All posts in “Tim Cook”

Apple’s ‘I’m sorry’ for throttling old iPhones isn’t good enough for Congress

Tim Cook, the CEO of Apple, speaks during the Fortune 500 Global Forum in Guangzhou, Guandong Province, China in December.
Tim Cook, the CEO of Apple, speaks during the Fortune 500 Global Forum in Guangzhou, Guandong Province, China in December.

Image: ALEKSANDAR PLAVEVSKI/EPA-EFE/REX/Shutterstock

The drama surrounding Apple’s old iPhone batteries isn’t over yet. 

Four U.S. House Republicans sent a letter to Apple CEO Tim Cook on Friday asking for answers on batterygate. 

In December, Apple admitted to throttling the speed of older iPhones to increase battery performance, a long-time conspiracy theory among iPhone users that turned out to be true. As a result, Apple issued an apology to its customers, and announced reduced pricing for out-of-warranty iPhone battery replacement, from $79 to $29. 

But the apology and explanation from the billion dollar company wasn’t enough for House Republicans, who want more answers on the subject, according to Reuters

The report also notes that U.S. Senator John Thune sent a similar letter to Apple on Tuesday. Thune is the chair on the the Senate Commerce Committee.

Cook reportedly made $12.8 million in 2017, according to a statement filed with the Securities and Exchange Commission

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Apple’s hand is down and its $1 trillion dream now rests with consumers


As we head into the end of 2017, it’s pretty safe to say that Apple’s fate — barring any major issue with its phones — is now in the hands of its consumers.

With the iPhone X now in stores (well, sort of — if you catch them at the right time), Apple has now laid down its hand and waits to see where consumer demand lands. Its bid to unlock a higher-tier consumer could indeed end up creating a ton of value for the company, which has spent the past year looking to reignite growth in its core driver.

While the iPad and Mac continue to contribute, Apple’s fate largely rests on the success of the iPhone X. Apple this year has increasingly looked like it’s on a real pathway to becoming a $1 trillion company, and now the holiday quarter is going to show if it’ll be able to pull that off.

And the signals are definitely there. Apple briefly tapped a $900 billion market cap, though it’s slipped since then. That $1 trillion goal is just a jump of a bit more than 10 percent for the company, though for Apple that means adding more than $100 billion in value. But this year alone, shares of Apple are up nearly 50 percent as it increasingly looks like Apple is getting its act together after a middling 2016.

Apple can aggressively invest in marketing, advertising or other channels to try to get the attention of consumers. But the phone is out there, people say it’s great and the price is already set. Apple’s immediate challenge may be to convince users to get the phone or sign up for its subscription upgrade plan. But with the holiday quarter hitting its critical juncture, consumers will very soon make their decision as to whether Apple’s interpretation of the next generation of smartphones is the right one. And it’s going to rest on whether or not Apple’s bid to unlock a new tier of paying customers is going to play out the way it expects.

If Apple is going to hit $1 trillion, it’s going to have to have a portfolio of products that allow it to incrementally increase the total market it can attack. This is typically referred to as TAM (total addressable market), and for a while it looked like Apple may have hit the upper bound of that as the iPhone hit a saturation point with consumers. So Apple has made a big bet to increase that possibility to ratchet up that least upper bound: seeing if people will pay more for its products. And that meant coming out with a phone that costs nearly $1,200 in the United States.

With the fall launches, Apple now has three pricing tiers to go with its products. You pay a lot of money for a big phone, a lot more money for a bigger phone and a lot more money than that to get a premium next-generation phone. That gives Apple an opportunity to tap the rabid early-adopter fan base that got people excited about the iPhone in the first place — the ones who may be willing to fork out more money to get early access to features that may one day be what a next-generation smartphone looks like.

And the iPhone X certainly has those features. The screen fits to the edges of the device. The home button is gone, now replaced by its interpretation of it as software. It has the ability to unlock itself with your face. It includes wireless charging (which the iPhone 8 also has), which seems more of a novelty for now as the technicals evolve. But more importantly, it aims to feel like a next-generation phone, packaging all the best notions that have incrementally pushed forward the bounds of a smartphone in one neat product at a high price point.

And the success of that is, indeed, a frustrating uncertainty. Apple initially seemed to be unable to get enough phones into the hands of consumers, though that seems to have leveled out a bit — checking the Apple Store indicates that the shipping time is now one to two weeks. But despite widely positive reviews, Wall Street still seems to be waiting on the right signals to give Apple the green light to race to a $1 trillion valuation.

