Apple has released iTunes 12.1, a relatively minor update that adds a new widget for the OS X Yosemite Notification Center and improves iPhone, iPad, and iPod touch syncing performance. The new widget allows users to control iTunes from the Notification Center, providing a “What’s Playing” view with controls to skip to the next track or even purchase songs while listening to iTunes Radio. iTunes 12.1 is available through the standard software update mechanism, or for direct download at iTunes.com.
A new report from The New York Times reveals that the Chinese Government is implementing new regulations that will require technology companies to comply with a stringent set of security disclosures and procedures in order to sell equipment to Chinese banks. The new rules are laid out in a 22-page document and are only the first in a new set of policies from the Chinese government which intend to strengthen cybersecurity in key Chinese industries. Requirements under the new terms would include turning over proprietary source code for operating systems and firmware, submitting to invasive audits, and including back doors in hardware and software that would allow the Chinese government to gain access to data stored on or transmitted from electronic devices. Apple, for example, would be required to redesign the encryption system used on the iPhone to protect user data in order to provide keys that would allow the Chinese government to decrypt such data. It was revealed last week that Apple agreed to allow the Chinese government to conduct “security inspections” on its products, although it is unclear if this is directly related to the new regulations.
Critics of the new policies, including the U.S. Chamber of Commerce, suggest that cybersecurity claims are really just covering for protectionism, and that the new rules are simply a means of bolstering the Chinese tech industry by requiring companies to use only domestically produced products and services. The new measures notably go far beyond those taken by most other countries, however they are also not atypical of the sort of technology policies seen in China – a country in which the government has routinely monitored and censored Internet traffic and services for decades. While the new policies only apply to companies doing business with Chinese banks, it’s generally anticipated that they will be expanded in the coming year to other industries which the Chinese government considers critical.
During Apple’s conference call announcing its record-breaking numbers from Q1 2015, Apple CEO Tim Cook kicked it off by saying that “demand for iPhone has been staggering, shattering our high expectations,” referring to the 74.5 million iPhones sold in the first quarter. “This volume is hard to comprehend.” He said the company sold 34,000 iPhones every hour of every day of the entire quarter.
Cook also briefly mentioned that he expects Apple Watch to ship in April. It’s the first official acknowledgment of a specific month for the release of Apple’s upcoming wearable. “My expectations are very high on it, I’m using it every day, and love it, and can’t live without it,” Cook said.
Questioned about the iPad’s future, Cook mentioned that first-time buyer rates for iPads are very high, and later mentioned that Apple’s enterprise partnership with IBM is “profound.”
CEO Tim Cook said the company is expecting to ship the upcoming Apple Watch in April. Cook briefly mentioned the tidbit during today’s conference call announcing Apple’s record-breaking Q1 2015 results. It’s the first time Apple has narrowed down the release date of its upcoming smartwatch to a specific month, but no particular date was mentioned.
Apple reported its first quarter 2015 financial results today, selling 74.5 million iPhones and 24.4 million iPads. The company posted quarterly revenue of $74.6 billion and quarterly net profit of $18 billion, or $3.06 per diluted share. In Q1 2014, Apple had revenue of $57.6 billion and net profit of $13.1 billion, or 2.07 per diluted share. Gross margin was 39.9 percent compared to 37.9 percent a year ago. International sales contributed to 65 percent of this quarter’s revenue.
For Q2 2015, Apple is providing guidance of revenue between $52 billion and $55 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’d like to thank our customers for an incredible quarter, which saw demand for Apple products soar to an all-time high,” Apple CEO Tim Cook said in a statement. “Our revenue grew 30 percent over last year to $74.6 billion, and the execution by our teams to achieve these results was simply phenomenal.”
“Our exceptional results produced EPS growth of 48 percent over last year, and $33.7 billion in operating cash flow during the quarter, an all-time record,” said Luca Maestri, Apple’s CFO. “We spent over $8 billion on our capital return program, bringing total returns to investors to almost $103 billion, over $57 billion of which occurred in just the last 12 months.”
Apple has officially released iOS 8.1.3 to the public, another relatively minor maintenance release that notes bug fixes, increased stability and performance improvements. The update also addresses problems some users have had signing into Messages and FaceTime, issues with Spotlight sometimes not displaying app results, and multitasking gesture fix for iPad users. The amount of free storage space required to perform an update has also been reduced, and new configuration options have been added for education standardized testing. iOS 8.1.3 is available as an over-the-air update or by updating via iTunes on a Mac or PC.
