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Apple's Quarterly Spending Points to Major Product Launches, Significant Revenue Growth

Looking at Apple's quarterly SEC quarterly filing, Katy Huberty of Morgan Stanley believes Apple's revenue is poised to explode in the coming quarters. Huberty based her prediction on increases in Apple's off-balance sheet commitments, which have a historical correlation with revenue growth.

Off-balance sheet commitments are those investments in components and services that are involved in the mass production and launch of new devices. These line items include component purchases, manufacturing process equipment investments, advertising, and other services. Huberty notes that Apple's total spending in these areas has climbed 46 percent yearly and 36 percent quarterly in fiscal Q3 2014, making last quarter's jump the largest spending increase since Apple first launched the iPhone in 2007.

huberty-off-balance sheet commitments
Huberty, not surprisingly, attributes this spending increase to Apple's iPhone 6 and iWatch wearable, both of which are expected to launch later this year. These new products, along with services such as mobile payments, could accelerate growth and boost margins.
Apple has the opportunity to take share in slower growth smartphone and tablet markets with larger screens and new services. New product categories like iWatch, and services like payments could further boost growth.
Apple is rumored to be launching its next-generation iPhone 6, refreshed iPad models and a new iWatch smartwatch later this year. The company may also update its Mac hardware to coincide with the debut of OS X Yosemite.

Related roundups: iPhone 5c, iPhone 5s, iPhone 6, iPad Air, iWatch

Apple Begins Mass Production of 4.7-Inch iPhone 6, 5.5-Inch Model and iPads Start in September

China media sources (via GforGames) report that mass production of Apple's 4.7-inch iPhone is underway ahead of the phone's expected fall launch. These same sources claim the 5.5-inch version of the iPhone 6 has not entered mass production, further suggesting that the launch timeframe for this larger iPhone model is still uncertain.

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Besides the iPhone 6, Apple also is preparing the next-generation iPad Air and Retina iPad mini for mass production starting in September. Apple is expected to unveil its new iPads, possibly alongside the iWatch, at an October event that also will likely be used to announce the public release of OS X Yosemite.

As Apple prepares to launch new iPhones and iPads later this year, the company's Asian suppliers are gearing up to boost production by as much as 85 percent by Q4 2014. Some of this increased production may be handled by Foxconn robots, "Foxbots", with the company reportedly deploying as many as 10,000 robots at a cost of up to $25,000 each.

Anticipation for Apple's fall lineup of devices is high, fueled by comments from Apple executives that suggest the company will enter new product categories with a device lineup that is the best it has had in 25 years.

OS X Yosemite Beta: First Impressions, Installation Tips, Known Issues, and Bug Fixes

Today marked the first day of Apple's public beta testing program for OS X Yosemite, letting thousands of non-developers download the software for the first time. With so many new users, new issues and bugs in the beta are coming to light and being catalogued in our Yosemite forum.

We've pulled out some user reactions from the forums to share, along with some tips on troubleshooting possible issues. For users having problems with the beta, the Yosemite forums can be an invaluable resource, and for users still debating whether or not to install the beta software, make sure to check out this post and our forums before taking the plunge as Yosemite is still somewhat unstable.

First Impressions
A lot of new Yosemite users think that the operating system looks great. According to one user, it makes Windows and Mavericks look antiquated in comparison with its new focus on translucency and clean lines. A "Yosemite is Beautiful" thread is full of praise, with users calling it "stunning" and "the best OS X has ever looked."

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While there are a lot of Yosemite users who like the changes Apple's brought to Yosemite, there's a much longer complaint thread entitled "Yosemite Looks Terrible" that includes complaints about Dark Mode, "crappy" fonts, and the bland look of the translucency. Users also say Yosemite looks far less appealing on a non-Retina display.

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Yosemite's Dark Mode, screenshot from Yosemite forum thread

Thus far, most users have not noticed significant performance improvements going from Mavericks to Yosemite, but that could change as Yosemite is still very much in a beta form.

Bugs and Issues
A lot of users have received an error message suggesting their Yosemite codes had already been redeemed after requesting a code. According to Apple, simply refreshing the beta page will provide an entirely new code.

One new Yosemite user who installed the operating system on a partition discovered that Yosemite may cause problems with partitions. Other users have also reported issues with partitions after installing Yosemite, while some have had no problems at all. The linked thread contains some Terminal fixes for users experiencing issues.

There's a lengthy bug thread on OS X Yosemite that has been added to throughout the beta testing period. Some remaining bugs include poor management of dual iTunes accounts, crashes in Activity Monitor, making and receiving calls with the FaceTime app, and unreliable WiFi connections. Problems with specific apps are listed in a separate thread, but some issues include frequent crashes with apps like Spotify and Microsoft Office. Apps like Final Cut Pro X, Aperture, iMovie, and Pixelmator also do not appear to be fully functional.

