All posts in “apple inc”

German court tosses Qualcomm’s latest iPhone patent suit

Qualcomm has had a patent lawsuit against Apple dismissed by a court in Mannheim, Germany, as groundless (via Reuters).

The chipmaker had argued Intel -powered iPhones infringed a transistor switch patent it holds. But in an initial verbal decision the court disagreed. Qualcomm has said it will appeal.

In a statement, Don Rosenberg, Qualcomm’s executive VP and general counsel, said: “Apple has a history of infringing our patents. While we disagree with the Mannheim court’s decision and will appeal, we will continue to enforce our [intellectual property] rights against Apple worldwide.”

We’ve reached out to Apple for comment.

The pair have been embroiled in an increasingly bitter and global legal battle in recent years, as Apple has shifted away from using Qualcomm chips in its devices.

Two years ago the FTC also filed charges against the chipmaker accusing it of anticompetitive tactics in an attempt to maintain a monopoly (Apple is officially cited in the complaint). That trial began early this month.

Cupertino has also filed a billion-dollar royalty lawsuit accusing Qualcomm of charging for patents “they have nothing to do with”.

While the latest court decision in Mannheim has gone in Apple’s favor, a separate ruling in Germany late last year went Qualcomm’s way. And earlier this month Apple was forced to withdraw the iPhone 7 and 8 from its retail stores in Germany, after Qualcomm posted €1.34BN in security bonds to enforce the December court decision — which related to a power management patent.

Although the affected iPhone models remain on sale in Germany via resellers. Apple is also appealing.

Qualcomm also recently secured a preliminary injunction banning the import and sales of some older iPhone models in China. Again, Apple is appealing.

Sorry Apple, I’m still not ready to upgrade my iPhone

Last week, in light of Apple’s revised revenue guidance, my TC colleague Ron Miller made a tongue-in-cheek apology for taking so long to upgrade his old iPhone.

He wrote that he had finally bitten the bullet and shelled out to upgrade a more than three-years-old (but still working) iPhone 6 for a shiny new iPhone XR ($750+) — deciding at the last minute to spare his wallet the full $1,000 whack for the top of the range iPhone XS. 

Ergo, even the famous Apple premium only stretches so far.

I bring even less good news for the company. I still can’t bring myself to upgrade my (still working but now heavily creaking on the battery and storage front) iPhone 6S because — and here’s my line — Apple removed the headphone jack. Which is absolutely an affront to usability and choice.

My (petite) ears do not conform to the one-size fits all shape Cupertino uses for its bundled earbuds. So even if the earbuds weren’t low audio quality I still couldn’t use them. Headphones that you have to walk around holding in your ears because otherwise every twist and head turn pops them right back out again are, to put it politely, not very useful.

And, yes, this also applies to wireless AirPods — even if I wanted to give Apple more money to be forever stuck having to charge a pair of headphones before being able to use them, which frankly doesn’t sound very smart to me.

On the earbuds front Apple does not cater to petite people, period. I have to use in-ear headphones, with replaceable rubber caps that come in a range of sizes (typically requiring the tiniest of the bunch). This means a 3.5mm jack, which lets me use my own choice of appropriately sized headphones, is not optional but essential.

A 3.5mm jack also lets me invest in higher audio quality kit, should I choose to.

Apple has other ideas, however. And judging by its own messaging at the time it ditched the headphone jack, it presumably thinks I should bravely ram its earbuds in my undersized ears anyway. Er, no thanks!

Of course I could upgrade and just plug in a dongle to (re)convert the Lightning port into the necessary 3.5mm headphone jack. But that’s yet another dongle tax ($9) I shouldn’t have to pay.

iPhones are a premium product, after all. Having to buy extra accessories that are actually essential to get you back to where you were doesn’t feel like progress. (A better word for these irritating wallet-gougers would be ‘unnecessaries’.)

Add to that there is of course the sheer irritation and hassle of having to remember to have the stupid thing with you whenever you want to use your headphones.

While, for those into Apple aesthetics, dongles are of course 100% pure eyesore.

Also — an extra kicker — the Apple Lighting to 3.5mm converter doesn’t appear to play nice with third party remotes. So your headphones’ physical volume control is probably going to be glitchy… (Just check out all these 1-star reviews.)

