Keeping you in the loop on a few of the very many things that happened around Apple over the past two weeks.
The rubber does not meet the road. Apple CEO Tim Cook met with Tesla CEO Elon Musk and talked about working together — not whether Apple would acquire the electric carmaker, people familiar with the discussion told me. Musk has publicly confirmed meeting with Apple last year, but brushed aside speculation that Tesla was for sale. “We had conversations with Apple. I can’t comment on whether those revolved around any kind of acquisition,” Musk said in an interview with Bloomberg News, before adding that it was “very unlikely” that Tesla would be acquired — by anyone. “I think that’s very unlikely because we need to stay super focused on achieving a compelling…creating a compelling mass market electric car. And I’d be very concerned in any kind of acquisition scenario, whoever it is, that’d be become distracted from that – from that task which has always been the – the driving goal of Tesla.” So what did Cook and Musk talk about? Possible ways that Apple’s mobile technology (iPhone, iPad, Siri, iTunes Radio) might be used in Tesla’s cars. (In case you didn’t know, the Tesla Model S has a digital dashboard centered around a 17-inch touchscreen.) Despite the breathless speculation about Apple building an “iCar” and Cook’s comments that Apple would consider large acquisitions, I can’t see them ponying up the bucks to buy Tesla (which has a market cap of $25.7 billion) — a company outside their area of expertise. Besides, Cook drives an Audi.
Taking flight — TestFlight. And while a buyout of Tesla isn’t happening, Apple did spend some of its $160 billion in cash last week to acquire Burstly, parent company of a popular iOS mobile app testing platform called TestFlight. Apple confirmed the deal to TechCrunch, but didn’t disclose details, saying, as it always does, “Apple buys smaller technology companies from time to time, and we generally do not discuss our purpose or plans.” As for why Apple would want TestFlight, seems like its adding some tools to its mobile developer kit. “TestFlight lets developers know how their in-app purchases and advertisements were performing. It also gives developers other insights, like what version of Apple’s iOS mobile operating system people are using, or why their apps may have crashed during use,” according to Re/Code. TestFlight also worked on Android apps, but the company is ending support for Google’s mobile OS as of March 21 because it’s “refocusing” on iOS. Big surprise — not. By the way, Cook said recently that Apple has bought 21 companies in the past 15 months. Too bad Nest, which went to Google for $3.2 billion, wasn’t among them.
Wearables watch. The Tesla-Apple meeting was first disclosed by the San Francisco Chronicle, which also said that Apple is deeply interested in heart-related medical devices. The newspaper points to a Dec. 13 meeting between Apple operations chief Jeff Williams and FDA chief Dr. Margaret Hamburg and Dr. Jeffrey Shuren, who oversees agency approval for medical devices, to discuss “mobile medical applications.” That meeting was catalogued in FDA records. Apple may also be working on sensor technology that can help predict heart attacks, the Chron says. A team led by Tomlinson Holman, a renowned audio engineer who invented THX and 10.2 surround sound, “is exploring ways to predict heart attacks by studying the sound blood makes at it flows through arteries.” Apple’s interest in health tech (and wearables) has been building for the past year as the company has expanded its team to include health and medical experts. Even though Apple hasn’t said anything about it, 9to5Mac.com has been keeping tabs and offers a handy list of the experts working on Apple’s wearable efforts, including fitness expert Jay Blahnik, sleep researcher Roy J.E.M. Raymann, and hardware engineer Nancy Dougherty, who worked on medical sensors at Proteus.
Not enough? Apple moving into the wearables market this year with its iWatch and possibly even a smart TV may not be enough to move the needle on the stock. That’s the word from longtime Apple analyst Ben Reitzes at Barclays, who downgraded his rating on the shares. Here’s what he had to say:
“We just couldn’t quite bring ourselves to use smart watches or TVs as reasons to raise numbers – nor were we fully convinced that these products could move the needle like new categories did in the old days. As a result, we believe it is time to step aside, given a maturing smart phone market. Eventually Apple could even see margin pressures as it adds advanced new features to new iPhones at similar price points later this year and into next (things like Sapphire glass, curved glass, new batteries, etc.).” he says. “As iPhone users, we are very excited about some products in the pipeline, like innovation in payments, geo-location, lifestyle/wearable devices and in converged media with the Apple TV improvements. However, nothing seems revolutionary like the iPhone or iPad – not even a potential TV next year. We believe Apple’s story is all about iPhones and “new categories” seem to be designed to make the iPhone more useful – but don’t necessarily re-accelerate growth in the iPhone category to sustainable double-digit levels. If we were to see evidence that payments and/or new content deals enhance the web services aspect of Apple vs. Google and others long-term, we may need to reassess this position.”
iOS woes. Apple’s shares, by the way, closed down $5.90 to $525.25 on Friday. But that could be because of all the concern around the security flaws in its iOS mobile operating system. As my Forbes colleague Andy Greenberg notes, Apple announced a fix for one flaw on Friday but that still leaves a problem with how its software protects users’ Internet connections. “The vulnerability, nicknamed “gotofail” by researchers after a flawed “goto” command in Apple’s code that skips an authentication step, allows an attacker who controls any network to which a device connects to hijack their traffic and redirect or modify it, and may have persisted in Apple’s devices for months before being discovered.”
