The iPhone Joins the Party. The Third-Party, that is.

Apple CEO Steve Jobs announced today, in a posting on the company’s website, that the iPhone will allow third-party applications to run directly on the iPhone. This announcement comes after months of developer disdain for the company over the lack of such capabilities.

What’s more, Jobs says he plans to release a software development kit for the device. Aiming for a February release, the kit will allow coders to create their own third-party applications for the iPhone and the new iPod Touch. The touch boasts similar attributes to the iPhone without the functionality of a cell phone, thus eliminating the need for an AT&T service contract.

"We are excited about creating a vibrant third-party developer community around the iPhone and enabling hundreds of new applications for our users," Jobs said in the posting.

Until today’s announcement, iPhone users had to risk voiding their contracts by installing third-party applications on their device. What’s more, installation often meant physically hacking the iPhone’s firmware, often resulting in the unfortunate “bricking” of many phones.

Developers and Apple fanatics alike have rejoiced upon hearing the news of Apple’s change of heart. Erica Sadun, a Denver computer programmer said, “I’m thrilled. I hope it is exactly as they say, full third-party development."

While many iPhone nay-sayers (including this one) see today’s announcement as a step in the right direction, Apple still has its hands full with a consumer law suit filed October 5, accusing the company of engaging in monopolistic behavior and unlawfully restricting consumer choice by preventing users from "unlocking" their iPhones.

Keep your proverbial ear to the ground for more updates on iPhone law suits, third-party apps, and security issues as iphailure.com finds them. Viva la SDK!!

Apple Slapped with Another Suit

Jobs and Co. were served papers again this week, this time by an unhappy customer who decided to bring his lawyers. California resident Timothy Smith’s suit claims that "Apple forced plaintiff and the class members to pay substantially more for the iPhone and cell phone service than they would have paid in a competitive marketplace either for the iPhone or for AT&T's cell phone service," and that Apple itself, "Acted in defiance and without sufficient consideration of consumers' rights to unlock their iPhones because it knew that the probable result of its update would be to render unlocked iPhones inoperable."

Sound familiar? Ask the thousands of dedicated would-be iPhone hackers who bricked their handhelds after trying to install third-party software. By locking down the iPhone, Apple has essentially crippled the consumer right of choice. The reason the iPhone has caused such a fuss is because of what it promised to do: revolutionize the cell phone. It brought the sexiest parts of a Windows Mobile or Blackberry device, and put it all in one neat, easy-to-use package.

In fields such as mobile technology, one usually expects to see advances in the technical specifications of handhelds. However, the iPhone has made advances in the social perception of mobile technology, consequentially bringing it to the forefront. The only problem being, that forefront only wants one product. By offering a product with so much mainstream appeal, Apple has forced the consumer to pay unreasonable amounts of money to obtain it, only to render it useless upon the installation of software other than Apple’s.

The claims by Smith all but accuse Apple of price-gouging (and you thought gas was bad). In a MySpace and YouTube generation, Apple's elasticity may remain relatively low until a rival is able to offer the everyday consumer a similar iPhone experience. Rivals are no doubt developing new usability methods and marketing campaigns to compete for consumer handheld dollars. Similarly, Apple may be finding ways to compete for the enterprise dollar, with or without the compatibility with Microsoft Exchange.

But for now, Apple must deal with another suit that points out the incompatibility of its star device, complete with a website where owners can join in the suit. So all you disgruntled early adopters can start there.

Apple Set to Double iPhone Production

Apple has prepared plans to nearly double production of its iPhone in the fourth quarter, according to reports.
The Cupertino, California-based company is now looking to manufacture about 2.7 million iPhones in the next quarter, up from the 1.54 million originally targeted, according to thestreet.com, the financial news website, which cited sources close to the company.
That would mean that Apple is now preparing to ship nearly 5 million iPhones this year, up from a previous target of 3.6 million.
Analysts suggested that a production increase could be related to the recent price cut of the iPhone in the United States and the device’s roll-out in Europe.
On September 5, Apple announced that it would be slashing 8GB iPhone prices by 33% to $399 while discontinuing the 4GB model, citing low demand. Shortly after the price cut announcement, Apple CEO Steve Jobs announced that the early adopters of the iPhone would be given a $100 credit to the Apple Store, in order to ease the wallet damage caused by the initial $599 price tag.
While the announcement of doubled iPhone production may seem like a sign that Apple is doubling sales expectations, the reality is that the device is about to go global in conjunction with the fact that it is now less unaffordable. I say “less unaffordable” because $400 for a phone with a two-year contract is anything but affordable, and somewhere short of rational.
A standing ovation to the Apple spin doctors, who have once again turned a simple case of economics of scale into a triumphant press release for the Apple company and their stockholders.
And for those early adopters out there, use your $400 for the new headphones you will need, case to protect the Taj Mahal of cell phones, and iTunes to load up your device. Seems like that Apple knows what they’re doing with that “rebate” after all.

Apple out of touch?

Apple’s recent announcement of a new iPod, the touch, has intrigued many an analyst in the mobile computing industry. The touch, which boasts several features inherent to the iPhone, has lead experts to predict that the new music player/web browser will significantly lessen iPhone sales this holiday season.

While the touch will include features such as YouTube browsing and Wi-Fi internet access, it will not include a phone feature. Eliminating the need for a contract, Apple has opened the door for millions of mobile users who aren’t willing to commit the next two years of their cellular lives to AT&T and their dismal EDGE network, not to mention lessening the strain on consumers’ wallets.

With increased circulation of the touch comes, presumably, decreased circulation of the iPhone. After all, no one with an iPhone will want, or need, to carry around another device that performs many of the same tricks the iPhone already does. Essentially, Apple has introduced its own competitor to the iPhone with less bells, whistles, and cost.

AT&T should be very concerned with this latest iPod installment. With each touch sold, another potential iPhone service contract goes out the window (so much for maintaining positive work relationships Mr. Jobs). Much like the nano before it, the touch will provide consumers with a cheaper alternative to what has become a product synonymous with style and wealth. If the nano is any indicator of the touch’s potential success, Apple could have a monstrous hit on their hands. The nano is the highest selling line of iPods, outselling even the original iPod line of 30 and 80 gigabytes.

The cynical reader may suggest that the touch is meant to compete with, or even replace, the iPod line. This does seem feasible until the memory of the touch is revealed. With only 8GB and 16GB models, the touch offers little competition for the current iPods, whose 30GB and 80GB capacities allow for entire music libraries to be held in one’s pocket.

Time will tell how the touch affects iPhone and iPod sales. It is my opinion that the touch may ultimately bring about the demise of the iPhone unless the price of the iPhone is somehow subsidized through a contract agreement. Until then, the cheaper touch will continue to siphon sales from the iPhone until AT&T wakes up and realizes that Apple has lost touch with the mobile provider’s business interests.

Custom Ringtones Cometh!

iPhone users rejoice! After much clamoring from consumers, custom ringtones have arrived for Apple's darling device. At last, your iPhone can finally play "My Humps" whenever your best friend calls.

Apple CEO Steve Jobs said a forthcoming update for iTunes would include a custom ringtone maker that will allow users to put ringtones on their iPhone, addressing what many users felt was a glaring omission from the mobile device.

The ringtone creation tool is part of iTunes 7.4, slated for release Wednesday night.
To make a ringtone with iTunes 7.4, you choose from the eligible songs marked with a bell icon in your iTunes Library. When users click on the bell icon, a ringtone maker pops up in iTunes that shows a waveform of the song. A draggable interface lets users select the 30-second clip of the song; users also can adjust fade ins and fade outs or loop the file. Pressing the Buy button creates the ringtone.

Once created, ringtones go into their own folder on iTunes. They can be synced with an iPhone from a new ringtones tab in the iTunes interface.
Ringtones cost $1.98—99 cents for the ringtone plus the cost of the iTunes download. If you’re making a ringtone out of a song you’ve already bought from iTunes, the cost is 99 cents—Apple doesn’t charge you for the same download twice.

Half-a-million songs in the iTunes catalog will offer a ringtone option initially, Jobs said. “We think this will increase over time,” he added.

Prior to iTunes 7.4, iPhone users were able to choose from 25 ringtones included on the iPhone's internal hard drive. Half-a-million should provide plenty of options for making the world's sexiest phone even sexier.

Million Unit Baby

Apple announced today that the iPhone has officially sold one million units, just 74 days after its official release. The Cupertino-based company estimates that the one millionth iPhone was sold on September 9, putting sales of the device weeks ahead of Apple’s own forecasts.

Comparatively, the iPod took more than two years to sell its first million. Granted, the iPod didn’t have a previously successful product line to piggy-back off of like the iPhone did, but nevertheless Apple is thrilled that their first venture in the mobile industry is moving ahead of schedule.

