MacRumors

Apple today is holding its "Back to the Mac" media event, where it is expected to introduce several new and updated products. The event is scheduled to kick off at Apple's corporate headquarters in Cupertino, California at 10:00 AM Pacific Time / 1:00 PM Eastern Time, or just about an hour and half from now.

Just about two hours ago, Apple announced that it will be offering live video streaming of the event to compatible Apple devices. In addition to Apple's video stream, we will be updating this article with coverage as the media event unfolds. We will also be issuing Twitter updates through our @MacRumorsLive account.

Apple's online stores around the world are currently down in advance of the event.

Recent News and Rumors

- A reliable source has just provided us with details on Apple's planned releases for today, including revamped 13.3-inch MacBook Airs at 1.86 GHz or 2.13 GHz and 128 GB or 256 GB of flash memory, iLife '11, and a "K99" product that could be the new 11.6-inch MacBook Air.

MC503LL/A - MBAIR 13.3/1.86/2/128FLASH-USA
MC504LL/A -MBAIR 13.3/1.86/2/256FLASH-USA
MC505LL/A - K99 BETTER BTR -USA
MC506LL/A - K99 BEST BTR-USA
MC623Z/A - ILIFE '11 RETAIL -USA
MC625Z/A - ILIFE '11 RETAIL FAMILY PACK - USA
MC628Z/A - ILIFE '11 MAINT FULFILL - USA
MC635Z/A - ILIFE '11 UP TO DATE - USA
MC684LL/A - APPLE MACBOOK AIR SUPERDRIVE
MC838LL/A - APPLE HDMI TO HDMI CABLE (1.8 M )
MC905LL/A - MBAIR 13.3/2.13/4/256FLASH-USA
MC906LL/A - K99 BEST RTL - USA

- 'Dropbox-killer' in Mac OS X 10.7? (Daring Fireball)

- iLife '11, MacBook Air, and Possible New Product Revealed by Apple
- Some More Details about the 11.6-Inch MacBook Air?
- Mac OS X 10.7 to Get iOS Scrollbars?
- More Claimed MacBook Air Specs: 8-10 Hour Battery, NVIDIA 320M, Upgradeable RAM and SSD
- New MacBook Air and Revolutionary Mac OS X Feature on Wednesday?

Live Updates

- Apple's video streaming page for the event is now active, although the stream has not yet begun.
- The video stream is now up and running, but currently just showing copyright info.

- Steve Jobs giving brief intro...in this intimate setting, we'll have some of our engineers on stage to share our new products with you. Tim Cook on stage to update on state of the Mac.
- Mac install base just shy of 50 million worldwide. Last quarter, Mac grew 27% year-over-year, compared to 11% for overall industry. We've outgrown industry 18 quarters in a row.
- NPD says Mac's share of retail sales in the U.S. was 20.7%.
- 600,000 registered Mac developers, growing at 30,000 per month. Highlighting Valve and Autodesk as new entrants, Microsoft as continuing partner.
- Customer satisfaction surveys continue to show Apple as #1, year after year: ASCI, Consumer Reports, PCWorld, PC Magazine.
- Feeding the Mac momentum has been Apple retail. Stores had 75 million visitors last quarter, sold 2.8 million Macs over the last year, 50% of those to customers new to Mac. 318 stores in 11 countries, highlighting Upper West Side store in Manhattan, Paris Opera House, Covent Garden in London, "jaw-dropping" Shanghai store, new Beijing store. Chinese stores are highest traffic of all retail stores.
- Jobs back on stage, asking people to silence phones.
- Now introducing new iLife. iLife is why some people buy a Mac. We keep improving it every year or two, and we've got a new one today. iLife '11. Same apps, and we'll offer a look at three of them today.
- iPhoto '11: New full screen modes ("can live in full-screen mode"), Facebook enhancements, emailing photos, new slideshows, big leap in books (printing over 2 million per year), letterpress cards.
- Demo of iPhoto with Phil Schiller.
- Showing off full-screen Events, Faces, Places. Toolbar in full-screen mode is very iOS-like.
- Demonstrating new automatic slideshows.
- Showing Album view. Automatically pulls in photos from Facebook and Flickr accounts.
- More slideshow templates being demoed.
- Emailing photos: Select photos, click share, select email, and email is automatically created directly within iPhoto. Photos organized in scrapbook-like template. Can reorganize and provide titles.
- Info tab offers timeline of activities for a given photo: emails, postings to Facebook/Flickr, as well as comments made on the photos from social networking sites.
- Demoing photo book creation with carousel to choose themes. iPhoto pulls information about the photos in an album to create the book: Higher-rated photos will be chosen for larger prints, photos taken at the same time and location will be presented together. But everything is customizable.
- Full-screen Project view. Wooden bookshelf like in iBooks to show all iPhoto projects...books, cards, etc.
- Letterpress cards. Playing a demo video from in iPhoto. Uses a raised plate to print and also deboss the card.
- Jobs back on stage. "This is why we do what we do". Recapping iPhoto highlights.
- iMovie '11: "This is a great release." #1 request was for better audio editing. We've responded with something amazing. All-new tools. One-step effects, people finder, news and sports themes, movie trailer creation.
- Demo of iMovie with Randy Ubillos
- Showing off color-coded audio waveforms, with click-and-drag audio level adjustments, fade-ins, etc. Can select segments and adjust audio. Can apply audio effects...slow down, speed up, etc.
- One-step effects. Select a video segment for instant replay at various speed options. Temporary "snapshot" freezing of video with Ken Burns effect in video. Complex editing with just a few clicks.
- Creating movie trailers. Can fill in movie name and date, cast members, create studio names, choose from logos, fill in credits. Storyboard tab to show pacing and timing before footage is even added. 15 different trailer styles with original scores with the London Symphony Orchestra.
- Face detection pulled from iPhoto into iMovie. Automatically finds group, action and other shots for use in movie trailers. Ubillos pulling individual segments being pulled into the trailer based on tags created by detection technology.
- Showing off final product put together in just a few minutes. Can share on Facebook and Vimeo in addition to existing options. Also playing two additional movie trailers as examples.
- Jobs back on stage. Recapping iMovie.
- GarageBand '11: Flex Time, Groove Matching, new guitar amps and effects, new guitar and piano lessons, "How did I play?"
- Xander Soren on stage to demo.
- Groove Matching: single click allows users to pick one track as the "Groove Track" and apply the groove to every other instrument track to lock together in a single "human" rhythm. "Kind of like an automatic spell checker for bad rhythm."
- Flex Time: Waveform editor can easily stretch or shrink segments. Showing the stretching one guitar chord to match the sustained chords played by others.
- Showing new guitar and piano lessons.
- "How did I play?": Using a USB keyboard to play along with GarageBand orchestra. Correct notes light up in green, mistakes show in red, timing issues shown in yellow. Percentage-based overall score also shown in real-time. Timeline shows exactly where mistakes were. GarageBand builds a history each time you play to chart improvements. Works with piano and guitar.
- Jobs back on stage. Over 5 million people now using GarageBand.
- So, that's iLife '11. All this amazing engineering. Free with every new Mac. $49 to upgrade existing versions. Available today.
- Next up, FaceTime. Introduced in June with iPhone 4, brought to iPod touch in September. 19 million FaceTime devices sold in four months. Today, announcing FaceTime for the Mac.
- No separate buddy list required, just pull from Address Book. Full-screen capable.
- Jobs demoing. Uses iMac to call Phil Schiller on an iPhone 4. FaceTime for Mac auto-rotates video feed based on orientation coming from iPhone/iPod touch.
- Beta release today. Download from Apple.com

