MacRumors

Apple is working on a multitude of prototype projects ranging from the expected to the fantastical, according to Jefferies analyst Peter Misek, who suggests the prototypes are "floating around" in the Asian supply chain. In a research note to investors, Misek describes several prototype products, including an iTV with 4K, gesture control, and voice control, along with an ARM-based touchscreen MacBook Air, and an "OLED iPhone that unfolds into an iPad mini."

In contrast to investors' fears, the supply chain thinks Apple's innovation may be accelerating. With more than the usual number of prototypes floating around, here are some highlights (with the caveat that Apple might be purposely leaking to confuse competitors): 5.5" OLED phone with 2k >660ppi display; iTV with full gesture control, voice control, and 4K; touchscreen MacBook Air running on A8; 4" OLED iPhone that unfolds into an iPad mini; smartwatch prototypes including curved bangle-type and curved-screen; and wearables including health care appliances and payment authentication modules.

While some of these products, such as the smartwatch prototypes sound plausible, some, such as the folding iPhone, range into the almost-unbelievable.

Given Apple's commitment to secrecy, it seems unlikely that many of these described prototype devices are available in the Asian supply chain. Apple maintains a highly exclusive design lab for its prototype products, which are likely produced in-house or in very small quantities by manufacturing partners, leaving the legitimacy of the "prototypes" discovered by Misek in question.

Apple has been rumored to be working on Apple television set prototypes and experimenting with ARM-based Macs, but it is unclear whether these type of products will make it out of the prototype stage.

Peter Misek has been frequently incorrect with his predictions, but occasionally, one of his reports is accurate. He was one of the first analysts to point towards early iPhone 6 prototypes in a 4.8-inch size, but he also incorrectly predicted several elements of the iPhone 5s and has long championed an Apple iTV that has not materialized. He has previously suggested Apple planned to merge iOS and OS X, which was not true, and he has predicted Apple signed deals to create an iTunes Netflix competitor, which did not happen.

In his research note, Misek also suggests that the iWatch is ready to go into full production and could thus be announced at any time, but this contrasts other reports that suggest the device will begin production in July. Misek believes the rumored 5.5-inch iPhone, which is said to be somewhat delayed in comparison to the 4.7-inch version, will launch at the earliest in November with a new in-cell display coating technology.

Apple today seeded the first build of OS X 10.9.4 to developers, approximately two weeks after releasing OS X 10.9.3 to the public. The new beta is available thorugh the Software Update mechanism in the Mac App Store should be listed soon in the Mac Dev Center.

It is unclear what improvements the 10.9.4 update will bring to Mavericks, but it is likely to include bug fixes and stability enhancements. It is also unclear when the beta might be released to the public.

The last Mavericks update, 10.9.3, added enhanced support for 4K displays and restored the ability to sync contacts and calendars between Mac and iOS devices over USB.

Apple reportedly is close to inking a deal with Beats Electronics for $3 billion, an acquisition that Morgan Stanley analyst Katy Huberty believes is important if Apple wants to further monetize its 800 million iTunes user base and boost revenue in its increasingly important online services division.

Apple's online services segment, which includes iTunes, is often overlooked because it contributes so little to the company's overall revenue. But as Huberty points out in a recent message to investors, online services shouldn't be so casually tossed aside as the segment "is an underappreciated growth and margin lever for Apple." It may be small, but online services revenue is expected to grow and margins are predicted to increase in 2014, driven primarily by rising App Store revenue.

Online services hold promise, but Apple needs to address iTunes, which is losing ground to rival music services. While App Store revenue is increasing, Huberty notes that iTunes revenue is falling as users turn to streaming services such as Pandora and Spotify to meet their music needs. This decline "raises concerns about Apple's ability to monetize the new base of emerging market customers," writes Huberty. According to Huberty's calculations, each iTunes account spent an average of $3.29 in the first quarter of this year, down 24% year-over-year.

Huberty believes Apple could reverse this trend and improve monetization with the introduction of a subscription music service. One of the quickest ways to launch a subscription music service under the iTunes umbrella would be to acquire an existing service, something Apple appears to be doing with Beats Electronics and its Beats Music service.

