Apple releases Q4 2013 numbers, shows $7.5 billion profit, but relatively flat year-over-year sales

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Date: Tuesday, October 29th, 2013, 02:06
Category: Finance, News

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A US$7.5 billion quarter is nothing to sneeze at, but the sales were a bit flat compared to a year ago.

Per Macworld, Apple wrapped up its 2013 fiscal year Monday with a US$7.5 billion profit on US$37.5 billion in revenue, reporting accelerating growth buttressed by strong iPhone sales and growth in the Chinese market. Compared to the same quarter a year ago, iPhone sales were up, iPad sales were flat, and Mac sales were down.

Apple announced that its revenues in its fiscal fourth quarter (ending September 28) were up four percent compared to the same quarter in 2012. That was good enough to once again beat most analyst estimates. But year-over-year profits fell eight percent.

The iPhone continued to be the prime mover in Apple’s fiscal world. The company said it sold 33.8 million iPhones—a record for the September quarter—compared to 26.9 million in that quarter last year. iPad unit sales were relatively flat at 14.1 million, up 100,000 from the year-ago quarter. And once again, Mac unit sales were down year-over-year, from 4.9 million in last year’s fourth quarter to 4.6 million this year. (Mac unit sales were lower every quarter this year compared to the same quarter the year before.) In fact, revenues from all Apple product lines except for the iPhone and for iTunes, software, and services were down year-over-year.

The good quarterly sales for the iPhone were no doubt goosed by the introduction of the iPhone 5s and 5c, which famously sold nine million units all by themselves in their debut weekend. The new iPhones were on sale for the last nine days of the quarter. Overall, iPhone unit sales were up eight percent over the previous sequential quarter, and up 26 percent over the year-ago quarter.

For the overall fiscal year 2013, iPhone net sales rose 13 percent (from US$80.4 billion to US$91.3 billion). At the same time, iPhone unit sales climbed 20 percent (125 million to 150 million). Overall, iPhone contributed 53 percent of Apple’s revenues, up 51 percent in 2012 and 43 percent in 2011; iPhones contributed more than half of all Apple revenues in every quarter of 2013.

iPad sales for the year were a mixed bag: While unit sales were up robustly (climbing 21 percent, from 58.3 million tablets to 71 million), net sales rose more anemically, from US$30.9 billion to just under US$32 billion. That revenue reduction can likely be chalked up to the introduction of the lower-cost iPad mini last fall. (With the introduction of the new-model iPad Air and iPad mini, due to ship in November, Apple’s next quarter will likely be quite impressive on the iPad front.)

Mac sales actually declined for the fiscal year as a whole. Unit sales dropped 10 percent in 2013 compared to the 2012 fiscal year (from 18.1 million to 16.3 million); net sales fell 8 percent (from US$23.2 billion to US$21.4 billion). Remember that there were actually very few Mac product introductions in 2013, beyond some tweaks to the MacBook Air line. Yet, as Apple CFO Peter Oppenheimer pointed out in the conference-call with analysts that accompanied the release of the results, the Mac has increased its share of the PC market in 29 of the past 30 quarters. In a rapidly shrinking market, a slow loss can look like growth.

The iPod is still selling, but in such relatively insignificant quantities that it doesn’t even merit a mention in Apple’s earnings call. That could be because it’s contributing just 3 percent of Apple’s overall revenues these days.

Much of Apple’s business is seasonal, spurred on by fall product announcements and massive holiday-quarter sales. But there’s one part of Apple’s business that just keeps growing, quarter by quarter, seemingly impervious to seasonal fluctuations. It’s the iTunes/Software/Services revenue line, which has grown more or less continuously every quarter. For the most recent quarter, it generated 4.26 billion dollars, up from 3.5 billion in the year-ago quarter. iTunes/Software/Services revenue has doubled in size in the past three years, from US$2.15 billion in the first quarter of 2011.

