Apple and Android are destroying the Swiss Watch industry


In Q4 2017 – essentially during the last holiday season – market research firm Canalys found that more people bought Apple watches than Swiss watches. Two million more, to be exact. Brian Heater has more data but this news is quite problematic for the folks eating Coquilles St-Jacques on the slopes of the Jura mountains.

The numbers are estimates based on market data but they still point to a trend. In Q1 2016 Apple shipped 1.5 million watches to Switzerlands 5.9 million. The intervening quarters were about the same until the launch of the Apple Watch 3 in September 2017, just in time for holiday shopping. The boost of a new phone and a new watch at the same time meant a perfect storm for upgraders, driving the total number of Apple Watches sold past the Swiss watch sales numbers.


This switch does not mean Apple will maintain that lead – they have one product while Switzerland has thousands – but comparing a single company’s output to an entire industry’s in this case is telling.

Wearing watches is, as we all remind each other, is passé.

“I check the time on my phone,” we said for almost a decade as phones became more ubiquitous. Meanwhile watch manufacturers abandoned the low end and began selling to the high end consumer, the connoisseur.

Take a look at this chart:

Sales of low- to mid-tier watches – and a mid-tier watch can range in price between $500 and $3,000 (and I would even lump many $10,000 watches in the mid-tier category) – were stagnant while the true cash cows, the expensive watches for the ultra-rich, fell slowly from a high in 2014. This coincides with falling purchases in China as what amounted to sumptuary laws reduced the number of expensive gifts given to corrupt officials. Sales are up as December 2017 but don’t expect much of a bump past the current slide.

As a lover of all things mechanical – I did ruin a few years of my life writing a book about a watch – I look at these trends with dismay and a bit of schadenfreude. As I’ve said again and again the Swiss Watch industry brought this on itself. While they claim great numbers and great success year after year the small manufacturers are eating each other up while nearly every major watch brand is snooping around for outside buyers. There is no money in churning out mechanical timepieces to an increasingly disinterested public.

As time ticks ever forward things will change. The once mighty Swiss houses will sink under the weight of their accreted laurel-resting and Apple will move on to embedded brain implants and leave watches behind. The result, after a battle that raged for more than four decades, will be a dead Swiss industry catering to a world that has moved on.

Azio’s Retro Classic typewriter-inspired Bluetooth keyboard is a luxurious treat


Maybe you’re sitting at a MacBook or other modern PC right now, typing away in near silence on a keyboard that provides no real satisfying response to your human fingers. Maybe, once in the distant past, you remember when keyboards offered something in return: A “click clack” that stood as an auditory proof of productivity.

If you miss that and want it back, the new Azio Luxury Retro Classic keyboard with Bluetooth is a fantastic option, and one that’s relatively affordable compared to some of the more extravagant typewriter-inspired keyboards out there – but with all of the same charm, and a mechanical typing action that you’ll love if you’re a fan of really pounding those keys.

The $219.99 ($189.99 if you don’t need wireless connectivity) accessory comes with a lot in the box you won’t get from comparably priced premium keyboards, including replaceable keycaps for both Mac and PC, as well as backlighting, and genuine metal, wood and leather finished surfaces. The wireless version works in both wired and Bluetooth configurations, and the 6,000 mAh battery on board can last for up to two months between charges.

The keyboard uses USB-C for charging, with a cable included (braided, no less) and it just works out of the box with both macOS and Windows thanks to the convenient mode switch at the back and the aforementioned interchangeable key caps (no tools required, either – just pull them off and push on the replacements.

In addition to the lovely material accents, and the Azio mechanical switches, which are indeed clicky and offer just the right amount of resistance for me, the Retro Classic also has typing angle adjustability thanks to screw down feet that can add a fair amount of lift if you find that more comfortable as a typist.

The keyboards also feel like they’re built to withstand a lot of typing – or a nuclear apocalypse, whichever comes first. They’re heavy, and that plus the rubberized anti-slip pads will keep them firmly rooted on your desk. This isn’t the keyboard you’ll want to take with you when you travel, however.

If you want something that’s as much desk decoration as it is functional tool, and you’re a big fan of mechanical keyboards (as I am, savoring each clack of this review on the Azio), then this is a prime option. Retro keyboards are getting easier to find, but Azio’s model has the best balance of price, versatility and quality of the ones I’ve come across thus far.

Apple’s Shazam takeover triggers competition review in Europe


The European Commission has announced a review of Apple’s acquisition of music discovery service Shazam — agreeing to a request made by several countries to weigh competition concerns.

Apple officially announced it was buying UK tech veteran Shazam back in December. It did not disclose the price-tag for the deal but sources suggest it’s paying in the region of $400 million.

