New iPhones may spur a surge in augmented reality

The runaway success of “Pokemon Go” last year taught the world at least two things. One: Lots of people love Pokemon. And two: Creating good augmented reality – the kind that superimposes 3-D objects into the real world and convinces people they’re actually chasing a Pikachu – is really, really hard.


“It’s not so hard that it’s impossible,” said Jeff Kelley, an iOS developer at app design and development firm Detroit Labs. “But it’s hard enough that you’re probably not going to get a return on your investment.”

Previously, if developers wanted to add augmented reality to an app, first they’d have to spend months building their own tools and performing a bunch of math to calculate how a 3-D object should look when light hits it from different angles, and how it interacts with real-world objects, Kelley said.

That high barrier to entry will all but disappear when iOS 11 launches Sept. 19 with AR Kit, a set of developer tools that takes out the hardest part of developing augmented reality experiences for the iPhone.

“As a developer, you don’t have to do all the hard math stuff to get it to work,” Kelley said. “The minimum time investment now goes way down.”

That means there soon could be a surge in the number of apps that feature augmented reality experiences, exposing more people to a technology that was once considered the purview of hardcore geeks.

Despite the enormous popularity of “Pokemon Go” last year, only 31 percent of Americans know what augmented reality is, according to a survey conducted in July by Skrite, a startup that makes a social augmented reality app.

As with its more immersive cousin, virtual reality, tech companies have for years tried to bring augmented reality to the mainstream, with little success. Google’s infamous Google Glass – a head-mounted display – was a flop that drew criticism over its conspicuous design and potential for privacy violations (the device could be used to record people).

Startups at the annual Consumer Electronics Show in Las Vegas year after year have hawked augmented reality screens that act as virtual dressing rooms, none of which have gained mass market adoption. And furniture stores and interior design firms have long offered tools to let people see what a sofa or coffee table might look like in their home, but these apps have been clunky or difficult to use.

Until “Pokemon Go,” most augmented reality experiences just weren’t very good, Kelley said. Even the most basic of experiences left much to be desired. Kelley recalls working on an app five years ago for wall decoration company Fathead, in which users could point a smartphone at a wall in their house and see how a Fathead wall sticker might look in their home. In order for it to work, though, users first had to print a PDF and stick it to their wall as a physical marker so that the app knew where to superimpose the virtual sticker.

With Apple’s AR Kit leveling the playing field, developers can spend less time worrying about the tech that powers augmented reality, and spend more time focusing on the experiences they want to create, Kelley said, which could ultimately lead to more experimentation and better products.

“The main push is that it’s priming the consumer field and the developer field,” said Gregory Curtin, whose Los Angeles firm CivicConnect works with city and transit agencies to integrate city data with augmented reality.

Curtin’s firm spent three years developing its own augmented reality platform, which can integrate transit schedules and commuter data so when a person opens a transit app and points a phone at a bus stop, the bus schedule appears on the screen.

Although a lower barrier to entry could mean CivicConnect will soon see more competition, Curtin welcomes it, because greater awareness of what augmented reality can do will mean more opportunities for developers in new markets.

Some challenges still will lie ahead, though.

AR Kit can solve the tech component, but many augmented reality experiences require 3-D art. Even Snapchat’s dancing hot dog, silly as it may be, had to be drawn and rendered by someone.

“For a lot of developers, that’s another difficult piece, because developers aren’t always good 3-D artists,” Kelley said.

The other challenge is that while the new iPhone 8 and iPhone X are optimized for augmented reality viewing, many phones – particularly cheaper options with lower-end cameras – aren’t. At a starting price of $699 for the iPhone 8 and $999 for the iPhone X, experiences made for those phones may exclude many potential users.

But it’ll be just a matter of time before the technology is readily available to everyone, developers said. Facebook already offers its own platform, AR Studio, for developers wanting to create augmented reality experiences for the social network, and dozens of third-party platforms such as Vuforia and EasyAR allow developers to create AR experiences across multiple platforms, including iOS and Android.

That Apple is throwing its weight behind AR Kit, with augmented reality-ready phones, is a big deal, developers said.

“I do think this will be a milestone in terms of changing the game,” Curtin said.


Explore further:
With iPhone X, Apple is hoping to augment reality for the everyman

New iPhones could make augmented reality a mainstream reality

The runaway success of “Pokémon Go” last year taught the world at least two things. One: Lots of people love Pokémon. And two: Creating good augmented reality — the kind that superimposes 3-D objects into the real world and convinces people they’re actually chasing a Pikachu — is really, really hard.

“It’s not so hard that it’s impossible,” said Jeff Kelley, an iOS developer at app design and development firm Detroit Labs. “But it’s hard enough that you’re probably not going to get a return on your investment.”

Previously, if a developer wanted to add augmented reality to an app, first they’d have to spend months building their own tools and performing a bunch of math to calculate how a 3-D object should look when light hits it from different angles, and how it interacts with real-world objects, Kelley said.

That high barrier to entry will all but disappear when iOS 11 launches Sept. 19 with AR Kit, a set of developer tools that takes out the hardest part of developing augmented reality experiences for the iPhone.

“As a developer, you don’t have to do all the hard math stuff to get it to work,” Kelley said. “The minimum time investment now goes way down.”

That means there soon could be a surge in the number of apps that feature augmented reality experiences, exposing more people to a technology that was once considered the purview of hardcore geeks.

Despite the enormous popularity of “Pokémon Go” last year, only 31% of Americans know what augmented reality is, according to a survey conducted in July by Skrite, a start-up that makes a social augmented reality app.

Like its more immersive cousin, virtual reality, tech companies have for years tried to bring augmented reality to the mainstream, with little success. Google’s infamous Google Glass — a head-mounted display — was a flop that drew criticism over its conspicuous design and potential for privacy violations (the device could be used to record people). Start-ups at the annual Consumer Electronics Show in Las Vegas year after year have hawked augmented reality screens that act as virtual dressing rooms, none of which have gained mass market adoption. And furniture stores and interior design firms have long offered tools to let people see what a sofa or coffee table might look like in their home, but these apps have been clunky or difficult to use.

Until “Pokémon Go,” most augmented reality experiences just weren’t very good, Kelley said. Even the most basic of experiences left much to be desired. Kelley recalls working on an app five years ago for wall decoration company Fathead, in which users could point a smartphone at a wall in their house and see how a Fathead wall sticker might look in their home. In order for it to work, though, users first had to print a PDF and stick it to their wall as a physical marker so that the app knew where to superimpose the virtual sticker.

