Visiting Beijing to tout Apple’s environmental strides in China, Apple CEO Tim Cook told Xinhua he is “very bullish on Apple Pay” for the country, despite a series of snags that has kept the payment system from going live there. Once Apple Pay is available, Cook said he believes China will adopt it even faster than the U.S. has. China has already become a more lucrative market than the U.S. for iPhone sales, with Apple overtaking local phone maker Xiaomi to become the top smartphone vendor in China. “I think China is a market where everyone will own a smart phone,” Cook said, adding he hopes to convince “a reasonable percentage” of that market to carry the iPhone. Apple is rapidly expanding its retail presence in China to meet growing demand, opening seven more Apple stores since the start of 2015 and planning to nearly double the current total of 22 stores by the middle of 2016. “Forty is a good objective for us for mid next year,” said Cook, “That is not where we want to end. We’ll keep adding from there.”
Apple has released its third beta of iOS 8.4 to developers, continuing to focus on the new iOS Music app. Featuring a build number of 12H4098c, the release is also accompanied by a new Xcode 6.4 beta to support the new APIs and development environment. The release notes for this latest beta indicate both improvements and limitations in App Extensions, the iTunes Store, Siri, Videos, and WatchKit, as well as with the new Music app. The new Music app appears to continue having a long list of issues that remain to be addressed, with limited progress since the first beta, although the language of several has been softened from phrases such as “does not work” to “may not work” suggesting that Apple is perhaps slowly working on improvements in these areas.
Apple has received samples of silver nanowire materials to be used for touch screens in a “large screen iPad, which will be released next year,” Korean outlet ETNews reports. The new material is thinner and more pressure sensitive than the indium tin oxide film used in current touch screen displays, allowing the silver nanowire to be incorporated into thinner devices. The more touch sensitive material could augment Apple’s Force Touch technology, already available in Apple Watch and newer MacBooks, and rumored to be featured in the coming “iPad Pro.” The silver nanowire can even maintain an electrical signal when bent or snapped, making it ideal for use in flexible screens. The material is also cheaper to create because rare materials like indium aren’t required and major display suppliers like LG and Samsung already have the ability to mass produce it. [via Apple Insider]
Fiat Chrysler CEO Sergio Marchionne said he has met with Apple CEO Tim Cook, but was tight-lipped about the details of the meeting, Reuters reports. Marchionne told the press that Cook is “interested in Apple’s intervention in the car,” but declined any further comment about Apple’s rumored car project. Recently, Marchionne told Bloomberg he was open to the possibility of collaborating with companies like Apple and Google, saying he was intrigued by how tech firms can disrupt marketplaces. “If they show up and they are truly successful, with their cash piles and know-how, they could fundamentally hurt this industry,” Marchionne said. Fiat is an official Apple CarPlay partner.
Apple is expanding its environmental protection and renewable energy push in China, announcing that it has partnered with World Wildlife Fund to protect up to a million acres of sustainable forest land in China to produce the fiber used in Apple packaging and products. This adds to the 36,000 acres of working forests the company is working to conserve in the U.S. with the help of The Conservation Fund. Apple is also partnering with several Chinese power companies to create two more solar farms. The company’s first solar project in China, started only three weeks ago, will produce enough power to run all of Apple’s corporate offices and retail stores in the country. The additional solar farms will generate up to 80 million kilowatt hours of additional clean energy that Apple can feed back into the Chinese power grid, bringing Apple closer to its goal of running its operations on 100 percent renewable energy.
With the company sitting at 87 percent now, CEO Tim Cook acknowledged the large scale of the task — especially since much of the environmental fallout related to Apple products comes from third-party suppliers out of the company’s direct control — but doubled down on the company’s commitment to achieving it. “This won’t happen overnight — in fact it will take years — but it’s important work that has to happen, and Apple is in a unique position to take the initiative toward this ambitious goal. It is a responsibility we accept. We are excited to work with leaders in our supply chain who want to be on the cutting edge of China’s green transformation,” Cook said.
Apple is apparently looking at options to provide limited free listening options for users of its new streaming music service, Re/Code reports. While Apple still doesn’t intend to offer a free tier, the new report suggests that some limited listening options will be available, designed to push users toward the paid streaming model. Industry sources have suggested that Apple is considering offering free trial periods of one to three months and a feature that will allow labels to provide a sampling of songs that users can listen to. Sources also note that Apple intends to not only continue offering its free, ad-supported iTunes Radio service, but is expected to be working to enhance it, having acquired new talent expressly for this purpose.
