Panel:
- Bart Busschots (host) – @bbusschots
- Lynda Gousha from the Silicon Valley MUG – @llg4cdg
- Nick Riley – @spligosh
The show starts with a quick run-down of developments in some of the major legal cases involving Apple, then moves on to some notable numbers and some Apple HR News. The five main stories are Apple’s Q1 2019 earnings, a good CES for Apple, the FaceTime bug, Facebook & Google breaking the rules of Apple’s Enterprise program and briefly losing their internal apps, and some encryption and privacy news. The show finishes with a quick rundown of some smaller Apple-related stories that made the news in January.
You’ll find detailed show notes below the fold, and if you enjoy this free show, please consider clicking on the donate button at the top of the left side bar – the show is free for you to listen to, but not for Bart to Produce!
Legal Latest
- 🇺🇸 A federal magistrate judge in Oakland CA denied an application for a warrant to cease every phone in a building regardless of who owned it, and the right to force the owners to biometrically unlock the devices. In her ruling Judge Kandis Westmore cited both 4th and 5th amendment concerns, saying the warrant is over-broad, and that unlocking a phone by any means is testimonial (hence covered by the 5th amendment protection against self-incrimination) because our phones are effectively extensions of our brains these days. This ruling conflicts with others in different federal courts, so this issue is likely to rise up to the US Supreme Court at some stage. It has some way to go though, this was a federal district court ruling which can be appealed to the relevant circuit court, and only then can it be appealed to the supreme court who can then choose whether or not to take the case — arstechnica.com/… & nakedsecurity.sophos.com/…
- Apple -v- Qualcomm
- 🇩🇪 Apple got a partial victory over Qualcomm in Germany when a court in Munich rejected four Qualcomm patent claims. These claims related to search, not hardware, and relate to the same patents that recently resulted in an iPhone ban in China. These claims were separate to those that resulted in a preliminary ban on sales of the iPhone 7 & 8 in Germany last month; a final ruling on those claims is still to come — 9to5mac.com/…
- Apple says Qualcomm refused to sell it chips for the latest iPhones — www.theverge.com/…
- 🇺🇸 Qualcomm and the US FTC made their closing arguments in the FTC’s lawsuit against Qualcomm. Judge Lucy Koh warned that because this is such and important and complex case, it may take her longer than usual to reach a decision — appleinsider.com/…
- 🇺🇸 Apple has lost its appeal against so-called patent troll VirnetX over FaceTime at the US Federal Circuit Court of Appeals. Apple now owes VirnetX $440M, but says it will appeal — arstechnica.com/…
- 🇺🇸 Apple Settles Lawsuit With Biometric Sensor Company Valencell That Accused it of Stealing Technology for Apple Watch — www.macrumors.com/…
- 🇰🇷 The Korean FTC has found Apple guilty of unfair practices in its dealings with carriers, but it will let Apple respond, and Apple has done so. Now we have to wait and see how Apple’s response is treated — www.macobserver.com/…
Notable Numbers
- Data from Localytics shows a sharp rise in iPad and iPhone XR activations over this Christmas period as compared non-holiday activation rates (iPad up 219%, 11“ iPad Pro up 125%, iPad Mini up 108%, iPad Pro 12.9” up 99%, and iPhone XR up 88%) — info.localytics.com/…
“We determine lift in device activations by calculating percent change in new devices in the days surrounding Christmas compared with new devices in the average week for the same time period”
- 🇺🇸 In 2018 Apple Spent $60 Billion With 9,000 U.S. Suppliers — www.macobserver.com/…
- Apple announced a record-breaking holiday season for the App Store ($1.22Bn total revenue, and $322M on New Year’s Day, a new daily record) — www.apple.com/…
Apple HR News
- Apple have hired Sandy Parakilas, a former Facebook employee who was tasked with monitoring developer compliance, tried to raise concerns within the company, and then left out of frustration. Parakilas also criticised Facebook for not taking privacy concerns seriously in testimony to a UK parliamentary committee — www.fastcompany.com/…
- Apple has hired Soonho Ahn, a former executive with Samsung’s battery division, generating speculation that Apple may start developing its own batteries — www.bloomberg.com/… & arstechnica.com/…
- Siri team continues to reorganize under John Giannandrea — www.imore.com/…
- Apple has cut 200 people from Project Titan, its autonomous vehicle project. Some media reported the cuts as layoffs, but a statement from Apple implied the workers could be re-assigned to different projects within Apple — arstechnica.com/…
- Apple Plans to Cut Back on Hiring Due to iPhone Sales Struggles — www.bloomberg.com/…
Main Stories
- Apple’s 2019 Q1 Earnings
- In a letter to investors Apple revised its guidance at the start of January, reducing expected revenue from $89–93Bn to $84Bn — www.apple.com/…
- Apple’s guidance was already quite low (from analysts POV), and Tim Cook reiterated the four reasons behind that conservative guidance:
- Timing — products were released at slightly different times in 2018 as compared to 2017, so it was always going to a touch year-on-year comparison
- Strong US Dollar — this makes Apple products relatively more expensive in foreign markets (I sure feel that here in Europe!)
