Apple quietly lost one of its most important iPhone and iPod executives late last year, according to a new report. Citing anonymous sources, 9to5Mac reports that David Tupman, Apple’s Vice President of iPhone and iPod engineering for over a decade, left the company late last year. Tupman was hired by the company shortly before the introduction of the original iPod, and was soon promoted to vice president of iPod engineering, a position that saw him help in the development of every iPod released to date. Tupman was also tapped to help build the iPhone, and, as a result, his title was expanded. In addition, Tupman is listed on around 70 Apple technology patents, including filings related to power and battery life management, noise-canceling ear buds, iPhone power adapters, and interaction with accessories. According to the report, a successor has yet to be named, but Apple is said to be actively pursuing a replacement from inside the company.
Apple and Walmart subsidiary Sam’s Club are in early discussions over the possibility of the latter’s warehouse club stores playing host to Apple Store-within-a-store locations. Citing anonymous sources, 9to5Mac reports that Apple is looking to expand the store-in-a-store program beyond its existing partnerships with Best Buy and Target. According to the report, a secondary plan is also being discussed, which would involve Sam’s Club selling Mac computers alongside its existing iPhone, iPad, and iPod offerings. The report notes that whatever the outcome of the discussions, it is unlikely such store-within-a-store locations would appear any time soon.
Apple has released a minor maintenance update to iBooks, addressing an issue where iBooks textbooks may not open under certain circumstances. An update to iBooks Author has also been released on the Mac App Store expressly to provide an updated version of the End User License Agreement. The original iBooks Author EULA drew criticism for a clause suggesting that Apple was potentially claiming exclusive distribution rights for any commercial work produced with the iBooks Author application, preventing users from distributing such works in other formats. The new EULA adds some necessary clarification, with an update to section 2.B.(ii) which now reads
The new EULA clause clarifies that Apple is enforcing exclusive distribution rights solely on content packaged in its own proprietary iBooks format, but that users retain their rights in their original content and may distribute this content outside of the iBookstore in any other format.
Motorola Mobility has won a second patent ruling against Apple in Germany, even as the latter has been forced to remove some iPhone and iPad models from its online store thanks to the prior ruling. Bloomberg reports that the Mannheim Regional Court found that Apple infringed upon a Motorola patent used to synchronize email accounts with its iCloud service, a ruling that allows Motorola hold Apple liable for damage. “The court has come to the conclusion that the wording of the patent does cover functions that were at issue here,” said ruling Judge Andreas Voss. Apple “wasn’t able to convince the court that it isn’t infringing.” Apple spokesman Alan Hely said that “Apple believes this old pager patent is invalid and we’re appealing the court’s decision.”
In addition, Apple overnight removed some iPhone and iPad models from its online store in Germany in response to a ruling from December claiming that the products infringe upon a Motorola patent related to GPRS technology. Specifically, the iPhone 3G, iPhone 3GS, iPhone 4, and all Wi-Fi models of the iPad are affected—according to BBC News—but not the iPhone 4S or Wi-Fi-only models of the iPad. “While some iPad and iPhone models are not available through Apple’s online store in Germany right now, customers should have no problem finding them at one of our retail stores or an authorized reseller,” Hely said. Apple has appealed the December ruling, arguing that Motorola refuses to license the industry standard patent on fair and reasonable terms.
Update: Apple has since been granted a suspension of the injunction against the iPhones and iPads mentioned previously. ”All iPad and iPhone models will be back on sale through Apple’s online store in Germany shortly” Apple told SlashGear in a statement. “Apple appealed this ruling because Motorola repeatedly refuses to license this patent to Apple on reasonable terms, despite having declared it an industry standard patent seven years ago.”
Apple has hired former Xbox Live marketing boss Robin Burrowes. According to MCV, Burrowes, who had worked at Xbox for seven years, will become Apple’s marketing head for the App Store in Europe. Prior to his work with Microsoft, Burrowes worked for MSN and HMV. As noted in the report, Burrowes is the latest in a sting of high-profile British gaming executives Apple has added to its team, with most new additions focused on the marketing of either apps or iOS hardware.
Apple has lost its bid for a preliminary ban on sales of Samsung’s Galaxy Tab 10.1N and Galaxy Nexus in Germany. Bloomberg reports that the Munich Regional Court rejected the motion today in one of many patent disputes between the two companies. “Samsung has shown that it is more likely than not that the patent will be revoked because of a technology that was already on the market before the intellectual property had been filed for protection,” Judge Andreas Mueller said when delivering the decision. As noted in the article, the ruling comes just one day after a separate German court upheld a sales ban on Samsung’s original Galaxy Tab 10.1 model; the 10.1N is a modified version, created by the company to circumvent the sales ban.