Continuing a legal battle that began in January with Apple, Reuters reports that Ericsson has now filed patent infringement lawsuits in Germany, Britain, and the Netherlands. The legal actions, which concern licensing fees and royalties over LTE patents, were escalated in February as the Swedish company filed seven additional lawsuits in the U.S. and asked the U.S. International Trade Commission to investigate. The dispute began after the two companies were unable to come to an agreement on appropriate licensing arrangements, even after offers of arbitration. Ericsson now claims that Apple is infringing on as many as 41 patents related to mobile device communications, user interfaces, battery conservation, and the operating system itself, while Apple insists that Ericsson is demanding excessive royalties for its LTE patents and that the patents are “not essential to industry cellular standards.”
Following reports earlier this week that Apple has been using its influence to encourage record labels to kill off free streaming licenses for services like Spotify and YouTube, some services are accusing Apple of anticompetitive pricing as a result of its App Store subscription model. Several music industry sources have spoken with The Verge, strongly calling out Apple for the thirty percent cut that it takes from all in-app subscriptions, which of course includes subscriptions to services such as Spotify and Rdio. While the sources acknowledge that some fee for administrative overhead is reasonable, the feeling is that a 30 percent cut is excessive.
The sense is that Apple gets an unfair pricing advantage for its own upcoming streaming service, as other services are forced to either give up 30 percent of their base fees to Apple, or raise their prices for in-app subscriptions to make up the difference. While most of these services provide alternate methods for purchasing subscriptions outside of the App Store, such as visiting the company’s web site directly, Apple’s App Store Guidelines specifically prohibit redirecting users to a web site or even providing this information in the app itself, resulting in many users not being aware of another way to purchase a subscription.
A civil suit filed Tuesday in U.S. District Court accuses Apple of violating five OpenTV streaming video patents, Re/code reports. OpenTV is requesting unspecific damages for patents it says Apple used illegally in iTunes software for securely downloading or streaming rented movies. OpenTV technology powers on-demand video services and digital video recorders and has been licensed by other giants in the streaming video business, such as Google and Disney, according to the suit. Apple couldn’t be reached for comment.
Apple is missing some key music licensing deals for its upcoming streaming service, according to a new report from Billboard. While several reports have suggested that the company has been targeting June’s Worldwide Developer Conference (WWDC) to debut the new service, industry sources have told Billboard that as of now Apple doesn’t have the necessary licensing deals in place as of yet. While at least one source notes that a June launch might be “still attainable” due to Apple’s past track record of quickly securing licensing deals, another major label source is cited as suggesting that the launch “isn’t coming soon” as “the deals aren’t done” and there isn’t enough time to make it happen.
GE is building intelligent, color-changing LED lighting that will be compatible with Apple’s HomeKit, GE CEO Beth Comstock said during the company’s Connected Future event. GE’s Align technology allows users to automate lighting based on the body’s sleep cycle, producing a bright blue tone during the day to suppress melatonin production and a warmer amber light at night to encourage sleep. HomeKit will allow the lighting to be controlled by Apple devices and to integrate with other connected devices. The connection between the bulbs and iOS device will be authenticated and protected by end-to-end encryption to prevent tampering. GE plans to make the intelligent bulbs available later this year.
Apple has laid out its guidelines for third-party developers looking to make bands for the Apple Watch. The document comes with only two basic guidelines — the band must securely attach to the watch and not hinder its operation — but there are still plenty of other restrictions. Most notably, bands are prohibited from integrating magnetic chargers or using certain materials that don’t meet environmental standards. No mention is made of the watch’s diagnostic port, located in the slot where the bottom band fastens to the watch. Bands will have to fasten tightly enough to keep the watch’s sensors in contact with the user’s skin while remaining comfortable. The bands must pass corrosion tests and resist efforts to pull the band off, while still providing easy detachment when a user wants to remove the band. Apple provides specifications for creating the special lugs used to secure bands to the Apple Watch, but the homepage for the new guidelines says Apple will be making its own lugs available to developers soon through the Made for Apple Watch program.
The Apple TV remote is getting a touchpad when Apple debuts the new Apple TV this summer, The New York Times reports. An employee briefed on the product said the remote will have two physical buttons and the touchpad, which will be used for scrolling. The new remote will also be thicker than the previous model. Apple declined comment.
Apple is trying to convince record labels not to renew Spotify’s license to stream music for free, drawing even more scrutiny from the Department of Justice, The Verge reports. Apple’s aggressive attempts to undercut the competition ahead of releasing its upcoming subscription music streaming service have already drawn attention from regulators in the the U.S. and Europe. If successful, this latest gambit would leave an estimated 45 million free Spotify users without the free listening option, putting Apple in a prime spot to grab new users by offering exclusive content that the paid tier of Spotify doesn’t have. Sources also told The Verge that Apple has offered to pay YouTube’s music licensing fee to Universal Music Group if the label will pull its songs from YouTube. Apple is expected to launch the new streaming service at WWDC in June.