Verification methods used by many banks and credit card providers are leaving Apple Pay open to potential fraud, according to a new report by Drop Labs. While Apple Pay remains secure at a technical level – there have been no incidents of stolen iPhones being used for unauthorized purchases, or Touch ID or NFC being compromised — criminals are resorting to much lower tech methods of identify theft and social engineering to steal credit card information and use it with Apple Pay. In short, thieves are stealing credit card numbers the old fashioned way, and then loading them onto their own iPhones using Apple Pay, taking advantage of inadequate procedures used by some banks and credit card providers for verifying and authorizing cards to be used with Apple Pay.
As the Drop Labs report notes, all participating card issuers were required by Apple to build a “Yellow Path” for verifying cards added to Apple Pay. However, this experience varies with each issuer, with some requiring nothing more than a phone call – a method that can easily be used by an identity thief to add a stolen credit card to an Apple Pay device such as an iPhone. Part of the problem stems from this “Yellow Path” requirement initially being optional for card issuers, with Apple reversing course and making it mandatory less than a month before Apple Pay was actually launched. Card providers that had originally not planned out a “Yellow Path” verification process were thereby forced to build in this support on relatively short notice or miss the initial Apple Pay rollout.
While Apple Pay itself remains inherently secure, it’s ironically this secure “trust’ system built into Apple Pay — with features like Touch ID and secure NFC — that makes it more attractive for this type of fraud. Once a card has been verified and authorized for Apple Pay, no further checks and balances are implemented, making it easier to use a stolen credit card on an Apple Pay device than it would be to physically produce a counterfeit card from a stolen credit card number. [via Gizmodo UK]
Apple’s annual proxy statement filed with the Securities and Exchange Commission has revealed details about the compensation plans paid to the company’s senior executives in 2014. CEO Tim Cook received a total of $9.2 million last year, which included his base salary of $1.7 million in addition to other forms of compensation. Cook also received $56,923 for his unused vacation days, and the company paid security expenses for him in the amount of $699,133.
Notably, Cook’s compensation last year came in well behind that of new retail chief Angela Ahrendts, who received $73 million for leaving her position as CEO of Burberry to join Apple. Ahrendts base salary was $400,000, and she received a $500,000 bonus for joining Apple along with other forums of compensation as a “transition package” designed to account for the much more lucrative compensation arrangement she had at Burberry and her unvested equity in that company, estimated to be worth approximately $37 million. The statement also reveals that Ahrendts had received “cash and perquisites” at Burberry in excess of $5 million annually, placing her among the highest paid UK executives and dwarfing the cash opportunities provided to Apple’s other executives.
The 80-page proxy statement includes numerous additional details, ranging from details on major shareholders and vested stock options to biographies on members of the Board of Directors and Senior Executives.
Apple will apparently allow integration between HomeKit and some non-HomeKit home automation solutions, according to a new report by 9to5Mac. Citing sources that have been briefed on the new specifications, the latest MFi program information outlines the specific types of products and restrictions for allowing alternative products to tie into HomeKit. While HomeKit is being designed primarily to work with Apple-certified Wi-Fi and Bluetooth accessories using Apple’s HomeKit protocol, some third-party manufacturers will be able to build HomeKit “bridge” devices to tie their existing products into HomeKit without having to specifically HomeKit-enable each individual product. The bridge will essentially translate proprietary protocols such as ZigBee and Z-Wave to the HomeKit protocol, allowing these accessories to be controlled from iOS devices using HomeKit methods such as Siri.
However, not all home automation accessories will be permitted to bridge to HomeKit, with Apple limiting the list to non-Wi-Fi accessories that “don’t offer users control of the home.” This rules out a lot of accessories such as thermostats, door locks, and even light bulbs, which will have to go directly through the MFi program and implement the HomeKit protocol. Essentially, it appears that the only bridgeable devices that are likely to quality under Apple’s requirements are those that simply provide data to HomeKit, such as monitoring sensors.
