- September 18, 2009
Record label executives are concerned about Apple shifting its focus from music to iPhone and iPod touch applications, according to a BusinessWeek report. The article suggests that due to Apple’s role as the world’s largest music retailer and dominance of the U.S. with roughly 90% of digital downloads and a 74% share of the MP3 market, the labels are more dependent on Apple than before, while Apple’s core business is growing less dependent on music sales and more dependent on apps. “It’s no contest,” said Needham analyst Charles Wolf. “Apple’s strategic future is tied to the App Store. There is no strategic importance to music anymore.” The report comes just one week after Apple introduced iTunes LP, a new digital album format aimed at spurring sales of full-length albums as opposed to single downloads, at a special event; the company also spent time highlighting the gaming abilities of the iPod touch, and the video camera of the fifth-generation iPod nano. “Our biggest concern would be if they started resting on their laurels [in music],” an unnamed senior executive at a major label told BusinessWeek. “We need them to continue innovating.”
- September 15, 2009
Bruce Sewell, a former general counsel and senior vice president of Intel, will join Apple as the company’s General Counsel and senior vice president of Legal and Government Affairs, replacing Daniel Cooperman, who will be retiring at the end of September. Sewell will report directly to Apple CEO Steve Jobs, and will likely lead Apple’s legal, corporate affairs and corporate social responsibility programs, responsibilities he also held at Intel.
“We are thrilled to have Bruce join our executive team, and wish Dan a very happy retirement,” said Steve Jobs, Apple’s CEO. “With Bruce’s extensive experience in litigation, securities and intellectual property, we expect this to be a seamless transition.”
- September 9, 2009
Below is a complete transcript of iLounge’s live coverage from Apple’s Rock and Roll media event, held on September 9, 2009. Updates are presented in reverse chronological order; photos from the event can be seen on iLounge’s Flickr account.
- August 31, 2009
Apple has sent out invitations to select members of the media inviting them to a special event on September 9th. Featuring a large iPod silhouette graphic at the top sporting the phrase “It’s only rock and roll, but we like it,” the invite states that the event will be held at the Yerba Buena Center for the Arts Theater in San Francisco, CA, and that it will begin at 10:00 a.m. Pacific Time. Apple is widely expected to announce its fall 2009 iPod lineup at the event, and iLounge will be there to cover it live.
Notable is the “only rock and roll” reference, which appears to be a simultaneous dismissal of rumors that the event might be focused on more than just Apple’s “music” business—iPods—and a reference to the Rolling Stones, who traditionally were seen as rivals to The Beatles. The September 9 date of the event coincides with the release of The Beatles’ entire backcatalog in remastered CD format, as well as a widely publicized tie-up for a special Beatles version of the game Rock Band; these events, combined with Apple’s longstanding interest in offering The Beatles’ catalog in digital format on iTunes, have led many to speculate that the event would include such an announcement. If so, the theme of the invitation provides only the most modest hint that such a thing could be possible.
- August 31, 2009
The U.S. Securities & Exchange Commission has launched an investigation into possible illegal trading of Apple shares both domestically and abroad, according to a new report. Citing a series of SEC documents sent to the brokerage community, the Huffington Post reports that the commission is looking at four specific time periods, asking for the names of clients who specifically bought and sold Apple shares during those periods. The report states that the SEC is asking whether anyone had an illegal lead on how iPod sales were faring, whether anyone was given insight into Apple CEO Steve Jobs’ health, and whether anyone had exact knowledge of the dates on which company press releases or announcements relating to Jobs’ health and/or iPod sales would be made public.
