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Chinese Government may require Apple to build ‘back door’ into iPhones

A new report from The New York Times reveals that the Chinese Government is implementing new regulations that will require technology companies to comply with a stringent set of security disclosures and procedures in order to sell equipment to Chinese banks. The new rules are laid out in a 22-page document and are only the first in a new set of policies from the Chinese government which intend to strengthen cybersecurity in key Chinese industries. Requirements under the new terms would include turning over proprietary source code for operating systems and firmware, submitting to invasive audits, and including back doors in hardware and software that would allow the Chinese government to gain access to data stored on or transmitted from electronic devices. Apple, for example, would be required to redesign the encryption system used on the iPhone to protect user data in order to provide keys that would allow the Chinese government to decrypt such data. It was revealed last week that Apple agreed to allow the Chinese government to conduct “security inspections” on its products, although it is unclear if this is directly related to the new regulations.

Critics of the new policies, including the U.S. Chamber of Commerce, suggest that cybersecurity claims are really just covering for protectionism, and that the new rules are simply a means of bolstering the Chinese tech industry by requiring companies to use only domestically produced products and services. The new measures notably go far beyond those taken by most other countries, however they are also not atypical of the sort of technology policies seen in China – a country in which the government has routinely monitored and censored Internet traffic and services for decades. While the new policies only apply to companies doing business with Chinese banks, it’s generally anticipated that they will be expanded in the coming year to other industries which the Chinese government considers critical.

Notes from Apple’s Q1 2015 earnings call

During Apple’s conference call announcing its record-breaking numbers from Q1 2015, Apple CEO Tim Cook kicked it off by saying that “demand for iPhone has been staggering, shattering our high expectations,” referring to the 74.5 million iPhones sold in the first quarter. “This volume is hard to comprehend.” He said the company sold 34,000 iPhones every hour of every day of the entire quarter.

Cook also briefly mentioned that he expects Apple Watch to ship in April. It’s the first official acknowledgment of a specific month for the release of Apple’s upcoming wearable. “My expectations are very high on it, I’m using it every day, and love it, and can’t live without it,” Cook said.

Questioned about the iPad’s future, Cook mentioned that first-time buyer rates for iPads are very high, and later mentioned that Apple’s enterprise partnership with IBM is “profound.”

Cook: Apple Watch shipping in April

CEO Tim Cook said the company is expecting to ship the upcoming Apple Watch in April. Cook briefly mentioned the tidbit during today’s conference call announcing Apple’s record-breaking Q1 2015 results. It’s the first time Apple has narrowed down the release date of its upcoming smartwatch to a specific month, but no particular date was mentioned.

Apple Q1 2015: Record $74.6B revenue, 74.5M iPhones, 24.4M iPads

Apple reported its first quarter 2015 financial results today, selling 74.5 million iPhones and 24.4 million iPads. The company posted quarterly revenue of $74.6 billion and quarterly net profit of $18 billion, or $3.06 per diluted share. In Q1 2014, Apple had revenue of $57.6 billion and net profit of $13.1 billion, or 2.07 per diluted share. Gross margin was 39.9 percent compared to 37.9 percent a year ago. International sales contributed to 65 percent of this quarter’s revenue.

For Q2 2015, Apple is providing guidance of revenue between $52 billion and $55 billion, and gross margin between 38.5 percent and 39.5 percent. Apple’s earnings call will begin at 5 p.m. EST, and can be heard live on the company’s investor website.

“We’d like to thank our customers for an incredible quarter, which saw demand for Apple products soar to an all-time high,” Apple CEO Tim Cook said in a statement. “Our revenue grew 30 percent over last year to $74.6 billion, and the execution by our teams to achieve these results was simply phenomenal.”

“Our exceptional results produced EPS growth of 48 percent over last year, and $33.7 billion in operating cash flow during the quarter, an all-time record,” said Luca Maestri, Apple’s CFO. “We spent over $8 billion on our capital return program, bringing total returns to investors to almost $103 billion, over $57 billion of which occurred in just the last 12 months.”

