iPhones have weak quarter, but wearables are doing great

As anticipated, Apple’s hardware numbers were a mixed bag during today’s Q2 earnings report. Apple continues to shift much of its resources to services and content, including a billion dollar push into Apple TV+. But while iPhone number were down, things weren’t all bad on the device front.

Notably, wearables are up in a big way. The category hit $5.5 billion for the quarter, up from $3.7 billion, year over year. The boost came in no small part to the arrival of new AirPods, featuring wireless charging functionality, in spite of the company DOAing its AirPower charging pad.

“This was our biggest June quarter ever — driven by all-time record revenue from Services, accelerating growth from Wearables, strong performance from iPad and Mac and significant improvement in iPhone trends,” Tim Cook said in a press released tied to earnings. “These results are promising across all our geographic segments, and we’re confident about what’s ahead. The balance of calendar 2019 will be an exciting period, with major launches on all of our platforms, new services and several new products.”

Apple’s revenue growth slows as iPhone sales dip 12% year-over-year

The optimism around iPhone isn’t entirely universal at the moment. The quarter marked another decline for the company, from $29.5 billion to $25.9 billion, with the category dipping below 50 percent of the company’s total revenue for the time period. The past several quarters have seen a decline in iPhone sales, thanks to an overall stagnation in the global market, coupled with slower than expected sales in China.

That, in turn, is the result of slowed economic growth in the country. In fact, few manufacturers have been able to buck the trend in China, save for Huawei. The embattled hardware giant has increased domestic sales through aggressive pricing strategy and an increased push for patriotic purchases as it sees political headwinds abroad.

Apple’s services revenue grows 13% year-over-year

On this evening’s call, Cook said there’s some cause for optimism when it comes to China. “I’d like to provide some color on our performance in Greater China, where we saw significant improvement compared to the first half of fiscal 2019 and return to growth and constant currency,” the exec said. “We experienced noticeably better year over year comparisons for our iPhone business there than we saw in the last two quarters. And we had sequential improvement in the performance of every category.”

Apple, of course, will be announcing new phones later this year, though, though it remains to be seen whether a new feature set will be strong enough to kickstart sales. 5G is expected to be a guy driver in smartphone numbers in the year ahead, though Apple isn’t expected offer the capability until 2020.

The company also recently agreed to purchase Intel’s modem division in an effort to build more components in house.

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Tim Cook confirms Apple Card is rolling out next month

Apple hitting its release timelines has become far from certain these days, cough cough AirPower, but the Apple Card will be hitting its summer release timeframe. CEO Tim Cook announced on the company’s quarterly earnings call that the Apple Card — which Apple has partnered with Goldman Sachs to rollout — will begin rolling out next month.

“Thousands of Apple employees are using Apple card every day in our beta test, and we plan to begin the rollout of Apple card in August,” Cook said.

Cook’s announcement confirms a Bloomberg report last week that Apple was targeting an early August rollout for the card.

How Apple Card works

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Apple’s services revenue grows 13% year-over-year

One of the constant refrains about Apple in 2019 is its shift towards services — a trend that’s reflected, once again, in its third quarter earnings release.

In fact, the release trumpets the “all-time high” for services revenue in its headline, while a statement from CEO Tim Cook describes this as “our biggest June quarter ever — driven by all-time record revenue from Services,” as well as sales of wearables, iPads, Macs and iPhones.

Apple’s services business includes its subscription products like iCloud, Apple Music and Apple News+. The category will probably grow even more in the coming months with the launch of Apple TV+ and Apple Arcade.

And the latest numbers do indeed beat last quarter’s services revenue (which also set a record), but it’s pretty close — $11.450 billion in Q2 compared to $11.455 billion in Q3. Also worth noting: Analysts had predicted Apple’s services revenue would come in at $11.68 billion, so this is a relative disappointment.

On the other hand, the growth is more impressive when you look at it year-over-year — in the same quarter last year, Apple reported services earning of $10.17 billion, so this is an increase of 13%. It also looks good compared to the direction of product revenue, which is down year-over-year, to $42.35 billion, due in part to falling iPhone sales.

