Seth Weintraub

We’ve previously noted KGI Securities’ Ming-Chi Kuo for his often accurate reports on upcoming Apple products in the past. Usually those reports revolve around features that have been somewhat expected. We’ve expected a fingerprint scanner for quite some time and even found code that seems to point to a biometric input for the new iPhone. We’ve also profiled possible fingerprint readers in the iPhone 5S just last week.

Today’s report is something a bit out of left field however. Kuo expects the iPhone 5S to have a sapphire fingerprint reader home button that will no longer be plastic and concave but actually protrude slightly from the iPhone in a convex manner. This isn’t the first we’ve heard of Sapphire home buttons but the first reputable source on the matter. Kuo

Convex home button creates space for fingerprint sensor; yield to improve. We think that a fingerprint sensor will be placed under the home button of iPhone 5S. However, assembling it could be difficult as the space under home button is limited as it already has to accommodate the Lightning connector, speaker and microphone. Thus, we think the shape of the home button could be changed from concave to convex to create more space for a fingerprint sensor.

Sapphire prevents home button from being scratched. A convex home button could be more easily scratched, so a harder material is required. We believe Apple will switch from plastic to sapphire, whose hardness is second only to diamond. Sapphire would protect the home button from being scratched and the fingerprint sensor from being damaged.

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January File Photo

We broke the news yesterday that Tim Cook was in China talking to the local telecoms about upcoming iPhones. It was speculated that along with the confirmed China Telecom, Cook would also likely be going after the big kahuna, China Mobile.

Today, Reuters got a confirmation from China Mobile Ltd Chairman Xi Guohua that Tim Cook did meet in Beijing on Tuesday to discuss the iPhone. The Chinese telecom confirmed the meeting in an emailed statement saying only ‘matters of cooperation’ [iPhone]were discussed.

China Mobile is the largest carrier on earth with nearly 700M subscribers (about U.S.+W. Europe in scale) and is the only carrier in China not to have a distribution deal with Apple. Just getting a conservative 5% of China Mobile’s huge base would net Apple 35M additional iPhone sales.

A deal with China Mobile would likely spur significant additional iPhone sales, especially the widely-rumored cheaper plastic version coming online later this year. The talks come after Apple reported  overall flattening growth in China, Apple’s second biggest market after the U.S.

Apple said last week that its April-June sales in Greater China, which includes Taiwan and Hong Kong, slumped 43 percent from the previous quarter. Greater China accounted for 13 percent of Apple’s quarterly sales, or $5 billion, down from nearly 19 percent in January-March.

It is Cook’s third known trip to China since he took over as CEO almost two years ago. Other things that may come up include Pegatron’s supposed worker violation issues and perhaps even another Beijing scalping problem.

Update: The WSJ confirms the meeting and notes that Cook also met with China Unicom, the nation’s third largest carrier and current apple distributor.

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January File Photo

According to a local Chinese report, Apple CEO Tim Cook was recently back in China hoping to jumpstart relations with Chinese carriers this week. Cook met with China Telecom, already a strong Apple partner. The topic of conversation wasn’t revealed but likely on the plate is Apple’s lower cost plastic iPhone, perhaps called the iPhone 5C, and overall flattening growth in Apple’s second biggest market.

Apple CEO Tim Cook in China, visited with China Telecom, possibly to talk about declining iPhone sales, say local reports.

— Michael Kan (@Michael_Kan) July 30, 2013

The article speculates that he probably met with the other local carriers including partner China Unicom and the world’s biggest carrier, China Mobile who has around 700M subscribers – none of which have direct access to Apple’s iPhone yet.

It is Cook’s third known trip to China since he took over as CEO almost two years ago. Other things that may come up include Pegatron’s supposed worker violation issues and perhaps even another Beijing scalping problem.

Rough translation below:
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Sprint reported its Q2 2013 numbers at 1am ET because it is now owned by Japanese Softbank. The carrier’s revenue was mostly flat and losses expanded. It did sell 1.4 million iPhones, down slightly from 1.5 million iphones in the 1st quarter.

