Tag Archives: Handheld Electronic Devices

Technology

Samsung’s New $1,800 Foldable Galaxy Phone Tests High-End Budgets

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NEW YORK—The entire smartphone industry is slumping except for the priciest devices.

Samsung

Electronics Co. is testing the limits of that high-end demand.

On Wednesday, Samsung unveiled its latest models of two of the world’s most-expensive phones. The Galaxy Z Fold 4, which becomes the size of a small tablet when opened, will cost about $1,800. The more compact Galaxy Z Flip 4 will go for around $1,000. The phones have prices similar to last year’s versions and become available in the U.S. later this month.

Total smartphone shipments slid 8% in the first half of this year versus the same period in 2021, largely because consumers have cut back spending on nonessential goods amid inflation and a shakier economic outlook, according to Counterpoint Research, a research firm. The declines were steepest for the lowest-priced devices, it said.

Foxconn Technology Group, the world’s biggest iPhone assembler, on Wednesday said demand for smartphones and other consumer electronics is slowing, prompting it to be cautious about the current quarter.

Shipments of “ultra-premium” phones—devices sold for $900 or more—grew by more than 20% during the same period, Counterpoint said. This category comprises mostly

Apple Inc.’s

iPhones and Samsung’s flagship devices.

WSJ’s Dalvin Brown checks out the newest foldable smartphones from Samsung to see if the kinks in early models have been ironed out and whether folding is a feature worth spending for, or just a gimmick. Illustration: Adele Morgan

The resilience of the phone industry’s upper class mirrors that of the luxury-goods business, as wealthier consumers show a willingness to keep spending on clothing, handbags and jewelry despite economic rockiness. Brands including

LVMH Moët Hennessy Louis Vuitton SE,

Ralph Lauren Corp.

and Gucci owner

Kering SA

have reported robust growth this year.

Apple, in its most recent quarter, reported a surprise rise in iPhone sales, defying analysts’ expectations for a decline. There has been no obvious macroeconomic impact on iPhone sales in recent months, Apple Chief Executive

Tim Cook

said on an earnings call last month.

Samsung, the world’s largest smartphone maker, recently said it expects the overall smartphone market to see shipments stay flat or experience minimal growth this year. But the South Korean company expressed optimism that its foldable-display devices, which are among its most expensive products, would sell well.

Demand for iPhones and Samsung’s flagship devices, boosted in recent years by the arrival of superfast 5G connectivity and pandemic-time splurging on gadgets, should remain high, said Tom Kang, a Seoul-based analyst for Counterpoint. “It’s clear that the affluent consumers are not affected by current economic headwinds,” Mr. Kang said.

Samsung has much riding on the Galaxy Z Fold 4, left, and the Galaxy Z Flip 4 becoming a success.



Photo:

SAMSUNG

The smaller of the two new devices, the Galaxy Z Flip 4, is an update of the model that accounted for most of Samsung’s foldable-phone sales last year. When fully open on its vertical axis, it has a display that measures 6.7 inches. When closed, it is half the size of most mainstream smartphones, and owners can view text messages and other alerts on a smaller, exterior screen. Compared with last year’s version, Samsung said the Galaxy Z Flip 4 takes better photos and has a slimmer hinge and larger battery.

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Would you buy one of Samsung’s new foldable phones? Why or why not? Join the conversation below.

The heftier Galaxy Z Fold 4 sports a tablet-sized display that is 7.6 inches diagonally when fully opened. It opens and closes like a book, and when shut, it has a 6.2-inch outer screen that performs most smartphone functions. The new version has a slightly thinner hinge and improved camera capabilities, Samsung said.

The Galaxy Z Fold 4 is the first device to use Android 12L, a version of the operating system created by

Alphabet Inc.’s

Google specifically for tablets and foldable phones, Samsung said.

Alongside the two foldable phones, Samsung on Wednesday also introduced two new versions of its Galaxy Watch 5, as well as a new edition of its Galaxy Buds wireless earphones, the Galaxy Buds 2 Pro.

Samsung has much riding on the Galaxy Z Fold 4 and the Galaxy Z Flip 4 becoming a success. Given their high price and fatter margins, foldable devices could represent about 60% of Samsung’s mobile-division operating profits, despite accounting for roughly one-sixth of the company’s smartphone shipments, said Sanjeev Rana, a Seoul-based analyst at brokerage CLSA.

Samsung said the Galaxy Z Fold 4 is the first device to use Android 12L, a version of the operating system created by Google specifically for tablets and foldable phones.



Photo:

SAMSUNG

Across the industry, the priciest tier of smartphones represent about 10% of annual shipments but about 70% of the industry’s profits, Counterpoint said.

Samsung was a pioneer in an industry that had gone stale when it released the first mainstream foldable smartphone more than three years ago. But the original Galaxy Fold stumbled out of the gate. Design flaws delayed its release. The pandemic closed stores, cutting off opportunities for would-be early adopters to test out the devices, Samsung executives have said. And many consumers balked at an initial price tag close to $2,000.

Last year, Samsung’s Galaxy Z Fold 3 and Galaxy Z Flip 3 saw stronger sales, helped by price cuts. The company also juiced demand through aggressive promotions and trade-in discounts that made purchases more affordable.

