MacRumors

Today's quarterly results call revealed that Apple's Mac sales are down 16% compared to last year. Apple sold just 312,000 Macs per week compared to 371,000 per week during the same time period a year ago.

Peter Oppenheimer noted that Apple has experienced significant constraints on the new iMacs, and was only able to ship them during December. Without these constraints, he says, Mac sales would have been higher.

IDC estimates the global personal computer market contracted by 6% during the December quarter. We introduced the new 13-inch MacBook Pro retina display as well as our stunning new iMacs in October. As we projected a quarter ago, we were significantly constrained with respect to the new iMacs and were only able to ship them for the final month of the December quarter. We believe our Mac sales would have been much higher absent those constraints.

Apple was only able to provide 3 to 4 weeks of inventory, below its target of 4 to 5 weeks. Apple's newest iMacs have been plagued with production issues, mainly due to a new lamination process used for the displays.

Cook further addressed this in the Question and Answer section.

The best way to answer this is to look at the previous year. The difference is $1.1 billion from last year. iMacs were down by 700k units year over year. As you remember, we announced new iMacs late in October. Announced they would ship in November and December. Did ship by those dates. Limited weeks of ramping on those products during the quarter. Significant constraints on the iMac at the end of the quarter. Sales would have been materially higher without those constraints. Tried to share this on the conference call in October.

If you look at last year, we had 14 weeks in the quarter last year. 13 weeks this year. Channel inventory was down from the beginning of the quarter by more than 100k units. Didn't have the iMacs in channel. These factors bridge more than the difference between this year's sales and last year's.

Cook also mentioned a few other minor factors, including the weak PC market and the impressive sales of the iPad. Apple sold more than 23 million iPads, and Cook said that some cannibalization was almost certainly a factor.

Apple today announced financial results for the fourth calendar quarter of 2012 and first fiscal quarter of 2013. For the quarter, Apple posted revenue of $54.5 billion and net quarterly profit of $13.1 billion, or $13.81 per diluted share, compared to revenue of $46.33 billion and net quarterly profit of $13.06 billion, or $13.87 per diluted share in the year-ago quarter. Apple's quarterly profit and revenue were both all-time company records, but Wall Street analysts had projected even slightly higher numbers.

Gross margin for the quarter was 38.6 percent, compared to 44.7 percent in the year-ago quarter, and international sales accounted for 61 percent of revenue. Apple also declared another dividend payment of $2.65 per share, payable on February 14 to shareholders as of the close of trading on February 11. The company currently holds $137.1 billion in cash and marketable securities.

Quarterly iPhone unit sales reached 47.8 million, compared to 37 million in the year-ago quarter and the company sold 22.9 million iPads, up from 15.4 million in the year-ago quarter. Apple sold 4.1 million Macintosh computers, compared to 5.2 million in the year-ago period, as well as 12.7 million iPods, down from 15.4 million a year ago. Apple set new sales records for both iPhone and iPad sales.

“We’re thrilled with record revenue of over $54 billion and sales of over 75 million iOS devices in a single quarter,” said Tim Cook, Apple’s CEO. “We’re very confident in our product pipeline as we continue to focus on innovation and making the best products in the world.”

Apple's guidance for the second quarter of fiscal 2013 includes expected revenue of $41-43 billion.

Apple will provide live streaming of its Q1 2013 financial results conference call at 2:00 PM Pacific, and MacRumors will update this story with coverage of the conference call highlights.

Despite the record revenue and earnings, Apple's stock is currently down nearly 5% in after-hours trading after falling short of analysts' expectations and issuing weaker guidance than many had expected.

Conference Call Highlights, Q&A Follows

Tim Cook:

- We are incredibly pleased to report an extraordinary quarter. New records for iPhone and iPad sales. No technology company has ever reported these kinds of results. Most prolific period of innovation and new products in Apple's history. New products in every category we make in the past few months.
- One team to surprise and delight our customers. Part of Cook's job is to preserve corporate culture. No greater reward than seeing how customers love our products. Our fundamentals: people, strategy and pipeline, ecosystem and retail stores will serve us well.
- Tomorrow is anniversary of Mac revolution. 1984, Jobs introduced Macintosh at shareholder's meeting in Cupertino. We've come a long way.
- We don't measure success just by the numbers. The most important thing to us is that our customers love our products, not just buy them. Laser focused on unprecedented customer experience.
- Sold more than 500 million iOS devices, more than 10 per second last quarter.

➜ Click here to read rest of article...

Research firm Gartner today shared its estimates of global semiconductor purchases for 2012, finding that Samsung has retaken the title Apple had gained in 2011 when it leapt over both Samsung and HP. Samsung (28.9% growth) and Apple (13.6% growth) registered as the biggest winners in 2012, as the overall market declined by 3% with Sony (1.9%) and Lenovo (0.3%) being the only other top-ten companies showing positive performance.

