Apple

Tim Cook, writing for Time Magazine:

That’s why I and others are calling on the U.S. Congress to pass comprehensive federal privacy legislation—a landmark package of reforms that protect and empower the consumer. Last year, before a global body of privacy regulators, I laid out four principles that I believe should guide legislation:

First, the right to have personal data minimized. Companies should challenge themselves to strip identifying information from customer data or avoid collecting it in the first place. Second, the right to knowledge—to know what data is being collected and why. Third, the right to access. Companies should make it easy for you to access, correct and delete your personal data. And fourth, the right to data security, without which trust is impossible.

And:

One of the biggest challenges in protecting privacy is that many of the violations are invisible. For example, you might have bought a product from an online retailer—something most of us have done. But what the retailer doesn’t tell you is that it then turned around and sold or transferred information about your purchase to a “data broker”—a company that exists purely to collect your information, package it and sell it to yet another buyer.

The trail disappears before you even know there is a trail. Right now, all of these secondary markets for your information exist in a shadow economy that’s largely unchecked—out of sight of consumers, regulators and lawmakers.

I applaud Tim’s efforts here. But this road is a difficult one. Just think about all the efforts made to prevent spam, both in your email, and via your phone.

The national do-not-call registry was a solid idea. But it lacked teeth. Like most people, I still regularly get phone calls from spammers and scammers, some spoofing local numbers to make me think the call is from someone I know.

Ridding ourselves of the spammers and scammers takes legislation with teeth. Ridding ourselves of behind the scenes data-brokers will take the same.

Again, I applaud the effort, but it won’t be easy. As always, follow the money. If what you want to get rid of is enriching someone, they’ll use that money to hamper your efforts, via lobbying and political donations. Fortunately, in this case, Apple has deep enough pockets to make a difference here.

Go get ’em Tim.

Pull up Siri and ask these two things:

• How many days since December 17th?

and:

• How many days since December 17th, 2018?

You’ll get two different responses. Now go read the linked post. Very interesting.

DuckDuckGo blog:

We’re excited to announce that map and address-related searches on DuckDuckGo for mobile and desktop are now powered by Apple’s MapKit JS framework, giving you a valuable combination of mapping and privacy. As one of the first global companies using Apple MapKit JS, we can now offer users improved address searches, additional visual features, enhanced satellite imagery, and continually updated maps already in use on billions of Apple devices worldwide.

With this updated integration, Apple Maps are now available both embedded within our private search results for relevant queries, as well as available from the “Maps” tab on any search result page.

I love this integration. It is very well done, and is blazingly fast.

Head to DuckDuckGo.com and type pizza in the search bar. Look for a block on the page with a map and click the Open Map button.

Just a taste, but this is privacy-respecting Apple Maps. Brilliant integration.

See also, DuckDuckGo’s CEO writing about their revenue generation model.

John Gruber deconstructs this Wall Street Journal article, titled Polaroid. Walkman. Palm Pilot. iPhone?. It’s a terrific read, especially useful given the linked article is behind a paywall.

Read John’s whole piece, it’s not that long. But from the wrap-up:

There will be major new products from Apple, someday, when they’re ready. There is no rush for them. If you’re worried about Apple’s near-future success, the key is their execution on their existing products. The Mac, iPhone, iPad, and Watch are all businesses that any company would kill for. Apple has all of them, and none of them are going anywhere. Apple needs to keep them insanely great where they already are, and raise them to insanely great where they aren’t.

This. So much this. I am such an Apple fan. I want that insanely great feeling to go back to being higher in the mix, more the rule than the rare jewel.

Michael Steeber, 9to5Mac:

Apple’s historic Tysons Corner store could be preparing to see an inspired move. Recent plans indicate that construction of a significantly larger and more modern replacement space may soon begin at the nearby Tysons Galleria.

This is big news. The Apple Store at Tysons Corner was the very first one in the world. It was the store that saw the first massive lineups waiting for the chance to buy an iPhone. It was Steve’s brainchild, a plan that would upend the entire concept of retail success.

I love this store. It’s my go-to store, and continues to be massively busy, even when the mall in which it lives is relatively empty (which is rare – it’s a very busy mall). It is a true cornerstone for the mall, a shopping destination for many.

Michael’s article is a good read, with lots of useful links. I would add a few clarifying points.

First, the existing Apple Store is in a mall called Tysons Corner Center, an extremely large, almost always busy, indoor mall. It is on the second floor of the mall, with massive glass doors that allow entry from the mall, into a relatively large rectangular space. No trees, no staircases, just a big retail rectangle dotted with typical Apple Store fixtures and furniture.

It carries none of the architectural details of the later Apple Store evolutions, but it is what it is. The space is boxed in by other retail stores and there are no real options to expand or upgrade the space in any significant way.

The second location referred to in the article is in a nearby mall called Tysons Galleria (to us locals, it’s called Tysons II). Tysons Corner Center is a mall for the people, with typical chain shops, affordable (at least for the region). Tysons II is notably upscale, with high end jewelers, boutique clothiers and pricy kitchen shops. Tysons Corner Center has massive amounts of parking, well managed, and Tysons II has limited parking, with lots of driving around looking for a space.

There is a metro stop between the two malls. Notably, the metro stop has a pedestrian bridge designed for access to Tysons Corner Center (the one with the existing Apple Store), and no trivial way to get to Tysons II (short of walking along busy roads, dodging traffic).

