Apple to host UK Special Event 18/9

Filed under: Other Events, AppleThanks to tipster Lee for sending this, courtesy of MacFormat. Apple has announced an invite-only event to be held next Tuesday morning (18th September) at London's Regent Street Apple Store. The event invite is simply headed with the tagline "Mum is no longer the word" and instructions on how to get to the Regents Street store. My money, as with most, is on an iPhone announcement - possibly UK-specific given that it's just one week before Apple Expo Paris...

Filed under: Other Events, AppleThanks to tipster Lee for sending this, courtesy of MacFormat. Apple has announced an invite-only event to be held next Tuesday morning (18th September) at London's Regent Street Apple Store. The event invite is simply headed with the tagline "Mum is no longer the word" and instructions on how to get to the Regents Street store. My money, as with most, is on an iPhone announcement - possibly UK-specific given that it's just one week before Apple Expo Paris (Europe's largest Apple event) - however we'll clearly have to wait until next week to get any more out of Apple.Read|Permalink|Email this|Comments

  • Apple Holding Special UK Event on Sept. 18th

    Tuesday September 18th, 2007 is the date. London's Regent Street Apple Store is the location. “Mum is no longer the word” is the tag line associated with the announcement, and those three facts are all we're going to know about what Apple has planned for their UK special event next week. Of course, everyone is assuming one thing, and one thing only - iPhone. Since this is special event is coming only a week before the Apple Expo Paris, which is the largest Apple Evnt in Europe, it's safe to say that this announcement is specific to the UK - making it even more likely the the iPhone will be the focus of the event. Apple Gazette will, of course, cover the event as best we can or all our UK readers. I'm not sure yet if we'll be able to live blog it, but at the very least, we'll have the information from the invent as soon as it's over. via TUAW

  • ★ Greatly Exaggerated

    At Tuesday’s annual iPod/iTunes special event, Steve Jobs both (a) served in his usual role as showman, and (b) appears to be just as thin as he was at WWDC in June, when his appearance sparked rumors that he was seriously ill. Like it or not, his appearance and health remains a big story in the major media. The coverage of Tuesday’s event from the technology columnists for both of the U.S.’s leading news magazines — Josh Quittner at Time (headline: “Steve Jobs: Not Dead Yet”) and Dan “Fake Steve” Lyons at Newsweek (who persists in referring to Jobs as “Dear Leader”) — was focused squarely on Jobs, not the day’s product announcements. The speculation is not wholly unfounded. If Apple and Jobs do not wish to discuss the details of his health other than in the broadest of terms (e.g. “doing just fine”), that leaves the outside world with only a few cold hard facts, one of which is what our eyes tell us — that Steve Jobs has lost a tremendous amount of weight — and another is that he had surgery for a rare, treatable form of pancreatic cancer in 2004. The other fact we know is that The New York Times reported that Jobs had a second “surgical procedure” earlier this year, “to address a problem that was contributing to a loss of weight.” The good news, such that it is, is that there are explanations other than a recurrence of cancer that would explain these facts. The pancreaticoduodenectomy (a.k.a. “Whipple procedure”) Jobs underwent in 2004 to treat his pancreatic cancer can lead to complications which require intestinal surgery, which surgery can lead to digestive changes and significant, perhaps permanent, weight loss. The best and most informative speculation I’ve seen is this piece on ScienceBlogs, written in late July by a pseudonymous surgeon. The details are unpleasant, and include severe diarrhea, nausea, and radical weight loss. But the conclusion is a good one: What’s more important, though, is that Jobs’ appearance (at least as far as I can tell from the limited information that I have) is almost certainly not due to a recurrence of his tumor, and it’s not something that can’t be fixed. Chances are Jobs will be fine, and will remain as cantankerous, arrogant, dictatorial, and wildly visionary as ever for many years to come. The author speculates that the procedure Jobs underwent this year is a Roux-en-Y, which according to Wikipedia is the surgical procedure that forms the basis for gastric bypass. Gastric bypass is a procedure that helps the obese lower their weight to a normal level. Steve Jobs was, if anything, already on the thin side before having surgery. We don’t know because Jobs won’t say, but this is my best guess as to what the deal is with Jobs’s weight loss. In a post-event interview with CNBC’s Jim Goldman Tuesday, Jobs reiterated that he’s “doing just fine”, but admittedly could “stand to gain 10 or 15 pounds”. Goldman then reports: I asked [Jobs] about the rampant speculation and rumors on the blogosphere about the issue, and whether he was surprised by it. Where did he think it all came from, I asked. He picked up his briefcase and told me it was from “hedge funds with a big short position in Apple.” I think a little context here might be helpful. He said it in passing. It wasn’t as if he was lobbing some specific grenade on Wall Street. I didn’t follow up with which funds he was talking about because it wasn’t relayed to me that way. He just said matter-of-factly that it’s what he thought. Or felt. Nothing specific on which to base it, or maybe there was, but he didn’t share that with me. I don’t have a problem with Jobs’s assertion that the specific details of his health are a private matter. But this sort of speculation regarding the cause of his weight loss is inevitable in the absence of full disclosure. What made matters worse is that, in the aftermath of WWDC, Apple PR put forth the claim that Jobs’s gaunt appearance was the result of “a common bug”. That seemed so Kremlin-esque, so clearly an insufficient explanation, that it’s understandable that some people, including investors, jumped to the worst-case conclusion. Jobs actually broached the rumors regarding his health on stage at the beginning of the event, standing beneath a slide that read “The reports of my death are greatly exaggerated”, a deft way of using Bloomberg’s accidental publication of their canned obituary as an excuse to assert publicly that he’s not going anywhere. Well-played. Quittner and Lyons don’t seem to be buying it, though. Lyons, on his weblog:1 But Dear Leader remains alive and well (see photo above). Oh, and they’ve got some upgraded iPods and a new version of iTunes. Seriously? That’s it? I’m still trying to figure out why they held an actual event today instead of just putting out a press release. As a fellow filthy hack commented to me after the big show, “Can you imagine if Sony did this?” Afterward I wondered if the entire purpose of the event was simply to have a reason to put Dear Leader out in public. Thing is, Dear Leader, while definitely still alive, nonetheless looks frail. […] It’s hard to describe this but there’s something not quite right about the way Dear Leader walks. I thought maybe I was imagining this but another hack said he thought the same thing. Quittner is of a mind with Lyons: Apple’s big event today in San Francisco left many people wondering: What the heck was that all about? Normally, the great Steve Jobs uses his time on the podium to delight and surprise the masses. But today he gave little more than a preview of the new holiday line of iPods, and the TV ads that will accompany them. You don’t have to be as cynical as me to understand the real reason this event was staged: It was so the world could watch Jobs swim the Yangtze River. The obvious reason as to why Apple holds this event annually is “because they can”. They fill a room with press and analysts, and the press fills newspapers, magazines, and web sites with coverage of what Apple announces. If (to take Lyons’s example) Sony could do this, they would. But Sony can’t, because they don’t have iPod-caliber players, or iTunes-caliber software, or an iTunes Store-caliber service. They have none of those, and Apple has all three. Quittner and Lyons are either ignorant or are being disingenuous. To claim that this week’s event was in any way not normal is to ignore the fact that Apple has scheduled an event just like Tuesday’s during September every year since the iPod debuted in 2001.2 Eight years in a row. Take it to the bank that there will be another such iPod/iTunes event on a Tuesday in mid-September 2009, too. Some years the announcements are more significant than others. Last year’s introduction of the iPod Touch was a bigger deal than this year’s introduction of the updated iPod Touch. But you can’t expect a Touch-like leap forward every year. In the eight years Apple has held this event, I’d say the coolness factor of this week’s news falls squarely in the middle: the new Nano is a complete redesign (and it’s already winning rave reviews); Apple is positioning the iPod Touch as a major handheld gaming platform; and the “genius” suggestion engine is a useful addition to iTunes. What gives resonance to the rumors regarding Jobs’s health is the suspicion that if he were terminally ill, that this is how he’d play it, denying it until the end. He’s intensely secretive and private, and the backstory regarding his original diagnosis and surgery, as reported by Peter Elkind at Fortune, is that he didn’t announce it publicly until after he’d had surgery on July 31, 2004 — eight months after the cancer was originally diagnosed in October 2003. But that suspicion doesn’t stand up to scrutiny. If Apple’s board of directors knows Jobs’s full bill of health, it would be illegal for them to stand by and allow Jobs and Apple’s PR department to make statements to the contrary. And if the board does not know Jobs’s full bill of health, they’re neglecting their legal responsibilities. There’s a difference between 2004, when Jobs and Apple kept his original cancer diagnosis a secret, and what Lyons is suggesting now, which is that Jobs is lying. The difference is that lying about this would constitute securities fraud. Under this scenario, Jobs himself would no longer be around to take the rap for it, but the members of Apple’s board would be. So consider this: What if instead of holding Tuesday’s event, Apple had instead done just what Lyons and Quittner propose, and announced this week’s news via press release? What would Lyons have written then? My guess is he would have jumped on it as evidence that Jobs was too ill to take the stage, and that his hubris was now harming Apple and its shareholders by robbing the company of the free publicity these events generate. Lyons’s article for Newsweek (a “web exclusive”), is more formal, dispensing with the “Dear Leader” nickname, but devotes just under half the article to Jobs’s weight and health: “Jobs still looks gaunt and frail. He walked under his own power but didn’t look like a fit healthy man in his early 50s.”↩ The original iPod debut was in October, not September, 2001, pushed back one month in the aftermath of the September 11 terrorist attacks.↩