Apple Pay support coming to more vending machines, kiosks, parking meters

USA Technologies has announced that it will be bringing Apple Pay support to its self-serve retail payment solutions, effectively adding about 200,000 new acceptance points for Apple Pay across categories of equipment including vending machines, coffee brewers, kiosks, laundry equipment, parking pay stations, and other self-serve appliances through the United States. The company’s flagship ePort cashless payments technologies are designed to be incorporated into small ticket, unattended retail applications such as food vending machines, and have already been incorporating NFC technology for the past decade, making the addition of Apple Pay support a logical extension.

Apple releases iOS 8.1.3

Apple has officially released iOS 8.1.3 to the public, another relatively minor maintenance release that notes bug fixes, increased stability and performance improvements. The update also addresses problems some users have had signing into Messages and FaceTime, issues with Spotlight sometimes not displaying app results, and multitasking gesture fix for iPad users. The amount of free storage space required to perform an update has also been reduced, and new configuration options have been added for education standardized testing. iOS 8.1.3 is available as an over-the-air update or by updating via iTunes on a Mac or PC.

Apple TV adds 120 Sports channel

Apple TV has added a new channel, 120 Sports, to its menu. Just like the existing iOS app and website, 120 Sports provides free sports videos without any required subscription, concentrating on highlights, interviews, and discussion. So far, the new channel has a small number of available videos about recent sports news.

Report: Bank verification methods leave Apple Pay vulnerable to fraud

Verification methods used by many banks and credit card providers are leaving Apple Pay open to potential fraud, according to a new report by Drop Labs. While Apple Pay remains secure at a technical level – there have been no incidents of stolen iPhones being used for unauthorized purchases, or Touch ID or NFC being compromised — criminals are resorting to much lower tech methods of identify theft and social engineering to steal credit card information and use it with Apple Pay. In short, thieves are stealing credit card numbers the old fashioned way, and then loading them onto their own iPhones using Apple Pay, taking advantage of inadequate procedures used by some banks and credit card providers for verifying and authorizing cards to be used with Apple Pay.

As the Drop Labs report notes, all participating card issuers were required by Apple to build a “Yellow Path” for verifying cards added to Apple Pay. However, this experience varies with each issuer, with some requiring nothing more than a phone call – a method that can easily be used by an identity thief to add a stolen credit card to an Apple Pay device such as an iPhone. Part of the problem stems from this “Yellow Path” requirement initially being optional for card issuers, with Apple reversing course and making it mandatory less than a month before Apple Pay was actually launched. Card providers that had originally not planned out a “Yellow Path” verification process were thereby forced to build in this support on relatively short notice or miss the initial Apple Pay rollout.

While Apple Pay itself remains inherently secure, it’s ironically this secure “trust’ system built into Apple Pay — with features like Touch ID and secure NFC — that makes it more attractive for this type of fraud. Once a card has been verified and authorized for Apple Pay, no further checks and balances are implemented, making it easier to use a stolen credit card on an Apple Pay device than it would be to physically produce a counterfeit card from a stolen credit card number. [via Gizmodo UK]

Apple filing reveals executive compensation plans, earnings

Apple’s annual proxy statement filed with the Securities and Exchange Commission has revealed details about the compensation plans paid to the company’s senior executives in 2014. CEO Tim Cook received a total of $9.2 million last year, which included his base salary of $1.7 million in addition to other forms of compensation. Cook also received $56,923 for his unused vacation days, and the company paid security expenses for him in the amount of $699,133.

Notably, Cook’s compensation last year came in well behind that of new retail chief Angela Ahrendts, who received $73 million for leaving her position as CEO of Burberry to join Apple. Ahrendts base salary was $400,000, and she received a $500,000 bonus for joining Apple along with other forums of compensation as a “transition package” designed to account for the much more lucrative compensation arrangement she had at Burberry and her unvested equity in that company, estimated to be worth approximately $37 million. The statement also reveals that Ahrendts had received “cash and perquisites” at Burberry in excess of $5 million annually, placing her among the highest paid UK executives and dwarfing the cash opportunities provided to Apple’s other executives.

The 80-page proxy statement includes numerous additional details, ranging from details on major shareholders and vested stock options to biographies on members of the Board of Directors and Senior Executives.