Iconic Smartphones Paired With Unlimited Data Remain Key Differentiator

Eighty-six percent of quarterly Sprint platform postpaid handset sales were smartphones, including approximately 1.4 million iPhones® sold during the quarter. Forty-one percent of iPhone sales were to new customers.

For those with LTE, Sprint announced 41 new markets bringing its total to 151 total in the US including Philadelphia, Brooklyn and the Bronx in New York City and a host of others including Grand Rapids, Mich.; Jacksonville, Fla.; Nashville, Tenn.; Oakland, Calif.; and Portland, Ore. Press release follows:
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WeiPhone forums (via Macotakara) has what appears to be a bin full of ‘iPhone 5C’ packaging (above). There is no way to verify if these are from an Apple production line or simply some knockoffs.

If these belong to Apple (big if), the assumption would be that the C will stand for “Color’ or ‘plastiC’ or ‘polyCarbonate’ or ‘China’ or ‘Cheap’ or ‘Consumer’ or something else in the same way that ‘S’ stands for speed. Theoretically, the aluminum model would be the iPhone 5S which of course would be speedier and have other upgrades.

As an example of Apple’s packaging, the 5G iPod touch looks to have a similar but thinner enclosure, right.

iLounge had previously gone on record with the prediction that the budget iPhone would be called the 5C.

Update: Nowhereelse.fr has disected the image and found some irregularities, below:

Has the Onion nailed it again?
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The China Times (via Macotakara) is forecasting an October launch for the Haswell-based MacBook Pros. Citing supply chain sources, which are often far more reliable on specs than they are on timing, the report notes that, based on pricing, the new MacBook Pros should remain in the same price range as present models.

Apple is widely expected to launch its new iPhones and iPads in the September-October timeframe ahead of the holiday buying season.

Haswell processors don’t offer too much in terms of improved processor speed but offer other-worldly battery savings compared to previous Intel CPUs. Battery times in Apple’s new MacBook Airs almost doubled in Apple’s spec and in real world testing.

Haswell processors also offer improved graphics including support for 4K displays which Apple is also rumored to be building alongside its new Mac Pro.

In a report earlier this year Ming-Chi Kuo of KGI securities laid out improvements he predicted in the upcoming MacBook Pros:
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Previously, we covered Apple’s announcement that it had won a large contract to supply iPads to LA Unified School District. The program will equip students across the nation’s second biggest school district with iPads that include the Pearson Common Core System of Courses delivered via a new app as part of the integrated solution. Additionally, each iPad will come preloaded with Apple’s iWork (Pages, Keynote, Numbers) and iLife (iMovie, iPhoto, GarageBand) suites in addition to a range of educational third-party apps. Apple noted that the $30 million commitment is only the first phase of a larger roll out for Los Angeles schools.

In a new report today, we see how big that buy really is.

The first 31,000 iPads are only the initial phase of the program, which plans to buy and distribute iPads to all 640,000 students in the nation’s second-largest school district by late 2014, Mark Hovatter, the chief facilities executive for the LAUSD, told CITEworld.

“The most important thing is to try to prepare the kids for the technology they are going to face when they are going to graduate,” said Hovatter. “This is phase one, a mix of high school, middle school, and elementary students. We’re targeting kids who most likely don’t have their own computers or laptops or iPads. Their only exposure to computers now is going to be in their schools.”

That’s a huge number to add to Apple’s iPad numbers over the next year. As it stands, if Apple reaped $400 of revenue from each iPad, it would receive $256M for the deal. More importantly, it lays the groundwork for other school districts that may want to emulate this adoption.

Best of all, it exposes a massive amount of children to Apple’s technology that might not already have access to it.

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Michael Kukielka, otherwise known as the DetroitBorg, posted the excellent video above showcasing one of the plastic iPhone shells that has been leaking all over the web like crazy. Besides the focus on the thinner ‘iPhone’ font on the back, we’re not seeing too much in the way of new stuff here, but it is nice to see the comparison, especially with the iPod touch and the plastic iPhone 3GS (which was alluded to many months ago).

Check out our gallery of 10 different color options for the plastic iPhone here.

I have a feeling that these things, especially at a reduced price, are going to be very popular with the mid-tier set. Thanks Niels!

