Company / division: Apple

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    Apple Delays Carpool Karaoke Launch (Apr 25, 2017)

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    Apple Revamps Stores To Become Destinations and Sell Services (Apr 25, 2017)

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    Apple Reduces App Affiliate Fees from 7% to 2.5% With a Week’s Notice (Apr 24, 2017)

    I noted this change myself this morning as I’m part of the affiliate program at Apple (we’ve very occasionally linked to the App Store and iTunes Store from the Beyond Devices Podcast site). The change affects app and in-app purchases, and represents both a short notice and significant reduction to the commissions affiliates have been paid in the past, without any kind of explanation or justification from Apple. There are several possible explanations: Apple could be adjusting this cut downward ahead of a reduction in its cut on apps and in-app purchases to be announced at WWDC in just over a month; it could have decided that too many companies are gaming the system, e.g. by linking to their own apps on the store and taking a bigger cut; it may have decided that it would rather foster better discoverability on the App Store than have third parties do it; or it could be something else entirely. Hopefully the other shoe will drop at WWDC – whether in the way I’ve suggested above or in some other way – but it’s entirely possible that we’ll never know. This isn’t a great signal to send people trying to build a business around the App Store, though, because it suggests capriciousness and unpredictability. And especially because it hurts those businesses which – like Apple – have eschewed advertising as a business model largely or entirely because of the tradeoffs it entails.

    via MacStories

    KGI Reports High-End 2017 iPhone Production May Be Delayed (Apr 24, 2017)

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    ★ Analysis Suggests Apple’s Chinese Market Share Decline is Due to Poor Services (Apr 22, 2017)

    Backchannel has a piece out this week which argues that the iPhone’s declining market share in China is due to the poor competitiveness of its services, notably Apple Music and Apple Pay. The piece is well worth reading, but it offers few real answers. It states that Apple fails to compete effectively with its music and payment services in China, but then also says that the music and payments markets in China have been sewn up by strong local competitors, with music rights in particular subject to exclusives from Chinese services. As such, it’s really not clear what Apple could have done differently in these categories. At the end of the day, Apple’s lack of competitiveness in services in China is a symptom of a much broader issue, which is that Apple doesn’t bend much to local custom when it comes to pricing or service structure (see also India). It does localize content stores, and indeed is one of the strongest players in that respect globally, but China is such a massive market, has so many homegrown competitors, and is run by a government which is not afraid to disadvantage foreign interlopers, that it’s hard to see how Apple could compete effectively there on services. As such, I think it’s smart to compete more on its devices, its growing retail presence, and its non-content software and services. But that does mean that the ecosystem Apple has built elsewhere is missing some of the appeal it has elsewhere.

    But all that is to ignore the central premise of the argument being made here, that it’s this services weakness that’s at the root of the recent decline in iPhone market share in China. I think that’s debatable at best, and it’s worth remembering that that decline isn’t about ownership but sales, and Apple went through a massive cycle earlier off the back of the iPhone 6 in China, and then came down to earth over the ensuing year, so that change in market share is reflective of cyclical rather than permanent trends, with some signs of recovery recently with the iPhone 7. So overall this piece feels like it makes some interesting points, some of them legitimate with regard to Apple’s services competitiveness in China, but overdoes the narrative about its impact.

    via Backchannel

    Apple Driver Training for Autonomous Vehicles Detailed in Documents (Apr 21, 2017)

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    Apple Hires Google Satellite Execs, Likely for Mapping or Broadband (Apr 21, 2017)

    Google recently got out of the satellite mapping business by selling its Skybox / Terra Bella unit to Planet Labs. That unit had mostly been working on mapping imagery, and Google clearly decided it didn’t need to do that work itself to benefit from the results, and effectively outsourced it. Now two executives from that former team have ended up at Apple, under former Dropcam exec Greg Duffy. Given that Apple has nothing whatsoever to do with satellites today, that raises some interesting questions. While it’s true that Google, Facebook, and others have invested in satellite and other new methods for getting connectivity to remote places, Apple has far less incentive to do so, because its users are typically the kind of well-connected people that can afford premium smartphones and computers, not those in remote emerging markets. And to pursue such a play in a market like the US makes little sense either given how satellite broadband has struggled to compete with wired and wireless services because of limited throughput and high latency (just ask DISH). What makes more sense is some kind of mapping play for better imagery, although even there the same logic that led Google to dump its unit would apply to Apple too. These are certainly intriguing additions to the Apple employee rolls, but I’m not yet convinced that either broadband access or mapping are the explanation here.