Apple’s retail segment is most definitely a seasonal business, but it’s showing strong growth. In fiscal 2012 Apple’s retail outlets generated US$15 billion in revenue; in fiscal 2013 that number wasUS $20 billion.

During Monday’s conference call, one analyst commented that Apple was one of the very few companies he was tracking to show strong growth in China this past quarter. Indeed, while Apple’s revenue in the Americas was actually down from the previous sequential quarter, many other key Apple segments showed sequential growth, most notably China and Japan.

Stay tuned for additional details as they become available.

Apple releases MacBook Air Flash Storage Firmware Update 1.1 to check for faulty SSDs in mid-2012 MacBook Air models

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Date: Saturday, October 19th, 2013, 23:18
Category: MacBook Air, News, Software

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It’s kind of a weird firmware update they sent out, but it might be useful.

Per AppleInsider, Apple on Thursday released an update for its MacBook Air lineup meant to test the thin-and-light laptop’s solid-state drive for a data loss issue and, if no fault is found, install a fresh firmware version.

Apple’s MacBook Air Flash Storage Firmware Update 1.1, a 2.3 megabyte download, specifically targets mid-2012 models, a “small percentage” of which was found to have flash drives containing an unspecified issue that erases data. As noted below, if a problem is discovered and the drive cannot be update, Apple will replace the affected SSD at no cost.

From the release notes:
“Apple has discovered that a small percentage of flash storage drives in these MacBook Air models have an issue that may result in data loss. This update tests your drive and, in the majority of cases, installs new firmware to resolve the issue. If your drive cannot be updated, Apple will replace it, free of charge.”

It is unknown how widespread the issue may be, though a quick search of Apple’s Support Communities forum reveals multiple threads pertaining to SSD failures and data loss.

Stay tuned for additional details as they become available.

Rumor: Apple to introduce all-new 12-inch MacBook, iPad with higher resolution in 2014

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Date: Monday, October 14th, 2013, 05:49
Category: iPad, MacBook, MacBook Pro, Rumor

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It’s the rumor mill that keeps things interesting, especially when it comes down to new hardware.

Per AppleInsider, Apple has an all-new-design 12-inch MacBook with a high-resolution display, and a new 9.7-inch sixth-generation iPad with an even higher pixel count than the current Retina display, both in the works for 2014, according to well-connected insider Ming-Chi Kuo.

Kuo, an analyst with KGI Securities, revealed on Saturday that Apple has a number of major new products in the works for next year. Most notably, the new 12-inch MacBook will feature what he said is an “ultra-slim clamshell form factor.”

He expects this new model to offer a marriage between the portability of the 11-inch MacBook Air and the greater productivity offered by the 13-inch model. The display is said to be on par with Apple’s high-resolution MacBook Pro Retina display.

According to Kuo, the new MacBook is expected to “redefine laptop computing once again following the milestone created by the MacBook Air.”

Despite speculation that Apple could introduce a notebook powered by its custom A-series chips found in the iPhone and iPad, Kuo does not expect that the new 12-inch MacBook will run on an A-series chip. Instead, he has predicted that the new MacBook will feature a traditional Intel CPU.

The analyst also revealed that Apple is working on a new sixth-generation iPad with a higher pixel-per-inch count than the existing 9.7-inch iPad with Retina display. Contrary to recent rumors, he doesn’t expect Apple to launch a 12-inch iPad next year.

The sixth-generation iPad is expected to launch in late 2014, and will pack in as much as 40 percent more pixels than the current iPad’s Retina display.

Kuo has a strong track record of accurately revealing Apple’s future product plans. He was the first to reveal that Apple would retire its 17-inch MacBook Pro, he correctly forecast Apple’s entire fall 2012 product lineup, and his predictions for Apple’s 2013 launch schedule made in January have thus far proven accurate.

Stay tuned for additional details as they become available.

