MacRumors

We've been hearing a lot of rumors about a new plastic iPhone due to arrive later this year, dubbed the "low-cost iPhone" by some, and a video posted by DetroitBORG on YouTube (via AmongTech) shows the new rear shell of the plastic iPhone, which is expected to replace the existing iPhone 4 and 4S models already on sale.

In the video, Mike from DetroitBORG walks through the various features of the new rear shell and speculates on what features the new "low-cost iPhone" will have. While the shell appears to be essentially identical to one that leaked earlier this month, the video offers a good comparison between the shell and several of Apple's other iOS devices, including the iPhone 3GS, the iPhone 5, and the fifth-generation iPod touch. The shell for the lower-cost iPhone is about the same dimensions as the current iPhone 5, though a little thicker.

Previously leaked design drawings from case makers have shown the rear shell measuring 8.5 mm thick, 124.4 mm tall, and 59.2 mm wide, all slightly larger than the iPhone 5 with the thickness difference being the most noticeable. The rear shell shown in the video is white, although it is also rumored that Apple will release the low-cost iPhone in a range of different colors, similar to the fifth-generation iPod touch.

Apple has been reported to be releasing a cheaper iPhone to target the lower end of the market and to expand its market presence in developing countries such as India, where iOS accounted for a mere 1% market share in mobile operating systems in June 2013, according to StatCounter (by contrast, the figure for the United States in June 2013 was 54.9%), as well as to compete with lower-priced Android smartphones, which have exploded in popularity recently.

The "low-cost" iPhone has been rumored to be priced anywhere from $300-$500 unsubsidized, with carrier subsidies likely to bring the cost down to $99 in markets where those subsidies are offered.

Apple was awarded a U.S. patent on Tuesday that appears to covers a way for iPhone users to share content with each other when phone calls are placed on hold.

The patent, number 8,494,123, is for an "on-hold visual menu from a user's communication device" and describes a system that shares a variety of content like pictures, music, videos, upcoming calendar events, and location information to the person that is being put on hold. For example, someone put on hold could look through the other caller's public Photo Stream.

The device determines that the party has been placed on hold and that the user has enabled sharing of personal content with the party. The device then transmits a visual menu to a communications device of the party via a data network, to allow the party to select a type of personal content to receive from the device while the party is on hold. When the device receives a selection from the party's device indicating the type of personal content, it transmits a personal information asset to the party's device according to the type of personal content indicated by the selection. Other embodiments are also described and claimed.

Additionally, privacy settings allow certain types of data, such as location or photos, to be limited within a specific group of people (for example, family members) while automatically sharing other content with all users placed on hold. Content can also be personalized to each specific caller.

When an iPhone owner is ready to continue a call, an on screen message, audible tone, or vibration will occur, alerting the on-hold user that the call will be resumed.

As with all Apple patents, there is no guarantee that the on-hold sharing feature will make it into a final product.

During the question and answer portion of today's third quarter earnings call,  Apple CEO Tim Cook was asked about iOS in the Car, which was a highlight of the company’s keynote presentation at WWDC. Cook said that it was an important "part of the ecosystem," likening it to the App Store, iTunes, messaging, and Siri.

"Having something in the automobile is very important," he said. "It’s something people want." He went on to say that Apple could "do it in a unique way better than anyone else," and that it was a "key focus" for the company.

iOS in the Car is designed to provide enhanced iOS integration in automobiles, offering hands-free controls that allow drivers to access maps, get directions, and control music by displaying content on the navigation screen of the car.

iOS in the Car seamlessly integrates your iOS device — and the iOS experience — with your in-dash system. If your vehicle is equipped with iOS in the Car, you can connect your iPhone 5 and interact with it using the car’s built-in display and controls or Siri Eyes Free. Now you can easily and safely make phone calls, access your music, send and receive messages, get directions, and more. It’s all designed to let iPhone focus on what you need, so you can focus on the road.

