Linked List: April 27, 2015

Monday, 27 April 2015

Quartz Charts Apple’s Second Quarter Results ★

Lots of interesting visualizations. The one that struck me was the last one, showing that the iPad remains ahead of the iPhone in terms of cumulative sales since launch. Apple has sold more iPads in its first 57 months than they sold iPhones in its first 57 months. The gap is narrowing, however.

This Is Tim: Six Colors’s Transcript of Tim Cook’s Remarks on the Analyst Call ★

Fast-typing Jason Snell has a transcript of Tim Cook’s remarks. Regarding the company’s projection that Apple Watch will have lower margins than the company’s average next quarter:

In the first quarter of any kind of product, you would always have learning and these sorts of things. We’ve had this with every product we’ve ever done. And so again, we’re not guiding to what it will be over time, we’re talking about what it is now. I would keep in mind that the functionality of the product that we’re making is absolutely incredible, the power of it. And I’d also say, generally there’s cost breakdowns that come out around our products that are much different than the reality. I’ve never seen one that is anywhere close to being accurate. And so if that’s the basis of your comment, I’d really dig on the data if I were you.

Countdown to iSuppli projection that Apple Watch Sport costs the company $67 in three, two, one…

Regarding iPad sales:

When you look at the underlying data, it makes you feel a lot better than the sales do. Things like first-time buyer rates, the latest numbers from the U.S. are like around 40 percent, and when you look at China they’re almost 70 percent. These numbers are not numbers you would get if the market were saturated, so I continue to believe — even though I’ve seen different people write that — I think that theory is not correct. We also see usage numbers that are off the charts, so far above competition, it’s not even in the same planet. And we see customer satisfaction at or near 100 percent. So these kind of numbers, along with intent-to-buy numbers, everything looks fantastic. So my belief is that as the inventory plays out, as we make some continued investments in our product pipeline which we’re doing, that we’ve already had planned and have had planned for some time… I think still, I believe the iPad is an extremely good business over the long term. When precisely it begins to grow again I wouldn’t want to predict, but I strongly believe that it will.

My reading on this: lots of people are still buying their first iPad — 40 percent of sales in the U.S., a remarkable 70 percent in China. So the market for “tablets” is not saturated. Usage numbers and customer satisfaction are high too, so it’s not that people who bought iPads previously aren’t happy with them. The problem, thus, is that older iPads continue to work just fine. People don’t replace them every two or three years like they do with their phones.

Apple Reports Record Second Quarter Results ★

Apple:

Apple today announced financial results for its fiscal 2015 second quarter ended March 28, 2015. The Company posted quarterly revenue of $58 billion and quarterly net profit of $13.6 billion, or $2.33 per diluted share. These results compare to revenue of $45.6 billion and net profit of $10.2 billion, or $1.66 per diluted share, in the year-ago quarter. Gross margin was 40.8 percent compared to 39.3 percent in the year-ago quarter. International sales accounted for 69 percent of the quarter’s revenue.

The growth was fueled by record second quarter sales of iPhone and Mac and all-time record performance of the App Store.

If there’s a dark cloud in the numbers, it’s the iPad. Sales dropped precipitously year-over-year, from 16.3 million in Q2 2014 to 12.6 million this quarter.

But overall, Apple’s growth continues to amaze. They’re the largest company in the world by market cap, but are reporting double-digit growth. For context, five years ago Steve Jobs noted, with considerable pride, that Apple had become a $50 billion company in annual revenue. Today, they’re a $50 billion company in quarterly revenue, and are easily on pace to book $50 billion in annual profit this financial year.

The Difference Between Apple and Samsung Industrial Design ★

Rene Ritchie:

But when I looked at the picture of Samsung’s product, it wasn’t the sticker that bothered me so much. That, I assume, can be peeled off. It was something else I saw that bothered me, and something I can now never un-see.

It’s the lack of basic alignment.

Apple’s Antitrust Lord ★

WSJ editorial excoriating Michael Bromwich, the “outside monitor” appointed by Judge Denise Cote:

To take one example of this feather-bedding, for Feb. 17 Mr. Bromwich charged Apple with a block-billing entry that included “review relevant media articles.” The same day we published an editorial, “All Along the Apple Watchtower,” as well as excerpts from a related appeals-court hearing. When Apple flagged the expense, Mr. Bromwich replied, “We do not charge the time for reading the newspaper except when the WSJ editorials focus specifically on our work.”

We hope we provide value for money, but it’s flattering to be read at Mr. Bromwich’s hourly rate of $1,100, $1,025 for Mr. Nigro, and a 15% “administrative fee” for his consulting firm. The larger conflict of interest inherent in this revenue stream raises questions about the impartiality required of Mr. Bromwich as an officer of the court. He even suggests in his report he may require more than the two-year term that expires in October.

Consumer Reports’s Initial Apple Watch Test Results ★

Impressive scratch-resistance results, especially for the sapphire crystal on the steel Apple Watch. Water resistance was as good as promised, and the heart rate monitor was as accurate as their highest-rated dedicated chest-strap monitor.

More details here.

Conversation With a Tech Support Scammer ★

Lenny Zeltser:

When investigating an incident that involved domain redirection and a suspected tech support scam, I recorded my interactions with the individual posing as a help desk technician and researched the background of this scheme. It was an educational exchange, to say the least. Here’s what I learned about this person’s and his employer’s techniques and objectives.

Fascinating story. That they offer a “senior citizen discount” gives you a clue as to their target audience. (Via InfoSec Taylor Swift.)

Apple Collecting Red Cross Donations via iTunes for Nepal Earthquake Relief ★

This is a good way to help the people of Nepal — 100 percent of the money collected goes to the Red Cross, and because it’s through iTunes, you can do it with just a few clicks from your Mac or iOS device. If you haven’t chipped in already, take a few moments and do it now.

Update: Another convenient way to help: Square is collecting money for UNICEF relief efforts.