MacRumors

Facebook is no longer able to use or distribute important internal iOS apps after Apple disabled the Enterprise Certificate Facebook was abusing to surreptitiously gather data from iOS users right under Apple's nose.

Since 2016, Facebook has been paying teens and adults $20 per month to install a data gathering "Facebook Research" app that harvested all kinds of sensitive details from participants.

Apple had already banned Facebook's attempts to gather data through the Onavo VPN app, so Facebook used its enterprise certificate - provided to companies to install and manage internal apps for employees - to get participants to sideload the Facebook Research app, bypassing the App Store and Apple's oversight.

Facebook yesterday said that it was not violating Apple's enterprise rules, but as it turns out, Facebook was wrong. Apple this morning revoked Facebook's enterprise and said the social network had clearly violated the Enterprise Developer Program.

We designed our Enterprise Developer Program solely for the internal distribution of apps within an organization. Facebook has been using their membership to distribute a data-collecting app to consumers, which is a clear breach of their agreement with Apple. Any developer using their enterprise certificates to distribute apps to consumers will have their certificates revoked, which is what we did in this case to protect our users and their data.

Facebook's revoked certificate wasn't just used for the Facebook Research app. According to The Verge, Facebook needed that certificate to run all of its internal apps, and with access revoked, none of those apps are working.

That means Facebook isn't able to distribute internal iOS apps like Facebook, Instagram, and Messenger for testing purposes, and internal employee apps for purposes like food and transportation are nonfunctional.

All of the apps that used the certificate "simply don't launch on employees' phones anymore," and Facebook is said to be treating the issue as a critical problem internally.

After the certificate was revoked, Facebook this morning said that it would shut down its Facebook Research app, though the company defended it and claimed that those who participated went through a "clear on-boarding process." The Facebook Research app for Android continues to be available.

Facebook is not going to be able to properly operate and distribute iOS apps on a wide scale basis without access to its certificate, so it's not clear how this situation will play out. Apple's tools are essential for internal apps, though Facebook will likely still be able to use alternatives like TestFlight if the certificate isn't reinstated.

Apple CEO Tim Cook has been highly critical of Facebook's lack of respect for user privacy in the past, and the two companies have had a dispute over the Onavo app, but this is the first time that Apple has directly punished Facebook and shut down one of its illicit activities.

Update: Facebook says it is "working closely" with Apple to reinstate access to internal apps. Employees, meanwhile, are said to be angry and unable to do their work without the apps.

Update 2: In a statement to The New York Times, Facebook says that Apple has restored its Enterprise Certificate. "We have had our Enterprise Certification, which enables our internal employee applications, restored. We are in the process of getting our internal apps up and running. To be clear, this didn’t have an impact on our consumer-facing services."

Apple yesterday reported its earnings results for the first quarter of the 2019 fiscal year. Apple's CEO Tim Cook and CFO Luca Maestri then went on a conference call with analysts to discuss the results. Key takeaways are below.

• Revenue of $84.3 billion. For financial details, see our earnings report coverage.
  

• 1.4 billion active devices at end of quarter.
  

• Apple Music now has over 50 million paying subscribers.
  

• App Store set single-day spending record: over $322 million on New Year's Day.
  

• 1.8 billion Apple Pay transactions in quarter, more than 2x vs. year-ago quarter.
  

• Target, Taco Bell, and Jack in the Box stores in U.S. will accept ‌Apple Pay‌ soon.
  

• Apple News now has over 85 million monthly active users.
  

• ‌Apple News‌ launching in Canada later this quarter. English and French.
  

• Apple's gross margin was 34.3% for hardware products and 62.8% for services.
  

• Apple remains on track to double its fiscal 2016 services revenue by 2020.
  

• Apple now has 360 million paid subscriptions across its services.
  

• Apple expects to surpass 500 million paid subscribers across its services in 2020.
  

• Wearables revenue driven by "amazing popularity" of Apple Watch and AirPods.
  

