By Graham K. Rogers

Opening Gambit:

Apple Q3 Results

The Company posted quarterly revenue of $35.0 billion and quarterly net profit of $8.8 billion, or $9.32 per diluted share. These results compare to revenue of $28.6 billion and net profit of $7.3 billion, or $7.79 per diluted share, in the year-ago quarter. Gross margin was 42.8 percent compared to 41.7 percent in the year-ago quarter. International sales accounted for 62 percent of the quarter's revenue.

The Company sold 26.0 million iPhones in the quarter, representing 28 percent unit growth over the year-ago quarter. Apple sold 17.0 million iPads during the quarter, an 84 percent unit increase over the year-ago quarter. The Company sold 4.0 million Macs during the quarter, a two percent unit increase over the year-ago quarter. Apple sold 6.8 million iPods, a 10 percent unit decline from the year-ago quarter.

Note the increases and declines: iPhone up 28%, iPad up 84%, Macs up 2%, while the iPad continues to decline as users switch to other devices (like the iPhone and iPad). Apple also declared a cash dividend of $2.65 per share of the Company's common stock.

Some more key information is always found in the questions and answers session at the end. One of the points was that Mountain Lion will launch tomorrow. Wait a minute, that is today here. Electronista, among many others had this: "July 25th, exclusively on the Mac App Store." That will be $19.99 for the sole version, unlike some companies with operating systems, and also unlike other companies users may install this legally on more than one computer in a household.

And please backup your essential data before trying the installation

Another point that did come out was about iPhone global sales: strong in US and Japan, even stronger in China, however flat sales in Europe affected overall performance.As part of the Q&A session, without saying too much, Tim Cook promised "amazing new products" and Erica Sadun speculates briefly on what this might mean.

There are now also 650,000 apps on the app store with 250,000 of these designed specifically for the iPad Jordan Crook reports with more news from the Conference Call.

Oh, and cash reserves are now $114 billion.

Apple Stuff

The NYTimes Nick Wingfield tells us that Apple's sales and profits missed analyst's estimates and despite (his first example) 28% growth in iPhone sales, Wall Street wanted more. Perhaps with economic crisis in Europe, partly brought about by Wall Street's own denizens in the banking sector, Wall Street is being just a little greedy.

There was real shock in the Street as many analysts felt that Apple had slipped, Lee Brodie reports, despite the increases, and there was a real fear that the anticipated fall in the share price may bring down the stock market. I must admit to being shocked myself: not at the figures which look OK to me (up, up, up and down) but the reaction that because the analysts wild over-estimates were not achieved Apple has somehow let them down.

Steven Sande, on the other hand, writes about the financial report as being evidence of "another strong quarter" and noted that the company did beat its own guidance, but also reports that Wall Street was not satisfied.

Europe was of particular interest and did affect sales of Apple products with the economies of some countries there in the trash can. No one is buying a computer/iPhone/Mac if they need the money to eat. John Martellaro comments on the sales there but also adds that a dearth of really new products (see comments above) is affecting the figures. But unlike some companies, Apple does not rush to bring products to market and prefers to get them right in terms of quality before any release.

An interesting pre-Q3 comment came from Mike Schramm concerning payments and Apple. Something that will please many accountants and strategists is the point that while Apple gets paid for selling its products (retail mainly) almost immediately, the way markets work the company is able to extend its credit from suppliers and delay payments: in other words, the money comes in faster than it needs to go out. For a side-reference I would suggest the words of Wilkins Micawber which is number One in the Daily Telegraph's list of 12 memorable quotes by Dickens on money.

With Mountain Lion on its way, some of those who bought Macs recently (after 10 June) will be eligible for a free update to OS X and the page for this actually went live on Monday, apparently by accident It was pulled later.

However, users in Thailand have reported difficulties in claiming the due download in the past, with no local page provided, they were required to register on the US site which did not accept the details because of the user's location: an infuriating circle if this happens to you. The retail outlets cannot help as they are not provided with the needed files. They did not even have Lion for days when it was released last year and a few days before the release, knew nothing at all about the date or any assistance they might be allowed to give to customers.