- August 25, 2009
BTG International, a technology company based in Pennsylvania, has filed a complaint with the International Trade Commission alleging that Apple and a host of other companies unlawfully import and sell products containing patent infringing MLC flash memory chips, as well as the chips themselves. The complaint explains that BTG’s patents “relate to methods and apparatuses for programming and reading Flash memory cells that store more than a single bit of information per cell;” such chips are found in every current iPod and iPhone model, save for the iPod classic, and are typically manufactured by Samsung, according to the complaint. BTG filed a lawsuit against Samsung over the patent dispute in December of 2008, and filed suit against Apple and several other companies this July. BTG is requesting the Commission issue either a general or limited exclusion order aimed at stopping the importation of the chips and products containing the chips, as well as a cease and desist order directed to all the involved companies. Other companies named in the suit include Sony, RIM, Dell, Lenovo, and ASUS.
- August 20, 2009
Former Palm CEO Ed Colligan rejected what he deemed a “likely illegal” proposal from Apple CEO Steve Jobs that the two companies refrain from hiring each other’s employees, according to two-year-old communications between the two executives obtained and reviewed by Bloomberg News. While the report states that the exact details of what Jobs proposed are unknown since the proposal was not included in the documents it received, it did review Colligan’s response, which said, “Your proposal that we agree that neither company will hire the other’s employees, regardless of the individual’s desires, is not only wrong, it is likely illegal.” Colligan reportedly considered offering hiring concessions, before deciding against it.
The proposal appears to have been a direct result of Palm’s hiring of former Apple executive Jon Rubinstein to develop new products; Jobs was concerned that Rubinstein would recruit Apple employees away from the company to join his team at Palm—a rational fear, given that Apple had hired a number of Palm employees in the lead-up to the iPhone. “We must do whatever we can to stop this,” Jobs said. The U.S. Justice Department is investigating possible collusion in hiring practices amongst technology companies, and the Federal Trade Commission is currently looking into whether ties between Google and Apple through shared board members—including Google CEO Eric Schmidt, who recently resigned from Apple’s board—might have led to a similar arrangement, reducing competition between the two companies.
- August 13, 2009
A new Apple patent filing suggests the company is continuing its work on motion compensation for screens, particularly touchscreens as found on the iPhone and iPod touch. The patent, entitled “Motion Compensation for Screens,” describes a method of combining motion data, touch data, and screen properties to make devices easier to use when they’re in motion. Possible implementations could include temporarily increasing the size of selectable items on the screen, increasing the touch input region, and changing both the display and the input regions based on the motion of the device and motion of the selectable object, such as when swiping through pages of apps. A similar Apple patent filing appeared in April, and dealt primarily with scaling screen elements to make them easier to select when the device is in motion. 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 AppleInsider]
- August 3, 2009
Apple has announced that Dr. Eric Schimdt, CEO of Google, is resigning from Apple’s Board of Directors, on which he has served since 2006. “Eric has been an excellent Board member for Apple, investing his valuable time, talent, passion and wisdom to help make Apple successful,” said Steve Jobs, Apple’s CEO. “Unfortunately, as Google enters more of Apple’s core businesses, with Android and now Chrome OS, Eric’s effectiveness as an Apple Board member will be significantly diminished, since he will have to recuse himself from even larger portions of our meetings due to potential conflicts of interest. Therefore, we have mutually decided that now is the right time for Eric to resign his position on Apple’s Board.”
- July 23, 2009
Apple has withdrawn its threat of legal action against OdioWorks, which runs the BluWiki website. In April, OdioWorks representatives, with the help of the Electronic Frontier Foundation, sued Apple over threats made to the company over content hosted on the wiki. At issue was a group of “iTunesDB” pages that contained information on how to use an iPod or iPhone with third-party software. Apple legal sent a letter demanding the pages be removed, arguing that the content constituted copyright infringement and a violation of the Digital Millennium Copyright Act’s (DMCA’s) prohibition on circumventing copy protection measures. Following the receipt of a letter from Apple saying it was withdrawing its cease & desist demands and stating that “Apple no longer has, nor will it have in the future, any objection to the publication of the iTunesDB Pages,” the Electronic Frontier Foundation is dismissing its suit.