I won’t get started on Apple also vanishing the SD card port from the MBA. But the expense and hassle of trying to deal with that SNAFU, following a work laptop upgrade, has put me right off the prospect of ‘courageously’ forgetting about other ports that I really need to use.

Nor am I the only TCer affronted by Apple ditching the headphone jack. My colleague Greg Kumparak wrote in December that he’s still missing the 3.5mm port two years later. “It enabled happy moments and never got in the way,” he lamented of the missing jack.

Safe to say, no one is ever going to bemoan the lack of a dongle like that.

For TC’s Miller, he was finally pushed to upgrade his trusty old iPhone because of bad battery and a glitchy recharge cable.

My own iPhone 6S has also tipped over into bad battery territory. The original battery was replaced in 2017 (after being in a faulty bunch that Apple offered free replacements for). But the other day the phone experienced its first “unexpected shutdown” — and a pop-up informed me Peak Performance Capability had been switched on.

Aka the performance management feature Apple got in some hot water with consumer groups for not being clear enough about previously. So there’s now an option to disable this in iOS settings.

I could also, of course, pay to replace the battery. Which would be a lot cheaper than a new iPhone. Or else — even cheaper — just carry a spare battery pack.

So which is less hassle to remember? A spare battery or a headphone dongle?

At least a battery pack extends the daily longevity of the handset which feels like it’s offering some added utility (with the bonus social feature of being able to offer to juice up friends’ devices on-demand).

I’d certainly much prefer to keep a spare battery pack in my bag when I leave the house than always be trying to remember where on earth I left the dumb headphone dongle.

Ignoring Apple’s customary fraying charger cables (which can just be replaced), the other issue I’m facing with my current iPhone is storage. It’s almost full.

Apple offers cloud storage for a fee (after a small amount of free space). But I could also delete stuff I’m not using and buy an external hard drive for storing iPhone photo content (which is what’s taking up the most space) and offload the data to that.

Then I could wipe the iPhone 6S clean and start again.

Frankly the prospect of a rebooted iPhone 6S, which (battery wobbles aside) otherwise still works fine, is more appealing than paying a premium for an otherwise not so different handset which will, in certain key aspects, be less welcoming and useful to me than the one I already own.

It’s almost the more environmentally friendly choice, of course. And let’s not forget that lots of dongles = lots more unnecessary e-waste. So imposed dongle hell is bad for the planet too.

One size never fits all but when combined with an upwardly inflating Apple premium the Cupertino philosophy is starting to feel increasingly awkward.

While ‘reuse don’t replace’ feels more and more normal.

Apple’s increasingly tricky international trade-offs

Far from Apple’s troubles in emerging markets and China, the company is attracting the ire of what should really be a core supporter demographic naturally aligned with the pro-privacy stance CEO Tim Cook has made into his public soapbox in recent years — but which is instead crying foul over perceived hypocrisy.

The problem for this subset of otherwise loyal European iPhone users is that Apple isn’t offering enough privacy.

These users want more choice over key elements such as the search engine that can be set as the default in Safari on iOS (Apple currently offers four choices: Google, Yahoo, Bing and DuckDuckGo, all U.S. search engines; and with ad tech giant Google set as the default).

It is also being called out over other default settings that undermine its claims to follow a privacy by design philosophy. Such as the iOS location services setting which, once enabled, non-transparently flip an associated sub-menu of settings — including location-based Apple ads. Yet bundled consent is never the same as informed consent…

As the saying goes you can’t please all of the people all of the time. But the new normal of a saturated smartphone market is imposing new pressures that will require a reconfiguration of approach.

Certainly the challenges of revenue growth and user retention are only going to step up from here on in. So keeping an otherwise loyal base of users happy and — crucially — feeling listened to and well served is going to be more and more important for the tech giant as the back and forth business of services becomes, well, essential to its fortunes going forward.

(At least barring some miracle new piece of Apple hardware — yet to be unboxed but which somehow rekindles smartphone-level demand afresh. That’s highly unlikely in any medium term timeframe given how versatile and capable the smartphone remains; ergo Apple’s greatest success is now Apple’s biggest challenge.)

With smartphone hardware replacement cycles slowing, the pressure on Cook to accelerate services revenue naturally steps up — which could in turn increase pressure on the core principles Cupertino likes to flash around.

