A compelling argument

iPhone sales in the U.S grow / Railroad crossing info. / Hacker-friendlier Apple

Greetings! Coming right up, the most interesting stuff about Apple in the past week. — Please forward this email to anyone you think might find it interesting.


"I thought he made a compelling argument", said Trump about Tim Cook's chat over dinner, in which both leaders talked about trade. The U.S. side keeps flip flopping, but for now it looks like we're on the same stage as in late April:

  • Smartphones and computers will stay out of the 10% tariffs until December 15th.

  • U.S. companies will have a new 90-day extension to trade with vetoed companies such as Huawei. 

This is a huge relief for Apple, as the company can get all the products for the Holiday season. Tariffs will still affect some of Apple's products like the AirPods, HomePod and more importantly the Apple Watch, but that's peanuts. 

The second part is important because it will keep Huawei in the game for longer, pressuring the iPhone and hurting some sales. Were Huawei to be cut off from Google's (as well as Facebook's and Microsoft's) software and services, Apple could gain a bit, but not as much as Samsung or Xiaomi, which are the primary beneficiaries of the Huawei veto.

My take from all this mess:

  • I'm sure Tim Cook is tired of putting his diplomatic hat on and having to travel to DC to lobby, but it seems that his life is going to be like that at least until January 2021. 

  • Trade is a good tool of pressure, and I think we all can agree on the tough stance. The CCP must be held accountable and civil rights must be greatly expanded in China. If we need to pay higher laptop and smartphone prices, so be it.


iPhone sales in the U.S. are looking great. Contrary to the rest of the world, Apple smartphones sales increased by 14% in the country compared to last year.

  • Apple revenue only increased in “Americas” region by 2.1% last quarter. There are too many variables to this, but probably the iPhone at ASP in the U.S. fell bit then.

  • Interestingly: the iPhone 8 outsold the XS Max, XS and 8 Plus.

  • Yes: “iPhone 8 and iPhone 7 have also picked up sales this quarter”.


iPhone jailbreak is back. For some technical reasons I can't comprehend, all the iPhones with iOS 12.4 (except for the XS and XR) can be easily jailbroken again. — Which reminds me that last week I forgot to talk about an important decision by the company...


Apple will give a custom-made version of the iPhone to certain chosen hackers. Announced by Ivan Krstić, Apple's head of security engineering, the company does a 180 and will make some very good friends in the external research arena. 

It won't be the same special iPhone that Apple engineers use, but a somewhat more open and "hacker-friendly" device that you can get at the stores. Experts are really happy about this, and it seems like a smart move.


U.S. airline safety regulators bans some MacBook Pro laptops. Customers can't bring any MBP sold between mid-2015 to February-2017 in flights, as part of the regulation banning recalled batteries. — This is going to be a mess:


Apple's R&D budget just topped that of Spain. The company's growing R&D expenditure meets the country's lagging one. — I'm sure there's some inexactitudes to the comparison, but given it's my home country I can't avoid the topic. 


Map apps still don't show railroad crossings' information. A U.S. federal agency asked Apple, Google and Microsoft back in 2016 to add railroad crossings to their navigation apps, but they haven't.

  • It looks like an easy decision to add them —but i'm not sure they would avoid many accidents—, why it hasn't been the case? Probably there's not good data. 


The voice-first gold rush is not your usual gold rush. Alexa Skills keep underperforming if measured against Apple's App Store initial years. — As much as I use my smart speakers (and I have 5!), there isn't yet much of a killer app in any of them. 

Image

Apple Watch Series 6 will come in titanium and ceramic. Both new cases were revealed in some internal files of iOS 13 beta software. I'm sure aluminium and steel versions will stay, but both materials are pretty great for watches.


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Thank you for reading Apple Weekly. Please consider forwarding this email to your contacts. — Alex

That's a lot of estimates

33 or 38 million iPhones? Who knows. / Apple Watch sales hit 70 million / Siri grading paused / Apple Music growth slows

Greetings! Coming right up, the most interesting stuff about Apple in the past week. — Please forward this email to anyone you think might find it interesting.


How many iPhones then? After Apple stopped telling us how many iPhones it sold nine months ago, we only have external consultants to look for some guidance. I gathered their data:

  • IDC says 33.8 million.

  • Canalys assumes 36 million.

  • Counterpoint Research claims 36.4 million.

  • Strategy Analytics puts it at 38 million.

  • IHS says 35.3 million

That's an average of 35.9 million with a relatively high variance of 4.2 million, and it would represent a drop of 13% from a year before from the official figure of 41.3 million. iPhone revenue fell 12% so it checks out. I won't bore you anymore with words, here's in chart form:

Looking at the new line up, we know the XR leads in sales, overall the decline is clear and although things seem to be improving, as Tim Cook said and data shows, in the first half of 2018 Apple sold 93.5 million iPhones, while this year only 77 million.

