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Notes from Apple’s Q2 2015 earnings call

Kicking off Apple’s conference call announcing its record-breaking numbers for Q2 2015, Apple CEO Tim Cook reported that the company had its strongest March quarter ever, with 27% revenue growth overall, and 55% year-over-year growth in iPhone revenue. Cook also noted that Apple has seen a higher rate of switchers to the iPhone than in previous iPhone cycles, cited strong success of the iPhone in emerging markets with 63% year-over-year growth, and noted that the App Store had its best quarter ever with a record number of customers making purchases, driving a new record for App Store revenue.

Cook also touched on Apple’s successes in other areas, noting that Apple Pay has had great momentum, with the number of merchants accepting Apple Pay having tripled, and new initiatives in accepting Apple Pay in the healthcare industry, as well as HealthKit and ResearchKit initiatives with over 60,000 iPhone users enrolled in ResearchKit in only the first few weeks of its availability, and thousands of researchers contacting Apple expressing interest in the technology for their own studies. Naturally, Cook also spoke on the Apple Watch debut, noting that the response to the Apple Watch has been “overwhelming positive” and that over 3,500 apps that are already available have added to “the surprise and delight” of Apple Watch. Cook expressed his thanks to third-party developers, customers, and Apple employees in making the Apple Watch launch a success.

During the Q&A portion of the call, Cook noted that Apple is hoping to expand Apple Watch sales into more countries in late June, although he noted that it’s been hard for Apple to gauge demand with products not yet being available in stores for traditional sales. He also mentioned that Apple has been adjusting to differing customer preferences due to the wide breadth of options available with the Apple Watch, and in some cases Apple anticipated where the demand would be, but in other areas the company has been ‘making adjustments.’ Cook also noted that differences in app availability at launch, stating that Apple was pleasantly surprised at how many Apple Watch apps were available right out of the gate, with over 3,500 on the App Store, as compared to the 500 that were available when the iPhone first launched and 1,000 apps that were available when the iPad debuted. When asked about iPhone upgrade ratios, Cook noted that Apple’s current estimate is that about 20% of the active installed base of iPhone users have upgraded to an iPhone 6 or iPhone 6 Plus, suggesting that there’s “plenty of upgrade headroom” in addition to Apple “inviting over as many switchers” as it can.

Asked about declining iPad sales, Cook acknowledged that Apple is in fact seeing cannibalization of iPad sales from the larger-screened iPhones and also from the Mac on the other side. Apple has “never worried about that” and that it “is what it is and will play out.” Cook noted that the IBM partnership is in its early stages “in terms of bearing fruit” but that he believes the iPad can “play in a major way in enterprise.”  He also noted that the numbers that Apple is seeing would not indicate that the market is saturated, and usage numbers that are “off the charts” compared to the competition and customer satisfaction “at or near 100%” suggested that the iPad still has a role and he is confident that the numbers will make a comeback.

Apple Q2 2015: Record $58B revenue, 61.1M iPhones, 12.6M iPads

Apple reported its second quarter 2015 financial results today, selling 61.1 million iPhones and 12.6 million iPads. The company posted quarterly revenue of $58 billion and quarterly net profit of $13.6 billion, or $2.33 per diluted share. In Q2 2014, Apple had revenue of $45.6 billion and net profit of $10.2 billion, or $1.66 per diluted share. Gross margin was 40.8 percent compared to 39.3 percent a year ago. International sales contributed to 69 percent of this quarter’s revenue.

For Q2 2015, Apple is providing guidance of revenue between $46 billion and $48 billion, and gross margin between 38.5 percent and 39.5 percent. Apple’s earnings call will begin at 5 p.m. EST, and can be heard live on the company’s investor website.

“We are thrilled by the continued strength of iPhone, Mac and the App Store, which drove our best March quarter results ever,” Apple CEO Tim Cook said in a statement. “We’re seeing a higher rate of people switching to iPhone than we’ve experienced in previous cycles, and we’re off to an exciting start to the June quarter with the launch of Apple Watch.”

