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Apple begins defense against possible ebook antitrust case
Apple is wasting no time beginning to defend itself against the possibility of a U.S. Department of Justice (DOJ) antitrust action alleging that the company conspired with publishers to fix ebook prices. Last week, Apple requested that a class action suit alleging price-fixing on ebooks be thrown out. Part of the suit hinges on a comment that Steve Jobs made to the Wall Street Journal's Walt Mossberg in January of 2010, saying that unhappy publishers might decide to withhold ebooks from Amazon. Lawyers in the class action suit think that Jobs's comment meant that Apple and publishers were conspiring to force Amazon to raise ebook prices. Apple's retort last week says that the lawyers "mischaracterized" the exchange, and that Jobs only meant that Apple had a different strategy in the ebook business than Amazon. Apple says that it wants to sell as many ebooks as possible, which is totally believable since the company is still a relative bit player in the ebook market. As a result, the company would not have an incentive to raise prices on ebooks. But Apple's argument fails to address accusations that Jobs schemed with publishers to slow Amazon's eventual move into the tablet market with the Kindle Fire. Apple's lawyers responded in their court filing last week by downplaying the threat of the Kindle Fire: But this allegation just strings together antitrust buzzwords.. Nor does this "Kindle theory" make sense on its own terms. For example, if Amazon was a "threat" that needed to be squelched by means of an illegal conspiracy, why would Apple offer Amazon's Kindle app on the iPad? Why would Apple conclude that conspiring to force Amazon to no longer lose money on eBooks would cripple Amazon's competitive fortunes? And why would Apple perceive the need for an illegal solution to the "Kindle threat" when it had an obvious and lawful one which it implemented – namely, introducing a multipurpose device (the iPad) whose marketing and sales success was not centered on eBook sales? There are rumors that some publishers are currently in settlement talks with the DOJ. These publishers might be exchanging damning information for a lesser settlement, which could spell trouble for both Apple and other publishers.
Apple's job-creation data spawns debate
Last Friday, Apple released employment data that suggests the company is directly and indirectly responsible for 500,000 jobs in the US. Now that the study has been out for a few days, economists are debating its accuracy, says a New York Times report. Some believe Apple is boosting its numbers by claiming workers who would have been employed at other places if Apple didn't exist. Others question Apple's use of job multipliers which are used to estimate the number of indirect workers associated with an industry. When Apple says it's responsible for 210,000 app economy jobs, the company uses a multiplier to arrive at this figure. Because they can vary so widely, the use of these estimates are fiercely debated among economists. The one thing most economists can agree on is that Apple has a big impact on the economy and is creating new jobs in the US. The extent of this impact and the number of jobs will likely be debated for years to come.
Apple is Fortune's Most Admired Company for fifth year in a row
For the fifth year in a row, Apple has taken the honors as Fortune's Most Admired Company. Apple aced out Google, Amazon.com, Coca-Cola, and IBM. Those companies that took second through fifth places respectively. Fortune cited Apple's stellar financial performance during the last year as the main reason for the company coming in at number one on the list: "The company's annual revenues climbed to US$108 billion, led by an 81% increase in iPhone sales -- a jump that doesn't factor in the runaway success of the iPhone 4S -- and a 334% spike in iPad sales, due in no small part to the revamped iPad 2. Increased sales across the board explain why shares soared 75% during the company's fiscal year to $495." This year's win ties General Electric for the number of appearances at the top of the Most Admired Company list. One more win in 2013 will put Apple at the top of the heap for years to come. You can read about Apple's wins in 2011 and 2010 by clicking these links.
