The First Trillion Dollars is Always the Hardest

In its first 10 years, the iPhone will have sold at least 1.2 billion units, making it the most successful product of all time. The iPhone also enabled the iOS empire which includes the iPod touch, the iPad, the Apple Watch and Apple TV whose combined total unit sales will reach 1.75 billion units over 10 years. This total is likely to top 2 billion units by the end of 2018.

• • •

The revenues from iOS product sales will reach $980 billion by middle of this year. In addition to hardware Apple also books iOS services revenues (including content) which have totaled more than $100 billion to date.

This means that iOS will have generated over $1 trillion in revenues for Apple sometime this year.

→ Asymco

The Inside Story of Apple’s $14 Billion Tax Bill

The Maxforce concluded that Ireland allowed Apple to create stateless entities that effectively let it decide how much — or how little — tax it pays. The investigators say the company channeled profits from dozens of countries through two Ireland-based units. In a system at least tacitly endorsed by Irish authorities, earnings were split, with the vast majority attributed to a “head office” with no employees and no specific home base — and therefore liable to no tax on any profits from sales outside Ireland. The U.S., meanwhile, didn’t tax the units because they’re incorporated in Ireland.

Interesting detail about the secrecy surrounding the process of collecting such documents :

Three weeks after the Senate hearing, Lienemeyer’s team asked Ireland for details of Apple’s tax situation. The Irish tax authorities soon dispatched a representative carrying a briefcase filled with a bundle of bound pages. The Irish could have simply sent the material via e-mail, but they were cautious about sharing taxpayer’s information with the EU and have a ground rule to avoid leaks: never send such documents electronically.

→ Bloomberg

Apple Is Selling You A phone, Not Civil Liberties

Let’s start with an important fact that Apple elides in its statement: Apple engineered this problem and it did so intentionally. In the wake of the Snowden leaks, Apple specifically decided to encrypt material end-to-end and at rest by default on the devices it manufactures and to not maintain any ability to decrypt material unless users specifically gave it the power to recover that material. It boasted about this decision and used it as a marketing weapon against its competitors. Reasonable people can argue about whether or not Apple did so for good reasons and whether or not doing so was the optimal way for the company to enhance the cybersecurity of its users. But the simple fact remains that Apple used to have the capacity to comply with warrants, and now it cannot without a certain amount of reengineering. And that was a matter of its own choosing made despite repeated warnings from the government that this choice would cause substantial problems for law enforcement, national security investigators, and public safety.

• • •

FBI and Justice Department officials, we think, can be forgiven if they’re a touch cynical about all of Apple’s elaborate legal argumentation and suspect that this all just masks what appears to be Apple’s genuine litigating posture towards the government: You can’t make us do anything, because we are immensely politically powerful, our CEO is on the phone with the President regularly, we are too big and way too cool to fail, and people around the world like us more than they like you. So what about that dead woman in Louisiana? Sorry, but bringing her killer to justice—and preventing his or her future violence—just isn’t as important as the data security of our devices. And about protecting people from ISIS? We’ll help out if it’s not too much trouble, but don’t ask us—ever—to do something that will make us look bad to the ACLU, even if there’s a very good legal argument that you can.

→ Brookings

The Most Important Apple Executive You’ve Never Heard Of

At the center of all this is Srouji, 51, an Israeli who joined Apple after jobs at Intel and IBM. He’s compact, he’s intense, and he speaks Arabic, Hebrew, and French. His English is lightly accented and, when the subject has anything to do with Apple, nonspecific bordering on koanlike. “Hard is good. Easy is a waste of time,” he says when asked about increasingly thin iPhone designs. “The chip architects at Apple are artists, the engineers are wizards,” he answers another question. He’ll elaborate a bit when the topic is general. “When designers say, ‘This is hard,’ ” he says, “my rule of thumb is if it’s not gated by physics, that means it’s hard but doable.”

→ Bloomberg Businessweek

Apple, Amazon, Tesla and the Changing Dynamics of the Car Industry

The baby boomer generation romanticizes cars. Most boomers can recite the horsepower and other engine specs of every car they have ever owned. For the tail end of Gen X (my generation) and Millennials, a car is an interruption between Facebook and Twitter. We know the brand of speakers in our car, but if asked would have to google its horsepower. We feel little romanticism for our cars and have much higher brand loyalty to Apple and Google than to GM or Ford.

→ Institutional Investor

Apple Is Building Its Largest Startup Ever

Meanwhile in Cupertino, CA :

Apple’s ultimate success with Project Titan will depend not on whether Apple can build autonomous features into an automobile or come up with a breakthrough user interface. Rather, those features are byproducts of the much bigger product that Apple is trying to build: the best team of automotive experts in the world. Even though Apple prides itself on a culture that puts the product first, the biggest risk factor to Apple Car is corporate politics and too many layers of management and decision-making. Success will come from allowing ideas to grow from the design labs to showroom without having interference.

→ Above Avalon

Projecting the Ad Revenue Effect of iOS 9 Content Blocking

The effect of the iOS content blocker. Worst case scenario is an 11% decrease in revenue :

We invented a hypothetical mid-size publisher based in the United States and reliant on exchange banner ads, using private data from a variety of sources and industry data reviewed in the report, including adoption models that predict equal or greater adoption compared to desktop ad blockers.


Eight months from now, our hypothetical publisher could see a 3.7% drop in ad revenue. With astronomical content blocker adoption (3x desktop rates) driven by App Store visibility and media coverage, that number could be as high as 11%. A potentially severe setback for businesses with thin margins.

And Ben Ilfeld to predict :

A trend toward native advertising will accelerate.

But I couldn’t disagree with Ben Brooks’ position on native ads. For the most part, ads feel impersonal and unrelated to the website bearing them, as they are supposed to be tailored to the reader by Google’s algorithms. On the other side, native ads are selected and delivered by the publisher himself (here, the website or blog) based on its perceived relevance to the reader. The issue is that the reader might sense a conflict of interest or being fooled by the publisher if the product or service doesn’t delivers what is promised by the trusted pen or voice of the publisher, putting himself at unnecessary risk. 

And if [John Gruber] does accept the [Apple] ad, even knowing that the has more than a decade of history for being objective about Apple — how does a reader look at Gruber’s praise of Apple now? It’s potentially devastating for the writers authenticity, and for reader trust. The entire system could crumble. Even though it seems like a logical sponsor for his site.

→ 10up