Worldwide foldable smartphone shipments are expected to total nearly 16 million units this year, up roughly 73% from the prior year, Counterpoint said. Samsung is projected to account for roughly 80% of the foldable market this year, according to Counterpoint.

The other foldable players—selling at prices below the ultra-premium threshold—include major Chinese brands, including Huawei Technologies Co., Xiaomi Corp., as well as BBK Electronics Co.-owned Vivo and Oppo.

Lenovo Group Ltd.

’s

Motorola,

which first launched a foldable phone in 2019, is slated to introduce a new model this month.

Write to Jiyoung Sohn at jiyoung.sohn@wsj.com

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Technology

Apple’s Coming iOS 16: A Wish List

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Please step into my psychic reading room. No, no, don’t touch the crystal ball! OK, here’s what I see:

Soon—very soon—Apple will announce the next version of its iPhone operating system with many new features. The Ouija board has guided me to…1…6! Yes, iOS 16! And the spirits whisper, “September.” Yes, that’s when your iPhone will get it.

Thanks for coming. That’ll be $200.

Fine, you don’t need my powers of prognostication to know the future of

Apple’s

AAPL -3.86%

software releases because you already know the past.

On Monday, the company opens its annual Worldwide Developers Conference (aka WWDC) with a keynote address. Like in previous years, Apple is expected to announce updates to its apps and core operating systems—iOS, MacOS, iPadOS, WatchOS, tvOS. Unlike previous years, or at least the last two years, I will be emerging from my basement to attend the event in Cupertino, Calif.

Monday’s keynote will still be prerecorded and streamed online, but an assortment of reporters, YouTubers and app developers are invited to watch from the company’s headquarters. 

I get why you might not tune in. It isn’t like we’re going to party like it’s iOS 99! (Forgive me, Prince fans.) After some 15 versions of iOS—with fewer and fewer whiz-bang features—it can be harder to get excited.

So why do we have to wait until June for the new software to be presented in a big, splashy, superlative-packed presentation? And why does the bulk of the features arrive in a big dump in September?

Justin Santamaria, who was a senior engineer manager at Apple until 2013 and led the development of the FaceTime and Messages apps, told me it’s because the company used to focus on the big yearly hardware upgrade. 

“We were always building the next operating system for the features that were coming out on the next iPhone,” he said. But he concedes that now that the company is more focused on software and services and people keep older iPhones longer, the one-big-annual-upgrade approach could be rethought.

And Apple’s moving away from it. In iOS 15, for instance, the company trickled out some of the bigger features over the course of the year—releasing its digital legacy feature in December and adding mask-support for Face ID in March.

SHARE YOUR THOUGHTS

What’s on your iOS wish list? Join the conversation below.

Could it go further? Possibly. iOS could just be iOS—no number!—and new features could just appear when they’re ready, without the big applause from the, well, largely virtual audience. 

Still, don’t let anyone tell you that you can’t get jazzed about minor feature updates, like some I’ve been dreaming of. Here’s my somewhat-annual somewhat-fantasy iOS wishlist of features:

Messaging Things 

Apple Messages has become my most important app, but not because it has the best tools. I’d love the ability to mark a message as unread, so I don’t forget about it and can come back to it later. Also, what about giving us more Tapback responses—you know, the icons that pop up when you hold down on a message? I’d love to see emoji options like Slack offers. And what I wouldn’t give for a typing indicator on group chats!

Given all the spam texts I’ve been getting lately, some better blocking and reporting tools are needed.

And finally, just embrace Rich Communication Services (or RCS) already, Apple. This messaging standard, already integrated into Android, brings iMessage-like features—such as read receipts, messaging over Wi-Fi and encryption—to regular text messaging. That means those texts with your green-bubble friends would be significantly better. Google has called on Apple to embrace the standard; an Apple spokeswoman declined to comment. 

Home Screen Things 

iOS 14 rethought the home screen with helpful widgets (those little boxes of live information) and an App Library to tame the mess. In iOS 16, Apple is planning to add widget capabilities to the lock screen, so you wouldn’t need to swipe to check weather or other info, according to Bloomberg. This goes hand-in-hand with the reports that the iPhone 14, due in September, would have an “always on” display that shows important info without needing to tap the screen—similar to Samsung Galaxy and Google Pixel phones, and the Apple Watch.

And how about some fresh homescreen design options? With Apple’s Shortcuts feature, people have gotten into customizing their app icons with downloadable packs. Yet I’m exhausted just watching this TikTok on how to do it. Android’s new Material You feature lets you overhaul the colors, icons and look of your home screens without all that effort. Who doesn’t want their screen to look like a West Elm showroom? 

Miscellaneous Things

I say it every time I review the super-mega-massive iPhone (the Pro Max): Let us put two apps side by side, iPad style, or on top of each other. That way we can look at, say, a webpage and a document simultaneously.

Then there’s ducking autocorrect! As I proposed in my recent column, we should have the ability to adjust the aggressiveness of the correction so “well” doesn’t always become “we’ll.” But I’d settle for what Android has: options to suggest offensive words and people from your contacts, and a way to undo unwanted autocorrections.

On the Google Pixel 6, you can easily save a frame from a video as a photo.