Apple has agreed to let the Chinese government conduct security inspections on its products, according to The Beijing News. The report claims that Apple CEO Tim Cook agreed the company would fully cooperate with the government during a December meeting. There have long been alleged issues between Apple and the Chinese government regarding the security of Apple’s products. Cook met with an official over security in October of last year. In August, the Chinese government refuted a report which claimed that it was banning Apple products from government procurement lists. [via ZDNet]
Apple has acquired Semetric, a London-based music analytics company, the Wall Street Journal reports. The analytics service produced by the company tracks music sales, illegal downloads, and social networking interactions, according to a person familiar with the acquisition. An Apple attorney also reportedly joined Semitic’s board in October. An Apple spokesman provided the generic response that “Apple buys smaller technology companies from time to time, and we generally do not discuss our purpose or plan,” however it seems likely that the acquisition is directly related to the rumored impending launch of a new music streaming service by Apple. Notably, Semitic’s Musicmetric service has been used with competing streaming services such as Spotify to help artists track the music listening habits of their fans, and the report notes that this acquisition may be an effort by Apple to position its streaming service as artist-friendly.
Apple has begun sending out notices of termination to Mac and iOS developers registered in Crimea, TechCrunch reports. The notices cite sanctions that the U.S. has ordered as a result of Russia’s annexation of the region last year – specifically Executive Order 13685 from December 18, 2014 – and developers in the region are now barred from creating and publishing apps in Apple’s App Store. The termination, effective immediately, requires that developers cease all use of Apple software and destroy all related materials. Crimean developers will also no longer have access to the developer portal, and apps published by those developers will presumably be pulled from the App Store.
Apple has updated its home page at apple.com for this year’s Martin Luther King Jr. Day, in honor of the “life and vision” of the revered civil rights activist. Tim Cook also announced the commemoration with a simple tweet.
Google is restructuring its Google Glass project and appointing former Apple Executive Tony Fadell to head it up, according to the Wall Street Journal. Fadell, one of the inventors of the original iPod, left Apple to form Nest in 2010, which was later acquired by Google last year. Under the new plan, Glass will be moving from the Google X research lab to be a stand-alone unit directly led by Ivy Ross. Ms. Ross will report to Fadell, who will continue to run Nest while providing strategic guidance to the Glass team. The report notes that Google also plans to stop selling the initial version of Glass to consumers, planning a new version of Glass to be released sometime later this year. The new strategy is expected to follow the more Apple- and Nest-like approach of unveiling fully-finished products rather than deploying large, public tests of hardware prototypes as Google previously did under the Glass Explorer program.
Apple has launched a lawsuit against Ericsson, alleging that the Swedish company is demanding excessive royalties for its LTE patents, Reuters reports. In the suit, Apple claims that Ericsson’s patents are “not essential to industry cellular standards” and that it does not owe Ericsson royalties for the patents as it has not infringed upon them. Apple’s suit further states that, should the patents be deemed essential by the courts, the royalties that Ericsson requires should be based on the value of the processor chip that includes LTE technology, rather than as a percentage of the price of an entire smartphone or tablet that incorporates the technology. The two companies have had a license agreement for the use of Ericsson’s patents since 2008, shortly after Apple launched the original iPhone. However, an Apple spokesperson noted that the company has “not been able to agree with Ericsson on a fair rate” for the patents in question, and is therefore asking the courts to intervene.
Update: In a follow-up report, Reuters notes that Ericsson has filed its own complaint against Apple, stating that Apple’s license to use its LTE technology had previously expired, and that it has been unable to come to a new deal after two years of negotiations. The company has asked the court to determine whether its license offer to Apple is fair. The company’s Chief Intellectual Property officer made a similar statement to the one in Apple’s filing, noting that it needs “the help of a third party” to help negotiate a new agreement.
Apple, Google, Adobe, and Intel have agreed to a settlement in the anti-poaching lawsuit, Reuters reports. The suit accused several large Silicon Valley companies of collaborating to avoid poaching each others employees while also fixing salaries, and was originally brought against Apple and several other companies in 2011 as a class action by about 100,000 tech employees. In late 2013, U.S. District Judge Lucy Koh ordered that the suit would proceed against Apple, Google, Adobe, and Intel; the other defendants originally named – Intuit, Lucasfilm, and Pixar – had previously settled out of court.
The suit originally requested damages of $9 billion, or about $90,000 in lost wages per employee. While the four companies offered a settlement of $324.5 million in April 2014, the proposal was rejected by Judge Koh as falling “below the range of reasonableness” after one of the plaintiffs objected. Judge Koh referred to a 2013 settlement involving Disney and Intuit, noting that Apple and Google workers received proportionally less than Disney workers, despite the “much more leverage” that the plaintiffs had against Apple and Google; Koh wrote that the deal with Apple, Google, Adobe, and Intel “would need to total at least $380 million.” The new agreement is reportedly closer to a joint payment of $415 million, and a detailed explanation of the deal is expected to be filed “imminently” at which point Judge Koh will then need to either accept or reject the new filing.
Following the introduction of its 14-day iTunes refund policy in Europe, Apple has apparently begun clamping down on refund abuse, according to a new report from 9to5Mac. Citing a tweet from developer Rosyna Keller, users who are detected by Apple as abusing the new refund policy will now be presented with a dialog box requiring them to acknowledge that they will no longer be eligible to receive a refund once they have downloaded the item in question.
So it appears Apple does detect abusers of their new 14-day return policy for digital items and revokes the ability. pic.twitter.com/JegmZlPiZy— Rosyna Keller (@rosyna) January 12, 2015
Since iTunes and App Store purchases normally begin downloading automatically once the user clicks the “Buy” button, this effectively removes the user’s right to receive a refund as soon as they click the “Buy” button. The relevant EU consumer protection laws specify that refunds are generally only available if the user has not begun “downloading or streaming the content,” provided the user is notified and acknowledges that this is the case prior to completing the purchase. Apple’s own Right of Withdrawal policy explicitly notes this as well:
You cannot cancel your order for the supply of digital content if the delivery has started upon your request and acknowledgement that you thereby lose your cancellation right.
In this case, it would appear that Apple has, by default, chosen the more user-friendly approach of providing a seamless one-click download experience rather than interrupting the user with additional confirmation popups. However, for those abusing the refund system – using it as a “try-before-you-buy” option, or taking advantage of a loophole previously reported by 9to5Mac – Apple is basically enforcing the letter of the law by notifying users that they will lose their right to a refund once they begin downloading the app, effectively requiring them to acknowledge that this is the case.
Following Apple’s announcement that third-party manufacturers will be able to license the female Lightning port, the company has now released more detailed specifications for how the port can be implemented various accessories, 9to5Mac reports. Apple is apparently hoping that a large range of different accessories will move from micro-USB to the Lightning port standard, and will allow manufacturers to have the port draw power from any MFi-certified power adapter, as well as providing passthrough charging and syncing for iOS devices connected to the other side of the accessory, such as iPhones used in battery cases. The passthrough feature could also allow a dock to simultaneously charge an iPhone while also providing audio output to Lightning headphones.
The specs note, however, that only one Lightning port will be allowed per accessory, ruling out the development of Lightning splitters or hubs. Faster charging will be possible via Lightning, however, with MFi-certified USB power adapters providing power ranging from a minimum of 1.0A to the Apple-recommended 2.4A level suitable for charging an iPad at full speed. Unfortunately, at this point the Lightning port is only available in sample quantities for development purposes, and all specs remain in “Developer Preview” mode, with some sections still listed as “to be determined.” It’s therefore unclear when the first accessories with female Lightning ports will actually appear.
Apple has released the fourth beta of iOS 8.2 to registered developers. The latest release appears to add direct support for pairing an Apple Watch via Bluetooth, with a note in the standard Bluetooth settings directing users to use the “Apple Watch app” to do so. The note appears to link to the App Store, suggesting that an Apple Watch app could be available as a separate download that users will need to install, rather than being bundled with the future iOS 8.2 update.
Apple may be planning a Canadian rollout of Apple Pay as early as this March, according to a new report from 9to5Mac. Citing “sources close to the situation,” the report notes that Canadian launch partners are currently in negotiations with Apple. Those partners are also in the process of planning advertising and promotional material scheduled for a possible release in March. While the report notes that negotiations are still ongoing, it claims that several sources have indicated that Apple is also targeting that timeframe. It remains unclear at this time whether Apple Pay would be launched across all of the six major Canadian banks right away, or limited to only specific partners for the initial rollout.