Handoff and Continuity
For users who have the iOS 8 beta installed on their iOS devices, MacRumors forum member Armen has put together a detailed walkthrough on how to set up Continuity and Handoff, new integration features introduced with the two new operating systems. Continuity appears to be largely functional for users with compatible machines, which have a Bluetooth LMP version of 0x6. Handoff does not appear to be working with 2011 MacBooks, but those machines do appear able to access SMS texts and phone calls.

New Features
New Yosemite users and those who are thinking about installing the beta should also check out the OS X 10.10: All The Little Things forum thread that details all of the lesser-known changes made to Yosemite throughout the beta testing period thus far to get familiarized with the operating system. For example, the latest developer preview introduced an entirely new version of iTunes, a new calculator app, and more.

Installation
Users who signed up for the public beta program can access promo codes to install Yosemite through the beta program website. Apple has also been sending out emails to those who have been selected to beta test Yosemite.

Apple recommends Yosemite be installed on a secondary machine as it is beta software, but users who do not have a secondary machine may want to install the operating system on an external drive or on a separate partition. OS X Daily has a set of instructions that walk users through both scenarios, explaining how to install on a partition or external hard drive. A MacRumors forum member has also explained how to create a bootable USB installer.

OS X Yosemite is expected to remain in beta testing until October, with new versions being seeded to both Appleseed participants and developers. Public beta test members will not, however, get as many updates to the software as developers.

Related roundup: OS X Yosemite

Possible 5.5-inch iPhone 6 Volume/Power Flex Cable and SIM Card Tray Shown in New Images

We've seen several different parts for the 4.7-inch iPhone 6, but parts for the larger 5.5-inch version have thus far been in short supply. Apple.club.tw [Google Translation] has shared some new images of what might be the first leaked internal parts for the 5.5-inch iPhone 6, offering up pictures of power/volume flex cables and SIM trays said to be for the device.

The two flex cables that separately house the left side volume buttons/mute switch and the top power button are similar in design to an earlier set of leaked flex cables said to be for one of the iPhone 6 models. There are, however, some design differences that suggest there are two distinct sets of flex cables designed for two different devices floating around the Asian supply chain. For example, the new set of flex cables depicts less space between the volume buttons and the mute buttons and the two flex cables for the power button have different shapes.

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iPhone 6 volume/mute flex cable on top, power button flex cable on bottom

Like the earlier cables, the flex cables in the new images resemble parts from other devices and have an Apple-style part number.

As it is difficult to determine size based on images, it is unclear which set of leaked flex cables might be designed for the 4.7-inch iPhone and which is destined for the 5.5-inch iPhone, but as both cables are different than existing parts for the iPhone 5s, iPad Air, and iPad mini, they point towards two separate devices if legitimate.

Apple.club.tw has also shared images of a longer flex cable with an unknown purpose and a set of SIM card trays in a cobalt blue color. Blue is not expected to be a color for the iPhone 6, as current rumors have pointed towards a release in the existing silver, gold, and space gray for both models, so the blue SIM trays are somewhat questionable.

simcardtrays
As we move closer to the September launch date of the iPhone 6, we expect part leaks to become more frequent. We may also see more parts designed for the larger iPhone 6 as it is expected to enter mass production in August or September. The 4.7-inch iPhone is said to have entered mass production in July.

Rumors have suggested that Apple may ship the 4.7-inch iPhone 6 ahead of the 5.5-inch iPhone 6 due to supply constraints with the latter, so it remains unclear if we will see the bigger phone at Apple's prospective iPhone 6 launch event in September.

Related roundups: iPhone 5c, iPhone 5s, iPhone 6

Apple Maintains Tablet Market Share Lead Despite iPad Sales Drop

Apple's recent earnings call revealed that iPad sales continue to decline, with the company shipping only 13.3 million iPads during the third fiscal quarter of 2014 (second calendar quarter), compared to 14.6 million in the year-ago quarter.

Despite the sales drop, Apple continues to be the world's leading tablet vendor, with a total 26.9 percent of the market, according to new numbers from research firm IDC. Samsung retains its number two spot with 8.5 million shipments and a 17.2 percent share, but both major companies have been losing significant ground to companies putting out more affordable tablet devices.

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Lenovo, for example, saw its share of the tablet market rise from 3.3 percent to 4.9 percent, a 64.7 percent jump. ASUS saw 13.1 percent growth, and the "Others" category, which is comprised of vendors not quite in the top five list, has jumped from a 37 percent share to a 44.4 percent share, an increase of 33.4 percent.

