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Updated: WWDC 2011 Keynote Still Not Announced

Charles Jade — Tue, 24 May 2011 14:57:41 +0000

Edit Note: We mistakenly referenced an old press release and thus, the following story has been changed to reflect the information for 2011. We regret the error.

Consider the hype machine up and running for WWDC 2011. ~~thanks to an official announcement highlighting Steve Jobs as the keynote speaker on June 7 at 10:00 AM PDT.~~ WWDC 2011 will cover five key technology tracks: Application Frameworks, Internet & Web, Graphics & Media, Developer Tools, and Core OS. ~~However, it’s Steve’s appearance that is the real news.~~

Jobs, who has been on medical leave since January but remains involved in strategic decisions at Apple, last made a public appearance at the iPad 2 launch event in March. That makes for an interesting comparison of event importance, especially considering that Jobs has skipped WWDC in the past. Last year, Jobs gave the keynote and launched the iPhone 4, as well as the iOS platform, which was previously named iPhone iOS. However, in 2009 Apple’s Phil Schiller did the keynote, introducing the iPhone 3GS, iPhone OS 3, demoing OS X 10.7, and showing off new MacBooks. Considering that this year’s WWDC will reportedly not have new hardware as the next generation iPhone is widely expected in the fall, what non-hardware announcement could be so important as to bring Steve Jobs to the keynote?

Conventional rumor wisdom suggests the event will feature a relaunch of MobileMe (possibly named iCloud) and that service may be free, or at least include free services. A paid service for online storage and streaming of music is also expected. Of course, OS X Lion will be shown, and almost certainly at least a preview of iOS 5. While these are all important products, do they warrant the presence of Steve Jobs? I’d argue that they don’t, and that could mean some other mysterious product will be announced, or perhaps Jobs is returning to Apple full-time. No matter the outcome, TAB will be reporting the event as it happens.

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Why It’s Now or Never for an iPhone Lite

Charles Jade — Thu, 19 May 2011 21:03:11 +0000

According to Gartner, mobile phone sales for the first quarter totaled some 428 million devices, with just 23 percent being smartphones. With so much room to grow, there would appear to be room for many competitors, but an expansive market is still a finite one. That’s why market share also matters.

Nokia sold 107 million freaking phones last quarter, as many as the next three competitors combined. Nonetheless, Nokia’s market share reached its lowest point since 1997. Likewise, Samsung, LG, and RIM also saw declines in market share year over year.

Only Apple, selling 16.9 million iPhones during the quarter and doubling sales year over year, saw its market share increase, from 2.3 to 3.9 percent. That made Apple the fourth largest purveyor of mobile phones. Considering the average selling price for an iPhone is about $650, that’s great news for Cupertino.

The bad news is Android. In terms of operating system market share trends, Google’s Android has won the platform war. For the first quarter of 2009, Android was powering just 1.6 percent of smartphones sold. Just three years later, Android is now running on more than a third of devices sold.

Against the Android onslaught, only iOS has manged to increase smartphone market share over the last three years, from 10.5 to 16.8 percent. Everyone else has seen their share plunge, with Symbian seeing the biggest drop, from 48 to 27 percent. But other competitors are no better off. RIM, which saw BlackBerry OS fall from 20 to 13 percent, is transitioning to its QNX operating system, but not until 2012. Microsoft, which launched Windows Phone last year, has thus far seen weak sales, with just 1.6 million devices in the first quarter. However, Gartner suggests that the transition by Nokia from Symbian to the Windows Phone operating will increase momentum for the platform.

While that’s possible, Gartner also asserts there is a shift towards an “ecosystem focus,” making users of a platform’s apps and services less likely to switch. That’s why Google and its free Android have such an advantage now, with only one real competitor, Apple, and only at the high end; but it doesn’t have to be this way.

Earlier this year, comments from Bernstein Research analyst Toni Sacconaghi in a meeting with Apple executives suggest that Apple may yet contest Google for Nokia’s market share. According to Bernstein, Apple COO Tim Cook said the company does not want its products to be “just for the rich,” and that Cook “appeared to reaffirm the notion that Apple is likely to develop lower priced offerings” in smartphones.

That sounds great, but simply offering an iPhone free with a contract, instead of for $99, won’t even slow Android down. We’re already seeing Android phones for a few hundred dollars without a contract. What Apple needs right now is a cheap iPhone. Really cheap, like about the price of an iPod touch, but more importantly it needs to be available without a data plan. While carriers would hate such a device, it’s hard to imagine them denying one access to their networks under regulator scrutiny. Those iPhone Lite users could access the Internet using Wi-Fi, and more importantly for Apple, the App Store, too.

“Ecosystem focus” is what matters as consumers abandon failed platforms like Symbian, Windows Mobile, and BlackBerry OS. Google knows that. Apple does too, but an iPhone Lite without contract or data plan for $299 would reinforce the point.

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The Apple Store at 10: Past, Present, and Future

Charles Jade — Thu, 19 May 2011 17:08:35 +0000

On May 19, 2001, the Apple Retail Store at Tysons Corner in Virginia opened its doors to the public and no small amount of criticism. From only two days later, the headline “Sorry, Steve: Here’s Why Apple Stores Won’t Work” is hilarious now, especially the prediction of it being “two years before they’re turning out the lights on a very painful and expensive mistake,” but at the time, it arguably made sense.