Apple’s revenue growth slows as iPhone sales dip

 

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Apple’s revenue growth slows as iPhone sales dip

Apple just released its Q3 earnings and it had a solid June quarter, outperforming analyst expectations. The company reported $53.8 billion in revenue and $2.19 earnings per share. The company’s stock popped 3 percent on the news.

Apple’s June quarter revenue showcases just how much revenue growth has been slowing for the company. The Q3 2019 revenue of $53.8 billion just peeks above the Q3 2018 revenue of $53.3 billion.

iPhone revenue had the biggest year-over-year dip going from $29.5 billion in last year’s Q3 to just $26 billion this most recent quarter. The year-over-year decline in iPhone sales was made up for in a boost in all of the company’s other product categories including a major bump in Wearables sales which crossed $5.5 billion in Q3.

The company hasn’t been sharing device numbers for the last several quarters and has instead focused solely on revenues, a sign of both the stagnating iPhone sales and the spike in the iPhone’s average selling price.

The story for the last several quarters that Cook and Co. have been selling is the spike in Services revenue. This quarter, Services didn’t grow quite as much as analysts hoped but it still reached $11.5 billion.

One of the company’s biggest headlines this quarter came last week when the company announced it was purchasing “most of” Intel’s modem business for $1 billion. There aren’t likely to be too many near-term effects of this deal though Apple aiming to own more of its supply chain has certainly been a decades-long effort for the company.

Updating

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Inside the history of Silicon Valley labor, with Louis Hyman

As I wrote for TechCrunch recently, immigration is not an issue always associated with tech — not even when thinking about the ethics of technology, as I do here.

So when I was moved to tears a few weeks ago, on seeing footage of groups of 18 Jewish protestors link arms to block the entrances to ICE detention facilities, bearing banners reading “Never Again” in reference to the Holocaust — these mostly young women risking their physical freedom and safety to try to help the children this country’s immigration service is placing in concentration camps today, one of my first thoughts was: I can’t cover that for my TechCrunch column. It’s about ethics of course, but not about tech.

It turns out that wasn’t correct. Immigration is a tech issue. In fact, companies such as Wayfair (furniture), Amazon (web services), and Palantir (the software used to track undocumented immigrants) have borne heavy criticism for their support of and partnership with ICE’s efforts under the current administration.

And as I discussed earlier this month with Jaclyn Friedman, a leading sex ethics expert and one of the ICE protestors arrested in a major demonstration in Boston, social media technology has been instrumental in building and amplifying those protests.

But there’s more. IBM, for example, has an unfortunate and dark history of support for Nazi extermination efforts, and many recent commentators have drawn parallels between what IBM did during the Holocaust and what companies like Palantir are beginning to do now.

Dozens of protestors huddle in the rain outside Palantir HQ.

I say “companies,” plural, with intention: immigrant advocacy organization Mijente recently released news that Anduril, the company founded by Palmer Luckey and composed of Palantir veterans, now has a $13.5 million contract with the Marine corps for their autonomous surveillance “Lattice” towers at four different USMC bases, including one border base. Documents procured via the Freedom of Information Act show the Marines mention “the intrusion dilemma” in their justification for choosing Anduril.

So now it seems the kinds of surveillance tech we know are badly biased at best — facial recognition? Panopticon-style observation? Algorithms of various other kinds — will be put to work by the most powerful fighting force ever designed, for expanded intervention into our immigration system.

Will the Silicon Valley elite say “no”? To what extent will new protests emerge, where the sorts of people likely to be reading this writing might draw a line and make work more difficult for their peers at places like Anduril?

Maybe the problem, however, is that most of us think of immigration ethics as an issue that might touch on a small handful of particularly libertarian-leaning tech companies, but surely it doesn’t go beyond that, right? Can’t the average techie in San Francisco or elsewhere safely and accurately say these problems don’t actually implicate them?