Yet without principles there can be no brand premium for Apple to command. So that way ruin absolutely lies.

Control shift

It’s true that controlling the iOS experience by applying certain limits to deliver mainstream consumer friendly hardware served Apple well for years. But it’s also true iOS has grown in complexity over time having dropped some of its control freakery.

Elements that were previously locked down have been opened up — like the keyboard, for instance, allowing for third party keyboard apps to be installed by users that wish to rethink how they type.

This shift means the imposed limit on which search engines users can choose to set as an iOS default looks increasingly hard for Apple to justify from a user experience point of view.

Though of course from a business PoV Apple benefits by being able to charge Google a large sum of money to remain in the plum search default spot. (Reportedly a very large sum, though claims that the 2018 figure was $9BN have not been confirmed. Unsurprisingly neither party wants to talk about the terms of the transaction.)

The problem for Apple is that indirectly benefiting from Google eroding the user privacy it claims to champion — by letting the ad tech giant pay it to suck up iOS users’ search queries by default — is hardly consistent messaging.

Not when privacy is increasingly central to the premium the Apple brand commands.

Cook has also made a point of strongly and publicly attacking the ‘data industrial complex‘. Yet without mentioning the inconvenient side-note that Apple also engages in trading user data for profit in some instances, albeit indirectly.

In 2017 Apple switched from using Bing to Google for Siri web search results. So even as it has stepped up its rhetoric around user privacy it has deepened its business relationship with one of the Western Internet’s primary data suckers.

All of which makes for a very easy charge of hypocrisy.

Of course Apple offers iOS users a non-tracking search engine choice, DuckDuckGo, as an alternative choice — and has done so since 2014’s iOS 8.

Its support for a growing but still very niche product in what are mainstream consumer devices is an example of Apple being true to its word and actively championing privacy.

The presence of the DDG startup alongside three data-mining tech giants has allowed those ‘in the know’ iOS users to flip the bird at Google for years, meaning Apple has kept privacy conscious consumers buying its products (if not fully on side with all its business choices).

But that sort of compromise position looks increasingly difficult for Apple to defend.

Not if it wants privacy to be the clear blue water that differentiates its brand in an era of increasingly cut-throat and cut-price Android -powered smartphone competition that’s serving up much the same features at a lower up-front price thanks to all the embedded data-suckers.

There is also the not-so-small matter of the inflating $1,000+ price-tags on Apple’s top-of-the-range iPhones. $1,000+ for a smartphone that isn’t selling your data by default might still sound very pricy but at least you’d be getting something more than just shiny glass for all those extra dollars. But the iPhone isn’t actually that phone. Not by default.

Apple may be taking a view that the most privacy sensitive iPhone users are effectively a captive market with little option but to buy iOS hardware, given the Google-flavored Android competition. Which is true but also wouldn’t bode well for the chances of Apple upselling more services to these people to drive replacement revenue in a saturated smartphone market.

Offending those consumers who otherwise could be your very best, most committed and bought in users seems short-sighted and short-termist to say the least.

Although removing Google as the default search provider in markets where it dominates would obviously go massively against the mainstream grain that Apple’s business exists to serve.

This logic says Google is in the default position because, for most Internet users, Google search remains their default.

Indeed, Cook rolled out this exact line late last year when asked to defend the arrangement in an interview with Axios on HBO — saying: “I think their search engine is the best.”

He also flagged various pro-privacy features Apple has baked into its software in recent years, such as private browsing mode and smart tracker prevention, which he said work against the data suckers.

Albeit, that’s a bit like saying you’ve scattered a few garlic cloves around the house after inviting the thirsty vampire inside. And Cook readily admitted the arrangement isn’t “perfect”.

Clearly it’s a trade off. But Apple benefitting financially is what makes this particular trade-off whiff.

It implies Apple does indeed have an eye on quarterly balance sheets, and the increasingly important services line item specifically, in continuing this imperfect but lucrative arrangement — rather than taking a longer term view as the company purports to, per Cook’s letter to shareholders this week; in which he wrote: “We manage Apple for the long term, and Apple has always used periods of adversity to re-examine our approach, to take advantage of our culture of flexibility, adaptability and creativity, and to emerge better as a result.”

