January 27, 2012

Apple reclaims title of world’s largest smartphone maker after blowout quarter

By Josh Ong

Published: 10:50 PM EST (07:50 PM PST)
Apple overtook Samsung in the fourth quarter of 2011 to grab the top spot among global smartphone makers, earning 23.9 percent of the market with sales of 37 million iPhones, according to one set of estimates.

Shortly after rival Samsung officially reported its quarterly results on Thursday, market research firm Strategy Analytics released a report proclaiming Apple the victor in the latest round of the smartphone wars. Apple’s win was supported by just a narrow lead, however, as Samsung shipped an estimated 36.5 million units worldwide in the fourth quarter.

The South Korean consumer electronics maker declined to say how many smartphones it shipped last quarter, but it did note 30 percent growth, roughly in line with analyst expectations. As such, Samsung managed to capture its first crown for annual smartphone shipments with an estimated 97.4 million units, compared to Apple’s 93 million iPhones in 2011.

“With global smartphone shipments nearing half a billion units in 2011, Samsung is now well positioned alongside Apple in a two-horse race at the forefront of one of the world’s largest and most valuable consumer electronics markets,” said Strategy Analytics Executive Director Neil Mawston.

Nokia took third place with estimated quarterly shipments of 19.6 million, enough for a 12.6 percent market share. The Finnish handset maker has seen its market share plunge during its transition from Symbian to Windows Phone. In the year ago quarter, Nokia shipped 28.3 million smartphones.

Total smartphone shipments for the quarter grew 55 percent year over year to reach a record 155 million, while annual shipments were an estimated 488.5 million units.

Apple first took the top spot among worldwide smartphone makers last June, but without its usual iPhone refresh last summer, it conceded the title to Samsung in the third quarter.

The Cupertino, Calif., company more than made up for the September quarter when it announced on Tuesday impressive results for the December quarter. Apple reported record quarterly revenue of $ 46.33 billion and profits of $ 13.06 billion, driven largely by sales of 37.04 million iPhones.

As Apple and Samsung have become the new smartphone powerhouses, their rivalry has extended to the courtroom. The two are locked in a complicated legal battle with multiple complaints spanning several different countries.


App Store sales result in average revenue gains of 19% for iPad, 22% for iPhone

By Josh Ong

Published: 09:45 PM EST (06:45 PM PST)
App publishers on Apple’s App Store typically see a significant first-day revenue jump of 52 percent for iPad apps and 41 percent for iPhone apps and and 19 percent and 22 percent overall, respectively, when they put their software on sale, according to a new analysis.

Netherlands-based Distimo published the results of a study tracking app sales and spotlights for top 100 apps across the App Store for iPad and iPhone and the Android Market during the fourth quarter of 2011. According to its findings, apps on the Android Market benefited the most from being featured, while App Store apps on average saw a higher jump in revenue on the first day of a sale.

During the first three days after being featured by their respective stores, iPad apps jumped 27 ranks in the top 100, iPhone apps rose 15 spots and Android titles leapt up 42. Over the course of seven days, Android Market offerings had an average gain of +65, compared to +15 for iPhone apps and +28 for those for the iPad.

The study acknowledged that rank jumps correspond to vastly different uptakes in downloads depending on where an app started on the top 100 list, so it included a graph depicting relative rank changes in terms of percentage with a seven-day average. For instance, an app that jumped from 10 to 5 saw a 50 percent increase in rank, while one that went from 50 to 25 counted as a 100% increase.

Distimo found that about one-third of iPad apps jumped 200 percent in ranks while being featured and approximately 50 percent of Android apps gained 100 percent when spotlighted. The report noted that positive effects continued even after the featured period ended, as iPad, iPhone and Android apps were on average up 145 percent, 75 percent and 828 percent, respectively, five days after.

As for app sales, Android Market software experienced gains of just 7 percent on the first day of a sale, compared to 52 percent for the iPad and 41 percent for the iPhone. During the length of the sale, however, Android apps passed up their iOS counterparts in terms of revenue increase. Revenue for Android Market apps went up 29 percent during a sale, while revenues for iPhone and iPad apps went up 22 and 19 percent.

According to the report, some applications actually lost revenue by going on sale. For example, 44 percent of iPhone applications saw a decline in revenue during a sale. The study found that steeper discounts often resulted in higher revenue gains.

“In general, we noticed that the tipping point happened when the price was cut in half or the application was offered in tier 1 ($ 0.99) or tier 2 ($ 1.99),” the report read.

