MacRumors

Today’s earnings call revealed that Apple saw lower than expected iPhone 5c sales in the United States, primarily because iPhone 5s sales exceeded Apple’s projections.

While Apple did not break down sales between individual iPhone models, the company did indicate that the iPhone 5c ended up representing a smaller mix of iPhone sales than anticipated.

According to Apple CEO Tim Cook, the company's iPhone sales growth in North America was not as high as that seen in other countries partially because Apple underestimated demand for the iPhone 5s, with the iPhone mix being "different than we thought." He also mentioned changes to domestic carrier upgrade plans as a partial reason for weaker-than-expected iPhone sales in the U.S.

The company expected a more balanced demand between the flagship iPhone 5s and the mid-tier plastic iPhone 5c, but actually saw a stronger preference than projected for the 5s, possibly due to a high interest in Touch ID.

It took us some time in order to build the mix that customers were demanding. As a result, we lost some units for part of the quarter in North America.

Cook said that it took Apple the better part of the quarter to get the iPhone into supply/demand balance as a result of the unexpected demand for the iPhone 5s, which was in short supply for several months following its release.

While Apple has not revealed how many iPhone 5c devices it has sold, multiple reports suggested that the phone was seeing poor sales compared to the iPhone 5s, with the 5s outselling the 5c by a two-to-one margin. Shortly after the phones were introduced, Apple cut iPhone 5c production while ramping up iPhone 5s production to meet customer demand.

Apple today reported record sales of 51 million iPhones in the quarter, up from 47.8 million in the same time period last year.

During Apple's earnings call today, CEO Tim Cook indicated that mobile payments were one of the driving forces behind the company’s decision to introduce Touch ID with the iPhone 5s.

The mobile payments area in general is one that we’ve been intrigued with. It was one of the thoughts behind Touch ID.

Cook went on to say that people love being able to buy digital content from their iPhones using Touch ID, because it's "incredibly simple and easy and elegant."

He added that while Apple is not planning on limiting Touch ID to digital purchases, the company had nothing specific to announce today, mobile payments are an opportunity that Apple has been "intrigued with" and there is a "big opportunity on the platform."

Tim Cook's comments on mobile payments follow a report last week that suggested Apple is currently working on developing a new mobile payment service that will allow the company to handle payments for physical goods and services in the future.

While Apple currently limits iTunes account holders to using their stored credit card information for purchases on Apple's online and retail stores through the Apple Store app, iTunes, and the App Store, stored information could be used in the future for other types of payments with Touch ID technology used to speed up and authenticate real world purchases.

The United States Department of Justice today reached a tentative deal with Apple and other technology companies on data requests to allow the companies to provide more detailed disclosures on information requests from the NSA Foreign Intelligence Surveillance Court.

As indicated in the Justice Department’s filing with the Foreign Intelligence Surveillance Court, the administration is acting to allow more detailed disclosures about the number of national security orders and requests issued to communications providers, and the number of customer accounts targeted under those orders and requests including the underlying legal authorities. Through these new reporting methods, communications providers will be permitted to disclose more information than ever before to their customers.

The relaxed restrictions on data disclosures come following a concerted effort by Apple and other technology companies to achieve greater NSA transparency. In July, Apple teamed up with multiple firms to request that the government allow them to offer regular reports on security related requests. Apple CEO Tim Cook also met with President Obama and several other tech executives to discuss NSA surveillance methods in December.

The new disclosure terms will allow companies to give out general figures on how often they receive demands for data from National Security Letters or the Foreign Intelligence Surveillance court, according to The Wall Street Journal. Companies are allowed to report each individual category in ranges of 1,000, so if a company receives 2,400 requests, they are able to report that they received between 2,000 and 3,000 requests.

Alternatively, companies are able to report in more specific number ranges in increments of 250 but must lump National Security Letters and FISA requests together.

