Daily Crunch: iPhone sales decline in Q1

Apple’s earnings show the impact of COVID-19, NVIDIA’s top scientist shares an open source ventilator design and Amazon anticipates big spending in the coming months.

Here’s your Daily Crunch for May 1, 2020.

1. iPhone sales are down, ahead of uncertain times for the industry

Apple device sales have taken a hit, but the company’s services are doing swell, according to its latest earnings report. The iPhone, the longtime cornerstone of the company’s hardware portfolio, hit $28.96 billion in revenue for Q2, down from $31.1 billion from this time last year. The iPad and Mac lines saw drops for the quarter, as well.

In fact, a new Canalys report suggests that smartphone sales are down 13% globally.

2. NVIDIA’s top scientist develops open-source ventilator that can be built with $400 in readily-available parts

The mechanical ventilator design developed by NVIDIA’s Bill Daily can be assembled quickly, using off-the-shelf parts with a total cost of around $400 – making it an accessible and affordable alternative to traditional, dedicated ventilators which can cost $20,000 or more.

3. Amazon Q1 beats on net sales of $75.5B but posts net income of $2.5B, down $1B on a year ago

The company’s net sales were up 26% year-year-over. Of those sales, $41 billion was attributable to product sales and $33 billion to services (which includes AWS, but also streaming and other non-physical goods). CEO Jeff Bezos acknowledged the challenges the company is facing, but he also reiterated that it plans to double down on spending in Q2.

4. Walmart is piloting a pricier 2-hour ‘Express’ grocery delivery service

Walmart now hopes to capitalize on the increased demand for speedier delivery with the introduction of a new service that allows consumers to pay to get to the front of the line. The retailer confirmed today it’s launching a new Walmart Grocery service called “Express,” which promises orders in two hours or less for an upcharge of $10 on top of the usual delivery fee.

5. 5 tips for starting a business with a stranger

Co-founder and CEO Sam Pillar argues that his startup Jobber is proof that starting a company with a stranger isn’t just doable, it can even be an advantage. That’s because it allowed them to arrive at big decisions and have productive debate without the baggage and bias of a pre-existing relationship, establishing Jobber’s feedback-oriented culture. (Extra Crunch membership required.)

6. Cliqz pulls the plug on a European anti-tracking alternative to Google search

Cliqz, a Munich-based anti-tracking browser with private search baked in that has sought to offer a local alternative to Google powered by its own search index, is shutting down — claiming this arm of its business has been blindsided by the coronavirus crisis. However, the company is not closing down entirely, and a spokesman confirmed that Ghostery will continue.

7. JetBrains Academy for learning code launches for free during COVID-19 pandemic

Most online coding courses, either free or paid, essentially suggest you download a project or copy-paste code from their snippets going through their courses. Unlike JetBrains, they tend not to include Integrated Development Environments, which are more helpful in the learning process.

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iPhone sales are down, ahead of uncertain times for the industry

Stop me if you’ve heard this one before: Apple device sales have taken a hit, but the company’s services are doing swell. The iPhone, the longtime cornerstone of the company’s hardware portfolio, hit $28.96 billion in revenue for Q2, down from $31.1 billion from this time last year. The iPad and Mac lines saw drops for the quarter, as well.

The company had already sounded the alarm bells for a weakened demand, due to the growing threat of COVID-19. Way back in February, Apple noted that the coming pandemic was set to both impact the global supply chain and weaken demand in China. “All of our stores in China and many of our partner stores have been closed. Additionally, stores that are open have been operating at reduced hours and with very low customer traffic,” it said at the time.

While aspects of life have returned to normal in China, the virus has subsequently delivered a huge hit to much of the rest of the world, including Apple’s home in the U.S., which continues to lead the world in COVID-19 cases.

Unsurprisingly, CEO Tim Cook struck a consolatory note in a press release, in spite of the company’s decision not to offer third-quarter guidance. “Despite COVID-19’s unprecedented global impact, we’re proud to report that Apple grew for the quarter, driven by an all-time record in services and a quarterly record for wearables,” he writes.

Wearables were, indeed, up. The category, which also includes home and accessory products like the HomePod, was up to $6.3 billion from $5.1 billion. The category continues to be a success on the strength of the Apple Watch and AirPods lines. Services, too, continue to grow steadily, up to $13.3 billion from $11.5 billion. That category seems to be a reasonably safe bet, as users turn to offerings like Apple Music and Apple TV+ during the ongoing stay at home period.

