MacRumors

A 99-cent application by the name of 'Baby Shaker' appeared briefly in the App Store yesterday, but was quickly removed by Apple after an uproar from users who found it to be inappropriate and offensive. The simple application displayed a crying baby on the screen with the instruction being that users should listen to the crying for as long as possible before shaking the iPhone to make the baby stop.

The Associated Press reports that Apple issued a statement apologizing for approving the application and stating that its approval had been an error.

Apple spokeswoman Natalie Kerris said Thursday that the game was "deeply offensive" and said it should not have been approved for sale. "We sincerely apologize for this mistake," Kerris said in a statement.

The incident has put Apple's approval process in the spotlight again. Though in the past, Apple has been criticized for being too restrictive with publishable content in the App Store. They have previously rejected a number of apps from the App Store for a variety of reasons. SF Gate suggests that the incident may even make Apple become more conservative about App approvals in the future.

NVidia and Nero announced yesterday that a recent update to the Nero Movie it software application for Windows reduces video encoding time by up to five times by utilizing NVIDIA's CUDA architecture. They specifically describe the encoding of HD video for an iPod going from "hours to mere minutes" when the application is used in conjunction with a supported NVIDIA graphics card.

CUDA is NVIDIA's parallel computing architecture that harnesses the power of their graphics card GPUs. This allows developers to leverage the parallel processing power that is otherwise being unused within these graphics cards.

By using CUDA technology to tap the massively parallel processing power of NVIDIA GPUs, Nero Move it converts videos in a fraction of the usual time, reducing the length of time to perform such tasks as customizing an HD video for an iPod, from hours to mere minutes.

While the announcement is not directly related to Apple, the harnessing of this GPU power is the cornerstone of OpenCL which will be featured in Mac OS X Snow Leopard.

OpenCL is an open standard that was established in collaboration with AMD, Intel and NVIDIA and was ratified in December. Apple is expected to release Mac OS X Snow Leopard later this year, and we should hear more details at WWDC in June.

In a patent application filed in November 2007 and released today, Apple reveals that it is researching methods for providing customized audio control for Internet browser content. The research is targeting the inability for a single system volume setting to address multiple simultaneous audio-generating applications, a common inconvenience for computer users. For example, a user may have audio content playing in the background through iTunes and may wish to mute only browser-based audio content coming from websites.

When using a web browser application (e.g., Microsoft Internet Explorer, Apple Safari), audio sources (e.g., websites) will often provide audio signals (e.g., music, noises) which may or may not be welcomed by the user. While operating system desktops often provide audio controls (e.g., volume controls), such audio controls adjust all audio signals playing on the host device, including desirable audio signals such as music the user desires to play from their music library while browsing the Web. Accordingly, if desktop audio controls are used, then desirable audio signals, as well as undesirable audio signals, will be adjusted together which may not be the intent of the user.

The patent application describes a browser-based system for adjusting the volume of Web-generated content and offers a system for remembering the user's preferences for future encounters with the audio content from those sources, identified by URL or domain.

The application also describes an implementation of the invention in which the differing preferences can be activated depending on whether audio is already playing on the system. For example, audio from websites could be muted if audio content is currently being played from a media player application such as iTunes, but audible if iTunes was inactive. Another implementation offers a server-based preference system, which would allow user audio preferences to be shared across devices for which such control is desired.

Apple's front page is now announcing that the App Store has reached one billion downloads. For the past two weeks, Apple has been running a 1 Billion App Countdown promotion, offering a package of Apple prizes valued at over $13,000 for the "entry (either through an app download or through the non-purchase online entry) sent immediately following the download of the 999,999,999th app." The competition is now closed, and the winner will be publicly announced in the near future.

A number of Apple pages, including the main apple.com page, countdown promotion page, iPod+iTunes page, iTunes Store, and App Store have been displaying counters reflecting the approaching milestone.

Apple revealed yesterday that they had sold 37 million iPhones and iPod Touches. The latest App Store application count is over 35,000.

