

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You don’t need this software to hack an AppleTV but it makes things easier.

aTV Flash (black) is a user-friendly software package that supercharges your new black AppleTV, unleashing a plethora of new functionality. Don’t worry about the technical details – aTV Flash (black) is simple to use and safe for your AppleTV. Installation is a snap and doesn’t require any physical changes to the AppleTV.

MacUpdate has it for the sale price of $19.99 today only.  AppleTV (2010) went on sale for $89.99 at Amazon matching Best Buy so you are looking at $110 for the whole shebang.  If you have an old AppleTV, they’ve got you covered there as well.  Full features below:


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Apple releases iTunes 10.5.1 Beta 2 to developers, featuring iTunes Match for Apple TV

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Following the release of iOS 5.0.1 this afternoon to developers, Apple has released iTunes 10.5.1 Beta 2 to developers this evening. Along with being posted to the Developer Center, Apple has sent out the following email to developers. In the email Apple now reveals that iTunes Match has been made available for Apple TV. This update also includes a number of bug fixes. Sadly, iTunes Match still isn’t available to the public.

iTunes 10.5.1 beta 2 is now available and includes a number of important stability and performance improvements. iTunes Match is also now available for testing on Apple TV.

On your Apple TV, choose Music > Turn on iTunes Match.

Please remember to backup regularly and do not delete the music you add to iCloud from your computer.

How’s it looking on your Apple TV? Let us know; tips@9to5mac.com. Full email after the break:


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Hulu Plus app is ready for Apple TV, decision to update is “political not technical”

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We’ve gotten word that inside Apple there are Apple TVs running the Hulu Plus app natively. The app is feature complete and ready to roll out to Apple TV users on current builds. In fact, it has been ready for at least a month and development is now on hold.

While there are no technical issues standing in the way of the Hulu Plus release on Apple TV, there appear to be some political ones. At some level at Apple, there appears to be some consideration that the Hulu Plus app could eat into iTunes TV sales on the Apple TV. Where Netflix tends to run older programming, iTunes is the Apple TV’s only outlet for current TV programming.

Hulu Plus is available on the iPad and other iOS devices but unlike many other content apps, you can’t AirPlay them to an Apple TV like Apple’s own iTunes videos. Additionally, you can use an HDMI cable to watch the iOS Hulu Plus through an iPad on your HDTV, but mysteriously only in Standard definition, not the native HD Hulu or iTunes quality. Plus, who needs an HDMI-tethered solution?

Adding to the political troubles, Hulu was recently trying to sell itself to players including Apple competitor Google (and Apple itself) but no bidders were willing to bid high enough. Perhaps Apple wanted to make sure that Hulu Plus didn’t turn into a Trojan Horse for one of its competitors?

Hulu Plus was originally barred from all TV platforms, but giving hope to Apple TV users, it recently appeared in HD on the $59 Roku (above) and even a few smaller platforms like the very capable Western Digital’s TV Live (pictured below).


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iTV

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The moment I read the “I’ve Cracked the TV” quote from the Steve Jobs bio, I knew what the subject of the next few months at the rumor mill would be. Here it is in context:

“‘I’d like to create an integrated television set that is completely easy to use,’ [Jobs told Isaacson]. ‘It would be seamlessly synced with all of your devices and with iCloud.’ No longer would users have to fiddle with complex remotes for DVD players and cable channels. ‘It will have the simplest user interface you could imagine. I finally cracked it.’”

That seems to be a lot more certain than Jobs was last year at the D8 conference when he took a question from an audience member. In it, he laid out some very important things that no one is really talking about.

