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Notes from Apple’s Q4 2014 earnings call

  • October 20, 2014
  • Apple,

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 Q4 2014: 39.3M iPhones, 12.3M iPads, 2.6M iPods, $42.1B revenue

  • October 20, 2014
  • 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.

Apple releases Apple TV Software Update 7.0.1

  • October 20, 2014

Apple has released Apple TV Software Update 7.0.1, the latest feature and content update for its set-top box. Apple has yet to update its release notes, so it’s unclear exactly what has changed in this latest update, it seems likely that it includes general bug fixes and performance improvements as well as changes related to the release of iOS 8.1 earlier today.

Apple releases iOS 8.1

  • October 20, 2014

Apple has officially released iOS 8.1 to the public. Announced last week during Apple’s iPad Event, iOS 8.1 brings support for Apple Pay to the iPhone 6 and iPhone 6 Plus, enables SMS Continuity between iOS 8.1 devices and Macs running OS X Yosemite, enables iCloud Photo Library for all users and brings back the much-requested Camera Roll that was removed in iOS 8.0 to be replaced with a “Recently Added” album. A number of other smaller fixes and improvements are also included. iOS 8.1 is available other as an over-the-air update or by updating via iTunes on a Mac or PC.

Update: iOS 8.1 also resolves issues when using AirPlay mirroring from an iPhone 6 Plus to a second- or third-generation Apple TV. iPhone UI mirroring looks noticeably cleaner and completely fills the screen when the iPhone is in landscape mode.

Apple launches iCloud Photos Beta Web Client

  • October 20, 2014

Apple has quietly launched the web version of its iCloud Photo Library client in advance of today’s expected release of iOS 8.1. Users who have enabled iCloud Photo Library on their iOS devices can log in at beta.icloud.com where a new “Photos” icon should appear. The iCloud Photos web client generally mirrors the iOS 8.1 Photos app, allowing users to browse by Moments or Albums, select a moment or individual photo, and favorite, delete, or download individual photos or groups of photos. Notably, there does not appear to be any way to upload photos via the web client, and while all user-created albums appear in the web interface, only the All Photos, Favorites and Videos predefined albums appear here; other categories such as Slo-mo, Time-lapse, Bursts, and Recently Deleted continue to be available only on the iOS side. iCloud Photo Library is expected to be available to all iPhone, iPad, and iPod touch users with the release of iOS 8.1 later today.

Apple working to cut music subscription prices

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.

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Apple Store returns, begins taking iPad pre-orders


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.

Apple updates Pages, Numbers, Keynote for iCloud Drive


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.

Belkin announces QODE keyboards for iPad Air 2

Belkin has announced that it’s bringing its line of QODE keyboard cases to iPad Air 2. The line includes the QODE Ultimate Pro Keyboard Case for iPad Air 2 ($150), QODE Ultimate Keyboard Case for iPad Air 2 ($130), and QODE Slim Style Keyboard Case for iPad Air 2 and iPad Air ($100) — the last of which is an already existing product that can fit the newer iPad Air. The updated keyboards have already been released for the first iPad Air — see our reviews for the original Ultimate Pro case here and the Ultimate and Slim Style cases here. While the QODE Slim Style Keyboard Case is already available, QODE Ultimate Pro Keyboard Case for iPad Air 2 and QODE Ultimate Keyboard Case for iPad Air 2 will be available in December.

Apple introduces Apple SIM, multi-carrier cellular SIM card

  • October 16, 2014

Buried in other announcements today, Apple has introduced Apple SIM, a single pre-installed SIM card that “gives you the flexibility to choose from a variety of short-term plans from select carriers in the U.S. and UK right on your iPad.” Pre-installed on Wi-Fi + Cellular versions of the iPad Air 2 and iPad mini 3, Apple SIM provides a list of participating national carriers—currently only AT&T, Sprint, and T-Mobile in the United States, with EE in the UK—that the user can choose from without having to swap SIM cards. Verizon apparently does not yet support Apple SIM.

Additionally, although the feature is currently quite limited, Apple suggests that some international data plans will be accessible with the Apple SIM when users travel: “you may also be able to choose a data plan from a local carrier for the duration of your trip.”

New iPad Smart Cases, Covers shown for iPad Air 2

  • October 16, 2014

Alongside today’s announcement of the iPad Air 2 and iPad mini 3, Apple has updated the prior $39 iPad Smart Covers and $69-$79 iPad Smart Cases. Apple’s iPad Air Smart Cover now comes in seven colors—blue, red, yellow, green, black, white, or red—each made from polyurethane, and compatible with the iPad Air and iPad Air 2. By comparison, the leather iPad Air 2 Smart Case comes in five different colors, namely black, white, brown, blue, or red, and covers virtually the entire Air 2 when closed. It is not compatible with the original iPad Air.

Apple unveils iPad mini 3, renames Retina iPad mini to iPad mini 2

Apple has debuted the newest edition of its 7.9” tablet, which it’s calling iPad mini 3. The new iPad mini 3 includes Touch ID, and it comes in silver, space gray, and gold. It notably continues to have an A7 processor, not an A8 or A8X, and does not include any of the wireless or camera upgrades found in the iPad Air 2.

iPad mini 3 starts at $399 for the 16GB Wi-Fi model, $499 for 64GB, and $599 for 128GB. Cellular + Wi-Fi models add $130 to each model. Like iPad Air 2, preorders for iPad mini 3 start Friday, Oct. 17, and the tablet ships by the end of next week.