• Wearables category is "approaching the size of a Fortune 200 company."
  

• 506 Apple Stores across 22 regions at end of quarter.
  

• Apple ended the quarter with $245 billion in cash plus marketable securities.
  

• Apple to provide update on its capital return program in March earnings report.
  

• iPhone XR is best-selling ‌iPhone‌ model, then ‌iPhone‌ XS Max, then ‌iPhone‌ XS.

More coverage:

• Apple Lowering iPhone Prices in Some International Markets to Boost Sales
  

• Tim Cook: Apple Plans to Participate in the "Breakdown of the Cable Bundle" With AirPlay 2, Original Content, and More
  

• Tim Cook: "I Do Think Price is a Factor" in Declining iPhone Upgrades
  

• Tim Cook: Customers Holding on to Older iPhones "a Bit Longer" Than in Past

A replay of the conference call is available on Apple's website for a limited time.

Apple today announced that, starting February 1, Apple Music subscribers can access ‌Apple Music‌ on any American Airlines flight in the United States equipped with Viasat satellite technology with no Wi-Fi purchase required.

American Airlines is the first commercial airline to provide exclusive access to ‌Apple Music‌ through complimentary inflight Wi-Fi. This applies to the iPhone and likely extends to the iPad, Mac or PC, and Android smartphones.

American Airlines will also be offering a collection of unique city-themed playlists through ‌Apple Music‌ starting February 1.

iFixit today announced that its do-it-yourself iPhone battery replacement kits will remain $29.99 until the end of 2019.

The repair website lowered the price of its kits in late 2017 to match Apple's discounted iPhone battery replacement fee of $29, which ended on December 31, 2018. Apple now charges $49 to replace the battery in the ‌iPhone‌ 6 through ‌iPhone‌ 8 Plus and $69 for the ‌iPhone‌ X and newer outside of warranty.

Apple had lowered its battery replacement fee after controversy erupted about a performance management feature it quietly introduced in iOS 10.2.1. The feature, when enabled, has the potential of slowing down older ‌iPhone‌ models with degraded batteries when necessary to prevent unexpected shutdowns.

Apple CEO Tim Cook said Apple replaced 11 million iPhones in 2018, up from a usual one to two million per year, according to John Gruber.

iFixit's kits include all of the tools necessary to open up an ‌iPhone‌ and swap in a new battery for those willing to give it a try. If the idea of opening up your ‌iPhone‌ sounds uncomfortable to you, it is probably best to stick to the Genius Bar.

Note that do-it-yourself ‌iPhone‌ battery replacements can have warranty implications.

Facebook has said it will end a controversial market research program in which the company paid users to install a mobile app that tracked their activity and data.

In a statement given to TechCrunch and other websites, the company said that its "Facebook Research" app, which paid volunteers between the ages of 13 and 35 up to $20 a month to access nearly all their data, would no longer be available on iOS.

The news came just hours after TechCrunch's exposé on the Facebook app, which used an enterprise certificate on iPhones to get people to sideload the app and skirt Apple's App Store rules. In the same announcement, the company also took issue with the way its "Project Atlas" program had been reported, claiming:

Key facts about this market research program are being ignored. Despite early reports, there was nothing 'secret' about this; it was literally called the Facebook Research App. It wasn't 'spying' as all of the people who signed up to participate went through a clear on-boarding process asking for their permission and were paid to participate. Finally, less than 5 percent of the people who chose to participate in this market research program were teens, all of them with signed parental consent forms.

In August 2018, Apple forced Facebook to remove its Onavo VPN app from the ‌App Store‌ because Facebook was using it to track user activity and data across multiple apps, which is a violation of Apple's ‌App Store‌ policy.

According to TechCrunch, a significant amount of code in the banned Onavo VPN app overlaps with the company's Facebook Research app, which remains available on Android devices.