Photo:

Joanna Stern / The Wall Street Journal

In the Photos app, how about the ability to pull a still from a video after it’s been recorded? I love having this feature on the Google Pixel: I don’t have to devote the mental energy to deciding “video or photo” when capturing my kids doing something adorable. 

Apple Wallet badly needs an interface overhaul. The vertical display of cards is confusing and swiping around when shopping or boarding a flight with your family should be simpler.

And, for the love of battery-saving, please just put the battery percentage back in the upper right corner. I’m done swiping down!

Some of my top new features over the years have been ones focused on protecting our privacy, security and even physical safety. As my colleague Rolfe Winkler reported, Apple is working on a car-crash detection feature that will automatically dial 911 if the phone senses there was an accident.

iPad Things

I’m throwing in some iPadOS things, too. Please give us multiple user accounts so I don’t have to fear my son sending emails when he’s supposed to be watching Pokémon. As the iPad has become increasingly like a Mac, it makes sense to have this functionality.

See how easy it is to add another user on a Mac? Now do it on iPads, Apple!



Photo:

Joanna Stern / The Wall Street Journal

And I’ll be honest, I really have no idea how to multitask efficiently on the iPad. I’ve never mastered the finger calisthenics to switch apps, place apps side by side, etc. All of this could be more intuitive.

Finally, my iPad wishlist constant: a freaking calculator. Seriously, just make it a widget at this point. 

Oh, and one AirPod thing. Look, I’m in charge, you little white doodads. I want to be able to say, “Stay connected to my iPhone and just my iPhone! Don’t connect to my MacBook or iPad!” Let’s have a setting to disable the constant switching between devices. 

We will see what wishes come true at the Monday event. I’ve just consulted my tarot cards and they confirm that we’ll in fact witness many things Apple touts as “great,” “incredible” and indeed “magical.”

—Sign up here for Tech Things With Joanna Stern, a new weekly newsletter. Everything is now a tech thing. Columnist Joanna Stern is your guide, giving analysis and answering your questions about our always-connected world.

Write to Joanna Stern at joanna.stern@wsj.com

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Business

AT&T, Verizon Refuse FAA Request to Delay 5G Launch

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AT&T Inc.

T -0.73%

and

Verizon Communications Inc.

VZ -0.56%

rebuffed a request from federal transportation officials to delay the launch of new 5G wireless services but offered a counterproposal that would allow limited deployments to move forward this week.

The cellphone carriers said Sunday in a letter reviewed by The Wall Street Journal that they could further dim the power of their new 5G service for six months to match limits imposed by regulators in France, giving U.S. authorities more time to study more powerful signals’ effect on air traffic. The plan from the companies, which have said they plan to start service Wednesday, could prolong a standoff between the telecom and aviation industries over how to proceed.

“If U.S. airlines are permitted to operate flights every day in France, then the same operating conditions should allow them to do so in the United States,” the chief executives wrote in the letter.

Telecom-industry officials have pointed to dozens of countries, including France, that have already allowed cellular service over the frequencies in question, known as C-band. France is among the countries that have imposed wireless limits near airports while regulators study their effect on aircraft.

The message from AT&T CEO

John Stankey

and Verizon CEO

Hans Vestberg

was in response to a letter Transportation Secretary

Pete Buttigieg

and Federal Aviation Administration chief

Steve Dickson

sent late Friday. The New Year’s Eve missive asked the carriers to postpone their planned 5G launch by “no more than two weeks” while officials worked to address the wireless services’ effect on specific airports on a rolling basis over the coming weeks.

The FAA said it was reviewing the wireless companies’ letter. “U.S. aviation safety standards will guide our next actions,” the FAA said. Representatives from the Transportation Department, the FAA’s parent agency, didn’t immediately respond to requests for comment on Sunday.

Air-safety regulators have said the new cellular services could confuse key cockpit safety systems and have been preparing to impose potentially disruptive flight restrictions.

AT&T and Verizon disputed claims of any air-safety risk, though the companies already postponed a planned December debut of the new signals to provide more time for telecom and aviation regulators to share information about the wireless infrastructure and aircraft equipment in question.

The Sunday letter from telecom CEOs said transportation regulators’ latest delay request would be to “the detriment of millions of our consumer, business and government customers,” noting that carriers spent more than $80 billion to acquire the licenses in a Federal Communications Commission auction that closed in January 2021.

FCC authorities padded the spectrum they auctioned with a swath of buffer frequencies to prevent interference with cockpit systems. But air-safety regulators have expressed concern that more sensitive altimeters that pick up signals well beyond their defined range could mistake cellular transmissions for terrain. The devices feed data to commonly used cockpit systems that help planes automatically land in bad weather, prevent crashes and avoid midair collisions.

AT&T and Verizon have spent the past year preparing to turn on new signals to provide new fifth-generation wireless technology, a faster and more capable mobile service. Wireless companies in other countries already use similar frequencies, but the spectrum wasn’t available to U.S. providers until recently because of existing satellite users that had to be moved into a narrower band of spectrum before 5G service could begin.

Without a resolution to the aviation-telecom dispute, Messrs. Buttigieg and Dickson warned the FAA’s flight limits would bring severe economic consequences.