Overall, the worldwide tablet market has grown 11 percent year-over-year, with total tablet shipments of 49.3 million, up from 44.4 million in 2013.

idctablets2
As we indicated last quarter, the market is still being impacted by the rise of large-screen smartphones and longer than anticipated ownership cycles," said Jean Philippe Bouchard, IDC Research Director for Tablets. "We can also attribute the market deceleration to slow commercial adoption of tablets. Despite this trend, we believe that stronger commercial demand for tablets in the second half of 2014 will help the market grow and that we will see more enterprise-specific offerings, as illustrated by the Apple and IBM partnership, come to market."
To date, Apple has sold 225 million iPads and according to Tim Cook, the company isn't worried about declining sales. Cook noted the tablet category is still "in its infancy," and Apple is planning to bring "significant innovation" to the iPad in the future.

iPad sales will likely pick up later this year with the introduction of a second-generation iPad Air and a second-generation Retina iPad mini. Both tablets are expected to include upgraded processors and Touch ID integration. Apple is also expanding its presence in the enterprise tablet market with a new partnership with IBM.

OS X Yosemite Public Beta Now Available via Mac App Store Redemption Codes

In line with yesterday's announcement, Apple today made available a pre-release version of OS X Yosemite to consumers who signed up for the company's OS X public beta program. Public beta program members can access promo codes through the beta program website that allow them to download Yosemite from the Mac App Store for free.

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Early reviews of the pre-release build are favorable, with several reviewers noting improvements in Safari, Messaging and Notifications. Notably missing from the beta, however, are the highly anticipated Continuity features that allow for the integration of OS X with an iPhone or iPad running iOS 8, as only Yosemite is included in the program.

To sign up for the beta program, users must have a Mac running OS X Mavericks and need to register with an Apple ID on Apple's website. Apple cautions members to install the OS on a secondary Mac as it is beta software and may cause unexpected errors or other issues. Enrollment in the beta program is limited to the first one million registrants.

MacRumors readers who want to discuss the beta can do so in our Yosemite forum, which has tips on troubleshooting, comments on new features, and more.

Apple is expected to release OS X Yosemite to the general public later this year, possibly following an October event that also may be used to unveil the iWatch and new iPad models.

Update 12:25 PM PT: Some users who have signed up for the Yosemite beta have encountered an error indicating their beta codes have already been used. Apple suggests that users getting that error message refresh the beta program redemption page to generate a new code.

Related roundup: OS X Yosemite

Swatch Denies Report It Is Working With Apple on iWatch Wearable

Swiss watchmaker Swatch Group today denied a recent report that it was working with Apple to develop a smartwatch product, reports Reuters. VentureBeat first reported this joint venture, citing an unnamed source with knowledge of Apple's plans.

A spokeswoman for Swatch told Reuters that the Apple rumor was "unfounded," adding that Swatch's only relationship with mobile phone manufacturers, including Apple, is as a supplier of internal electronic circuitry and other smaller components. Swatch Chief Executive Nick Hayek reiterated in an interview with Reuters that "he was not interested in teaming up with a tech group to develop a smartwatch."

swatch-logo
The original VentureBeat rumor claimed Swatch and possibly Timex would build a smartwatch based on Apple's iWatch specifications. These third-party manufacturers would release their watches alongside Apple's own iWatch, providing "a family of smart watches to suit all tastes "from geek to chic."

This type of agreement would be unusual for Swatch, whose CEO has publicly expressed skepticism about the future success of the iWatch, saying he doesn't believe "it's the next revolution." Earlier reports also indicate that Apple is working alone on the iWatch, hiring a variety of medical, fitness and fashion experts to help develop the wearable product.

Apple is rumored to unveil its wearable device later this year with reports indicating it will be available in different materials and at various price points in order to appeal to a range of consumers. The smartband may have a fitness focus with sensors that measure vitals such oxygen saturation, hydration status and heart rate. This data may then be shared with iOS 8's new Health app in order to generate a comprehensive health profile for the user.

Related roundup: iWatch

Apple Launching 5.5-Inch iPhone 6 After 4.7-Inch Version to Avoid Competition Between Two Models?

