MacRumors

In a lengthy piece detailing the hardships that workers in Apple's supply chain can face, Bloomberg follows the story of a factory worker at Flextronics International, a contract manufacturer based in Singapore and Kuala Lumpur that produced camera parts for the iPhone 5.

Ahead of the launch of the iPhone 5, Flextronics had to significantly ramp up production, hiring a 1,500 new employees via brokers and recruiters in Nepal, Malaysia, and surrounding areas. Because factory jobs are highly desired, many families pay upfront fees to brokers to acquire the positions, resulting in loans that can take "imported" workers years to pay off, with factory managers controlling when workers are able to leave.

For the iPhone 5 rollout, a recruiter working for Flextronics contacted four brokers in Kathmandu, Nepal's capital, in late August and early September, urgently seeking 1,500 men to make cameras, according to three of the four brokers. The pressure to move so many men so quickly was unprecedented. "The recruitment agency was telling me, 'We need these workers, you have to send them by today,'" says Rajan Shrestha, managing director of a small company called Sharp Human Resources.

The frenzy to hire workers was how one Nepalese man, Bibek Dhong, found himself paying $250 and handing over his passport to a recruiter who promised him a good job. Dhong was forced to pay another $500 to a broker (6 months of his wages from his former job as a dairy farmer) and sign a debt agreement stating he would pay $400 more. Dhong was told to keep his broker fees secret, as Apple has a policy that prevents excessive charges by recruiters.

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Before the announcement of its Apple partnership and the new 700-employee manufacturing facility in Arizona, GT Advanced Technologies only generated 11 percent of its revenue from its sapphire business.

Going forward, with the new Apple deal, GT Advanced will see sapphire production as its main source of revenue, increasing its sapphire sales by as much as 15 to 16 times, according to a report by Cantor Fitzgerald analyst Brian White (via AllThingsD).

So far in 2013, sapphire accounted for just $29 million in revenue, while the company projects as much as $480 to $640 million in sapphire sales in 2014. According to White:

We do not expect sapphire to replace Corning's Gorilla Glass on the iPhone or iPad in the coming quarters; however, we believe sapphire could gain traction in new small form factor applications or high-end devices with Apple in the future.

AllThingsD agrees that the increase, suggesting that "Cupertino has big plans and broader uses for the sapphire material" that it currently uses in iPhone camera lenses and fingerprint-recognition buttons.

According to the press release GT Advanced released on Monday, Apple is requiring GT to maintain a minimum level of capacity and the company will be subject to certain exclusivity terms. More interestingly, GT expects to see its gross margins to drop significantly as production rises, though the recurring revenue stream from Apple will be strategically important to the company.

Apple currently uses small pieces of sapphire glass -- which provides superior durability and scratch resistance to other forms of glass -- to protect the cameras on the iPhone and on the home button for the new Touch ID-equipped iPhone 5s. A report from earlier this year suggested that future smartphones may use sapphire, a crystalline form of aluminum oxide, instead of more traditional forms of glass.

One possible destination for Apple's new sapphire glass production is in a potential smart watch project. Sapphire is already extensively used in high-end watchmaking and could be more feasible on a small screen than the larger display on a smartphone or tablet.

Earlier this week, we shared a trade-in promotion from Target, which generated tremendous interest. Target is offering $200 for any iPad, including the original 1st generation models. Outside of the promotion, Target normally offers only $65 for a 16 GB Wi-Fi original iPad, which makes the $200 gift card a great deal.

Target's trade-in promotion is still going on, ending on Saturday, November 9, leaving two days to complete potential trade-ins. We've received some mixed reports about the success of the trade-ins. Trade-ins can only be done in-store to receive the special offer, as original iPad trade-ins online are still listed with a $65 value.

While Target has altered the wording on its original offer to suggest consumers trading in iPads should use the funds to purchase an iPad Air or iPad mini, many customers are still receiving $200 gift cards with no strings attached. Target's new promotional wording is below:

"Between November 3rd thru 9th, visit your local Target Mobility store and trade in any iPad for at least $200 to use towards the purchase of a new iPad."

According to our forums and emails we've received, Target has had some difficulty processing all of the trade-ins, and some Target stores seem to be unfamiliar with the details of the promotion. While some customers have had no issues trading in their iPads, others have faced long lines due to each store only having a few employees in the Mobile department, or been turned away entirely.

For most, the process is quick and simple. A Target employee will type in the model number, check to make sure the buttons are functional and that the screen isn't cracked, then enter a license number before handing over the gift card.