Samsung was dealt another blow in its ongoing patent battle with Apple as a court in Germany has upheld a ruling barring sales of its Galaxy Tab 10.1 tablet in the country. Reuters reports that a higher regional court in Duesseldorf, Germany, said that Samsung may not sell the older version of the 10.1 in Germany. Samsung redesigned the Galaxy Tab 10.1 for the German market only and named it Galaxy Tab 10.1N to get around the sales ban; Apple subsequently challenged that version in court, but had its claims rejected in a preliminary judgement. A final ruling in that case is expected on February 9.
Apple has announced that John Browett will join the company as senior vice president of Retail. Browett, who will report to Apple CEO Tim Cook, was previously CEO of European technology retailer Dixons, a title he had held since 2007. Browett will join Apple in April, and be responsible for Apple’s retail strategy, as well as the continued expansion of Apple retail stores around the world. Prior to Dixons, Browett held a series of executive positions at Tesco, advised retail and consumer goods clients at Boston Consulting Group, and earned a degree in Natural Sciences from Cambridge University before receiving his MBS from Wharton Business School. He replaces Ron Johnson, who left Apple late last year to become CEO of retailer J.C. Penney.
“Our retail stores are all about customer service, and John shares that commitment like no one else we’ve met,” said Tim Cook, Apple’s CEO. “We are thrilled to have him join our team and bring his incredible retail experience to Apple.”
Apple has implemented a new lottery reservation system for iPhone 4 and iPhone 4S sales in Hong Kong that it hopes will help limit the efforts of scalpers. 9to5Mac reports that the new system should prevent the scalpers from using automated bots to overwhelm Apple’s reservations servers by requiring prospective buyers to give both a name and ID number, which need to match a government ID presented at the time of purchase. It is unclear if Apple plans to expand the use of the system to other areas and countries; the full text of Apple’s message regarding the change appears below.
“Due to high demand, we are accepting a limited number of iPhone reservations per day. To request an iPhone reservation, please choose your store and the iPhone you want. If we have an iPhone reservation for you, you’ll receive a confirmation email by 9:00 p.m. tonight that includes the time when you can pick up your iPhone tomorrow. A government-issued photo ID matching the name and ID number on your reservation is required for iPhone purchases. If you don’t receive an email, we were unable to reserve an iPhone for you, and you can try again another time. Only those who receive an email confirming their reservation will be able to purchase an iPhone; we will not be selling iPhone 4 or iPhone 4S to walk-in customers.”
After months of backlog, Apple appears to have finally reached a supply/demand balance on the iPhone 4S, at least in the United States. A quick check of the company’s online store shows all three iPhone 4S capacities—in both black and white—as “In Stock”, suggesting that new orders likely ship out as soon as the payment can be processed. During last week’s financial results conference call, Apple CEO Tim Cook discussed the overwhelming demand for the iPhone 4S, saying that the company made a “large bet” in building as many units as it did, but still “bet too low”, as it ended the quarter with a backlog of orders. [via Electronista]
After being fined late last year by the Italian antitrust authority for failing to inform its customers of their legal right to two years of technical support, Apple has posted a new notice regarding the case on its online store in the country. Ars Technica reports that the Italian Apple Store now features a prominent link at the top which leads to directly to the court decision, which contains an explanation of how Apple must change its marketing language for its AppleCare Protection Plans to reflect the mandatory two-year warranty. Apple’s products typically come with only a one-year limited warranty.
Samsung has lost its second patent infringement against Apple in Germany. A spokesman for the Regional Court in Mannheim, Joachim Bock, told Bloomberg that the suit—related to three telecommunications standards—has been rejected, while Samsung claims that the ruling relates to only one of several patents asserted against Apple. “We are disappointed that the court did not share our views regarding the infringement by Apple of this specific patent,” Samsung said in a statement. “We will wait for the written grounds of today’s judgment, and after thorough review make a decision about a possible appeal.” Apple had no specific comment on the ruling, according to the report.
Following yesterday’s report in The New York Times highlighting the sometimes hard lives of those who work in the factories where Apple’s products are made, Apple CEO Tim Cook has sent out an email to all Apple employees in response. “As a company and as individuals, we are defined by our values. Unfortunately some people are questioning Apple’s values today, and I’d like to address this with you directly. We care about every worker in our worldwide supply chain”, Cook writes in the lengthy email, which was reprinted by 9to5Mac. “Any accident is deeply troubling, and any issue with working conditions is cause for concern. Any suggestion that we don’t care is patently false and offensive to us. As you know better than anyone, accusations like these are contrary to our values. It’s not who we are.” The email continues for several more paragraphs, in which Cook reiterates the company’s commitment to being a leader in this area. For the full text of the email, visit the link above.
