Edible Apple

With rumors of Apple’s plans to release a low cost iPhone this Summer swirling about, we now have a new report via the China Times which claims that Apple’s more economical iPhone will make use of Qualcomm’s Snapdragon chip as opposed to one of Apple’s A-series processors.

The report claims that the Snapdragon’s ability to integrate both bluetooth and Wi-Fi onto the main chip will enable Apple to keep costs low and ideally protect their margins as much as possible.

What’s more, the report claims that Apple has tapped TSMC to manufacture the chips using their 28nm process. What’s notable here, aside from Apple foregoing using one of its in-house designed processors, is that it would mark the first time Apple would be utilizing a foundry other than Samsung to produce its processors. The report also claims that the low cost iPhone will be 3G only.

It’s worth mentioning that the above report regarding Apple’s use of Qualcomm’s Snapdragon chip is at odds with the typically spot-on Ming-Chi Kuo who wrote earlier this week that Apple’s lower cost iPhone will utilize Apple’s A6 processor.

Kuo also noted that the lower cost iPhone will be comprised of plastic and fiberglass and will come in 6 different colors.

China Times via Macotakara

Wireless charging isn’t exactly knew – anyone out there remember the Palm Pre? But according to a recent report in Digitimes, both Samsung and Apple may be implementing wireless charging technology into their flagship smartphone models later in 2013.

While the report pegs Samsung as opting for Qi wireless charging technology for its upcoming Galaxy S IV, it points out that it won’t come with this capability right out of the box. Rather, users will be given the option to purchase a replacement back cover that will be able to access a charging pad.

As for Apple, shockingly, they may be going about things on their own.

Apple is likely to adopt the wireless charging technology developed internally, but it remains unknown if the next-generation iPhone will come with built-in wireless charging capability or with other attached accessories, said the sources.

Digitimes has a spotty track record when it comes to predicting features on upcoming Apple products, so certainly take this with a grain of salt. It’s also worth looking back at a Phil Schiller quote from a 2012 interview with All Things D where Apple’s Senior VP of Marketing explained why he wasn’t keen on wireless charging.

As for wireless charging, Schiller notes that the wireless charging systems still have to be plugged into the wall, so it’s not clear how much convenience they add. The widely-adopted USB cord, meanwhile, can charge in wall outlets, computers and even on airplanes, he said.

“Having to create another device you have to plug into the wall is actually, for most situations, more complicated,” Schiller said.

At the same time, it’s not as if Apple ever tips its hand and praises a new technology that it hasn’t yet implemented into its own products yet. Still, I’d be skeptical that wireless charging is on the way. The next iPhone, the iPhone 5S, will for the most part feature upgraded internals such as a superior camera. Aside from that, there are strong rumors that the next iPhone will come with a fingerprint authorization sensor. As for wireless charging? Color me skeptical

Perhaps speaking to the power wielded by analysts, UBS tech analyst Steve Milunovich recently reiterated his “Buy” rating on Apple shares, while also mentioning that Apple may stand to learn something from IBM to the extent that Big Blue will meet with analysts and clue them in as to what’s coming down the pipeline.

IBM was one of the early vendors to deal with maturity and make a strength of it by consistently giving back up to 80% of its free cash flow to investors. Intel, Cisco, and more recently Dell and TI have made strong commitments to returning cash. We believe Apple needs to do the same and, from all signs, is likely to meaningfully boost cash return in the next few months, most likely through buybacks. Increased transparency the next step In 2005 IBM was telling the Street it could grow earnings double-digit, but the company was so complicated that analysts didn’t believe it. IBM’s earnings roadmap has been a great success in increasing understanding of the company. In its own way, Apple needs to be more transparent, perhaps beginning with an analyst meeting. Without pre-announcing products, management should be able to outline how it thinks, highlight strengths, and showcase management depth.