The feature is expected to be integrated into a number of new cars in 2014, from manufacturers like Honda, Acura, Mercedes-Benz, Nissan, Infiniti, Ferrari, Chevrolet, Hyundai, Kia, Volvo, Opel and Jaguar.

According to settings hidden within iOS 7, iOS in the car may potentially work over AirPlay in addition to USB. iOS in the Car will be officially unveiled later this year alongside the release of iOS 7.

Last year, Apple debuted Siri 'Eyes Free,' which made its first appearance in the Chevy Spark and Sonic cars earlier this year.

During the question and answer portion of Apple's third quarter earnings call, Apple CFO Peter Oppenheimer suggested that Apple will have a "very busy fall," following it up with a statement that he'd like to "leave it there and go into more detail in October."

Apple is expected to unveil a number of products in the fall months, including the next generation iPhone, the fifth generation iPad, the low-cost iPhone, and refreshed MacBook Pros.

All of the products on the horizon are expected to include impressive new features, including a fingerprint sensor and an upgraded camera for the iPhone 5S, an iPad mini-style redesign for the fifth generation iPad, and Haswell processors for the new MacBook Pros.

The company is also rumored to be working on additional projects such as the iWatch, and according to Tim Cook, Apple's catalyst will always be "new products and new services" in both current product categories and "in new categories."

Apple's iWatch, which has been trademarked in multiple countries, is not expected until 2014 despite the fact that Apple has recently hired a number of new employees to work on the product. "We're working on some stuff that we're really proud of, and we'll announce things when we're ready," said Cook during the call.

Apple today announced financial results for the second calendar and third fiscal quarter of 2013. For the quarter, Apple posted revenue of $35.3 billion and net quarterly profit of $6.9 billion, or $7.47 per diluted share, compared to revenue of $35 billion and net quarterly profit of $8.8 billion, or $9.32 per diluted share in the year-ago quarter.

Gross margin for the quarter was 36.9 percent compared to 42.8 percent in the year-ago quarter, with international sales accounting for 57 percent of revenue. Apple also declared a dividend payment of $3.05 per share, payable on August 15 to shareholders as of the close of trading on August 12. The company currently holds $146.6 billion in cash and marketable securities.

The company generated $7.8 billion in free cash flow from operations and Apple CFO Peter Oppenheimer said Apple returned $18.8 billion in cash to shareholders through dividends and share repurchases.

Quarterly iPhone unit sales reached 31.2 million, compared to 26 million in the year-ago quarter, and the company sold 14.6 million iPads, down from 17 million in the year-ago quarter. Apple sold 3.8 million Macs compared to 4 million in the year-ago period.

“We are especially proud of our record June quarter iPhone sales of over 31 million and the strong growth in revenue from iTunes, Software and Services,” said Tim Cook, Apple’s CEO. “We are really excited about the upcoming releases of iOS 7 and OS X Mavericks, and we are laser-focused and working hard on some amazing new products that we will introduce in the fall and across 2014.”

Apple's guidance for the fourth quarter of fiscal 2013 includes expected revenue of $34-37 billion and gross margin between 36 and 37 percent.

Apple will provide live streaming of its Q3 2013 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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Apple has released an updated version of its Apple Store app for the iPhone, which is said to include both performance enhancements and improved product search capabilities. The Apple Store app allows users to purchase Apple products quickly and efficiently on their iPhones.

News of an upgrade first came to light last week, with a report that suggested Apple would begin offering free downloads within the App, including content from Apple’s iTunes Store, App Store, and iBookstore.

While the app appears to be the same on the surface, it is entirely possible that Apple has included the framework that will support the addition of new deals and offerings within the app in the near future. 9to5Mac suggests the possibility that free content may only be shown when a customer is inside a brick-and-mortar Apple Store.

Apple is said to be overhauling the app as part of its incentivization efforts designed to increase its number of in-store iPhone sales. According to Apple CEO Tim Cook, iPhones are an important "gateway product" that lead customers to purchase other Apple products.