At the time it described its Apple Music streaming service and Shazam’s music discovery offering as “a natural fit”, adding: “We have exciting plans in store, and we look forward to combining with Shazam upon approval of today’s agreement.”

In a press release today the Commission said it had accepted a request by seven European countries to assess the proposed acquisition — which it says “may threaten to adversely affect competition in the EEA” (European Economic Area).

A provision in EU law allows Member States to submit a request to the executive body to examine a merger that does not have an EU dimension — on account of it not meeting the turnover thresholds set by the EU Merger Regulation — but which nonetheless affects trade within the Single Market and threatens to significantly affect competition within the territory of the countries making the request.

The EC said EU Member State Austria submitted the initial request, with Iceland, Italy, France, Norway, Spain and Sweden joining subsequently.

“On the basis of the elements submitted by Austria and the countries joining the referral request, and without prejudice to the outcome of its full investigation, the Commission considers that the transaction may have a significant adverse effect on competition in the European Economic Area,” it writes. “The Commission has also concluded that it is the best placed authority to deal with the potential cross-border effects of the transaction.”

It added that it will now ask Apple to notify the transaction.

We’ve reached out to Apple for comment and will update this post with any response.

Featured Image: TechCrunch

Foxconn to plug at least $340M into AI R&D over five years


Manufacturing giant Foxconn has said it will make a major investment in artificial intelligence-based R&D as it looks for new business growth opportunities in a cooling global smartphone market, Nikkei reports.

“We will at least invest some 10 billion New Taiwan dollars ($342M) over five years to recruit top talent and deploy artificial intelligence applications in all the manufacturing sites,” said chairman Terry Gou.

“It’s likely that we could even pour in some $10BN or more if we find the deployments are very successful or can really generate results.”

Gou added that the ambition is to become “a global innovative AI platform rather than just a manufacturing company”.

Data put out this week by Strategy Analytics records a 9 per cent fall in global smartphone shipments in Q4 2017 — the biggest such drop in smartphone history — which the analyst blames on the floor falling out of the smartphone market in China.

“The shrinkage in global smartphone shipments was caused by a collapse in the huge China market, where demand fell 16 percent annually due to longer replacement rates, fewer operator subsidies and a general lack of wow models,” noted Strategy Analytics’ Linda Sui in a statement.

On a full-year basis, the analysts records global smartphone shipments growing 1 percent — topping 1.5 billion units for the first time.

But there’s little doubt the smartphone growth engine that’s fed manufacturing giants like Foxconn for so long is winding down.

This week, for example, Apple — Foxconn’s largest customer — reported a dip in iPhone sales for the holiday quarter. Though Cupertino still managed to carve out more revenue (thanks to that $1k iPhone X price-tag). But those kind of creative pricing opportunities aren’t on the table for electronics assemblers. So it’s all about utilizing technology to do more for less.

According to Nikkei, Foxconn intends to recruit up to 100 top AI experts globally. It also said it will recruit thousands of less experienced developers to work on building applications that use machine learning and deep learning technologies.

Embedding sensors into production line equipment to capture data to feed AI-fueled automation development is a key part of the AI R&D plan, with Foxconn saying earlier that it wants to offer advanced manufacturing experiences and services — eyeing competing with the likes of General Electric and Cisco.

The company has also been working with Andrew Ng’s new AI startup Landing.ai — which is itself focused on plugging AI into industries that haven’t yet tapping into the tech’s transformative benefits, with a first focus on manufacturing — since July.

And Gou confirmed the startup will be a key partner as Foxconn works towards its own AI-fueled transformation — using tech brought in via Landing.ai to help transform the manufacturing process, and identify and predict defects.

Quite what such AI-powered transformation might mean for the jobs of hundreds of thousands of humans currently employed by Foxconn on assembly line tasks is less clear. But it looks like those workers will be helping to train AI models that could end up replacing their labor via automation.

Featured Image: Matt Wakeman/Flickr UNDER A CC BY 2.0 LICENSE

Amazon and Apple Gush Over Holiday Sales

Amazon’s shares soared nearly 6 percent in after-hours trading following the release of the results. “Amazon’s best-in-class large-cap growth story remains unchanged,” Colin Sebastian, an analyst at Robert W. Baird & Company, wrote in a research report.

While Amazon’s online store sales grew 20 percent from a year earlier, the company’s total retail growth benefited from its acquisition of Whole Foods Markets. That deal, announced in June, added much of the $4.52 billion in physical store revenue for the quarter.

Yet the biggest revenue growth came from a category generically named “other,” which includes advertising services and rose 62 percent to $1.74 billion from a year earlier.

