| From: Jon Koplik | 12/16/2023 1:55:30 PM | | | | | | Bloomberg -- China’s iPhone Ban Accelerates Across Government and State Firms ..........................
Bloomberg
December 15, 2023
China’s iPhone Ban Accelerates Across Government and State Firms
Agencies from Beijing to Tianjin instruct staff to go local
The formal directives follow a general mandate from months ago
By Bloomberg News
More Chinese agencies and government-backed firms across the country have ordered staff to stop bringing iPhones and other foreign devices to work, setting in motion an unprecedented prohibition that’s likely to block Apple Inc. and Samsung Electronics Co. from parts of the world’s biggest mobile market.
Multiple state firms and government departments across at least eight provinces -- including the prosperous coast -- instructed employees in the past month or two to start carrying local brands, according to people familiar with the matter. That’s a major step-up from around September, when a small number of agencies in Beijing and Tianjin began telling staff to leave foreign devices at home, said the people, who asked not to be identified discussing confidential orders.
The much broader, coordinated effort marks a dramatic quickening of Beijing’s campaign to wean itself off American technology, coinciding with the resurgent popularity of homegrown brand Huawei Technologies Co. Xi Jinping’s administration this year decided to expand a ban on foreign devices beyond the most sensitive departments -- a directive that had been in place for years -- to encompass many more government agencies and even state firms, Bloomberg News reported in September.
Apple shares dipped to a session low after Bloomberg reported on the widening bans. The stock fell less than 1% to $197.57 at the close Friday in New York and then declined further in after-hours trading. Apple had reached a record high earlier in the week.
While Chinese software and hardware have gradually replaced American products over the years -- from Microsoft Corp. software to Dell computers and Intel Corp. chips -- the edict threatens to deal a swift and direct hit to Apple’s market share.
This month, smaller firms and agencies in lower-tier cities have issued their own verbal directives, suggesting a much broader movement is kicking in, the people said. The orders originated from cities across at least eight provinces from prosperous Zhejiang, Guangdong, Jiangsu and Anhui to northern Shanxi, Shandong, Liaoning and central Hebei -- home to the world’s largest iPhone factory.
An Apple spokesperson declined to comment. The State Council Information Office and the Cyberspace Administration of China, which oversees online security, didn’t respond to faxed requests for comment.
The Chinese government has previously pushed back on reports about iPhone restrictions, while also raising concerns about the security of the device. “China has not issued laws and regulations to ban the purchase of Apple or foreign brands’ phones,” Foreign Ministry spokeswoman Mao Ning said during a press briefing in September.
It’s unclear how many government agencies precisely have issued directives, nor how widespread they’ve been. Different organizations will likely vary in how zealously they enforce internal edicts, with some forbidding Apple devices from the workplace and others barring their use entirely.
Collectively however, they present a major challenge for Samsung and Apple, which are both struggling to sustain growth in a key market. For Apple, which also uses China to produce the majority of its devices, the country yields about a fifth of its revenue.
Apple gets the majority of the world’s iPhones from sprawling factories run by suppliers like Foxconn Technology Group that together employ millions of Chinese. Chief Executive Officer Tim Cook was the architect of the company’s strategy to outsource manufacturing to China two decades ago. He has worked hard since to maintain positive ties with Beijing, even as Apple has begun shifting more production capacity to other countries including India.
Independent data has indicated that the iPhone 15 is selling worse in the country than the previous model, prompting some analysts to scale back revenue projections.
Analysts believe that part of the slowdown stems from the August release of a Huawei smartphone that contained an advanced made-in-China processor. State media celebrated it as a triumph against US sanctions, while American lawmakers called for an investigation into possible violations of those curbs.
While Apple’s revenue from Greater China fell 2% in the fourth quarter, the company blamed the decline on the iPad and Mac. Cook said the iPhone 15 Pro did well in the region and that is is “very optimistic” about the company’s performance there. Apple still enjoys popularity in China and its devices remain common in both the government and private sector.
Chinese state firms like oil giant PetroChina Co. employ millions and still control vast swaths of a centrally planned economy. The state sector provides jobs for an estimated 80 million people and the figure could have grown by as much as 2 million on a net basis in 2022. Government agencies employ millions more.
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What Bloomberg Intelligence Says
The possibility of weak iPhone sales in China is a risk to Apple’s financial performance in 2024, but our analysis indicates that the $7.4 billion drop in consensus sales since fiscal 4Q23 results adequately accounts for that threat. We expect more press coverage of Huawei’s success in China versus Apple, which is supported by our own smartphone survey, but see little risk of more estimate cuts.
-- Anurag Rana and Andrew Girard, analysts
---------------------------------------------
Even with US-China ties fraying, the US company is highly dependent on the Asian country -- both as a manufacturing partner and a market for its products. Cook celebrated that relationship during a trip to China earlier this year, calling it “symbiotic.”
But the blockade on the devices is the culmination of a years-long effort to root out foreign technology in sensitive environments, and coincides with China’s push to become self-sufficient in critical areas.
In 2022, Beijing ordered central government agencies and state-backed corporations to replace foreign-branded personal computers with domestic alternatives within two years, marking one of the most aggressive efforts to eradicate key overseas technology from within its most sensitive organs.
-- with assistance from Steven Yang and Debby Wu
© 2023 Bloomberg L.P.
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| From: zax | 1/17/2024 3:42:29 PM | | | | | | Apple Watch imports banned in America - again
cnn.com
New York CNN — A federal appeals court has denied Apple’s motion to temporarily pause a ban on imports of advanced models of the Apple Watch and the ban will be reinstated on Thursday, according to a Wednesday court filing.