- July 21, 2009
In comments made during a conference call with analysts following the release of third-quarter 2009 financial results, Apple CFO Peter Oppenheimer noted that the company now views its iPod and iPhone business—“pocket products”—as comprising three segments: “traditional MP3 players,” “iPod touch,” and “iPhone,” and had internally forecasted year over year declines to occur in the traditional segment, one of the reasons the company developed the iPhone and iPod touch. “We expect decline to continue as we cannibalize ourselves” with the touchscreen devices, said Oppenheimer, though he noted that 50% of traditional iPod purchasers are people who are buying their first iPods, and suggested that these iPod models are not going away any time soon. According to Oppenheimer, unit sales declined in part based on reduction of channel inventory, as well as reduced sell-through of 4% year-over-year.
However, iPod touch sales grew “extremely well” in the quarter, representing 130% year over year growth, with the iPod continuing to have over 70% market share based on the latest NPD tracking information, and growth in nearly every territory it is being tracked in. iTunes sales of 8 billion songs were confirmed, with restatements of past figures: 1.5 billion downloads of Apps and 65,000 applications in the App Store. iPod touch sales are expected to grow considerably in the future.
Though Apple would not break out specific numbers on sales of the iPod touch and iPhone, COO Tim Cook noted: “As we made the changes, both the launch of the 3GS and the price reduction of the 3G, we saw a significant acceleration of total unit sales… as Peter alluded to, the iPhone 3GS is currently [supply] constrained in virtually every country we’re shipping in, so the demand for it is very robust.” Regarding sales to the corporate world, Cook said that interest is growing, in part due to the 3GS’s new hardware encryption and security features, and noted that almost 20% of the Fortune 100 have purchased 10,000 or more iPhone units, as have multiple government agencies.
The executives said that the App Store is now available in 77 countries and now reaches over 45 million total iPhone and iPod touch users. Apple is also looking to expand iPhone distribution within currently available countries where it makes sense to do so, and expand past the iPhone’s current 80 countries, including large ones. Notably, they had nothing to add on the situation regarding the iPhone in China, beyond the fact that it continues to be a priority and they hope to have the device available there within a year. The company also admitted that it is a “beginner” in markets where pre-paid phones dominate the market, saying that there are some opportunities available there, and that a “good” number of iPod touch users had upgraded to version 3.0. Finally, when asked about the movement towards $0.99 pricing in the App Store, Cook and Oppenheimer said that the company does have some ideas on how to improve the store experience, and they realize there is room for improvement, but that the developers set the price themselves, and are doing “good business” when deciding where best to set their prices.
- July 21, 2009
Reporting its third quarter financial results today, Apple said it sold 10.2 million iPods during the quarter—a 7 percent decrease compared to the 11.01 million iPods sold in Q3 2008, and similarly a 7% decrease compared to the 11.01 million iPods sold in the year ago quarter. It also sold 5.2 million iPhones in the quarter, up significantly from the 3.79 million sold in the second quarter, but vastly more—626%—than the 717,000 units sold in the third quarter of 2008, when the original iPhone’s stocks were depleted in anticipation of the iPhone 3G’s release. The company posted revenue of $8.34 billion and a net quarterly profit of $1.23 billion, or $1.35 per diluted share, compared with revenue of $7.46 billion and net quarterly profit of $1.07 billion, or $1.19 per diluted share in Q3 2008.
Sales of “Other Music Related Products + Services” were up 17% over the year-ago quarter but down 9% from the second quarter of 2009, to $958 million total. That category includes iTunes Store sales, iPod services, and revenues from Apple and third-party iPod accessories. Revenue from iPhone and Related Products & Services, which includes iPhone handset sales, carrier agreements, and Apple-branded and third-party iPhone accessories, was $1.589 billion, up 11% from Q2 2009 and 303% over the year-ago quarter.
“We’re making our most innovative products ever and our customers are responding,” said Steve Jobs, Apple’s CEO. “We’re thrilled to have sold over 5.2 million iPhones during the quarter and users have downloaded more than 1.5 billion applications from our App Store in its first year.”
