A DailyFinance article discussing the legality of Gizmodo's acquisition of a next-generation iPhone left in a bar last month has been receiving a bit of attention today. The report outlines the series of events that led to Gizmodo receiving the device and examines whether its possession of the iPhone constituted a violation worthy of either criminal charges of possession of stolen property or civil charges regarding misappropriation of trade secrets.
At heart is the question of whether the person who found the phone made "reasonable and just efforts to find the owner and to restore the property to him," as required by the California penal code.
The report notes that while Gizmodoclaims that the iPhone's finder apparently "asked around" at the bar on the night the device was left behind and attempted to call several Apple support numbers the following day to no avail, the person failed to take several basic steps to reunite the device with its owner.
What he never did, however, was notify anyone who worked at the bar, according to its owner, Volcker Staudt. That would have been the simplest way to get the phone back to the Apple employee who lost it, who "called constantly trying to retrieve it" in the days afterward, recalls Volcker. "The guy was pretty hectic about it."
Nor did the finder report it to the Redwood City Police Department, says Sgt. Dan Mulholland.
The question becomes whether Gizmodo, which paid $5,000 for the device, had an obligation to verify whether the seller was in legal possession of the device. Nick Denton of Gawker Media, Gizmodo's parent company, claims that the authenticity of the device was in question until they had purchased and disassembled it, and notes that they intended to return the device to Apple if it was verified to be an Apple product.
It remains to be seen whether Apple will take any further action beyond requesting the return of the device, whether it be in the form of legal action or other means such as restriction of invitations to Apple media events. Apple has remained silent on the issue despite multiple media requests from a number of sources, and company officials were not questioned about it by analysts during the Q&A portion of yesterday's earnings conference call.
They frequently comes in threes, and after the release of two new iPhone ads earlier this week, it's no surprise that a third one has now been posted to Apple's iPhone ad gallery. The new commercial, entitled 'Family Man', shows how various members of a family can use the iPhone's apps for their individual needs. Highlighted apps include:
AT&T today announced financial results for the first quarter of 2010, revealing that the carrier activated 2.7 million iPhones during the quarter. The number is down from 3.1 million in the previous quarter, despite Apple announcing yesterday that it had sold 8.75 million iPhones overall during the quarter, an increase of approximately 15,000 units over the prior quarter.
The results illustrate that international growth is a primary driver for the iPhone as AT&T begins to experience a slowing of its portion of the overall growth. The iPhone's ability to attract new customers to AT&T has also begun to slip, as the company noted that "more than one-third" of its iPhone activations for the quarter came from customers new to the carrier, down from a 40% figure the company has consistently cited in past earnings releases.
Signs of slowing iPhone growth for AT&T are likely to add to the clamor for Apple to extend distribution to additional carriers in the United States, with market leader Verizon having received the most attention in recent years despite the requirement that Apple offer specialized hardware to operate on the carrier's current network. For its part, Apple executives noted during yesterday's earnings conference call that the U.S., Germany, and Spain remain the company's three major markets where the iPhone is offered in exclusive carrier relationships. Despite that fact that the company has seen increased unit sales and market share in countries where it had moved to a multi-carrier model, however, it is not convinced that that dynamic would play out everywhere. Consequently, Apple continues to evaluate its carrier relationships on a country-by-country basis.
Earlier this month, Apple made a change in its iPhone developer agreement that appeared to directly target Adobe's plans to release a Packager for iPhone feature in its forthcoming Flash Professional CS5 application that would allow creators of Flash content to export their projects into native iPhone format. The change resulted in a fair amount of fallout in what is becoming an increasingly strained relationship between Apple and Adobe.
Adobe Flash Platform project manager Mike Chambers yesterday offered on his blog a detailed explanation of his and Adobe's view of Apple's change of heart, noting that while Packager for iPhone will continue to ship in Flash Professional CS5, Adobe is ceasing investments on the feature for the future.
While it appears that Apple may selectively enforce the terms, it is our belief that Apple will enforce those terms as they apply to content created with Flash CS5. Developers should be prepared for Apple to remove existing content and applications (100+ on the store today) created with Flash CS5 from the iTunes store.