Steve Jobs, who announced the milestone, boasted in a press release that Apple will accelerate iPhone sales. The company dropped the price of the 8GB iPhone by 33 per cent to $399 last week, a move which angered early adopters who had paid the original retail price of $599.
After receiving a glut of emails from customers, Jobs offered previous buyers a $100 credit for the Apple Store.

Even before the price drop, the iPhone was making news with strong sales. Research firm iSuppli estimated that the device accounted for 1.8 percent of all mobile phone sales in July.
ISuppli went on to describe the iPhone's meteoric rise as "unprecedented in the history of the mobile handset market".
Apple hopes to release the iPhone in Europe by the end of 2007. No deal has been officially announced, but T-Mobile, Orange, and O2 have been reported as possible European carriers.

While Apple claims to be “ahead of schedule” thus far, I would take this announcement with a serious grain of salt. After all, this is the same company who used ambiguous language and included accessories when accounting for opening weekend iPhone unit sales. Don’t be shocked to Apple’s stock rise as a result of this announcement, it’s no coincidence. Well done Mr. Jobs.

iPhone Drops its Price Tag and Gets in “Touch”

Apple announced today that they will be cutting the price of the iPhone by a third in the US in an effort to boost sales, while announcing a worldwide ‘phone-less’ version of the product.
At an unveiling of a new line of its music and video players in San Francisco, Apple CEO Steve Jobs said the price of its most popular iPhone, with 8Gb of storage, would be cut from $599 to $399 in time for the crucial holiday season selling period. Its $499 4Gb version would be discontinued.

Jobs also announced the launch of the iPod touch, a version of the iPhone without phone capabilities but still with wi-fi internet access. As well as links to YouTube and a web browser, it includes access to a new iTunes Wi-Fi Music Store.

Its rollout in other countries is subject to agreements with mobile operators, but the Silicon Valley company will not need to strike deals with national carriers for the iPod touch. It will ship worldwide in the next few weeks. An 8Gb version will sell for $299 in the US and a 16Gb version for $399.

The iPod’s smaller counterpart, the nano, received a significant makeover. Apple revealed a major overhaul for the nano, its most popular player, with features including a squarer design, wider screen, new interface and colours and the ability to play video. Storage has been increased to 4Gb and 8Gb versions, costing $149 and $199 respectively.

Apple’s efforts are clearly focused on economics of scale, making the iPhone more affordable and allowing consumers to avoid any service contracts by introducing the touch. It should be interesting to monitor the sales of the touch when it is made available for purchase and its effect on iPhone sales.

And lest we forget Apple’s pseudo arch nemesis, Microsoft announced a 20 per cent price cut for its rival Zune media player – from $249 to $199 for its 30Gb model. Microsoft had sold 1m units of the Zune by June, but is far behind Apple sales of more than 110m iPods.

The Update 1.0.2 Mystery

Apple released the second update for the iPhone this past Tuesday, via iTunes. Dubbed update 1.0.2, Apple declined to mention much detail about the update, only that it included unspecified “bug fixes.” However, iPhone owners are claiming that the update did much more than just fix bugs, and most users are reporting positive results.

Message boards around the web have been inundated with users claiming what update 1.0.2 improved in addition to the generic “bug fixes.” Many users have reported extended Wi-Fi range. If true, this would be a significant improvement given the speed (or lack there of) of AT&T’s EDGE data network. Still others claim that the update improved the camera’s color quality and that the external speaker is now considerably louder after initial reaction that the speaker was too quiet.

Another notable function of the update is the restoration of modded, or hacked, iPhones. Just as its 1.0.1 update predecessor, this latest offering from Apple will restore the iPhone’s system settings if a modification is detected.

This latest iPhone update appears to have many beneficial aspects that improve the functionality of the device and the overall end user experience. Apple may have packed a few extras into the 3.7 MB file that will seemingly brush some iPhone shortcomings under the rug. By quietly fixing problems the device was experiencing, Apple can maintain the perception that the iPhone lacks the common flaws inherent to new technology. Bravo, Mr. Jobs, bravo.

Apple may come clean with the full story in the coming weeks. Stay tuned to iphonemobilesolutions.com for further iPhone news and happenings.

The iPhone Unlocked!

A hacker known as Geohot has claimed to have finally completely unlocked the iPhone. In a video released on YouTube, the hacker is shown using an iPhone with a T-Mobile SIM card and even displays the iPhone screen connected to the T-Mobile network.

A full software unlock may be on the horizon for consumers. The current unlock, a hardware unlock, involved a lot of hard work, innards restructuring, and soldering. The details of how the device was unlocked and what you can do to unlock an iPhone of your very own are set to be revealed in a week.

Until then, keep an eye on iPhailure.com for the most breaking news and updates.

Apple Offers Price Break on Refurbs

High-tech penny pinchers everywhere rejoice! Apple is now offering refurbished iPhones for sale on its website at a $100 discount. That’s right; the 4GB version is now $399, while the 8GB is $499. All the original features remain intact as well as the need for a two-year service agreement from exclusive service provider AT&T.

The refurbished units come complete with a one-year limited warranty, free shipping, and full customer service support. Units are currently available at the online Apple Store and also offer the option of the two-year extended Apple Care plan.

How did Apple obtain enough units to sell on their website as refurbs? The question remains one of mystery. Apple fans suggest would-be eBay sellers who anticipated a shortage of units that never transpired. Apple haters suggest a marketing ploy from Steve Jobs to sell more units and to test out a different price range for the device. Still others blame a slew of angry customer returns due to problems with the phone itself, as well as AT&T activation issues. Not surprisingly, mum’s the word around Cupertino.

Regardless of the reason for the latest option, consumers now have another means of obtaining the holy grail of coolness. And options, as we have learned, are almost always a good thing.

Latest iPhone Usability Study Bashes Keyboard

User Centric, a user-experience consultancy company, has released a study that claims typing is twice as slow on the iPhone when compared with handhelds that have tactile key input. 20 consumers were used in the experiment, 10 who owned phones with a QWERTY keyboard and 10 used to the standard numeric keyboard. Members of the experiment were given a small amount of time to familiarize themselves with the iPhone’s onscreen keypad and then given the same amount of text to type on their current device, as well as the iPhone.

Not surprisingly, the subjects typed faster on the device they were most accustomed to. While this was to be expected, the large discrepancy in timeliness has iPhone bashers using the report to help justify their distaste for the device. Conversely, Apple fanatics are quick to point out the study’s many flaws.

What this study might actually point out is all too obvious: Text input is going to be slower on any new device vs. one you are accustomed to. I will be the first to admit that my experience with the iPhone’s virtual keyboard has been one of difficulty and frustration. On the other hand, there are a handful of Apple fans out there that swear by the iPhone’s text entry format.

What iPhone keyboard proponents have in common with frustrated texters like me may be an agreement that the learning curve for iPhone text entry is quite steep. The first time I attempted to write an article on the iPhone, I broke down halfway through it and switched to my laptop. My impatience led me to the conclusion that I may never be able to own a handheld without a tactile keyboard.

The issue with the iPhone may be that it is too revolutionary for widespread use. With standards already set in place within the BlackBerry and Windows Mobile platforms, tactile keyboards have become a necessity for efficient mobile email, data entry, and text messaging.

This breaking of convention the iPhone exhibits in the keyboard aspect of the device is a theme that rings true throughout the entire package. The iPhone certainly has changed the game in terms of how cell phones work and fit into consumers’ lives. While the iPhone has made progress in the areas of mobile UI and functionality, it has taken a backseat in respect to enterprise capability. Application development, exchange support, and on-board applications are just a few areas of mobility that have been left out of the iPhone equation.

And still, the question remains: Is the iPhone half as speedy when entering text? The answer will vary for each and every user. For a novice iPhone user, used to a Treo or Blackberry, it probably will take twice as long to type up an email, for a hypothetical guy in Denver who “whittled down his thumbs” in a spoof story, the iPhone would most likely be incredibly efficient.

The answer for you may reside in an Apple store, where you can test drive an iPhone for yourself. You may love it or hate it, just don’t go to your plastic surgeon asking for a thumb job.

iPhone Bill Nears Encyclopedia Status

AT&T received several complaints from iPhone subscribers who were delivered their first monthly bills this week. While you might expect the complaints to revolve around the standard overcharges and hidden fees, these qualms were of a different variety: size. Not the size of the bills’ price, but the actual physical size of the paper-based activity reports sent to iPhone users.

One bill, received by Pittsburgh graphic designer Justine Ezarik, totaled over 300 pages and had to be shipped in a cardboard box. A video made by Ezarik, showing the opening and flip-through of her bill, has been viewed over 200,000 times on YouTube. The video plays the ever-familiar iPhone jingle in the background while the footage of her paging through her bill is fast-forwarded culminating with the onscreen text: “Use e-billing. Save a Forest”

For AT&T, who has chosen to document every instance of voice, text, and data usage, the use of e-billing and summarized billing could mean saving a decent chunk of change due to the high shipping costs involved with the gigantic bills.