With Apple’s AR Kit leveling the playing field, developers can spend less time worrying about the tech that powers augmented reality, and spend more time focusing on the experiences they want to create, Kelley said, which could ultimately lead to more experimentation and better products.

“The main push is that it’s priming the consumer field and the developer field,” said Gregory Curtin, whose Los Angeles firm CivicConnect works with city and transit agencies to integrate city data with augmented reality.

Curtin’s firm, which counts cities such as Palm Springs, San Diego and Mission Viejo among its clients, spent three years developing its own augmented reality platform, which can integrate transit schedules and commuter data so when a person opens a transit app and points their phone at a bus stop, the bus schedule appears on their screen.

Although a lower barrier to entry could mean CivicConnect will soon see more competition, Curtin welcomes it, because greater awareness of what augmented reality can do will mean more opportunities for developers in new markets.

Some challenges still will lie ahead, though.

AR Kit can solve the tech component, but many augmented reality experiences require 3-D art. Even Snapchat’s dancing hot dog, silly as it may be, had to be drawn and rendered by someone.

“For a lot of developers, that’s another difficult piece, because developers aren’t always good 3-D artists,” Kelley said.

The other challenge is that while the new iPhone 8 and iPhone X are optimized for augmented reality viewing, many phones — particularly cheaper options with lower-end cameras — aren’t. At a starting price of $699 for the iPhone 8 and $999 for the iPhone X, experiences made for those phones may exclude many potential users.

But it’ll be just a matter of time before the technology is readily available to everyone, developers said. Facebook already offers its own platform, AR Studio, for developers wanting to create augmented reality experiences for the social network, and dozens of third-party platforms such as Vuforia and EasyAR allow developers to create AR experiences across multiple platforms, including iOS and Android.

That Apple is throwing its weight behind AR Kit, with augmented reality-ready phones, is a big deal, developers said.

“I do think this will be a milestone in terms of changing the game,” Curtin said.

tracey.lien@latimes.com

Twitter: @traceylien

A ‘bug’ that let a $500 password cracking box open up iPhones is patched as of iOS 11


A video posted to YouTube by users EverythingApplePro yesterday shows a small $500 box unlocking an iPhone 7 locked with a short passcode. The box works on all iPhone 7 and iPhone 7+ models, as well as some iPhone 6 and 6S models and, unless you’re willing to wait an incredible amount of time, only works in a small subset of edge cases.

I did some poking around and Apple confirmed that the behavior that lets this box work will be patched out of the final version of iOS 11 that’s due this fall. It’s also patched under iOS 11 beta 4, if you’re running that.

To be clear, what this box does will not work on iOS 11. You can watch the video here, then I’ll explain what’s going on.

The box is similar to several tools that law enforcement professionals (and those who have access to the suppliers they order from) have used for years. It basically continuously guesses a series of passcodes until it finds the right one — a time-consuming process that is typically not available because an iPhone automatically locks guessers out after a few attempts. On iOS 10, there is a “bug,” for lack of a better term, that allows repeated, rapid guesses of the passcode if you’ve changed it within the last minute or so. This allows the box to work within that period. Once another threshold is crossed — say 10 minutes after a passcode is changed — you no longer have the freedom to guess rapidly. There is a major delay initiated that would make it nearly impossible (or incredibly time-consuming) to use this method.

Very specifically, this box only works at this speed in this case because the device is:

  • An iPhone 7 or iPhone 7 Plus (or some models of iPhone 6/6s)
  • Has had its passcode changed very recently
  • Has not been used for more than 10 minutes after the passcode has been changed
  • Has a 4-digit passcode

Here’s some perspective. Let’s say someone wanted to crack into your phone and they had both this box and unlimited physical access (already an issue, but one that does come up with government actors).

If your password was 6 digits (as is default now) and you had changed your password within the last few minutes, it could take up to 374 days to crack it. A 4-digit code would take over 3 days.

If it was 6 digits and you hadn’t changed it recently, it could take 19 years. A 4-digit 70 days.

And all of that is going to be much longer on iOS 11. I am reminded of the recent revelation that you’ll be able to soft-disable TouchID on iOS 11 in situations where you could be coerced to give up your fingerprint — a development that TC’s own Taylor Hatmaker referred to as “the wokest thing I’ve seen a company do on an OS.”

The cat and mouse between law enforcement and Apple’s security division is my favorite TV show.

Article has been updated to note that some iPhone 6/6s models have the flaw.

Apple Insists It’s Not Responsible For Distracted Driving Accidents Involving iPhones

Apple appeared in Los Angeles Superior Court on Thursday to argue that it shouldn’t be held liable for iPhone-related distracted driving accidents, in response to a lawsuit filed against the company earlier this year.


California resident Julio Ceja filed a class action complaint against Apple in January, accusing the company of placing profit before consumer safety by choosing not to implement a lock-out mechanism that would disable an iPhone’s functionality when being used behind the wheel by an engaged driver.

Ceja said his vehicle was involved in a collision with another vehicle in which the driver was texting on an iPhone.

Apple, however, told the court that it’s a driver’s fault if they choose to misuse an inherently safe iPhone while operating a vehicle. Apple essentially said it cannot be blamed simply because it manufactures the device, according to court documents filed electronically and obtained by MacRumors.

Just yesterday, a U.S. district court in Texas dismissed a similar distracted driving lawsuit brought against Apple last year. In that case, Meador v. Apple, Inc., the plaintiffs accused Apple of failing to automatically disable a user’s ability to operate an iPhone while driving, and of improper marketing.

However, judge Robert W. Schroeder III said the plaintiff’s injuries stemmed from neglecting to safely operate her vehicle.

When a driver negligently operates her vehicle because she is engaging in compulsive or addictive behaviors such as eating food, drinking alcohol, or smoking tobacco, it is the driver’s negligence in engaging in those activities that causes any resulting injuries, not the cook’s, distiller’s, or tobacconist’s supposed negligence in making their products so enticing.

Similarly, her decision to direct her attention to her iPhone 5 and maintain her attention on her phone instead of the roadway is the producing cause of the injury to Plaintiffs.

Apple has faced similar lawsuits in the past. In response to one filed in Texas in 2015, Apple indicated the responsibility is on the driver to avoid distractions in a statement provided to The New York Times:

“We discourage anyone from allowing their iPhone to distract them by typing, reading or interacting with the display while driving,” Apple said… “For those customers who do not wish to turn off their iPhones or switch into Airplane Mode while driving to avoid distractions, we recommend the easy-to-use Do Not Disturb and Silent Mode features.”