Apple announced this week that it had reached a new milestone of $ 4 billion paid out to App Store developers. The company had previously reported a $ 3 billion figure last October during the iPhone 4S launch. The App Store has grown to 550,000 iOS applications, including over 170,000 specifically for the iPad.

A separate study last month found that among top apps with both iOS and Android versions, iOS apps generate 300 percent more revenue than their Android counterparts.


Half of the enterprise is issuing Macs, 21% of workers use Apple products

By Daniel Eran Dilger

Published: 07:54 PM EST (04:54 PM PST)
A new study indicates around half of all large companies with 1,000 employees or more are buying Macs, while over a fifth of all “information workers” are now using at least one Apple product to do their work.

Apple’s resurgence among business users was profiled in a report by Forrester analyst Frank Gillett entitled “Apple Infiltrates The Enterprise.”

It further noted that companies buying Macs plan to increase their purchases by 52 percent this year. The study was based on interviews with 3,300 Information Technology decision makers and an additional 10,000 workers across 17 countries.

Forrester charted dynamic growth for Macs among enterprise users, noting that the percentage of companies issuing Macs to their workers has grown from 30 percent in 2009 to 37 percent in 2010 and 46 percent over the last year.

The research firm notes that among companies that deploy Macs, 7 percent of all computers being issued are now Macs.

Adoption by demographic

The firm notes that 15 percent reported using at least one Apple product (such as a Mac, iPad or iPhone), while an additional 6 percent said they used two or more. Eleven percent said they used an iPhone, while 9 percent said they used an iPad and 8 percent reported using a Mac for work.

It also points out that Apple devices in general are most popular among workers with a senior position, higher wages and among younger workers.

“Most of our sample of 10,000 global info workers earns less than $ 50k,” the report stated, “but the adoption rate of Apple products is almost 17% even in the bottom quartile of workers who make less than $ 12k per year.”


Motorola posts $80M quarterly loss, sells only 200K tablets

By Mikey Campbell

Published: 07:15 PM EST (04:15 PM PST)
Motorola Mobility’s fiscal year ended on a sour note with poor tablet and smartphone sales leading to a Q4 2011 loss of $ 80 million, which was further exacerbated by merger costs associated with a planned Google takeover.

In posting its fourth quarter and full-year results for 2011 on Thursday, the RAZR smartphone maker reported that despite a slight increase in yearly revenue, low device sales and high operating costs ultimately led to a decline in earnings from the year ago quarter.

Year-to-year revenue increased to $ 3.4 billion in 2011, however the fourth quarter saw a precipitous decline in earnings compared to 2010, with a net loss of $ 80 million compared to $ 80 million in gains in the quarter one year prior. The disappointing report can be blamed on costs associated with Motorola’s merger with Google, but relatively stagnant device sales during the usually lucrative holiday season are also telling.

Most notably, the company sold 200,000 Xoom and Xyboard tablets in the last quarter, which brought the yearly total to one million. In comparison, Apple sold over 15 million iPads in the last quarter alone as it continues its stranglehold on the global tablet market.

Also contributing to the poor quarterly showing was the company’s mobile devices unit which posted a $ 70 million net operating loss. The division’s smartphone sales fared a bit better than the tablets numbers, with the 5.3 million units moved in quarter four accounting for almost 30 percent of the 18.7 million total for the year. Combined with feature phone sales, Motorola was able to sell 42.4 million in 2011.

Google is planning to take over Motorola in a proposed $ 12.5 billion deal that would give the internet monolith access to a treasure trove of telecom patents to help bolster its Android mobile OS.


Briefly: Verizon pulls away from AT&T, Apple philanthropy

By Mikey Campbell

Published: 05:40 PM EST (02:40 PM PST)
AT&T announced a significant quarterly loss as a result of a failed T-Mobile takeover and is now adding fewer new customers than rival Verizon Wireless, while Apple extends its charitable matching program to include part-time employees.

Verizon pulling ahead of AT&T

Verizon strengthened its position as the number one mobile carrier in the U.S. based on subscribership as the company announced a 7.7 percent rise in overall revenue to end the fourth quarter of 2011, with even bigger earnings seen by its wireless arm’s $ 18.3 billion in revenue which represented a 13 percent rise year-to-year, reports The Wall Street Journal.