The future for smartphones continues to be a rocky one, going forward. The company recently introduced the SE in a bid to appeal to consumers put off by $1,000+ price tags. And Apple’s certainly not alone there. The entire industry has taken a hit in recent years, well before the arrival of the novel coronavirus.

Apple and other companies were expected to get a boost from the arrival of 5G, though everything is currently up in the air due to the pandemic. That reportedly also includes the arrival of a 5G iPhone, which is said to have potentially been pushed back a month over supply chain issues.

The next iPhone could be delayed a month, as pandemic wears on

The latest budget iPhone arrived this month to largely positive reviews. The next flagship, on the other hand, may have to wait. The COVID-19 pandemic is having all manner of knock-on effects on the global economy, and the supply chain is certainly not immune.

The Wall Street Journal this morning is reporting that the iPhone 12 may be among the devices impacted by unexpected issues. Apple is “pushing back the production ramp-up” of the new devices, per the report, owing to manufacturing issues in Asia and “weakened global consumer demand.”

This follows a number of similar reports of delays, with some putting the flagship smartphone’s launch at December, instead of the usual September/October timeframe. The current report, would likely put the phone’s release at around November — in line with that of the iPhone X. The company, unsurprisingly, hasn’t commented on the matter. The company doesn’t often comment on supply issues for released products, let alone those that are months away.

Asia was the first to be hit by the pandemic, and while a number of areas have returned to some semblance of business as usual, issues still remain. Beyond that, Apple (like all manufacturers) will have to grapple with the changing face of consumer wants/needs in the face of a pandemic and widespread stay-at-home orders. For many areas, those are expected to continue at least until the summer. 

Those are compound overall slowing smartphone demand, putting manufactures in a tough spot. Prior to COVID-19, however, Apple was no doubt anticipating an uptick in demand with the expected arrival of its first 5G handset. For now, however, it seems best to expect the unexpected. 

Apple Watch designer reveals the device’s origins on its fifth birthday

Update: We mistakenly noted in an earlier version that Chaudhri had been a part of Microsoft’s Hololens team. The story has been updated to remove the reference. 

In his two decades at Apple, Imran Chaudhri worked on many of the company’s most iconic product lines, including the iPhone, iPad and Mac. The designer left the company in 2017 , but today he’s offering up some fun insight into Apple Watch’s beginnings on the wearable’s fifth birthday.

The thread is a treasure trove of fun facts about the device’s early days. One interesting tidbit that might not be a huge surprise to those following Apple at the time is that an early prototype of the Watch consisted of an iPod nano strapped to a watch band.

Five years before it finally entered the smartwatch market in earnest, Apple introduced a square touchscreen nano. Three years before the arrival of the first Pebble, people were already considering the smartwatch possibilities. Accessory makers quickly took advantage, introducing wrist bands that would let it function as a touchscreen music watch. That sixth-gen product ultimately served as a foundation for the popular device to come. 

Per Chaudhri:

i had just wrapped up ios5 and took it down to show the ID team what notification centre and siri was – and what it could be in the future. i never got to share it with steve. we lost him right after ios5.

Other interesting bits here include:

  • The Solar watch face was designed as “as a way for muslims observing ramadan to quickly see the position of the sun and for all to understand the sun’s relationship to time.”
  • The butterfly animation was created using real (albeit deceased) butterflies (one of which is now framed in his home).
  • The touch feature originally went by the name E.T. (electronic touch).
  • The Digital Touch drawing feature was inspired by his time as a graffiti artist.

Apple said to sell Macs powered by in-house ARM-based chips as early as 2021

Apple’s long-rumored Mac ARM chip transition could happen as early as next year, according to a new report from Bloomberg. The report says that Apple is currently working on three Mac processors based on the design of the A14 system-on-a-chip that will power the next-generation iPhone. The first of the Mac versions will greatly exceed the speed of the iPhone and iPad processors, according to the report’s sources.

Already, Apple’s A-series line of ARM-based chips for iPhones and iPads have been steadily improving, to the point where their performance in benchmark tests regularly exceeds that of Intel processors used currently in Apple’s Mac line. As a result, and because Intel’s chip development has encountered a few setbacks and slowdowns in recent generations, rumors that Apple would move to using its own ARM-based designs have multiplied over the past few years.