Past

In 2001, Apple Computer was struggling. The tech bust saw Mac sales plunging as much as 50 percent in one quarter in 2000. The company was fully engaged with launching OS X. If Apple didn’t have enough problems with its own business model, there was the cautionary tale of Gateway Country Stores to consider. In March, PC reseller Gateway closed 10 percent of its retail stores. If ever there was a time for Apple not to try retail, it was 2001. How fortunate for Apple and consumers the company did try it anyway.

The origin of the Apple Store begins with a full-sized mockup built in a warehouse. That idea came from Mickey Drexler, CEO of Gap, who had joined Apple’s board of directors in 1999. Not surprisingly, Apple and Gap stores share certain design similarities, but Apple Stores took retail minimalism to a new level, using just three materials. The materials were, as Apple SVP of Apple Retail Ron Johnson pointed out at the time, “glass, stainless steel, and wood.”

Much more importantly, the focus wasn’t on products to the exclusion of all else. Organizing products around categories was perceived as a mistake, or as Steve Jobs put it, “we were like, ‘Oh, God, we’re screwed!’ But because it was a mockup, Apple was able to redesign the store, emphasizing Mac usage and related interests, like digital photography. That focus on developing relationships with customers, especially when compared to competitors like Best Buy, is an underrated part of the Apple Store’s success, and what an astonishing success it has been.

Present

Ten years later, there are 324 Apple Stores: 233 in the U.S., and 91 international locations. In terms of foot traffic, Apple saw its billionth retail visitor last month, with 71 million in the last quarter alone, up 51 percent year over year. The increasing number of visitors can be ascribed not only to the popularity of Apple products, but location of stores. In the U.S., the goal has always been to have 85 percent of the population within driving distance of an Apple Store, which has often meaning paying a premium for retail space. Bu it’s been a strategy that’s paid off.

For fiscal year 2010, just under $10 billion in sales came from Apple Stores. Last quarter, revenue from Apple retail was $3.19 billion, up 90 percent year over year. That means Apple Stores accounted for 13 percent of the company’s revenue, an impressive figure that puts them far ahead of competitors like Best Buy when measured by metrics like sales per square foot.

Last quarter, Apple sold 797,000 Macs in Apple Stores, up 32 percent year over year. One of every five Macs sold now comes from an Apple Store, but even more important is who is buying them. Going back at least five years, about half of those buying Macs in Apple Stores are new to the platform. For the Mac, the Apple Store has contributed to the brand’s halo effect, boosting Macs sales by affinity just like the iPod, iPhone, and iPad. It’s also been instrumental to the iPad’s success, according to CEO Steve Jobs, and can’t be underestimated in terms of its contribution to how well the iPhone has done.

Looking at the numbers, it’s hard to argue the Apple Store has been anything but a huge success (and one made visually apparent in this infographic from last year), but perhaps not a flawless one. In 2004, Apple began experimenting with “mini-stores” in six locations. While it was rumored the concept would see expansion to as many as 50 locations, that never happened, likely for the obvious reason. The mini-stores are just too small to accommodate Apple Store traffic. The above mini-store in Palo Alto, Calif. is relocating to a much larger space in the same mall, and other mini-stores can be expected to follow.

Future

Besides the mini-store experiment, it’s hard to fault Apple’s execution of its retail strategy over the last ten years. But what about the future? Here are five predictions for the next ten years at the Apple Store.

Apple Store International. Apple expects to open around 40 stores in 2011, with only one in four of those located in the U.S. Expect that trend to accelerate, likely with a focus on China. Apple will soon be opening its fifth store in China, the same number as in Germany and just one less than France. A decade from now, China will quite possibly have more Apple Stores than any country except the U.S. and possibly the U.K., which currently has 29.
Personal Service. Last quarter, Apple set up more than one million purchased products for people in stores for free, a service competitors like Best Buy often charge for. While not all concierge services have succeeded (Personal Shopper being a noteworthy exception), expect more attempts to create and nurture relationships with customers over products and services.
No Software. With the launch of the Mac App Store, and now the rumored digital distribution of OS X Lion, it’s only a matter of time before boxed software disappears from the Apple Store. Signing up Microsoft for Mac Office and Adobe for its Creative Suite in the App Store will likely by the key to finally clearing that shelf space.
Desktop Deprecation. You don’t need to wait to 2021 to see this one coming true. Just visit any Apple Store today and count the desktops and laptops. It’s not hard to imagine the only desktop Macs on the sales floor being iMacs in just a few years.
Apple Television. Despite razor-thin margins, turning Apple’s tiny black box “hobby” into a flat screen with functionality and ease of use built has potential as another source of serious revenue, and there’s plenty of wall space in Apple Stores. However, first Apple must extend the App Store to the current Apple TV 2, and with an emphasis on gaming.

We’ll likely find out by Monday what the company’s own plans for Apple retail’s immediate future. Whatever those plans are, now and going forward, one thing is for certain: No one will be predicting failure.

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Apple Stores Reportedly Getting 10th Anniversary Makeover

Charles Jade — Wed, 18 May 2011 17:07:14 +0000

Blacked out Apple Store in Durham, NC, before the iPad 2 launch

Earlier this week, BGR cited a “solid” source concerning a possible “major product launch” in conjunction with the 10th anniversary of Apple retail. Details focused on mysterious “hardware” that had already been received, overnight shifts this weekend, black ~~helicopters~~ curtains, and the always insanely tight security. Of course, the longtime Appleologist would be rightly be skeptical at the company launching a new product on a Monday, unless the new product was the Apple Store itself.

