Future iPhones Could Have Apple-Designed Cellular Modems, But Possibly Not Until 2021

Apple is actively building its own cellular modem chip for future iPhones, according to a paywalled report by The Information today.


The report, citing a person briefed on the plans, claims that Apple has engineers working on the project close to its headquarters in Northern California. For several months, Apple has also been actively hiring engineers in San Diego, where the company has an office with a growing Wireless Architecture team.

Due to the complexity of wireless modems, it could take Apple as long as three years to ship iPhones with them, according to analysts cited in the report. Apple is already rumored to debut its first 5G-enabled iPhone in 2020, with an Intel modem, so the first iPhone with an Apple-designed modem could launch in 2021.

The move would align with Apple's increasing shift towards in-house chip designs, including its best-in-class A-series processors in iPhones, S-series processors in Apple Watches, W-series wireless chips in AirPods and select Beats headphones, and T-series coprocessors in some of the latest Macs.

The shift wouldn't be all that surprising, as Apple is currently in a high-profile legal battle with its former modem supplier Qualcomm over chip-related licensing fees. Intel has since become the exclusive supplier of modems in the latest iPhones.

Qualcomm is based in San Diego, turning the city into a hotbed for wireless engineers, explaining Apple's presence there. One of the executives leading Apple's cellular modem effort is Bernd Adler, who joined the company in 2015 after serving as an executive on Intel's modem team, according to the report.


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Apple Said to Have ‘Dramatically Reduced’ Multi-Billion-Dollar iPhone Repair Fraud in China

Within the past four years, Apple has managed to "dramatically reduce" the rate of iPhone-related repair fraud in its retail stores in China, according to The Information's Wayne Ma. The report is based on interviews with more than a dozen former Apple employees who spoke on condition of anonymity.

Image: iFixit

In 2013, Apple is said to have discovered a highly sophisticated fraud scheme in which organized thieves would buy or steal iPhones, remove valuable components like the processor or logic board, swap in fake components, and return the "broken" iPhones to receive replacements they could resell.
Thieves would stand outside stores with suitcases full of iPhones with some of the original components stripped out and replaced with inferior parts, two of the people said. The fraudsters would hire people to pretend to be customers to return them, each taking a device to stand in line at the Genius Bar, the people said. Once the phones were swapped, the actors would pass the new phones to the fraudsters and get paid for their time, the people said.
"In the old-school world, this would be a car chop shop, where you would take all the pieces off and sell them," said Kyle Wiens, co-founder and CEO of iFixit. "Now they're doing that with iPhones."

The report claims most of the schemes originated in Shenzhen, a southern Chinese city known as a hotbed for criminal organizations because of its proximity to gangs in nearby Hong Kong. Shenzhen is also the largest electronics manufacturing base in the world, home to many Apple suppliers like Foxconn.

When the first Apple Store opened in Shenzhen in November 2012, the report says weekly iPhone warranty claims, including repair and replacement requests, jumped from about 200 to more than 2,000 within the first six months—"almost three times more" than Apple's flagship Fifth Avenue store in New York at the time.

At first, the report says Genius Bar employees would swap broken iPhones for new ones as long as they didn't appear intentionally damaged, as was the policy elsewhere. But as the problem started to have a material impact on Apple's financial sheet, to the tune of billions, the company began to take further action.

Hesitant to get Chinese authorities involved, due to the risks of public backlash and negative publicity in state-run media, Apple launched an online reservation system that required proof of ownership, and later developed diagnostic software that allowed retail employees to quickly detect fake parts in iPhones.

Fraudsters found ways to evade these tactics, however, and even went as far as obtaining Apple customer records, including serial numbers, for iPhones that had already been sold in China. Last year, police in China arrested a ring of suspected data thieves involved with the fraud.

An increase in rejected warranty claims sparked angry scenes in Apple Stores, the report says, as customers suspected of fraud "grew irate" when their iPhones weren't accepted. Partly for this reason, Apple stopped authorizing iPhone replacements in stores and began requiring sending them to off-site repair centers for inspection.