Bloomberg says that “at least one Mac” powered by Apple’s own chip is being prepared for release in 2021, to be built by chip fabricator and longtime Apple partner Taiwan Semiconductor Manufacturing Co. (TSMC). The first of these chips to power Macs will have at least 12 cores, including eight designed for high-performance applications, and four designed for lower-intensity activities with battery-preserving energy efficiency characteristics. Current Intel designs that Apple employs in devices such as the MacBook Air have four or even two cores, by comparison.

Initially, the report claims Apple will focus on using the chips to power a new Mac design, leaving Intel processors in its higher-end pro level Macs, because the ARM-based designs, while more performant on some scores, can’t yet match the top-end performance of Intel-based chip technology. ARM chips generally provide more power efficiency at the expense of raw computing power, which is why they’re so frequently used in mobile devices.

The first ARM-based Macs will still run macOS, per Bloomberg’s sources, and Apple will seek to make them compatible with software that works on current Intel-based Macs as well. That would be a similar endeavor to when Apple switched from using PowerPC-based processors to Intel chips for its Mac lineup in 2006, so the company has some experience in this regard. During that transition, Apple announced initially that the switch would take place between 2006 and 2007, but accelerated its plans so that all new Macs shipping by the end of 2006 were powered by Intel processors.

Apple introduces new $399 iPhone SE with Touch ID and 4.7″ screen

Apple has dropped a new iPhone SE on the market today. It’s a 4.7” iPhone with a physical home button, Touch ID, a single rear-facing camera and the A13 Bionic chip on board. With a $399 starting price point, the new SE is aimed squarely at new iPhone users or first time smartphone buyers but could appeal to those who want the smallest iPhone model currently available above other considerations.

It comes in black, silver and Product(RED) editions and features a single rear-facing camera and a single front-facing camera. This is Apple’s new entry-level iPhone.

The overall package is pretty appealing here. It’s got the same A13 chip as in the iPhone 11 and iPhone 11 Pro and Apple tells me that the processor performance in the SE is comparable and not toned down for the more affordable unit.

The display is Apple’s Retina HD unit, which is an LCD panel. It is not a Liquid Retina display like the iPhone 11 and iPhone XR. I’m still waiting on specs to see what we’re looking at from a contrast ration perspective here, but it does have True Tone.

Probably the biggest defining feature of the iPhone SE besides its size is its inclusion of a physical home button with Touch ID instead of the Face ID system we’ve come to expect on new iPhones. It’s not clear now whether that’s due to size constraints preventing the inclusion of the needed front-facing True Depth Camera array — but pricing is probably just as likely to figure in this calculation.

Touch ID is reliable and even preferred by some users, though the physical home buttons have long been one of the biggest hardware failure points of iPhones with the feature. In our new mask-using world, though, some ground swell of Touch ID enthusiasm has been gaining. It’s hard to make Face ID systems properly recognize you behind a cloth wrap covering half of your face. This has been an issue for a while in Asia, where mask wearing has long been a matter of courtesy during allergy season or when a person is ill.

Camera and Comparisons

A couple of main items make Apple’s claim that the iPhone SE is ‘the best single-camera system’ supportable. You may recall that the iPhone XR also supported portrait mode and had the same resolution of rear camera. But with the iPhone SE, you have the A13 bionic, a new ISP and the Neural Engine that have improved things significantly in the machine learning department — allowing for segmentation masks and semantic rendering, two big improvements that make the portrait mode far more effective in recent iPhone models.

Apple only supported 3 lighting effects on the XR — the ones where you didn’t have to strip away the background. Those require more beef in the rendering and separation pipeline so the iPhone SE can do those now. The iPhone SE also has the improved Smart HDR that came to the iPhone 11 — once again tied to the chip.

You also get a bunch of other benefits of that new image pipeline including expanded dynamic range while shooting video at 4k 30fps, 4k 60 cinematic stabilization and the improved smart HDR while shooting still images. Also brought all 6 lighting effects to the front facing camera in this model.

It’s very like you’re getting iPhone 11 Pro image pipeline attached to a single-camera system — but, and it’s a big but — you don’t get Night Mode. Night Mode is one of the most compelling iPhone camera features in a very long time, so buying the new SE is really a price and size over camera equation.

