Rebecca Day

Worldwide smartphone sales were flat in Q1, inching ahead by 600,000 over the year-ago quarter to 334.9 million, said IDC’s quarterly mobile phone tracker Wednesday. IDC attributed the smallest year-over-year quarterly growth rate on record to saturation in developed markets and year-over-year declines from market leaders Samsung and Apple.

Apple shares closed 6.3 percent lower Wednesday at $97.82 after a disappointing Q2 FY 2016 earnings report and Q3 guidance for a second consecutive quarterly revenue decline. Apple had predicted an earnings decline for Q2 (see 1601270033) -- its first quarterly revenue drop since Q1 2003, and the $50.6 billion Q2 revenue was at the low end of guidance, a 13 percent drop year over year. Sales of the iPhone fell 16 percent to 51.2 million over the year-ago quarter, Apple said. Apple’s revenue guidance for Q3 is $41 billion-$43 billion, down from year-ago revenue of $49.6 billion, said Chief Financial Officer Luca Maestri. He cited a planned channel inventory reduction worth more than $2 billion -- vs. $800 million a year ago -- that will hit higher-end models. The “tough compare” is also due to a strong year-ago quarter and macroeconomic conditions, he said. Apple CEO Tim Cook outlined the three buyer segments for the iPhone: Customers who upgrade from previous iPhones, switchers from Android and other operating systems, and first-time smartphone buyers. During the first half of this fiscal year, the upgrade rate for the iPhone 6s has been “a lot lower” than that of the iPhone 6 but slightly higher than that of the 5s two years ago, Cook said. Apple continues to see a “very high level” of switchers, adding more in first half FY 2016 than any other six-month period, he said. For first-time buyers, he focused on emerging markets including India, where iPhone sales were up 56 percent in Q2 vs. the year-ago quarter. In Q&A, Cook commented on the “mature” smartphone market, saying the company is optimistic about the opportunity for attracting new customers with the more affordable iPhone SE, and about new products in the pipeline. The SE is attracting customers who want the latest technology in a compact package, and that group is larger than Apple anticipated, causing supply constraints. The SE is also drawing consumers who “aspire to own an iPhone but couldn't quite stretch to the entry price of the iPhone,” said Cook.

The global noncellular wireless connectivity market will reach more than 10 billion annual integrated circuit (IC) shipments by 2021, said ABI Research Tuesday. Smartphones will continue to be the largest market, but Bluetooth mesh networking, emerging Wi-Fi protocols, enhancements to 802.15.4 such as ZigBee 3.0 and Thread -- plus the growing trend to develop multiprotocol connectivity SoCs -- will create new opportunities in IoT vertical markets, said ABI.

Consumer IoT awaits its “iPod moment,” said Jonathan Gaw, IDC research manager-connected home, on a webcast on findings of a March consumer survey. Most consumer IoT devices add connectivity and apps to existing home devices that do “little more than save users the bother of a few steps to click a switch,” he said. IDC’s survey of 1,517 U.S. adults with broadband at home indicated a flattening of interest in smart home adoption. Consumers lack understanding of what networked technology can do, said Gaw. Three-quarters of U.S. broadband households have the devices and services in place that would enable video streaming from Internet to the TV, and 28 percent do it. Just over 30 percent of consumers said they were highly interested in streaming online videos to TV but weren’t doing it, even though a majority of those owned the devices and paid for subscriptions that would enable them to do so. Nine of 10 owned a home network -- what Gaw called the “critical part of home IoT readiness." Respondents expressed concerns about privacy and security, said Gaw, though respondents hadn’t done much to protect their data.