Microsoft CEO Steve Ballmer sees pay cut as result of poor Windows 8, Surface tablet marketplace performance

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Date: Monday, October 7th, 2013, 08:54
Category: News

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This is pretty much unparalleled.

Or at least it’s a decent case of schadenfreude.

Per CNET, Microsoft CEO Steve Ballmer saw his pay docked this year as a result of the disappointing performance of the company’s Windows Division over the past year.

The Microsoft head received US$1.26 million in compensation for fiscal 2013, with US$697,500 of that in base salary and US$550,000 in bonuses. Ballmer’s “incentive plan award” for 2013, which is calculated by the Microsoft board, was only 79 percent of the total he could have gotten, while in 2012, the Microsoft chief received 91 percent of his eligible incentive award.

The reason for the pay dock: the continuing poor sales of devices running Windows 8 the spectacular failure of the company’s Surface RT device. Microsoft’s latest operating system has underperformed since its launch, and the firm’s fiscal 2013 proxy statement points to those shortcomings.

The report cites “weakness in the consumer PC market,” a continuing issue for Microsoft as consumers increasingly turn away from traditional PC form factors in favor of smartphones and tablets running iOS or Android. Microsoft has sold more than 100 million Windows 8 licenses since the platform’s launch, but that is well below what the company had expected.

Adding to the Windows Division’s woes, the Surface RT device Microsoft rolled out last year met with middling reviews and virtually nonexistent consumer demand. Microsoft eventually wrote down US$900 million worth of unsold inventory. The company has since shown off new versions of its tablet devices, but the poor performance of the last generation still dragged on Ballmer’s compensation.

All told, the sales woes for the PC market and product launch costs for Windows 8 and Surface resulted in an 18 percent decline in Windows Division operating income.

The report is not entirely negative regarding Ballmer, as it notes that “the Committee and Board believe Mr. Ballmer is underpaid for his role and performance.” That feeling, though, was insufficient to earn the Microsoft chief his full incentive payment. A number of other Microsoft managers received 100 percent of their incentive payments, including COO Kevin Turner and CFO Amy Hood. The head of the Servers and Tools unit received 105 percent of his eligible award, as that division pulled in more than US$7 billion.

Ballmer shocked the tech world some weeks ago by announcing that he will leave Microsoft within the next year, and the company’s search for a successor is ongoing.

Apple confirms purchase of Cue, has yet to disclose final sale price

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Date: Friday, October 4th, 2013, 07:04
Category: Finance, News, Software

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It’s hard to say exactly WHAT Apple will do with Cue, but there’s some interesting possibilities.

Per AppleInsider and TechCrunch, Apple is said to have purchased Cue, a startup company behind a personal assistant app for iPhone which shut down just this week.

An anonymous source claimed on Thursday that Apple is buying Cue, which was formerly known as Greplin, for between US$50 million and US$60 million. The startup was a Y Combinator venture capital alumnus that reportedly obtained funding from both Sequoia Capital and Index Ventures.

The source shared that although Cue never disclosed their latest funding round, the company allegedly raised US$10 million from Index Ventures. The information provided could not be independently verified, and Apple declined to comment.

As of Thursday, Apple affirmed the acquisition, but as usual declined to offer specifics. Cue’s functionality was much like that of Google Now or Apple’s new iOS 7 contextual notifications, though it debuted before both of those services.

Cue announced to its users on Tuesday that the service is shutting down and is no longer available. Cue Premium users who bought a paid subscription, either through official iOS app or the company’s website, will receive a prorated refund.

“We apologize for any inconvenience this might cause you,” the company said. “It’s been an incredible journey that wouldn’t have been possible without your loyal support.”

Cue’s functionality was much like that of Google Now or Apple’s new iOS 7 contextual notifications, though it debuted before both of those services.

Originally founded as “Greplin”, the company would index content from social networking sites like Facebook and Twitter, as well as pulling data from Gmail. For example, a single search for “Jim” would surface contacts from the user’s LinkedIn account, emails from Gmail, and documents from Dropbox.