Former Xbox Live marketing exec may join Apple
Apple conquered the smartphone and tablet market, and it may be turning its sights on the gaming market next. According to a report from MCV, Robin Burrowes, the Xbox Live marketing manager for EMEA, has left Microsoft to join Apple. Burrowes will supposedly take over marketing for the App Store in Europe. Apple hasn't commented on this report, so this is still a rumor. If this is true, Burrowes will become the third high-profile gaming hire to join Apple in the past year. Apple also grabbed Rob Saunders, former PR and communications boss for Nintendo, and Nick Grange, the previous PR head for Xbox. Does this mean Apple is taking a new direction in gaming? Probably not. We'll likely see an increase in marketing for iOS games as a result. There may also be an increased emphasis on iOS as a gaming platform to replace portables like the Nintendo DS. Portable gaming is on a downward slide, and, as MacStories recently points out, Nintendo needs to overhaul its business before the iPhone and iPad steal it away. [Via Macgasm]
Chinese readers respond to story of Apple's Chinese suppliers
The financial world's eyes are on Apple this week after it announced record-breaking quarterly earnings. In the midst of all this commentary and congratulations, there was also a sobering article by New York Times reporters Charles Duhigg and David Barboza. Titled "In China, Human Costs Are Built Into an iPad," the story was critical of Apple's relationship with its overseas manufacturing partners. The piece details the purported harsh working conditions found in the factories of the contract companies that build Apple products. The 7-page article claims Apple puts incredible pressure on its partners to produce a large volume of components in a short amount of time and for little profit. This incredible pressure forces companies like Foxconn and Wintek to cut corners and risk the safety of their workers to meet Apple's demands. Apple supposedly turns a blind eye to these practices and will even cut money to companies that complain. The article ends with a statement that implicates Apple fans in this scandal by saying "And right now, customers care more about a new iPhone than working conditions in China." This report was reprinted in the Chinese business magazine, Caixin, and elicited equally emotional responses by the Chinese who both support and condemn Apple. Here are a few samples of the comments left on the Chinese report, If people saw what kind of life workers lived before they found a job at Foxconn, they would come to an opposite conclusion of this story: that Apple is such a philanthropist. - Zhengchu1982 Apple has gained so much sales revenues from China. Do you think the company really cares about the conditions of those workers? I think they are just proud of having an Apple product. - 李凌云-深圳 1.) It is a pity that, we know that for Apple fans, such a story won't stop their enthusiasm. Just like people are still buying Nike and Adidas shoes, knowing that shoe manufacturing is highly environmentally hazardous; 2.) if a government cannot guarantee the welfare of its own 120 million disadvantaged population and even suppresses their appeals, then how could we require an overseas company to protect the labor rights in a Chinese factory? - Jionglegejiong When the explosion happened, I was working for media in Chengdu. Domestic media were all silenced and only allowed to use the (Xinhua) official report, because that (Foxconn factory) was a key project. Compare to what The New York Times wrote, the gap really saddened my heart. - Chen Qiye Without Apple, Chinese workers will be worse off. I hope China can some day soon have dozens of its own companies like Apple, who (only) work on high-end research and development and send manufacturing lines to Africa. - Anonymous In the end, there's no easy answer to this problem. Apple tries to be transparent and releases an annual report that details its progress in improving supplier working conditions. Apple can pressure its suppliers to conform to its standards, but it has no control over regulation in a foreign country. Is Apple doing enough, or does it need to do more to ensure the safety of workers at other companies? Right now, the best thing we can do is bring this problem to light and get people (and companies) talking about it. [Via AppleInsider]
Apple increasing operations in Israel with Anobit, new research center
Apple recently confirmed its purchase of Israeli-based flash memory firm Anobit, and today Israeli business newspaper Calcalist reports [Google translation, subscription required] Apple will open a research center in Haifa this February. Calcalist notes that the research center is not related to the Anobit acquisition, and Anobit employees should not expect to be working there. Speaking of employees, Apple is reportedly seeking engineers with experience in chip development, and has already received "several hundred resumes" from interested hopefuls. During yesterday's earnings call, Apple CEO Tim Cook noted that Senior Vice President of Hardware Engineering Bob Mansfield is now in charge of the Anobit team. [Via 9to5 Mac]
Apple changes approach to iAds
Apple is reportedly altering the terms of its iAds mobile advertising service in an attempt to attract more customers. The Wall Street Journal (WSJ) reports that the price of entry has dropped (again) as Apple is becoming more flexible with the pricing structure in general and even wooing potential advertisers onsite in Cupertino. According to "a person familiar with the matter," the WSJ reports that the price of entry has dropped to US$400,000. That's down from the half-a-million price tag the company adopted in February and further still from the cool million that was required when the service launched. The Journal also suggests that Apple is prepared to cap its per-tap charge to advertisers. Previously unlimited, the $2 per-tap fee (and $10 per thousand views) was quickly draining advertising budgets. There were no further details on how the cap would work or when it will take effect. Finally, Apple has supposedly been providing high-profile marketing executives with information sessions and tours of the Cupertino campus. While this is common practice for many Silicon Valley corporations, the Journal notes that Apple hasn't wooed advertising executives like this before. Shiv Singh, head of digital at PepsiCo Beverages, told the Journal "[Apple] are still learning the advertising world." The success of the iAds program has been debated by analysts on the outside. In August of 2010, just a month after the first iAds began to appear, the Wall Street Journal noted that advertisers were balking at Apple's insistence on creative control, causing friction. A pricey trademark settlement reportedly costs Apple $1M in October of 2010. Then in February of this year, a study conducted by Medialets suggested that iOS ads were surging against Android.