“Failure to reach a solution by Jan. 5 will force the U.S. aviation sector to take steps to protect the safety of the traveling public, particularly during periods of low visibility or inclement weather,” they wrote in their Dec. 31 letter.

Airlines have been bracing for significant flight cancellations and diversions due to potential FAA flight restrictions because of the regulator’s aviation-safety concerns. Pilots and airlines had been awaiting details of potential FAA flight restrictions that limit the use of systems that rely on radar altimeters. Aviation industry officials have most recently expected the agency to detail flight limits as soon as Monday.

Over the past week, U.S. air travel has been snarled by a mix of winter storms and staffing challenges because of increasing ranks of airline crews calling in sick with Covid-19 as the U.S. deals with a surge by the Omicron variant. Thousands of flights have been canceled and delayed.

5G and Air Traffic

More WSJ coverage on the debate over wireless frequencies and aviation, selected by the editors.

Write to Drew FitzGerald at andrew.fitzgerald@wsj.com and Andrew Tangel at Andrew.Tangel@wsj.com

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Science

How the Search for Extraterrestrial Life Helped Make Your Smartphone’s Screen Possible

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In December, the National Aeronautics and Space Administration and its partners plan to launch the James Webb Space Telescope. A technological marvel 100 times as powerful as the Hubble telescope, it has enough visual acuity to examine the atmospheres of planets far outside our solar system for evidence of extraterrestrial life.

The Webb, a NASA collaboration with space agencies in Europe and Canada, will do its work at an orbit around the sun 1 million miles away from our world. Here on Earth, though, part of the technology that went into the giant telescope is also visible when you look at the screen of a smartphone, smartwatch, tablet, or laptop computer with the latest high-resolution displays.

The connection between humanity’s boldest experiment in deep-space exploration and the gadgets in your hands is the technology to produce giant, ultrahigh-precision mirrors and lenses. Such “optics” weren’t possible until NASA asked a handful of companies more than 20 years ago to bid on the rights to figure out a way.

The result, developed by a company called Tinsley Integrated Optical Systems, was a technique that enabled production of very large mirror surfaces that are so nearly flawless that any imperfections on their surface are only a few atoms thick. And that technology can also be involved in producing many displays—using lasers to transform extra-large sheets of silicon deposited on glass—significantly reducing the costs of electronic components for some displays.

The transfer of know-how from space telescopes to the manufacture of displays is the latest in a long line of commercial technologies with similar lineage, from digital-camera sensors to the Dustbuster, which was developed by

Black & Decker

out of its partnership with NASA.

Laser company Coherent’s linebeam system, used for producing high-resolution OLED displays, incorporates advances from the Webb telescope’s optics.



Photo:

Coherent, Inc.

One classic example is the Apollo guidance computer—the first digital general-purpose, multitasking, interactive portable computer—which was present on both the Apollo command module and the lunar lander. In its use of then-novel components like some of the world’s first silicon microchips (aka integrated circuits), it paved the way for our modern world, from the internet to the innards of the same smartphones whose displays are in part due to the James Webb Space Telescope.

Since the Apollo missions, NASA’s need for engineers to accomplish feats that are impossible at the time it first sets forth its requirements, combined with its willingness to fund such development, have spurred companies to develop new technologies that end up affecting everyday life.

Funding innovation through NASA and the Defense Department has long been America’s favored method of “industrial policy”—that is, using government money to supplement private investment in new technologies. The difference between American industrial policy and the kind practiced in many other countries is that the U.S. government has long favored paying for research and development rather than aiding the scaling up of industries based on those innovations. This often means technologies like the LCD display are invented here but lead to giant industries elsewhere.

With the Webb telescope, the connection between space tech and regular-life tech is more than just the transfer of insights gained from research and development conducted on NASA’s dime. It turns out that the very same factory where the mirrors for the space telescope were polished are now where the optics required for manufacture of OLED displays—short for organic light emitting diode, the screens in the latest generation of smartphones—are made.

Nearly flawless silicon lenses like the one above are essential for high-end displays, and arose thanks to advances made during development of the Webb telescope.



Photo:

Coherent, Inc.

The Webb telescope’s primary mirror, which collects the interstellar snapshots, is made up of 18 hexagonal sections, each 1.32 meters in diameter, that will fold origami-style for flight, then unfold in space to make a surface 6.5 meters across, or more than 21 feet. All the gold-plated beryllium mirror sections must be so unblemished that they can collectively focus even the faintest whisper of the most distant celestial body into a detectable image.

​​Tinsley had already provided the corrective lenses that astronauts installed on the Hubble Space Telescope in 1993, fixing a glitch that had caused blurry images and enabling it to capture the pictures from deep space for which Hubble has been famous ever since. Later, Tinsley won the contract to make the mirrors for the Webb.

The timing of the completion of the manufacture of those mirrors was fortuitous, says Brandon Turk, a vice president of Tinsley, which since 2015 has been a subsidiary of laser-systems company Coherent. In 2012, when engineers finished the last of the Webb telescope’s primary mirror sections, engineers at Coherent, who were in contact with their counterparts at Tinsley, were looking for ways to make bigger, more precise lenses for the machines that prepare silicon to be transformed into one of the most important parts of many high-resolution flat-panel displays.

