Services really are becoming a bigger part of Apple’s business

We’ve known for a while now that Apple was going to be putting more of an emphasis on services. As the technical leaps from one iPhone/iPad/Mac generation to the next become less dramatic, product revenue has started to shrink; in response, the company is focusing on driving forward on things like the App Store, iCloud, Apple Pay, Apple Music and its soon-to-launch games and video offerings.

This shift is already playing out in the company’s financials. While product sales dipped a bit year-over-year — down from $51.3 billion in the quarter that ran from January to March 2018 to $46.6 billion in the same quarter of 2019 — revenue from the services business climbed from $9.9 billion to $11.5 billion.

In this fiscal Q2 quarter of 2018, Apple’s total revenue came in at roughly $61.1 billion; in the same quarter of 2019, it dipped to $58 billion. This works out to services accounting for 16.1% of Apple’s revenue in fiscal Q2 2018, but nearly 20% in fiscal Q2 2019. Apple CFO Luca Maestri says services now account for “one-third” of the company’s gross profits.

A big part of Apple’s services business is monthly subscriptions — the things like iCloud, Apple Music and Apple News that make money each month from the hardware that’s already out there. Tim Cook says Apple now has 390 million paid subscriptions across its services. Cook didn’t dive into how that breaks down service-by-service, but that’s up roughly 30 million subscribers over last quarter. The company says it expects paid subscribers to surpass half a billion by 2020 (presumably fueled by the launch of its gaming/video services).

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

Apple Q2: iPads up, iPhones down

Today’s big story for Apple revenue was once again focused on services. That’s likely to be the tale for the foreseeable future, as the company continues to pump billions into product offerings like Apple TV+.

As predicted, hardware was more of a mixed bag for the company. The iPad, a bright spot in an otherwise stagnant tablet market, also marked a key highlight for the quarter, as revenue jumped 22% year over year. Notably, the company now offers its largest range of slates, with recent quiet refreshes to the Air and Mini following last year’s big Pro update.

Revenue for Mac dipped slightly, in spite of recent refreshes to the MacBook Pro and iMac and last year’s milestone of 100 million Macs in use. Late last month, the company apologized for ongoing woes involving its MacBook keyboards.

iPhones, meanwhile, missed expectations slightly, maintaining the recent downturn in handset sales.

Last quarter was a rough one for Apple devices, as iPhone revenue dropped 15% year over year. Tim Cook attempted to soften that blow with lowered guidance, pointing specifically to a less than spectacular showing in China. That, in turn, was the result of several factors, including a slowing Chinese economy and plateauing global smartphone numbers. This quarter notably saw an iPhone price drop in China.

Yesterday’s Alphabet earnings took a similar line, as CEO Sundar Pichai noted “headwinds” in year on year sales of its Pixel device. Google is expected to follow in Apple’s footsteps with its own budget smartphone, the Pixel 3a, next week at I/O.

Many analysts have pointed to 5G as the next major factor in kickstarting phone sales for both Apple and the rest of the industry. However, all signs currently point to a 2020 arrival for a 5G iPhone — putting the device more than a year out, and well behind releases from chief competition like Samsung and Huawei.

That said, a recent deal with Qualcomm that finally ended the longtime feud between the two hardware powerhouses could hasten the arrival of the technology on the iPhone. Though it seems equally likely the company will focus on other features and will simply wait until next year, when 5G has had an opportunity for a much wider rollout.

In a statement, Cook lauded iPads sales, while attempting to set the stage for future announcements. “Our March quarter results show the continued strength of our installed base of over 1.4 billion active devices, as we set an all-time record for Services, and the strong momentum of our Wearables, Home and Accessories category, which set a new March quarter record,” Cook said. “We delivered our strongest iPad growth in six years, and we are as excited as ever about our pipeline of innovative hardware, software and services. We’re looking forward to sharing more with developers and customers at Apple’s 30th annual Worldwide Developers Conference in June.”

Last year’s WWDC was notably devoid of any sort of hardware announcements, with most coming toward the end of the year. This year’s could be different, as the company looks to shake loose some of the hardware cobwebs. Apple TV, HomePod and other home devices seem primed for an upgrade as it continues to pump money into the services that fuel those products, along with increased competition to HomeKit from the likes of Amazon and Google.

The exact breakdown of device sales is difficult to parse, given how the company currently reports earnings. Late last year, the company announced that it would no longer be reporting iPhone sales figures. Revenue for the home and accessories categories, meanwhile, are mixed in with wearables — namely the best-selling Apple Watch.

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

Apple’s stock jumps 5% after beating expectations

Apple released earnings for its fiscal second quarter today, reporting revenue of $58 billion, a decline of 5% from the year-ago quarter, and quarterly earnings per diluted share of $2.46, down 10%. International sales accounted for 61% of the quarter’s revenue.

