Citi slashes sales outlook for iPhone XS Max by nearly half

Citi Research has joined a growing list of analysts to lower first-quarter production estimates for Apple’s iPhones amid weakening demand for the smartphones.

Citi Research analyst William Yang cut the overall iPhone shipment forecast by 5 million to 45 million for the quarter, reported Reuters. That’s a sting that falls in line with others such as influential TF International Securities Apple analyst Ming-Chi Kuo, who delivered a less than stellar iPhone forecast earlier this month.

It’s Yang’s outlook for the 6.5-inch iPhone XS Max that is particularly gloomy. In a research note to clients, Yang slashed the shipment forecast for the iPhone XS Max by 48 percent for the first quarter of 2019.

The cut in Citi’s forecasts is driven by the firm’s view that ” 2018 iPhone is entering a destocking phase, which does not bode well for the supply chain,” Yang wrote.

Two weeks ago, Kuo predicted that 2019 iPhone shipments will likely between 5 to 10 percent lower than 2018. He also lowered first quarter shipment forecasts by 20 percent.

from iPhone – TechCrunch https://tcrn.ch/2Alpfpm

Smart speakers hit critical mass in 2018

We already know Alexa had a good Christmas – the app shot to the top of the App Store over the holidays, and the Alexa service even briefly crashed from all the new users. But Alexa, along with other smart speaker devices like Google Home, didn’t just have a good holiday — they had a great year, too. The smart speaker market reached critical mass in 2018, with around 41 percent of U.S. consumers now owning a voice-activated speaker, up from 21.5 percent in 2017.

According to a series of reports from RBC Capital Markets analysts released in December, the near doubling of the adoption rate for smart speakers in the U.S. was driven by growth in both Alexa and Google Home devices, while Apple’s HomePod played only a small role.

The firm found that U.S. penetration of Alexa-enabled devices reached 31 percent this year, compared with 41 percent overall for smart speakers.

It also forecast that Alexa would generate $18 billion to $19 billion in total revenue by 2021 – or ~5 percent of Amazon’s revenue –  through a combination of device sales, incremental voice shopping sales, and other platform revenues. In the U.S., there are now over 100 million Alexa-enabled devices installed – a key milestone for Alexa to become a “critical mass platform,” the report noted.

RBC additionally called out Amazon’s progress with Alexa’s development, with launches like Alexa Guard, which listens for break-ins and smoke detector alarms; plus new features like local voice control for when the internet is down; location-based reminders; advanced routines; email integrations; expanded calling options; and many others.

Alexa’s third-party app ecosystem also grew in 2018, with 150 percent year-over-year growth in skills to reach over 60,000 total Alexa skills by year-end. That’s up from 40,000 skills in May; 25,000 in Q3 2017; and just 5,000 two years ago.

Google Home also gained traction in 2018, with U.S. penetration for Google devices growing to 23 percent, up from 8 percent in 2017. Each household owns around 1.7 devices, which leads a Google Home install base of around 43 million in the U.S., and around 9 million in other Google Home markets, the forecast said.

However, the report doesn’t see as much revenue coming in from Google Home over the next few years, compared with Alexa. Instead, it estimates that Google Home generated $3.4 billion in revenue this year, and will grow that to $8.2 billion by 2021.

But combined with Google’s other hardware products like Pixel, Nest, and Chromecast, the hardware suite will have generated approximately $8.8 billion in 2018, and will grow to $19.6 billion in 2021.

This is the first year the analysts asked about Apple’s HomePod in the consumer survey, and they found its share of the U.S. smart speaker market remains small. Amazon has a 66 percent share to Google’s 29 percent. HomePod had 5 percent, it said.

from Apple – TechCrunch https://tcrn.ch/2Srbexp

Put down your phone if you want to innovate

We are living in an interstitial period. In the early 1980s we entered an era of desktop computing that culminated in the dot-com crash – a financial bubble that we bolstered with Y2K consulting fees and hardware expenditures alongside irrational exuberance over Pets.com. That last interstitial era, an era during which computers got smaller, weirder, thinner, and more powerful, ushered us, after a long period of boredom, into the mobile era in which we now exist. If you want to help innovate in the next decade, it’s time to admit that phones, like desktop PCs before them, are a dead end.

We create and then brush up against the edges of our creation every decade. The speed at which we improve – but not innovate – is increasing and so the difference between a 2007 iPhone and a modern Pixel 3 is incredible. But what can the Pixel do that the original iPhone or Android phones can’t? Not much.