If Google’s search product is the best and Apple wants to take the moral high ground over privacy by decrying the surveillance industrial complex it could maintain the default arrangement in service to its mainstream base but donate Google’s billions to consumer and digital rights groups that fight to uphold and strengthen the privacy laws that people-profiling ad tech giants are butting hard against.

Apple’s shareholders might not like that medicine, though.

More palatable for investors would be for Apple to offer a broader choice of alternative search engines, thereby widening the playing field and opening up to more pro-privacy Google alternatives.

It could also design this choice in a way that flags up the trade-off to its millions of users. Such as, during device set-up, proactively asking users whether they want to keep their Internet searches private by default or use Google?

When put like that rather more people than you imagine might choose not to opt for Google to be their search default.

Non-tracking search engine DDG has been growing steadily for years, for example, hitting 30M daily searches last fall — with year-on-year growth of ~50%.

Given the terms of the Apple-Google arrangement sit under an NDA (as indeed all these arrangements do; DDG told us it couldn’t share any details about its own arrangement with Apple, for e.g.) it’s not clear whether one of Google’s conditions requires there be a limit on how many other search engines iOS users can pick from.

But it’s at least a possibility that Google is paying Apple to limit how many rivals sit in the list of competitors iOS users can pick out an alternative default. (It has, after all, recently been spanked in Europe for anti-competitive contractual limits imposed on Android OEMs to limit their ability to use alternatives to Google products, including search. So you could say Google has history where search is concerned.)

Equally, should Google actually relaunch a search product in China — as it’s controversially been toying with doing — it’s likely the company would push Apple to give it the default slot there too.

Though Apple would have more reason to push back, given Google would likely remain a minnow in that market. (Apple currently defaults to local search giant Baidu for iOS users in China.)

So even the current picture around search on iOS is a little more fuzzy than Cook likes to make out.

Local flavor

China is an interesting case, because if you look at Apple’s growth challenges in that market you could come to a very different conclusion vis-a-vis the power of privacy as a brand premium.

In China it’s convenience, via the do-it-all ‘Swiss army knife’ WeChat platform, that’s apparently the driving consumer force — and now also a headwind for Apple’s business there.

At the same time, the idea of users in the market having any kind of privacy online — when Internet surveillance has been imposed and ‘normalized’ by the state — is essentially impossible to imagine.

Yet Apple continues doing business in China, netting it further charges of hypocrisy.

Its revised guidance this week merely spotlights how important China and emerging markets are to its business fortunes. A principled pull-out hardly looks to be on the cards.

All of which underscores growing emerging market pressures on Apple that might push harder against its stated principles. What price privacy indeed?

It’s clear that carving out growth in a saturated smartphone market is going to be an increasingly tricky business for all players, with the risk of fresh trade-offs and pitfalls looming especially for Apple.

Negotiating this terrain certainly demands a fresh approach, as Cook implies is on his mind, per the shareholder letter.

Arguably the new normal may also call for an increasingly localized approach as a way to differentiate in a saturated and samey smartphone market.

The old Apple ‘one-sized fits all’ philosophy is already very outdated for some users and risks being caught flat-footed on a growing number of fronts — be that if your measure is software ‘innovation’ or a principled position on privacy.

An arbitrary limit on the choice of search engine your users can pick seems a telling example. Why not offer iOS users a free choice?

Or are Google’s billions really standing in the way of that?

It’s certainly an odd situation that iPhone owners in France, say, can pick from a wide range of keyboard apps — from mainstream names to superficial bling-focused glitter and/or neon LED keyboard skins or indeed emoji and GIF-obsessed keyboards — but if they want to use locally developed pro-privacy search engine Qwant on their phone’s native browser they have to tediously surf to the company’s webpage every time they want to look something up.

Google search might be the best for a median average ‘global’ (excluding China) iOS user but in an age of increasingly self-focused and self-centred technology, with ever more demanding consumers, there’s really no argument against letting people who want to choose for themselves.

In Europe there’s also the updated data protection framework, GDPR, to consider. Which may yet rework some mainstream ad tech business models.

On this front Qwant questions how even non-tracking rival DDG can protect users’ searches from government surveillance given its use of AWS cloud hosting and the U.S. Cloud Act. (Though, responding to a discussion thread about the issue on Github two years ago, DDG’s founder noted it has servers around the world, writing: “If you are in Europe you will be connected to our European servers.” He also reiterated that DDG does not collect any personal data from users — thereby limiting what could be extracted from AWS via the Act.)