(Update: A similar video from TechExamined below)
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Apple just started sending out the above explanation for the Developer Center outage that has been going on since Thursday. According to the note, Apple’s security was breached and an intruder might have gotten some personal information (specifically names, mailing addresses, email addresses, etc.). In the spirit of (just a bit late) transparency, Apple is now informing developers who may have been affected.

https://twitter.com/markgurman/status/359082212144062464

Also, because of the intrusion, Apple has decided to totally overhaul its developer systems, including updating server software and rebuilding databases seemingly from scratch. That would explain the significant, now over 4-day, outage.

Apple expects the developer site to be up soon. The full address is below:
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Apple is no stranger to beefing up its mapping efforts through company purchases. We’ve counted at least three big map company purchases including Placebase, C3 and Poly9 that have helped Apple in its growing mapping and location services effort. As we know Apple is still a long way from mapping nirvana and as any Apple PR person will read from a boilerplate to you, “Apple buys smaller technology companies from time to time, and we generally do not discuss our purpose or plans.”

Today it is being reported that Apple closed a deal on Locationary, a service which helps manage databases of location and importantly merge duplicate information and remove outdated entries.

It uses crowdsourcing and a federated data exchange platform called Saturn to collect, merge and continuously verify a massive database of information on local businesses around the world, solving one of location’s biggest problems: out-of-date information.

Not only does Locationary ensure that business listing data is positionally accurate (IE: the restaurant I searched for is where Apple said it would be), it ensures that it is temporally accurate as well (IE: the restaurant I searched for is still open for business and not closed for renovation or shuttered entirely).

In September of last year Locationary CEO Grant Ritchie spoke about what things Apple needed to do to improve its Mapping services obviously including things his company excelled at. Apple apparently liked his advice. A video interview with Ritchie follows:
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From 9to5toys.com:

Best Buy is having a significant College Student sale this week on MacBook Airs, Retina/Pros and iMacs and Students or anyone with a .edu email address get another $100 off the sale prices signing up here. For instance, the entry level Haswell MacBook Air is now $949 and another $100 drops it down to $849, the lowest price we’ve seen by $100.

Haswell MacBook Air prices:

• MacBook Air – 11.6″ Display/4GB Memory/128GB Flash Storage:$949.99-$100 students=$849.99 ($150 off)
• MacBook Air – 11.6″ Display/4GB Memory/256GB Flash Storage:$1139.99-$100 students=$1039.99 ($170 off)
• MacBook Air – 13.3″ Display/4GB Memory/128GB Flash Storage:$1,044.99-$100 students=$944.99 ($155 off)
• MacBook Air – 13.3″ Display/4GB Memory/256GB Flash Storage:$1,234.99-$100 students=$1134.99 ($165 off)

Retina MacBook Pro prices:

• MacBook Pro Retina 13.3″/8GB Memory/128GB Flash Storage:$1399.99-$100 students=$1299.99 ($200 off)
• MacBook Pro Retina 15.4″/8GB Memory/256GB Flash Storage:$2044.99-$100 students=$1944.99 ($255 off)

iMac Prices save $100 across the board and another $100 for students = $200 savings starting at $1100

The MacBook Student $100 off promotion starts today, and will end July 27.
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[youtube=http://www.youtube.com/watch?v=zXKqIr4cjyo]

A series of reports from Israeli publication Calcalist.co.il claims PrimeSense, the company behind the original Microsoft Kinect’s technology, is in acquisition talks with Apple, somewhere near a valuation in the $280-300M range.  According to the report, a delegation of PrimeSense senior executives visited Apple’s engineering offices in recent days. The purchase would bolster Apple’s living room TV interface offerings and allow Apple to add controls with body movements and hand gestures to its products.

Apple purchased Israeli Flash chip optimization company Anobit in late 2011 for $400M+, also originally reported by Calcalist. The company now functions as one of Apple’s R&D centers in country.

We’ve heard previously that Apple is working on such 3D gesture interface and may have already been licensing IP from the Israeli firm and/or its competitors. At $280M, Apple may believe it’s better to own this IP and technology rather than let others have access to it in the future.