"Although Samsung and Apple continue to go from strength to strength, other leading electronic equipment makers fared less well, and six of the top 10 reduced their demand in 2012," said Masatsune Yamaji, principal research analyst at Gartner. "In addition to a weak macroeconomic situation, a dramatic change in consumer demand contributed to a reduction in semiconductor demand in 2012.

Yamaji pointed to the strong shift to mobile devices as a primary reason for the overall decline in the semiconductor market, with traditional computers that require significantly higher semiconductor content experiencing relatively poor sales in the face of smartphone and tablet popularity.

Top Ten 2012 Semiconductor Customers (Billions of Dollars)

Gartner's numbers measure the total silicon content of all products designed by Apple and each of its competitors, a metric known as Design TAM. This is distinct from Purchasing TAM, which would attribute to a given company only the amount actually purchased by the company. As an example of the difference between the two metrics, semiconductors purchased by a third-party manufacturing partner would generally count toward the primary company's Design TAM but not its Purchasing TAM.

Philip Elmer-Dewitt has assembled his quarterly list of analyst predictions ahead of Apple's earnings report this afternoon. The list includes estimates from 67 analysts: 28 "independent" and 39 "institutional" who work for large investment houses or research organizations.

As usual, the independents are much more bullish than the institutional analysts. The independent consensus expects earnings per share (EPS) of $15.11 on revenue of $58.84 billion. The institutional consensus is EPS of $13.45 on $54.74 billion in revenue. Across all analysts, the median expectation is for earnings of $14.20 on $55.96 billion in revenue, a year-over-year increase of 10% and 30% respectively. 2011's holiday quarter was the strongest in the company's history.

Last quarter the company earned $8.2 billion in profit on revenue of $36 billion. For this quarter, Apple issued guidance of $52 billion in revenue with profits of $11.75 per share. The company has, in the past, exceeded its guidance by a significant margin.

Apple will announce its earnings for the first fiscal quarter of 2013 (fourth calendar quarter of 2012) and host a conference call regarding the release this afternoon at 5:00 PM Eastern / 2:00 PM Pacific. The earnings release itself typically comes in around 4:30 PM Eastern. MacRumors will have live coverage of the proceedings.

A few of the details on the the history of Siri, including Steve Jobs' move to contact the company just three weeks after the independent app's launch, have surfaced over the last several years, but The Huffington Post has now published an extensive history of the technology and company that reveals a few other interesting details.

The report outlines how Siri grew out of a Department of Defense project to integrate with 42 different web services to perform its virtual assistant services, many of which were discontinued when Apple scaled back the platform for inclusion in iOS. Apple has been relatively slow to build Siri's feature set back up, but has been making progress on the effort.

Perhaps most interestingly, the report reveals that Siri was very nearly an Android exclusive for Verizon, but the deal was obviously broken when Steve Jobs and Apple moved quickly to acquire Siri.

In the fall of 2009, several months before Apple approached Siri, Verizon had signed a deal with the startup to make Siri a default app on all Android phones set to launch in the new year. When Apple swooped in to buy Siri, it insisted on making the assistant exclusive to Apple devices, and nixed the Verizon deal. In the process, it narrowly avoided seeing Siri become a selling point for smartphones powered by its biggest rival, Google. (Somewhere in the vaults of the wireless giant, there are unreleased commercials touting Siri as an Android add-on.)

The report goes on to discuss some of the challenges faced by Siri at Apple, including difficulties in negotiating partnerships with content providers, Apple's emphasis on broadening access to other countries and languages over pushing the technology forward for a smaller subset of users, and corporate politics that have resulted in the loss of some of Siri's biggest advocates at Apple.

Siri is also facing strong competition from the Android platform of which it was almost a part. Google has moved quickly to develop its own virtual assistant capabilities in the form of Google Now, and many are looking for Apple to step up the pace of improvement with Siri in order to reestablish it in users' minds as a key advantage for Apple as it was touted at its 2011 launch on the iPhone 4S.

Steve Jobs threatened to file a patent suit against Palm if they didn't agree to not hire Apple employees, according to a Reuters report on a court filing (via AppleInsider) made public Tuesday. The court filing is a part of a class action lawsuit against Apple, Google, Pixar, Lucasfilm and others over an agreement those companies made to not actively solicit each other's employees to hire them away.

The companies attempted to keep an array of documents secret, but that request was rejected in parts by Judge Lucy Koh, which is why a statement from former Palm executive Edward Colligan has become public record. Colligan said that Jobs proposed the agreement to Palm, and that Jobs suggested that if Palm didn't agree they could face lawsuits "alleging infringement of Apple's many patents." Colligan responded to Jobs with an email:

Your proposal that we agree that neither company will hire the other's employees, regardless of the individual's desires, is not only wrong, it is likely illegal.[...] Palm doesn't target other companies-we look for the best people we can find. l'd hope the same could be said about Apple1s practices. However, during the last year or so, as Apple geared up to compete with Palm in the phone space, Apple hired at least 2% of Palm's workforce. To put it in perspective, had Palm done the same, we'd have hired 300 folks from Apple. Instead, to my knowledge, we've hired just three.