By far the most profitable big business for the company was Amazon Web Services, the cloud computing unit. Its revenue rose 45 percent to $5.11 billion, and its operating income increased 46 percent to $1.35 billion.

Amazon kept with its tradition of secrecy by refusing to reveal exactly how many of its Echo family of devices it sold, saying only that it sold “tens of millions” of them last year. The company priced the devices aggressively over the holidays — its cheapest was only $29. The devices probably did not yield much profit, though they are an important part of Amazon’s effort to establish a technology ecosystem that could result in other benefits, such as enabling customers to make impulse purchases with their voices.

Photo

An Amazon warehouse in Peterborough, England, late last year. Amazon raved on Thursday about demand for gadgets like the Echo.

Apple, in contrast, is without equal in making profits from tech hardware.

For the company’s fiscal first quarter, it reported a record for quarterly net income — $20.07 billion, up 12 percent from a year earlier. Revenue rose 13 percent to $88.3 billion. The gains were notable considering that Apple’s fiscal first quarter was a week shorter than the previous year’s 14-week fiscal first quarter.

While Amazon is content to price its devices near its costs for making them, Apple is known for charging a premium for its smartphones, tablets and computers. The iPhone X, which uses facial recognition to unlock the device, is the most expensive in its history, starting at almost $1,000.

“Customer satisfaction is literally off the charts on iPhone X,” Timothy D. Cook, Apple’s chief executive, said on the company’s earnings call.

Mr. Cook noted that the iPhone X was the company’s top-selling phone in the quarter despite its November release, roughly a month and a half after Apple’s other new iPhones.

The company sold 77.3 million iPhones over the quarter, which was down 1 percent from the longer quarter a year earlier. Yet revenue was higher largely because of the pricing of the new iPhones: In addition to introducing the iPhone X, Apple raised the price of the base model of its iPhone to $699, up from the $649 starting price for past iPhones.

Sales in its “other products” category, which includes the Apple Watch, grew 36 percent to $5.5 billion. Apple declined to disclose sales of the Apple Watch for competitive reasons, but Mr. Cook noted on the earnings call that revenue for the Apple Watch had grown 50 percent.

Apple also highlighted money generated from services, which include the App Store and Apple Music, with revenue rising 18 percent to $8.5 billion. Apple said the App Store continued to be the top destination for smartphone customers to buy apps.

Apple sold 13.2 million iPads, up 1 percent — notable because iPad sales declined for many consecutive quarters over the last few years. But Mac sales shrank about 5 percent to 5.1 million units.

Despite strong sales of the pricey iPhone X, some analysts remained concerned that its sales were slowing. Ahead of the earnings call, some news reports said Apple was slashing production of the iPhone X for the quarter that ends in March. The reports cited supply chain partners that said Apple had cut orders for parts.

But in years past, Apple has warned investors that activities of its complex supply chain were an unreliable metric for overall sales. The company also typically slows down iPhone production after the holiday quarter, which is the peak shopping season.

Last month, Apple also unveiled plans to bring the vast majority of its $252 billion in cash held abroad back to the United States, paying a one-time repatriation tax of $38 billion. Because the company had already earmarked $36.4 billion in anticipation that it would eventually have to pay taxes on its foreign earnings, Apple did not see much impact from the recent tax code changes.

Luca Maestri, Apple’s chief financial officer, said that in light of the new tax code, the company would announce plans for its repatriated cash, including dividends and buybacks, in April.

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Tech Fix: Your iPhone Slowed Down. Here’s What to Do When the Solution Is Just as Slow.

Apple may be dealing with the fallout for a while. The company published a lengthy memo in December saying that smartphone batteries became less effective over time and that its software was intended to prevent iPhones with older batteries from unexpected shutdowns. Apple also apologized to customers for the slowdowns, offered discounts for its battery-replacement program and said it would introduce software to gain visibility into the health of an iPhone battery.

Yet since then, consumer advocacy groups have filed lawsuits against the company for failing to disclose that the software would throttle old iPhones. The Justice Department and the Securities and Exchange Commission have also started an inquiry into the matter, according to a person with knowledge of the situation, who asked not to be named because the details were confidential. Bloomberg earlier reported the inquiry.

Early Wednesday, Apple said in a statement that it had received questions from some government agencies and that it was responding to them; the company did not specify the agencies it had heard from. The Justice Department declined to comment.

As for the wait times that Ms. Schipper and others are experiencing for a battery replacement, a spokeswoman referred to Apple’s support webpage, which states that battery supplies at its stores may be limited.

Let’s not wait around. Here’s a guide to other solutions to keep an iPhone running in the absence of an Apple battery replacement.