AT&T spokesman Mark Siegel insists these situations are exceptions. "We're not sending lots of boxed bills to customers," he says. However, reports of 30 and 50 page bills continue to pop up around the country. Along with increased costs, the bills have also sparked discontent and outrage among customers who don’t want, or see the need, for such large documents.

AT&T offers a remedy for the huge bills, however. Customers who are discontent with their current form of billing can call AT&T’s customer service line and request that their bill either be delivered electronically via email or through US mail in a summarized report.

For now, iPhone users can harness their bills for all sorts of activities. Origami, wallpaper, and a paper weight all come to mind as alternative uses for a billing system that desperately needs an alternative format.

iPhone Prompts Users to Switch Carriers…at the Same Rate as Other Phones

In a research piece released today, Bernstein Analyst Toni Sacconaghi brought up a point that Apple’s iPhone has been no more effective at soliciting new members to AT&T than the average new cellular device, based on reports from the second quarter.

On its Q2 earnings call, AT&T said that over 40% of the 146,000 iPhone activations were for customers new to the San Antonio-based carrier. While this number may appear very impressive at first glance, Sacconaghi goes on to add that an analysis of AT&T’s subscriber metrics finds that 40%-50% of its handsets normally are issued to new customers. Leading the Bernstein analyst to the conclusion that, “the iPhone is rather unexceptional in this regard.”

He goes on to point out that in 2006, AT&T sold 26.1 million handsets, of which 12.4 million, or 48%, went to customers new to the company. The concern at hand is that many investors likely believe that the iPhone’s ability to drive subscriber gains for AT&T at least partly justifies a “unique revenue-sharing agreement with Apple.”

Despite this discrepancy, the iPhone still manages to generate value for AT&T. For one, iPhone buyers are more likely to be switchers than first-time phone buyers, which helps the company snatch precious market share from its rivals. Additionally, the average AT&T customer pays $58 monthly for an annual contract. The iPhone contracts start at $60, with an average contract price seemingly around $70-$80. Translation: an extra $500 or so in revenue over the course of two-years, the minimum length of an iPhone service contract. The iPhone also generate $120 of gross profit for AT&T with each unit sold. Comparatively, the net loss on the average cell phone subsidy is $75, generating a nearly $200 swing.

Sacconaghi closed his report contending that “investor expectations around iPhone unit sales could prove to be too optimistic.” Maybe not, Apple fell today $3.76, or 2.9%, to $123.95.

The iPhone as a Gaming Device?

If you’ve been scouring the blogosphere lately, you’ve no doubt heard the recent buzz surrounding the iPhone as a mobile gaming platform, entering the arena with industry mainstays Sony and Nintendo. Reports from the New York Post have said that the iPhone has Nintendo in its sights, to compete with the popular DS handheld gaming system. Within the Post article, Kasper Jade of AppleInsider.com was quoted as saying, “I was told that a major game developer was seeded with iPhone [technology] quite some time ago.” Additionally, Engadget’s Peter Rojas said that he expected a formal announcement regarding gaming from Apple soon, “by Macworld [convention] in January at the latest.”

Needless to say, all this buzz has created quite a stir online. However, no formal announcement has come from Apple (which means little knowing Apple’s track record with secrecy). All this hype got me thinking about what would happen if Apple were to break into the mobile gaming arena. Hackers have already begun work on an NES emulator and an iPhone version of Doom, suggesting a possible market for gaming on the device.

What Apple will have to overcome is their interface in terms of transcending traditional handheld gaming controls. The Nintendo DS and the Sony PSP both have physical buttons for gaming input. The iPhone must find a user-friendly and intuitive interface for game control. The DS does have a touchscreen feature, but uses physical buttons for the majority of fast-paced gaming. Apple will no doubt have a great outlet for touch-based games, but may fall very short on fast-paced action and sports games. I mean really, imagine Madden on the iPhone, doesn’t seem very plausible, or fun.

Another hurdle for Apple is the competition they face. Nintendo revolutionized the video game industry when it introduced the Nintendo Entertainment System in the US in 1985. Since then, Nintendo has sold over 60 million units of the now archaic system. In terms of mobile gaming, the Game Boy also changed the face of electronics in 1989 selling 69 million units as of December, 2004. Nintendo also has the resources and people who know how to adapt to changing trends and consumer demands. The Wii has had overwhelming success since its initial launch, outselling both Microsoft’s XBOX 360 and Sony’s Playstation 3.

Apple’s success in the gaming industry seems highly unlikely. But, lest we forget, Apple has the coolest gadget on the planet, and Steve Jobs. Innovation has been the name of the game for Apple, and they have been winning it recently. While Apple faces a huge mountain to climb, they may find a way. That way, however, goes through Nintendo and Sony. As with the iPhone, Jobs and Co. must find a way to “revolutionize” the mobile gaming industry in order to realize any significant victory.

Have your own ideas for the iPhone gaming platform? Post your thoughts in the comments section below:

Is the iPhone Out of Touch?

The honeymoon may be over for iPhone fanatics and iSheep everywhere. Recent reports of sporadic touch screen failure have surfaced on various online threads and permeating the blogosphere.

According to the aforementioned online threads, users have reported that sections of the iPhone’s pressure-sensitive screen have been failing, leaving the affected screen space, as well as the interface on it, completely unresponsive to touch.

More specifically, the majority of disgruntled users are reporting a half-inch strip running across the iPhone screen that blocks access to the phone’s functions. One upset iPhone owner said, "On the main screen, I can’t hit the button for clock, or calculator. For text messages, I can’t hit the send button. On the phone keypad I can’t hit the 7, 8, or 9 keys."

Claims about screen failure began to surface roughly two weeks ago. Frustrated owners say that none of the Apple-issued updates have helped to solve the problem. To make matters worse, Apple is also charging users $29 to use a loaner iPhone while their handheld is sent to Apple to be fixed, rubbing some proverbial salt in the wound for owners affected by screen failure.

Apple has yet to release any official comment and seem to be dodging many of the online forum threads found on their website. Reports of apparent thread deletions regarding screen failure have been reported.

Nomura International analyst Richard Windsor had previously said that the iPhone uses a chemical film that uses touch sensitivity through the application of heat. Windsor further says that use of the initial technology, developed by a now defunct Finnish company and later acquired by Apple, showed that the film would eventually degrade leaving the screen’s surface dead to touch in the affected areas.

In his report, Windsor went on to point out that it is very likely that Apple knew about such screen shortcomings prior to the device's release. Furthermore, Windsor also said that it would be likely for Apple to fix this flaw before the handhelds were in consumer hands. For the time being, it appears that this "likelihood" may not have been so likely.

Out of Thin Air!?

iPhone owners may have noticed a slight, yet strange, modification to their “Camera and Photos” application in the past couple of days. Perhaps even more peculiarly, they don’t know exactly how it got there. The new modification is the inclusion of a function titled “Send to Web Gallery.” This is a button that appears under the aforementioned Camera and Photos application upon clicking the share button. Oddly enough, this button didn’t exist on Monday, and no one is quite sure how it got there.

The button links with new .Mac iPhone integration functionality that allows photos to be sent directly from the iPhone to the new “Web Gallery” function. Not only did this button appear without any synchronization via iTunes, it also appeared at different times for users. Some first noticed the button on Tuesday, while others don’t have it still today. Many theorists believe the discrepancy is due to the need to establish a .Mac email account on your iPhone and reset it to make the button appear, but even these steps did not result in addition of the feature for all users.

Some users claim that the welcome addition to the iPhone’s multimedia repertoire was installed with the 1.0.1 update released last week and set on a timer to not appear until August 7 in order to coincide with the .Mac announcements. However, this fails to explain why some users received the update yesterday, while others still remain unchanged. Another theory that is gaining in popularity is that AT&T is allowing Apple to send updates via the EDGE network, due to some experiments conducted by iphoneatlas.com in which the Wi-Fi connection was disabled for an hour or so with the EDGE network left connected. Upon reset, the phone booted up with the new function in tow.

The jury is still out on the exact means and rationale for the update. Perhaps this is Steve Jobs’ latest publicity stunt for a phone that has undersold analyst estimates and had to cut production. But don’t take my word for it.

Apple Slapped with another Suit

Apple has yet another lawsuit on their hands over the technology used in the hottest cellular device in the galaxy. Following a suit brought late last month regarding the iPhone’s battery life, this second suit may merit more consideration than the somewhat laughable, and misinformed, first one; in which many of the facts were misconstrued.

