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HOW APPLE MAKES BILLIONS OF DOLLARS SELLING SERVICES

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 focus is shifting. In recent years, iPhone sales have begun to plateau, and now Apple’s services business — which encompasses everything from the App Store to licensing deals — is being positioned as its next big frontier for revenue growth. More than ever, Apple wants to sell people constant, ongoing subscriptions for things they can do on their phones.

That new direction is going to be thrust into the spotlight next week at Apple’s “It’s Show Time” event, where the company is expected to unveil two big new subscription services: a TV service for original shows and movies, and an Apple News service that will bundle together premium news sources and magazines.

Apple’s services business brought in over $10.9 billion during the most recent quarter, setting records in “every geographic segment” in the process, according to Apple CEO Tim Cook. Cook also said that Apple is on track to double its services business from 2016 to 2020. Last quarter saw a 19 percent increase year over year.

It’s a substantial figure compared to Apple’s other business segments: services already brings in more per quarter than the Mac ($7.4 billion last quarter), iPad ($6.7 billion), or the collected “Wearables, Home, and Accessories” group of products ($7.3 billion). And that balance will likely only continue to shift as Apple starts to push services harder and introduces new services to which people can subscribe.

So what’s already bringing in all that services revenue, and how healthy are those businesses? Apple doesn’t break down how much money individual services make, so there’s a large extent to which we just can’t say. But we do know what businesses the segment is composed of, how much they charge, and whether they’re any good. With the services business entering a new era, here’s an overview of where it stands today.

Photo by Amelia Holowaty Krales / The Verge

APPLE MUSIC

 Music is arguably the highest-profile entry in Apple’s new services business, due to it being one of the most modern (it launched in 2015, after Apple bought and rebranded Beats Music) and one of the most interesting (sorry, extended warranty programs).

The music subscription service had 56 million customers as of December 2018, according to the Financial Times. For comparison, Spotify had 96 million paid customers as of February 2019.

It’s unclear how many of Apple Music’s customers are actively paying. The company offers free trials, and its service also comes bundled with some Verizon wireless plans.

Assuming all customers are paying $10 per month (with family plans, annual discounts, bundles, and student deals, they’re not, but this is ballpark numbers here), that puts Apple Music at a high-ball estimate of $6.7 billion per year brought in.

Cost: $10 per month ($5 per month for student plans, $15 per month for family plans)

How Apple makes money: Subscription fees, carrier partnerships.

APP STORE / MAC APP STORE

 one of the biggest contributors to Apple’s revenue is the massively popular App Store, which was estimated as of May 2018 to have seen upward of 170 billion downloads in its 10-year history.

Most of those aren’t straight-up paid purchases — a massive percentage of the App Store’s revenue comes from in-app purchases in free-to-play games like Fortniteand Candy Crush and subscription apps like Netflix, Tinder, and YouTube. According to App Annie’s latest estimates, every single one of the 50 top grossing apps on the platform is either a major service that relies on subscription fees or a free-to-play game. Even the most popular paid apps like Minecraft or Facetune just don’t make the same kind of money as free apps that rely on in-app purchases, even with in-app purchases to help bolster their numbers. And Apple takes a cut of each of those in-app purchases and subscriptions.

Those “free” apps have resulted in some pretty big sales: as of June 2018, Apple had paid out $100 billion to developers from the App Store. If you work off of Apple’s 70 / 30 revenue split (which is usually, but not always, the cut it takes from purchases), you get total sales of roughly $142 billion, with $42 billion of that going to Apple in the decade it’s been running the App Store.

That said, Apple has recently come under fire for the App Store model in the past few months: the Supreme Count is hearing an iOS App Store antitrust lawsuit that alleges Apple has an unfair monopoly on iPhone apps. And Spotify has filed another antitrust complaintover Apple’s 30 percent cut with the European Union, complaining that it gives Apple an unfair advantage when promoting its own streaming service, Apple Music.

Cost: Depends on content purchased.

How Apple makes money: in-app purchases in games, app sales, app subscriptions.

ICLOUD

 every single Apple customer who owns an iPhone, iPad, or Mac is an iCloud user, because Apple gives a paltry 5GB of storage to all customers for free. But for revenue, the important part here is the paid plans, which give users additional storage for a monthly cost.

iCloud may not have the same brand recognition as Dropbox or Google Drive when it comes to storing and sharing files, but it does have some big advantages in getting users to subscribe: it’s the only way to back up iPhones and iPads to the internet. And that storage pool counts toward nearly everything on your phone. Take too many pictures, for example, and your phone stops backing up, which creates a real incentive to shell out for more than the scant 5GB Apple gives for free.