Additionally, the former “iPad mini with Retina display” has been renamed “iPad mini 2” to more clearly differentiate it from its predecessor and successor. It will be offered in 16GB ($299/$429) and 32GB ($399/$529) models.

Apple debuts iPad Air 2

Apple has officially introduced the newest edition of its full-sized tablet today with the debut of iPad Air 2. Touch ID, first seen in iPhone 5s and included within iPhone 6 and iPhone 6 Plus, has been added to the tablet. The side switch has been removed, and it appears to have been replaced by another microphone.

iPad Air 2 is 6.1 mm thin, 18 percent thinner than the previous iPad Air. A single-component display reduces internal reflection with a sharper image. The screen also now has an anti-reflective coating, and reflections are reduced by 56 percent.

A new chip, A8X, has been created specifically for iPad Air 2. The second-generation 64-bit architecture chip is 40 percent faster. The GPU is 2.5x faster than iPad Air. iPad Air 2 has 10-hour battery life and an M8 coprocessor that can track elevation and motion.

A new iSight camera has been added to the new Air — an 8MP camera that can shoot 1080p HD video. Burst mode is also available on the iPad Air 2 camera. Slo-mo videos have also been added to video recording — 120 fps at 720p. A new FaceTime camera with an all new sensor has also been included in iPad Air 2 — improved face detection, burst selfies, HDR videos, and single-shot HDR photos are all included.

Faster Wi-Fi — 802.11 ac with MIMO — and faster LTE with 20 LTE bands are featured in iPad Air 2.

iPad Air 2 comes in silver, space gray and gold, and will cost $499 for 16GB Wi-Fi only, $599 for 64GB, and $699 for 128GB. Cellular prices are $130 more for each model.

Pre orders begin Friday, Oct. 17, and the iPad Air 2 will ship next week.

iPad stats: 225 million sold, 675,000 apps

  • October 16, 2014
  • iPad,

During his introduction of new iPads today, Apple CEO Tim Cook revealed that 225 million iPads have already been sold—70 million of them in the last 12 months, outstripping the unit sales of any PC manufacturer over the past year. Cook also noted that the product has a 100% customer satisfaction rating, and now has 675,000 iPad-specific apps available.

Apple formally debuts iTunes 12 after three months of betas

Oddly released without any fanfare in beta form to developers back in July, iTunes 12 has officially debuted at Apple’s media event today. As noted in our What’s New in iTunes 12 article, the Mac and PC application has received a “flatter” cosmetic overhaul inspired by iOS 7 and iOS 8. It largely does away with the traditional sidebar found in earlier versions of iTunes — a feature that was hidden but still present in iTunes 11 — to embrace a more media library-heavy interface. Various types of media are now individually browsed and managed using icons at the upper left of the iTunes window, with separate iTunes Store access points for each medium.

iTunes 12 has been announced for OS X Yosemite, but not yet for older versions of OS X or Windows PCs. Updated: It is now available for download for OS X 10.7.5 and newer through iTunes.com, as well as for Windows XP and newer.

 

iOS 8.1 gets official, adding Apple Pay, photo features (Oct. 20)

Following earlier beta releases of iOS 8.1, Apple today formally announced the release of the first point update to September’s iOS 8.0. iOS 8.1 adds support for Apple Pay, the NFC-dependent wireless transaction technology introduced in the iPhone 6 and iPhone 6 Plus, as well as bringing back user-requested features, including the Camera Roll. Apple is also using iOS 8.1 to debut the iCloud Photo Library tied in with the public beta of Photos, the new OS X Yosemite photo management and editing app designed to replace iPhoto and Aperture.

During his introduction of iOS 8.1, Apple’s Craig Federighi also noted that 48% of the installed base are on iOS 8.0 after roughly a month, which sounds low, but is nearly twice as high as the last release of Android after nearly a year. iOS 8.1 will be available on October 20.

Apple Pay to launch Oct. 20 in U.S., 500 new banks on board

Apple Pay, the NFC-dependent wireless transaction technology introduced in the iPhone 6 and iPhone 6 Plus, has been confirmed for an October 20, 2014 launch in the United States. A collection of previously-announced retailers will be the first to have Apple Pay in their stores.

Five hundred additional banks have signed up to support Apple Pay since it was announced, including all of the major networks and a number of major retailers signing on to support by year’s end. Apple CEO Tim Cook noted today that Apple Pay payments can also be made online, not just at retail stores.

Later in the event, Apple also introduced Apple Pay for the iPad Air 2, however, it explicitly omitted any reference to NFC capabilities for in-store purchasing using iPads. The suggestion was that Apple Pay can only be used for iPad online purchases.

WatchKit to roll out next month

Apple announced today that its WatchKit SDK would roll out next month prior to the launch of Apple Watch. WatchKit will give developers a way to make apps for Apple Watch, which is still on track for an “early 2015” release. The November release of WatchKit should give developers time to tinker with creating their own watch apps before Apple Watch hits the market.

Apple Events channel up on Apple TV, Apple Online Store down ahead of event

  • October 16, 2014

The Apple Events channel has once again returned to Apple TV ahead of today’s new product event, allowing users to stream the event live at 1 p.m. Eastern. Last month’s Apple event stream was plagued by technical problems. Additionally, the Apple Online Store is already down before the debut of the company’s new products, as Apple is expected to reveal new iPads and a new iMac during today’s event. Check in with iLounge during the event — we’ll be updating the site with all the new product details live this afternoon.

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