Like pieces in a puzzle, additional rumors are putting together a picture of a new retail experience to start the second decade of the Apple Store. 9to5 Mac has coined it the “Apple Store 2.0 event,” citing a source that provided “a load” of tantalizing unconfirmed information.

9to5 Mac asserts the new retail experience has been in planning for a while, led by CEO Steve Jobs and VP of Retail Ron Johnson. That makes sense, as the original Apple Store design was heavily influenced by those two. Supposedly, Apple industrial design wizard Jonathan Ive has also been involved with the planned changes.

Those changes reportedly include more emphasis on personal services relating to new products. Last quarter, Apple set up more than a million products for customers for free. Supposedly, a dedicated part of the store will be used for personal setup going forward.

In terms of the shopping experience, signage next to Apple products like Macs will be replaced with iPads, presumably to provide information displays. There will also be new, “huge” displays in some stores, as well as new sound systems. A few stores currently have wall-screen projectors. There will also be a new Apple Store app, if that’s not being too redundant, that will help guide consumers through a local shopping experience.

AppleInsider, citing sources “familiar” with Apple retail, suggests Apple is preparing to have employees use iPads on the floor. It’s unknown whether the iPads would replace the current EasyPay terminals used with the iPod touch, or perhaps be complementary. Those iPads could be the hardware BGR referenced.

It’s looking more and more like these rumors will pan out. That means besides a press release on Monday, expect some kind of carefully staged unveiling at a flagship store with at least some Apple executives present, if not Steve Jobs himself.

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No LTE iPhone in 2011 Because There’s No LTE

Charles Jade — Wed, 18 May 2011 15:46:20 +0000

Verizon LTE Coverage

The on-again, mostly off-again rumor of an LTE iPhone is likely to remain off for the rest of 2011, at least according to the latest from DigiTimes. Citing “industry sources,” DigiTimes reports, “problems concerning yield rates of LTE chips offered by Qualcomm” is the latest issue with an LTE iPhone. Of course, the real problem remains a lack of coverage.

Despite Verizon’s attempt at obfuscation in the chart above, the only U.S. carrier with 4G service worth mentioning doesn’t have much to show for LTE so far. Only cities with the yellow circles actually have the service, the green stars being planned for later this year. Not surprisingly, that’s still better than AT&T, which claims “4G” service with its HSPA+ upgrade, with LTE having an “initial” launch sometime this year. That’s important to the prospects of an LTE iPhone, because Apple still sells about a third of its iPhones in the U.S., making it easily the single largest market.

Internationally, the situation is even less favorable for an LTE iPhone, though there is interest, notably in China. Last month, Bloomberg reported Chairman of China Mobile Wang Jianzhou said Steve Jobs had “expressed his interest in an LTE iPhone and is willing to start the development at an early date.” China Mobile is the world’s largest mobile phone provider, with more than 600 million subscribers. China Mobile is currently in the process of large-scale testing of TD-LTE networks in several large cities.

It’s also rumored China Mobile may be getting the next generation of iPhone for its TD-SCDMA network. That makes sense for Apple, as the company has explicitly stated China is a major focus for future growth. However, it’s unlikely LTE networks will reach maturity in China by even the end of 2012, unlike in the U.S. Since coverage should be quite good by 2012, we can very likely expect an LTE iPhone to debut in the U.S. next year. For that reason, the rumored iPhone 4S for this fall will be the first model I pass on. How about you?

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Google’s Victory is Not Apple’s Defeat

Charles Jade — Wed, 11 May 2011 19:30:34 +0000

In a few weeks at WWDC, Apple fans can expect an exciting Keynote. Likely topics include OS X Lion, iCloud, and iOS 5, as well as news on the state of Apple and its products and platforms. In the past, that has included data on the ever-increasing number of iOS devices sold and growth of the platform, and the same can be expected this year; just don’t expect any more comparisons between iOS and Android on activations.

Tuesday, at the Google I/O Developer Conference, among announcements about a unified Android OS and Google music storage, there was also new information on Android’s growth, including a new record of 400,000 activations of per day. If past pronouncements apply, those activations only include devices that use Google services, with the vast majority being smartphones, not that it matters no matter how the numbers are counted. Android has passed iOS( not just the iPhone), in terms of sheer volume, for good.

Apple reported approximately 26 million iOS devices sold for the quarter ending in March. That number includes 16.2 million iPhones and 4.7 million iPads, and an estimated 5 million iPod touch devices. The latter is estimated because Apple does not break out iPods by model, but the company has repeatedly stated more than half of iPod sales are the iPod touch. In terms of activations, that works out to around 289,000 activations per day; far below Google’s latest numbers.

Of course, iPad supplies were constrained during the last quarter, but selling an iPad to everyone that wants one won’t change the numbers, either. By the end of June, Google should easily be activating 450,000 devices per day. Even assuming Apple sells 9 million iPads, 20 million iPhones, and 6 million iPod touches, that works out to 35 million iOS devices, or only 389,000 activations per day.

It’s over; Google and Android have won, at least in market share. But that’s not the whole story, at least not going by Google’s Android numbers from yesterday.

100 million activated Android devices
200,000 free and paid applications available in Android Market
4.5 billion applications installed from Android Market
400,000 new Android devices activated every day

To put those numbers in perspective, it took Apple three years to sell 100 million iOS devices, compared to 2.5 years for Google and Android. It took Apple 22 months to reach 200,000 apps and 4.5 billion downloads, 30 months for Google to do the same. For whatever reason, the Android Market has been slow to launch internationally, in about half as many countries as Apple, but both companies cover the major markets. More importantly, what’s missing from Android’s bullet list of accomplishments is revenue data.