As some sort of confirmation that Mountain Lion will shortly be with us, Michael Rose among others reports that copies of the new OS X have been distributed to customer service reps: these are the guys who need to know how it works so they can help us with fixes.

The final preparation for Mountain Lion is the download and installation. Erica Sadun explains how this might be done effectively.

With the way Apple works, it would not surprise me to find that as well as the OS X release and the Q3 financial reports, Apple will spring another surprise of sorts this week, just to keep the others on their toes.

However, looking ahead, AppleBitch suggests that the whole Apple product line is to have a major makeover later in the year.

I ran a couple of articles about what I have done to prepare for the Mountain Lion release, and I also linked to something that Topher Kessler put out, although I question his comment that the update itself might fix some minor problems: I would not want to wait to find out. Now another surprise comes from Gene Steinberg's Tech Night Owl with a heading, "DO YOU REALLY NEED TO PREPARE FOR MOUNTAIN LION" (yes, all in caps). After rehearsing what we are likely to read from others concerning preparations, then goes into what he does. So I am left asking, why the title?

Also on the way, we hear is a new iPhone. Common sense for Apple followers who would admit this must be so and that the new device, whatever it is or has, will be released around September or October: no crystal balls needed there. Of course there is much speculation some of which is cited as "confirmed". Possible or probable are words more suitable, but the only confirmation will be from Apple.

First confirmation (see above) is concerning the production which many, including Brooke Crothers, say has now started at the Pegatron plant in China. As with earlier reports we are told that the back of the new iPhone has both glass and aluminum and a larger 4-inch class Retina display with a 16:9 aspect ratio. Possible to probable ratings here.

One of the major rumours about the new iPhone this week concerned the connector. A smaller design has been anticipated for a few months as this would allow design changes to the iPhone and more features could be provided for the phones, such as larger screens and batteries. Don Reisinger among others feels that this is done and dusted and that a 19-pin connector will be replacing the current 30-pin one. There is of course no comment from Apple.

An extra (and widely-cited) comment on this came from Rene Ritchie who notes that the new 19-pin connector will require new adapters. I have adapters for the current 30-pin connector: one for VGA and for HDMI; and they would be of no use for the new iPhone. Nor, of course would all those connectors built into a lot of expensive cars by manufacturers who Apple took great care to nurture. Rene posits that, as this has been done before with other connector transitions, Apple is highly likely to provide a 30 to 19 socket connector so we can (sort of) carry on as before. I do hope so.

The last week or so has seen a number of reports concerning the hack that allowed in-app purchasing to be done by free for those willing to steal from developers. Let me give a small example that I experienced recently. I downloaded a lovely app called Photo Editor by Aviary. As a free app it puts a lot of paid apps in the shade.

The developers have done a lot of work on this, and here it is in the App Store as a free download: they make nothing from that, but have spent time (and love) in making it. There are however, in-app purchases for more filters: $0.99 each package. I did not hesitate when reviewing this as it is a tiny way to reward these guys and if everyone did this, it would help pay some bills. But if everyone cheated and used that hack (or those cheapjack stalls you can find in most Bangkok shopping malls) the developer gets zero.

Apparently Apple has now fixed the hole for now, and there is a permanent fix for iOS 6 Aaron Souppouris reports on The Verge. However there is little information about the similar hack for the Mac App Store apart from a side mention in an item on the iOS hack from Matt Brian on TNW. Related to the fix for iOS 6 it will not be necessary to enter passwords when downloading free software from the App Store, AppleInsider reports

Talking of hacks, Jordan Robertson on the Bloomberg tech Blog reports that Apple is to make some form of presentation at the Black Hat Conference which is to be held in Las Vegas next week: "Dallas De Atley, manager of Apple's platform security team, is scheduled to give a presentation on key security technologies within iOS"

Malware is also becoming more of a problem and a new threat has been found called OSX/Crisis and it affects Lion and Snow Leopard (another reason to upgrade to Mountain Lion today?) Topher Kessler reports. He writes, "while it does not require a password to install, if a password is provided then the mode of infection changes." Although it exists according to Intego, it has bot been found in the wild, which makes me ask how did Intego find it, and what do they get out of it? The answer there is that it was on the VirusTotal website, a site used to share examples by security companies. Intego's own examination and analysis is thorough and may be of interest to some.

