Lala.com, the music streaming service Apple purchased last December, will be shutting down on May 31. Around the time of Apple’s acquisition, it was said the company wanted to use Lala’s technology and streaming expertise to offer a streaming service on iTunes in addition to the its normal purchase and download model. According to the site, Lala users will receive iTunes credit for all money spent purchasing web songs, wallet balances, and unredeemed gift cards. Lala launched in June 2006 as a CD trading service before re-focusing on digital music uploads and streaming the next year. [via Engadget]
Apple CEO Steve Jobs has posted an open letter entitled “Thoughts on Flash,” in which he explains the company’s motivation for leaving Adobe’s Flash off of its iPhone, iPod, and iPad devices. Jobs divides his explanation into six key factors, including Flash’s proprietary nature, the fact that the vast majority of web video is now accessible without Flash, reliability, security, and performance issues, battery life concerns, Flash’s reliance on mouse-dependent interface elements, and the fact that Adobe wants to allow its developers to use Flash for creating cross-platform applications that will run on Apple’s platform, as well as on competitors’ devices, without exploiting any platform’s unique and innovative features. The crux of the letter is an attack on Flash as a battery-hogging middleware solution that is no longer necessary or desirable in an age of advanced mobile devices.
Jobs makes several scathing comments in the letter, claiming that Flash is the leading cause of Mac crashes, that Adobe was the slowest major third-party developer to adopt important changes to Apple’s Mac OS X operating system, and that the company has promised but repeatedly failed to deliver an optimized mobile version of Flash. The letter also sheds new light on Apple’s App Store business, including the statement that “[t]here are more games and entertainment titles available for iPhone, iPod and iPad than for any other platform in the world,” and noting that there are now more than 200,000 apps available in the App Store. In closing, Jobs says, “[n]ew open standards created in the mobile era, such as HTML5, will win on mobile devices (and PCs too). Perhaps Adobe should focus more on creating great HTML5 tools for the future, and less on criticizing Apple for leaving the past behind.”
Apple plans to charge close to $1 million for ads on its new iAd network, according to a new report. Citing an unnamed source familiar with the matter, the Wall Street Journal reports that Apple has indicated it may charge as much as $10 million to be part of the initial group of advertisers on the service. Ad executives told the paper they are used to paying between $100,000 and $200,000 for similar mobile deals. Along with the lofty price tag, Apple is also making demands for greater control over advertisers’ marketing campaigns, at least initially. “It’s a hefty sum,” said Phuc Truong, managing director at Mobext, a mobile marketing business whose clients include Sears, Choice Hotels, Amtrak and Volvo. “What Apple is trying to do is certainly above and beyond what’s been done in the past.”
Despite the pricing, ad executives at agencies across the U.S. have met with Apple in recent weeks to listen to the company’s pitch for iAd. Discussions over possible deals are said to be ongoing, but several ad executives said they are beginning to look at potential creative ideas for iAd campaigns. “It was very easy to think about the several minutes of interaction time consumers can spend with the ad. It’s incredibly attractive,” said Baba Shetty, chief media officer at Boston-based ad agency Hill Holiday. Apple’s demands for creative approval, and that it build the ads itself during the first few months, are giving some agencies pause, however. “As a creative director, I can completely understand that they created this new baby and they want to make sure it gets born looking gorgeous,” said Lars Bastholm, chief digital creative officer at WPP’s Ogilvy. “But as a creative director, I don’t feel completely comfortable letting Apple do the creative.” According to the report, marketers will be able to target ads to users based on past download preferences from the iTunes Store, and by location; Apple is planning to charge one cent each time a consumer sees a banner ad, with a $2 charge if the user taps on the banner.
