Apple gained much in 2011, managing to hold off Google Android in both the tablet and smartphone arenas. However, it also lost co-founder and CEO Steve Jobs, who died in October following a long battle with cancer.
Apple’s first big release of 2011 was a long anticipated one: the iPhone on Verizon Wireless’ CDMA network. Executives from the carrier joined Apple COO Tim Cook onstage at New York City’s Time Warner Center Jan. 11 to reveal what was one of the tech industry’s worst-kept secrets. With the exception of tinkering with the antenna to make it CDMA-applicable, the Verizon version of the iPhone 4 offered precious little difference from the AT&T version in both hardware and software. Nonetheless, Verizon hoped the iPhone would work the same magic on its revenue and profits as it did for AT&T.
Verizon launched the iPhone 4 Feb. 10. Despite the iPhone receiving prominent placement front-and-center in Verizon stores, however, the carrier continued to promote several rival devices, including Motorola’s Droid franchise-illustrating how, despite its longstanding popularity, Apple’s sleek smartphone entered 2011 facing more competition than ever from Google Android smartphones.
Despite the hoopla surrounding the release of the iPhone 4 on a new network, analysts and Apple fans were already conjecturing feverishly over the possible specs of Apple’s next iPhone, which some dubbed “iPhone 5” and predicted would see a summer release. They would end up disappointed on both counts.
The iPad 2
Apple’s second big unveiling of 2011 came March 2, when Jobs took a San Francisco stage to unveil the next-generation iPad 2. The 9.7-inch tablet featured a dual-core processor, front- and rear-facing cameras, and a thinner body. “Is 2011 going to be the year of the copycats? I think if we did nothing, maybe a little bit,” he told the audience. “But we haven’t been resting on our laurels.”
The first iPad’s release in early 2010 ignited the consumer tablet market. Rival manufacturers rushed to introduce an “iPad killer,” many of them running Google Android. As 2011 began, this trickle of competing devices threatened to become a flood that would erode Apple’s sizable market-share lead. In addition to Android devices such as the Motorola Xoom and Samsung Galaxy Tab, Hewlett-Packard was prepping a tablet loaded with webOS, the mobile operating system inherited as part of its Palm acquisition in 2010.
The iPad 2 hit store shelves March 11. In New York City, hundreds of people lined up at Apple stores, anxious to get their hands on the 9.7-inch tablet. Analysts such as Global Equities Research’s Trip Chowdry estimated sales of the iPad 2 as on track to eclipse those of the first iPad during those first days of release. At least in the short term, it seemed as if Apple’s hold on the tablet market was assured-something validated throughout the course of the year, as many of the ostensible “iPad killers,” including HP’s TouchPad, crashed and burned in the marketplace.
In addition to consumers, the iPad gained further traction with businesses. During a July earnings call, company executives claimed some 86 percent of the Fortune 500 had either tested or deployed the tablet. Throughout the year, more productivity apps found their way into Apple’s App Store alongside the usual games and “consumer” products.
Mac Apple Store
Mac App Store
Apple’s focus on mobility began to influence its desktops and laptops, with the company launching a Mac App Store Jan. 6. The storefront started off with more than 1,000 free and paid applications, including the always-popular Angry Birds and more productivity-centric programming, such as Autodesk. It required Snow Leopard, specifically Mac OS X v.10.6.6 with a software update, with Apple promising it would be fully integrated into the then-in-development Mac OS X 10.7 Lion.
By porting its mobile-app model to the PC realm, Apple hoped to attract users interested in downloading smaller programs with just one click, as well as third-party developers looking for a new platform for their products. Apple retailed full control over software listed in the store via its usual review process, although developers also had the option of distributing Mac-supported software independently of the store.
Apple’s arch-rival Google already had a similar effort underway with Chrome Web Store, which offered a variety of apps. Moreover, rumors suggested that Microsoft would include an apps storefront of some sort with Windows 8, scheduled to release on both tablets and traditional PCs sometime in 2012-rumors later validated, once Microsoft began unveiling details about their next-generation operating system.
