10 Biggest Concerns For Apple In 2013

Apple had a splendid 2012. Its products iPhone5, iPad 4, iPad mini and MacBook Pro were blockbusters; in fact MacBook Pro is now the world’s best selling notebook. Believe it or not, for Cupertino giant the year 2013 may not be a cake walk, for it will have to face a lot of challenges with respect to its products— the Mac Pro, once the popular part of Mac Business had been ignored for years, Maps still messy, Android seems to be eating up into Apple market, and many others. Read on to know 10 biggest concerns for Apple as compiled by eWEEk.

                                                                                 #1 A New Way of Managing Operations

Earlier this year there were major executive changes in Apple. The company’s CEO Tim Cook decided to get rid of Scott Forstall and John Browett and realign his executive team. 2013 will be a year to look forward if the company’s management team, without two key players, can manage operations. And Cook would have to prove that he has the right management team to keep the company on track.

#2 Samsung's Trump Cards

Samsung has got a new feather added to its crown. It beat Apple to become the number one company in Smartphone sales in U.S. And Samsung’s Galaxy S III is considered to be the best Smartphone available now. For Apple in 2013 there’s a big challenge of regaining its market leadership.   

#3 Patent Trials

Apple has a sort of bone of contention with its competitors. The company had sued Samsung, Motorola and others over patent infringement. The law suits however seems to be draining time and money of the iPhone maker. 2013 can be a year for Apple to determine whether those cases are worth to fight and to try playing bit nicer with the competitors.

#4 Google's Hardware Push

If Android’s reign is not enough, the new device from Google, Nexus 10, as for consumer reports, turned out to be the first device to match Apple’s iPad in terms of value, reliability and purchase-worthiness. That’s a bad news for Apple. In 2013, the company has to raise its tab to maintain its existing rapport with the consumers. 

#5 Android's Growth

Android has now grown into world’s most used mobile platform. The Google’s OS already got three quarters of the Smartphone market to its name and if you go with industry analysts’ take, Android had equally impressive market share than that of Apple by the end of 2013. Next year Apple should pep up to take on Android or just be a spectator watching Android eating up into Apple’s market share.    

#6 More Apple Products Should Get the Retina Display

Apple’s new offering— “Retina display” caught the attention of the consumers. And this feature was a specialty of the Apple products like iPhone, iPod, which later got iPad and MacBook in its folds. But consumers are expecting to experience this new feature on other Apple products too, and most expectation is being built on iPad mini sporting a Retina Display. So 2013 will be the year where consumers would like to see more Apple products with this exciting feature.

#7 Design Upgrades Matter

Apple is known for its exciting product design, though its design is still appreciated, the zing thing about   it seems to be at hand’s distance. True that iPhone 5 is taller and thinner than its predecessor iPhone 4S, but it’s still the same look and the feel. And iPad’s basic design remains same all these years. On the other hand Apple’s arch rival Samsung is coming up with different products with different appeals, be it a tablet and phone combinations or the latest flexible screen that may eventually turn in to a flexible Smartphone or tablet. No wonder Samsung waylaid Apple in U.S. consumer electronics market.

So it’s time for Apple to have a clear look on 2013 and on the design of their products.

#8 Is That TV Coming?

Apple cofounder and charismatic tech personality the late Steve Jobs once hinted that he had cracked the code for a television, and of course the rumours about Apple TV spread abound since then. The rumors got fuel when Apple CEO Tim Cook said recently that the television is an “area of interest” for his company. The expectations of the consumers were notched up to the extent of seeing the product some time in 2013. So it’s time for Apple to take a note or loose the customers to Samsung or LG.

#9 Figuring Out Maps

Apple’s move to cut the popular and apt working Google maps from iOS 6 met lot of criticism. Apple Maps application wasn't ready when it launched with the new OS, and it still has lots of irregularities which are in contrast to Apple’s motto of being perfect. Now with Google Maps hitting 10 million downloads in just a week of availability in the App Store, Apple's failure with this application is looking even worse. Next year, if Apple wants to make it big, it must fix its mapping service or should just leave it to Google and save itself from embarrassment it faced with its mapping fiasco in 2012.   