Apple also began dipping batteries in a special dye that could only be seen under a high-frequency light to authenticate them during repairs, the report says. A-series chips in iPhones are also allegedly coated in a waterproof sealant that can be seen under certain wavelengths, offering another countermeasure.

Apple's efforts appear to have worked, with fraud rates in the Greater China region dropping to about 20 percent of repair claims from more than 60 percent at its peak, according to the report.

Fraudsters are now said to be shifting to Apple Stores in other countries, including Turkey and the United Arab Emirates.


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Amazon Has Reportedly Gained Edge Over Apple in Deals With Smart Home Builders

Amazon appears to have gained an edge over Apple in deals with smart home builders, according to The Information.


The paywalled report claims that an increasing number of home builders have agreed to partnerships with Amazon to build homes with preinstalled Alexa-enabled accessories, rather than HomeKit-based products from Apple.

Last year, for example, Amazon reportedly struck a large-scale deal with Lennar, one of the biggest home builders in the United States. Lennar first had a partnership with Apple in 2016, but the company is "prioritizing Amazon now."
As part of its deal, Lennar gets access to Amazon's growing army of so-called Amazon experts, the company's in-home service team, to go around to every new homeowner and make sure their smart home is hooked up. Every new Lennar home comes with Echo Dot speakers and Echo Show displays to connect with Alexa, as well as a suite of connected doorbells, locks, light switches and thermostat.
A few other builders, such as Arizona-based Meritage Homes and Shea Homes, also said they considered Apple but opted for Amazon.
"Apple is closed source about what will talk to their system, so we shied away from it," said CR Herro, a vice president with Arizona-based Meritage Homes. "I don't want to restrict what I think the future could be because I have no idea what it will be."
The report claims that Apple requiring accessory makers to install an authentication chip for HomeKit compatibility has "significantly limited the number of new devices getting to market," but that is no longer the case, as iOS 11.3 introduced software-based authentication for accessories to interface with HomeKit.

Meanwhile, some builders believe there is a downside in allowing Amazon to embed a network of Alexa-powered devices that can collect data into homes, ranging from privacy concerns to competitive reasons.
Startup home builder Kasita, for instance, thinks these traditional players are giving up a huge amount of business by linking up with Amazon. Kasita uses Alexa devices for performing voice control in its "micro homes," but tries to maintain its relationship with the consumer by providing its own app and wants to offer its own services to consumers in the future.

"Amazon owns you when you buy anything online," said Jeff Wilson, founder and chairman of Kasita. "Do you really want them owning home experiences?"
While new homes are estimated to account for only about 10 percent of residential home sales in the United States, Apple believes the best way to introduce homeowners to HomeKit is from the get-go.

"We want to bring home automation to the mainstream," said Greg Joswiak, a marketing executive at Apple, in an interview with Bloomberg. "The best place to start is at the beginning, when a house is just being created."


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Former Apple Employees Reflect on Siri’s ‘Squandered Lead’ Over Amazon Alexa and Google Assistant

The Information has published an in-depth look at how Siri has transitioned from one of Apple's most promising technologies into a "major problem" for the company. The article includes interviews with a dozen former Apple employees who worked on the various teams responsible for the virtual assistant.


The report claims that many of the employees acknowledged for the first time that Apple rushed Siri to be included in the iPhone 4s before the technology was fully ready, resulting in several internal debates over whether to continue patching up the half-baked product or start from scratch.
Siri's various teams morphed into an unwieldy apparatus that engaged in petty turf battles and heated arguments over what an ideal version of Siri should be—a quick and accurate information fetcher or a conversant and intuitive assistant capable of complex tasks.
The team working on Siri was overseen by Apple's then iOS chief Scott Forstall, but his attention was reportedly divided by other major projects, including the upcoming launch of Apple Maps. As a result, Forstall enlisted Richard Williamson, who was also managing the Apple Maps project, to head up the Siri team.

According to the report, several former employees said Williamson made a number of decisions that the rest of the Siri team disagreed with, including a plan to improve the assistant's capabilities only once a year.

Williamson, in an emailed response to the report, wrote that it's "completely untrue" that he decided Siri shouldn't be improved continuously.
He said decisions concerning "technical leadership of the software and server infrastructure" were made by employees below his level, while he was responsible for getting the team on track.