Apple seems to know that, too: the cheapest iCloud plan is just 99 cents per month for 50GB of storage, making it an easy sell to users, but that $12 per customer per year starts to add up across the billion-plus iOS devices out in the world, even if only a fraction of them subscribe. A 2016 interview with Apple SVP Eddy Cue revealed that at the time, there were 782 million iCloud users, but Cue’s comments referred to all users — Apple has never broken out how many paid subscribers it has.

Cost: $0.99 per month (50GB), $2.99 per month (200GB), $9.99 per month (2TB). The 200GB and 2TB plans can be shared as a family plan.

How Apple makes money: subscription fees.

Mac-apps-report-verge-Amelia Krales-03

ITUNES / APPLE BOOKS

 iTunes store isn’t the juggernaut it once was — with streaming services like Spotify, Apple Music, Netflix, and Hulu, people just tend to buy fewer songs, TV shows, and movies nowadays. But it still does bring in money: it’s a one-stop-shop for a huge range of content, and like all of Apple’s other services, it’s front and center on all its devices. Want to rent a movie on your Apple TV for a movie night? iTunes is right there, ready and waiting. And with Apple expanding iTunes to other devices, like Samsung smart TVs, it seems like iTunes is still a big part of Apple’s revenue strategy going forward.

Also included here is Apple Books, which is basically iTunes, but for books. Apple Books has the issue of Amazon and its massive Kindle library as competition, which Apple infamously tried to solve in a price fixing scandal that cost the company $450 million. Even so, it’s still one of the biggest ebook stores around, and is another easy source of service revenue.

Lastly, iTunes also includes Apple’s less popular iTunes Match subscription service, which costs $25 per year and syncs users’ iTunes music across their devices, sort of like a private cloud music service where you have to buy all the music.

Cost: Depends on content purchased; $24.99 per year for iTunes Match (iTunes Match is included with Apple Music).

How Apple makes money: Purchased content, subscription fees.

APPLE PAY

 Pay is Apple’s overarching payments system — it includes using Apple Pay to make purchases on websites and inside apps, conducting contactless payments at retail stores, and sending money using Apple Pay Cash (Apple’s Venmo-style person-to-person payment system).

Apple says it doesn’t charge “users, merchants, or developers” to use Apple Pay, but reports indicate that it still receives a small fee from each transaction. That cut appears to come from the bank that issued the card with which Apple Pay is being used. Reports from 2014, when Apple Pay launched, said the fee for US banks was 0.15 percent, or 15 cents on every $100 spent.

Last quarter, Apple said there were 1.8 billion Apple Pay transactions, more than twice as many as the same quarter a year earlier. We don’t know how much those transactions are worth, and it’s likely that the vast majority of them happened outside the US, in countries where mobile payments are more popular. But that’s still a large volume of transactions where Apple takes a cut.

Apple also makes money off of Apple Pay Cash. The service is free to use when sending money with a debit card, but it charges a 3 percent fee for any funds sent using a credit card.

Cost: Three percent of any funds sent using Apple Pay Cash tied to a credit card.

How Apple makes money: Transaction fees from users, banks.

Photo by Chris Welch / The Verge

APPLECARE

 is Apple’s extended warranty service: it lets customers get longer and more comprehensive warranties for their Apple products, usually with things like discounted screen or device replacements, depending on the device.

AppleCare+ is also included as part of the monthly cost of Apple’s iPhone Upgrade Program. Like many of the other Apple services, the company hasn’t said how many users opt to buy the extended warranty.

Cost: Depends on product, ranges from $129 to $199 for iPhones, $249 to $369 for MacBook laptops, and $99 to $249 for iMac and Mac desktops.

How Apple makes money: Warranty fees.

LICENSING

 isn’t quite a consumer-facing service like everything else on this list, but it’s a big business. Apple sells licenses to companies to get their services built into iOS, like how Google is the default search engine or The Weather Channel provides weather data. That kind of front row real estate on all of Apple’s devices is worth a lot, and it provides a big chunk of Apple’s services revenue.

