Lawsuit Accuses Google of Paying Apple to Not Launch a Search Engine
I can’t say whether a lawsuit is crazy. That’s for a judge and jury to decide. I can say when one sounds crazy to me, though, and here comes a crazy sounding suit right now.
MacDailyNews says the California Crane School is suing Apple and Google because Google is paying Apple to not launch a search engine. That, the suit argues, is a violation of U.S. antitrust laws. In fairness, I think it would be if that were the case. However, the suit indicates that the scheme between the two companies was hatched up in “regular secret meetings between the executives of both companies…”
What’s the supposed damage? The piece says the complaint “alleges that advertising rates are higher than rates would be in a competitive system.” They don’t want a lot - just for any deals between Apple and Google to be shut down and for both companies to be broken up into much smaller companies.
If you’re wondering, by the way, California Crane School is exactly what it sounds like. It teaches people to operate cranes.
Sorry. If you thought it was about the birds or stationery, then no. It’s not exactly what it sounds like.
Apple TV+ Orders Limited Series on Hunt for John Wilkes Booth
Source: Apple
Ripped from today’s headlines (160 years ago) Apple TV+ has inked a deal for a limited, true crime series. The Cupertino-streamer issued a press release Wednesday, announcing an order for “Manhunt,” based on a book about the days following the assassination of Abraham Lincoln. “Part historical fiction, part conspiracy thriller,” the release says:
…“Manhunt” will take audiences into the aftermath of the first American presidential assassination and the fight to preserve and protect the ideals that were the foundation of Lincoln’s Reconstruction plans — issues that reverberate into the present day.
Based on the James Swanson book “Manhunt: The 12-Day Chase for Lincoln's Killer,” the series will star Tobias Menzies (“The Crown,” “Rome,” “Game of Thrones”), with creator Monica Beletsky (“Fargo,” “Leftovers,” “Friday Night Lights”), serving as writer, producer, showrunner, and executive producer.
“Fraggle Rock: Back to the Rock” Premiers Friday 21 January on Apple TV+
Source: Apple
After what’s felt like a very long wait, we finally know when audiences can head back to “Fraggle Rock.” Apple TV+ issued a press release Wednesday announcing a premier date for “Fraggle Rock: Back to the Rock.” According to the release:
Jim Henson’s fun-loving and musical Fraggles — Gobo, Red, Boober, Mokey, Wembley, Uncle Traveling Matt — alongside new Fraggles and Doozers voiced by special guests stars Patti LaBelle, Cynthia Erivo, Daveed Diggs, Ed Helms, Kenan Thompson, as well as an appearance by Foo Fighters, kick off the new year by embarking on epic, hilarious adventures about the magic that happens when we celebrate and care for our interconnected world.
That was one sentence.
All 13 episodes will premier in a little over two-weeks. “Fraggle Rock: Back to the Rock” hits Apple TV+ on Friday 21 January. Between now and then, you can catch a trailer for the show below.
Apple Splitting (PRODUCT)RED Proceeds Between COVID and HIV Fights
Source: Apple/(PRODUCT)RED Video
Apple and (PRODUCT)RED are marking 15-years of cooperation. Apple Insider highlights a video from the combined organizations, as well as an announcement from Apple. “In fifteen years,” the piece says, “Apple has raised nearly $270 million through the sales of (PRODUCT)RED devices and accessories.” The video marking the milestone:
…informs viewers that while COVID threatens the progress made in the fight against HIV/AIDS, Apple (PRODUCT)RED products and experiences will help fight two pandemics.
According to Apple:
From now until December 31, 2022, half of those proceeds will go to the Global Fund's COVID-19 Response to mitigate the impact of COVID-19 on the fight to end AIDS. This will provide critical support to health systems most threatened by the outbreak, and, in turn, help preserve lifesaving HIV/AIDS programs in communities most in need in sub-Saharan Africa.
The video is about a minute long. It’s inspiring. And it can be seen now below.