Update: Apple revoked Facebook's certificate for the app, according to a statement it provided to Recode:

We designed our Enterprise Developer Program solely for the internal distribution of apps within an organization. Facebook has been using their membership to distribute a data-collecting app to consumers, which is a clear breach of their agreement with Apple. Any developer using their enterprise certificates to distribute apps to consumers will have their certificates revoked, which is what we did in this case to protect our users and their data.

Apple is already facing its first lawsuit over the FaceTime eavesdropping bug that was discovered just last night, reports Bloomberg.

Houston lawyer Larry Williams II today filed a lawsuit against Apple claiming that his iPhone allowed an unknown person to listen in on sworn testimony during a client deposition.

He is suing Apple for unspecified punitive damages for negligence, product liability, misrepresentation, and warranty breach. The bug, says Williams, violates the privacy of a person's "most intimate conversations without consent."

The FaceTime bug in question was widely publicized yesterday after making the rounds on social media. By exploiting a bug in Group ‌FaceTime‌, a person could force a FaceTime connection with another person, providing access to a user's audio and sometimes video even when the ‌FaceTime‌ call was not accepted.

There was no way to avoid malicious ‌FaceTime‌ calls forced to connect in this manner short of turning off ‌FaceTime‌, but after the issue received attention, Apple disabled Group ‌FaceTime‌ server side, and the feature remains unavailable. With Group ‌FaceTime‌ turned off, the exploit is not available and no one is in danger of being spied on via their Apple devices through the ‌FaceTime‌ bug.

Apple is planning to implement a fix via a software update later this week, but the company has not commented on how long this bug was available before it was widely shared. Group ‌FaceTime‌ has been available since iOS 12.1 was released in October.

A woman whose teenage son initially discovered the bug says that she contacted Apple multiple times starting on January 20, and even sent a video demonstrating the issue, but she received no response from the company.

Apple in August 2018 forced Facebook to remove its Onavo VPN app from the App Store, because Facebook was using it to track user activity and data across multiple apps, something that violate's Apple's ‌App Store‌ policies.

As it turns out, Facebook has found an underhanded way to skirt Apple's rules and get people to continue installing its VPN -- paying them.

TechCrunch this afternoon exposed Facebook's "Project Atlas" program, in which Facebook paid people -- adults and teenagers -- to install a "Facebook Research" VPN that is similar to the Onavo VPN app.

As of 2016, Facebook has been secretly offering people aged 13 to 35 up to $20 per month along with referral fees to sideload the Facebook Research app using an enterprise certificate on iPhone. Enterprise certificates like this are designed to allow companies to distribute internal corporate apps and give full root access to a device.

To hide its involvement, Facebook has been using beta testing services like Applause, BetaBound and uTest to recruit participants to install Facebook Research.

By getting people to sideload an app this way through an enterprise certificate, Facebook has access to data that includes private messages in social media apps, chats from instant messaging apps (including photos and videos), emails, web searches, web browsing activity, and ongoing location information. It's not clear if Facebook is accessing this data, but it could, according to security researcher Will Strafach, who TechCrunch consulted for this piece.

"The fairly technical sounding 'install our Root Certificate' step is appalling," Strafach tells us. "This hands Facebook continuous access to the most sensitive data about you, and most users are going to be unable to reasonably consent to this regardless of any agreement they sign, because there is no good way to articulate just how much power is handed to Facebook when you do this."

The terms of service for the Facebook Research app suggest Facebook was collecting information about the smartphone apps on a participant's phone and how and when those apps are used. Facebook also said it would collect data about activities and content within the apps, and information about internet browsing history. There's even a line suggesting Facebook collects data even when an app uses encryption or from within a secure browser session.

Facebook confirmed the program in a statement provided to TechCrunch and reportedly said that the Facebook Research app was "in line with Apple's Enterprise Certificate program," though that does not seem to be the case based on Apple's Enterprise Certificate policy.

