The U.S. International Trade Commission (ITC) has announced that it will be launching an investigation into a patent infringement claim against Apple filed by Taiwanese firm Elan Microelectronics late last month. The complaint alleges that Apple is violating Elan’s patents related to touch-sensitive input devices with multi-touch capabilities, specifically with the iPhone, iPod touch, MacBook laptops, the Magic Mouse, and the iPad. “We have taken the step of filing the ITC complaint as a continuation of our efforts to enforce our patent rights against Apple’s ongoing infringement,” Elan said at the time of the filing. “A proceeding in the ITC offers a quick and effective way for Elan to enforce its patent.” Elan is requesting that the ITC issue an exclusion order and a cease and desist order, which would block Apple from importing infringing products and from selling its current stock; the company filed a lawsuit against Apple in April 2009 over the same alleged infringement.
Apple has hired long-time IGN editor Matt Casamassina to help manage the App Store’s games section. Casamassina worked at IGN for over a decade, focusing primarily on Nintendo; his official title at Apple will be global editorial games manager, App Store. “I will be leading the charge for games on the App Store, so whether you browse through iTunes, iPhone, iPod Touch or iPad, the games content you see will be handpicked and organized by me and my team[,]” Casamassina wrote in a post on his personal blog, adding, “I couldn’t be happier.” Nintendo of America president Reggie Fils-Aime recently made some disparaging remarks about gaming on iPhone OS devices, saying that Apple “is not having an impact on Nintendo when you look at our business, our volume, our hardware, our software,” later adding that the iPhone isn’t a “viable profit platform” due to the ratio of free to paid downloads.
Police are investigating possible criminal law violations related to the lost fourth-generation iPhone prototype that appeared online earlier this week. Citing an unnamed law enforcement official, Cnet reports that Apple has spoken to local police about the incident, with the investigation being handled by a computer crime task force led by the Santa Clara County district attorney’s office. The phone in question was lost by an Apple engineer at a bar in Redwood City, CA, and was recovered by an unknown party that subsequently sold the unit to Gizmodo for a reported $5,000 bounty. Gizmodo photographed and disassembled the device, posting photos of it online and claiming it was “lost.” Daring Fireball’s John Gruber has argued that both the seller and the editors of Gizmodo may be guilty of crimes related to the incident under California law; Cnet has yet to confirm whether the police probe is targeting the seller, Gizmodo, or both parties.
A recently published Apple patent application suggests the company is working on a system for wireless transportation ticketing and check-in. Entitled “System and method for transportation check-in,” the patent refers to a travel management application called “iTravel” which would allow the users to purchase, store, and use travel documents. The patent goes on to show the application being used on an iPhone equipped with Near Field Communication (NFC) technology, such as RFID, which then interacts with similarly-equipped electronics throughout the travel process, such as at check-in, security checkpoints, and when boarding. As with all Apple patents, this filing does not necessarily represent any future product release from Apple, but offers evidence of the company’s research in this area. [via Patently Apple]
Apple has started sending out emails to a select group of current iPad owners asking them to “please complete [a] 15-minute iPad survey” to help the company understand their purchase. Business Insider reports that survey is over 50 questions long, and attempts to discover whether or not iPad owners are still using iPods, eReaders, and laptops following their purchase. Questions include where the iPad was purchased, how the user first heard about the iPad, what types of questions they had before purchasing the iPad, their satisfaction with various features of the device, where they intend to use the device, in what rooms at home do they use the iPad, and who else uses the iPad they purchased.
Following a pair of new television advertisements for the iPhone 3GS that were posted earlier this week, Apple has added a third new spot to its online gallery. “Family Man” continues the recent trend of personal, testimonial-style narration, and describes how different members of the family use the patriarch’s iPhone for various purposes. This latest iPhone 3GS TV ad is available for viewing now on Apple’s website.
- April 20, 2010
During Apple’s Second Quarter 2010 Financial Results Conference Call, Apple CFO Peter Oppenheimer and Apple COO Tim Cook made several comments concerning its media-related products, including the iPod, iPhone, iPad, and Apple TV. In his opening statements, Oppenheimer said that sales of the iPod touch were up 63% year-over-year, with overall iPod revenue growing 12%, the strongest growth seen in the last two years. According to NPD, the iPod has retained over 70% market share, and continues to gain market share year-over-year in every country tracked, including the U.K. and Japan.
