Services, Threats, and Stumping for iPhone 14

The Daily Observations

Considering Apple Services, in defense of the entry-level iPhone 14, and iFixit breaks the latest HomePod.

Finbold Sees Services as Apple’s Elevator

While the Apple watching world worries over the Cupertino-company’s Services segment, an interesting piece from the financial news site Finbold, which I found thanks to AppleInsider

According to Finbold, “Apple Services now generate more revenue than Nike and McDonald’s combined.” The piece tracked Apple Services revenue coming in at $79.4 billion for last year. That eclipsed such Fortune 500 companies as:

  • Boeing with recorded revenue of $66.6 billion in 2022
  • Intel with recorded revenue of $63.1 billion
  • Nike with recorded revenue of $49.1 billion 
  • American Airlines with recorded revenue of $49 billion
  • Coca Cola with recorded revenue of $42.3 billion
  • Netflix with recorded revenue of $31.6B
  • McDonalds with recorded revenue of $23.2 billion

All of these were beaten, let me reiterate — just by Apple’s Services segment. 

Finbold focuses on Apple’s homegrown services like Apple Fitness+, Apple TV+, and Apple Music. Makes sense. They all have “Apple” in the title. Still, the site does not mention the over 935-million paid subscriptions the Cupertino-company touted on its Q1FY23 earnings call. A vast majority of those are believed to be subscriptions to third-party services processed through Apple’s App Store and from which Apple takes a cut. 

Either way, the piece sees Apple’s shift toward Services as a successful move, “creating a steadier source of revenue and insulating its earnings growth from the swings affecting its manufacturing unit…” The way Finbold sees it:

With its focus on services, [Apple] has been able to mitigate the impact of declining iPhone sales and maintain its profitability and growth despite the competitive market environment.

Get While the Getting is Good

As well as Apple’s Services segment is going right now, “gather ye rosebuds while ye may” may be a thing Apple thinks about. Between rhetoric in the U.S. and rules in the EU, threats to Apple’s current business model may not loom, but they’re never far away. 

Jason Snell wrote a piece for Macworld this week addressing four threats faced by Apple. Among those listed:

  • The iPhone falters
  • The next big thing isn’t as big as the iPhone
  • China tensions boil over
  • The government forces change

While the whole piece is interesting as a thought exercise, the government one seems the most persistent. Quoting that section:

The real existential threat here is that a powerful government somewhere crafts legislation or regulation that completely rewrites Apple’s business model, either splitting apart the company or causing changes that make the iPhone unappealing. 

While Snell can see it, he can’t really see it happening. It’s a piece full of thought exercises, as I say. 

Japanese Authorities: Apple’s App Store Rules May Violate Antitrust Laws

To me the thing that makes it the most plausible threat to Apple is that it comes from all side. The U.S., the EU, the U.K., China, Russia — there’s news against and sometimes even moves against from all parts. Parts like Japan. 

MacRumors highlights a Nikkei report that has the Japan Fair Trade Commission (FTC) saying that Apple’s App Store may be in violation of antitrust law on the island nation. According to the report:

Japanese regulators do not believe there is enough “competitive pressure” on Apple and Google as the two companies have a duopoly in mobile operating systems and dominate the app market.

Authorities in Japan are said to have a few requests for the Cupertino-company. Among them:

  • Allow third-party payment methods, rather than requiring the use of Apple’s in-app payment system
  • Address the 15%/30% commission rates, which are seen as a possible “abuse of a dominant bargaining position”

Not that they’re waiting for Apple to clean house for them. MacRumors says the body:

…is calling for further regulation to suppress anti-competitive behavior, and said that it plans to work with the government council on digital competition on new laws. 

Apple Designer: Entry-Level iPhone 14 is Better Than iPhone 13 Pro

Roughly five-months after its introduction, an interesting take on iPhone 14. A piece from 9to5Mac has Apple arguing that the entry-level iPhone 14 is more powerful than the iPhone 13 Pro. That’s despite the fact that they both use the same A15 processor. 

Speaking with The Sydney Morning Herald, iPhone design director Richard Dinh makes the case, saying it has to do with the casing. According to the designer, the “central structural plane helps to dissipate more heat across the entire surface more consistently.” In other words, it doesn’t have to limit itself as much to prevent overheating. 