A Florida-based company by the name of SP Technologies is claiming that the technology used in the iPhone’s touch-screen keyboard belongs to them and was filed in a patent back in 2000. More specifically, the individual filing the suit is physician Peter V. Boesen, an Iowa surgeon recently sentenced to 51 months in jail for healthcare fraud. The patent, filed under U.S. patent number 6,784,873 B1, describes a "method and medium for a computer readable keyboard display incapable of user termination" and lists Boesen as the inventor.

The company claims to have addressed a letter to Apple in February, but that Apple “failed to investigate, respond to the letter ... or take reasonable steps to avoid infringement." Civil court records show a pattern of lawsuits filed by Boesen. Notable defendants include Canon, LG, and Kyocera. SP Technologies is seeking unspecified damages or royalties from Apple, who they claim engaged in “willful and deliberate” infringement.

The suit was filed on Thursday in federal court in Tyler, Texas; historically known as a patent litigation-friendly court. Apple has yet to issue any formal response to the allegations and was unavailable to be reached for comment.

As Black Hat Looms, Apple Makes Some Fixes

Apple released the first iPhone firmware update today, just one day before the start of the annual Black Hat Conference. In a report filed on July 17^th, Baltimore, MD-based firm Independent Security Evaluators (ISE) ran a security evaluation of the iPhone and found several vulnerabilities. Apple was given until August 2^nd, the start of the Black Hat Conference, to resolve the security issues before ISE issued their full report on how to hack into the iPhone to steal users’ private information and even record voice conversations.

The vulnerability, contained in the Safari Web Browser, was exploited by sending a link to a site within an email or through the controlled use of a Wi-Fi hotspot. Apple’s latest firmware update fixes all the problems associated with Safari, WebCore and WebKit.

There may be bad news for all you hackers out there, however. The update appears to wipe all mods from the firmware when connected to a PC via iTunes. But at press time, there have been various reports claiming that Jailbreak still works.

Aside from the security fixes, the update offers no new features; sad news for the thousands of iGeeks pining for an SDK and the sniveling CEOs who want the coolest phone to have Microsoft Exchange integration. While there are some third party vendors who have offered Exchange Support for the iPhone, it is done via IMAP, a security nightmare that just might keep your CIO up at night.

As for future updates, Apple is keeping quiet as usual. For now, it seems, Apple has rescued the iPhone from security mishaps just in the knick of time.

Apple Rumored to Lower Production on iPhone

Apple shares fell 3% today as rumors swirled around the production numbers for the company’s most coveted gadget, the iPhone. According to a note from the stock trading desk at Miller Tabak & Co, Apple is reducing its iPhone production from 9 million units to 4.5 million units, or half of initial expectations. The note goes on to add that cuts in iPod production may also be on the way.

This news comes at a bad time for Apple, whose opening weekend sales of the device were staggeringly below what industry analysts expected, with activation numbers from AT&T even worse. However, Apple’s quarterly earnings were bolstered by high sales of MacBooks and company staple, the iPod.

The reported cuts could mean bad news for Apple’s goal of selling 10 million iPhones by the end of 2008, a point reiterated at Wednesday’s quarterly earnings report. Despite the relatively low sales and the projected cuts in production, the iPhone did have the greatest debut weekend for any cellular device in the history of mobile phone sales. Additionally, the holiday season should increase iPhone sales significantly as rumors of a price drop have begun to start. Lastly, we mustn’t forget the launch of the iPhone overseas, which will most certainly contribute to a significant increase in sales.

For the time being, Apple and its iPhone chip vendors will have to weather the storm of stock price drops and analyst predictions; something Steve Jobs and Co. have become quite used to in the recent weeks after the iPhone’s release.

Hats off to Apple

Steve Jobs had a vision all along. Back in mid-June, the Apple CEO announced that the iPhone would not include an SDK, leaving many Mac developers with their heads hung low in disappointment. Opponents of the decision argued that the need for AJAX-based application development would cripple the iPhone in various arenas, particularly in the enterprise.

However, the lack of an SDK may have assured a strong and powerful iPhone development community for years to come. It seems that Apple may have used a form of reverse psychology to set in motion such an outcome. You see, the majority of developers and techies write software for Windows-based platforms due to their relative ease and perpetual presence in the homes and businesses of America. Steve Jobs is a smart, and seemingly humble, enough man to understand this. Therefore, handing developers an SDK would probably make a moderate splash in the development world with a rather meager lineup of third-party offerings.

Where Jobs’ genius really took over was in not offering an SDK. By withholding an easy means of development, ambitious tech wizards across the globe were faced with a challenge: crack the iPhone by any means necessary. At present time, hackers have come painstakingly close to unlocking the iPhone. In fact, so close that full access to all mobile carriers seems to be just a matter of time. And why would Apple care? They are making close to 55% markup on each unit sold, regardless of whether the user activates with AT&T.

Furthermore, Apple has laid the groundwork for a long-term and successful development community. In order to crack the iPhone, the best and brightest developers in the world have pooled their resources and know-how to access open source applications like Apache and Python on the iPhone, not to mention rumblings of VoIP offerings and remote web-sharing. And if history tells us anything, old habits die hard. The assembly of top-notch developers and hackers that have infiltrated the iPhone are likely to continue their iPhone developing ways long after the iPhone is fully accessible with an Apple offered SKD. What may be even sweeter music to Apple’s ears is that top-notch developers will be in a rush to win the race for the initial third-party iPhone applications.

Oh Mr. Jobs, you’ve done it again. Your company’s ubiquitous marketing buzz and hype combined with your knowledge that developers will do anything you tell them NOT to do have laid the framework for what could be one of the strongest development environments in recent memory. Time will tell how successful the SDK community for the iPhone becomes, but at least for now, the future looks oh so bright.

Apple Earnings Strong, iPhone Sales Disappoint

Apple posted strong earnings Wednesday, due in large part to increased Mac Book sales. The Cupertino, CA-based company posted revenue of $5.41 billion and net quarterly profit of $818 million, or $.92 per diluted share. Comparatively, Apple posted revenue of $4.37 billion and net quarterly profit of $472 million, or $.54 per diluted share, in last year’s third quarter.

The greatest gains in product sales were within Apple’s Macintosh computer line, shipping 1,764,000 units. This 33% increase in growth over last year’s third quarter was 150,000 units higher than Apple’s previous quarterly record. The company’s staple product, the iPod, sold over 900,000 units, representing 21% growth over last year.

Despite the overall earnings, Apple’s biggest surprise may have been the low number of iPhone units sold relative to analyst expectations. Reports for the opening weekend had estimated somewhere between 500,000 and 700,000 units sold. Investors were licking their chops at the news, and the iPhone, it seemed, had lived up to the hype. However, Apple’s earnings indicate that a mere 270,000 “iPhones and product accessories, such as headphones and carrying cases” were sold on Friday and Saturday of the kickoff weekend. With a headphone jack that doesn’t fit most headphones and a $600 investment to protect, you can bet that a lot of “accessories such as headphones and carrying cases” were sold.

So there you have it. Where the iPhone fell short, the Mac Book excelled. Perhaps the most disturbing element of the earnings report was in the way Apple portrayed the iPhone sales, including accessories with the number of units sold. It seems that Apple’s trick may have worked. A quick google news search will return numerous articles claiming 270,000 units sold; so much for “responsible journalism.” Apple’s spin doctors appear to have done it again.

Another inconvenient statistic for Apple was the fact that AT&T activated only 146,000 iPhones in the third quarter, leaving many iSheep to blame the 124,000 unit discrepancy on eBay sales and foreign buyers, an unlikely story to say the least. Despite the iPhone’s disappointing performance, CEO Steve Jobs reiterated the company’s sales goal of 10 million units shipped by the end of 2008. Jobs went on to say, “iPhone is off to a great start—we hope to sell our one-millionth iPhone by the end of its first full quarter of sales—and our new product pipeline is very strong.”

For now, we can expect further reporting of Apple’s invincibility and overestimates of iPhone sales. You want the truth? Apple won’t let you handle the truth.

iPhone Activation Numbers Disappoint

Apple shares fell 6.1%, or $8.81, yesterday due in large part to AT&T’s quarterly earnings report. Despite initial opening weekend estimates of over 500,000 iPhone units sold, AT&T only activated 146,000 in the same time frame, according to their report.

While this number is staggeringly lower than analyst predictions, it may be deceivingly low. Many of the early iPhone adopters incurred problems when activating their iPhones, while some purchased them for resale on eBay; both potential reasons why some owners didn’t activate their handhelds within the first weekend of availability. However, many experts point out that the 350,000+ unit discrepancy cannot be fully explained by such circumstances. Piper Jaffray analyst Gene Munster called the number of activations a "disappointment." Munster also added that he believes opening weekend sales will come in at around 200,000 units when Apple releases its quarterly report later today.