Apple had requested a stay on the ban while it appealed a US International Trade Commission ruling that went into effect last month. That ITC order prevented Apple from importing the Apple Watch Series 9 and Apple Watch Ultra 2, among other newer models, to the United States because they violate patents registered to another company.
Apple last month was granted an interim pause on the ban until a judge could rule on a longer stay that would last through the appeal process, which will likely take months.
... cnn.com |
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| From: Jon Koplik | 1/30/2024 2:13:57 AM | | | | | | speaking of that word : "titanium" -- I have noticed that in one AT&T Wireless ad, the words (regarding the latest over-priced Apple Crapple smart phone) are : "made WITH titanium."
I remember learning (decades ago) that when a vitamin C manufacturer said :
"made WITH rose hips"
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Wikipedia on : rose hips : en.wikipedia.org
<<<<< The rose hip or rosehip, also called rose haw and rose hep, is the accessory fruit of the various species of rose plant.
It is typically red to orange, but ranges from dark purple to black in some species.
Rose hips begin to form after pollination of flowers in spring or early summer, and ripen in late summer through autumn. >>>>>
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that . . . if the "rose hips" were actually a meaningful portion of the vitamin C tablet,
then, the tablet would be absurdly enormous.
So . . . all that "made WITH rose hips" meant was : more than 0% rose hips,
the rest : all synthetic, normal, typical vitamin C
apparently made as follows :
glucose (1) ---> sorbitol (2) --->fermentation---> sorbose (3) --->fermentation---> ketogluconic acid (5) ---> ascorbic acid (6)
------------------------------------------------------
I assume that Apple Crapple is similarly full of s****
regarding proudly saying : made WITH titanium.
Anyone know for sure ?
Jon.
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| From: Jon Koplik | 2/5/2024 12:53:07 PM | | | | | | AP News -- Apple has had its first box office flop .....................................
and, from below :
<<<<< “Killers of the Flower Moon,” though not profitable with $156 million in global sales, was one of the most celebrated films of 2023 and is nominated for 10 Academy Awards. “Napoleon,” released in November, has raked in $219 million worldwide -- also not enough to turn a profit. >>>>>
****************************************
February 4, 2024
‘Argylle,’ with checkered reviews, flops with $18M for the big-budget Apple release
By JAKE COYLE
NEW YORK (AP) -- Apple has had its first box office flop.
“Argylle,” the $200-million star-studded spy thriller from Apple Studios, debuted with $18 million in ticket sales, according to studio estimates Sunday. The film, directed by Matthew Vaughn, managed to lead the weekend box office, but still found little interest from moviegoers.
Although Apple has been in the original film business since 2019 and won the Oscar for best picture with 2021’s “CODA,” the company has only recently produced its own lineup of big-budget releases. The first two -- Martin Scorsese’s “Killers of the Flower Moon” and Ridley Scott’s “Napoleon” -- could be called successful.
“Killers of the Flower Moon,” though not profitable with $156 million in global sales, was one of the most celebrated films of 2023 and is nominated for 10 Academy Awards. “Napoleon,” released in November, has raked in $219 million worldwide -- also not enough to turn a profit. But both films raised Apple’s reputation as a home to top directors and prestige filmmaking.
The same can’t be said for “Argylle,” a twisty thriller starring Bryce Dallas Howard, Sam Rockwell and Henry Cavill. The movie was badly dinged by critics, who gave it a Rotten Tomatoes score of 35% “fresh.” Ticket buyers also gave it a thumbs down, with a C+ CinemaScore.
Apple has paired with traditional studios for each of those releases. Universal Pictures handled the rollout of “Argylle,” which opened in 3,605 North American venues and took in an additional $17.3 million in 78 international markets. Paramount handled “Killers of the Flower Moon,” while Sony steered “Napoleon.”
“Argylle,” with “Kingsman” director Vaughn at the helm, was made with aspirations of starting a new franchise. But one of its biggest talking points ahead of its release was conjecture that Taylor Swift might have been involved with the movie thanks to the prominent presence of argyle patterns and a cat in the promotional materials. Despite plenty of online discussion, Swift had no involvement in the film.
Second place on the weekend went to the Christian drama series “The Chosen.” The first three episodes of the fourth season of the series, which dramatizes the life of Jesus, played in 2,263 theaters. The Angel Studios release grossed $6 million Friday through Sunday.
On another quiet weekend in cinemas, the rest of ticket sales went mainly to holdovers and awards contenders.
Warner Bros.’ “Wonka,” in its eighth week, crossed $200 million domestically. After four weeks in theaters, Paramount’s “Mean Girls” crossed $100 million. “The Beekeeper,” from the Amazon MGM, neared $50 million in its fourth week.
Although many Oscar contenders hit theaters months ago, the top choices of those in theaters remain Cord Jefferson’s “American Fiction” ($15 million thus far for MGM), starring Jeffrey Wright, and Yorgos Lanthimos’ “Poor Things” ($28.2 million, plus $40.1 million overseas), starring Emma Stone.
Estimated ticket sales for Friday through Sunday at U.S. and Canadian theaters, according to Comscore. Final domestic figures will be released Monday.
1. “Argylle,” $18 million.
2. “The Chosen,” $6 million.
3. “The Beekeeper,” $5.3 million.
4. “Wonka,” $4.8 million.
5. “Migration,” $4.1 million.
6. “Mean Girls,” $4 million.
7. “Anyone But You,” $3.5 million.
8. “American Fiction,” $2.3 million.
9. “Poor Things,” $2.1 million.
10. “Aquaman and the Lost Kingdom,” $2 million.
------------------------------------------------------------------
Follow AP Film Writer Jake Coyle at twitter.com
Copyright 2024 The Associated Press.