#10 Handling Mac Pro Outcry

It’s true that Mac Pro is not for average consumers, but for designers and heavy enterprise users, the product is apple of the eye. And for over two years no attempts have been made by Apple to update it and also the company hadn’t provided any confirmation when Mac Pro will get a refresh. On the other hand the complaints are mounting up. So if the Apple has to keep its core designer and heavy enterprise loyalty, it must better take notice and do something.   

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Apple steps up labor audits, finds underage workers

Apple Inc(AAPL.O) stepped up audits of working conditions at major suppliers last year, discovering multiple cases of underage workers, discrimination and wage problems.
The iPhone and iPad maker, which relies heavily on Asian-based partners like Taiwan's Foxconn Technology Group to assemble the vast majority of its iPhones and iPads, said on Thursday it conducted 393 audits, up 72 percent from 2011, reviewing sites where over 1.5 million workers make its gadgets.
Apple in recent years has faced accusations of building its profits on the backs of poorly treated and severely underpaid workers in China.
That criticism came to the fore around 2010, after reports of suicides at Foxconn drew attention to the long hours that migrant laborers frequently endure, often for a pittance in wages and in severely cramped living conditions.
Foxconn is the trading name of Hon Hai Precision Industry (2317.TW) and employs 1.2 million workers across China.
Under Chief Executive Tim Cook, who took over from Steve Jobs in 2011, Apple has taken new steps to improve its record and boost transparency, including the extensive audits of its sprawling supply chain. Last year, it agreed to separate audits by the independent Fair Labor Association.
In an interview on Thursday, Apple senior vice president of operations Jeff Williams said the company has increased its efforts to solve two of the most challenging issues - ensuring there are no under aged workers in its supply chain and limiting working hours to 60 hours a week.
While child labor reflected a small percentage of the workforce, Apple is now investigating its smaller suppliers - which typically supply parts to larger suppliers and hence face less oversight on such issues - to bring them into compliance, sometimes even firing them.
"We go deep in the supply chain to find it," Williams said. "And when we do find it, we ensure that the underage workers are taken care of, the suppliers are dealt with."
In one case, Apple said it terminated its relationship with a component maker Guangdong Real Faith Pingzhou Electronics Co Ltd after discovering 74 cases of underage workers.
Officials at Pingzhou Electronics could not be reached despite three telephone calls from Reuters.
Apple also discovered an employment agency that was forging documents to allow children to illegally work at the supplier.
Apple reported both the supplier and the employment agency to local authorities, the company said in its latest annual report on the conditions in its supply chain.
Apple has audited both small and ancillary suppliers, as well as large ones such as Korea's Samsung Electronics Co, (005930.KS) for working conditions. It found 95 percent of sites audited complied with avoiding underage labor.
Child labor is an issue that is part of the larger supply industry as the component maker that Apple found violated child labor laws supplied parts to more than a hundred different companies, including automotive companies, Williams said, vowing to eradicate under aged labor from the industry.
"I don't know how long it will take to get there but that's our goal," said Williams, who has spent a significant amount of his 14 years at Apple in Asia managing the supply chain.
FOCUS ON STUDENT INTERNS
For 2013, Williams said a key focus for Apple will be student interns and ensuring that suppliers do not abuse the internship system, especially in China where many colleges require students to complete internships as part of their curriculum.
Some companies in China are solving labor shortages by employing students. Last September, city officials of the northeastern Chinese coastal city of Yantai ordered vocational high schools to send students to a large plant run by Foxconn - a key contract manufacture for Apple and other large electronics companies like Hewlett Packard (HPQ.N) - to overcome a shortage of workers.
Another focus areas has been "bonded labor", where agencies who help immigrant workers find jobs take a substantial portion of the worker's pay.
Apple said in the report that it asked suppliers to reimburse $6.4 million in excess foreign contract worker fees in 2012, according to the report.
The company said it achieved 92 percent compliance with a maximum 60-hour work week in its supply chain. Where violations were discovered, Apple took action, it said in its report.
Apple also found and stopped discriminatory practices against women workers in 34 supplier facilities that required pregnancy testing and 25 facilities that tested employees for certain medical conditions, the report said.