- Supply Constraint — lots of new products ramping up in the quarter, so a real danger of demand out-stripping supply
- “Expected Economic Weakness in Some Emerging Markets” — i.e. “we expected things to slow down in China”
- Tim Cook blamed the miss on:
- China — Apple had expected the Chinese economy to slow down, but not by nearly as much as it did
- Related: Data released by the China Academy of Information and Communications Technology (a government body) shows smartphone shipments down 12–15.5% in China — www.reuters.com/…
- Slower iPhone Demand than Expected due to fewer carrier subsidies and cheaper battery replacements
- China — Apple had expected the Chinese economy to slow down, but not by nearly as much as it did
- Tim stressed that Apple would have plenty of good news to report too, and even shared a little in the letter:
- Instal-base grew by 100M in the past 12 months to a new all-time high (exact number followed in the earnings call — 1.4Bn, and reached record levels in each geographic region)
- Excluding iPhones, revenue is up 19%, with all-time records for Services, Wearables, and Mac.
- Services set new records in every region.
- Wearables grew 50% year-on-year.
- Related: Samsung Electronics says weak chip demand sent fourth-quarter profit well below market estimates — www.reuters.com/…
- Analysis:
- Apple Warns of December Quarter Revenue Shortfall, Blames China, Stock Drops After Hours – Here’s What You Need to Know — www.macobserver.com/…
- Apple stock plummets 8% on news of grim Q1 2019 outlook — arstechnica.com
- Apple’s Terrible No Good Very Bad Earnings Warning — daringfireball.net/…
- Steve Jobs and Apple’s Last Previous Earnings Warning — daringfireball.net/…
- Daring Fireball: On Apple’s $29 iPhone Battery Replacement Program and Its Role in Their Earnings Miss — daringfireball.net/…
- Apple’s guidance was already quite low (from analysts POV), and Tim Cook reiterated the four reasons behind that conservative guidance:
- Apple released their Q1 2019 Results on the 29th of January — www.apple.com/…
- Highlights:
- The final revenue number was $84.3Bn, down 5% year-on-year.
- iPhone revenues were down 15% year-on-year, but everything else was up.
- Services revenues was up 19% year-on-year to $10.9Bn, which was up 19% year over year.
- Earnings per share were up 7.5% year-on-year at $4.18, and all-time record!
- Apple returned returned over $13Bn to investors through dividends and share buy-backs.
- Active installed base of devices reached an all-time high of 1.4Bn in the first quarter, growing in each geographic segment.
- Apple Music subscribers hit 50M over the holidays.
- Apple Reports December Quarter Revenues: iPhones Down, Everything Else Up, After Hour Market Reacts Positively — www.macobserver.com/…
- Apple Q1 2019: Services, Mac, and wearables up as iPhone revenues dip — www.imore.com/…
- Apple’s Q1 2019 Results: iPhone Bad, the Rest Good — tidbits.com/…
- Apple says iPhones were down 15% last quarter, but everything else was up 19% — arstechnica.com
- Related: Apple Reportedly Shipped 14.5 Million iPads in Q4 2018 — www.macobserver.com/…
- Highlights:
- In a letter to investors Apple revised its guidance at the start of January, reducing expected revenue from $89–93Bn to $84Bn — www.apple.com/…
- A good CES for Apple
- Lots of new Home Kit products unveiled — www.macobserver.com/…
- AirPlay 2 coming to TVs from LG, Samsung, Sony, and Vizio — www.macobserver.com/…
- A version of iTunes coming to Samsung smart TVs — tidbits.com/…
- TiVo unveiled and demoed an up-coming Apple TV app — www.macobserver.com/…
- Related: VLC will add AirPlay support ‘soon’ — arstechnica.com/…
- A serious bug was discovered in Apple’s Group FaceTime feature. The bug allowed an attacker to remotely enable the microphone, and in some cases camera too, on a victims device. The problem seems to have been with the transition between regular FaceTime and Group FaceTime. To trigger the bug an attacker would call their victim via FaceTime, then, before the victim answered the call, add a third person to the conversation, when the conversation jumped into Group FaceTime mode, the fact that the call was not accepted was forgotten, and the victim device silently joined the group call. The third person could be anyone, including the attacker themselves! The bug was discovered by a teenager, and his mother tried extremely hard to raise the alarm, but without must success at first. When the issue finally gained media attention Apple quickly responded by promising a fix within a few days, and then shutting the Group FaceTime service down temporarily. On Friday Apple released a statement apologising for the bug, explaining that they had fixed it on the server-side, and that a software update would be released next week re-enabling the service for users. Apple also promised to improve its bug reporting process.
