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(Bloomberg) -- Apple Inc. is planning updates to its AirPods earbuds next year, seeking to capitalize on the success of a product that has become an important source of growth.The Cupertino, California-based technology giant is working on two new models: third-generation entry-level AirPods and the second version of the AirPods Pro earbuds, according to people familiar with the plans.The models will join other new Apple audio devices like the HomePod mini and upcoming over-ear headphones. The company has also weighed launching another smart speaker that would sit between the HomePod mini and the original version in the line up.The design of the updated entry-level AirPods will be similar to the current AirPods Pro, gaining a shorter stem and replaceable ear tips. Apple is also looking to improve battery life. That model however will not have higher-end AirPods Pro features like noise-cancellation, said the people, who asked not to be identified discussing private matters.For the new AirPods Pro, Apple is aiming to make the earbuds more compact by eliminating the short stem that currently sticks out from the bottom. A design in testing has a more rounded shape that fills more of a user’s a ear -- similar to the latest designs from Samsung Electronics Co., Amazon.com Inc. and Google.Integrating noise-cancellation, wireless antennas and microphones into a smaller AirPods Pro casing has proved challenging during development, which could result in a less ambitious design when the product is finalized, the people said. An Apple spokeswoman declined to comment.Apple has internally discussed launching the new low-end AirPods during the first half of next year. The company is also planning new wireless chips to power both models. Luxshare Precision Industry Co. and Goertek Inc. are expected to handle most of the production for the new earbuds.Goertek, which derives roughly 40% of its revenue from Apple, jumped 2.5% to a record in Shenzhen trading Tuesday. Luxshare inched up 0.2%, after having more than doubled this year. After being mocked by some early on, AirPods have become one of Apple’s biggest hits in recent years. The company’s Wearables, Home and Accessories division, which includes AirPods, reported $6.5 billion in revenue in the latest quarter, up more than 70% from two years ago. The earbuds may get a new sales boost soon because Apple stopped including headphones with new iPhones.The success has attracted rivals such as China’s Xiaomi Corp. that offer more affordable options.Read more: Apple Ceding Wireless Earbuds Market ShareApple currently sells entry-level AirPods for $159 and the AirPods Pro at $249. The original AirPods launched in 2016 and were last updated in March 2019. The AirPods Pro came out in October last year.Beyond the new AirPods, Apple has also internally weighed a new HomePod that sits in size, price and sound quality between the original $299 HomePod and the $99 HomePod mini. It’s unclear if Apple will ultimately launch that product or just further cut the price of the higher-end version.Apple is still planning to announce high-end, noise-canceling over-ear headphones. The device has faced several development challenges over the past two years and has been delayed multiple times.The headphones were due to go into production weeks ago, but that was pushed back due to problems with the headband, a person familiar with the matter said. That part was deemed too tight in some testing.Read more: Apple Developing High-End Headphones With Interchangeable PartsThe company initially wanted to include large touch pads on the sides of the headphones, but reduced the size of those panels. Apple has also scaled back some of the interchangeable functionality of the headphones that were a hallmark of the initial concept. The latest version of the product is likely to lack a replaceable headband, but could still include interchangeable ear pads.(Adds shares of Chinese suppliers in 8th paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Jay Y. Lee has been groomed for decades to take over Samsung Group, the conglomerate founded by his grandfather and built by his father into a technology giant. Yet even after the death of Lee Kun-hee on Sunday, his only son will likely have to wait a bit longer for his ascension.The younger Lee is in the midst of two trials over allegations he used bribery and accounting trickery to smooth his succession. While he has repeatedly denied wrongdoing, Lee faces the possibility of returning to jail if he is convicted. Samsung may hold off on naming Lee to his father’s role as chairman of Samsung Electronics Co. at least until the first trial is completed in the coming months, avoiding a scenario where the newly minted chairman goes to prison.That means Samsung would operate without a chairman for at least a few more months, a lack of clear leadership that could hurt many companies. But Samsung Electronics has respected executives who run the key operations, and Lee already holds the title of vice chairman to make broader, strategic decisions as needed.“I think Jay Y. Lee will be promoted to chairman early next year,” said Lee Sang-hun, analyst at HI Investment & Securities. “He might also wait until the bribery case is finalized.”Samsung declined to comment. The company hasn’t said who will take over the chairman position or when.The timing of Lee’s formal ascension is sensitive given how public dissatisfaction with the country’s powerful conglomerates, or chaebols, has grown in past years. That backlash stems in part from the high-profile allegations of graft against Lee, which triggered the impeachment of then-President Park Geun-hye.Also complicating the succession is an enormous inheritance tax bill the Lee family will have to pay, possibly loosening their control over the conglomerate. The elder Lee had an estimated fortune of $20.7 billion, according to the Bloomberg Billionaires Index, and could owe about $10 billion because of the country’s high rates.Samsung Heirs Owe Billions in Taxes. Here’s How They Might PayMost families choose to pay such taxes in cash rather than in stock to maintain control, said Chung Sun-sup, chief executive officer of Seoul-based corporate-analysis firm Chaebul.com. They can take five years to make the payments, he said.There’s little doubt the 52-year-old Lee will succeed his father eventually. The younger Lee, who is trilingual, studied at Japan’s Keio University and Harvard Business School after receiving an undergraduate degree from Seoul National University, the nation’s top school. He has brought a more global approach to Samsung’s management, forging relationships with key partners like the late Steve Jobs.While Samsung Electronics is best known globally for its smartphones and appliances, it makes most of its money by supplying companies like Apple Inc. with components such as memory chips and panels.Chang Sea-Jin, a professor at the National University of Singapore Business School, said the alternatives to simply promoting Lee may be worse. Naming an interim chairman from the Samsung executive ranks, for example, would complicate decision making by adding an extra management layer, he said. There would be valuable clarity in Lee taking on his father’s role, he said.