Apple Abandoning Headphone Jack Suddenly Makes Perfect Sense 

Where there’s smoke it is said there’s fire, and the rumours that Apple AAPL +0.00% will ditch the headphone jack (starting with the iPhone 7) refuse to go away. In fact having first started 18 months ago, this week the rumours have intensified as new leaks build a compelling case for a headphone jack-less Apple world… 

Both The Verge and AppleInsider note multiple sources at Japan’s Portable Audio Festival are reporting Apple is in discussions to add high resolution streaming audio to Apple Music in 2016. The reports claim Apple wants to implement 96kHz / 24-bit music streaming and is in deep discussions with headphone makers – and here’s the interesting part: the high res audio is specifically designed for use with headphones featuring Lightning connectors. 

And now you’re ahead of me: Apple would be in its familiar position of being able to take something away (the jack) by giving something more (high res audio). Apple loves this tactic. A focus on FireWire allowed it to dump the floppy disk and this year a focus on USB Type-C gave it (perhaps dubious) grounds to remove every other port type on the 12-inch MacBook. 


But why would Apple want to abandon the headphone jack? After all, as a variation of the original phono connector which has been around since 1878, it is the oldest common technology standard still in use today. The answer is simple: practicality and profit. 

On the practical side, Apple would be able to do away with the largest and deepest connector it uses. This would free up space for it to fit either in a larger battery or (given past attempts to cut the width of the receptor) allow it to make even thinner products. Furthermore it would open the doors to making a device like the iPhone 7 waterproof. 

Needless to say, this also comes at a time when Apple has stepped up its marketing of Lightning headphones. JBL, Philips and yes, Beats are all now selling Lightning headphones which are being heavily promoted in Apple stores. A great deal of marketing was also thrown behind the debut of Audeze’s $799.95 EL-8 Titanium Lightning headphones earlier this month. Clearly Lightning is being positioned as the high quality option. 

The (Deliberate?) Flaw 

Of course those serious about their audio will spot a flaw in this logic: the headphone jack is a standard which already supports high resolution audio. That’s true, but it also misses a crucial point: Apple’s business logic. 




Without the headphone jack Apple gains greater control over how audio is consumed on all its devices. Lightning is a proprietary standard, so it can charge all headphone makers licensing fees meanwhile it can champion the greater power delivery of Lightning (it can support integrated DACs, for example) and smart functionality (a digital connection could be programmed to offer specific functionality based on the time, location, etc that a pair of Lightning headphones is connected. Apple can avoid looking overly controlling as it can still point to Bluetooth. 

Ultimately if it ditches the headphone jack, Apple also gets a great new way to hold onto customers. Users will need to think twice about leaving the Mac OS/iOS ecosystem if it entails them investing in a new pair of premium headphones. Meanwhile I’m sure a simple 3.5mm to Lightning adaptor will welcome those with standard headphones into the Apple world. 

What about charging? Again this opens the door for Apple to offer another trade: wireless charging. Throw wireless charging (optional accessory alert), waterproofing, high res audio and thinness/battery benefits at consumers in exchange for them giving up the headphone jack and the majority may well come around to the idea. 

I have been sceptical that Apple would abandon the headphone jack as quickly as the iPhone 7, but as the puzzle comes together it makes ever more sense. Furthermore, even if the iPhone 7 ultimately escapes this port cull, I’ll bet it will only be a temporary reprieve. Apple has the headphone jack’s demise in its sights and very little escapes Cupertino crosshairs…

Apple Makes It Easier for Shareholders to Nominate Board Members

Apple announced a significant change in its corporate bylaws that will make it easier for shareholders to nominate candidates for Apple's board of directors. According to The Wall Street Journal, Apple filed amended bylaws with the Securities and Exchange Commission (SEC) giving shareholders "proxy access" for a limited number of board positions. 

Proxy access is a new trend in open governance, and The Journal said that Apple was one of the most prominent to adopt the policy. It allows shareholders to include nominations on a company's proxy statement, making it more likely those candidates can get voted on by other shareholders. 

Activist shareholders of all persuasions—predatory investors, social activists, and fans of a company—want proxy access because it gives them more opportunities to change the direction of a corporation. 

Usually, that is. In Apple's case, a shareholder or group of shareholders who have owned 3 percent or more of Apple's shares for three contiguous years to nominate up to 20 percent of Apple's directors. Apple has a remarkably small board for a company its size at just eight members, meaning that shareholders can nominate just one candidate. That leaves Apple's chosen nominees firmly in control of the company. 

James McRitchie, an activist investor who was pushing this change for Apple, said that he didn't want Apple to adopt proxy access because he expected to use it, but because Apple is a leader in the corporate world. 

"We need to get proxy access on the books where it’s really needed," Mr. McRitchie told The Journal. "One way to do that is to get it where it’s not needed and point to those companies." 

In general, Apple's shareholders greatly support the company's management, and for good reason. Apple's stock is well off its high, but it has still risen tremendously during Tim Cook's stewardship. That doesn't stop Carl Icahn from pushing for measures that he thinks will make him more money, and it won't stop activists on the left and right trying to push their agendas onto Apple. 

