Future Versions of the Apple iPhone Could Take a Cue From Samsung Galaxy Note 8

Apple’s iPad Pro might not be alone.

Future version of the Apple iPhone might have a feature you can only find in the company’s iPad Pro tablets.

The tech giant is planning to bring “digital pen” support to iPhones starting in 2019, Korean news outlet The Investor is reporting, citing people who claim to have knowledge of the company’s plans. Apple is working on the feature now and has already held talks with digital stylus companies to see how the feature might work with a future iPhone update, according to the report, which was earlier discovered by 9to5Mac.

Apple AAPL offers a digital stylus already called the Apple Pencil. However, the accessory, which is about the size of a real pencil, is only compatible with the company’s iPad Pro. Apple Pencil allows users to digitally “write” on the iPad Pro’s screen to annotate and sign documents, and take notes. Apple Pencil costs $ 99.

Apple’s chief competitor in the smartphone market, Samsung, has offered a digital stylus with its Galaxy Note line of devices for years. Its most recent smartphone, the Galaxy Note 8, similarly comes with the company’s S Pen stylus.

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While some customers have called on Apple to offer a stylus, the company has been loath to do so after late Apple co-founder Steve Jobs said when the iPhone was announced in 2007 that touch input is far superior to stylus input. And each time Apple has been called on to consider a stylus, the company has balked.

However, in recent years, Apple patents have surfaced that point to the company at least considering a stylus for its iPhone. Apple CEO Tim Cook also said last year in an interview with Apple-tracking site Daring Fireball that “if you’ve ever seen what can be created with that Pencil on an iPad or an iPhone, it’s really unbelievable.” His comment ignited speculation that Apple is testing a stylus for the iPhone

Still, Apple has remained silent on possible plans and hasn’t discussed bringing Apple Pencil to any other devices. And it’s also worth noting that two years is a long time in the technology industry. And although Apple might be considering iPhone stylus support for 2019, things can change and the concept could be scrapped without much notice.

Apple did not immediately respond to a Fortune request for comment on the report.

Tech

This Time It Matters: Why Apple Is Falling

Preface
Apple Inc (NASDAQ:AAPL) is dropping hard after its event to announce the new series of hardware, in particular the new iPhone 8, 8 Plus and X as well as the Apple Watch 3.

It’s Different This Time
Normally when Apple stock dives on lukewarm product reviews we stand firmly in our position that the stock market reaction is over blown. Our simple thesis for that response is to look at demand, which is hypnotically strong, every time. That is not the case this time.

A New Risk is Not Obvious But is Enormous
Apple announced a more complicated lineup of iPhones this time around. It introduced the iPhone 8 series which is an upgrade to the iPhone 7, and then it announced the highly anticipated iPhone X (pronounced iPhone Ten).

Then the company made the iPhone 8 available this month, but pushed delivery of iPhone X to early November, which pre-orders stating in late October. That has created a risk.

It turns out that Apple hyped the iPhone X so much, and poured so much new technology into it, that it has left the demand for iPhone 8 lackluster in Apple terms. Here’s what we mean.

If you go to the Apple Store, and try to purchase an iPhone 8, the wait time is essentially 1-3 days for the smaller memory version. Here is an image:

That is for the iPhone 8, in Los Angeles, on Verizon’s (NYSE:VZ) network. The other networks are essentially the same. A normal wait time for a new iPhone release is usually several weeks, let’s say 2-4 depending on where you are in the world.

There are also reports that in store lines are much smaller than before, with one report pinpointing Sydney Australia, where only 30 people were camped out for the new release. Reports from China are similar.

Here are links to two stories:

Turnout for iPhone 8 Launch in Australia “Bleak” as Customers Hold Out for Upcoming iPhone X
The iPhone 8 launch in Sydney saw “a bleak turnout,” reports Reuters, with fewer than 30 people lining up outside of the Sydney Apple Store on George Street. In past years, hundreds of people have lined up for new iPhones on release day.

Apple Falls After Analyst Report Indicates Weak iPhone 8 Demand
Consumers pre-ordered about 1.5 million handsets on Chinese retail website JD.com in the first three days, compared with about 3.5 million for the comparable period of iPhone 7 orders.

Tim Cook just said he “couldn’t be happier” with the iPhone release (and Apple Watch 3). While sales are lower than prior models, there is one reason, a big reason, that he may actually be telling the truth.

Is There a Plan?
One of the headlines that surfaced from the Apple Event was that the iPhone X was very expensive, starting at $ 999 and climbing to $ 1,200 based on the configuration.

It’s possible, maybe even likely, that Apple decided to release the iPhone 8 for less to make it appear that it was not forcing Apple loyalists to buy a far more expensive phone by offering a reduced priced new model (iPhone 8).

