Business

Bloomberg:

Apple Inc.’s sales of iPads, iPhones and other devices fell 20 percent at Target Corp. stores during the second quarter, confirming Apple’s struggles with a global slowdown in smartphone demand and waning interest in its out-of-date gadgets.

Hmmm. Out-of-date gadgets?

Target CEO Brian Cornell said the weakness in Apple’s sales at the retailer was “across the product suite,” and that the company is putting plans in place to better capitalize on the new devices when they hit the shelves.

“Our guests come to us looking for those products,” Cornell said on a conference call to discuss earnings. “They’re looking for the newness and the innovation. We’re putting together plans with Apple and our merchandising teams to make sure we’re ready to take advantage of that in the back half of the year.”

Hard to tell where this is Target shifting blame for poor sales and actual evidence of an Apple-specific slump. But the out-of-date gadgets stings, at least in part because of the aging MacBook Pro and Mac Pro lineup. But are those gadgets? I certainly wouldn’t call the iPhone or iPad out-of-date.

Reuters:

Apple Inc will boost its investment in China, one of its largest but increasingly challenging markets, and build its first Asia-Pacific research and development center in the country, Chief Executive Tim Cook said on Tuesday.

Cook made the pledge during a trip to China, at least his second in four months, as demand for Apple’s iPhones has plummeted in the world’s second-largest economy and the government remains wary about foreign technology.

Apple’s new research and development center will be built by the end of the year, Cook told Vice Premier Zhang Gaoli, one of China’s most senior officials, according to CCTV, the official Chinese state broadcaster.

The center will unite Apple’s engineering and operations teams in China and is also intended to deepen the company’s ties to partners and universities, it said in a statement.

Solid read, based on analysis by Horace Dediu.

From the linked official Apple press release:

Apple® today announced a significant commitment by major supplier Lens Technology to run its Apple operations on entirely renewable energy. This unprecedented commitment, combined with zero waste compliance from all final assembly sites, furthers Apple’s efforts to help manufacturers lower their carbon footprint and reduce waste in China, helping to advance China’s transition to a new green economy.

Lens Technology has committed to power all of its glass production for Apple with 100 percent renewable energy by the end of 2018, as part of Apple’s industry-leading supply chain clean energy program announced last year. Lens is the first supplier to make a clean energy commitment for all of its Apple production, and will meet its goal through an unprecedented power purchase agreement with local wind projects.

Lens Technology is the first Chinese supplier to sign such a power purchase agreement, a notable first step in an important push by Apple. This will take time.

More immediately:

Apple is working with suppliers to help transform the environmental landscape in China, and is proud to announce all 14 of its final assembly sites in China are now compliant with UL’s Zero Waste to Landfill validation. The UL standard certifies all of their manufacturing waste is reused, recycled, composted, or, when necessary, converted into energy. Since the program began in January 2015, the sites have diverted more than 140,000 metric tons of waste from landfills.

And:

Apple has taken significant steps to protect the environment by transitioning from fossil fuels to clean energy. Today, the company is powering 100 percent of its operations in China and the US, and more than 93 percent of its worldwide operations, with renewable energy.

I can’t think of another company of size with this sort of self-awareness, this commitment to doing the right thing. Much respect, Apple.

9to5Mac:

Apple isn’t an official Olympics sponsor, but it’s managed to still take advantage of the event for its own marketing purposes with limited-edition Apple Watch bands themed with country flag designs. Not only is it selling those watch bands for 14 different country flags to coincide with the Olympics this month, it’s also reportedly giving them away for free to athletes at its Apple Store in Rio.

Citing a firsthand account from a team manager for Germany, iphone-ticker notes the Apple Store is giving away two free bands to accredited Olympic athletes, effectively allowing it to market its product during the games without an official sponsorship of athletes or the games itself. Athletes can get the two free bands through the VillageMall Apple Store in Rio after showing proof of being an Olympian, according to the report. The bands normally sell for $49 US each. […More at main post…]

The linked New York Times piece is worth reading in its own right, with some interesting background on Twitter’s battle with Facebook for the right to stream and sell ads for the NFL’s lucrative Thursday Night Football games.

From the article:

To bolster the effort, Twitter is in talks with Apple to bring the Twitter app to Apple TV, which would potentially let millions of Apple TV users watch the streaming N.F.L. games, according to the two people briefed on the discussions.

Apple and Twitter declined to comment.

It should be noted that Thursday Night Football is said to draw an average of 13 million viewers. That’s on par with the highest rated prime time TV show, Empire.