Having attended many $AAPL shareholder meetings and covering them extensively, I'd be shocked if a shareholder nomination not supported by Apple's management could get elected in today's environment. 

*In the interest of full disclosure, the author holds a tiny, almost insignificant share in AAPL stock that was not an influence in the creation of this article.

Apple Pay Coming to China Through Partnership With China UnionPay

Apple today announced a new partnership with China UnionPay, which will see Apple Pay expanding to China in early 2016. Through the partnership, China UnionPay cardholders will be able to use their bank cards with Apple Pay on the iPhone, Apple Watch, and iPad (within apps). 

apple pay wwdc 2015 
"Apple Pay has revolutionized the way millions of people pay every day with their iPhone, Apple Watch and iPad," said Eddy Cue, Apple's senior vice president of Internet Software and Services. "China is an extremely important market for Apple and with China UnionPay and support from 15 of China's leading banks, users will soon have a convenient, private and secure payment experience." 
Apple Pay in the country will work with the China UnionPay Quickpass, an existing contactless payment service. Customers will be able to hold an iPhone or Apple Watch near a UnionPay QuickPass-enabled point-of-sale terminal to make a payment at participating stores. 

Reaching a deal to bring Apple Pay to China has been a priority for Apple, given China's increasing importance to the company. A partnership between Apple and China UnionPay was first hinted at in February, when the first iOS 8.3 beta introduced support for the China UnionPay network. Talks reportedly stalled later that month, but in the weeks ahead of today's announcement, rumors pointing towards a deal picked up. 

A recent rumor has suggested Apple is aiming to launch Apple Pay in China before February 8, 2016, which marks

the start of Chinese New Year. According to Apple's press release, the service will be available following "relevant tests and certification" required by Chinese regulators. 

Apple Offers Proxy Access

Apple Inc. said it had made it easier for long-time shareholders, or a group of shareholders, to nominate a director for its board, joining a growing list of companies offering “proxy access.” 

In a securities filing, Apple said its board of directors had adopted amended bylaws Monday that allow a shareholder, or a group of up to 20 shareholders, holding 3% of its shares continuously for three years to include board nominees in the company’s annual proxy statement. 

The bylaw allows shareholders to nominate up to 20% of Apple’s directors. Apple’s board currently has eight members, so shareholders could nominate one director. 

Proxy access gives shareholders greater clout to oust directors and influence strategy by letting them list competing board candidates on corporate ballots. The push comes as activist investors seek changes on many company boards. 

Apple, the world’s most valuable company by market capitalization, is among the most prominent companies to adopt proxy access. Others include Goldman Sachs Group, McDonald’s Corp. and Coca-Cola Co.
Institutional Shareholder Services, a proxy-advisory firm, said in October that nearly 10% of the companies in the Standard & Poor’s 500 Index have adopted or are committed to proxy access. 

A shareholder proposal asking Apple’s board to adopt proxy access gained 39% support at Apple’s most recent annual meeting in March. 

James McRitchie, a California investor who runs a corporate-governance website and sponsored the March shareholder proposal, applauded the move, but said he was disappointed that Apple limited shareholders to nominating 20% of the board, or effectively one director. 

“One person on a board could be silenced,” Mr. McRitchie said. “If you’re a board member and no one else would second a motion,” it would be hard to be effective. 

Mr. McRitchie said he didn’t anticipate using proxy access at Apple in the next few years, but thinks the company is an important symbol because of its size and prominence. 

“We need to get proxy access on the books where it’s really needed,” Mr. McRitchie said. “One way to do that is to get it where it’s not needed and point to those companies.” 

An Apple spokesman declined to comment.

A new name for OS X

The end of the year is the traditional time for list-making and reflection on the past, as well as pondering the future. I’ve found that taking down one calendar and putting up another makes me curious about what the new year will bring. Since no peeking into the future is allowed, I’m going to use this space to list off some of the things I hope we see from the Mac in 2016. 

I’ve banged this drum a couple of times this year, but 2016 seems like the right time for Apple to retire the “big X” and put the Mac back in OS X. 

In 2015, we saw tvOS and watchOS join iOS in Apple’s operating-system portfolio. In 2016, it seems only logical that macOS join them. (No, I’m not thrilled about the capitalization either, but I suspect we’ll get used to it.) Only Macs run OS X, and the X seems like a relic of the late ’90s now. Bring back the Mac! Er, “mac.” 

An improved Mac App Store 

The Mac App Store finally got a renewed focus in 2015–as in, writers and pundits focused on the missteps that led to Mac users being told their apps were damaged and should be thrown in the Trash. 