Acer unveiled a broad 2016 lineup of devices in New York as CEO Jason Chen ushered in the age of “Beingware,” part of the company’s transformation to next-generation electronics, in what Chen dubbed the “post-smartphone” era. Products include a cycling computer that will upload video clips, social media via app, a fitness tracker with double the battery life of previous trackers, and the $250 5.5-inch Liquid Zest Plus smartphone. The phone's 5000 mAh battery is said to last as long as two days. The Chromebook 15, Acer’s first under Google’s Chrome for Work initiative, is the first notebook PC to use customizable Vibrant Gorilla Glass, which Corning announced last week. Acer bowed what it called a portable desktop gaming PC that can handle virtual reality gaming. Acer is “ready for VR,” Chen said, saying the company is the only PC maker to support four VR standards.

Balancing opportunities for in-vehicle digital advertising with driver distraction and safety took the spotlight during a webinar moderated Wednesday by TU-Automotive Project Director Jack Palmer. The vehicle is a key target for advertisers finding it increasingly difficult to get their message to consumers, panelists said. Palmer cited Harvard Health Watch data saying U.S. drivers average 101 minutes per day of drive time, making cars an “obvious” revenue opportunity for targeted digital advertising.

Promoting “the next generation of TV” and the color boost from high dynamic range, Netflix Chief Product Officer Neil Hunt said in a blog post Tuesday the company is adding more than 100 hours of HDR programming to the streaming platform by August, and another 50-plus hours by year-end. HDR content will be available in both Dolby Vision and open HDR formats, Hunt said.

Addressing industry concern Wednesday over the safe operation of USB Type-C charging products, which led Amazon earlier this month to restrict noncertified products from its site (see 1603310055), the USB 3.0 Promoter Group announced an authentication spec for the latest generation of USB Type-C chargers and devices. The USB Type-C specification defines cryptographic-based authentication for USB Type-C chargers and devices so host systems can confirm the authenticity of a USB device or USB charger, covering descriptors, capabilities and certification status, the group said.

Cybersecurity led the issues at the CTA Technology & Standards Spring Forum last week in San Diego. New CTA standards projects included battery backup requirements for VoIP systems, a list of deprecated cybersecurity methods, and an update to CTA Technical Report #12, Securing Connected Devices for Consumers in the Home, CTA said. Sponsors of the event, which drew 130 attendees, were the Custom Electronic Design & Installation Association, Kavi and the Personal Connected Health Alliance.

Millions of Netflix subscribers were tipped off last week to a $2 per month bump in standard streaming subscriptions on tap for next month, as stories swirled around media sites and social media about the hike to $9.99 per month. Subscribers didn’t get an official word from Netflix, and a few were miffed at the streaming video service for not sending notice directly, although the increase shouldn’t be a surprise. Netflix emailed subscribers in May 2014 (see 1405120065) alerting them they were grandfathered in at $7.99 but would face a price hike in two years. At the time, the new subscriber rate was $8.99 per month, which went up to $9.99 last October. Wedbush Securities anticipates some falloff due to the increase, analyst Michael Pachter emailed us. “Most subscribers use the service and perceive sufficient value to remain subscribers after the price increase.” Wedbush estimates 600,000-750,000 subscribers don't use the service “but still pay out of inertia.” It expects those subscribers to “gradually defect when the price goes up, particularly if the company notifies them of the increase.” Pachter said new subscribers have paid $9.99 since October, “and it appears to be dampening new subscriber growth already.” Business Insider reported that Netflix will raise prices on roughly 17 million of its standard accounts next month and said “most people have no idea.” It cited a JPMorgan survey saying 80 percent of Netflix subscribers grandfathered in at $7.99 didn’t know the increase was to go into effect in May. A Netflix spokeswoman told us Friday that grandfathered subscribers will have the choice of continuing at $7.99 on the standard-definition plan or continuing on HD at $9.99 per month. The two-year holding price was a "thank you" to members, she said. Later this month, members in the U.K. will begin to be "ungrandfathered," she said, and beginning in May, the price hike is rolling out elsewhere based on member billing periods. Members affected by the price increase "will be clearly notified by email and within the service, so that they have time to decide which plan/price point works best for them," she said.