A new essay by Glenn Fleishman discusses the reasons for the winding down of his iPad-only digital publication, The Magazine, including an in-depth look at Apple’s continued treatment of Newsstand as a failed experiment. Launched around two years ago as a digital-only periodical, The Magazine focused on reaching iPad users via Apple’s then-fledgling Newsstand app and online store. At its height, The Magazine had nearly 35,000 monthly subscribers paying $2/month, however Fleishman notes that it peaked in February 2013, and has since diminished to 2,000 yearly and 4,000 monthly subscribers.
While Fleishman doesn’t completely blame Apple, he spotlights how Newsstand’s implementation failed to live up to expectations and publisher requirements, noting that Apple’s well-intentioned focus on privacy and customer experience weren’t always compatible with the publishing industry’s needs. Difficulty communicating with subscribers, nagging monthly billing reminder e-mails, required continuous app re-developmen, and the “brushing aside” of Newsstand in iOS 7’s design were all key issues that eroded and dissatisfied readership. Fleishman notes that iOS 7 alone triggered hundreds of emails from readers who forgot to read new issues, received bills, then cancelled subscriptions after realizing that they hadn’t read a single article in recent memory. The 30% cut taken by Apple for each subscription was also a factor, and Fleishman notes that it would have been more reasonable for Apple to find a way to reduce the amount to 15% in subsequent years, as most publications expect front-loaded expenses for acquiring new subscribers, but expect costs to be reduced for subscriber retention.
Fleishman describes Apple’s Newsstand today as “a wasteland for publications that only use it as an adjunct,” but offers salient points on what Apple could do to improve the experience for both users and publishers. Options include releasing publications from Newsstand to essentially turn them into standalone apps, providing an optional path for publishers to reach their readers directly, and stop sending monthly billing notifications to subscribers. Fleishman acknowledges that Newsstand clearly didn’t turn into a success for Apple, and compares it to the iBookstore, which he notes “never quite took off either.” While Apple continues to run both systems, he said, it hasn’t been improving the tools on either side. He concludes by saying that “If Newsstand is to persist, it needs its own app for users to find publications, download sample issues (currently not available; only free trials), and manage subscriptions,” describing the integration and dependency on the App Store and iTunes as “maddening and confusing.”
A new report in The Wall Street Journal highlights comments by Apple’s chief designer, Jony Ive, on the challenges of designing the Apple Watch. Speaking at the San Francisco Museum of Modern Art on Thursday, Ive explained that although he believes with “every bone in his body” that the Apple Watch will break new ground in computing devices, actually designing it was more challenging than the iPhone due to the “social expectations around a wristwatch.” Ive noted that the wrist is an ideal place for “lightweight interactions” and “casual glancing” but not for heavy reading. He went on to explain that there are “cultural, historical implications and expectations” around designing a watch, and described it as a “humbling” experience, stating that creating a wearable device raises new consumer expectations that had to be addressed, such as a wider selection of cosmetic options as people don’t generally all wear the same thing—except in prison. Ive also stated that his focus is entirely on creating great products, rather than paying attention to Apple’s finances, and revealed that he doesn’t even know sales and revenue numbers, other than that “they are high.”
Following Wednesday reports that Apple would be removing apps from the App Store that make improper use of the new iOS 8 Today screen extensions, TechCrunch reports that the company appears to have softened the policy somewhat, at least concerning calculator widgets. James Thomson, developer of the popular iOS calculator app PCalc, had been one of the first to add new extension features when iOS 8 was released. However, despite his app being approved in time for the initial iOS 8 launch — and featured as an Editors Choice in the App Store — Thomson was advised by Apple earlier this week that PCalc would be pulled from the App Store as “widgets on iOS cannot perform any calculations.”
Now, however, an Apple spokesperson has confirmed to TechCrunch that it is reversing course, allowing the PCalc app to remain in the App Store, with the widget intact, and permitting calculator-type widgets in other apps in the future. The calculator use case was supposedly not one that Apple had anticipated—despite including its own calculator widget in the OS X Yosemite Today screen—and the restriction was originally intended to prohibit developers from creating more complex widgets with functionality that should be placed in a standalone app. Apple’s developer documentation specifically notes that Today widgets are designed to “give users quick updates or enable very simple tasks.”
This is all news to me! Trying to get confirmation from Apple…— James Thomson (@jamesthomson) October 30, 2014
Thomson tweeted that the policy reversal actually came as a surprise to him, and that he is now trying to get confirmation from Apple that this is indeed the case. But it appears that PCalc will remain in the App Store in its current form, allowing iOS 8 users to continue to take advantage of the handy calculator widget that it provides. While calculator widgets have now received a green light, it remains unclear what this means for other apps making more advanced use of Today widgets; it seems that with any major new iOS 8 feature, Apple still has to sort out a few blurred lines within its App Store Review Guidelines.
Apple CEO Tim Cook has published an essay on equality in Bloomberg Businessweek, in which he publicly acknowledges that he is gay in an effort to help others who may be struggling with issues of inequality or coming to terms with their own sexual orientation. Cook notes that while he has been open about his sexuality to many of his colleagues, and has never denied his sexuality, he has yet to acknowledge it publicly until now. Cook states outright, “I’m proud to be gay, and I consider being gay among the greatest gifts God has given me.” While Cook describes himself in the essay as a private person, he notes that he has come to the realization that what he can do to help others is more important than his own desire for privacy:
“I don’t consider myself an activist, but I realize how much I’ve benefited from the sacrifice of others. So if hearing that the CEO of Apple is gay can help someone struggling to come to terms with who he or she is, or bring comfort to anyone who feels alone, or inspire people to insist on their equality, then it’s worth the trade-off with my own privacy.”