Apple will launch the 5.5-inch iPhone 6 several months after the 4.7-inch version to avoid competition between the two models, according to a new report from DigiTimes citing supply chain sources.
The different timetables have been set as Apple does not want to repeat the mistake it made in 2013 when it launched the iPhone 5s and iPhone 5c simultaneously, said the sources.
Prior rumors have pointed out that production issues with the 5.5-inch iPhone 6 would cause Apple to delay its release a few months after 4.7-inch version, however this newest report claims that isn't the case for the launch delay. A report from Bloomberg last month suggested that Apple would be launching both versions of the iPhone 6 simultaneously, noting that the company had begun preparing the 4.7-inch model and 5.5-inch for manufacturing.

iphone_5s_6_grass
4.7 and 5.5-inch iPhone 6 mockups compared to iPhone 5s

Apple is expected to unveil the 4.7-inch iPhone 6 at a September event, although a report yesterday noted that the company is unsure as to whether it will show off the 5.5-inch version at the same time. The company is said to be preparing between 70 and 80 million iPhone 6 units to meet anticipated customer demand, as the larger screen could cause a massive spike in upgrades from both iPhone upgraders and those switching from Android.

In addition to a larger screen, the iPhone 6 is expected to feature a faster A8 processor, a thinner profile, an improved camera, and Apple's new iOS 8 mobile operating system.

Related roundups: iPhone 5c, iPhone 5s, iPhone 6

Apple Working With Swatch for iWatch With Multiple Designs, Price Points?

Apple may be working with manufacturing partners like Swatch to create multiple versions of the iWatch that are available in a range of styles and price points, according to a questionable report from VentureBeat, citing a source with knowledge of Apple's plans.
While most Apple-watchers and media have been laser-focused on one or two "iWatches" from Apple itself, the Cupertino, Calif.-based electronics and media giant may actually be working a number of partners in the watch business.

Apple and its partners will offer a family of smartwatches to suit all tastes "from geek to chic," our source says.
VentureBeat suggests it is possible that Swatch may be involved in building one or more of Apple's smart watches, and the site's source also believes Apple may be teaming up with Timex as well. Watches from third-party manufacturers would likely accompany an iWatch of Apple's own branding, according to the source.

A possible partnership with Swatch or another watch maker would seemingly go against many of the existing iWatch rumors, which have indicated that Apple is building its own wrist worn device with multiple screen sizes up to 2.5 inches and an array of complicated health sensors.

Apple has also hired a massive team of health and fashion experts to work on the iWatch, suggesting much of the development work is in-house. Thus far, there have been few hints on what the iWatch might look like, so there is a possibility that Apple could use something of a modular design, with a screen able to integrate with bands from multiple companies.

paparazzi
The Swatch Paparazzi, a 2004 smart watch created in collaboration with Microsoft

Some reports, including a prediction from KGI Securities analyst Ming-Chi Kuo, have indicated Apple will produce the iWatch in a variety of materials and at multiple price points to satisfy a wide range of tastes. Apple is also said to be marketing the iWatch as a fashion accessory, but thus far other reports have not pointed towards third-party design partnerships.

Tim Cook yesterday suggested partnerships are "unusual" for Apple, speaking about the company's recent decision to team up with IBM. He emphasized that Apple's IBM partnership was possible because the two companies do not compete with each other, which is not the case with Swatch.

Last year, Swatch CEO Nick Hayek also had some negative things to say about an Apple iWatch, stating "I don't believe it's the next revolution." Swatch does have some limited experience with smart watches, however, having previously teamed up with Microsoft to offer the Swatch Paparazzi smart watch.

According to Hayek, Apple and Swatch have been in contact for multiple years over materials for products and energy harvesting technology, but in March, Hayek clearly stated that Swatch was not interested in forging a partnership with a company manufacturing wearable devices, including Apple, which casts doubt on today's report.

Apple is expected to introduce the iWatch in October.

Related roundup: iWatch

Apple in Talks With Credit Card Companies Over Payment Solution, Could Launch Mobile 'Wallet' This Fall

applestore.pngApple's talks with companies in the payment industry have been heating up in recent months, according to a new report from The Information. Apple executives have discussed launching a mobile payment solution as soon as this fall, allowing users to pay for physical goods with their iPhones.

Apple is currently speaking with credit card company Visa over a possible partnership, a move that would bypass third-party payment processors resulting in direct savings for retailers and customers.

Apple's payment solution is said to work with a "secured element" within the iPhone, safely storing payment credentials. This secured solution may involve the "Secure Enclave" built into Apple's A7 processor.
Apple has told some partners its system would involve a so-called secured element in the phones--a piece of hardware where sensitive information such as a phone owner's financial credentials can be stored. The company also aims to run the system without giving up any control to wireless carriers.
The Secure Enclave, which was designed for Touch ID, is a coprocessor within the A7 chip that uses a secure boot process to ensure that its separate software is both verified and signed by Apple. It functions independently even if a kernel is compromised and contains a unique ID that is inaccessible to other parts of the system, keeping all data held within safe.