Apple continues to make money hand over fist, and yet their P/E ration is shockingly low. We’ve all seen how much influence un-sourced reports out of Asia can have, so maybe this isn’t such a bad idea after all. I know Apple doesn’t like to pander to short term AAPL observers, but with shares of Apple in the gutter and its earnings multiple under 10, it’s not the worst idea we’ve come across.

via Barrons

BusinessWeek has a in-depth piece up detailing the behind the scenes happenings that led to Disney purchasing Lucasfilm. The story is a must-read for any Star Wars fans out there, but there is an interesting nugget about Steve Jobs that shouldn’t come as a surprise to anyone familiar with his antics.

While discussing Disney’s purchase of the Steve Jobs led Pixar, the article notes:

Iger accelerated that process by making acquisitions. The first was the $7.4 billion purchase of Pixar Animation Studios in 2006. Iger personally negotiated the deal with Steve Jobs, who was then Pixar’s CEO. As part of the deal, Iger kept the creative team, led by John Lasseter, in place and allowed them to continue to operate with a minimum of interference in their headquarters near San Francisco. “Steve and I spent more time negotiating the social issues than we did the economic issues,” Iger says. “He thought maintaining the culture of Pixar was a major ingredient of their creative success. He was right.”

The transaction gave Disney a new source of hit movies. Jobs also became a Disney board member and its largest shareholder. Periodically he would call Iger to say, “Hey, Bob, I saw the movie you just released last night, and it sucked,” Iger recalls. Nevertheless, the Disney CEO says that having Jobs as a friend and adviser was “additive rather than the other way around.”

Jobs’ efforts to maintain the creative integrity of Pixar under the Disney umbrella was well-documented in his biography. Indeed, maintaining a healthy corporate culture that fostered creativity was a common thread that ran through both Pixar and Apple. You might remember that Jobs, in his biography, noted that famed Apple designer Jony Ive was given free reign at Apple.

With Jobs, creativity and design always reigned supreme.

via BusinessWeek

Not too shabby! Google Glasses may very well feature cool technology, but it seems that Google, in their zeal and excitement for the project, haven’t thought of any of the practical concerns that might accompany the product’s release.

Here’s a hilarious spoof poking fun at some of those issues.

Phil Schiller doesn’t tweet often, but today the Apple executive decided to send out a tweet poking fun at the growing problem of malware on Google’s Android platform.

A few hours ago, he sent out a tweet that read, “Be safe out there:” along with a link to a recent security study conducted by F-Secure which details the growing threat malware poses to Android.

The summary of the report reads:

Android malware has been strengthening its position in the mobile threat scene. Every quarter, malware authors bring forth new threat families and variants to lure more victims and to update on the existing ones. In the fourth quarter alone, 96 new families and variants of Android threats were discovered, which almost doubles the number recorded in the previous quarter. A large portion of this number was contributed by PremiumSMS—a family of malware that generates profit through shady SMS-sending practices—which unleashed 21 new variants.

Check out the full scoop over here at Network World.

Amid rumors that Apple is attempting to roll out its own music streaming service comes a report from the New York Post which claims that Apple is attempting to pay record labels even less money in  royalties than they currently receive from sites like Pandora.

Apple is reportedly offering about 6 cents per 100 songs streamed compared to the 12 cents per 100 songs streamed that Pandora currently pays.

While the labels would admit Apple’s music service could tap a whole new revenue stream for them, they are loath to say yes to the offer as the industry is fighting on Capitol Hill to prevent Pandora from lowering its current rate, sources added.

Music label insiders suggest Apple — which is sitting on a cash hoard of roughly $137 billion — ought to pay at least the rate set by the Copyright Royalty Board, or about 21 cents per 100 songs streamed.

That rate applies to companies that don’t own broadcast operations.

By comparison, terrestrial radio-backed online services — such as iHeart — pay about 22 cents per 100 songs streamed.

Interestingly enough, Spotify, everyone’s favorite subscription based music service pays record labels 35 cents per 100 songs streamed.

So why does Apple want to get into the music streaming business? Well to be blunt, music streaming is huge. Not only does 50% of Apple’s iTunes revenue come from purchases on mobile devices, note that Pandora is a hugely popular application and it would make sense for Apple to want a piece of that pie.

