January 2012 In Review

By Graham Spencer

Starting this month we’re launching a new, month-in-review feature that will summarize the past month’s big news stories, apps and editorials that we have published on MacStories. Each month we’ll give links to all those big stories and give a summation of the big events: for example, this month we detail Apple’s Education Event and include links to all the important articles related to it. We’ll also include links to new apps, app updates and app reviews that we think are worthy of your attention. Finally, we’ll be including links to our standout editorial stories from the past month - the stories we are most proud of.

We hope you enjoy this new feature and find it useful. Our hope is that it gives some perspective on the events of the past month, particularly when news flows so fast these days.

Apple’s Education Event

The big news of January was probably Apple’s Education Event that was held on January 19th in New York. The education-themed event saw the release of iBooks 2.0 which featured the ability to read new multi-touch books and, specifically, textbooks. In order to promote the creation of these new multi-touch books, Apple also released the free iBooks Author application for OS X, allowing virtually anyone to create a beautiful and interactive book for the iBookstore. The event also saw the release of an iTunes U app for the iPhone and iPad to give students and teachers more control over their courses.

Apple’s Q1 2012 Earnings Call

The other significant piece of news from January was Apple’s Q1 2012 earnings call in which Apple revealed it had just had the best quarter in its history, posting $46.33 billion in revenue, selling 37.04 million iPhones and 15.43 million iPads during the blowout quarter. The Next Web pointed out an interesting statistic that by selling 37.04 million iPhones during the 14 week quarter, Apple had actually sold more iPhones than babies had been born during the same time period. We also posted some of the more interesting details and statistics from the earnings call in a follow-up post which is well worth the read. A final article related to the earnings call is the one about how the iPhone ASP rose in Q1 2012, despite the addition of the “free” iPhone 3GS.

Apple Continued To Rollout Products Internationally

January saw the next big wave of iPhone 4S launches in China and 21 other countries on January 13th, making the 4S available in over 90 countries. Apple’s recently launched iTunes Match also became available in 19 additional countries around Europe and South America - taking the total number of countries with iTunes Match to 37 - making it another quick international rollout.

Supplier Responsibility

This month the issue of working conditions at Apple’s suppliers again came under close inspection. It started with the NPR program ‘This American Life’ investigating the issue in one of its episodes. Apple then released its annual Supplier Responsibility report (earlier than last year) and revealed its list of suppliers for the first time. Towards the end of the month, The New York Times featured an editorial on the issue - focusing on Apple. We also linked to a paidContent article that put the NYT article into perspective and rationally laid out the reality that Apple can’t solely change manufacturing overnight.

Jailbreak

January saw the untethered A5 jailbreak finally being released, to the joy of many iPhone 4S and iPad 2 owners who had been holding out for a jailbreak for quite some months. In fact the demand for the jailbreak saw nearly 1 million downloads of the tool in just the first 24 hours. Jailbreak certainly hasn’t become irrelevant just yet.

New SVP of Retail

On January 31, Apple announced John Browett has been hired as new Senior Vice President of Retail, a position left open since Ron Johnson left Apple to become the new CEO of J.C. Penney. Browett has been the CEO of European technology retailer Dixons and previously held various executive positions at Tesco, including CEO.

Everything Else

New apps, updates to apps and reviews that we published in January 2012.

January Quick Reviews

A selection of the best editorial pieces that we published on MacStories in January 2012.

January MacStories Reading Lists

Obama, Romney Election Campaigns To Use Square In Fundraising Efforts

By Graham Spencer

Square looks set to play a big part in the 2012 US Presidential race, with both the Obama and Romney camps announcing this week that they will be adopting the tool to give their grassroots fundraising efforts a boost. The mobile payments company uses a small accessory that plugs into the headphone jack of an iPhone, iPad or Android phone and works with a companion app to accept payments from credit cards.