Companies are also allowed to report in general numbers how many customer accounts have been affected by the requests. While National Security Letter requests from the FBI can be reported in real time, there is a six-month delay in reporting the number of FISA court requests.

Following today’s agreement, Apple posted an update [PDF] on its website with new information on Account Information Requests the company has received. Between January 1, 2013 and June 30, 2013 Apple received a total of 927 account requests in the United States and disclosed data for 747 accounts, Apple objected to 102 requests and disclosed no data in 254 requests, for a total disclosure rate of 81 percent.

Apple also received between 0 and 249 National Security Orders.

Apple has been working closely with the White House, the U.S. Attorney General, congressional leaders, and the Department of Justice to advocate for greater transparency with regard to the national security orders we receive. We believe strongly that our customers have the right to understand how their personal information is being handled, and we are pleased the government has developed new rules that allow us to more accurately report law enforcement orders and national security orders in the U.S.

In June of last year, NSA program PRISM was revealed to be giving U.S. National Security Agency direct access to user data on corporate servers across a wide spectrum of Internet companies, including Apple, Microsoft, Yahoo, Google, Facebook, and more.

Following the reveal, Apple quickly published a statement of "Commitment to Customer Privacy" denying its participation in the NSA program. Last week, Cook told David Muir in an ABC interview that the government does not have direct access to Apple’s servers and that "they would have to cart us out in a box" for that to happen.

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.

Apple today announced financial results for the fourth calendar quarter of 2013 and first fiscal quarter of 2014.

For the quarter, Apple posted revenue of $57.6 billion and net quarterly profit of $13.1 billion, or $14.50 per diluted share, compared to revenue of $54.5 billion and net quarterly profit of $13.1 billion, or $13.87 per diluted share in the year-ago quarter.

Gross margin was 37.9 percent compared to 38.6 percent in the year-ago quarter, with international sales accounting for 63 percent of revenue. Apple also declared a dividend payment of $3.05 per share, payable on February 13 to shareholders as of the close of trading on February 10. The company currently holds $158.8 billion in cash and marketable securities.

Apple had previously issued guidance for the quarter of revenues between $55-58 billion, with gross margin between 36.5 and 37.5 percent.

Apple sold a record 51 million iPhones in the quarter, up from 47.8 million in the same time period last year, and the company has now sold 472.3 million smartphones in total. It sold 26 million iPads, a new record, up from 22.86 million last year. Apple has now sold 195 million tablets. It sold 4.8 million Macs during the quarter, compared to 4.06 million in the year-ago period.

“We are really happy with our record iPhone and iPad sales, the strong performance of our Mac products and the continued growth of iTunes, Software and Services,” said Tim Cook, Apple’s CEO. “We love having the most satisfied, loyal and engaged customers, and are continuing to invest heavily in our future to make their experiences with our products and services even better.”

Apple's guidance for the second quarter of fiscal 2014 includes expected revenue of $42-44 billion and gross margin between 37 and 38 percent. This guidance reflects an expectation for near zero growth from Q2 of fiscal 2013.

Apple will provide live streaming of its Q1 2014 financial results conference call at 2:00 PM Pacific, and MacRumors will update this story with coverage of the conference call highlights.

Conference Call and Q&A Highlights are available in reverse chronological order after the jump.

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Earlier this month, Nintendo president Satoru Iwata indicated Nintendo was looking into a new business structure involving "smart devices" after the company experienced its third consecutive annual loss in light of increasing competition from mobile platforms.

While that statement was interpreted by some as an indication of Nintendo's plan to develop game titles for iOS and Android, it appears that the company instead intends to use smartphones to market its existing handheld and console hardware and game lineup.

According to a report from Japanese business newspaper Nikkei [Google Translation] (via Dr. Serkan Toto), Nintendo will introduce a free app that includes information on new games, including videos and character profiles along with some smartphone mini games.