Overall, iPhone carrier AT&T faired well in the second quarter. The San Antonio-based company posted net income of $2.9 billion, or 47 cents a share; an increase of 61% over earnings of $1.8 billion, or 46 cents a share, in the same period a year earlier. Quarterly revenue shot up 87% to $29.5 billion from $15.8 billion. More specifically, its mobile unit gained 1.5 million customers in the quarter, to give it 63.7 million subscribers. Its churn rate (the percent of those quitting the service) fell to 1.2% from last year's 1.5%.

For now, investors and analysts alike wait patiently as Apple is set to announce its quarterly report later this afternoon. Until then, the iPhone sales speculations are likely to continue until the real results are heard. However, it is important to keep in mind that second quarter sales reports will only include sales from the first weekend, as the quarter ended on June 30^th.

Stay dialed in to www.iphailure.com for more information once sales figures are released.

Security Researchers Infiltrate iPhone

Baltimore, MD-based firm Independent Security Evaluators (ISE) recently ran a security evaluation of the iPhone. What they found may come as a surprise to loyal Apple fans everywhere. While Apple limited the security vulnerabilities of the iPhone significantly by not allowing the integration of third-party applications, they neglected to further secure the device if someone were to penetrate the walls of the iPhone and gain access to its hardware. Because all iPhone applications run with administrative privileges, a compromise of any application gives an attacker full access to the device; essentially meaning that once an attacker is in, they have free reign over the entire iPhone interface including features such as text messaging, phone calls, and access to various personal data.

So how did ISE infiltrate the iPhone’s supposedly impenetrable shell? Through an HTML address sent as a link in an email. When this page was viewed, the payload of the exploit forced the iPhone to make an outbound connection to a server controlled by ISE. The compromised iPhone then sent personal data including SMS text messages, contact information, call history, and voice mail information over the connection. In a detailed 7-page report, ISE notes that other personal data such as passwords, emails, and browsing history could be obtained from the device using the same process.

After the initial exploit was found to be effective, ISE crafted a second exploit that, when accessed via HTML, controlled the iPhone and forced it to make a system sound and vibrate the phone for a second. Researchers also noted that the exploit could have dialed phone numbers, sent text messages, or recorded audio and transmitted it over the network for later collection by a malicious party.

Apple was notified of such security flaws on July 17th. The full details of the research will not be released until August 2nd, however, in order to give Apple time to produce patches to ensure that attackers will not take advantage of the noted vulnerabilities.

Along with emails containing links to malicious websites, there are other ways in which to access iPhone users’ personal information and services. A more subtle approach can be utilized via Wi-Fi hotspot. By setting up and advertising a free Wi-Fi hotspot in a heavily populated area with an iPhone user connecting to the network, all traffic from the victim will pass through the attacker controlled wireless router. The attacker can intercept and change any HTTP traffic intended for the victim. This traffic can invisibly be modified to contain the iPhone exploit code and gain full access to the device.

Perhaps the most frightening aspect of this newly discovered security flaw is the fact that all of this can be achieved without the user ever knowing, leaving an identity-theft victim with no idea they have been wronged. Engineers at Apple are certainly working diligently to fix these issues before the full detailed report is issued on August 2nd. If these issues are not addressed, expect a lot more stories about iPhone identity theft on August 3rd.

Researchers Advise Against Safari Dialer

In a report issued Monday, security software company SPI Dynamics warned consumers against using the iPhone’s Safari browser to make calls. The Safari browser includes a feature that allows users to tap any telephone number seen on a webpage and automatically dial it upon touching it. While this feature is very user-friendly and convenient, SPI has discovered that it can be exploited by hackers, resulting in a number of negative consequences.

The first threat is the ability for hackers to redirect calls to different phone numbers of the attacker’s choosing. This threat includes the possibility of the redirection of calls to expensive 900 numbers or international lines. Additionally, calls can also be tracked by whoever is attacking a given phone at that time, allowing for the monitoring of phone usage. Other threats include the placing of phone calls without the user accepting the confirmation dialog, placing the phone into an infinite loop of making calls, and even preventing the phone from dialing. SPI researchers added that the only way to halt such malicious attacks is to turn the iPhone off and reboot completely, that is, if you notice.

These attacks can be launched from a malicious website, a legitimate website that has Cross-Site Scripting vulnerabilities, or as part of a payload of a web application worm. SPI claims to have reported these issues to Apple as early as July 6, and is working with Apple to solve this potentially catastrophic dilemma. Currently, SPI is recommending that iPhone users do not use the built-in Safari browser to dial telephone numbers until Apple has resolved the problems inherent to its use.

While many don’t see this issue as a huge problem, citing the lack of monetary benefits to the attacker and the relatively small amount of people actually using iPhones, it does hold a significant amount of weight due to the iPhone’s immense popularity. Certainly, most hackers wouldn’t spend their time hacking into a device that is so absent on a major computing scale, but the iPhone seems to have somewhat of a target on its back due to its ubiquitous hype and high expectations.

For Apple, this is another mark against its darling device. In addition to Wi-Fi networks crashing at Duke, a suspect battery replacement policy complete with consumer group petition filings, EDGE network sluggishness, and 68 identified bugs, this announcement fuels the fire being stoked in the blogosphere and technology journalism industry. Despite the bad press circulating the device, it continues to sell strong. Apple stock is rising as fast as ever as Apple Stores rush to restock inventory nearly everyday, while cell phone rival Motorola has reported their second straight quarterly loss to investors.

Apple seems to be stepping outside of their box in terms of support and a general lack of technical problems. However, Apple may be biding their time in anticipation of the second-gen iPhone, taking into account the hiccups of the first-generation in order to perfect their craft. Either way, consumers who shelled out the cash for the first set of iPhones will most certainly be expecting a fix for their features, and fast.

iPhone Flunks Out at Duke University

Well it wasn't AT&T's west coast network, but the iPhone did manage to short circuit one, albeit much smaller, network today. The iPhone's Wi-Fi connection appears to be causing problems on the wireless network at Duke University in Durham, North Carolina.

The built-in 802.11b/g adapters on a number of phones occasionally flood certain parts of the University's wireless LAN with MAC address requests. This has lead to the temporary loss of signal from 12 to 30 wireless access points on different occasions.

The campus primary WLAN provider, Cisco, is currently working with network administrators who have opened a help desk ticket with Apple. However, a specific cause has yet to be determined.

Because it is summer, a time in which the majority of full-time students are not enrolled in classes, the problem is not as severe as say during finals week of fall semester. However, when students return for classes in the fall, they are certain to bring more iPhones with them. And with more iPhones, come even more network requests flooding the campus system.

The iPhones appear to be flooding the University's access points with up to 18,000 address requests per second (nearly 10Mbps of bandwidth) and hording the campus airtime. When the access points can no longer handle the intense traffic, they proceed to shut down for 10-15 minutes with no means to communicate with Wi-Fi enabled devices. According to Kevin Miller, assistant director, communications infrastructure, with Duke’s Office of Information Technology, there are currently 150 or so Apple iPhones regularly using Duke's Wi-Fi network.

The iPhone uses the Address Resolution Protocol (ARP) to request the MAC address of the destination node, for which it already has the IP address. When it doesn’t get an answer, the iPhone just keeps asking, leading to the aforementioned 18,000 requests per second.

So far, the communication with Apple has been “one-way,” according to Miller. After initially filing the problem ticket, Apple has told him the problem is being “escalated” but as of mid-afternoon Monday, nothing significant had been heard from Apple.

With this story in full rotation in the blogoshpere and national news publications, Apple would be wise to offer some real solutions to the problems, and fast. With an angry consumer rights group and an irritated mob of EDGE customers already barking up their proverbial tree, this is just one more bump in the road the iPhone must cope with and resolve.

The coming days may prove costly for Apple as they could see their college-age market shrink due to potential perceived complications with campus wireless networks. Regardless of whether the Duke case is an isolated incident, the negative press from its occurrence is sure to leave some college-aged purchasers with a bitter taste in their mouth.

UPDATE: Cisco Network Gear Responsible for Duke iPhone Flooding, read about it here

iPhone Nano Coming Soon! Or Maybe Not…

When JP Morgan analyst Kevin Chang reported that Apple had aspirations of introducing an iPod Nano-based iPhone, the internet blogosphere went nuts, news sources started printing, and Apple’s stock hit an all-time high. What was even more outstanding was that reports suggested that Apple would release the iPhone’s baby brother to the world in the fourth quarter of 2007.

Chang, a representative based out of Taiwan who made his announcement on Monday, based his findings off of a patent filed by Apple last week that described a Nano-like device capable of playing multimedia and making phones calls. Additionally, Chang claimed he knew unnamed sources in the Apple supply chain that contributed further legitimacy to his report.

While investors scampered to pick up Apple stock and reporters threw together press releases, JP Morgan’s New York office was doing a little work of their own. In a detailed one page note, analysts Bill Shope, Elizabeth Borbolla, and Vlad Rom advised company subscribers to ignore the report out of Taiwan stating, "We believe a near-term launch would be unusual and highly risky." They went on to say that Chang’s story had yet to be corroborated and ran contrary to Apple’s historical approach of introducing new technology into the market as it become necessary, rather than milking a cash cow all at once.

