Edible Apple

Back in February, Apple issued a warning of sorts to Capcom in the wake of complaints about the game Smurfs Village. At the time, Smurfs Village was a top grossing iPhone game that while available as a free download, offered users the ability to make in-app purchases using real money. As a result, kids, without their parents knowledge, inadvertently generated exorbitant iTunes bills via the purchase of Smurf Berries that sometimes cost as much as $99.99.

Kids were able to make said purchases because iTunes does not require the re-entry of a password 15 minutes after an account password has been entered.

But Smurfs Village wasn’t the only game that tempted young users with in-app purchases.

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Following Apple earnings announcements, Tim Cook and CFO Peter Oppenheimer typically field a few questions from analysts. Below are a few numbers that were touched upon yesterday that are worthy of looking at.

Macintosh

Mac sales grew 7% year over year, and though this was lower than what analysts were hoping for, Apple this past quarter set new records for Mac sales. Indeed, Apple set Q2 sales records for iPhones and iPads as well. Also note that while Apple’s Mac growth checked in at 7%, it was still markedly better than the 2% growth experienced by the rest of the PC market.

iPhone

iPhone sales were exceptional this past quarter, thanks in large part to sales over seas. Specifically, Apple noted that iPhone sales in Japan doubled year over year. Even more impressive were the results from China where iPhone sales increased five fold, thanks mostly to the fact that the iPhone 4S didn’t debut until January 2012 there. Also, the iPhone arrived on China Telecom this past quarter, adding a few hundred thousand more eligible iPhone customers.

Availability wise, the iPhone 4S is now available on 230 carriers across 100 countries worldwide. It’s sure come a long way in just a few years when it was an AT&T exclusive.

Things are a bit bleaker for the iPod, but that, to a certain extent is to be expected given that the iPod is now almost 10 years old and peaked quite a while ago. Year over year, iPod sales declined from 9 million units during Q2 2011 to 7.7 million units during the March 2012 quarter. Still, the iPod remains the best selling MP3 player in the world with a 70+% marketshare. As expected, the iPod Touch accounts for more than 50% of all iPods sold.

To date, Apple announced that they’ve sold more than 365 million cumulative iOS devices worldwide, with 50 million of those coming in the March quarter.

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Apple this morning announced that WWDC 2012 is set to take place from June 11 through the 15th at San Francisco’s Moscone Center.

“We have a great WWDC planned this year and can’t wait to share the latest news about iOS and OS X Mountain Lion with developers,” Phil Schiller explained. “The iOS platform has created an entirely new industry with fantastic opportunities for developers across the country and around the world.”

Passes went on sale this morning for $1599 and sold out within two hours. So if you’re just finding out about WWDC tix now, sad to say, but you’re out of luck.

But if you happened to snatch up a ticket,Apple is touting plans to hold over 100 technical sessions for iOS and OS X developers. Also noteworthy is that over 1,000 Apple engineers will be attending the event, providing support for attendees.

Over the last few years, Apple has gotten much better about posting videos from the conference online, for free mind you, shortly after the event. But if you want that hands-on experience to network with other developers and interact with Apple engineers, attending WWDC is the way to go. That is, if you can get a ticket. Last year tickets began popping up on Craigslist at inflated prices.

Apple last week released a software tool enabling users to rid their machines of the increasingly sophisticated and stealthy Flackback malware. Before the tool was released, security experts estimated that more than 600,000 Mac users worldwide were infected, including 200 some machines at Apple’s Cupertino campus.

One week later, security firms have some big disagreements regarding how many Mac users remain infected. The Kapersky firm initially said that 30,000 Macs remain infected while Dr. Web, the security firm which first discovered the malware, claims that over 500,00 Macs remain infected with the malware.

Doctor Web’s virus analysts continue to monitor the largest to date Mac botnet discovered by Doctor Web on April 4, 2012. The botnet statistics acquired by Doctor Web contradicts recently published reports indicating a decrease in the number of Macs infected by BackDoor.Flashback.39 The number is still around 650,000.

According to Doctor Web, 817 879 bots connected to the BackDoor.Flashback.39 botnet at one time or another and average 550 000 infected machines interact with a control server on a 24 hour basis. On April 16, 717004 unique IP-addresses and 595816 Mac UUIDs were registered on the BackDoor.Flashback.39 botnet while on April 17 the figures were 714 483 unique IPs and 582405 UUIDs. At the same time infected computers, that have not been registered on the BackDoor.Flashback.39 network before, join the botnet every day. The chart below shows how the number of bots on the BackDoor.Flashback.39 botnet has been changing from April 3 to April 19, 2012.