While some Target locations have insisted that the $200 trade-in value must be used for an iPad purchase, forum members have been able to circumvent this by claiming to wait for a Retina iPad mini or by visiting another Target location that did not implement the same restrictions.

Apple has filed for a United States patent detailing a system for allowing a device to access and share a remote network with a second device using the low-power Bluetooth LE protocol, reports AppleInsider. The patent application was published today and credits Apple engineers Daniel Borges, Jason Giles, and Michael Larson as inventors.

Notably, the application mentions a first device acting as a hotspot and having short-range connectability with a second device, with the second device having access to remote networks. This would be very similar to the rumored interaction between Apple's upcoming iWatch and a second iOS device such as the iPhone, with the iWatch serving as an accessory and giving users easy at-a-glance access to common functions without having to take out larger devices.

The described technology would seem particularly apt for providing intermittent Internet access for the iWatch, allowing it to take advantage of low-power Bluetooth to only intermittently connect to the Internet using an iPhone as a hotspot rather than having to host its own cellular or Wi-Fi connectivity.

The proximity profile defines a proximity notification alert that the supporting device sends to the device to advertise its shared access service to the network for devices within range. In one embodiment, upon receiving the proximity notification alert the device joins the supporting device’s shared access service and briefly connects to the network to receive push notifications or other messages, before disconnecting.

The patent also details how a low-power connection protocol such as Bluetooth could prove to be advantageous as the first device remains in a low-power background mode while connecting to a network with the ability to receive push notifications:

In one embodiment, the short-range connectability to the supporting device is provided over a low-power enabled connection protocol such as Bluetooth. In a typical embodiment, the device is able to maintain itself in a low-power background mode while joining the supporting device's shared access service and briefly connecting to the network. In this manner the device may perform such activities as establishing intermittent network presence for receiving push notifications and other messages or updates, or for engaging in other network-related activities while advantageously remaining in low power mode.

Apple has long been rumored to be working on the iWatch, which is expected to provide common functions along with additional biometric integration in addition to serving as an accessory to iOS devices. Apple CEO Tim Cook stated during the company's fourth quarter earnings call last month that Apple still plans to introduce new product categories in 2014, which is a likely timeframe for the release of the iWatch as previously indicated by multiple sources. A report last week also indicated that Apple was close to striking a deal with LG Display to provide OLED displays for the device.

Apple is planning to begin offering in-store display replacements and other repairs for both iPhone 5s and iPhone 5c, reports 9to5Mac, continuing Apple's effort to lower repair costs.

These sources say that Apple Stores will be able to replace several aspects of the iPhone 5s and iPhone 5c on-site, meaning that Apple no-longer needs to fully replace iPhone 5s and iPhone 5c units with damage or other problems.

The display replacements will cost $149 for each device for users not subscribed to AppleCare+, and $79 for users subscribed to the warranty service. In addition, Apple will also have the ability to replace volume buttons, sleep/wake buttons, vibrating motors, the rear camera and speakers systems on both phones.

Apple Stores will also be able to replace the home button on the iPhone 5c, but will likely not be able to replace the Touch ID sensor on the iPhone 5s, likely due to constrained supply.

Part replacements due to defects will be free if the device is under AppleCare warranty. However, devices not under an AppleCare warranty plan there will have repair fees specific to each part, such as a $29 surcharge for a Home button replacement on the iPhone 5c.

In June, Apple began offering in-store display replacements for the iPhone 5 for $149 for both AppleCare+ and non-AppleCare+ subscribers.

Apple has internally seeded two upcoming updates to Mavericks, OS X 10.9.1 and OS X 10.9.2, to its employees, according to a source that spoke to 9to5Mac. Reportedly nicknamed "Board," OS X 10.9.1 will be released later in the month to fix several bugs introduced with OS X 10.9.

Since the release of Mavericks, users have reported several different issues, with the Mail app, mostly related to Gmail accounts. Apple has already seeded an updated Mail app to its employees and AppleSeed members, and it is possible that a Mail fix could be bundled into the next public Mavericks release. Apple is also said to be preparing updates for issues within Safari, iBooks, and Remote Desktop.

OS X 10.9.2, nicknamed "Carve", is also said to be in testing with Apple's software engineering teams, adding minor feature enhancements and additional bug fixes after the 10.9.1 update.