Apple recruiting engineers for Siri team
Apple is hiring more engineers for the Siri team, with at least two postings open for iOS software engineers dedicated to the project. "You will primarily be responsible for implementing the content that appears within the conversational view. This is a broad-ranging task -- we take every application that Siri interacts with, distill it down to fundamentals, and implement that application's UI in a theme fitting with Siri," one posting notes. "Consider it an entire miniature OS within the OS, and you get a good idea of the scope!" These positions have been open since early November, but they were brought into the spotlight recently when Siri UI manager Dan Keen posted them on Twitter. AppleInsider subsequently pointed out that three postings also exist for Language Technologies Engineers dedicated to bringing Siri support to languages beyond those it currently supports. Siri's functionality is already quite impressive -- despite a few wildly overpublicized hiccups -- but it's clear that Apple isn't content to let the service stay as it is for too long.
iPad production is just fine, says All Things D
Yesterday there was a small panic around the web when Bloomberg noted a report by Hong Kong-based J.P. Morgan analyst Gokul Hariharan who noted that Apple supposedly cut its fourth quarter orders for iPad components by 25%. Such a component cut could mean that iPad 2 sales were in trouble. However, that's probably not the case. Today, AllThingsD noted that Sterne Agee's Shaw Wu has issued a research note saying that build plans for the iPad 2 remain "well above expectations," and expects that any production cuts should be no cause for concern: "From our understanding, these production cuts are due to much improved capacity and Apple actively managing its inventory in front of what is likely an iPad refresh in the March quarter. The iPad 2 started shipping in March 2011 making the product likely due for an update near its 1-year anniversary. We would also like to remind investors that production changes are common throughout a quarter and through the lifecycle of a product." Wu went on to say that distributor checks of iPad 2 sales indicated demand of the device remains strong. He also reiterated his iPad shipment estimates for Q4 2011 (which ends on Friday) of 12 million iPad 2s sold and the holiday quarter's Q1 2012 shipments of 15 million iPad 2s.
Apple pilots program to loan iPads to retail employees
CNET reports that Apple is trying out a new program to let retail employees "check out" an iPad for a week at a time. They're free to use the iPads and familiarize themselves with that device during the week. When the time is up, the unit is to be returned to the store's loaner stock. For now, CNET says, the program is limited to Apple's San Francisco store in California. It certainly makes sense to let sales people familiarize themselves with the things they're selling. So far, there's no word on if or when this program will launch at other locations.