  • Apple's iPhone Heads for Europe

    With Apple (AAPL) self-imposed deadline of Sept. 30 rapidly approaching and a mysterious press event scheduled for Tuesday Sept. 18 in London, the rumor sites have fallen into line and concluded that Steve Jobs is finally set to unveil his plans for rolling out the iPhone across the pond, as CFO Peter Oppenheimer promised last July. For the phones themselves, Europeans will have to wait a little longer -- probably until November. Much of what Apple will announce in the next two weeks is hardly a secret anymore. FT Deutschland reported in August that the company had signed contracts with three European cellular network operators -- T-Mobile in Germany, Orange in France and O2 in the UK -- that included a 10% kickback to Apple on revenue collected from iPhone calls and data transfers. Since then reports have surfaced almost daily to flesh out the details, including the image at left that purports to be an ad for a 16 GB German iPhone priced at 499 euros ($692). The ad may well be a fake, but the price corresponds with the most authoritative rumor to date, Reuters' report on Friday that Deutsche Telekom's T-Mobile unit will sell the iPhone in Germany for an initial price of 399 euros ($554). Presumably that's the price for an 8GB model. Although Reuters' source predicted that the T-Mobile deal would be announced this coming week, Apple has not yet issued press invitations in Germany. The event in London -- cryptically entitled "Mum is no longer the world" -- is to be held at 10 a.m. local time at the Apple store on Regent Street, a surprisingly modest venue for what most observers expect will be the O2 announcement. The Apple Expo in Paris, which runs from September 25 to 29, would seem a more propitious time for Steve Jobs to share his iPhones plans for Continental Europe. The only suspense left may be when the phones start shipping and whether they will sell. Peter Oppenheimer in July said only that Apple was on track to start shipping iPhones to Europe before the end of the year, which hasn't stopped the rumor sites from putting their chips on earlier dates. On Friday Think Secret cited "fresh information" suggesting that the phone would arrive in the U.K. during the week of November 12, in France "around November 29" and in Germany "some time in November." If the German advertisement is to be believed, Europeans could see 16 GB iPhones before Americans do. Early speculation that the new devices would run on Europe's 3G networks has largely been dismissed, leading some analysts to suggest that a 2.5G iPhone might be received by cellphone sophisticates on the Continent with a yawn. But the eagerness with which Apple enthusiasts abroad have been snapping up iUnlock and other programs that free the phone to work in Europe suggest that there might be quite a bit of pent-up demand.