According to IHS, app revenue for 2010 clearly favors Apple’s App Store by an enormous margin, and apparently there are no shocking numbers from Google to suggest that’s changed much yet. However, even should the Android Market see revenue growth in line with market share, it won’t matter to those using iOS devices. As was reported last month, Apple has paid out $2 billion in revenue to developers, eight months after it paid out the first billion. It’s hard to argue against the iOS platform being self-sustaining at this point, and that’s what should matter to developers and consumers. Unlike during the 90s with the Mac, iOS users won’t have to worry about finding apps and services in the future, no matter how many activations Android reaches per day.

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Quick Fix: MobileMe Gallery Video on Apple TV

Charles Jade — Tue, 10 May 2011 21:32:28 +0000

Use just a MobileMe name to add an account to the Apple TV

For Apple TV owners that also subscribe to MobileMe, Gallery is an underrated feature. By uploading pictures and video on the go, there’s no need to sync an iPhone or camera with iPhoto at home before enjoying content on a television. MobileMe Gallery and the Apple TV just work, at least most of the time.

After upgrading my broadband service, I had to reset the Apple TV to get it on the network, after which I logged on to MobileMe without issue. After looking at some pictures from a day trip, I tried viewing some video. Instead of a home movie, I saw a dialog box that said, “an error occurred loading this content. Try again later.” I did, many times, always getting the same error. While it’s important to remember that video for the Apple TV must be H.264 or MPEG-4, this was video recorded with an iPhone and uploaded to MobileMe.

At first, I thought the problem might be with MobileMe, but it turned out to be user error, though I think Apple shares a little blame. When adding the MobileMe account to the Apple TV, I inadvertently used my MobileMe e-mail address, not just the user name. Nonetheless, it was accepted, and Gallery photos worked fine, but not video. Removing and re-adding the account with just the user name solved this odd problem, and should work for anyone else experiencing the same curious issue.

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iPhone Holding on Against Android as RIM Collapses

Charles Jade — Mon, 09 May 2011 16:00:45 +0000

According to analytics firm comScore , smartphone OS market share continues trending Google’s way in the U.S. Counting some 75 million mobile subscribers for the three-month rolling average ending in March, Android climbed to 34.7 percent, up from 28.7. That six-percentage-point increase is less than Android’s growth in the previous quarter, but still big. Apple saw a little growth, from 25 to 25.5 percent, which was about double that of the previous three-month period. The rise can possibly be attributed to some 2.2 million Verizon iPhones sold during the quarter, though the collapse of RIM is probably having a larger impact.

The BlackBerry maker saw its share decline to 27.1 percent, down 4.5 percent from three months ago. To put that in perspective, a year ago RIM accounted for about 40 percent of smartphone OS market share in the U.S. It’s hard to imagine anything worse than that, except for Microsoft and Palm, both of which have seen their market share halved from a year ago. While HP remains flat at 2.8 percent of the market, Microsoft dipped from 7.7 to 7.5 percent, suggesting Windows Phone 7 has failed to stop the company’s decline.

What this means for Apple is that, simply by not failing like its competitors, and even without a new iPhone in June, Apple will pass RIM in terms of U.S. smartphone OS market share this summer. (It already did so in the global market.) Not surprisingly, the same can be said for handset share, too.

Apple is closing on RIM in the race among handset OEMs, with the iPhone climbing from 6.8 percent to 7.9 percent in the last three months. Currently fourth in the U.S., Apple will pass RIM in the next three months, as the Canadian company saw its own share of handsets decline from 8.5 to 8.4 percent. In third, Motorola dropped nearly a full percentage point, down to 15.8 percent. If current trends continue — and there’s nothing to suggest they won’t — Apple could be the third-largest manufacturer of phones in the U.S. by this time next year.

Going back to Android’s dominance in smartphone operating systems, it should be noted that including tablets like the iPad and handhelds like the iPod touch, the numbers change drastically. According to comScore, as of just last month, the combined installed base of iOS users was some 59 percent greater than that of Android users. That’s important because, to date, Android tablets have failed to significantly impact the tablet market. Currently, there is no competition for the iPod touch, though Samsung is launching the Galaxy Player against Apple’s media player supermajority. Good luck with that.

The takeaway here is that accounting for mobile operating systems across devices, instead of just on smartphones, Google’s chances of achieving the kind of dominance in mobile computing that Microsoft did with traditional computers is much less likely. That means the iOS platform won’t become a niche market the way the Mac did in the late ’90s, and that’s what really matters for Apple’s customers.

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ARM-Based Macs: A Real Possibility?

Charles Jade — Fri, 06 May 2011 18:48:36 +0000

Could this be a WWDC Keynote sent from 2012?

Tech blog SemiAccurate sped up a slow news Friday with a so-crazy-it-might-be-true rumor that Apple will be switching CPU architecture. Again. According to SemiAccurate “moles,” Apple is planning to transition its laptops to ARM architecture in “2-3 years,” and “presumably” desktops, too, though without a time frame. The plan is a “done deal” according to the site.

This seems hard to believe. While it’s arguable the Apple A5, derived from the ARM Cortex-A9, can keep up with Intel’s Atom in a netbook, there’s simply no comparison between ARM chips and the Intel Core CPUs used in Mac laptops. Of course, in 2013 it wouldn’t be the A5 in a hypothetical ARM-based MacBook Air, but a CPU derived from the ARM Cortex-A15. Based on a 32nm fabrication process, with up to 8 cores and clock speeds up to 2.5 GHz, as well features like virtualization and access to the 64-bit ARM instruction set, the A15 certainly packs enough keywords to qualify for a Keynote presentation on paper. Unfortunately, the most salient benefit of ARM architecture, power efficiency, will diminish as computing potential increases. Is the diminishing difference worth another major architectural transition for Apple, one that would undoubtedly require a vast amount of engineering effort?