Apple's interest in the mobile payment arena has been rumored for years, but gained renewed attention earlier this year when The Wall Street Journal suggested the company as working on a new mobile payment service. As previously detailed, the service is said to allow people to use their iOS devices to make purchases for physical goods in apps and on the web, as well as in retail stores.

The payment solution will most likely be built around iTunes, allowing Apple to leverage more than 800 million iTunes accounts, most with credit cards attached. It may also be tied to Touch ID, the fingerprint scanning home button built into the iPhone 5s and slated for inclusion in future iPads and iPhones.

In January, Apple CEO Tim Cook said that mobile payments were "one of the thoughts" behind Touch ID. He has also said that Apple is "intrigued" with mobile payments and noted there's a "big opportunity on the platform."

Earlier this year, Apple was said to be in talks with Paypal about a possible partnership and it has also sought out senior payments industry executives to take on roles within the company.

OS X Yosemite to Launch in Late October, 12-inch Retina MacBook and 4K Desktop in the Works

Following an earlier report on the launch of the iPhone 6 and iOS 8, 9to5Mac has released a second report with details on OS X Yosemite and Apple's fall Mac plans. As has been previously mentioned, OS X Yosemite will launch in October, following iOS 8's September release alongside the iPhone 6.

The final Yosemite Developer Preview is expected to be seeded to developers on September 29, with a final golden master build coming around October 10, which suggests a late-October public launch date for Yosemite.

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October will also see the potential introduction of the iWatch, as has been widely rumored, and Apple may also be planning to unveil several new products designed to promote Yosemite, including a smaller 12-inch MacBook with a high-resolution display and a new desktop computer, which may be an iMac or a standalone monitor with a 4K resolution screen.

Along with providing a few details on the desktop Retina machine, 9to5Mac's report echoes several details on the 12-inch MacBook previously shared by rumor sites, suggesting it will have a Retina display and a "thinner and slightly lighter aluminum body."
Apple believes that this new Retina MacBook will be a significant step forward in the laptop industry, and it is currently unclear if Apple will label this machine as a smaller MacBook Pro, a new MacBook Air, or as an entirely new line.

While it is possible Apple will market the aforementioned 4K desktop as a "Retina" machine, the technology for true pixel-doubling of the current 27-inch iMac and Thunderbolt Display's 2560 x 1440 resolution is not ready for market.
9to5Mac's sources indicate the 12-inch Retina MacBook and the iMac are on pace to ship in late in the third quarter or in the fourth quarter, but could be pushed back to early 2015, which is in line with recent rumors about the 12-inch Retina MacBook. A report has suggested the notebook's launch will be pushed back due to continued Broadwell delays.

Rumors have also long focused on a possible Retina iMac and/or a 4K display, and back in June, hints of a Retina iMac were found in the OS X Yosemite beta. Less has been said about a potential 4K display in recent months, but an update to Apple's Thunderbolt Display is long overdue.

Along with new Macs, Yosemite's introduction may also include updates to both iMovie and Final Cut Pro to improve support for video captured with 4K cameras.

Apple Planning Mid-September Event for 4.7-Inch iPhone 6, Timing of 5.5-Inch Model Unclear

According to 9to5Mac, Apple is putting the finishing touches on iOS 8 in advance of a September iPhone and iOS 8 launch event. Based on current projections, Apple is unsurprisingly tentatively planning to hold this iPhone-oriented event in mid-September. In line with previous reports, Apple is said to be aiming for a second product launch event in October for the iWatch and OS X Yosemite.

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iPhone 5s with mockups of 4.7-inch and 5.5-inch iPhone 6 models

Similar to other recent September events, Apple is reportedly planning to focus on only iOS 8 and the iPhone 6 in this year's September event. While the 4.7-inch iPhone will headline the presentation, the debut of the 5.5-inch model is still uncertain as it is further behind the 4.7-inch model in both testing and manufacturing.
These people say that the second and third weeks of September are the mostly likely weeks for the event to be held, but they add that manufacturing uncertainties could alter the event’s timeframe. A decision has not been finalized, and sources made it clear that the plans are in flux.
This information aligns with an earlier report that suggests Apple may push off the 5.5-inch model until 2015.

The report claims iOS 8 is on track for its public release this fall, with a fifth and final beta version expected on Monday, August 4, although a separate report from BGR claims a sixth beta is planned for Friday, August 15. A golden master version may debut a few weeks later at the end of August or early September. As rumored, dual-screen multi-tasking for the iPad and Maps improvements are still in the works, but these features are not expected to be available at launch and would come in a later iOS 8 update.

Following the September event, Apple also is planning a second event in October that will showcase the iWatch, Apple's entry into the wearables market. This late fall event also will be used to discuss OS X Yosemite as well as unveil new iPad models. The iPad update is expected to be a modest refresh with hardware additions such as Touch ID and a faster A8 processor.