Update: Apple has announced that 13-year old Connor Mulcahey of Weston, Connecticut is the contest winner.

As usual, Apple executives were questioned about the possibility of an Apple netbook during today's financial results conference call. The issue has been raised a number of times but continues to be a hot topic given the fact that inexpensive netbooks seems to be boosting PC manufacturers' unit sales numbers.

Apple executive Tim Cook replied to the questions with a similar response as in the past. Cook said that when he looks at the existing netbook market, he sees cramped keyboards, terrible software, junky hardware and very small screens. While Apple is still looking at the space, they have no interest in putting the Mac brand on these types of devices. Cook notes that if they do find a way to deliver an innovative product that makes a real contribution, Apple will pursue it.

Despite Cook's denials, rumors have persisted that Apple has been ramping up a 10" Netbook with a possible touch screen. As Cook details, it seems unlikely that if Apple does enter the market, that a Mac netbook would resemble many of the existing low-cost devices currently available.

Apple's Tim Cook and Peter Oppenheimer provided some insights behind Apple's iPhone strategy today during the Q2 financial results conference call.

When specifically asked about Apple's long term exclusivity with AT&T, Apple responded that they are very happy with AT&T and feel they have done a very good job promoting the iPhone. Despite some recent hope that Apple might expand the iPhone to other networks, Apple said that they have no plans to change the AT&T exclusivity at this time. Also mentioned was the fact that Verizon currently uses the CDMA network which is incompatible with the current iPhone. Apple stated they wanted the iPhone to be a global hardware device which requires the use of the GSM standard. This may confirm claims by Verizon's CEO that Apple may have never intended to launch a CDMA (Verizon) iPhone. This situation may change when Verizon upgrades their networks.

Another interesting statistic revealed was the total number of iPhones and iPod Touches has now reached 37 million units. Apple had sold 30 million as of December 2008.

Finally, Apple reiterated that they no plans to leave a "price umbrella" for competitors to sneak in. What this ultimately means remains unclear, though some had originally felt this could mean Apple will introduce lower priced models ("nano"). Apple also reiterated the importance of the App Store and their software-focused approach to the iPhone platform.

Apple today announced financial results for the second quarter of fiscal 2009. Apple posted revenue of $8.16 billion and net quarterly profit of $1.21 billion, or $1.33 per diluted share, compared to revenue of $7.51 billion and net quarterly profit of $1.05 billion, or $1.16 per diluted share, in the year-ago quarter. Gross margin was 36.4 percent, compared to 32.9 percent in the year-ago quarter, and international sales accounted for 46 percent of the quarter's revenue. The numbers represent the best March Quarter revenue and earnings in Apple history.

Using non-GAAP data, which eliminates subscription-based accounting for the iPhone and Apple TV, Apple would have had $9.06 billion revenue and $1.66 billion of net income.

Apple shipped 2.22 million Macintosh computers during the quarter, a unit decline of 3 percent over the year-ago quarter. The company also sold 11.01 million Pods during the quarter, representing 3 percent unit growth over the year-ago quarter. Quarterly iPhone unit sales reached 3.79 million, up 123 percent from the year-ago-quarter.

"We are extremely pleased to report the best non-holiday quarter revenue and earnings in our history," said Peter Oppenheimer, Apple's CFO. "Apple's financial condition remains very robust, with almost $29 billion in cash and marketable securities on our balance sheet."

Apple's guidance for the third quarter of fiscal 2009 includes expected revenue of $7.7 billion to $7.9 billion and earnings per diluted share of $0.95 to $1.00.