The market apparently approves. Apple’s shares have jumped $10 apiece since the earnings were released, putting the company in spitting distance of the $1 trillion market cap it has been flirting with since last August.

The earnings are also in line with the guidance that Apple had provided during its last earnings call. In late January, per Apple’s guidance for the second quarter, it had estimated that its revenue would fall between $55 billion and $59 billion, its gross margins between 37% and 38%; its operating expenses between $8.5 billion and $8.6 billion; and that it would see other income of $300 million.

In a release, the company did not break out iPhone sales, which have come under pressure. Instead, CEO Tim Cook tried focusing attention on other aspects of the company’s business. “Our March quarter results show the continued strength of our installed base of over 1.4 billion active devices, as we set an all-time record for services, and the strong momentum of our wearables, home and accessories category, which set a new March quarter record,” said Cook in the release. “We delivered our strongest iPad growth in six years, and we are as excited as ever about our pipeline of innovative hardware, software and services. We’re looking forward to sharing more with developers and customers at Apple’s 30th annual Worldwide Developers Conference in June.”

Apple had a tough 2018, with iPhone sales in the last quarter of the year falling 15% from where they’d been at the end of 2017 owing in part to stalled demand in China. Overall, sales in China fell a whopping 27% between the end of 2017 and the end of 2018, from $18 billion in revenue in the fourth quarter of 2017, or 20% of the company’s total revenue during the period, to $13.2 billion, or 16% of the total.

Apple has blamed softening consumer demand in China’s market for its woes, but it hasn’t given up on the country; it can’t afford to, given its potential. In fact, earlier this month, to goose demand, Apple trimmed by up to 6% prices on the iPhone, iPad and other products it sells in China, according to Xinhua, the state-run news agency. The move was ostensibly triggered by China reducing its value-added tax, which is akin to sales tax in the U.S., to 13% (from 16%).

Devices have been tough for everyone. As we reported yesterday, Alphabet’s Q1 earnings were a disappointment for Wall Street primarily because of the company’s ad revenue shortcomings but also because of a stagnating global smartphone market that has impacted virtually all players. (CEO Sundar Pichai cited “year over year headwinds” when referring to the company’s smartphone line.)

Indeed, as widely anticipated, hardware proved a mixed bag for Apple in the second quarter. In the meantime, Apple has dramatically increased its focus on its services business. Roughly a month ago, the company announced a credit card in partnership with Goldman Sachs and Mastercard that’s designed for the iPhone and works with the Wallet app. It also officially unveiled it streaming initiative, Apple TV+, which is coming this fall and will be supported through an ad-free subscription.

Apple announced last year that its fiscal fourth quarter of 2018 was the last quarter in which it would report detailed iPhone figures, which may frustrate current and potential shareholders.

As famed VC Bill Gurley noted in a series of tweets earlier today, “Interesting to see very large companies get away with a lack of segment disclosure. AWS for a long time was not broken out. Mixing search and YouTube revenues makes no sense for $GOOG, and is quite unhelpful to investors trying to understand the company . . .Our much smaller companies are routinely told by their auditors and the SEC that they need to provide segment analysis, but it seems remarkably unfair when a company the size of Google with a segment as large as YouTube (~$20B) are not held to same standard.”

We’ll have more on Apple’s earnings for you soon.

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

Meet the tech boss, same as the old boss

“Power corrupts, and absolute power corrupts absolutely.” It seems darkly funny, now, that anyone ever dared to dream that tech would be different. But we did, once. We would build new companies in new ways, was the thinking, not like the amoral industrial behemoths of old. The corporate villains of 90s cyberpunk were fresh in our imaginations. We weren’t going to be like that. We were going to show that you could get rich, do good, and treat everyone who worked for or interacted with your business with fundamental decency, all at the same time.

The poster child for this was, of course, Google, whose corporate code of conduct for fifteen years famously included the motto “don’t be evil.” No longer, and the symbolism is all too apt. Since removing that phrase in 2015, we’ve all witnessed reports of widespread sexual harassment, including 13 senior managers fired for it; Project Maven; and Project Dragonfly. Internal backlashes and a mass walkout led to retractions and changes, courtesy of Google employees rather than management … and now we’re seeing multiple reports of management retaliation against those employees.

Facebook? I mean, where do we even begin. Rootkits on teenagers‘ phones. Privacy catastrophe after privacy catastrophe. Admissions that they didn’t do enough to prevent Facebook-fostered violence in Myanmar. Sheryl Sandberg personally ordering opposition research on a Facebook critic. And those are just stories from the last six months alone!