The company transitioned in 2012 to become Cue, and offered a personal assistant application for Apple’s iOS that would automatically turn data such as flight or restaurant reservations into a daily agenda. Cue would accomplish this by collating and indexing a user’s contacts, files, and emails, then display important and timely information. The company was founded by entrepreneurs Daniel Gross and Robby Walker.

Cue was formerly run by Greg McAdoo, who was also previously associated with Bump, a company acquired by Google earlier this year for at least US$30 million. McAdoo has since moved on to become a venture capitalist at Sequoia Capital.

There’s no word as to how Apple will incorporate Cue’s technologies, but it’s another part of the company’s arsenal for somewhere down the road.

Stay tuned for additional details as they become available.

Apple releases SMC firmware updates for 2012, 2013 notebooks

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Date: Wednesday, October 2nd, 2013, 07:35
Category: MacBook Air, MacBook Pro, News, Software

The firmware fixes for your recent Apple notebook arrived yesterday.

Per Macworld, Apple released SMC Updatesfor the MacBook Air, MacBook Pro, and Retina MacBook Pro.

The MacBook Air SMC Update v1.9 is available as a 1.09 megabyte download for MacBook Air notebooks released in 2012 and 2013. It fixes a “rare” problem where the battery stops working, the battery is no longer recognized, or the system hangs when the battery has a charge that’s less than one percent.

The MacBook Pro SMC Firmware Update 1.7 is available as a 1 megabyte download for non-Retina MacBook Pro laptops released since 2012. Apple says that the update fixes a “rare” problem where a battery that has over 1,000 charge cycles shuts down or stops working.

The MacBook Pro Retina SMC Update v1.1 is available as a 504 kilobyte download that fixes a few problems, including Power Nap bug fixes, and a “rare” issue with slow frame rates in games on the 15-inch model. This update is for Retina MacBook Pros only.

All of the updates can be obtained using the links above or by running Software Update.

If you’ve tried the firmware updates and have any feedback to offer, let us know in the comments.

iSuppli runs numbers, finds $199, $183 build costs for iPhone 5s, 5c handsets

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Date: Wednesday, September 25th, 2013, 07:47
Category: Hardware, iPhone, News

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If you’re wondering how much Apple’s new iPhone handsets cost to manufacture, they’ve got a number.

Per AllThingsD, a forthcoming IHS iSuppli report posits that Apple spends at least US$191 on components to build a 16GB model of the iPhone 5s and between US$167 and US$176 for a low-end iPhone 5c. Those prices are just a few dollars lower than what Apple spent in order to build the iPhone 5 according to iSuppli’s year-ago report on that device. The firm adds another US$8 in assembly costs for the iPhone 5s, while iPhone 5c assembly tacks on another US$7 to assemble, giving full construction estimates of US$199 for the 5s and between US$173 and US$183 for the 5c.

The iPhone 5, released in 2012, cost Apple about US$205 to produce and sold for between US$649 and US$849 off-contract. Apple saves about US$13 to produce the new high-end iPhone, even considering its beefed up processor and biometric sensor, and Apple sells it for the same price point.

Memory capacity plays a part in the price of an iPhone, with the jump from a 16GB module to a 64GB module adding US$19 to the component cost, plus another US$8 in assembly.

The display components are among the biggest cost contributors for the device, though, amounting to US$41 out of the component cost. IHS believes that Apple’s displays came from a number of vendors, including Sharp, Japan Display Inc., and LG Display.

The use of a polycarbonate shell for the iPhone 5c helps Apple drop the component cost of what is essentially an iPhone 5 even further. Whereas the iPhone 5 was machined from a single piece of aluminum in a costly process, Apple spends only US$173 to build a 16GB iPhone 5 model and US$183 to build the 64GB model.

IHS’ look at the new iPhones seems to agree with some observers’ opinion that the iPhone 5s, despite the addition of a number of technologies, is more of an incremental progression over its predecessor.