Currently, iPhone sales for 2019 are on par with those in 2014 for units, and 2016 for revenue. The iPhone installed base is still growing, even if slower.

What will the iPhone 11 prices be? Lower entry price for the "R" variant? Even more expensive to increase revenue per customer? Who knows. The yuan and trade tariffs will have a say on this. More on that down below.


And the Apple Watch? We never knew how many watches the company is selling, but with a few hints from Apple and third party estimates, this is the best chart I can give you.

The last quarter data comes from a lonely report from Strategy Analytics. A total of 70 million Apple Watch units would've been sold if this data is accurate. Likely the company will hit the 100 million mark in 2021.


Apple rolls out Apple Card to a few selected users. The onboarding looks very well designed and, honestly, it could even be a good thing for the industry, at least in the U.S. where it will be exclusively launched this month. Here's a good round-up of its features.

  • My super deep take, you ask? I don't like or trust Goldman Sachs or anything that has to do with it, and anyone drooling over a "shiny card" is a fool. 


Apple paused the Siri 'grading' where humans listened to some of our conversations with Siri while the company conducts "a through review". Irish contractors were sent home for the time, I'm unsure about those in Spain.

A few points:

  • Listening to Siri conversations seems like the best way to improve the service.

  • Apple's privacy stand makes them more vulnerable to public opinion on this. Why not pay some customers then?

  • The company should also have detailed explicitly in their terms of service that actual, real humans listened to some of our conversations.


Why is Apple doing exclusive podcasts? Although the endeavor hasn't been corroborated by Apple yet, it's a good question. The key quote is "Someone that uses Apple Podcasts is more likely to use Apple Music, and so on". So, a hedge.

On this regard, one of the most interesting and misspent boosts to Apple Music is the Beats 1 radio station. I assumed they would be making a whole lot of them instead of just one focusing on the over-served "Top 40" for American and British audiences. Where are Beats Japan, Beats Latino, Beats Indie, Beats Rock, Beats China, Beats Classic, etc?

Anyway, Spotify announced new figures (108 million paid subscribers, up 31% from last year) and it keeps gaining share while Apple Music growth stalls a bit. It looks like there's room for several of these services and I could see Apple Music hitting 100 million subscribers in the very long term (that'd be a $5-6 billion business).


China is doing something with their currency. Or not. Experts disagree on how the Yuan price will affect the world economy, and what's more important, the iPhone price. Weaker yuan means Apple will pay Hon Hai fewer dollars to assemble each unit. So far it seems to be going in that direction, but it's a relatively minor change.

We also have to wait to see if the extended U.S. tariffs will affect the iPhone price come autumn. Bank of America says probably:

Apple might raise prices of iPhones by around 10%, reducing demand by 20% or around 10 million units.

While TFIS’ Kuo says Apple will take the hit:

we forecast that, in the mid-short term, Apple will absorb most of the additional costs due to tariffs.


HomePod stays the same in the U.S. according to recently released CIRP data that puts it around 5% of the total 76 million installed base for smart speakers in the country. Down a bit from 6% (of 66 million) in late 2018, and 6% (of 50 million) a year ago.

  • That translates to a total of about 3.8 million now down from 4 million six months ago. Taking error margins into account, it suggests few Americans bought a HomePod recently. Apple will probably never reveal HomePod sales or revenue figures anyway.

  • Context for those 4 million HomePods: there are over 190 million iPhones in use in the U.S. — So around 2% of American iPhone owners have a HomePod too. Probably less because I'm sure the average HomePods-per-Home is closer to 2 than to 1.


Apple locks iPhone batteries' software features if you change it yourself or with an unauthorized provider. Overall, this doesn't seem like a huge deal (the battery still works fine), but reminds me of the Error 53 blunder that Apple ended up fixing and apologizing for it.


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Thank you for reading Apple Weekly. Please consider forwarding this email to your contacts or hitting the like button below. — Alex

The iPhone is a cruel mistress

The humans behind Siri / iMessage bugs / "Sign-in with Apple" caveats

Greetings! Coming right up, the most interesting stuff about Apple in the past week. — Please forward this email to anyone you think might find it interesting.


Q3 results are in and they're a mixed bag of great, good and not so good. The latter mostly on the iPhone. The quarter was a record Q3.

  • The iPhone went below 50% of total turnover for the first time since some quarter in 2012 after dropping by $3.5 billion.

  • This is somewhat good for the company in the long term but I'm sure the company would love to sell both more iPhones and more "of the rest" instead of just one of those options.

  • Canalys has the iPhone falling 13% (while the market only 2%) to 36 million units, with no data yet from Gartner, IDC or CounterPoint.

  • In China, the iPhone took off again in June according to Tim Cook, a bit late to save the quarter: under 6 million sold according to Canalys (-14%).