- Now, "the entree for today": Mac OS X. We've had seven major releases in the last decade. We're really happy with Snow Leopard, but we want to take it even further. Preview of Mac OS X Lion.
- Philosophy of Lion: "Back to the Mac". We started with Mac OS X, and created iOS from it. Created some new things there, and moved it to the iPad. Now we want to bring some of that back to the Mac. Lion = Mac OS X + iPad.
- iPad features we'd like to bring back to the Mac: Multi-touch gestures, App Store, App Home screens, full screen apps, auto save, auto resume when launching.
- Multi-touch. We've done lots of research, but multi-touch doesn't work on vertical surfaces. Great demo, but terrible ergonomics. That's why focus on the trackpad, Magic Mouse, and Magic Trackpad for multi-touch.
- App Store: Over 7 billion App Store downloads on iOS. We'd like to bring it to the Mac: Mac App Store in Lion. Best place to discover apps...not only place, but best place. One-click downloads, free and paid apps (same 70/30 revenue split), automatic installation, automatic app updates. Apps licensed for use on all personal Macs.
- Launchpad: Home screen for Mac App Store apps.
- Expose, Full screen apps, Dashboard, and Spaces...four great features on Mac OS X. Wouldn't it be great to unify them all? New feature: Mission Control. View everything running and instantly navigate anywhere.
- Craig Federighi to demo.
- Demoing Mac App Store. Very similar to existing App Store. "Top" lists, categories, updates, etc. Showing purchase and installation with Pages. Description, screenshots, customer reviews, one-click purchase. App icon flies into Dock, and you're ready to go.
- Demoing Launchpad. Full screen grid of all apps. Can organize using drag-and-drop and with iPad-style pages of apps. Also folders just like on iOS.
- Full screen apps. Showing a PDF in Preview, sweeps open into facing pages view in full screen. Gestures to move between pages. Multi-touch gesture to move back to desktop, and then back to app. No need to manually leave full-screen mode.
- Mission Control: Expose view of open windows, Dock on bottom, etc. App clusters in Expose bring multiple windows from a single app together. Gestures to open up clusters.
- Jobs back on stage. Recapping the new features. I wish we had another hour and half to show you more.
- Our plan is to release Lion in summer 2011. We feel real good about it.
- Talking more about Mac App Store. We think it's going to be really great, and we don't want to wait for Lion, so we're going to put it out on Snow Leopard. Opening within 90 days. Developers can go to our website to learn about it today. Begin accepting app submissions next month.
- Reviewing status of the Mac. 33% of revenue, $22 billion business (#110 on Fortune 500 if standalone), 20.7% share of retail sales, retail stores bringing more and more people into the Mac tent. iLife '11 with new iPhoto, iMovie, and GarageBand. FaceTime on Mac. Mac OS X Lion. Mac App Store.
- One more thing.
- What would happen if a MacBook met an iPad?
- Some features we might like to see: instant on, great battery life, amazing standby time, SSD, etc.
- This is the result if a MacBook and an iPad hooked up: the new MacBook Air. We think it's the future of notebooks.