AT&T, on the other hand, reported a $ 6.68 billion loss for the quarter after a late-2011 pullout from a planned T-Mobile deal, though overall revenue rose 3.6 percent to $ 32.5 billion. The telecom activated a record 7.6 million iPhones over the holiday quarter, accounting for over 80 percent of all of the company’s smartphone sales, however a bulk of those were to existing customers.

The new data makes it clear that AT&T is losing the customer sign-up battle even though it saw a 79 percent bump from the year ago period with 717,000 new users. Verizon’s new subscribership eclipsed AT&T’s numbers and added 1.2 million contract subscribers during the same period.

Verizon now serves 108.7 million subscribers compared to AT&T’s 103.2 million users.

Apple charitable matching

Apple announced via Twitter from its Apple Retail Workers account that the company is expanding its charitable matching program to include part-time workers.

The program, first introduced by CEO Tim Cook in September 2011, calls for Apple to match employee non-profit donations dollar-for-dollar up to $ 10,000 a year. Originally, the plan was limited to full-time U.S. workers, but Cook promised that it would soon expand to other countries.

According to the most recent statistics regarding the gift matching initiative released in November, Apple and its employees raised $ 2.6 million.


iPhone 4S accounts for 9 out of 10 US iPhone sales, 42% of customers break contract to buy one

By Mikey Campbell

Published: 04:10 PM EST (01:10 PM PST)
Despite the customary price drop of Apple’s last generation iPhone 4 and the free-on-contract iPhone 3GS, the company’s newest handset dominated sales and has seen strong numbers not only from early adopters, but “conventional” smartphone users as well.

Citing a recent survey by Consumer Intelligence Research Partners, All Things D reports that since the debut of the iPhone 4S in October 2011, some 89 percent of all U.S. iPhone sales can be attributed to the newest Apple smartphone.

The CIRP survey shows that iPhone buyers weren’t put off by the $ 399 price of the top-of-the-line 4S, which boasts up to 64 GB of storage, and reports that an impressive 21 percent opted for the highest capacity model while the 32 GB and 16 GB versions garnered 34 percent and 45 percent of sales, respectively.

A deeper look into the figures reveals that recent iPhone buyers are bucking the trend of waiting the two years for their current contracts to expire before buying the popular device, and suggest that a majority of 4S adopters bypass cheaper legacy models for the newer Siri-enabled device.

“An amazing 19 percent of all iPhone buyers upgraded from the iPhone 4, a phone barely a year old at the time of the launch,” said CIRP co-founder Mike Levin. “Forty-two percent of iPhone buyers broke existing carrier contracts to get the new iPhone 4S. And 19 percent of these iPhone 4S buyers sold their old iPhone in the secondary market. Early upgrades, broken contracts, and selling used phones — all allow buyers to purchase the new iPhone 4S, when conventional wisdom suggests that these users would follow the two-year contract cycle, or at least purchase the cheaper models.”

The news comes on the heels of Apple’s Q1 2012 earning’s call on Tuesday, which outlined the company’s best performance ever and the second best quarterly corporate performance in U.S. history.

The iPhone 4S has seen amazing success after a longer than usual product refresh cycle built up customer demand to unprecedented heights. Sales were so strong that CEO Tim Cook said during the after-earnings conference call that Apple failed to too small.

The iPhone 4S rollout was the fastest in company history and the product line continues to set records for both Apple and mobile carriers such as AT&T’s 2011 holiday quarter where the iPhone represented 80.8 percent of all smartphones activated. Verizon recorded 4.2 million iPhone activations which represented more over half of the number one U.S. carrier’s smartphone sales.


Nokia’s earnings plunge 73%, Nintendo sees first annual loss

By Slash Lane

Published: 02:47 PM EST (11:47 AM PST)
On the heels of Apple’s announcement of the biggest quarter in company history, two of the iPhone maker’s rivals — Nokia and Nintendo — have reported significant losses.

Nokia’s Windows Phones off to a slow start

Nokia Oyj saw a 73 percent drop in fourth-quarter earnings, the company reported on Thursday. While Apple saw sales of 37 million iPhones in the holiday quarter, Nokia sold just 1 million of its new “Lumia” Windows Phones since it debuted in mid-November, according to Reuters.

Going forward, the picture isn’t much better for Nokia, as the company expects its phone business to be around break-even in the first quarter of calendar 2012. That’s well below what analysts expected the company to project.

Still, the Finnish handset maker’s fourth-quarter earnings per share of 0.06 euro was better than the market expected. Analysts generally predicted Nokia would report earnings per share of around 0.04 euro.