Apple’s own expectations for the holiday quarter bring it back to a growth phase, though this is always the most critical quarter for the company. It’s when it’s going to sell the most phones, but it’s also when Apple is able to thoroughly test the appetite for its new phones. This holiday quarter is going to give Apple the opportunity to see if its users are ready to spend nearly $1,200 on a phone — quite a bit more than the norm.

So, at a mechanical level, this is a way to continue to grow its business. It can release new products like the HomePod or AirPods, or continue to build out its services business as it looks to continue to lock in its users. But because the iPhone is its sweet spot, if it can figure out a way to eke more value out of that business, it basically just gives Wall Street an opportunity to take additional value onto its market cap — even if it’s just a function of the amount of money it makes and the revenue it projects for the next round.

But Apple has really always been a premium product. Though accessible to a wide array of users, Apple wants to have that shine that the company has a robust ecosystem that it’s able to ensure has a high quality. Apple is going to look to tap that shine that made it the original harbinger of the smartphone era — and its hopes of becoming a $1 trillion company are now more or less a waiting game to see how the story plays out.

Apple said to be working on AR headset aimed for potential 2020 ship date


Apple is working on technology that would enable it to build an augmented reality headset by 2019, with shipping targeted for as soon as 2020, according to a new report from Bloomberg. The device would be independent from Apple’s iPhone or other mobile devices, with its own buillt-in display, OS (dubbed ‘rOS’ internally), and a new custom processor, per the report.

Apple CEO Tim Cook has been bullish on the prospects of AR in past interviews, and iOS 11 includes a built-in feature to support the development of AR experiences called ARKit, which allows developers to easily leverage those features within its apps. Earlier reports from Bloomberg noted that Apple has hired on a number of AR experts, and that the team is being run by former Dolby Labs engineering executive Mike Rockwell.

Recently, Cook told press that the technology is just not there yet for there to be an augmented reality headset available to consumers that offers a satisfying experience, while chiding “anything you would see on the market any time soon” in that category. This likely refers obliquely to at least Windows HoloLens, if not other products also on the horizon like whatever Magic Leap ends up releasing.

Apple is still firming up plans for this future device, per Bloomberg, but it’s exploring various interaction methods including touch sensitive input, Siri voice interaction and even head gestures. The team are also building out applications, including messaging, virtual meetings, 360 video and navigation, and their are plans to potentially build out an App Store for the hardware.

Testing is being done internally on the HTC Vive and a device that uses an iPhone screen but is similar to a Samsung Gear VR, per the report. Apple recently made its most recent Macs compatible with external GPUs and the HTC Vive for the purposes of developing VR content, so this seems like one motivating factor. The report also claims that Apple will release a new version of ARKit in 2018 that will pave the way for developers to begin building experiences that could target this device.

Apple spins up a wide range of experimental projects, and not all of them result in shipping products. But Cook has spoken about AR and its future potential enough to suggest they have more than a passing interest in the technology.

Everyone’s waiting for the iPhone X, and that may be bad news for Apple

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Today’s retail launch of the Apple iPhone 8 and 8 Plus is a crucial test for Apple’s riskiest iPhone strategy.

For the first time, Apple introduced its latest iPhone upgrades while simultaneously teasing something better coming soon — what, by Apple’s own admission, is “the future.”

Apple’s iPhone 8 and 8 Plus are, based on my review and what I’ve seen elsewhere on the web (and even in teardowns), “S” series devices in full-number-update clothing. Except for the glass back, the handsets maintain the iPhone 6 design introduced in 2014. Apple swapped out the A10 Fusion chip for the incredibly powerful A11 Bionic CPU, but left the screen and cameras largely unchanged.

I really like the iPhone 8 and 8 Plus, but the changes come directly from Apple’s “S” playbook.

There’s nothing wrong with any of this, and I really like the iPhone 8 and 8 Plus, but the changes come directly from Apple’s “S” playbook: Upgrades instead of an overhaul, so the number stays the same to signal the subtler nature of the changes.

Instead of delivering the iPhone 7S (and 7S Plus), though, Apple gave them the full-number update treatment and simultaneously introduced the iPhone X (which, to remind, is pronounced “ten”). With its aggressive redesign and cutting-edge technology like the TrueDepth camera module, edge-to-edge OLED display and retirement of the home button, the iPhone X earns the name. It’s the true apex iPhone and easily the most coveted product in Apple’s iPhone lineup.

On Friday, the day Apple put the iPhone 8 and 8 Plus on sale in retail stores (after a few days of online store pre-sales) I started reading reports of sparse crowds at Apple Stores. In London, there were more Apple employees in the store than queued up iPhone 8 buyers, and it appears to be a very similar picture in the U.S. To be fair, iPhone retail launch events have been in decline since the iPhone 6 launch.