Even should the computing potential of the A15 be sufficient for mainstream use in 2013, software written for current x86 Macs would either have to be rewritten or run in some kind of emulation mode. It’s hard to imagine Rosetta 2 running x86 applications on ARM being the engineering miracle the original was when running PPC applications on Intel Macs. That would leave Mac users waiting months, possibly years, for ARM versions of applications like Office for Mac or Adobe Photoshop. Considering the incredible success Macs have enjoyed since transitioning from PPC to x86 architecture, this rumor seems ridiculous.

And yet one can’t discount the possibility of ARM extending beyond mobile; certainly Microsoft isn’t. As much as Apple has grown in traditional computing over the last five years, x86 PCs running Microsoft Windows sell about 19 times as many computers in aggregate. That’s why Microsoft announcing Windows 8 will be available for ARM-based systems matters. If Microsoft sees value in the platform, then Apple, with its growing mobile focus, no doubt does as well.

Also important, if true, is the rumor reported by EE Times that Intel is seeking to become a foundry for Apple fabricating ARM chips. One could argue that Intel doesn’t care what kind of chips it sells Apple, as long as they come from Intel.

Regarding the problem of applications, while current Mac apps wouldn’t run on an ARM MacBook, it could open the library of apps that run on the iPhone and iPad. Imagine a touch-screen MacBook running Angry Birds. Considering iOS devices outsell Macs by a ratio of six to one and growing, there’s a good argument that iOS developers could quickly take up the app slack for ARM-based Macs. Apple is reportedly making the Mac App Store the “preferred” method of distribution for OS X software beginning with Lion, so that could give it greater control when it comes to handling a chip architecture transition with developers.

Finally, there’s something to be said for Apple’s desire to control its own destiny. It banned Flash from iOS, for example. Rants about security and power management aside, Apple doesn’t want Adobe controlling any part of their mobile operating system. Considering Apple’s painful CPU history with Motorola (now Freescale) and IBM, and most recently the GPU spat between Intel and Nvidia impacting Macs, underestimating Apple’s corporate obsession with controlling the “whole widget” would be a mistake. A transition to Apple CPUs would give the company much more control over its own product, in the same way the A4 and A5 chips have done for its mobile devices.

SemiAccurate has proven itself fairly reliable with similar reports in the past, including the prediction that Nvidia would eventually disappear from Mac computers, and that Light Peak would make its way to Apple products. TUAW points out the original story on SemiAccurate is tagged “humor,” but a quick look at how that tag is used in other stories doesn’t indicate that site isn’t serious about the claims made regarding Apple’s intended use of ARM. We contacted Apple for comment, but have yet to receive a response back.

What do you think? Is this latest rumor crazy or conceivable?

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Report: Imminent iOS 4.3.3 Update to Fix “Locationgate” Bug

Charles Jade — Mon, 02 May 2011 18:01:07 +0000

According to Boy Genius Report, Apple is preparing to release iOS 4.3.3 “within the next two weeks, possibly sooner.” The purported update will specifically address the iPhone “tracking” issue that has mesmerized the mainstream media, specifically:

The location database will no longer be backed up to iTunes.
The location database cache, and thus the number of days logged, will be reduced.
When Locations Services are off, the database will be deleted.

Additionally, battery life improvements are claimed, as well as “iPod bug fixes.” To BGR’s credit, they correctly predicted the release of iOS 4.3.2 within a two-week time frame last month, but the imminent release of iOS 4.3.3 should surprise no one. Last week, Apple took the extraordinary steps of issuing a press release stating a fix was on the way, and making company executives, including CEO Steve Jobs available for an interview.

Unfortunately, an issue impacting a far smaller number of users is not mentioned in the rumored update. A minority of Verizon iPad 2s continue to have connectivity issues with Verizon’s network. The most benign of problems results in Verizon iPads requiring data roaming to be turned on to acquire a 3G connection. Supposedly, iOS 4.3.2 was supposed to fix this, but iPad owners continue to report connectivity-related issues in Apple Community discussions. If you have a Verizon iPad 2 with problems, restrained expectations for iOS 4.3.3 are probably a good idea.

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Snow Leopard Goes Out With a Market Share Roar

Charles Jade — Mon, 02 May 2011 16:22:49 +0000

Come WWDC in June, we’ll likely see OS X Lion changing status from preview to official public release. That makes May a good time to look at the April report on OS market share from web-analytics firm Net Applications for some perspective on Snow Leopard.

According to Net Applications, all versions of OS X combined reached a new high in OS market share in April, with 5.4 percent worldwide as determined by web browsing usage. The previous record was 5.33 percent, set in March 2010. Following that high, OS X declined to 4.98 percent last October before rebounding. Perhaps not coincidentally, that rebound coincided with the release of the redesigned MacBook Air, followed by new MacBook Pros this February. This isn’t to say new Mac portables were the only drivers of Snow Leopard growth. Over the course of its lifespan, Snow Leopard has seen plenty of previous Mac users upgrading, too.