But the music labels aren’t as willing to get into bed with Apple as they once were. The music industry is thriving and Apple’s negotiating position isn’t as strong as it once was as a result. Consequently, the music labels aren’t opposed to a streaming music service from Apple but want upfront payments in addition to a percentage advertising revenue.

via NY Post

It’s funny how an anonymously sourced rumor about the iPhone supply chain can send shares of Apple reeling and prompt analyst to adjust their estimates while favorable research based on cold hard data doesn’t seem to have much of an impact on anything.

So it goes in the land of investing. But as for the favorable research involving Apple, a recent study released by comScore yesterday reveals that Apple’s share of the US smartphone market increased by 3.5% from October through January. All told, the iPhone comprised approximately 37.8% of smartphone users as of this past January.

Following Apple was of course Samsung whose share of the smartphone market increased just under 2% to a final tally of 21.4%. Trailing Samsung is HTC and Motorola, who both lost marketshare during the covered time period.

As for overall platform marketshare, Google’s Android still reigns supreme with a 52.3% share, followed by Apple with its 37.8% share. But while Apple’s share increased by 3.5%, Android’s share of the smartphone market dropped by 1.3%.

via ComScore

The bad news keeps poring in for Apple. Sure, the company continues to post record breaking profits seemingly every quarter, but the buzz on Wall Street is that Apple may have peaked, thanks in part to the increased success of Samsung’s lineup of Galaxy smartphones.

Earlier today, Citigroup issued a lukewarm reports regarding Apple’s sales and revenue for the current quarter.

Specifically, Citigroup was so bold as to predict that Apple this quarter may very well miss the lower bounds of its own guidance, which is historically rather conservative. For the current quarter, Apple is anticipating revenue to come in somewhere between $41 and $43 billion. Citigroup expects Apple’s actual revenue to come in at about $39.5 billion.

Driving Citigroup’s pessimism is the belief that demand for both the iPhone and the iPad are weakening.

In conducting our regular field work with the hardware supply chain, we again find evidence of reduced demand to Apple’s suppliers for iPhone 5 related components. While production does not directly translate to sales (for example, we estimate Apple finished 1Q13 (Dec) with [around] 10M iPhone units in inventory), we suspect this is an indication of softer demand for iPhone 5 and iPhone 4S.

Consequently, Citigroup analyst Glen Yeung believes that the Wall Street consensus of Apple selling 69 million iPhones during the first half of 2013 is faulty. Instead, Citi anticipates iPhone sales to come in at around 59 million units.

Even more interesting is that Citigroup is also skeptical that a low cost iPhone is on the horizon, which is strange given the number of reputable sources that are already viewing it as a forgone conclusion.

Despite much speculation amongst investors and third-party research, we find limited evidence of a low-end iPhone at this stage … We continue to expect iPhone 5S to be launched (albeit in early C3Q13 vs. late C2Q13) and anticipate a large-screen iPhone in late 2013/early 2014. But clear indications of a low-end iPhone remain elusive.

Per usual, while these research notes can be informative, it’s often dangerous to take them at face value. For instance, it’s worth noting that while Yeung has discovered weakened demand for iPhone 5 parts in the supply chain, it’s being reported that iPhone 5S production is about to commence. Similarly, amidst reports that Apple’s order for iPad parts are diminishing comes news that Apple will be launching a new iPad model as early as this April.

via CNET

The latest info from the rumor mill suggests that Apple’s iWatch is very real and is on target to launch sometime in 2013. Recently, Citibank analyst Oliver Chen explained how the global watch market may ultimately prove to be much more lucrative for Apple than the HDTV market because of the healthy margins associated with watches. HDTVs, in contrast, are notorious for their razor thin margins.

Apple reportedly has about 100 employees toiling away on the iWatch product, all under the watchful eye of watch enthusiast and Apple design guru Jony Ive.

So while the rumor mill is a’buzzin with news about Apple potentially getting into the watch business, not everyone is optimistic.