Apple will provide live streaming of its Q2 2009 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

- Oppenheimer: results exceeded our expectations and very pleased given this economy.
- Mac: for March quarter, sold 2.2 million Macs. 3% decline from year-ago quarter. Difficult to compare since MacBook Air launched last year which boosted sales.
- Very confident in Mac sales
- Music: 3% over year ago quarter. Very strong sales of iPod Touch.
- Customers and reviews responded favorably to new iPod shuffle
- Very pleased with iPod marketshare. Over 70% in U.S. (per NPD)
- Year over year iPod sales growth in a number of international markets
- iTunes Store: strong quarter. A number of changes in iTunes stores: DRM free titles.
- App Store: over 35,000 applications compared to 15,000 as of last conference call. Within hours of reaching 1 billionth download.
- Software is the key ingredient for a great mobile experience.
- Very excited about the prospect of more compelling apps with the iPhone 3.0 OS
- Expanding iPhone's geographic reach. 81 countries.
- March 17th - provided a preview of iPhone 3.0 to developers.
- iPhone 3.0 release will include over 100 features for customers and 1000 new APIs for developers. Very enthusiastic developer response
- Delayed the reporting of revenue of iPhones sold after March 17th until 3.0 ships.
- Commodity prices were significantly lower than expected. sales of higher margin products were better than planned.
- June Quarter outlook: forcasting the current economic environment is challenging. Expect $7.7-7.9 billion in revenue.
- Very pleased with the record March quarter results. Extremely enthusiastic about iPhone 3.0 launch this summer. Very excited about other products in pipeline.

Q/A:

Q: What is your outlook in pricing and component supply in next quarter.
A: We believe that most of the excess inventory was consumed so while we still see the component environment to be favorable, but expect prices to increase during the next quarter. Don't expect to see the same level of reductions we previously saw.

Q: Can you talk about the Mac business? How the new Macs are doing? And ASPs (average sales price)?
A: After we did the desktop launch, we shipped a higher mix of desktops before the transition and that helped the overall ASP down. The Pro products were weaker than in the year ago quarter. We believe that's mainly economic related. In addition, education in the U.S. contracted by about 11% year-over-year -- a result of the states not having the tax revenues for the quarter. Hope to see rebound this year. So, yes, ASPs did decline, desktops were a piece of it. Refreshing all the desktops in a single day really helped us drive more sales in March. The notebook business we did have an ASP decline which was reflective of a push towards the lower end price ($999) Macbooks. As a result, we see the consumer is holding up much better than Pros and Education.

Q: New thoughts on the Netbook at this point?
A: For us it's about doing great products. When I'm looking at what's sold in the Netbook market, I see cramped keyboards, junky hardware, very small screen, bad software. Not a consumer experience that we would put the Mac brand on. As it exists today, we're not interested in nor would it be something customers would be interested in the long term. We are looking at the space. For those who want a small computer that does browsing/email, they might want an iPhone or iPod Touch. If we find a way to deliver an innovative product that really makes a contribution, we'll do that. We have some interesting ideas. The product pipeline is fantastic for the Mac. We've historically exceeded the market rate of growth, especially given this economy is an extraordinary achievement. These netbook sales are propping up the unit numbers for the industry. We are very pleased with our performance.

Q: Any mix of paid and free downloads in the App Store?
A: We don't disclose the free vs paid numbers. We are just hours away from our billionth download and couldn't be happier. One of the keys behind the iPod this quarter despite the economic environment was that the iPod touch doubled year over year. The sum of iPhone and iPod Touch is 37 million units now.

Q: Why maintain exclusivity with AT&T?
A: We view AT&T as a very good partner, the best wireless provider in the U.S. Very happy to do business with them. They have done a good job with the iPhone. We have no plans to change it. Technically, Verizon is on CDMA. We decided to focus on one phone for the entire world, which means you have to go down the GSM route. CDMA doesn't have a life after a certain point in time.

Q: Update on Steve Jobs?
A: We look forward to Steve returning to Apple at the end of June.