But wait! There’s more! Dinh lists a few other features that make the 14 better than the 13 (despite looking pretty much identical). “These include weight reductions, cheaper and easier repairability, and longer battery life,” according to the Herald. Additionally, the piece has the designer saying:

[Apple was] able to deliver a larger main camera than last year’s Pros, with a bigger sensor, better low-light performance, and there’s a brand new ambient light sensor in the back…

Frustratingly, the piece swerves back and forth between saying “iPhone 13” and addressing “iPhone 13 Pro” specifically. It also struck me as odd at first that Apple is doing this now. Why not push the base-level 14 back around the holidays when Apple and Foxconn couldn’t make enough 14 Pro units? Then I remembered all of the economic uncertainty that might be keeping would-be buyers on the sidelines. An interview with one of the phone’s designers saying “you’re getting more for less” might be pretty well timed. 

iFixit: 2nd-Gen HomePod is Surprisingly Repairable

Breaking things so you don’t have to — that’s the iFixit way. MacRumors says the disassemble/reassemble experts have opened their tool-kit to open Apple’s second-generation HomePod. 

On the outside, the first and second-generation machines are practically identical. On the inside, not so much. The piece says Apple has given the updated version “a more repairable design that uses less adhesive. With the original ‌HomePod‌,” MacRumors says, “iFixit had to resort to special cutting tools, but the new version does not have as much glue” and is easier to get into.

No surprises on the inside. The piece says the machine’s S7 processor, LEDs, large internal woofer, amplifier board, heat sink, power supply, five tweeters, and humidity and temperature sensor were all easy to spot. “Overall,” the piece concludes:

…iFixit said that the ‌HomePod‌ 2 was surprisingly easy to dismantle simply because Apple removed all of the excess adhesive. Those who want to repair their own HomePods should be able to do so.

You know… once you can actually get one. Ordering through Apple today, you’re looking at delivery between the first and second week of March. If you want to watch somebody take a perfectly good one apart, iFixit has posted a video of its teardown on YouTube

iPad mini 6 and M1 iPad Pros Hit Apple Refurbished Store

If you’re in the market for a like-new iPad, point your browser toward Apple’s refurbished store. A piece from MacRumors says that store’s now playing host to the sixth-generation iPad Mini 6 and the M1 iPad Pro. 

According to the site, the refurbished iPad mini starts at $419 for the 64GB model — an $80 discount off the new price. Going bigger on storage means bigger savings, with a refurbished 256GB model selling for $549. That is $100 less than buying a new unit. 

Compares on the iPad Pro are a bit more difficult. Models available on the refurbished store sport Apple’s M1 processor while the latest iPad Pro units sport the M2. Older tech does mean lower prices, though. The refurbished 11-inch iPad Pro starts at $639 — a discount of $160 versus the starting price for the current model. The 12.9-inch refurbished device starts at $889 — $210 less than the starting price for the latest 12.9-inch machine. Again though — it’s not a 1-to-1 comparison, so be ready to do some serious comparison. 

Hugh Laurie Joins Apple TV+ Series ‘Tehran’ for Season Three

And finally today — add another huge name to the Apple TV+ series “Tehran.” The Cupertino-streamer issued a press release this week announcing the addition of Hugh Laurie to the series. 

If you’ve forgotten about the show, the release says:

“Tehran” follows Tamar (Niv Sultan), a Mossad hacker-agent who infiltrates Tehran under a false identity. After going rogue at the end of season two and reeling from the loss of her closest allies, in season three, Tamar must find a way to reinvent herself and win back the Mossad’s support if she is to survive.

So for Mr. Laurie — I’m thinking less “Black Adder” more “House.” Less “Jeeves and Wooster” more “The Night Manager.” 

Seasons one and two of “Tehran” are available to stream now on Apple TV+. No word on when the third season will hit the screen.

Today on The Mac Observer’s Daily Observations Podcast

Daily Tech News Show’s Tom Merritt named generative AI the most important story of 2022. It is not slowing down in 2023. He joins me to talk about this week’s announcements from Microsoft and Google and what’s going on with AI and Apple? All of that and more on the Daily Observations Podcast from The Mac Observer.

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