Ceja’s lawsuit mentioned a patent for a motion analyzer that would detect whether a handheld device is in motion beyond a certain speed. A scenery analyzer would then determine whether the holder of the handheld device is sitting somewhere other than the driver’s seat. Otherwise, the device could be disabled.

In other embodiments, a vehicle or car key could transmit a signal that disables functionality of the handheld device while it is being operated. To a lesser degree, a vehicle could also transmit a signal that merely sends the device a notification stating that functionality should be disabled.

Apple hasn’t gone as far as implementing any of those functions, but in iOS 11 it introduced Do Not Disturb While Driving.



Do Not Disturb While Driving is an optional setting that, when enabled, turns on whenever an iPhone connects to a vehicle via Bluetooth or detects rapid acceleration. While active, the feature mutes all incoming phone calls, notifications, and text messages, and the iPhone’s screen stays off completely.

Phone calls are allowed, so long as an iPhone is connected to a car’s Bluetooth or a hands-free accessory, allowing drivers to respond without needing to pick up their phone. If not connected to Bluetooth or a compatible accessory, calls will be blocked like text messages and notifications.

For text messages, there is an option to send your contacts a message that lets them know you’re driving and will get back to them later. In an emergency, a person who is attempting to contact you via text while you’re driving can break through Do Not Disturb by sending a second “urgent” message.

Do Not Disturb While Driving can also be activated manually in Settings > Do Not Disturb or in Control Center.

Samsung Galaxy Note 8 will copy THIS feature iPhone’s had for years | Tech | Life & Style

Samsung Galaxy Note 8 will launch later this month.

The next-generation smartphone will include an expansive 6.2-inch Infinity Display that curves around the body of the device.

It also looks set to follow the Galaxy S8’s lead and drop the physical Home Button, relocating the fingerprint scanner to the rear of the phone.

The Galaxy Note 8 looks set to include a much-improved S Pen.

The new stylus is said to have a built-in motor that works with the Find My Mobile app to help you locate it, should you misplace it.

Samsung is expected to include Qualcomm’s latest Snapdragon 835 processor coupled with 6GB of RAM and a 3,300 mAh battery cell – slightly smaller than the Galaxy S8+’s 3,500 mAh battery, but not all that surprising given the recent history of the Note series.

According to a new report from The Investor, the South Korean technology company will also include a feature borrowed from the iPhone.

The follow-up to the fiery Note 7 will purportedly include a pressure-sensitive display, very similar to the one Apple debuted with the iPhone 6S and 6S Plus back in 2015.

Apple used its pressure-sensitive display technology to introduce a feature dubbed 3D Touch.

This enables users to access hidden menus and additional options by pushing harder on the display than a standard tap.

According to sources speaking to The Investor, Samsung looks set to use its pressure-sensitive display for a similar function.

In the Galaxy Note 8, the pressure-sensitive display will be used to “replace all the functionality of a home button and open a hidden menu with shortcuts to different features”.

Unfortunately, none of this cutting-edge technology comes cheap – and the Galaxy Note 8 looks set to be one of the most expensive handsets on the market.

According to Ronald Quandt, who has a solid track record predicting the latest developments from Samsung, the Galaxy Note 8 will have a price tag well over $1,000, that’s about £771 converted.

Quandt has unearthed a reference to a top-of-the-line variant of the Galaxy Note 8 – purportedly dubbed Emperor Edition – that looks set to be even more expensive.

This top-of-the-line variant will quadruple the 64GB onboard storage included with the standard model.

For context, when Samsung debuted a limited edition 128GB version of the Galaxy S8 Plus back in June, the price tag jumped from $850 for the standard model – to almost $1100 (70,900.00Rs).

If there is a Galaxy Note 8 model that ships with 256GB of storage – don’t expect a price tag below $1,100.

According to Quandt, the Galaxy Note 8 Emperor Edition will not increase the RAM from the standard 6GB. So, that could help to keep the RRP down. 

All 2017 iPhones to Come in Only Three Colors, Launch Simultaneously in September

Apple’s upcoming 2017 iPhones, including the “iPhone 8,” the iPhone 7s, and the iPhone 7s Plus, will be available in just three colors — black, silver, and gold — according to a new investor note shared today by respectable KGI Securities analyst Ming-Chi Kuo.

Kuo previously said the iPhone 8 would be available in a limited number of colors, but made no mention of its two companion devices. His three color list seemingly matches up with an iPhone 8 dummy model leak that we saw earlier this week, but one of the dummy model shades displayed was more of a copper than a gold, so it’s not clear if it’s an accurate depiction of the colors we can expect.

If Apple does plan on introducing the iPhone in just three hues this year, we won’t be seeing rose gold or the multiple shades of black that were available in the iPhone 7.


According to Kuo, all three iPhone models expected in 2017 will also support fast charging, but he warns that consumers may need to purchase a Type-C power adapter to enable faster charging. The current iPad Pro has a similar feature — it uses the MacBook’s $49 29W USB-C power adapter for fast charging.

Kuo now believes Apple will begin production verification tests on the iPhone 8 in late August, leading to mass production in mid-September, which is earlier than Kuo’s previous estimates that suggested mass production might not begin until the middle of October.

With mass production starting earlier, Kuo expects Apple will announce all three iPhone models simultaneously in September, with plans to launch them all on the same date. The OLED version will be in short supply, though, with Kuo forecasting shipments of 2-4 million units in the third quarter.

The OLED version will be in short supply as we forecast shipments in 3Q17 will be 2-4mn units or less. We do not think production of the OLED iPhone will pick up substantially before 4Q17; and given strong demand, tight supply may persist until 1Q18 before improving much.

Though a September launch is expected, supplies of the iPhone 8 may be constrained until the first quarter of 2018 due to an expected high demand. Still, Kuo’s latest prediction is a rosier outlook than we’ve seen in the past, as some former rumors suggested Apple could potentially announce the iPhone 8 and then delay its launch until October or November.

Apple announces Q3 2017 revenue of $45.4b: 41m iPhones, 11.4m iPads, 4.29m Macs

Apple has announced its latest quarter results including $45.4b in revenue from 41m iPhones, 11.4m iPads, and 4.29m Macs sold.