Q: Do you care about your market share in the U.S.? And given the lower sales prices, does that change your opinion about Mac pricing?
A: On a worldwide basis, IDC projected that the market contracted by 7% worldwide. On a reported basis, we contracted by 3%. But on a sell through basis we were essentially flat. U.S. was our weakest/largest market but in the U.S. a larger percentage is educational so is subject to recent budget constraints. So, I think that's one reason by the U.S. is disproportionately affected. We saw less Pro Macs being sold in the U.S. compared to other markets which we also attribute to the economy. Do I care, of course, but cycles come and go. We are about making the best computers in the world, not the most. We believe that if we do that over the long term, we will gain marketshare.

Q: Comments about iPhone adoption?
A: We have a plan that keeps us leaders in the iPhone space. We'll make sure we don't leave a price umbrella for people.

Q: Any steps in making it easier for the Apps to be discovered?
A: We're doing a number of things. We include easy to find top 50 and 100 apps both paid for and free. We have them associated in various genres and we are expanding those. So I think the team is making it easy to discover. Games are quite popular. That's one of the reasons why the iPod touch has been such a success.

Q: Competitive landscape for smartphones?
A: Difficult to comment on products that aren't shipping. So nothing I can say about the Pre. We think we're in a great position with a combination of the App Store and the billion app downloads. We think we're years ahead, and we see this product through a "software platform lens". The power of the device and ecosystem is enormous.

End of conference.

AT&T today announced its financial results for the first quarter of 2009, and among the highlights was the announcement that AT&T had activated 1.6 million iPhone 3Gs during the quarter. Continuing a trend seen in previous quarters, customers new to AT&T accounted for 40% of iPhone 3G activations.

In the first quarter, AT&T's iPhone 3G activations totaled more than 1.6 million, more than 40 percent of them for customers who were new to the company. AT&T's U.S. iPhone exclusive continues to deliver subscribers with ARPUs (average monthly revenues per subscriber) that are approximately 1.6 times higher and churn rates that are significantly lower than the company's overall postpaid subscriber base.

While AT&T's 1.6 million activations were down from 1.9 million in fourth quarter of 2008 and 2.4 million in the third quarter of 2008, the decline was not unexpected given the iPhone's product cycle. Overall, AT&T saw a net gain of 1.2 million wireless subscribers for the quarter. Wireless revenue rose 9.8% year-over-year and made up 42.1% of AT&T's total revenue, up from 38.5% in the year-ago quarter.

Apple will release its earnings report for the second fiscal quarter (first calendar quarter) of 2009 later today.

9to5Mac cites their "favorite Apple source" who claims that Apple will be delivering minor updates for MacBooks and MacBook Pros at WWDC. The source speculates that this could involve 3G or speed bumps or battery changes, but this is entirely speculative. Also expected are updates to Apple's Pro Apps including Final Cut Pro, Aperture, Logic, and Shake.

Such updates at WWDC would be somewhat uncharacteristic for Apple who has not historically focused on these products during the developer's conference. Looking back at previous WWDCs, Apple has focused on iPhone, Mac OS X and Mac Pros/PowerMacs at the annual event.

WWDC 2009 takes place in San Francisco between June 8th and 12th.

Several weeks ago, we mentioned in passing that configuration files for a feature called "Voice Control" had been unearthed in the iPhone OS 3.0 beta. Ars Technica now provides a few additional details about the feature, although the specifics remain unknown. Chiefly, the feature is apparently code-named "Jibbler" and will enable both voice synthesis and voice recognition on the iPhone OS 3.0.

Not much information is known at this time, but according to our own people familiar with the matter, Jibbler appears be an enhancement to the iPhone SpringBoard application, the Finder-esque app that acts as a launcher and will support the newly announced 3.0 Spotlight search. Jibbler may be controlled via the iPhone headset -- button squeezes could be used to record short voice segments from the user, which Jibbler will then interpret. Voice synthesis can then be used to give the user a response, similar to the latest generation iPod shuffle, which can "read" playlists and track names -- the difference being that the iPhone hardware itself could handle real-time voice synthesis.

Ars Technica notes that the evidence allows for the possibility that "Jibbler" could be made available via the SDK to third-party developers for use in their applications. There is also no indication whether the feature would be limited to the next-generation iPhone or if existing devices would also be able to take advantage of it.