- 0.68" at thickest point, 0.11" at thinnest. Weighs 2.9 lbs. Rigid and durable with complete aluminum unibody construction. Full size keyboard and full size glass trackpad.
- 13.3" LED display at 1440x900, more than on our 15" MacBook Pro. Core 2 Duo processor with NVIDIA GeForce 320M. FaceTime camera.
- No optical drive, no hard drive. Moved to flash storage...we know the benefits: Instant-on, up to 2x faster, more reliable, and 90% smaller and lighter, silent operation.
- Battery life: Wireless web tests yield 7 hours, 30 days of standby time. The PC industry's battery tests don't often reflect real-world results. We've developed more stringent tests , and the new MacBook Air still gets 7 hours under the new tests. The old MacBook Air gets only 5 hours by that metric.
- Showing the guts: flash memory right on the board, 802.11n Wi-Fi, CPU, GPU, RAM, stereo speakers, battery...just like in leaked prototype.
- Now, this 13.3" MacBook Air isn't the whole story, because it has a younger brother too. 11.6 inches, 2.3 lbs., 1366x768 display, more than our MacBook. 5 hours of wireless web battery and 30 days of standby.
- Pricing: 11.6-inch/64 GB at $999, 128 GB at $1199. 13-inch/128 GB at $1299, 256 GB at $1599. All with 2 GB of RAM. All available today.
- Showing ad for new MacBook Air: "Everything we've learned, has come down to this."
- Showing feature video similar to those for iPad and iPhone 4.
- Jobs back on stage. We've got a hands-on room set up for you guys to test this out. Thanks for coming.

Some clever exploring of Apple's discussion forum has revealed several new products that are believed to be part of today's announcements. Spidersweb.pl found that by typing in certain category numbers manually, you could find these placeholder categories:

Category 277 - Reserved 10 20
Category 278 - iMovie '11
Category 279 - GarageBand '11
Category 280 - iPhoto '11
Category 281 - MBA (Need official name)

iLife '11 was revealed as well as one simply labeled "Reserved 10 20" which could represent a new iLife application. The MacBook Air appears to have also gotten a new category for unclear reasons. A MacBook Air category already exists.

Update: Apple has now removed the product names from the placeholder pages, replacing them with generic descriptions of "a", "aa", "ab", "ac", and "ad".

Update 2: The noted discussion forums have now been entirely removed from Apple's site.

Engadget claims to have details from a trusted source that claims to have knowledge of Apple's upcoming MacBook Air announcement.

- 11.6-inch display
- 2.13 GHz Intel Core 2 Duo
- 2 USB Ports, Mini DisplayPort, SD card reader
- Trackpad similar to MacBook Pro
- Black power key on top right of keyboard

No word on graphics card or SSD storage capacity. A 2.13GHz processor could be the ultra-low voltage processor we previously detailed.

Apple will likely reveal the new MacBook Air at today's Back to the Mac media event. We'll provide coverage here, as well as on our Twitter accounts (@MacRumors / @MacRumorsLive) and we've also set up a Spoiler Free page.

Previously unheard of site RichyRich claims to have some photos of a prototype N92 iPhone. N92 is the iPhone code number that is believed to be Apple's Verizon-compatible CDMA phone. This is from August, 2010:

But I do know that engineering-wise, the wheels are turning on N92, the CDMA variant of the iPhone 4. It's certainly not in production yet, and hasn't reached DVT status (device verification test - like Gray Powell's infamous stolen unit), but it is, a few little birdies claim, at EVT (engineering verification test). That's one step below DVT, which is one step below production.

The small gallery of photos claim to depict a DVT N92 -- which would be a step closer to mass production.

The images are reported to have originated in a Vietnamese repair shop, but no further source is given. The photos aren't particularly revealing, but the design appears identical to the currently shipping iPhone 4.

Aspyr has officially announced that they will be publishing Sid Meier's Civilization V for the Mac this fall.

Developed by Firaxis Games, Sid Meier's Civilization V reinvigorates the classic turn-based strategy genre with an astonishing new engine built from the ground-up for this flagship edition of the Sid Meier's Civilization franchise. Players are introduced to an entirely new combat system, deeper diplomatic interactions and a cavalcade of expanded features that deliver a fully immersive experience. Players build and defend their empire on their quest to become the greatest ruler the world has ever known.

The Mac version is expected "this holiday season" though no specific date is given. Specific dates, details on pre-orders and availability are to follow. Notably absent in the press release is any mention of Steam as a distribution method. Aspyr does state they have discounted their existing strategy games on GameAgent by 40% in celebration of the announcement.

We had previously reported about the imminent launch of the title for Mac.