“We’re extremely pleased to report record non-holiday quarter revenue and earnings and quarterly cash flow from operations of $2.3 billion,” said Peter Oppenheimer, Apple’s CFO. “Looking ahead to the fourth fiscal quarter of 2009, we expect revenue in the range of about $8.7 billion to $8.9 billion and we expect diluted earnings per share in the range of about $1.18 to $1.23.”
- July 21, 2009
A China-based employee of Apple manufacturing partner Foxconn has committed suicide, following his apparent loss of a prototype iPhone. According to Chinese news reports recounted by DigitalBeat, 25-year-old Sun Danyong was a recent engineering graduate, and handled product communications for Foxconn, including shipping iPhone prototypes from Foxconn to Apple. Danyong had 16 prototype fourth-generation iPhone prototypes from the assembly line at a local factory, but over the course of several days, he discovered that one of the phones was missing, and was unable to find it at the factory. After reporting the missing phone to his boss, Danyong’s apartment was reportedly illegally searched by Foxconn employees in an attempt to find the device; some reports indicate that Danyong may have been detained and physically abused during the investigation. He then jumped out of a window of his apartment building last Thursday, committing suicide.
Apple today released the following statement to CNet regarding Danyong’s death. “We are saddened by the tragic loss of this young employee, and we are awaiting results of the investigations into his death. We require our suppliers to treat all workers with dignity and respect.”
- July 17, 2009
Apple has been sued by a Beverly Hills, CA man, who accuses the company of conspiring with the mafia to track him and his activities in secret. According to the complaint, Gregory McKenna believes his bedroom, living room, upstairs bathroom, and Toyota Camry, along with an iPod shuffle he purchased from eBay and an iPod mini he purchased in an Apple Store, all contained receivers that allowed the mafia to transmit threats to him and follow his whereabouts. McKenna claims that recordings of mafia members saying “I’m going to kill him” played in unison with a song on his iPod mini in 2008, and that a modified version of the Mike Jones song “Still Tippin,” heard on his iBook G4, PowerBook G4, and two iPods contained the word “herpes,” which McKenna suggests was added to the song in order “to humiliate, degrade, and cause emotional stress.” Apple is but one of several entities named in the lawsuit, joining the St. Louis County Police Department, a local auto mechanic, and “unknown agents” of the Federal Bureau of Investigation.
Filed in U.S. District Court in Missouri, the suit reads, “The recording of death threats and other evidence prove that APPLE INC. conspired with the Mafia and other Defendants to manufacture, distribute, and sell illegally bugged iPods and other electronic equipment to Plaintiff to perpetuate the stalking, extortion, and torture.” (via AppleInsider)
- June 26, 2009
Apple has more than doubled its stake in U.K.-based Imagination Technologies, a new regulatory statement has revealed. The Street reports that Apple is boosting its ownership share in Imagination—which designs the PowerVR graphics chips found in the iPhone and iPod touch—from 3.6% to 9.5% via a combination of share placement and stock purchases. Apple first purchased 8.2 million shares, or a 3.6% ownership interest, in December; Intel also owns a stake in the company, and recently increased its ownership position to 16%.
- June 24, 2009
Following a Wall Street Journal report that Apple CEO Steve Jobs received a liver transplant roughly two months ago, and subsequent speculation as to Jobs’ health and eligibility for such a rapid transplant, Methodist University Hospital in Tennessee has confirmed the surgery and its context. James D. Eason, M.D., the hospital’s chief of transplantation, said in a statement that Jobs did receive a liver transplant, and was eligible for a rapid donation “because he was the patient with the highest MELD score (Model for End-Stage Liver Disease) of his blood type and, therefore, the sickest patient on the waiting list at the time a donor organ became available.” Jobs was said to be recovering well with an excellent prognosis, and chose Methodist due to its nation-leading one-year patient and graft survival rates.