FY17 Q3 results compare to the previous quarter’s $52.9 billion in revenue, $11.03 billion in profit, 50.7 million iPhones, 8.92 million iPads, and 4.19 million Macs. In the same quarter a year ago, Apple reported $42.4 billion in revenue, $7.8 billion in profit, 40.4 millions iPhones sold, 9.9 million iPads sold, and 4.2 million Macs sold.

Full press release after the break, and stick around for our earnings call live blog at the top of the hour:

Sony A6500

Apple CEO Tim Cook:

“With revenue up 7 percent year-over-year, we’re happy to report our third consecutive quarter of accelerating growth and an all-time quarterly record for Services revenue,” said Tim Cook, Apple’s CEO. “We hosted an incredibly successful Worldwide Developers Conference in June, and we’re very excited about the advances in iOS, macOS, watchOS and tvOS coming this fall.”

And Apple CFO Luca Maestri:

“We reported unit and revenue growth in all our product categories in the June quarter, driving 17 percent growth in earnings per share,” said Luca Maestri, Apple’s CFO. “We also returned $11.7 billion to investors during the quarter, bringing cumulative capital returns under our program to almost $223 billion.”

Revenue Growth of 7 Percent and EPS Growth of 17 Percent Services Revenue Hits All-Time Quarterly Record

August 01, 2017 04:30 PM Eastern Daylight Time

CUPERTINO, Calif.–(BUSINESS WIRE)–Apple® today announced financial results for its fiscal 2017 third quarter ended July 1, 2017. The Company posted quarterly revenue of $45.4 billion and quarterly earnings per diluted share of $1.67. These results compare to revenue of $42.4 billion and earnings per diluted share of $1.42 in the year-ago quarter. International sales accounted for 61 percent of the quarter’s revenue.

“We hosted an incredibly successful Worldwide Developers Conference in June, and we’re very excited about the advances in iOS, macOS, watchOS and tvOS coming this fall.”

“With revenue up 7 percent year-over-year, we’re happy to report our third consecutive quarter of accelerating growth and an all-time quarterly record for Services revenue,” said Tim Cook, Apple’s CEO. “We hosted an incredibly successful Worldwide Developers Conference in June, and we’re very excited about the advances in iOS, macOS, watchOS and tvOS coming this fall.”

“We reported unit and revenue growth in all our product categories in the June quarter, driving 17 percent growth in earnings per share,” said Luca Maestri, Apple’s CFO. “We also returned $11.7 billion to investors during the quarter, bringing cumulative capital returns under our program to almost $223 billion.”

Apple is providing the following guidance for its fiscal 2017 fourth quarter:

• revenue between $49 billion and $52 billion
• gross margin between 37.5 percent and 38 percent
• operating expenses between $6.7 billion and $6.8 billion
• other income/(expense) of $500 million
• tax rate of 25.5 percent

Apple’s board of directors has declared a cash dividend of $0.63 per share of the Company’s common stock. The dividend is payable on August 17, 2017 to shareholders of record as of the close of business on August 14, 2017.

Apple will provide live streaming of its Q3 2017 financial results conference call beginning at 2:00 p.m. PDT on August 1, 2017 at www.apple.com/investor/earnings-call/. This webcast will also be available for replay for approximately two weeks thereafter.

This press release contains forward-looking statements including without limitation those about the Company’s estimated revenue, gross margin, operating expenses, other income/(expense), tax rate, and plans for return of capital. These statements involve risks and uncertainties, and actual results may differ. Risks and uncertainties include without limitation the effect of competitive and economic factors, and the Company’s reaction to those factors, on consumer and business buying decisions with respect to the Company’s products; continued competitive pressures in the marketplace; the ability of the Company to deliver to the marketplace and stimulate customer demand for new programs, products, and technological innovations on a timely basis; the effect that product introductions and transitions, changes in product pricing or mix, and/or increases in component costs could have on the Company’s gross margin; the inventory risk associated with the Company’s need to order or commit to order product components in advance of customer orders; the continued availability on acceptable terms, or at all, of certain components and services essential to the Company’s business currently obtained by the Company from sole or limited sources; the effect that the Company’s dependency on manufacturing and logistics services provided by third parties may have on the quality, quantity or cost of products manufactured or services rendered; risks associated with the Company’s international operations; the Company’s reliance on third-party intellectual property and digital content; the potential impact of a finding that the Company has infringed on the intellectual property rights of others; the Company’s dependency on the performance of distributors, carriers and other resellers of the Company’s products; the effect that product and service quality problems could have on the Company’s sales and operating profits; the continued service and availability of key executives and employees; war, terrorism, public health issues, natural disasters, and other circumstances that could disrupt supply, delivery, or demand of products; and unfavorable results of legal proceedings. More information on potential factors that could affect the Company’s financial results is included from time to time in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s public reports filed with the SEC, including the Company’s Form 10-K for the fiscal year ended September 24, 2016, its Form 10-Q for the fiscal quarter ended December 31, 2016, its Form 10-Q for the fiscal quarter ended April 1, 2017, and its Form 10-Q for the quarter ended July 1, 2017 to be filed with the SEC. The Company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.

Apple revolutionized personal technology with the introduction of the Macintosh in 1984. Today, Apple leads the world in innovation with iPhone, iPad, Mac, Apple Watch and Apple TV. Apple’s four software platforms — iOS, macOS, watchOS and tvOS — provide seamless experiences across all Apple devices and empower people with breakthrough services including the App Store, Apple Music, Apple Pay and iCloud. Apple’s more than 100,000 employees are dedicated to making the best products on earth, and to leaving the world better than we found it.

NOTE TO EDITORS: For additional information visit Apple Newsroom (www.apple.com/newsroom), or call Apple’s Media Helpline at (408) 974-2042.

© 2017 Apple Inc. All rights reserved. Apple and the Apple logo are trademarks of Apple. Other company and product names may be trademarks of their respective owners.