These new lenses for display manufacture were up to 1.85 meters across, more than twice as wide as those used previously. This is important because, in the fabrication of displays, as in the fabrication of microchips, the bigger the sheet of near-perfect silicon a company can use, the more displays (or microchips) it can etch onto and then cut out of that sheet. That means significantly more efficiency, and lower cost.

The Apollo Guidance Computer, included on both the command module and lunar lander, represented one of the first uses of silicon microchips. That technology went on to be widely used in all kinds of computers.



Photo:

Jesse Rieser for The Wall Street Journal

One challenge for both processes is that the optics that direct the lasers that accomplish key steps must be nearly perfect. And the bigger those lenses, the harder it is to eliminate imperfections.

Coherent was already making lenses for its own “linebeam” systems—industrial objects as big as school buses that shoot lasers at sheets of silicon deposited on panes of glass, an early step in the manufacture of many displays. But doubling the size of its optics wouldn’t have happened at that point in history without NASA funding Tinsley’s innovations in manufacturing that the space telescope’s unprecedented mirrors required, says Dr. Turk.

Coherent has a strong market position in manufacturing linebeam systems and other specialized lasers and optics, as evidenced by the March 2021 three-way bidding war for the company that eventually led to an agreement to be acquired by competitor

II-VI,

says Wayne Lam of CCS Insight, a technology consulting firm.

“I love that people trying to create highly polished mirrors for Hubble has meant eventually having the tech migrate to mobile phones, enabling the displays we see now,” says Ian Jenks, now head of display-manufacturing startup SmartKem and previously president of the company then known as

JDS Uniphase,

which was for many years a competitor of Coherent.

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What space-age technologies do you use on a daily basis? Join the conversation below.

As for where the technology to make big, nearly perfect optics could take humanity next, there are more telescopes on the way—the forthcoming Thirty Meter Telescope, which will be the second-largest telescope on Earth once it’s completed, uses the technology. Other, more commercial applications also are derived from the use of these optics in manufacturing.

One of them, says a spokesman for Coherent, is the superconducting tape required to make future fusion reactors. Each magnet inside such a reactor requires kilometers of the stuff, and making it affordable is one of the many requirements for making energy from fusion economically viable.

The winding path of innovations, from technologies intended to satisfy our curiosity to ones with substantial cultural and economic impact, shows that John F. Kennedy’s famous exhortation—“we choose not to go to the moon because it is easy, but because it is hard”—has meant many advances that otherwise might have arrived much later, if at all.

For more WSJ Technology analysis, reviews, advice and headlines, sign up for our weekly newsletter.

Write to Christopher Mims at christopher.mims@wsj.com

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Technology

Apple Studying Potential of AirPods as Health Device

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Apple Inc.

AAPL -0.91%

is studying ways to make AirPods into a health device, including for enhancing hearing, reading body temperature and monitoring posture, according to documents reviewed by The Wall Street Journal and people familiar with the plans.

The plans further demonstrate Apple’s ambition to add health and wellness features to devices beyond the Apple Watch, where most of the company’s health functions exist today. Apple is also working on technology that aims to use iPhones to help diagnose depression and cognitive decline, the Journal reported last month.

It isn’t clear if Apple is developing specific new hearing-aid features for AirPods or wants to market the earbuds’ existing hearing-improvement features as hearing aids. AirPods Pro, Apple’s higher-end earbuds, already offer features to improve hearing, including “conversation boost,” launched last week, that increases the volume and clarity of people in front of the wearer.

The proposed AirPods features aren’t expected by next year and might never be rolled out to consumers or the timing could change, cautioned people familiar with the company’s plans.

An Apple spokeswoman declined to comment.

SHARE YOUR THOUGHTS

Would you consider wearing AirPods as a health device? Join the conversation below.

Apple is already developing prototypes for AirPods to take wearers’ core body temperature from inside their ear, according to the documents reviewed by the Journal. The thermometer would be the second that Apple could add to its devices, including a new wrist temperature-sensor Apple may include in next year’s version of the Apple Watch, the Journal previously reported.

As for ergonomics, the AirPods would lean on the motion sensors in the earbuds and alert wearers of slouching and to improve their posture, according to the documents and a person familiar with the idea.

Offering AirPods as hearing aids could significantly expand their reach. Millions of people suffer from hearing loss, including many whose impairment is less severe and choose not to treat it, experts say.

New regulations, expected to be completed by the U.S. Food and Drug Administration next year, would permit the sale of a new class of cheaper hearing aids direct to consumers to treat mild to moderate hearing loss.

About 28 million Americans suffer from mild hearing loss, yet only 5% use a hearing aid, estimates the Cochlear Center for Hearing and Public Health at Johns Hopkins. Another 12 million suffer from moderate hearing loss, though only 37% of this group use a hearing aid.

Dr. Nicholas Reed,

an audiologist at Johns Hopkins, said the prospect of Apple offering future AirPods as an over-the-counter hearing aid would be a potential game-changer. He said that Apple’s ubiquitous earbuds can break the old-age stigma associated with traditional hearing aids, which often prevents people from wearing them, and would cost far less than traditional hearing aids.

AirPods may not be suited for some sufferers of hearing loss because they don’t yet have all-day battery life. Also, Apple has been beaten to the hearing-aid market by consumer electronics rival Bose, which sells an FDA-cleared hearing aid that consumers can customize themselves.