“The tremendous customer demand for our products and services in the March quarter drove revenue growth of 27 percent and EPS growth of 40 percent,” said Luca Maestri, Apple’s CFO. “Cash flow from operations was also outstanding at $19.1 billion.”

Crowdfunding Spotlight

Glass x Silicone Protector for iPhone 6

The only tempered glass screen protector that covers the iPhone 6 edge-to-edge, while maintaining the curvature of its screen. With liquid silicon surrounding technology and our Impossible Tempered Glass, your iPhone will resist shock and scratches like never before. The ultra smooth glass surface also makes it a cinch to apply to your phone's screen. It's the ultimate screen protector for your iPhone 6.

Apple releases second iOS 8.4 beta to developers

Apple has released its second beta of iOS 8.4 to developers, a release that continues to focus on Apple’s new Music app introduced in the original iOS 8.4 beta. Featuring a build number of 12H4086d, the release is also accompanied by a new Xcode 6.4 beta to support the new APIs and development environment. The release notes for this latest beta indicate both improvements and limitations in App Extensions, CarPlay, App Store, iTunes Store, MFi GPS accessories, Videos, and WatchKit, as well as with the new Music app. Notably, the list of limitations in the Music app remains the same as in the first beta, suggesting that the development process may be proceeding more slowly than expected.

Review: Apple Watch

Apple Watch is Apple’s first smartwatch and represents the company’s much-anticipated foray into the wearables market. Credible reports on the existence of an Apple-designed smartwatch started to surface in early 2013, with most people generally referring to the proposed device as “iWatch.” Apple CEO Tim Cook continually referred to “new categories” in a number of interviews before Apple Watch was officially revealed on Sept. 9, 2014, alongside the iPhone 6 and iPhone 6 Plus. No release date was given at the time — Apple later unveiled the April 24 launch date at a March event.

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Apple Watch comes in more pricing options than any other Apple device, based on its many configurations. There are three separate models: Apple Watch Sport ($349-$399), the stainless steel Apple Watch ($549-$1,099), and the high-end Apple Watch Edition ($10,000-$17,000). Each model comes in a 38mm or 42mm size, and the stainless steel Watch and Apple Watch Edition differ in price based on which interchangeable watch band is selected. (Apple Watch Sport only comes with a sport band.) The 42mm Apple Watch is $50 more than the 38mm watch when paired with the same band (this doesn’t apply to the Edition). Apple started taking pre-orders for Apple Watch at 12:01 a.m. Pacfic Time on April 10 and limited stock sold out quickly — mere minutes after being made available to order, many model/band options weren’t available to ship until months later. Within six hours or so, all model/band options showed shipping times delayed at least four to six weeks.…

Major hospital links HealthKit data to patient records

Cedars-Sinai Medical Center has turned on access to HeathKit data for more than 80,000 patients, the largest integration yet for Apple’s move into the health industry, Bloomberg reports. Patients can now allow Cedars-Sinai’s My CS-Link app to access HealthKit’s monitoring of weight, blood pressure, glucose levels, steps taken and many other kinds of data, passing that information along to the patient’s doctors. How that information will be used in diagnosis and treatment is still up for debate, Darren Dworkin, chief information officer at Cedars-Sinai, said in an interview. “This is just another set of data that we’re confident our physicians will take into account as they make clinical and medical judgments,” Dworkin said. “We don’t really, fully know and understand how patients will want to use this and we’re going to basically stand ready to learn by what will happen.”