At the current point in time, only a small percentage of iPhones are sold in Apple Stores, with the majority of sales coming from third party locations like carrier stores and electronics retailers. By offering free content in its Apple Store app, Apple can draw customers in to view and purchase additional Apple devices.

In an effort to increase iPhone sales Apple has begun including the iPhone in its annual Back to School program, allowing eligible education customers to receive a $50 gift card that can be used to purchase music, books, or apps.

Apple is also planning to implement a new iPhone trade-in program, which is designed to encourage users to upgrade to the latest models by offering a credit for used devices.

The Apple Store app can be downloaded from the App Store for free. [Direct Link]

Update: Apple has pushed a second update to its Apple Store app, bringing it to version 2.7.1. The release notes continue to point to improved search capabilities and performance enhancements, so it is unclear why the app has been updated again.

Following the introduction of T-Mobile's "Jump" and AT&T's "Next" early upgrade programs, T-Mobile has launched a new anti-AT&T ad campaign that calls the company's Next policies "calculating, sneaky, and underhanded," reports AllThingsD.

First introduced last week, Next is AT&T's answer to Jump, a T-Mobile program that allows users to upgrade their phones at regular intervals with a $10 monthly fee. Like Jump, Next provides AT&T users with an option to upgrade their phones more frequently, but its $32.50 monthly charge is on top of standard monthly fees, ultimately causing customers to pay double for their devices.

A comparison of the two plans reveals that a T-Mobile customer using Jump would pay $518 for a 16 GB iPhone 5 over the course of a year while a customer using Next would pay $630, a premium of $112. With both plans, customers have to trade in existing devices and pay the monthly fees in order to obtain an upgrade.

T-Mobile CEO John Legere has been vocal about AT&T Next since its debut, releasing a number of tweets condemning the program. The company's newest ad includes a quote from The Verge that Legere highlighted last week: "AT&T's reaction to T-Mobile's transparency is to be more deceptive than ever."

Verizon has also introduced an upgrade program called "Edge," which shares similarities with AT&T's Next program. A 16 GB iPhone 5 costs $565 on the plan. According to T-Mobile marketing chief Mike Sievert, Verizon will be targeted in ads set to run later this week.

"There are real and material differences between what we are doing and the so-called upgrade programs that AT&T and Verizon are doing," he said.

T-Mobile and AT&T have an ongoing feud that originally began in 2011 after AT&T was unable to purchase the T-Mobile network due to objections from the Federal Communications Commission and the Department of Justice.

Tensions ramped up in January after Legere called the AT&T network "crap," leading to an advertising war between the two companies as T-Mobile unveiled its "Un-Carrier" policies, designed to decouple device fees from service fees.

Philip Elmer-Dewitt has assembled his quarterly list of analyst predictions ahead of Apple's earnings report this afternoon. The list includes estimates from 59 analysts: 21 "independent" and 38 "institutional" who work for large investment houses or research organizations.

Apple's stock price remains down significantly from its highs of last year, and investors are concerned about Apple's growth prospects across both existing and potential new product lines.

As far as hardware goes, Apple only introduced new MacBook Air models during the past quarter, and only in the final month. The company is not expected to introduce new iPhone models -- its financial bread and butter -- before the last month of Q4.

Two quarters ago, Apple changed how it provides financial guidance, choosing to offer a range of guidance for what the company believes it can achieve, rather than a point prediction. Apple provided guidance for the third quarter for revenue of between $33.5 and $35.5 billion and gross margin between 36% and 37%.

Last year, in the third quarter of 2012, Apple reported a profit of $8.8 billion on $35 billion in revenue.

Apple will announce its earnings for the third fiscal quarter of 2013 (second calendar quarter of 2012) and host a conference call regarding the release this afternoon at 5:00 PM Eastern / 2:00 PM Pacific. The earnings release itself typically comes in around 4:30 PM Eastern. MacRumors will have live coverage of the proceedings.