At the same time, I launched a little online poll:

People want the X.

People want the X.

Image: lanc eulanoff

Granted the results aren’t exactly scientific, but the sentiment is clear: More than half the people responding are sitting on their hands and waiting until the sexier iPhone X ships in November, even after numerous reports said supplies could be so low that some people won’t get the smartphone until next year

What if, I wondered, Apple made a terrible mistake?

This strategy of offering the iPhone 8 and 8 Plus first, while the real update, one that some believe is prohibitively expensive, looms just a few weeks later, is an unusual choice. In fact, it could squeeze Apple from both sides. iPhone consumers usually want the shiniest, new thing, but they don’t want to pay an arm and a leg (The argument could be made they they’ve been doing so for ages, but the loss of carrier subsidies and the psychographic impact of a $1,000 price should not be underestimated).

Could iPhone consumers feel caught in the middle between the phone they really want, but can’t afford, and the more reasonably priced device that doesn’t excite them because it’s not Apple’s ultimate iPhone?

Looked at this way, this bold iPhone strategy could be Apple CEO Tim Cook’s first big misstep… or another stroke of brilliance.

One iPhone for all

Ten years ago, we had one iPhone to choose from. Even as Android competitors started introducing a wider array of handsets and the early, large-screen devices that, at the time, few (certainly not Steve Jobs) believed would be successful, Apple maintained its one (small-screen) handset strategy

That strategy persisted until 2013, when Tim Cook unveiled the iPhone 5C alongside the iPhone 5S. Suddenly, Apple’s new phone lineup doubled in size. It set the stage for the company’s first big-screen iPhone, the 5.5-inch iPhone 6 Plus, which launched in 2014 next to the 4.7-inch iPhone 6. 

Personally, I loved this shift. It acknowledged changing smartphone tastes and started to give people design and price options. 

Today, we have a lineup of eight iPhones that range in price from the $349, 4-inch, iPhone SE to the $999, 5.8-inch, iPhone X. There’s a lot of choice in there and I have no doubt that consumers welcome this. However, the core iPhone user, the person who bought the first iPhone as a status symbol and has upgraded like clockwork to every new device each year is possibly facing a dilemma.

This bold iPhone strategy could be Apple CEO Tim Cook’s first big misstep…or another stroke of brilliance.

If they bought the iPhone 7 last year, are they planning on buying the iPhone 8? Probably not. It certainly wasn’t my recommendation. So that means they wait for the iPhone X.

As Mashable Senior Tech Analyst Raymond Wong pointed out to me: This is potentially a “win-win” for Apple. Consumers who don’t buy the cheaper iPhone 8 or 8 Plus, will just wait for the expensive iPhone X.

He may be right, but what if anemic iPhone X supplies in 2017 mean that most people are waiting or buying their iPhone X in 2018?

“So what?” you might respond. Apple still makes the money, right?

Yes, but what does the Apple’s first quarter look like if demand for the iPhone 8 and 8 Plus is low (we have yet to hear about pre-sale numbers, but there have been zero reports of delivery delays on pre-sales, a possible sign of soft demand) and tens of millions of customers wait for iPhone X in 2018?

Apple’s first quarter, the one that includes holiday sales, has looked amazing for almost a decade precisely because of the iPhone, which sells anywhere from 40 to 75 million units in the first three months after launch. Those sales are driven by the Apple’s hottest new device and, in this situation, that isn’t the iPhone 8.

Things could still work out in Apple’s favor, especially if they just collect all the pre-orders for the iPhone X, put those sales on the 2017 Q1 books and then let people wait for delivery until next year when they can make enough of the 5.8-inch handsets.

Alternatively, Apple could benefit from the unusually high number of upgraders ready to buy new phones. Samsung told me earlier this year that some 50 million consumers were at the end of the 18-month smartphone ownership cycle. They hope to sweep a lot of them up in the Galaxy S8/S8+ and Note 8 launches. But they’re up for grabs for Apple, too, which could sell them any one of eight different iPhones.

I’m confident Apple will sell millions of new iPhones, but if most them end up being the iPhone X, the question of when those sales happen starts to look really murky. Will they still be meaningful if many happen after the Samsung Galaxy S9 is a reality? Or iPhone 11/iPhone X2 rumors start to mount?

How the world — and Apple’s customers — respond to a protracted iPhone X launch is anyone’s guess.

Watch: Secrets of the Steve Jobs Theater

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