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Apple Conference Call: Steve Jobs Goes Wild
He may or may not have taken off his mock turtleneck, but Steve Jobs did make a special appearance at the fourth quarter 2010 conference call, taking questions but no prisoners, and probably saying a few things that made his subordinates wince. It was indeed wild.

Jobs began the Apple earnings conference call today by going on a tear against two of his biggest competitors, Google and RIM. Apple “handily beat RIM,” with 14.1 million iPhones sold last quarter, versus 12.1 million BlackBerry devices, and Jobs doesn’t “see them catching up.” According to Jobs, RIM must move from its “comfort zone” of the enterprise, and woo both the average consumer and developers, and it will be a “challenge.”

Regarding Google, Jobs once again challenged the search giant on Android sales data. Not only did he question the reliability of Google’s claim of activating 200,000 Android devices a day, but he also countered that in the last 30 days Apple was selling an average of 275,000 iOS devices, with a peak of 300,000.

Fragmented vs. Integrated Platforms

In terms of platform philosophy, Jobs went after Google for calling Android open and iOS closed, arguing the difference was between a fragmented and an integrated approach. He complained about “proprietary interfaces” added by companies like Motorola and HTC.

He contrasted iOS as a development platform with only two versions, with Android which has more than 100 on more than 200 handsets. Jobs contends that customers and developers want devices that “just work,” and he’s confident that his “integrated” platform will triumph over a “fragmented” one.

Quality Control

Jobs also took a shot at Nokia, saying Apple doesn’t “know how to make a great smartphone for $50.” Apple approaches product design from what’s best for the consumer, not necessarily what will sell the most, though Jobs pointed out that Apple did both with the iPod.

On tablets, Jobs adamantly defended the 10-inch form factor, arguing that a 7-inch screen just “isn’t sufficient to create great tablet apps.” According to Jobs, “10 inches is the minimum size for a great tablet,” which notably does not rule out larger displays.

Jobs further argues that competitors can’t match Apple on pricing, have zero apps for their tablets, and may end up abandoning the 7-inch model next year, leaving customers with “orphaned product.” He summed up his thoughts on the tablet platform succinctly: “We’re out to win this one.”

Apple TV

Breaking with three years of tradition on refusing to report sales of the Apple TV, Steve Jobs announced Apple has sold 250,000 since the device went on sale at the beginning of the month. If those kinds of numbers persist, it’s hard to imagine Apple not introducing an App Store for the Apple TV.

Everything Else

Another high point in Jobs’ performance: When asked about his feeling on Flash, he replied, “Flash memory? We love flash memory.”

Here are some other highlights that aren’t quite as theatrical, but are impressive nonetheless:
- Macs are more than doubling the growth of the PC industry average of 22 percent thanks to strong iMac, MacBook and MacBook Pro sales.
- Despite decreasing sales, the iPod continues to represent about 70 percent of the media player market in the U.S., and is the top-selling device internationally in most markets.
- The iPhone had a blowout quarter with more than 14.1 million units sold, up 92 percent year over year, compared to 64 percent for the industry average. It’s now available in 89 countries, and being piloted or deployed by 80 percent of Fortune 100 companies. While there’s still a “sizable backlog” of orders, supply/demand equilibrium is getting closer.
- The iPad is being met with “great enthusiasm” in 26 countries and 66 percent of Fortune 100 companies. Supply channel inventory is now 3 to 4 weeks, less than the 4 to 6 desired, but enough so that additional partners and countries can start to sell iPads.
- Sometime in September, the 125th million iOS device was sold, up from 100 million in June, meaning Apple is now tracking at 100 million iOS devices sold per year and growing.
- Retail saw nearly 75 million visitors, up from 50 million a year ago. 874,000 Macs were sold at 317 Apple Stores worldwide, “about half” to those new to the platform. The company plans to open between 40 and 50 new stores in 2011.
Finally, Apple has $50 billion in the bank, up $5 billion from last quarter. Rather than return the money to shareholders as dividends, Jobs said Apple plans to “keep our powder dry” for “one or two” possible strategic acquisitions in the future. Nintendo looks quite ripe, doesn’t it?

