A new report from The Wall Street Journal reveals that iTunes music sales have fallen by 13 to 14 percent worldwide this year, citing people familiar with the matter. This is in stark contrast to only a 2.1 percent overall dip last year in global revenue from music downloads – a decline that was said to be offset by increases from ad-supported and subscription services. As previously reported, Apple has been working to cut music subscription prices and has plans to rebuild its recently-acquired Beats Music and relaunch it next year as an iTunes service, according to a person familiar with the matter.
Despite the drop, Apple remains the largest seller of music in the world, both physical and digital, and according to music executives, its dominance over other digital music stores is “especially pronounced.” Although overall music sales were mostly steady last year due to physical CD sales, some record company executives are reportedly concerned that the music industry could fall into decline if download sales drop more quickly than streaming service growth accelerates. Notably, executives are working to persuade users of online music services to pay a monthly subscription fee, rather than using free ad-supported services which are said to generate considerably less revenue for the music labels. According to the RIAA, streaming services now account for nearly one-third of the revenue from recorded music in the U.S.
Notably, Apple reported a healthy increase in overall iTunes sales this quarter, which includes other types of content such as apps, movies, and books, although the company does not break out sales by individual content type.
As was reported Wednesday, GT Advanced Technologies has now officially announced that it has reached a settlement agreement with Apple. The announcement reveals GT will retain ownership of its production, ancillary, and inventory assets in Mesa, Arizona. GT will also be given four years interest-free to repay Apple $439 million – money that the company will earn by selling its sapphire furnaces. Although GT is leaving the sapphire production business, the company and Apple will “continue their technical exchange involving the development of processes for growing next generation sapphire boules.”
Only two days into its rollout, some Apple Pay users are already reporting a problem with the service. Some Bank of America customers have seen two charges for the same purchase on their credit card statements after using Apple Pay to make transactions, as reported by CNN. The issue is said to be affecting “hundreds of customers.” A Bank of America representative told CNN that the issue was on Apple Pay’s end, but the bank was ultimately able to refund the money after some back-and-forth between Apple and bank representatives. A fix for the problem is expected to be released at some point today.
Apple has launched Apple Maps Connect, a new online portal to allow local businesses to add or edit their business listings for the Apple Maps service. Targeted at small business owners or their authorized representatives, the service is free and allows users to quickly and easily add content directly into Apple Maps. Users can sign in with their normal Apple ID and password, or can create a new Apple ID if they don’t already have one, or would prefer to use a different one for business purposes. The service is available only for U.S. addresses for now, but Apple says that it has plans to add additional countries “soon.”
Following last week’s launch of the iPad Air 2 and iPad mini 3, the new models are reportedly now available for sale in at least some Apple Retail Stores, and initial shipments have begun arriving for customers who pre-ordered the new models. Unboxing videos have already started appearing from customers in the UK and Australia who have received their pre-ordered devices, and a number of sources are reporting that the new tablets are now available for purchase online and in-store — although strangely, an Apple customer service representative responded to an inquiry stating that the new models are not yet available in-store. During last week’s launch event, Apple announced that pre-orders would begin October 17, but did not specify an actual retail availability date. [via MacRumors]
Apple CEO Tim Cook has been in recent discussions with a top Chinese government official concerning security, Reuters reports. The meeting comes following a report that Apple users in China have been targeted in a “sophisticated and widespread” attack by hackers looking to access private user data stored in iCloud. The report was released by Chinese web monitoring group Greatfire.org, which has also claimed that the Chinese government is involved in the hack—a claim strongly refuted by the Chinese government. Cook and Vice Premier Ma Kai met Wednesday in Zhongnanhai to discuss “protection of users’ information” and “strengthening cooperation and in information and communication fields,” according to the official Xinhua news agency. Apple also appears to have rerouted user data on Tuesday to circumvent the hack, Greatfire told Reuters.
