Year: 2019

Apple’s Q1 earnings are in, and things don’t look too rosy for the iPhone. Revenue for the handset has declined 15 percent year over year for the quarter. It’s a pretty hefty drop for a device that’s been flying high for so long, but you can’t say Apple didn’t warn us. Earlier this month, Tim Cook noted that the company was lowering its guidance, thanks in no small part to smartphone figures.

In its earlier report, the company put much of the blame at the feet of the Chinese market. There are a lot of factors on that front, including slowing economic growth in the world’s largest smartphone market, and a general trend toward prolonged upgrade cycles, as users are holding onto devices for longer. That’s been a large part of the reason that smartphone sales are down nearly across the board, marking the first contraction of the category since analysts began tracking it. 

Last year’s arrival of the XS marked a less dramatic refresh than the iPhone X, but Apple also introduced a new budget handset with the XR. That device has reportedly been a disappointment, though Apple has repeatedly noted that the device has been the best selling iPhone since its October launch.

Notably, those numbers are off-set somewhat by growth in other categories. The iPad grew 17 percent on the strength of new models, while Mac/Wearables and Home/Accessories each grew, at 9 and 33 percent, respectively. Services, meanwhile, saw the biggest uptick at 19 percent to $10.9 — an all-time high for the category.

“While it was disappointing to miss our revenue guidance, we manage Apple for the long term, and this quarter’s results demonstrate that the underlying strength of our business runs deep and wide,” Cook said in a statement. “Our active installed base of devices reached an all-time high of 1.4 billion in the first quarter, growing in each of our geographic segments. That’s a great testament to the satisfaction and loyalty of our customers, and it’s driving our Services business to new records thanks to our large and fast-growing ecosystem.”

Apple met its already-lowered expectations for its first earnings report of 2019, but the outlook isn’t too rosy as the gadget maker sees a major year-over-year decline in its cash cow iPhone business.

Apple reported revenue of $84.3 billion with $4.22 in basic earnings per share, falling largely in line with Wall Street expectations of $84 billion with an EPS of $4.17. The company’s revenue shrank 5 percent year-over-year from $88.3 billion one year ago. Apple shares popped 2 percent after-hours.

Apple set guidance for Q2 revenue between $55 billion and $59 billion at the low-end of analysts expectations of $58.8 billion.

While Apple’s revenue arrived closely in line with expectations, the number is a far cry from the guidance Apple offered in November. Earlier this month, Apple CEO Tim Cook issued a letter to investors, slashing Q1 guidance from a range of between $89 billion and $93 billion to $84 billion. Apple’s stock price cratered nearly 10 percent when Cook’s letter was released, a drop that represented the worst single-day plunge for the company in more than five years. Apple’s wild stock fluctuations have been a cause for a lot of uneasiness amongst the broader market.

A big focus in this release was on Apple’s revenues in emerging markets. While shifts among revenues in most regions were moderate, the company’s revenues in Greater China shrank nearly 27 percent to $13.2 billion compared to $18 billion in the quarter one year ago.

This is notably the first quarter that Apple has not included unit sales for its product lines including iPhone, iPad and Mac. iPhone revenues were down 15 percent year-over-year with $52 billion in revenue in Q1 2019 compared to $61.1 billion in Q1 2018. It wasn’t all bad news, the company saw gains across each of its other product divisions with Services up 19 percent, Mac up 9 percent, iPad up 17 percent, and the newly renamed “Wearables, Home and Accessories” vertical up 33 percent.

The company highlighted the gross margins of its Services business, operating at 62.8 percent.

“While it was disappointing to miss our revenue guidance, we manage Apple for the long term, and this quarter’s results demonstrate that the underlying strength of our business runs deep and wide,” Apple CEO Tim Cook said in a statement.

We’ll have more details from the earnings call.

Updating

As eBay gets increasing pressure from activist shareholders like Elliott Management and Starboard to reform its business and turn it into a high-growth tech stock by overhauling its main Marketplace, refreshing management and rethinking its other businesses like StubHub and classifieds, the e-commerce platform delivered a set of Q4 results that were solid if a little lacklustre.

The company today said that for the quarter that ended December 31, it posted revenues of $2.9 billion with non-GAAP net income of $670 million or $0.71 per share. On both counts, it just beat analyst expectations, which were respectively $2.87 billion on EPS of $0.68. But as a sign of the flagging business that activist shareholders have been highlighting, gross merchandise volumes were $24.6 billion, up just one percent on a year ago, even as revenues rose six percent.