The Obama re-election campaign will begin using Square straight away, initially with campaign staffers and “some approved volunteers”. But the ultimate goal is to develop their own Obama Square app that they can distribute on the App Store - allowing anyone to get the app and Square attachment and go around collecting donations. To comply with the Federal Election Commission’s (F.E.C.) rules, the app will need to collect the name, address, city, state, ZIP code, occupation and employer of the contributor, along with contribution size and collection date.

If the Square rollout is successful, and others follow, campaigns could send out armies of volunteers brandishing the Square credit card reader and collecting millions of dollars in micro-payments from political supporters.

The Romney campaign similarly announced today that they will also be trialling Square and likely developing their own, Romney-themed Square app. They will conduct a “beta-test” of the Square app and accessory on Tuesday night’s Florida primary election.

Daniel Rubin, strategic partnerships manager at Square, who works with political campaigns and major nonprofit organizations, said Square was partnering with a number of campaigns to make 2012 the year mobile payments change the way donations are collected on the ground. “It’s now easier than ever to give to campaigns of any political stripe,” Mr. Rubin said. “At a campaign, or any political event, donors will be able to give on the spot. They won’t have to run home and get a check or fill out long paper forms.”

[via The New York Times]

Apple Hires John Browett To Fill Senior Vice President Of Retail Position

By Graham Spencer

Apple has this morning announced that it is hiring John Browett to serve as the company’s senior vice president of Retail - a position that he will fill from late April. Browett has been the CEO of European technology retailer Dixons since 2007 and has considerable experience in the field, also holding executive positions at Tesco including CEO of Tesco.com.

“Our retail stores are all about customer service, and John shares that commitment like no one else we’ve met,” said Tim Cook, Apple’s CEO. “We are thrilled to have him join our team and bring his incredible retail experience to Apple.

Browett will become responsible for the retail strategy at Apple and lead the expansion of Apple retail stores around the world. He will be taking over the position that Ron Johnson had held until he left Apple last November to become chief executive of JC Penney.

Apple’s full press release and Dixons’ full press release are included after the break.

Even Apple Can’t Change The Reality Of Consumer Electronics Manufacturing Overnight →

Linked By Graham Spencer

Even Apple Can’t Change The Reality Of Consumer Electronics Manufacturing Overnight

There’s nowhere else in the world you can build a modern smartphone or tablet as cheaply, easily, and reliably as the massive factories of companies like Foxconn, which operate on a scale that is difficult to comprehend. The price for doing business with companies like Foxconn is living with the knowledge that these products are being built by people who have signed up for a modern-day version of indentured servitude.

This month the issue of working conditions and the human cost of producing Apple products has come up a few times with a ‘This American Life’ episode, the release of Apple’s annual Supplier Responsibility report and then this week’s New York Times report on the issue. It’s an incredibly serious issue and one that is rightly in the spotlight again. Yet whilst it is wrong to excuse Apple on this issue, the New York Times report perhaps glosses over the important part of this issue. Tom Krazit of paidContent goes one step further than the New York Times report and points out the sad, conflicted reality that if we want these luxury consumer electronics (such as the iPhone), they just have to be made in China and Apple cannot single-handedly change this reality.

As should be clear by now, Apple is only being singled out by the Times because it is at the top of the tech heap, and while that may be fair game given Apple’s unbelievable profit, it overstates the ability of the company to act as a macroeconomic force.

Apple has been the focus of these reports and backlash because they are now at the top of industry - despite the fact that by all accounts they are also one of the most transparent companies regarding this issue. As Krazit points out, Apple’s Supplier Responsibility report is far more detailed than that of Nike or GAP’s - companies that were targeted nearly a decade ago for horrifying conditions in their supplier’s factories. In fact GAP’s last report was in 2010 and Nike hasn’t even released a report since 2009.

It could use some of its $97 billion cash hoard as a carrot and the threat of losing its formidable business (Foxconn has no customer more important than Apple) as a stick. But unless Apple is willing to incur significant risk and set up its own manufacturing facilities governed by its own principles within China (something which, to be clear, may not be permitted by either China or the U.S.) it is dependent upon suppliers that have different standards when it comes to the well-being of their employees. And changing the labor laws of a foreign country is not necessarily a project that a U.S. company can throw money at and cross its fingers hoping everything works out.