Apple Sets Q1FY2022 Earnings for 27 January
The financial minded among you have a date to circle. On Tuesday, Apple updated its Investor page with the date and time of its December-quarter earnings call. The date is Thursday 27 January. The time is 2PM Pacific/5PM Eastern.
Apple did not offer guidance for the quarter on the last call, though it did offer color. Apple set records for the September-quarter despite supply constraints that executives said cost Apple about $6 billion in revenue. They also said on that call that such constraints would be larger in the December-quarter.
Despite that harder squeeze, Apple said on the last call that it still expected to achieve “very solid year-over-year revenue growth, and to set a new revenue record for the December-quarter.” The company also expected revenue for each category to beat revenue for the same quarter a year earlier - iPad not included. Revenue for iPad was (and is) expected to decline due to supply constraints. Growth for Services was predicted to decelerate, though Apple CFO Luca Maestri said the category was expected to remain strong.
A piece from MacRumors lists some of Apple’s key contributors for the holiday-quarter. The first-quarter of fiscal year 2022 will mark the first full-quarter of sales for the iPhone 13 line. It’ll also include the earliest sales of MacBook Pros with Apple Silicon M1 Pro and M1 Max processors. Series 3 AirPods will figure in. We heard about their contribution earlier this week from TF International analyst Ming-Chi Kuo.
How Does One Keep Up?
Earnings come in two parts - first there’s the release of data, then there’s the call between Apple execs and financial folks about a half-an-hour later. Numbers are released on Apple’s site after the close of trading - roughly 1:30 Pacific/4:30 Eastern. Then the call kicks off at 2PM/5PM as stated earlier.
You can stream it as it happens on Apple’s Investor site. The company will make it available as a podcast soon after. Twitters will tweet. Bloggers will Blog. I’ll cover highlights here the day after the call. And if you missed any of that, fear not. You’ll hear it a lot between now and the 27th.
Evercore Analyst Sees Single-Digit App Store Growth for December-Quarter
At least one analyst is seeing the slowdown in Services growth anticipated by Apple’s CFO. Philip Elmer-DeWitt’s Apple 3.0 ran part of a note from Evercore analyst Amit Daryanani on Tuesday. That note notes a notable slowdown for growth in the App Store. Quoting his note:
App Store revenue slowed once again with the growth rate falling to 9%, which makes December the first month of single digit App Store growth (over the last 10 years).
While the slowdown was expected, he and his figured growth would drop to between 10% and 15%, not 9%. Still, the analyst says his team is comfortable with its forecast of 18% y/y services growth for the December-quarter.
Such a slowdown is the kind of thing that could freak investors out. Daryanani is aware of that and seems set on trying to stop it. Quoting his note again:
We would caution investors against reading too much into a single month and it is important to note that App Store revenue was still up 20% for the year. This is consistent with our view that Apple’s Services business can maintain high teens growth over the next 3-5 years.
On the upside, the analyst thinks “near term momentum [for Apple] will be driven by improving supply that could unleash upside to iPhone expectations in Dec & March-qtrs.”
Daryanani has an “Outperform” rating on Apple shares. His price target on the shares is $180.
A Few Guesses Ventured from Loup Ventures
Spurred by Apple touching a market valuation of $3T on Monday, Loup Ventures has posted a video to its YouTube channel, reminiscing on Apple’s past and considering the year ahead.
Loup Ventures principal Gene Munster ropes in team members Andrew Murphy and Doug Clinton for the discussion. Murphy and Munster see the big surprise for Apple this year being the Mixed Reality headset they and others expect the company to introduce.
Upon hearing that, my initial thought was, “how could that be a surprise?” Then I remembered all of the people who buy iPhones in August of a given year, apparently oblivious to new iPhones on the way in 60-days or less. While we don’t know everything about Apple’s mixed reality whatzit, it would be hard to call its announcement a surprise, pretty much from now on. Then again, Munster & Co. point out that even though everyone knew Apple was about to announce an iPhone in 2007, it was still surprising when Apple actually did it, while the device itself was full of surprises.
For his part, Mr. Clinton says the big surprise for 2022 will be intensifying talk of Apple Car. He’s not looking for Apple to actually announce the car, he just thinks rumors will get hotter and heavier. I do not see on what planet that could be a surprise.