Again, if you believe you’ve been infected, download Apple’s removal tool as soon as possible. It patches up the Java security hole by disabling the automatic execution of Java applets.

To check if you’ve been infected, Kapersky has a free online tool (no download required) that lets you see if you’ve been burnt.

Along with the Regina Display, the other key feature/selling point of  Apple’s latest iPad is its support for 4G. But if you’re trying to get on a 4G network outside of North America, you’re in for a big disappointment. You see, Apple’s latest iPad can only hop on 4G networks in the United States and Canada.

But because Apple is touting the device’s 4G capabilities abroad, some consumer watchdog groups abroad are crying foul.

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The US Justice Department filed an antitrust lawsuit against Apple two weeks ago, alleging that Apple, along with a cohort of publishers, colluded to raise the price of e-books on Apple’s iBookstore, and in turn, adversely affect the pricing of e-books on Amazon as well.

While three publishers have already settled with the US Justice Department, Macmillan and Penguin are apparently planning to fight the allegations. As is Apple who continues to deny any wrongdoing.

In the wake of the allegations, Apple spokesman Tom Neymayr issued a statement explaining:

The DOJ’s accusation of collusion against Apple is simply not true. The launch of the iBookstore in 2010 fostered innovation and competition, breaking Amazon’s monopolistic grip on the publishing industry. Since then customers have benefited from eBooks that are more interactive and engaging. Just as we’ve allowed developers to set prices on the App Store, publishers set prices on the iBookstore.

What’s more, legal experts have been vocal in stating that the Justice Department has an arduous challenge ahead as it looks to secure an antitrust verdict on Apple.

So it’s not at all surprising that Apple is publicly welcoming a trial on the fact at issue and is looking forward to defending itself.

Daniel Floyd, an attorney representing Apple, explained Apple’s position to US District Judge Denise Cote.

“Our basic view is that we would like the case to be decided on the merits. We believe that this is not an appropriate case against us and we would like to validate that.”

Game on.

The next hearing on the case is scheduled to take place on June 22.

via Reuters

Apple’s current legal battles with Samsung encapsulate a large number of patents, innumerable suits and countersuits, and have resulted in legal motions across 11 jurisdictions across the globe. As you may remember, Steve Jobs in his biography was quite vocal about his intent to go thermonuclear on Android, vowing to spend every last dime in Apple’s coffers to destroy Google’s mobile OS.

But Tim Cook is a bit more level headed about things.

A few weeks back, Business Week, citing people familiar with Apple’s legal situation, claimed that Samsung and Apple had been communicating with each other recently about settlement options.

“Apple CEO Tim Cook does not seem to share his predecessor’s passion about laying all foes to waste,” the report added. “Cook appears to view litigation as a necessary evil, not a vehicle of cosmic revenge.”

During Tuesday’s earnings conference call, Tim Cook was asked how Apple viewed its cash situation in light of the myriad of patent disputes the company currently finds itself entangled in.

Cook response seemed to validate the Business Week report above, at least to the extent that Cook isn’t a fan of using the courts to settle disputes.

I’ve always hated litigation always hated litigation, and I continue to hate it.. We just want people to invent their own stuff. If we could get an arrangement where we can be assured that’s the case, and that a fair settlement on stuff that’s occurred, I would highly prefer to settle vs battle.

The key thing is that it’s very important that Apple not become the developer for the world. We need people to invent their own stuff.

As it stands now, Apple is currently embroiled in Android-related patent disputes with Samsung, Motorola, and HTC and the only clear cut winners in all of this litigation are the lawyers.

Apple a few minutes ago released its earnings for its second fiscal quarter of 2012 and recorded $39.2 billion in revenue and net quarterly profit of $11.6 billion. EPS checked in at $12.30 per share.

During the same Q2 quarter a year-ago, Apple posted revenue of $24.7 billion along with a net quarterly profit of $6 billion. Profits, year over year, rose by an impressive 93%. So much for all those analysts claiming Apple’s earnings this quarter would disappoint.