Apple's 36% Boost in Research and Development Spending Points to Strong Product Pipeline

Apple made a significant investment into research and development this past quarter, increasing spending in the category by 36 percent over the same quarter last year, reports Financial Times. As noted by BTIG Research analyst Walt Piecyk, Apple's $1.6 billion quarterly investment represents 4 percent of sales, the highest percentage of spending in R&D since 2006, the year before Apple released the first iPhone.

This huge increase supports rumors the company is investing significantly in more than just new iPhones, iPads, and Macs for its upcoming product pipeline. Apple CEO Tim Cook has repeatedly confirmed the company is preparing to enter new product categories, with Cook saying Apple is working "really great stuff." Apple's Internet Software and Services chief Eddy Cue also enthusiastically noted that Apple's planned products for 2014 are "the best product pipeline that I've seen in my 25 years at Apple."

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iWatch concept by Todd Hamilton

The highlight of these new products is likely the iWatch, a fitness-oriented smartwatch rumored for release later this year. The sensor-laden wearable device is expected to sync with the iPhone including via a new Health app for iOS 8 and may monitor vital health parameters such as blood pressure, oxygen levels and hydration status. A recently awarded patent hints at some of the advanced connectivity features Apple could embed into the device in future iterations.

Over the past several years, Apple has been hiring a number of medical and wearables experts, presumably to work on the iWatch team. Apple has also been pursuing hires from the fashion industry including former Yves Saint Laurent CEO Paul Deneve and former sales director of luxury watch company TAG Heuer Patrick Pruniaux. New retail chief Angela Ahrendts also comes from the fashion industry, having served as CEO of Burberry.

Related roundup: iWatch

OS X Yosemite Public Beta Launches Tomorrow, July 24

In a coordinated release today, a number of publications have released official overviews of the latest OS X Yosemite beta build alongside word of Apple's plans to open up the public beta tomorrow, July 24. As noted by The Loop, the public beta of Yosemite will be the same build released to developers on Monday.
The public beta version of OS X Yosemite is the same version released to developers on Monday, so to start off, consumers and developers will be running the same software. However, the developer version of Yosemite will be updated more often over the next few months than the public beta version. This is so developers can continue to test their software with the latest operating system available. Consumers really don’t need updates that frequently.
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As far as the overviews designed to bring members of the public beta up to speed as the program launches, the general feeling is positive. Some note, however, that many of Yosemite's best features involve integration with iOS 8 and will be inaccessible during the public beta as the program covers only OS X. Here are a few snippets:

- Dana Wollman, Engadget
For anyone who thought OS X was getting stale, that it was evolving a little too gradually, you'll definitely want to check out Yosemite: It ushers in a new, iOS-inspired design, along with some new, iOS-like features. In my week of testing, I've found the updated look to be more visually pleasing than the previous version, yet still easy to navigate. The new features are generally welcome too, though some admittedly feel more granular than others.
- Darrell Etherington, TechCrunch
We’ve had some time with the pre-release build ahead of today’s launch, and our time spent with the next version of Apple’s desktop OS has proven one thing: Yosemite offers a host of great new features for users new to Mac and experienced Apple fans alike. Even the pre-launch build feels like a solid step-up from Mavericks, which bodes well for the finished result that should launch once Apple irons out the bugs and incorporates user feedback from its beta test program.
- Lauren Goode, Re/code
I like its new design, the small improvements in Safari and Messages, and what appear to be promising fixes in Mail. It has already made a better impression on me than Mavericks did right out of the gate. But it’s also still very much a work in progress.
The official launch of OS X Yosemite to the general public will come later this year, likely in the October timeframe. The public beta program is limited to the first one million users to sign up on Apple's site.

Related roundup: OS X Yosemite

Apple Addresses iOS 'Backdoor' Concerns by Outlining Legitimate Uses for Targeted Services [Updated]

apple_security_iconEarlier this week, forensic expert Jonathan Zdziarski attracted attention for his disclosures of what appeared to be "backdoors" in iOS that could allow for covert data collection of users' information from their devices. While Apple issued a statement denying that anything nefarious was involved, the company has now posted a new support document (via Cabel Sasser) offering a limited description of the three services highlighted in Zdziarski's talk.
Each of these diagnostic capabilities requires the user to have unlocked their device and agreed to trust another computer. Any data transmitted between the iOS device and trusted computer is encrypted with keys not shared with Apple. For users who have enabled iTunes Wi-Fi Sync on a trusted computer, these services may also be accessed wirelessly by that computer.
The three processes include:

- com.apple.mobile.pcapd: Diagnostic packet capture to a trusted computer, used for diagnosing app issues and enterprise VPN connection problems.