In fact, it does appear that even in the bearish analyst notes, each tends to comment on the fact that demand reduction for the iPhone 8 is simply a reflection of the outsized demand for the iPhone X.

If that’s true, then Apple will have an average selling price significantly higher than in prior times, and if demand is in fact to the point where Apple also sells more units, then that would bring a windfall of profits larger than any company has ever seen in one quarter. If that sound overly bullish, it’s just the choice of words — Apple already has the largest earnings ever in one quarter, so this would be a breaking of its own record — also known more simply as, “growth.”

Back to Risk
While there is a rather bullish narrative to wrap around this odd iPhone selection, there is also, in earnest this time, a reasonable bearish thesis.

Apple won’t be delivering its iPhone X until well into November, and if demand is very strong, it might not even be able to deliver before the holiday season in the United States. And while, certainly, if all of those sales simply occur later in the year (or early 2018), then that’s fine, but to consider that a foregone conclusion is a step we are not willing to take with blind faith.

Some consumers, perhaps many consumers, will not wait. And while Apple loyalists may stick around for a later date, the all-important “Android switchers” (those smartphone Android owners that switch to Apple) may not — and that is a real risk and worthy of a stock drop, until proven otherwise.

Apple’s market share in the United States is jumping as Android loses market share — an under reported but critical phenomenon. On January 11th, 2017, 9TO5Mac wrote iPhone market share grows 6.4% in USA, takes share from Android in most markets.

Apple gained 9.1% in the UK, mostly at the expense of Windows phones.

The iPhone grew its market share in Australia, France, Italy, Japan, Spain, the UK and USA, with Android seeing its own share drop in all of these countries bar Italy, where its growth was less than half that of iOS.

Those are Android switchers and Apple may have just put that group, or at least that trend, in serious jeopardy.

Now What?
We believe the iPhone X is going to be a knock-down drag-out mega hit, and the elevated price will make it yet an even larger success. But, the risk that Apple took, as of right now, is hurting the company both with iPhone 8 sales, and potentially, with Android switchers. And that is not a false narrative — it is accurate.

That risk means the stock should drop, and is dropping.

But, we’re not done yet. What we did not show you, and is easily missed unless you are really looking, is how hard Apple is focusing consumers on the iPhone X over the iPhone 8 — in our opinion.

I recorded a 45 second video arriving on the Apple Store and looking at iPhones. I have turned to video to allow you to make your own decision, as opposed to snapshots, which are too selective and an be used to weave any narrative the author likes.

When you watch this video (below), decide for yourself if you feel that Apple is purposefully pointing people to the iPhone X over the iPhone 8. Here we go:

That’s hardly headline grabbing footage, but we found it noteworthy.

Apple Watch 3
There have been some pretty poor reviews of the Apple Watch 3 surrounding its LTE connectivity and its battery life. This is one of those times where the reviews are meaningless. Demand is strong and that’s all that matters.

Here is a snapshot from the Apple Store for that product:

We see the Watch becoming a runaway success as people learn to use that wearable device as a standalone product — leaving the phone at home on runs, meetings, swims, hikes, and whatever other times such a convenience could be desired.

Conclusion
We maintain our Top Pick status on Apple, but have certainly tempered our bullishness with an undeniable new risk. It might work out very well, but, it might not, and that is a new risk to Apple stock.

The author is long shares of Apple Inc (NASDAQ:AAPL).

Thanks for reading, friends.

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Disclosure: I am/we are long AAPL.

Tech

Why Apple iOS 11 Won’t Run Some of Your Apps

After users download iOS 11 to their iPhones and iPads starting today, they might discover some of their apps no longer work.

Apple’s iOS 11 will not support slow and old apps that use a technology called 32-bit, rendering those programs useless. Additionally, Apple will not allow users to find 32-bit apps in its App Store, effectively killing them off until the app developers update their older apps to support the new 64-bit process, which speeds up apps and makes them more usable on newer iPhones and iPads.

When users download iOS 11, they’ll get a notification from the operating system, saying that a particular app “needs to be updated.” Apple’s notification says that the app “will not work with iOS 11” and it will be banned from use until it’s updated.

Apple (aapl) started to use 64-bit apps in 2013 after the company launched the iPhone 5S, the first smartphone from the company to come with a 64-bit processor. At that time, Apple pressured developers to start taking advantage of the faster chip technology, but still allowed 32-bit apps to be developed and brought to its App Store. In 2015, however, Apple announced that all new apps and updates would need to run on 64-bit.

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While the majority of app developers heeded Apple’s warning and updated their programs, there are still some that have not, which means they haven’t been updated in over two years.

Apple announced last year that it would start to inform users of older and outdated apps, and this year, decided to finally stop supporting the older programs. Since last year, users have only been informed that their older apps would “slow down” their devices but Apple would allow them to be used. Now, though, Apple has seen enough and is stopping them in their tracks.