Licensing agreements are a particularly opaque area of Apple’s business. The last clear numbers we have are from 2014, when court documents revealed that Google paid Apple $1 billion to stay the default search bar on iOS as part of the company’s revenue sharing agreement. But recent estimates from analysts have put Apple’s fee at roughly $9 billion — a number that, if true, would make it one of the biggest parts of Apple’s entire service group all on its own.

Cost: Nothing, unless you prefer Bing for search.

How Apple makes money: Licensing payments from companies like Google to be featured on Apple products.

MAPS, SIRI, FREE ICLOUD

 is where things get weird: As of its most recent quarter, Apple now takes part of the sale price of every iPhone, iPad, and Mac and converts it into money for services, which it then spreads out across multiple quarters. Basically, Apple counts “free” services like Maps, Siri, and parts of iCloud (like iMessage), and considers them to be built into the cost of its devices.

It’s a meaningful shift, too: when Apple started factoring in payments for these free services, its total service revenue for Q1 2018 jumped 7.7 percent, from the originally reported $8.47 billion to $9.13 billion.

Cost: Free? But also you’re technically paying for it when you buy your iPhone.

How Apple makes money: Hardware purchases.

Correction: Only Samsung smart TVs will have the iTunes app, not LG TVs (although those will have AirPlay 2 and HomeKit).

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Physicists Just Smashed an Insane Record of Particle Acceleration in a Plasma Channel

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In a breathtaking achievement, physicists have shattered the world record for particle acceleration. In just 20 centimetres (8 inches), they have increased the acceleration of electron beams from 0 to a whopping 7.8 billion electron volts (GeV).

This nearly doubles the team’s previous energy gain of 4.2 GeV over 9 centimetres, demonstrating a way to vastly improve plasma wakefield acceleration.

High energy particle accelerators are vital for better understanding the particles our Universe is made of, but they also have some pretty hefty limitations, especially in terms of size and cost. The Large Hadron Collider (LHC) consists of a vacuum tunnel buried deep underground, with a circumference of 26.7 kilometres (16.6 mi).

Along the tunnel, metallic chambers are spaced at intervals to generate radiofrequency waves, which transfer energy to the particles passing by to give them a velocity boost, with each radiofrequency chamber delivering an accelerating field of 5 million volts per metre (5MV/m) to ultimately deliver speeds close to that of light in a vacuum.

Last year, physicists at CERN announced that, using a developing technology called plasma wakefield acceleration, they’d achieved an acceleration gradient of 200 MV/m. That resulted in an acceleration to nearly 2 GeV in 10 metres.

It works just like wakesurfing. Laser pulses are used to generate plasma waves with electromagnetic fields that can be thousands of times stronger than radiofrequency fields. Then, just as a wakesurfer can use the waves generated in the wake of a boat to accelerate, particles can ‘surf’ the plasma waves to gain energy.

To improve on this, physicists at the Lawrence Berkeley National Laboratory designed and incorporated a plasma waveguide. These, the researchers wrote in their paper, “can be used to mitigate laser diffraction of focused laser pulses, which increases the acceleration length and the energy gain for a given laser power.”

This work was the achievement behind the previous 4.2 GeV result in 2014; now, the team has improved on their methods.

In a sapphire tube filled with gas, an electrical discharge is triggered to create plasma. Then, a “heater” laser pulse is used to drill out some of the gas from the centre of the plasma, lowering the density, which focuses the laser light.

This plasma channel is then strong enough to keep the laser pulses confined over the length of the accelerator. Subsequent “driver” laser pulses generate waves in the plasma. Electrons in the plasma then hitch a ride, surfing the length of the sapphire tube.

In the previous experiment, the density of the plasma caused the laser to lose its focus along the length of capillary, resulting in damage to the sapphire tube.

“The heater beam allowed us to control the propagation of the driver laser pulse,” said physicist  Anthony Gonsalves of Lawrence Berkeley National Laboratory.

“The next experiments will aim to gain precision control over electron injection into the plasma wave for achieving unprecedented beam quality, and to couple multiple stages together to demonstrate the path to even higher energy.”

The research will be presented at the 61st Annual Meeting of the APS Division of Plasma Physics this week, and appeared in Physical Review Letters earlier this year.