- June 22, 2009
Apple CEO Steve Jobs, who has been on medical leave from the company since mid-January, received a liver transplant roughly two months ago, according to the Wall Street Journal. Reporting without citing a source, which may have been due to an intentional but quiet Apple leak of the information, the Journal claims that Jobs had the surgery done in Tennessee, possibly to bypass longer transplant waiting lists in other states. The report goes on to cite William Hawkins, a doctor specializing in pancreatic and gastrointestinal surgery at Washington University in St. Louis, Mo., as saying that the type of pancreatic tumor Jobs had in 2004 will often metastasize in the patient’s liver later in their lifetime. Hawkins also raised doubts as to the effectiveness of liver transplant surgery in such cases. Jobs is expected to return to work at Apple by the end of the month.
- June 15, 2009
Concluding a report on Apple in the BBC technology program Click, which featured an extended segment on Apple’s control over its employees, developers, and the media, presenter Spencer Kelly said that Apple was invited to participate in the program, but declined and threatened to sour relations with the program if it ran the segment. Click included two Apple-related segments in its 30-minute episode, one focused on announcements from the 2009 WWDC in San Francisco, and the next on various aspects of the company’s development and marketing strategies. In the latter portion, Click aired interviews that suggested that Apple communicates with members of the press solely for marketing purposes, and cuts access when coverage hasn’t been positive enough.
According to Kelly, “we did invite Apple to participate in that report, but they said they don’t comment on their internal operations, and that our piece was ‘speculative’ because it didn’t feature anyone from Apple. We’ll leave you to work that one out. They also added that running that report could ‘sour’ our relationship with them. We’re not quite sure what that means, but I’m sure that we, and you, will find out in due course.” A text article summarizing the piece is available online, but it should be noted that the spirit of the segment that aired on television is not fully captured in the print version.
- June 10, 2009
Video from Apple’s 2009 WWDC Keynote Address is now available in both a streaming QuickTime format for online viewing, and through the company’s Keynotes podcast in iTunes. The iTunes version weighs in at 1.32 GB; both versions run just slightly over two hours in length. For those of you that missed our live coverage, Apple yesterday updated its line of MacBook laptops, demoed and announced a shipping timetable for Mac OS X 10.6 Snow Leopard, discussed and announced a release date for iPhone OS 3.0, and introduced the new iPhone 3GS.
The news out of Apple’s WWDC 2009 came so quickly that our News column has barely been able to keep up with it all. Here’s a quick summary of what was announced, along with links to our full articles:
WWDC 2009 Keynote in Brief: Learn about new MacBook Pro models, the $29 Snow Leopard upgrade, iPhone OS 3.0 and iPhone 3GS announcements in our text play-by-play from the event. See over 100 pictures in our photo gallery, as well. Accessory problems twice interrupted the Keynote.
iPhone 3GS Announced: A weird name for a largely iterative upgrade to the iPhone 3G, the iPhone 3GS features a 3MP still camera, 640x480 video camera, voice controls, twice the storage capacity (16/32GB), improved responsiveness, and modestly improved battery performance. It hits June 19 for $199/$299.
iPhone 3GS Upgrade Fees: AT&T and Apple are hitting “early upgraders” with $200 to $400 fees if they want the iPhone 3GS, depending on when they purchased the iPhone 3G or other AT&T phones.
iPhone 3GS Data Plans Announced: AT&T, Rogers, and O2 are amongst companies announcing plans with no changes for prior 3G service offerings, but potentially higher charges for features such as MMS and PC/Mac Internet tethering.
iPhone 3GS Gets Enhanced Remote Support, New Headset: Apple has updated the iPhone 3GS headphone port with support for the Earphones with Remote and Mic, which it includes along with the device.
iPhone 3GS Radiation Data Released: The iPhone 3GS puts out less potentially dangerous radiation at maximum in five of six measures than its predecessor, but more in the sixth.
iPhone OS 3.0 Coming June 17: Free for iPhone and iPhone 3G users, $10 for iPod touch owners, it adds a variety of new software features to every iPhone OS device, and unlocks new hardware features in certain devices as well. iTunes video downloading and Find My iPhone are newly announced features, atop the massive list we’ve been compiling since March.