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| From: Jon Koplik | 2/14/2024 12:35:23 AM | | | | | | tidbits from NYT / Vision Pro Review: Apple’s First Headset Lacks Polish and Purpose ..................
nytimes.com
or
archive.ph
*****************************************
NYT
TECH FIX
Updated Feb. 12, 2024
Vision Pro Review: Apple’s First Headset Lacks Polish and Purpose
Billed as the future of computing, the $3,500 goggles can’t replace a laptop for work. At times, wearing them also made our columnist feel nauseated.
By Brian X. Chen
Brian X. Chen, the personal tech columnist for The New York Times, has worn more than a dozen tech headsets over 12 years.
------------------------------------
Apple declined to provide an early review unit to The New York Times, so I bought a Vision Pro on Friday. (It costs much more than $3,500 with the add-ons that many people will want, including a $200 carrying case, $180 AirPods and $150 prescription lens inserts.) After using the headset for about five days, I’m unconvinced that people will get much value from it.
The device feels less polished than past first-generation Apple products I’ve used. It’s not better for doing work than a computer, and the games I’ve tried so far aren’t fun, which makes it difficult to recommend. An important feature the ability to place video calls with a human-like digital avatar that resembles the wearer -- terrified children during a family FaceTime call.
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... it’s slightly heavier than Meta’s cheaper Quest headsets, and it plugs into an external battery pack that lasts only two hours.
The ski-goggle aesthetic of the Apple product looks better than the bulky plastic headset visors of the past. But the videos posted by early adopters walking around outside with the headset -- men I call Vision Bros -- confirm that people still look ridiculous wearing tech goggles, even when they are designed by Apple.
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I preferred to see into physical reality most of the time, but I still felt isolated. The headset cuts off part of your periphery, creating a binoculars-like effect. I confess that it was hard at times to remember to walk my dogs because I didn’t see them or hear their whining, and in another session, I tripped over a stool. An Apple spokeswoman referred to the Vision Pro’s safety guidelines, which advise users to clear away obstacles.
When using the headset for work, you can surround yourself with multiple floating apps your spreadsheet can be in the center, a notes app to your right and a browser to your left, for example. It’s the 3-D version of juggling windows on a computer screen. As neat as that sounds, pinching floating screens doesn’t make working more efficient because you need to keep twisting your head to see them.
I could tolerate juggling a notes app, a browser and the Microsoft Word app for no longer than 15 minutes before feeling nauseated.
The least joyful part of the Vision Pro is typing with its floating keyboard, which requires poking one key at a time. I had planned to write this review with the headset before realizing I wouldn’t make my deadline.
There’s an option to connect a physical keyboard, but at that point I’d rather use a laptop that doesn’t add weight to my face.
------------------------------------------------
Next I tried the headset in the kitchen, loading a pizza recipe in the web browser while I grabbed and measured ingredients. Moving around while looking through the camera, I became nauseated again and had to remove the headset.
---------------------------------------------
Video calling is now an essential part of office life, and here the Vision Pro is especially inferior to a laptop with a camera. The headset uses its cameras to snap photos of your face that are stitched into a 3-D avatar called a Persona, which Apple has labeled a “beta” feature because it is unfinished.
Personas are so cringe that people will be embarrassed to use these in a work call. The Vision Pro produced an unflattering portrait of me with no cheekbones and blurred ears. In a FaceTime call with my in-laws, they said the blur conjured 1980s studio portrait vibes.
One of my nieces, a 3-year-old, turned around and walked away at the sight of virtual Uncle Brian. The other, a 7-year-old, hid behind her father, whispering in his ear, “He looks fake.”
--------------------------------------------
The headset’s two-hour battery life is not long enough to last through most feature-length movies, but in my experience, this turned out to be moot because I couldn’t watch movies for more than 20 to 30 minutes before needing to rest my neck and eyes from the heavy headset.
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Not many games have been made for the headset yet. I tried some new Vision Pro games such as Blackbox, which involves moving around a 3-D environment to pop bubbles and solve puzzles. It looked nice, but after the novelty wore off, my interest fizzled out. It’s tough to recommend the Vision Pro for virtual-reality gaming when Meta’s $250 Quest 2 and $500 Quest 3 headsets have a deeper library of games.
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The Vision Pro is the start of something -- of what, exactly, I’m not sure.
But the point of a product review is to evaluate the here and now. In its current state, the Vision Pro is an impressive but incomplete first-generation product with problems and big trade-offs. Other than being a fancy personal TV, it lacks purpose.
Most striking to me about the Vision Pro is, for such an expensive computer, how difficult it is to share the headset with others. There’s a guest mode, but there’s no ability to create profiles for different family members to load their own apps and videos.
So it’s a computer for people to use alone, arriving at a time when we are seeking to reconnect after years of masked solitude. That may be the Vision Pro’s biggest blind spot.
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| From: Jon Koplik | 2/27/2024 12:51:07 AM | | | | | | WSJ Opinion / William Barr / Siri, Does Apple Violate Antitrust Law ? .............................
WSJ
Feb. 26, 2024
Siri, Does Apple Violate Antitrust Law ?
The Justice Department reportedly plans a major lawsuit against the firm -- with good reason.
By William P. Barr
Politicians in both parties broadly agree that a handful of tech companies hold too much power. As attorney general in 2019, I launched an antitrust review of the problem. The Justice Department filed suit the following year against Google for monopolizing internet search and search advertising. Under Attorney General Merrick Garland the department has pressed forward with the Google case and the Big Tech review and is now reportedly preparing to file a major antitrust suit against Apple. This is a good development.