  • Why Dan Frommer and Scott Moritz Are Wrong on iPhone Sales

    Daniel Eran DilgerSilicon Alley Insider's Dan Frommer says Apple's announcement of reaching its million mark goal in iPhone sales three weeks early is actually bad news for Apple and is convolutedly "below plan." He also says the announcement only props up the speculative conjecture by Scott Moritz of the Street that Apple's iPhones sales are somehow woefully below expectations. They're wrong, here's why.The PremiseFrommer wrote that Apple isn't selling iPhones as fast as planned and is set to only sell around half of its 2008 goal.His premise revolves around the idea that if Apple were selling iPhones at "a constant rate," a million phones in 74 days would be five million per year. However, because it sold over a quarter of those in the opening day and a half at the end of June, Frommer calculates that sales of the remainder in the 72 days since the first of July mean that Apple is only hitting a "3.6 million annual run rate."By the end of 2008, that would only result in 5.8 million units instead of the ten million goal Apple. [Silicon Alley Insider: Apple's iPhone: 1 Million Is Below Plan]Strike One: The Run Rate Myth.The most obvious problem with that idea is the fact that devices don't sell at a constant “run rate." Apple's iPhone sales took off at launch much faster than the original iPod due to the fact that a swell of early adopters were ready to buy it after being convinced over six months of anticipation. At the same time, many potential buyers held off on plans to buy the iPhone until they could read reviews and get a real sense of how it worked. Many were also locked into contracts with Verizon or Sprint. With only six months of advanced notice, it will still be a few more months before the majority of buyers who want an iPhone even get the chance to buy one without having to pay outrageous fees to cancel their existing mobile contract. iPhone sales are also now taking on the network effect of the iPod, as early adopters show their friends. All these factors have difficult to estimate impacts upon sales that make trying to figure a static “run rate? a very simplistic and pointless exercise.However, there is another factor that simply blows the entire idea of a static “run rate? out of the water. Last November, I predicted that sales of the Zune would bomb that winter because Microsoft had failed to critically examine Apple's historical sales patterns. Sure enough, the Zune was thrown against the rocks by Apple's riptide. Frommer's idea ignores that same reality by imagining that iPhone sales will schlep along at a linear pace. Had Frommer tried to calculate an "annual run rate" for the iPod based on a portion of third quarter sales at any point over the last half decade, he would never have been close to accurate. That’s because Apple’s iPod sales roughly triple every winter quarter.In 2002, it sold nearly as many iPods in its winter quarter as it did the first three quarters combined: 219,000In 2003, it actually sold more iPods in its winter quarter than in the first three combined: 733,000In 2004, it again sold more iPods in its winter quarter than in the first three: 4,580,000In 2005, it sold more than 4 million units every quarter, but still sold nearly three times as many in the winter: 14,480,000.In 2006, it sold more than 8 million units every quarter, and then sold over 21 million in the winter quarter.In 2007, it has maintained quarterly sales between 10.5 and 9.8 million per quarter.[Strike 3: Why Zune will Bomb this Winter]Strike Two: The Have it Both Ways Myth.One particularly annoying bit of analysts' talk about Apple's expectations is that they can't seem to decide if Apple's projections are bad because they are conservative lowballs, or if they are bad for being overly enthusiastic figures the company won't be able to reach. They often try to describe them as both, loading contempt on both sides of the scale. This makes them look very foolish. Do they think we have no memory, or are they just changing their stories back and forth in sheer desperation?Frommer tried to argue both sides at once in the same article. Recall that Apple only ever gave two iPhone sales goals: one million by the end of the first quarter of sales, and ten million by the end of 2008. In his piece, Frommer suggests Apple will only be able to sell 5.8 million iPhones by the end of 2008, based on that fallacious "run rate." That would be just over half of Apple's ten million goal. However, he then says that Apple's immediate short term goal was an unimpressive low ball, no doubt because Apple reached it three weeks early.Apple's stated goals must be a greatly frustrating logical conundrum for Frommer, because even at a “run rate" of one million in a quarter, Apple could only ever hope to sell six million iPhones by the end of 2008, another five quarters later. No wonder he's faced with trying to say that the immediate goal was too low and the longer term one is too high! Frommer needs to stop trying to pound round facts into square holes just so they can be stacked up like bricks the way he would like them to be.Strike Three: The Market Bearing Price Myth.While Frommer and Moritz are enamored with the idea that iPhone prices could only be cut if sales were in crisis, a variety of obvious market realities don't support that simpleton idea. Between now and the end of 2008, Apple has just two holiday seasons. If it wants to dramatically exploit its historical potential for selling roughly three times as many gadgets during the winter season, it makes sense to trade off unit pricing for volume sales, even if it could perhaps sell fewer at a higher price and make more short term profits doing so.Such a strategy isn't unique. Microsoft and Sony currently lose money on their new game consoles in desperate bids to establish their gaming and HD video playing platforms. Even so, this year they both cut prices again to accelerate volume demand. Nintendo purposely aimed low to capture volume sales using a more attractive price point. Given high demand for the Wii and extremely constrained availability, Nintendo "should" seemingly raise its console price and profiteer. It hasn't. While prices are clearly linked to demand, it is a common fallacy to think that the "right price" is always the highest the market will bear. Jobs' 99 cent pricing in the iTunes store is clearly not the top price consumers will pay for downloads. Music labels are fuming that other licensees such as Verizon will collect $2.50 or more for portions of a song sold as a ringtone. Jobs wants media prices low to induce volume sales and attract buyers to the legitimate market for music and movie downloads. Labels and studios want "market pricing," in part so they can jack up the price of popular music to exploit consumers, and in part so they can exploit artists by threatening to release their work at lower tiered prices and signal to the market that their careers are over.[Universal vs Apple in the iTunes Store Contracts][Nintendo Wii vs Microsoft Xbox 360 and Sony PS3]This All Happened Before.Dial back the clock twenty years, and you'll discover that Steve Jobs also fought with Apple CEO John Sculley over the price of the original Macintosh. The desire to use an expensive but pioneering amount of RAM and a futuristic new processor had inflated the price of the Mac, but the design team was still able to deliver it at a fairly attractive price point of $1,995. Scully determined that the Mac would still sell at $2495, delivering high profits to fund splashy advertising. Nothing on the market was really similar to the Mac apart from Apple's $9,995 Lisa. VisiOn for the PC similarly cost nearly $10,000 and did far less. Sculley thought that the market would bear anything Apple might charge. Andy Hertzfeld recalled on Folklore.org that in October 1983, "Steve Jobs strode into the software area one evening, looking angry. 'You're not going to like this,' he told us, 'but Sculley is insisting that we charge $2495 for the Mac instead of $1995, and use the extra money for a bigger marketing budget. He figures that the early adopters will buy it no matter what the price. He also wants more of a cushion to protect Apple II sales. But don't worry, I'm not going to let him get away with it!'"Jobs fought Sculley over the price increase, but Sculley prevailed. Sure enough, Macs did sell well out of the gate to early adopters at the higher price, but sales then began to stall. While Jobs couldn't cut the price for the original Mac to induce wider adoption in the mid 80s, he could choose to cut the price of the iPhone early and use interest in the iPod Touch to ramp users toward the iPhone. That price cut will dramatically boost sales this winter, just as iPod price cuts and feature refreshes do every year.Apple will earn less profit on individual hardware sales of the iPhone, and may even earn slightly less money overall this quarter than it might have selling the iPhone at $599. However, a $399 iPhone will dramatically boost the company's sustainable subscriber revenues and devastatingly cut into stationary rivals like Palm and the Windows Mobile licensees, giving them little opportunity retool and strike back with copycat products.  [Price Fight - Folklore.org][Office Wars 3 - How Microsoft Got Its Office Monopoly]Strike Four: The Myth of Unlimited Availability.Another problem with idea that iPhone sales were in crisis--and that a price cut is a conspiracy to hide the truth--is that Apple sold out of iPhones in many of its retail stores throughout the first three weeks on sale.Carl Howe of Blackfriar's Communications tracked iPhone availability every day through July, and then animated the results in a movie that depicts just how constrained iPhone inventories in Apple's retail stores were. So not only did Apple meet its 94 day goal 20 days early, but it did so despite having no or few iPhones to sell in many of its stores during the first 21 days. Price isn't just related to demand, but also to supply.That also demonstrates the fallacy of Scott Moritz' assertion that Apple secretly planned to sell a million iPhones in a day and a half, and was sorely disappointed after failing to do so. How could Apple have planned on selling a million units in one day when it didn't even have a million units on the shelves of its stores during the first month? Remember, Moritz wasn't saying Apple had a delivery problem in getting enough units to stores as Nintendo is experiencing with its constrained supplies of the Wii. Instead, he tried to suggest that interest in the iPhone was far below Apple's estimates, and buyers were leaving it on the shelf like Windows Vista. The result, he claimed, was that "rivals were rejoicing."The only real rejoicing by rivals was that Moritz was volunteering to repeat the talking points handed to him by Verizon shill Roger Entner of IAG Research. Just hours before Apple announced it had sold a million units, Moritz tried to get some traction out of the idea that Apple had dropped the price in desperation to find another half million or so customers over the next three weeks. Apple isn't the typical tech company being run by visionless bean counters. It it were, it would have continued selling $600 iPhones at least through the end of September and then announced that it had sold its million. Apple had to push out new iPods in early September and fit the iPhone into the price range because next month it will be rolling out Leopard and a series of new software updates. Apple feeds the press in small, consistent, and regular feedings so reporters know what to write. If Apple were a big stupid company such as, say HP, it would parade out a mix of dozens of consumer and business products all together in one big event, and nobody would ever hear about any of it. HP did.[Why a million iPhones in 74 days is better than you think- Blackfriars][HP's marketing this week: fashionable but ineffective - Blackfriars][Unraveling Anti-Apple Panic: the iPhone Launch Success] [More on Scott Moritz and the Jim Cramer Misinformation Engine]Strike Five: It's Too Late to Deny the iPhone.The most comical part of Frommers’ analysis is that he’s trying to stuff a cat back into a bag and explain that there was never really any cat, long after everyone in the room heard the purr and pet the thing. Sorry, but the windows of opportunity to doubt the iPhone have long since closed.Real Windows Enthusiasts were aware of the need to deny the iPhone well before its release. They all chimed in with reasons why the iPhone wouldn't work, wouldn't offer what consumers want, and wouldn't sell well, all hoping that their non-stop misinformation campaigns would act as a self-fulfilling prophesy. They failed miserably.John Dvorak began his smear campaign immediately, appearing on CNBC to say that the iPhone was "trending against what people are really liking in phones nowadays, which are those little keypads.? He explained, “The BlackJack, the Samsung, the BlackBerry obviously pushes this kind of thing. The Palm, all of these. I guess some of these stocks went down on the Apple announcement, thinking that Apple could do no wrong. But I think Apple can do wrong, and I think this is it." Reader Jim Barrow sent in a link to a MarketWatch article from March, where Dvorak scribed a rambling diatribe entitled "Apple should pull the plug on the iPhone." He offered no factual basis for worrying that the iPhone might not work out apart from the offhanded comment that "there is no likelihood that Apple can be successful in a business this competitive," words which echoed Dvorak's 1984 observation that "the Macintosh uses an experimental pointing device called a 'mouse.' There is no evidence that people want to use these things."In April, Dvorak inflamed his 'pull the plug' rhetoric further in a TWiT podcast, where he reported to an audience of hundreds of thousands that the iPhone only delivered "40 minutes of talk time" and "the interface fouls up constantly.? Dvorak said that his inside information on the iPhone came from a "guy at Cingular who’s testing the product," adding, "he’s telling me confidentially and I shouldn’t be telling anybody."[John Dvorak: How Wrong Can One Guy Be?][Readers Write: Don't Write About John Dvorak Anymore]It'll Be the Death of You.Dvorak was joined by Rob Enderle, who called the iPhone “damned? and “not a very good phone? at every opportunity in the months before its launch, despite not really knowing anything about it, or even ever offering any rational criticism. Instead, Enderle appealed to fantasy fears of sexual assault, murder, and the violent death of children, all of which he suggested might somehow be related to the iPhone. Unaware that a password protected iPhone--or even a unauthorized unit without a configured service plan--can still be used to make emergency phone calls, Enderle wrote about, "an emergency situation where, say, a woman was being raped and couldn’t call for help because she didn’t remember her iPhone password." As I understand, with a Windows Mobile phone, even if the unit crashed while trying to place the call, at least the victim could use it like a brick as a blunt weapon. Enderle also feared that being unable to take out the battery would somehow making recharging it impossible, resulting an a scenario where one might end up on “the wrong side of town? with a dead iPhone and be murdered because of it. Being on the wrong side of town was apparently the source of most murders prior to the arrival of the cell phone, which somehow made it safe to be in bad neighborhoods. For those who unfazed by the prospect of one's own own grizzly death in relation to the iPhone, Enderle appealed to his readers to please think of the children, particularly the potential for their brutal decapitation in an iPhone-related collision. "If you are buying this phone for a child or another member of your family," Enderle warned, "please emphasize that entering data on this phone while driving is dangerous." In contrast, operating the slide out keyboards of an HTC brick phone, or using both hands to thumb type on a BlackBerry may or may not save your children as they drive off an embankment, but at least you'll know they didn't die at the hands of Apple's "damned" iPhone.[SCO, Linux, and Microsoft in the History of OS: 1970s][Mac OS X vs Linux: Third Party Software and Security]Pure Concentrated Evil with a Multitouch Screen.Brian Lam of Gizmodo published an impassioned plea to boycott the iPhone shortly before its launch, due to the fact that Cingular had purchased the AT&T name, a brand Gizmodo's writer correlated with "monopoly tactics" in the late 70s. Gizmodo hasn't ever called for the boycotting of Verizon Wireless, which is well known for its anti-consumer tactics and which shares just as much blood with the old AT&T as its Baby Bell sibling Cingular, nor has it ever urged the boycott Microsoft products due to "monopoly tactics." Gizmodo also failed to boycott any other GSM phones that are tied to AT&T.Gizmodo's Lam and Enderle then teamed up with Slate's David Sessions in an article purporting to expose Apple's rated battery life for the iPhone. Sessions complained about the attention the iPhone was getting, and tried to dismiss Apple's announcement of a two fold increase in battery life over what was originally advertised. Unbelievably, Sessions and friends could only explain away the iPhone's jump in talk time by crediting its glass screen, saying that "glass transmits light more efficiently than plastic." That and some witchcraft.However, all of these individuals sharply reduced their squirt rate of false information after the iPhone's successful launch. In day and a half, Apple sold 270,000 iPhones compared to the 500,000 Palm OS Treos, 1.03 million RIM BlackBerrys, and 1.51 million Windows Mobile phones that were sold worldwide in the first 90 days of 2007.Apple has since nearly matched highflying RIM in sales during July, despite being limited to a single carrier and only offered for sale in the US. At this point, denying the iPhone is like saying the Earth is flat. It might be fun to do at a Renaissance Faire, but pretending to seriously doubt reality is not a good career move unless you work for the Street--or perhaps Rupert Murdoch, as Dvorak does.[Secret iPhone Details Lost in a Sea of Hype and Hate][iPhone Sales vs Zune, Palm, RIM, Symbian, Windows Mobile]And Now: a Warning.Let it be known that anyone who publishes further misinformation or blows out similar inanity will risk being instantly awarded a Zoon on the spot. No complicated voting, no tedious application process. New Zoon nominees will be rubber stamped with the same effortless fast tracking as the ECMA declaring Microsoft technology as an international standard.In fact, I’m going to totally Zoon Dan Frommer and Scott Moritz right now, as well as John Dvorak, Rob Enderle, Brian Lam, David Sessions, and even Roger Entner. And John Sculley. And while I’m handing out an intellectual property construct that costs me nothing to distribute, I will also award Steve Jobs with a Zoon for the whole two month “just kidding? iPhone pricing situation, although I might take half of it back if I get a $100 coupon that doesn’t force me to spend $500 to actually use it. So let that be a warning to you out there on the Tubes thinking about how to linkbait an article at the expense of the progress of technology. I have a rapid firing gun full of Zoons and I’m not shy about cranking them out. Be sure to post any nominees.What do you think? I really like to hear from readers. Comment in the Forum or email me with your ideas. Like reading RoughlyDrafted? Share articles with your friends, link from your blog, and subscribe to my podcast! Submit to Reddit or Slashdot, or consider making a small donation supporting this site. Thanks!