But Nintendo will not simply put Mario, Pokemon or other games on smartphones. According to the report, Nintendo plans to use Android and/or iOS devices (not confirmed at this point) to market its console games.

To be more concrete, The Nikkei writes that Nintendo wants to use smartphones to expand its potential user base by spreading information about new game releases, i.e. by using video to introduce future titles. (This will probably happen through some kind of official Nintendo app.)

Nintendo's mini games are said to be playable demos of console games, but full versions of the titles will only be available on Nintendo hardware like the Wii U and the 3DS. The idea is to give players a small taste of the gameplay in order to entice them to purchase content on the Nintendo platform.

Mobile devices from Apple and Android and more popular consoles from Microsoft and Sony have devastated Nintendo's earnings in recent years. According to a report from App Annie, consumer spending on games for iOS and Android is now 4x that of dedicated gaming handhelds and sales of the Xbox and PlayStation have far outpaced Wii U sales. Though Iwata has said that Apple is "the enemy of the future" he has stated publicly that he will not provide Nintendo's "precious resources" to other platforms.

Nintendo is expected to make an announcement about its new mobile app on Thursday.

The U.S. National Security Agency specifically looks for data sent by mobile apps in order to capture personal data on targets, according to a new report from The New York Times and other news agencies.

Intelligence agencies can grab data as it travels across the Internet, looking specifically for data from smartphone apps including Google Maps -- searches within the app allow Governments to locate users to within a few yards -- and even Angry Birds. Much of the information being sent seems to be related to targeted advertising.

The secret report noted that the profiles vary depending on which of the ad companies — which include Burstly and Google’s ad services, two of the largest online advertising businesses — compiles them. Most profiles contain a string of characters that identifies the phone, along with basic data on the user like age, sex and location. One profile notes whether the user is currently listening to music or making a call, and another has an entry for household income.

In addition, apps like Facebook, Instagram, and Twitter all support sending some amount of location data and other information, allowing intelligence agencies significant opportunities to capture personal data in real-time on targeted persons without ever having access to phones, something that was part of a different intelligence strategy revealed in previous leaked documents.

Apple CEO Tim Cook has been vocal in his disapproval of some of the NSA's methods, meeting with the President to discuss NSA surveillance and more recently saying the NSA "would have to cart us out in a box" to have access to Apple's servers.

For its part, the NSA says it only analyzes data on foreign intelligence targets and that significant protections exist for data collected on U.S. persons and "innocent foreign citizens". The NSA has said in the past that collection of this sort of smartphone traffic has been useful in cracking cases.

"N.S.A. does not profile everyday Americans as it carries out its foreign intelligence mission," the agency said in a written response to questions about the program. "Because some data of U.S. persons may at times be incidentally collected in N.S.A.'s lawful foreign intelligence mission, privacy protections for U.S. persons exist across the entire process." Similar protections, the agency said, are in place for "innocent foreign citizens."

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.

Starwood Hotels & Resorts is implementing a new pilot program that will see two key hotel locations in Manhattan and Silicon Valley allowing guests to enter their rooms with their smartphones, reports The Wall Street Journal.

After installing the Starwood Preferred Guest (SGP) App, guests will receive a virtual key on their iPhone, which can then be used to unlock a door with a tap using Bluetooth 4.0. The newer Bluetooth specification, first introduced with the iPhone 4s, has been used in a similar way for many home locking products like the Lockitron and the August Smart Lock, but this is the first time it's being used on a larger scale.

Starwood officials are betting that the technology will become the standard for hotels in the future, replacing traditional hotel check-in methods.

"We believe this will become the new standard for how people will want to enter a hotel," says Frits van Paasschen, Starwood's CEO. "It may be a novelty at first, but we think it will become table stakes for managing a hotel."

