Apple is attempting to complete all necessary licensing deals for the music streaming service iRadio before next week, so the company can unveil it at its Worldwide Developers Conference. According to a report, Apple has agreed with Universal on music rights, but not publishing. The company apparently agreed to terms with Warner Music Group over the weekend, but it’s still discussing deals with Sony Music Entertainment and Sony/ATV. This new report doesn’t have any information on Apple’s negotiations with BMG Rights Management, but as recently as a few weeks ago, a deal was not believed to be in place with BMG. If Apple isn’t able to complete the deals by next week, it’s unclear when the service may be introduced. [via The New York Times]
Apple is reportedly testing versions of iOS 7 with AirDrop, the Mac’s Wi-Fi file sharing tool, which lets users exchange files between devices more easily than sending e-mails or using Messages. According to a report, AirDrop may be integrated into the iOS sharing menu, and could work between two iOS devices, or between a Mac and an iOS device. Like the reported Flickr and Vimeo integration in iOS 7, there’s a possibility AirDrop will not make it to the newest version of iOS. [via 9to5Mac]
Apple has raised its prices for the iPad and iPod in Japan in response to a weaker yen, according to a report. For instance, the 16 GB Wi-Fi iPad now sells for 49,800 yen ($493), an increase of about $70. The iPod shuffle increased roughly the equivalent of $6. “We made some pricing adjustments due to changes in foreign exchange rates,” Apple spokesman Takashi Takabayashi said. [via Bloomberg]
Without a press release, Apple has quietly released an unusually stripped-down 16GB version of the fifth-generation iPod touch, eliminating the rear iSight camera and loop wrist strap found in the previously-released 32GB and 64GB models. The new 16GB iPod touch retains the other specifications of the late 2012 models, but is available solely in a silver and black color combination, selling for $229 with packed-in EarPods earphones. It is two grams lighter than before due to the missing components, and will be available in U.S. stores starting tomorrow.
Apple simultaneously appears to have discontinued the fourth-generation iPod touch, which remained available in two storage capacities to preserve a $199 option in the touch family. iPod sales have continued to slide from previous highs quarter after quarter, due as much to weak feature and price combinations as the continued strength of new iPhone and iPad models.
Update: Apple has also announced that 100 million iPod touches have been sold since 2007. [via Engadget]
Apple will use Pegatron — not Foxconn — as its primary assembler for the company’s new low-cost iPhone “expected to be offered later this year,” according to a new report. A rival of Foxconn, Pegatron was a “minor producer” of iPhones in 2011 and also made iPad minis last year. Sources say Apple decided to use Pegatron to diversify its manufacturing after Foxconn had issues with scratches on the iPhone 5’s metal casing, and because Apple is expanding its product lines. While some claim Pegatron will accept smaller profits to produce Apple products, neither company has commented. [via The Wall Street Journal]
Apple CEO Tim Cook was interviewed to kick off All Things D’s D11 Conference, and though Cook was reluctant to reveal details about new Apple products, he did say the company has “several more game changers.” Cook spoke about television being an outdated experience, and said Apple has “a very grand vision.” He did note that Apple has sold 13 million Apple TVs, and “about half” were sold in the last year.
Cook was even more vague on wearable technology, saying the area was “ripe for exploration,” without answering if Apple had any specific plans. He said the wrist “is more natural” than wearing glasses, but that “you still have to convince people it is worth wearing.” Cook doesn’t see Google Glass as having broad appeal, and mentioned that he wears a Nike FuelBand.
Regarding iOS 7, Cook was still vague, but verified “the future of iOS” would debut at Apple’s Worldwide Developers Conference in June. Cook also confirmed that Apple Senior Vice President of Industrial Design Jony Ive was key to the new operating system.
In other news, Cook mentioned Apple has already acquired nine companies this fiscal year, but only some of them were announced. He did note the company did not make a bid for Waze, as was rumored. Cook also answered questions on taxes and Apple’s stock, among other topics. On larger screens for phones, he again mentioned the tradeoffs that come with those screens, and reiterated his belief that the iPhone 5’s Retina display is the best screen on the market.