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Samsung, Apple dominate as 700M smartphones ship in 2012

Handset makers shipped a record number of smartphones last year, a market that saw robust but slower growth over 2011.

A record 700 million smartphones shipped last year, with Samsung and Apple accounting for half the market, according to new research released today.
While global smartphone shipments increased 490.5 million units over 2011, the 43 percent growth rate slowed in comparison to 2011's growth rate of 64 percent over 2010, according to market researcher Strategy Analytics. The research blamed saturation in North America and Western Europe for the slower growth.
"Large marketing budgets, extensive distribution channels, and attractive product portfolios have enabled Samsung and Apple to tighten their grip on the smartphone industry," the market researcher said in a blog post today.
Samsung captured 30 percent of the market with 213 million smartphones shipped worldwide, blowing away the previous record of 100 million smartphones shipped by Nokia in 2010. The study said the company had success with a wide range of models, from the pricier Galaxy Note 2 phablet to the less-expensive Galaxy Y. 
Apple captured 19 percent of the market with 135.8 million units shipped last dyear, a 46 percent increase over 2011. The iPhone maker benefited from strong demand in North America but was hobbled by limited presence in developing markets such as Africa, the researchers said.
Nokia retained its position as the No. 3 smartphone maker in 2012, but its market share dropped from 16 percent to 5 percent.
"Nokia's Windows Phone portfolio has improved significantly in recent months, with new models like the Lumia 920, but we believe the vendor still lacks a true hero model in its range that can be considered an Apple iPhone or Samsung S3 killer," Strategy Analytics said.
Meanwhile, the global mobile phone market, which includes feature phones, was largely flat, growing only 2 percent with 1.6 billion units shipped in 2012. The study blamed the market's modest growth on a variety of causes, including tighter upgrade policies, changing consumer tastes, and economic challenges in North American and Western Europe.

 

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Wozniak slams scene in Kutcher's 'Jobs' biopic

Apple co-founder caught a glimpse of the movie's first scene and proclaims that it is "not close" and "totally wrong.".

Ashton Kutcher as Apple co-founder Steve Jobs.

(Credit: Sundance)

Probably only a handful of people know what Steve Jobs was really like. And one of them is Apple co-founder and longtime friend Steve Wozniak.
After watching the first publicized clip from the Steve Jobs biopic starring Ashton Kutcher, Wozniak has said it's all wrong, according to Gizmodo. 
"Not close...we never had such interaction and roles...I'm not even sure what it's getting at...," he wrote to Gizmodo.
The movie, titled "Jobs," is about Jobs' life from the 1970s through the 1990s. The cast of characters includes Josh Gad as Wozniak, Matthew Modine as former Apple CEO John Sculley, and "The Help" star Ahna O'Reilly playing Chris-Ann Brennan, Jobs' girlfriend.
The first scene of the film was previewed on Entertainment Tonight yesterday. It shows Kutcher/Jobs heartwarmingly trying to persuade Gad/Wozniak to take the idea of the "operating system" to the public. Gad/Wozniak replies, "Nobody wants to buy a computer. Nobody."
Wozniak goes into length with Gizmodo about how the clip was inaccurate. Here's what he said:

Totally wrong. Personalities and where the ideas of computers affecting society did not come from Jobs. They inspired me and were widely spoken at the Homebrew Computer Club. Steve came back from Oregon and came to a club meeting and didn't start talking about this great social impact. His idea was to make a $20 PC board and sell it for $40 to help people at the club build the computer I'd given away. Steve came from selling surplus parts at HalTed he always saw a way to make a quick buck off my designs (this was the 5th time). The lofty talk came much further down the line.
I never looked like a professional. We were both kids. Our relationship was so different than what was portrayed. I'm embarrassed but if the movie is fun and entertaining, all the better. Anyone who reads my book iWoz can get a clearer picture.