Nokia was aided in the quarter by a $ 250 million payment from Microsoft, as part of the agreement between the two companies to release handsets based on the Windows Phone platform. Nokia announced nearly a year ago that it would ditch its proprietary Symbian platform and instead feature Windows Phone on its high-end smartphones going forward.

Reacting to Nokia’s earnings, analysts said that the company needs to initiate a strong push for its smartphones running Windows Phone if it hopes to push Microsoft’s platform beyond the 1 percent to 2 percent share it currently holds.

Nintendo posts first annual loss in history

Japanese game maker Nintendo revealed on Thursday it expects to post its first full-year loss at an operating level in company history. Nintendo publicly revealed that it expects an annual operating loss of 45 billion yen, or $ 575 million U.S., which is significantly greater than analyst expectations of a 4.2 billion yen loss.

Nintendo also cut annual sales forecasts for its once-dominant Nintendo Wii console from 12 million to 10 million. In addition, sales of the Nintendo 3DS portable game console were slashed from 16 million to 14 million.

“We had higher expectations for the year-end season, but failed to meet them,” Nintendo President Satoru Iwata said to reports in Osaka, Japan.

Nintendo drastically cut the price of the 3DS by $ 80 last year only months after it was released. Now available for $ 169.99 in the U.S., the console faces significant pressure from smartphones like Apple’s iPhone, along with the iPod touch.

Sales of the 3DS did pick up considerably after Nintendo cut the price and began to release blockbuster titles like “Mario Kart 7″ and “Super Mario 3D Land.” But the Wii has been overtaken by rivals like Microsoft’s Xbox 360, and Nintendo must wait for its successor, the Wii U, to be released later this year.

The Wii U will be an HDTV-based console that features a controller with a 6.2-inch touchscreen. The controller immediately drew comparisons to the iPad when it was announced, but unlike the pairing of an iPad and Apple TV, in which the iPad sends content to the Apple TV, Nintendo’s Wii U is powered by a traditional console capable of 1080P graphics that will be required to stream content to the tablet controller.


Apple to offer employees $500 off a new Mac, $250 off iPads – report

By Katie Marsal

Published: 12:32 PM EST (09:32 AM PST)
Apple Chief Executive Tim Cook reportedly informed employees this week that later this year they will be able to buy an iPad with a $ 250 discount, while Macs will be available for $ 500 off.

Starting in June, the discounts will be available to employees who have worked more than 90 days at Apple, according to The Register. Employees will be able to obtain the $ 750 in discounts once every three years.

The announcement was made by Cook in a “town hall” meeting put on by Apple with its employees. It came a day after Apple announced a record quarter, in which it earned $ 13 billion.

For some products and configurations, the new discounts go well beyond what Apple has traditionally offered. Employees can currently receive a 25 percent discount on a complete Mac system one time per year.

But $ 500 off would actually be a reduced discount for some of Apple’s high-end products when compared to the current 25 percent reduction. For example, a maxed-out 17-inch MacBook Pro, with 8GB of RAM and a 512GB solid-state drive, can cost over $ 4,000 at retail, and a 25 percent discount would amount to $ 1,000 in savings, or twice that of the new promotion.

But $ 500 off would be a larger discount in most cases. For example, an employee looking to buy the entry-level 11.6-inch MacBook Air would pay just $ 500 for the usually $ 999 notebook, while a 25 percent discount would only reduce the price to about $ 750.

The new perk also applies to all Apple employees, and not just those who work at the company’s corporate headquarters in Cupertino, Calif. That means more than 60,000 workers, including those at Apple’s hundreds of retail stores, will be eligible for the promotion.


Apple exploring MagSafe data, headphone connections for iPhone, iPad

By Neil Hughes

Published: 09:03 AM EST (06:03 AM PST)
Apple’s standard 30-pin iPod cable and even its headphones could be replaced on future iPhones and iPads by new magnetic cables, much like the MagSafe power adapters currently used on MacBooks.

Apple’s interest in a magnetic data and power cable for portable devices was revealed this week in a patent application discovered by AppleInsider. Named “Programmable Magnetic Connectors,” the filing describes a series of “coded magnets” found in both a portable device and a data and power cable.

The filing includes an illustration of an iPad 2 with a forward-facing camera and associated cable that are described as having a “coded magnetic structure.”