Apple launches charitable matching program for employees
MacRumors has confirmed that Apple has instituted a program to match its employees' charitable donations, up to US$10,000 per year. It's restricted to full-time employees in the U.S. for now, but the company hopes to expand that. Tim Cook announced the initiative to Apple's employees earlier today: "Team: I am very happy to announce that we are kicking off a matching gift program for charitable donations. We are all really inspired by the generosity of our co-workers who give back to the community and this program is going to help that individual giving go even farther. Starting September 15, when you give money to a non-profit 501(c)(3) organization, Apple will match your gift dollar-for-dollar, up to $10,000 annually. This program will be for full-time employees in the US at first, and we'll expand it to other parts of the world over time. Thank you all for working so hard to make a difference, both here at Apple and in the lives of others. I am incredibly proud to be part of this team. If you'd like more information on the program, you can get it on HRWeb, which can be easily accessed through AppleWeb. Tim" Good on Apple and CEO Tim Cook. It sounds like a great program.
Eddy Cue promoted to Senior VP of Internet Services
Apple has promoted its Vice President for Internet Services, Eddy Cue, to Senior Vice President for Internet Software and Services. The promotion represents the first reorganization of Apple's leadership under Tim Cook's command. Cook distributed an email earlier today, first obtained by 9to5Mac, that announced Cue's promotion to the company: Team, It is my pleasure to announce the promotion of Eddy Cue to Senior Vice President of Internet Software and Services. Eddy will report to me and will serve on Apple's executive management team. Eddy oversees Apple's industry-leading content stores including the iTunes Store, the revolutionary App Store and the iBookstore, as well as iAd and Apple's innovative iCloud services. He is a 22-year Apple veteran and leads a large organization of amazing people. He played a major role in creating the Apple online store in 1998, the iTunes Music Store in 2003 and the App Store in 2008. Apple is a company and culture unlike any other in the world and leaders like Eddy get that. Apple is in their blood. Eddy and the entire executive management team are dedicated to making the best products in the world that delight our customers and make our employees incredibly proud of what they do. Please join me in congratulating Eddy on this significant and well-deserved promotion. I have worked with Eddy for many years and look forward to working with him even closer in the future. Tim As a Senior Vice President, Apple has given Cue his own biography page, which lists his new duties at Apple. Among them, Cue will oversee the iTunes Store, the App Store, the iBookstore, Apple's iCloud services and the iAd advertising platform. Good luck, Eddy!
Antitrust investigation examining Apple-led Nortel patent purchase
Antitrust officials are reportedly examining the recent consortium purchase of Nortel's patent portfolio. According to the Washington Post, the Feds are interested in determining how Google will be affected by the sale: "Federal antitrust enforcers are scrutinizing whether Google, often accused of abusing its Web search power, is facing an unfair coalition of companies that could block its popular Android mobile phone software, according to a source close to the matter." Specifically, it's the board reach of included patents that has drawn attention. Apple, EMC, Ericsson, Microsoft, RIM and Sony were among the consortium that took part in the sale. We'll have more on this story as it develops over time.
Apple to create 350 jobs in Cork, Ireland
There's good news for Cork, Ireland residents looking for work. The Irish Examiner is reporting that Apple intends to create 350 jobs in the city. Apple has reportedly leased the top two floors of a building on Cork's Half Moon Street (about 25,000 sq ft.), which was completed in 2009. This won't be Apple's first cluster of offices in Ireland or in Cork for that matter. The Irish Examiner notes that Apple has had "a major presence" at Hollyhill on the northside of Cork. Also, the Examiner reports that Apple looked at several locations in Cork before deciding on the Half Moon Street spot. Local retailers hope that Apple's staffers in "the striking glazed building" (that even sounds like a space Apple would occupy) will spend their hard-earned dollars at the city's restaurants, bars, shops and so on. Good luck to Apple in its new space and to the mom-and-pop shops of Cork. May you have a long and lucrative relationship.
