MacRumors

Macworld | iWorld 2012 kicked off this morning in San Francisco with the opening of the expo show floor. For years, Macworld was the major trade show for Apple to announce their new products. The venue was the launching ground for the first iPhone launch back in 2007.

Since Apple's departure, the show has continued with a focus on 3rd party companies. This year, the show has been rebranded as Macworld | iWorld reflecting the increased importance of iOS in the Apple ecosystem.

Clear

Realmac Software and Impending used Macworld | iWorld to announce their new to do app for the iPhone. Impending is a new studio formed by Phill Ryu and David Lanham. Ryu is best known for his work on MacHeist, which MacRumors has partnered with in the past.

The app is called Clear and is a minimalist take on the to do / list manager app, focusing on simple gestures to manage all elements of the list:

The app has not yet launched but will be coming in the next couple of weeks. It will be a free download for the basic app with in-app purchases for color themes and the ability to have multiple lists.

WDC MyBook Thunderbolt Duo

At least one new Thunderbolt product has been announced. Western Digital announced that they would be showing off their MyBook Thunderbolt Duo drive system at Macworld. The new drives will presumably be similar to their existing MyBook product line. Pricing and availability has not yet been announced.

We'll have more from Macworld | iWorld over the next few days.

The New York Times today published a lengthy report discussing working conditions at the facilities of Apple's suppliers in China, part of a growing focus on how Apple's popular products are made. While the company is making strides in holding its suppliers accountable to company standards, the report cites former Apple executives who note that the company continues to struggle balancing its desire for better working conditions and workers' rights with its business priorities.

Some former Apple executives say there is an unresolved tension within the company: executives want to improve conditions within factories, but that dedication falters when it conflicts with crucial supplier relationships or the fast delivery of new products. [...]

“We’ve known about labor abuses in some factories for four years, and they’re still going on,” said one former Apple executive who, like others, spoke on the condition of anonymity because of confidentiality agreements. “Why? Because the system works for us. Suppliers would change everything tomorrow if Apple told them they didn’t have another choice.”

Apple is far from the only company experiencing such tensions, but has been receiving the most publicity due to the popularity of its products and its booming financial results.

Apple details its efforts on monitoring supplier responsibility in an annual report, outlining hundreds of audits it conducts to check for compliance and the steps it has taken to remedy issues discovered as part of the process. But sources note that while Apple routinely threatens companies with a loss of business if issues are not addressed, the company in practice has tolerate continued issues because it frequently has few alternatives in its supply chain.

“If you see the same pattern of problems, year after year, that means the company’s ignoring the issue rather than solving it,” said one former Apple executive with firsthand knowledge of the supplier responsibility group. “Noncompliance is tolerated, as long as the suppliers promise to try harder next time. If we meant business, core violations would disappear.”

The highest-profile issues at Apple suppliers have involved a number of suicides at Foxconn's facilities and separate explosions at Foxconn and Pegatron facilities last year that together resulted in four deaths and 77 injuries.

Apple has over 150 suppliers contributing to its products, many of them located in China and other Asian countries where workers are plentiful and wages low in comparison to other regions of the world. Last week, The New York Times detailed how the U.S. has been unable to compete with China for production of the iPhone and other devices as factories in Asia have proven to be considerably more flexible in their ability to scale production up and down and have become the location for nearly the entire supply chain.

But while the economics and logistics of manufacturing in China bring Apple speed, scale, and costs that are unmatchable in the United States, the company finds itself struggling to deal with the human factor that has become increasingly visible alongside Apple's rise to prominence.

Research firm Strategy Analytics today announced the results of its calculations of worldwide tablet shipments during the fourth quarter of 2011, revealing that Apple continues to hold a majority of the market as Android improves its standing on the strength of Amazon's Kindle Fire.

Peter King, Director at Strategy Analytics, said, “Global tablet shipments reached an all-time high of 26.8 million units in Q4 2011, surging 150 percent from 10.7 million in Q4 2010. Demand for tablets among consumer, business and education users remains strong. Apple shipped a robust 15.4 million iPads worldwide and maintained its strong market leadership with 58 percent share during the fourth quarter of 2011. Apple shrugged off the much-hyped threat from entry-level Android models this quarter.”

Despite strong growth in shipment share for Android, Apple's share is down less than four percentage points since the firm's estimates for the second quarter of last year. Android's other gains appear to have come at the expense of Microsoft and Research in Motion, which registered at 4.6% and 3.3% respectively during the second quarter.