Source: https://www.sciencealert.com/electrons-hit-record-acceleration-from-0-to-7-8-gigaelectronvolts-in-20-centimetres

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Apple’s iOS 13 is running on 50 percent of all iPhones after three weeks

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Apple’s iOS 13 update may have been riddled with bugs over the course of its first few weeks post-release, but that hasn’t had a meaningful impact on user adoption. According to the company, more than 50 percent of all iPhones were running iOS 13 just 26 days after launch. That’s slower than iOS 12, which took just 23 days to hit 50 percent, but not by much. If you count only iPhones purchased in the last four years, the figure jumps up to 55 percent.

The numbers look even better — vis a vis Android — when you take into account that most other phones are running iOS 12. Of all iPhones currently accessing the App Store, which is how Apple checks these numbers, 41 percent are using iOS 12 and just 9 percent are using an earlier mobile OS. For devices four years old and younger, 38 percent are running iOS 12 and just 7 percent are running an older OS. For iPadOS, the numbers are slightly lower, with 33 percent of all iPads running the new OS and 41 percent of newer iPads running it.

While these adoption rates may have slowed from last year, Apple is still miles ahead of Google in this regard, thanks to its tight integration of hardware and software that Google has never been able to replicate with Android. In fact, Google seems to have stopped reporting adoption rates recently, so we don’t know how many devices have Android 10 installed.

Last time Google checked in on that front, in May of this year, we knew that Android 9 Pie was installed on just 10.4 percent of all Android devices worldwide. For other versions, the rate spans spans 15 percent to 30 percent for versions as far back as Android 5.0 Lollipop, which is still running on 14.5 percent of all Android phones. At the time, Android 8.0 Oreo held the crown at the time with 27 percent of all devices. But the wide variety of years-old versions each serving millions upon millions of phones remains a bad look for Android fragmentation, a problem Google has all but given up on solving.

So whatever trepidation Apple fans may have had about the bugs and overall inconsistency with iPhone software, it doesn’t seem to have translated into action. As The Verge’s Dieter Bohn points out in his piece about holding off on installing macOS Catalina, he makes the smart point that phone updates are low risk and high reward, whereas the same is not true of desktop and laptop OS updates, where you may inadvertently affect your ability to get real work done. Looks like most iPhone owners agree.

Source: https://www.theverge.com/2019/10/16/20918359/apple-iphone-11-pro-ios-13-adoption-rate-google-android-10

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How 5G could improve augmented reality

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We all know by now that 5G is going to be a big deal. The next generation mobile network will provide ubiquitous gigabit connection speeds, extremely low latency and unrestricted capacity.

In fact, it’s rather difficult to imagine a modern industry that won’t be positively affected by 5G’s arrival.

When it comes to augmented reality, however, 5G looks set to be more transformational than most. Indeed, 5G could prove instrumental to augmented reality finally hitting the mainstream.

Let’s first clarify what we mean when we talk about ‘augmented reality’. AR, as it’s commonly known as, is the art and science of overlaying virtual information onto a live view of the real world.

While virtual reality (VR) creates a completely enclosed, self-contained 3D virtual world that a person can fully immerse themselves in, AR seeks to enhance or indeed augment our perception of the physical environment around us.

Augmented reality is already firmly embedded in our culture, from the heads-up displays (HUDs) in a fighter pilot’s cockpit to the live selfie effects of Snapchat and Facebook. But 5G’s arrival heralds a whole new wave of deeply integrated, highly social AR experiences.

Statista estimates that the value of the AR market will rise from $5.91 billion in 2018 to $198.17 billion in 2025 – it’s no coincidence that this rise will coincide with the rollout of 5G networks.

Augmenting reality

As we’ve hinted at already, augmented reality isn’t a new or cutting edge technology. We already have the means to create convincing AR experiences, but it’s an extremely hardware-intensive process.

Embedding virtual components in a real world view requires powerful processors, sharp cameras, a range of advanced sensors, and some serious software smarts. In short, the best AR apps crunch a lot of numbers.

What’s more, that data needs to be rendered in real time in order to produce a convincingly smooth and responsive AR experience. Immersion is everything with AR, to the point where any performance shortfall can be ruinous to the experience.

The huge amount of data being processed in real time means that modern mobile AR applications are very localized, essentially ‘offline’ affairs. Not only does this necessitate powerful mobile devices, it limits the scope of the AR experiences too.