    via Bloomberg

    Apple Uses Music Muscle to Promote Young Artists for a Month at a Time (Apr 21, 2017)

    Apple is starting a new program through which it will spend a month at a time promoting young relatively unknown artists through its various Apple Music assets, including the streaming service, Beats 1 Radio, and in other venues. When Apple first launched Apple Music, the Connect feature felt like it could be a great way for artists of all sizes to connect organically with their fans through the platform, but it really hasn’t taken off in that way. Meanwhile, SoundCloud and YouTube continue to do better in helping young artists get their start before they get signed to labels. This effort is aimed at a somewhat later stage in the game, but builds on Beats 1 DJ Zane Lowe’s reputation for giving artists their big break, but if it’s a monthlong effort it’s hard to see how it will be scalable. However, it’s all part of Apple’s pitch that its service is the best for artists, whether that’s through exclusives, discovery and promotion, or simply getting paid for their work (since it’s one of the few services that doesn’t have a free tier).

    via Bloomberg

    Apple Enables Web Embedding of Live Photos for Developers (Apr 20, 2017)

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    Apple Makes Big Environmental Push for Earth Day (Apr 20, 2017)

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    ★ iPhone Ownership in US Driven to All-Time High by iPhone 7 Models (Apr 20, 2017)

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    Apple News is Starting to Generate Decent Traffic for Some Publishers (Apr 20, 2017)

    I recently shared an item about Facebook struggling to help publishers monetize their traffic through Instant Articles, and this article now suggests that Apple News is actually doing fairly well in generating traffic (though not much revenue) for publishers. That gels with what I’ve heard from other sources, who say Apple News is now bringing them decent sized audiences, but isn’t giving them all the tools they need to monetize their content on the platform (analytics and integration with third party services like Nielsen are still pretty rudimentary). I think Apple News has made big strides, and arguably gives publishers a lot more control over how their content appears, while also being the only one of the three big proprietary news formats (Apple News, Facebook IA, and Google’s AMP) to allow for paid subscriptions. It’s got a long way still to go, and those subscriptions are still only open to very few publishers, but it sounds like it’s making some decent progress in building an audience which is willing to consume news content through the app.

    via Digiday

    Apple Acquires First Movie at Tribeca Film Festival (Apr 20, 2017)

    This didn’t get a ton of attention, but it’s symbolically important. Apple has so far mostly commissioned content rather than acquiring existing content, while existing online streaming companies Netflix and Amazon have been bidding up prices for movies at festivals for several years now. But Apple has now acquired its first festival film, a documentary about the live of Clive Davis, a music executive. As such, even though the format and origin of the content is different, the subject matter of music is very much the same as Apple’s other original content, suggesting that it still sees Apple Music as the home for this stuff. But Apple is also testing out different models for original content, which will stand it in good stead if (when) it eventually decides to launch its own video streaming service.

    via Variety

    Qualcomm Details Apple Dispute Financials in Earnings Release (Apr 19, 2017)

    Qualcomm has just reported its earnings for the March quarter, and one of the most interesting aspects is its commentary on its dispute with Apple. It says that Apple’s suppliers reported but did not pay around $1 billion in royalties in the quarter, which exactly offset the $1 billion Qualcomm is refusing to pay Apple under the Cooperation Agreement the two companies have, and which Qualcomm says Apple breached. Importantly, that Agreement ended in December, so there are no more payments to be withheld, which means if Apple suppliers continue to withhold royalty payments, they’d affect Qualcomm financially going forward in a way they didn’t this past quarter. As such, it’s given a wider EPS guidance range (25 cents) than usual (it was 10 cents in the last two quarters, for example) because of the uncertainty over these royalty payments (the math here is tricky but I reckon that’s about a $400m range in net income terms). Beyond the Apple dispute, the results are a little tricky this quarter because on paper they look terrible, with revenues and profits way down over the same quarter last year. But that’s partly because Qualcomm had to reduce from its GAAP revenues the nearly one billion dollars it’s due to pay BlackBerry as a result of arbitration between the two companies. The actual results are much better, in keeping with recent trends at Qualcomm, lawsuits aside.