Asked what reception it’s had when asking about getting its search engine on the Safari iOS list, Qwant told us the line that’s been (indirectly) fed back to it is “we are too European according to Apple”. (Apple declined to comment on the search choices it offers iOS users.)

“I have to work a lot to be more American,” Qwant co-founder and CEO Eric Leandri told us, summing up the smoke signals coming out of Cupertino.

“I understand that Apple wants to give the same kind of experience to their customers… but I would say that if I was Apple now, based on the politics that I want to follow — about protecting the privacy of customers — I think it would be great to start thinking about Europe as a market where people have a different point of view on their data,” he continued.

“Apple has done a lot of work to, for example, not let applications give data to each by a very strict [anti-tracking policy]; Apple has done a lot of work to guarantee that cookies and tracking is super difficult on iOS; and now the last problem of Apple is Google search.”

“So I hope that Apple will look at our proposal in a different way — not just one-fits-all. Because we don’t think that one-fits-all today,” he added.

Qwant too, then, is hoping for a better Apple to emerge as a result of a little market adversity.

Citi slashes sales outlook for iPhone XS Max by nearly half

Citi Research has joined a growing list of analysts to lower first-quarter production estimates for Apple’s iPhones amid weakening demand for the smartphones.

Citi Research analyst William Yang cut the overall iPhone shipment forecast by 5 million, to 45 million for the quarter, reported Reuters. That’s a sting that falls in line with others such as influential TF International Securities Apple analyst Ming-Chi Kuo, who delivered a less than stellar iPhone forecast earlier this month.

It’s Yang’s outlook for the 6.5-inch iPhone XS Max that is particularly gloomy. In a research note to clients, Yang slashed the shipment forecast for the iPhone XS Max by 48 percent for the first quarter of 2019.

The cut in Citi’s forecasts is driven by the firm’s view that “2018 iPhone is entering a destocking phase, which does not bode well for the supply chain,” Yang wrote.

Two weeks ago, Kuo predicted that 2019 iPhone shipments will likely between 5 to 10 percent lower than 2018. He also lowered first-quarter shipment forecasts by 20 percent.

Apple Pay finally launches in Germany

Apple’s mobile payment technology has finally launched in Germany, some four years after it debuted in the U.S.

On its newly launched Apple Pay website for Germany, Apple lists partner banks and credit card companies at launch, with customers from the likes of Deutsche Bank, O2 Banking, N26, Comdirect, HypoVerensbank, Bunq and Boon able to tap up the payment method directly.

Some fifteen banks and services are supported at launch. A further nine banks are slated as adding support in 2019, including DKB, INK and Revolut.

iOS users in the country can now add supported debit or credit cards to Apple Pay to make contactless payments with their device, rather than having to carry cash. Apple’s Face ID and Touch ID biometrics are used to a security layer to the payment system.

The local Apple Pay site also lists a selection of retailers, with Apple writing: “Apple Pay works in supermarkets, boutiques, restaurants, hotels and many other places. You can also use Apple Pay in many apps — and on participating websites with Safari on your Mac, iPhone or iPad.”

Aside from convenience, the other consumer advantage Apple touts for the system is privacy, with Apple Pay using a device-specific number and unique transaction code — and the user’s actual card numbers never stored on their device or on Apple’s servers — which means trackable card numbers aren’t shared with merchants, so purchases can’t be tied back to the individual.

While that might sound like an abstract concern, a Bloomberg report this summer revealed details of a multi-million deal in which Google pays for transaction data from Mastercard — in order to try to link online ad views with offline purchases in the US.

Facebook has also long been known to buy offline data to supplement the interest signals it collects on users from inside (and outside) its social network — further fleshing out ad-targeting profiles.

So escaping the surveillance net of one flavor of big tech can require buying into another. Or else going low tech and paying in cash.

Apple does not say what took it so long to add Germany to its now pretty long list of Apple Pay countries but Apple Insider suggests the relatively late adoption was down to pushback from local banks over fees, noting that it’s four months after the official announcement of a German launch.

It’s also true that paying by plastic isn’t always an option in Germany, as cash remains the dominant payment method of choice — also, seemingly, for privacy purposes. So Apple Pay is at least aligned with those concerns.