The Nevada Board of Economic Development on Wednesday endorsed a deal negotiated by the state to help lure Apple to Reno with $89 million in tax breaks. The Associated Press (via the San Jose Mercury News) reports that the action was largely ceremonial, since the panel lacked the authority to change the agreement. Nevada Government Brian Sandoval called the deal a “win” for the state and said that Apple’s commitment will generate interest from other companies. The deal will see Apple build a 350-acre data center east of Sparks, NV, to house servers, as well as a purchasing and business center in a currently rundown area near downtown Reno.
Following dueling reports from earlier in the week indicating that Apple had met with Twitter reps about a strategic investment, a new report claims that talks between the two companies centered more on product integration ideas. Citing multiple people familiar with the matter, the Wall Street Journal reports that the investment idea never progressed into serious discussion or negotiations, while the product integration deal came together very quickly. According to the report, which cites two people briefed on the matter, the two companies continue to talk about future product integrations, which may include more deeply melding Twitter and iTunes as Apple prepares to phase out Ping later this year. Apple added Twitter integration in iOS 5 last year, and in OS X Mountain Lion last month.
AMD has announced that it has hired Jim Keller away from Apple. Keller, who joined Apple as part of its acquisition of PA Semi, was a director in the platform architecture group and was focused on mobile products, playing a key role in the development of the A4 and A5 chip families. At AMD, Keller will serve as corporate vice president and chief architect of AMD’s microprocessor cores, and will report to CTO and senior vice president of technology and engineering Mark Papermaster, who is also an Apple veteran and who left the company in 2010 following the uproar over the iPhone 4’s antenna woes.
The opening statements and first testimony were given yesterday as the trial between Apple and Samsung kicked off in San Jose, CA. Reuters reports that Apple attorney Harold McElhinny gave the opening statement, focusing on the dramatic difference in design between Samsung’s pre-iPhone handsets and those that came after the iPhone’s launch. During the statement, McElhinny showed jurors an internal Samsung product analysis which said the iPhone’s hardware was “easy to copy”; another said the company was in a “crisis of design” due to Apple’s handset. “As we all know it is easier to copy than to innovate,” McElhinny told the court. “Apple had already taken the risks.”
The first expert witness called was longtime Apple designer Christopher Stringer, who helped design the iPhone and also shed light on Apple’s internal design process. Cnet recounts his testimony, during which he said that the process for any product begins with lots of sketching, before heading off to a CAD phase, and said his team’s role is to “imagine objects that don’t exist, and guide the process that brings them to life.” “We work together around a kitchen table,” Stringer said. “We have our lives all around the products. In some ways it feels like a small company.” Regarding the iPhone, Stinger was very direct in his criticism of Samsung’s devices. “We’ve been ripped off, it’s plain to see. It’s offensive,” he said. “It’s a huge leap of imagination to come up with something new, that’s something we did. By which you have to dismiss everything you know, forget everything you know, it can be difficult.”
Apple senior vice president of Worldwide Marketing Phil Schiller briefly took the stand towards the end of the day, and discussed influences on Apple’s products. “We don’t use any customer input in the new product process,” Schiller said. “We never go and ask the customer, ‘What feature do you want in the next product?’ It’s not the customer’s job to know. We accumulate that information ourselves.” Schiller is expected to testify again when proceedings resume on Friday, the New York Times reports.
The day ended with Judge Lucy H. Koh demanding to know who on Samsung’s legal team authorized the public release of evidence that she had ordered excluded from the case. The release of the evidence—which was related to a Sony-inspired, Apple-created iPhone design—was accompanied by a statement from Samsung, which has been reprinted by AllThingsD. “The Judge’s exclusion of evidence on independent creation meant that even though Apple was allowed to inaccurately argue to the jury that the F700 was an iPhone copy, Samsung was not allowed to tell the jury the full story and show the pre-iPhone design for that and other phones that were in development at Samsung in 2006, before the iPhone,” the statement reads. “The excluded evidence would have established beyond doubt that Samsung did not copy the iPhone design. Fundamental fairness requires that the jury decide the case based on all the evidence.”
Apple has added a new Hulu Plus app to the Apple TV. The app, which may require a restart before appearing, allows for access to the online streaming video service. As with Netflix, users can subscribe to Hulu Plus directly from the Apple TV using their iTunes account to pay the $7.99 monthly fee; a free one-week trial is currently being offered. Hulu is a joint venture of NBCUniversal, Fox, and Disney, and is also available on Apple’s mobile iOS devices via a free app.