Apple Inc.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(In millions, except number of shares which are reflected in thousands and per share amounts)

Three Months Ended Nine Months Ended
July 1,
2017
June 25,
2016
July 1,
2017
June 25,
2016
Net sales $ 45,408 $ 42,358 $ 176,655 $ 168,787
Cost of sales (1) 27,920 26,252 108,400 102,337
Gross margin 17,488 16,106 68,255 66,450
Operating expenses:
Research and development (1) 2,937 2,560 8,584 7,475
Selling, general and administrative (1) 3,783 3,441 11,447 10,712
Total operating expenses 6,720 6,001 20,031 18,187
Operating income 10,768 10,105 48,224 48,263
Other income/(expense), net 540 364 1,948 921
Income before provision for income taxes 11,308 10,469 50,172 49,184
Provision for income taxes 2,591 2,673 12,535 12,511
Net income $ 8,717 $ 7,796 $ 37,637 $ 36,673
Earnings per share:
Basic $ 1.68 $ 1.43 $ 7.18 $ 6.66
Diluted $ 1.67 $ 1.42 $ 7.14 $ 6.62
Shares used in computing earnings per share:
Basic 5,195,088 5,443,058 5,239,847 5,505,456
Diluted 5,233,499 5,472,781 5,274,394 5,535,931
Cash dividends declared per share $ 0.63 $ 0.57 $ 1.77 $ 1.61
(1) Includes share-based compensation expense as follows:
Cost of sales $ 216 $ 188 $ 662 $ 583
Research and development $ 566 $ 479 $ 1,730 $ 1,413
Selling, general and administrative $ 411 $ 387 $ 1,274 $ 1,184
Apple Inc.
Q3 2017 Unaudited Summary Data
(Units in thousands, Revenue in millions)
Q3 2017 Q2 2017 Q3 2016 Sequential Change Year/Year Change
Operating Segments Revenue Revenue Revenue Revenue Revenue
Americas $20,376 $21,157 $17,963 – 4% 13%
Europe 10,675 12,733 9,643 – 16% 11%
Greater China 8,004 10,726 8,848 – 25% – 10%
Japan 3,624 4,485 3,529 – 19% 3%
Rest of Asia Pacific 2,729 3,795 2,375 – 28% 15%
Total Apple $45,408 $52,896 $42,358 – 14% 7%
Q3 2017 Q2 2017 Q3 2016 Sequential Change Year/Year Change
Product Summary Units Revenue Units Revenue Units Revenue Units Revenue Units Revenue
iPhone (1) 41,026 $24,846 50,763 $33,249 40,399 $24,048 – 19% – 25% 2% 3%
iPad (1) 11,424 4,969 8,922 3,889 9,950 4,876 28% 28% 15% 2%
Mac (1) 4,292 5,592 4,199 5,844 4,252 5,239 2% – 4% 1% 7%
Services (2) 7,266 7,041 5,976 3% 22%
Other Products (1)(3) 2,735 2,873 2,219 – 5% 23%
Total Apple $45,408 $52,896 $42,358 – 14% 7%

Apple is working on a major change for future iPhones, and Samsung is in trouble – BGR

Samsung turned in a huge holiday quarter last year despite the Galaxy Note 7 debacle that cost the company billions in lost sales and cleanup expenses. The South Korean consumer electronics giant then followed up that fantastic performance with an even bigger first quarter, and unaudited results suggest the second quarter was Samsung’s most profitable quarter ever.

Sure, strong sales of smartphones like the new Galaxy S8 and Galaxy S8+ have helped. But the real story here is Samsung’s strength across its various component businesses. Sales of memory chips, processors, display panels, and other key components have been soaring lately, and Apple’s iPhone 8 will play a huge role in pushing Samsung’s earnings to new heights. As has been the case with various Apple partners in the past, however, this gravy train won’t last forever, and Apple is reportedly working on a major change for future iPhones that could lead to tens of billions in lost sales for its top rival, Samsung.

According to a report on Monday morning from Korean-language ET News (via Digitimes), Apple is already taking steps toward an OLED future where the company would be far less reliant on Samsung. Well-sourced rumors suggest Apple’s upcoming iPhone 8 will be the company’s first smartphone to feature an OLED display, and Samsung will reportedly be the company’s sole OLED panel supplier. Earlier reports have suggested that no other supplier is able to meet Apple’s needs in terms of production volume.

But Apple is never satisfied with just one supplier, and that rings especially true when that supplier also just so happens to be its arch rival. Apropos, ET News reports that Apple is already taking steps to decrease its dependency on Samsung, and perhaps someday even move away from Samsung entirely as a display panel supplier.

Apple has reportedly purchased its own chemical vapor deposition (CVD) machines from a South Korean company called Sunic System, machines that are key to research and development surrounding OLED display panels. The report states that Apple is intent on developing its own OLED display technology so that it can move away from Samsung as its sole OLED supplier. The company likely has no interest in manufacturing its own panels, but Apple has in the past purchased or leased equipment and worked closely with manufacturing partners in order to perfect components for its devices. Apple’s A series chipsets are a perfect example.

It’s unclear exactly what Apple’s plans are or how its own OLED tech might differ from Samsung, which is currently the clear leader in OLED smartphone display technology.

Best HomeKit and smart-home products for iPhones – Lights, locks, cameras

What are the best smart locks, thermostats, lights and security systems that I can control from my iPhone? I want to set up a smart home.

The internet has been a part of our lives for a few decades now, but for the most part, not a lot of things have changed. Apart from the rise of apps and social media, the internet has mainly been a product made accessible by devices such as laptops, tablets and smartphones. But that’s set to change.

If you’re a keen techie, you’ll no doubt have heard of the Internet of Things. While it sounds nothing more than a confusing tech term, it actually has big consequences for us all. Essentially, it refers to a whole manner of products being connected to the internet, from fridges to cars. And pundits believe that over the next few years, we’ll see even more internet-connected objects come to fruition.

In fact, according to Cisco, there could be 50 billion things connected to the internet by 2020. And the IoT industry will also generate trillions in profit annually. Although the benefits of connected technology will be felt in many areas, the home will benefit from it hugely. It’s where we spend most of our lives when we’re not working, and it’s generally the place where we feel the most comfortable.

What is HomeKit?

Our homes are growing ever smarter, and Apple is one of the tech giants betting on the potential IoT offers in our homes and personal lives. That’s exactly why it launched HomeKit, a framework that developers can use to enable their smart products to be controlled via an iOS app, either from inside or outside of a user’s home, in 2014.

HomeKit was first introduced during WWDC in June 2014, and during WWDC 2016 Apple unveiled its new Home app, which arrived in iOS 10. The Home app on your iPhone places the controls for any HomeKit products you own into one simple-to-use app.

HomeKit is Apple’s own smart home IoT framework. Built for manufacturers and developers, it can turn the iPhone into a smart home remote. With HomeKit functionality, you’re able to control smart home products through iOS apps and Siri voice commands.

What is the Home app on the iPhone?