Snow Leopard was released on August 28, 2009, for as little as $29 for a single-user license. Within a month, it accounted for 17 percent of the OS X market, despite being available only for Intel-based Macs. Undoubtedly, the low cost of Snow Leopard spurred adoption, but was arguably not the only reason. Leopard peaked at 71 percent of the OS X market in July 2009, before being superseded by Snow Leopard, which now accounts for 68 percent of the OS X over a similar time frame. It appears new versions of OS X do quite well whatever the price. The downside of that success, at least for users, is a likely return to a higher price. How high, and the method of distribution, may be intertwined.

Although the developer preview of Lion has been distributed through the App Store, expecting consumers to download nearly four gigabytes of data seems unreasonable, at least as the exclusive method. Other Apple software — like iWork, iLife, and Aperture — are all available at the App Store and on disc, and there’s also been an Amazon placeholder sighting for Lion on DVD. Two methods of distribution seem possible, but perhaps not three. The redesigned MacBook Air shipped with system software on a USB drive, but the future is clearly download only. Why introduce another retail distribution method now, especially considering no USB version of Snow Leopard was offered to owners of the previous generation of the MacBook Air?

More salient, at least to anyone with more than one Mac, would be the licensing terms for downloading OS X. From the Mac App Store Terms and Conditions:

(i) You may download and use an application from the Mac App Store (“Mac App Store Product”) for personal, non-commercial use on any Apple-branded products running Mac OS X (“Mac Computer”) that you own or control.

That would effectively render the family pack version of OS X, which has always been a great deal, obsolete. The downside would be consumers with only a single Mac would be paying substantially more (if you consider cost per install) through the Mac App Store, no matter what the cost of Lion is. We’ll find out what the next version of OS X costs next month at WWDC, but how much would Lion be worth to you?

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Apple Looking to Help iOS Users Get Fit?

Charles Jade — Fri, 29 Apr 2011 15:35:22 +0000

Thursday, Apple filed a patent application for “personalized fitness services” on a handheld device, focusing on exercise in a gym setting. Features would include how-to videos for equipment, as well as the ability to check on classes and possibly schedule training sessions.

Social networking would also play a role in the app, with possible features including finding a “workout buddy,” as well as leaderboards. Users could also be challenged to “beat” workouts by others through notifications. Performance would also be measured, and results delivered as post-workout critiques, which would be part of the “motivating” aspect of the app. If simple self-improvement was insufficient, the patent application also includes the idea of rewards outside the app in the form of coupons or gifts.

While this sounds like an interesting idea, the obvious drawback is that necessary equipment would include a compatible gym to get the most out of the app. Considering that to date Apple has published just ten apps for the iPhone and iPod touch, a fitness app requiring a special gym seems an odd choice for the 11th.

However, as can be seen in the diagram, Nike is mentioned, a fitness company that Apple has had a product partnership with since 2006. That relationship lends credence to this patent application being more than just a vague idea. Would you be interested in such an app, even if it meant finding and belonging to a gym that supported it?

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Does Apple Even Have a Cloud Strategy?

Charles Jade — Wed, 27 Apr 2011 18:42:37 +0000

Apple’s massive data center in North Carolina has been in the news of late, prompting more wide-eyed speculation among some analysts about its ultimate purpose. Possibilities include a music subscription service like Rhapsody, a video subscription service like Netflix, and free MobileMe. However, the most likely service, at least initially, is a digital locker for iTunes. Music storage for a fee would be the latest online service for Apple, the first of which was launched more than a decade ago:

2000: iTools offered email, web pages, and online storage.
2002: .Mac adds more features, including online backup for $99 a year.
2006: Apple launches blogging app iWeb, closely tied to .Mac service.
2008: MobileMe introduces “Exchange for the rest of us:” push services for mail, contacts, appointments.
2009: iWork.com beta ties online services to Apple’s office suite.
2010: Ping social networking and music recommendation service added to iTunes.
2011: iTunes storage locker expected for a yearly fee.

While that history looks impressive, the reality for Apple’s online efforts has been markedly different. Apple’s problems started in 2002, when the company began charging $99 a year for online services, going from more than two million iTool users to 100,000 .Mac subscribers in about two months. That was the last we heard about paid subscriber numbers from Apple. In sharp contrast, Google’s Gmail, which launched in 2004 with email and storage for free, now has about 200 million users.

Even more successful than Gmail is Facebook, which now has more than 600 million users for its social networking service. Apple launched Ping, the music-focused social networking service in iTunes, last year. Although there are more than 200 million iTunes Store accounts, Ping’s user experience leaves much to be desired and has done little for Apple or Ping’s users. Hardly worth mentioning is iWeb, Apple’s apparently short-lived blogging application which wasn’t updated in iLife ’11, and one can presume is on its way to becoming obsolete.

As for MobileMe itself, it remains a highly limited service centered around email and personal information management. It works well enough, at least in 2011. When MobileMe launched in 2008, push services failed so badly Steve Jobs apologized, and MobileMe users were given a 60-day extension on their subscriptions. Sadly, iDisk, Apple’s online storage, never received similar corrective attention and remains a tortuously slow service to use, unlike the marvelous non-Apple Dropbox. MobileMe also offers photo sharing via Gallery, and it works well enough, but it’s nothing special. Whatever happened to the iWork.com “beta” launched in 2009? Still in beta. Apple’s online services are, at best, uneven; at worst, missing.

What would a comprehensive strategy to turn Apple’s online services around include? The first step is to fix what doesn’t work well; the second might be to generate interest and usage by offering limited free services. Besides current offerings, MobileMe badly needs document and data syncing. How frustrating is it to sync iWork documents on a Mac and iPad? Somehow, iBooks manages to synchronize across devices wirelessly. Wouldn’t it be great if Game Center synced your progress across games played on iOS devices, too? These are the kind of free services that cost little and generate interest, and interest is platform lock-in.

The next step is to add expanded services, such as an iTunes storage locker, though arguably that may not be that desirable. Video streaming certainly is more so, as Netflix has demonstrated. How about shared photo libraries in the form of an iPhoto Cloud? Cloud-based Time Machine certainly would seem to be another obvious choice. There are many possibilities, but they need to be offered as part of a package built upon a free set of limited but relevant services. To summarize, a cloud strategy for Apple in 2011 will hopefully look something like this:

Fix what doesn’t work, like iDisk.
Include free services, including data and document synchronization, as well as basic email.
Offer expanded services like music storage, individually and as a part of a package.

If, instead, Apple launches yet another isolated online service for profit, this time music storage, well, it will no doubt make another great bullet point in Apple’s list of less-than-scintillating online services.

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Apple Conference Call: Don’t Expect Another iPad in 2011

Charles Jade — Wed, 20 Apr 2011 23:04:52 +0000

After today’s earning report for the second fiscal quarter, Apple’s conference call was something of a dénouement. In a relatively dry call without the presence of Steve Jobs, the main topic of interest was the iPad; the questions focused on supply problems, the answers avoided them. Despite selling just 4.69 million iPads during the quarter, definitely on the lower end of estimates, Apple executives were “thrilled” by the reception of the iPad 2, though admitted they were facing the “mother of all backlogs.”

When pressed as to why Apple wasn’t prepared to produce more iPad 2s for launch when during the holiday quarter Apple sold more than 7 million, the response was that product “transitions are never simple.” Nonetheless, Apple executives are proud of the “progress on production,” asserting that it was better than with the original iPad. To that end, the company plans on expanding the number of countries next week, and add more during the quarter. If that seems contradictory, well, it is, and no time frame was given on when supply and demand equilibrium would be reached, except that Apple executives are “confident we’ll produce a very large number” this quarter.

Those like myself thinking Apple might add another iPad model this year, perhaps even an iPad 3, can forget it. If the product transition is this difficult for the iPad, it’s nearly impossible to imagine Apple attempting another transition during the holiday quarter.

Besides the iPad, there were only a few points of interest during the call, including:

Apple Retail will have its tenth anniversary and one billionth visitor next month, and, as has been the case for a while now, “about half” of people buying Macs in stores are new to the platform.
On Steve Jobs, executives see him on a regular basis. He’s involved in major strategic decisions, and wants to be back as soon as he can.
China now accounts for a tenth of Apple revenue.
Demand for the MacBook Air remains strong, while consumer response to the new MacBook Pros has been “excellent,” and the Mac has outgrown the PC market for 20 straight quarters.
iPhone growth is “off the charts” in two places, the U.S. and China, up 155 percent and 250 percent, respectively.
Don’t expect an LTE iPhone anytime soon, as Apple is “not going to make” the kind of design compromises the first generation chipsets require.
The iPod touch continues to account for more than half of iPod sales.
On the recent patent lawsuit with Samsung, Samsung “crossed the line,” so Apple went to the courts after trying to resolve the issue.

Finally, when pressed on the analogy of the Android being like Windows PCs in the 90′s and the iPhone the Mac during the same period, Apple executives sidestepped. Citing the iOS platform as a whole, app counts, the value of and integrated versus “fragmented” platform, Apple executives “feel good about where we are.”

That answer was typical of the call, which was short on real information, but short on genuinely interesting questions, too. Nary a white iPhone or Apple TV question was heard, despite recent talk swirling around both. Hopefully, Steve Jobs will be back for some trash talking of the PlayBook come July.

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Apple Q2 2011: Macs and iPhone Up, Apple ‘Also Sold’ 4.69 Million iPads

Charles Jade — Wed, 20 Apr 2011 21:13:11 +0000

Today, Apple reported earnings for the second fiscal quarter, including revenue of $24.67 billion and a net quarterly profit of $5.99 billion, or $6.40 earnings per share. Revenue nearly doubled from a year ago, blowing past Apple’s low-ball guidance of $22 billion, as well as Wall Street expectations of $23 billion and change. Although Apple CEO Steve Jobs remains on medical leave, he was rightly feeling pretty good about the numbers in the press release announcing the results:

With quarterly revenue growth of 83 percent and profit growth of 95 percent, we’re firing on all cylinders. We will continue to innovate on all fronts throughout the remainder of the year.

However, there was nothing “magical” about the iPad, and the “also sold” in Apple’s press release really tells it all. Whether it’s constrained supplies or lack of interest, the number for iPads may result in recalculations of estimates of upward of 30 million iPads for 2011. However, the iPad is only one of four major product segments, and the news is much better for the Mac.

Mac sales increased 28 percent from last year, with 3.76 million sold, sharply contrasting with aggregate PC sales. Both IDC and Gartner have reported single-digit declines for PCs, and arguably those declines are at least partially attributable to the iPad. That cannibalization of traditional computer sales has not impacted the Mac. In fact, we are likely seeing the third-generation of ”halo effect,” where first the iPod, then the iPhone, and now the iPad increase Mac sales by affection.

As to which Macs are selling, the refreshed MacBook Pros, likely combined with continued strong sales of the MacBook Air, pushed laptop sales to new highs. Apple sold 2.75 million laptops, compared to 1.01 million desktops, with laptops accounting for 73 percent of Mac sales for the quarter. By the end of the calendar year, it’s likely three out of four Macs sold will be portables. The inexorable trend towards niche status for desktops continues.