Apple at one point discussed making a strategic investment in Twitter, according to a pair of new reports. Citing people briefed on the matter, the New York Times reports that the considered investment was in the hundreds of millions of dollars, and would have valued Twitter at more than $10 billion. While the report notes that the two companies are not in negotiations at the moment, the Wall Street Journal follows up with a report of its own, citing people familiar with the matter who claim that the discussions were held over a year ago. The latter report goes on to claim that the talks didn’t immediately result in a deal and aren’t currently active. Apple added direct Twitter integration to iOS starting with iOS 5, and subsequently added sharing support for the service to Mac OS X in Mountain Lion.
Apple has entered into an agreement to purchase mobile security firm AuthenTec. Reuters reports that the deal—worth $8 per share, or roughly $356 million—was disclosed in an SEC filing. AuthenTec makes mobile security software and chips for mobile phones, as well as chips for fingerprint recognition and near-field communication (NFC), the latter being a technology that has been repeatedly speculated upon in Apple’s upcoming devices. AuthenTec currently counts Apple competitors such as Samsung, Lenovo, Dell, and Fujitsu as customers.
Apple has received a stay on a court order that would have led to it posting pro-Samsung messages. Bloomberg reports that a London court has ruled that the order — which called for Apple to post a notice on its U.K. site and take out advertisements in British newspapers explaining that Samsung hadn’t copied the iPad — will be stayed until after Apple’s appeal is heard in October.
Google warned Samsung against copying Apple with its Galaxy Tab designs, according to a new report. Citing an unredacted version of Apple’s trial brief for its U.S. trial against Samsung, AllThingsD reports that Apple claims Samsung was well aware of its products’ similarity to Apple’s iPhone and iPad, and that the company discussed the fact internally. “Samsung’s documents show the similarity of Samsung’s products is no accident or, as Samsung would have it, a ‘natural evolution,’” Apple claims in its brief. “Rather, it results from Samsung’s deliberate plan to free-ride on the iPhone’s and iPad’s extraordinary success by copying their iconic designs and intuitive user interface. Apple will rely on Samsung’s own documents, which tell an unambiguous story.”
Apple then points to purported evidence showing that Google told Samsung in February 2012 that its “P1 and “P3” tablets—which became the Galaxy Tab and Galaxy Tab 10.1—were “too similar” to the iPad and demanded “distinguishable design vis-à-vis the iPad for the P3.” Samsung’s own Product Design Group purportedly noted that it was “regrettable” that the Galaxy S “looks similar” to older iPhone models, a thought that was repeated by a group of famous designers who said the device “looked like it copied the iPhone too much” during a Samsung-sponsored evaluation. The trial between the two is set to kick off next week.
Apple has released updates to Pages, Numbers and Keynote for compatibility with the new iCloud Documents features in Mountain Lion and the corresponding Mac OS X updates released yesterday. The three apps, now at version 1.6.1, simply now list that they work with iCloud to make documents, spreadsheets and presentations automatically available between iOS devices and the corresponding Mac OS X applications, with changes made on one device now being “instantly available” on the other. The three iWork apps for iOS were originally updated to add iCloud support last fall with the initial debut of iCloud in iOS 5, allowing users to share documents, spreadsheets and presentations between multiple iOS devices. However, iCloud support did not come to iWork for the Mac until yesterday’s release of OS X Mountain Lion; these latest iOS updates appear to be primarily focused on ensuring compatibility with iCloud on the Mac. Pages, Numbers and Keynote 1.6.1 are universal apps and require iOS 5.1 or later. Each is sold separately from the App Store for $10.
Apple has released a minor update to its Podcasts app focused on performance, stability and usability improvements. Originally released last month, the new standalone Podcasts app is designed to replace the Podcast playback functionality previously incorporated into the iOS Music app with additionl features such as the ability to search for and subscribe to new podcasts and download or stream podcast episodes over a 3G or Wi-Fi connection.
In addition to listing “significant improvements to performance and stability,” the Podcasts 1.0.1 update adds several small user interface tweaks, including displaying the number of unplayed episodes for each Podcast in the user’s library, displaying the Podcast titles in Top Stations in place of missing artwork, remembering the last-used playback speed when switching between episodes, and fixing problems with the Subscribe button and Top Stations artwork. Podcasts 1.0.1 is a universal app requiring iOS 5.1 or later and is available from the App Store as a free download.
Apple has released an update to its universal iTunes U app adding new note-taking and sharing features and improvements to searching within the app. iTunes U 1.2 now allowed users to take notes directly in the app while watching or listening to a lecture. An improved search feature now allows users to search for text within posts, assignments, notes and other course materials from any of their subscribed courses, and users can now also share their favourite courses with friends via Twitter, Mail or Messages. iTunes U 1.2 is a universal app requiring iOS 5.0 or later and is available from the App Store as a free download.