"After launch, Siri was a disaster," Mr. Williamson wrote. "It was slow, when it worked at all. The software was riddled with serious bugs. Those problems lie entirely with the original Siri team, certainly not me."
Forstall and Williamson were both fired by Apple in 2012 following the botched launch of Apple Maps on iOS 6. The former employees interviewed said they lamented losing Forstall, who "believed in what they were doing."

Another interesting tidbit is that the Siri team apparently didn't even learn about the HomePod until 2015. Last year, Bloomberg News reported that Apple had developed several speaker prototypes dating back to 2012, but the Siri team presumably didn't know due to Apple's culture of secrecy.
In a sign of how unprepared Apple was to deal with a rivalry, two Siri team members told The Information that their team didn't even learn about Apple’s HomePod project until 2015—after Amazon unveiled the Echo in late 2014. One of Apple’s original plans was to launch its speaker without Siri included, according to a source.
The report says that Siri is the main reason the HomePod has "underperformed," and said Siri's capabilities "remain limited compared to the competition," including Amazon Alexa and Google Assistant.
The most notable failure in Siri's evolution is that it still lacks the third-party developer ecosystem considered the key element of the original Siri vision. Apple finally launched SiriKit in 2016 after years of setting aside the project and shifting resources away to other areas. […]

But SiriKit has yet to fulfill its promise. So far it includes just 10 activities—Apple calls them "intent domains"—such as payments, booking rides, setting up to-do lists and looking at photos. Several senior engineers who worked on SiriKit have left Apple or moved off the project.
Some former employees interviewed noted that "while Apple has tried to remake itself as a services company, its core is still product design."

Apple responded to today's report with a statement noting Siri is "the world's most popular voice assistant" and touted "significant advances" to the assistant's performance, scalability, and reliability.
"We have made significant advances in Siri performance, scalability and reliability and have applied the latest machine learning techniques to create a more natural voice and more proactive features," Apple wrote in its statement. "We continue to invest deeply in machine learning and artificial intelligence to continually improve the quality of answers Siri provides and the breadth of questions Siri can respond to."
The full-length article is a worthwhile read for those interested in learning more about Siri's internal struggles and shortcomings.

The Information: The Seven-Year Itch: How Apple's Marriage to Siri Turned Sour


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Apple News Drives Significant Traffic to Stories, Publishers Can Pitch Articles via Slack

Apple News can yield a flood of traffic for news publishers, with the app accounting for as much as 50 to 60 percent of readership for some stories, according to a paywalled report by Tom Dotan for The Information.

Apple News has generated half of Vox.com's daily traffic at times, according to a person familiar with Vox's numbers. An executive at the website of a major TV network said Apple News has accounted for as much as 60% of traffic for some stories.
The report claims Apple has an editorial team of about a dozen former journalists, led by veteran Apple executive Roger Rosner, who decide which articles get featured in the Top Stories or Spotlight sections of Apple News, or in the News tab on an iPhone, accessible by swiping left from the first page of the home screen.

The editorial team in the United States runs a dedicated Slack channel in which publishers can pitch stories to Apple, which tends to favor big breaking stories, special features, and multi-part series, according to the report. Apple is said to have similar teams working with publishers in Australia and the United Kingdom.

The curation process isn't praised by all publishers, as smaller to medium-sized sites say Apple News tends to favor big mainstream outlets, which get featured prominently when users first sign up for Apple News.

A bigger issue that publishers have with Apple News is that many don't earn any significant ad revenue from the app.
Part of the problem relates to how it sells ad space next to stories. Apple initially used its ad team iAd, but it later outsourced sales to NBC. It has yet to integrate Google's industry standard ad-serving tool DoubleClick, which publishing executive say would make ad sales much easier.
This may change soon, as Apple has supposedly begun to run a closed test of Google's industry standard ad-serving tool DoubleClick with around 20 publishers, in line with a report from last July. However, it's unclear when or if Apple News will roll it out wider, according to the report.

All in all, while Apple News has proved more successful than first expected, there is still some progress to be made as Apple aims to become a key distribution outlet for news publishers around the world.


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