Non iPhone news:

  • Wearables (for now Beats, AirPods and Apple Watch, maybe Glasses soon) are now on par with the Mac and the iPad in terms of revenue. 

  • Wearables are now roughly a $25 billion per year business, similar to Xiaomi as a whole, which did $26 billion in 2018.

  • 75% of Apple Watch customers this quarter were first time buyers. That's pretty good sign of a healthy segment.

  • iPad and Mac flattish.

  • Apple Card will come out in August, as reported.

  • Apple Pay is doing about 1 billion transactions per month according to the company, double from last year.


Apple contractors 'regularly hear confidential details' on Siri recordings. The report goes to enumerate a few details on how the human "grader" team works (spoiler: mostly similar to Alexa and Google's teams). — The unnamed contractor is actually Sigma Technologies here in Madrid, who works for Google too.

👉 I'm pretty sure most Apple customers don't know actual humans can hear some of their Siri recordings. I don't have hard data on it, but I'd take a huge bet on it.


Google reveals six bugs in Apple's iMessage app. Google's Project Zero team told Apple about a fistful of flaws, one of them pretty awful according to the researchers. iOS 12.4 should have patched the vulnerabilities.


The Tesla-Apple Motorway is still busy. Former Jaguar Land Rover and Tesla executive "in charge of engineering for car exteriors and interiores", Steve MacManus, joined Apple as Senior Director.


'Sign in with Apple' isn't that good for privacy. The service could get better, but as stated it "may not really impact customer data tracking" according to marketing company Arm Treasure Data's co-founder and CTO Kazuki Ota. — I quote

"With that type of solution, our match rate will be decreasing for sure,"

The gist is here: 

"The effectiveness of this Apple move was more about how the email address will be used. That prevents certain actions, but I think the effectiveness, personally, will be limited."


Super interesting thread on how Apple's Lightning video adaptors work. Tiny computers that need the iPhone to upload a custom firmware every time they're connected. The problem is: they aren't super reliable.


Apple takes some iPhone models off India. The company stopped selling the iPhone SE, iPhone 6, iPhone 6 Plus, and iPhone 6s Plus in the country. The iPhone 6s still on sale as the cheapest option, the rest is iPhone 7 and newer.


Apple bought Intel's smartphone modem business. Over 17,000 patents (good) and 2,200 employees (not that good), mostly coming from the Infineon purchase in 2014. The deal will take a lot of time to get in position.


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Thank you for reading Apple Weekly. Please consider forwarding this email to your contacts. — Alex

The MacBook Collusion

New MacBooks, wrong estimates, new iPads, security kung-fu and the history of accessibility in iOS

Greetings! Coming right up, the most interesting stuff about Apple in the past week. — Please forward this email to anyone you think might find it interesting.


The MacBook line up got refreshed. A few and interesting changes for the new school season. The 15" MacBook Pro is still the same, while the rumor drums for a 16" MacBook Pro with scissor keys keep banging.

  • All of the 13" MacBook Pro have TouchBar and TouchID now. No more "Escape" keys. Same butterfly keyboard but the internals got beefed up to a quad-core chip for the first time. Still no discrete GPU. Same starting 128 GB and 8 GB of (soldered) RAM. Starts at $1,300.

  • The MacBook Air got a $100 discount (now $1,100) and a True Tone display. Everything else is the same as the previous model from October.

  • The 12" MacBook got the guillotine. I was going to say axed but today is Bastille day.


The Mac line is selling more? less? We don't know. Gartner and IDC released new PC shipments data. Gartner claims Apple shipped 3.7 million Mac computers in 2019 Q2, IDC says 4.1 million. — Apple is still holding up in the "Post PC" era much better than the overall PC industry.

A cautionary tale from last year: Both IDC and Gartner stated that Apple had shipped 4.3/4.4 million computers in 2018 Q2, and now they've updated those figures to 3.7 million (the second to last public number that Apple released). Small corrections are common, but 700,000 unaccounted computers, much less so.


Five new iPads coming. Oddly, in 10.2" and 10.5" sizes. One would be the new cheap iPad (currently $350 and 9.7") but the other one is a puzzle.


Ireland opens a third GDPR inquiry to Apple. The case is in relation to an access request from a customer. Probably nothing, as the company was more than ready for the European privacy super law earlier and with more severe measures than required. — Apple has a few more probes open for other EU countries.


Apple shows its Security-Kung Fu black belt this week in two separate events regarding potential real life spying exploits


How the iPhone went from zero to master of accessibility. For a couple of years the iPhone lacked any accessibility features. This wonderful article does a year by year timeline of all the changes that made the iPhone a must have for people with disabilities.