[vodpod id=Video.4289468&w=650&h=425&fv=videoGUID%3D%7BFF922002-FA63-4B68-A326-EA12EC800612%7D%26amp%3Bplayerid%3D4001%26amp%3BplyMediaEnabled%3D1%26amp%3BconfigURL%3Dhttp%3A%2F%2Fm.wsj.net%2Fvideo-players%2F%26amp%3BautoStart%3Dfalse]
(Flashless)

The whole clip is much more fascinating than much of what I’ve been reading over the past week. The interface that Jobs is talking about isn’t whether Apple will use Siri or 3D gestures or not. It is how to put a layer on top of everything else with a consistent UI. He gets down to the nitty gritty at 1:30-3:00:

Add a box on to the TV system. You can say well gosh I notice my HDTV has a bunch of HDMI ports on it one of them is coming from the set-top box I’ll just add another little box with another one. Well, you just end up with a table full of remotes, clutter of boxes, bunch of different UIs, and that’s the situation we have today. The only way that’s ever going to change is if you go back to step one and tear up the set top box and restart from scratch with a redesigned UI and present it to the consumer in a way they’re willing to pay for it. And right now there’s no way to do that. So that’s the problem with the TV market. We decided what product do we want the most, a better TV or a better phone? Well the phone won because there was no chance to do the TV because there’s no way to get it to market. What do we want a better TV or better tablet. Well a better tablet because there’s no way to get the TV to market. The TV is going to lose until there is a better go to market, or there’ll just be a bunch of TIVOs. That’s the fundamental problem. It’s not a problem of technology, it’s a go to market technology.

So the question becomes: How is Apple going to “tear up the set top box” and start over?


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Apple seeds iOS 5 beta 7, iTunes 10.5 beta 7, Xcode 4.2 beta 7 to developers (full change log)

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Apple has just released iOS 5 beta 7 to developers as an over-the-air update. iOS 5 includes new features like Notification Center, Twitter integration, Newsstand, and iCloud support. The software update will become publicly available this fall, likely alongside the new iPhone lineup in early October. Apple has released iTunes 10.5 beta 7 and Xcode 4.2 beta 7 as well. Apple has also just released Safari 5.1.1 update 3. Let us know at tips@9to5mac.com anything you find!

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We’ve found that in the Wi-Fi sync settings there is now support for multiple Macs. Under each Mac you’ll find what categories your iOS devide will sync to. Thanks Christoph!

Additionally, the Nuance Text to speech is now available as a menu item (below)

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The following issues relate to using the 5.0 SDK to develop code.We’ve pasted the full change log for the new beta after the break:


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Is the AppleTV 2 the future of low-CPU use servers? Desktops?

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Why run a family pictures website, DNS or any other low CPU-use server on power-hungry Intel-based hardware when an AppleTV2 does the trick?  The folks at MacMinivault.com have set up a webpage on a AppleTV 2 (go ahead, try to take it down) jailbroken with httpd as an example of what can be served off of the little 6 watt, A4-powered dynamo.  Put 10 of these together and you’ll be using the same power as a single 60 Watt light bulb.

The Apple TV is running iOS 4.2.2 (obviously jailbroken) with lighttpd for a web server. You can see the webpage we set up by visiting atv.macminivault.com. We’ll keep an eye on the CPU load and watch the analytics to record how much traffic the Apple TV receives.

They say this won’t be a cost effective solution for their customers (8 GB of storage won’t cut it) but is a ‘fun experiment.’

What’s interesting is that Apple likely has an dual core A5-platform AppleTV coming out shortly which may push a little more into the Intel server space.  Perhaps more interesting is that the A5 chips could also make nifty little ChromeOS-busting terminals or even cheaper laptops.

If you want to create your own little AppleTV 2 server, they recommend the following:
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More on Apple's Airport/Time Capsule and a possible refresh

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Image via Amazon

We’ve been tracking Time Capsule/Airport shortages reported earlier for about a week. Our sources noted that Airport Express has been plentiful but supplies of TimeCapsule and Airport Extreme have been tightening globally the way products usually do before a refresh.

What we do know is that Apple has been internally testing Time Capsules to cache Software Updates for both Mac and iOS devices.  The way we’ve heard it works is that the new Time Capsule learns which devices connect to it via Wifi.  It then goes out to Apple’s servers and downloads Software Updates for those products.

When the user wants to install the software update, the Time Capsule, which is also the router, routes you to the locally stored update, rather than downloading the whole thing over the Internet.  This works for iOS updates as well, though the updating still happened via the Mac.

Apple’s Mac OSX Servers currently do this for Mac businesses, so the technology already exists externally (though Mac OSX Server just downloads everything – without knowing which devices will be connected).