As for the fate of Apple shares, the Loup Ventures site says:
Shares of AAPL will continue to move higher with a $250 price target based on 2022 investor euphoria, in anticipation for two new product categories (metaverse and autonomy) that should increase the multiple on AAPL.
I’m back to wondering whether they know what “surprise” means.
I will say, while I’ve been following Mr. Munster for years, that following has mostly been reading what he’s written. Seeing him in conversation on Loup TV was interesting. He tells a story about iPod’s “halo effect” in action. He also pokes fun at himself for his years-long belief that Apple was going to release a television. No, he does not still believe that, but he asks Tim Cook for one anyway. That part’s funny. It’s a short discussion - about 12-minutes total. You can check it out below.
Ming-Chi Kuo: Apple’s MR Headset to See Limited Availability in Late 2022
Munster & Co. aren’t the only ones expecting mixed reality madness in 2022. TF International analyst Ming-Chi Kuo was calling for an AR/VR headset this year for much of last year. Not surprisingly, he’s still there.
9 to 5 Mac has Young MC reiterating his belief in a mixed reality headset from Apple by late 2022. He’s not expecting many of them, though. “According to the analyst,” according to the report:
…more significant shipments of the product won’t begin until the first quarter of 2023, suggesting that the headset will arrive in stores with only a few units available for customers.
Remember that tingly feeling you got ahead of iPhone? That sense, almost, of inevitability? I’m getting that again, in ways I didn’t ahead of iPad. I don’t know that my expectations will be anything like reasonable until we finally get an announcement from Apple. Hopefully we’ll get the same “how could we be surprised” surprise that Mr. Munster got off the iPhone. And hopefully we’ll get that this year.
Shazam/Apple Music Predict/Promote Top Listens of 2022
Shazam thinks it knows what songs you’ll be asking about this year. MacRumors says the Apple-owned music recognition service has shared its Shazam Predictions 2022 playlist - surprisingly (not really) on Apple Music. The report says the playlist “offers songs from 50 artists ‘poised to have a breakthrough year.’” According to MacRumors:
Data was calculated through Shazam's predictive algorithms, and the tracks included were hand-selected by the Apple Music global editorial team. The songs show indicators of future growth, including early and consistent Shazam activity and discovery in more than one country.
I know I’m a cynical so-and-so, but can it really be called a “prediction” if you’re putting your thumb on the scale?
In addition to the 50 tracks, MacRumors says Apple has “highlighted the top five musicians that are considered ‘artists to watch.’” They include Nigeria’s Ayra Starr, Mexican American singer DannyLux, Lyn Lapid out of Maryland in the U.S, Sad Night Dynamite out of Somerset, England, and the K-pop girl group STAYC out of South Korea.
Report: Apple In Pole Position on Brad Pitt Formula One Drama
Apple TV+ appears to be in the lead in acquiring a sought after Formula One racing film. A piece from Deadline says the Cupertino-streamer “is in exclusive negotiations” for the film to be produced by Top Gun’s Jerry Bruckheimer, directed by Top Gun: Maverick’s Joseph Kosinski, and starring Brad Pitt - who I’m pretty sure has nothing to do with Top Gun. Still, he’s kind of a big deal.
According to Deadline, Pitt will play:
…a racer who comes out of retirement to mentor a younger driver and take his final stab at glory on the track as the younger driver’s teammate.
Sounds a lot like Days of Thunder, a movie about NASCAR which starred Tom Cruise who - funny enough - is in Top Gun and Top Gun: Maverick. Days of Thunder was also produced by Jerry Bruckheimer. Will wonders never cease?
If the deal goes through, it’ll be the second film for Pitt at Apple. Deadline says:
…Apple acquired an untitled film that Spider-Man director Jon Watts will direct, with Pitt and George Clooney starring as two lone wolf “fixers” assigned to the same job.
George Clooney, by the way, not in the Top Gun universe.