  • Apple: "the iPhone is a gaming console"

    According to extremely reliable and embarrassingly handsome Engadget sources, at an iPhone event held today, John Geleynse (AKA Director of Technology Evangelism at Apple) made some statements regarding the iPhone platform that should seriously raise a few eyebrows. During an ADC "iPhone Tech Talk" in San Jose, Geleynse apparently waxed excited about the potential for the handheld as a viable threat to the DS (and the PSP by proxy), calling the iPhone a "gaming console" and claiming that "it's not a phone, it's a console experience." Pretty bold talk about a device that has yet to really prove its gaming mettle, but nothing new from the Apple camp as far as we're concerned. Considering these comments alongside those from a recent interview in which Greg Joswiak compared the touch to the DS, it seems clear that the company is making a noticeable effort to push this angle. Adding some fuel to that fire is PR that just went out announcing a series of EA "sneak peek" events at Apple Stores around the US. In their words:Throughout the month of December Apple Stores in New York, LA, San Francisco and Chicago will host special "EA Games Sneak Peek" events where Electronic Arts will discuss why the iPod touch and iPhone are amazing platforms for mobile gaming...While there's no question the iPhone and touch have made inroads when it comes to gaming, it still isn't clear that there's going to be anything beyond a casual interest for these devices. Then again, if the Wii's success has proven anything, it's that there's plenty of cash in casual if you can make it appealing enough. And you know how Apple feels about appealing products and money.Filed under: Cellphones, Gaming, HandheldsApple: "the iPhone is a gaming console" originally appeared on Engadget on Fri, 12 Dec 2008 16:43:00 EST. Please see our terms for use of feeds.Permalink|Email this|Comments

  • The Apple Store is... up? Isn't it Tuesday?

    Filed under: Analysis / Opinion, Cult of Mac, Odds and ends, Apple Walk back with me through the nostalgia of the past two months: January 8. New Mac Pros and Xserve January 15. Macworld Expo, MacBook Air, Apple TV 2, etc. January 22. Pink nanos January 29. New iWork updates February 5. Storage boost for iPhone and touch February 12. Aperture 2 February 19. New shuffle pricing and new 2 GB model 2008 has been updaterriffic for Apple, every Tuesday like clockwork. So what about today? The store is up, and nothing new has dropped. Maybe this Thursday's special event counts for the week -- or maybe we've been deluding ourselves about the longevity of Apple's run of Super Tuesdays. Tell us what you think in the comments.Read|Permalink|Email this|Comments

  • ★ Macworld Expo 2009 Predictions

    As required by the FCC, all Mac-related web sites must publish pre-Macworld Expo predictions regarding what Apple may announce at the show. Remember: these are predictions based on little more than my own speculation and tea-leaf reading, so hold your applause until the end, and, please, no wagering. New 17-Inch MacBook Pro — Seems like a sure thing. The lack of new 17-inch hardware was a glaring omission from October’s new MacBook line-up. Expect something that looks pretty much exactly like a bigger version of the new 15-inch MacBook Pro. Last-minute rumors claim that the new 17-inch MacBook Pro will have a sealed (non-user-replaceable) battery. Sounds odd, and if true, will surely generate complaints that it’s stupid move on Apple’s part, but given Apple’s recent penchant for sealed batteries, it wouldn’t surprise me. New Mac Mini — Yes. The current Mac Mini lineup is unchanged since August 2007, almost a year and a half ago. Overdue for an update, to say the least. I don’t think there’s any great enthusiasm for the Mac Mini at Apple, but it’s a strong seller. New 30-Inch Cinema Display — Yes. Much like with the 17-inch MacBook Pro, the existing 30-inch Cinema Display just looks old next to the new 24-inch model. As for a 20-inch model, I’m going to say no. 20-inch displays are the new 17-inch displays: too small. Speed Bump iMac Revisions — I’m not sure where the rumors started about there being significant changes to the iMac, but I expect what we’ll actually see will look the same as the current iMacs but offer slightly faster processors, slightly bigger hard drives, etc. Speed bump revisions don’t make for good demos, so while I expect updated iMacs this week, I don’t expect them to be announced during the keynote itself. iLife and iWork ’09 — Yes, nearly a sure thing. These suites are both profitable and popular, and the current ’08 suites were released in August 2007. They’re both due for updates, and they both make for good keynote demo material. At the top of my personal wish list: improvements to iMovie and Pages. I see the logic behind Apple’s decision to scrap the old iMovie and start over from the ground up with iMovie ’08. But I find iMovie ’08 downright confusing. The difference between “events” and “projects” seems muddled, and it’s a clumsy tool when it comes to actually editing clips together to make a movie. As for Pages, I would love to see it gain additional professional-caliber typographic controls (including better support for OpenType fonts). Snow Leopard — I expect a demo, and maybe a loose release date (like, say, “first half of 2009”). As Apple emphasized when Snow Leopard was announced at WWDC last year, Snow Leopard is mainly about low-level under-the-hood improvements and optimizations to Mac OS X, not about new user-visible features. But the new Exchange integration for Mail and iCal is certainly demo-able. What I expect is for Apple to make old features look new, by updating the system-wide appearance theme. I’ve made this prediction several times in the past and been wrong, but eventually I’ll be right: it’s time for the last vestiges of the original Mac OS X 10.0 “Aqua” theme to go. Scrollbars and push buttons, for example, remain largely unchanged since the Mac OS X public beta in 2000. My bet says iTunes-style scrollbars everywhere, darker window chrome, and a light-text-on-dark-background menu bar. (The name I’ve heard for the new theme: Marble. Make of that what you will.) Updated Apple TV — Yes. I expect new hardware, but probably nothing radically new other than increased storage space. But it’ll be in the keynote as a signal that Apple is serious about this market. There’s been a lot of supposedly expert speculation that Apple is going to abandon Apple TV because it’s not a hit. But while it’s not a hit, it’s not a failure, either, and, more importantly, there is no dominant player in this field, where by “this field” I mean that for consumer-level digital media management for the living room. I’m not going to say that Blu-ray is dead because it isn’t. But if DVD isn’t the last mainstream physical medium for home movie distribution, Blu-ray will be. The future, obviously and inevitably, is in downloads. I’m already there, and you, dear DF reader, probably are too, but for the mass market, downloadable movies for the living room remain in the future. The iPhone was an instant hit, but the iPod wasn’t. Apple grew the iPod from a Mac-only peripheral into a cultural sensation slowly but steadily over three or four years. I think they have a similar long-term plan for Apple TV. And in large part Apple — along with every other hardware maker — is hobbled by the limitations of what content the movie studios will allow them to distribute. The iTunes Store’s movie library has grown significantly over the past year, but it’s still far smaller than what your neighborhood video store has to offer. And while iTunes has high definition movies available to rent, the only movies you can buy are in standard definition. That’s a studio-imposed limitation, and it’s one that works in Blu-ray’s favor, and against Apple TV’s. (Wishful thinking on my part: I’d love for Apple to announce some Boxee-like features built-in as standard Apple TV features. The TV networks seem more willing to play ball with digital distribution than the movie studios, so, maybe.) There are rumors that Apple might release software that allows any Mac to serve as an Apple TV. I know nothing about such software, but if you think of it more as the unification of Front Row and Apple TV, it makes perfect sense. But I don’t expect Apple to abandon selling dedicated Apple TV hardware soon — even the cheapest Mac Mini costs a few hundred bucks more than an Apple TV. iPhone Nano — No. Frankly, I just don’t get these rumors. The only way this makes sense is if it’s a replacement for the iPhone 3G — i.e. a slightly smaller form factor for the existing iPhone 3G’s features. But why now, just six months after iPhone 3G debuted? The pattern seems to be for Apple to release new iPhone hardware every summer, much like who they’ve usually released new iPod hardware in the fall. (And why “nano” rather than “mini” for something that, according to the purported third-party case designs that the rumor is founded upon, is only a little bit smaller? With iPods, “nano” is used for models that are way smaller and thinner.) iPhone Tethering — No, but I would love to be wrong. The longer I use my iPhone, the more frustrating it feels that my MacBook doesn’t have the same sort of nearly-ubiquitous network access. I’m one of the lucky few to have scored a copy of NetShare during its brief availability on the App Store, and there are other solutions for jailbroken iPhones, but I want Apple-style integration. I can’t see any way that this could happen without having to pay an extra monthly fee to AT&T, but if the price is even just semi-reasonable, I’d pay it in a heartbeat. iPhone OS 3.0 Demo — My wildcard prediction, which, I will reiterate, is based on nothing more than my own speculation and wishful thinking. One thing I’m nearly certain of is that the next iPhone OS release will be 3.0, not 2.3, if for no other reason than that there have been no developer betas since the release of version 2.2. To my nose, that smells like a major release with significant new features is in the oven. I fully expect iPhone OS 3.0 to be announced and demoed at least a few months before it is released. Third-party developers need to time to adapt to any changes, add support for new features, and to bang away on beta releases to shake out the bugs. But assuming there will be significant new features, Apple will want to unveil them at a high-profile event. If I had to wager, I’d bet on a special event around March, much like last year’s event to unveil the iPhone SDK. But if it’s going to be ready for developer betas sooner than later, it’d be a nice surprise to see Phil Schiller call Scott Forstall on stage to demo it now. As for what might appear in iPhone OS 3.0, here’s my wish list. First, a new home screen app (a.k.a. SpringBoard), designed from the ground up for a system where users have a few dozen or more extra apps installed. Managing dozens of apps on the iPhone today is simply a pain in the ass. Second, maybe an answer to the question of where the background notification API is — you know, the one we were told at WWDC to expect a few months ago, but which we haven’t heard a word about since. And maybe — pretty please, Mr. Forstall, with sugar on top — copy and paste.