Needless to say, Kevin Chang is back in the job market. The analyst was canned after shaking up the industry yesterday on what we now know was a false, or at least misinformed, report. While many industry experts see a more affordable iPhone down the road, it would be foolish for Apple to slow sales of the gold mine they are currently operating by offering a cheap substitute.

What will likely happen, instead, is that the iPhone will continue to sell at a solid pace with a future, low-end product in the works. However, it seems as though Apple has been down that road before; and it wasn’t pretty. For those or you who don’t remember the Motorola ROKR E1, it was the first cell phone to integrate iTunes into its interface. Users could upload 512 MB worth of songs internally with an expandable Micro SD memory card slot. The ROKR remained in circulation on Cingular for about one whole year. With the device lagging in sales and reviews far from good, the device was forever banished to the depths of “O, I remember that one!”

Apple will have to do some heavy revamping in order for an iPhone Nano to avoid the same fate. What Apple does have on their side is the sleek design and package of the iPod Nano, one of their best selling models. For the device to catch on with consumers, Apple will need another hefty advertising and PR campaign coupled with a full iPod interface inside of the device.

There is no question that Apple is currently the “it” brand in the mobile industry. How they use and perpetuate that brand identity to push sales and improve their market position has yet to be seen. The coming months for Apple will go far in determining their long-term feasibility in the mobile market.

iPhone Carrier Swap on the Horizon, But for How Long?

A European company known for unlocking cell phones says it is close to unlocking the iPhone for use with non-AT&T GSM networks. In an interview with UK-based Uniquephones founder John McLaughlin, the feasibility and availability of such claims were discussed. McLaughlin claims that he has engineers in several countries working tirelessly to crack security features within the iPhone, claiming that they are very close to success.

Since the June 29 release of the iPhone, hackers have been working non-stop to find ways to employ the iPhone without the need for AT&T’s 2-year service agreement. The most common complaints regarding AT&T’s service have been high prices and slow performance on the provider’s EDGE network, a supplement to the iPhone’s Wi-Fi connection. Interest in unlocking the iPhone has been high among consumers with 150,000 inquiries sent to unlockingiphone.com for information regarding iPhone unlocking as of Sunday night.

McLaughlin cited the second step of a two-step process for unlocking the iPhone as the main deterrent in unlocking the phone. While his team has succeeded in unlocking the activation process to the AT&T SIM card specific to an iPhone so that a different AT&T SIM card can work with the phone and be activated within iTunes, they have yet to alter the firmware to support another carrier’s SIM card as it could lead to the destruction of the iPhone itself, rendering it useless. McLaughlin believes that the key to unlocking the phone is breaking the encryption process that protects the token sent through the iTunes activation process to an iPhone's firmware. This has proven difficult, however, due to the fragile nature of tinkering with the device’s firmware.

Infamous Norwegian hacker Jon Johansen, also known as “DVD Jon” for his successful hack of DVD encryption software, announced last week that he was able to crack the iPhone for use without the activation of an AT&T data and voice plan. Despite the device’s lack of a mobile service provider, Johansen was able to use the handheld’s iPod feature along with web services using a Wi-Fi connection. However, the hack left users without the ability to make phone calls or send text messages. If McLaughlin and company were able to unlock the iPhone, it could mean a fully-functioning iPhone through competing service providers such as T-Mobile.

Despite promising news that unlocking the iPhone is quite possible, many industry experts think that Apple will squash the problem by issuing a simple firmware update through the iTunes synchronization process, returning the iPhone to its initial restrictions. "I assume that someone will succeed in unlocking the iPhone," said Avi Greengart, principal analyst, mobile devices at Current Analysis Inc. "I also assume Apple will close whatever loophole is open the next time they synchronize."

Although this may be the harsh reality for McLaughlin and all the hackers trying to unlock the iPhone worldwide, Uniquephones still plans to charge customers $49.99 for software to unlock the iPhone once it is developed and consumer-ready. Until then, the waiting game continues as consumers and hackers alike anticipate the next step in the unlocking of the iPhone.

Consumer Group Slams Apple over Battery Policy

Apple’s recent announcement of its battery replacement policy has sparked a backlash amongst consumer advocacy groups. The policy, introduced yesterday, involves customers paying $79, plus an additional $6.95 in shipping, to replace the non-removable iPhone battery. Users must also submit their iPhone to Apple with an expected turn-around of 3 days. Apple will offer rental units for use during repair with a price tag of $29, leaving the cost of a new battery over $100 if you want to be reachable via cell phone during repair.

After the initial price tag of $500 or $600 for the device, it is more than understandable that consumers would be upset with this policy. However, the timing of its introduction is what has the Santa Monica-based Foundation for Consumer and Taxpayer Rights fired up. The consumer group issued a letter to Apple and AT&T Inc. citing the unfairness of withholding such a policy until after the device went on sale. Having released information regarding service plan and device prices prior to release, there is no reason to think Apple couldn’t have also included the information regarding the battery policy.

Harvey Rosenfield, founder of the Foundation for Consumer and Taxpayer Rights, issued a statement to news reporters this week stating, "Some of them might be waking up now wondering who they got in bed with." Apple did not have any immediate comment on the situation regarding the consumer advocate group.

Rosenfield was also upset that he was only able to find the policy after clicking through several links in the Apple website. Many blogs and news sources have begun to disclose, and lament, Apple’s battery repair policy due to its high price and “hush, hush” nature.

"The cell phone industry is notorious for not being consumer-friendly while Apple has a fairly good reputation, so for Apple to stand on a technicality of a hidden disclosure that's going to cost the user as much as 20 percent of the purchase price I think will prove to be a colossal mistake," Rosenfield said.

Apple’s choice to not include a removable battery has been one of general disapproval from the market overall. Most cellular phones allow the customer to easily replace their battery when it becomes worn and no longer functions properly, allowing for a quick and relatively inexpensive transaction. Not Apple, however. With profit margins somewhere around 55% on the 8 GB model of its fledgling technology phenomenon, the price gouging must continue so that buyers of the iPhone will eventually need to spend another 100 bucks to maintain a device analysts estimate will cost somewhere between $2000 and $3000 when additional costs such as service plans, accessories and fees are taken into account.

The Foundation for Consumer and Taxpayer Rights is currently battling Apple in court over a defect in the first generation of iPod Nanos. We’ll have to keep a close eye to see if the battery issue is resolved, or if it ends up in court alongside the Nano.

Recent Hack Could Spell Trouble for AT&T

With the estimated 700,000 iPhones sold over the past week, it comes as no surprise that retailers and developers have been working around the clock to churn out accessories and AJAX based applications. After spending some serious cash to acquire the device, consumers are more than willing to improve, protect, and expand their treasured item.

Users can find an extensive list of headphones, cases, FM transmitters, and adapters at ilounge.com. In the AJAX based application sector, iphoneapplicationlist.com houses an impressive collection of early applications. While there are some worthwhile apps, the overall product list is a bit lacking in terms of productive software and outstanding content. Perhaps the biggest downer is that all of these applications must be run through the iPhone’s web browser, Safari. Translation: you won’t be able to run them when you don’t have an internet connection. Forget playing games down in the subway, with no Wi-Fi or EDGE access, your morning commute will have to rely on the iPhone’s music features.

Steve Jobs has relentlessly argued that security concerns have prevented the iPhone from opening its doors to third-party developers who are more than eager to craft non-web based applications. An interesting claim from a guy who’s handheld operates on IMAP and Yahoo mail. Despite pleas from the techie community, the iPhone will run strictly AJAX applications from third-parties until further notice.

What may be the actual case, is that Apple has the best interests of AT&T in mind. AT&T, who is generating revenue from data and voice plans attached to the iPhone, has much to lose if certain applications were to be introduced to the iPhone. The first, and maybe most damaging, would be the introduction of VOIP phone programs. Essentially allowing free internet phone calls via the iPhone would no longer necessitate the need for AT&T’s voice service. Similarly, instant messaging software such as AIM or MSN messenger would facilitate the use of IM without the use of AT&T’s text messaging, also eliminating the need for unlimited text messaging plans.

Jobs has hinted at the possibility of future software development kits for offline software. However, today’s news from well-known hacker Jon Johansen may delay such a kit. Johansen has apparently discovered a way to activate an iPhone without signing up for service with AT&T. This hack allows users to access Wi-Fi connectivity and use the device’s iPod feature without ever contacting AT&T via iTunes to sign up for the mobile carrier’s data and voice plans. If this hack were to be utilized with VOIP and IM software, one could essentially own and use an iPhone with a substantial amount of features comparative to an iPhone signed up for AT&T service. However, the user would need constant access to a Wi-Fi connection. While this seems unrealistic for calls on the go, the future may be bright for such usage due to the implementation of municipal, city-wide Wi-Fi networks in many US cities.