As conference calls go, this one was just about the best ever. Check out the audio for yourself if you don’t believe me.

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Apple TV: 250,000 Sold In Six Weeks
Apple didn’t announce the number of Apple TVs sold as part of its earnings release, but Steve Jobs was on the company’s investor call today and gave the first official numbers for how many of the brand new set-top box have seen purchased. So far, the sales are pretty good: Jobs reported that the company has sold more than 250,000 Apple TVs since the company first made the product available in early September.

Apple first announced the new Apple TV broadband set-top box on September 1, pricing it at $99 and announcing a new business model for streaming rentals of TV episodes and movie files. With the new streaming model, Apple rents TV episodes from Fox and ABC for 99 cents, compared to the $1.99 price for standard definition episode downloads and HD downloads for $2.99.

To put that into perspective: Roku reported at the beginning of this year that it had sold 500,000 of its set-top devices after about a year-and-a-half on the market, and hopes to have sold more than a million of its box by the end of the year. So Apple is tracking well ahead of other, similar devices already in the market.

That said, Apple TV is still very much a hobby when compared to the other products it makes. Apple sold 4.2 million iPads and 3.9 million Macs in the third quarter, as well as 9 million iPods and 14 million iPhones. While those products were available all quarter, compared to just the last several weeks like the Apple TV, it’s clear that it could be some time before Apple’s video set-top box becomes a significant portion of Apple’s business.

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Apple Q4 2010: Record Quarter/Year, Surprises to Come
For the fourth fiscal quarter, Apple reported revenue of $20.34 billion and a net quarterly profit of $4.31 billion, or $4.64 earnings per share. Once again, the company has broken a record set just the prior quarter, surpassing the previous record of $15.7 billion for third quarter 2010, and more than doubling the $9.87 billion earned for the year-ago quarter.

"We’re blown away to report over $20 billion in revenue and over $4 billion in after-tax earnings — both all-time records for Apple," said Steve Jobs, Apple's CEO. "iPhone sales of 14.1 million were up 91 percent year-over-year, handily beating the 12.1 million phones RIM sold in their most recent quarter. We still have a few surprises left for the remainder of this calendar year."

For those owning Apple kit instead of stock, your investment in the platform has never been safer, with record sales of Macs, iPhones and iPads. The iPad, with 4.19 million sold so far, has now definitely sold more than the combined sales of all Windows tablet and slate PCs for the entire year, and while the iPad appears to be negatively impacting netbook sales, it doesn’t appear to be cannibalizing the Mac.

Apple sold a record 3.89 million Macs in the fourth quarter, up 27 percent from 3.053 million a year ago, and more than double the seven million sold just three years ago. For FY 2010, Apple sold 13.66 million Macs, besting the sales record of 10.4 million last year.

Once again, notebook sales continue to outperform desktop sales by a wide margin. For Q4, Apple sold 2.64 million laptops and 1.24 million desktops. Expect this trend towards portability to accelerate with Apple introducing a new 11.6-inch laptop this Wednesday. Clearly, the trend is towards mobility. Could we be without an Apple consumer desktop, by say, 2015 or 2020?

Speaking of trends, if there’s any bad news in this report it’s for the iPod. Apple sold 9.05 million iPods in the fourth quarter, down from 10.2 million year over year, a drop of 11 percent. For FY 2010, Apple sold 50.31 million iPods, compared to just over 54 million sold in 2009 and 2008, and 2010 better compares to 2007, when Apple sold 51.5 million iPods.

As for fourth quarter 2010, it appears the new nano and shuffle introduced in September were not the kind of breakout hits that might have reversed the downward trend. Revenue from the higher-priced iPod touch was apparently not enough to lift overall iPod revenue. It’s possible the iPad is cannibalizing iPod sales instead of affecting the Mac’s performance.