Apple has acquired the voice-based personal assistance and search service Siri, according to a newly-published FTC document (PDF Link). Business Insider reports that a Siri representative has confirmed the purchase, but would not comment on the financial aspects of the deal. Siri describes itself as a voice-based personal assistant, that can “help you find and plan things to do,” such as finding a dinner spot, telling you what’s playing at a local music venue, or getting tickets to a movie. The company describes the service as “young” and says it “may be awkward at times,” but also says it “will improve quickly by getting to know you better and understanding a broader set of tasks.” The current version service, which is currently only available in the U.S., is built to run on the iPhone 3GS and iPod touch. The Siri Assistant app is available now as a free download from the App Store.
- April 28, 2010
Apple CEO Steve Jobs will give an on-stage, opening night interview to kick off this year’s D: All Things Digital Conference. In its eighth year, the Wall Street Journal executive conference will be held near Los Angeles, CA from June 1-3. Jobs has appeared at the conference before, most notably in 2007 when he took the stage with Microsoft Co-founder Bill Gates, as well as interviewers Walt Mossberg and Kara Swisher, to discuss their long history in, and the future of, the technology industry. Microsoft CEO Steve Ballmer, Oscar-winning director James Cameron, and Facebook CEO Mark Zuckerberg, among others, are also scheduled to appear.
Apple has announced the dates for its 2010 Worldwide Developers Conference. This year’s event will be held June 7-11, in its traditional venue of Moscone West in San Francisco, CA. As with last year’s event, Apple will be providing sessions focusing on both Mac OS X and iPhone OS X, as well as web app development; although this year’s sessions appear to be more heavily focused on iPhone OS development than in previous years. For the past three years, the company has also used the event’s keynote address as a venue for iPhone-related announcements, revealing the launch date for the original iPhone in 2007, introducing the iPhone 3G at the 2008 event, and unveiling the iPhone 3GS in 2009.
“This year’s WWDC offers developers in-depth sessions and hands-on working labs to learn more about iPhone OS 4, the world’s most advanced mobile operating system,” said Scott Forstall, Apple’s senior vice president of iPhone Software. “WWDC provides a unique opportunity for developers to work side-by-side with Apple engineers and interface designers to make their iPhone and iPad apps even better.”
Following reports from earlier this month suggesting Apple had acquired ARM processor development company Intrinsity, the New York Times has been able to confirm the deal, which according to the report may have been worth as much as $121 million, with Apple. “Apple buys smaller technology companies from time to time, and we do not comment on our purpose or plans,” said Apple spokesperson Steve Dowling. Austin, TX-based Intrinsity gained publicity for its efforts to speed up ARM CPU designs, including working with Samsung to introduce the 1GHz Hummingbird processor last July. According to the report, “many experts” in the chip industry believe that Apple relied upon Intrinsity’s Hummingbird chip as the basis for the iPad’s A4 processor.
Apple has released iTunes 9.1.1, the latest update to its digital media management software. According to Apple’s release notes, version 9.1.1 addresses several stability issues with VoiceOver, a usability issue with VoiceOver and Genius Mixes, issues with converting songs to 128 kbps while syncing, and “other issues that improve stability and performance.” iTunes 9.1.1 is available now via Apple’s Software Update utility, and will be available as a direct download from apple.com/itunes shortly.
The U.S. International Trade Commission (ITC) has announced that it will be launching an investigation into a patent infringement claim against Apple filed by Taiwanese firm Elan Microelectronics late last month. The complaint alleges that Apple is violating Elan’s patents related to touch-sensitive input devices with multi-touch capabilities, specifically with the iPhone, iPod touch, MacBook laptops, the Magic Mouse, and the iPad. “We have taken the step of filing the ITC complaint as a continuation of our efforts to enforce our patent rights against Apple’s ongoing infringement,” Elan said at the time of the filing. “A proceeding in the ITC offers a quick and effective way for Elan to enforce its patent.” Elan is requesting that the ITC issue an exclusion order and a cease and desist order, which would block Apple from importing infringing products and from selling its current stock; the company filed a lawsuit against Apple in April 2009 over the same alleged infringement.
