Edible Apple

Apple this week announced during their earnings conference call that the iPhone 5 would be gaining 4G LTE service on an additional 36 carriers starting next week. As it stands now, LTE for the iPhone 5 is only available on carriers in a few countries –  the US, Canada, Britain, Japan, Australia, Korea and Germany just to name a few.

Note that LTE functionality on the iPhone 5 is only enabled on a carrier once Apple has certified them themselves. Consequently, a jailbroken iPhone running on a carrier that does have 4G LTE service will not actually get those 4G speeds.

Cook noted that LTE support for the iPhone 5 will hit some new countries such as Italy, Denmark, Switzerland, and several Middle Eastern countries that tallied together cover over 300 million customers.

It’s been an up and down year for Apple retail stores. First and foremost, we had the questionable-from-the-outset hiring of John Browett as Senior VP of Retail who barely lasted a few months at Apple before being shown the door. Nevertheless, Apple was able to push beyond Browett’s tenure – where he ruffled a few feathers with a controversial strategy to save money by scaling back on employee hours – and have another banner year.

Here are the details.

For the quarter, Apple posted revenue of $54.5 billion and a profit of 13.1 billion, both company records. Of that revenue figure, $6.44 billion came from Apple’s line of retail stores. That’s a slight increase from the $6.112 billion Apple retail stores generated during the holiday quarter of 2011. Average revenue per store totaled $16.3 million, the second highest figure in Apple retail history.

Other points of interest regarding Apple retail stores include that Apple opened up 11 new stores during the past quarter, while 14 were moved or were expanded on account of growing demand (i.e some stores are getting too big for their britches).

Cumatlively, there are now 401 Apple retail stores across the globe. The breakdown is 251 of them are located in the US while 150 are located abroad. China in particular, which is clearly Apple’s main source of revenue growth these days, now has 11 Apple stores in total.

During Apple’s earnings conference call yesterday, Tim Cook was asked during the Q&A portion whether or not Apple has plans to release phones with larger screens in the near future.

Q: Many of your competitors are differentiating themselves with larger screen sizes. How do you feel about the market in that respect? Is there a long term case for larger screen sizes for smartphones?

A: iPhone 5 offers a new 4″ retina display. The most advanced display in the industry. No one comes close to matching the level of quality as our retina display. It also provides a larger screen size without sacrificing one-handed ease of use. We believe we’ve picked the right screen size.

Of course, Apple said similar things when it seemed improbable that the company would expand the original iPhone’s 3.5-inch screen or release an iPad with a smaller display. But having used various models of gargantuan Samsung smartphones, there is something to be said for the ease of use associated with one-handed operation. Just try taking a photo with one hand while using a 4.8-inch smartphone, it’s a disaster waiting to happen.

In other news of note from the earnings conference call, Tim Cook was asked about Apple’s Maps app and about future innovation at Apple.

Cook responded:

We’re working on some incredible stuff. The pipeline is chock full. We feel great about what we’ve got in store.

In terms of Maps, we’ve made a number of improvements since the introduction of iOS 6. Roll out even more improvements throughout the rest of the year. Going to keep working on this until it lives up to our standards. Include improved satellite imagery, improved local information and so forth. Usage of Maps is significantly higher than prior to iOS 6.

Hopefully “chock full” really refers to some amazingly cool products and features in the pipeline, and not, oh I don’t know, stuff like spec upgrades and minor design changes to the MacBook Pro.

via MacRumors

In the wake of Apple’s earnings – which were actually pretty impressive if you’re not blinded by the sinking stock price – a number of analysts have issued their thoughts on Apple’s recent quarter and what to expect going forward.

Peter Misek, an analyst with Jefferies, said that while the company’s gross margin and EPS exceeded estimates, iPhone shipments were disappointing. If you recall, Apple shipped 47.8 million iPhones while Misek was anticipating 53 million.  Funny how an all-time record of iPhones shipped is disappointing simply because it doesn’t measure up to an analysts arbitrary prediction. Note that Wall Street was anticipating about 48.3 million iPhones sold.

Gene Munster, everyone’s favorite Apple HDTV proponent, was slightly disappointed with Apple’s iPhone numbers but remains confident about the company’s future prospects. Munster is keeping his $785 price target for Apple shares.

Ben Reitzes of Barclays was overall pleased with Apple’s earnings, but was taken aback but much lower than expected Mac sales. This however can be attributed to supply constraints and as a result he feels that much of the Mac revenue missing from this past quarter will show up during the March quarter. Barclays maintains its $740 price target for Apple shares.

As for other analysts and Apple price targets, Brian white of Topeka maintains a $1,111 price target for Apple shares while Brian Marshall of ISI lowered his from $710 down to $600.

via Fortune

We’ve all see the photos of Ashton Kutcher as Steve Jobs, and now thanks to Entertainment Tonight, we now have the first video clip from the biopic JOBS of Kutcher in full-on Jobs mode – and truth be told, he’s actually pretty good. He really nails Jobs’ speech patterns and voice inflections.