The iTunes Store had its strongest quarter ever, with sales of $1.1 billion, and now offers 12 million songs. Oppenheimer said the App Store now offers 185,000 apps, with four billion downloads to date across 90 countries; the store also now offers 3,500 apps for the iPad. Speaking about the iPhone, Oppenheimer said year-over-year iPhone sales growth was three times IDC’s published estimate for overall smartphone market, and accounted for $5.45 billion in revenue, compared to $2.43 billion in the year-ago quarter. Average Selling Price for the iPhone was about $600, and is based on the sales value of the iPhone, not accessories, and not carrier payments. The device is now available on 151 countries in 88 countries, and is seeing very strong year-over-year growth worldwide, particularly in Asia. Oppenheimer referred to the iPad’s pricing as “very aggressive,” and said the company thinks the market will be large, and wants to capitalize on its “first mover advantage.” The CFO also referred to a “future product transition” that would impact numbers in the upcoming third quarter.
During the Q&A session, Tim Cook said that the company saw “no obvious impact” on Mac or iPod sales from the iPad announcement, although he admitted that the company doesn’t really have enough experience to come to a judgment of possible Mac cannibalization by the iPad. Cook also said that initial iPad sales have “far exceeded” the company’s expectations, and said that it was too early to tell what the mix would be of Wi-Fi versus Wi-Fi + 3G iPad units, as the company has only been selling the Wi-Fi version in stores, and needs to sell them side-by-side in an “unconstrained” environment to get an idea about possible consumer preference for one model or the other.
Regarding iPad production capacity, Cook said the company has “done very well” versus planned capacity, so there’s not exactly a production problem; instead, demand in the U.S. is “much, much stronger” than the company expected, which led them to push the international launch back. Cook said the company is adding production capacity, and will “see where this thing goes,” but said that the level of initial demand had “shocked” the company. The pair declined to say whether Apple will be deferring iPad revenue or instead charging for software updates, stating that the company would discuss that in July on the Q3 conference call, but Cook did say that he was “already personally addicted to mine and couldn’t live without it.” Apple will report the iPad as a line item in its data summary, similar to how it handles the iPhone, including revenue for iPad units and iPad-specific accessories.
Speaking on the company’s record-setting iPhone sales, Cook said that channel inventory was essentially flat, but the company saw “staggering” year-over-year growth rates in Japan (183%), Europe (133%), and Asia (470%), some of which can be attributed to adding new carriers, as well as strong performance from existing carrier partners. China, in particular, saw strong growth, with mainland China, Hong Kong, and Taiwan seeing iPhone unit growth of 9x, with 800 distribution points added, and has accounted for $1.3 billion in revenue through the first half of Apple’s fiscal 2010, up roughly 200% year-over-year.
Cook also said that AT&T continues to work “very hard” and has made big strides towards improving its network, something that Apple expects to continue. He did note, however, that the U.S. is one of only three main countries where Apple has a contractual exclusive relationship with the iPhone’s carrier, and that the company has seen unit sales and market share improve everywhere they’ve moved from an exclusive to non-exclusive arrangement, although he also said that’s not proof that moving to a non-exclusive arrangement would work everywhere. In response to a questioner who noted that average iPhone sales per operator were 58,000, Cook responded that the number isn’t meaningful because some carriers do a few million units while others do very low numbers, but overall the company can drive those numbers up through product innovation, including software and hardware, as well as through new products, new carriers, new distribution points, geographic expansion, and great marketing. Another questioner noted that Cook had not mentioned price, to which he responded that sales of the iPhone 3GS at a higher price point than the iPhone 3G demonstrated that consumers were willing to pay more for innovative products containing the sort of hardware and software Apple has developed. The response suggested that price was not a critical issue from Apple’s perspective at this point in time.
On the Apple TV, Cook said that unit sales for the second quarter were up 34% year-over-year, but added that the absolute number of units is still small, and the company still classifies it as a “hobby.” Cook went on to point out the large markets for the Mac (300 million units/year), iPhone (1.2 billion units/year), and iPod (100 million units/year), all “enormous markets.” The market for the Apple TV is not nearly as large yet, but he said that the company continues to think there’s something interesting there and is continuing to invest in it.