During a press conference held in Grenchen, Switzerland this week, Swatch CEO Nick Hayek expressed skepticism that Apple’s iWatch will fuel a smartwatch revolution.

“Personally, I don’t believe it’s the next revolution,” Hayek said. “Replacing an iPhone with an interactive terminal on your wrist is difficult. You can’t have an immense display.”

Hayek also explained that consumers more often than not look at watches as pieces of jewerly that they like to change often. To that end, perhaps the dynamic display of Apple’s rumors iWatch will allow for many type of watchfaces that consumers can easily change at will.

Indeed, I’ve mentioned before that a one design fits all iWatch would likely be a horrible strategic decision from Apple. As Hayek indicated, watches are often personal fashion statements and to that end, having a little bit of variety can only help. If Apple truly wants this to be a huge money maker, they’ll have to simultaneously appeal to soccer moms, teenagers, and stodgy old businessmen.

via Bloomberg

Following up on today’s report that Apple this Summer will be releasing an iPhone 5S with fingerprint authorization technology alongside a lower cost iPhone comes news via the typically reliable Rene Ritchie of iMore who writes that Apple is targeting a release date sometime in August. The equally reliable Ming-Chi Kuo, however, recently pegged an iPhone launch date for sometime in July.

I guess we’ll have to wait a few months to know for sure, but either way it appears that Apple is intent upon moving up its iPhone launch window. From the original iPhone all the way through the iPhone 4, Apple’s latest and greatest smartphones launched during the Summer. Technical difficulties, however, delayed the release of the iPhone 4S until October. Subsequently, the iPhone 5 was released in September.

That being the case, an August launch would seem to be on target as a July launch would mean that the iPhone 5 would only have been out on the market as Apple’s flagship device for 10 months.

In any event, Ritchie also relays that Apple is considering launching its next-gen iPad sometime in April, but that those plans remain up in the air for now. As for a revamped iPad Mini with a Retina Display, Ritchie says that “doesn’t sound imminent.”

That said, if the iPad Mini gets a refresh this April, expect nothing more than upgraded internals, much like the 4th generation iPad.

via iMore

While the iPhone moniker may seem rather intuitive – after all, it did follow in the footsteps of the iMac and the iPod – it seems that Apple did spend some time exploring other names for its revolutionary smartphone.

While speaking at the University of Arizona’s marketing department yesterday, Ken Segall – the former creative director of Apple’s marketing efforts – laid out a few other options Apple considered when it came to naming the iPhone.

Put simply, Apple chose wisely.

According to Segall, some of the names Apple was considering included Mobi, TriPod, TelePod, and believe it or not, iPad.

Interestingly, Segall delved into each name and explained why it was up for consideration.

Let’s start with the Telepod. Segall said that Apple was toying with this name because it provided a futuristic twist on the word ‘telephone’ while the ‘pod’ suffix was obviously meant to capitalize on the incredible success and familiarity of the iPod.

What about Mobi? My first association was with the singer Moby, but alas, the Mobi on Apple’s radar was a play on the word “mobile”. It’s decent, but Mobi sounds like a cheap knockoff smartphone, or better yet, something Apple might have alternatively called Siri.

And then we have Tripod.

While this name did not win out, it did make a big impact on Apple’s original presentation and marketing for the iPhone. “Tripod” stems from the iPhone being a combination phone + iPod + internet communications device. Indeed, Apple heavily marketed the original iPhone as such.

And if you look back at Steve Jobs’ iPhone unveiling at Macworld 2007, you’ll note that the root of his masterful delivery was to announce that Apple had three new products to introduce before wowing the audience by revealing that all 3 products were actually just one device.

And finally we have the iPad moniker. Of course the iPad would subsequently go on to become the name for Apple’s tablet, but recall that Apple’s iPhone project initially started out as a tablet initiative.

All in all, I think Apple chose wisely with the iPhone. It’s Apple. It’s simple. And with millions upon millions of iPhones sold each and every year, you have to agree that it just works.

via 9to5Mac