When asked about Android’s ability to let users make changes to a home screen, Cook said Apple would “open up more” and give more control to developers and users in the future, while noting, “not to the degree that we put the customer at risk of having a bad experience.” When comparing his style of leadership to Steve Jobs, Cook said he is different in many ways, “but the important things are the same.” [via All Things D]
Update: All Things D has posted the full video interview with Apple CEO Tim Cook on its website.
Apple has agreed to pay $53 million to resolve a class action lawsuit regarding warranty claims denied due to alleged water damage, Bloomberg reports. The lawsuit alleged that the liquid submersion indicators on iPhones and iPods could be triggered through ordinary use, which would have resulted in some devices being incorrectly excluded from warranty coverage, as Apple summarily denied repairs when the indicator was triggered on a device. Apple had denied the allegations, maintaining that the indicators were reliable.
Affected consumers whose warranty claims were denied on the basis of Apple’s liquid damage policy may be eligible for up to $300 depending on the device model owned. The settlement applies to warranty claims denied for iPhones before Dec 31, 2009 or iPod touch devices prior to June 2010.
A new Apple patent describes a system that can adjust an iPhone’s receiver volume based on the proximity of the device to a user’s ear. The phone would be able to sense if a user has moved the telephone further away from his or her ear, and raise the receiver volume in response. Additionally, the speakerphone volume could also be adjusted based on the user’s distance from the telephone, while another concept would allow the phone to automatically switch from using the receiver to using the speaker as the phone gets further from a user.
Users could conceivably store proximity audio settings within user profiles. Proximity changes could trigger a recall of these various user profiles — each profile could have its own default volume. Other acoustic properties, such as frequency response, could also be adjusted based on proximity. [via Apple Insider]
Apple’s largest manufacturing partner Foxconn may be planning to sell its own line of iPhone, iPad, and iPod accessories, according to the Wall Street Journal. According to executives with the company who declined to be named, Foxconn has been looking for ways to diversify beyond contract manufacturing, with investments in media content and software and is now apparently reviewing plans for its own brand of electronics accessories to include data transmission cables, headphones, and keyboards under the Foxconn brand. It also plans to license Apple’s technology to produce accessories compatible with the iPhone and iPad.
Foxconn is also expanding into the software and content market with the aim to directly supply content for all of the devices it assembles. The company has reportedly begun hiring software engineers for a research and development centre in southern Taiwan to focus on developing mobile applications, cloud computing technology, and smart watch apps.
A new report from the Financial Times indicates that the European Union is proceeding with an investigation into alleged anti-competitive tactics by Apple in regard to sales and distribution of the iPhone in the European market. A nine-page questionnaire was sent to a number of EU mobile network operators last week relating to iPhone distribution terms, sales practices, minimum iPhone purchasing requirements, and marketing budget restrictions. The questionnaire also reportedly asks whether Apple limits the use of the iPhone 5 on high-speed European 4G networks.
Reports of an EU antitrust probe first surfaced in March when a group of carriers complained about the strict contract terms required to sell iPhones. Apple maintains that its contracts “fully comply with local laws.”
The U.S. government has sufficient evidence to prove Apple participated in a conspiracy to raise e-book prices, U.S. District Judge Denise Cote said during a court conference. “I believe that the government will be able to show at trial direct evidence that Apple knowingly participated in and facilitated a conspiracy to raise prices of e-books, and that the circumstantial evidence in this case, including the terms of the agreements, will confirm that,” Cote said. The U.S. Department of Justice alleged Apple engaged in a price-fixing scheme with book publishers, which Apple denied — the DOJ originally filed the suit in April 2012. A non-jury trial on the case is scheduled to start on June 3. The trial could last as long as three weeks. [via Bloomberg]
The new iOS 7 is reportedly dropping heavy textures and adding black and white elements, with sources calling the new iOS “black, white, and flat all over.” A new report from 9to5Mac offers more details about iOS 7, about a month after a previous report noted the new iOS would have a “very, very flat” interface. Senior Vice President of Industrial Design Jony Ive is — as many expected — leading iOS away from skeuomorphism, reportedly believing “designs filled with physical metaphors do not stand the test of time,” and that differing designs could confuse users.