With less than 24 hours from Apple's Back to the Mac media event, a few more claims have been trickling in. MacStories claims to have information about some subtle interface changes to Apple's next version of Mac OS X. According to the site, iOS's influence will be apparent in 10.7's window scroll bars:

The first big news is iOS scroll bars and scrolling behavior are coming to OS X. That means you'll have to say goodbye to the current Aqua scroll bars and get ready for a more minimal look. Also, the "rubber band" elastic scrolling iOS is famous for is making its first appearance on the desktop, and we're told it "works really well and feels natural". Basically, it works like the current inertial scrolling, but when you hit the top or bottom of a scroll view it "rubber bands" down like iOS devices do.

The site also reports a new Quick Look interface.

MacStories has not been a regular source of Apple-related rumors, so we can't comment on their reliability. Mac OS X visual changes have always been a big topic of discussion and speculation over the years.

Apple's media event kicks off at 10am Pacific on Wednesday, October 20th. We'll provide live Twitter coverage at @MacRumorsLive and stories at @MacRumors. And, of course, continuing coverage on MacRumors.com.

In the wake of Apple CEO Steve Jobs' lengthy comments on Google's Android and other competitors during the company's earnings conference call yesterday, executives from Google and app developer TweetDeck have offered brief public responses disputing Jobs' assertions.

TechCrunch notes that Google's vice president of engineering Andy Rubin, who heads up the Android project, was inspired by Jobs to post his first-ever tweet. Rubin's tweet amounted to defining "open" as the code required to get the Repo tool that serves as a basis for working with Android source code installed and ready for use.

the definition of open: "mkdir android ; cd android ; repo init -u git://android.git.kernel.org/ platform/ manifest.git ; repo sync ; make"

During his comments, Jobs also referred to TweetDeck, developers of a popular Twitter platform who recently launched an Android application, noting that they had to test their application against 100 different versions of Android on 244 different handsets. Jobs contrasted that experience with the tightly-controlled iOS environment, claiming that Android's fragmentation is leading to significant headaches for app developers seeking to ensure compatibility.

TweetDeck CEO Iain Dodsworth quickly responded to Jobs' comments via Twitter, disputing the claim that the burden of testing on Android devices was an onerous one.

Did we at any point say it was a nightmare developing on Android? Errr nope, no we didn't. It wasn't.

Dodsworth followed up with a second tweet noting that the company has only two employees working on the Android version of TweetDeck and citing that as proof that Android fragmentation is essentially a non-issue.

We only have 2 guys developing on Android TweetDeck so that shows how small an issue fragmentation is

Representatives of Research in Motion have apparently yet to speak out on Jobs' claims that the company will be unable to keep pace with Apple as it is forced to move out of its "comfort zone" into a smartphone world where software is driving the innovation.

Despite Apple reporting lower-than-expected iPad sales in its quarterly earnings release yesterday, research firm iSuppli has once again raised its projections for iPad sales through the end of 2012 to over 120 million, up over 20 million from its July projections.

iSuppli has increased its iPad sales estimates from 12.9 million to 13.8 million for 2010, from 36.5 million to 43.7 million for 2011, and from 50.4 million to 63.3 million for 2012.

"In its previous iPad forecasts, iSuppli noted that the only constraint on shipment growth now is production - and not demand," said Rhoda Alexander, director of monitor research for iSuppli. "The only factor limiting production is the availability of key iPad components, such as the Field Fringe Switching (FFS) LCD panels, projected capacitive touch screens and NAND flash. Despite ongoing yield issues, Apple's suppliers have steadily increased monthly production to meet Apple's demand. Production rates are now on target to meet the expected strong fourth-quarter sales."

Along with the easing of supply constraints, the report points to faster-than-expected expansion of retail distribution and opportunities in education as positive factors for the iPad's sales future.

Apple yesterday announced sales of 4.19 million iPads in the June-September quarter, well ahead of the 3.27 million iPads sold in the previous quarter but below the nearly 5 million units that had been expected by Wall Street analysts.

During today's earnings conference call, Apple CEO Steve Jobs noted that the company has sold over 250,000 units of the revamped Apple TV that was unveiled at the company's September 1st media event and began shipping at the very end of September.

Responding to a question about how the device is performing in the marketplace and whether users can expect Apple to shift to a streaming model for other products, Jobs noted that Apple doesn't discuss unannounced products but that it's been "thrilled" with the performance so far. Jobs also pointed to the AirPlay capabilities in iOS 4.2 set to debut next month as another reason for customers to look to the "very enticing" $99 Apple TV.

One analyst estimated earlier this month that Apple was selling the new Apple TV at a rate of about one million units per quarter, although it will take some time for the true demand to become apparent as the initial wave of orders tapers off and supply constraints experienced at the launch begin to ease.

Steve Jobs made a surprise appearance at today's financial results conference call for Apple's Q4 2010 results. Jobs commented on a range of topics including the fragmentation seen on Android as compared to the iPhone.

Of particular note, Jobs commented on the influx of tablet competitors that are flooding the market, and criticized the 7" tablet size, saying that it was too small.