Also in testing, the source said, is OS X 10.9.2. That release is codenamed "Carve," and it's likely to include more bug fixes, and perhaps minor feature enhancements. Both OS X 10.7.2 and OS X 10.8.2 were updates to Lion and Mountain Lion designed to increase feature-parity between iOS and OS X. OS X Mavericks is currently lacking support for iOS's iMessage blocking feature and FaceTime Audio, so it seems plausible that OS X 10.9.2 could add those features.

According to 9to5Mac, Apple is also continuing work on the next iteration of OS X, 10.10, which has been seeded internally. The next iteration of OS X is said to alter the look of the operating system to bring it in line with iOS 7.

In addition to Mavericks updates, Apple has also been testing iOS 7 updates. As we reported this afternoon, MacRumors has seen increasing numbers of devices running iOS 7.0.4 in web logs since October 22, suggesting that the next minor update to iOS 7 could come in the near future.

Apple's bifurcation of its iPhone lineup will provide the company with the opportunity to offer new iPhone products multiple times per year in the future, according to Morgan Stanley analyst Katy Huberty. Along with pricing flexibility, the ability to offer new products at more frequent intervals will drive unit growth upwards in 2014.

Apple recently introduced both the high-end iPhone 5s and the mid-range iPhone 5c, priced slightly lower, selling both alongside the lower-end iPhone 4s. It is unclear how Apple plans to continue to upgrade these lines in the future, but according to Huberty, Apple will be able to utilize its dual product lineup for "multiple refreshes per year."

Huberty, who recently met with Apple CEO Tim Cook and CFO Peter Oppenheimer to gain some insight on Apple's future plans, also indicates that there's a lot of growth potential in Apple's services category. She suggests that Apple could, for example, expand the usage of Touch ID in the future, setting the stage for new services revenue streams

Services a meaningful opportunity. As we highlighted in our June 4, 2013 note, iOS usage stats far exceeds Android. Combining 575M+ high-end consumer accounts (most linked to credit cards or ACH) with investments Apple is making in cutting edge hardware, like the fingerprint sensor, and upgrading its installed base to the latest versions of iOS and OS X sets up for new services revenue streams, in our view.

Apple recently made some drastic moves towards improving its software and service offerings, providing OS X Mavericks for free to all users, along with a number of other free software upgrades for its iLife and iWork suite of apps. Apple has also been aiming to enter new service markets, introducing iTunes Radio earlier this year and working on completing deals with cable companies like Time Warner with the potential goal of debuting new television services.

During Apple's fourth quarter earnings call, CEO Tim Cook indicated Apple would introduce new product categories in 2014, suggesting the company would use its skills to build software, hardware, and services to create "great products" in categories that Apple does not currently participate in.

Apple unsurprisingly appears to be ramping up activity on iOS 7.0.4 as the next version of iOS to see a release to the public, with MacRumors seeing increasing numbers of devices running iOS 7.0.4 from Apple's networks showing up in web logs.

The first signs of iOS 7.0.4 appeared on October 22, the same day iOS 7.0.3 was released to the public. Activity has been ramping up over the past two weeks, but there is no word yet on when the update might be released to the public. Apple has also not seeded registered developers with any builds of iOS 7.0.4, but the company does not always do so for its minor iOS updates.

As we previously noted, iOS 7.1 devices from Apple's network began showing up in our logs in late August, and while visits from those devices increased during October, they have declined somewhat during the first week of November. iOS 7.1 would be expected to bring a more substantial number of updates, but it appears that a public launch may yet be some time off with Apple working on a smaller iOS 7.0.4 release.

iOS 8 continues to show very low levels of activity in our logs, with the next major version of Apple's iOS software undoubtedly still in the very early stages of development and a public release roughly a year in the future.

Pebble today announced a significant update to its smart watch that allows any Notification Center alert to be pushed directly to the watch, a big improvement from the prior version which only allowed some notifications like calls and text messages to be sent.

Now, any iOS 7 notification -- whether from Facebook, Google Maps, Calendar or any other app -- will appear directly on the Pebble Smart Watch. The company also announced the next major version of the Pebble SDK for developers, including new APIs for Javascript, the accelerometer, data logging and persistent storage.

A new Pebble app for iOS will enable this functionality and is currently under review by Apple. Expect an update on the iTunes Store soon. Pebble is streaming the announcement live at 10AM Pacific so developers can see the latest updates.

