MacRumors

While much attention has been placed on Apple's first quarterly revenue decline in thirteen years, with some suggesting that the iPhone maker may push deeper into services to combat the slowdown, there is evidence to suggest that Tim Cook and company have bigger plans in store.

Apple analyst Neil Cybart of Above Avalon notes that Apple is now on track to spend a record $10 billion on research and development this year, up nearly 30 percent from 2015 and significantly more than the little over $3 billion per year it was spending on R&D just four years ago.

Cybart believes that the most likely explanation for Apple's increased R&D spending is that the company is looking to make a long-term pivot beyond the iPhone, which currently accounts for nearly two-thirds of the company's revenue. His predicted product of the future: the widely rumored Apple Car.

"Apple is not spending $10 billion on R&D just to come up with new Watch bands, larger iPads, or a video streaming service," he wrote. "Instead, Apple is planning on something much bigger: a pivot into the automobile industry."

Apple's R&D spending has experienced a significant uptick since mid-2014, which Cybart attributes to Apple Car development over the past few years. There were similar quarter-over-quarter spikes in spending leading up to the release of the iPhone, iPad, and Apple Watch, as illustrated in the chart below.

The analyst added that Apple has likely already spent upwards of a few billion dollars on Project Titan, the alleged internal codename for the Apple Car, with R&D spending likely to hit at least $14 billion per year by 2017 or 2018. He predicts the odds of Apple releasing an electric vehicle are at least 80 percent.

There is one very simple reason for my high degree of confidence: Project Titan is a long-term pivot. I don't consider Titan to be just another project that Apple has been tinkering around with in the lab for years like an Apple television set or Apple Pencil. Instead, Project Titan is much more about building a foundation for Apple that will literally represent the company's future.

Apple is widely rumored to be working on an electric vehicle that could launch by 2020. The bulk of research and development may be centered in the Santa Clara Valley area, near Apple's existing Cupertino headquarters, led by a team that includes former Tesla, Ford, and GM employees and other automotive experts.

Related Article: Apple R&D Reveals a Pivot Is Coming — Above Avalon

Taylor Swift this morning tweeted out a new ad for Apple Music, this time showcasing a playlist called "Friday Night Rocks!" recommended to the singer within the For You tab of the music streaming service.

The new commercial plays out in a way similar to Swift's previous ad, which saw her lip syncing to Jimmy Eat World as she prepared for a night out. This time, however, she dances around her living room alone to the tune of The Darkness' "I Believe In A Thing Called Love."

Previous Coverage: Apple Music is 'Distractingly Good' for Taylor Swift in New Ad

Apple has been named the world's most valuable brand in 2016, according to the latest Forbes rankings, despite posting its first negative-growth quarter since 2003 with declining sales across its iPhone, iPad, and Mac product lines.

Apple's recent slowdown was not enough to prevent the company from securing the number one position in the list for the sixth consecutive year, ahead of rivals Google and Microsoft. Forbes placed Apple's brand value at $154.1 billion, up 6-percent from 2015 and nearly double Google's value of $82.5 billion.

Coca-Cola, Facebook, Toyota, IBM, Disney, McDonald's, GE, Samsung, Amazon, AT&T, BMW, and Cisco rounded out the top fifteen. Apple Watch fashion partner Hermès ranked 48th on the list. Other notable companies listed include Intel (17th), Verizon (21st), HP (38th), Sony (76th), Netflix (79th), and T-Mobile (93rd).

Apple remains the world's most valuable company with a market cap of over $510 billion, despite its stock being down around 30-percent from May 2015 highs. Google parent company Alphabet trails closely behind, and briefly surpassed Apple as the world's most valuable company in February.

Apple also topped Interbrand's most valuable brand list in 2013, 2014, and 2015.

Update: AAPL is down nearly 3 percent in trading today, resulting in Google parent company Alphabet's market cap once again briefly surpassing Apple's. The two companies will likely continue to trade positions until the volatility settles.

Apple allegedly has an aggressive plan to "terminate" music downloads from iTunes within two years, reports Digital Music News citing sources with "close and active business relationships" with Apple.

Apple is also rumored to be considering a three to four year timeline for the shutdown of iTunes downloads, but overall discussions with Apple executives are said to focus "not on if, but when" the company should retire music downloads. Termination of music downloads could be staggered by country based on the popularity of streaming content in different regions.

Back to the story, the sources indicated that a range of shutdown timetables are being considered by Apple, though one executive noted that "keeping [iTunes music downloads] running forever isn't really on the table anymore." Also under discussion is a plan to "ride the [iTunes music download offering] out for the next 3-4 years, maybe longer," when paid music downloads are likely to be an afterthought in a streaming-dominated industry. [...]