  • Wall Street Breakfast: Must-Know News

    Third time's the charm? The Federal Reserve launched its third attempt to ease money markets strains, announcing a program to fund purchases of up to $600B in money market mutual fund assets. In its official statement, the Fed said the initiative "should improve the liquidity position of money market investors" and increase their ability to meet future redemption requests. The Fed, which will announce the program's start date by the end of the week, could lend up to $540B to five "special purpose vehicles" established to buy CDs and commercial paper from highly rated institutions. Around $500B has been withdrawn from prime money-market funds since August. Bernanke stands behind stimulus package. Federal Reserve's Bernanke voiced his support for a congressional stimulus package, testifying a stimulus "seems appropriate" for an economy that will be weak for several quarters and faces "some risk of a protracted slowdown." Democrats are considering a $150B initiative, though some economists are pushing for twice as much, arguing that significantly more money will have to be pumped into the economy and the banking sector in order to survive the downturn. Policy makers are also pushing forward with efforts to overhaul government regulation of the financial sector, calling for greater transparency and oversight. Asian countries move to shore up economy. Thailand has proposed a plan for Asian countries to pool $350B, or 10% of their foreign exchange reserves, to help cushion their economies in the event of a global recession. Around $150B would be earmarked for currency protection, if necessary, while the other $200B would be used to buy equities, bonds and fund infrastructure projects. Meanwhile, acting unilaterally, South Korea says it is prepared to follow up its $100B bailout plan with whatever measures are necessary, including a possible fiscal stimulus package, in order to restore confidence in its financial system; China will inject $19B into the Agricultural Bank of China, completing a reorganization of China's banking system that has cost the government $500B so far; and Bank of Japan may announce plans to begin paying interest on reserves deposited at the central bank. Trio creates gas cartel. Iran, Qatar and Russia met on Tuesday and agreed to form an OPEC-style group for gas-exporting countries. Gas producing nations have long discussed the possibility of creating a "gas OPEC" but building a cartel could be difficult since gas markets, unlike oil markets, are mostly fragmented and regional. Moreover, trade volume is relatively small and prices are often pegged to oil, making it harder for a cartel to control prices. The U.S. imports virtually no natural gas from Iran, Qatar or Russia, but U.S. politicians and Western allies worry closer ties between Russia and Iran could harm strategic political relationships. Auto woes continue. Tracinda Corp, the investment company of billionaire Kirk Kerkorian, sold shares worth about $18M in Ford (F) at a major loss and is considering selling its remaining 6% stake, raising concerns about the automaker's health. To raise cash, Ford may have to sell its roughly 33% stake in Mazda (MZDAF.PK), while uncertainty about the future Ford-Mazda relationship sent Mazda shares down by the most in over eight years in Tokyo trading. Kerkorian's move, along with efforts by Cerberus to sell its Chrysler stake, could leave the auto industry short of funding at the same time sales are heading to a 26-year low. General Motors (GM), the preferred buyer for Chrysler, is looking for a large capital injection from an outside investor as a possible alternative to a Chrysler deal, while Chrysler is exploring a possible alliance with Nissan (NSANY) and Renault. Samsung drops buyout offer. Samsung abandoned its $5.85B ($26/share) hostile bid for SanDisk (SNDK), citing tough economic conditions and failure to make "meaningful progress" with the bid over the last six months. A successful bid would have been Samsung's largest acquisition and a good chance to widen its lead over Toshiba (TOSBF.PK). Analysts believe Samsung may launch a renewed bid at a later date to gain access to SanDisk's patents, but a Samsung spokesman said "we withdrew our offer and there should not be further room for speculation." Pre-market: SNDK -10.5% to $13.21. Samsung -2.1% in Seoul. Apple shines after Jobs talks up prospects. Share of Apple (AAPL) are up 9.3% in early pre-market trading after beating analyst expectations despite a contracting economy (see below). CEO Steve Jobs made a surprise appearance on Apple's analyst conference call (transcript), likely to talk up the company's prospects amid a close-to-recessionary U.S. economy and a 54% drop in its shares YTD. "I think this economic downturn may present some extraordinary opportunities to companies that have cash," he said, adding Apple is comfortable with its cash, and doesn't feel it's "burning a hole in our pocket." Jobs told investors Apple, as it always has, understates its results. Yahoo's so-so Q3 gets boost from job cuts. Yahoo (YHOO) reported Q3 net income of just $54M, down 64% from a year ago and in line with consensus (see below). Yahoo also said it plans to cut its global workforce of 15,000 by at least 10% during the current quarter, as part of a broader cost-cutting plan, as CEO Jerry Yang tries to orchestrate a turnaround despite a softening economy and internet-advertising landscape (conference call transcript). Shares gained 