First, we're introducing a delightful user experience for Pebble customers using iOS. Pebble is now fully integrated with iOS 7 and works seamlessly with Notification Center. This means that any notifications that you've enabled in Notification Center on your iOS 7 device will appear on your Pebble -- just like that. It's easier than ever to pick and choose which updates you want to see on your watch. This includes notifications beyond calls, texts and emails, such as Calendar, Twitter, Facebook, Google+, Instagram, LinkedIn, Flickr, Dropbox, WhatsApp, Flipboard and more.

Second, we're launching Pebble SDK 2.0, which makes it even easier for developers to build awesome Pebble apps. SDK 2.0 opens up an entire universe of rich new watch apps thanks to four new APIs: Javascript, Accelerometer, Data Logging and Persistent Storage. These API allow developers to make Pebble apps that interface directly with the web (real-time weather, transit info, location check-in), access the accelerometer (health/fitness monitoring and gesture-based remote control), log data when disconnected from the phone (health/fitness tracking), and store info on the watch (high scores for games, settings).

The Pebble raised more than $10 million on Kickstarter, potentially proving the viability of the smart watch as a product. Apple is widely rumored to be working on its own iWatch and recently invested hundreds of millions of dollars in a new Arizona factory to make sapphire glass, perhaps for such a product.

Pebble says it has native apps from Foursquare, GoPro and Yelp on the way, with more to come. The Pebble smart watch is available for $150 in five colors from getpebble.com and at Best Buy and AT&T retail stores.

Following the release of updated iWork apps for the Mac and iOS, many power users were upset with the loss of several important features within Pages, Numbers, and Keynote.

Multiple threads on Apple's Support forums lambasted the changes, and one blogger called the removal of features within Pages an "unmitigated disaster." Apple has now responded to user outrage with a new support page detailing upcoming updates that it plans to add to all three apps within the next six months, which will see the return of many lost features.

The new iWork applications—Pages, Numbers, and Keynote—were released for Mac on October 22nd. These applications were rewritten from the ground up to be fully 64-bit and to support a unified file format between OS X and iOS 7 versions, as well as iWork for iCloud beta.

These apps feature an all-new design with an intelligent format panel and many new features such as easy ways to share documents, Apple-designed styles for objects, interactive charts, new templates, and new animations in Keynote.

In rewriting these applications, some features from iWork '09 were not available for the initial release. We plan to reintroduce some of these features in the next few releases and will continue to add brand new features on an ongoing basis.

Pages updates will include a customizable toolbar, a vertical ruler, and improved alignment guides, object placement, and word counts. Importing cells with images will also be possible, pages and sections will be manageable from the thumbnail view, and keyboard shortcuts for styles will also return.

Numbers will also gain a customizable toolbar, improvements to zoom and window placement, auto-complete text in cells, page headers and footers, and improvements to AppleScript support, which was a major complaint.

Along with a customizable toolbar, Keynote will see the return of old transitions and builds, improvements to presenter display, and improvements to AppleScript support.

As Apple works to return features to its suite of iWork apps, the company recommends that users who want to use these missing features can access previous versions of iWork applications, which are found in Applications > iWork '09. Apple also details how to revert documents to old formats to retain compatibility with its older apps.

On October 22, Apple began offering free copies of the updated iWork apps to all users who owned a previous version. The company is also supplying free copies of the apps, which are normally priced at $19.99, to any customer who purchases a new Mac.

Yesterday, we noted that a 6-core version of Apple's upcoming Mac Pro had shown up in the results database of popular benchmarking tool Geekbench, the third variety of the machine to appear there since June. We compared performance of that machine to an 8-core version from late September but noted that a 12-core version from June was tested using an older version of Geekbench with a different baseline, making direct comparisons with that machine difficult.

John Poole of Primate Labs, the company behind Geekbench, has now put together a good overview of what users should expect for the new Mac Pro when it comes to processor options and performance. With Geekbench being a cross-platform tool, Poole has taken several results from Windows machines running the processors that will be offered in the Mac Pro to develop an estimate of performance of the various Mac Pro models.

As we noted in yesterday's report, the 6-core and 8-core versions showed nearly identical Geekbench scores for single-core tests, and Poole highlights how that will be expected to hold true for the as yet unseen quad-core model due to consistent Turbo Boost frequencies of 3.9 GHz. The 12-core version will, however, score approximately 15% lower on single-core tests due to its slower 3.5 GHz Turbo Boost.

These estimates suggest that single-core performance will be similar for the 4-, 6-, and 8-core models. Since all of the processors have the same Turbo Boost frequency, and since the processors run single-core tasks at the Turbo Boost frequency, this isn't surprising news. However, it is welcome news since users will not have to sacrifice single-core performance when choosing between the 4-core and the 6- or 8-core models.

