AWT News Update: July 11, 2016

Taxes, talking to your home, and revenue streams are all in today's Apple news:

  • US Treasury Secretary Jacob Lew is meeting with the EU's antitrust head to forestall a penalty of Apple on back taxes
  • iDevices adds Alexa compatibility to its line of home automation products
  • Piper Jaffray analyst Gene Munster thinks the iPhone 7 could be big for Apple
  • Apple supplier TSMC reports excellent 2nd quarter revenues and is expected to do even better in the next quarter

The text version of the podcast can be read below. To listen to the podcast here, click the play button on the player below.

Text Version

Hi, this is Steve Sande for Apple World Today, and this is the AWT News Update for July 11, 2016.

In a rare show of administration support for Apple, US Treasury Secretary Jacob Lew is meeting with EU antitrust head Margrethe Vestager ahead of the EU’s ruling on whether or not the Irish government will have to bill Apple for back taxes. Lew recently contacted Vestager in an attempt to ask her to not order collection of back taxes. The EU is angry that Ireland made an agreement with Apple that resulted in a lower tax rate for the company in exchange for facilities and jobs in the country, something that happens quite frequently in the United States. Lew believes that American firms have been unfairly targeted by the EU investigations, as Amazon, Starbucks and McDonalds have also been hit for back taxes.

The competition in home automation devices keeps heating up, and the latest change comes from iDevices, a company that has given the majority of its products compatibility with Apple’s HomeKit and Siri. Today the company announced that the devices are also compatible with Amazon Alexa, so the devices — which include a thermostat, outdoor power switch and socket, indoor connected plug and light bulb adapter — can be controlled by either Siri or the Amazon intelligent assistant.

Investment firm Piper Jaffray is usually bullish on Apple, but the company’s latest figures make a lot of sense. Two-thirds of US iPhone owners have a devices that is two or more years old, which means that they’re prime for upgrades. The iPhone 7 expected in September could be the biggest draw for many of these people who have been waiting for a new phone, and Piper Jaffray’s Gene Munster expects the percentage of consumers that plan to upgrade to the iPhone 7 to increase following the announcement — even if the new phone isn’t a significant technology upgrade. Munster believes that the iPhone 7 would sell similarly to the iPhone 6 and 6 Plus cycle from two years ago, meaning that there would be 12 percent year over year growth over the current iPhone 6s cycle.

Finally, Apple gets a lot of chips from Taiwanese manufacturer TSMC, and the company posted great revenues today for its second quarter. It’s expected to do even better in the third quarter because of shipments of Apple A10 processors for future iPhones and iPads. In fact, it’s expected that TSMC’s Q3 revenue could be at an all-time high.

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That’s all for today; We’ll be back tomorrow afternoon with another edition of the AWT News Update.