Linked List: July 21, 2015

Tuesday, 21 July 2015

Audi, BMW, and Daimler Near Deal to Buy Nokia Mapping Service 

William Boston, reporting for the WSJ:

A group of German auto makers agreed to pay slightly more than €2.5 billion ($2.7 billion) for Nokia’s digital mapping service, prevailing over Silicon Valley bidders in a battle for a key enabling technology for self-driving cars.

German luxury car makers Audi, a unit of Volkswagen AG, Mercedes-Benz parent Daimler AG, and BMW AG have agreed in principle to purchase the telecommunications group’s digital mapping service Nokia Here, according to a person familiar with the situation.

Both sides of this — why Nokia needs to sell Here Maps, and why the car makers want to buy it — were explained by Horace Dediu last month.

The Five Biggest Takeaways of Apple’s Q3 2015 Quarterly Earnings 

Good take from Jason Snell. On China:

Over the past couple of years, Apple has made a point–not just in conversations with the financial industry, but also on stage at media events–of discussing its efforts in China. The massive effort the company is putting into China is certainly paying off: While the last two quarters have showed 75 percent year-over-year growth, Apple more than doubled its China revenue in this most recent quarter, compared to the same quarter a year ago. Apple isn’t just growing in China, its growth is accelerating.

With the Chinese stock market and economy being called into question in recent days, it was interesting to hear Cook defend the market to financial analysts. He made it clear that Apple believes China will ultimately be Apple’s largest market. (It’s already surpassed Europe in total revenue.)

Tim Cook on Apple Watch Sales 

From Serenity Caldwell’s transcript of Tim Cook’s remarks on Apple’s quarterly analyst call:

Sales of the Watch did exceed our expectations and they did so despite supply still trailing demand at the end of the quarter.

And to give you a little additional insight, through the end of the quarter, in fact, the Apple Watch sell-through was higher than the comparable launch periods of the original iPhone or the original iPad. And we were able to do that with having only 680 points of sale. And as you probably know, as I had reviewed earlier, the online sales were so great at the beginning we were not able to seed inventory to our stores until mid-June. And so those points of sale, pretty much, the overwhelming majority of the low numbers of sales were not there until the last two weeks of the quarter.

Later:

On the Watch, our June sales were higher than April or May. I realize that’s very different than some of what’s being written, but June sales were the highest. The Watch had a more of a back-ended kind of skewing.

So, either Tim Cook is lying and committed securities fraud, or, those reports about Apple Watch sales “plunging” — all of them based on that one report from Slice Intelligence — were a pile of crap. It will take years to judge the overall success of Apple Watch, but it seems pretty clear it’s gotten off to a good start.

Luca Maestri: Apple Watch Revenue ‘Well Over’ $952 Million 

The AP:

Some analysts noted that Apple reported $2.6 billion in revenue from the company’s “Other Products” segment, which includes the watch. That’s about $952 million more than the previous quarter, when the watch had not yet gone on sale, or significantly less than the $1.8 billion in watch sales that analysts surveyed by FactSet were expecting.

But Chief Financial Officer Luca Maestri told The Associated Press that revenue from the watch amounted to “well over” that $952 million increase. He said the watch sales were offset by declining revenue from iPods and accessories, which are also lumped into that segment.

As Dan Seifert tweeted (one and two), this means Apple Watch already generates more revenue than Microsoft Surface — which was up 117 percent:

While the company’s stumbles in smartphones have shown the bruising downsides of the hardware business for Microsoft, it had success with other devices, including its Surface tablet, the revenue from which grew 117 percent, to $888 million. Revenue from its Xbox game business rose 27 percent. In total, Microsoft said it had nearly $2 billion in computing and gaming hardware revenue in the quarter.

Apple Reports Record Third Quarter Results 

Apple PR:

The Company posted quarterly revenue of $49.6 billion and quarterly net profit of $10.7 billion, or $1.85 per diluted share. These results compare to revenue of $37.4 billion and net profit of $7.7 billion, or $1.28 per diluted share, in the year-ago quarter. Gross margin was 39.7 percent compared to 39.4 percent in the year-ago quarter. International sales accounted for 64 percent of the quarter’s revenue.

The growth was fueled by record third quarter sales of iPhone and Mac, all-time record revenue from services and the successful launch of Apple Watch.

Apple shares are, of course, way down in after-hours trading, because after-hours traders start drinking as soon as the markets close.

Beleaguered Microsoft Reports $2.1 Billion Quarterly Loss 

Dan Seifert, reporting for The Verge:

Microsoft today reported its earnings for the fourth quarter of its 2015 fiscal year and unsurprisingly, the massive $7.6 billion write down for its Nokia purchase last year tanked any chances of it turning a profit. The write down pushed Microsoft’s losses to $2.1 billion for the quarter. Excluding the write down and related charges, Microsoft’s other businesses earned a profit of $6.4 billion on $22.2 billion in revenue.

$7.6 billion write-off, no big deal.

$1 billion Xbox writeoff, no big deal.

$900 million write-off for Surface RT, no big deal.

$6.2 billion write-off for Aquantive, no big deal.

Web Design: The First 100 Years 

Maciej Ceglowski:

So the world of the near future is one of power constrained devices in a bandwidth-constrained environment. It’s very different from the recent past, where hardware performance went up like clockwork, with more storage and faster CPUs every year.

And as designers, you should be jumping up and down with relief, because hard constraints are the midwife to good design. The past couple of decades have left us with what I call an exponential hangover.

Josh Topolsky on Leaving Bloomberg 

Josh Topolsky:

The reality in media right now is that there is an enormous amount of noise. There are countless outlets (both old and new) vying for your attention, desperate not just to capture some audience, but all the audience. And in doing that, it feels like there’s a tremendous watering down of the quality and uniqueness of what is being made. Everything looks the same, reads the same, and seems to be competing for the same eyeballs. In both execution and content, I find myself increasingly frustrated with the rat race for maximum audience at any expense. It’s cynical and it’s cyclical — which makes for an exhausting and frankly boring experience.

I think people want something better, something more meaningful. Something a lot less noisy.

Sounds good to me.

Why iTunes 12.2 Changed Metadata, Artwork and iCloud Status for Files in Some Users’ iTunes Libraries 

Kirk McElhearn:

Now that I understand what happened, and why it happened, I can see that the process does make sense. Apple’s goal is to ensure that all your music is accessible from all your devices. Mine is certainly an edge case, but, judging from the number of emails I’ve received, and comments to articles on this website, there are plenty other people in the same boat as me. (Though that’s an infinitesimal number compared to the total iTunes user base.)

See also, Apple’s tech support document: “If Some Songs That Were Previously Matched by iTunes Match Show Up as Apple Music Songs in iTunes”.

Perspective on Apple Watch Sales 

We don’t yet know what Apple will reveal regarding Apple Watch sales in its quarterly finance numbers later today (and remember, Tim Cook said all the way back in October that Apple will not reveal Apple Watch sales figures, for competitive reasons), but in the meantime, Mike Wehner provides some useful perspective, by looking back at early sales numbers for the iPod, iPhone, and iPad.