Big Tech firms like Apple require rigorous antitrust scrutiny. Today, virtually all aspects of life -- finance, commerce, entertainment, social relations, news and public discourse -- are conducted over a handful of digital platforms. Giant tech companies have the power to snuff out challenges to their dominance; collect mountains of customers’ personal data, which they can exploit to manipulate users’ decisions and beliefs; and control what we hear and read. This overwhelming economic and social power is antithetical to the founding principles of our democratic republic.
While antitrust enforcement under President Biden, particularly at the Federal Trade Commission, has gone too far, the Justice Department’s concerns about Apple are justified. Keeping markets free requires confronting anti-competitive abuses. For many years, competitors have credibly complained that Apple has used its dominant market position and heavy-handed tactics to cripple competition.
More than half of the mobile devices in the U.S. are Apple devices using its proprietary iOS operating system. Apple has made its App Store the only way for software developers to reach this vast market, and it uses technical and contractual restrictions to box out competitors. Apple does this in two ways: by prohibiting iOS users from downloading software from any other source, and by making developers agree not to distribute their apps through any other store as a condition of getting access to the tools necessary to make iOS-compatible apps.
A significant part of Apple’s business now is distributing other companies’ applications to iOS users. The App Store’s dominance allows Apple to take up to a 30% cut on sales of paid apps, demand the same fee for subsequent “in-app” purchases, and insist that developers not communicate with customers about less expensive ways to download their apps. This arrangement limits competition and raises prices. With surging sales of more than $89 billion in 2023, the App Store by itself would rank in the Fortune 100.
Apple allegedly uses its control over iOS and the App Store to impose technical limitations on competing apps that impair their performance. A 2020 House Judiciary Committee investigation cited Apple’s treatment of Tile Inc., a company that makes hardware and software enabling users to track lost items. Tile told the committee that in 2019 Apple made changes to iOS 13 that increased the difficulty of using the Tile app and devices, while at the same time rolling out and pre-installing its own competing Find My app.
Another example of Apple’s anti-competitive behavior is how it gives preference to Apple Pay over other mobile payment services. Apple installs within its iPhones near field communication chips, or NFCs, so the devices themselves can complete tap-to-pay transactions. The European Union has challenged Apple for allegedly handicapping rivals by denying the same NFC access to competing mobile payment services.
Apple has also long pursued a strategy of weaving together an integrated ecosystem of easily inter-operable products and services. That is unobjectionable, but when the company moves into a new product market -- such as smartwatches or smart homes -- the regulators’ concern is that Apple makes hardware and software choices that optimize the inter-operability of its own new-market devices with Apple’s ecosystem, while degrading the inter-operability of incumbent devices. The Justice Department has reportedly been studying why iPhones work better with Apple smartwatches than with other smartwatches.
Smartwatches illustrate how impairing inter-operability can harm competition. Apple smartwatches, standing alone, would have no obvious competitive advantage over those made by Garmin. But if Garmin watches don’t work as smoothly with the ever-present iPhone, Apple’s product would gain an advantage. In essence, Apple would be using its power in the smartphone market as leverage to capture a new market with a less compelling product.
Nor is the inter-operability issue confined to rival devices. Two months ago, Apple blocked an Android message application, Beeper Mini, which allowed Android phones to exchange secure and encrypted messages using Apple’s iPhone-only iMessage service.
There is little question that Apple incorporates some hardware and software design choices that make it difficult for customers to leave the system and harder still for rivals to compete with any part of it. Apple typically claims that any anti-competitive effects are justified to protect the security and privacy of its ecosystem. But there is reason to think this security-privacy mantra is frequently used as a pretext when the real purpose is hobbling competitors.
In 2018, after launching its own parental-control application, Screen Time, Apple purged similar third-party apps from its App Store. Internal Apple communications proposed advancing the “narrative” that this was done for privacy reasons. According to a House report, when the Justice Department announced it was investigating the matter, Apple started reinstating the apps and found less-restrictive ways of satisfying supposed privacy concerns.
Apple uses an arsenal of tactics whose anticompetitive effects, taken individually, may operate subtly but, taken cumulatively, work powerfully to suppress competition. To make headway, a Justice Department challenge must address these tactics comprehensively and force Apple to demonstrate that the handicaps it inflicts on rivals are essential to achieving legitimate security and privacy requirements. The burden should be on Apple to prove that less restrictive alternatives don’t exist.
Mr. Barr is a co-founder of Torridon Law PLLC, a distinguished fellow at the Hudson Institute and author of the memoir “One Damn Thing After Another.” He served as U.S. attorney general, 1991-93 and 2019-20.
Copyright © 2024 Dow Jones & Company, Inc.
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| From: zax | 3/5/2024 12:30:50 AM | | | | | | Apple fined almost $2 billion by EU for giving its music streaming service leg up over rivals'
cbsnews.com
London — The European Union leveled its first antitrust penalty against Apple on Monday, fining the U.S. tech giant nearly $2 billion for breaking the bloc's competition laws by unfairly favoring its own music streaming service over those of competitors.
...
The investigation found that Apple banned streaming services from telling users about how much subscription offers cost outside of their apps, including links in their apps to pay for alternative subscriptions or even emailing users to tell them about different pricing options.
The fine comes the same week that EU rules are set to kick in that are aimed at preventing tech companies from dominating digital markets.
... cbsnews.com |
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| From: Jon Koplik | 3/6/2024 11:00:32 PM | | | | | | Bloomberg Opinion : If Apple Has Something Up Its Sleeve, Now’s the Time ...............................