According to one source, an initial shutdown could take place in 'tier 1' countries like the United States, UK, and leading countries in Europe and Asia, with 'tier 2' and 'tier 3' countries experiencing a staggered shutdown in subsequent years.

The timeline is unclear because Apple's iTunes business continues to bring in hundreds of millions of dollars each year, but it is on the decline due to the rise of streaming music services. According to music industry Mark Mulligan, iTunes music downloads will be worth $600 million in 2019, down from $3.9 billion in 2012. Mulligan believes Apple's download business could be 10 times smaller than its streaming music business by 2020.

Apple is also said to be considering ending music downloads due to the confusion it causes with Apple Music, mixing downloaded music purchases with Apple Music content.

Late last month, Apple CEO Tim Cook announced that Apple Music now has 13 million paying subscribers, up from 11 million users in February. Apple Music originally launched on June 30, 2015 in more than 100 countries and at its current growth rate, Apple is on track to have 15 million subscribers at its one-year anniversary.

Update: Apple rep Tom Neumayr contacted Recode and said the report that Apple would stop iTunes music downloads in two years is "not true."

Rumors suggest Apple's 2016 iPhone 7 will look very similar to the iPhone 6s, with major changes to the iPhone's form factor actually coming in 2017, the year that marks the 10th anniversary of the device's initial launch. Apple blogger John Gruber recently shared some tantalizing details about the 2017 iPhone, which may see some radical design tweaks.

In the latest episode of his podcast The Talk Show, Gruber said he's heard "scuttlebutt" suggesting the 2017 iPhone will include an edge-to-edge display that eliminates the top and bottom bezels on the device, with the front-facing camera, Touch ID, and other sensors hidden under the display.

I think next year's phone, the 2017 model, the one that will come out in September of 2017. What I have heard -- now this is not really from the rumor mill but just scuttlebutt that I've heard -- is that it will be an all-new form factor.

And there have been some rumors, I guess, but what I'm saying is that I've heard this independently and it is completely getting rid of the chin and forehead of the phone. The entire face will be the display. And the Touch ID sensor will be somehow embedded in the display. The front-facing camera will somehow be embedded in the display. The speaker, everything. All the sensors will somehow be behind the display.

What I don't know... I have no idea, but whether that means that they're going to shrink the actual thing in your hand to fit the screen sizes we already have, or whether they're going to grow the screens to fit the devices we're already used to holding... I don't know.

Previous rumors have indicated Apple is planning to introduce a flexible OLED display in the 2017 iPhone, and an OLED display panel would allow for an edge-to-edge screen design. Apple has already signed a deal with Samsung for a portion of the OLED panels it will need for the devices.

Multiple rumors have suggested one 2017 iPhone could include a 5.8-inch OLED display, which would perhaps mean Apple plans to have the display wrap around the edges of a 5.5-inch device, but it is not clear how such a screen size would work without top and bottom bezels as suggested by Gruber.

Along with an OLED display, the iPhone coming in 2017 is rumored to include a glass shell, like the iPhone 4 and 4s, rather than the aluminum body that's been used for the iPhone 5s, 6, 6s, 6 Plus, 6s Plus, and SE. Long-range wireless charging and expanded biometric features like iris or facial recognition are also features that have been rumored, along with a 10-nanometer A11 chip from TSMC and NAND flash memory supplied by Samsung.

Apple has been working on developing touch and display driver integration (TDDI) chips since 2015, which would let the Touch ID fingerprint recognition system be embedded directly into the display, allowing for the elimination of the Home button. Analyst rumors have previously suggested the Home button will be removed in the 2017 iPhone, in line with what Gruber has heard.

With Apple planning major design changes for the 2017 iPhone, there have been rumors indicating the devices will not feature an "S" name, with Apple perhaps skipping the iPhone 7s and 7s Plus to move directly to the iPhone 8 or another name.

Apple recently reported its first year-over-year decline in iPhone sales, with CEO Tim Cook claiming one of the reasons is that the upgrade cycle for the larger iPhone 6 and iPhone 6s series has stretched out longer than it anticipated.

Despite the launch of the lower-priced iPhone SE, that decline is expected to continue into the second half of this year. In reporting its first negative-growth quarter since 2003, Apple forecasted another revenue drop next quarter.

The sales decline is placing downward pressure on Apple's overseas suppliers, who have ridden the iPhone's coattails to success over the past half-dozen years. Not only does LCD supplier Japan Display reportedly expect to post a nearly $300 million loss for the fiscal year ended March, but Nikkei reports that Apple's slowdown is also sending Taiwanese suppliers into a downward spiral.

"Suppliers are saying that they are getting fewer orders for the second half of this year compared with the year-ago period," a source said. "The traditional peak season this year will not be able to compare to the past few years."