Where the 12-core version unsurprisingly shines is in multi-core situations, showing roughly 20% improvement over the previous high-end 12-core model and scores approaching 30,000. Other processor options also compare favorably to their corresponding models from the previous generation of Mac Pro.

CPU capability is of course only one part of the overall system performance, and the new Mac Pro will also offer significantly improved graphics performance in the form of standard dual AMD FirePro GPUs. In addition to the systems being able to drive up to three 4K displays simultaneously, Apple clearly expects developers of high-end software to embrace OpenCL to allow Mac Pro users to tap into that vast GPU power for general computational tasks.

Apple's new Mac Pro is launching in December, and the company has so far only released pricing on base configurations of the quad-core ($2999) and 6-core ($3999) models. Customized configurations boosting to the available 8-core or 12-core CPU and the high-end D700 GPU, as well as other options such as RAM and flash storage, will push prices much higher for customers interested in maximum performance.

Several times in recent days, we've mentioned a website called Apple-Tracker.com that was allowing customers to easily monitor in-store Personal Pickup availability of iPhone 5s and iPad Air models.

The site offered a much more efficient method of checking for availability than on Apple's online store, showing product availability of all capacities of a given color/connectivity combination at the 20 closest retail store locations to a given zip code on a single screen. In contrast, Apple's online store requires users to select a single color/connectivity/capacity combination, enter a zip code, and then navigate through four pages of availability listings to see all 20 closest stores.

Late yesterday, the site's operator suddenly shut down the stock tracker, citing a takedown request from Apple's lawyers sent to Heroku, the cloud app platform where the tool had been built. The request had been sent by Apple on October 17 when the site was tracking iPhone 5s availability, but it had since expanded to include iPad Air and was preparing to track Retina iPad mini stocks as well. In particular, Apple cited the tracker's violations of the terms of use for its own site:

Your Use of the Site. You may not use any “deep-link”, “page-scrape”, “robot”, “spider” or other automatic device, program, algorithm or methodology, or any similar or equivalent manual process, to access, acquire, copy or monitor any portion of the Site or any Content, or in any way reproduce or circumvent the navigational structure or presentation of the Site or any Content, to obtain or attempt to obtain any materials, documents or information through any means not purposely made available through the Site. Apple reserves the right to bar any such activity.

"Mordy", the tool's author, notes that he has no interest in fighting Apple on this issue, and so he has shut down the site.

Apple is set to add new manufacturing partners in Asia to handle production of its current line of iOS devices, reports The Wall Street Journal.

The company will contract with Wistron to produce the cheaper iPhone 5c and Compal Communications to assemble the iPad mini, though the report does not say whether the latter will assemble the iPad mini or Retina iPad mini. Apple is reportedly expanding its supplier list as its primary supplier, Foxconn, is focused on producing the iPhone 5s.

Furthermore, Apple is reportedly said to be unhappy with the labor issues that have surrounded Foxconn over the past few years, along with the repair costs said to have come with the high return rate of defective iPhones:

Hon Hai, also known as Foxconn, has also been under scrutiny for its labor practices, creating a headache for Apple, they said. According to J.P. Morgan analyst Alvin Kwock, the high return rate of defective iPhone 5 smartphones also led to tensions between Apple and Hon Hai over which company would be responsible for repair-work costs.

Last month, Apple notified Pegatron and Foxconn that it would be reducing orders of the iPhone 5c, with another report stating that iPhone 5s production was to be boosted by 75 percent to meet demand. The iPhone 5s remains in very short supply, with carriers such as Verizon and T-Mobile indicating that they could have sold even more units of the device had supplies been readily available. The iPhone 5c, in contrast, has seen good supplies throughout Apple's distribution channels, allowing the company to meet demand.

"Apple has raised this quarter's iPhone 5S orders from Hon Hai as demand has been stronger than expected. But it takes time to boost production capacity and Apple can't find other assemblers to increase production to meet demand immediately," said the Hon Hai executive.

Meanwhile, Apple's upcoming iPad mini with Retina display is said to be in very short supply, with Apple CEO Tim Cook stating last week during the company's fourth quarter earnings call that it was "unclear whether we will have enough for the quarter or not" and a report last week stating that the company is turning to Samsung as low display yields for the Retina iPad mini continue. Currently, it is not known when specifically the second-generation iPad mini will be released, as Apple has only stated that the tablet will be out by the end of November.