During Apple’s third quarter 2012 financial results conference call, Apple CEO Tim Cook and CFO Peter Oppenheimer made a number of comments related to Apple’s iPhone, iPad, and iPod businesses.
Peter Oppenheimer, Apple’s CFO, opened the conference call by calling attention to the company’s record June quarter, which he said was fueled primarily by strong iPhone and iPad sales.
He said that iPod sales, though down year-over-year, were ahead of internal projections, and as with the past few quarters, the iPod touch accounted for over half of iPod sales. U.S. share of the MP3 player market remained at over 70 percent. He added that iPhone is now available from over 250 carriers in over 100 countries, and said that the company estimates that the number of Fortune 500 iPhones has doubled over the last year.
Regarding iPad, Oppenheimer said the company was “thrilled” with sales. The company saw very strong year-over-year growth globally, and the iPad is now available in 97 countries. Just under one million iPads were sold into the education market during the quarter, and Oppenheimer said sales of iPad 2 in K-12 market were particularly strong. Notably, the iTunes U app has been downloaded over 14 million times, and over 700 new courses have been added.
Overall, over 410 million iOS devices have now been sold. The App Store now offers 650,000 apps, 225,000 of which are tailored to the iPad. Apple has now issued over $5.5 billion in payments to developers, and now boasts 150 million iCloud users.
During the Q&A session, both executives made several comments of interest.
Oppenheimer said that weekly iPhone sales continue to be impacted by rumors and speculation related to new products, a subject that would come up later, when Tim Cook replied to a pointed question about iPhone transitions. Cook said that he’s happy that people want the next thing, and added that he’s not going to put any energy into trying to get people to stop speculating about what the company may be doing next.
Discussing iPhone pricing in emerging markets, Cook said that the company has been very focused on China, seeing it as an enormous opportunity. He said that he firmly believed that people in emerging markets want great products, so Apple is going to stick to its “knitting,” and continue to make the best products it can.
Cook also discussed the iPad pricing umbrella, competing tablets, and the decision to offer the iPad 2 for $399 alongside the third-generation iPad. He said that iPad 2 did very well during the quarter. In terms of competition, he said Apple has seen tons of tablets come onto the market this year, and doesn’t think any of them have gained serious traction. He said the company is going to keep innovating in the space, and feels really confident about its momentum. Later, when discussing the iPad 2’s price point, he said that the company believed it would help drive elasticity, and it certainly helped in the K-12 market. He added that it’s been a big help to Apple, and he’s glad the company did it.
Discussing the Apple TV, Cook said that Apple sold 1.3 million in the third quarter, up over 170 percent year-over-year, bringing sales for the year to over 4 million. He said that’s still at a level that Apple would call a hobby, but it continue to invest in it, and there are a lot of people at Apple who are believers in Apple TV.
Finally, when asked if Passbook be a stepping stone to a digital wallet, he said that it’s a key feature, and that employees of Apple all found themselves receiving all these tickets and passes. He said it does a great job of pulling all those together in one place. He again called it an important feature, but said that he wouldn’t want to speculate on where it might lead.
Reporting its third quarter 2012 financial results today, Apple said it sold 26 million iPhones in the quarter, an 28 percent increase year-over-year, but down somewhat from 35.1 million units in the prior quarter. Apple sold 17 million iPads during the quarter, up 84 percent from the year-ago quarter and also up from 11.8 million units in the second quarter of 2012. Finally, the company said it sold 6.8 million iPods during the quarter — a 10 percent decrease compared to the same quarter last year. Unit sales of iPhones, iPads, and iPods bring the cumulative totals for the three device categories to 244.1 million, 84.08 million, and 351.08 million, respectively.
Apple posted revenue of $35.02 billion and net quarterly profit of $8.8 billion, or $9.32 per diluted share, compared with revenue of $28.57 billion and net quarterly profit of $7.31 billion, or $7.79 per diluted share in Q3 2011. Revenue from Other Music Related Products and Services, which includes revenue from the iTunes Store, App Store, and iBookstore in addition to sales of iPod services and Apple-branded and third-party iPod accessories, was 2.06 billion for the quarter, up 31 percent year-over-year but down four percent from the prior quarter. Apple’s Board of Directors also declared a cash dividend of $2.65 per share of the Company’s common stock. The dividend is payable on August 16, 2012, to stockholders of record as of the close of business on August 13, 2012.
“We’re thrilled with record sales of 17 million iPads in the June quarter,” said Tim Cook, Apple’s CEO. “We’ve also just updated the entire MacBook line, will release Mountain Lion tomorrow and will be launching iOS 6 this Fall. We are also really looking forward to the amazing new products we’ve got in the pipeline.”