Bloomberg
March 6, 2024
If Apple Has Something Up Its Sleeve, Now’s the Time
Sales of the iPhone are slumping in China, the App Store is under assault and the company is behind in AI. Worse, its reputation for having the next hot innovation is waning.
By Dave Lee
Dave Lee is Bloomberg Opinion's US technology columnist. He was previously a correspondent for the Financial Times and BBC News.
-------------------------------------------
Last year, when I described Apple Inc.’s 2023 as “miserable,” my inbox took something of a battering. Many readers questioned how I could suggest such a thing: The stock was up 48% that year !
But just as a rising stock market does not necessarily indicate a strong underlying economy, a rising share price doesn’t always take into account, or take seriously enough, the vulnerabilities of the underlying business. To me, by the end of 2023, it had become quite clear Apple had problems sprouting all around it. At that point, though, investors seemed happy with Chief Executive Officer Tim Cook’s multiple reassurances.
Now, some 66 days into 2024, Apple is clearly at a crossroads, falling short on expectations of growth through innovation and facing urgent threats to its legacy businesses. Its shares are down more than 11% this year.
On Monday, the European Union issued a $2 billion fine as part of an all-out assault on the economics of the App Store. To protect its walled garden, Apple has come out fighting, but it will lose -- the only question being how badly and with what consequences to its bottom line. As my Bloomberg Opinion colleague Parmy Olson wrote on Monday, Apple is now in a new era of scrutiny that will be hugely costly -- the US is expected to file its suit against the company, on similar concerns, any day now.
Tuesday brought more bad news, this time out of China. New data from Counterpoint Research suggested sales of the iPhone were down 24% in the country in the first six weeks of this year in an overall smartphone market that fell by 7%. Part of this decline, Counterpoint notes, can be attributed to the fact that Apple enjoyed unusually strong iPhone sales in January 2023 thanks to pent up demand from 2022’s supply squeeze. But Apple’s drop in market share -- from 19% a year ago to 16% this year -- shows a shift. It’s now China’s fourth most popular smartphone maker after being on top a year ago.
Multiple headlines last year spoke to what was being seen as a shift in sentiment around Apple’s business in the country; consumers were growing more interested in buying smartphones from homegrown companies such as Huawei, which is banned in the US. Counterpoint’s data suggests these concerns may not be as overblown as they have been in the past, when rumors of an iPhone decline did not materialize.
It’s not just an issue of patriotism. While China is, in many respects, a tech trends silo, a possibly diminished interest in the iPhone crosses borders. It’s a product that has become a victim of its own quality. I was in an Apple Store this week, shopping for my own new device, when it occurred to me the last time I bought an iPhone was some five years ago. The quality of Apple’s hardware and its continued software upgrades mean the device feels every bit as capable as the day I got it were it not for a recently cracked screen, a new device would not have crossed my mind. Counterpoint has observed this, too: “Consumers feel fine holding on to the older-generation iPhones for now,” it said.
As a result, the iPhone has become an item that people refresh in the same way they might buy a new television, refrigerator or car -- an expensive good that’s replaced once the existing model shows signs of aging rather than through an aspiration for the new technology of the most recent one. Price increases have offset this so far, but Apple will need to innovate its way to future growth. Minimal progress has been made so far.
Successful recent hardware, such as the Apple Watch and AirPods, are merely iPhone accessories. The Vision Pro mixed-reality headset remains a gamble. Judging by the sharp tailing off of demonstration videos on social media, it seems the only “killer app” the device has so far is the ability to make wearers go viral if they do something daft with it in public. If the company was hoping the Vision Pro would fill investors’ “what’s next?” void, it does not seem to have been the case.
For the longest time, Apple has traded on the belief that, at any given moment, it has something extraordinary locked away in a secret lab, something it is perfecting with the help of its legendary design team. This perception is rapidly waning as symbolized by last week’s news that the company had abandoned efforts to build its own car, a project that had long suffered from a lack of direction.
The same could be said of Apple’s approach to artificial intelligence. Siri continues to be an embarrassment: The way many users feel about the voice assistant’s ability to assist was summed up by Larry David’s recent (very funny and very sweary) scene in the latest season of Curb Your Enthusiasm, in which Siri repeatedly misunderstands what is being asked of it.
Apple’s announcement that it would be redirecting resources from its car to AI comes as investors’ murmurs grow louder. Unlike Google, Amazon.com Inc. and especially Microsoft Corp. -- which is now more than $350 billion ahead of Apple in market value, having only overtaken it this past January -- Apple has yet to make any meaningful announcements about how AI will change its business other than to say it’s excited by the prospect.
It’s unclear what an AI strategy for Apple might look like. At a minimum, it could enhance the iPhone, but consumers will come to just expect that as standard in a new phone. And unlike the immense data centers owned by Microsoft, Amazon and Alphabet Inc., Apple has no enterprise-facing cloud business on which it can offer companies (other than itself) access to cutting-edge AI capabilities.
“Everyone is clamoring for Apple to have a story” on AI, one investor told the Wall Street Journal last week, and the company certainly seems eager to present one. This week it promoted its latest MacBook Air as the “world’s best consumer laptop for AI” -- by which Apple means that it’s a great computer on which to run other companies’ AI software. That may well be enough to keep selling devices, but the worst-case scenario for Apple is that this temporary weakness becomes a generational one, much like Microsoft’s lack of foresight on the smartphone, a mistake that put it on the backfoot for more than a decade.
© 2024 Bloomberg L.P.
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| From: Jon Koplik | 3/13/2024 11:59:27 PM | | | | | | (long) Bloomberg -- How Apple Sank About $1 Billion a Year Into a Car It Never Built ................................