Lots to process here. I would love to see another Apple Store open in the area. I would hate to see the historic first Apple Store close in favor of a new location that is in a high end boutique center, with relatively little foot traffic, that is harder to get to, and far less pedestrian/parking friendly.

As far as I can tell, no formal announcements have been made. Clearly, the retail pieces are moving, rare anchor space being opened up. So it does seem likely that something will happen here. Following with bated breath.

First, from this Apple press release, touting this Friday’s HomePod release in China:

HomePod is a convenient way to check the weather or the latest sports scores, set multiple timers and reminders, make and receive phone calls and more. Siri on HomePod also offers storytelling for children, just say “Hey Siri, tell me a story.”

As pointed out by Benjamin Mayo in this tweet, the request to “tell me a story” does not yield anything useful, just the typical Siri whimsy.

But it is unlike Apple to post an announcement for a non-existent feature. I’m wondering if there’s a mechanism in the works that will bring story time to HomePod, perhaps with an imminent update. I’ve got the latest update installed, so there’s no update waiting, at least as of this moment.

This also makes me wonder how Apple would deliver storytelling for children. Would this be a hook into the Books store, where you’d buy a book and Siri would read to your kids, keeping track of the current place in the book?

Would there be an API for developers to add their own, similar commands? Might this be a clue into HomePod/Siri’s direction for WWDC 2019?

All speculation, I realize. But Apple did open this door with their press release. Will update if I hear anything more.

Ignore the opening paragraph, which is a rant on “armchair CEOS” and “doom and gloom”, read the list itself. Some thoughtful points.

For me, this point stands out:

Installed base of active devices grew by more than 100 million units.

This demonstrates how Apple’s brand tends to keep users within the ecosystem, rather than losing more of them to competitors. Year over year growth for Apple’s services are largely dependent on increasing the overall active installed user base, so this bodes extremely well for Apple’s services sector going forward.

My 2 cents, perhaps uninformed, but it’s what I got:

The smartphone market is, like the PC market years before, growing saturated. The big win features for smartphones have arrived, new features are incremental, not revolutionary. Most people have what they need.

As has been pointed out by many biz bloggers, Apple is shifting their focus to Services. And this new business model grows relative to the installed base of active devices.

Short term, pricing issues and trade wars are bringing the pain. But as long as Apple continues to grow its installed base, I think they’ll turn this giant ship in that new business direction and the business model will find a new point of stability.

John Gruber deconstructs Tim Cook’s “revising our guidance” announcement that is shaking the markets today (here’s a link if you want to check Apple’s current stock price, or just type AAPL into Google).

iPhone sales have effectively peaked for two reasons. First, Apple ran out of new markets to conquer years ago. The iPhone is effectively available worldwide.

And:

But there’s a limit on the number of people in the world who (a) want an iPhone and (b) can afford one, and the iPhone reached that 3-4 years ago. A bad economy in China significantly shrinks the number of people worldwide who can afford one. They’re much in the position Microsoft got to with Windows and PCs — they’re no longer an upstart growth company and are now a massively profitable blue chip.

Apple is making that shift from dependence on iPhone growth to services growth. The good news is that Apple’s services are, indeed, booming. This bad news is a bitter pill, but Apple will certainly get past this.

In an interview with CNBC yesterday (I’ll post that next), Tim highlights a number of services growth stories, including record numbers for Apple’s Chinese App Store.

That said, Apple’s services growth is dependent on ecosystem lock-in. That’s good business for Apple, but is it the best experience for consumers? Does that lock-in mean our photos, music, and message threads are captives of Apple’s iCloud subscription?

Gruber’s take is a fascinating read. And don’t miss his look back at Steve Jobs and Apple’s Last Previous Earnings Warning.

Sarah Perez, TechCrunch:

Earlier this year, Netflix was seen testing a bypass of iTunes billing across dozens of markets worldwide. As 2018 draws to a close, Netflix — the App Store’s top grossing app — has ditched the ability for new users to sign up and subscribe to the streaming service within its iOS app across all global markets. The change means Apple will miss out on hundreds of millions in App Store revenue per year — money it would have otherwise received by way of its standard cut of in-app transactions.

And:

Before the change, Netflix on iOS was grossing an average of $2.4 million per day in 2018 — meaning Apple was making around $700,000 by doing nothing other than allowing Netflix to offer subscriptions in its app.

Interesting power dynamics at work here. Netflix seems to hold all the cards here. Not sure there’s anything Apple can do to bring that revenue back.

Tim Cook:

Today we are revising our guidance for Apple’s fiscal 2019 first quarter, which ended on December 29. We now expect the following:

• Revenue of approximately $84 billion
• Gross margin of approximately 38 percent
• Operating expenses of approximately $8.7 billion
• Other income/(expense) of approximately $550 million
• Tax rate of approximately 16.5 percent before discrete items

We expect the number of shares used in computing diluted EPS to be approximately 4.77 billion.

Based on these estimates, our revenue will be lower than our original guidance for the quarter, with other items remaining broadly in line with our guidance.

Share trading was halted today. Follow the headline link to read the rest of the letter. This seems pretty significant news.

Apple tweaked their App Store review guidelines from:

Apps should not directly or indirectly enable gifting of in-app purchase content, features, or consumable items to others.

To:

Apps may enable gifting of items that are eligible for in-app purchase to others. Such gifts may only be refunded to the original purchaser and may not be exchanged.

It’ll take time to see this, as apps need to implement the change, resubmit, then the updates need to propagate to the end users. But it’ll get there.

Seems a clear win for Apple. Gifting allows more money to flow through the ecosystem.