ETNews.com reports that Apple is discontinuing its relationship with AU Optronics to supply display panels for the iPad mini as production on displays for the second-generation models is expected to ramp up in the coming months. According to the report, LG Display is already onboard and Sharp is in solid position given its technological advantage in energy efficiency, while other display manufacturers such as Samsung are competing to replace AU Optronics' production share.

LG Display already secured order from Apple. Sharp seems to have no problem in getting approval from Apple as a supplier for iPad mini 2 despite some product quality problems, because it is the only supplier of oxide semiconductor LCD. Oxide semiconductor LCD has an advantage of saving electricity. Apple plans to apply oxide semiconductor LCD to iPad mini 2 despite the initial low production yield, because it gives the advantage of saving electricity.

AU Optronics won a share of display production for the original iPad mini, but struggled with production issues and reportedly did not catch up on production until months after the device's launch, contributing to tight supplies.

According to today's report, AU Optronics has been unable to meet technical and timing milestones for the next-generation iPad mini, and Apple's improving relationship with Samsung's display arm may be giving Apple more flexibility in managing its suppliers.

Apple's plans for its next-generation iPad mini have been the subject of numerous conflicting rumors, with some suggesting that a Retina iPad mini will launch later this year, while others have indicated that the company will launch a new non-Retina model later this year before adding a Retina display early next year. Just yesterday, KGI Securities analyst Ming-Chi Kuo reported that Apple will not be updating the iPad mini until it can launch a Retina display version in March or April 2014.

After news that government officials would be testing the efficiency of iOS 7’s Activation Lock against thieves, San Francisco District Attorney George Gascón has come out in support of the feature, saying that “clear improvements” have been made to stop criminals, according to the San Francisco Examiner.

Last week, Gascón and New York Attorney General Eric Schneiderman brought in security experts from the Northern California Regional Intelligence Center to test out Apple’s Activation Lock feature as well as Absolute Software’s Lojack service on the Samsung Galaxy S4 in order to determine how effective they are against thieves.

"I'm very optimistic that they came and were willing to share their technology with us," Gascón said in a statement, also noting that Microsoft and Google had not yet come forth with their plans to combat theft. Gascón did not detail how the specific features work, explaining that they were not yet finished.

Both attorneys called for the tests as a part of the Secure Our Smartphone (S.O.S) program that aims to stop the theft and black market resale of stolen mobile devices. While carriers have already established a database to track stolen phones, it has proven to be largely futile. Prior to these tests, Gascón and Schneiderman called for smartphones to have a kill switch that would disable them in the event of theft.

Announced at WWDC, Activation Lock is set to be included in iOS 7, which is expected to be released to consumers this fall.

According the Podcasts section of the iTunes Store, Apple has just hit a milestone of one billion Podcast subscriptions. Originally introduced in 2005, Podcasts allow both individuals and major companies to broadcast episodic radio-style shows. Apple offers thousands of different Podcasts that are available via iTunes or its Podcasts iOS app [App Store].

In honor of the one billion milestone, Apple has highlighted a number of its most popular podcasts over the years in a new iTunes section which offers up a number of classic Podcasts alongside New and Noteworthy content.

From comedy to hard new to sports to innovative educational content and so much more, podcasting has transformed the global media landscape. Podcasts on iTunes launched in the summer of 2005 and since then, we’ve seen countless episodes downloaded and streamed. But the heart of podcasting is finding your favorite voices in this exciting field and subscribing to the best ones. To celebrate reaching 1 billion podcast subscribers, we’re highlighting some of the most popular podcasts of all time, as well as a collection of captivating new shows.

Apple told Macworld that its billion subscriptions are spread across 250,000 unique podcasts in more than 100 languages, with more than eight million episodes published to date.