- April 20, 2010
Reporting its second quarter financial results today, Apple said it sold 10.89 million iPods during the quarter, compared to sales of 11.01 million iPods in the year-ago quarter, and down 48 percent from the previous quarter. Apple also sold 8.75 million iPhones in the quarter, a 131 percent increase year-over-year, and up from 8.7 million units in the prior quarter. The company posted revenue of $13.5 billion and net quarterly profit of $3.07 billion, or $3.33 per diluted share, compared with revenue of $9.08 billion and net quarterly profit of $1.62 billion, or $1.79 per diluted share in Q2 2009. International sales accounted for 58 percent of the quarter’s revenue. Sales of Other Music Related Products + Services were up 27% from the year-ago quarter, and 14% from Q1 2010, to $1.3 billion total. That category includes iTunes Store sales, iPod services, and revenues from Apple and third-party iPod accessories.
Notably, the numbers from Q2 2009 are different from those originally reported due to Apple’s change in accounting rules that sees the company now recognize “substantially all of the revenue and product costs from the sales of iPhone and Apple TV at the time of sale,” instead of accounting for the sales over a 24-month period.
“We’re thrilled to report our best non-holiday quarter ever, with revenues up 49 percent and profits up 90 percent,” said Steve Jobs, Apple’s CEO. “We’ve launched our revolutionary new iPad and users are loving it, and we have several more extraordinary products in the pipeline for this year.”
“Looking ahead to the third fiscal quarter of 2010, we expect revenue in the range of about $13.0 billion to $13.4 billion and we expect diluted earnings per share in the range of about $2.28 to $2.39,” said Peter Oppenheimer, Apple’s CFO.
Apple has released the second beta version of the iPhone OS 4 Software Development Kit for the iPhone and iPod touch. As with the prior beta release, a main Xcode and SDK beta is available for download, as are pre-release builds of the iPhone OS 4 software for the iPhone 3G and 3GS, as well as the second- and third-generation iPod touch. Both the new SDK and pre-release builds are available now for download by registered iPhone developers from the iPhone Dev Center.
Apple has posted two new iPhone 3GS TV advertisements online. Both new spots continue Apple’s recent trend of iPhone advertisements that are more testimonial in nature, while featuring a single iPhone using a variety of apps in front of a white background. “Dog Lover” features a female narrator talking about searching local dog shelters to find a new pet, taking and sharing photos, finding nearby dog parks, and checking a monitor video feed while away. “Backpacker” features a male narrator talking about a trip to Spain, during which he checked for hostels, shared pictures, and downloaded and used a translation app. Both advertisements are available for viewing now on Apple’s website.
Apple has begun to ship its iPad Camera Connection Kit to customers who pre-ordered the accessory. Unlike other Apple iPad accessories, the Camera Connection Kit wasn’t available for pre-order until March 29, and was listed as shipping in “late April;” a shipment notification received by iLounge claims the dongle set will arrive by April 22. The iPad Camera Connection Kit includes two separate 30-pin connectors, one with an SD card slot, and the other with a USB port that can be used to attach most digital cameras. A recent report claimed that the USB-to-iPad connector may also provide support for USB audio devices, although this has yet to be confirmed. For more information on the Apple iPad Camera Connection Kit, see our First Look article.
Apple has been sued by a California woman over what she claims are false-positive readings on the iPhone’s moisture sensors. InformationWeek reports that Charlene Gallion of San Francisco claims to have had two separate iPhone units fail within six months of each other, and was denied warranty coverage due to triggered sensors. Gallion claims that neither of the units was ever subjected to water damage. The suit itself states, “As a result of Apple’s improper application of the Liquid-Damage Exclusion, Apple sells [devices] with the intent to exclude them from the warranty coverage Apple promises consumers it will provide—even when consumers pay extra for Extended Warranty coverage—simply because their Liquid Submersion Indicator has been triggered, without any attempt by Apple to verify whether the Class Devices actually have been damaged as a result of submersion or immersion in liquid.” Overly-sensitive moisture sensors have been a problem for some iPhone customers in the past; a report from September 2009 claimed that Apple’s company protocol when responding to a customer with a unit that has had its external sensors triggered is to say the warranty is now void and turn the customer away.