We are limited by the use cases afforded by our current technology. In 1903, a bike was a bike and could not fly. Until the Wright Brothers and others turned forward mechanical motion into lift were we able to lift off. In 2019 a phone is a phone and cannot truly interact with us as long as it remains a separate part of our bodies. Until someone looks beyond these limitations will we be able to take flight.

While I won’t posit on the future of mobile tech I will note that until we put our phones away and look at the world anew we will do nothing of note. We can take better photos and FaceTime each other but until we see the limitations of these technologies we will be unable to see a world outside of them.

We’re heading into a new year (and a new CES) and we can expect more of the same. It is safe and comfortable to remain in the screen-hand-eye nexus, creating VR devices that are essentially phones slapped to our faces and big computers that now masquerade as TVs. What, however, is the next step? Where do these devices go? How do they change? How to user interfaces compress and morph? Until we actively think about this we will remain stuck.

Perhaps you are. You’d better hurry. If this period ends as swiftly and decisively as the other ones before it, the opportunity available will be limited at best. Why hasn’t VR taken off? Because it is still on the fringes, being explored by people stuck in mobile thinking. Why is machine learning and AI so slow? Because the use cases are aimed at chatbots and better customer interaction. Until we start looking beyond the black mirror (see what I did?) of our phones innovation will fail.

Every app launched, every pictured scrolled, every tap, every hunched-over moment davening to some dumb Facebook improvement, is a brick in bulwark against an unexpected and better future. So put your phone down this year and build something. Soon it might be too late.

from Android – TechCrunch https://tcrn.ch/2GJX0GI
via IFTTT

Put down your phone if you want to innovate

We are living in an interstitial period. In the early 1980s we entered an era of desktop computing that culminated in the dot-com crash – a financial bubble that we bolstered with Y2K consulting fees and hardware expenditures alongside irrational exuberance over Pets.com. That last interstitial era, an era during which computers got smaller, weirder, thinner, and more powerful, ushered us, after a long period of boredom, into the mobile era in which we now exist. If you want to help innovate in the next decade, it’s time to admit that phones, like desktop PCs before them, are a dead end.

We create and then brush up against the edges of our creation every decade. The speed at which we improve – but not innovate – is increasing and so the difference between a 2007 iPhone and a modern Pixel 3 is incredible. But what can the Pixel do that the original iPhone or Android phones can’t? Not much.

We are limited by the use cases afforded by our current technology. In 1903, a bike was a bike and could not fly. Until the Wright Brothers and others turned forward mechanical motion into lift were we able to lift off. In 2019 a phone is a phone and cannot truly interact with us as long as it remains a separate part of our bodies. Until someone looks beyond these limitations will we be able to take flight.

While I won’t posit on the future of mobile tech I will note that until we put our phones away and look at the world anew we will do nothing of note. We can take better photos and FaceTime each other but until we see the limitations of these technologies we will be unable to see a world outside of them.

We’re heading into a new year (and a new CES) and we can expect more of the same. It is safe and comfortable to remain in the screen-hand-eye nexus, creating VR devices that are essentially phones slapped to our faces and big computers that now masquerade as TVs. What, however, is the next step? Where do these devices go? How do they change? How to user interfaces compress and morph? Until we actively think about this we will remain stuck.

Perhaps you are. You’d better hurry. If this period ends as swiftly and decisively as the other ones before it, the opportunity available will be limited at best. Why hasn’t VR taken off? Because it is still on the fringes, being explored by people stuck in mobile thinking. Why is machine learning and AI so slow? Because the use cases are aimed at chatbots and better customer interaction. Until we start looking beyond the black mirror (see what I did?) of our phones innovation will fail.

Every app launched, every pictured scrolled, every tap, every hunched-over moment davening to some dumb Facebook improvement, is a brick in bulwark against an unexpected and better future. So put your phone down this year and build something. Soon it might be too late.

from iPhone – TechCrunch https://tcrn.ch/2GJX0GI

Indonesia unblocks Tumblr following its ban on adult content

Indonesia, the world’s fourth largest country by population, has unblocked Tumblr nine months after it blocked the social networking site over pornographic content.

Tumblr — which, disclaimer, is owned by Oath Verizon Media Group just like TechCrunch — announced earlier this month that it would remove all “adult content” from its platform. That decision, which angered many in the adult entertainment industry who valued the platform as an increasingly rare outlet that supported erotica, was a response to Apple removing Tumblr’s app from the iOS Store after child pornography was found within the service.

This impact of this new policy has made its way to Indonesia where KrAsia reports that the service was unblocked earlier this week. The service had been blocked in March after falling foul of the country’s anti-pornography laws.

“Tumblr sent an official statement regarding the commitment to clean the platform from pornographic content,” Ferdinandus Setu, Acting Head of the Ministry of Communication and Informatics Bureau, is reported to have said in a press statement.

Messaging apps WhatsApp and Line are among the other services that have been forced to comply with the government’s ban on ‘unsuitable’ content in order to keep their services open in the country. Telegram, meanwhile, removed suspected terrorist content last year after its service was partially blocked.

While perhaps not widely acknowledged in the West, Indonesia is a huge market with a population of over 260 million people. The world’s largest Muslim country, it is the largest economy in Southeast Asia and its growth is tipped to help tripled the region’s digital economy to $240 billion by 2025.

In other words, Indonesia is a huge market for internet companies.

The country’s anti-porn laws have been used to block as many as 800,000 websites as of 2017 — so potentially over a million by now — but they have also been used to take aim at gay dating apps, some of which have been removed from the Google Play Store. As Vice notes, “while homosexuality is not illegal in Indonesia, it’s no secret that the country has become a hostile place for the LGBTQ community.”

from Apple – TechCrunch https://tcrn.ch/2SnihqX

Epic Games, the creator of Fortnite, banked a $3 billion profit in 2018

Epic Games had as good a year in 2018 as any company in tech. Fortnite became the world’s most popular game, growing the company’s valuation to $15 billion but it has helped the company pile up cash, too. Epic grossed a $3 billion profit for this year fuelled by the continued success of Fortnite, a source with knowledge of the business told TechCrunch.

Epic did not respond to a request for comment.

Fortnite, which is free to play but makes money selling digital items, has popularized the battle royale category — think Lord of the Flies meets Hunger Games — almost single-handedly and it has been the standout title for the U.S-based game publisher.

Epic, which was founded way back in 1991, hasn’t given revenue figures for its smash hit — which has 125 million players — but this new profit milestone, combined with other pieces of data, gives an idea of the success that the company is seeing as a result of a prescient change in strategy made six years ago.

This past September, Epic commanded a valuation of nearly $15 billion, according to the Wall Street Journal, as marquee investors like KKR, Kleiner Perkins and Lightspeed piled in on a $1.25 billion round to grab a slice of the red-hot development firm. However, the investment cards haven’t always been stacked in Epic’s favor.

China’s Tencent, the maker of blockbuster chat app WeChat and a prolific games firm in its own right, became the first outside investor in Epic’s business back in 2012 when it injected $330 million in exchange for a 40 percent stake in the business.

Back then, Epic was best known for Unreal Engine, the third-party development platform that it still operates today, and top-selling titles like Gears of War.

Why would a proven company give up such a huge slice of its business? Executives believed that Epic, as it was, was living on borrow time. They sensed a change in the way games were headed based on diminishing returns and growing budgets for console games, the increase of ‘live’ games like League of Legends and the emerging role of smartphones.

Speaking to Polygon about the Tencent deal, Epic CEO Tim Sweeney explained that the investment money from Tencent allowed the company to go down the route of freemium games rather than big box titles. That’s a strategy Sweeney called “Epic 4.0.”

“We realized that the business really needed to change its approach quite significantly. We were seeing some of the best games in the industry being built and operated as live games over time rather than big retail releases. We recognized that the ideal role for Epic in the industry is to drive that, and so we began the transition of being a fairly narrow console developer focused on Xbox to being a multi-platform game developer and self publisher, and indie on a larger scale,” he explained.

Tencent, Sweeney added, has provided “an enormous amount of useful advice” while the capital enabled Epic to “make this huge leap without the immediate of fear of money.”

LOS ANGELES, CA – JUNE 12: Gamers ‘Ninja’ (L) and ‘Marshmello’ compete in the Epic Games Fortnite E3 Tournament at the Banc of California Stadium on June 12, 2018 in Los Angeles, California. (Photo by Christian Petersen/Getty Images)

Epic never had a problem making money — Sweeney told Polygon the first Gear of Wars release grossed $100 million on a $12 million development budget — but with Fortnite the company has redefined modern gaming, both by making true cross-platform experiences possible and by pulling in vast amounts of money.

As a private company, Epic keeps its financials closely guarded. But digging beyond the $3 billion figure — which, to be clear, is annual profit not revenue — there are clues as to just how big a money-spinner Fortnite is. Certainly, there’s room to wonder whether analyst predictions this summer that Fortnite would gross $2 billion this year were too conservative.

The most recent data comes from November when Sensor Tower estimates that iOS users alone were spending $1.23 million per day. That helped the game bank $37 million in the month and take its total earnings within Apple’s iOS platform to more than $385 million.

But, as mentioned, Fortnite is a cross-platform title that supports PlayStation, Xbox, Switch, PC, Mac, Android and iOS. Aggregating revenue cross those platforms isn’t easy, and the only real estimate comes from earlier this year when Super Data Research concluded that the game made $318 million in May across all platforms.

That is, of course, when Fortnite was fresh on iOS, non-existent on Android and with fewer overall players.

We can deduct from Sensor Tower’s November estimate that iOS pulled in $385 million over eight months — between April and November — which is around $48 million per month on average. Android is harder to calculate since Epic skipped Google’s Play Store by distributing its own launcher. While it quickly picked up 15 million Android users within the first month, tracking that spending off-platform is a huge challenge. Some estimates predicted that Google would miss out on around $50 million in lost earnings this year because in-app purchases on Android would not cross its services.

There are a few factors to add further uncertainty.

Fornite spending tends to spike around the release of new seasons — updated versions of the game — since users are encouraged to buy specific packages at the start. The latest, Season 7, dropped early this month with a range of tweaks for the Christmas period. Give the increased velocity that Fortnite is picking up players and the appeal of the festive period, this could have been its biggest revenue generator to date but there’s not yet any indicator of how it performed.

More broadly, Fortnite has undoubtedly lost out on revenue in China, which frozen new game licenses nine months ago thereby preventing any publishers from monetizing new titles over that period.

Tencent, which publishes Fortnite in China, did release the game in the country but it hasn’t been able to draw revenue from it yet. The Chinese government announced last week that it is close to approving its first batch of new titles but it isn’t clear which games are included and when the process will be done.

Already, the effects have been felt.

Games are forecast to generate nearly $40 billion in revenue in China this year, according to market researcher Newzoo. However, the industry saw its slowest growth over the last 10 years as it grew 5.4 percent year-over-year during the first half of 2018, according to a report by Beijing-based research firm GPC and China’s official gaming association CNG.

Fortnite and PUBG — another battle royale title backed by Tencent — have perhaps suffered the most since they are universally popular worldwide but unable to monetize in China. It seems almost certain that those two titles will receive a major marketing push if, as and when they receive the license and, if Epic can keep the game competitive as Sweeney believed it could back in 2012, then it could go on and make even more money in 2019.

Epic Games is taking on Steam with its own digital game store, which includes higher take-home revenue rates for developers.

But Epic isn’t relying solely on Fortnite.

A more lowkey but significant launch this month was the opening of the Epic Game Store which is aimed squarely at Steam, the leader in digital game sales.

While Fortnite is its most prolific release, Epic also makes money from other games, Unreal Engine and a recently launched online game store that rivals Steam. Epic’s big differentiator for the store is that it gives developers 88 percent of their revenue, as opposed to Value — the firm behind Steam — which keeps 30 percent, although it has added varying rates for more successful titles. Customers are promised a free title every two weeks.

Either way, Epic is betting that it can do a lot more than Fortnite which could mean that its profit margin is even higher come this time next year.

from Android – TechCrunch https://tcrn.ch/2ESuAbB
via IFTTT

Two years later, I still miss the headphone port

Two years ago, Apple killed the headphone port. I still haven’t forgiven them for it.

When Apple announced that the iPhone 7 would have no headphone port, I was pretty immediately annoyed. I figured maybe I’d get over it in a few months. I didn’t. I figured if worse came to worse, I’d switch platforms. Then all of the other manufacturers started following suit.

This, of course, isn’t a new annoyance for me. I’ve been hating headphone adapters on phones right here on this very website since two thousand and nine. For a little stretch there, though, I got my way.

It was a world full of dongles and crappy proprietary audio ports. Sony Ericsson had the FastPort. Nokia had the Pop-Port. Samsung had like 10 different ports that no one gave a shit about. No single phone maker had claimed the throne yet, so no one port had really become ubiquitous… but every manufacturer wanted their port to become the port. Even the phones that had a standardized audio jack mostly had the smaller 2.5mm port, requiring an adapter all the same.

Then came the original iPhone with its 3.5mm headphone port. It was a weird recessed 3.5mm port that didn’t work with most headphones, but it was a 3.5mm port! Apple was riding on the success of the iPod, and people were referring to this rumored device as the iPod Phone before it was even announced. How could something like that not have a headphone port?