Desperately Seeking Joséphine
Shakeup in the Bonaparte house. A report from Deadline says Jodie Comer has dropped out of the Apple TV+ film Kitbag. Directed by Ridley Scott and starring Joaquin Phoenix, the piece says Kitbag:
…is billed as an epic drama examining [Napoleon] Bonaparte’s origins and his swift, ruthless climb to emperor, viewed through the prism of his addictive and often volatile relationship with his one true love.
Comer was meant to play that love - Napoleon’s wife Joséphine. She’s now bagged on the role, “citing Covid-related scheduling issues,” according to the report. Apple is said to be in “advanced negotiations” with a replacement. A separate piece from Deadline says Pieces of a Woman’s Vanessa Kirby is being sought for the role. Whoever it is, a deal needs to happen soon. Back in November, director Scott said production on Kitbag was set to start on 15 January.
Tom’s Guide: Breaking Up is Easy with Apple TV+
Philip Michaels over at Tom’s Guide has reviewed Apple TV+. Not the shows on the Cupertino-streamer, but the streaming service itself, and there is one thing that he really, really likes.
Is it the low price? Is it the quality content? Is it “Ted Lasso?”
None of the above. It’s how easy the service is to cancel. In his review, Michaels writes, “I think what I appreciate most about Apple TV Plus is how easy Apple makes it to leave the service behind.”
That's not a backhanded compliment. Apple is surprisingly upfront about when your Apple TV Plus subscription is about to auto-renew and gives you enough advance warning to do something about it. It's a practice I wish other subscription services —including the best streaming services — would take note of.
Okay, that last part did sound backhanded. The rest of it really is praise, though. Quoting Michaels again:
It's a remarkably canny move on Apple's part. Instead of luring someone in with a free trial and hoping that they don't bother to check a calendar, Apple makes it very clear that your trial's about to end, even if it means losing out on recurring revenue. That helps build trust and goodwill, not just for Apple TV Plus but for the many other services Apple offers. And that more than makes up for any of the cancelled subscriptions Apple will have to strike out of the books because of those email reminders.
Also, he says he does like “Ted Lasso.” Michaels figures he will re-up when season three is out.
Apple Market Value Hits $3T
The first day of trading for 2022 was the day. While a piece from TechCrunch says there’s a bit of quibbling, just about every financial and tech site seems to agree that Monday 3 January 2022 was the day that Apple became the first publicly traded company with a market value of $3 trillion.
The quibbling, by the way, is between some who say Apple crested $3T while others say shares stalled at $2.99T. Doesn’t sound like a lot until one remembers (as TechCrunch pointed out) that the difference between those two amounts is $10 billion.
Assuming the $3T number, TechCrunch puts it in context. Less than five-years ago (May 2017), CrunchBase pointed out that Alphabet, Amazon, Apple, Facebook, and Microsoft together were approaching a combined market cap of $3T. Now, Apple’s there by itself. CNET goes a bit more global in its contextualization, saying:
At $3 trillion, Apple's value is greater than the annual economic output of the United Kingdom, France, India or Italy, according to data collected by the World Bank. Only Germany, Japan, China and the US are larger.
What changed? Probably more things than we can count, though the TechCrunch piece gives a lot of credit to COVID-19. “The pandemic revalued tech companies,” according to the report, “giving them far more value per dollar of revenue than before.”
And?
Mike Wuerthele at Apple Insider had an interesting editorial on the milestone. That came under the headline, “Apple's $3 trillion valuation is the least interesting news about the company.”
If you’ll pardon my two-cents… eh. I mean, he’s not wrong when he says news of the $3 trillion in valuation “is far less important and notable than what the company has in mind for the future — and how it gets it done.” At the same time, the $3T is indicative of sentiment around Apple. It’s indicative of investor belief in “what the company has in mind for the future,” which theoretically helps fund “how it gets it done.” Still, props to him for his Jed Bartlet-esque, “What’s next?”
What’s next, by the way, are VR, AR, and Apple Car, in his estimation. The way Wuerthele sees it, “the $3 trillion valuation has no impact on what [Apple] plans on doing, or on the road map that it set years ago.”