Commenting on avalanche of tablets heading to market. Just a handful of credible entrants. Almost all use 7" screen, compared to iPad at nearly 10" screen. 7" screen is only 45% as large as iPad's screen. Hold an iPad in portrait view and draw a horizontal line halfway down. What's left is a 7" screen...too small. There are clear limits to how close elements can be on the screen before users can't touch accurately. We believe 10-inch screen is minimum necessary.

This effectively kills persistent rumors that Apple was planning on creating a 7" iPad in the near future. Apple has been known to experiment with different form factors and has even been suspected of creating multiple prototypes to throw off competitors.

Boy Genius Report claims to have received information from a source who reports that a tweaked version of the iPhone 4, known internally as "iPhone3,2", as entered the final field testing stage before production, indicating that a release may be coming in the next several months.

One of our solid Apple sources has just let us know some pretty interesting (and exciting) information surrounding Apple's upcoming iPhone devices. For starters, we have been told that iPhone model 3,2 - what everyone is assuming to be the Verizon (or at least CDMA-compatible) phone - just hit the "AP" testing stage. This is the very last stage before retail release; final hardware, almost final software.

But according to the source, the iPhone3,2 carries a SIM card slot similar to that used by the existing iPhone 4, a feature not required for a straightforward CDMA-only phone. Boy Genius Report offers three theories as to what this device might be then, given that it possesses a SIM card slot:

- A "global" mode phone offering support for both GSM and CDMA that would be compatible with all carriers. The design could obviously carry a tweaked antenna design to address reception issues and serve as a mid-cycle upgraded model around the world while also introducing new CDMA support.

- A CDMA phone with SIM support for global roaming, although this scenario seems overly complicated.

- A tweaked version of the existing iPhone 4, with no support for CDMA networks. This could simply be an updated version to addresses antenna issues.

The source also indicates that the fifth-generation iPhone has entered the "engineering verification test" (EVT) stage, a phase the CDMA-based iPhone 4 was said to have entered back in May. Additional claims of the CDMA iPhone 4 being in the EVT stage surfaced in mid-August. The first software references to iPhone3,2 appeared in iPhone OS 3.2 back in early April.

Apple today announced financial results for the third calendar quarter and fourth fiscal quarter of 2010. For the quarter, Apple posted revenue of $20.34 billion and net quarterly profit of $4.31 billion, or $4.64 per diluted share, compared to revenue of $12.21 billion and net quarterly profit of $2.53 billion, or $2.77 per diluted share, in the year-ago quarter. Gross margin was 36.9 percent, compared to 41.8 percent in the year-ago quarter, and international sales accounted for 57 percent of the quarter's revenue.

Apple shipped 3.89 million Macintosh computers during the quarter, a unit increase of 27 percent over the year-ago quarter. Quarterly iPhone unit sales reached 14.1 million, up 91 percent from the year-ago quarter, and the company also sold 9.05 million iPods during the quarter, representing 11 percent unit decline over the year-ago quarter. Apple also sold 4.19 million iPads during the quarter.

"We are blown away to report over $20 billion in revenue and over $4 billion in after-tax earnings - both all-time records for Apple," said Steve Jobs, Apple's CEO. "iPhone sales of 14.1 million were up 91 percent year-over-year, handily beating the 12.1 million phones RIM sold in their most recent quarter. We still have a few surprises left for the remainder of this calendar year."

Apple's guidance for the first quarter of fiscal 2011 includes expected revenue of $23 billion and earnings per diluted share of $4.80.

Apple will provide live streaming of its Q4 2010 financial results conference call at 2:00 PM Pacific, and MacRumors will update this story with coverage of the conference call highlights.

Conference Call Highlights:
- CFO Peter Oppenheimer with summary: New all-time records for Mac, iPhone and iPad sales.
- New Mac sales record by over 400,000 - double overall market growth. Double-digit growth in both desktop and portables, led by iMac, MacBook Pro, and MacBook.
- Nearly 9.1 million iPods sold. Market share remains over 70% per NPD.
- iTunes Store revenue over $1 billion for the quarter.
- "Extremely pleased" with 14.1 million iPhones sold. iPhone revenue reached $8.82 billion, up 92 percent. Average selling price of $610.
- iPhone has 166 carriers in 89 countries. Very pleased with response in China since recent launch.
- Enterprise adoption of iPhone 4 continues to grow. 80% of Fortune 500 companies, up from 60% before iPhone 4 launch.
- iPhone sales very strong, but could have sold more if supply had been available.
- iPad sales strong. 65% of Fortune 100 companies using iPad. Expanding retail distribution and filling sales channels, but still below desired levels.
- Have now passed 125 million total iOS devices sold.
- iOS 4.2 coming in November with AirPrint and other features.
- App Store: Over 200,000 registered developers. "Very happy" with iAd performance.
- Retail store revenue at $3.75 billion. 874,000 Macs sold, up 30% year-over-year. 50% of sales to customers new to Mac.
- First-day sales at new Beijing and Shanghai stores set new records.
- Average revenue per store $11.8 million, up 52% year-over-year.
- 74.5 million visitors during the quarter, up 62% year-over-year.
- Fiscal 2011 will see focus on international expansion. 40-50 new stores, with over 50% outside U.S. Also replacing several U.S. stores.
- Cash plus marketable securities at $51 billion, up $5.2 billion.
- Fiscal 2010 saw over 13.6 million Macs sold, 40 million iPhones, nearly 7.5 million iPads, record revenue of over $65 billion. Earnings of $14 billion. 5x the revenue and 10x the earnings of five years ago.
- Guidance: Revenue at $23 billion, gross margin at 36%, earnings of $4.80 per share.