AirPods dominate the global Bluetooth headset market, generating $12.8 billion in revenue in 2020, estimates research firm Strategy Analytics—five times the figure of No. 2 player Bose.

The array of sensors in the devices, including microphones, an amplifier and a sophisticated processor, means AirPods Pro already contain much of the technology necessary to help sufferers of mild or moderate hearing loss, experts say.

The market for hearing aids is dominated by a handful of companies, and hearing aids can cost thousands of dollars. Cheaper “personal sound amplification products” are available in stores, but their quality is inconsistent, experts say.

AirPods can’t be marketed as hearing aids today because of federal regulations that date back decades to when many hearing aids were unsafe or ineffective. Those restrictions require the devices to be sold through licensed hearing specialists who tune the hearing aids to the wearer.

The FDA is working to complete safety and effectiveness rules as required by a 2017 law for a new category of over-the-counter hearing aids that consumers can tune themselves. The rules are expected to permit companies like Apple, Bose and

Samsung

to market cheaper hearing aids.

Write to Rolfe Winkler at rolfe.winkler@wsj.com

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Technology

Covid-19 Surge in Asia Threatens Manufacture of Ceramic Bits in iPhones and PlayStations

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Hidden inside the newest smartphones are more than a thousand tiny bits of ceramic to control the flow of electricity. Inside an electric vehicle, there are more than 10,000.

They are called MLCCs, for multilayer ceramic capacitors, and the surge of Covid-19 infections across East Asia is raising the risk that factories won’t be able to make enough of them.

Murata Manufacturing Co. of Kyoto, Japan, the biggest MLCC maker, closed a major factory for the final week of August because of a virus outbreak. Japan’s Taiyo Yuden Co. , another major maker, said in August that it suspended some operations at its factory in Malaysia because of employee infections.

“MLCC supply will remain very tight,” said Forrest Chen, an analyst at Taiwan-based research firm TrendForce.

The world has seen this year how a shortage of normally little-noticed components can hit the global supply chain. Global makers of cars and electronics have shut down factory lines and missed potential sales because they don’t have enough semiconductors.

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Technology

Apple’s Next iPhone Is Coming Soon. Here’s What to Expect.

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About to buy a new iPhone? Don’t. We expect Apple to announce new models sometime next month, as it does every year. And even if you aren’t interested in the latest and greatest, the company generally drops the price of some older models along with the new crop.

Apple is, of course, hush-hush on what’s to come. A company spokeswoman declined to comment on future products. But iPhone production tends to be a leaky business, and I asked analysts who monitor Apple’s sales and supply chain to weigh in on the next iPhone.

First, what will it be called? The iPhone 13? It’s a likely bet, since Apple skipped the iPhone 11S and went right to the 12.

Some have hypothesized Apple might steer clear of the number because of superstition, the way some skyscrapers skip a 13th floor. A survey of 3,000 Apple users by Sell Cell, a used-electronics vendor, found that 18% would be put off by an iPhone 13. But Apple hasn’t shied away from naming software iOS 13 or selling a 13-inch MacBook.

Whether it’s iPhone 13, iPhone 12S, iPhone 2021 or even iPhone (15th generation), there will be several new models this year. Here’s what you can expect from the coming device:

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Technology

Apple Earnings Are Due Tuesday. Why the Market May Already Be Looking Past Them.

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Text size

Apple is set to report earnings on Tuesday.


Sascha Steinbach/Getty Images for Apple


Apple

shares recently surged to new all-time highs, amid heightened investor anticipation of June-quarter earnings, due after the closing bell on Tuesday. But it’s the launch of the next generation of iPhones, expected to be unveiled in September, that might be the real difference-maker.

Apple’s recent rally has not erased concerns about the stock. Growing regulatory scrutiny of Big Tech generally and Apple (ticker: AAPL) in particular, with a specific focus on the fees Apple charges developers who distribute applications on the company’s App Store for iPhones, iPads, and Macs, is the obvious one. There are also worries about tough year-over-year comparisons, and some investors fear that the recently robust growth in Mac and iPads sales will slow as the economy returns to more normal conditions. Others are nervous that the next set of iPhones will provide only incremental improvements, and that demand could disappoint.

But no one seems to be too worried about the earning themselves. The Wall Street consensus for the fiscal third quarter is for $72.9 billion in revenue and profits of $1 a share. Even analysts who are cautious about the stock think those numbers are too low. For instance, BofA Global Research analyst Wamsi Mohan is projecting revenue of $77 billion, with profits of $1.05 a share, driven by strength across the company’s hardware portfolio. Mohan still has a Neutral rating and $160 price target on the stock, however, and cautions that the company faces tough comparisons in the quarters ahead given spikes in Mac and iPad sales during the pandemic.

He’s got a point. In the March quarter, Apple’s sales surged 54%, driven by strong growth across the portfolio, with sales increases of 66% for iPhone, 70% for Macs, 79% for iPads, 25% for wearables, and 27% for Services. Street consensus estimates for the June quarter call for $34.2 billion in iPhone sales, $7.2 billion for iPads, $7.9 billion for Macs, $7.8 billion for wearables, home, and accessories, and $16.3 billion for services.