With Apple’s new iCloud component, we believe Apple has a chance to extend this functionality.  Perhaps Time Capsules could cache parts of your iCloud music locker that you use the most so that it speeds up the streaming process.  It could also cache large documents and files that get used often or even movies and photos you own.

While Macs have plenty of local storage, this would be particularly beneficial for iOS devices which are limited to Flash storage, especially AppleTV which has very little local storage.  As HD video gets bigger (1080P) Apple will need new ways to deliver and store this content.

The system could also work in reverse.  Apple could allow these new Time Capsules to back up your backups to the Cloud.

Will this be part of Apple’s iOS 5/Lion/iCloud announcement?  We’ll just have to wait and see.
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Apple TV 4.2.2 update released, bugfixes mostly

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Apple has just pushed out a software update to the Apple TV and it’s version 4.2.2 build number 8F305. The update is likely bug fix related and we’ll update with more details when they are available.

Here’s the direct download link.

Update: Here are the updates:

Apple TV Software Update 4.2.2 features

Feature Summary
Audio Addresses an issue in which audio is not output when playing some video content.
Video playback Addresses an issue in which video is not displayed when playing some content.
Audio output setting Adds an audio output setting for switching to 16-bit audio for compatibility with some TVs and AV receivers.
Live FF/RW improvements Improves the performance of fast-forwarding and rewinding live events.
Movie description Addresses an issue in which the description information is not displayed for some movies.
YouTube video order Addresses an issue in which YouTube subscription videos were not ordered by date.

Jailbreakers might want to hold off.  Via MuscleNerd: (thanks commenter)

Apple just pushed out a lone AppleTV2G update…stay away from that if you’re currently untethered on ATV2G


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Apple and Verizon to deliver over-the-air iOS updates to Verizon iPhone

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Apple has long used the proxy of iTunes to push updates to its iOS devices: when a new software update is available, users need to plug their device in via USB, click update, and the new software version is downloaded and installed.

Smartphone competitors have long offered a different, more direct method for software updates that happens over-the-air. Specifically, when an update to Google’s Android operating system or HP/Palm’s webOS is released, users are provided an update notification and can update the software right on their phone. No computer required.

Now, Apple wants to provide the same convenience to their iPhone users and is preparing to provide over-the-air iOS updates, starting this fall.

Multiple sources (one as far back as March) say the new feature will debut in iOS 5, meaning iOS 5 will not come over-the-air but following point updates to it will. Just like tethering in iOS 3, Apple has the technology but cannot just unleash it everywhere. Apple and Verizon Wireless are said to have been in talks over these wireless software updates since early this year. Sources could not comment on whether or not Apple is negotiating similar deals with AT&T or international iPhone carriers.

The iOS-based AppleTV has been able to update itself without iTunes intervention so the hooks are obviously in iOS.  Two things to note:

  1. Updates are now over 600MB.  Apple would have to make these smaller to get the carriers to agree to push these things as they are.  We believe that Apple will make the updates much smaller by using incremental patches rather than full OS downloads
  2. iTunes provides the backup to the iOS device so a failed update would need some sort of backup.  We think there will be a Cloud-based backup system.

Obviously, if this is a feature in iOS 5, it should conceivably make its way to iPad and iPod touches as well.  That means  iTunes may no longer be a needed conduit for updating iOS devices in the future.  It would also mean that the iPad could finally be a stand alone device.

Mockup below


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AppleTV Update 4.2.1 fixes flickering and other small issues

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Apple just issued a 4.2.1 update to AppleTV that is meant to fix a few nagging bugs:

Feature Summary
TV compatibility Addresses issues that may cause the screen to flicker or display incorrect color on some older TVs.
Wake from sleep Addresses an issue where Apple TV may not wake up from sleep.
Audio Addresses an issue where audio may not be heard on some TV models after switching from another input.
Stability and performance Apple TV Software Update 4.2.1 includes stability and performance fixes for Apple TV.