It took a while for Apple to finally get the iPad on sale in China but it finally happened last week (20th) in an orderly fashion too. What opened the doors to selling the iPad in China was the settlement that Apple agreed to with Proview a bankrupt company who insisted they owned the iPad name. They did, but there was disagreement over whether Apple had legally bought it: the courts there said, No. So $60 million passed hands (What's in a name? A rose would smell as sweet. . .") and all was settled. Not quite as the lawyers want their cut and its own lawyers are now suing Proview, Steven Musil (and scores of other amused commentators) reported for their 4% although Proview looks as if it is refusing to pay: "not currently under "normal operations" and should not be bound by the terms of its obligation to Grandall." Did I hear a snigger from Infinity Loop?

Last week I linked to some of the artwork that was displayed outside an Apple store under construction in Spain. This week we are told by ifoAppleStore where there are some more images, that the particular store is scheduled to open on 28 July: another part of Apple's interesting week.

There was another final, final reminder from Apple this week about iWork. An email sent out on Monday told me that 31 July (less than a week to go) will see the servers closed down and any files not recovered by then will be lost forever.

I reported earlier in the week that one of my essential applications, Graphic Converter, had been updated to version 8.2., while Agen G. N. Schmitz reports on TidBits that another long-time valuable utility, Carbon Copy Cloner (CCC) has been upped to version 3.5 and is Mountain Lion ready. Look out for a number of other 3rd party (and Apple) updates soon because of the new OS X. As an additional piece of information CCC which has been donationware for years is now to cost $39.95 Chris Welch reports, although there is an introductory offer of $29.95.

Half and Half

In Australia, a judge in a case between Apple and Samsung has almost bettered the British judge who recently said of course Samsung did not copy as the device is just not cool enough. I expect he put the patch over the bad eye later. Now a judge Down Under has said that the case there is "ridiculous" according to a report on Electronista. She feels that mediation may be a better course, but the results from the US may give us some doubt about that.

The tables turned a little in Germany this week where Apple has not had much success of late, when a judge in Dusseldorf did agree that the Samsing thing infringed on Apple patents and gave Apple permission to push for a European Union-wide ban Caleb Cox reports on The Register. That of course was for the Galaxy Tab 7.7 while Apple lost the 10.1N appeal, Jeff Blagdon reports on The Verge.

Also in some disagreement, this time with the DOJ are a number of booksellers and authors who according to Greg Sandoval complain that the DOJ have it all wrong and the real villain of the peace is Amazon: Apple was just providing a reasonable alternative, and one that existed already in some forms. Some of the arguments here are worth reading to put this in a better perpective.

Other Matters

While Rupert Murdoch jumped ship last weekend, others are still being dealt with belatedly by the legal processes that had been reluctant earlier to do anything. Now former golden girl Rebekah Brooks who had been one of Murdoch's favourite editors, and Andy Coulson who jumped from News International to the UK prime minister's office then into a series of frying pans (metaphorically speaking) have both been charged with conspiracy to hack that murdered child's phone and 600 others according to Martin Hickman (among many others). That could be a whole lot of jail time.

Others are also likely to be charged and I wonder if one might be the boss, only with him resigning directorships, he might be able to escape arrest. Mind you, with the number of extraditions from the UK the US has insisted on in recent years, it might be in the public interest to use that for US to UK cases too. Ah, I see that Ian Burrell also has the same idea about the missing Murdoch in his article about almost the whole New International hierarchy facing the music. At last.

Local Items

And please remember backup your essential data before trying the Mountain Lion installation

Graham K. Rogers teaches at the Faculty of Engineering, Mahidol University in Thailand. He wrote in the Bangkok Post, Database supplement on IT subjects. For the last seven years of Database he wrote a column on Apple and Macs.