Apple has hired long-time IGN editor Matt Casamassina to help manage the App Store’s games section. Casamassina worked at IGN for over a decade, focusing primarily on Nintendo; his official title at Apple will be global editorial games manager, App Store. “I will be leading the charge for games on the App Store, so whether you browse through iTunes, iPhone, iPod Touch or iPad, the games content you see will be handpicked and organized by me and my team[,]” Casamassina wrote in a post on his personal blog, adding, “I couldn’t be happier.” Nintendo of America president Reggie Fils-Aime recently made some disparaging remarks about gaming on iPhone OS devices, saying that Apple “is not having an impact on Nintendo when you look at our business, our volume, our hardware, our software,” later adding that the iPhone isn’t a “viable profit platform” due to the ratio of free to paid downloads.
Police are investigating possible criminal law violations related to the lost fourth-generation iPhone prototype that appeared online earlier this week. Citing an unnamed law enforcement official, Cnet reports that Apple has spoken to local police about the incident, with the investigation being handled by a computer crime task force led by the Santa Clara County district attorney’s office. The phone in question was lost by an Apple engineer at a bar in Redwood City, CA, and was recovered by an unknown party that subsequently sold the unit to Gizmodo for a reported $5,000 bounty. Gizmodo photographed and disassembled the device, posting photos of it online and claiming it was “lost.” Daring Fireball’s John Gruber has argued that both the seller and the editors of Gizmodo may be guilty of crimes related to the incident under California law; Cnet has yet to confirm whether the police probe is targeting the seller, Gizmodo, or both parties.
A recently published Apple patent application suggests the company is working on a system for wireless transportation ticketing and check-in. Entitled “System and method for transportation check-in,” the patent refers to a travel management application called “iTravel” which would allow the users to purchase, store, and use travel documents. The patent goes on to show the application being used on an iPhone equipped with Near Field Communication (NFC) technology, such as RFID, which then interacts with similarly-equipped electronics throughout the travel process, such as at check-in, security checkpoints, and when boarding. 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 Patently Apple]
Apple has started sending out emails to a select group of current iPad owners asking them to “please complete [a] 15-minute iPad survey” to help the company understand their purchase. Business Insider reports that survey is over 50 questions long, and attempts to discover whether or not iPad owners are still using iPods, eReaders, and laptops following their purchase. Questions include where the iPad was purchased, how the user first heard about the iPad, what types of questions they had before purchasing the iPad, their satisfaction with various features of the device, where they intend to use the device, in what rooms at home do they use the iPad, and who else uses the iPad they purchased.
Following a pair of new television advertisements for the iPhone 3GS that were posted earlier this week, Apple has added a third new spot to its online gallery. “Family Man” continues the recent trend of personal, testimonial-style narration, and describes how different members of the family use the patriarch’s iPhone for various purposes. This latest iPhone 3GS TV ad is available for viewing now on Apple’s website.
- April 20, 2010
During Apple’s Second Quarter 2010 Financial Results Conference Call, Apple CFO Peter Oppenheimer and Apple COO Tim Cook made several comments concerning its media-related products, including the iPod, iPhone, iPad, and Apple TV. In his opening statements, Oppenheimer said that sales of the iPod touch were up 63% year-over-year, with overall iPod revenue growing 12%, the strongest growth seen in the last two years. According to NPD, the iPod has retained over 70% market share, and continues to gain market share year-over-year in every country tracked, including the U.K. and Japan.
The iTunes Store had its strongest quarter ever, with sales of $1.1 billion, and now offers 12 million songs. Oppenheimer said the App Store now offers 185,000 apps, with four billion downloads to date across 90 countries; the store also now offers 3,500 apps for the iPad. Speaking about the iPhone, Oppenheimer said year-over-year iPhone sales growth was three times IDC’s published estimate for overall smartphone market, and accounted for $5.45 billion in revenue, compared to $2.43 billion in the year-ago quarter. Average Selling Price for the iPhone was about $600, and is based on the sales value of the iPhone, not accessories, and not carrier payments. The device is now available on 151 countries in 88 countries, and is seeing very strong year-over-year growth worldwide, particularly in Asia. Oppenheimer referred to the iPad’s pricing as “very aggressive,” and said the company thinks the market will be large, and wants to capitalize on its “first mover advantage.” The CFO also referred to a “future product transition” that would impact numbers in the upcoming third quarter.