Colligan also told Jobs that he was not intimidated by patent litigation and said that Palm had recently acquired some patents from Siemens that it could use against Apple and its iPhone patents. Jobs responded:

Just for the record, when Siemens sold their handset business to BenQ they didn't sell them their essential patents but rather just gave them a license. The patents they did sell to BenQ are not that great. We looked at them ourselves when they were for sale. I guess you guys felt differently and bought them. We are not concerned about them at all. My advice is to take a look at our patent portfolio before you make a final decision here.

Walter Isaacson's biography of Steve Jobs revealed that Jobs was angry at Palm for hiring former employees, although the threat of patent litigation in Colligan's statement is certainly a new revelation.

"Jobs was so furious that Palm was hiring some of his former employees that he complained to Bono, who was a cofounder of a private equity group, led by the former Apple CFO Fred Anderson, that had bought a controlling stake in Palm."

These aren't the only instances that Jobs became angry at the poaching of Apple employees, however. In January 2012 it was revealed, also according to a court filing, that Jobs complained to then-Google CEO Eric Schmidt about the hiring of Apple employees at Google.

Recently, current CEO Tim Cook was ordered to give a deposition in this case, so more nuggets of information are likely to be released as court filings are made public.

As TechCrunch reports, Apple has pulled photo sharing app 500px for iOS from the App Store because of concerns over nude photos. Though the company says that its recent acquisition ISO500 for 500px from Pulpfingers was also removed from the App Store, it remains available for download.

500px is a popular website for both professional and amateur photographers, and according to 500px COO Evgeny Tchebotarev, the company's mobile apps have been downloaded by more than a million users. TechCrunch has a rundown on what happened:

The apps were pulled from the App Store this morning around 1 AM Eastern, and had completely disappeared by noon today. The move came shortly after last night's discussions with Apple related to an updated version of 500px for iOS, which was in the hands of an App Store reviewer.

The Apple reviewer told the company that the update couldn't be approved because it allowed users to search for nude photos in the app. This is correct to some extent, but 500px had actually made it tough to do so, explains Tchebotarev. New users couldn't just launch the app and locate the nude images, he says, the way you can today on other social photo-sharing services like Instagram or Tumblr, for instance. Instead, the app defaulted to a "safe search" mode where these types of photos were hidden. To shut off safe search, 500px actually required its users to visit their desktop website and make an explicit change.

Tchebotarev said the company did this because they don't want kids or others to come across these nude photos unwittingly. "Some people are mature enough to see these photos," he says, "but by default it's safe."

According to Tchebotarev, 500px does not allow explicit pornographic images, and he explains that most of the nude images on 500px are "artistic."

Though the app has been in the App Store for 16 months, it runs off of the 500px site, which is currently limited to community moderation for inappropriate photos. 500px is working on a solution that will automatically flag questionable photos to prevent them from appearing in searches, but the technology is not yet finished.

Flickr, Tumblr, and other photo sites that function in the same way, with user-based moderation, remain available in the App Store.

500px has created a fix to address the nude photo issue, which has already been submitted to Apple and could result in the return of the apps to the App Store shortly.

The U.S. Patent and Trademark Office today officially granted Apple a patent (via AppleInsider) describing methods for automatically adjusting screen brightness to suit the content being displayed. The patent, which was originally filed for in mid-2006 and can actually be traced back to a separate 2002 application, addresses techniques for saving battery life on portable devices.

The improved techniques reduce power consumption by lowering display intensity at appropriate times. In one embodiment, the display intensity can be controlled depending on the type of content being displayed. For example, when displaying certain types of content, the display intensity can be lowered from its otherwise high, constant intensity level. In another embodiment, the display intensity can be controlled depending on the characteristics of the content being displayed. For example, when displaying images that are light, the display intensity can be lowered from its otherwise high, constant intensity level. In still another embodiment, the display intensity can be controlled depending on the type and characteristics of content being displayed.

Apple's battery-powered devices have long had the capability to automatically dim displays based on such criteria as power source (battery vs. wall power), ambient light levels and usage (dimming the display of a device that hasn't been used for a particular time interval). Dimming the screen based on content, such as when a particularly bright image is displayed, requires a more sophisticated approach, something that Apple has clearly been working on for some time.

Apple actually now uses a variation on this invention for its Passbook application in iOS 6 for the iPhone, automatically boosting the display's brightness to maximum when the app is launched in order to make it easier for scanners to read the 2D barcodes used on passes within the app.