The iPhone is clearly the iOS flagship. Fourth quarter 2010 was the best quarter ever for the iPhone, thanks to the iPhone 4. Despite being supply constrained for months, Apple sold 14.1 million iPhones, a new all-time record, and up a shocking 91 percent year-over-year. For fiscal year 2010, Apple sold just under 40 million iPhones, compared to 20.76 million in 2009. With shipping time down to 3-5 days in the U.S., supply and demand have at last reached equilibrium. No white iPhone in sight, but maybe that’s one of the surprises hinted at by Jobs.

Finally, there’s the iPad. Apple sold 4.19 million iPads in the fourth quarter, compared to 3.27 million in the third quarter, for a total of 7.46 million units in fiscal year 2010.

To put those sales in a business perspective, the iPad revenue has already surpassed the iPod, which sold approximately 10 million units and has been around for years, compared to just six months for the iPad. If this trend continues, it’s very likely that 2011 will see the iPad pass the Mac in terms of revenue.

Expect more information on the Apple numbers and products following the conference call. TheAppleBlog is listening, so you don’t have to.

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Quick Look: Consumer Reports Mobile Shopper for iPhone
Consumer Reports has a long-standing history of provider shoppers with advice about what to buy. Now, you can carry it with you on your iPhone as you shop and check products instantly. So, scanning the barcode of the iPhone 4 with its camera will (in theory) reveal CR’s high rating, and its lack of a “Buy” recommendation.

Maybe Consumer Reports’ refusal to issue that recommendation is why the app isn’t optimized for the iPhone 4′s Retina Display, though that wouldn’t make much sense, as the newest iPod touch also supports high-res graphics. Either way, I’m surprised to see a new app come to market today without Retina-optimized visuals, especially when it’s an app that costs $9.99.

Graphics aside, what really makes the Mobile Shopper app useful is its ability to tag barcodes on the fly and return product information and ratings. While it may just be that I was trying out things that weren’t well-suited to the technology, I found the barcode scanner to be hit or miss. I tested five or six products, and only video games and Amazon’s Kindles returned results. No Apple products worked.

When it did work, it was impressive. The Kindle DX included a ratings report card, with detailed information provided in an easily readable format consisting of clear icons displayed along with a legend. There’s also a review, complete with highs and lows.

Manually searching for products is only marginally more time-consuming than scanning barcodes, and much more likely to return good results. You can also view local results, and shop online, though shopping locally will kick you out to Safari. Shopping online will, too, but at least you get to see a PriceGrabber comparison chart in-app before selecting an actual retailer.

A nice feature Mobile Shopper provides is the ability to compare devices in the same category. You’ll get a chart if one is available, providing scores, price and buy recommendations. You also get access to CR buying advice, which provide tips on how to shop for different categories of products. Basically, you get access to much of the content you only get through the ConsumerReports.org website by subscribing, and for a much cheaper one-time fee of $9.99 (or $14.99 beginning Jan. 1, 2011).

In the end, though, unless you’re an avid Consumer Reports user, I can’t recommend this app. From the low-res graphics, to the poorly designed user interface, to the sporadically effective barcode scanning, it just seems like an amateurish offering. Which is too bad, because the content is there.

Maybe if we see an update that brings the app in line with the type of quality we’ve come to expect from developers these days, especially when affiliated with an organization like consumer reports attached, I’ll have a change of heart, but until then, doing comparison shopping the old-fashioned way (via Google in mobile Safari) is not only easier, but also easier on the eyes.
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A Call for Sanity: Are 300,000 Apps Too Many?

Some sources report that there are now 300,000 apps available for iOS devices. Whether or not the number is actually there yet, it will be soon, and that’s an impressive feat for Apple. But is it the best thing for Apple consumers and iOS developers?

Granted, it’s an amazing rate of growth, especially considering that Apple announced the 250,000 app milestone only recently. It shows that despite the rising influence of Android, developers still like Apple’s platform best, if only because its ability to make money stands on much more solid ground.

