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Connected, Episode 106: Running in Gucci Shoes→

With a week to go before Apple’s fall event, the Connected Trio gather from their respective lands to discuss the possibilities of new Apple Watch models, new Macs and Apple’s situation in Ireland.

On this week’s Connected, we start the speculation on what next week’s Apple event could bring. You can listen here.

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Apple Ordered to Pay Up to 13 Billion Euros in EU Tax Crackdown→

Dara Doyle and Stephanie Bodoni, writing for Bloomberg:

Apple Inc. was ordered to repay a record 13 billion euros ($14.5 billion) plus interest after the European Commission said Ireland illegally slashed the iPhone maker’s tax bill.

The world’s richest company benefited from a “selective tax treatment” in Ireland that gave it a “significant advantage over other businesses,” the European Union regulator said Tuesday in its largest tax penalty in a three-year crackdown on sweetheart fiscal deals granted by EU nations.

The European Commission is not saying that Apple has not paid its taxes. Rather, they have said that two tax rulings handed down to Apple by the Irish government in 1991 and 2007 had “no factual or economic justification” and constituted illegal state aid. That’s a problem in the eyes of the European Commission because profits from Europe, the Middle East, Africa and India were attributed to Apple’s corporate entity in Ireland.

“Ireland granted illegal tax benefits to Apple, which enabled it to pay substantially less tax than other businesses over many years,” EU Competition Commissioner Margrethe Vestager said in an e-mailed statement. “This selective treatment allowed Apple to pay an effective corporate tax rate of 1 percent on its European profits in 2003 down to 0.005 percent in 2014.”

The European Commission now wants the Irish government to claw back 13 billion Euros from Apple. Whilst this ruling is a significant development, it is far from the end of the story, Apple and the Irish government have already signaled their intentions to appeal the decision of the European Commission. If they do appeal, it is likely to take years for a final decision to be reached.

Update: Apple has posted an open letter from Tim Cook on their website, responding to today’s European Commission decision.

The European Commission has launched an effort to rewrite Apple’s history in Europe, ignore Ireland’s tax laws and upend the international tax system in the process. The opinion issued on August 30th alleges that Ireland gave Apple a special deal on our taxes. This claim has no basis in fact or in law. We never asked for, nor did we receive, any special deals. We now find ourselves in the unusual position of being ordered to retroactively pay additional taxes to a government that says we don’t owe them any more than we’ve already paid.

The Commission’s move is unprecedented and it has serious, wide-reaching implications. It is effectively proposing to replace Irish tax laws with a view of what the Commission thinks the law should have been. This would strike a devastating blow to the sovereignty of EU member states over their own tax matters, and to the principle of certainty of law in Europe. Ireland has said they plan to appeal the Commission’s ruling and Apple will do the same. We are confident that the Commission’s order will be reversed.

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Connected, Episode 105: What Does Done Mean?→

Federico’s back, so the power of The Prompt Curse has been restored. Picturelife is dead, Ping is in headlines and iOS 10 is closer than ever.

On this week’s episode of Connected, I check back on the status of my iOS 10 review as we move closer to September. You can listen here.

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Government Hackers Caught Using Unprecedented iPhone Spy Tool→

Lorenzo Franceschi-Bicchierai, writing for Motherboard:

This is the first time that anyone has uncovered such an attack in the wild. Until this month, no one had seen an attempted spyware infection leveraging three unknown bugs, or zero-days, in the iPhone. The tools and technology needed for such an attack, which is essentially a remote jailbreak of the iPhone, can be worth as much as one million dollars. After the researchers alerted Apple, the company worked quickly to fix them in an update released on Thursday.

The question is, who was behind the attack and what did they use to pull it off?

It appears that the company that provided the spyware and the zero-day exploits to the hackers targeting Mansoor is a little-known Israeli surveillance vendor called NSO Group, which Lookout’s vice president of research Mike Murray labeled as “basically a cyber arms dealer.”

A great story from Motherboard that is equal parts fascinating and absolutely terrifying. The malware from NSO is able to effectively steal all the information on your phone, intercept every message and add backdoors to every method of communication on your phone. Evidence suggests that NSO has likely been able to hack iPhones since the iPhone 5.

The security researchers who first became aware of the security bugs notified Apple about 10 days ago, and Apple today released iOS 9.3.5 which fixes the bugs. Suffice to say, you should immediately install the update onto your iOS devices.

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Inside Your iPhone’s Brain→

Steven Levy has a fascinating inside look at Apple’s artificial intelligence and machine learning efforts on Backchannel. Levy spent most of a day with Eddy Cue, Phil Schiller, Craig Federighi, Tom Gruber, and Alex Acero in a wide-ranging discussion of the products impacted by those efforts. Perhaps the most interesting parts of the interviews revolved around what Levy refers to as the Apple Brain inside the iPhone:

How big is this brain, the dynamic cache that enables machine learning on the iPhone? Somewhat to my surprise when I asked Apple, it provided the information: about 200 megabytes, depending on how much personal information is stored (it’s always deleting older data). This includes information about app usage, interactions with other people, neural net processing, a speech modeler, and “natural language event modeling.” It also has data used for the neural nets that power object recognition, face recognition, and scene classification.