Lineup Placement

This lineup puts the current iPhones Apple produces at roughly 7 as far as I can tell. The iPhone XR, XS and XS Max, iPhone 11 and iPhone 11 Pro and this new model. The iPhone SE’s pricing is incredibly attractive at $399 with 64GB of storage with only a $50 bump to $449 for 128GB.

If you’re comparing the iPhone XR to the iPhone SE, your only real consideration for the older model would be that you must have the larger screen size. But that seems like a hard sell at $200 more.

Overall, Apple seems to be working hard to mortar over the gaps in its iPhone pricing umbrella, making entry into its ecosystem more attractive. Once in, iPhone users tend to stick for the most part, both because of service-based lock-ins and high customer satisfaction.

Apple opens access to mobility data, offering insight into how COVID-19 is changing cities

Apple is providing a dataset derived from aggregated, anonymized information taken from users of its Maps navigational app, the company announced today. The data is collected as a set of “Mobility Trends Reports,” which are updated daily and which provide a look at the change in the number of routing requests made within the Maps app, which is the default routing app on iPhones, for three modes of transportation including driving, walking and transit.

Apple is quick to note that this information isn’t tied to any individuals, since Maps does not associate any mobility data with a user’s Apple ID, nor does it maintain any history of where people have been. In fact, Apple notes that all data collected by maps, including search terms and specific routing, is only ever tied to random rotating identifying numbers that are reset on a rolling basis. This anonymized, aggregated data is collected only to provide a city, country or region-level view, representing the change over time in the number of pedestrians, drivers and transit-takers in an area based on the number of times they open the app and ask for directions.

As far as signals go for measuring the decrease in outdoor activity in a given city, this is a pretty good one considering Apple’s install base and the fact that most users probably don’t bother installing or using a third-party app like Google Maps for their daily commuting or transportation needs.

The data is available to all directly from Apple’s website, and can be downloaded in a broadly compatible CSV format. You can also use the web-based version to search a particular location and see the overall trend for that area.

For an individual, this is more or less a curiosity, but the release f this info could be very useful for municipal, state and federal policy makers looking to study the impact of COVID-19, as well as the effect of strategies put in place to mitigate its spread, including social distancing, shelter-in-place and quarantining measures.

Apple has also announced that it’s working with Google on a new system-level, anonymized contact tracing system that both companies will first release as APIs for use by developers, before making them native built-in features that are supplemented by public health agency applications and guidance. Apple seems particularly eager to do what it can to assist with the ongoing COVID-19 crisis, while still striving to ensure that these measures respect the privacy of their individual users. That’s a hard balance to strike in terms of taking effective action at a population level, but Apple’s reach is a powerful potential advantage to any tools it provides.

Apple said to be planning fall iPhone refresh with iPad Pro-like design

Apple is readying a new iPhone for fall to replace the iPhone 11 Pro this fall, Bloomberg reports, as well as follow-ups to the iPhone 11, a new smaller HomePod, and a locator tag accessory. The top-end iPhone 11 Pro successors at least will have a new industrial design that more closely resembles the iPad Pro, with flat screens and sides instead of the current rounded edge design, and they’ll also include the 3D LIDAR sensing system that Apple introduced with the most recent iPad Pro refresh in March.

The new highs-end iPhone design will look more like the iPhone 5, Bloomberg says, with “flat stainless steel edges,” and the screen on the lager version will be slightly bigger than the 6.5-inch display found on the current iPhone 11 Pro Max. It could also feature a smaller version of the current ‘notch’ camera cutout in at the top end of the display, the report claims.

Meanwhile, the LIDAR tracking system added to the rear camera array will be combined with processor speed and performance improvements, which should add up to significant improvements in augmented reality (AR) performance. The processor improvements are also designed to help boost on-device AI performance, the report notes.

These phones are still planned for a fall launch and release, though some of them could be available “multiple weeks later than normal,” Bloomberg claims, owing to disruptions caused by the ongoing coronavirus pandemic.

Other updates to the company’s product line on the horizon include a new smaller HomePod that’s around 50 percent smaller than the current version, with a planned launch sometime later this year. It’ll offer a price advantage versus the current model, and the report claims it’ll also come alongside Siri improvements and expansion of music streaming service support beyond Apple’s own. There’s also Apple Tags, which Apple itself has accidentally tipped as coming – a Tile-like Bluetooth location tracking accessory. Bloomberg says that could come out this year.