The report claims Taiwanese Semiconductor Manufacturing Company (TSMC), one of Apple's primary chip suppliers, may ship up to 30% fewer chips in the second half of 2016 compared to the year-ago period. The decline is attributed to the iPhone 7's expected lack of innovative features, saturation of the smartphone market, increased competition, and a global economic slowdown.

Another source said that for Taiwan Semiconductor Manufacturing Company, the sole supplier for the latest A10 chips used in iPhone 7, its iPhone 6s and iPhone 7 chip shipments for the June to December period will likely shrink to 70%--80% of the level reached in the second half of 2015.

Apple suppliers Largan Precision, LG Display, Catcher Technology, Foxconn, and Pegatron have and will likely continue to face similar declines in the near term.

Largan Precision, a key high-end camera module supplier for Apple's iPhone, reported its first year-on-year decline in revenue in three years in the last quarter of 2015. The company has suffered a revenue fall for five months in a row since last December.

Adam Lin, chief executive of Largan, attributed the dip to a "significant scale-back of orders from a major customer."

Apple is expected to announce the iPhone 7 and iPhone 7 Plus, the latter of which may be branded with a "Pro" name instead, in September. Newly leaked drawings suggest both smartphones may have no 3.5mm headphone jack and a single speaker, while a dual-lens camera system and Smart Connector will seemingly be exclusive to the larger 5.5-inch model with 3GB of RAM.

Apple plans to produce a single iPhone 7 Plus that will ship with a dual-lens camera and 3GB of RAM to compensate for increased image processing demands, according to a new report from KGI Securities analyst Ming-Chi Kuo that walks back from past reports suggesting Apple would produce two iPhone 7 Plus models.

Earlier rumors from Kuo indicated Apple was working on multiple versions of the iPhone 7 Plus -- a model with a single lens camera to match the iPhone 7 and a second "Pro" model with a dual-lens camera -- but Kuo now believes this is no longer Apple's plan as a single-camera iPhone 7 Plus would undermine demand for the dual-camera model. Apple is expected to continue producing two iPhone models, in 4.7 and 5.5-inch sizes.

In a previous report, we said the new 5.5-inch iPhone model (referred to as iPhone 7 Plus), to be launched in 2H16, may come in two versions: one with rear single-camera and the other with rear dual-camera. However, we now believe Apple (US) will only roll out the dual-camera version in 2H16, with 3GB RAM to meet image processing requirements, and we estimate shipments of this model in 2016F of 20-30mn units.

Kuo does not foresee any significant supply bottlenecks that would affect production of the dual-camera iPhone 7 Plus, but because of design constraints, he predicts optical zoom capabilities, which have been previously rumored for the device, will be limited.

Today's report from Kuo follows the leak of design blueprints said to be sourced from Apple supplier Catcher Technology, which suggest that the iPhone 7 Plus will also exclusively feature the Smart Connector that first debuted in the iPad Pro.

Less than four months before Apple is expected to announce the iPhone 7 and iPhone 7 Plus, which may have a "Pro" moniker instead, purported new blueprints of the smartphones have been shared by uSwitch on behalf of noted leaker Steve Hemmerstoffer, who runs the Twitter account OnLeaks.

The drawings, purportedly sourced directly from Taiwan-based Apple casing subcontractor Catcher Technology, seemingly confirm that Apple plans to remove the 3.5mm headphone jack on both the iPhone 7 and iPhone 7 Plus. Both smartphones will also retain protruding cameras, but without the metal ring around the lenses.

Meanwhile, the drawings show that Apple plans to add a dual-lens camera system and Smart Connector exclusively to the 5.5-inch iPhone 7 Plus, much to the chagrin of some customers that are hopeful Apple will not differentiate features beyond screen size. The 4.7-inch iPhone 7 will supposedly retain a single-lens camera.

The report also corroborates rumors claiming Apple will reposition the rear antenna bands along the top and bottom of its next iPhones, but the drawings also stifle stereo speaker rumors with only a single speaker grille shown on both the iPhone 7 and iPhone 7 Plus. Each smartphone retains a Lightning port and bottom microphone.

Both the iPhone 7 and iPhone 7 Plus look similar to the iPhone 6 and iPhone 6s series, suggesting that Apple will retain the same overall smartphone design beyond minor tweaks for three consecutive years. The report confirms the new iPhones will have identical dimensions as the current 4.7-inch and 5.5-inch models.

Recent rumors have been conflicting about which features Apple will reserve for the iPhone 7, iPhone 7 Plus, or OLED-based iPhone expected in 2017, but these drawings are mostly in line with expectations. The images were reportedly taken from Apple's January testing stage, however, so changes could arise.

Update: uSwitch and OnLeaks have teamed up to share a new 3D video that offers a closer look at the blueprints.