4.2.1 Direct Download.
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Mac OS X 10.6.6 ships — App Store is open

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Apple has confounded industry watchers who expected the rumored noon launch time and the Mac App Store is available immediately, with over 1,000 apps available to download. Fire up Software Update and go grab it, people…(and read this while you wait). Update: No iWork 11, but you can get the individual apps and Aperture here. Press Release after the break.
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Reviews: A little Mac App Store info-nugget

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We’re all agog waiting on the introduction of the Mac App Store tomorrow (Jan 6). It seems likely to eclipse the CES clamor. Now we have this tiny nugget to share: You’ll be able to review Mac Apps just like you review iOS apps.

Sure, we know this isn’t a massive surprise: stop and think about it and it makes perfect sense that you’ll be able to put virtual pen to paper to leave others with your impressions of those Mac Apps you love or loathe.
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Apple updates Remote.app to 2.1, adds AirPlay, Internet Radio

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Pretty much everything on any Apple product is playable on any other Apple product now…I think…

What’s New in Remote.app Version 2.1?

• AirPlay video support to control iTunes on your computer to stream videos to an Apple TV
• Internet radio control to play thousands of internet radio streams in iTunes on your computer
• The ability to control iTunes on your computer to play Movies and TV shows that are rented from the iTunes Store
• Addresses issues connecting to an iTunes library or Apple TV
• Includes stability and performance improvements


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New Apple TV Sales to Top One Million This Week

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Even while it emerges Google’s Google TV plans seem to be foundering (FIRE SALE!), Apple has announced that its new Apple TV will ship its millionth unit later this week.

While many hope the A4 chip inside Apple TV might be enabled to run some apps one day, many also consider the Netflix support within Apple TV to be the big win for sales.

Press Release follows:
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AirFlick lets you AirPlay anything compatible on the Internet (update: AVIs too)

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[youtube=http://www.youtube.com/watch?v=FOrn3aoc8yo&w=480&h=385]

Erica Sadun has put together a new Mac application called AirFlick . To put it simply, AirFlick lets you watch any video stored on your Mac or any video from the internet that is compatible with the AppleTV/iTunes ecosystem (.mov, mp4, etc.). Simply launch the application (screenshot after the break) drag a file path from your Mac or an internet video URL. As soon as you hit the play button the video will start playing on your TV via the Apple TV.

The first time we tried it we got an error message but then we left the error window and tried again and it worked. AirFlick is a bombshell piece of software for your Mac and if you’re like me you will find it extremely useful. AirFlick sort of turns your Apple TV into a video web browser as you are no longer limited to the built in YouTube or Netflix player. You get way more now.

Sadun notes that AirFlick is “quite alpha” with 0.01 as its version number. AirFlick has worked as it should so far for us, and you can give it a try here too. A third party developer has proved that the Apple TV can act as a “data server” and as an internet browser to a point. So why is it taking Apple so long?

Update: Erica Sadun figured out how to get AVIs streaming too. Video after the break.


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NFL Sunday Ticket coming to AppleTV (and others)

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It would appear that NFL Sunday ticket is coming to AppleTV, Boxee and Roku players if a survey dug up by Engadget has any merit.  Not surprising as it is a natural extension of the AppleTV experience.  But will it be delivered as an app or as a built in module in the way Netflix is currently delivered.  Notice there is no mention of GoogleTV?
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AppleTV receives a minor update (8C154) [Update: release notes]

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At 4:12 ET today Apple updated its AppleTV firmware.  It should be hitting devices shortly or can be downloaded for fun below.  There is no update list as of yet.

AppleTV(2G) (AppleTV2,1) 4.2.1 (8C154) 12/14/2010 16:12:02

Update: According to Apple’s release notes the update resolves an issue regarding 480p playback as well as a video re-downloading issue.

Feature Summary
TV resolution fix Addresses an issue that causes some high-definition TVs to incorrectly display at 480p.
Download fix Addresses an issue that may cause a movie or TV show to be re-downloaded.


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Airplay is now working to the Mac

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[youtube=http://www.youtube.com/watch?v=hQg046aoV9Y&w=640&h=390]

For those of us who still use a Mac Mini (or other Mac) as a MediaCenter connected to our TVs, today’s hack from Erica Sadun is a blessing.  She created a Mac Application that can catch Airplay from iOS devices and output the video on the screen.  For all intents, AirPlayer lets your Mac do what an AppleTV does naturally.

