Apple Roundup: Tariffs, FAA, Russia, Music, App Store, Security

Good news about tariffs on iPhone, iPads, Macs, etc not kicking in until Dec 15 more than offset things like the FAA restricting some risky devices on flights, an antitrust probe in Russia and other.

Tariffs and Apple

China-made smart watches, fitness trackers, smart speakers and Bluetooth headphones are not among the products on which the Trump administration is delaying tariffs. Amazon (NASDAQ:AMZN) , Apple (NASDAQ:AAPL) , Fitbit (NYSE:FIT) and Alphabet’s (NASDAQ:GOOGL) Google sell products in these categories, and so will be impacted by the increase.

Apple’s iPhone, along with other smartphones, laptops, tablets, MacBooks, iPads and iPod touch devices, monitors, keyboards, Apple TV boxes, Roku devices, video streaming consoles, etc however managed a lucky escape. The 10% increase in tariffs on this set of products will go into effect from Dec 15 instead of Sep 1, at which time most of the holiday shipments are expected to be on shelves.

The U.S. Trade Representative (USTR) apparently delayed tariffs on product categories in which China supplied more than 75%. Since 82% of cell phones and 94.5% of laptops came from China in 2018, tariffs on these items were delayed.

MacBooks Banned by FAA

U.S. Federal Aviation Administration (FAA) banned some MacBook Pro models after Apple recalled hundreds of thousands of its 15-inch devices in June citing a battery overheating issue, which therefore increased fire risk. The FAA said that it had alerted major U.S. airlines about the recall. Customers will also be unable to take the devices as cargo or as carry-on baggage.

Earlier this month, the European Union Aviation Safety Agency allowed passengers to carry the devices as long as they were switched off and not used. The devices were sold between September 2015 and February 2017. Apple is replacing the said batteries, after which devices incorporating them can be taken on flights without restrictions.

Antitrust Probe in Russia

Russia’s Federal Antimonopoly Service (FAS) is investigating Apple for monopolistic practices after Kaspersky approached it. Kaspersky’s complaint talks about its parental control app called Kaspersky Safe Kids, which it claims competes with Apple’s own Screen Time.

The company claims that while Apple requires app developers using its Mobile Device Management (MDM) profiles and configuration profiles to ask for explicit written consent, it has made the processes for doing so very unclear. Moreover, the information it seeks to use does not relate to the child but the parent and with due consent.

Apple has a statement on parental control apps that it issued back in April, where it says it removed several apps from the App Store because of privacy and security risk to users.

Sued for Siri

Apple has been sued by the adult guardian of a child in a San Jose federal court for violating California’s privacy law that prohibits recording of people without their permission. The lawsuit was triggered by a story in the Guardian that said that Apple contractors regularly listened in on conversations.

Apple’s defense was that human beings listening in on conversations was done for technical reasons in order to improve Siri’s quality and feature set, that in fact less than 1% of total conversations had been listened in on, that it was immediately putting an end to the practice and that in future, users will have the ability to opt out of participating. Since not just the Hey Siri” address but also gestures and unintended sounds can trigger Siri in this modern age of advanced tech, permission may not be assumed for all conversations that get recorded.

The lawsuit was filed as a class action.

Apple Music

TechCrunch reports that Apple Music for Musicians is finally out of beta and its getting some new features. Artists can claim their accounts, which go as far back as 2015 for free. It offers them (through web or app) data on the number of times a song has been played or bought, as well as the number of people it has reached. It also integrates data from Shazam, which Apple acquired last year. The data, which helps musicians plan their tours and promotions, can also be viewed on a map.

Smart Speakers

Privacy fears notwithstanding, demand for smart speakers remains very strong, according to recently released data from Strategy Analytics. The research firm says that second-quarter sales nearly doubled over the year-ago period to 30.3 million units.

Amazon managed to retain its leadership position with a 21.9% share, but dropping from a 29.1% share last year. Google was close at its heels, going from 20.8% last year to 18.5%. Baidu (NASDAQ:BIDU) came from nowhere to number three position with a 15.3% share, likely helped by surging demand in China. It was followed by two other Chinese companies, Alibaba (NYSE:BABA) and Xiaomi. Apple remained in fifth position, growing 81% for a 4.7% share.

The firm currently expects the global installed base of smart speakers to exceed 260 million units by the end of the year. Demand is very strong even in the U.S., in which there’s a 30% penetration. With local language devices expected to come soon, demand is expected to pick up in markets like Russia, Mexico and Brazil.

July App Store Growth

Morgan Stanley (NYSE:MS)'s Katy Huberty says that App Store revenue in July picked up from June. Based on her analysis of third party data, she said that sales grew 19% in July, compared with 14% in June and 18% in May. China was the biggest driver, growing 20%. She said it was a good start to the quarter though of course it’s too soon to say how the rest of it will go given the geopolitical conditions.

Bug Bounty Program

Apple just expanded its bug bounty program by adding several layers. In addition to the $200,000 it’s paying its security researchers and a 50% bonus for flaw detection before shipment to customers, the company now has a $500,000 level for finding flaws that could expose user data and $1 million for discovering more advanced flaws (remote access to the iPhone kernel without any action from the phone's user).

Apple has been criticized for spending too little on these efforts. Some government contractors are occasionally paid more for hacking technologies to fight crime, but Apple’s million-dollar bounty is now reportedly at par with others.

Meanwhile, researchers at Check Point Software Technologies (NASDAQ:CHKP) discovered a security flaw in the SQLite database engine that is very widely used across operating systems, desktops and mobile phones, including Apple’s iOS, MacOS and Safari browser, Google’s Android OS and Chrome browser, Microsoft’s (NASDAQ:MSFT) Windows 10, the Firefox web browser, as well as products from Dropbox, Adobe (NASDAQ:ADBE) and others. (MarketWatch reports)

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