Home is an Apple app, available for your iPhone, iPad and iPod touch, that lets you control all of your HomeKit products. With Home, you’ll be able manage each of your smart products from one app, and even create Scenes and Room presets. Scenes can include “Leaving home”, for example, which would turn off the lights, lock your doors and lower the temperature in the home. Home works with Siri, too, so you could say “Good night” to set the Bedtime scene, or “Lock the front door” if you’re already in the car or in bed.

HomeKit has been around for a few years now, so as you can imagine, there are more products out there that can work with the platform. From smart thermostats to connected lightbulbs, this technology has matured and there’s so much more you can do with it. We look at the best, most innovative HomeKit-enabled products available on the market today.

Not every smart gadget works with HomeKit and the Home app. It’s important to look for HomeKit-compatible products with the little yellow house symbol. Here, to get your started, we’ve gathered some of the best Internet of Things devices for your smart home – those that are compatible with HomeKit, those that are likely to get HomeKit support in the future, and those that can be controlled via their own apps on iPhone or iPad. We specify how each device is controlled next to its write-up.

What are the best smart home devices for Apple Home?

We have a selection of some of the best accessories that work with HomeKit below, but you can also take a look on Apple’s website to see some of the newest home automation products that are hitting the market with HomeKit support. See: HomeKit accessories.

The Apple web page links to the store so you can see which Apple Home Kit accessories are available in the UK – unfortunately there are a lot of accessories available in the US that aren’t available here. You will also see that some accessories are ‘announced’ while others are ‘Coming soon’.

There is also a ‘Works with Apple HomeKit’ logo that you should start to see in shops. This indicates that a product can be controlled with the Apple Home app.

Works with HomeKit badge

Search the Apple Store for HomeKit accessories you can buy in the UK here: Apple UK HomeKit devices.

Thermostats & heating

It’s brilliantly convenient being able to monitor and control the temperature of your house while you’re out – turning on the heating when you’re 20 minutes from your front door on a freezing-cold evening, for instance, or just checking you remembered to turn it off when you’re halfway to the airport. 

Apple includes a number of HomeKitc-compliant thermostats, such as the Honeywell Lyric T6R, the Netatmo Thermostat, and the Elgato Eve Wireless Room Sensor.

Security cameras

Want to keep an eye on your house from your desk? HomeKit cameras and related security products include the D-Link Omna 180 Cam and the Elgato Eve Motion Sensor.

Lighting

Perfect for adding the finishing atmospheric touch to a Scene: lower the lights for your chill-out preset, turn off the downstairs lights when you activate “Bedtime” and so on. HomeKit lights include the Philips Hue White Ambiance Lighting Starter Kit.

What smart home devices don’t work with Apple Home? Does Nest work with Home Kit?

Unfortunately one of the most popular thermostatic devices don’t work with Apple Home and may never do so.

Nest doesn’t work with HomeKit. However, the myHome Plus app, available from the App Store, lets you control Apple HomeKit accessories, as well as the Nest Thermostat. Get the myHome Plus app here.

All of the devices we look at below can be controlled via an iOS device, but not all of them are compatible with HomeKit and the Home app. We indicate whether a product is HomeKit-certified in each entry. Some of the products their own dedicated app that you’ll need to download to control the device; in every case these apps are free.

HomePod


HomePod

Apple’s upcoming smart speaker, the HomePod, is a must-have for iPhone owners. As well as being a high-end speaker capable of providing high-quality audio playback via Apple Music, it also features built-in Siri support.

Siri can handle requests ranging from the likes of the weather to unit conversion to reminders and more, although it’s not as expansive as what is offered by Siri on iPhone or iPad, or compared to what is offered by Amazon Echo and Google Home.

It’s due out for release later this year and expect Apple to shed more light on its capabilities when it announces the iPhone 8, likely in September. You can find out more about the HomePod in our rumour hub: HomePod UK release date, pricing and features

August Smart Lock


August Smart Lock

The HomeKit-connected Smart Lock from August lets you use your smartphone as a key, even if you’re away from home. You can create virtual keys for family and friends and limit their access to just one week, a specific date or an hour or two, for example. You can also delete guests at any time. You’ll be able to see who has been in and out of your house at any time with the key tracker.

If you want it to, the Smart Lock can auto-lock behind you as you leave your home, and unlock when you approach to save you fumbling in your bag for your keys. It’s easy to install, too.

Controlled via: August Home iOS app, Siri
Apple HomeKit Certified: Yes (second-generation model)

Belkin WeMo Switch


Belkin WeMo Switch

Belkin’s WeMo Switch device lets you control household electrical appliances with your iPhone.

Positioned as a central item in your home, the WeMo Switch uses your internet network to manage devices such as TVs, lamps, stereos, heaters and fans. The idea is that you have a way to control your electricals wherever you happen to be. So, for instance, you could turn your heating on before you get home from work.

Controlled via: WeMo iOS app, Amazon Alexa, Nest
Apple HomeKit Certified: No

ConnectSense Smart Outlet with Apple HomeKit Technology


ConnectSense Smart Outlet with Apple HomeKit Technology

Note: this product is designed for US plugs and power standards.

ConnectSense is another company working on some exciting internet-enabled gizmos, and the ConnectSense Smart Outlet is an excellent example. This device lets you control and monitor the power usage in your home through your iPhone.

Positioned as a central item in your home, the Smart Outlet is integrated with Apple HomeKit, and you can easily create different functionalities for your smart home. For instance, you can get the outlet to turn off lights automatically, lock your doors, adjust your thermostat and close the garage door.

Like the Netatmo Thermostat (elsewhere in this article), ConnectSense has developed a companion app for the Smart Outlet. Once downloaded on to your iPhone, iPod touch or iPad, it enables you to issue commands to the outlet. There’s also integration with Siri, meaning you can turn on and off any plug-in accessory by using your voice.

Controlled via: Apple Home app, Siri, ConnectSense iOS app
Apple HomeKit Certified: Yes

Elgato Eve


Elgato Eve

The Elgato Eve home-monitoring system includes a wide range of electronic sensors for tracking air quality, temperature, humidity, air pressure, energy and water consumption and more.

The Eve range is wide ranging, and each is HomeKit-compatible. That means that, thanks to the Home app, your smart home is controllable through one central app with this lot. You can use iPhone, iPad or iPod touch, and even control the Eve gadgets using Siri voice control.