In what might be a small concession to those requests for reform, eBay said it repurchased approximately $1.5 billion of its common stock in the quarter, and that it plans to “return approximately $7 billion to shareholders through dividends and repurchases over the next two years, with approximately $5.5 billion to be returned in 2019.”

It also provided some guidance for the full year: net revenues will be between $10.7 billion and $10.9 billion, growing between just 1 percent and 3 percent, with GAAP earnings per diluted share from continuing operations in the range of $1.83 – $1.93 and non-GAAP earnings per diluted share from continuing operations in the range of $2.62 – $2.68.

“We delivered record earnings for the fourth quarter and full year 2018,” said Devin Wenig, President and CEO of eBay Inc., in a statement. “In 2019, our focus will be on further improvements to the eBay user experience, while pursuing significant long-term growth opportunities in advertising and payments. We are confident in the strength of our business and future growth prospects, as demonstrated by our decision to institute eBay’s first-ever dividend and increase our share repurchase program.”

Active buyers are up four percent to 179 million, with the Marketplace, its core platform, accountung for $2.3 billion of its revenues, and $23.2 billion of GMV. StubHub, its ticketing business, accounted for $314 million of sales, while classifieds brought in $263 million of revenues.

The company is often compared against Amazon, which started out of the gate around the same time as eBay, but has gone on to diversify into a vast array of business areas and has truly changed the face of commerce as we know it. eBay hasn’t quite had that impact, and arguably its greatest acquisition, of PayPal, was spun off several years ago into its own business, which is thriving (it will report results later this week).

eBay has been trying to diversify its own business in the meantime, in areas such as promoted listings and other services to expand how merchants and buyers can spend on its platform. It said that revenues from promoted listings are up 150 percent across 200 million listings from 600,000 active sellers.

It’s also trying to move into more services around its sales, for example around installation and authentication services for higher-end items such as jewellery.

It also provided some guidance on Q1, where it expects revenues of between $2.55 billion and $2.60 billion, which will be representative of flat to two percent growth on a year ago — one more sign of the kind of sluggish growth that Elliott is pinpointing in its reform plan. Non-GAAP earnings per diluted share from continuing operations in the range of $0.62 – $0.64.

I’m listening to the earnings call and will update this post with any additional points that are notable.

In an effort to bolster its public credibility in the wake of a very rough year, Facebook is bringing a fierce former critic into the fold.

Next month, longtime Electronic Frontier Foundation (EFF) counsel Nate Cardozo will join WhatsApp, Facebook’s encrypted chat app. Cardozo most recently held the position of Senior Information Security Counsel with the EFF where he worked closely with the organization on cybersecurity policy. As his bio there reads, Cardozo is “an expert in technology law and civil liberties” and already works with private companies on privacy policies that protect user rights.

Cardozo announced the move in a post to Facebook on Tuesday.

“Personal news!

After six and a half years at the Electronic Frontier Foundation (EFF), I’ll be leaving at the end of next week. I’m incredibly sad to be leaving such a great organization and I’ll miss my colleagues with all my heart.

Where to? Starting 2/19, I’ll be the Privacy Policy Manager for WhatsApp!! I could NOT be more excited.

If you know me at all, you’ll know this isn’t a move I’d make lightly. After the privacy beating Facebook’s taken over the last year, I was skeptical too. But the privacy team I’ll be joining knows me well, and knows exactly how I feel about tech policy, privacy, and encrypted messaging. And that’s who they want at managing privacy at WhatsApp. I couldn’t pass up that opportunity.

It’s going to be an enormous challenge professionally but I’m ready for it.”

Though it also does more cooperative work with major tech companies, the EFF frequently finds itself on the opposite side of the ring. Cardozo’s own background reflects that adversarial relationship, and he certainly hasn’t minced words about his new employer. In a 2015 op-ed, Cardozo hit the nail on the head about Facebook’s lucrative habit of tracking its users’ every move.

“It’s creepy, but maybe you don’t care enough about a faceless corporation’s data mining to go out of your way to protect your privacy, and anyway you don’t have anything to hide,” Cardozo wrote. “Facebook counts on that; its business model depends on our collective confusion and apathy about privacy.”