The company did not provide detailed guidance for the quarter, but cautioned that sales could be reduced by as much as $4 billion due to a tight supply of Macs and iPads tied to component shortages. 

Still, Wedbush analyst Dan Ives thinks Apple is headed for another across-the-board beat, driven by continued strong demand for iPhone 12, with particularly strong demand in China. “While the chip shortage was an overhang for Apple during the quarter, we believe the iPhone and Services strength in the quarter neutralized any short-term weakness that the Street was anticipating three months ago,” Ives writes. The analyst says Apple remains his favorite large-cap tech pick, with a “1-2 punch” of services and iPhone demand. He thinks the company can reach the $3 trillion market capitalization level in 2022, from just under $2.5 trillion now. Ives keeps his Outperform rating and $185 target price.

Canaccord analyst T. Michael Walkley also reupped his Buy rating on Apple shares, while boosting his target price to $175, from $165. He likewise expects June quarter results to beat Street estimates. One interesting question is whether Apple will return to providing quarterly guidance, a practice the company suspended during the pandemic. If they do, Walkley says, expect the forecast to outstrip current Street projections.

“Apple is well-positioned to continue to benefit from the 5G upgrade cycle, and we anticipate strong overall growth trends as 5G smartphones ramp and its installed base expands with higher-margins services revenue,” he writes. “Apple’s ecosystem approach, including an installed base that exceeds 1.65 billion devices globally and now over 1 billion iPhone users, should continue to generate strong services revenue.”

But the big news might still be yet to come. Once the company navigates past earnings, Apple investors will zero in on the fall iPhone launch. (Let’s call it iPhone 13, although Apple hasn’t specifically named the new line.) Ives sees incremental improvements, including Lidar capability in all phones, which will improve their utility for augmented reality applications. More important is his observation that about 250 million of the installed base of nearly 1 billion iPhones are at least 3.5 years old and due for an upgrade.

As Morgan Stanley’s Katy Huberty has noted, Apple shares tend to outperform the market heading into the launch of new phones. There’s no reason to think this year will be any different. Expect a strong June quarter from Apple, with higher highs likely as we approach the fall.

We can reassess after that.

Write to Eric J. Savitz at eric.savitz@barrons.com

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Business

The main attractions arrive: Apple, Microsoft, Google, Facebook, Amazon and Tesla headline the biggest week of earnings

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The coming week will be the most important of this quarter’s earnings season — even if later weeks beat it on quantity, it will be nearly impossible to top this slate in terms of dollars and attention.

That is because all of Big Tech will report, and those five companies — Google parent Alphabet Inc.
GOOGL,
+3.58%
GOOG,
+3.37%,
e-commerce and cloud-computing powerhouse Amazon.com Inc.
AMZN,
+0.51%,
iPhone maker Apple Inc.
AAPL,
+1.20%,
social-media titan Facebook Inc.
FB,
+5.30%
and software giant Microsoft Corp.
MSFT,
+1.23%
— can determine the course of the market at this point in history.

Consider these stats, from Dow Jones Market Data Group:

  • The five Big Tech companies comprised more one-fifth of the total market cap of the S&P 500 index
    SPX,
    +1.01%
    as of the end of the second quarter, 22%.
  • In the first quarter, they provided nearly 10% of the total sales of the 500-member index, and nearly 18% of the total profit (9.7% and 17.8%, respectively).
  • That proportion of profit provided by Big Tech actually decreased from 2020, when the five companies provided nearly a quarter of the index’s full-year earnings, 23.8%, and accounted for 9.1% of the total sales.

In the coming week, the five companies are expected to reveal some large earnings and sales for the second quarter, which can typically be slower ahead of back-to-school and holiday shopping in the second half of the year. Collectively, they are expected to report profit of nearly $60 billion on sales of more than $310 billion, according to analysts’ estimates collected by FactSet.

Those estimates are likely conservative. So far this quarter, 88% of S&P 500 companies have surpassed analysts’ average estimates for earnings per share, and 86% have beaten on revenue with nearly a quarter of the index reporting, according to FactSet. Both of those figures would be records for overall surprise percentage, which FactSet has tracked back to 2008, according to senior earnings analyst John Butters.

Facebook and Google, for example, are widely expected to outdistance estimates after fellow online ad-sales companies Snap Inc.
SNAP,
+23.82%
and Twitter Inc.
TWTR,
+3.05%
blew away expectations in their reports last week, which helped boost Alphabet and Facebook to record stock highs Friday, along with Snap.

See also: Facebook earnings preview and Alphabet earnings preview

Stock movement is unlikely to be determined by the numbers those companies report, especially after the big bounce on Friday; forecasts have been more important for investors as they wait to see how long the current boom in corporate earnings will last. And all five companies have been careful with their forward-looking statements during the COVID-19 pandemic.

Apple has stopped providing guidance during the pandemic, which will obstruct the annual parlor game of trying to glean facts about the coming iPhone release from the company’s financial forecast. While Microsoft is expected to wrap up its fiscal year by breaking the records it put up the year before by a healthy amount, it will likely only provide official financial guidance for the coming quarter instead of the full year, as executives have done in the past.