In its application with the U.S. Patent and Trademark Office, Apple notes that current coupler designs, like with the 30-pin dock connector or headphone jack found on existing iPhones and iPads, prevent a device from being properly sealed. This is why the connector port and headphone jack feature water sensors, to determine if water entered the device through one of these openings.

The use of MagSafe connectors not only for the data and power cable, but also headphones, could allow Apple to properly seal its devices and make it more difficult for moisture to damage the valuable electronics.

Apple’s filing also notes that the male half of a data and power cable usually has pins or prongs that are exposed when it is not coupled to a device.

“Due to this exposure, the pins or prongs may be damages and render the connector/cable unusable,” the application reads. “Additionally, many connectors are device and/or purpose specific. For example, they may have a certain number of pins or prongs that are configured in a particular manner. As such, each device may have multiple unique cables and connectors that are not compatible with other devices.”

The solution proposed by Apple is a new universal cable, much like the existing 30-pin iPod connector, but one that features programmable magnets. These coded magnets, found inside both the cable and the portable device, would share identifying information on the device with the cable.

By sharing information from the magnets about the device, the cable could appropriately connect to it and provide the correct number of pins. The application describes a controller that would repurpose one or more of the pins on a cable to connect certain communication channels.

“The magnets (would) create a universal port that detects the coded magnet ‘signature’ of a particular cable type and reconfigures itself accordingly,” the filing reads.

The magnets found in the device and cabling could also be used to “repulse, eject, and/or prevent coupling of certain cables.” In one example, a heat sensor is triggered and the device is automatically ejected.

The filing also describes a unique, magnet-powered headphone connector. In Apple’s concept, the male headphone plug has multiple segments, but its full size would be concealed until it is paired with a smart magnet found on an iPhone, iPad or iPod.

Connecting the plug to a headphone jack would then fully extend the plug, revealing all of the connectors and segments, and allowing it to receive stereo audio and transmit microphone data.

Much like the pins in the data and power cable, the size of the audio plug could be determined based on the needs of the device as transmitted through the programmed magnet. In this way, a smaller device, like an iPod nano, could have a shallower headphone port, while larger devices could accommodate the full plug and all of its available connectors.

The application, made public by the USPTO this week, was first filed in July of 2011. It is credited to Brett Bilbrey, Aleksandar Pance, Peter Arnold, David I. Simon, Jean Lee, Michael D. Hillman, Gregory L. Tice, Vijay Iyer, and Bradly Spare.


More than 80% of smartphones activated at AT&T were Apple’s iPhone

By Sam Oliver

Published: 09:26 AM EST (06:26 AM PST)
Apple’s first carrier partner remains is strongest, as AT&T revealed on Thursday that it activated a record 7.6 million iPhones over the holiday 2011 quarter.

The 7.6 million iPhones activated on AT&T represented 20.5 percent of the total 37 million iPhones Apple sold in its own record quarter, the results of which were announced on Tuesday. AT&T followed up Thursday with its quarterly earnings, in which consolidated revenues were up $ 1.1 billion to $ 32.5 billion.

The iPhone was dominant at AT&T, accounting for 80.8 percent of the 9.4 million smartphones sold through the carrier.In the previous quarter, the iPhone represented 56 percent of AT&T’s smartphone activations with 2.7 million units.
The wireless carrier revealed that a majority of the 7.6 million iPhones it activated in the quarter were the iPhone 4S. That aligns with what Apple executives said on Tuesday, when they revealed the latest model of their smartphone was by far the best selling.

The 7.6 million iPhones activated on AT&T also easily bested the 4.2 million iPhones Verizon activated during the same three-month span. The iPhone accounted for 55 percent of smartphone sales at Verizon.

AT&T also said it was a strong quarter for its Android-based handsets, as Android smartphones also set a new record over the holidays. Specific sales figures for Android and other platforms weren’t provided, but would remain among the remaining 1.8 million non-iPhone smartphones sold in the three-month period. Total smartphone sales were the best ever seen at AT&T, blowing past its previous quarterly record by 50 percent.

The nation’s second-largest wireless carrier added a total of 2.5 million wireless subscribers in the quarter. That means most of the 7.6 million iPhones activated over the holidays were to existing AT&T subscribers.

AT&T saw 10 percent growth in wireless revenues, and 19.4 percent growth in wireless data revenues. It said that 82 percent of its postpaid sales were smartphones.

Computing devices, including the iPad and other tablets, reached 571,000. That was the company’s best-ever quarter, and the carrier now has 5.1 million subscribers with those 3G-connected devices, up almost 70 percent from a year ago.