    via Qualcomm (see also slide deck)

    Apple Makes iMovie, GarageBand, and iWork Apps for Mac and iOS Free for All Users (Apr 18, 2017)

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    Bloomberg Confirms Existing Reports about Next iPhone (Apr 18, 2017)

    Bloomberg has a report out today which basically just confirms all the existing reporting on the iPhone. Given that the Samsung Galaxy S8 goes on sale this week, this may be coming off the back of leaks from Apple itself, though the byline includes at least one reporter in Asia, suggesting there are supply chain sources too. There’s really nothing new here – the new iPhone is to come in three variants, with the high-end one getting an edge to edge OLED screen, with the glass but not the screen itself curved, and two other models similar to the existing sizes. At this point, this isn’t a surprise, but it’s good for Apple to have this news out there in the week the S8 goes on sale, because it’s been working on this shift to much smaller bezels for some time but has been beaten to the punch by several Android vendors, and needs to ensure that iPhone buyers are aware something similar is coming this fall. The big questions, which go unanswered in this piece, are about pricing and design differences between the new top-tier iPhone and the others. I continue to expect just another $100 or so price difference between the Plus model and the premium model rather than the $1000 iPhone many seem to think we’re going to get. But I’m curious to what extent the design of the two regular models evolves and how similar or different it is from the new high-end one.

    via Bloomberg

    Apple Receives Permission to Test Autonomous Vehicles in California (Apr 14, 2017)

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    Apple Says Three More Suppliers to Use Solely Renewable Power (Apr 13, 2017)

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    Apple Has Been Working on Glucose Monitoring Technology for Diabetes For Five Years (Apr 12, 2017)

    There’s a nice scoop here for CNBC, which reports that Apple has had a team working on non-invasively monitoring glucose levels for diabetics for five years or more. What’s fascinating here is that Steve Jobs apparently came up with the idea, which gels with a theory my podcast co-host Aaron Miller has that Jobs’ own illness precipitated Apple’s investment in what became the Apple Watch. Tim Cook has said in the past that he didn’t want to build diagnostic or treatment features into the Apple Watch because of the laborious and unpredictable FDA approval process, but it seems the company isn’t averse to working on health-related technology elsewhere. Diabetes has been the focus of a number of Alphabet’s Verily healthcare initiatives too, and remains one of the most widespread chronic illnesses in the world, with an estimated 9.3% of the US population suffering from it and 415 million around the world. One source says 12% of global healthcare spending goes on treating diabetes, so it’s a big target to go after for anyone investing in health tech. But creating products around all this would be a huge departure for Apple, which generally creates general-purpose technology, though there are obvious ties to the fitness features of Apple Watch and the HealthKit and ResearchKit initiatives.

    via CNBC

    Gartner Says Worldwide PC Shipments Declined 2.4 Percent in First Quarter of 2017 (Apr 12, 2017)

    Yesterday, we had IDC’s PC numbers for Q1 2017, and today we have Gartner’s. As usual, they show pretty different trends (IDC the first growth in five years, Gartner the lowest total shipments since 2007), because the companies define the market in different ways. Whereas those IDC numbers were for “traditional” PCs, these Gartner numbers include what some call “detachables” and Gartner calls “ultra mobile premiums” such as the Microsoft Surface. Interestingly, though, whereas in the past those detachable and convertible devices have led Gartner’s numbers to grow faster than IDC’s, the situation now appears to be reversed. That’s interesting, given how hot this category has been and how much it’s helped the overall PC market in the past couple of years. My guess is that the trend will go back to its previous pattern the rest of the year. The two companies do agree on some trends though: HP had a great quarter, particularly in the US, and component shortages are driving some interesting trends. However, whereas IDC saw the latter driving higher shipments in Q1 to get ahead of price increases, Gartner focuses on the downward pressure on shipments the component shortage is likely to cause in the rest of the year due to price increases. IDC and Gartner also agree that the “other” category is suffering badly as the big names consolidate share.

    via Gartner