Apple CEO Tim Cook touted the company’s high hopes for use of HealthKit data by doctors during a conference in February, but was careful to point out that all sharing of HealthKit data would be at the patient’s discretion. My CS-Link users will have to manually select which HealthKit data is reported to the hospital, a process detailed on Cedars-Sinai’s instruction page for use of wearable devices. While HealthKit collects a massive amount of information about users, only the data that users specifically select will be reported automatically to the hospital. Aside from setting up the configuration for HealthKit to let My CS-Link to access specific data, the hospital won’t require any added patient consent beyond the general My CS-Link sign-up process. “Rather than turn it on as sort of an opt-in, we’ve basically enabled it for all of our patients,” Dworkin told Bloomberg. “The opt-out is just don’t use it.”

Daily Deal: Griffin WatchStand Apple Watch Charging Dock

Today in iLounge Deals we’ve got a special offer for all of those current and soon-to-be Apple Watch users—Griffin’s WatchStand Apple Watch Charging Dock for $26.99 – 10% off the regular price. Allowing you to charge your Apple Watch in style, WatchStand provides a sleek and convenient charging dock and stand that seamlessly holds the magnetic Apple charging connector in place, allowing you to simply lay your watch against the cradle and get charging. The Apple Watch is presented at an easily viewable angle as it charges, and excess cable is hidden away inside the post, while the folded base features a non-slip and no-scratch padding as well as a place to hold your iPhone.

Get the WatchStand™ Apple Watch Charging Dock now for only $26.99

Apple Pay adds Discover cards

Apple’s last holdout among the major American credit card companies will be joining Apple Pay this fall, Discover announced. Discover members adding their card to Apple Pay will be assigned a unique Device Account Number to avoid storing their actual card number on the device, but cardholders using Apple Pay will still receive all of the usual benefits of using their card, including Cashback Bonus and the Freeze It security tool for stopping transactions on lost cards. Discover Network will also enable Apple Pay for Discover Debit cards issued by “eligible financial institutions,” but didn’t specify what makes an issuing financial institution eligible. “As the mobile payments landscape matures, Discover remains committed to giving card members secure options for using their cards and mobile devices,” Discover’s President of Payment Services Diane Offereins said in the release. “Discover’s focus on simplicity and value for our card members aligns well with the way Apple Pay makes purchases easy and convenient.”

Apple enables iTunes donations for Nepal earthquake

Apple is accepting Red Cross donations via iTunes to help survivors of the Nepal earthquake that claimed more than 3,000 lives last week. The link is featured prominently on the iTunes home screen, leading users to a simple page soliciting donations of $5, $10, $25, $50, $100, or $200. Apple assures users that 100 percent of the money raised will go to the American Red Cross, but since Apple is keeping the donations anonymous, users won’t get any communication from the Red Cross confirming the donation. The transaction will show up on credit card statements as an iTunes transaction, making it impossible to claim as a tax deduction.

Apple’s third-generation Siri built on Mesos platform

Apple has turned to the open-source Mesos platform to run the third generation of its Siri app, the Mesosphere blog reports. Apple engineers said the company’s first move away from traditional infrastructure has made Siri more scalable, reduced latency and made it easier for engineers to deploy services that the app uses to answer questions from millions of iPhone and iPad users each day. The new Siri consists of around 100 different services organized in a Mesos cluster spanning thousands of nodes, making it one of the largest Mesos clusters in existence. Apple announced the change last week during a meeting at its Cupertino, California headquarters, adding that they’re calling Siri’s new Mesos scheduler Just A Rather Very Intelligent Scheduler, a nod to Tony Stark’s J.A.R.V.I.S. computerized assistant in Marvel’s Iron Man movies. An attendee posted photos of the presentation, one of which shows a simplified description of the Mesos layout. [via 9to5Mac]

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The latest edition of iLounge Weekly, our weekly newsletter covering all things iLounge, will be arriving in subscribers’ inboxes early next week. iLounge Weekly is a summary of the week’s best news, reviews, and feature articles we’ve published, and it also features giveaways and accessory discount offers from various companies. There’s still plenty of time to sign up and receive this week’s edition — just use the simple form below to submit your email address, if you haven’t done so already.

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