Press reports, including the Financial Times and Wall Street Journal, suggest Apple is considering the purchase of Beats Electronics, which would give Apple an accessories business focused on headphones and a music streaming service. Apple has not commented and we have no knowledge of any pending deals. However, a subscription music service -- whether organically built or acquired -- is a logical extension of iTunes.

Spotify, which is generally viewed as the leader in streaming music, has 10M paying subscribers or about 25 % of its over 40M active user base (MAU). If Apple charges $10 per month, same as Spotify, every 1% penetration of Apple's 800M user base, equates to $960M revenue annually, adding 8 pts of growth to online services and half a point to total company growth.

Apple's acquisition of Beats would bring not only a streaming music service, but also veteran music producer Jimmy Iovine and musician Dr. Dre to Apple. The pair are considered to be the "big prizes" of the acquisition and could help Apple negotiate favorable music deals for a streaming music service.

Looking beyond Beats, Huberty argues that Apple also could bolster its online services with the introduction of a mobile payments option, an area of opportunity recently acknowledged by CEO Tim Cook. The launch of the rumored iWatch also may contribute to Apple's online services as customers bolster App Store revenue by purchasing apps compatible with the new device.

Based on Taiwanese supply chain sources, analyst Brian Blair of Rosenblatt Securities believes Apple's iWatch will feature a round face, similar to a traditional watch (via Business Insider). The iWatch design will resemble Motorola's Moto 360 smart watch, with the Apple version shipping with a slimmer profile.

Apple may begin production of the iWatch in late July, with the goal of producing up to 21 million units in the second half of 2014, claims Blair in a research note to investors. AppleInsider also highlights Blair's claim that Apple may partner with Quanta Computer to produce the smart watch device, instead of Foxconn which may be busy manufacturing the iPhone 6. Quanta's involvement in iWatch production has been rumored since last August.

Blair's sources also believe Apple may be producing multiple models of the iWatch, including one that features a sapphire display cover. This information echoes an earlier report from KGI Securities analyst Ming-Chi Kuo, who claimed the iWatch may ship at various price points and in a variety of materials that allow the smart watch to compete with both low- and high-end watches.

Apple's iWatch is currently expected to arrive near the end of 2014, with a fashionable design and biometrics that provide basic health monitoring features. It likely will sync with an iOS device sharing data with iOS apps, including the new Healthbook app that is expected to debut in iOS 8. Though an iWatch announcement is not expected for WWDC, Apple will likely unveil some of the early details on iOS 8 at the developer conference next week.

Apple has introduced reduced education pricing for the iPad Air and Retina iPad Mini, offering both tablets at starting prices of $469 and $379, reports iGeneration (Google Translate).

With both iPads still showing a standard retail price starting at $499 and $399, the new education pricing totals to a $30 discount on the iPad Air and $20 discount on the Retina iPad mini and marks the first time that Apple has included the iPad in the special program. Apple is also offering special education pricing on the first-generation iPad mini and the fourth-generation iPad, as well as deals on refurbished previous generation iPads.

Apple previously cut education pricing on the non-Retina 13-Inch MacBook Pro to $999 last year, and also offers discounts on the entire Mac line in its education store. The discounted education pricing is available to employees of K-12 schools as well as faculty, staff, students, and parents of students at higher education institutions.

Apple's rumored acquisition of Beats will indeed happen, just for a slightly reduced fee, according to a report from the New York Post this evening. The acquisition, which was originally reported to be roughly $3.2 billion for both Beats companies -- the headphone and consumer electronics division as well as the streaming music service -- will now happen at $3 billion.

Since the acquisition was originally reported on May 8, Spotify -- the leading player in the subscription music field -- announced that it had 10 million paying subscribers, and this could have given Apple additional negotiating leverage.

Still, the company is understood to place a high value on the profitable Beats audio business which retails headphones — costing up to $450 — and speakers around the globe.

That business recorded sales of $1.3 billion in 2013.

“Apple hadn’t even begun its due diligence process when news of the number came out,” one source close to the talks said Tuesday.

The paper notes that both Jimmy Iovine and fellow Beats co-founder Dr. Dre are expected to attend Apple's Worldwide Developer Conference next week. Dre is expected to net somewhere around $750 million from the sale as he currently owns approximately 25 percent of the company.

At today's Re/code Code Conference in Ranchos Palos Verdes, California, Microsoft CEO Satya Nadella and Skype chief Gurdeep Singh Pall demoed an real-time language translation tool) that has been built into Skype.