5.2% in extended trading, but Cowen's Jim Friedland was circumspect: "Cost cutting is important, but I wouldn't call that a positive longer-term sign." Retail sales. ICSC chain-store sales rose 0.9% last week vs. a year ago and fell 1.6% vs. the week before. Stores continue to face a "tough retail landscape" as consumers spend cautiously. Redbook reported a 0.8% gain last week from a year ago, but a 1.1% fall in October vs. September. Consumers far from confident. ABC's Consumer Confidence Index dropped 7 points in the last two weeks to a dismal -50, one point away from the lowest rating in 22 years of weekly polling, and markedly worse than this year's -40 average. Earnings: Wednesday Before Open Air Products and Chemicals (APD): FQ4 EPS of $1.26 beats by $0.01. Revenue of $2.7B (+14.5%) vs. $2.6B. [PR] Arkansas Best (ABFS): Q3 EPS of $0.61 in-line. Revenue of $496M (+2.0%) vs. $498M. [PR] Baker Hughes (BHI): Q3 EPS of $1.29 misses by $0.06. Revenue of $3.0B (+12.4%) vs. $3.1B. [PR] Dover (DOV): Q3 EPS of $1.01 beats by $0.03. Revenue of $2.0B (+5.4%) in-line. [PR] Kinetic Concepts (KCI): Q3 EPS of $0.96 beats by $0.09. Revenue of $503M (+22.5%) vs. $507M. [PR] Knight Capital Group (NITE): Q3 EPS of $0.40 beats by $0.16. Revenue of $270M (+31.7%) vs. $212M. [PR] Philip Morris (PM): Q3 EPS of $0.93 beats by $0.03. Revenue of $7.0B (+17.5%) vs. $6.6B. [PR] WellPoint Health Networks (WLP): Q3 EPS of $1.60 beats by $0.10. Revenue of $15.3B (+2.2%) vs. $15.5B. [PR] Earnings: Tuesday After Close Amylin Pharmaceuticals (AMLN): Q3 EPS of -$0.57 misses by $0.07. Revenue of $218M (+14.9%) vs. $229M. Shares +4.5%. (PR, earnings call transcript) Apple (AAPL): FQ4 EPS of $1.26 beats by $0.15. Revenue of $7.89B (+27%) vs. $8.05B. Sees Q1 EPS of $1.06-1.35 vs. $1.65, and revenue of $9-10B vs. $10.57B. Shares +13.25%. (Briefing.com) Boston Scientific (BSX): Q3 EPS of $0.16 beats by $0.05. Revenue of $1.98B (-3.4%) in-line. Shares +5.6%. (PR) Broadcom (BRCM): Q3 EPS of $0.31 beats by $0.09. Revenue of $1.3B (+36.7%) in-line. Shares +8.7%. (PR, earnings call transcript) Canadian National Railway Company (CNI): Q3 EPS of $1.16 beats by $0.17. Revenue of $2.26B (+11.6%) vs. $2.15B. [PR] Century Aluminum Company (CENX): Q3 EPS of -$0.57 misses by $0.89. Revenue of $552M (+21.5%) vs. $549M. [PR] Cerner (CERN): Q3 EPS of $0.57 beats by $0.01. Revenue of $423M (+13.4%) in-line. Shares +5.1%. (PR, earnings call transcript) E*TRADE Financial (ETFC): Q3 EPS of -$0.09 beats by $0.19. Provision for loan losses triples to $518M. While ETFC continues to make progress toward returning to profitability, it does not expect to report a quarterly profit Q4. ETFC plans to take advantage of the government's bailout plan. Shares +0.4%. (PR, earnings call transcript) Illumina (ILMN): Q3 EPS of $0.22 beats by $0.06. Revenue of $150M (+54.2%) vs. $146M. Shares (PR, earnings call transcript) Sigma-Aldrich (SIAL): Q3 EPS of $0.64 misses by $0.01. Revenue of $541M (+7.4%) vs. $564M. Shares -7.2%. (PR) VMware (VMW): Q3 EPS of $0.24 beats by $0.04. Revenue of $472M (+32.1%) vs. $463M. Operating margin of 24.4% vs. guidance of 20-22%. Shares +24.6%. (PR, earnings call transcript) Yahoo (YHOO) Q3 EPS of $0.09 in-line. Revenue of $1.32B (+3.3%) vs. $1.37B. Shares +5.2%. [PR] Today's Markets Asia markets closed broadly down. Nikkei -6.8% to 8,675. Hang Seng -5.1% to 14,267. Shanghai -3.2% to 1,896. BSE -4.8% to 10,170. In Europe: London -2.8%. Paris -2.8%. Frankfurt -2.9%. U.S. futures: Dow -1.4%. S&P -1.7%. Nasdaq -0.8%. Gold -1.4% to $757.20. Wednesday's Economic Calendar 7:00 MBA Mortgage Applications 10:35 EIA Petroleum Status Notable earnings before Wednesday's open: ABFS, ABI, APD, ARW, ATI, BA, BHI, COP, DOV, EMC, FCL, GD, GENZ, GSK, KCI, KMB, MCD, MRK, NFX, NITE, NOC, NTRS, NWA, PM, R, RAI, ROH, RYN, SEIC, T, TCB, TRV, WB, WLP, WYE Notable earnings after Wednesday's close: ADS, ALL, AMGN, AMZN, ANAD, BIDU, CDNS, CNB, CNW, CRUS, CTXS, CVA, EQIX, FFIV, FNF, ISIL, KNX, LRCX, LSI, NE, OMTR, OSIP, PHM, QTM, RHI, RRC, RYL, SLM, SSCC, STX, TER, TEX, TQNT, WSH Seeking Alpha editor Eli Hoffmann contributed to this post.

  • Metaliveblogging Apple's "Mum is no longer the word" event

    Good morning, dear TUAW readers. London calling. It's Tuesday morning, and that can only mean one thing. We've been getting tonnes of tips that the Apple Store is down. The Apple store is still online, although tipster Gary tipped us off that the O2 store - the very same network rumoured to be the sole carrier of the iPhone here in the U.K. is in fact offline. Yes, that's right - iDay / iPhone Day / totally iPhone-unrelated announcement day is upon us, so sit back and enjoy the show. If you're short of reading material before the event, we'd recommend you check out this article in yesterday's Guardian about the deals rumoured to have been struck to bring the iPhone to our fair isle and beyond.As it happens (in reverser chronological order)0959 (Engadget) "Feels a bit surreal having an Apple press event in an Apple retail space: black shirted Apple mafia are everywhere."0955 Just five minutes to go, multiple sources are reporting El Jobso is indeed in London.0942 (Engadget) Phil Schiller is in the house, talking to staff at the recently modified Regent St store theatre.0923 (Engadget) Strange packages reportedly entering the store in the build-up to the event.0917 (Engadget) The iPhone product manager, the star of numerous iPhone tutorial videos, is snapped at the store.Permalink|Email this|Comments