“I would say that they’re almost the same phone,” said IHS analyst Andrew Rassweiler, “except for that the 5s has the fingerprint sensor, the A7 processor and some newer memory chips that consume less power. Beyond that, they’re basically the same.”

The lower production cost per unit could work in Apple’s favor going forward. The Cupertino company recently revised its guidance for the September quarter after selling more than nine million new iPhone units in the launch weekend. Part of that guidance revision was to orient investors to look toward the upper range of its previous estimate, possibly due to the improved margins on its hot-selling new devices.

Stay tuned for additional details as they become available.

VMWare releases Fusion 6.0.1 update

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Date: Wednesday, September 25th, 2013, 07:32
Category: News, Software

Late Tuesday, virtualization softare maker VMWare released version 6.0.1 of its Fusion software for the Mac.

Similar to other virtualization software packages, VMWare allows users to run alternate operating systems such as Windows and Linux distributions on Intel-based Macs at native speeds. Other features, such as Unity, allow users to run and minimize Windows applications from the Mac OS X Dock.

The new version, a 244.6 megabyte download, can be found here and offers the following fixes and changes:
Addressed an issue that caused VMware Fusion 6 to crash when opening
- Improved support for Boot Camp on 2013 Macs.

- Improved detection of Windows 8.1 and Windows Server 2012 R2 media.

- Resolved an incompatibility with certain USB audio devices.

- Resolved an issue where Cubase could cause virtual machines to not power on.

- Addressed a graphics issue when switching between spaces in single window mode.

Fusion 6.0.1 retails for US$59.99 and requires an Intel-based Mac, 2 GB of RAM, Mac OS X 10.6.7 or later (10.7 recommended) and a copy of Windows (if you’ll be installing Windows).

If you’ve tried the new version and have any feedback to offer, please let us know in the comments.

Rumor: Apple to built biometric fingerprint sensor into more expensive iPhone 5S units

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Date: Tuesday, September 10th, 2013, 07:12
Category: Hardware, iPhone, Rumor

This is just about the last rumor before Apple hopefully unveils its long-awaited next-gen iPhone(s) today, so here we go.

Per AppleInsider and the Wall Street Journal, sources close to the story last week stated that fingerprint scanners will be built into the “more expensive of two iPhones” Apple plans to announce at a media event on Tuesday, seemingly confirming a long stream of rumors regarding the feature’s inclusion.

The publication speculates that Apple’s entry into the biometric security segment will spark interest from other handset makers to find similar solution. Another source claims at least one smartphone running Google’s Android will incorporate fingerprint security, though it is unknown if the device will be marketed in the U.S.

Apple is expected to field a fingerprint sensor built by AuthenTec, a biometric security firm the Cupertino company purchased for US$356 million in 2012, and plans to place the module under the iPhone’s home button. While other handsets and computers have tried to use fingerprinting methods in the past, Apple’s solution is thought to be much more intuitive and less prone to error.

Instead of swiping a finger across a small sensor strip, the AuthenTec package uses RF field attenuation to map a user’s print. This static means of capture would allow iPhone owners to authenticate by simply pressing the home button as they would when waking the phone from sleep.

Most recently, rumors of a “silver ring” surrounding the “iPhone 5S” home button surfaced, with some claiming the part was added as an aesthetic flourish. AppleInsider, however, reported that Apple’s patent applications suggest the component likely serves a functional purpose in the fingerprint sensor’s design.

All should be revealed at today’s event, which is scheduled to kick off at 10 a.m. Pacific, 1 p.m. Eastern.

Stay tuned for additional details as they become available.

Rumor: iPhone 5 “silver ring” around Home button could be part of fingerprint reader system

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Date: Monday, September 9th, 2013, 09:20
Category: Hardware, iPhone, Rumor

You know that rumored cool “silver ring” that’s been rumored for the upcoming iPhone 5S handset?

