Inside Apple - July 26th, 2019 |

Inside Apple (Jul 26th, 2019)

Apple announces $1B Intel modem deal / #FollowFriday: @krewell / iPhone Photography Contest winners

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$AAPL (10:00 AM EDT July 26): $208.62 (+0.77%) [pre-market] // More info

Even though there’s bigger news, my favorite thing to read in today’s issue was the interview with the new head of Apple Music. Apple execs have a lot of cliché lines like “music is in our DNA,” and then they do dorky things that make you disbelieve them, but it’s actually true. Reading Oliver Schusser’s explanations of Apple Music’s priorities and strategy, it struck me as the most pro-music stuff I’ve ever heard a businessperson say, and as a good business for Apple to be in.

Do you use Apple Music or another service? Hit reply and tell me which music service you use and why.

— Jon

1. As reported earlier this week, here’s Apple’s press release announcing it will acquire the majority of Intel’s smartphone modem business. The deal is worth around $1 billion and nets Apple 2,200 employees as well as IP for making 5G modems. Intel’s CEO says it “really only had one customer” for modems, and it’s happy to let that customer buy the business. This will not bear fruit overnight; a roadmap to get an Apple-built modem into one product by 2021 is considered aggressive. There are other shoes to drop in this strategy; analyst Ben Bajarin says to watch for Apple to buy a baseband radio company next. — @BENBAJARIN

2. Sources say the Apple Card credit card will launch in the first half of August. This is a big bet for Goldman Sachs as well as for Apple. Goldman’s still new at consumer banking, and Apple hasn’t yet proven a large portion of its users want Apple managing their money. But the card’s ease of use and no-brainer built-in discounts on Apple stuff make it an easy thing to say yes to. It sounds like this launch has been stressful behind the scenes, but it’s on target, and it will be a big step in Apple’s services narrative. — BLOOMBERG

3. #FollowFriday: @KREWELL

Kevin Krewell is a California-based tech industry analyst and self-identified “long-time chip geek.” He tweets about high-level industry and investor news, like Tesla stock price reactions and speculative analyses of future tech, as well as a healthy amount of non-tech stuff, but he brings his expertise to bear when something big is happening in silicon. Chip stuff is arguably the hardest part of the business for mere mortals to grasp, but as you can see in Apple’s press release about this week’s Intel deal, it’s absolutely key to understanding the company’s strategy right now.

Krewell reminded us this week of the history of Intel’s mobile modem portfolio. Intel bought Infineon, a German modem company that’s the core of what Apple just bought, for $1.4 billion in 2010. Intel then invested heavily in turning that into a business with “only one customer”, and then sold it to that customer for just $1 billion. Apple is as good at getting a deal as it is as turning those deals into hugely profitable products. Intel, for its part, at least got a little of its money back.

4. Oliver Schusser, head of Apple Music, and some members of his team gave an unusually revealing interview about how that part of Apple is doing. Currently VP of Apple Music and VP of International Content for all Apple media services, Schusser worked at BMG and Napster, then spent 15 years building iTunes’ international operations. He took over Apple Music from Jimmy Iovine and Robert Kondrk 15 months ago. He’s extremely put-together and on-message — very Apple-like, and not much like his predecessor, Jimmy Iovine, who was a great music executive, but at Apple apparently spent way too much money and didn’t have a clear product direction. Schusser seems like the right person to take over for the long term. — BILLBOARD

5. The upcoming 16-inch MacBook Pro, reported this week to be coming in October, apparently will have the new scissor switch keyboard. This is according to the very same Ming-Chi Kuo, a relatively authoritative supply chain analyst whose dribs and drabs we’ve been following all along for info about this computer and the new keyboard. But last we heard, the keyboard replacement would be coming in a new MacBook Air. Then Apple updated the Air this month with the “improved” butterfly keyboard already shipping in MacBook Pros. Does this guy know what’s going on or not?? — APPLEINSIDER

6. Apple was the biggest corporate user of solar power in the U.S. last year. It has nearly 400 megawatts of installed capacity, putting it ahead of Amazon, Target, and Walmart. This is a big talking point for Apple, and it’s not just talk; last year it announced 100 percent of its operations are powered by renewable energy. — SOLAR MEANS BUSINESS

7. Apple announces Q3 earnings and Q4 guidance next week. Earnings are unlikely to be surprising; Apple’s expectations for Q4 will be more interesting to investors. Low expectations there do leave room for surprises. — APPLE 3.0

8. It looks from new banner ads like Apple is reducing the free trial of Apple Music from three months to one month. Update your friends-and-relatives sales pitch accordingly. — MACRUMORS

9. The iPhone Photography Awards have announced their 12th annual winners. Every shot is breathtaking in a different way. (One winning shot is from Burning Man, which warms my heart as a former member of the team that gave people releases to take such photos.) — IPP AWARDS

10. Follow-Up Friday: In yesterday’s issue, alongside a #ThrowbackThursday about an Apple IIe lab in an elementary school in 2019, I asked about your earliest experiences with computers. Here are some of the most fantastic responses:

Peter C: “My sophomore year of HS included computer lab with IIc’s. I got a summer internship at a software dev because of it! Definitely helped kick start my career.“

Scott S: “My high school was also all Apple IIe, but my first computer growing up because Apple was too much money was an Atari 130XE. Many of my friends went Commodore, but even then I was a rebel and went with Atari.”

Tiziano D: “A Commodore VIC-20, 1981 if i can remember. 3KB of RAM. Now my 10+ TB of HD are never enough.”

Jim W: “About 40 years ago my dad was given a Radio Shack TRS80. It had an external 16kb cassette deck attached to it where programs were stored. We were the first kids I knew of that had a computer of any kind. I wrote a little program of a robot moving across the screen with his hands and legs going up and down, and then another program that was kind of like pong.”

Mark S: “My brother bought a Tandy TRS-80 in 1980 (I still have it) He was 23 and at Uni and I was 8. I learnt to program following the (beautifully written) manuals. We had no storage device in those days, so whatever program we typed in, we played for 3–4 days (or less if the power went out, or mum turned it off). Lots of time debugging code mistyped from magazines meant I really learned the BASIC (written in part by Bill Gates, I believe) language well. In later years we bought a tape deck for saving programs and then in 1988 I bought a floppy drive for it!”

Jon Mitchell has been a tech journalist since 2010. He covered Apple, Google, and the societal effects of social media for the storied blog ReadWriteWeb (now ReadWrite). He co-hosts Internet Friends, a podcast about life online with occasional lengthy digressions into Apple news. He’s the author of In Real Life: Searching for Connection in High-Tech Times from Parallax Press. He has recently, reticently returned to Twitter at @ablaze.

Editor: Bobby Cherry (senior editor at Inside, who’s always on social media).

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