Turns out that’s not right either.

Which is why I had to speak this week with Cornell University historian Louis Hyman. Hyman is a Professor at Cornell’s School of Industrial and Labor Relations, and Director of the ILR’s Institute for Workplace Studies, in New York. In our conversation, Hyman and I dig into Silicon Valley’s history with labor rights, startup work structures and the role of immigration in the US tech ecosystem. Beyond that,  I’ll let him introduce himself and his extraordinary work, below.

Louis Hyman. (Image by Jesse Winter)

Greg Epstein: I discovered your work via a piece you wrote in the Washington Post, which drew from your 2018 book, Temp: How American Work, American Business, and the American Dream Became Temporary. In it, you wrote, “Undocumented workers have been foundational to the rise of our most vaunted hub of innovative capitalism: Silicon Valley.”

And in the book itself, you write at one point, “To understand the electronics industry is simple: every time someone says “robot,” simply picture a woman of color. Instead of self-aware robots, workers—all women, mostly immigrants, sometimes undocumented—hunched over tables with magnifying glasses assembling parts, sometimes on a factory line and sometimes on a kitchen table. Though it paid a lot of lip service to automation, Silicon Valley truly relied upon a transient workforce of workers outside of traditional labor relations.”

Can you just give us a brief introduction to the historical context behind these kinds of comments?

Louis Hyman: Sure. One of the key questions all of us ask is why is there only one Silicon Valley. There are different answers for that.

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Apple, Microsoft and Google to test new standard for patient access to digital health data

A newly released data model and draft implementation guide for providing digital access to historical health insurance claims data directly to patients could mean you have better access to this info from the devices you use everyday. Called the CARIN Blue Button API, it’s a new model developed by private sector partners including consumer organizations, insurance providers, digital health app developers and more, this new draft implementation will be in testing beginning this year, with participating companies including a number of different state-specific BlueCross/BlueShield providers, the State of Washington – and Apple, Google and Microsoft.

The news was announced today at the White House Blue Button Developers Conference in Washington D.C., and builds on the work done last year by the Centers for Medicare and Medicaid Services to launch Blue Button 2.0, a new standard aimed at providing Medicare beneficiaries in the U.S. access to all of their historical claims information in one place from whatever application they choose to use.

All of the organizations participating in the draft testing process will perform “real-world testing” of the CARIN model developed by the multi-disciplinary working group, with the aim of preparing for a broad, product launch of the data standard in 2020.

Seeing Apple, Google and Microsoft on that list along with a significant number of health care providers is a good sign, since it should mean more data portability and choice when it comes to how you access your own patient information, rather than it being decided on a platform-by-platform basis.

Apple already built a Health Records section into its own native Health app in iOS at the beginning of last year, and while it works with standards sometimes adopted by health care providers, it’s far from a universal, truly interoperable health care history feature on its own. Apple has been building partnerships with agencies and providers including Veterans’ Affairs and Aetna to flesh out its personal health data offering for users, and Microsoft has its own health records offering called HealthVault.

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Apple is hosting augmented reality art walking tours in major cities

Apple is combining two long-standing major efforts in a new push, making AR more consumer-friendly and helping portray Apple Stores as civic centers where communities can come together.

The project, called [AR]T Walk, is a walking tour through various city centers around the globe aiming to help the digital art works of artists come alive in physical spaces. The tours are taking place in Hong Kong, London, New York, Paris, San Francisco and Tokyo through mid-August.

Showcasing digital art in geo-specific locations isn’t a new concept. In 2017, Snapchat debuted a partnership with Jeff Koons in Central Park, though the company had some issues with ensuring the tech worked reliably.

Hands-on with Snapchat’s mediocre, crashy AR art

People looking to take part in the AR walking tours can sign up on Apple’s site. The tours seem to last a couple of hours and involve a 1.5-mile walk. The artists behind the work are Nick Cave, Nathalie Djurberg and Hans Berg, Cao Fei, John Giorno, Carsten Höller and Pipilotti Rist.

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