Eve Room senses indoor air quality, temperature, and humidity. Eve Weather senses temperature, humidity, and air pressure. Eve Energy sees how much energy devices are using. Eve Door & Window knows whether your door or window is open or closed. Eve Motion notifies you via your iPhone or iPad whenever movement in the room is detected.

Eve Light Switch lets you switch your lights on and off using Siri, or with a tap on your iPhone. And Eve Thermo allows you to set your comfort temperature level, and create schedules to synchronise your heating with your routine. The Thermo costs £59.95 from Apple; read our Eve Thermo review. 

Controlled via: Apple Home app, Elgato Eve iOS app
Apple HomeKit Certified: Yes

First Alert Onelink Wi-Fi Smoke + Carbon Monoxide Alarm


First Alert Onelink Wi-Fi Smoke + Carbon Monoxide Alarm

You can even get internet-connected smoke alarms. The First Alert OneLink, which retails at around £200 in the UK, aims to make your home safer. Just download the app on to your iPhone, iPod Touch or iPad, and the smoke alarm will send you a push notification if it identifies smoke or a carbon dioxide leak.

Powered by Wi-Fi, the smoke alarm has close integration with Apple HomeKit. As well as looking out for dangers, the device also sports a night light, which can be dimmed through the iPhone app. It’s easy to set up like any other smoke alarm, and you get 10 years of protection.

Controlled via: Apple Home app
Apple HomeKit Certified: Yes

Friday Lock


Friday Lock

Friday Labs has worked with architects at the Bjarke Ingels Group to create the Friday Smart Lock, a locking system that is designed to let you open your front door key-free via your smartphone.

You can let friends and family into your house remotely. There’s also a tamper alert, so you will be notified immediately if someone is trying to break into your home.

The lock is available in a range of natural materials, including woods, metals and porcelain; the design team says it’s a “stylish smart lock that homeowners can individually select to complement their décor.”

The Friday Smart Lock is available to pre-order now for $199 from the Friday Lock website.

Controlled via: iOS and Android apps (to be released at launch)
Apple HomeKit Certified: No

Honeywell Lyric Thermostat


Honeywell Lyric Thermostat

Honeywell’s Lyric Thermostat offers HomeKit support for controlling your heating with ease, as well as control via the Apple Watch should you happen to have Apple’s wearable, too.

Apple Watch users can see a snapshot of their home system in Glances, plus, thanks to the Apple Watch’s geofencing feature, your thermostat will automatically engage Out of Town mode when you leave range of your home.

Other HomeKit-enabled thermostats include Netatmo (which we look at elsewhere in this article) and Ecobee.

Controlled via: Apple Home app, Lyric iOS app
Apple HomeKit Certified: Yes

iDevices Outdoor Switch


iDevices Outdoor Switch

Note: this product is designed for US plugs and power standards.

We’ve talked about how you can make your home’s interior smart, but what about your garden? The iDevices Outdoor Switch works with HomeKit to enable you to control gadgets outside of your home. This can include lights, speakers, fans and more. Handy.

If you use electrical appliances outside – like a posh shed television – then you ought to have a look at the Outdoor Switch. The name of the device is pretty simple to digest. It’s a plug device that allows you to control and monitor outdoor electronics straight from your iPhone or iPad.

Electricity and the great outdoors don’t always go together, but luckily, the outlet features a design that’s rugged and rain-tight. You’ll find twin dual power outlets, letting you control two appliances at the same time. As far as functionalities go, the outlet is certainly a handy thing to have around.

You can schedule products to turn on when you need them the most, and you can access real-time energy consumption data to save money on bills. Switch responds to Siri voice commands directly, and you can control it through an iOS device wherever you happen to be.

Controlled via: Apple Home app, iDevices Connected iOS app
Apple HomeKit Certified: Yes

Netatmo Thermostat for Smartphone


Netatmo Thermostat for Smartphone

The Netatmo Thermostat is one of the most popular connected gadgets you can get for your dream smart home. Compatible with both the iPhone and iPad, you’re able to monitor your past energy consumption and record your boiler activity. This information is accessible through a free companion app.

That’s not all the thermostat can do, though. You can also get monthly reports to help you manage your heating effectively and save money on bills. It can even make adjustments to your heating based on your living habits and the amount of insulation you have in your house. The device itself comes in five interchangeable colours.

Controlled via: Apple Home app, Netatmo iOS app, Amazon Alexa
Apple HomeKit Certified: Yes

Panasonic Smart Home Monitoring And Control Kit


Panasonic Smart Home Monitoring And Control Kit

If there’s one area that a lot of smart home technologies cover, it’s security. There are few experiences worse than a break-in, but you’ll find a variety of IoT devices that can help you monitor your house.

The Panasonic Smart Home Monitoring and Control Kit does exactly what it says on the tin. It provides you with a plethora of sensors and gadgets to ensure your house is always safe, wherever you happen to be. And they can all be controlled via an iOS app.

In the kit, you’ll find a full compact indoor camera sporting an infrared sensor and microphone for two-way communication, as well as a motion sensor that can detect movement. You also get a sensor that can tell if a window or door has been opened and a smart plug that can control your lights and everyday appliances.

While the kit is pretty expensive to buy up front, it’s worth noting that you don’t have to pay any monthly fees to use the technology and services. The idea here is that you have a solid foundation to build the smart home of your dreams, putting safety and security first. You can read more about the kit here.

Controlled via: Panasonic Home Network System iOS app
Apple HomeKit Certified: No

Philips Hue White Personal Wireless Lighting LED Starter Kit


Philips Hue White Personal Wireless Lighting LED Starter Kit

Smart light bulbs are popular option for modern homes, too. If lighting is what you’re looking to control remotely, the Philips Hue range is a good option. They’re WiFi-enabled and come with a smartphone app. Using it, you can turn them on/off and alter their brightness.

There are plenty of options including a White Ambiance Lighting Starter Kit (£99.95) or a White and Colour Ambiance Starter Kit (£149.95) if you’re looking to add a splash of colour. There are also lightstrips and other options for adding more dramatic or mood-setting lighting your home too.

In terms of design and functionality, the Hue lightbulbs are on the simple side. Once you’ve got them up and running, they’ll provide your home with a dimmable white light. That’s handy if you don’t want to make your house look tacky.

What’s also great about the lightbulbs is that they last for around 25,000 hours and are compatible with ES light fittings. The bulbs don’t just act as lights, however. You can get them to wake you up in the morning and tell you once your food has finished cooking.