Steve Jobs on the call:
- I couldn't help dropping by for our first $20+ billion quarter.
- Discussing iPhone performance. Handily beat RIMM in their last quarter. We just passed RIMM, and we don't see them catching back up. They must move beyond their comfort zone and become a software company, and we don't see them being successful at it. They have a high mountain ahead of them.
- What about Google? Apple activates 275,000 iOS devices per day, sometimes over 300,000. Unfortunately, no solid data on how many Android handsets shipped per quarter. Gartner says 10 million in June quarter, and we wait to see whether iPhone or Android won in the most recent quarter.
- Discussing Google claiming Android is "open". We find this disingenuous. Android is fragmented.
- "TwitterDeck" (probably TweetDeck) revealed that it had to contend with over 100 different versions of Android in developing its app. Compare to Apple with two different versions.
- Amazon, Vodafone, and Verizon have announced creating their own Android app stores. A mess for users and developers. Contrast with Apple's integrated App Store.
- Even if Google was right, open doesn't always win over closed. See Microsoft's "Plays for Sure" system that they were forced to scrap. Google flirted with integrated approach with Nexus One. Google's claims are a smokescreen for what is best for customers: integrated or fragmented. We believe integrated will trump fragmented every time. Users and developers will agree.
- Commenting on avalanche of tablets heading to market. Just a handful of credible entrants. Almost all use 7" screen, compared to iPad at nearly 10" screen. 7" screen is only 45% as large as iPad's screen. Hold an iPad in portrait view and draw a horizontal line halfway down. What's left is a 7" screen...too small. There are clear limits to how close elements can be on the screen before users can't touch accurately. We believe 10-inch screen is minimum necessary.
- All of these tablets are using Android, but Google is telling them it isn't ready for tablets and to wait until next year.
- Even with smaller, less-expensive screens, competitors are having a hard time matching iPad pricing. We have tons of experience in design...we've designed everything on ours. The 7-inch tablets will be dead on arrival. Their manufacturers will learn the painful lesson and abandon them for larger sizes next year, abandoning customers and developers. Sounds like a lot of fun.

Q&A:
Q: Supply constraints on iPad...how severe? How fast will they improve?
A: We got into balance in September. We got into situation at the end of the quarter where we can expand distribution. We'll be launching in new countries as the quarter goes on.

Q: Headwinds for gross margins?
A: Margins came down about half of what we thought they would because commodity and other costs came down, and iPhone sales better than expected.

Q: How do you think about the iPad opportunity a year or two down the road in terms of size of business?
A: Jobs: iPad is clearly going to affect notebook computers. It's a question of when, not if. Already seeing tremendous interest from education, and surprisingly, business. We haven't been pushing it with businesses, but they're tearing it out of our hands. We've got a tiger by the tail.

Q: Could iPad be second-biggest business behind iPhone?
A: Jobs: I try to report, not predict. But it's already outselling Macs.

Q: What could true demand for iPhone have been?
A: Demand is "absolutely staggering" in all countries. We had anticipated it going to a different level, but what we're seeing is even higher.

Q: You are the tablet market right now. Like RIMM with the smartphone, can you hold onto market share?
A: Jobs: We have a hard time seeing the strategies of our competitors. They're not matching us in pricing, and lack of Flash doesn't seem to be causing us difficulties. We're out to win this one.

Q: Are smartphones a zero-sum game?
A: Jobs: The vast majority of phones are non-smartphones. Many of those will convert to smartphones over the next few years. There will be room for some companies to have success, but will become closer to zero-sum game in time. It's a battle for mindshare right now, and iPhone and Android are winning that battle.

Q: How is Apple TV going? Are you going to build on that streaming model with other products?
A: Jobs: I don't talk about unreleased products. Apple TV is complete streaming. We've already sold over 250,000 of them, and we're thrilled with that. $99 price point is very enticing. We're really happy with how it's turned out.

Q: Effect of bumper program on revenue and margin?
A: Revenue deferral of $100 million; should be recognized in December quarter. Margin hit was not a surprise to us. High mix of iPhone 4 and iPad pinch margins a bit, but didn't better than we'd hoped.

Q: Steve, you believe Apple should be able to outship Android when looking at all devices. What are the key risks you are managing?
A: Our goal is to be the best. We're not the biggest...that's Nokia. We admire them, but don't aspire to be them. We want to make the best devices. Android is our biggest competitor. They outshipped us in the June quarter when we were caught in a transition, and we'll see about the September quarter. We'll be competing with them for quite some time, but we have very different approaches and we believe in ours. We think that's the winning approach in the end.