You can download the Macintosh Application, called AirPlayer.app here.

The interesting question is: Does Apple want us doing this?  They make much more money selling Minis (and other Macs) than they do on AppleTV units.  However, it would seem easy enough for Apple to include this type of Application with Mac OSX.  So why does Sadun have to build it instead?  Are we in for another cat and mouse chase?

(update: it is a .01 release and we did have some trouble getting it to work with a YouTube video over wifi)
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Bloomberg: Netflix Streaming on iTV, released tomorrow

Well, there you have it.  According to Bloomberg, an Army of people “familiar with the matter” have said that Apple will launch a TV service tomorrow with Netflix inside.  iTV?

Apple Inc., preparing to announce a new set-top box that delivers TV to consumers, will include movies from Netflix Inc., according to three people with knowledge of the plans.

The streaming service would be available on the revamped version of Apple TV, due to be introduced tomorrow in San Francisco, said two of the people, who asked not to be identified because the plans haven’t been made public. Users would pay a subscription fee to Netflix for the service, the people said.

Perhaps that’s why the Roku HD player dropped from $129 to $69 with $10 of free content at Amazon overnight.
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Notes from Tim Cook’s Goldman Sachs talk (Updated with transcript)

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Apple COO Tim Cook spent an hour this afternoon answering analyst questions about Apple.

You can hear the audio here.

Update: We’ve pasted the full text of Cook’s Q&A below:

From SAI

4:08 Clapton’s “Change the World” is playing leading up the presentation. Now “Sunny Came Home.”

4:09 Getting underway. Tim Cook reads disclosure.

4:10 Q&A begins. Steve Jobs was very clear about leadership in mobile devices. Is that how we should think about Apple at this point? Tim Cook: Yes. Let me elaborate. If you look at Dec. quarter results, which included revenues of almost $15.7 billion, as we compared ourselves to every other company in the world, including Sony and Nokia and Samsung, which now have huge mobile device businesses, we found out we were the largest in the world, measured by revenues.

4:11 How are you channeling resources differently? Transition to mobile devices began in 1991 with first introduction of portable product for Apple with introduction of the TFT screen. During that time, the Mac business has become a predominantly mobile device business. Huge difference between us and the balance of the industry in portable share.

4:12 Ah, a history lesson. Going through all the mobile devices Apple has ever launched. Vast majority of Apple’s revenue now comes from mobile devices and content purchased for those devices. Believe we’re well positioned to do extremely well because we can seamlessly offer software and hardware.

4:13 Who are biggest competitors and who are biggest partners? Tim Cook: I wish the world were that simple. Many people you can’t cleanly put in one or another. Take Microsoft. In Microsoft, we love the Mac Office division. They do a great product and we partner with them and work with them very tightly. Most of the balance of Microsoft we compete vigorously against, in OS, in mobile OS, etc. If you look at Google, I would say Google is similar in that respect. We partner with them in maps, in search for most of our products, but we also compete with them in the mobile OS space and now in the hardware phone space. So, it’s difficult to put people in one camp or the other always. There are some companies like the media companies where we partnered with so well that Apple is now selling billions of dollars of digital content.

4:15 Also companies like carriers where we partnered with to bring iPhone to in 86 countries. Ones that draw the most attention are the ones that are more complex, where we’re both competitors and partners.

4:16 Apple TV is still a hobby. We’ve been very clear about that. The reason that we call it a hobby… if you look at the other businesses we’re in, these businesses are all in huge markets. The unit volumes in these things is huge. Apple TV is in a market that’s very small. Today. Apple TV did grow in the quarter we just finished by 35% in a unit basis year-over-year.

4:17 No interest in going into the TV market. But still think there’s something there. So we continue to invest in this as a hobby.

4:18 iMac is very key, will continue to be very key. I think people will continue to want a very gorgeous large screen, all-in-one, simple to use, very elegant machine, we’re going to continue to deliver it.