Retail chief Ron Johnson leaves Apple for J.C. Penney
Apple's Senior Vice President of Retail Operations, Ron Johnson, is leaving to become President and eventually CEO of J.C. Penney. Johnson will assume this role November 1, 2011 and will join J.C. Penney's board of directors on August 1. Johnson joined Apple in 2000 from Target where he worked as the VP of merchandising. Johnson guided Apple's retail division from its inception to its current standing as one of tech's most successful brick-and-mortar stores. He was responsible for the performance of over 300 Apple stores worldwide. His departure is not a reflection of bad times at Apple. According to J.C. Penney's press release, Johnson has always dreamed of being the CEO of a major retail company. In this role, he hopes to turn around the struggling retail giant and "transform the way America shops." It's a tall order, but if he is as successful with J.C. Penney as he was with Apple, he may able to achieve the comeback of the decade. Show full PR text J. C. Penney Company Names Ron Johnson as Its Next Chief Executive Officer, Effective November 1 MYRON E. (MIKE) ULLMAN, III TO BECOME EXECUTIVE CHAIRMAN OF THE BOARD Johnson Has Led Apple Inc.'s Retail Since Its Inception Will Join J. C. Penney's Board of Directors on August 1 PLANO, Texas, June 14, 2011 /PRNewswire via COMTEX/ -- Myron E. (Mike) Ullman, III, chairman and chief executive officer of J. C. Penney Company, Inc. (NYSE: JCP), today announced that Ron Johnson, an innovative and highly regarded retail executive, has been named the Company's next chief executive officer, succeeding Mr. Ullman in that role. Mr. Johnson will assume the CEO position on Nov. 1, 2011, and report to Mr. Ullman, who will become executive chairman. Mr. Johnson will also join the Company's Board of Directors, effective Aug. 1, 2011. Mr. Johnson, 52, has served for the past 11 years as senior vice president of retail at Apple Inc., where he led its retail strategy, which from its start in 2001 now numbers over 300 stores in the U.S. and abroad. He joined Apple after 15 years at Target Corporation, where he was a key merchandising executive. Mr. Ullman said, "I am delighted that Ron is joining our Board and the Company, and look forward to working with him as we continue to transform the jcpenney brand. He is widely recognized and highly regarded in the retail industry for his creativity and innovation, his commitment to empowering employees to deliver an unparalleled customer experience, and to making stores exciting places where people love to shop. His tremendous accomplishments at Apple and Target speak to his great consumer merchandising, marketing and operational talent." Thomas J. Engibous, lead director of J. C. Penney Company's Board, said, "The Company has made outstanding strides under Mike Ullman's leadership and it has great potential ahead thanks to the Long Range Plan for growth he and the management team developed and are executing, which includes top management succession planning. The progress made under Mike's leadership is reflected in the Company's ability to attract an executive of Ron Johnson's talent and track record as it continues to focus on achieving its objective of becoming America's most exciting place to shop. We look forward to Ron joining our Board and then to his assuming the chief executive role as he, Mike and their team work towards achieving the Company's goals." Mr. Johnson said, "I've always dreamed of leading a major retail company as CEO, and I am thrilled to have the opportunity to help J. C. Penney re-imagine what I believe to be the single greatest opportunity in American retailing today, the Department Store. I have tremendous confidence in J. C. Penney's future and look forward to working with Mike Ullman, the Executive Board and the Company's 150,000 associates to transform the way America shops." As a demonstration of his confidence in J. C. Penney's long-term potential, Mr. Johnson requested and has committed to make a personal investment of $50 million in the Company through the purchase, at fair market value, of 7 1/2-year warrants on 7.257 million shares ofJ. C. Penney Company stock. The warrants cannot be sold or hedged for the first six years of their term and have a strike price of $29.92, the closing price of the stock on the business day prior to Mr. Johnson's commitment to purchase the warrants. About Ron Johnson Ron Johnson brings to J. C. Penney Company over 25 years of retail experience and a long and successful track record of delivering year-over-year growth for multi-billion dollar companies. Before joining Apple, Mr. Johnson held a variety of positions with Target Corporation, serving in his last role there as vice president of merchandising. In his 15-year merchandising career with Target he had responsibility for such categories as Men's Apparel, Women's Apparel and Accessories, Children's and Home. He is most noted for launching and leading the Design Initiative at Target, which began with the Michael Graves collection for home and included several other key brands such as Calphalon, Carr, Bodum and more. Mr. Johnson received his MBA from Harvard Business School and his Bachelor of Arts at Stanford in Economics.