Apple plans to launch an OLED-based HDTV set as soon as April or May, according to a new report. Citing a high-ranking source with a major electronics retailer, TechnoBuffalo reports that the source has seen pre-production versions of the device, which is described as “gorgeous” and “very thin” and will come in sizes up to 42 inches diagonally. The report goes on to claim that the set will use a Siri-like voice command system in lieu of a typical remote, with the option to use an iOS device as a remote, instead. In addition, the set is said to use facial recognition software to automatically turn itself off if no one is in the room for a set period of time—a feature already found on some competing sets—and automatically wake itself when someone reenters the viewing area.
Apple is also said to be exploring the idea of using the TV to control other appliances in the home, including ovens and garage doors, although the report claims that the source provided no details as to whether Apple make such devices themselves; it is instead suggested that Apple might create a Made For iPod-like program to certify such products from third-party manufacturers. Finally, the report claims that the TV has been delayed in getting to market as the company has been focused on making the first-generation product as feature-complete as possible, as it will have fierce competition not only from established brands but from larger—and often times cheaper—sets. While it seems likely at this point that Apple will launch its own TV set, the timeframe as laid out in the report strikes us as being a little early; if Apple were shooting for such an early launch, reports of early manufacturing tests would quite possibly already have started to appear. As such, it wouldn’t be a surprise if an Apple-branded TV was debuted mid-year at WWDC, possibly later.
The New York Times has launched a new series of articles, dubbed The iEconomy, which examine “the challenges posed by increasingly globalized high-tech industries”, and have focused specifically on Apple thus far. The first article, “How the U.S. Lost Out on iPhone Work”, examines the favorable manufacturing conditions in China and other overseas locations that keep Apple from building its products in its home country, while the second, “In China, Human Costs Are Built Into an iPad”, examines the sometimes brutal lives of those who build Apple’s products. Both articles are too lengthy to briefly summarize here; we present these only as articles of interest for those who want to know more about the inner workings of Apple and its competitors.
Apple has announced plans to start offering substantial discounts on both Macs and iPads, according to a new report. According to 9to5Mac, Apple CEO Tim Cook announced the discount plan—which offers a $500 discount on purchases of Macs and a $250 discount on purchases of iPads—at yesterday’s employee-only Town Hall event. The report claims that the discount program will go live in June, and that employees may only use the discount once every three years. The discounts will reportedly be available for any employee who has been with the company for at least 90 days.
Motorola Mobility has filed a new patent infringement lawsuit against Apple in the U.S. According to Reuters, the case, filed in a Florida federal court, claims that Apple is infringing upon six patents related to wireless antennae, software, data filtering, and messaging. Notably, Motorola said the patents cited in this suit are the same as those cited in a separate Florida suit against Apple, the difference being that the new suit names both the iPhone 4S and iCloud as infringing products. Google agreed to buy Motorola Mobility last August for $12.5 billion, and likely approved this latest suit as part of its purchase agreement with the company.
Following the release of yesterday’s record-setting financial results, Apple CEO Tim Cook sent an email out to the company’s employees congratulating them on a great start to 2012 and inviting them to a special event. As reprinted by 9to5Mac, the email reads:
Thanks to everyone’s hard work, we’re off to a great start in 2012. Last week in New York we launched a groundbreaking initiative for education with iBooks textbooks, and today we reported the strongest quarter in Apple’s history. Please join me tomorrow morning at 10 a.m. in Town Hall. We’ll review our record-setting results and discuss some exciting new things going on at Apple. The meeting will be broadcast live to many sites in Cupertino and other Apple locations. Please check AppleWeb for details.”
During Apple’s first-quarter 2012 financial results conference call, Apple CEO Tim Cook and CFO Peter Oppenheimer made a number of comments related to Apple’s iPhone, iPad, and iPod businesses, as the company celebrated record revenue, profits, and sales of iPhones, iPads, and Macs.
As usual Apple CFO Peter Oppenheimer gave the opening remarks, saying the company was “very proud” of the results. Oppenheimer said that despite the drop off in unit sales, iPod sales beat internal expectations, with the iPod touch representing more than half of all iPod sales. In addition, the iPod retains over 70 percent market share in the U.S., and is still the top-selling MP3 player in most of the countries Apple tracks.