Report: Apple Watch battery life expected to be about 19 hours

Sources familiar with the Apple Watch’s development have revealed details on the specific battery life targets Apple is aiming to achieve with the new wearable device, with the company aiming for 19 hours of typical usage each day, 9to5Mac reports. Although Apple has previously indicated that the Apple Watch would need to be charged on a nightly basis, the new information suggests that Apple’s choice of CPU and screen for the Apple Watch will contribute to a significant power drain, with the Apple S1 chip used in the Watch performing “surprisingly close” to the A5 found in the iPod touch, and the Retina-class display capable of rendering graphics smoothly at 60 frames per second.

While Apple reportedly wanted the Watch battery to provide between 2.5 to 4 hours of active application use and 3 to 4 days of pure standby or sleeping time, sources indicate that the company will likely achieve only about 2 to 3 days of battery life while in the standby or low-power modes. Apple has also apparently been testing the Apple Watch’s battery life with various applications, and is targeting 2.5 hours of “heavy” app use or 3.5 hours of “standard” app use. Battery life while using fitness tracking software is expected to be better at up to 4 hours on a single charge. The company has also conducted numerous tests to determine how long the Apple Watch will run on a single charge in straight time-keeping modes, with information suggesting that clock face can be displayed for about three hours in total, including animations, although like the iPhone, the display will normally be powered off when the Watch screen is not actively in use.

The report’s sources indicate that Apple may not hit that 19-hour number in the first generation. Battery life has apparently remained the most serious concern for Apple over the Watch’s development cycle, and was at least part of the reason that the retail launch was pushed into 2015. The report notes that as many as 3,000 Apple Watch test units are currently deployed in order to test the device’s performance under real-world conditions.

Apple outlines limited HomeKit support for non-HomeKit accessories

Apple will apparently allow integration between HomeKit and some non-HomeKit home automation solutions, according to a new report by 9to5Mac. Citing sources that have been briefed on the new specifications, the latest MFi program information outlines the specific types of products and restrictions for allowing alternative products to tie into HomeKit. While HomeKit is being designed primarily to work with Apple-certified Wi-Fi and Bluetooth accessories using Apple’s HomeKit protocol, some third-party manufacturers will be able to build HomeKit “bridge” devices to tie their existing products into HomeKit without having to specifically HomeKit-enable each individual product. The bridge will essentially translate proprietary protocols such as ZigBee and Z-Wave to the HomeKit protocol, allowing these accessories to be controlled from iOS devices using HomeKit methods such as Siri.

However, not all home automation accessories will be permitted to bridge to HomeKit, with Apple limiting the list to non-Wi-Fi accessories that “don’t offer users control of the home.” This rules out a lot of accessories such as thermostats, door locks, and even light bulbs, which will have to go directly through the MFi program and implement the HomeKit protocol. Essentially, it appears that the only bridgeable devices that are likely to quality under Apple’s requirements are those that simply provide data to HomeKit, such as monitoring sensors.

Report: Apple agrees to accept product inspections from Chinese government

Apple has agreed to let the Chinese government conduct security inspections on its products, according to The Beijing News. The report claims that Apple CEO Tim Cook agreed the company would fully cooperate with the government during a December meeting. There have long been alleged issues between Apple and the Chinese government regarding the security of Apple’s products. Cook met with an official over security in October of last year. In August, the Chinese government refuted a report which claimed that it was banning Apple products from government procurement lists. [via ZDNet]

IK Multimedia announces iRig Mic Studio

IK Multimedia has announced iRig Mic Studio ($180), the latest product in its lineup of iOS-compatible audio accessories. An ultra-portable large-diaphgram digital condenser microphone, iRig Mic Studio contains a 1” diameter back electret condenser capsule in an extremely compact enclosure, making it easy to take with you for making professional recordings anywhere. The mic provides a 24-bit A/D converter with a 44.1/48 kHz sample rate, a built-in low-noise preamp, and a 133dB SPL rating, promising to provide high-quality recording in a wide range of environments and applications. iRig Mic Studio will include a Lightning cable for connecting to an iPhone, iPad, and iPod, with a 30-pin Dock Connector cable option available for users of older iOS devices, and additional USB and micro-USB cables bundled for connecting to Macs and other devices. The microphone will also include a portable tabletop tripod stand. The mic is designed to work with any iOS app supporting Core Audio, and will specifically work with IK’s VocaLive and EZ Voice vocal recording and effects apps. iRig Mic Studio will be available this quarter.

NimbleBit announces Apple Watch support for Letterpad

Game developer NimbleBit has announced that its upcoming iOS game Letterpad will feature Apple Watch support, TouchArcade reports. The developer previously announced that it was looking for testers for the upcoming game, which challenges users to come up with words relating to specific topics from a provided grid of nine letters. With the game nearing completion, NimbleBit has announced that the game will also be playable on the forthcoming Apple Watch. While no release date has been set, Letterpad is expected to come with 200 different puzzles and also include the ability for users to create their own puzzles and share them. It’s also unclear at this point whether the game will run standalone on the Apple Watch or require the user to have their paired iPhone in proximity.

Apple acquires music analytics firm Semetric

Apple has acquired Semetric, a London-based music analytics company, the Wall Street Journal reports. The analytics service produced by the company tracks music sales, illegal downloads, and social networking interactions, according to a person familiar with the acquisition. An Apple attorney also reportedly joined Semitic’s board in October. An Apple spokesman provided the generic response that “Apple buys smaller technology companies from time to time, and we generally do not discuss our purpose or plan,” however it seems likely that the acquisition is directly related to the rumored impending launch of a new music streaming service by Apple. Notably, Semitic’s Musicmetric service has been used with competing streaming services such as Spotify to help artists track the music listening habits of their fans, and the report notes that this acquisition may be an effort by Apple to position its streaming service as artist-friendly.

Apple terminates Crimean developer agreements due to U.S. sanctions

Apple has begun sending out notices of termination to Mac and iOS developers registered in Crimea, TechCrunch reports. The notices cite sanctions that the U.S. has ordered as a result of Russia’s annexation of the region last year – specifically Executive Order 13685 from December 18, 2014 – and developers in the region are now barred from creating and publishing apps in Apple’s App Store. The termination, effective immediately, requires that developers cease all use of Apple software and destroy all related materials. Crimean developers will also no longer have access to the developer portal, and apps published by those developers will presumably be pulled from the App Store.

Apple commemorates Martin Luther King Jr. Day

Apple has updated its home page at apple.com for this year’s Martin Luther King Jr. Day, in honor of the “life and vision” of the revered civil rights activist. Tim Cook also announced the commemoration with a simple tweet.

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Monument Valley infographic reveals revenue, other stats from hit game

In a new blog post on their site, iOS game developer ustwo provides some interesting insight into the economics of its hit game, Monument Valley. Titled Monument Valley in Numbers, the infographic reveals that more than 80 percent of the game’s $5.85 million revenue came from the iOS side, with over 1.7 million official sales on iOS devices. Factoring in multiple devices from single sales, the report indicates that the game was actually installed on over 10 million unique devices – a ratio of approximately four devices for every one sale. The post also shows revenue over time, with clear spikes in sales following the game’s initial release, receipt of various awards, and the Christmas season. Revenue is also broken down by country, and additional information is provided on development costs and other more esoteric statistics such as in-game camera usage, most played chapters, and number of totems drowned.

Tony Fadell to oversee restructured Google Glass project

Google is restructuring its Google Glass project and appointing former Apple Executive Tony Fadell to head it up, according to the Wall Street Journal. Fadell, one of the inventors of the original iPod, left Apple to form Nest in 2010, which was later acquired by Google last year. Under the new plan, Glass will be moving from the Google X research lab to be a stand-alone unit directly led by Ivy Ross. Ms. Ross will report to Fadell, who will continue to run Nest while providing strategic guidance to the Glass team. The report notes that Google also plans to stop selling the initial version of Glass to consumers, planning a new version of Glass to be released sometime later this year. The new strategy is expected to follow the more Apple- and Nest-like approach of unveiling fully-finished products rather than deploying large, public tests of hardware prototypes as Google previously did under the Glass Explorer program.

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