Ive has apparently made sweeping changes to the interface. These changes may include: A removal of the shiny, transparent time bar on the lock screen, replacing it with a “shine-free, black” interface; the square pin code grid will feature round, black buttons; the lock screen could utilize additional gestures; widgets may be added to Notification Center; Notification Center will be dark with white text instead of featuring the current “dark linen” background; a panel for Wi-Fi, airplane mode, and Bluetooth toggles could be added; app icons have “lost shine” and Apple icons have been made less skeuomorphic; Apple’s Notes, Mail, Calendar, and Maps apps have a uniformed “flat white” look; panorama-like wallpapers are available; navigation and tab bars have lost gradient textures with some bars sporting a “minor blurring effect”; App Store, Newsstand, Game Center, Safari, Camera, and Weather have changed significantly; iPhone may introduce its own standalone FaceTime app, just like iPad and iPod touch.
iOS 7 has reportedly been “re-architected” several times, so interface changes are still possible. Designers and engineers are also “prioritizing an overhaul of the iPhone’s version of iOS” over iPad’s version of the software. As noted earlier, Flickr and Vimeo will likely be integrated. iOS 7 will likely be released in the fall with new Apple hardware.
In case there was any ambiguity on the matter, Apple has confirmed that it will open its annual Worldwide Developers Conference with a keynote speech on Monday, June 10. By all accounts, Apple will be showing a preview of iOS 7 at the event, as well as the next generation OS X operating system for Macs. It’s still unclear if Apple’s “iRadio” streaming music service will debut during the conference, which runs from June 10-14. [via AllThingsD]
A newly-published Apple patent application discusses an interactive AirPlay update—one that lets a single AirPlay-enabled app simultaneously show multiple, different user interfaces on multiple display devices, coordinating separate interactivity with each display. User input through any display can make changes to the central app and/or modify the app’s data. In short, an app running on an iOS device could also be controlled via the second screen it’s displaying on, rather than just the iOS device itself.
This new AirPlay implementation appears to contemplate a more sophisticated Apple TV or iTV product: Apple’s invention would enable two-way communication between the TV and the Apple TV, such that their separate remote controls—simple or sophisticated—could actually interact with both devices. A TV with integrated Apple TV functionality is also referenced in the application. [via Patently Apple]
Previously believed to launch in late 2013, Apple’s iWatch should arrive in late 2014, according to KGI Securities analyst Ming-Chi Kuo. Kuo claims that the iWatch will use a 1.5- or 2-inch display and GF2 touch technology, components similar to ones previously found in the iPod nano and iPad mini, respectively. However, Kuo believes the iWatch won’t be seen until late 2014 because Apple does not have the resources necessary to develop an iWatch-specific version of its iOS platform, and that there would be a scarcity of components needed to meet high demand. He also expects the device to feature biometrics, secure user identification, and iOS integration.
In a note to investors, Kuo wrote, “Investors shouldn’t be misled by the word ‘Watch’. We think iWatch will not be positioned as a time-telling device, nor as a device that displays information from other Apple products.” As noted on our rumor page about the device, we wouldn’t be surprised to see a name closer to “iBand.” [via Apple Insider]
Apple has revamped the look of its online store’s homepage, placing a considerably stronger focus on Apple-developed hardware and high-margin accessories. Fewer and generally more expensive items have been given prominent positions on the Store’s main pages, while text and links have been reduced. Notably, the redesign removes front-page graphic links to educational discounts, as well as refurbished and clearance products, hiding text links in a tiny “More Stores” section at the bottom of the page.
High-margin accessories have been placed “below the fold” on the new pages, with the “Shop iPod” section pushing particularly expensive speakers below Apple’s own products. Currently, a Father’s Day promotion sits in the center of the main page.
Apple is reportedly planning an “increased presence of third-party social networks” in iOS 7, and more specifically, a deeper integration of photo and video sharing services Flickr and Vimeo. According to a 9to5Mac report, users will be able to sign into Flickr or Vimeo using iOS 7’s Settings application. Users could log into and use Flickr and Vimeo as simply as they currently use Facebook or Twitter for iOS. However, the report notes a “very real possibility that any feature in testing could be removed” before iOS 7 is announced.
While a recent report detailed Apple and Yahoo’s discussion of a deeper partnership, it’s unknown if the Yahoo-owned Flickr was part of those talks. The proposed addition of Vimeo to iOS could conceivably further distance Apple from Google’s YouTube app; sources didn’t comment on Vimeo completely replacing YouTube.