Update: Upon obtaining a copy the actual filing, iLounge has learned that Gallion has filed a class action suit, and is seeking both actual and punitive damages.
Apple has launched a new Apple Headphones with Remote Replacement Program for units included with certain third-generation iPod shuffle models. According to the program’s page, “Apple has determined that the Apple Headphones with Remote included with the iPod shuffle (3rd gen) may fail under certain conditions.” The page claims that a “very small percentage” of iPod shuffle owners had experienced the issue, and that the headphones were distributed with iPod shuffles made between February 2009 and February 2010. “If your headphones stop working or work intermittently as described below, Apple will replace them, free of charge, for two years from date of purchase,” the page states.
Apple lists several symptoms for failing headphones, including non-responsive or intermittently working controls, unexpected volume changes, and unexpected voice feedback. According to the program page, the serial number ranges for the iPod shuffle units with covered headphones are xx909xxxxxx to xx952xxxxxx and xx001xxxxxx to xx004xxxxxx. Notably, the page also states that Apple’s In-Ear Headphones with Remote and Mic and the company’s Earphones with Remote and Mic are also eligible for coverage under the program if they exhibit the listed symptoms. Failing iPod shuffle headphones have been the source of customer complaints since the third-generation model was released last year; Apple was sued in a class-action lawsuit over the issues in March. [via TUAW]
- April 19, 2010
Apple has filed a lawsuit against Kodak in California Northern District Court claiming patent infringement. In conjunction with the lawsuit, Apple has also filed a complaint against Kodak with the U.S. International Trade Commission (ITC). According to the ITC Law Blog, the technologies in the Apple patents Kodak is allegedly infringing “relate generally to advancements and innovations in the fields of image processing, power management, and memory architectures in portable digital devices.” Apple is claiming a number of Kodak products infringe on its patents, including the Kodak Z series, M series, and C series of cameras, as well as the company’s Zi6, Zi8, Zxl, and Zx3 video cameras. Kodak filed a lawsuit and ITC complaint against both Apple and BlackBerry-maker RIM in January, claiming that the iPhone and some BlackBerry models infringe on a patent covering technology for previewing photos; the ITC later said it would consider Kodak’s claim against the two companies, but has yet to announce a decision.
- April 15, 2010
Apple has begun visiting advertising agencies to promote its new iAd platform. In a posting on his company’s blog, Hill Holliday advertising executive Ilya Vedrashko shares some details on his meeting with the Apple iAd team. Vedrashko indicated that each published advertisement will carry the iAd logo to differentiate it from other advertising content, that there will be only one advertising banner per screen and that the ads “look and behave a lot like apps” comparing ads to the Zippo lighter app. He also notes that iAds can tap into OS features of the iPhone such as the compass, accelerometer and multitouch interface, and that while all ads will initially be built by Apple’s own iAd team in HTML5, Apple does plan to release an iAd SDK at some point in the future.
Apple also emphasized during this meeting that it is selling advertisers on the iPhone and iPod demographic in general, and not users of any specific app, and that it is lining up “charter” advertisers to be online for the June launch that will produce “high-quality creative” ads. Apple also discussed targeting and pricing during this meeting, and while Vedrashko indicated that he is unable to share any details, he described the targeting as “impressive in its granularity” and the pricing scheme as “straightforward and elegant.” In discussing the targeting, Vedrashko made reference to comments in a January blog post from his colleague Adam Cahill, suggesting that “Adam got more than a few things right” with regard to Apple using consumer metrics from iTunes and the App Store for targeted behavioural advertising.