Mac OS X “Lion”
By the end of February, Apple had released a developer preview of Mac OS X Lion. In June, Jobs and other executives took the stage at San Francisco’s Moscone Center to profile the operating system’s new features: full-screen applications, the ability to restore applications to the same condition prior to logging out or restarting, disappearing scroll bars, an increased range of gesture controls, and an AirDrop feature that wirelessly shoots files to other users.
Apple released Lion in mid-July. Combined with the termination of the company’s iconic white MacBook, which made its lowest-priced MacBook Air the company’s default entry-level laptop, it seemed clearer than ever that Apple was rushing to embrace Jobs’ philosophy of a “post-PC” era, one in which handheld devices like smartphones and tablets crowd out traditional PCs as peoples’ primary computing device.
With that strategy, though, came questions about what sort of effect the mobile philosophy would ultimately have on Apple’s bottom line. During the company’s July 19 earnings call, Cook suggested that the iPad was eating into the customer base for traditional PCs. “Some customers chose to purchase an iPad instead of a new Mac during the quarter,” he told media and analysts on the call. “But even more customers chose to buy an iPad over a Windows PC … There’s a lot more of the PC Windows business to cannibalize than the Mac.”
Within a year of largely good news, Apple did have to weather some controversies. In April, tech researchers Alasdair Allan and Pete Warden posted to O’Reilly Radar that they’d discovered Apple recording the positions of devices running iOS 4 in a “hidden file” on iPhones and iPads. Still worse, the pair added, was that the “file is unencrypted and unprotected, and it’s on any machine you’ve synched with your iOS device. It can also be easily accessed on the device itself if it falls into the wrong hands.”
The fallout included lawmakers sending written demands to Jobs for greater clarification on Apple’s practices. It also spread to Google and Microsoft, which noted that their mobile operating systems record location data from mobile devices.
Apple responded April 27 in a statement on its Website, largely blaming a software bug in its iOS operating system for storing the incredible amount of data and insisting that Apple isn’t tracking its users. The company also said it would issue a software fix to ensure the data wasn’t kept for long periods of time.
“Users are confused,” read Apple’s statement, adding that it was “maintaining a database of WiFi hotspots and cell towers around your current location” in order to reduce the time it takes an iPhone to “accurately calculate its location when requested.”
Despite the controversy, Apple continued to maintain its smartphone market share. By the end of the third quarter, research firm Nielsen estimated iOS as nabbing 28 percent of the U.S. market, behind Android at 43 percent but ahead of Research In Motion and Microsoft.
Throughout 2011, rumors abounded about Apple’s next iPhone. Supposedly informed sources told various news outlets that the company’s upcoming device would feature a radically different exterior, in addition to upgraded hardware and software. Apple itself, however, remained close-lipped; the company had long since learned that keeping its collective mouth shut was worth millions in free publicity.
Summer, the usual unveiling time for the new iPhone, came and went without a peep from Apple. Instead, the company chose to whip the curtain back in October. Instead of “iPhone 5,” the new device was the “iPhone 4S,” and seemed virtually identical in appearance to the iPhone 4. Nonetheless, it boasted a more powerful processor along with Siri, a “personal digital assistant” that responded to the user’s voice queries. It also came loaded with iOS 5, a significant upgrade to the company’s mobile operating system.
The iPhone 4S sold more than 4 million units during its first weekend in release in mid-October. By then, of course, Apple was wrestling with one of the biggest events in its history.
Steve Jobs’ Death
Steve Jobs had been fighting cancer for years, although he did seemingly everything in his power to prevent the details of his condition from leaking to the press. In August he surrendered the CEO reins to Cook, insisting in a statement that he was unable to carry out his duties; from that point forward, speculation abounded that he was indeed sick again.
On Oct. 5, Apple announced Jobs’ death, its Website opening with a black-and-white photo of him. The accompanying statement read: “Apple has lost a visionary and a creative genius, and the world has lost an amazing human being.”
Walter Isaacson’s biography of Jobs, published a short time later, featured passages in which his subject publicly worried over Apple’s ability to endure in his absence. The big question in 2012-and beyond-will be whether the current roster of executives will indeed keep Apple in its enviable position.