O2 Expected to Win Bid for UK iPhone

Sources in London say that the sole carrier of the iPhone in the United Kingdom will be mobile phone operator O2. Newspapers reported Thursday that the deal is now imminent and should be inked within the week.

One of the most sought after deals in the mobile industry, the announcement comes as somewhat of a surprise to many analysts expecting competing mobile provider Vodafone to acquire the exclusive rights to the iPhone. No official announcement has come from either O2 or Apple as of press time.

O2 is the largest mobile operator in Great Britain with over 18 million customers. However, Vodafone holds the greatest market share due to greater revenue. While somewhat of a surprise, experts see the value of Apple’s choice and site reasons for Vodafone’s pass on the contract.

Gartner analyst Carolina Milanesi said, "Although it would make a great deal of sense for Apple to go with Vodafone, it doesn't really fit with Vodafone's emphasis on their own music content and portal." Other industry experts site Vodafone’s tendency to take control away from device makers in handset deals, coupled with Apple’s tendency to dictate conditions in such deals, as the reason an agreement could not be reached.

Apple has yet to announce the release date of the iPhone in the UK. However, experts estimate that the launch will be around Christmas 2007.

AT&T’s EDGE Not Too Sharp on Reliability

After months of techies and bloggers alike lamenting the limited speed of AT&T’s EDGE network, it appears that capacity may have been the greater issue at hand. With iPhone units flying off retail shelves this past weekend, somewhere in the neighborhood of 500,000 iPhones have proven too much for AT&T’s network to handle. Makes you wonder how Steve Job’s target of 10 million iPhones sold by the end of 2008 will fair.

The glitch left users in the Central and Western United States without data services. Yes, that’s right; the very features that made the iPhone a media darling were temporarily unavailable yesterday to thousands of AT&T subscribers. The lack of web-browsing and email access was not limited to only iPhones however, several other EDGE network devices were left without data capabilities in the iPhone’s wake. One can imagine those without an iPhone and their extreme disdain for the Apple gadget following the stoppage in service.

The network mishap has led to two separate complications. Some users are able to log-in to the EDGE network but are unable to transfer data and others are unable to even log-in. In anticipation of such an event, AT&T promised that it had beefed-up its network in order to accommodate the increased traffic due to the iPhone’s release. Apparently, the beef was insufficient as users have continued to experience problems throughout the day.

Some users have been able to access their data service for sporadic periods of time, but continue to go without consistent, long-term service.

While AT&T and Apple appear to have a big problem on their hands, things may get worse. With the high sales numbers from the weekend, iPhone’s should continue flying off the shelves as shipments are made available in stores. Either AT&T must correct the problem immediately and make the network even stronger, or Apple will have to delay shipments until the issue is resolved.

Either way, one thing is certain. The EDGE network, which was already on thin ice with tech consumers, will have another very serious strike against it’s feasibility for supporting the new iPhone craze, not to mention the other devices using the network.

iPhone Nears Sellout, Hackers Near Unlocking

It took four days, but the world’s most sought after mobile device is finally nearing sellout status. Despite the multitude of Apple fans lining up in front of stores as early as Monday, for last Friday’s release in anticipation of immediate sellouts, the iPhone was readily available at many Apple Stores throughout the weekend. AT&T stores sold out of inventory relatively quickly due to lower unit numbers on hand.

The combination music player and phone has managed a complete absence in 10 states as of last night at 9PM. Overall, 95 out of 164 Apple Stores reported sellouts last night. Industry analysts have the iPhone’s weekend sales estimated at somewhere between 500,000 and 700,000 units, according to various reports.

According to AT&T spokesman Mark Siegel, the iPhone has sold out in nearly all of its 1,800 stores nationwide. As the sole service provider of the iPhone, the iPhone shattered AT&T sales records for phone units. In fact, the iPhone sold more units in its first weekend than Motorola’s ever popular RAZR did in its first month.

With such high initial sales numbers and a lone service provider, hackers are racing to be the first team to unlock the device for use on other service providers’ networks. Beginning almost immediately after the iPhone’s Friday evening launch, hackers went to work claiming “very significant progress.”

An unlocked iPhone would mean that cell phone users would be able to use the device on networks other than AT&T, a major selling point to consumers reluctant to spend the money on high-priced contract cancellation fees with their current non-AT&T provider. Early indicators suggest that the iPhone is unlockable. However, hackers are having difficulty finding a means to circumvent authentication processes embedded in iTunes software that register users for an AT&T service plan and enable all of the iPhone’s features.

Because the iPhone makes use of SIM cards, many tech experts are optimistic that the handheld will be easily unlocked versus a hardwired phone. Furthermore, the use of a SIM card means that the iPhone is locked using its firmware, which can most likely be cracked.

If the iPhone is successfully cracked, AT&T could potentially have a devastating problem on their hands. With Apple already claiming every bit of the 55% markup on the device, AT&T has been left to generate revenue through the acquisition of new customers’ service plans. Not surprisingly, AT&T has seen an increase in new customers since the iPhone launch. However, if members of other networks such as Verizon and T-Mobile were able to gain access to iPhone service through their current provider, AT&T will find itself missing out on potential new customers and the subsequent revenue they generate.

As of noon on Tuesday, no word has been issued of a confirmed unlocked iPhone. But with the dedicated and talented hackers of America, it seems that the unlocked iPhone will be only a matter of time.

Apple’s iPhone Revolutionary, But at What Cost?

On January 9, 2007 Apple CEO Steve Jobs claimed that Apple had “reinvented the phone.” And today, just 3 days after the iPhone’s release, he may be right. The sleek and easy-to-use interface has consumers gushing over its features and aesthetics. In fact, the vast majority of iPhone reviews have been quite positive. While not geared for business enterprise by any means, the iPhone has set the standard for what consumer electronic devices can be. However, the average consumer may not be aware of what they’re missing within the sleek iPhone package.

Having done its part to promote the smartphone industry through incredibly high levels of buzz and hype, the iPhone may have dealt the industry a setback in terms of perceived capabilities across the board. For many people, the iPhone is the first taste they’ve ever had of any significant exposure to smartphones. Where this can hurt the industry is in regard to its lack of third-party applications and software development.

In essence, the capabilities of the iPhone will only go as far as Apple will let them. A lack of out-of-house developers significantly reduces the likelihood of groundbreaking applications that think outside of Apple’s box.

Although regarded as an outright failure, the iPhone may want to take a page out of the ill-famed Newton’s book. This PDA, released by apple in 1993, eventually fizzled out by 1998 due in most part to high prices and the large size of the device. However, despite the handheld’s shortcomings, there was still a very active developer community. The introduction of the Toolbox programming software allowed programmers to develop applications for the Newton separate of Apple’s empire. While the price for Toolbox was initially quite expensive at $1000, Apple eventually provided the software free of charge and many third-party and shareware applications were developed, ultimately furthering the capabilities of the device.

For today’s smartphone industry, the iPhone may be one step forward, but two steps back. The masses now believe in the feasibility of the smartphone and see it as a potential addition to their pocket within the near future. It is now the job of competitors like Palm, RIM, and Microsoft to show consumers the true capabilities of smartphones. If these companies are able to piggyback off of Apple’s buzz, they may be able to parlay Apple’s success into their success. Ultimately, this benefits not only said companies, but also the consumer who may not even know what they’re missing.

If Apple is to truly contribute long term advancements in the smartphone field, it must facilitate third-party development for the iPhone platform. Sleek features combined with a robust and diverse software line will not only allow us to see what the iPhone is truly capable of, but it will also help Apple maximize sales of the device. Until then, Apple may be selling itself, and the smartphone world, all too short.

Availability Exceeds Buzz

Those camping out in front of Apple stores this past Friday were dealt a harsh reality come 6 PM. Despite what they had anticipated, iPhones were not only available throughout Friday evening, but continued to be available throughout the entire weekend.

According to Piper Jaffrey’s Gene Munster, 100 percent of Apple Stores had the phones available on Saturday and 84 percent had them available on Sunday. This was due, in large part, to the higher number of units on hand in Apple stores versus the supply in stock at AT&T vendors.

Coupled with the iPhone’s widespread availability, the unit managed to move 500,000 units this weekend alone, according to analyst estimates. Leaving many to wonder whether Apple’s initial sales weekend lived up to its hype. While initial sales forecasts from early in the year put the iPhone right around the 200,000 mark, it more than doubled early expectations. This is certainly a big success, in terms of sales, for Apple’s fledgling phone. However, the buzz surrounding the iPhone was so great that its accessibility may have deflated what was to have been the summer’s most hard-to-get gadget.

