This is Tim: Apple’s CEO on iPad sales, China, Beats, IBM, and more

A (very lightly) edited transcript of Tim Cook’s comments from Apple’s Q3 earnings call:

Highlights of the June quarter

It’s been a very busy and exciting time at Apple, and I’d like to review some of the highlights of our June quarter. We hosted our best-ever Worldwide Developers Conference last month, with over 20 million people from around the world watching our keynote session, which is a new record. We’ve had overwhelming response from customers and developers to the new features we previewed in OS X Yosemite and iOS 8. Yosemite has been redesigned with a fresh look and powerful new apps, and iOS 8 is the biggest release since the launch of the App Store. With powerful Continuity features, these upcoming releases will allow Macs and iOS devices to work together in even smarter ways. Customers can start an activity like writing an email on one device and pass it to another, picking up where they left off without missing a beat. They’ll even be able to make and receive iPhone calls on their Mac with just a click. These are features that only Apple can deliver.

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iOS 8 and OS X Yosemite May Launch Separately Despite Integration Features

While iOS and Mac OS X have traditionally followed different release schedules, Apple’s recently announced Continuity features suggested it was possible for Apple’s two operating systems to debut at the same time. However, Apple is planning to stagger the releases of both iOS 8 and Mac OS X Yosemite, reports 9to5Mac, citing sources with knowledge of Apple’s plans.

continuity
iOS 8 is expected to launch in September alongside the iPhone 6 while OS X Yosemite will not launch until October. Apple used the same release schedule last year, launching iOS 7 alongside the iPhone 5s in September and OS X Mavericks one month later in October.

Continuity allows users to work seamlessly between iPhone, iPad and Mac, with the ability to start emails on one device and easily finish it on another, or using Macs and iPads to answer phone calls and “green bubble” text messages. Because iOS and OS X have never been designed to work better together than with iOS 8 and OS X Yosemite, many saw a dual release as a good opportunity for Apple to cross-promote both its iOS devices and Macs with a stand-out new feature like Continuity.

Apple is planning on using engineering and user interface design members from the iOS team to help complete OS X Yosemite in time for a fall release, with a public beta planned as early as later this month.



Five takeaways from the Apple earnings call

Apple reported its quarterly numbers on Tuesday, a mixed bag that saw profits rise up but sales fall short of the mark. Here are five takeaways from the earnings call that followed.

Apple’s pouring more money into R&D

Apple has spent US$3.3 billion in the past nine months on research and development. That’s 3.1 percent of revenue, putting it on course to beat its R&D spending for the past several years. The last time spending reached that level was 2009, and it could still go higher yet. In the April-to-June quarter, R&D spending was 4.3 percent of revenue, a level not reached since before the iPhone launch. What’s driving the spending? Only Apple knows, but a good guess would be the iPhone, which will reportedly soon see a major overhaul, and Apple’s much-rumored wearable. It’s worth noting, however, that Apple’s R&D spending is lower as a percentage of revenue than many of Silicon Valley’s big enterprise tech firms.

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AT&T, Apple Begin Paying $40 to U.S. iPad 3G Purchasers After Unlimited Data Lawsuit [iOS Blog]

AT&T and Apple have begun sending out payments to consumers in the United States who purchased an original iPad 3G, following the culmination of a long-running class action lawsuit over unlimited data.

Originally settled in September of 2013, the lawsuit covered a $29.99 no-contract unlimited data plan that Apple and AT&T offered with the original iPad — a deal that Steve Jobs advertised on stage when the tablet was revealed in January of 2010.

In June of 2010, AT&T stopped offering the plan and replaced it with a 2GB for $25/month plan. AT&T did grandfather in users who had an unlimited plan prior to June 2010, but the company also began throttling unlimited users in October of 2011.