Q: Aspirations for iPhone and iPad? Looking for a Mac-like model of lower market with higher prices and quality or iPod-like market dominance and low pricing?
A: Jobs: Nokia makes $50 handsets. We don't know how to make great handsets at that price. So our goal is to make great breakthrough products but also drive costs down. As you know, we have low share in phones, and high share in tablets. But we don't think about it that way. We're not not making a 7-inch tablet because we don't want to hit a lower price point. We're just believe it's too small to hit the user experience people want. When we make decisions, it's not about cost, it's about value when you factor in the software. We're all about the best products at aggressive prices.

Q: If the market moves toward lower-functionality smartphones with lower price points and you can't make a great phone at those prices, will you cede share?
A: Jobs: You're looking at wrong. You're looking at it from a hardware perspective and you assume that the software will just come alive, but it won't. App developers have taken advantage of these products that came before and changing assumptions on developers will result in them not following you.

Q: $50 billion in cash on your balance sheet. What is your aspiration for that cash and why not return some to shareholders?
A: Jobs: Of course that's been proposed to us. We firmly believe that one or more unique strategic opportunities will present itself to us, and we'll be in a position to take advantage of it. We've been very disciplined, and will continue to be so.

Q: Opportunities in enterprise? Marketing or sales changes you need to make to push this?
A: Cook: 2/3 of the Fortune 100 are deploying or piloting iPad. I've never seen an adoption rate like this in enterprise. iPad also seeing adoption in K-12. Early data points look great. Have built and are building additional capacity to call on businesses. Also enabling carrier partners to do the same. See announcement by AT&T last week. iPhone has followed a similar trajectory, with 85% of Fortune 100 deploying or piloting. This isn't a hobby...we put a number of enterprise features in the OS, and building sales capabilities as well. Mac is also increasingly getting pulled into enterprise where employees themselves have decision-making capabilities. Maintaining focus on consumer, and these "enterprise consumers" are pulling the Macs in. We're not targeting with different machines.

Q: Demand from new carrier to pick up iPhone 4? Pressure on subsidies?
A: Cook: Pressure we're getting is on supply. Everyone we're doing business with wants more supply. We have 166 carrier relationships in 89 countries. That's a significant increase. Latest move was Germany, where we'll be launching with Vodafone and O2. iPhone 4 is in 85 of those 89 countries. I believe we will be in all 89 by end of the year.

Q: Moving from exclusive to non-exclusive, have you given up anything on subsidies?
A: Cook: We don't give details, but you can see our average selling price as remained above $600 as we've expanded distribution.

Q: Where is your primary advantage in tablets?
A: Jobs: We've designed everything from batteries to enclosures, and we've learned a lot from our prior experience. We know how to design and build in an efficient way. Others will have to source components from middlemen, while we design our own and build them directly.

-End of call

Advertising Age today announced that it has selected Apple as its "Marketer of the Decade", removing the company from the running for its annual "Marketer of the Year" award to present it with a first-ever award recognizing Apple's prominence over the last ten years.

It seems fitting: Apple kicked off the aughts in 2001 with the iPod, an electronic device that went on to disrupt and forever change the music industry; then mid-decade it dropped the iPhone, a mobile device that changed the mobile-phone industry and added the word "apps" to the English vocabulary; and finally, in 2010 it debuted the iPad, a computing device with the potential to disrupt the media, publishing, entertainment and computing industries.

Yes, it has been a golden decade for Apple. And while one can certainly argue that its influence has been overstated -- it is No. 56 on the list of Fortune 500 by revenue -- Apple's influence on business models across industries from music and computing to entertainment and advertising, along with its impact on popular culture, media and, of course, marketing, has been indelible.

The report points to Apple's high-profile advertising campaigns over the years, from the "Switch" and "Mac vs. PC" ads for Mac to the dancing silhouette iPod ads and the latest iPad commercials, as examples of the company's instant recognizability in the industry.

From the brand loyalty shown by the company's customers to the money invested by Apple into its retail store initiative, Apple's "golden decade" has seen the company's marketing prowess help drive it to #56 on the list of Fortune 500 by revenue.

Apple won a nearly-identical award last December from AdweekMedia, which also broke its rankings down into a number of other categories and where Apple took home the lion's share of top honors.

As noted by 9 to 5 Mac, the page for iLife '09 on the German Amazon site has been updated to list an availability date of this Wednesday, October 20th, the day of Apple's "Back to the Mac" media event.

It is frequently difficult to assess the reliability of Amazon's item listings for unreleased Apple products, as the company frequently posts placeholders and other estimates based on its expectations for future releases rather than true inside knowledge. But with just two days to go before Apple's media event, the development is certainly being seen as an indication that we may see an iLife revamp.

Amazon has been a frequent source for iLife claims in recent weeks, including iLife '11 pages briefly appearing in early September, and iLife '11 book listings appearing on the German site earlier this month. iLife '09 and iWork '09 were also noted to be backordered at Best Buy over the weekend, adding further hints regarding a potential update. Rumors of iLife kicked into high gear in late July with rumors of a revamp coming in August, but the rumored timeframe obviously didn't come to pass.