During the Q&A session, Tim Cook said that the company saw “no obvious impact” on Mac or iPod sales from the iPad announcement, although he admitted that the company doesn’t really have enough experience to come to a judgment of possible Mac cannibalization by the iPad. Cook also said that initial iPad sales have “far exceeded” the company’s expectations, and said that it was too early to tell what the mix would be of Wi-Fi versus Wi-Fi + 3G iPad units, as the company has only been selling the Wi-Fi version in stores, and needs to sell them side-by-side in an “unconstrained” environment to get an idea about possible consumer preference for one model or the other.
Regarding iPad production capacity, Cook said the company has “done very well” versus planned capacity, so there’s not exactly a production problem; instead, demand in the U.S. is “much, much stronger” than the company expected, which led them to push the international launch back. Cook said the company is adding production capacity, and will “see where this thing goes,” but said that the level of initial demand had “shocked” the company. The pair declined to say whether Apple will be deferring iPad revenue or instead charging for software updates, stating that the company would discuss that in July on the Q3 conference call, but Cook did say that he was “already personally addicted to mine and couldn’t live without it.” Apple will report the iPad as a line item in its data summary, similar to how it handles the iPhone, including revenue for iPad units and iPad-specific accessories.
Speaking on the company’s record-setting iPhone sales, Cook said that channel inventory was essentially flat, but the company saw “staggering” year-over-year growth rates in Japan (183%), Europe (133%), and Asia (470%), some of which can be attributed to adding new carriers, as well as strong performance from existing carrier partners. China, in particular, saw strong growth, with mainland China, Hong Kong, and Taiwan seeing iPhone unit growth of 9x, with 800 distribution points added, and has accounted for $1.3 billion in revenue through the first half of Apple’s fiscal 2010, up roughly 200% year-over-year.
Cook also said that AT&T continues to work “very hard” and has made big strides towards improving its network, something that Apple expects to continue. He did note, however, that the U.S. is one of only three main countries where Apple has a contractual exclusive relationship with the iPhone’s carrier, and that the company has seen unit sales and market share improve everywhere they’ve moved from an exclusive to non-exclusive arrangement, although he also said that’s not proof that moving to a non-exclusive arrangement would work everywhere. In response to a questioner who noted that average iPhone sales per operator were 58,000, Cook responded that the number isn’t meaningful because some carriers do a few million units while others do very low numbers, but overall the company can drive those numbers up through product innovation, including software and hardware, as well as through new products, new carriers, new distribution points, geographic expansion, and great marketing. Another questioner noted that Cook had not mentioned price, to which he responded that sales of the iPhone 3GS at a higher price point than the iPhone 3G demonstrated that consumers were willing to pay more for innovative products containing the sort of hardware and software Apple has developed. The response suggested that price was not a critical issue from Apple’s perspective at this point in time.
On the Apple TV, Cook said that unit sales for the second quarter were up 34% year-over-year, but added that the absolute number of units is still small, and the company still classifies it as a “hobby.” Cook went on to point out the large markets for the Mac (300 million units/year), iPhone (1.2 billion units/year), and iPod (100 million units/year), all “enormous markets.” The market for the Apple TV is not nearly as large yet, but he said that the company continues to think there’s something interesting there and is continuing to invest in it.