Bloomberg Businessweek
The Big Take
Updated March 7, 2024
How Apple Sank About $1 Billion a Year Into a Car It Never Built
Tim Cook shut down plans to acquire Tesla before cycling through a junkyard’s worth of self-driving designs over the past decade. The inside story is a case study in indecision.
By Mark Gurman and Drake Bennett
Around the beginning of 2020, Apple Inc.’s top executives gathered at a former Chrysler testing track in Wittmann, Arizona, to try out the latest incarnation of the car the technology giant had been trying for years to make. The prototype, a white minivan with rounded sides, an all-glass roof, sliding doors and whitewall tires, was designed to comfortably seat four people and inspired by the classic flower-power Volkswagen microbus. The design was referred to within Apple, not always affectionately, as the Bread Loaf. The plan was for the vehicle to hit the market some five years later with a giant TV screen, a powerful audio system and windows that adjusted their own tint. The cabin would have club seating like a private plane, and passengers would be able to turn some of the seats into recliners and footrests.
Most important, the Bread Loaf would have what’s known in the industry as Level 5 autonomy, driving entirely on its own using a revolutionary onboard computer, a new operating system and cloud software developed in-house. There would be no steering wheel and no pedals, just a video-game-style controller or iPhone app for driving at low speed as a backup. Alternately, if the car found itself in a situation that it was unable to navigate, passengers would phone in to an Apple command center and ask to be driven remotely.
In the Arizona desert, Chief Executive Officer Tim Cook, Chief Operating Officer Jeff Williams and senior members of Apple’s design team sat in the prototype as it drove itself around a test track. They loved what they saw. But there was a catch, as the car project’s head, Doug Field, made clear: A lot of work still needed to be done before the autonomous driving system would work in the real world. Field, who’d been hired away from Tesla Inc. to oversee the project, proposed scaling back the self-driving goals to Level 3, which requires a human driver to be ready to take over at a moment’s notice, not watching TV or FaceTiming in a backward-facing seat. But Field’s bosses wanted Level 5.
The next year, Field left Apple to take over the electric-vehicle and software engineering efforts at Ford Motor Co. Under Field’s successor, Kevin Lynch, who also runs Apple’s smartwatch software group, the car’s design continued to evolve. It had become pod-shaped, with curved glass sides that doubled as gull-wing doors, and the company considered including ramps that would automatically fold out to make heavy cargo easier to load. The front and the back were identical, and the only windows were on the sides, a design choice with potentially dire consequences in the event that a human needed to do any driving. (Front and rear windows were later added.) Some people on the project called it the I-Beam.
The I-Beam never made it into production, nor did any of Apple’s other designs. Now, it seems, they never will. On Feb. 27, Apple told staff it was giving up on developing a car. That decision, while abrupt, was not a surprise. Over the past decade, the company toiled away on at least five different major designs, drove prototype self-driving systems for more than a million miles, hired engineers and designers only to lay them off, and weighed partnerships or acquisitions with Tesla, Mercedes-Benz, BMW, Volkswagen and McLaren Automotive, among others. The car program cost, on average, roughly $1 billion annually (or nearly a fifth of Apple’s research and development budget a decade ago), with outside teams for chips, camera sensors, cloud services and software adding hundreds of millions of dollars more to the yearly spend.
But Apple never got close to realizing its original vision, or any of its subsequent ones. It didn’t get as far as testing a full-scale prototype on public roads. That it didn’t is partly thanks to the enormous technical difficulty of its self-driving goals, as well as the punishing economics of the auto-making business. The project was also a failure, at the highest levels of the company, to settle on one thing and do it.
“There are a lot of roads you can take when you have a lot of really smart people and a very big budget,” says Reilly Brennan, a partner at the transportation technology venture fund Trucks VC. “But Apple never had the ability to make a bunch of specific decisions to lead them one way or the other.”
This story is based on conversations with several people involved in the development of the Apple car over the past decade, nearly all of whom asked to remain unnamed because the work was private. According to a longtime Apple executive who worked on the car, it was widely seen within the company as an ill-conceived product that needed to be put out of its misery. “The big arc was poor leadership that let the program linger, while everyone else in Apple was cringing,” they say. Asked what went wrong with the effort, a senior manager involved in the vehicle’s interior design replied: “What went right?”
What emerges is a portrait of the product development process at Apple today. The $2.6 trillion company has a history of hugely ambitious bets, and a track record of upending long-established businesses. It’s been a while since it did that, however. The iPhone is 17 years old and its sales declined last year, and newer products such as Apple’s watch and AirPods, while profitable, exist mostly in its orbit. The jury’s still out on the Vision Pro. Right now, the company is looking for its next big thing, and does not seem sure how to find it.
It was Steve Jobs who first floated the idea of a car at Apple. In the late 2000s, in a typically grand pronouncement, the company’s co-founder and CEO declared internally that Apple should have dominant technologies in all of the spaces in which people spend time: at home, at work and on the go. For many Americans, being in transit means being on the road, sometimes for hours a day. “We talked about what would be this generation’s new Volkswagen Beetle,” recalls Tony Fadell, who was the senior vice president of the iPod division under Jobs. In the wake of the 2008 financial crisis, with American car companies on the brink of failure, the Apple chief executive even floated the idea of acquiring General Motors Co. for pennies on the dollar.