Apple’s iAd features are part of iPhone OS 4, expected to be released for the iPhone and iPod touch this summer. The iPad will get iAd support later this fall when the iPhone OS 4 update is released for that device. [via Mac Rumors]
- April 15, 2010
Patently Apple reports on a new patent application from Apple for a “Concert Ticket+” system. Patent application 20100082491 details a system that would provide an iTunes-based service for purchasing, storing and using concert tickets electronically. Users would be able to purchase event tickets via iTunes, store them on an electronic device such as an iPhone and use them in place of a paper ticket to gain entry to an event or venue. The patent outlines a ticketing system to be used not just for traditional music concerts but also sporting events, amusement parks and even a wedding invitation system. The patent outlines detailed information on how such tickets would be purchased, transferred, stored and validated at points of entry. Information is also outlined on how iPhone Concert Tickets could include detailed map and seating plan information and also be used to obtain additional benefits such as live recordings, exclusive interviews, and discounted or prepaid merchandise and refreshments at an event. The full patent application is at the available online on the United States Patent and Trademark Office web site.
Movies rented from the iTunes Store using the iPad cannot be transferred back to users’ iTunes libraries, iLounge has discovered, and must be viewed solely on the iPad. When Apple introduced movie rentals as a new iTunes Store feature, it noted that movies rented using iTunes on a computer or on a portable device could be transferred to and from each other during the duration of the 30-day rental period. Movies rented from a computer version of iTunes can still be transferred to the iPad or any other Apple device, and of course, items purchased rather than rented using the iPad transfer back to iTunes in the same manner as with the iPod, iPhone, and Apple TV.
Unlike the Apple TV, however, the iTunes Store does not provide any notification of this restriction when renting a movie on the iPad; the information is hidden unless the user chooses the “Learn About Rentals” option, or looks within the iTunes Store Terms of Service—it is similarly buried in a just-published Apple KnowledgeBase Article on Viewing and downloading HD content on iPad. Although similar to restrictions for the Apple TV, this differs from renting movies directly on iPhone or iPod touch devices, which can still be transferred back to iTunes during the rental period.
A report from Create Digital Music indicates that the iPad Camera Connection Kit may be able to provide support for audio interfaces that are compatible with the USB Audio Class. The report points to a posting on the Apple Core Audio API Mailing List from Apple software engineering manager William Stewart. When asked if “class-compliant USB audio devices” would be supported through the USB dongle from the iPad Camera Connection Kit, Stewart replied simply “Yes.” Support for USB Audio Class devices would potentially allow applications on the iPad to interface directly with a variety of pro audio equipment without requiring specialized hardware accessories. The iPad Camera Connection Kit is scheduled for release later this month so this functionality has not yet been confirmed, however another post from Stewart implies that USB Audio Class support is already included in the OS and that the Camera Connection Kit is the only other requirement to interface with such devices. [via Mac Rumors]
Apple announced this morning that it will be posponing the international launch of the iPad until the end of May. Citing “surprisingly strong US demand,” in a statement released today Apple indicated that it expects demand for the device to exceed its available supply “over the next several weeks” and that they have already taken a large number of U.S. pre-orders for iPad 3G models which remain on track for delivery by the end of April. The iPad was originally scheduled to also launch outside of the U.S. at the end of April, however Apple now plans to announce international pricing and begin taking online pre-orders in other countries on Monday, May 10th for delivery by the end of May.
Apple has begun banning App Store applications that contain the term ‘pad’ in the app name. Previously, the company contacted Jesse Waites, maker of ContactPad, to inform him that an update to his application would be rejected because “it [was] inappropriately using ‘Pad’ in the application name.” The company also included its product work mark guidelines, which states that the developer can use the mark “in a referential phrase such as ‘runs on,’ ‘for use with,’ ‘for,’ or ‘compatible with.’” Following Waites’ rejection, Chris Ostmo, developer of journalPad and journalPad Bible edition, received a similar notice from Apple regarding his apps’ names, and emailed Apple CEO Steve Jobs explaining his position on the matter. 9 to 5 Mac reports that Ostmo claimed to have “spent tens of thousands of dollars” on marketing and media exposure for the two apps, both of which will need to be renamed.
Jobs, in a typically brief response, wrote simply, “Its [sic] just common sense to not use another company’s trademarks in your app name.” Curiously, Apple’s Copyright and Trademark Guidelines page, linked to in the initial email to Waites, makes no mention of a “Pad” trademark, and neither does the company’s official Trademark listing. Judging by the language in both App Store correspondence emails and in Jobs’ response, however, it appears that Apple considers the “Pad” trademark to be under its ownership, and intends to defend it.