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Apple partly blames weak iPhone sales on $30 battery replacement offer

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tim cookAP Images / J. Scott Applewhite
  • In a surprise move on Wednesday, Apple issued a press release to announce it was lowering is revenue guidance for its first fiscal quarter, which ended in December.
  • Apple previously told investors to expect revenue between $89 billion and $93 billion. Apple revised that estimate down to $84 billion.
  • In a letter to investors, Apple CEO Tim Cook offered more details on why iPhone sales were weak during the holiday quarter — and one of the reasons he cited was how customers took advantage of “significantly reduced pricing for iPhone battery replacements.”
  • In December 2017, after it had been caught quietly throttling the performance of older iPhones, Apple issued an open letter to customers announcing it would cut the price of out-of-warranty iPhone battery replacements from $79 to $29 “for anyone with an iPhone 6 or later,” an offer that ended on December 31, 2018.

Apple issued a press release on Wednesday to announce it would be lowering revenue guidance for its first fiscal quarter, which ended in December.

Apple stock was halted in after-hours trading just minutes prior to the announcement. Apple CEO Tim Cook wrote a letter to investors, which was issued alongside the press release, and he also spoke to CNBC Wednesday afternoon to answer questions about the quarter and revised down guidance.

Cook said most of the blame falls squarely on iPhone sales.

“Lower than anticipated iPhone revenue, primarily in Greater China, accounts for all of our revenue shortfall to our guidance and for much more than our entire year-over-year revenue decline,” Cook said in the letter.

“In fact, categories outside of iPhone (Services, Mac, iPad, Wearables/Home/Accessories) combined to grow almost 19 percent year-over-year.”

The letter offers many possible explanations for why iPhone sales were so weak during the holiday quarter: Cook mentions broader challenges like selling expensive phones in emerging markets, changes to the strength of the dollar, and notably, a relative lack of people who wanted to upgrade their iPhone.

But Cook also listed this among the factors: “some customers taking advantage of significantly reduced pricing for iPhone battery replacements.”

The iPhone throttling controversy

iphone 6s plus backLast year, Apple instituted a program to replace out-of-warranty batteries for the iPhone 6 or later for just $29 — a $50 price drop from the usual $79 cost.Antonio Villas-Boas

Last year, Apple cut the price of an out-of-warranty iPhone battery replacement from $79 to $29 “for anyone with an iPhone 6 or later whose battery needs to be replaced, available worldwide through December 2018.”

The reason for this year-long offer, though, was because Apple was caught intentionally slowing down iPhones with older batteries.

In December 2017, new data from Geekbench backed up some long-held theories that replacing the battery in an older iPhone could significantly improve its performance. This suggested that a software limitation was holding back older devices to a slower processor speed. And just a few days after Geekbench’s report was published, Apple admitted that it was, in fact, throttling the performance of older iPhones to prevent them from shutting down unexpectedly.

While Apple believed it was in the right place to intentionally lower iPhone performance to save on battery life, the company was facing a good deal of consumer outrage at the time, so it issued an offer at the end of its letter to customers: For one year, until December 31, 2018, customers could go into an Apple store and replace the batteries in their iPhones for just $30.

Apparently, enough people took advantage of that “significantly reduced pricing” on iPhone battery replacements to make a dent to Apple’s bottom line in the holiday quarter.

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More groups join in support of women in STEM program at Carleton

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OTTAWA — Major companies and government partners are lending their support to Carleton University’s newly established Women in Engineering and Information Technology Program.

The list of supporters includes Mississauga-based construction company EllisDon.

The latest to announce their support for the program also include BlackBerry QNX, CIRA (Canadian Internet Registration Authority), Ericsson, Nokia, Solace, Trend Micro, the Canadian Nuclear Safety Commission, CGI, Gastops, Leonardo DRS, Lockheed Martin Canada, Amdocs and Ross.

The program is officially set to launch this September.

It is being led by Carleton’s Faculty of Engineering and Design with the goal of establishing meaningful partnerships in support of women in STEM.  

The program will host events for women students to build relationships with industry and government partners, create mentorship opportunities, as well as establish a special fund to support allies at Carleton in meeting equity, diversity and inclusion goals.

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VR tech to revolutionize commercial driver training

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Serious Labs seems to have found a way from tragedy to triumph? The Edmonton-based firm designs and manufactures virtual reality simulators to standardize training programs for operators of heavy equipment such as aerial lifts, cranes, forklifts, and commercial trucks. These simulators enable operators to acquire and practice operational skills for the job safety and efficiency in a risk-free virtual environment so they can work more safely and efficiently.

The 2018 Humboldt bus catastrophe sent shock waves across the industry. The tragedy highlighted the need for standardized commercial driver training and testing. It also contributed to the acceleration of the federal government implementing a Mandatory Entry-Level Training (MELT) program for Class 1 & 2 drivers currently being adopted across Canada. MELT is a much more rigorous standard that promotes safety and in-depth practice for new drivers.

Enter Serious Labs. By proposing to harness the power of virtual reality (VR), Serious Labs has earned considerable funding to develop a VR commercial truck driving simulator.

The Government of Alberta has awarded $1 million, and Emissions Reduction Alberta (ERA) is contributing an additional $2 million for the simulator development. Commercial deployment is estimated to begin in 2024, with the simulator to be made available across Canada and the United States, and with the Alberta Motor Transport Association (AMTA) helping to provide simulator tests to certify that driver trainees have attained the appropriate standard. West Tech Report recently took the opportunity to chat with Serious Labs CEO, Jim Colvin, about the environmental and labour benefits of VR Driver Training, as well as the unique way that Colvin went from angel investor to CEO of the company.

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Next-Gen Tech Company Pops on New Cover Detection Test

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While the world comes out of the initial stages of the pandemic, COVID-19 will be continue to be a threat for some time to come. Companies, such as Zen Graphene, are working on ways to detect the virus and its variants and are on the forefronts of technology.

Nanotechnology firm ZEN Graphene Solutions Ltd. (TSX-Venture:ZEN) (OTCPK:ZENYF), is working to develop technology to help detect the COVID-19 virus and its variants. The firm signed an exclusive agreement with McMaster University to be the global commercializing partner for a newly developed aptamer-based, SARS-CoV-2 rapid detection technology.

This patent-pending technology uses clinical samples from patients and was funded by the Canadian Institutes of Health Research. The test is considered extremely accurate, scalable, saliva-based, affordable, and provides results in under 10 minutes.

Shares were trading up over 5% to $3.07 in early afternoon trade.

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