If you’re a smart bulb newbie, your best option is probably the cheapest kit of all: the White Personal Wireless Lighting LED Starter Kit (£59.99). This comes with two bulbs and the Hue Bridge.

Controlled via: Apple Home app, Philips Hue iOS app
Apple HomeKit Certified: Yes

Also see: Best smart lights and smart bulbs you can control from your phone

Schlage Connect Deadbolt


Schlage Connect Deadbolt

Internet-enabled locks may sound bizarre, but they do exist and could play an important role in the home of the future. The Schlage Connect is definitely worth considering if you’d like to add an extra layer of security to your home.

The lock sports an easy-to-use touchscreen keypad, and it can sense the smallest vibrations or movement of your door. When that happens, an audible alarm is set off, giving you a way to protect your home from break-ins. It’s also a handy way to ensure you don’t leave your door unlocked.

There’s also the ability to set up alarms for when someone goes in and out of your home, and you can set up keypad passwords for family and friends. The lock offers memory for up to 30 users. You can use the lock with your iPhone and Apple TV.

Controlled via: Schlage Sense iOS app, Amazon Alexa
Apple HomeKit Certified: No (although Schlage Sense Smart Deadbolt is)

WiFi Plug Home


WiFi Plug Home

Although Belkin unveiled HomeKit-enabled WeMo models (discussed earlier in this article) at CES in January, it may be a while before they arrive on British shores. The Wifi Plug Home could be your best bet if you’d like to use Apple’s smart home app straight away.

It’s pretty similar to WeMo, giving you the ability to manage your household appliances from anywhere in the world. There are also timers, which let you schedule your devices to turn themselves on and off, and you can monitor your energy use to save money on bills. You get Siri voice control, too.

The company says the product is “due to be released in Q1 of 2017”, but you can pre-order now.

Controlled via: Apple Home app, or WifiPlug Power app for Android
Apple HomeKit Certified: Yes

Withings Home


Withings Home

Should you want to make security a priority in your home, then you’ll want to get a good security camera. The Withings Home HD is great model to go for. It sports a 5-megapixel CMOs sensor that’s capable of recording full HD (1080p) at 30 frames per second.

That may sound pretty technical, but put it this way, it’ll give you a great picture of your home while you’re out and about. As well as a high-quality sensor, the camera also provides you with a 135-degree view of your home. And there’s automatic night vision so you can keep tabs on things when it’s dark.

You can get live updates within a companion app designed for iPhone, iPod Touch and iPad. While this is predominantly a security camera, there are other things you could do with it. For instance, you could use it to check what’s happening in the kitchen or turn it into a smart baby monitor.

Read more about the Withings Home here.

Controlled via: Withings Home iOS app
Apple HomeKit Certified: No (although Withings Home Plus will be)

Apple’s ‘installed base’ of iPhones has stopped growing, says Deutsche Bank

The “installed base” of total iPhone users has all but stopped growing, according to Deutsche Bank.

This is the biggest problem Apple faces with the launch of iPhone 8, expected in September. The industry is expecting a complete refresh of the product with a radical new redesign, and a spectacular boost in sales as a result.

But the iPhone customer base is now so massive — around 650 million users — that Apple is having difficulty finding new users to buy phones. Growth of the installed base (total current users) is heading toward zero percent annually.

The useful life of an iPhone is so long that individual users can typically make one last for three years before buying a new one. Everyone who wants a new iPhone now has one, basically, and the market for all types of smartphones is almost saturated, according to Deutsche Bank analyst Sherri Scribner.

You can see the ‘installed base’ growth problem in this chart:

DBDeutsche Bank

Previously, Apple’s installed base had been regarded as a valuable asset. Every year, an increasing percentage of existing customers needs a new phone, and Apple almost automatically takes a huge chunk of that demand. Scribner’s analysis turns that on its head: The base is now so big it may not produce further growth. Apple may be at peak iPhone, in other words.

Scribner notes that other analysts expect 244 million new iPhones to be sold in fiscal-year 2018. That number can’t be right, Scribner argues:

“Based on our estimates, there will be roughly 228M iPhones ready for upgrade in FY-18. Assuming every one of these iPhones is upgraded to a new phone, and that Apple does not lose any customers to competitors, Apple would still not reach Street expectations for sales of 244M iPhones in FY-18, unless they were able to gain a substantial set of new customers. To hit these optimistic numbers, Apple would need to add roughly 15M new iPhone users. To put this in perspective, the smartphone market [as a whole] grew by 36M units in 2016 and is expected to grow by 44M units in 2017.”

In other words, 15 million new iPhone users represents 34% of all new smartphones sold in 2017. Historically, Apple only takes about 15% of all phone sales. It would now need to double that market share of new phones and not lose any existing customers in order to hit analysts’ expectations for iPhone 8 sales, Scribner says.

Really old iPhones don’t generate new iPhone sales

Part of the problem is that the installed base includes old iPhones that still work: units that are one, two or three years old, which are given to children, poor friends, or sold online. About 10% of all iPhone users are second-hand owners, the bank believes.

That percentage of second-hand phones is expected to grow as each new iPhone model comes onto the market, prompting owners to sell their old ones online or give them to family members, and charities.

The installed base looks as if it is showing a small amount iPhone sales growth until you take out all the second-hand iPhones, Scribner and her team argue:

DBDeutsche Bank

People who own “secondary market” iPhones are not the same as iPhone customers, the Deutsche Bank team argue, because they are unlikely to buy a new iPhone. These are the people who take on old, second-hand phones because they can’t afford new ones. About 25% of iPhones end up recycling back onto the market with a new owner, according to data from IDC cited by Deutsche Bank.

When you take out the second-hand phones from the installed base, it suggests the number of people who might be expected to upgrade for iPhone 8 is smaller than others have assumed:

“Assuming 25% of the iPhones that are refreshed each year get sold as secondary phones suggests that about 10% of Apple’s current installed base is comprised of secondary phones. … we expect this number to continue to rise, as each new upgrade drives further iPhones into the secondary market. While these secondary phones increase Apple’s installed base, these secondary sales do not benefit Apple’s iPhone growth, as the sale goes through others.”

“… Cutting out secondary iPhones in the installed base suggests that the available number of phones that are candidates for a refresh to a new phone each year is close to 590M, not the full 650M installed base. Using a 3-year refresh cycle, suggests that only about 200M iPhone will upgrade each year, again, well below Street expectations for sales of 244M iPhones in FY-18.”

She concludes, “there just aren’t that many new customers to be had given the saturation of the market.”