Amazon Music Unlimited is growing faster than Apple Music or Spotify. According to Midia Research Amazon boasts 32 million paid accounts, up from 19 million last year, and it has an older user base. It certainly is growing faster than Apple Music, but not Spotify.

Notes:

  • Apple Music growth has slowed down. With 60 million paid subs now, it has 10 million more than by mid 2018. But the twelve months prior to that, it grew by over 20 million.

  • Spotify is still losing money. It grows faster when it makes heavy discounts like the Hulu deal.

  • But seriously, how long will they keep the '$10/month' pricing? The TV subscriptions app like Netflix, Hulu, HBO, etc. are increasing their prices every 18-30 months. Spotify has been stuck with $10 for a decade, setting the bar for the rest of the industry.


Apple has a new fancy Store in the fanciest airport in the world. Singapore's Jewel Changi is a breathtaking facility with lots of stores (and planes), and the place to Apple's #503 store, the second in the tiny nation.

Notes:


The iPhone 6 of a teenager in California blew up while charging. Sparking the fears of a PR nightmare. It probably will end up being a cheap cable. The company is investigating the reasons, while local TV does its thing.

Notes: "Overheating by pillow" is a real issue, and Apple should make iOS more proactive to shut down when temperatures raise. I use the smartphone all the time while charging and it gets too hot to fast, much more so in the Spanish summer, which can't be that much different from the Californian summer.


Bill Gates praised Steve Jobs again. In an interview with CNN.

"It's really easy to imitate the bad parts of Steve. The times being an asshole... and it is... I have yet to meet any person who, in terms of picking talent, hyper-motivating that talent, and having a sense of design of, oh, this is good, this is not good"

Curious timing, Just as Ive left the company.

"He would be casting spells, and I would see people mesmerized, but because I'm a minor wizard, the spells don't work on me."

Gates is such a nerd. Love him.


How long does apple support older iPhone models? Statista made a chart of al the iPhone models with the iOS versions that run in them. Five years looks like the standard. — iOS 12 was a soothing update that made up for a crazy buggy iOS 11. Will the 6s and the SE get iOS 14?

Infographic: How Long Does Apple Support Older iPhone Models? | Statista

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Jony Bye Bye

Greetings! Coming right up, the most interesting stuff about Apple in the past week. — Please forward this email to anyone you think might find it interesting.


Jony Ive isn't leaving Memphis with a guitar in his hand, but he's leaving Cupertino to create a new design firm with Marc Newson, also from Apple. "There were some significant projects that I feel like I've completed". Looks like Ive's done designing electronics. Jeff Williams will oversee the design department.

This friendly divorce has led to plenty of gossip and social media war between rabid fanboys, mild enthusiasts and "the others".

We'll only know what really transpired in a few years when it's time for a new biography. Meanwhile, I'd recommend all of you to read John Siracusa's take on it, which I take the liberty to quote:

And so we come to the most common criticism of Ive's work. With so few limitations on his power and skills, the spark that animates his creative philosophy has been allowed to burn so brightly that it has overwhelmed everything else. Symmetry overrides utility. Simplicity overrides flexibility. Purity of form overrides quality of function.

A few more assorted thoughts before jumping to another topic:

  • Many insiders talk about how Jony sort of left a few years ago

  • Angela Ahrendts left the company after five years. Pure chance, obviously, but they worked together closely in the new direction for the Apple Stores.

  • I talked about the state of the Stores some weeks ago: pretty, yes, but insufficient.

  • I think Apple fell a bit into the design for the sake of looking good in the last years. See: MacBooks, cylindrical Mac Pro, Pencil, Magic Mouse, and so on.

  • The design/function balance wasn't ideal.

  • WWDC 2019 felt to me like a benign coup d'état from the engineering side of the company. 


Talking about balance from function and design...

The Butterfly era is over. The next MacBook Air will come in the fall and will bring back the scissor switches for the keyboard made by Taiwanese firm Sunrex. — Fair to assume all the MacBooks will eventually adopt it.


iPhone in China is slowly turning back after price cuts, the installed base is growing again. — Tim Cook already talked about this inflection point.


Apple hired long time ARM chip genius Mike Filippo. He's seen as the father of the A57, A72 and A76 cores, that other companies can use or modify. Big hire


Tim Cook met with Donald Trump to talk about tariffs. Trump came out of the G-20 with a more dialoguing position.


Apple yields to China again, this time in podcasts. The company started removing shows that weren't approved by the country’s media regulators. — With autocratic regimes, you can only follow the law so much.


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Apple Not-So-Weekly

This publication hasn't live up to its name for the last month, and I'm sorry about that. I'm switching jobs after three years at the newspaper and going independent, all while keeping my sanity taking care of three young kids for the summer.

I cherish writing this newsletter. It makes me sit and take a perspective in some really interesting affairs. I hesitate between going daily and staying true to its original mission. What are your thoughts?

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