Apple has been poaching more radio producers from BBC, according to a new report from Music Business Worldwide. On the heels of the recent move of BBC Radio 1 personality Zane Low to Apple in March, the report notes that four other producers from BBC Radio 1 have been hired by Apple, including Lowe’s former producer, James Bursey, who apparently is already headed to Los Angeles to work with Lowe. Three other BBC producers are expected to join Apple at the end of the month to work from the company’s London office, rumored to possibly include Natasha Lynch and Kirean Yeates, star producers responsible for the Huw Stephens show and BBC Introducing, respectively.
While MBW suggests that all of these recent hires, including Zane, are geared directly toward Apple’s upcoming Beats-based streaming service, it’s notable that earlier reports suggested that Zane, at least, was hired to play a role in redesigning iTunes Radio to “bear some resemblance to a traditional radio station,” suggesting that the addition of other talent from BBC Radio may also be directed toward the same project.
The limited availability of the Apple Watch at launch is the result of supply constraints related to the taptic feedback sensors, the Wall Street Journal reports. The component, which provides the wrist-based vibration feedback, was being manufactured by two suppliers, one of which was found to be producing faulty components. The problem apparently remained undiscovered until mass production began in February, only revealing itself through reliability testing on finished units coming off the assembly line. Some completed watches were apparently scrapped entirely as a result, and Apple was forced to move all of its production to a single supplier, which has not been able to scale up production as quickly as needed to meet the demand for the new wearable device. While it’s unclear how much the taptic engine component problems altered Apple’s retail availability plans overall, several other component suppliers have reported that they have been told to slow down production until June, in line with prior retail availability announcements and shipping estimates that have been coming out of Apple.
Apple rejects Apple Watch apps that just tell time, requires independent approval for certain health apps
In a series of updates to its App Store guidelines, Apple has spelled out some boundaries for which apps will be allowed on the Apple Watch. Watch apps built primarily to tell time will be rejected, reflecting the time Apple has spent in its own exhaustive efforts to create intricate faces for the watch. Apple also clarified that apps used for health-related research on human subjects will need to be approved by an independent ethics review board. [via 9to5Mac]
Apple sold more iPhones in China than the U.S. for the first time in Q2, Reuters reports. Apple’s revenue in the country was up 71 percent to $16.8 billion over the quarter, fueled by gift buying around Chinese New Year. Apple sold 61.2 million iPhones overall in the quarter, up 40 percent from last year’s Q2, but down from the previous record-breaking holiday quarter. The larger-screen iPhone 6 and 6 Plus have proven popular with customers worldwide, helping Apple overtake Samsung in global smartphone sales last quarter.
Kicking off Apple’s conference call announcing its record-breaking numbers for Q2 2015, Apple CEO Tim Cook reported that the company had its strongest March quarter ever, with 27 percent revenue growth overall, and 55 percent year-over-year growth in iPhone revenue. Cook also noted that Apple has seen a higher rate of user switching to the iPhone than in previous iPhone cycles. He cited strong success of the iPhone in emerging markets with 63 percent year-over-year growth, and noted that the App Store had its best quarter ever with a record number of customers making purchases, driving a new record for App Store revenue.
Cook also touched on Apple’s successes in other areas, noting that Apple Pay has had great momentum, with the number of merchants accepting Apple Pay having tripled. More than 60,000 iPhone users enrolled in ResearchKit in only the first few weeks of its availability, and thousands of researchers have contacted Apple expressing interest in the technology for their own studies. Naturally, Cook also spoke on the Apple Watch debut, noting that the response to the Apple Watch has been positive and that more than 3,500 apps that are already available have added to “the surprise and delight” of Apple Watch. Cook expressed his thanks to third-party developers, customers, and Apple employees in making the Apple Watch launch a success.
Apple reported its second quarter 2015 financial results today, selling 61.1 million iPhones and 12.6 million iPads. The company posted quarterly revenue of $58 billion and quarterly net profit of $13.6 billion, or $2.33 per diluted share. In Q2 2014, Apple had revenue of $45.6 billion and net profit of $10.2 billion, or $1.66 per diluted share. Gross margin was 40.8 percent compared to 39.3 percent a year ago. International sales contributed to 69 percent of this quarter’s revenue.
For Q2 2015, Apple is providing guidance of revenue between $46 billion and $48 billion, and gross margin between 38.5 percent and 39.5 percent. Apple’s earnings call will begin at 5 p.m. Eastern Time, and can be heard live on the company’s investor website.