What is happening at Apple?

“While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China. In fact, most of our revenue shortfall to our guidance, and over 100 percent of our year-over-year worldwide revenue decline, occurred in Greater China across iPhone, Mac and iPad," – Tim Cook Apple Investors Letter 02/01/2019

Apple has been in the news a lot lately, and it’s not all been for positive reasons. It began with their January profit warning, hot on the heels of whichwas the FaceTime eavesdropping bug and the announcement that their Head of Retail, (ex-Burberry boss Angela Ahrendts) was stepping down after five years.

It’s a lot to take in. Hopefully Young Media Voices can break it down for you!

The hype before the storm

Apple started 2018 in far better shape than it started 2019. For a start, the App Store was continuing to experience growth, thanks in part to the battle royale style games Fortnite and PUBG making their way to iPhone, iPad and Android. Questions were being asked about how well the flagship model, the iPhone X (Ten) was selling but the combined sales of the 2017 models (iPhone X, iPhone 8 Plus and iPhone 8) and the sales of older models (iPhone 7 and 7 Plus, iPhone 6S and 6S Plus and iPhone SE) more than made up the shortfall in iPhone X sales. In March 2018 Apple announced a revised version of its most basic iPad, simply dubbed iPad. The revision brought better hardware and a new colour option. In June at WWDC (World Wide Developers Conference) Apple previewed its new software iOS 12 and Mac OS Mojave both of which promised to fix the bugs their predecessors contained and provide new features and for the most part, they delivered. Finally, in September and October Apple held two events to announce its new iPhone models (iPhone XS and XS Max and iPhone XR) and new Mac and iPad models. Excitement then began to build as the company began to recruit famous faces, such as Jennifer Aniston, to its upcoming in-house, Netflix rival.

Falling iPhone sales and China

In January 2019 Apple issued a profit warning, its first since 2002. It had been speculated for a while but that didn’t make it any less shocking. Apple had predicted that it would make $93 billion globally in that financial quarter; their actual profits were $9 billion less. $84 Billion isn’t exactly small change but it’s rare for Apple to overestimate its profits by so much. The profit warning took the world by surprise, so much so that Apple’s share price tumbled and so did Microsoft’s and Amazon’s. The shortfall was so large that CEO Tim Cook wrote a letter to investors explaining why he felt that profits had fallen. Tim Cook attributed the profit warning to one main issue, the rapid fall in iPhone sales in China.

However, while Chinese iPhone sales have slowed down, there are other factors to consider. In my opinion, the biggest being the fact that people are simply fed up of forking out several hundred pounds for a new phone. Especially if that phone can only promise marginally faster processors or a slightly better camera, or something as insignificant as a new colour. People, even technology lovers like myself, are sick and tired of minor improvements being passed off as revolutionary new ideas. Even when Apple revealed the new home button-less iPhone X design it wasn’t exactly original. The Samsung Galaxy S8 had already achieved this some months earlier, and Face ID the iPhone X’s standout feature wasn’t that amazing. Facial recognition software has been in widespread use since the 2000’s. The iPhone X did offer the first viable application of the technology in a phone, but even all this new tech can’t lure the average consumer away from their current phone, particularly if their phone is still working fine.

FaceTime Eavesdropping Bug

Part of the host of improvements that iOS 12 brought to the table was group FaceTime. This was done to compete against video chat giants such as Skype and Houseparty. Group FaceTime is a great idea and having used it I can say that I prefer it to any of its rivals. It’s so much better I actually deleted my Houseparty account.

However, it’s not been flawless. One of its main selling points has been that it is safer than rivals because, like standard FaceTime, the only way people can contact you is via your iCloud account trusted e-mail or your mobile number. However, a bug developed within the software for group FaceTime allowed people to listen in on others even if the call had not been answered. There is a process to go through to exploit the bug, but it’s shockingly simple.

Here’s how to trigger the iPhone FaceTime bug:

  • Start a FaceTime Video call with an iPhone contact.
  • Whilst the call is dialling, swipe up from the bottom of the screen
    and tap Add Person.
  • Add your own phone number in the Add Person screen.
  • You will then start a group FaceTime call including yourself and
    the audio of the person you originally called, even if they haven’t
    accepted the call yet

– Benjamin Mayo 9to5Mac 28/01/2019

9to5Mac were the first to report the story. Benjamin Mayo, who wrote the 9to5Mac article also said that that there is a way not only to hear others conversations but, to be able to watch them using FaceTime’s main function, video calling. The bug only affects devices running iOS 12.1.3 and macOS 10.14.2 or later and Apple has since disabled group FaceTime on those devices. If you update to a newer version of iOS 12 or macOS then you will find the bug is fixed and group FaceTime reinstated.

Nevertheless, the whole situation was rather surprising, especially since it violated people’s privacy in such a profound way. What is more surprising is that the bug was found by a fourteen-year-old.

Grant Thompson, a 14-year-old in Arizona, stumbled upon the hack last month when he was calling a friend to play the video game Fortnite. When his friend did not pick up the FaceTime call, he added a second friend to the group call, which caused the original call to “pick up” even though his friend did not answer, according to multiple reports. The security flaw let Grant eavesdrop on the other line. He re-created the hack several times with his friends and his mom to confirm the existence of the bug, he said.

Now Apple is rewarding him for his discovery. The company said it would pay the Thompson family for reporting the bug and will also make a gift toward Grant’s education. Apple did not confirm how much it would donate. – Hamza Shaban 08/02/2019

Whilst Grant Thompson’s discovery is remarkable, he shouldn’t have been the one to find it. Someone at Apple should have spotted it way before Grant did. Although, big congratulations are in order for Grant regardless!

The end of Ahrendts era

Angela Ahrendts joined Apple in 2014 after working as CEO for Burberry from July 2006 until April 2014. During her five years at Apple she worked as Senior Vice President of Retail. She implemented new sales techniques and refurbished every Apple store as well as opening many more. On February 5 th 2019, Apple announced that Ahrendts would be leaving in April 2019 and would be replaced by Deirdre O’Brien, another VP at Apple and an Apple employee of over 30 years. Neither Apple nor Ahrendts stated why she was leaving although she is known for having a knack for timing so she definitely is leaving for a reason. She is hardly leaving under a cloud. Rather her departure is out of the blue. Whether we ever find out why Ahrendts has chosen to leave is yet to be seen, but it’s not wrong to speculate. Might she have left to pursue a dream of hers or is it more likely to move to another yet-to-be announced role? I think she wanted out while the going was still good. She will know more about the situation at Apple than most. Could there be more profit warnings on the way? Could some Apple stores be about to close? Who knows!

Make no mistake, Ahrendts is leaving for a reason and it’s not something petty like her salary, as it’s bigger than CEO Tim Cook’s. Has Ahrendts seen dark clouds on the horizon? It is a little coincidental that she has chosen to leave right after Apple’s first profit warning for sixteen years and a privacy scandal?

But remember this is all light-hearted speculation.

I am an iPhone; iPad, Apple Watch and Mac user and I love all my Apple products. I hope that they continue to thrive. Hopefully, Apple will go another sixteen years without another profit warning.

But the bigger they are, the harder they fall.

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