Amazon? Consider how they overwork and underpay delivery drivers and warehouse workers. Apple? Consider how they “deny Chinese users the ability to install the VPN and E2E messaging apps that would allow them to avoid pervasive censorship and surveillance,” to quote Stanford’s Alex Stamos. Microsoft? The grand dame of the Big Five has mostly evolved into a quiet enterprise respectability, but has recently seen “dozens of” reports of sexual harassment and discrimination ignored by HR, along with demands for cancellation of the HoloLens military contract.

Those are the five most valuable publicly traded companies in the world. It’s far from “absolute power,” but it’s far more power than the tech industry has had before. Have we avoided corruption and complacency? Have we done things differently? Have we been better than our predecessors? Not half so much as we hoped back in the giddy early days of the Internet. Not a quarter. Not an eighth.

And it’s mostly so gratuitous. Google didn’t need to try to build a censored search engine for China. They don’t need the money — they’re a giant money-printing machine already — and the Chinese people don’t need their product. Amazon doesn’t need to treat its lower-paid workers with vicious contempt. (It’s true they finally — finally! — raised their minimum wage to $15, but it could very easily afford to make their pay and working conditions substantially better yet.) Facebook doesn’t need to … to increasingly act like a company whose management is composed largely of wide-eyed cultists and/or mustache-twirling villains, basically.

Google should have promoted the organizers of their walkout, but there, at least, you can see why they didn’t. Raw fear. The one thing which truly frightens the management of big tech companies, more than regulators, more than competitors, more than climate change, is their own employees.

Is it that the modern megacorps have inherited from their forebears the obsession with growth at all costs, a religious drive to cast their net over every aspect of the entire world, so it’s still not enough for each of those companies to make billions upon billions from advertising and commerce to spend on their famous — and now sometimes infamous — “moonshot” projects? (Don’t talk to me about the fiduciary duty of maximum profit. Tech senior management can interpret that “duty” however they see fit.)

Is it that any sufficiently large and wealthy organization becomes, in its upper reaches, a nest of would-be Game of Thrones starlets, playing power politics with their pet projects and personal careers, regardless of the costs and repercussions? (At least when they are born of hypergrowth; it’s noticeable that more-mature Apple and Microsoft, while imperfect, still seem by some considerable distance the least objectionable of these Big Five, and Facebook the most so.)

I don’t want to sound like I think the tech industry is guilty of ruining everything. Not at all. The greatest trick the finance industry ever pulled is somehow convincing (some of) the world that it’s the tech industry who are the primary drivers of inequality. As for the many media who seem to be trying to pin recent election outcomes, and all other ills of the world, on tech, well —

Honestly I'm a little sick of journalists blaming tech for all that ails us as if "tech" put Hillary Clinton's emails on their front pages for months straight.

— Catherine Bracy (@cbracy) April 24, 2019

But the existence of greater failures should not blind us to our own, and whether we have failed in an old way or a new one is moot. Accepting this failure is — at least for people like me who were once actually dumb/optimistic enough to believe that things might be different this time — an important step towards trying to build something better.

from Apple – TechCrunch https://tcrn.ch/2ZFD2SX

Apple Q2: iPads up, iPhones down

Today’s big story for Apple revenue was once again focused on services. That’s likely to be the tale for the foreseeable future, as the company continues to pump billions into products offerings like Apple TV+.

As predicted, hardware was more of a mixed bag for the company. The iPad, a bright spot in an otherwise stagnant tablet market also marked a key highlight the quarter, as revenue jumped 22 percent year over year. Notably, the company now offers its largest range of slates, with recent quiet refreshes to the Air and Mini following last year’s big Pro update.

Revenue for Mac dipped slightly, in spite of a recent refreshes to the MacBook Pro and iMac and last year’s milestone of 100 million Macs in use. Late last month, the company apologized for on-going woes involving its MacBook keyboards.

iPhones, meanwhile, missed expectations slightly, maintaining the recent downturn in handset sales.

Last quarter was a rough one for Apple devices, as iPhone revenue dropped 15 year over year. Tim Cook attempted to soften that blow with lowered guidance, pointing specifically to a less than spectacular showing in China. That, in turn, was the result of several factors, including a slowing Chinese economy and plateauing global smartphone numbers. This quarter notably saw an iPhone price drop in China.

Yesterday’s Alphabet earnings took a similar line, as CEO Sundar Pichai noted “headwinds” in year on year sales of its Pixel device. Google is expected to follow in Apple’s footsteps with its own budget smartphone, the Pixel 3a next week at I/O.

Many analysts have pointed to 5G as the next major factor in kickstarting phone sales for both Apple and the rest of the industry. However, all signs currently point to a 2020 arrival for a 5G iPhone — putting the device more than a year out, and well behind releases from chief competition like Samsung and Huawei.