During the demonstration, Pall conducted a conversation with a German-speaking colleague, with Skype providing real-time translation from German to English and vice versa. According to German speaking audience members at the conference, the translation software performed "pretty good" but not perfectly.

Skype Translator results from decades of work by the industry, years of work by our researchers, and now is being developed jointly by the Skype and Microsoft Translator teams. The demo showed near real-time audio translation from English to German and vice versa, combining Skype voice and IM technologies with Microsoft Translator, and neural network-based speech recognition.

Microsoft hopes to use the huge number of conversations that take place on Skype to improve its translation tools with real language and speech patterns, which could lead to much better back and forth translations. Pall says the company is "working through" potential privacy issues that surround the use of customer calls.

While Microsoft plans to debut Skype Translate on the Windows platform later this year in a beta capacity, the company says that it will expand to other platforms, including OS X and iOS, shortly after the Windows version launches.

Microsoft will start with a handful of languages and only for the Windows version of Skype, though Microsoft hopes to quickly add more languages as well as support for the many types of computers and mobile devices that Skype customers use.

At launch, the Skype translator will only work with a small number of languages, those that "it can do well" but Microsoft has plans to continually add additional languages to the app as development progresses.

Update: The full video of the demo has been released by Re/code and available above.

Ahead of next Monday's keynote kicking off its annual Worldwide Developers Conference, Apple has begun preparations at the Moscone Center in San Francisco. As part of the preparations, banners are beginning to go up in the lobby of Moscone West, including one with the event's tagline of "Write the Code. Change the World."

More banners will undoubtedly continue to appear inside the lobby, some of which may tease hints of Apple's announcement plans. Banners advertising specific details on keynote announcements will remain covered until after the keynote.

Apple's WWDC keynote kicks off on Monday at 10:00 AM Pacific Time, and the company will be providing a live video stream of the event.

Thanks @KielO

Apple today updated the front page of its website to announce that it will be offering a live video stream of next Monday's keynote address at the company's Worldwide Developers Conference in San Francisco. The keynote kicks off at 10:00 AM Pacific Time.

Users will need Safari on Mac/iOS or QuickTime 7 on Windows in order to watch the stream, and Apple will also be making the stream available through a channel on Apple TV.

A number of announcements are expected at the WWDC keynote, with OS X 10.10 and iOS 8 expected to be the major focus of the event. OS X 10.10 in particular will reportedly be receiving the most attention as it will be receiving a facelift somewhat similar to that seen with iOS 7 last year. iOS 8 is said to be a more modest update, although there will undoubtedly be plenty of changes and additions relevant to users and developers alike.

Hardware announcements are a bit less certain, with two highly anticipated and long-rumored products in the iWatch and a revamped Apple TV unlikely to make their appearances at the event. Apple's rumored Retina MacBook Air may also not be ready, but the company could slip in some other announcements such as updates to the MacBook Pro or outdated Mac mini, or perhaps a low-priced iMac.

Ahead of WWDC 2014, shipping estimates for Apple's iMac models have slipped to 3 to 5 business days, fueling speculation of a possible announcement of new iMac hardware next week. As noted by AppleInsider, dwindling inventory is also evident at authorized Apple resellers, with some retailers selling the latest iMac models with steep discounts.

As we have seen with Apple may be clearing out inventory Amazon is completely sold out of the base-line 21.5-inch and 27-inch models, relying on third-party resellers who only have a handful of units left in stock. MacMall is also down to its last units on the 2.9-gigahertz 21.5-inch model, and the 3.4-gigahertz 27-inch model.

While movement in product shipping estimates is historically a hit-or-miss indicator of imminent updates, the slip to 3-5 days over the weekend is not the only factor contributing to speculation of iMac updates. KGI Securities analyst Ming-Chi Kuo has been predicting for some time that Apple will launch a "low-priced" version of the iMac, and his extensive product roadmap published last month showed the new iMac debuting at the end of the second quarter, which would be next month. Kuo argues that this new iMac with cost-efficient hardware to keep the base price low would offer Apple a way to increase its market share in Asia and other critical foreign markets.