The patent suggests that Apple's plans for content-sensitive automatic brightness adjustment could even extend as far as frame-by-frame or scene-by-scene adjustments when viewing videos, with users also being able to configure their own preferences for content-based brightness.

Microsoft today announced that its Surface Pro tablet will go on sale on February 9 in the United States and Canada. Originally slated to arrive in January, the Surface Pro tablet is priced at $899 for the 64GB model and $999 for the 128GB model.

The Surface Pro sports an Intel Core i5 processor with Intel HD Graphics 4000, 4GB of RAM, and a more robust battery. Unlike the RT version of the Surface, it is able to run the full version of Windows 8 as well as Windows 7 applications.

Both versions of the Surface Pro ship with a Surface pen, but the Touch or Type Covers, which retail for $100, are not included.

Anandtech took a preliminary look at the tablet, and created a chart comparing the Surface Pro to the Surface RT and Apple's iPad.

Beginning on February 9, the Surface Pro will be available for purchase on Microsoft’s website, at Microsoft retail outlets, and third party retailers like Staples and Best Buy.

Alongside the Pro, Microsoft is planning to release a 64GB standalone version of the Surface RT for $599, $100 less than the version that ships with the included Touch Cover, and a slew of new Surface accessories.

Earlier this month, Digitimes claimed that Apple was planning to launch a larger and cheaper iPhone in the second half of this year, seeking to make an impact on emerging markets and combat the growing screen sizes seen on Android devices.

Rumors of cheaper and larger iPhones as part of a multi-pronged product strategy for Apple have continued to circulate, but the idea of a new iPhone being both larger and cheaper drew skepticism and questions about how the company would be able to accomplish both goals in a single device.

Digitimes has now published a new report backtracking on its earlier claim and indicating that Apple only plans to launch two new 4-inch iPhone models in 2013, presumably the iPhone 5S and some form of a new iPhone 5, perhaps revamped into a cheaper form factor based around a plastic shell. A larger iPhone is reportedly still in the works, but will not be seeing a launch this year.

Previously it was said that Apple would release a lower-cost version of its iPhone with a bigger screen in 2013. But the sources claimed that Apple is indeed developing an iPhone with a bigger screen, but that will not be among the models to be launched this year.

One of the two versions to be introduced this year will target the midrange market segment, but both will adopt in-cell touch technology.

The report notes that Apple may struggle to bring in-cell display technology to a lower-cost iPhone given issues with yields on the panels, which allow for the thinner profile seen on the iPhone 5, but yields on the new technology are reportedly improving.

Amazon is continuing its full-frontal attack on Apple's iTunes and App Store platforms, announcing today that it is expanding its In-App Purchase program to include virtual goods and currencies on Mac, PC and Web-based games. Amazon has previously offered IAP for Android and Kindle Fire developers, including the ability to order physical goods from within apps.

Further expanding its multi-platform, end-to-end offering for game developers, Amazon today announced a new In-App Purchasing service that enables developers to let customers use their Amazon accounts to purchase virtual goods and currencies from within Mac, PC and Web-based games. With today’s announcement, Amazon now provides In-App Purchasing services for Mac, PC and Web, Android and Kindle Fire developers, enabling them to offer Amazon’s millions of customers a convenient, trusted and secure buying experience.

This isn't the only development in Amazon's digital store efforts. Recently, Amazon optimized its MP3 music store so mobile iOS devices could purchase music directly on the device via Safari.

Apple and Amazon have been dueling in court over the trademark for the "app store" term, with the most recent development sending Apple and Amazon into court-ordered settlement talks.

Research firm Kantar Worldpanel today issued a report indicating that Apple continued to maintain its position as the best-selling smartphone platform in the United States during the fourth quarter of 2012. Kantar Worldpanel, which releases its rolling quarterly data on a monthly basis, indicated that Apple retook the lead from Android in the August-October period and gathered a majority share for the first time in the September-November period.

Looking at year-over-year comparisons, iOS increased its market share in the final quarter of 2012 to 51.2% from 44.9% in the same quarter the previous year. Android sales remained almost constant at just over 44%, with nearly all of Apple's gains coming at the expense of Research in Motion and other smaller players.

“Apple’s continual improvement is thanks to both the iPhone 5 and older models attracting various customer groups, from repeat Apple buyers, first time smartphone buyers and those coming from other smartphone brands," said Kantar Worldpanel ComTech analyst Mary-Ann Parlato.

Kantar Worldpanel notes that 35% of Apple's sales during the period were to those upgrading from a previous iPhone, with 36% switching from a competitor platform and 30% upgrading from a feature phone to their first smartphone.

Kantar's data comes just as Verizon announced its results for the fourth quarter, revealing that the iPhone represented approximately 63% of the carrier's total smartphone activations.