Personally, we’d sleep ever so slightly better at night knowing that the guy who wrote the sentence “If a business model depends on deception and apathy, it deserves to fail” is trying a turn on the inside.

The cognitive dissonance of a well-regarded privacy advocate moving over to Facebook is notable, though not without precedent. For all its privacy blunders, Facebook does own the most popular digital messaging app in most countries around the world — an app it opts to keep end-to-end encrypted by default (so far, anyway).

As far as WhatsApp goes, Cardozo’s hiring comes at a critical time: Last week, The New York Times reported Facebook’s intention to integrate WhatsApp, Instagram and Facebook Messenger. The massive change has some security and privacy-minded people happy (more end-to-end encryption!) and plenty more worried about what else the integration will mean.

Leading into the change, if it materializes, Facebook would be smart to hire as many prominent voices in online privacy as it can attract. Public criticism of the company hasn’t waned exactly, but hiring critics is a straightforward way to build trust in the meantime. For a company not known for public dissent and open dialogue, Facebook’s critics may prove a valuable asset if they can be recruited for a tour of duty behind the big blue line.

Update: Cardozo isn’t alone in making the switch from privacy advocacy to Facebook. The company has also hired Robyn Greene from the Open Technology Institute. As she announced in a tweet, Greene will focus on law enforcement access and data protection in her new role with Facebook.

A server security lapse has exposed a massive database of customer information belonging to Rubrik, an IT security and cloud data management giant.

The company pulled the server offline Tuesday within an hour of TechCrunch alerting the company, after the data was found by security researcher Oliver Hough. The exposed server wasn’t protected with a password, allowing access to anyone who knew where to find the server.

The database itself, running on a hosted Amazon Elasticsearch server, was storing tens of gigabytes of data, including customer names, contact information, and case work for each corporate customer.

It’s believed the data goes back to October 2018, according to timestamps found inside.

A portion of the database was dedicated to all of the company’s corporate clients, allowing its customers to interact with Rubrik staff with issues or complaints. This included the contents emails that had been ingested into the system from customers — including, in many cases, their email signature with names, job titles and phone numbers. From a cursory review, we also found some emails included sensitive information about that customers’ setup and configuration.

Each company record also includes descriptive profile information, such as if it’s a Global 2000 or a Fortune 500 ranked company to determine the importance of the account, as well as the go-to person’s name and phone number.

It’s somewhat ironic, given that the IT unicorn, valued at $3.3 billion, recently announced that it’s expanding into security and compliance services.

Ribrik has thousands of major clients, and publicizes big names such as the Scottish Government, the U.S. Department of Defense, and CarePoint Health, among others, on its website.

But the client database disclosed what appears to be the company’s entire roster of corporate customers, including Deloitte, Shell, Amalgamated Bank, the U.K. National Health Service, and Homeland Security and other federal government departments.

In remarks, Rubrik said it was investigating.

“While building a new solution for customer support, a sandbox environment containing a subset of our customer corporate contact information and support interaction data was potentially accessible for a brief period of time,” said a spokesperson for Rubrik. “We rectified this issue immediately.”

“We also confirmed that no customer-owned data was exposed,” the spokesperson added. The company also said that, “other than the security researcher who discovered this issue, no one has accessed this environment,” without providing evidence for that claim.

It’s not known who might have accessed it beyond the security researcher, but the exposed server was indexed on Shodan, a search engine for exposed devices and databases, making it easily discoverable and accessible.

“We have traced the cause to human error, a default access setting was not changed per our standard practice. We have enacted changes to our processes to prevent this from happening again. Privacy and security is our top concern and we sincerely apologize for the mistake,” the spokesperson said.

Rubrik didn’t say if it would notify its customers or state regulators, per data breach notification laws.

Given that European businesses are included in the exposed data, Rubrik could face financial penalties of up to four percent of its global annual revenue if found to be in breach of the EU’s recently implemented GDPR data protection rules.

Rubrik’s data exposure came just months after data management and backup rival Veeam exposed millions of email addresses in its own data exposure.

Mobility is changing and the world with it. Technology is upending century-old establishments, creating new lifestyles and routines. Regions across the globe are trying to replicate Silicon Valley, but all the while Silicon Valley has been replicating a different innovative American city: Detroit. Countless companies have sprung up around the Bay Area focused on the challenges around the industry. And the auto industry noticed, opening and expanding facilities on the West Coast. With its abundance of engineers and resources, Silicon Valley is uniquely suited to lead the mobility disruption.