The big industry news on Monday was the announcement that Oracle Corporation would acquire Sun Microsystems for approximately $7.4 billion. The acquisition would bring Sun controlled technologies such as Java, MySQL and Sun's workstations under the control of Oracle. The New York Times points out that Oracle sees Sun as a "software gem, skillful in computer design and ripe for cost-cutting."

The combined company, according to Oracle and Sun executives, will be able tweak and integrate its software to reduce costs and bugs, and to tighten security. Suns computer designers, they said, can tailor hardware to the combined companys software, promising further gains in efficiency.

Some are even calling the buyout an Apple-like maneuver with hopes to control the entire user-experience through tight software and hardware integration:

Jobs showed that locking the software to the hardware and focusing relentlessly on building a perfectly integrated system aimed at the customer, was the superior approach. He gave consumers a first-class experience and got to command premium pricing, protecting Apple's margins along the way.

The move will put an end to long-running rumors and speculation that Sun may acquire Apple or vice-versa. Apple and Sun had reportedly been in talks over the years and come close to merging on two separate occasions.

NVIDIA announced the release of the Quadro FX 4800 professional graphics card for the Mac Pro today.

With its sophisticated GPU architecture and industry leading features, the Quadro FX 4800 delivers a substantial boost in graphics performance and capabilities, allowing users to continue to push the boundaries of realism and performance in markets such as: architecture, content creation, science and medicine.

The new video card will be on display at the 2009 NAB conference and will become available for purchase in May. The $1799 card carries a number of features targeted at professional uses including:

- Interactive Visualization of Large Models - Offers a massive 1.5GB frame buffer and memory bandwidth up to 76.8 GB/sec. to deliver high throughput for interactive visualization of large models; high-performance for real time processing of large textures and frames; and the highest quality and resolution with full-scene antialiasing (FSAA)
- High-performance Visualization - NVIDIA's(R) CUDA(TM) parallel computing architecture for NVIDIA Quadro GPUs enables breakthrough application performance to enhance creative expression in areas such as video, animation, photography and production
- Dual Dual Link DVI and Stereo Connectors - Outfitted with a dedicated 3 pin min-din connector for stereo glasses support and up to two dual-link DVI digital connectors to drive the highest resolution digital displays available on the market
- Boot Camp Support - Access to native Quadro GPU accelerated professional Windows 3D graphics performance and features when using Apple Boot Camp

According to NVIDIA's site, the card is only compatible with the 2008 or 2009 Mac Pro (MacPro3,1 or MacPro4,1).

Telephony Online reports that AT&T is in the process of upgrading its 3G wireless network from the current 3.6 Mbps download standard to 7.2 Mbps. Several recent rumors have suggested that the next-generation iPhone due this summer will be able to take advantage of the higher speeds.

AT&T is increasing the downlink capacity on its high-speed packet access (HSPA) from 3.6 megabits per second to 7.2 Mb/s through software upgrades at the base station, said Scott McElroy, AT&T Mobility vice president of technology realization. AT&T currently has the enhanced networks running in two test markets but plans to extend those capabilities to its entire network.

Furthermore, while the HSPA standard has the capability of supporting 14.4 Mbps through future upgrades, AT&T appears to be planning to bypass that step and move later this year directly to the HSPA+ standard, offering download speeds of up to 21 Mbps and a number of other upgrades.

The next obvious step would be for AT&T to further upgrade its 3G networks and devices to its full 14.4-Mb/s potential, but McElroy said AT&T will most likely skip the final HSPA iteration for two reasons: There have been technical difficulties implementing the final step, and HSPA+ is now ready for prime time. There's little point in migrating to 14.4 Mb/s if AT&T can go straight to 21 Mb/s, McElroy said.

These upgrades to AT&T's 3G network are designed to serve as intermediate steps until AT&T rolls out its LTE (4G) network, currently slated to debut in 2011.