Discussing the iPhone, Oppenheimer said that nearly all of the top companies in Fortune 500 now use and support iPhone on their networks. It is “changing the way companies use mobile devices for work”, he said, noting that many companies were developing mission-critical apps. The 128 percent year-over-year iPhone sales growth outpaced the expected 40 percent growth in smartphone sales overall, he said, adding that the iPhone 4S is now available in 90 countries.
Apple CEO Tim Cook later added that the company was thrilled with iPhone sales for the quarter, which were substantially above the prior 20 million unit sales record. He attributed the outstanding sales to several factors, including consumer enthusiasm, delayed sales from the prior quarter, and the fact that the company made a “large bet” on potential demand—but noted that it still ended the quarter with a backlog, and thus “didn’t bet high enough”. Cook said that sales in the U.S. and Japan were particularly strong, as were iPhone sales in greater China, which is especially surprising given that the iPhone 4S was not available in mainland China during the quarter - and later said that there was nothing to announce regarding the company’s likely tie-up with China Telecom.
Turning to the iPad, Oppenheimer said the company was “very pleased” with its record iPad sales during the quarter, saying that sales surpassed internal expectations. Overall, the company has now sold over 315 million iOS devices, including more than 62 million in the holiday quarter alone—suggesting that the company sold roughly 9.6 million iPod touch units during the period. Oppenheimer also revealed that iOS app developers earned over $700 million during the holiday quarter, and are quickly approaching $4 billion earned since the launch of the App Store in 2008.
Cook later reiterated that Apple is “very happy” with iPad sales, and believes that the record sell through is consistent with its long-term belief that the tablet market is a “huge opportunity” for the company. He said that the company still believes that the tablet market will grow to be larger than the PC market, and noted that based on research, it appears as if tablet sales have already overtaken traditional desktop PC sales. He added that there are now over 170,000 apps available specifically for the iPad compared to “hundreds” for competing products, and also noted that Apple doesn’t really see “limited-function” tablets and eReaders as direct competition for the iPad. Cook said that Apple will continue to “innovate like crazy in this area”.
In addition, Cook uncharacteristically revealed exact Apple TV sales for fiscal 2011 and for the holiday quarter. Saying the product was doing very well, Cook said that 2.8 million units were sold in fiscal 2011, with another 1.4 million units sold in the first quarter of 2012. He also said that the company will continue to add things to it, adding that he personally “couldn’t live without it”. Discussing iCloud, Cook revealed that the company has signed up over 85 million users in just three months, and described consumer response as incredible. He went on to describe the realization of iCloud as a “fundamental shift”, and said that, instead of being a product, per se, it’s actually a very important strategy for the next decade.
Finally, concerning the company’s massive cash balance, Oppenheimer said that the company’s executives and Board of Directors are “actively” discussing options as to what is the best use of the cash - whether it be investments in the supply chain, or acquisitions—before noting bluntly that the company had nothing to report as far as possible stockholder dividends or stock buybacks.
Reporting its first quarter 2012 financial results today, Apple said it sold a record-breaking 37.04 million iPhones in the quarter, a 128 percent increase year-over-year, and up from 17.01 million units in the prior quarter. Apple sold 15.43 million iPads during the quarter—another record—up 111 percent from the year-ago quarter and up from 11.12 million units in the fourth quarter of 2011. Finally, the company said it sold 15.4 million iPods during the holiday quarter — a 21 percent decrease compared to the same quarter last year, but up from 6.62 million in Q4 2011. Unit sales of iPhones, iPads, and iPods bring the cumulative totals for the three device categories to 183 million, 55.28 million, and 336.58 million, respectively.
Apple posted revenue of $46.33 billion and net quarterly profit of $13.06 billion, or $13.87 per diluted share, representing all-time revenue and profit highs, compared with revenue of $26.74 billion and net quarterly profit of $6 billion, or $6.43 per diluted share in Q1 2011. Revenue from Other Music Related Products and Services, which includes revenue from the iTunes Store, App Store, and iBookstore in addition to sales of iPod services and Apple-branded and third-party iPod accessories, was $2.027 billion for the quarter, up 42 percent year-over-year and 21 percent over the prior quarter.
“We’re thrilled with our outstanding results and record-breaking sales of iPhones, iPads and Macs,” said Tim Cook, Apple’s CEO. “Apple’s momentum is incredibly strong, and we have some amazing new products in the pipeline.”
“We are very happy to have generated over $17.5 billion in cash flow from operations during the December quarter,” said Peter Oppenheimer, Apple’s CFO. “Looking ahead to the second fiscal quarter of 2012, which will span 13 weeks, we expect revenue of about $32.5 billion and we expect diluted earnings per share of about $8.50.”