We will still be shipping the ability to target the iPhone and iPad in Flash CS5. However, we are not currently planning any additional investments in that feature.
Chambers notes that the Packager feature complied with all of Apple's licensing terms throughout its development, with Apple making the change banning the feature just days before Adobe's official introduction of Creative Suite 5.
Furthermore, Chambers explains that the teams working on the Packager feature implemented a number of technologies that can easily be moved to other devices and platforms, setting the stage for a push into Android-based phones. A number of developers have already shifted gears to port their Flash games to Android, and Chambers himself is shifting all of his personal mobile focus to Android.
Update: CNET reports that an Apple spokesperson offered the following rebuttal to Chambers' comment that "ultimately open platforms will win out over the type of closed, locked down platform that Apple is trying to create":
"Someone has it backwards--it is HTML5, CSS, JavaScript, and H.264 (all supported by the iPhone and iPad) that are open and standard, while Adobe's Flash is closed and proprietary," said spokeswoman Trudy Miller in a statement.
In another interesting twist in the relationship between Google and Apple, peHUB reports that Google has purchased startup firm Agnilux, a San Jose company founded by a number of defectors from P.A. Semi, the chip company Apple acquired in early 2008 to provide expertise in ARM chip designs for products such as the iPad and iPhone. A number of prominent P.A. Semi employees were previously known to have left Apple to form Agnilux soon after their previous company was acquired.
Many of P.A. Semi's chip developers stuck with Apple, but others -- including some system-level folks -- launched a stealth startup called Agnilux. They also personally funded Agnilux with proceeds from the Apple acquisition.
Now, peHUB has learned that Google recently acquired Agnilux, which previously held strategic investment talks with companies like Cisco, Microsoft and Texas Instruments. We have not yet been able to confirm pricing terms, although assume it must have been a big deal to convince the Agnilux founders to shun the strategic investment -- or traditional venture capital -- routes so soon after founding.
According to a New York Times article from early February, sources have claimed that some of the P.A. Semi employees left Apple due to unattractive pricing of stock grants they received as part of the acquisition. And as far as what Agnilux has been working on, the company has been silent on the matter. A separate report from The New York Times, however, cites an Agnilux employee who claimed that the company is developing "some kind of server".
It is unclear whether Google's acquisition of Agnilux is yet another direct threat to Apple's position in the mobile market, or whether reports that Agnilux is focused on server technology mean that Google's interest in the company lies elsewhere and its connection to Apple and P.A. Semi is merely tangential.
Update: The New York Times reports that Google's purchase of Agnilux is not for hardware but to assist in porting Google software platforms to other devices.
A person familiar with the deal said Google acquired the firm not for silicon expertise or to build actual hardware, but for help with porting Google platforms like its Chrome and Android operating systems onto other devices - like tablets, or possibly even television set-top boxes. "These are systems guys focusing on hardware-software integration," this person said. "It's not chip design. It's getting software platforms to work on different kinds of hardware with lots of obscure back-end technologies."
In particular, another source indicates that the Agnilux team can help Google with power regulation that would allow its software platforms to make better use of battery life on tablet devices.
It seems Gizmodo did spend time taking apart the leaked next generation iPhone while they had it in their possession. They've posted a tear-down but unfortunately little new information was discovered. One question answered, however, is the fact that there is not a user replaceable battery as some had speculated.
Other notes:
- Battery takes up 50% of iPhone - Circuit board encased in metal, thermal paste, black tape. - They were unable to delve further without damaging the device - No details on processor, memory, etc... - No user-removable battery.
Apple today released Final Cut Server 1.5.2, bringing several fixes to the company's backend application for managing Final Cut Pro projects. Full details on the changes are included in the release notes for the update.
- Fixes an expiring Java certificate in the Final Cut Server Java client. Updates the Java signing certificate to avoid certification authentication issues in the Final Cut Server Java client.
- Fixes an issue that blocked the use of a transcode setting for the Matrox CompressHD H.264 encoding card. When the Matrox CompressHD plug-in for Compressor is installed, fixes an issue that stopped the corresponding transcode settings from appearing as an available option in the Final Cut Server administration window.
Full details on the changes are included in the release notes for the update.
The update weighs in at 41.90 MB and requires Mac OS X 10.5.8 or later.