Krazit’s full article is well worth the read, as he rationally examines the issue and discusses what could be done by Apple. As he and us at MacStories want to stress, Apple is right to scrutinise their suppliers and should continue to put ever more pressure on their suppliers to improve conditions. Yet it is unrealistic to expect Apple to stop relying on Foxconn and other Chinese suppliers and move production to a Western nation or equalize working conditions overnight. As Krazit notes, “even Apple doesn’t have the clout to reverse two decades of economic history that has led to the status quo”.

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Why The iPhone’s Average Selling Price Increased Despite The “Free” iPhone 3GS

By Graham Spencer

Earlier this week Apple released its Q1 2012 financial results and it was a blockbuster quarter, Apple’s best ever with $46.33 billion in revenue. One of the key factors that drove this sky-high figure was the sale of 37 million iPhones at an average selling price (ASP) of $660 — iPhone sales actually contributed to 53% of Apple’s revenue for the quarter.

Significantly, this was the first full quarter where Apple offered a “free” iPhone in the US to customers going on contract — the iPhone 3GS. Previously Apple had offered the 3GS alongside the iPhone 4 at a reduced price, but with the 4S the iPhone 4 fell to $99 and the 3GS became free. One would have presumed that the iPhone ASP would thus fall with the addition of another lower-priced iPhone model but in fact the ASP increased from the previous quarter and at $660 the iPhone ASP is near the highest it has ever been.

How has the ASP risen despite the presence of the “free” 3GS?

There are a few reasons as to why the ASP has increased and a big reason is that in addition to the new lower-priced 3GS ($345), Apple also introduced the 64GB iPhone 4S that is at a higher price-point ($849) than the previously most-expensive iPhone. This new higher-priced model would seem to have offset any reduction in the ASP that the iPhone 3GS would have caused - particularly given Q1 2012 was the 4S launch quarter and demand was very high for the new iPhone model.

Whilst Apple didn’t give out details on what the breakdown was of sales between the iPhone 4S, 4 and 3GS, an estimate from Consumer Intelligence Research Partners suggests that in the last quarter the iPhone 4S represented 89% of all iPhone purchases in the US. The report showed that only 4% of iPhone purchases last quarter were for the 3GS and 7% for the iPhone 4. This backs up the notion that the higher-priced iPhone 4S 64GB model (estimated to be 21% of iPhone 4S purchases) actually offset any decrease in the ASP and probably drove the increase in ASP to $660.

How will the iPhone ASP fare in the following quarters?

As Horace Dediu of Asymco points out, there is usually a slight uptick in the iPhone ASP during a launch and holiday season. This would suggest that in the following quarters the ASP may decrease a little as the high launch demand for the 4S subsides a little. It is unlikely to drop that much though, with the iPhone ASP typically hovering somewhere between $620 and $660. Dediu also investigated the historical ASPs for the iPhone, iPad, iPod and Mac and found that “Apple does not change pricing but rather stakes out a specific price point as resonating with consumers given their positioning”. The above chart demonstrates this point quite well.

[Sources: MacRumors, Asymco, AllThingsD]

Adam Lashinsky’s Inside Apple Is Now Available For Purchase On The iBookstore

By Graham Spencer

Adam Lashinsky’s new book Inside Apple is now available for purchase on the iBookstore and those who pre-ordered it can now download it. The book goes inside the secretive company, revealing a number of tactics, strategies and systems that has allowed Apple to “churn out hit after hit”.

Based on numerous interviews, the book offers exclusive new information about how Apple innovates, deals with its suppliers and is handling the transition into the Post Jobs Era. Lashinsky, a Senior Editor at Large for Fortune, knows the subject cold: In a 2008 cover story for the magazine entitled The Genius Behind Steve: Could Operations Whiz Tim Cook Run The Company Someday he predicted that Tim Cook, then an unknown, would eventually succeed Steve Jobs as CEO.