Another inescapable conclusion seems to await the iPod: stagnation. Apple sold 9.01 million iPods in the quarter, compared to 10.89 million last year, down 17 percent. Overall, iPod sales have been down or flat since 2008, as the dedicated media player market reached saturation. However, even as overall sales went flat, the iPod touch continues to see growth. Apple has reported the iPod touch now accounts for about half of iPods sold, which is a big boost for the iOS platform.

Another boost to the iOS platform, the Verizon iPhone helped to propel sales to a new record of 18.65 million sold. That’s more than double the number sold for the same period last year, and also beats the previous record set during the holiday quarter of 2010. While we don’t know the exact number of Verizon iPhones sold yet, we do know AT&T sold 3.6 million. Expect Verizon iPhone sales to meet or exceed that.

As for the iPad, the best-case scenario is that supply constraints and damage to parts production from the earthquake in Japan impeded Apple’s ability to get devices into consumer hands, as Apple sold 4.69 million units for the quarter. That compares poorly to over 7 million units last quarter, which admittedly was the holiday quarter. However, that number barely exceeds the quarter prior to that, which was 4.18 million. Apple will need to do some explaining at the conference call on those iPad numbers.

Hopefully, that will be done by Steve Jobs. It’s hard to imagine Steve Jobs not showing up to trash talk the PlayBook at today’s conference call. Jobs was absent for the call in January, but made the iPad 2 event in March. Whether or not Steve Jobs is at the today’s call, TheAppleBlog will be providing highlights immediately following.

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Apple Second Quarter Earnings Preview

Charles Jade — Fri, 15 Apr 2011 14:00:05 +0000

On Wednesday, Apple will announce results for the second quater of the fiscal year, and expectations are looking large. Guidance is for $22 billion in revenue, $4.90 earnings per share, while conventional analyst wisdom calls for $23 billion in revenue, $5.30 EPS. Apple will likely blow past both, which is great news for shareholders, but the rest of us are likely more interested in Apple products. At the conference call, and in the numbers, there may be a few hints about Apple’s mysterious “product pipeline.”

Mac sales are expected to be between 3.5 and 4 million units, up from 2.9 million last year. More interesting, IDC is reporting ten percent growth year-over-year for Mac sales in the U.S., and while Toshiba also saw growth, HP, Dell, and Acer saw declines of 2.4, 11.8, and a CEO-firing 42.1 percent, respectively. According to IDC, “media tablets” like the iPad could be one factor in those declines. However, the reverse appears to be true for Apple, with the iPad having yet another “halo effect” on Mac sales. This ensures the Mac will remain a major focus for Apple, good news for Mac users, but which Macs will receive Apple’s attention in the future?

While Apple doesn’t break out numbers on individuals models, 70 percent of Macs sold last quarter were laptops, with the redesigned MacBook Air likely leading sales. Analysts expect the trend towards portability to continue, even though desktop sales are actually increasing. Nonetheless, the continued decline in market share likely means less focus on Mac Pros, Mac minis, and even the iMac. The Xserve, of course, is no longer part of the picture at all, having been discontinued.

Also in decline, or at the least stagnating, are iPod sales, likely to be between 9.5 and 10 million units, compared to 10.9 million last year. Sales of iPods have been slowly declining since 2008, but that decline is tempered by the increased average selling price of iPod units. That is attributed to the iPod touch, which accounted for half of all iPod sales in the holiday quarter last year. That’s great for the iOS platform, far more important to the future than Apple controlling 70 percent of the declining market for media players. The interesting question will be whether, despite alleged e-mails from Steve Jobs to the contrary, the iPod classic will be phased out. For that matter, merging the iPod nano and shuffle into a single device starting at $99 doesn’t seem like an impossibility, either.

For the iPhone, the opposite might happen with the introduction of news models and price points. Sales for last quarter will likely be between 16 and 20 million units, but it’s hard to be too optimistic because of the uncertainty over Verizon iPhone sales. Apple, never shy about being self congratulatory, has been silent on sales, though Verizon has said the iPhone 4 was the “largest retail launch” in company history. But even if Apple sold 20 million iPhones last quarter, that would be ten million fewer than Google is reporting for Android activations. Those numbers are likely the reason Tim Cook was hinting about the iPhone being “not just for the rich” earlier this year. A low-priced, current generation of iPhone would definitely help keep the iPhone from being relegated to niche status in an Android world.

As for Android doing to the iPad what was done to the iPhone, it hasn’t happened so far, though estimates on iPad sales are all over the place, anywhere between 5 and 10 million. Arguably, if iPad sales are near the holiday quarter’s 7.3 million, that will put the iPad on track for 30 to 35 million units sold this calendar year. That kind of success took years for both the iPod and iPhone to achieve, but let’s hope Apple isn’t getting fat on margins and lazy. Competitors like Samsung and beleaguered Acer are finally bringing tablets to market with lower price points than the iPad. Price will be the challenge for the iPad in the second half of the year, a challenged that could be met with another iPad 2.

In summary, my predictions for next week are:

Revenue, EPS: $24.9 billion, $5.05
Macs: 3.75 million
iPods: 9.95 million
iPhones: 17.55 million
iPads: 7.05 million

What are your estimates for Q2 2011?

And don’t forget TheAppleBlog will provide highlights of the earnings report and the conference call, including any trash talking from any Apple execs on RIM’s Playbook.

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