The relevance of Strategy Analytics' numbers have been questioned in the past due to its counting of shipments rather than end sales to customers. With many early Android tablets seeing little interest from consumers, the firm's reports were seen as overstating Android's impact by counting Android tablets still sitting on store shelves while Apple was selling nearly every iPad it could make. It is unclear whether that dynamic has changed with the introduction of the Kindle Fire, which has reportedly seen fairly strong adoption and which may have lower channel inventory needs due to Amazon's heavy emphasis on distribution through its own website.

AT&T today announced its financial results for the fourth quarter of 2011, revealing that the carrier saw record-smashing sales of 9.4 million smartphones, nearly double the previous quarter's sales and 50% higher than the company's previous record. The iPhone was clearly the primary driver of smartphone sales for AT&T, as the carrier reported 7.6 million iPhone activations during that quarter, with the "majority" of those activations being iPhone 4S devices.

In the fourth quarter, the company set a new record with 9.4 million smartphones sold, nearly double the number sold in the third quarter and 50 percent more than the previous quarterly record. Fourth-quarter smartphone sales represented more than 80 percent of postpaid device sales. Both iPhone and Android device sales set records. During the quarter, more than 7.6 million iPhones were activated, the majority of which were iPhone 4S, which went on sale Oct. 14, and more than twice as many Android smartphones were sold versus the fourth quarter a year ago. iPhone sales were helped by a superior customer experience, with AT&T delivering download speeds up to three-times faster than on other U.S. carriers' networks.

The iPhone and total smartphone numbers can not be directly compared, however, as the "activations" number AT&T reports for iPhones includes used devices activated on new contracts such as when a user's old device is sold or given away upon upgrading.

AT&T also touts its lead over Verizon in iPhone activations, noting that it has continued to easily outpace Verizon every quarter since AT&T lost exclusivity on the iPhone in early 2011.

Finally, AT&T notes that it has continued to improve its voice and data network, with more than 80% of data traffic now coming over the carrier's enhanced backhaul that allows for "4G" speeds on devices supporting at least HSPA+, such as the iPhone 4S. The carrier also reports that "call retainability", an inverse measure of dropped call rates, has continued to increase and was over 99% throughout the quarter for 3G connections on a nationwide basis.

According to 9to5Mac, during today's town hall meeting, Apple CEO Tim Cook announced to employees that they would get $500 off Macs and $250 iPads.

The new discount program starts in June 2012, and can only be used once every 3 years. Employees also need to have been working at Apple for at least 90 days. The discount is reportedly for both corporate and retail employees. The discount is said to exclude the Mac mini.

Apple employees presently are allowed a one-a-year 25% discount on Apple systems. One report even claims that this discount will remain in place alongside the new discounts.

In 2007, shortly after the original iPhone's launch, Apple had announced a similar perk for employees. At that time, Steve Jobs announced that all full time and part time Apple employees would receive an 8GB iPhone.

Brazilian newspaper Folha reports [Google translation] that the Brazilian government has officially approved tax incentives that will allow Foxconn to begin producing iPads in the country. Interministerial Ordinance #34, signed on Monday and published in Brazil's official register today, specifically provides for a reduction in or exemption from certain taxes associated with the production of touchscreen tablet devices lacking a keyboard and weighing less than 750 grams.

According to ministerial decree 34 published Wednesday in the "Official Gazette", the company will be entitled to the benefits provided for in Decree 5906 of September 2006.

The determination provides for exemption or reduction of the IPI (Excise Tax), PIS and Cofins for companies investing in research and development of technology products.

The iPad 2 of course fits within those specifications, weighing in at just over 600 grams with only slight variation among the various models. The ordinance also permits the production of accessories, cables, power supplies and manuals associated with the allowed tablet devices. While the ordinance applies generically to tablet devices, it has clearly been written to support Foxconn's plans for the iPad.

Last April, Foxconn announced a major push to bring iPad production to Brazil, but the company's efforts were slowed as it negotiated with government officials over tax breaks and other issues. As recently as October the company had signaled its intention to begin production by December, and while the company has missed that target it now appears ready to move forward.

The launch of iPad production in Brazil comes at a key time for Apple, as CEO Tim Cook noted just yesterday during the company's earnings conference call that Brazil is its next area of emphasis after China among the "BRIC" countries with newly advanced economies. Russia and India are the other two countries in that grouping and Cook acknowledged that Apple has begun to "go deeper into Brazil" as its next target, although he cautioned against any expectations of Apple retail stores arriving in the country over the near term.