In the clip below we have Kutcher as Jobs having an impassioned talk with a meek Steve Wozniak, played by Josh Gad.

In the clip, Jobs (played by Ashton Kutcher) is raving about the operating system that Apple co-founder Steve Wozniak (played by Josh Gad) created. While Jobs is certain that this will become a ubiquitous product for mass consumption, Wozniak needs convincing.

“Nobody wants to buy a computer,” says Wozniak.

“How does somebody know what they want if they’ve never even seen it?” Jobs replies.

JOBS will be making its movie premiere tomorrow at the Sundance Film Festival in Utah and will see a wider release come mid-April of this year.

via ET Online

Despite record breaking revenue and profits, Apple is taking a pounding on Wall Street today as shares of Apple are down over 10% and trading at $460 levels. I guess when you fail to hit the arbitrary guesstimates of Wall Street clowns, you take a financial beating even if you happen to deliver the most profitable quarter in the history of the world.

But that aside, Tim Cook earlier today sent out an email to Apple employees congratulating them on another stellar quarter (let’s just hope they’re not watching the share price) and inviting them to a Town Hall Q&A at 10 a.m. Pacific Time in 1 Infinite Loop.

9to5Mac obtained the email in full and it reads:

Team,

We’ve just reported another record setting quarter, thanks to everyone’s incredible hard work and focus. We sold over 75 million iOS devices in the holiday quarter alone, which is a testament to the strength of Apple’s innovation. Please join me for an employee communications meeting tomorrow at 10 a.m. Pacific time in the auditorium of De Anza 3. We’ve created a space on AppleWeb where you can submit your questions in advance, and we’ll do our best to answer as many of them as we can during the meeting. The meeting will be broadcast live throughout Cupertino and at many other Apple locations. Please check AppleWeb for details.

Tim

It’ll be interesting to see how Cook addresses Apple’s share price, if at all. Also interesting will be Cook’s answers regarding Apple’s upcoming product pipeline. While we shouldn’t expect any specific details, remember that Steve Jobs once used a Town Hall to chastise Google and promise Apple employees that the next-gen iPhone (which at the time was the not-yet-released iPhone 4) was going to be an A+ upgrade.

Apple issued its earnings for the quarter gone by and posted revenue of $54.4 billion and profits of $13.1 billion. That compares to revenue of $46.3 billion in the same quarter a year-ago and profits of $13.1 billion.

And keep in mind that last year’s quarter encompassed 14 weeks while Apple’s 2013 Q1 quarter encompassed just 13.

The Company sold a record 47.8 million iPhones in the quarter, compared to 37 million in the year-ago quarter. Apple also sold a record 22.9 million iPads during the quarter, compared to 15.4 million in the year-ago quarter. The Company sold 4.1 million Macs, compared to 5.2 million in the year-ago quarter. Apple sold 12.7 million iPods in the quarter, compared to 15.4 million in the year-ago quarter.

And yet shares of Apple are down to the $480 range.

via Apple

Samsung’s extremely hyped up Galaxy S4 with a full HD Super AMOLED display will reportedly ship with a mesmerizing new display sporting a resolution that will give Apple’s Retina Display a run for its money. According to reports from Asia, Samsung engineers have been working with Laser Induced Thermal Imaging (LITI) and have developed with a new display resolution scheme wherein they utilize a diamond shaped pixel layout that results in 400 ppi.

By way of contrast, the Retina Display on the iPhone 5 sports 326 pixels per inch.

via Phandroid

Once again, the long time champion of the Apple HDTV – Gene Muster – is up to his old tricks. In an interview with Bloomberg yesterday regarding Apple’s upcoming earnings conference call, Muster cited his old friends – checks in the supply chain – and said that Apple will be releasing a fully equipped HDTV by the end of 2013.

All told, Munster anticipates that Apple will have three revenue generators of note in 2013 – a Retina Display iPad Mini, a more economical iPhone, and a full fledged HDTV.

Munster specifically noted:

The core of the debate is an improved set-top box… a hockey puck that attaches to your TV, or an actual television. Based on our work, in part, with talking to suppliers in asia, to talking with people in the industry, we think its an actual television. Specifically, the basic thing it fixes is the remote control problem… We think fixing that is going to be an important part of it. And the second piece down the road is content, content on demand. That’s essentially what apple television is. 

Now before you get all excited, remember that Munster has been predicting an Apple HDTV for years now. Back in March 2012 he said that Apple would release an HDTV before 2013 and that it would be the “biggest thing in consumer electronics since the smartphone.”

via Bloomberg (audio)

Back in April, we reported on a civil lawsuit against Apple, Google, Intel, Pixar, Intuit, and Lucasfilm for all allegedly engaging in anti-poaching agreements where each of the above-listed companies agreed not to hire employees from any of the other companies.