- April 20, 2010
Reporting its second quarter financial results today, Apple said it sold 10.89 million iPods during the quarter, compared to sales of 11.01 million iPods in the year-ago quarter, and down 48 percent from the previous quarter. Apple also sold 8.75 million iPhones in the quarter, a 131 percent increase year-over-year, and up from 8.7 million units in the prior quarter. The company posted revenue of $13.5 billion and net quarterly profit of $3.07 billion, or $3.33 per diluted share, compared with revenue of $9.08 billion and net quarterly profit of $1.62 billion, or $1.79 per diluted share in Q2 2009. International sales accounted for 58 percent of the quarter’s revenue. Sales of Other Music Related Products + Services were up 27% from the year-ago quarter, and 14% from Q1 2010, to $1.3 billion total. That category includes iTunes Store sales, iPod services, and revenues from Apple and third-party iPod accessories.
Notably, the numbers from Q2 2009 are different from those originally reported due to Apple’s change in accounting rules that sees the company now recognize “substantially all of the revenue and product costs from the sales of iPhone and Apple TV at the time of sale,” instead of accounting for the sales over a 24-month period.
“We’re thrilled to report our best non-holiday quarter ever, with revenues up 49 percent and profits up 90 percent,” said Steve Jobs, Apple’s CEO. “We’ve launched our revolutionary new iPad and users are loving it, and we have several more extraordinary products in the pipeline for this year.”
“Looking ahead to the third fiscal quarter of 2010, we expect revenue in the range of about $13.0 billion to $13.4 billion and we expect diluted earnings per share in the range of about $2.28 to $2.39,” said Peter Oppenheimer, Apple’s CFO.
Apple has released the second beta version of the iPhone OS 4 Software Development Kit for the iPhone and iPod touch. As with the prior beta release, a main Xcode and SDK beta is available for download, as are pre-release builds of the iPhone OS 4 software for the iPhone 3G and 3GS, as well as the second- and third-generation iPod touch. Both the new SDK and pre-release builds are available now for download by registered iPhone developers from the iPhone Dev Center.
Apple has posted two new iPhone 3GS TV advertisements online. Both new spots continue Apple’s recent trend of iPhone advertisements that are more testimonial in nature, while featuring a single iPhone using a variety of apps in front of a white background. “Dog Lover” features a female narrator talking about searching local dog shelters to find a new pet, taking and sharing photos, finding nearby dog parks, and checking a monitor video feed while away. “Backpacker” features a male narrator talking about a trip to Spain, during which he checked for hostels, shared pictures, and downloaded and used a translation app. Both advertisements are available for viewing now on Apple’s website.
Apple has begun to ship its iPad Camera Connection Kit to customers who pre-ordered the accessory. Unlike other Apple iPad accessories, the Camera Connection Kit wasn’t available for pre-order until March 29, and was listed as shipping in “late April;” a shipment notification received by iLounge claims the dongle set will arrive by April 22. The iPad Camera Connection Kit includes two separate 30-pin connectors, one with an SD card slot, and the other with a USB port that can be used to attach most digital cameras. A recent report claimed that the USB-to-iPad connector may also provide support for USB audio devices, although this has yet to be confirmed. For more information on the Apple iPad Camera Connection Kit, see our First Look article.
Apple has been sued by a California woman over what she claims are false-positive readings on the iPhone’s moisture sensors. InformationWeek reports that Charlene Gallion of San Francisco claims to have had two separate iPhone units fail within six months of each other, and was denied warranty coverage due to triggered sensors. Gallion claims that neither of the units was ever subjected to water damage. The suit itself states, “As a result of Apple’s improper application of the Liquid-Damage Exclusion, Apple sells [devices] with the intent to exclude them from the warranty coverage Apple promises consumers it will provide—even when consumers pay extra for Extended Warranty coverage—simply because their Liquid Submersion Indicator has been triggered, without any attempt by Apple to verify whether the Class Devices actually have been damaged as a result of submersion or immersion in liquid.” Overly-sensitive moisture sensors have been a problem for some iPhone customers in the past; a report from September 2009 claimed that Apple’s company protocol when responding to a customer with a unit that has had its external sensors triggered is to say the warranty is now void and turn the customer away.
Update: Upon obtaining a copy the actual filing, iLounge has learned that Gallion has filed a class action suit, and is seeking both actual and punitive damages.