- com.apple.mobile.file_relay: Used on internal devices and can be accessed (with user permission) by AppleCare for diagnostic purposes on the user's device.

- com.apple.mobile.house_arrest: Used by iTunes for document transfer and by Xcode during app development and testing.

Security experts will undoubtedly have additional questions about just how these services work and whether there are better and more secure ways of accomplishing the tasks they handle. At the very least, however, today's disclosure demonstrates a willingness by Apple to share information about the legitimate need for these services and should help quell unsupported speculation that Apple has worked with security agencies to implement these tools to allow for covert surveillance.

Update July 23, 9:52 AM: Zdziarski has responded [Google cache] to Apple's posting of the support document, acknowledging the disclosures but arguing that Apple is downplaying the power of these services.
I give Apple credit for acknowledging these services, and at least trying to give an answer to people who want to know why these services are there – prior to this, there was no documentation about file relay whatsoever, or its 44 data services to copy off personal data. They appear to be misleading about its capabilities, however, in downplaying them, and this concerns me. I wonder if the higher ups at Apple really are aware of how much non-diagnostic personal information it copies out, wirelessly, bypassing backup encryption. All the while that Apple is downplaying it, I suspect they’ll also quietly fix many of the issues I’ve raised in future versions. At least I hope so. It would be wildly irresponsible for Apple not to address these issues, especially now that the public knows about them.
Zdziarski also emphasizes that he has never suggested Apple is involved in a conspiracy to open up these services for surveillance - only that they could be used by those seeking to access such data.

Note: Due to the political nature of the discussion regarding this topic, the discussion thread is located in our Politics, Religion, Social Issues forum. All forum members and site visitors are welcome to read and follow the thread, but posting is limited to forum members with at least 100 posts.

iOS 8 and OS X Yosemite May Launch Separately Despite Integration Features

While iOS and Mac OS X have traditionally followed different release schedules, Apple's recently announced Continuity features suggested it was possible for Apple's two operating systems to debut at the same time. However, Apple is planning to stagger the releases of both iOS 8 and Mac OS X Yosemite, reports 9to5Mac, citing sources with knowledge of Apple's plans.

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iOS 8 is expected to launch in September alongside the iPhone 6 while OS X Yosemite will not launch until October. Apple used the same release schedule last year, launching iOS 7 alongside the iPhone 5s in September and OS X Mavericks one month later in October.

Continuity allows users to work seamlessly between iPhone, iPad and Mac, with the ability to start emails on one device and easily finish it on another, or using Macs and iPads to answer phone calls and "green bubble" text messages. Because iOS and OS X have never been designed to work better together than with iOS 8 and OS X Yosemite, many saw a dual release as a good opportunity for Apple to cross-promote both its iOS devices and Macs with a stand-out new feature like Continuity.

Apple is planning on using engineering and user interface design members from the iOS team to help complete OS X Yosemite in time for a fall release, with a public beta planned as early as later this month.

Apple Facing Class Action Lawsuit From 20,000 Employees Over Alleged Labor Code Violations

Apple is facing a class action lawsuit in California over a number of alleged Labor Code violations, with the company being accused of not providing timely meal breaks, timely rest breaks, and timely final paychecks, reports TechCrunch.
Plaintiffs bring this Class Action against Defendants to recover for, among other things, failure to provide meal and rest periods, failure to furnish accurate itemized wage statements, and failure to pay timely wages on the end of employment, interest, attorneys' fees, penalties, costs, and expenses on behalf of themselves, the Plaintiff Class, and the Plaintiff Subclasses.
Originally filed in December of 2011 by four former Apple retail and corporate employees in San Diego, the lawsuit was certified as class action yesterday and could affect up to 20,000 current and former Apple employees in the state of California.

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According to the filing, which demands a jury trial, employee complaints cover a wide range of possible labor code violations. One complaint, for example, cites employees having to work for five hours straight without a meal break, while another complaint suggests that Apple took several weeks to send out a final check to multiple employees.

The lawsuit asks for compensatory damages and restitution of all monies due to affected employees from unlawful business practices, along with interest, but it does not specify a damages amount.

Along with this new class action lawsuit, Apple is embroiled in a class action lawsuit with Apple retail employees who allege that Apple's bag checking policies have resulted in lost wages, a suit that also accuses Apple of violating state labor laws.

iPad Sales Total 225 Million Units Since 2010 as Apple Claims 'Significant Innovation' Coming

During today's earnings call, Apple CEO Tim Cook shared new information on the state of the iPad, including details on overall sales since the product launched a little over four years ago, recent growth in different markets, and hints at future plans. It was revealed earlier that sales of the iPad were down for the second straight quarter in a row, as the company sold a total of 13.3 million iPads, down from 14.6 million in the year-ago quarter.