In praise of Apple — or not. There’s plenty of reading to be found by friends and critics of Apple in the past two weeks. User interface designer Jordan Price, hired as a contractor to work on mobile design, detailed in a blog post why he decided to walk away from his “dream job after just a month. He places the blame on the inflexible working hours and a hard-to-cope-with boss, who “had a habit of making personal insults shrouded as jokes to anyone below him…He started reminding me that my contract wouldn’t be renewed if I did or didn’t do certain things. He would hover over my back (literally) like a boss out of Dilbert and press me to finish some mundane design task that he felt urgently needed to be examined. He was democratic about his patronizing and rude comments, but it didn’t make me feel any better when he directed them towards my team members. I felt more like I was a teenager working at a crappy retail job than a professional working at one of the greatest tech companies in the world.”
Meanwhile, AppleInsider criticized the tech media for being Google fan boys, saying: “Listening to the Google-enraptured tech media’s echo chamber of fears, uncertainties and doubts about the world’s most profitable and successful company, you’d never realize that there’s an incredible bounty of low hanging fruit waiting for Tim Cook’s Apple to harvest, and little but mobile scorched earth left behind Google.” Then there’s the Mac Observer’s lament that “criticism of Apple, without offering insight, is a betrayal,” with references to two additional stories defending the company against, well, media hacks.
Carl Icahn backs down, Kanye West acts up. After months of taking to twitter and talking to the media about his view that Apple should return more of its $160 billion-ish in cash to investors — and putting an item on the agenda for shareholders to vote on at Apple’s Feb. 28 annual meeting, activist investor Carl Icahn backed down. In a Feb. 10 letter to Apple shareholders after shareholder advisory firm ISS came out against Icahn’s proposal, Icahn, who started buyin Apple last August and now has about a $4 billion stake, praised Tim Cook and said he was making the right moves, including buying back $14 billion in shares in recent weeks. “As Tim Cook describes them, these recent actions taken by the company to repurchase shares have been both “opportunistic” and “aggressive” and we are supportive,” Icahn said. “In light of Tim Cook’s confirmed plan to launch new products in new categories this year (in addition to an exciting product roadmap with respect to new products in existing categories), we are extremely excited about Apple’s future.”
Kind words indeed, and quite the contrast to a rant by Kanye West, who targeted Apple’s CEO at a concert in New Jersey a week ago, saying , ”Hey, Tim Cook, the Head of Apple, stop trying to get performers to play your festivals for free. You are rich as fuck. Quit trying to act like you’re so dumb.” Charming. West was likely talking about Apple talking to him about performing at the first iTunes Festival in the U.S., which will take place at the SXSW conference in Austin March 11-15. Needless to say, West isn’t among the performers on the roster (Coldplay, Imagine Dragons, Pitbull, Keith Urban, and ZEDD.) You can watch a fuzzy video of West’s rant here.
Samsung bashes iPhone, iPad. The war of words betweens Apple and Samsung continues, with the South Korean electronics maker releasing two new commercials dissing the iPhone and iPad. The first shows how you can watch basketball great LeBron James in high-def on Samsung’s larger-screen Galaxy 3 Note versus on the iPhone, which is described as “4.0 inches of non-HD. LeBron is literally running away from this phone.” The 1-minute spot has had nearly 5.5 million views on YouTube. The second is a play on the iPad Air commercial Apple created showing how thin its tablet is compared to a pencil. Samsung also uses a pencil – but to make an entirely different point about its Galaxy Tab Pro 10.1 tablet . You can watch the ads below.
Steve Jobs gets U.S. Postal nod. Apple’s co-founder is among the list of candidates for commemorative stamps the postal service is planning for 2015, the Washington Post learned this week. Jobs, who died in 2011, is in excellent company (though the list is subject to change). Other candidates include Johnny Carson, Elvis Presley and James Brown.
That’s it. Have a good week ahead.
If you missed the last Apple Loop, here you go: