“I” is for iPhone and India

The Daily Observation Deck Feature

News on iPhone production and consumption, Apple’s ad firm wants its clients off Twitter, and a short round in the Apple/Fortnite fight.

Report: Foxconn to Quadruple iPhone Production Workers in India

We’re hearing more about planned production increases for iPhone in India. Production of iPhone 14 has been disrupted for the better part of a month thanks to an outbreak of COVID-19 at the Foxconn iPhone plant in Zhengzhou, China. Disruptions have included the plant operating in “closed-loop” mode (thought to be less efficient than normal production), workers leaving the plant in droves due to hardships around the COVID outbreak, and a weeklong lockdown from 2 November through 9 November to try to stop the COVID outbreak from breaking out further. 

All of that led to Apple issuing a press release just over a week ago saying that the company is working to meet continued strong demand for iPhone 14 Pro and iPhone 14 Pro Max. Hard to say when that’s gonna happen though, because — have you heard about the disruptions? 

Between China’s zero-COVID policy and tensions between the US and China, Apple’s had plenty of reason to want to shift some production out of the Middle Kingdom and into other places. Places like India, perhaps. A few hours before Apple issued it’s iPhone warning last week, TF International analyst Ming-Chi Kuo hit Twitter, saying:

My latest survey indicates that Foxconn will accelerate the expansion of iPhone production capacity in India after Zhengzhou iPhone plant’s COVID-19 lockdown.

And now we are hearing more on that. 9to5Mac highlights a Reuters report that says Foxconn is looking to grow its workforce in India four-times over. The one site quotes the other, saying:

Apple supplier Foxconn plans to quadruple the workforce at its iPhone factory in India over two years, two government officials with knowledge of the matter said, pointing to a production adjustment as it faces disruptions in China […]

Taiwan-based Foxconn now plans to boost the workforce at its plant in southern India to 70,000 by adding 53,000 more workers over the next two years, said the sources, who declined to be named as the discussions are private.

That won’t completely solve the problem and it won’t solve it any time soon, either. I mean, two years is pretty soon in the grand scheme, but it won’t help headed into this holiday season. As for not solving the problem completely, the iPhone City plant in Zhengzhou is thought to have about 200,000 employees. Hard to replace 200,000 with 130,00 fewer people. Then again, what most have talked about is Apple diversifying its supply chain, not getting out of China completely. Or, as 9to5Mac puts it, “Creating this kind of capacity should make Apple significantly more resilient to future issues in China.”

CIRP: iPhone Buyers Opting for Higher Storage Capacities

An anticipated increase in Average Selling Prices for iPhones won’t just come from the Pro end of the iPhone 14 line. That’s one takeaway from market tracker Consumer Intelligence Research Partners (CIRP). Taking a look at iPhone sales for the end of September and the beginning of October, including the first three weeks of sales for iPhone 14, iPhone 14 Pro, and iPhone 14 Pro Max, the firm found folks opting for more storage. 

If I’m honest, the CIRP numbers are hard to pin down, but provide some interesting insight. “For now,” the firm says:

… the headline is, consumers continued their long-standing tendency to upgrade from base storage. For the new iPhone 14 models and the more expensive iPhone 13 Pro and 13 Pro Max, a majority of customers paid a premium for larger storage capacity phones.

That’s not true for folks went for the least expensive models available. A majority of people who purchased iPhone SE and iPhone 12 did opt for the entry-level storage, according to CIRP’s findings. iPhone 11 was a bit of an outlier there, with 48% of buyers surveyed going for the entry-level storage. 42% went for one of the two higher capacities available, while 9% did not know what storage capacity they bought. 

To me, that sounds silly. Then I realize I’m only pretty sure what capacity I purchased. Of course, it wasn’t six-weeks ago for me. I was a year-and-six-weeks, give or take.

As for what the storage numbers mean to Apple, Philip Elmer-DeWitt at Apple 3.0 says:

I suspect Apple profits handsomely on the 128 GB step-ups it sells for $100 each. Units of 128 GB retail on Amazon for $400 $20 apiece, and you can bet Apple gets a steep discount for buying in unimaginable bulk.

For iPhone sales overall, the numbers are interesting as I say — though hard to pin down. You can dig through them for yourself on CIRP’s Apple Substack. 

Apple’s Ad Firm Urges Clients to Pull Ads from Twitter

Apple’s ad agency has a recommendation for its clients: Stay out of the chaotic mess that is Twitter until things settle down. AppleInsider ran a report late last week saying the firm Omnicom had recommended “a halt to advertising on Twitter until certain guarantees about trust and safety can be made.”

If you’ve not been keeping up with what’s happened to- at-and-around Twitter since Elon Musk took ownership nineteen-days ago, I’m not even going to try to recap it, except to say “chaotic mess” might be an understatement. That’s a term from The Mac Observer, though AppleInsider may be going more understated, saying that Twitter “has had a tumultuous few days.”  

Too tumultuous for Omnicom, it seems. The piece highlights a memo seen by The Verge from Omnicom Media Group to its clients. That had the firm suggesting to clients like Apple and others that they:

“…pause activity on Twitter in the short-term.” Specifically, the ad agency is concerned about not just impersonation but also layoffs in Twitter trust and safety teams, resignations of executives responsible for FTC compliance, and more.