Finally, the report says there are updates to the MacBook Pro, Apple TV, lower-end iPads and iMac on the way, which is not surprising given Apple’s usual hardware update cadence. There’s no timeline for release on any of those, and it remains to be seen how the COVID-19 situation impacts these plans.

Apple accidentally confirms the existence of an unreleased product, AirTags

Whoops! Apple inadvertently revealed the existence of an unreleased product, AirTags, in a support video uploaded to its YouTube account today. The video, “How to erase your iPhone,” offers a tutorial about resetting an iPhone to factory settings. Around the 1:43 mark, it instructs users to turn off “Find my iPhone” as part of the process. On the Settings page that then appears, another option for “Enable Offline Finding” is shown, and beneath that, the text references AirTags by name.

Specifically, it says: “Offline finding enables this device and AirTags to be found when not connected to Wi-Fi or cellular.”

The discovery was first spotted by the eagle-eyed blog Appleosophy.

Apple has since pulled the video. (A copy of the video is embedded below.)

AirTags, essentially Apple’s Tile competitor, were already known to be in the works. Based on details and assets found in Apple’s iOS code, AirTags are believed to be small tracking tiles with Bluetooth connectivity that can be used to find lost items — just like Tile.

The difference is that Apple’s AirTags will benefit from deeper integration with iOS, including within its “Find My” app. There, the tags will show up in a new “Items” tab allowing you to keep track of items that tend to get lost or stolen — like your keys, wallet or even your bike.

According to reports from MacRumors, the tags will feature a removable CR2032 coin cell battery, also similar to Tile.

Apple’s intention to copy Tile’s concept has not gone unnoticed by Tile.

The company on Wednesday told a congressional panel that Apple’s anticompetitive behavior has “gotten worse, not better.”

During the hearing, Tile referenced Apple’s plans to integrate its own product into the “Find My” app. Tile and other Bluetooth trackers won’t be able to do the same. They also have to ask for background location access repeatedly, while Apple’s AirTags, presumably, will not. That gives Apple’s own product an advantage as it owns the platform.

Apple has been asked for comment.

Image credits: Apple, via YouTube; MacRumors 

Apple agrees to settlement of up to $500 million from lawsuit alleging it throttled older phones

Apple Inc. has agreed to pay a settlement of up to $500 million, following a lawsuit accusing the company of intentionally slowing down the performance of older phones to encourage customers to buy newer models or fresh batteries.

The preliminary proposed class action lawsuit was disclosed Friday night and would see Apple pay consumers $25 per-phone, as reported by Reuters.

Any settlement needs to be approved by U.S. District Judge Edward Davila, who oversaw the case brought in San Jose, Calif.

For consumers, the $25 payout may seem a little low as a new iPhone can cost anywhere from $649 to $849 (for a lower-end model). The cost may be varied depending on how many people sue and the company is set to pay at least $310 million under the terms of the settlement.

For its part, Apple is denying wrongdoing in the case and said it was only agreeing to avoid the cost and burden associated with the lawsuit.

Any U.S. owner of the iPhone 6, 6 Plus, 6s, 6s Plus, 7 Plus or SE that ran on iOS 10.2.1 or any of the later operating systems are covered by the settlement. Users of the iPhone 7 and 7 Plus which ran iOS 11.2 or later before Dec. 21, 2017 are also covered by the settlement.

Apple customers said their phone performance slowed down after they installed Apple software updates. The customers contend that Apple’s software updates intentionally degraded the performance of older models to encourage customers to unnecessarily upgrade to newer models or install new batteries.

Lawyers for Apple said that the problems were mainly due to high usage, temperature changes and other issues and that its engineers tried to address the problems as quickly as possible.

In February, Apple was fined $27 million by the French government for the same issue.

As we reported at the time:

A couple of years ago, Apple  released an iOS update (10.2.1 and 11.2) that introduced a new feature for older devices. If your battery is getting old, iOS would cap peak performances as your battery might not be able to handle quick peaks of power draw. The result of those peaks is that your iPhone might shut down abruptly.

While that feature is technically fine, Apple failed to inform users that it was capping performances on some devices. The company apologized and introduced a new software feature called “Battery Health,” which lets you check the maximum capacity of your battery and if your iPhone can reach peak performance.

And that’s the issue here. Many users may have noticed that their phone would get slower when they play a game, for instance. But they didn’t know that replacing the battery would fix that. Some users may have bought new phones even though their existing phone was working fine.

Shares of Apple were up over 9% today in a general market rally.