Apple’s iOS 11 will be available for download starting today. The software is free and users will get a notification on their iPhones and iPads when it’s ready to be downloaded.

Tech

Apple iPhone X Might Be Cannibalizing iPhone 8

Apple’s iPhone 8 pre-orders are a little slower than previous models, and the handset might have an unlikely foe to thank for it.

In a note to investors this week, KGI Securities analyst Ming-Chi Kuo said that iPhone 8 and iPhone 8 Plus pre-orders are sluggish because of strong demand for Apple’s upcoming iPhone X. In the note, which was earlier reported on by Apple-tracking site 9to5Mac, Kuo said pre-order shipment dates after initial orders are placed usually stands around three to six weeks. Depending on the model they want, if consumers order an iPhone 8 or iPhone 8 Plus today, they might be able to get it on Friday’s launch day or need only to wait a week for the handset to arrive.

Apple (aapl) has been offering pre-orders on new iPhones for years. And in most cases, the handsets it starts selling in September see their initial supply run out soon after the company turns on pre-order sales. By mid-morning of pre-order day, it’s not uncommon for new purchasers to have to wait weeks, if not a couple of months, for their smartphones to arrive.

But the iPhone 8 and iPhone 8 Plus were different. The smartphones were announced alongside the iPhone X, a major upgrade, featuring a big screen that nearly entirely covers the face and a revamped design featuring glass and stainless steel. Apple has called the iPhone X the “future” of smartphone technology, which might have made some would-be iPhone 8 customers feel like they were buying outdated hardware.

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For its part, Apple (aapl) tried to allay some of those fears by bringing a similar glass finish to the iPhone 8 line. Apple’s handsets are also running the same A11 Bionic chip that users would find in the iPhone X, and all three of the company’s new smartphones support wireless charging.

Still, iPhone 8 and iPhone 8 Plus models are readily available, marking a stark departure from Apple’s recent iPhone pre-orders.

According to Kuo, it appears a large number of Apple customers are simply waiting for Apple to offer pre-orders on the iPhone X starting on October 27. And although the iPhone X comes with a hefty $ 999 price tag to start, at least the early adopters don’t seem concerned.

While Apple hasn’t commented on pre-orders, it’s unlikely the company would bemoan customers waiting to buy the iPhone X.

On Monday, researcher Susquehanna International Group estimated that Apple pays $ 581 for the components inside its iPhone X, giving the company a profit margin of $ 418 per unit before it factors in assembly cost. Last year’s iPhone 7, which cost $ 649, cost Apple $ 401 for its components. That translated at the time to a $ 401 profit. Apple, in other words, should make a surprisingly high margin on the sale of each iPhone X.

Tech

Apple could add tap-to-pay support to iPhone 7 in Japan, but it’s not NFC


Apple might be looking to introduce a new tap-to-pay feature to its upcoming line of iPhones exclusively for customers living in Japan, Bloomberg reports. Instead of using NFC – similarly to its Apple Pay service in North America, Europe and Australia – the iPhone maker will opt for a Sony-built technology called FeliCa that currently dominates the mobile tap-to-pay market in Japan. With this move, Apple is looking to offer customers in Japan a quick and easy way of using their iPhones for public transport payments. The feature will also be widely supported at various vending machines, convenient stores and retailers across the country. Ditching NFC in favor of FeliCa makes sense.…

This story continues at The Next Web


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5 more banks join Apple Pay in Singapore so we can all finally use it

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SINGAPORE — Now many more Apple users here can pay in stores with their iPhones and Apple Watches.

Five banks in the country — DBS, OCBC Bank, POSB, Standard Chartered and UOB — announced on Wednesday they had started to support Apple Pay on their credit and debit cards.

Together with American Express, which launched together with Apple Pay here a little over a month ago, the six banks collectively cover the vast majority of the island’s card users, with over 80% of the cards issued by Visa and MasterCard. Some popular banks like Citibank and Maybank have not yet started supporting the service here. Read more…

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DOJ knew of possible iPhone-cracking method before Apple case

Weeks before the FBI sought a court order forcing Apple to help it break into an iPhone used by one of the San Bernardino gunmen, a sister agency was already using an Israeli security firm’s technology to attempt to crack a similar device.

The FBI and the Department of Justice (DOJ) have repeatedly insisted that they had no other option but to force Apple to help them crack an iPhone used by the gunman Syed Rizwan Farook, at least until an outside party offered assistance earlier this week.

“We have engaged all parts of the U.S. government” to find a way to access the device without Apple’s help, FBI Director James Comey told lawmakers in early March. “If we could have done this quietly and privately, we would have done it.”

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