 

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Apple fires supplier after audit uncovers underage workers

Apple found 74 underage workers at one company and then reported the labor agency to local authorities, it says in its latest Supplier Responsibility report.

 

A worker in Apple's supply chain prepares an iPhone for final assembly.

(Credit: Apple)

Apple severed its relationship with a China-based third-party labor supplier after discovering a conspiracy to employ dozens of underage workers there, Apple reported in its latest Supplier Responsibility report, which was released this evening.
The iPhone maker said it discovered the violations during an audit of the supplier, Guangdong Real Faith Pingzhou Electronics (PZ). In addition, Apple reported the labor agency that knowingly provided the child labor to PZ to local authorizes.
The agency, which allegedly conspired with the children's families to falsify age-verification documents, had its license suspended and was levied a fine.
"The children were returned to their families, and PZ was required to pay expenses to facilitate their successful return," Apple said in its report (PDF). "In addition, the company that subcontracted its work to PZ was prompted by our findings to audit its other subcontractors for underage labor violations -- proving that one discovery can have far-reaching impact."
The revelation was included in Apple's annual report on its efforts to improve employee safety and working conditions at its manufacturing partners' production facilities. The condition of workers in the electronics industry has come under intense focus in recent months. As a result, companies such as Apple and Samsung have pledged to do more to prevent the abuses.
"Underage labor is a subject no company wants to be associated with, so as a result I don't believe it gets the attention it deserves, and as a result it doesn't get fixed like it should," Jeff Williams, Apple's senior vice president of operations, told Bloomberg in an interview.
In its report, Apple said it conducted 393 audits in its supply chain last year, a 72 percent increase over 2011. The audits included reviews on environmental and operations safety, business practices, and employee recruitment. 
The company said it achieved an average 92 percent supplier compliance with the maximum 60-hour work week. Last year's report indicated compliance averaged 38 percent. Apple says it is now tracking more than 1 million workers in its supply chain and posting the results each month on its Web site.
The report comes a few months after key Apple supplier Foxconn admitted it had hired interns that were under 16 -- China's legal working age. Foxconn said in October that it discovered the violations during an internal audit and that it would "immediately" terminate any employee found to have been responsible for the violations.
Apple noted that last year it requested that the Fair Labor Association launch an investigation into Foxconn's business practices. While that investigation yielded a host of violations, including excessive overtime and improper pay, this year's report did not mention any violations found at Foxconn facilities.
The report is the seventh in a series that have been published following scrutiny of Apple's product manufacturing. Previous reports have also focused on working conditions and disposal of hazardous waste.

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Heady Returns, but Apple Finds Its Stock Falling

Apple on Wednesday reported the kind of quarter most big companies would envy, posting a profit of $13.1 billion and selling 28 percent more iPhones and 48 percent more iPads, its two biggest products.

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For Investors, Apple Not as Shiny

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Its stock sank 11 percent Thursday.

What is going on? Because of its great success in recent years, many investors have come to expect nothing short of perfection from Apple. And while it is still widely considered the most innovative company in the technology world, a maker of products that its devoted customers cannot live without, Apple is facing a range of challenges.

It is dealing with increased competition from big rivals like Samsung and Google, and with so many people already using smartphones, the market is not quite as untapped as it once was. Apple is forging into cheaper product categories, meaning lower profit margins. And given that Apple has grown so big, with sales of more than $160 billion in the last 12 months, keeping up its heady growth rate is becoming harder and harder.

Once-euphoric investors, who pushed Apple’s stock to a record high of $702.10 last September, have become nervous, and in early trading on Thursday, the stock traded at $455.89, down more than 34 percent from its peak.