GT Advanced Technologies has signed an agreement with Apple for an “amicable parting of the ways,” The Wall Street Journal reports. GT’s attorney, Luc Despins, told a U.S. Bankruptcy court that as part of the agreement, the two companies have agreed to file a revised explanation for GT’s sudden bankruptcy filing earlier this month — the companies will also withdraw court papers from the public record that outlined what went wrong in the partnership.
Earlier this year, Apple had financed a new factory in Arizona for GT Advanced Technologies to the tune of $578 million, and entered into a multi-year agreement to set the company up as a supplier of sapphire material for Apple products. GT’s bankruptcy filing earlier this month came as a surprise to Apple. Shortly after the filing, GT began asking for court documents in the bankruptcy proceedings to be sealed due to confidentiality agreements, and then later requested that the court void its agreements with Apple entirely. Although this latest news suggests that the two companies are working toward a peaceful resolution, court documents and proceedings in the case remain sealed, at least while the two companies continue to pursue their settlement.
Apple’s conference call after announcing its Q4 2014 financial results kicked off with Apple CEO Tim Cook discussing the iPhone 6 and iPhone 6 Plus, Apple Pay, Apple Watch, iPad Air 2, iPad mini 3, the new iMac with a Retina 5K Display, iOS 8 and OS X Yosemite.
Getting to the financial results, Cook announced that Apple saw its strongest growth rate in seven quarters, with a new record for Apple’s September quarter revenue. “Fuelled by the launch of iPhone 6 and 6 Plus and strong demand for previous iPhone models, we set a new September quarter record for iPhone,” Cook said. He also noted that they set an all-time record for App Store revenue, which grew 36% since last year, and cumulative app downloads have now topped 85 billion.
Cook spoke with enthusiasm about the landmark partnership Apple forged with IBM to bring its Mobile First solutions to enterprise customers, with solutions launching across six sectors next month: banking, government insurance, retail, travel, and telecommunication.
Apple CFO Luca Maestri talked about how Apple exceeded its guidance range due to better than expected sales of iPhones and Macs due to customer demand growing year-over-year. iPhone sales grew over both developed and emerging markets, with 17% growth year-over-year in the U.S., and growth of over 50% in Latin America and the Middle East. Maestri went on to note that iPhone demand in the enterprise market remains strong, with 75% of surveyed corporations planning to purchase iPhones in the coming quarter. Referring to lower iPad sales, Maestri indicated that channel inventory was reduced in anticipation of the new iPad releases, and sales were consistent with Apple’s expectations, and sales increased in Japan year-over-year. iPad also continues to lead in the education market with a 90% share.
Apple also announced that it would be changing how it reports revenue categories beginning in Q1 2015, with the new categories being iPhone, iPad, Mac, Services, and Other Products. Apple Pay revenue will be reported under “Services” alongside iTunes content and App Store apps. iPod and Apple Watch revenue will now be grouped into “Other Products” alongside the Apple TV and iPhone, iPad, Mac, and other accessories manufactured by Apple.
Apple reported its fourth quarter 2014 financial results today, selling 39.3 million iPhones, 12.3 million iPads, and 2.6 million iPods. The company posted quarterly revenue of $42.1 billion and quarterly net profit of $8.5 billion, or $1.42 per diluted share. In Q4 2013, Apple had revenue of $37.5 billion and net profit of $7.5 billion, or $1.18 per diluted share. Gross margin was 38 percent compared to 37 percent a year ago. International sales contributed to 60 percent of the quarter’s revenue.
“Our fiscal 2014 was one for the record books, including the biggest iPhone launch ever with iPhone 6 and iPhone 6 Plus,” Apple CEO Tim Cook said. “With amazing innovations in our new iPhones, iPads and Macs, as well as iOS 8 and OS X Yosemite, we are heading into the holidays with Apple’s strongest product lineup ever. We are also incredibly excited about Apple Watch and other great products and services in the pipeline for 2015.”
“Our strong business performance drove EPS growth of 20 percent and a record $13.3 billion in cash flow from operations in the September quarter,” Apple CFO Luca Maestri said. “We continued to execute aggressively against our capital return program, spending over $20 billion in the quarter and bringing cumulative returns to $94 billion.”