And now, the punchline: Apple’s current market valuation is not $3T - no quibbling about it.
Apple Shares Start 2022 with New Intraday and Closing Highs
Source: Apple Stocks App
While Apple made history on Monday by being the first company with a $3T valuation, it could not hold that mark. According to CNET:
Around 10:45 a.m. on Monday, Jan. 3, Apple stock hit $182.86 per share, which when multiplied by the 16.4 billion shares outstanding, values Apple at about $3 trillion.
$182.86 was the magic price. Apple hit that. Apple passed that. Then shares retreated a tiny bit. That said, it was a record day all around. MacDailyNews says shares in the Cupertino-company hit new intraday and closing highs on the first trading day of the year. They got as high as $182.88 before giving back almost a buck. Shares ended the day at $182.02, leaving Apple with a market value of $2.986 trillion.
Ming-Chi Kuo: Apple Sold 90 Million Pairs of AirPods Last Quarter
Source: Apple
It seems to have been a hoppin’ holiday season for AirPods. CNBC has a new guesstimate from TF International analyst Ming-Chi Kuo. According to Young MC, Apple sold 90-million pairs of AirPods during the December-quarter. The way he sees it, sales last quarter “will translate to 20% year-over-year revenue growth [for] Apple’s wearable gadget business,” according to CNBC.
The analyst says 27-million of the 90-million pairs of AirPods were the newest version of the entry-level earbuds - AirPods Series 3, introduced last fall. Outside of that, he did not break out sales of individual models. That gives him something in common with the Cupertino-company. CNBC points out that “Apple doesn’t break out its wearables revenue,” lumping them instead in its “Other Products” line item. That said, Apple’s “Other Products” took in close to $13 billion revenue in the December-quarter of 2020, making that a number to watch.
Wedbush All About iPhone 13 Sales and Apple Services
Source: Apple
Bigger than sales of AirPods, literally and figuratively, are sales of iPhone. MacRumors has had a look a note from Wedbush analyst Daniel Ives. He says Apple sold over 40-million phones from the iPhone 13 line last quarter. If those numbers hold, that would put sales in record territory despite problems in the supply chain. That said, Ives thinks Apple could have sold more iPhones if it had had more iPhones to sell. Quoting his note:
Based on our supply chain checks over the last few weeks, we believe demand is outstripping supply for Apple by roughly 12 million units in the December quarter which now will add to the tailwinds for Cupertino in the March and June quarters as the supply chain issues ease in 1H22.
What a Difference a Day Makes
Ives issued his note on Sunday, just hours before Apple’s $3T milestone. As he has for some time, he predicted Apple hitting that mark soon - thanks to both hardware and Services. Apple 3.0 posted more of his note. Quoting that again:
The linchpin to Apple’s valuation re-rating remains its Services business which we believe is worth $1.5 trillion in the eyes of the Street, coupled by its flagship hardware ecosystem which is in the midst of its strongest product cycle in over a decade led by iPhone 13.
Ives thinks Apple’s Services will pass $100 billion in annual revenue by 2024, according to his note. As for the $3T milestone, Ives argued:
Hitting $3 trillion will be another watershed moment for Apple as the company continues to prove the doubters wrong with the renaissance of growth story playing out in Cupertino.
Ives has an “Outperform” rating on Apple shares. His price target on the shares is $200.
Apple Turns Landing Page Over to Fitness+ and Apple Watch Promotion
Source: Apple
Seeming to prove Wedbush analyst Daniel Ives right, Apple stared the year pushing one of its services, alongside a piece of hardware with which it is paired. 9 to 5 Mac says Apple on Monday turned over its landing page to a promotion for Fitness+ and Apple Watch. “When you access apple.com," says the piece:
…you’ll watch a short video with Apple Fitness+ trainers working out. Different from what customers are used to, there are no references about new iPhones, Apple Watch, AirPods, Mac, or even the holidays gifts.
When the video’s done, Apple posts the message:
11 workout types, everything from HIIT to Yoga. New workouts and meditations every week. All powered by Apple Watch.