Too Much Choice

While I appreciate the wealth of choice offered by the App Store, I do think these library size milestones are getting slightly out of hand. 300,000? What does that level of selection even mean to the average consumer? At this point, the number has everything to do with impressing stockholders, and very little to do with pleasing consumers and/or developers.

I propose Apple do something shocking: Now that they’ve reached a library size that its closest competitors could only dream of, why not go about significantly reducing that number? The App Store already has a reputation as a walled garden, so why not turn that reputation into a positive?

Real Gatekeeping

As it stands, Apple’s nebulous guidelines regarding App Store content basically ensure its legal interests are covered, developers don’t expand the capabilities of an iOS device beyond what Apple intends, and no objectionable content makes it through the gate. Apple has run up against criticism for what some have seen as rejections designed to either stifle expression or prevent people from gaining access to device features Cupertino reserves for its own use.

How much better would it be, for both the development community and consumers alike, if instead, Apple wielded its executive power to enforce a high standard of quality instead? A much smaller library would make the App Store more competitive, encourage more innovative design, and result in higher profits for the apps that did make it through. Good apps wouldn’t be lost amid a sea of questionable content.

Better Tend a Smaller Garden

I’m a fan of choice, but at this point in the game, Apple has the luxury of being able to enforce restrictions that would make the choosing that much sweeter. As it stands, there’s nothing stopping developers from releasing countless carbon copies of a poor quality app with minor cosmetic changes (and not for the better). That’s the kind of choice I don’t want.

Apple, celebrate the 300,000 app milestone by freezing or even decreasing that number. Take your curation duties seriously, and differentiate the App Store by making it the software market of quality, since the Android Market, being open, will probably catch up volume-wise soon enough anyway. Good developers will thank you, and so will consumers.

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What Wine Goes Best With the Future of Ping?
A tipster speaking to the Los Angeles Times says Steve Jobs and Mark Zuckerberg, two of the most influential figures in the tech scene, got together for dinner at Steve’s place two weeks ago. No word on what they ate, but Apple’s fledgling music social network Ping was definitely on the menu.

The source spotted the two walking and talking together in Palo Alto, Calif., where Steve Jobs has a home. Jobs must have reached out to Zuckerberg, who is now worth more than him, to see what could be done about mending the bridges between Facebook and Ping, which apparently suffered major structural damage near Ping’s launch with the release of iTunes 10.

To recap, Apple was in talks with Facebook 18 months prior to the launch of Ping, trying to arrive at agreeable terms for a partnership between the two. Building in a user’s Facebook friends list would’ve meant Ping already had a user base out of the gate. As it is, building a Ping network means starting from scratch, something I just can’t be bothered to do at this point.

Negotiations broke down because Apple found Facebook’s terms to be too bitter a pill to swallow. No doubt Facebook wanted a share of iTunes’ considerable revenue in return for its participation, something Jobs probably couldn’t tolerate. Apple instead tried to just use Facebook Connect, which is available to all through the network’s API, but Facebook shut it down since the usage didn’t comply with its terms.

Fast forward to now. Ping, at launch, apparently attracted 1 million subscribers. Sounds impressive, but it’s actually only a tiny fraction of the 160 million users iTunes boasts. And if my experience is at all representative, sign-ups don’t necessarily translate into frequent usage.

Even though Apple relented and introduced the ability to like items from your library, and not just from the iTunes store (though content still has to be found there in order to be liked), it still doesn’t provide an easy way to find and add friends. You can search by name, or email people you’d like to join, but that’s it. Even without Facebook Connect, a simple tool that browses your email contacts and finds friends shouldn’t be beyond Apple’s abilities.

The details of the reported dinner between Jobs and Zuckerberg point to an event that was planned and initiated by the Apple CEO. This is probably the first major instance of Jobs’ “my way or the highway” method of doing business blowing up in his face. Without Facebook’s cooperation, Ping is wilting on the vine and shows no signs of turning around. That Jobs is even open to sitting down to talk again reveals the desperation of the situation.