4:19 Where growth coming from going forward? Here’s the exciting thing. If you take a look at the Mac, the Mac has outgrown the market 20 of the last 21 quarters. 5 years in a row. Has outgrown the market. And in many of those quarters, outgrew it by multiple. The PC industry is over 300 million units per year. Last fiscal year, Mac did over 10 million units. Ceiling is far above. Continue to invest in enormous amount of energy and talent in the Mac. Doesn’t take Market growth. 50% of customers in Apple store are from Windows.

4:20 iPod touch has been a runaway hit, and it helps the platform that you’re talking about. If you look at the iPod touch, it grew 100% last fiscal year. 55% y/y last quarter. Each fuels more app sales, more developers. iPad? Haven’t sold one yet. A lot of interest in it. I’ve been using one for 6 months or so, I’ll tell you the experience is just absolutely incredible. Can’t wait to start shipping it.

4:21 iPhone, I feel we’ve just gotten started.

4:22 Over 3 billion downloads on app store, over 140,000 apps for sale, these are incredible numbers. Who would have dreamed of these? I see opportunity all over the place.

4:23 The word “complete” is not in our dictionary. We’re all about innovation. Many times that means we’re all about obsoleting ourselves. Going to continue to make things better and going to continue to innovate. I’d say the ecosystem is really good, the platform is really good. Certainly all the foundation is in place. Will it get better? Clearly yes. But great now.

4:24 iPad new use case or replacement for netbooks? We haven’t sold one. I’m a paranoid guy by nature, but I’m not losing any sleep over cannibalization, to be honest with you. Who would buy it? I’ve been very clear about my view of netbooks. I think they are an experience that most people will not want to continue to have. People were interested in the price and they got it home and used it and went ‘Why did I buy this?’ so I think when somebody looks at iPad and compares it to a netbook, I find it hard to believe that people are going to buy netbooks. Not everyone will make the comparison so I’m not suggesting that. But I think what I’d rather do with this question is report back to you.

4:26 iPad will launch in direct channel first, and indirect channels where we have assisted sales, such as store-in-store at Best Buy, and Internationally, Apple Premium Resellers. Initially, it will be around places with really great assisted sales. Over time, it will expand. Where it goes and how fast it goes, we’ll see.

4:27 Why so cheap? We didn’t want to leave pricing umbrella for competition. For those who haven’t focused on this, it has best browsing experience you could ever imagine. Very anxious to start getting it out.

4:28 Extended key partnership with AT&T. Can you talk about advantages and disadvantages of having exclusive agreement? The primary advantages on a single carrier model, and I’ll talk about the iPhone, is simplicity and in some cases, we’re able to innovate along with the carrier and provide a feature it would be difficult to work with multiple carriers and provide. We brought visual voicemail to market, which took innovation from Apple and carrier partner. On a multi-carrier model, the question is, can you sell more units? And so what that gets at is, in some countries, carriers have very sticky relationships with their countries, so having more carriers and more distribution allows you to sell more units. If you look where are from the end of our Q1 in December, if you looked at top 10 iPhone countries, 5 were single carrier countries. 3 of those we had a contractual exclusivity, 2 we can add carriers when we desire. Across 2009, we added carriers in France, UK, Singapore, several Scandinavian countries. A great deal of our work on distribution side was expanding carriers in existing countries. Pleasantly surprised that in every single country, our units increased significantly, and our share with it. Feel like we made really good decisions. Not saying we would do it in every country. But that was our experience with the ones we did it in 2009. We do it on country by country basis.

4:32 Would another carrier need to match pricing on iPad to become carrier for it? I think AT&T’s pricing is revolutionary. (Unlimi

ted data for $30/month, 250 MB for $15/month.)

4:33 Talked a little before about virtuous cycle we have with devs. How do you protect user experience as developers go out and develop products? This is the privilege and curse of technology. Same as you’d see in PC world; at some point, if you include every hardware you’ve ever shipped, you stifle innovation. Because we’ve done this for so long, I feel like we’ve come to a really intelligent conclusion on these each time. I think that’s part of our knowledge and heritage as a platform provider.