In Silicon Valley, where engineering talent is king, keeping talented employees from jumping ship to rival firms is a top priority. The lawsuit, however, claims that in implementing these agreements, employees are often held hostage to the extent that their job opportunities may be limited as a result.

Despite efforts to have the case dismissed, US District Judge Lucy Koh ruled this past February that the case would continue pending an amended complaint from the plaintiffs. That complaint has since been amended and Koh has ruled that the case can proceed.

With trial set for June 2013, documents from the case are starting to leak out and we’re starting to see some really interesting to stuff.

Say, for instance, an email from Steve Jobs to former Palm CEO Ed Colligan where Jobs threatened Palm with legal action if they were to continue hiring Apple employees. Jobs of course wanted Palm to stop hiring Apple employees completely.

Colligan wrote an email to Jobs which read:

Your proposal that we agree that neither company will hire the other’s employees, regardless of the individual’s desires, is not only wrong, it is likely illegal.[…]Palm doesn’t target other companies-we look for the best people we can find. l’d hope the same could be said about Apple1s practices. However, during the last year or so, as Apple geared up to compete with Palm in the phone space, Apple hired at least 2% of Palm’s workforce. To put it in perspective, had Palm done the same, we’d have hired 300 folks from Apple. Instead, to my knowledge, we’ve hired just three.

Jobs fired back and said that Palm was actively recruiting Apple employees based on information from former Apple employees Jon Rubenstein and Fred Anderson.

Jobs also wrote:

[…] I’m sure you realize the asymmetry in the financial resources of our respective companies when you say: “We will both just end up paying a lot of lawyers a lot of money.”

Just for the record, when Siemens sold their handset business to BenQ they didn’t sell them their essential patents but rather just gave them a license. The patents they did sell to BenQ are not that great. We looked at them ourselves when they were for sale. I guess you guys felt differently and bought them. We are not concerned about them at all. My advice is to take a look at our patent portfolio before you make a final decision here.

In a declaration, Colligan noted that he nor Palm weren’t intimidated by Jobs’ veiled threats.

In any event, Apple CEO Tim Cook was recently ordered to sit for a 4-hour deposition as it relates to the ongoing suit.

via Reuters

One day ahead of Apple’s holiday earnings report, UBS analyst Steve Milunovich lowered his stock target for Apple shares from $700 down to $650.

The reason behind Milunovich’s lowered projection is a new survey from Consumer Intelligence Research Partners which found that consumers, by and large, are increasingly flocking towards cheaper iPhone models which yield lower gross margins for Apple.

Consequently, he adjusted his 2013 and 2014 earnings outlook for the company. For the fiscal 2013 year, he now anticipates earnings of $44.68 a share, down from an initial target of $47. And in 2014 he projects Apple to bring home earnings of $52.80 a share, down from an initial target of $55.85.

Milunovich still has a “Buy” rating on Apple’s shares, albeit with a lowered target of $650 per share.

Notably, the survey cited by Milunovich noted that demand for older iPhone models went up to 50% in the iPhone 5 cycle, compared to just 33% in the iPhone 4S cycle.

via Forbes

Depending on what you read, it may seem as if Apple as a company is being torn apart at the seams. No one’s buying iPhones anymore. iPhone 5 demand is waning. Samsung is the new king of the mountain. The company is doomed without Steve Jobs. Shares of Apple keep on plummeting.

Indeed, there are no shortage of shortsighted explanations as why analysts and many in the tech world have seemingly abruptly branded Apple the red headed step child not worthy of our attention and intrigue.

That’s all well and good, and truth be told, issues surrounding such things as iPhone 5 demand are worthy of discussion. Similarly, Apple’s next big thing, whatever it may be, is also worthy of dissection, and yes, skepticism.

That said, Apple as it stands now is sitting pretty. Despite its floundering share price – which may be the result of market manipulation – Apple is poised to release another blockbuster earnings release tomorrow. Indeed, earlier today Verizon noted that 63% of their smartphone activations for the quarter gone by were iPhones.

Apple needs to continue to grow, there’s no doubt about that. But the fact that some people are already saying the Apple party is over is a bit misguided.

As an example, Peter Cohan of Forbes recently penned a piece articulating why Tim Cook should be replaced with Jony Ive. How absurd is that?

But Cook has yet to demonstrate that he can create a big new revenue source. He has proven that he can oversee a botched new product introduction though — witness the six epic fails of Apple Maps. He can also fire people who take the blame for embarrassing him.

But can he do what Steve Jobs did so often — invent a new category-killing product? Since September 2012, Apple stock has lost $100 billion worth of its value, falling 29%. While nothing can make up for the loss that investors who bought at Apple’s peak price — perhaps investors should throw in the towel on Cook.

That seems to be what Apple’s board should do. But the problem is figuring out who could do a better job than Cook.

One person to consider is Jony Ive — Jobs’ product design partner. He was previously responsible for Apple hardware design and in December was promoted to be in charge of the look and feel of its software as well.

What’s funny is that Cohan quickly goes on to question whether or not Ive has the skills to manage Apple.

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