Ping probably won’t get shuttered unless it starts to become damaging to the Apple brand. It probably doesn’t cost that much to operate, and even if it boosts iTunes sales only a little, it’s doing what it’s designed for. But it also won’t replace MySpace for musicians, or become the next big social network. Without Zuckerberg and Facebook, it might just become a ghost town.

Are you still (or were you ever) using Ping? If so, (1) why and (2) how do you deal with the weak friend discoverability tools?

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New MacBook Air Rumors Suggest Two Distinct Models (UPDATED)
Over the weekend, we saw a slew of new rumors surrounding the new MacBook Air hit the web. The new reports suggest we might see more than one form factor for the ultra-portable, as we predicted. We might also see the introduction of a new kind of notebook storage.

The original rumors of a new MacBook Air can be traced to Taiwanese newspaper DigiTimes. Citing sources in the supply chain, DigiTime predicted an 11.6-inch MacBook Air, featuring an ultra-low voltage processor from Intel’s Core i-series. The new MacBook Air would also have “an even slimmer and lighter design,” and use new technologies that will eventually proliferate across Apple’s portable lineup.

Some of those new technologies could include “amorphous, non-crystalline, metal alloy” from LiquidMetal Technologies, whose IP Apple recently acquired. That would mean a MacBook Air enclosure that is both lighter and stronger than the current aluminum unibody model. In a contradictory report, AppleInsider refers to “chatter” suggesting the new MacBook Air enclosure will instead be using carbon fiber and weigh as little as 2.7 pounds.

AppleInsider is also reporting with confidence that the new MacBook Air will have neither a conventional mechanical drive, nor a solid-state drive. Instead, it will use an “SSD Card,” which “more closely resembles a stick of RAM,” but may not be accessible to the user. As the MacBook Air currently has its RAM soldered to the system board, this wouldn’t be a surprising development.

A display size of 11.6 inches is being reported by many outlets, including CNET. The site reports that the new MacBook Air will continue to use “older” Core processors from Intel, along with NVIDIA’s MCP89 chipset, like the current model. What’s not the same is the price, which will be “significantly lower” than $1,499, the starting price of the current MacBook Air.

Seeming to contradict everyone else, there’s the image of an alleged MacBook Air prototype from Engadget showing a 13.3-inch enclosure. It appears to have USB ports on both sides, a Mini DisplayPort, an SD card slot, and power connection. There doesn’t appear to be any kind of drive enclosure on the system board, but instead a curious stick of RAM near the top left.

All these rumors are impossible to reconcile in just one new MacBook Air, but maybe not if Apple ships two distinct models. AppleInsider reports this will be the case, with the 11.6-inch model “a more aggressively priced option.” Further refinements will include a button-less trackpad, and the elimination of the port door housing the USB and Mini DisplayPort. Both models will continue to be extremely thin.

Internally, the larger model is expected to continue to use the Core 2 Duo and NVIDIA chipset. If so, it’s likely the more aggressively priced model will do the same, which would be unfortunate. With Intel’s new microprocessor architecture just two months away, the new MacBook Air will be two generations behind the rest of the world and suffer in performance and battery life because of it.

One MacBook Air or two: find out the truth with TheAppleBlog on Wednesday, starting at 10:00 a.m. PST.

UPDATED:

Cult of Mac now cites “independent confirmation” of two traditional 13.3-inch MacBook Air models, and a new 11.6-inch model. The 13.3-inch form factor will not be as “curvy,” as the current Macbook Air, but “boxier, like the iPhone 4 design.” Although the new MacBook Air will still have an aluminum unibody enclosure, it will weigh less than the current model’s three pounds.

The case will feature two USB ports, one on each side, an SD card slot, a MiniDisplay port, and a new MagSafe port. A larger battery will provide eight to ten hours of power. An “amazing” boot time suggests some sort of solid state storage. There will be two models, running at 2.1 GHz and 2.4 GHz with 2GB and 4GB RAM. Pricing will be as low as $1300. These 13.3-inch models would be in addition to a 11.6-inch model, which allegedly will start at $999.

It’s hard to believe Apple is about to “blow up” its pricing model, but in just two days we’ll know.

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