When the Mac App Store launched, we were all excited by the possibility that it would do for Mac software sales what the App Store had done for iOS apps. Unfortunately, the developers of more complex apps have been frustrated by Apple’s security demands and the limitations of the Mac App Store itself. Some key Mac apps have never been allowed into the store, and many more–including most recently Sketch–have given up and pulled out. 

mac app store 
In 2016 I’m hoping Apple refocused on the Mac App Store, and makes it worthy of the Mac platform. The Mac is fundamentally a more complex, rich system than iOS. That’s its advantage, and why it continues to exist. Why apply iOS standards to the needs of Mac users? It was understandable that the Mac App Store would launch as nothing more than a copy of the iOS App Store, but it’s been years now. 

In particular, I’d like to see Apple improve the App Store app, relax its restrictions on what apps are allowed in the Mac App Store so that more complex products can be allowed entrance, and introduce support for trial periods and paid upgrades. (The later in the list, the less likely it is to happen, but we live in hope.) 

Thunderbolt 3, everywhere possible 

Intel announced this year that Thunderbolt 3, the new generation of the high-speed connection technology, will be plug compatible with USB-C ports. In an ideal world, this would be the port that Apple could standardize on for all of its computers across its entire line, providing USB compatibility along with the speed and flexibility of Thunderbolt. 

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thunderbolt update 3 quarter preview transparentIntel 
Not every Mac released in 2016 will support Thunderbolt 3, but I’m hopeful that by the second half of the year, it’s standard issue on all of them. Imagine a single, small port that’s capable of attaching just about any peripheral you can think of, including a 4K external display. In 2016 we should see it, and it should allow Apple to finally avoid offering both Thunderbolt and USB ports on almost all of its Macs. 

A Retina external display from Apple 

Every Mac power user I talk to seems to want a Retina successor to Apple’s Thunderbolt Display. So why hasn’t it happened? It’s probably some combination of connection technologies and available graphics processing power, but in 2016 it should finally be possible. If it uses Thunderbolt 3 and works with a new round of Mac Pros and MacBook Pros, all the better. 

A MacBook upgrade 

The new MacBook is a fun, interesting laptop, but this year’s model has the feel of being a bit too far on the cutting edge. Perhaps a new model for 2016 could upgrade its USB-C port to Thunderbolt 3, or at the very least add a second USB-C port? Improving the keyboard wouldn’t be a bad move, either. 

macbook 2015 
Retina spreading across the iMac line 

This year Apple made every 27-inch iMac a 5K iMac. Next year, it should do the same for the 21.5-inch 4K model, getting non-Retina out of the iMac range at last. (A more likely scenario is a single, low-cost non-Retina model remaining in the product line.) 

The death of spinning hard drives 

Speaking of the 21.5-inch iMac, even the base configuration of the 4K iMac is equipped with a spinning hard drive. This is old, slow technology that doesn’t have a place on new Macs sold in 2016. So here’s hoping for the abolition of that technology, with only Fusion Drives (a spinning hard drive augmented by a small amount of speedy flash storage) and pure Flash Storage in the mix. 

People make a big deal about Apple being famous for abolishing outmoded technologies and forging ahead–floppy disks, optical drives, maybe even the 3.5mm headphone jack–but it’s clung to the classic hard drive too long. Time to turn the page and recall it as a dim memory of 2015 past.

evernote skitch

Evernote bought popular annotation app Skitch back in 2011 and, after incurring the wrath of loyal users for a series of unpopular updates, it is finally saying goodbye to it for good after announcing that it will end support for almost all versions of the service. 

“As part of our promise to focus on improving the core Evernote experience, we are ending support for several… standalone apps,” Evernote said in a statement. 

Skitch is the highest profile casualty, but Evernote’s Clearly reading extension and its Pebble app will keep it company in the app after-life. Evernote Food, the company’s dedicated recipe app, was shuttered at the end of September. 

Evernote said it is ending support for Skitch for Windows, Windows Touch, iOS, and Android on January 22. That means that they will no longer be available for download after that date. Each version will continue to work for existing users but, because there is no longer a team or resources dedicated to each product, “external changes like updates to your operating system or browser may break features or functionality at any point in the future,” Evernote admitted. 

Slight caveat: Evernote said it will continue to offer Skitch for Mac for download and also provide support, too. (Presumably that’s down to its sheer popularity, but it remains to be seen how long it will live on for.) 

The move is sure to further anger any Skitch users who are left using the product — things haven’t exactly been smooth under Evernote’s ownership — but the company downplayed these closures, saying that the staple features are already baked into its core service. (We’ve heard this argument before and it rarely assuages disappointed users.) 

We’ve incorporated many of the best features of Skitch and Clearly in our core applications. Skitch users will find nearly identical annotation functionality in the Evernote Windows and iOS apps. And the article simplification features from Clearly are available in our Web Clipper. People with Pebble watches can find similar Evernote features with the Powernoter app. 

Improving the core experience is one argument for shutting down these apps, but another is that is that Evernote — a company that is in crisis following the departure of long-time CEO Phil Libin and exit of other execs like COO Linda Kozlowski this year — is cutting its costs in the wake of faltering subscription numbers and giving its core app, which has barely advanced in terms of features in recent times, a much needed boost. 

January 22 is the deadline for getting these apps if you want them. But, be warned, they will be living on borrowed time going forward.