Despite the year-over-year increase in iPhone unit sales, the results notably included a year-over-year decline in iPad and iPod sales. iTunes/Software/Services and Accessories categories both posted healthy gains of 8 percent and 13 percent, respectively.
A new report from Re/code reveals that Apple is working to get the price of its subscription music services down to as low as $5/month. Apple was reportedly asking the labels to cut prices to pave the way for a cheaper Beats music subscription, and is suggesting that top iTunes buyers spend about $60/year on music downloads, which equates to about $5/month. On a $5/month subscription model, the music labels would therefore not lose any revenue as a result of those download buyers switching over to a streaming model, and would in fact potentially gain more revenue in the form of new subscribers who may not otherwise spend as much on downloads. The Re/code report also notes that Spotify has just made changes to its streaming plan, offering a “family plan” price of $5/month for additional accounts beyond the first account, suggesting that some room exists in the label agreements for lowering pricing. It’s also worth noting that competing streaming service Rdio has been offering a similar “family plan” for about two years now.
After being offline for the past several hours, the Apple Store has returned and begun taking iPad pre-orders. When Apple unveiled the iPad Air 2 and iPad mini 3 at yesterday’s event, the company announced that pre-orders would begin today, October 17th. While Apple did not specify at what time pre-orders would begin this time around, products have become available for pre-order as early as 12:01 PT, and pre-orders are usually available by the beginning of the business day. While it is unclear exactly why the Apple Store was down this morning, it seems likely that some technical issues prevented pre-orders from being available as early as Apple would have preferred.
Following yesterday’s release of OS X Yosemite, Apple has released updates to its three iOS iWork apps—Pages, Numbers, and Keynote—adding support for iCloud Drive and the new iOS 8 and Yosemite Handoff feature. The updates also include support for third-party storage providers in iOS 8 and note “updated file formats” that make it easier to send documents via services such as Drobox and Gmail. Additional new features have also been added such as more color options with a custom color mixer in the iPad versions, the ability to take photos and videos directly from within the apps, and accessibility, usability, and language improvements. Keynote also introduces a feature that allows users to pair with nearby iOS devices using Multipeer Connectivity.
Apple has debuted the newest edition of its 7.9” tablet, which it’s calling iPad mini 3. The new iPad mini 3 includes Touch ID, and it comes in silver, space gray, and gold. It notably continues to have an A7 processor, not an A8 or A8X, and does not include any of the wireless or camera upgrades found in the iPad Air 2.
iPad mini 3 starts at $399 for the 16GB Wi-Fi model, $499 for 64GB, and $599 for 128GB. Cellular + Wi-Fi models add $130 to each model. Like iPad Air 2, preorders for iPad mini 3 start Friday, Oct. 17, and the tablet ships by the end of next week.
Additionally, the former “iPad mini with Retina display” has been renamed “iPad mini 2” to more clearly differentiate it from its predecessor and successor. It will be offered in 16GB ($299/$429) and 32GB ($399/$529) models.
Apple has officially introduced the newest edition of its full-sized tablet today with the debut of iPad Air 2. Touch ID, first seen in iPhone 5s and included within iPhone 6 and iPhone 6 Plus, has been added to the tablet. The side switch has been removed, and it appears to have been replaced by another microphone.
iPad Air 2 is 6.1 mm thin, 18 percent thinner than the previous iPad Air. A single-component display reduces internal reflection with a sharper image. The screen also now has an anti-reflective coating, and reflections are reduced by 56 percent.
A new chip, A8X, has been created specifically for iPad Air 2. The second-generation 64-bit architecture chip is 40 percent faster. The GPU is 2.5x faster than iPad Air. iPad Air 2 has 10-hour battery life and an M8 coprocessor that can track elevation and motion.
A new iSight camera has been added to the new Air — an 8MP camera that can shoot 1080p HD video. Burst mode is also available on the iPad Air 2 camera. Slo-mo videos have also been added to video recording — 120 fps at 720p. A new FaceTime camera with an all new sensor has also been included in iPad Air 2 — improved face detection, burst selfies, HDR videos, and single-shot HDR photos are all included.