That scheme was quickly abandoned, in part because Apple decided it would be a bad look and in part because of the need to focus on the iPhone. But in 2014, seeking a new multi-hundred-billion-dollar revenue stream, Cook began to focus again on cars. Apple executives weighing whether to enter the market joked with one another that they’d rather take on Detroit than a fellow tech giant: “Would you rather compete against Samsung or General Motors?” The profit margins in cars were far lower than in consumer electronics, but Apple was coming off a stretch during which it had reshaped not only the music industry but the mobile phone market. To its supporters, the idea of getting into automobiles had the potential to be, as one Apple executive puts it, “one more example of Apple entering a market very late and vanquishing it.” While the initial prototypes operated like traditional cars, these supporters eventually pursued more radical redesigns, invoking a transportation technology experience they said would “give people time back.” The ultimate plan was a living room on wheels where people who no longer needed to drive their cars could work or entertain themselves with Apple screens and services instead.
But before sketching out its own designs, Apple considered acquiring Tesla. At that point the electric-car maker’s success was far from assured, and its value was less than $30 billion, or a 20th of what it is today. Adrian Perica, Apple’s head of corporate development, held a series of meetings with Elon Musk. But Cook, who’d succeeded Jobs three years earlier, shut the deal down while negotiations were still at an early stage. Apple’s chief financial officer, Luca Maestri, formerly the General Motors CFO in Europe, argued that the car industry’s low margins were something the tech company couldn’t easily overcome.
Although the Tesla idea was abandoned, the ambitions didn’t go away. Apple’s newly minted hardware chief, Dan Riccio, received approval to start building a car engineering team, and he hired hundreds of engineers from the auto industry for what came to be known as Project Titan. The team working on the car was called the Special Projects Group. Within the company, it was difficult to find spare engineering talent, with attention focused on preparing for the upcoming Apple Watch release and, later, the iPhone X, but Riccio managed nonetheless to poach several dozen engineers from other projects. Early on, Jay Leno gave the team a tour of his garage for inspiration and a minor lesson in automotive history. Around this time, Riccio, rallying his troops, often would close with “Boys, let’s go build a car!”
The infighting began almost immediately. Maestri, the CFO, remained a skeptic, as did Craig Federighi, Apple’s software engineering chief, who had to donate personnel to what he considered a vanity project. Jony Ive, Apple’s design chief at the time, was more ambivalent, pushing for full driving autonomy but also expressing doubts about the wisdom of the endeavor. Some car fans on the Apple leadership team, including the company’s marketing executives, were resistant to building a product that didn’t look and feel like a car. Services head Eddy Cue suggested that it might be more prudent to just try to make a better Tesla rather than invent an entirely new category of machine.
Similar disagreements played out within Project Titan itself. Steve Zadesky, a former Ford engineer and iPhone executive in charge of much of the car effort, imagined the company starting off with limited self-driving features that could then be improved. Others held fast to Level 5. Perica, the mergers-and-acquisitions chief who’d pushed to buy Tesla, told the Apple car team that the company should build “the first bird,” not “the last dinosaur.” When the group first began staffing up in 2015, the goal was to bring something to market by 2020.
Under Ive, the microbus design emerged. The interior would be covered in stainless steel, wood and white fabric. Ive wanted to sell the car only in white and in a single configuration so it would be instantly recognizable, like the original iPod he’d designed. At one point, the group briefly discussed a more traditional SUV-like design, as well. The team’s secret facility in Sunnyvale, California, was packed with car cabin prototypes and simulators. “It looked like you entered Disneyland -- it was chock-full of toys,” says someone who worked in the building.
The team played with several different ideas for the interior, including installing a pair of specialized touchscreens suspended with brackets from the ceiling to control the car from both sides of the cabin. It also engineered microphones to be placed outside the vehicle to bring external sounds into the cabin, something passengers in non-Apple cars did by rolling down a window. “They would add all sorts of crazy features to the car and then realize those were bad ideas and pull them back out, leading to another cockpit redesign,” says an Apple executive with knowledge of the frequent changes.
Throughout much of the process, Apple continued exploring partnerships. Riccio and Zadesky, years after Cook shot down buying Tesla, met with Musk to discuss ways they could collaborate, including the possibility of Tesla producing batteries for the Apple car. That prospect didn’t advance. Musk, who didn’t respond to a request for comment for this story, at one point publicly called Apple a “Tesla graveyard” full of engineers he’d fired. A few years later, he tried to restart talks with Cook as Tesla struggled to build the Model 3. Musk has said the Apple CEO wouldn’t meet.
Talks with Mercedes-Benz progressed further. For a few months, Apple and the German automaker actively worked on a partnership similar to the Tesla idea, but with a twist. Mercedes would manufacture Apple’s vehicle, while it would also sell its own cars with Apple’s self-driving platform and user interface. Apple eventually pulled out, in part because the early work gave its executives confidence they could build a car on their own, people involved in the failed deal say.
At other points, Apple held exploratory acquisition talks with car companies beyond Tesla. The closest it got to a deal was with McLaren. Some Apple executives believed that scooping up the British automaker, which makes a few thousand cars by hand each year and sells them to the super rich, would excite Jony Ive, who’d scaled back his involvement at Apple after the launch of the Apple Watch, and reengage him with the company. The proposed deal, before it fell apart, would have provided Ive with a new design studio in London. Other discussions with BMW AG and, much later, Canoo Inc. -- an electric-vehicle startup with a decidedly Apple-esque design aesthetic -- went nowhere.
By 2016, Apple hadn’t gotten far, and internal advocates of scaling back its car ambitions began to win out. After the board of directors and senior executives began questioning the program’s viability and asking pointed questions about its costs, there were discussions about shutting down the project. But then Riccio convinced Bob Mansfield, a legendary figure at the company for leading the hardware development of the original MacBook Air and iPad, to come out of semi-retirement to shake things up.