Bluetooth 4.0 (or Bluetooth LE) is being utilized in a number of innovative ways. In addition to being installed in multiple different home locking products, it has also been used to replace traditional password logins on Macs through the Knock app and to deliver car diagnostics in the Automatic connected car device. Bluetooth 4.0 is also the driving technology behind Apple's iBeacons, which are rapidly being implemented in retail stores and other locations across the world to deliver location-based notifications.

Two Starwood Aloft hotels, in Harlem, New York and Cupertino, California, will be updated with the Bluetooth 4.0 technology during the first quarter of 2014. Starwood has plans to roll out the system at all of its locations by the end of 2015 should the pilot program be successful.

OS X 10.10, the next version of OS X which carries the code name of "Syrah", will take a few cues from iOS 7 with a somewhat flatter look compared to OS X Mavericks, but the changes will not result in as stark a look as seen on iOS 7, according to a new report from 9to5Mac. The report comes on the heels of comments from Apple executives reiterating that convergence of iOS and OS X is a "non-goal" for the company.

Instead [of a complete iOS 7-like overhaul], I am expecting OS X 10.10 to have user-interface tweaks that will make the interface “flatter,” but not as stark as iOS 7′s look. I’d also expect some blur and translucency effects in a few places, but not in anyway that is central to the experience like it is on iOS. There will be a little bit more white space, more defined menu bars, and squared-off window controls, but I would not expect a full color palette change and redesigns for every single application and icon.

The report indicates that internal build numbers for OS X 10.10 are currently around 14Z109 and that new features could include improved notifications, cross-platform AirDrop support to and from iOS 8, and possible Siri integration.

MacRumors has been seeing fairly low levels of activity coming from machines running OS X 10.10 from Apple's network, and that activity has unsurprisingly been beginning to ramp up this month following the holiday break. With Apple having accelerated its OS X release cycles over the past several major updates, a public release for OS X 10.10 could come late this year or early next year.

Analysts predict Apple will return to growth when the company announces its quarterly earnings later today, reports Philip Elmer-Dewitt of Fortune. Growth will be in the single digits and will be an improvement over the negative earnings growth the company reported for the previous three quarters. Apple is not, however, expected to return to the 50% growth it achieved between 2010 and 2012.

The consensus estimates among the 47 Apple analysts we've heard from so far -- 29 Wall Street professionals and 18 Internet amateurs -- are for earnings of $14.36 per share on sales of $58.1 billion. That represents year-over-year growth of 4.0% for earnings and 6.6% for revenue.

Eighty percent of Fortune's surveyed analysts estimate Apple's revenue will fall within the company's guidance of $55 to $58 billion. Six analysts predict Apple will beat the street with revenue that tops $58 billion. Consensus estimates also predict Apple will sell a record 55 million iPhones and 25 million iPads in 1Q 2014.

Apple will report its quarterly earnings today after the close of trading, at approximately 4:30 PM Eastern / 1:30 PM Pacific. MacRumors will have full coverage of Apple's earnings release and the conference call taking place at 5:00 PM Eastern / 2:00 PM Pacific.

Research firm Kantar Worldpanel has released a new report (via The Next Web) highlighting global smartphone sales over the October-December period, finding that while Apple's market share dip slightly in key markets, Google's Android devices increased their lead over other platforms during the end of 2013, registering year-over-year growth in various major markets.

Dominic Sunnebo, strategic insight director at Kantar Worldpanel ComTech, comments: “Android finished 2013 strongly, showing year-on-year share growth across 12 major global markets including Europe, USA, Latin America, China and Japan. Apple has lost share in most countries compared with this time last year, but importantly it has held strong shares in key markets including 43.9% in USA, 29.9% in Great Britain and 19.0% in China.

Apple's total market share in the U.S. hit 43.9% in December, and was overall lower in most countries compared to the same timeframe last year. However, Sunnebo stated himself in Kantar's prior report highlighting global smartphone sales over the August-October period that customers generally react more positively to "full" releases than incremental improvements such as the iPhone 5s and the iPhone 5c, which is the likely reason for the drop in market share.