Our current 4G networks simply don’t have the capacity to bear the weight of more connected or shared AR experiences, nor do they have the required low latency – that is, the time between an input and data being sent in response – for real time responsiveness.

What 5G brings to the AR table

It’s here that 5G will be able to take AR to the next level. The next generation mobile network will massively increase capacity and lower latency. ABI Research predicts that 5G will provide a “10X increase in throughput, 10X decrease in latency, and 100X increase in traffic capacity” over 4G, which will mean that “5G will not only improve, but will also be a requirement for some of the most exciting AR and VR applications”.

In such an environment, existing AR applications would be able to offload much of the intensive processing to the cloud, opening AR applications out to new, smaller, more energy efficient and cheaper form factors.

While the Google Glass project appeared to be halted several years ago (it wasn’t, but we’ll come to that), the prospect of a truly wearable, permanently accessible AR device hasn’t gone away. It was just hibernating until the technology could be refined, part of which involves a sufficiently capable mobile network.

The nature of AR applications will also grow more sophisticated, with truly shared and social real time augmented reality experiences. The transmitting of AR-enhanced live events could be one example.

This synergy between AR and 5G will also expand the potential for remote control drone and robot operation through enhanced HUDs (Heads Up Displays) and improved haptic feedback. Indeed, this lofty concept of the so-called ‘Tactile Internet’ is expected to kickstart the fourth industrial revolution.

That might sound lofty, but cutting edge researchers such as South Korea’s Electronics and Telecommunications Research Institute predict just such an eventuality. In January 2019, it was announced that ETRI had developed a 5G-based technology that would enable AR applications to send and receive packets of data at speeds that match human perception.

“We will see robots, cars and all other machines connected to the Internet all around us,” said ETRI team leader HwanSeok Chung. “[The] Tactile Internet will enable humans and machines to interact with each other even from far away.”

AR and you

Talk of the Tactile Internet is all well and good, but you might ask how 5G-enhanced augmented reality is set to benefit the average user over the coming years.

The first thing to note is that the framework is there for massive advances in everyday AR applications. Both Google and Apple, gatekeepers to the two biggest smartphone platforms in the world, are investing heavily in AR. Apple announced its ARKit framework in June 2017, while Google announced its own ARCore in August 2017.

AR computation has been a core component of two generations of iOS and Android devices now, and there are countless AR-enhanced applications on their respective platforms. But the two companies have huge plans beyond the current status quo.

It’s widely expected that Apple will have some big things to say about AR at its next WWDC event from June 3, including potential macOS and iOS support for AR headsets. 

It’s long been rumored that Apple is working on its own set of AR glasses, which could prove a huge boost to AR’s mainstream acceptance. You only need to see the company’s dramatic effect on the adoption of smartphones, tablets, and smartwatches for evidence of that.

For its part, Google has been steadily ticking over in the background with its pioneering Google Glass project after an initial failed public run. The latest update comes in the form of the business-focused Glass Enterprise Edition 2, which now runs on Android and is powered by Qualcomm’s AR-focused XR1 chipset. 

On the software front, the company announced at Google I/O that it was adding 3D augmented reality models to its search results later this year.

Separately to this, Facebook is known to be investing heavily in augmented reality. Having played a major part in the related resurgence of VR through its Oculus Rift platform, the company is known to be working on its own advanced AR glasses. 

Facebook has also been steadily bringing AR features to its vast network of social platform ever since 2017, from Messenger to Instagram to Facebook ads. Through AR Studio, it’s also allowing third parties to get in on the act.

Microsoft has its own longstanding AR hardware project in the form of HoloLens, which has yielded some of the most impressive (though alas not commercially available) AR applications of the current era – including an augmented reality version of Minecraft. 

Talking of Minecraft and AR, Microsoft recently announced the Minecraft Earth mobile game, which could well prove to be the true breakout moment for AR gaming.

Make no mistake, AR is set to enter a whole new phase of mainstream acceptance in industry, on our phones, and through a whole new class of personal devices – and 5G is going to be at the very heart of the revolution.

5G Uncovered, in association with Samsung, brings you everything you need to know about the next wave of connectivity – not just how fast it’s going to be, but in just how many ways it’s going to change your life. Our 5G Uncovered hub is carefully curated to show everything there is to know about the next generation of connection.   

Source: https://www.techradar.com/news/how-5g-could-improve-augmented-reality

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