"Like many companies, we invite people to participate in research that helps us identify things we can be doing better. Since this research is aimed at helping Facebook understand how people use their mobile devices, we've provided extensive information about the type of data we collect and how they can participate. We don't share this information with others and people can stop participating at any time."

Apple has been made aware of the issue, but declined to provide a comment to TechCrunch. It's not clear how the Cupertino company will handle the situation, but as TechCrunch points out, Apple CEO Tim Cook has been highly critical of Facebook and its privacy violations. Apple could potentially block the Facebook Research app or revoke Facebook's permission to distribute internal apps entirely.

Full details on Facebook's spying app can be found in TechCrunch's exposé.

Apple shipped an estimated 65.9 million iPhones during the first fiscal quarter of 2019 (aka the fourth calendar quarter of 2018) according to new data shared today by Strategy Analytics.

As of this quarter, Apple is no longer providing a breakdown of unit sales of the iPhone, iPad, and Mac, so we will not have concrete data on how well the ‌iPhone‌ is selling going forward.

Apple in Q1 2018 sold 77.3 million iPhones, which would mean Apple sold 11.4 million fewer iPhones in Q1 2019 if Strategy Analytics' estimates are correct, marking a 15 percent decline in sales year-over-year.

Global iPhone shipments fell sharply, due to high retail pricing, unfavorable foreign exchange rates, intense competition from rivals like Huawei, battery replacement programs driving longer ownership cycles, diminished carrier subsidies in some developed markets, and flagging demand in some emerging markets.

Apple's Q1 2019 ‌iPhone‌ revenue was $52 billion, down from $61 billion in the year-ago quarter, also a 15 percent decline. The drop in ‌iPhone‌ revenue led to total revenue of $84.31 billion, down from $88.3 billion in Q1 2018.

Despite the decline in ‌iPhone‌ sales, which Apple CEO Tim Cook has attributed to weakness in China and fewer upgrades, Q1 2019 was Apple's second-best in terms of both revenue and profit, coming in behind only the first fiscal quarter of 2018.

Apple CEO Tim Cook today commented on the opportunities Apple sees in the video market, though he declined to provide details on the company's specific plans.

Cook said that Apple sees "huge changes" taking place in customer behavior, which the company expects to "accelerate as the year goes by." Specifically, Cook said that Apple is expecting an acceleration of the breakdown of the cable bundle. "I think it'll likely take place at a much faster pace this year," he said.

Apple plans to "participate in that" in a number of ways, including the Apple TV, which offers support for apps so customers can watch television content on a per-app basis, and AirPlay 2, which will soon support third-party television sets. Cook said Apple is "excited" about the expansion of ‌AirPlay‌ 2 compatibility to third-party television companies because it will make the experience with people using Apple products in the living room "even better."

Cook said that third-party video subscriptions available on the App Store provide another opportunity for Apple that could "accelerate in the future" as customers are likely to buy multiple services, and finally, Cook pointed towards Apple's own work on original content.

Finally, original content, where we will participate. We've signed a multi-year partnership with Oprah. Today I'm not really ready to extend that conversation beyond that point. We've hired some people we have a super amount of confidence in, and they're working really hard. We'll have more to say on that later.

Rumors have suggested Apple is working on a full streaming television service to distribute both its original content and content from third-party providers such as HBO and STARZ. At least some of the content Apple is creating could be available for free, and Apple is said to be planning to integrate the service and the new TV shows into its TV app.

Apple has more than two dozen original television shows in the works, many of which are in the casting stages, with filming likely set to begin soon. Apple has also purchased movies and inked deals with well-known industry talent including Jason Katims and Justin Lin.

Apple is aiming to have its streaming television service ready for a mid-April launch, and has been telling its launch partners to prepare for that date. An actual release could come right around that target date.

During today's earnings call for the first fiscal quarter of 2019, Apple CEO Tim Cook was asked whether he thought that the pricing of the iPhone XR, XS, and ‌iPhone‌ XS Max was too high.