4:35 Which way is OS market moving? I don’t see it as this or that — iPhone vs. Mac — or this over that. I think there is a place for both. What you’re seeing for Apple is that the Mac OS is very scalable. Huge competitive advantage for Apple. Use the Mac OS in a lot of products. Don’t think there’s another company that can use the foundation of their OS that way. Move at a fast speed with many fewer people than it would take if we were geographically north. (Slap at Microsoft.)

4:36 Our surveys indicate Mac and iPhone are attracting significant interest in enterprise. What are you doing?

4:36 For the iPhone, 70% of Fortune 100 companies in US are either deploying iPhone or currently testing for deployment. 50% of the FT 100 are doing the same thing. Huge uplift in interest as we went to iPhone 2.0 software and then 3.0 because we put a number of enterprise features in the software. We clearly see this continuing. On Mac side, amazing how many CIOs are now visiting Apple and are interested in the Mac. We haven’t put on a huge channel, and don’t have a huge sales force, but many CIOs that once thought standardization was the most important thing in life, they now look at salaries of people and the importance of having peoples’ creativity at peak, and are increasingly allowing employees to decide. This helps Apple immensely.

4:39 I think people in general and they think enterprise is bigger than consumer. But it’s not. In PCs, it’s 10%, which is sizable, but consumers are over 50%. Our heart and soul and DNA is in consumer. It just so happens there are consumers working in enterprises who want to use these products.

4:41 People are looking at this differently. At least the people with a lot of vision are.

4:41 Just short of 300 stores. Ron Johnson has built a retail team Bar None. We went into retail not as a test, not as pilot, but to sell to consumers, because many wanted it. We knew we’d never have enough stores to cover the world. So after we got going, we set a range of 25-50, reasonable range we could execute really well. Made a strategic call in 2008, we thought we’d see many more opportunities — some top properties would come on the market with better economics. And guess what? Now, there’s a lot of great properties on the market. So we’re going to do about 50 this year. We’ve always had the team to do 50. It’s not easy to do, it’s very hard to do. But we’re going to do it. We didn’t lower the bar at all. These stores are among the best we’ve ever done. If you haven’t been to NYC Upper West Side store, it will make your jaw drop. Next time you’re in Paris, go to the Louvre; it’s just amazing. Another store in China in Shanghai in the summer that is mind blowing. Another one in London that will also drop your jaw.

4:45 New chip. Apple has been in silicon design business for years. Not new to us to be in silicon design business. As we looked at some of the products that we are doing like the iPad, and some we will do in the future, we felt that we had the best knowledge of what we wanted the silicon to do. And were in the best ability to deliver that ourselves versus going out to somebody else and buying something that wasn’t exactly what they wanted.

4:47 Acquisition strategy: Historically, we have acquired companies for technology and talent. And they have been on the small size. We’ve looked at large companies, but we have not had a large company pass a strategic and a financial test. We don’t let our money burn a hole in our pocket. Unless we find something that really makes sense for Apple shareholders, we’re not going to do it. The small ones have been incredibly valuable for us, mainly from the talent POV, but also from technology. If we find a large one, we won’t be shy about it. But we won’t do it to do it. We have never been about being the biggest, we’ve always been about making the best products. Not having highest market share or most revenue. Acquiring something that makes our revenue go higher wouldn’t be a reason why we’d buy a company.

4:49 How do you stop hubris from creeping in? Executive team in the company spends a lot of time thinking and discussing how to retain and recruit the best talent in the world. At the end of the day, I know it’s a cliche, but people are our most important asset in the world by far. It’s people who deliver innovation. We are the most focused company that I know of or have read of or have any knowledge of. We say no to good ideas every day. We say no to great ideas in order to keep the amount of things we focus on very small in number so that we can put enormous energy behind the ones we do choose. The table each of you are sitting at today, you could probably put every product on it that Apple makes, yet Apple’s revenue last year was $40 billion. I think any other company that could say that is an oil company. That’s not just saying yes to the right products, it’s saying no to many products that are good ideas, but just not nearly as good as the other ones. I think this is so ingrained in our company that this hubris you talk about that happens to companies that are successful and sole role in life is to get bigger, I can tell you the management team at Apple would never let that happen. That’s not what we’re about. Small list of things to focus on.

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