Mac updates have generally been somewhat in flux as Intel has experienced delays with its next-generation Broadwell chips. While the company has been releasing interim "Haswell refresh" chips in recent months, these chips offer minimal improvements over their predecessors. Just last month, Apple released a minor MacBook Air update using one of these new chips, but more importantly reduced pricing by $100. The company could make a similar move with the iMac in the coming weeks.

Exact timing for iMac updates remains uncertain, as it is still a bit early for a launch based on historical update cycles. The iMac has also not played a role in recent WWDC product launches, perhaps due to its consumer focus compared to the professional/developer emphasis for the conference. Consequently, an iMac price drop with minor spec bumps could come in the weeks after WWDC, similar to the quiet MacBook Air update last month.

Apple last refreshed the iMac in September 2013, following a major redesign in 2012. The current iMac model features Intel Haswell processors, faster PCI Express-based flash storage and 802.11ac Wi-Fi connectivity. Prices start at $1299 for the entry-level 21.5-inch iMac and climb to $1799 for the base 27-inch model.

According to a new report from Digitimes, Foxconn will again be the primary manufacturer for the iPhone 6, supplying 70 percent of the expected shipments of the 4.7-inch iPhone 6 model in 2015. Shipments could begin as soon as July for the 4.7-inch model, with the 5.5-inch following shortly afterwards.

The 4- and 4.7-inch iPhones will be the main sales force of Apple for 2014. Foxconn's plants in Zhengzhou, China are expected to start supplying the 4.7-inch model in July and start manufacturing the 5.5-inch one in August.

Besides Foxconn, Apple also may be turning to Pegatron and Wistron to supply iPhone handsets for its next product cycle. Pegatron is believed to be a secondary supplier for the 4.7-inch iPhone 6, while Wistron may step in to supply Apple with the existing 4-inch iPhone model. Wistron is a new production partner that Apple added last year to help produce the iPhone 5c.

Rumors on the larger 5.5-inch iPhone 6 model have suggested that it may arrive as a premium model in lower quantities with perhaps exclusive features such as a sapphire crystal display. A new report from Nomura Securities shared by G 4 Games suggests that the larger model is likely to carry a $100 price premium over the 4.7-inch model. Apple had previously been reported to be negotiating with carriers for a $100 price increase on the iPhone 6, but it would make more sense for that increase to arrive in the form of a higher-end model such as the rumored 5.5-inch iPhone.

Digitimes has a fairly spotty track record with regard to Apple rumors, but it does occasionally offer accurate insight when sourcing information from within Apple's supply chain. Digitimes' latest report is one of several recent communications that unsurprisingly suggest mass production of the 4.7-inch iPhone 6 will begin this summer in advance of a fall launch. Apple is expected to follow the 4.7-inch model with a larger 5.5-inch version that will debut in late 2014 or early 2015. Both models may ship with Apple's A8 processor, an improved camera, and iOS 8.

A new research note from KGI Securities analyst Ming-Chi Kuo indicates that Apple will include Touch ID across all new iOS devices in 2014, boosting shipments and bringing the fingerprint sensor to the iPhone 6, iPad Air 2 and iPad mini 3. The report reiterates previous claims made by Kuo last month, which noted that Apple's next-generation iPads will feature Touch ID upon their releases this fall.

Apple’s Touch ID module should see shipments soar 233% in 2014. We believe every new iOS device launched this year will be equipped with Touch ID, including 4.7” and 5.5” new iPhone 6, iPad Air 2 and iPad mini 2 with Retina display. Considering shipments of new products and iPhone 5S sales last longer than in 2013, we forecast unit sales of the fingerprint sensor module to grow 233% to 120mn for 2014.

Kuo also notes that Apple will change its Touch ID module design to utilize tin over previously used chemicals to enhance durability. Apple is also expected to stick with Taiwan Semiconductor Manufacturing Company (TSMC) and its subsidary XinTec to produce the fingerprint sensors.

Last month, it was noted that TSMC provided the first batch of fingerprint sensors for the iPhone 6, iPad Air 2 and iPad Mini 3. A report in January noted that TSMC would begin production on the sensors sometime in the second quarter of this year with a new 12-inch fab processing method, however a report in February stated that TSMC would be using the same 8-inch fingerprint sensor processing method used for the iPhone 5s.

Improved shipments of Touch ID will also likely help launch supplies of all three devices, as low yield rates of the component was said to be a key factor contributing to the limited supplies of the iPhone 5s at its launch last September.