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Cook said that iPad sales have totaled to 225 million units since 2010, as the current iPad Air and iPad mini have hit 98% and 100% customer satisfaction, respectively. According to recent market studies, 63% of customers planning to buy a tablet are planning to buy an iPad, while half of all iPad buyers were planning to buy their first iPad.

Additionally, Apple noted that 2.5 iPads are being sold for every Mac, as the tablet now holds an 85% share of the U.S. education market. Internationally, the iPad also experienced a 50% growth in China and 60% growth in the Middle East year-over-year.

In reaction to iPad sales being down, Cook noted "significant innovation can be brought to the iPad", stating "[Apple] plans on doing that" and that the tablet category as a whole is still "in its infancy." Recent reports have pointed to Apple launching updated models of the iPad Air and Retina iPad mini later this year, with each likely to come with the Touch ID fingerprint sensor and a faster A8 processor.

The company is also rumored to be preparing a larger "iPad Pro" which is said to feature a 12.9-inch ultra high-definition display. KGI Securities analyst Ming-Chi Kuo reported that the iPad Pro in 2015, but a recent report noted that Apple's plans may be on hold for the foreseeable feature.

Related roundups: iPad Air, iPad mini

Apple Acquired 29 Companies Since Beginning of Fiscal 2014, Including Five Since April

During today's third quarter earnings call, Apple CEO Tim Cook revealed that Apple has purchased a total of 29 companies over the course of the last nine months, including five new companies after the end of the March quarter. Of the 29 companies purchased, some are known but many remain unknown.

Only two of Apple's newest acquisitions have been revealed, including LuxVue Technology in early May Spotsetter in June, leaving three unknown acquisitions. The May acquisition of Beats was not counted in the 29 company total because the deal, which was Apple's most expensive purchase to date, doesn't close until this quarter. After the Beats deal closes, the total number of acquisitions will rise to 30.

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Earlier in 2014, Apple acquired SnappyLabs, a company that produced a burst-mode photo app, and Burstly, the company behind the Testflight iOS beta testing platform.

Many of the other acquisitions were made in 2013, and those purchases focused heavily on mapping. 2013 acquisitions included mapping companies BroadMap, Embark, HopStop, Locationary, and WiFiSlam, along with other notable additions like 3D company PrimeSense and Novauris, a speech recognition company.

The technology from Apple's acquisitions will undoubtedly make its way into future products and updates. For example, significant mapping updates are expected sometime after the launch of iOS 8, adding transit directions and improved indoor mapping techniques.

During the company's April earnings call, Tim Cook said Apple was "on the prowl" for additional companies to acquire and in today's call, Cook said that Apple is always looking at acquisition space and doesn't let "money burn a hole in our pocket."

Apple Reports Q3 2014 Results: $7.7 Billion Profit on June Quarter Record $37.4 Billion in Revenue [Call Complete]

Apple LogoApple today announced financial results for the second calendar quarter and third fiscal quarter of 2014. For the quarter, Apple posted revenue of $37.4 billion and net quarterly profit of $7.7 billion, or $1.28 per diluted share, compared to revenue of $35.3 billion and net quarterly profit of $6.9 billion, or $1.07 per diluted share in the year-ago quarter.

Gross margin for the quarter was 39.4 percent compared to 36.9 percent in the year-ago quarter, with international sales accounting for 59 percent of revenue. Apple also declared an upcoming dividend payment of $0.47 per share, payable on August 14 to shareholders of record as of August 11. The company currently holds $164.5 billion in cash and marketable securities.

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Quarterly iPhone unit sales reached 35.2 million, up from 31.2 million in the year-ago quarter, and the company sold 13.3 million iPads, down from 14.6 million in the year-ago quarter. Apple sold 4.4 million Macs, up from 3.8 million in the year-ago period.
“Our record June quarter revenue was fueled by strong sales of iPhone and Mac and the continued growth of revenue from the Apple ecosystem, driving our highest EPS growth rate in seven quarters,” said Tim Cook, Apple’s CEO. “We are incredibly excited about the upcoming releases of iOS 8 and OS X Yosemite, as well as other new products and services that we can’t wait to introduce.”
Apple's guidance for the fourth quarter of fiscal 2014 includes expected revenue of $37-40 billion and gross margin between 37 and 38 percent.

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Apple will provide live streaming of its fiscal Q3 2014 financial results conference call at 2:00 PM Pacific, and MacRumors will update this story with coverage of the conference call highlights.

Earnings call highlights are available after the jump.

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