Full earnings preview: What will Apple say about the next iPhone at earnings time? Maybe more than usual

Most Big Tech forecasts that have been shared ended up undershooting their actual performance, which can keep expectations low and produce big beats. Amazon, for instance, topped the highest end of its sales forecast by 2.3% in the first quarter, which equates to an additional $2.5 billion. And that was actually the closest Amazon came to an accurate prediction in Big Tech’s $1.2 trillion pandemic year, after beating the top end of its quarterly guidance by 3.8%, 3.4% and 9.8% looking backward from the fourth quarter.

So expect at least a couple of big earnings beats and a lot of questions about what comes next as these reports flood in during the week. Apple, Google and Microsoft all expect to report on Tuesday afternoon following the close of markets, while Facebook follows Wednesday afternoon and Amazon wraps it up on Thursday afternoon.

The call to put on your calendar
  • Tesla Inc. When Tesla
    TSLA,
    -0.91%
    Chief Executive Elon Musk speaks, the markets listen.

The most controversial CEO in Silicon Valley has sent cryptocurrencies like bitcoin
BTCUSD,
+4.38%
and dogecoin
DOGEUSD,
+3.44%
on crazy rides with his tweets and pronouncements so far this year, but when he kicks off the week’s after-hours earnings slate Monday afternoon, the focus should be on Tesla and its stock.

As always, there are plenty of issues to discuss with the electric-car manufacturer. After the departure of a longtime executive, the progress of Tesla’s Semi road map will need to be addressed, as will the gross-margin effects of the continuing semiconductor shortage, an issue across the automotive industry.

Full Tesla earnings preview: Semi truck, Cybertruck pickup and chip shortage in focus

Tesla is also likely to address its plans to sell its advanced driver-assistance features as a subscription package, even as Consumer Reports joins in a chorus of criticism about Tesla’s approach to autonomous driving. Musk’s recent pronouncement that Superchargers will be opened to electric vehicles from other manufacturers, as well as demand amid heated competition in China will also be topics to look for.

Also watch for chip-shortage commentary from other, more staid automakers, such as Ford Motor Co.
F,
-0.65%
on Wednesday, as well as chip supplier Qualcomm Corp.
QCOM,
+1.71%.

  • Hasbro Inc. and Mattel Inc. Could there be a more worrisome phrase than “toy shortage” as we approach the holiday shopping season?

Well, analysts raised the alarm last week that we could face exactly that, after parents purchased bundles of toys out of season to keep their kids entertained while home from school during the COVID-19 pandemic, which put a crimp on the industry’s supply chain. Expect executives to address any problems at Santa’s workshop when Hasbro
HAS,
-0.89%
reports on Monday and Mattel
MAT,
-1.60%
follows on Tuesday.

The numbers to watch
  • Boeing Co.’s bottom line. Boeing
    BA,
    +0.29%
    is expected to post another loss in the quarter, but analysts predict that it will go against the grain and post a loss much wider than the average consensus. “We think Boeing is set to announce another monster 2Q loss, with a free cash outflow of ~$2.8bn by our estimates,” Vertical Research analysts said, while Benchmark analyst Josh Sullivan predicted last week that Boeing would top $1 a share in losses, while the average analyst estimate currently is looking for a loss of about 83 cents a share.
  • Fast food sales. After strong reports last week from Chipotle Mexican Grill Inc.
    CMG,
    +1.81%
    and Domino’s Pizza Inc.
    DPZ,
    -2.48%,
    burger makers and other casual dining chains will detail if their pandemic-influenced boom continued as certain areas of the U.S. opened up. On the schedule this week are McDonald’s Corp.
    MCD,
    +1.80%,
    Shake Shack Inc.
    SHAK,
    +0.63%,
    Yum Brands Inc.
    YUM,
    +2.10%
    (and Yum China Holdings Inc.
    YUMC,
    +0.65%
    ), and Wingstop Inc.
    WING,
    +1.20%.
    Also look for signs of change from chain restaurants that depend more on in-house traffic but pivoted to more takeout during the pandemic, such as Cheesecake Factory Inc.
    CAKE,
    -0.31%
    and Bloomin’ Brands Inc.
    BLMN,
    +0.55%.
This week in earnings

Exactly one-third of the 30 Dow Jones Industrial Average
DJIA,
+0.68%
components and more than one-third of the S&P 500 components, up to 180, are expected to report earnings in the coming week, according to FactSet. Notable reports from outside the major indexes include Canadian e-commerce platform Shopify Inc.
SHOP,
+3.09%
and streaming-music service Spotify Inc.
SPOT,
-0.22%
reporting on the same morning Wednesday, which is bound to produce some confusion between the two similarly named companies, as well as growing Silicon Valley software maker Twilio Inc.
TWLO,
+1.07%
on Thursday afternoon.

Dow Jones Industrial Average reports: 3M Co.
MMM,
+0.71%,
Apple, Microsoft and Visa Inc.
V,
+2.00%
(Tuesday); Boeing and McDonald’s (Wednesday); Merck & Co. Inc.
MRK,
+1.32%
(Thursday); Caterpillar Inc.
CAT,
+0.18%,
Chevron Corp.
CVX,
+0.04%
and Proctor & Gamble Co.
PG,
+1.44%
(Friday)

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