Last week, there was a bit of publicity surrounding Apple's December rejection of an iPhone application highlighting the work of online political cartoonist Mark Fiore, who was awarded the Pulitzer Prize for his work earlier in the week.
After Fiore's disclosure that his NewsToons application had been rejected by Apple last December for "ridiculing public figures", Apple invited him to resubmit his application, and Apple CEO Steve Jobs noted that the rejection had been a mistake.
Fiore resubmitted his application on Friday, and NewsToons ($0.99) is now available in the App Store. The application provides access to Fiore's animated political cartoons, as well as offering links to the news stories that inspired each cartoon.
Apple today released via the iPhone Dev Center its second beta version of iPhone OS 4 and the associated Software Development Kit (SDK) for developers to use in creating and updating applications. The initial versions of iPhone OS 4 and the SDK were released earlier this month alongside Apple's media event to introduce the features of the next-generation operating system.
iPhone OS 4 will bring a number of new features, including various services supporting multitasking, email enhancements, and greater access for third-party application to built-iPhone functions such as calendars, photos, and camera controls. In all, Apple notes that iPhone OS 4 brings over 1,500 new APIs for developers to use in their applications.
Apple is expected to publicly release iPhone OS 4 to iPhone and iPod touch users "this summer", although early models of those devices will not be compatible with the new OS and even some newer models will not be able to take advantage of all of the features. iPhone OS 4 will come to the iPad "in the fall".
Apple today announced financial results for the first calendar quarter and second fiscal quarter of 2010. For the quarter, Apple posted revenue of $13.50 billion and net quarterly profit of $3.07 billion, or $3.33 per diluted share, compared to revenue of $9.08 billion and net quarterly profit of $1.62 billion, or $1.79 per diluted share, in the year-ago quarter. Gross margin was 41.7 percent, compared to 39.9 percent in the year-ago quarter, and international sales accounted for 58 percent of the quarter's revenue. The numbers represent the best non-holiday quarterly revenue and earnings in Apple history.
Apple shipped 2.94 million Macintosh computers during the quarter, a unit increase of 33 percent over the year-ago quarter. Quarterly iPhone unit sales reached 8.75 million, up 131 percent from the year-ago quarter, and the company also sold 10.89 million iPods during the quarter, representing 1 percent unit decline over the year-ago quarter.
"We're thrilled to report our best non-holiday quarter ever, with revenues up 49 percent and profits up 90 percent," said Steve Jobs, Apple's CEO. "We've launched our revolutionary new iPad and users are loving it, and we have several more extraordinary products in the pipeline for this year."
Apple's guidance for the third quarter of fiscal 2010 includes expected revenue of $13.0 billion to $13.4 billion and earnings per diluted share of $2.28 to $2.39.
Apple will provide live streaming of its Q2 2010 financial results conference call at 2:00 PM Pacific, and MacRumors will update this story with coverage of the conference call highlights.
Update: Apple's stock, trading of which was temporarily halted for the earnings release, immediately leapt by over $19.00 (~8%) per share upon the resumption of trading, and is currently up approximately $17.00 (7%).
Conference Call Highlights: - CFO Peter Oppenheimer giving overview of quarterly results, notes that PC industry grew 24% year-over-year, while Mac grew 33%. - Breaking out iPod results, iPod touch grew 63% year-over-year, with iPod revenue up 12%. Apple maintains over 70% share of MP3 player market. - iTunes Store brought in $1.1 billion, with over 4 billion App Store downloads so far. - Thrilled with iPhone sales, 8.75 million is most ever. Growing at three times the overall market rate. - Very happy with iPad sales so far. 3G on track for April 30th in U.S. Nine more countries coming in late May. - Retail store sales up 22%, and 50% of retail store Mac purchasers continue to be new to Mac. - Apple on track to open 40-50 new stores this fiscal year.
Q&A Q: What insights have you gained in the U.S. market in terms of iPad cannibalization of Mac sales. A: In our view, for last quarter, there was no obvious impact on the iPod or Mac sales from the iPad. We're thrilled with the sales of the iPad. An overall great start.
Q: iPad 3G vs Wi-Fi breakdown? A: Too early to tell, since they haven't both been available.