Apple marketing VP Allison Johnson leaving the company
One of the brains behind Apple's ad campaigns, Allison Johnson, is leaving the company to start a new marketing firm with a former Facebook PR executive. According to John Paczkowski at AllThingsD, Johnson reported directly to Steve Jobs and managed Apple's ad campaigns, which were of course created by TBWA\Chiat\Day. Johnson was at Apple for 6 years and was at HP before that. We wish her the best of luck in her new venture. [via BusinessInsider]
Apple Store retail employee discusses what it's like to work there
Although doing so usually ends with a current employee becoming a former employee, one Apple Store retail worker recently had a lot to say about his experience working for the company. In an article over at Popular Mechanics, an unnamed employee spilled the beans on everything from being in the dark about new products until the Keynote Address (just like the rest of us), the undercover plain-clothes security working in every store, how working the Phone Room is like working a suicide hotline, and how talking to the press about your experiences can get you fired. In that case, one hopes he has another job lined up now that this article was published! We have, of course, seen articles before about what it's like to work for Apple and confirmation that Apple Store employees are usually in the dark about new products, but the article is definitely worth a read to get an insider's view as to what it may be like to work retail for Apple. If you were thinking of trying to get a job with Apple yourself, you may be able to glean a little info as to which subjects to avoid during your interview.
Apple will announce Q1 2011 financials on January 18
Apple has officially announced its intention to share Q1 2011 financial results on January 18 at 2:00 PM PST (5:00 PM EST). There will be a live audio stream available here. Apple also notes that the call will be made available for replay for 2 weeks. We'll have a live blog of the results, so be sure to check back on the 18th. Analysts expect Apple's announced results to be ridiculously positive, and we're not going to argue with that.
Apple, Verizon negotiations from the inside
Bloomberg has posted an interview with Verizon Communications Inc. President Lowell McAdam that explores a bit of the lengthy process that brought the iPhone to Verizon. The technical acrobatics took the most time, while "the commercial deal took us a day," McAdam said. The two companies actually built Verizon cell towers at Apple's Cupertino campus, and Apple also received "their own laboratory to play with," according to McAdam. Additionally, Verizon's executive director of technology David McCarley spent a year working at Infinite Loop. The two companies also had to agree on branding. Verizon typically places a logo their handsets; Apple allows only its own. It was a concession Verizon was apparently OK with."They don't put a lot of logos on their phones," McAdam told Bloomberg. "So that wasn't a major issue for us." There's no mention of the clearly redesigned antenna, or how the associated brouhaha in 2010 might have influenced negotiations. The interview concludes with speculation on likely sales numbers (spoiler: a lot) and the announcement's effect on each company's stock prices. It's an interesting peek into a very high-profile business deal. [Via MacRumors]
Apple Stores certified by US Green Building Council...barely
While Apple has made great gains in the environmental friendliness of its products, manufacturing and facilities, the U.S. Green Building Council (GBC), a "non-profit community of leaders working to make green buildings available to everyone within a generation," has identified its retail stores as ripe for improvement. Apple earned the group's low "certified" ranking, but it wasn't due to poor design or implementation. The group's tool is the Leadership in Environmental and Energy Design, or LEED standard, which measures a building's performance across five aspects of human and environmental health: sustainable site development, water savings, energy efficiency, materials selection and indoor environmental quality. Unfortunately, Apple's stores failed to qualify for certain points, contributing to its low ranking. For example: Sustainable sites: Apple won points for for site selection and density, but was unable to earn points for protecting habitats since Apple Stores don't include a lawn, yard or other landscaping. Water efficiency: Again, Apple loses out on possible points towards innovative wastewater technology as its stores lack any significant landscaping. Elsewhere in the test, Apple scored well in indoor environmental quality (its most compliant category) and poorly in the materials and resources and innovation and design process categories. You'll find more information on the LEED for retail standard here. Congratulations to Apple for receiving certification; hopefully there will be opportunities to gain a higher ranking next time.