Cook goes on to emphasize that Apple has been a long advocate of human rights and equality, and has taken stands in support of workplace equality, marriage equality, and against gender discrimination. He writes that Apple will continue to fight for these values, and that he himself will “personally continue to advocate for equality for all people until my toes point up.”
Apple’s Vice President of iPhone and iOS Product Marketing Greg Joswiak was interviewed at the Code/Mobile conference today, where he discussed a number of new Apple products and initiatives, including the iPhone 6 and 6 Plus, Apple Pay, the Apple Watch, and the ill-fated iOS 8.0.1 release last month. While Apple had previously announced first weekend sales of 10 million iPhones, Joswiak wouldn’t disclose the breakdown between the iPhone 6 and iPhone 6 Plus, although he did mention that most iPhones are sold at carrier stores, rather than directly by Apple. When asked about Apple SIM for phones, Joswiak said he wouldn’t discuss the subject. Asked about the iOS 8.0.1 release that caused carrier and Touch ID problems on the iPhone 6 and iPhone 6 Plus, Joswiak also apologized, but noted that the problem wasn’t the software itself, but rather how it was distributed, and said that less than 40,000 users were affected. When asked more pointedly about QA issues recently plaguing iPhones, Joswiak responded that, “[t]he reality is we don’t make many mistakes,” but that Apple quickly acknowledges the mistakes and works to resolve them.
In discussing the decision by some U.S. retailers to shut out Apple Pay, Joswiak responded that retailers who want to be successful will accept the way customers want to pay. Regarding the Apple Watch, Joswiak defended the form factor, saying “things tend to read better when they’re square,” and when asked by Walt Mossberg who the Apple Watch was for, based on the high price points, Joswiak simply responded with ‘Who is it not for?” Joswiak responded more evasively to questions regarding falling iPad sales and experiences with Siri; Joswiak stated that “Siri has gotten really good,” and when asked by Walt Mossberg whether everyone has had a perfect experience with Siri, Joswiak responded by saying, “You can’t ask that. Has everyone had a perfect experience with Walt?” Joswiak noted that Apple’s priority is on staying focused on making the best products and user experience, rather than chasing market share, and that Apple is often not the first to do something, but rather aims to be the first to do it well.
Apple CEO Tim Cook was interviewed at the Wall Street Journal’s inaugural WSJD Live conference in California last night where he talked about Apple’s latest initiatives and directions, including Apple Pay and Apple Watch. Cook described last week’s Apple Pay launch as very successful; more than one million credit cards were activated in the first 72 hours, and Visa noted that more credit cards have been activated in Apple Pay than in all other contactless payments combined. Cook also noted that he’d be talking with Chinese e-commerce company Alibaba about a possible Apple Pay partnership “later this week.”
Regarding Apple Watch, Cook was a bit evasive on the battery life question, reiterating a previous claim that Apple “think[s] people are going to use it so much you will end up charging it daily,” and that the key to Apple Watch was that it needs “to look really cool” as opposed to being “geeky.” Cook also touched on Apple’s involvement in the TV marketplace, stating that “We are living in the 1970s” when it comes to the television paradigm, and suggesting that Apple is working on something in this area, although he once again declined to go into specifics beyond saying “that there can be something great done in the space.” Asked about the discontinuation of the iPod classic, Cook noted that Apple could no longer get the parts for the existing 2009 model, and huge engineering would have been required to update it, which wasn’t worth it in light of small consumer demand. Cook also said that Apple would continue to go as low as it could on iPhone prices while “maintaining the customer experience.”
A new report from The Information (subscription required) notes that Apple is presently in talks regarding expanding NFC use in the iPhone 6 and iPhone 6 Plus to go beyond mobile payments. While the NFC chip in the new iPhone models is currently restricted to use by Apple Pay, this new report suggests that the company is seeking partnerships to implement the technology into areas such as building security and public transit, conceivably to let people use iPhones as replacements for business ID cards and metro passes. The report specifically notes that Apple has already been in talks with HID Global and Cubic, two companies that develop electronic solutions in these areas. [via 9to5Mac]
At least two U.S. retailers have disabled Apple Pay in their stores, with analysts speculating that the move may be intended to promote a rival payment system, The New York Times reports. Both Rite Aid and CVS have disabled NFC payments in their stores, and although the move appears to specifically target Apple Pay, other contactless payment systems such as Google Wallet and even MasterCard PayPass and VISA payWave are also affected by the move.
Rite Aid and CVS are part of a consortium of retailers known as the Merchant Consumer Exchange (MCX) that also includes Wal-mart, Best Buy, and Gap, among others. The group is presently in the process of developing their own payment system, CurrentC, which is scheduled to be released in 2015 and will link payments directly to a customer’s checking account using a dedicated app. CurrentC will use an on-screen QR Code rather than NFC, removing the requirement for NFC payment terminals while also bypassing the credit card companies and their associated merchant fees entirely. The retailer-developed system also promises to provide the companies with the ability to track shopping habits and collect related data on customers—data that Apple has explicitly stated is not shared via Apple Pay for the protection of consumer privacy.
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.