Q: Why were the iPhone sales so good? A: We had staggering growth rates in some areas. Asia, Japan, Europe growth rates were enormous. Some of this was adding additional carriers in some key countries. Also some other carries in key countries in Asia. But also had strong performance with existing carriers.
Q: Production problems with iPad? A: No production issues. Demand simply much larger in U.S. than expected. We're adding capability, and we'll see where this thing goes.
Q: Thoughts on potential for iAd profitability? A: Don't expect much from us this calendar year. We're building a foundation for the future.
Q: Thoughts about iPhone distribution? A: Three main markets where still exclusive: U.S., Germany, Spain. We've moved a number of markets to non-exclusive and seen unit sales and market share improve. Can't say that will work everywhere though.
Q: iPad's effect on gross margin? A: We priced it very aggressively at first to appeal to what is expected to be a huge market. Costs will come down over time.
Q: Plans for retail stores in China? A: Very excited about China. Planning 25 stores there by end of 2011, starting with two in Shanghai this summer.
Q: Legal costs seem to be escalating with patent disputes. Any effect on bottom line? A: We've taken it into account.
Q: Any plans for Apple TV? A: Units were up 34%, but absolute number of units still small. Still a hobby. Comparing the Apple TV's small market to that of Mac, iPhone, iPod.
Q: Does the iPad compete with netbooks? A: It's a no-brainer that someone would opt for the iPad over the netbook. The netbook doesn't do anything well.
Q: Any planned drop in iPhone service plan prices? A: Apple always works to get the best deal for consumers, but price isn't everything. When we dropped iPhone 3G to $99, we still saw demand skewing toward iPhone 3GS starting at $199.
Q: How about accessories and their effect on gross margin? A: Our portfolio of accessories is good and more coming for iPad. Devs are rallying around them, and more good stuff will probably be coming.
Q: Retail growth driven by new store openings? A: Revenue per store up 8%. Same-store Mac sales up 20%. We think iPad is great opportunity for retail store sales.
Q: How will iPad be reflected in financial reports? A: Will be a separate line item like the iPhone.
Q: How many iPad customers are new to Apple? A: It's still early, and we don't really trust the data yet.
Q: Education sales outlook? A: We're holding up in market share and ready to compete, but budgets are difficult right now.
Apple yesterday released two new iPhone commercials, posting them to the company's iPhone ad gallery. The two ads continue Apple's recent pattern of narrative-style commercials showing off multiple applications used in succession.
'Dog Lover' tells the story of a family adopting a new dog, using the iPhone to find an available dog, share pictures of her, find dog parks, and stream webcam footage of her while away from the house.
'Backpacker' shares the adventures of a backpacker traveling through Spain and mixes demonstrations of several App Store applications with default applications included on the iPhone. In the commercial, the narrator describes how he uses his iPhone to find information on hostels, share photos with family back home, download apps from the App Store, and automatically translate spoken phrases into Spanish.
Apple announced that the 3G version of the iPad will be delivered to pre-order customers in the U.S. on Friday, April 30th and in retail stores starting at 5 p.m. the same day. The Wi-Fi version of the iPad became available on April 3rd, while the 3G version has lagged behind.
Meanwhile, Apple has begun shipping the iPad Camera Connection Kit to customers. The kit allows iPad owners to download digital photos to their iPad using a USB or SD Card interface. There have been reports that the USB interface may also support USB audio, opening the door for 3rd party audio devices to connect.
After all the drama behind the leaked next generation iPhone, it's interesting to note that there still appears to be at least one more next-generation iPhone still in the wild. When the story first broke over the weekend, there was another set of images that depicted a very similarly designed phone:
These images were posted by a Chinese user's twitter account back in February. The design of this phone and the leaked prototype iPhone are practically identical -- but not entirely so. A close look at the bottom of the phones show some clear differences:
The left image reflects the original Twitter leak while the right shows the Gizmodo leak. The first image has no visible screws on the bottom of the device. The original images also don't seem to have the Apple logo on the back of the device, or even the iPhone name printed on it. We're not sure the significance of this, or who might have possession of this other device, but it seems more of these unreleased iPhones are out there in unauthorized hands.