  • ★ The Ringtones Racket

    Steve Jobs, introducing iTunes 7.4 during last week’s Apple special event: “We’re going to ship a new version of iTunes tonight, to support some of the new products you’re going to hear about shortly. And the biggest new feature is going to be ringtones. Well, we’re going to do ringtones in our own special way.” Apple’s own special way of doing ringtones is this: You can only use songs purchased from the iTunes Store; you must pay an additional 99 cents on top of the price of the song itself; only a small subset of the songs at the iTunes Store are eligible; and, if you decide to create a second ringtone using a different segment of the same song which you’ve already paid for twice, you must pay for it again. But you do get to pick which segment of the song to use. This “special way” seems fair only when compared to the ringtones offered by competitors, which, as Jobs pointed out in his keynote, typically sell for $2.50, which price includes only the ringtone snippet, not the entire original song itself. The whole ringtones racket is predicated on the notion that ringtones are something different than songs. This notion is bullshit. You don’t turn songs into ringtones; you treat them as ringtones. They’re not even a different file format. It’s just a different context for playing the same song on the same device.1 This false notion that ringtones are something in and of themselves is an anachronism, an artifact dating back to the time when mobile phones existed in their own ecosystem, wholly separate from the PC or the Internet. There was no way to transfer songs from your computer to your phone, because phones didn’t support USB or Bluetooth. Back then, if you wanted new ringtones, the only way to get them onto your phone was through your mobile service provider. And because people did want them, and there was no other way to get them, the mobile providers were able to charge exorbitantly high prices for them. But ringtones are simply digital audio files — no more, no less. (Actually, they are less, given that most are only 15 or 30 seconds long.) The way it should work today, not just with the iPhone but with any music-playing mobile phone, is that any song the phone can play should be allowed to be specified as a ringtone. If you shouldn’t have to pay for each device on which you play a song — computer, iPod, Apple TV — then clearly you shouldn’t have to pay for each context for playing the same song on the same device. Instead of the complicated, confusing mess of a ringtone policy that Apple announced last week, what they should have announced is this: Any song you can play on your iPhone can be used as a ringtone for no additional charge. Want a new ringtone? Just buy it from iTunes or rip it from a CD. Yes, this might have further antagonized Apple’s already-contentious relationship with the music labels (and with the entertainment media conglomerates in general; cf. NBC), but the reason these relationships are rocky is that the executives running these companies are stubborn fools who are only willing to consider ways to keep things the way they were, and who hold their own customers in utter contempt. You can’t reason with the masterminds behind “ringles”. The distinction between ringtones and songs is an artificial marketing construct. It is a misconception, albeit a widely held one, that there is any foundation in copyright law for this, i.e. that an honest consumer is obligated to pay for ringtones separately from “regular” songs for some legal reason. Not so. Copyright attorney Nilay Patel dispelled this notion last week in a piece at Engadget. Patel points out that, oddly enough, even the RIAA agrees: Well, the RIAA wanted to be able to distribute ringtones of its artists without having to pay them big money to do so (surprised?), and it won a decision last year before the Copyright Office saying that ringtones weren’t “derivative works”, meaning they didn’t infringe on the copyright of the songwriter. So if you have the right to play a song, you have the right to use it as a ringtone on your phone. There’s no reason to feel one iota of guilt about using tools like MakeiPhoneRingtone or iToner. All That Is Gold Does Not Glitter Clearly, in some way, Apple is beholden to the whims of the music labels with regard to iTunes’s ringtones support. There are over six million songs available for sale through iTunes, but, as of this writing, only 500,000 are available for purchase as ringtones. Why aren’t all songs available for purchase as ringtones? Clearly it’s not Apple’s choice, but a limitation imposed upon them by the music labels. Even if we concede for the moment that it’s reasonable to charge additional money to use songs as ringtines, the question remains: What is wrong with the music labels that they won’t allow Apple to sell every song at iTunes as a ringtone? It boggles the mind. The recording industry is going down the tubes because people are buying less and less music each year; but here, in iTunes, they’re willfully turning down potential sales. Customer: I’m willing to pay you an extra dollar for this song I’ve already given you a dollar for, so that I can use it as a ringtone on my iPhone. Music Labels: Nope. iTunes — the application, not the store — has long supported two distinct types of music: files obtained from outside the iTunes Store, and those purchased from the iTunes Store and restricted by FairPlay. The difference being one’s afforded usage rights; FairPlay-protected songs are restricted in terms of the number of devices they can be played on, for example. With the introduction of ringtones support, iTunes now breaks songs into three groups: Non-iTunes Store songs. iTunes Store songs which are not eligible for sale as ringtones. iTunes Store songs which are eligible as ringtones. Apple’s right to sell songs through iTunes is not simply a matter of copyright law. If we assume, as seems likely, that the music labels stipulated in their contracts with Apple that songs to be sold at an additional cost for use as ringtones must be cleared separately, the distinction between groups 2 and 3 is not under Apple’s control. But group 1 — those songs in your iTunes library which you did not purchase from the iTunes Store — is under Apple’s control. Apple can’t charge you for the right to use these songs as ringtones, but they could allow you to do so for free, just as you’re allowed to play them on a Mac, iPod, Apple TV, or iPhone for free. They could do it, but they haven’t. From the inception of the iTunes Store, Apple has done right by its customers. The iTunes Store was conceived and designed as something customers would enjoy. It competes fairly, both against traditional music sales on physical media such as CDs, and against illegal bootlegging. It can’t beat bootlegging on price, but it can beat it in terms of convenience and user experience. Three billion songs sold can’t be wrong. iTunes’s new ringtone feature, though, is the first time Apple has created a feature that is only usable with iTunes Store tracks. Burning to disc, transferring to peripheral devices such as iPods and Apple TV, playing over the air to Airport Express — in all these cases, the features work with all songs in your library, wherever they came from. In fact, prior to ringtones, the only special treatment iTunes granted to iTunes Store files were additional restrictions, such as the “only five authorized computers” rule. The difference with ringtones isn’t legal; it’s that there’s money to be made. Even if you agree that the entire notion of a “ringtone industry” is a racket, you might be tempted to argue that Apple would be foolish not to participate simply because it’s a profitable endeavor. But rackets seldom continue forever. Short-term, yes, surely Apple is already generating additional revenue from the sale of ringtones. But this money comes at a cost: resentment. For any song you already own on CD, Apple is asking you to pay three times for it in order to use it as a ringtone on your iPhone: once for the CD you’ve already purchased, again to buy a needless duplicate of the track from the iTunes Store, and a third time to generate the ringtone. A fair, free “just use the songs you already own as ringtones” policy wouldn’t generate revenue directly, but it could be used as a powerful marketing bludgeon. Consumers know what ringtones are, and they know that mobile providers want them to pay through the nose for them. Imagine an ad proclaiming that with the iPhone, any song in your iTunes library can be used as a ringtone. Want to use a new hit single as a ringtone? Just buy it from the iTunes Store, and play it everywhere. The policy as it stands now, on the other hand, discourages people who know better from buying tracks from the iTunes Store. Apple may well close or change the loophole in a future iTunes update, but as of version 7.4.1, the “change the file extension” trick and yesterday’s newly discovered metadata trick (now used by MakeiPhoneRingtone 1.1) allow informed iPhone users to do what they should be able to do, both by common sense and U.S. copyright law: use any song they already own as a ringtone — but only with songs that aren’t protected by FairPlay.2 Faced with the choice between doing what’s right for customers or charging them money for something they shouldn’t need to pay for, Apple chose the latter. There is no middle ground. And any business that hinges on your customers “not knowing any better” is a bad business. Even when using a snippet rather than the entire song, a smart implementation could simply store the “ringtone” as time markers indicating which portion of the song to play. And even if the implementation does involve creating a copy of the original song file, it’s no more something you should pay for than the copy of a song on an iPod synched from your computer’s iTunes library.↩ iTunes Plus tracks, however, do work as free ringtones using these tricks. And Ambrosia’s $15 iToner utility somehow allows you to use even FairPlay-protected songs as ringtones.↩

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