Apple has reinvented itself several times over the last decade with groundbreaking new products, and could do so again. Television and electronic payments are among the markets where analysts believe the company could make a push, leading it to new heights.

“Apple has really been able to invent whole new markets,” said John Gallaugher, an associate professor at Boston College’s Carroll School of Management. “That’s where it differs from companies like Microsoft. I don’t think the mojo of this team has evaporated.”

In a conference call with analysts, Timothy D. Cook, Apple’s chief executive, said the company’s pipeline of new products was “chock-full.”

“We feel great about what we have in store,” he said, without adding details.

In the meantime, though, the love affair that investors once had with Apple is clearly waning.

“There’s nothing that can help the stock from sliding now,” said Mark Moskowitz, an analyst at J. P. Morgan Securities, who said Apple’s holiday sales met his own forecasts, even though they missed others’ predictions.

For years, Apple has offered an unusual alchemy: it was not only a large, highly profitable tech company, but one with the rapid growth rate of a start-up. It pulled this off under the leadership of Steven P. Jobs, its former chief executive, who died in late 2011. He had a startling knack for finding new multibillion-dollar opportunities for Apple with the iPod, iPhone and iPad, but his death has accentuated concerns about the company’s prospects.

A big part of Apple’s challenge is that it is now so large that it seems unrealistic, mathematically, for the company to continue finding new pots of gold big enough to maintain its growth. In a recent research report, A. M. Sacconaghi, an analyst at Bernstein Research, calculated that were Apple to grow for the next five years at the same rate as the last five years, its revenue would be $1.2 trillion, or about the size of Australia’s gross domestic product.

One continuing concern is that the iPhone, which accounts for over half of Apple’s revenue, could be smothered by smartphones running Google’s Android operating system, which accounts for three out of every four handsets shipped globally.

But Apple continues to take an outsize portion of the profits in the smartphone business, and in the United States the company actually increased its share of the smartphone market over the holiday quarter, rising to 51.2 percent from 44.9 percent a year earlier, according to a study released this week by Kantar Worldpanel ComTech.

On Wednesday, Apple did not appear to provide a strong enough reason for investors to warm to it again. It said its profits were flat because of higher manufacturing costs, even as revenue rose 18 percent.

Apple’s net income for its fiscal first quarter ending Dec. 29 was $13.1 billion, or $13.81 a share, flat compared with $13.1 billion, or $13.87 a share, in the same period a year earlier. Revenue was $54.5 billion, up from $46.33 billion a year ago. Those results compared to the average estimates of $13.44 a share earnings and revenue of $54.73 billion from analysts surveyed by Thomson Reuters.

Apple’s growth in the quarter looked anemic compared with the huge numbers it used to deliver. For the holiday quarter of 2011, in contrast, its revenue jumped 73 percent and its profit soared 118 percent.

In its financial forecasts for the current quarter, Apple provided numbers that suggest a decline of roughly 20 percent in earnings a share, according to Mr. Sacconaghi’s calculations.

A number of analysts say they still believe the company’s good times are not over. “Sentiment has turned super-pessimistic on Apple, where they’ve gone from being able to do no wrong to suddenly being able to do no right,” said Rob Cihra, an analyst at Evercore Partners. “I tend to think the company’s momentum is a heck of a lot more solid than people are concerned about.”

One factor that hurt comparisons between Apple’s most recent holiday quarter and the previous one was that its 2012 quarter was a week shorter.

Headed into the holiday quarter, analysts were worried about Apple’s profit margins, which the company had warned would decline as a result of a near total overhaul of the company’s product line.

While new products are routine for a company like Apple, it said the number of devices it released around the holidays, like the iPhone 5, iPad Mini and new Mac computers, was unusual.

But negative sentiment has further hardened amid reports that Apple had cut orders for components with a supplier, potentially suggesting weak demand for the iPhone.

Mr. Cook cautioned that investors shouldn’t place too much significance on such reports because Apple often gets its parts from multiple sources.

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