Faster Wi-Fi — 802.11 ac with MIMO — and faster LTE with 20 LTE bands are featured in iPad Air 2.
iPad Air 2 comes in silver, space gray and gold, and will cost $499 for 16GB Wi-Fi only, $599 for 64GB, and $699 for 128GB. Cellular prices are $130 more for each model.
Pre orders begin Friday, Oct. 17, and the iPad Air 2 will ship next week.
Apple Pay, the NFC-dependent wireless transaction technology introduced in the iPhone 6 and iPhone 6 Plus, has been confirmed for an October 20, 2014 launch in the United States. A collection of previously-announced retailers will be the first to have Apple Pay in their stores.
Five hundred additional banks have signed up to support Apple Pay since it was announced, including all of the major networks and a number of major retailers signing on to support by year’s end. Apple CEO Tim Cook noted today that Apple Pay payments can also be made online, not just at retail stores.
Later in the event, Apple also introduced Apple Pay for the iPad Air 2, however, it explicitly omitted any reference to NFC capabilities for in-store purchasing using iPads. The suggestion was that Apple Pay can only be used for iPad online purchases.
Apple announced today that its WatchKit SDK would roll out next month prior to the launch of Apple Watch. WatchKit will give developers a way to make apps for Apple Watch, which is still on track for an “early 2015” release. The November release of WatchKit should give developers time to tinker with creating their own watch apps before Apple Watch hits the market.
Apple’s own iOS 8.1 user guide in the iBookstore reveals screenshots of an iPad Air 2 and iPad mini 3, both with Touch ID. Additionally, the guide shows a screenshot noting that iPad Air 2 will be able to use Burst Mode when taking photos. Based on the shots, it does appear that Apple will call the devices iPad Air 2 and iPad mini 3. As the screenshots in the user guide are for iOS 8.1, we’ll likely also see that debut tomorrow, as well. [via 9to5Mac]
Apple is planning to stop selling Fitbit fitness products in its stores, according to a new report from Re/code. Although it’s unclear why Apple plans to discontinue sales of the Fitbit, this news comes shortly after Fitbit issued a statement that it was still “evaluating integration with HealthKit” in iOS 8. Several other major health and fitness accessory makers have already updated their apps for HealthKit integration, making Fitbit one of the few holdouts. Apple declined to comment on the basis that it doesn’t discuss its vendor partnerships. [via 9to5Mac]
A recent U2 interview posted on Facebook saw the band members taking questions from fans, and one of the questions concerned the automatic free download of U2’s Songs of Innocence album to iTunes playlists: “Can you please never release an album on iTunes that automatically downloads to peoples [sic] playlists ever again? It’s really rude.” The album was accessible for free to 500 million iTunes customers; early estimates claimed 33 million users accessed the album.
The question was posed to U2 frontman Bono, who answered, “Oops. Um. I’m sorry about that. I had this beautiful idea and we got carried away with ourselves. Artists are prone to that kind of thing. Drop of megalomania, touch of generosity, dash of self-promotion, and deep fear that these songs that we poured our life into over the last few years mightn’t be heard. There’s a lot of noise out there. I guess we — we got a little noisy ourselves to get through it.”
Ireland is planning major changes to its corporate tax structure, according to Reuters, including eliminating the “Double-Irish” tax loophole that has allowed companies such as Apple to use Ireland as a tax haven. Addressing Ireland’s parliament, the government’s Finance Minister Michael Noonan stated that “aggressive tax planning by multinational companies has been criticised by governments across the globe and has damaged the reputation of many countries,” further promising to change the country’s residency rules to require that all companies registered in Ireland also be “tax resident,” thereby requiring them to pay taxes to the Irish government. The change takes effect on January 1st, 2015 for new companies, however the government plans a transitional approach for existing companies including Apple through the end of 2020. Last month, the European Union issued a “preliminary view” notifying Ireland that its tax deals with Apple and other large companies constituted illegal state support for those companies.