And, according to Apple, it’s all done so your preferences, predilections, and peregrinations are private.

Levy also covers the replacement of Siri’s smarts on July 30, 2014 with neural-net system. The impact according to Eddy Cue was immediate:

This was one of those things where the jump was so significant that you do the test again to make sure that somebody didn’t drop a decimal place.

Many people have commented that Siri has improved over time, but without the context beyond one’s own experience or metrics from Apple, the perceived change has been largely anecdotal. According to Acero, however:

The error rate has been cut by a factor of two in all the languages, more than a factor of two in many cases.… That’s mostly due to deep learning and the way we have optimized it — not just the algorithm itself but in the context of the whole end-to-end product.

Levy also delves into whether Apple’s stance on privacy hobbles its ability to effectively implement AI and machine learning. According to Apple, it does not. The most personal information remains on-device in the ‘Apple Brain.’ Other data, which is transmitted to Apple uses techniques like differential privacy, which is coming in iOS 10, to obfuscate a user’s identity.

The entire article is worth a read to get a sense of the breadth and depth of Apple’s AI and machine learning efforts and the impact on its products. It’s also fascinating to see Apple continue to open up on its own terms as a way to rebut recent criticisms leveled against it.

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Pinterest Acquires Instapaper→

In a surprising move, Pinterest has acquired Instapaper, the iOS app and web service originally built by Marco Arment and sold to betaworks in 2013. According to Casey Newton of The Verge:

The goal is “to accelerate discovering and saving articles on Pinterest,” the company said in a statement. It will continue to operate as a standalone app, and the Instapaper team will work on both that app and on Pinterest generally.

Pinterest has had an article saving feature since 2013, though the service is far better known as a way to bookmark images and other visual content. With the acquisition of Instapaper, which Pinterest says will be maintained as a stand-alone app, Pinterest appears to be looking for a way to expand its customer base into sectors adjacent to it’s core product.

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iOS Accessibility Milestones→

The impact of the accessibility features built into iOS cannot be understated. Accessibility has opened doors to computing that were previously shut to many people with disabilities. With iOS 10 launching soon, Steven Aquino takes a look at iOS accessibility milestones in a guest post on 512 Pixels that focuses on five key features: VoiceOver, Guided Access, Large Dynamic Type, Switch Control, and Magnifier.

It feels like VoiceOver has been around forever, so it was interesting to be reminded that it didn’t debut until the introduction of the iPhone 3GS and has its roots in the short-lived buttonless iPod Shuffle. Of the other accessibility feature covered, the one that will probably be the least familiar to most readers is Magnifier, which is coming in iOS 10. Aquino believes that when we look back at iOS 10 in the future, Magnifier will be viewed as one of the greatest enhancements to iOS:

The reason I’m so effusive about Magnifier is the handiness of it. So often, I’m reading a restaurant menu or looking at price tags in the grocery store, and the print in set in small font. Where previously I would strain my eyes in order to see, now all I need to do is pull out my phone and triple-press the Home button to launch Magnifier.

Steven has written a lot about the accessibility of Apple products, including here at MacStories, and does a wonderful job putting each accessibility milestone into historical context. I encourage everyone to read the full article on 512 Pixels.

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Apple Acquires Health Care Start-Up Gliimpse→

One of the most interesting quotes from Fast Company’s interview with Tim Cook a couple of weeks ago was his comment about healthcare:

When you look at most of the solutions, whether it’s devices, or things coming up out of Big Pharma, first and foremost, they are done to get the reimbursement [from an insurance provider]. Not thinking about what helps the patient. So if you don’t care about reimbursement, which we have the privilege of doing, that may even make the smartphone market look small.

Today, Fast Company is reporting that Apple has confirmed that it acquired start-up Gliimpse earlier this year. According to Fast Company:

Silicon Valley-based Gliimpse has built a personal health data platform that enables any American to collect, personalize, and share a picture of their health data. The company was started in 2013, and funded by serial entrepreneur Anil Sethi, who has spent the past decade working with health startups, after taking his company Sequoia Software public in 2000. He got his start as a systems engineer at Apple in the late 1980s.

Gliimpse feels like a natural fit with the Health app, HealthKit, ResearchKit, and CareKit, especially considering Apple’s focus on data privacy. It’s still very early days, but between recent keynotes featuring the health-related features of the Apple Watch and acquisitions like this, Apple’s commitment to exploring healthcare opportunities is unmistakable.

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