I wonder what they’re trying to say… Actually, the piece says:
…the company says users can get up to three months of trial whether they buy a new Apple Watch. For Fitness+ users, Apple also notified them about 25 new workouts available within the Fitness app for this New Year.
Dutch Regulators Demand App Store In-App Payment Changes by Mid-January
New year, same old issues for Apple and the App Store. Apple Insider ran a piece a couple of weeks back, outlining changes demanded of the App Store in the Netherlands. According to the report:
Authorities in the country have been investigating Apple's App Store since 2019 on allegations that the company abuses its dominance in the marketplace. In a decision unsealed on Friday (24 December), but made in October, Dutch regulators ruled that Apple's requirement that developers use its in-app payment system was anti-competitive.
And now, Apple has to change it. A piece from 9 to 5 Mac indicates that Apple will be required to let developers employ payment systems besides Apple’s in their applications - provided their applications are dating apps. According to 9 to 5 Mac, “the demand seems to be focused on dating apps like Tinder for some reason.” According to a statement from Dutch regulators:
Dating-app providers are currently not able to choose freely a payment system for purchases made in their dating apps by consumers. [suspended] If Apple does not adjust the unreasonable conditions within two months, it will have to pay a periodic penalty of 5 million euros per week up to a maximum of 50 million euros. In this way, [the regulator] seeks to improve the situation for app providers regarding Apple’s unreasonable conditions.
The Apple Insider piece says Dutch authorities expect the changes to be made by 15 January. No word yet on Apple’s plans.
WSJ: Chip Shortage to Last Thanks to Worker Shortage
Source: Apple
When will the world move beyond the current chip shortage? No time soon, according to a piece from the Wall Street Journal. While a lack of fabs is one issue, a bigger issue may be a lack of people to run them. 9 to 5 Mac highlights the Journal report. According to that:
New chip-making facilities, known as fabrication plants, or “fabs,” require thousands of college-educated engineers to operate. Technicians oversee and manage the manufacturing process, while researchers help innovate new types of chips and ways of making them.
The piece has the dean of National Taiwan University’s College of Electrical Engineering and Computer Science saying, “The talent shortage problem has become even more severe, mainly because of the increase in demand.” They go on to say that they’re “not optimistic that we can totally resolve this problem.”
And it’s a big problem. And it’s growing. The piece says:
An August report from [a] recruiting platform estimated that the average monthly shortfall in semiconductor workers was about 27,700 employees, up 44% from the previous year.
And that’s before the fabs being built to catch up with demand even come online. Where are the future fab workers of the world? Probably looking to do something cooler. The piece indicates that it’s hard to attract software engineers to chipmaking, “as the role is very much a behind-the-scenes one, with no ability to point to a finished product in the way a consumer app developer can.” According to the Journal:
Santosh Kurinec, a professor at the Rochester Institute of Technology, said the number of students enrolled in the school’s undergraduate electrical-engineering program has dwindled steadily, from about 50 in the mid-1980s to about 10 now. “Some want to go make an app for Google and Facebook and others,” she said.
Report: Apple Doles Out Restricted Stock to Keep Certain Employees Around
While competition is fierce for fab workers worldwide, Silicon Valley is as cutthroat as ever. To keep peeps from jumping ship, Apple’s said to be handing out stock. A piece last week from MacRumors had the Cupertino-company giving some engineers as much as $180,000 in restricted stock, provided they stick around. Citing a Bloomberg report, the piece says:
…select engineers in silicon design, hardware, software, and operations were informed that they would be receiving a $50,000 to $180,000 stock bonus, which Bloomberg says is "unusual and significant.”
Quoting Bloomberg:
The payouts aren't part of normal Apple compensation packages, which include a base salary, stock units and a cash bonus. Apple sometimes awards additional cash bonuses to employees, but the size of the latest stock grants were atypical and surprisingly timed, the people said. They were given to about 10% to 20% of engineers in applicable divisions.
Which you know has to really please the 80% to 90% who got to read about it in Bloomberg. The awards are “set to vest over the course of four years,” according to the report, “provided the employees stay with Apple and do not take jobs at other companies.”