High import taxes on foreign-made goods have prevented Apple from making significant inroads in Brazil, with iPad pricing currently starting at the equivalent of US$925 for the 16 GB Wi-Fi iPad 2. With Foxconn moving iPad production to Brazil under the new tax incentives, Apple should be able to offer more competitive pricing on the device as production ramps up. Photos of a Brazilian-made 8 GB iPhone 4 showed up in late November, suggesting that Foxconn is also ramping up domestic production of new iPhone devices for Brazilian customers.

9to5Mac reports that it has received word from a "reliable" source at Foxconn that Apple is gearing up to begin production of the iPhone 5, suggesting that the company could be pushing for a mid-year launch more in line with pre-iPhone 4S debuts.

The source said various sample devices are also floating around (which vary slightly from one another) so it is impossible to tell which one will be the final. Some things in common with all of them, however, are:

- 4+ inch display (made by LG on at least one of them)
- No teardrop-shaped devices as were rumored in the lead up to the iPhone 4S. Samples so far have been symmetrical in thickness. Also longer/wider.
- None of the sample devices have the iPhone 4/4S form factor
- None of the devices are final versions

The report notes that the start of production seems to be coming several months ahead of last year's schedule, indicating that Apple could be targeting a launch well ahead of last year's October debut of the iPhone 4S. Consequently, Apple could be returning to its traditional iPhone launch pattern of an introduction at the company's Worldwide Developers Conference (typically held in June) with availability in the first batch of countries coming just a few weeks later.

Some of the details of today's report are very similar to those shared in an iLounge report from last November that also claimed a 4-inch next-generation iPhone 5 without a teardrop shape was being targeted for a summer launch.

Speculation on Apple's next-generation iPhone launch timing has been split, with some observers suggesting that the iPhone 4S was an anomaly for Apple and that it will return to the usual mid-year timeframe, while others have suggested that moving back to the mid-year launch would make for an extremely short lifecycle for the iPhone 4S.

Update: Daring Fireball's John Gruber specifically refutes the claim that iPhone 5 production is starting up. He also doubts the claim that the device is likely to be longer and wider that the current form factor, although he does not appear to suggest that he has specific knowledge on that aspect.

Reuters reports on new data from research firm Kantar Worldpanel ComTech showing that Apple slipped past Android by the narrowest of margins in fourth quarter U.S. smartphone sales, with Apple's iPhone taking 44.9% of the market and Android taking 44.8%.

"Apple has continued its strong sales run in the U.S., UK and Australia over the Christmas period," Dominic Sunnebo, global consumer insight director at the research firm said.

"Overall, Apple sales are now growing at a faster rate than Android across the nine countries we cover," Sunnebo added.

The results, driven by Apple's blockbuster quarter in the wake of the iPhone 4S launch, saw Apple double its U.S. sales share year-over-year while Android slipped from its 50% share a year ago. Apple yesterday reported sales of 37 million iPhones during the quarter, far exceeding expectations.

Kantar's report also focuses on Windows Phone, which continues to struggle despite the high-profile launch of Nokia's Lumia smartphones. Windows Phone's market share remains at less than 2% in all nine markets followed by Kantar.

According to a new report from Israeli business newspaper Calcalist (via 9to5Mac), Apple has begun hiring for its research and development center in Haifa, Israel with a goal of opening the center by the end of February. The report claims that Apple has already received "several hundred resumes" from engineers looking to work in the new center, which is being headed up by Apple's newly-hired Israeli high-tech executive Aharon Aharon.

The report notes that is likely to set up its research center near existing facilities run by Intel, Microsoft, and Phillips, with Apple seeking expertise in chip development, specifically with electrical circuits and hardware testing and verification.

Apple's new research center effort is a separate initiative from its recent acquisition of Israeli flash memory firm Anobit. Apple CEO Tim Cook noted on yesterday's earnings conference call that Anobit is currently being integrated into Apple's structure and that it will operate under hardware engineering chief Bob Mansfield. 9to5Mac reports that Apple has sent vice president Johny Srouji to oversee Anobit's operations in Israel. A native of Israel, Srouji worked for IBM and Intel (including several stints at those companies' operations in Israel) before joining Apple in 2008. Srouji is overseeing aspects of Apple's VLSI operations, which focus on chip design and implementation.

As noted by think broadband, a privacy flaw in the way UK carrier O2 handles web traffic on mobile devices has resulted in users' mobile numbers being sent to any website visited from the device as part of the headers in the HTTP requests. While O2 is apparently still investigating the situation, it appears to have the potential for significant privacy-related issues.

If you're reading this news article using your O2 mobile phone, you'll be pleased to know that O2 have already sent us your mobile phone number within the HTTP headers which normally contain information about how content can be displayed on your device. These headers are not normally seen by users, and usually not logged by most websites, but the flaw allows malicious sites to get more personal information about you than you may be willing to share.