“We’re continuing to invest in the growth of our business and are pleased to be declaring a dividend of $2.65 per share today,” said Peter Oppenheimer, Apple’s CFO. “Looking ahead to the fourth fiscal quarter, we expect revenue of about $34 billion and diluted earnings per share of about $7.65.”
Apple has started to air its latest TV advertisement for the iPhone 4S. Entitled “Busy Day”, the 30-second spot continues Apple’s recent trend of using celebrities as typical users of Siri—in this case, Martin Scorsese. During the commercial, the famed director uses Siri to manage his schedule, check on the location of a friend using Find My Friends, and also check on traffic conditions, all from the back of a taxi. The new ad is available for viewing now on YouTube via the above link or in embedded form below.
The U.S. Justice Department has released a document in which it calls the criticism of its eBook price-fixing settlement leveled by Apple and the publishers as “self-serving.” PaidContent reports that the document serves as a reply to the 868 public comments that were filed in response to the announced settlement, the vast majority of which were in opposition to the deal. In the reply, the Justice Department refuses to modify any parts of the settlement, and addresses Apple’s objections at length because of its “central role in the events leading to the underlying enforcement action.” Under the terms of the settlement, Apple and the settling publishers must terminate their existing “Apple Agency Agreements” within seven days of the settlement’s final approval, and can then sign new contracts — but are forbidden for two years from using clauses that limit retailers’ rights to discount. [via DF]
Apple has launched its iTunes in the Cloud service for movies in 35 new countries. MacRumors reports that the feature has rolled out in Australia, Argentine, Bolivia, Brazil, Brunei, Cambodia, Canada, Chile, Costa Rica, Czech Republic, Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Hong Kong, Hungary, Ireland, Laos, Macau, Malaysia, Mexico, New Zealand, Nicaragua, Panama, Paraguay, Peru, the Philippines, Singapore, Slovakia, Sri Lanka, Taiwan, Thailand, the U.K., Venezuela, and Vietnam. In addition, the company has also expanded its iTunes Match service into Hungary and Poland. Apple’s iTunes in the Cloud service allows customers to re-download past purchases multiple times, and also serves as a base for content streamed directly to the Apple TV.
U.S. Senator Chuck Schumer (D-NY) has penned an open letter the the Department of Justice, asking it to drop its lawsuit against Apple and major publishers. In the suit, the DOJ claims that Apple and the publishers colluded to raise the price of digital books. “While the claim sounds plausible on its face, the suit could wipe out the publishing industry as we know it, making it much harder for young authors to get published,” Schumer writes for the Wall Street Journal. “The suit will restore Amazon to the dominant position atop the e-books market it occupied for years before competition arrived in the form of Apple. If that happens, consumers will be forced to accept whatever prices Amazon sets.”
Schumer goes on to point out that Amazon held a monopoly position in the market before the arrival of the iBookstore, and set the prices for the books itself—many times undercutting the market for hardcopy titles. He also states that “As our economy transitions to digital platforms, we should be celebrating and supporting industries that find ways to adapt and grow”, adding that he believes the suit will “have a deterrent effect not only on publishers but on other industries that are coming up with creative ways to grow and adapt to the Internet”. Finally, the senator calls for new guidelines governing non-merger Justice Department investigations, which should “take a broad, pragmatic view of the market as a whole”.
Apple has been granted a patent that covers a wide swath of the iOS user interface. Patently Apple reports that the patent covers the basic user interface for many of iOS’ built-in apps, including Mail, Photos, Camera, Videos, Music, Calendar, Safari, Notes, and Maps. Also covered by the patent are iOS’ scroll bar, as well as the virtual keyboard. As noted in the report, Apple lists the following inventors on the patent: Scott Forstall, Henri Lamiraux, Andrew Platzer, Michael Matas and Imran Chaudhri. The patent was originally filed in the first quarter of 2007; Apple refiled the application in March of this year.
A U.K. judge has ordered Apple to publish notices on both its website and in British newspapers alerting consumers to a ruling in which Samsung was cleared of all alleged patent infringement. Bloomberg reports that according to Judge Colin Birss, the notice should outline the July 9 decision that Samsung’s Galaxy tablets don’t infringe Apple’s patented designs, and should be posted on the website for six months, as well as appear in several newspapers and magazines to correct the impression that Samsung had copied the iPad. The ruling will result in Apple running “an advertisement for Samsung, Richard Hacon, a lawyer representing Apple told the court, adding, “no company likes to refer to a rival on its website.” In his ruling, Birss said Samsung’s tablets were unlikely to be confused with Apple’s iPad because they are “not as cool”.