TechCrunch is excited to announce a one-day event on July 10, 2019 in San Jose, CA that’s centered around future of mobility and transportation – TC Sessions: Mobility.

TC Sessions: Mobility will present a day of programming with the best founders, investors, and technologists who are hell-bent on inventing a future Henry Ford could have never imagined. These thinkers know that before autonomous vehicles are deployed as service, revolutionaries must forge rivers of regulation, consumer sentiment, embedded business thinking, and, perhaps most importantly, solutions to profound technological challenges. And that doesn’t include forging the relationships necessary outside of the industry, in fields such as blockchain, AI, satellite navigation and mobile networks.

The auto establishment and up-and-comers alike face similar questions. What’s the best way for mobility companies to navigation regulations and government bodies? How does a company scale manufacturing from MVP to thousands a week? And of course, every company developing autonomous vehicles need to examine the trolley problem — the ethical conundrum around who should autonomous vehicles hit in an accident, when unavoidable.

TC Sessions: Mobility is the latest in TechCrunch’s growing series of Sessions events that feature a deep dive into a specific topic. In the past, TechCrunch hosted similar events on robotics, the blockchain, and social justice. Through intimate interviews and in-depth discussions, attendees of TC Session events hear from the top individuals and companies pushing their respective field forward.

Through the coming weeks, TechCrunch will announce the participants of TechCrunch Mobility’s fireside chats, panels, and workshops.

Tickets
Early Bird Tickets are available now for $195 – that’s $100 savings before prices go up. Students can book a ticket for just $45 here.

Speakers/Demo Applications
We’re always looking for speakers/demos for our events. Apply here.

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As Slack reportedly readies itself for an entry to the public markets, the high-flying startup is ready to brag a little bit about what it has accomplished in the past year.

In a blog post, the company shared that it now has 10 million daily active users on the platform, up from 8 million DAUs in May. It’s not just tech companies in Silicon Valley using the service either, the company broke down the number a bit, clarifying that more than half of the DAUs are from outside the United States.

User numbers via Slack

We didn’t get an update on the number of paid users — the company also shared in May that it had 3 million paying users — but the company did say that the number of subscribers has grown to 85,000, a 50 percent over the past year. The company’s major challenge of the past couple years has been bringing on more big companies to its platform, it seems they’ve definitely had some success, detailing in the blog that 65 of the Fortune 100 companies were slacking away.

Even with its weird new logo, the company seems to be growing at a fairly consistent pace from a user standpoint. We got a look at how things were looking on the financial side via a recent report in The Information, which forecast its 2019 revenue at $640 million and detailed that the company had over $900 million in cash on its balance sheet.

The company was last valued at more than $7 billion.

DrLupo, one of the biggest names and most recognizable voices in Fortnite streaming, has closed a sponsorship deal with State Farm.

Bejanmin “DrLupo” Lupo has nearly 3 million Twitch followers and often plays with the world’s most popular streamer, Tyler “Ninja” Blevins. Beloved for his talent and his personality alike, Lupo has also worked as a caster for various Fortnite tournaments and events. Last year, DrLupo held a charity stream for St. Jude’s Research Hospital and raised $1.3 million.

State Farm Marketing Director Ed Gold had this to say:

DrLupo is one of the world’s most followed Fortnite streamers. His philanthropic efforts and massive fanbase make him an ideal partner as we continue to amplify our esports programming and efforts with the gaming community.

This marks State Farm’s first sponsorship of an esports athlete. The sponsorship will include support of the stream through branded replays, live in-stream stunts and product integration (here’s me trying to imagine integrating insurance products into a video game stream), event-based remote streams, sponsored giveaways, and social content.

DrLupo announced the partnership on his stream, saying that he and his family have worked with State Farm for a long time and that he’s very thankful for the opportunity.

Sponsorships are certainly not new in the esports world — Newzoo reported that some $359 million would be spent in 2018 on esports sponsorships. That said, this does mark a grown-up shift in an industry whose sponsors have traditionally included energy drink brands, Taco Bell and Totinos Pizza Rolls.

Part of that has to do with the fact that both the viewership and the popular content creators, particularly in Fortnite, have grown up. DrLupo is married with a child, and his family frequently appears on his stream. If his viewers aren’t already age appropriate for insurance products, they soon will be.