For example, if you open an e-mail which includes references to external images, the mere action of opening the e-mail would divulge your phone number. This could be used by anyone undertaking a phishing attack or other scam to get more information from you. The opportunity to abuse this is potentially endless.

The issue was discovered by Twitter user @lewispeckover, who then set up a website to allow users to see what headers are being sent as part of their HTTP requests to websites.

He now notes that the headers coming from his device appear to have stopped showing his mobile phone number, although O2 has yet to issue an official statement on the matter. The company's Twitter account is continuing to blast out responses to concerned users, noting only that the company is looking into the situation and will issue an update when it knows more.

The issue is not exclusive to the iPhone and has the potential to affect all mobile data on the second-largest carrier in the UK, although some users have reported that they are not seeing their mobile numbers appearing in their HTTP request headers. The issue has the potential to for a significant impact on UK iPhone users, as O2 has proven to be a popular choice for iPhone users dating back to its status as the exclusive iPhone carrier in the UK when the device originally launched back in 2007.

Those familiar with the UK's privacy laws have indicated that mobile phone numbers are not considered protected information, but the disclosure of such numbers as part of standard HTTP requests does have the potential to carry implications for users.

Contrary to some reports, Apple CEO Tim Cook said today that the company hadn't seen any slowdown in iPad sales following the introduction of the much-hyped Kindle Fire tablet.

When asked by an analyst during today's quarterly earnings call about the impact on the iPad from lower priced tablets, Cook noted that the company sold a record 15.4 million iPads and that Apple doesn't consider "limited function tablets and e-readers to be in the same category as the iPad". A big reason for the iPads success, Cook believes, is that the ecosystem for the iPad is "in a class by itself".

We strongly believe in optimizing applications from day one to take advantage of the larger canvas. There are only a few hundred apps designed for the competition, versus more than 170,000 apps designed specifically for iPad. People who want an iPad won't settle for a limited function tablet.

Apple execs have said before, and Cook reiterated today, that they believe tablets will pass the PC market in units, and that in the United States according to IDC, tablets outsold desktop PC's last quarter on a unit basis.

Throwing down the gauntlet to other tablet makers -- who thus far haven't been able to mount a significant challenge to the iPad -- Cook finished by saying Apple was going to "continue to innovate like crazy" and that the company will continue to compete with any company currently shipping tablets, or anyone who may enter the market in the future.

The next generation iPad 3 with a high-resolution Retina Display is expected to be introduced in the next few months.

Apple sold 1.4 million Apple TV set-top boxes in the Q1 2012 quarter, Apple CEO Tim Cook disclosed during today's earnings call. Cook also disclosed that Apple sold 2.8 million Apple TVs in all of fiscal 2011, so the last quarter's results seem to represent a significance acceleration of sales for the product.

The current generation Apple TV was released at the beginning of fiscal 2011, which means Apple has sold 4.2 million 2nd Generation (iOS-based) Apple TVs in total. This is fairly impressive, especially considering Google's set-top box efforts have fallen flat thus far. However, even with these numbers, Tim Cook still considers Apple TV a "hobby" simply because on a dollar-for-dollar basis, the device barely makes a dent in Apple's earnings numbers.

Answering an analyst's question about Apple's living room plans for the future, Tim Cook dodged the obvious inference to an Apple-branded television set and instead noted:

We continue to add things to it, and I don't know about you but I couldn't live without it. We continue to pull the strings and see where it takes us.

In the past year, Apple has added support to Apple TV for the streaming service from Major League Baseball, the National Basketball Association, and the National Hockey League, among others.

After today's record breaking results, Apple will be holding a company-wide Town Hall for employees discussing some "exciting new things going on at Apple." Tim Cook sent a company-wide email to employees, as posted by 9to5Mac:

Thanks to everyone’s hard work, we’re off to a great start in 2012. Last week in New York we launched a groundbreaking initiative for education with iBooks textbooks, and today we reported the strongest quarter in Apple’s history.Please join me tomorrow morning at 10 a.m. in Town Hall. We’ll review our record-setting results and discuss some exciting new things going on at Apple.The meeting will be broadcast live to many sites in Cupertino and other Apple locations. Please check AppleWeb for details.

Tim

These town hall meetings are restricted to Apple employees and it's unlikely Cook will announce anything too exciting. However, details of the event invariably leak out, and may show Apple's changes and direction internally. The Town Hall is taking place on Wed, Jan 25th at 10am Pacific.