Inside Apple is available on the iBookstore for $12.99 and is also available on Amazon. We’ll be publishing a full review of Inside Apple sometime in the coming week, so stay tuned for that. A full description of the book is available below the break.

All The Statistics And Insights That Apple Revealed In Their Earnings Call

By Graham Spencer

A few hours ago Apple released its Q1 2012 financial results and it saw Apple post its biggest quarter ever with revenue of $46.33 billion and see record sales of its Mac, iPhone and iPad product lines. We covered all the results in our Q1 2012 Results article earlier today so be sure to head over there if you haven’t already - it also includes a number of graphs that demonstrates Apple’s performance over the past 12 quarters and it paints a fascinating picture.

However, the earnings call itself is an interesting one hour, with Tim Cook (CEO) and Peter Oppenheimer (CFO) also answering a number of questions from select investors and analysts. In this Q&A section, a number of details are revealed - including additional statistics. We’ve re-listened to the call and have compiled the following post that highlights the more interesting aspects of this Q&A section and it is all below the break.

Further Reading:

MacStories: Apple Q1 2012 Results

MacStories: “Our Next Big Insight”

MacStories: More iPhones Than Babies Born Every Day

Apple’s Q1 FY12 Earnings Press Release

Audio Webcast of the Earnings Call

SeekingAlpha: Transcript of the Earnings Call

ReadWriteWeb: Apple’s Growth Rate Is Simply Incredible… And It’s Accelerating

Macworld: This is Tim: Apple’s CEO in his own words

PDF Expert 3.2 Brings Full PDF Searching And Better Support For Bluetooth Keyboards

By Graham Spencer

PDF Expert for iPad was updated last night to version 3.2, adding some nice new features to further improve the capabilities of the excellent PDF manager, viewer and annotation iPad app. The big new addition is full text search, allowing you to search through all your PDFs, rather than just their file names. I gave this new feature a quick try and whilst the initial indexing took a few minutes, I did have 535 files saved in PDF Expert. Furthermore, once it was indexed, subsequent searches worked virtually instantly.

A new sorting panel is also present in PDF Expert 3.2, now allowing you to reorder your files by name, date or modified date. If you use a Bluetooth keyboard with your iPad you can now use those “Tab” and arrow keys for faster data entry, particularly for PDF forms.

Readdle has also improved the Handwriting and Wrist Protection features in PDF Expert so they work better with less accidental annotation because you have rested your wrist on the iPad’s screen. Included in this is a new eraser tool for your handwriting, so if you do make a mistake it is now easy to erase just what you want. Finally, yesterday’s update included the use of data protection APIs, so all your PDFs are now stored securely inside the app.

PDF Expert for iPad is available for $9.99 on the App Store.

Virgin America Names Jet “Stay Hungry, Stay Foolish” After Steve Jobs

By Graham Spencer

The saying that Steve Jobs made popular with his 2005 Stanford commencement address, “Stay Foolish, Stay Hungry” has now (literally) made its way onto a Virgin America plane.

An Airbus A320 plane (tail number N845VA) that Virgin America owns and runs, has been named “Stay Hungry, Stay Foolish”, with the quote emblazoned on the front of the plane, as seen above. A Virgin America spokesperson explained to MacRumors that the name was chosen after an internal naming competition.

The quote originated from the 1970’s magazine The Whole Earth Catalogue as Steve Jobs noted in his commencement address:

On the back cover of their final issue was a photograph of an early morning country road, the kind you might find yourself hitchhiking on if you were so adventurous. Beneath it were the words: “Stay Hungry. Stay Foolish.” It was their farewell message as they signed off. Stay Hungry. Stay Foolish. And I have always wished that for myself. And now, as you graduate to begin anew, I wish that for you.

[Via MacRumors]