Apple also continues to have strong presence in Japan, as the iPhone has held a steady market share in the months after the debut of the iPhone on the country's largest carrier, NTT DoCoMo:

In Japan, consumers’ desire for all things Apple continued into the final quarter of 2013, with iOS taking 68.7% share of smartphone sales. Apple’s deal to sell iPhones through Japan’s largest carrier, NTT DoCoMO, has proved an unarguable success with Apple’s share on the carrier reaching 58.1% in the fourth quarter compared with 91.7% on Softbank and 63.7% on AU KDDI.

Despite its strong market share in various countries, the iPhone continues to face challenges in mainland Europe and China, where Android's market share is around 70% or higher in many countries. Microsoft's Windows Phone also continues to show growth in many markets, as the platform's market share has even overtaken that of iOS in Italy.

Last night, over 100 members of the original Mac team gathered to celebrate the Mac's 30th anniversary in De Anza College's Flint Center, where Steve Jobs first introduced the Macintosh 30 years ago. The event was focused around three separate panels: the conception of the Mac, the building of the Mac and the third-party developers who built software for the Mac.

The evening began with video of both Jobs' introduction of the Macintosh in the Flint Center and a couple minutes of the 90-minute Macintosh presentation at the Boston Computer Society, which was made public for the first time last night. Master of Ceremonies and Apple employee #4 Bill Fernandez then introduced the first panel of the night: the conception of the Mac.

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On January 24, 1984, Steve Jobs famously demonstrated the Macintosh for the first time at Apple's shareholders meeting at the Flint Center in Cupertino.

Less than a week later, Jobs again showed off the Mac. But this time, instead of showing it to Apple's investors, he showed it to his potential user base at the monthly general meeting of the Boston Computer Society.

This lesser known introduction actually comes off more polished than the January 24 version, which is viewable on YouTube.

The Boston Computer Society introduction, which runs for 90 minutes, has gone virtually unseen since it took place. Time reporter Harry McCracken managed to track down the tape, locating a Boston-area videographer who had the original tapes in storage on a now-obsolete format called U-matic.

According to McCracken:

Fortunately for posterity, the production values on the video version of the meeting are quite good — far better than what Apple managed for the shareholder meeting. (In Cupertino, the lighting had been so murky at times that the only thing you can see clearly is Jobs’ white shirt gleaming from inside his jacket.) Apple sprung for multiple cameras, one of which was manned by the BCS’s [videographer Glenn] Koenig. Moments with subpar camera work in the Cupertino video, such as when Jobs pulls the Mac out of its bag and boots it up, are nicely shot in this one.

As presented here, the video — which is a rough cut of the version which the Computer History Museum will preserve — has a few moments which have been reconstructed. The slides which Jobs shows are the same ones he presented in Boston, but they’re borrowed from the video of the Cupertino event. And when Jobs shows a blurry slide of the IBM PC — provoking mirth from the audience and prompting him to say "Let’s be fair" — the blurring is a recreation of what really happened. (To this day, [BCS co-founder Jonathan] Rotenberg isn’t sure whether it was a prank on Apple’s part or a bona-fide technical glitch.)

"It’s so much more intimate," Rotenberg says of the Boston version of the presentation. "It’s about the users, which is what you don’t get at the shareholder meeting."

McCracken has much more about the video and the event itself in his Time piece, along with details on the Boston Computer Society, which shut down in 1996. Excerpts of the video were shown at Macworld and the Computer History Museum's Macintosh 30th Anniversary party, held last night at the same Flint Center where Jobs first introduced the machine to his shareholders.

At the end, it includes a special Q&A session with Macintosh team members, along with a number of software demos -- McCracken calls the BCS demonstration "a prototype for the media extravaganzas which we citizens of the 21st century call Stevenotes."

The never-before seen video is an important piece of Apple history, and, fittingly, the Computer History Museum will be preserving it for posterity.