If there were any remaining doubters about the authenticity of the prototype iPhone that was leaked earlier today, Gizmodohas posted a letter from Apple demanding the device back. The letter may seem like an odd admission by Apple, but apparently was required by Gizmodo to return the device.
Apple reportedly called Gizmodo earlier today after the images of the unreleased device were posted to the internet. The prototype iPhone was reportedly left at a bar by an Apple employee. The letter reads:
It has come to our attention that GIZMODO is currently in possession of a device that belongs to Apple. This letter constitutes a formal request that you return the device to Apple. Please let us know where to pick up the unit.
The letter is signed by Apple's Senior Vice President & General Counsel Bruce Sewell.
Gizmodo describes the circumstances surrounding how the next generation iPhone was lost and even names the Apple employee that lost the device. Gray Powell an Apple Software Engineer is said to have left the pre-release iPhone at Gourmet Haus Staudt, a bar in Redwood City on March 18th.
Gizmodo's source was said to be sitting next to Powell and picked up the prototype iPhone after it was left on his bar stool.
The person who ended up with the iPhone asked around, but nobody claimed it. He thought about that young guy sitting next to him, so he and his friend stayed there for some time, waiting. Powell never came back.
The lost iPhone reportedly booted up and "seemed like a normal iPhone". It wasn't until the following morning that it had been remote wiped by Apple.
The Associated Press reveals that Gawker (Gizmodo's parent company) paid $5000 to obtain the device.
Apple today launched a new replacement program for users experiencing problems with the headphones that shipped with Apple's third-generation iPod shuffle that launched in March 2009 and was updated last September.
Apple has determined that the Apple Headphones with Remote included with the iPod shuffle (3rd gen) may fail under certain conditions. A very small percentage of iPod shuffle owners have experienced this issue. These headphones were included with the iPod shuffle (3rd generation) made between approximately February 2009 and February 2010.
Users experiencing non-responsive or intermittently-responsive controls on the integrated remote or unexpected volume changes or voice feedback should check to see whether their iPod shuffles fall into the range of affected serial numbers.
Serial number ranges of the iPod shuffle with the covered headphones: xx909xxxxxx to xx952xxxxxx xx001xxxxxx to xx004xxxxxx
Affected users in the U.S. should use Apple's online support system to request replacement headphones. Along with the replacement headphones, Apple will provide a pre-paid return envelope to provide for the return of the defective headphones. Users may also visit an Apple Retail Store (or Apple Authorized Service Provider outside the U.S.) for replacement.
Over the weekend, one MacRumors reader noted that the shipping window for Apple's 30" Cinema Display HD has slipped from its normal 24-hour timeframe to 5-7 business days. While slight variations in shipping windows routinely occur as supply and demand of certain items ebbs and flows, Apple has been rumored to be introducing a new 27-inch display by June, and thus sensitivities have been heightened for any sign that a release might be imminent.
Despite the release of the 24" LED Cinema Display in October 2008, Apple's 30" display has been around for nearly six years. Priced at $3299 at its June 2004 launch, the display saw several price cuts over the first few years on the market before landing at its current $1799 price point just over three years ago.
Apple's rumored 27-inch LED Cinema Display is claimed to carry the same 2560x1440 resolution of its new 27" iMac, compared to the 2560x1600 resolution of the existing 30" display. The design of the new display is also expected to be nearly identical to that of the 24" display released a year and a half ago.
The big news this past weekend was the leak of several photos of what appeared to be the next-generation iPhone. The early photos were a bit blurry and elicited a range of responses -- many negative. Opinions seemed to turn somewhat when high-quality images of the next-generation iPhone were revealed by Gizmodo this morning.
If you haven't seen the device in detail yet, check out this nice hands-on video from Gizmodo showing it at all angles.
The unreleased device seems to carry a number of features that have been requested by users in the past, including a front-facing camera, camera flash and higher-resolution screen. But the design of the phone itself seems to be producing the most vocal reactions, so we thought we'd conduct a poll to see where the sentiment falls:
The next-generation iPhone is expected to be released sometime this summer/fall. Apple has yet to announce the dates for its Worldwide Developers Conference where it has traditionally been announcing its iPhone hardware updates. Other rumors have suggested the iPhone may also be expanding to other carriers such as Verizon.