The class action lawsuit accused Apple and AT&T of using bait-and-switch tactics, selling iPads that advertised unlimited data without actually providing unlimited data. The lawsuits also suggested that without the prospect of an unlimited data plan, consumers had overpaid for their tablets. Apple and AT&T’s settlement, which called for the companies to send out $40 checks to all affected customers, was finalized in February. As noted by 9to5Mac, checks are now arriving to customers.

settlementcheck

Enclosed is a check in the amount of $40.00 representing your settlement in the award of Apple & AT&T iPad Unlimited Data Plan Litigation. The amount of your settlement award has been calculated pursuant to the terms of the Settlement that was approved by the court. Pursuant to the terms of the settlement, the enclosed check must be cashed by October 16, 2014; after that date, the check will be void and will not be reissued. If you have any questions, you can contact the Settlement Administrator at 1–800–248–1504.

Under the terms of the settlement, AT&T is also required to offer customers a $20 discount on the $50/month 5GB data plan, but the deal is only available to customers who do not have another data plan with AT&T due to no-class action provisions in their contracts.



Apple Has Now Paid $20 Billion to iOS Devs, According to Quarterly Earnings Call

Apple held its quarterly earnings call today, and the report from CEO Tim Cook follows the general trend we’ve been seeing for some months now. Device sales are generally up for year-over-year, with the notable exception of the iPad (which has witnesses sales drops of 8 percent in the past 12 months). But there’s an important statistic among all these numbers—since 2008, the Cupertino giant has paid over 20 billion to its iOS developers.

Compare that figure to the $15 billion Apple reported just last January, and you’ll discover that that’s a increase of $5 billion just within the last half-year. TechCrunch, who drew attention to the figure, points out that Google reportedly paid out $5 billion over the entirety of last year. Push those numbers a few months further, and it’s suddenly apparent that Apple has paid out “nearly half” of the total $20 billion within the last 12 months along.

TechCrunch also points out that Apple’s cut of all this is approximately $8.5 billion, based on a calculation figuring in the iPhone maker’s 30 percent cut and thus bringing the total number to roughly $28.57 billion. If you weren’t already aware, in other words, it’s a good idea to focus on iOS if you design apps for mobile devices.

All total, Apple sold 35.20 million iPhones, 13.27 million iPads, 4.41 million Macs, and 2.96 million iPods during the last quarter. For the same quarter last year, Apple sold 31.24 million iPhones, 14.62 million iPads, 3.75 million Macs, and 4.57 million iPods.

Follow this article’s writer, Leif Johnson, on Twitter.

Apple Secures Patent Filed in 2011 for ‘iTime’ Smartwatch

Today Apple secured a patent for a smartwatch from the U.S. Patent and Trademark Office (No. 8,787,006), providing some of the first direct evidence that the company is, in fact, working on a piece of wearable tech for the wrist. Here’s the thing, though—the patent filing dates all the way back to 2011, meaning that whatever Apple announces in the coming months (if they do) might not look anything like what we see on the paper.

Indeed, at this point, the concept described seems rather old fashioned. Rather than an integrated device, the filing describes a unit with sensors to be worn on the wrist that can be fitted with various peripherals. That’s only found in the details, though. The basic wording is so vague that the patent could likely be interpreted as applying to smartwatches in general.

Some of the language, for instance, reads as follows: “As an electronic wristband to be worn on a wrist of a user, another embodiment of the invention can, for example, include at least a central portion and at least one band portion. The central portion can include a touch screen display, control circuitry and a battery. The touch screen display can be configured to present visual information to the user and to receive user input from the user. The control circuitry can be configured to control operation of the electronic watchband, and the battery can be configured to provide power to the electronic wristband.”

And so forth. You can read the entire lengthy document here if you have around 15 minutes to spare. It also describes gesture-based controls in place on the swipes and taps we know so well from iOS, and it already includes information about the health and fitness sensors that have been a staple of iWatch rumors almost from the beginning. And how about that name? The patent filing calls the device “iTime,” which seems like a more elegant styling for such a device than the more prosaic “iWatch.”

Be sure to check out our roundup of existing iWatch rumors here.

Follow this article’s writer, Leif Johnson, on Twitter.

Apple & AT&T begin sending $40 checks to original 3G iPad buyers

Apple and U.S.-based wireless carrier AT&T have begun sending out $40 checks to buyers of the original iPad WiFi + 3G in the United States over a “bait-and-switch” regarding the device’s data plan. The backstory is that when Steve Jobs announced the 3G iPad in January 2010, he announced a deal with AT&T for a […]