Third-Party Repair Shops

Plenty of irate Apple customers are turning to local third-party repair shops to get their iPhone batteries replaced. At Mega Mobile Boston, twice as many customers are coming in for iPhone battery replacements than in years past, said Adam Fullerton, the store’s operations manager.

Third-party repairs are a decent — but imperfect — solution. One drawback is that they vary in quality; some repair shops buy lower-quality batteries that don’t last. So to find a good shop, rely on word of mouth and reviews on the web, similar to how you might seek out a good car mechanic.

Another issue is that if you service your phone with a third-party battery and later take your device in to Apple for repair, the company could refuse to service your phone. So if you go the third-party route, chances are you will have to stick with third-party repair shops through the end of your phone’s life.

There’s a less risky route here. On Apple’s support webpage, you can look up third-party repair shops that are authorized by Apple as service providers. These are fixers who have been trained by Apple and carry original parts. But the list is short.

If you find a good local fixer, there are plenty of benefits to sticking with one long term. For one, third-party shops tend to have shorter waits. Mr. Fullerton said his shop could typically get an iPhone battery replacement done in about 30 minutes. The process involves opening the device, cleaning away the old waterproofing adhesive, replacing the battery and applying a new waterproofing adhesive.

For another, local repair shops make their prices competitive with the manufacturer’s. In the case of batteries, many shops are discounting their battery replacements to match Apple’s $29 pricing.

“We’re probably losing money on it with the cost of a half-hour time from a technician,” Mr. Fullerton said. “But it’s like a loss leader in any other industry. If you’re Best Buy and you get them to buy one item at cost, maybe you can teach them something about your business.”

Finding a good repair shop can feel daunting, but if you ask around, your peers will probably have recommendations. For a sample, here’s a list of highly recommended repair shops in the United States that I compiled from talking to repair experts I trust:

■ In Chicago: uBreakiFix Chicago

■ In San Francisco: MacRepair

■ In New York: Simple Mac

■ In Boston: Mega Mobile Boston

■ In Washington: Computer Geeks

■ In Austin, Tex.: Austin Mac Repair

Fix It Yourself

You can always replace an iPhone battery by yourself. The pros: You can choose the best components for repairs and minimize costs. The cons: Learning repairs can be time consuming, and if you mess up, you have no one to blame but yourself. And again, Apple stores could refuse to service your phone if it sees you have repaired it with third-party parts.

A good place to start for D.I.Y. repairs is iFixit, a company that provides instruction manuals and components for repairing devices. It is offering discounts on battery replacement kits for older iPhones, which cost $17 to $29. Each kit includes a new battery and the tools for disassembling iPhones.

Installing a phone battery can be intimidating. Replacing an iPhone 7 battery, for example, requires eight tools and 28 steps. Kyle Wiens, the chief executive of iFixit, said some customers also opted to buy a battery from iFixit and then take it to a local repair shop for installation.

Carry a Battery Pack

If you don’t feel confident hiring a third-party fixer or installing your own battery, you can always wait for Apple to replace your battery. But since that could take weeks or months, don’t suffer with a sapped phone battery in the meantime.

A better temporary solution is to invest in a battery pack that you can carry around until replacement batteries arrive at an Apple store. Wirecutter, a New York Times company that reviews products, has tested hundreds of battery packs to recommend a few. My favorite is the Anker PowerCore 20100, which can charge a smartphone every day for a week.

Ms. Schipper, the Seattle resident, is considering buying a battery pack. In the meantime, she is constantly plugging her iPhone into a power outlet because her battery lasts only two hours a day.

Yet she has resisted what she thinks Apple wants: for her to buy a new phone.

“I was tempted to just chuck this phone and suck it up and spend $1,000-plus and get the iPhone X,” she said. “I said, ‘No, darn it, I have a budget I’m saving up.’ I’m not going to let Apple push me around.”

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Apple reportedly under investigation by SEC and DOJ for phone slowdown


The U.S. Department of Justice and the Securities Exchange Commission are jointly investigating Apple’s communications about the software update that slowed down older models of the iPhone, Bloomberg is reporting.

Citing sources familiar with the matter, the government has reportedly requested details on the company’s communications about the software update.

The Bloomberg report indicates that the two agencies are in very early stages of their investigation.

We’ve reached out to Apple, the SEC and the DOJ for comment and will update when we hear back.

For background, Apple got into a lot of trouble with customers who noticed that the performance of their older model phones was degrading over time. Apple was pushed to disclose that it had issued a software update that privileged power management over performance in older devices that had degraded batteries.

There was, unsurprisingly, some pushback and Apple was forced to apologize for the way it handled the update.

The U.S. isn’t the only country where people are pressing Apple for more information. Consumer advocacy groups around the world — from Europe to Asia — are pressing for an investigation into the slowdown.