Mansfield was among the car skeptics at Apple. His task, as he saw it, was to find out what could be salvaged from the effort. After a few months of evaluation, he decided to focus more attention on the self-driving system than on a car itself. Autonomous software, he argued, could benefit Apple in other areas, even if the company never made an actual vehicle. Other executives, notably Perica, thought Apple could license such an AI system to other carmakers without dirtying its hands in the auto business itself. Over an 18-month period from 2016 to mid-2018, Apple laid off about 120 people, a significant portion of the car project’s head count, according to people with knowledge of the cuts.
Before Mansfield persuaded Field, the former Tesla executive, to take over for him, he and Cook did manage to agree on an interim direction for the company’s autonomous driving efforts: a self-driving shuttle made in collaboration with Volkswagen for Apple employees to use at its new headquarters in Cupertino, California. That project didn’t come to fruition, either. It was seen as a distraction, and Field shut it down. He also eventually shuttered Apple’s work on batteries and other components he felt Apple could just buy off the shelf.
Under Field, full autonomy continued to be a focus even as it grew to seem less attainable. The Arizona demonstration, which the team spent nine months preparing for, was essentially a proof of concept. The team tweaked the prototype software to take turns and curves slower than usual, to make extra sure it wouldn’t injure Cook. “It was well scripted and well laid out,” says someone involved in its creation. “The intent was to show Tim that if we built this product, this is what it would look like for the customer.” (Apple bought the Arizona test track outright a year after the demo.) The team spent a lot of time working on backup controls for such a car so that a driver could extract it from tricky road situations, such as a complex construction zone. The most fully developed steering wheel substitute looked like the controller that comes with an Xbox. “It should have been either all autonomy or a wheel and pedals,” one person involved in the car’s development says, adding that the company spent a lot of time working on ways to mitigate the issue rather than on the hard problem itself.
There were other, smaller dead ends over the course of the project. Apple started planning a multi-acre engineering campus in Silicon Valley where it would design cars, but never broke ground. At one point, Apple and Ford met to discuss a proposal from the American automotive giant to sell Apple cars from its Lincoln brand, an unglamorous make that’s well-represented in rental fleets, to test the self-driving system. The talks didn’t progress past an early meeting.
For Field, Mansfield and others on the team, Cook’s indecision was frustrating. “If Bob or Doug ever had a reasonable set of objectives, they could have shipped a car,” says someone who was deeply involved in the project. “They’d ask to take the next step, and Tim would frequently say, ‘Get me more data, and let me think about it.’” In that setting, it was hard to retain talent: engineers Apple hired for the project would grow convinced things weren’t going anywhere and find jobs elsewhere. After Mansfield retired, the company tried another leadership change to boost the self-driving system. It put Williams, the COO, and John Giannandrea, Apple’s machine learning chief, in charge of overseeing Field and the project. Field left a year later, in September 2021.
Under Lynch, Apple never got to a streetworthy prototype. The self-driving technology in the company’s fleet of customized Lexus SUVs did show enough promise that there were plans to expand it to more cities in late 2024, according to people with knowledge of the plan. The idea had always been to sell self-driving as a subscription service, as Tesla does with its driver-support features. Other paid add-ons, such as Apple Music and Apple TV+ streamed to the vehicle, would help make up for the uninspiring margins on car hardware. (Some internal estimates pegged Apple’s cost to produce the car at about $120,000, far more than the $85,000 the company had wanted to charge for it.)
Last year, Apple pivoted one last time. Designs were tweaked to move from Level 5 down to Level 2, the level of Tesla’s current Autopilot, which can control both speed and steering but is assistive technology for drivers rather than their replacement. In keeping with that, the new design also incorporated a more traditional automotive interface: a steering wheel and pedals. “They finally smartened up,” says an Apple executive. “I was like, ‘Guys, you could have done this 10 years ago!’”
But the company had ended up where it began a decade earlier, with a product little different from what was already on the market and a basic, not-great self-driving system. “Kevin Lynch is a sensible person,” says an Apple executive involved in the car decision making. “He tried to bring a pragmatic view to it.” When asked, he made clear that true autonomy might be another decade off. He seems to have finally convinced Apple’s leadership that that was a problem without an affordable or reliable solution in the foreseeable future.
Recently, members of the Apple car organization were studying how the company would produce the less-advanced car. It considered working with Magna International Inc., which builds some models for Jaguar, BMW and Mercedes. But the indecision at the top of the company filtered down, sapping morale. Apple declined to comment for this story, as did BMW, Ford, McLaren, VW and Mercedes. The former Apple executives named in this story didn’t respond to requests for comment, nor did Canoo.
Around the beginning of 2024, Cook, who’s known for making decisions based on consensus, began seriously considering shutting down the project. “That’s when you started to see members of the leadership of Titan look for jobs at other companies and within Apple,” says someone with knowledge of the matter. People working on powertrains and other car-related engineering products began to depart.
On the evening of Monday, Feb. 26, the roughly 2,000 employees of Apple’s Special Projects Group received an email announcing a 10 a.m. all-hands meeting the next day. On Tuesday morning, the employees gathered in conference rooms and at desks at Apple’s Silicon Valley offices were told that Project Titan was winding down immediately. Lynch and Williams broke the news on a video call, and they didn’t explain the decision.
The meeting lasted about 12 minutes. Both men thanked the staffers for their work and got straight to the reorg and layoffs. Some employees would immediately get shifted to Apple’s AI division, and some would move over to software engineering. A chunk of the team, though, was immediately without a job. Hardware engineers would have the opportunity to apply for roles in other groups, but there aren’t spots for everyone. Other employees, such as the hundreds of car-specific engineers, test track technicians, self-driving car testers and automotive safety experts, received emails with their severance packages. As for the Arizona track, Apple is already working to sell it.
© 2024 Bloomberg L.P.
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