“We’re thrilled with sales of over 35 million iPhones and almost 12 million iPads in the March quarter,” Apple CEO Tim Cook said in a press release. “The new iPad is off to a great start, and across the year you’re going to see a lot more of the kind of innovation that only Apple can deliver.”

Product wise, Apple sold 35.1 million phones, an 88% increase from Q2 2011. And with the new iPad in tow, Apple moved 11.8 million units, representing an even more astounding 151% increase from the same quarter a year-ago. As expected, Mac sales came in lower than expected with just 4 million units, still good enough for a 7% increase from the year-ago quarter. And as for the iPod (yeah, remember that ole’ product?), Apple sold 7.7 million units, a 15% drop from last year’s quarter.

via Apple

AT&T announced today that it sold 5.5 million smartphones during the Q1 of 2012 and that 4.3 million of all smartphone activations were iPhones. Translation – the iPhone accounted for more than 75% of all AT&T smartphone sales.

• $0.60 diluted EPS compared to $0.57 diluted EPS in the first quarter of 2011
• Consolidated revenues of $31.8 billion, up $575 million, or 1.8 percent, versus the year-earlier period
• Wireless operating income margin up to 27.2 percent; wireless EBITDA service margin up significantly to 41.6 percent even with strong smartphone sales
• More than $2 billion in stock buybacks; 67.7 million shares repurchased
• Smartphone sales of 5.5 million, exceeding the previous first-quarter record, with about 30 percent of all postpaid smartphone subscribers on 4G-capable devices

Apple’s Senior VP of worldwide marketing, the one and only Phil Schiller, created a mild stir last week when he responded to a fan question about why he deleted his Instagram account.

As you can see from the screenshot to the right, Schiller said that the app “jumped the shark” when it became available on Android. The reality, though, likely has something to do with the fact that Instagram was for a long time the most popular mobile photo sharing app and Apple liked that it was an iPhone exclusive. Hell, it even won an iPhone app of the year award. But with iOS exclusivity no longer draping the app, Schiller apparently isn’t keen on supporting cross platform apps.

Or as 9to5 points out, “As marketing chief at Apple, seeing one of the platform’s most popular third-party pieces of software running on millions of Android phones is a disappointing sight.”

A few hours later, a 9to5Mac reader emailed Phil Schiller at good ole’ schiller@apple.com to get a more complete answer. And surprise surprise, Schiller responded with a more fleshed out explanation.

It read:

Instagram is a great app and community. That hasn’t changed.
But one of the things I really liked about Instagram was that it was a small community of early adopters sharing their photographs.

Now that it has grow (sic) much larger the signal to noise ratio is different.

That isn’t necessarily good or bad, it’s just not what I originally had fun with.

Phil

Fair enough, Phil. Fair enough.

Ahead of Apple’s upcoming earnings announcement, the folks on Wall St. are expecting strong iPhone and iPad sales but aren’t as optimistic when it comes to the Mac. Specifically, the consensus on Wall St. is that Mac sales will check in at 4.3 million units.

But stalwart Apple bull Gene Munster claims that low Mac sales might actually be a good thing and not a cause for concern amongst investors because consumers are merely waiting for anticipated upgrades to the Mac before diving in and making a purchase. Indeed, many are in fact waiting for Apple’s next-gen hardware sporting Intel’s Ivy Bridge processors, a fact which Munster believes will send sales during Apple’s third fiscal quarter sky high.

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With Apple largely expected to revamp its MacBook Pro line in the coming months, analyst Ming-Chi Kuo writes for KGI Securities that Apple may also be phasing out its 17-inch model MacBook Pro due to weak sales.

Apple’s Mac business in 2Q12 will be boosted by several factors. Three of which are:

(1) Mountain Lion, which integrates iOS features with Mac OS, Apple TV’s interaction function, will be launched in June; (2) upgrading to Ivy Bridge; and (3) back-to-school demand. We forecast Apple will sell 5.32mn units of the Mac series (up 28.5% QoQ and 35.2% YoY) in 2Q12, making it the main growth driver.

We also predict Apple will roll out a fully new MacBook model in early 3Q12, boasting strong performance and easy carryability by combining the advantages of MacBook Air and MacBook Pro.

Since hitting the market a few years ago, the svelte MacBook Air quickly became one of Apple’s more popular models as consumers were quite interested  in the portability and thinness it offered compared to the bulkier MacBook Pro models with larger screens.

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