In response, Cook said that while he didn't feel that was as much of a factor in the United States, it was an issue in emerging markets.

The ‌iPhone‌ XS is priced the same as the ‌iPhone‌ X at $999, while the ‌iPhone‌ XS Max, a new device, was $100 more. The XR, at $749, was priced to be right in the middle of the entry level ‌iPhone‌ 8 and ‌iPhone‌ 8 Plus models. Cook said that's a "pretty small difference in the United States compared to last year."

In emerging markets, however, ‌iPhone‌ pricing was an issue due to the strength of the dollar. Foreign exchange rates amplified the pricing increases leading to weaker sales. Cook says that in January, in some locations, the company has absorbed all or part of the currency movements compared to a year ago, getting closer to local price compared to a year ago.

Cook in an interview with Reuters earlier today said that Apple is lowering iPhone prices in some emerging markets.

In developed markets, like Japan, a lack of subsidies has also become a major factor. Even in the U.S., where subsidies have been phased out for several years, Cook said that a person who last purchased an ‌iPhone‌ 6 or 6s for $199 when subsidies were still in place may be reluctant to upgrade to a device that costs upwards of $749 without subsidies.

Apple is working to address the subsidy issue with trade-ins and installment payments.

Cook in a separate statement said all of Apple's devices are designed to last. "We do design our products to last as long as possible," he said. Some customers choose to hold on to those products for as long as possible, while some trade them in. Apple's product cycle has indeed extended and upgrades were less than anticipated last quarter, but Cook says he doesn't know where that will go in the future.

"I'm convinced that making a great product that is high quality is the best thing for the customer. That's the way we look at it."

Apple saw lower than expected iPhone sales during its first fiscal quarter of 2019 (aka the 2018 holiday quarter) and one explanation provided by Apple was lower quarterly ‌iPhone‌ upgrades. During today's earnings call, Apple CEO Tim Cook delved into the reasons why Apple is seeing fewer upgrades.

First and foremost, he named foreign exchange rates. The strength of the U.S. dollar has made the ‌iPhone‌ much more expensive in many parts of the world, which is why Apple today said that it plans to lower prices in some emerging markets. In Turkey, for example, the ‌iPhone‌ became so expensive due to exchange rates that revenue fell $700 million from the previous year.

Cook also said that ‌iPhone‌ subsidies are becoming increasingly less common, which is impacting upgrade rates. In Japan, for example, it used to be common to have subsidies for smartphones, but local regulations have eliminated many of those. According to Cook, less than half of iPhones sold in Japan were subsidized compared to 3/4ths a year ago. The total value of subsidies has declined as well.

Cook's third reason for fewer ‌iPhone‌ upgrades was the battery replacement program that Apple offered across 2018, allowing customers to swap out the battery in their iPhones for $29. Cook said that this made it inexpensive and efficient to replace ‌iPhone‌ batteries and hold on to older iPhones for a longer period of time.

According to Cook, while analysts suggested Apple shouldn't do it, the company "strongly believes it was the right thing to do for [its] customers."

To combat fewer upgrades, Cook pointed towards Apple's trade-in program, which drives down the price of new devices when trading in older devices, and he highlighted the monthly payment options that Apple recently started promoting on its trade-in page. This page provides details on the monthly price of the ‌iPhone‌ XR and ‌iPhone‌ XS when trading in an older device.

The lower than anticipated ‌iPhone‌ upgrades along poor sales in China ultimately led to a 15 percent decline in ‌iPhone‌ revenue year over year.

Cook says that while ‌iPhone‌ upgrades were lower than anticipated, the company's business grew in the rest of the world, setting new records in the U.S., Canada, Mexico, Germany, Italy, Spain, and Korea.

According to Cook, investors should be aware of three factors long term: a loyal and satisfied customer base, a large and growing active installed base, and Apple's deeply ingrained culture of innovation.