It might be part of a fingerprint sensor.

Per AppleInsider and Fox News’ This Week in Tech, reporter Clayton Morris proposed the ring is merely aesthetic, possibly added so users can easily distinguish an iPhone that has a built-in fingerprint sensor from those that do not.

However, given recent patent filings, the metallic ring may be a functional component necessary to the sensor’s operation.

There stands a variety of ways to accomplish biometric fingerprint readings, including the stereotypical “swiping” motion made famous in movies, as well as methods using optical, thermal, pressure and capacitive measurements, among others. AuthenTec, which Apple purchased in 2012 for US$356 million, uses a few different capture methods in its products, though the tech most likely to be used in the iPhone doesn’t involve swiping.

Typical methods of swipe authentication, usually direct capacitance, involve a thin “strip” sensor that captures and stitches together multiple images of a fingerprint as a user sweeps their finger across the sensing plate. With direct capacitance, an electrical field is applied to the sensor, which detects ridges and valleys — the skin structures that form fingerprint whorls — by measuring variations in capacitance at the sensor plate. Lower capacitance denotes skin that is farther from the sensor, or valleys, while higher capacitance is associated with ridges.

A more accurate and robust method of capture is called radio frequency field sensing, or AC capacitance. Like direct capacitive sensing, this technique also measures capacitance of a sort, but the similarities end there. Instead of measuring the effect on an electrical field, a low frequency RF signal is inserted into the finger and received by the sensor. In this case, RF signal strength captured by the pixel traces are measured and the corresponding data is translated to form an image of the print.

Benefits of RF field/AC capacitance sensing include static non-swipe readings, resistance to dust and capability for the sensor to operate even when covered by layers of protective material. These types of sensors are usually larger in size to allow for a wider capture area.

One patent, filed by AuthenTec cofounder Dale R. Setlak and subsequently assigned to Apple, goes into detail about a technology based on mechanics which are very similar to RF field sensing. The property also relates to the company’s “Smart Sensor” — also based on RF field sensing tech — which has been used successfully in at least one phone, the Japan-only Toshiba REGZA T-01D.

As noted in Setlak’s patent, along with other similar inventions credited to his name, electrodes need to be in contact with the finger to pump the drive signal that will ultimately be measured by pixel traces on the pixel plate.

In nearly all RF field sensors, a ring disposed around the sensor array acts as the electrode that drives the low frequency RF signal into the finger, which is attenuated by ridges and valleys in the print and finally captured by AC sensors as a high quality image.

As a type of bonus side effect, the tech can also be used as a form of input. By analyzing slight movements or changes in attenuation over time, the system can interpolate gesture behaviors like scrolling, cursor control and, when combined with a physical or virtual button, drag-and-drop operations.

Embedding this type of package in an iPhone’s home button is likely quite challenging as the part moves up and down constantly, which would put undue wear on the sensing module’s interconnects. It is possible that Apple has found a way to separate the finger ring from the sensor array in order to isolate the integral components from wear and tear. Such a system would also be less apt to fouling or misreadings due to debris.

As for utility, the sensor design wouldn’t force users to swipe the home button to authenticate, but would have the module read the print while a user presses the button to wake the phone from sleep. In other words, the security factor would take place seamlessly. No new gestures to learn, just enhanced functionality, transparent to the user.

It remains wholly unknown if Apple has incorporated this particular fingerprint technology into the next-gen iPhone, though circumstantial evidence seems to point in that very specific direction.

Further, a non-functional aesthetic bezel rimming the home button, which has seen nary a design tweak since the first iPhone launched in 2007, simply to demarcate new biometric capabilities seems to go against Apple’s design sensibilities. When the company introduced a front-facing camera with the iPhone 4, it buried the feature just above the earpiece. No special decorations or embellishments to note that the handset sported FaceTime capabilities.

Stay tuned for additional details as they become available and be sure to check in tomorrow for coverage of Apple’s September 10th iPhone press event.