That said, a recent deal with Qualcomm that finally ended the long time feud between the two hardware powerhouses could hasten the arrival of the technology on the iPhone. Though it seems equally likely the company will focus on other features and simply wait until next year, when 5G has had an opportunity for a much wider roll out.

In a statement, Cook lauded iPads sales, while attempting to set the stage for future announcements. “Our March quarter results show the continued strength of our installed base of over 1.4 billion active devices, as we set an all-time record for Services, and the strong momentum of our Wearables, Home and Accessories category, which set a new March quarter record,” Cook said. “We delivered our strongest iPad growth in six years, and we are as excited as ever about our pipeline of innovative hardware, software and services. We’re looking forward to sharing more with developers and customers at Apple’s 30th annual Worldwide Developers Conference in June.”

Last year’s WWDC was notably devoid of any sort of hardware announcements, with most coming toward the end of the year. This year’s could be different, as the company looks to shake loose some of the hardware cobwebs. Apple TV, HomePod and other home devices seem prime for an upgrade as it continues to pump money into the services that fuel those products, along with increased competition to HomeKit from the likes of Amazon and Google.

The exact breakdown of device sales is difficult to parse, given how the company currently reports earnings. Late last year, the company announced that it would no longer be reporting iPhone sales figures. Revenue for the home and accessories categories, meanwhile, are mixed in with wearables — namely the best-selling Apple Watch.

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

Developers can now verify mobile app users over WhatsApp instead of SMS

Facebook today released a new SDK that allows mobile app developers to integrate WhatsApp verification into Account Kit for iOS and Android. This will allow developers to build apps where users can opt to receive their verification codes through the WhatsApp app installed on their phone instead of through SMS.

Today, many apps give users the ability to sign up using only a phone number — a now popular alternative to Facebook Login, thanks to the social network’s numerous privacy scandals that led to fewer people choosing to use Facebook with third-party apps.

Plus, using phone numbers to sign up is common with a younger generation of users who don’t have Facebook accounts — and sometimes barely use email, except for joining apps and services.

When using a phone number to sign in, it’s common for the app to confirm the user by sending a verification code over SMS to the number provided. The user then enters that code to create their account. This process can also be used when logging in, as part of a multi-factor verification system where a user’s account information is combined with this extra step for added security.

While this process is straightforward and easy enough to follow, SMS is not everyone’s preferred messaging platform. That’s particularly true in emerging markets like India, where 200 million people are on WhatsApp, for example. In addition, those without an unlimited messaging plan are careful not to overuse texting when it can be avoided.

That’s where the WhatsApp SDK comes in. Once integrated into an iOS or Android app, developers can offer to send users their verification code over WhatsApp instead of text messaging. They can even choose to disable SMS verification, notes Facebook.

This is all a part of WhatsApp’s Account Kit, which is a larger set of developer tools designed to allow people to quickly register and log in to apps or websites using only a phone number and email, no password required.

This WhatsApp verification codes option has been available on WhatsApp’s web SDK since late 2018, but hadn’t been available with mobile apps until today.

from Android – TechCrunch https://tcrn.ch/2ITg8m2
via IFTTT

Aperture dies the true death in Apple’s next macOS update

Aperture was a great application for editing photos back in the day, but it hasn’t been supported by Apple for years. You can, however, still run it on the latest Macs, should you need to. But that won’t be the case for long, the company has announced.

In a support page pointed out by MacRumors, Apple explains that “for technical reasons, Aperture will not run in future versions of macOS after macOS Mojave.”

What exactly those technical reasons are only Apple knows, but it isn’t hard to imagine the various file structures, architectures, libraries and so on that Aperture relied on are simply no longer compatible with the changes the company has made to the OS. macOS has come quite a distance since Aperture was abandoned in 2014, and it’s actually kind of impressive that the app still runs.

Apple To Cease Development Of Aperture And Transition Users To Photos For OS X

You can of course keep a machine running Mojave around if you really need to use Aperture for some reason or another, but honestly, there’s not much reason any more. The photo editor has long been outpaced by its competition, the likes of Lightroom, Capture One, and of course mobile photography software. Apple’s own Photos app is nothing like Aperture but fills some of the same roles.

To that end Apple suggests you migrate your Aperture photo library into either Lightroom Classic, which has an import tool specifically for this, or Photos, which should automatically import your old library when you launch it for the first time. If it hasn’t already, you can hold option while opening it and it will let you manually add a library to it.

Be aware however that adjustments and other settings you’ve made in Aperture may not carry over or might be set in stone once they arrive in their new home. So if you’ve been putting off editing that one shoot from all those years ago… better do that first.

It’s sad to see a good product finally fade away completely, but I’ve already shed those tears, moved on to Lightroom, and never looked back. I wish Apple prioritized its pro and pro-ish users more too, but what can I say? They don’t.

from Apple – TechCrunch https://tcrn.ch/2PD23te