Apple has its own patents on similar 3D technology and has been working on its own gesture-controlled OS (below).

Microsoft used the sensor technology that PrimeSense developed for its original Kinect, previously known as Project Natal, but has since replaced the technology with its own in-house technology for 3D body mapping and movement.

PrimeSense went on to work with Asus on its WAVI Xtion living room home media controller (video) and has since shrunk chips down to be used in tablets and phones (another area of  Apple interest)

PrimeSense was founded in 2005 and is a founding member of OpenNI, an industry-led non-profit organization formed to certify and promote the compatibility and interoperability of Natural Interaction (NI) devices, applications and middleware.

Update: PrimeSense has issued a denial that it is currently in talks to be bought by Apple. As we know with past history surrounding these type of matters, the company’s claims might not mean much.

PrimeSense denies that it's in talks to be acquired by Apple. Story to come.

— Seth Fiegerman (@sfiegerman) July 16, 2013

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If today’s Digitimes report is to be believed, Apple has a spec-updated iPad Mini due later this year, in time for the holidays. Details are, of course, scant but a slightly updated version of the current iPad mini which is expected to be ‘lighter, thinner and equipped with improved specifications’ is said to be targeted for a 2nd half of 2013 release.

I’m not sure how much sense it makes to change the size of the iPad Mini at this point but some improved CPU/GPU would be appreciated – almost as much as a $30 price drop, which might make more strategic sense.

According to the report, the 2048×1536 pixel Retina version of the iPad Mini won’t come until early 2014 with production ramping up at the end of 2013. That’s a change from last months Digitimes’ report which expected the Retina iPad for the holidays.

Perhaps most interesting here is that Apple is said to be working on a bezel-less design for the Retina Mini which could either make the device smaller or the screen bigger in the same form factor. Apple would also have to increase the battery size and GPU considerably as it did when the iPad 3 went Retina.

Apple is reportedly aiming to use Retina panel technology equipped with 2,048 by 1,536 resolution in the next generation 7.9-inch iPad mini. Apple is also said to be revising the design of the chassis to give the next-generation iPad mini an almost bezel-free look.

Additionally, the sources said that Apple’s upcoming fifth-generation iPad is expected to use thin-film touch screen technology, which will be able to reduce the weight of the device by 20-30%. The device will also feature a slimmer bezel design to allow a bigger viewing area.

Oh and that Septmber iPad 5 that Digitimes reported last week? 
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Update: Apple provided a comment to AllThingsD and confirmed it will appeal the decision:

“Apple did not conspire to fix ebook pricing and we will continue to fight against these false accusations. When we introduced the iBookstore in 2010, we gave customers more choice, injecting much needed innovation and competition into the market, breaking Amazon’s monopolistic grip on the publishing industry. We’ve done nothing wrong and we will appeal the judge’s decision.”

Reuters reports that a judge just ruled that Apple conspired to raise the retail prices of e-books and said a trial for damages will soon follow:

The decision by U.S. District Judge Denise Cote[pictured, right] in Manhattan is a victory for the U.S. government and various states, which the judge said are entitled to injunctive relief. The publishers have already settled with the federal government on e-book pricing. Cote ruled after a non-jury trial that ended on June 20.

Apple warned that a guilty verdict in its e-book price-fixing case could have a negative impact on how digital media deals are negotiated in the US and Apple CEO Tim Cook even called the suit ‘bizarre’:

The e-book case to me is bizarre. We’ve done nothing wrong there, and so we’re taking a very principled position. … We’re not going to sign something that says we did something we didn’t do. … So we’re going to fight.

The DOJ had argued that Apple had conspired to raise prices with all of the publishers and hurt rival Amazon.

Interestingly, according to the NYTimes, one of the most damning pieces of evidence in the government’s case is the video below of Steve Jobs talking with Walt Mossberg. Per Daring Fireball: Mossberg asks Jobs why someone would buy a book for $14.99 from the iBookstore when they could buy the same book from Amazon for $9.99.

Jobs: Well, that won’t be the case.

Mossberg: Meaning you won’t be $14.99, or they won’t be $9.99?

Jobs (smiling): The prices will be the same.

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