9 to 5 Mac also notes that Amazon's U.S. site is showing a price of $49.99 for iLife, although it is difficult to gauge whether this represents a change in Apple's list price for the software from its current $79, as Amazon's prices have long varied significantly up and down over time while remaining below Apple's list price.

Update: Several readers have written in to point out that shipping estimates for virtually all of Apple's notebooks and desktops slipped over the weekend to "2 business days" in the company's European online stores, leading to speculation that new orders are being briefly held for the release of updated iLife software.

Update 2: Apple's UK online store is also showing 1-2 week shipping estimates for both single-user and family pack versions of iLife '09.

Engadget notes that Sanho, maker of the popular HyperMac line of external batteries for Apple notebooks, will halt sales of the MagSafe charging cables required for connecting its batteries to Apple's machines as of November 2nd. The move comes as the company attempts to work out a licensing agreement with Apple to offer the MagSafe interface.

As part of our ongoing comprehensive licensing negotiations with Apple regarding a wide array of technologies and issues, we have decided to cease the sale of the MacBook charging cables and car charger on November 2, 2010.

While we will continue to sell the same batteries together with the rest of our product line after November 2nd, they will not be able to charge MacBooks without the cables.

Apple filed suit against Sanho early last month over the accessory company's use of the MagSafe interface, alleging patent infringement. Sanho had hoped to escape the eye of Apple by utilizing official MagSafe connectors recycled from Apple adapters, but their incorporation into new products was deemed by Apple to be an inappropriate usage.

It is unclear if Apple and Sanho will be able to work out an agreement to allow the MagSafe-compatible HyperMac charging cables to return in the future, but negotiations are clearly underway to at least settle the lawsuit brought by Apple.

Apple's suit had also targeted Sanho for including Apple's USB-to-Dock cable with its external battery battery products for mobile iOS devices, but Sanho has apparently already discontinued that practice, with customers having to rely on their current cables or acquiring new ones from elsewhere.

Cult of Mac weighs in with claims from a new source regarding the new MacBook Air that has been receiving considerable attention in the days leading up to Apple's media event on Wednesday. The new report corroborates many of the claims coming from other sources, but also offers a few new details on what we might expect in the new machine.

- Battery life rumored to be 8-10 hours, up from 5 in the current MacBook Air.
- Thinner and lighter form factor with fewer curves.
- Two USB ports, SD card slot, straight-style MagSafe, Mini DisplayPort.
- Base model with 2 GB of RAM, but upgradeable. SSD also upgradeable.
- NVIDIA GeForce 320M graphics.
- Unconfirmed CPU claims of 2.1 GHz and 2.4 GHz options, but no claim of a specific processor family is offered.
- Suggestion of $999 for 11.6-inch model and $1100 for the 13.3-inch model, but Cult of Mac believes something like $1100/$1400 to be more likely.

As we approach Apple's "Back to the Mac" media event on Wednesday, October 20th, rumors are ramping up about what Apple is expected to introduce.

A leaked image of a prototype MacBook Air seems to confirm rumors that Apple is working on a new form of Solid State Drive (SSD) that could push notebook's size and cost down. Looking back at reports this past year, it seems many of these details (and one additional one) have been previously predicted through the supply chain.

As far back as July, DigiTimes reported that an 11.6" MacBook Air with a slimmer and lighter design was gearing up for production:

Kuo, citing discussions with upstream component makers, noted that the 11.6-inch MacBook Air will feature an even slimmer and lighter design than the previous-generation models and the technologies used for the design and concept are expected to be broadly used in the company's other product lines to boost their competitiveness.

DigiTimes also specified that the new MacBook Air would use one of Intel's Ultra Low Voltage processors. While Intel offers multiple "Ultra Low Voltage" (ULV) Core 2 Duo processors, the Core i7 ULV seems the most likely candidate.

Intel also offers Core i3 and Core i5 ULV chips but those top out at only 1.2GHz. One analyst also predicted that the new MacBook Air would come in two models, and that based on high unit projections, the new Airs were likely to come in at a lower starting price. In fact, CNet has since described the starting price as "much lower" then the current $1499 entry level.

As for Mac OS X, Apple's invitation with the Lion image clearly hints that the next major revision of Mac OS X (10.7) will finally be revealed. Apple has long named their major Mac OS X releases after various cat names. Early rumors suggested that Apple might have introduced 10.7 earlier this year, but it seems the company's resources were focused on iOS at the time. The only real hint we've had at 10.7 was a very intriguing job description from July in which Apple was looking for someone to focus on a "revolutionary new feature" for Mac OS X.

Are you looking to help create something totally new? Something that has never been done before and will truly amaze everyone? Are you excited by the prospect that what you helped create would be used every day by millions of Apple customers? Then come and work on with the Mac OS X software engineering team to help build a new and revolutionary feature for Mac OS X.

The language of the job description seemed much more specific than Apple's usual recruitment language. Of course, it's possible that this amazing feature could be slated for the next version of Mac OS X, but the timing seems right for 10.7.

Apple's media event kicks off at 10am Pacific on Wednesday, October 20th. We'll provide ongoing coverage of the news and events.