“I think he should take the chairmanship now,” said Chang. “Whatever the circumstances, he has to make the decisions.”Samsung can’t afford to drift. The company faces renewed challenges from Apple and the rise of tough Chinese competitors in smartphones, along with chronic pricing difficulties in memory chips. Samsung is also embarking on expensive initiatives in fifth-generation wireless technology and the semiconductor foundry industry. Samsung Electronics reports results Thursday.Samsung Low-Profile Heir Poised to Succeed Father Seen as a GodChang pointed out that Lee wouldn’t have to run individual business units because of the professional managers who steer the operations. That’s a marked contrast to the early days of his father’s tenure, when the elder Lee got deeply involved in key divisions.“He doesn’t have to be another Lee Kun-hee; they have much stronger professional management,” Chang said. “He should be a different kind of chairman than his father.”Lee’s legal troubles could drag on for years. A retrial of bribery and corruption allegations will unfold this year, with a decision likely early next year. A newer case about alleged accounting wrongdoing will get under way again in January and will likely take months.Such prosecutions don’t carry the same kind of stigma in South Korea as they do in many other countries. Lee Kun-hee was convicted twice -- and pardoned twice. The chairman of SK Group was also jailed in 2013, then returned to his company in 2016 where he remains at the helm.Chang joked that prison is almost like “graduate school” for the country’s business leaders.“Eventually we should move away from this environment in South Korea and have the same standards as other countries,” he said.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- Apple Inc. has finally joined the 5G party, and it’s a well-timed entrance. Often derided for being late to new technologies, and rightly so, the launch of its first 5G iPhones coincides with some important changes to be rolled out by the telecoms industry this quarter. As a result, wireless connections are going to get better and smartphone performance should improve. Release 16 of the 3GPP standards, also known as 5G Phase 2, is mostly focused on technologies that will benefit non-smartphone applications, including vehicle communications, factory connectivity and internet of things. (Release 15 marked the first set of 5th-generation mobile telecom specifications). The details were finalized in June — frozen, in industry parlance — and will be rolled out by year end. While the standards are global, countries, operators and vendors may implement them at different times.Yet owners of Apple’s $999 iPhone 12 Pro along with consumers who have the Galaxy S20 5G from Samsung Electronics Inc. ($999) or the Mate 40Pro from Huawei Technologies Co. ($1,400)(1) can also expect to see some upside. And it’s not a minute too soon. As my colleague Tae Kim pointed out recently, the lackluster current state of 5G networks “could lead to underwhelming demand.”One of the biggest complaints about 5G handsets is that they’re power hogs, a fact acknowledged by Samsung. An update contained in Release 16 addresses this by offering a power-saving technique called DRX adaptation. DRX stands for discontinuous reception and has been used in 4G systems, with the new specifications now making a version available for 5G radio standards. This feature allows the smartphone and the network to coordinate so that the device can enter a kind of sleep mode for signal reception.With a few other techniques also added to the line-up (for geeks, they are: cross-slot scheduling, maximum MIMO layer adaptation, and fast transition out of connected state), smartphones should be able to last longer before requiring a recharge.Much of the hype surrounding 5G speeds relates to the use of new high-frequency bandwidths more commonly known as mmWave; the wavelengths are literally 1 millimeter. But the problem is that it’s subject to all sorts of environmental factors — a heavy rainstorm could reduce speeds to a trickle — and crazy small footprints that could make coverage range even worse than WiFi.This requires operators to roll out more base stations and place them closer together. But doing so also requires more connections to the core network — known as backhaul. Normally this is done via some sort of cable, eg, fiber optic.Release 16, however, supports integrated access and backhaul, meaning that telecom operators can add mmWave base stations without the need to run a cable to the cell site, though it will still need electricity. Instead, they can use wireless frequencies to provide both consumer access and network backhaul, which should cut both the time and cost of rolling out more stations and help boost coverage.A collection of other additions, each seemingly minor, will also improve the way smartphones move between existing Long-Term Evolution (4G) networks and the new 5G systems. While there’s a lot of expectation surrounding the faster 5G networks, the reality is that operators and smartphones will generally be switching between the old and the new. If done well, consumers will barely notice the difference in speeds and reliability. But to make it happen seamlessly, Release 16 offers enhancements that will make the transition between the networks more efficient.As these new specifications trickle through the industry, from handset and equipment vendors to telecom operators, consumers can expect to see their fancy new 5G handsets start to approach the speeds they’re paying for.(1) All prices are approximate, and will vary according to region. These devices shouldn't be considered equivalent.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Tim Culpan is a Bloomberg Opinion columnist covering technology. He previously covered technology for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.