Sales of the iPhone started to climb. A few million in 2007. Nearly 12 million in 2008. 20 million in 2009. A tide shifted. As Apple’s little slab of glass took over the smartphone world, other manufacturers tried to figure out what Apple was doing so right. The smartphone market, once filled with chunky, button-covered plastic beasts (this one slides! This one spins!), homogenized. Release by release, everything started looking more like the iPhone. A slab of glass. Premium materials. Minimal physical buttons. And, of course, a headphone port.

Within a couple years, a standard headphone port wasn’t just a nice selling point — it was mandatory. We’d entered a wonderful age of being able to use your wired headphones whenever you damn well pleased.

Then came September 7th, 2016, when Apple had the “courage” to announce it was ditching the 3.5mm jack (oh and also by the way check out these new $150 wireless headphones!).

Apple wasn’t the first to ditch the headphone port — but, just as with its decision to include one, its decision to remove it has turned the tide. A few months after the portless iPhone 7 was announced, Xiaomi nixed the port on the Mi 6. Then Google ditched it from its flagship Android phone, the Pixel 3. Even Samsung, which lampooned Apple for the decision, seems to be tinkering with the idea of dropping it. Though leaks suggest the upcoming Galaxy S10 will have a headphone port, the company pulled it from the mid-range A8 line earlier this year. If 2016 was the year Apple took a stab at the headphone jack, 2018 was the year it bled out.

And I’m still mad about it.

Technology comes and goes, and oh-so-often at Apple’s doing. Ditching the CD drive in laptops? That’s okay — CDs were doomed, and they were pretty awful to begin with. Killing Flash? Flash sucked. Switching one type of USB port for another? Fine, I suppose. The new USB is better in just about every way. At the very least, I won’t try to plug it in upside down only to flip it over and realize I had it right the first time.

But the headphone jack? It was fine. It stood the test of time for one hundred damned years, and with good reason: It. Just. Worked.

I’ve been trying to figure out why the removal of the headphone port bugs me more than other ports that have been unceremoniously killed off, and I think it’s because the headphone port almost always only made me happy. Using the headphone port meant listening to my favorite album, or using a free minute to catch the latest episode of a show, or passing an earbud to a friend to share some new tune. It enabled happy moments and never got in the way.

Now every time I want to use my headphones, I just find myself annoyed.

Bluetooth? Whoops, forgot to charge them. Or whoops, they’re trying to pair with my laptop even though my laptop is turned off and in my backpack.

Dongle? Whoops, left it on my other pair of headphones at work. Or whoops, it fell off somewhere, and now I’ve got to go buy another one.

I’ll just buy a bunch of dongles, and put them on all my headphones! I’ll keep extras in my bag for when I need to borrow a pair of headphones. That’s just like five dongles at this point, problem solved! Oh, wait: now I want to listen to music while I fall asleep, but also charge my phone so it’s not dead in the morning. That’s a different, more expensive splitter dongle (many of which, I’ve found, are poorly made garbage).

None of these are that big of a deal. Charge your damned headphones, Greg. Stop losing your dongles. The thing is: they took a thing that just worked and just made me happy and replaced it with something that, quite often, just bugs the hell out of me. If a friend sent me a YouTube link and I wanted to watch it without bugging everyone around me, I could just use whatever crappy, worn out headphones I happened to have sitting in my bag. Now it’s a process with a bunch of potential points of failure.

“But now its water resistant!” Water-resistant phones existed before all of this, plenty of which had/have headphone ports. As a recent example, see Samsung’s Galaxy S9 with its IP68 rating (matching that of the iPhone XS.)

“But it can be slimmer!” No one was asking for that.

“But the batteries inside can be bigger!” The capacity of the battery barely jumped in the years from the 6S to the 8 — from 1,715mAh to 1,821mAh. It wasn’t until a few years later with the iPhone X, when the standard iPhone started getting wider and taller, that we saw super big jumps in its battery capacity.

Will this post change anything? Of course not. Apple blew the horn that told the industry it’s okay to drop the headphone port, and everyone fell right in line. The next year — and the year after that — Apple sold another 200M-plus phones. At this point, Apple doesn’t even bother giving you the headphone adapter in the box. Apple’s mind is made up.

But if you’re out there, annoyed, stumbling across this post after finding yourself with a pair of headphones and a smartphone that won’t play friendly together in a pinch, just know: you’re not the only one. Two years later, I’m still mad at whoever made this call — and everyone else in the industry who followed suit.

from iPhone – TechCrunch https://tcrn.ch/2Vdr4hh