Citing, “evidence that the risk to our clients’ brand safety has risen sharply to a level most would find unacceptable,” the memo has Omnicom saying: 

We recommend pausing activity on Twitter in the short term until the platform can prove it has reintroduced safeguards to an acceptable level and has regained control of its environment.

App Store Security Concerns Lead to Proposed Class Action Lawsuit

News of another “ready, fire, aim” lawsuit against Apple. The site Bloomberg Law says the Cupertino-company has been hit with a class action lawsuit over the tracking of mobile app activity — specifically in the App Store.

Last week, a pair of security researchers who go by the name “Mysk” found that an old version of iOS — iOS 14.6, “sends Apple a detailed log of how users interact with the App Store.” To me, this makes sense. On last week’s Checklist no. 303 by SecureMac, we put forth the argument that if you go into a store, whether physical like a Macy’s or digital like the App Store, you’ve gotta figure the store owner is keeping up with what you’re doing. Apple’s never said it didn’t. What Apple has said is that it won’t share information about specific users with third-parties. Also worth noting, Mysk says, “It’s unclear if Apple still collects analytics data in iOS 16, even when sharing analytics and personalized recommendations are switched off.” But, you know… ready, fire, aim.

Bloomberg Law has the law firm Bursor & Fisher on the case. They are arguing on behalf of its client and a proposed class of California iPhone users that:

Apple Inc. records users’ private activity on mobile applications without their consent and despite its privacy assurances in violation of the California Invasion of Privacy Act …

The piece quotes the suit as saying:

Privacy is one of the main issues that Apple uses to set its products apart from competitors… But Apple’s privacy guarantees are completely illusory.

The suit goes on to say:

Through its pervasive and unlawful data tracking and collection business, Apple knows even the most intimate and potentially embarrassing aspects of the user’s app usage—regardless of whether the user accepts Apple’s illusory offer to keep such activities private …

In the complaint, the plaintiff accuses Apple of unjust enrichment, invasion of privacy, and violations of the California Invasion of Privacy Act, which sounds like the same thing twice to me, but I’m no lawyer. The suit seeks class certification, injunctive relief, compensatory damages, statutory damages, punitive damages, restitution, and attorney’s fees and costs.

Bloomberg Law received no comment from Apple on the issue.

Apple and Epic Argue Before Ninth Circuit Court of Appeals Today

The Apple/Fortnite fight is on again. A piece from ABC News says the Cupertino-company and Epic Games will argue their sides “before three judges on the Ninth Circuit Court of Appeals” today.  

This is the fight that kicked off in 2020 when Epic bypassed Apple’s in-app payment mechanism, allowing Fortnite players to make purchases in the app. That cut Apple out of its usual 30% commission on in-app purchases. It also violated the developer agreement between Apple and Epic. Less than a day later, Apple revoked Epic’s developer license. It didn’t take much longer for Epic to sue Apple for alleged antitrust violations. According to ABC:

Although [the judge hearing the case — Judge Yvonne Gonzales Rogers] declared Apple’s exclusive control over iPhone apps wasn’t a monopoly, Gonzalez Rogers opened one loophole that Apple wants to close. The judge ordered Apple to allow apps to provide links to payment alternatives outside the app store, a requirement that has been put off until the appeals court rules.

They’ll hear arguments today, though they’re not likely to rule for quite a while. The piece says it’ll likely be six-months before a decision is haded down. Whoever loses is likely to take the case to the Supreme Court. The report says that could push a final ruling into 2025. 

Apple Opens Updated Store in Portland, Oregon

There’s a new Apple Store in town. Well… there is if you live in Portland, Oregon. MacRumors ran a piece late last week saying that a new store at Bridgeport Village was set to open on Saturday 12 November. The location replaces another location in the same outdoor shopping center, according to the report, only this one’s bigger, according to MacRumors, “and features Apple’s latest retail design, including a dedicated pickup area for orders placed on Apple’s online store.” 

Steve Jobs’ ‘70s Sandals Sell for Over $200k

And finally today — icky or not, Steve Jobs’ old Birkenstock sandals ended up a hot ticket item. I told you Friday that Julien’s Auctions was auctioning the footwear. This Birkenstocks were previously owned by Jobs’ former house manager, Mark Sheff … I mean … after they were owned by Jobs… 

When I told you about the sandals on Friday, bidding was just just above $22,000. I told you that Julien’s was hoping to get between $60,000 and $80,000 for the forty-something to fifty-something-year-old-sandals. I also told you that the whole thing sounded icky to me, though ickiness does not negate value, it seems. 

Bidding on the Birkenstocks closed over the weekend. The pair sold for $218,750.

Today on The Daily Observations Podcast from The Mac Observer

TMO Managing Editor Jeff Butts and I talk about the watchful eye Apple keeps on the App Store. Plus: A new feature for the show — three letters from listeners kick off Mailbag Monday! That’s all today on the Daily Observations Podcast from The Mac Observer.

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