From the Washington Post interview, addressing a question about Apple’s longtime philosophy of simplicity:

It’s as important as it ever was. We’re a bit larger today, so we can do a bit more than we could do 10 years ago or even five years ago. But we still have, for our size, an extremely focused product line. You can literally put every product we make on this table. That really is an indication of how focused it is. I think that’s a good thing. Regardless of who you are, there’s only so many things that you can do at a very high-quality and deep, deep level — personally and in business. And so we’re not going to change that. That’s core to our model and way of thinking.

I find it interesting that Tim pulled out this familiar model of being able to put all of Apple’s products on a table top, especially in response to the reporter’s repeated attempts to get him to talk about Apple’s long-rumored car project. If Apple does make a car, that certainly will break the “all out products on one table” model.

Saturday’s Washington Post Tim Cook interview was a long, excellent read, a lot to unpack. One of the questions addressed Apple’s tax situation:

Q: What do you say in response to Nobel economist Joseph Stiglitz’s comments on Bloomberg [television], where he called Apple’s profit reporting in Ireland a “fraud”?

The response is amazingly direct, and remarkably transparent for a CEO. Hit the main link for video of the original accusation and the quote from the Washington Post interview.

Vindu Goel, writing for the New York Times:

In the primordial days of computing, IBM machines were so common inside corporations that there was a running joke in the industry: Nobody ever got fired for buying IBM.

These days, the same could be said about Apple. Even IBM is promoting Apple gear.

And:

For Apple, which is struggling to reverse declining sales of its iPhones and Macs and has seen overall revenues drop for two quarters in a row, the corporate market is a surprising bright spot. Sales of high-end iPads to business customers in particular have been strong. Nearly half of all iPads are now bought by corporations and governments, according to the research firm Forrester.

“Apple is stronger in the enterprise market with its devices than it is with consumers,” said Frank Gillett, an industry analyst at Forrester.

Partnerships with more traditional enterprise entities like IBM, Cisco, and SAP are starting to bear fruit. Tim Cook is definitely playing the long game.

This is a long read, focused on Tim Cook’s management style and the path down which Tim is taking Apple. There is way too much to quote to truly capture the article, but here are two tidbits.

The first is on the way Tim is perceived as a boss, reflected in the disastrous Apple Maps rollout:

This continual learning process is central to the way Cook manages Apple. He accepts the inevitability of flaws, but relentlessly insists that employees pursue perfection. “I twitch less,” says Cue cheerfully when I ask about the difference between Jobs and Cook. “No, no, no, just kidding! Steve was in your face, screaming, and Tim is more quiet, more cerebral in his approach. When you disappoint Tim, even though he isn’t screaming at you, you get the same feeling. I never wanted to disappoint Steve, and I never want to disappoint Tim. [Other than them,] I have that feeling with, like, my dad.”

And:

Perhaps the best example of this continuous improvement at work under Cook is the company’s rehabilitation of its Maps app, which was universally scorned after its introduction in September 2012. Apple Maps’ miscues were legion: Bridges seemed to plunge into rivers; hospitals were located at addresses actually belonging to shopping centers; directions were so bad they confused airport runways with roads.

And:

the company did more than just throw numbers at the problem. Cook also forced his execs to re-examine, and change, the way they worked with development teams. Famous for being secretive, Apple opened up a bit. “We made significant changes to all of our development processes because of it,” says Cue, who now oversees Maps. “To all of us living in Cupertino, the maps for here were pretty darn good. Right? So [the problem] wasn’t obvious to us. We were never able to take it out to a large number of users to get that feedback. Now we do.”

There’s a lot more on Apple Maps and the culture change that came with that learning process.

The second anecdote involves the thinking behind the difficult problem of following up one of the most successful products of all time.

It’s entirely possible that Apple will never introduce a product as universally desired as the iPhone. That doesn’t mean it won’t continue to be a great company. “The iPhone entered a market that was the biggest on earth for electronic devices,” Cooks tells me, as we’re wrapping up our interview. “Why is that? It’s because eventually, everyone in the world will have one. There are not too many things like that.”

Then Cook makes another one of his points that can get lost if you don’t understand the care he takes with every word. “It’s hard to imagine a market defined in units—not revenues—that’s that big.”

In terms of unit sales, yes, there may never be another iPhone. But in terms of revenue, well, look at the industries that Apple is just now entering, or is rumored to be pursuing. Media and entertainment is a $550 billion global market. Global car ownership is a $3.5 trillion business. Annual global health spending is more than $9 trillion. And while Apple may not currently dominate any of these arenas, remember that analysts once thought Apple would have a hit on its hands if it could garner 1% of the mobile phone business.

Fantastic read.