But more importantly, the relationship DrLupo (or any other popular streamer) has with his audience is very different from the one Sofia Vergara has with Modern Family fans/Head & Shoulders customers. Streamers spend anywhere from six to twelve hours a day with their audience, often simply shooting the shit. Moreover, viewers can interact through the chat, having actual conversations with the creator.

The potential for brands to harness and translate that influence through esports sponsorships could be quite powerful, but streamers will have to remain diligent to stay authentic considering their audience is a generation that has become entirely numb to and/or incredulous toward advertising.

In its clearest move yet to woo the healthcare industry, Apple has collaborated with the health insurance provider Aetna to launch a new app called Attain that uses Apple Watch data to provide a window into users’ health.

The launch stems from a 2016 collaboration between the insurer and Apple which saw 90% of participants in a study reported a health benefit from using their Apple Watch.

Both Apple and Google (through its parent company, Alphabet) have been making headway into personalized health using wearables. Earlier this month, Alphabet’s Verily business unit had its wearable device approved by the FDA for tracking heart health. Apple had received its approval from the FDA in September 2018 when it launched a new version of the Apple Watch.

“We believe that people should be able to play a more active role in managing their well-being. Every day, we receive emails and letters from people all over the world who have found great benefit by incorporating Apple Watch into their lives and daily routines,” said Jeff Williams, Apple’s COO. “As we learn over time, the goal is to make more customized recommendations that will help members accomplish their goals and live healthier lives.”

Healthcare has been on Apple’s radar since at least 2016, when Tim Cook targeted it as an area the company was looking to pursue in an interview with Fast Company.

“We’ve gotten into the health arena and we started looking at wellness, that took us to pulling a string to thinking about research, pulling that string a little further took us to some patient-care stuff, and that pulled a string that’s taking us into some other stuff,” [Cook said at the time]. “When you look at most of the solutions, whether it’s devices, or things coming up out of Big Pharma, first and foremost, they are done to get the reimbursement [from an insurance provider]. Not thinking about what helps the patient. So if you don’t care about reimbursement, which we have the privilege of doing, that may even make the smartphone market look small.”

The new Attain app consists of four pillars divided into achieving activity goals; sustaining everyday health, personalized health notifications; and rewards for achievements.

The app determines personalized activity goals based on age, sex and weight, and includes a more varied array of potential activities than just steps taken — using the Apple Watch to measure swimming and yoga as potential activities.

Aetna’s app will also offer challenges where participants earn points for taking actions like getting more sleep, engaging in meditation activities and monitoring and improving their diet.

Attain will also recommend health actions based on the healthcare reports culled from the health records that Aetna’s patient populations shares through the app. Created alongside physicians the app uses doctor recommended clinical guidelines and will incorporate prompts for healthy actions like getting flu shots and vaccinations, refill medication prescriptions when they’re scheduled to run out; suggest visits to primary care physicians if checkups have lagged and prompt about lower-cost options for lab tests.

Finally, users can earn rewards — like points off the cost of their Apple Watch or gift cards to national stores. The app is available to Aetna members who have an iPhone 5s or later and an Apple Watch Series 1 or later.

“From fitness enthusiasts, to casual gym-goers, to parents who get all their exercise by keeping up with their kids – we designed Attain for everyone,” said Alan Lotvin, M.D., Executive Vice President of Transformation for CVS Health, in a statement. “We understand that you don’t need to be a personal trainer or work out several hours a day to be healthier. We’re designing Attain to be personalized and clinically relevant to where each individual is in their health journey. This is an ambitious challenge, and we will adapt and improve over time to create the best experience for our members.”

After users have signed up with the Attain app they can share data and health history with Apple, giving both companies access to data that can be used later for potential clinical trials or to make predictions abut population health… while the companies are pitching it as a way to get more personalized suggestions from the app.

According to a statement from the company all the health data is encrypted on the device, in transit and on Apple and Aetna’s servers where it is stored in a HIPAA compliant way.

The companies also say that the data won’t be used for underwriting, premium or coverage decisions.

In the future you could see Apple and Aetna collaborating to make Apple Watches an employee benefit — like computers — to track employee health and lower healthcare costs. It’d be a win-win for both.

But as Apple pushes deeper into collecting health records and data the company is setting a high bar for its security protocols at a time when the company is still cleaning up the mess from a bug that left Facetime users exposed.