In front of the U.S. Senate’s Permanent Subcommittee on Investigations, Apple CEO Tim Cook reiterated the company’s claim that Apple uses no gimmicks to avoid paying U.S. taxes. “We pay all the taxes we owe. Every single dollar,” Cook said. Under the country’s current tax system, Cook argued that it would be expensive to bring money earned from international sales back to the U.S. As in the pre-released testimony, Cook said that Apple recommends “dramatic” tax code reform. Regarding Apple’s use of Irish subsidiaries, Apple Chief Financial Officer Peter Oppenheimer said those subsidiaries employ nearly 4,000 people. He noted that profits of Apple Operations International and Apple Sales International are already taxed by foreign governments, and U.S. taxes are unaffected by those profits.
Earlier in the hearing, U.S. Senators Carl Levin (D-Mich.) and John McCain (R-Ariz.) brought up many of the points they made in their statements, while placing additional emphasis on Apple’s techniques in using subsidiaries such as Apple Operations International and Apple Sales International to avoid taxes. For instance, in the case of Apple Operations International: the U.S. system taxes based on where a company is incorporated, while Ireland — where AOI is incorporated — taxes based on the people managing the company. Since AOI is incorporated in Ireland but managed in the U.S., it appears to avoid any tax burden in either country — though Apple noted that AOI pays taxes on interest. Levin estimated Apple avoided paying $9 Billion in U.S. income taxes in 2012 alone. McCain pointed to a “flawed system,” while Levin said closing unjustified tax loopholes could provide hundreds of billions of dollars, “whether or not we reform the overall tax code.” By contrast, Sen. Rand Paul (R-Ky.) praised Apple and said the company should be apologized to for having to attend the hearing, and the company should be congratulated for creating jobs.
The U.S. Senate’s Permanent Subcommittee on Investigations claims Apple has avoided paying billions of dollars in U.S. income taxes by using offshore entities. “Apple wasn’t satisfied with shifting its profits to a low-tax offshore tax haven,” subcommittee chairman Carl Levin (D-Mich.) said in a statement. “Apple sought the Holy Grail of tax avoidance. It has created offshore entities holding tens of billions of dollars, while claiming to be tax resident nowhere.” The subcommittee also released a 40-page memorandum with findings and recommendations.
Apple CEO Tim Cook is scheduled to appear at a hearing on Apple’s tax practices this morning — the company released its testimony yesterday. In the testimony, Apple points out that it is “likely the largest corporate income tax payer in the US.” Subcommittee ranking member John McCain (R-Ariz.) said in a statement that “Apple claims to be the largest U.S. corporate taxpayer, but by sheer size and scale, it is also among America’s largest tax avoiders.” The subcommittee does not appear to believe that Apple acted illegally, however, the company took advantage of legal loopholes to dramatically lower its tax burden.
One of the findings in the subcommittee’s memorandum involves Apple’s tax rate in Ireland, which is said to be less than 2 percent. The subcommittee maintains Apple’s cost sharing agreement with offshore affiliates in Ireland is “primarily a conduit for shifting billions of dollars in income from the United States to a low tax jurisdiction,” as $74 billion in sales income was shifted to Ireland from 2009 to 2012. Ireland said it’s not to blame for Apple’s low payments, claiming its system is transparent, and other jurisdictions’ tax systems are at fault, according to Reuters.
Apple has released a document containing CEO Tim Cook’s testimony ahead of his scheduled appearance tomorrow before US Senate’s Permanent Subcommittee on Investigations. Responding to questions about the company keeping more than $100 billion overseas, Apple used the testimony to state that it does not use tax gimmicks, and “has substantial foreign cash because it sells the majority of its products outside the US.” The company also points out that it is “likely the largest corporate income tax payer in the US” and notes that it has “created or supported approximately 600,000 jobs in the US.”
As anticipated by comments from Cook last year, Apple proposes that the current US corporate tax system must be reformed — “to reflect both the digital age and the globalization of commerce.” The company believes comprehensive reform should “be revenue neutral; eliminate all corporate tax expenditures; lower corporate income tax rates; and implement a reasonable tax on foreign earnings that allows free movement of capital back to the US.” It does not make more specific proposals in the testimony, but suggests that the simplification of the tax system is in line with its long-held belief system that simplicity is superior to complexity.