- FaceTime bug lets callers hear you before you answer (really) — arstechnica.com
- Everything You Need To Know About the FaceTime Spying Bug — www.intego.com/…
- Group FaceTime Security Bug was Apparently Highlighted by Twitter User a Week Ago — www.macobserver.com/…
- Apple Apologizes About FaceTime Bug, Software Update With Fix Delayed Until Next Week — www.macrumors.com/…
- Apple Fixes Group FaceTime Bug; Promises to Improve Bug Reporting Process — tidbits.com/…
- Facebook & Google caught abusing Apple’s enterprise app program to bypass the app store and deliver data gathering apps to select users. Facebook’s app installed a new root certificate and a VPN app, giving their app access to just about everything users did on their phones. Apple temporarily pulled both companies enterprise certs, but re-instated them after negotiating with the companies.
- Facebook pays teens to install VPN that spies on them — techcrunch.com/…
- Facebook, Google Caught Deploying Invasive Apps; Apple Shuts Them Down — www.intego.com/…
- Apple, Facebook spat is over, for now—iOS certificate access restored — arstechnica.com
- Google says sorry for pulling a Facebook with monitoring program — nakedsecurity.sophos.com/…,
- Apple restores Google’s own internal iPhone apps after privacy brouhaha — arstechnica.com
- Certificate Wars: A Quick Rundown of Apple’s Dustup with Facebook and Google — tidbits.com/…
- We dismantle Facebook’s memo defending its ‘Research’ — techcrunch.com/…
- Developments in the on-going fight over privacy and encryption:
- 🇦🇺 Australia’s controversial anti-encryption law has come into effect — www.macobserver.com/…
- Grey-hat security firm Zerodium upped their prices for many classes of zero-day exploit, including those attacking iOS and the Mac. A remote iOS exploit is worth up to $2M now. Zerodium sell vulnerabilities to governments, and do not inform the vendors — www.macobserver.com/…
- 🇷🇺 Russia succeeds in getting Apple to comply with its 2014 law requiring data on Russian citizens to be stored within the country. This follows a similar achievement by the Chinese government last year — www.macobserver.com/… & foreignpolicy.com/…
- 🇬🇧 GCHQ (Britain’s equivalent of the NSA in the US) is proposing requiring tech companies to silently add agents into encrypted group calls and messages. Because companies like Apple and Facebook manage encryption keys on behalf of users, this is technically possible. For now, these are just proposals, not concrete plans — www.macobserver.com/…
- 🇯🇵 The Japanese government are investigating ways of applying their privacy laws to international companies — www.macobserver.com/…
- In an opinion piece in Time Magazine Tim Cook called on the US government to introduce privacy rights and to regulate data brokers — time.com/…
Quick Stories
- Apple launches Smart Battery Case for iPhone XS, iPhone XS Max, and iPhone XR — www.imore.com/…
- App Store News:
- Netflix have stopped allowing new customers to sign up through iTunes, cutting off Apple’s 30% cut. Note that existing customers will be allowed to continue renewing through iTunes, so Apple’s not losing all Netflix revenue immediately — arstechnica.com/… & daringfireball.net/…
- Office 365 comes to the Mac App Store — www.microsoft.com/… & arstechnica.com/…
- Two interesting Apple Music deals:
- Apple have struck a deal with American Airlines allowing Apple Music subscribers to stream music onboard without having to buy wifi access — www.apple.com/…
- Verizon are offering free Apple Music subscriptions as part of their high-end cellphone plans — 9to5mac.com/…
- The iPhone SE made two brief appearances on Apple’s US Clearance store — www.macrumors.com/… & www.macobserver.com/…
- Transit directions have been added to Apple maps in four European countries: Sweden, Norway, Denmark & Finland — www.macobserver.com/…
- Apple, Johnson & Johnson, Partner on Stroke Prevention Study — www.macobserver.com/…
- Apple Pay News:
- 🇺🇸 Apple have partnered with US health insurer Aetna to create Attain, a fitness tracking app that helps users set realistic goals, and then rewards them for achieving them with gift cards and even free Apple Watches. The company stressed that data from the app will not be used when assessing policies — www.macobserver.com/…
- For the 12th year in a row Apple has topped Fortune’s Most Admired Company list — www.macobserver.com/…
- Microsoft no longer sees Cortana as an Alexa or Google Assistant competitor — www.theverge.com/…
- Apple to hold annual shareholders meeting on March 1st at Steve Jobs Theater — 9to5mac.com/…