The new celebratory section includes popular Podcasts like This American Life, TEDTalks, 60 Minutes, and Happy Tree Friends, among others.

According to a new report from KGI Securities analyst Ming-Chi Kuo, production difficulties will cause Apple's iPhone 5S to ship towards the end of September, with supplies constrained until October or November. This is in line with recent reports that have suggested production on the iPhone 5S will ramp up towards the end of the month for a fall launch.

Apple's upcoming iPhone 5S is expected to retain the same form factor as the iPhone 5, but it is said to feature upgrades like a higher megapixel camera, a new slow motion video mode, and a fingerprint sensor — reportedly the factor behind the production delays.

We believe iPhone 5S will experience production difficulties among numerous components as well as assembly, as seen with iPhone 5 last year. The model will thus be available only in limited amounts following launch. We expect undersupply to improve in October or November.

Kuo believes that Apple’s low cost iPhone, which will be priced between $450 and $550, will launch somewhat earlier, likely towards the beginning of September alongside the fifth generation iPad.

A number of images of Apple's plastic-cased device have leaked over the last few weeks, suggesting that it will be similar in form to the iPhone 5 and that it will come in a variety of colors. MacRumors also has renderings of what the device may look like.

The fifth generation iPad, which is also expected in September, has been rumored to feature a slimmer, iPad mini-style redesign that will offer a thinner form factor and smaller bezels. According to Kuo, it will be the only iPad released in 2013, which is unsurprising as the potential release date of the iPad mini has been in flux in recent months. Though some reports have suggested Apple might release a slightly upgraded non-Retina version of the iPad mini in late 2013, Kuo does not believe that will happen.

Judging by the production status of low-cost iPad mini model, we estimate shipments can only launch in December at the earliest. For the sake of gross profit, the model may not be much cheaper than current iPad mini, which means less appeal to consumers. As such, we think Apple is unlikely to launch the product this year.

Kuo attributes the iPad mini Retina delay to the higher energy demand of a Retina display alongside limited battery capacity because of the diminutive size of the device. Rather than launching in 2013, Kuo predicts that the Retina mini will instead be released in March or April of 2014.

Finally, Kuo believes that the Haswell Retina MacBook Pro will launch in mid-September while an updated iMac will launch in late August. The exact launch date of the next MacBook Pro refresh has been in question since WWDC, as many expected Apple to release an upgraded MacBook Pro alongside the upgraded MacBook Air. While the MacBook Air was refreshed in June, the date of the MacBook Pro refresh has remained up in the air.

Ming-Chi Kuo has been proven to have relatively reliable information over the past several years and his release predictions also line up with a number of other reports that have filtered out over the past few months.

In its latest report on Apple, Consumer Intelligence Research Partners (CIRP) surveyed a number of recent purchasers of Apple products to determine U.S. buyer's purchasing habits regarding preferred capacity and model of a variety of Apple products.

Among other things, the survey found that the iPhone 5 accounted for just 52% of iPhones purchased in June 2013 -- back in October, just after the iPhone 5 had launched, the new device commanded some 68% of iPhone purchases. In June, 30% of iPhone sales were from the 4S, while 18% were from the 4.

The iPhone 4 and 4S aren't the only older iOS devices to be seeing significant sales success. The iPad 2, which is particularly popular in educational and enterprise environments, accounted for 34% of total iPad sales in June. The Retina iPad and iPad mini each counted for a third of total sales.

The 16GB capacity iPad is by far the most popular model, with the 32GB, 64GB and 128GB models accounting for 28%, 11% and 2% of total sales respectively.

Finally, though the Mac Pro has not been significantly updated in several years, it still accounts for 5% of total Mac sales, according to the survey -- and is more popular than the Mac mini. The MacBook Pro makes up 70% of Apple's notebook sales, with more than half of those sales going to the Retina display-equipped models.

Apple does not break down sales by model, and though this data is from a survey and not company-provided, it gives some insight into the sales preferences of Apple's customers.