You may recall a quote from Apple CEO Steve Jobs last month advising a consumer on the art of acquiring an iPhone. "Don't go to an Apple store, it will be a madhouse there. People will be lined up around the block, sleeping on the sidewalk to get one. Go to an AT&T/Cingular store. Most people don't know that they will be selling them too." Oddly enough, it was the Apple stores that catered to availability and the AT&T stores that ran short of supply. As for the “madhouse” effect; while most stores did have increased customer traffic, the iPhone’s home activation allowed customers to get in and out of the store in a relatively quick fashion, certainly much faster than when activating a phone in-store.

So was this weekend a success for Apple. The answer is “yes” and “no.” In terms of sheer sales numbers, 500,000 units represent 5% of the 10 million unit sales mark established by Jobs in January. With the end of the 2008 calendar year still 17 months away, Apple seems poised to meet their goal based upon the first wave of iPhone purchases. On the other hand, Apple may have had a weekend perceived by many analysts and consumers as less than stellar, due to the fact that the iPhone was widely accessible throughout the entire weekend and into the week.

This dichotomy centers upon a question many analysts have posed. Can Apple live up to the hype? With consumer expectations sky-high, the relative ease of acquiring the handset may serve to undermine the exclusivity of the handheld. And at $600, consumers expect a certain level of exclusivity.

Many Apple stores have remaining inventory still today from the busy weekend. The company has even set up a portion of their website to allow users to check the availability of the iPhone at their local Apple store. The inventory count is updated at 9 PM local time every night and displays the remaining iPhones in stock available for purchase at 9 AM the following day.

So leave your tent at home. Eat good meals and shower daily. The season’s supposedly most hard-to-get item may not be so hard to get after all.

Research Paints Gloomy Picture for iPhone

International research performed by media agency Universal McCann has determined that Apple’s target number of 10 million iPhones sold by the end of 2008 may be too ambitious, pointing to the device’s lack of a 3G network and low demand for converged devices.

Strangely enough, research concluded that demand for converged devices was lowest in affluent countries with just 31% of Americans surveyed saying they wanted a device with multiple capabilities and only 27% of Japanese citizens expressing interest. The demand for multiple capabilities was highest in Mexico at 79% with Malaysia and Brazil coming in second at 70%.

What may be the biggest obstacle for the iPhone is that 60% of US mobile phone users already own three or more specialty specific devices such as digital cameras, mp3 players and portable media devices. Many of these users have obtained their devices at a substantial overall cost and are leery of investing more money into one device.

The bottom line, according to Universal McCann, is that convergence is a trend limited to the financial resources of the consumer. With multiple devices becoming increasingly affordable, consumers continue to prefer multiple devices while shying away from the high end all-in-one convergence devices.

The iPhone is set to launch tonight at 6PM local time. Apple stores will be open until midnight and are offering iPhone workshops at stores tomorrow morning.

Despite research indicating that the iPhone will likely fall short of the expected 10 million units sold, the buzz and hype surrounding the device may propel US consumers to purchase the device despite its high price and preexistence of multiple devices. Cool factor goes a long way when selling a product, especially if you’re Apple, whose sleek and user-friendly product line has become a staple in the consumer electronics market.

Even still, AT&T’s slower EDGE network has analysts and consumers alike cautious of the iPhone’s internet browsing speed; a feature described in Apple’s marketing campaign as not a “watered down version of the internet.” While it may not be “watered down,” it may be held down in its capabilities to deliver online content quickly without a 3G network.

Even Apple chief executive Steve Jobs expressed doubts in the speed of the EDGE network in an interview yesterday with the Wall Street Journal. In the interview, Jobs was quoted as saying, “Where you wish you had faster speed is…on a Web browser. It's good enough, but you wish it was a little faster.”

When your CEO is unenthusiastic about a feature, especially Steve Jobs, you may have a slight problem on your hands. Despite Jobs’ distaste for the EDGE network’s speed, his common defense of Wi-Fi integration continues to surface. “That's where sandwiching EDGE with Wi-Fi really makes sense because Wi-Fi is much faster than any 3G network.”

Initial sales of the iPhone will no doubt be huge, but the continued sales growth for the device will tell the real tale of whether Apple has set its goals too high.

The Top 6 Ways to Spend $600

With the launch of the iPhone a mere 30 hours or so away, I got to thinking. What will I do with the $600 I won't be spending on it? A quick glance around the web afforded me a number of luxuries that may just be worth your $600. This is my top six ways to spend $600:

6. 1.66 GHz Mac Mini Intel Core Duo Combo Drive Desktop ($574, ecost.com)
-Whether you're a Mac fan, or a PC follower, there's no denying the strange amount of irony that you can get a fully functioning Mac computer for less than the price of a cell phone! Personally, I don't know if I'd pick it up due to its modest capabilities. But hey, 60 gigs is a whole lot more than 8!

5. 32 inch LCD HDTV w/Built-in DVD Player by Westinghouse ($449, ecost.com)
-Not only will you be able to watch High Def channels and DVDs, with an S-video cable you have a fully functioning, gigantic computer monitor. Sure you might not get mobility, but you'll save
$150 and have 28.5 more inches of viewing pleasure.

4. XBOX 360 Ultimate Bundle 2 ($570, amazon.com)
-With 5 games, a rechargable wireless controller, and the premium XBOX console, you'll be inside so much you won't even need a cellphone! Sure landlines won't give you google maps, but who needs to go anywhere when you've got XBOX live?

3. 1.73 GHz Satellite Intel Pentium Dual-Core DVD+RW Wireless Notebook ($639, ecost.com)
-I know, I know, I'm a tad over budget on this one. But with 528 MB of RAM, an 80 GB hard drive, DVD SuperMulti Drive, and a 15.4" WXGA HD display I'm thinking the extra $40 is money well spent.

2. Initial 5-inch Touchscreen GPS Navigation System ($495, overstock.com)
-I know for certain that this handheld device has GPS. With a 5-inch display and more features than you'll know what to do with, this baby will get you from point A to point B with the greatest of ease. Did I mention it has Bluetooth and expandable memory?

1. Motorola Q ($160, amazon) and 4-nights at The Venetian in Vegas w/airfare ($457, priceline)
-Once again over budget, but hey, its 17 bucks and it's Vegas Baby! The Motorola Q offers everything the iPhone does and more, albeit in a less sexy and user-friendly package. When you're traveling in Vegas, it's always good to have multimedia options, GPS, corporate email, and perhaps most importantly, online banking. Let's just hope you don't have to make too big a transfer. And it you're still set on investing your hard-earned cash in the iPhone craze, I'm sure the hotel across town probably has some nice budget rooms it didn't fill for the weekend.

The Point of Sale Hypocrisy

As you sit at your desk and read this, there are millions of people across the country taking in the beautiful summer weather. In fact, some people are taking in summer in front of an AT&T retail store in hopes of procuring the hottest gadget known to man, the iPhone. Going days without adequate shelter and bingeing on the fast food outlet next door, these brave Apple enthusiasts wouldn’t have it any other way.

Inside the store, the manager readies all of the employees for Friday’s madhouse atmosphere and preps them on the finer points of the sleek new handheld to address when presenting it to customers, as if they needed more information.

When 6 PM rolls around on Friday, the two parties will converge in what will no doubt be an immediate sellout of existing inventory. The consumers, now sporting beards and a less than pleasant aroma, will take their boxes to the front desk to shell out the 5 or 600 bucks necessary to call it their own.

The clerk takes the box and scans it with the UPC reader. The unit is subtracted from inventory and added to the list of items sold for the day. This may seem a little overboard on description but the point of sale is where the biggest irony of the iPhone’s purchase exists. Strangely enough, the point of sale devices used by Apple Stores are powered by Windows Mobile! Quite an anomaly, some may even say hypocrisy, that the wireless vendor and supplier of the iPhone utilizes Windows Mobile for business solutions.

It actually makes perfect sense when you mull it over a bit. The iPhone is NOT a business-friendly phone, simple as that. Despite what you may hear that corporate email will be compatible with the iPhone, it is only through an IMAP system, a system that allows for multiple security vulnerabilities that your IT department will most likely not go for. In this case, Apple is no exception. Sure, when your sales rep wants to go home and unwind with some mobile entertainment, he or she may spring for an iPhone. However, they may as well eliminate another handheld device from their pocket (ie: iPhone) as the new Windows Mobile 6 powered smart phones have all the multimedia offering of the iPhone, albeit in a less sleek package.

While Windows Mobile smart phones offer multimedia features such as video playback, mp3 capabilities, and a digital camera; it is the line’s extensive relevance in the business solutions environment that put it head and shoulders above the iPhone in terms of becoming the all-in-one device.

So, you can see why Apple must utilize Windows Mobile for their enterprise mobility. And until point of sale operations involve iTunes and YouTube, things are most certain to stay that way.

The Real Cost of the iPhone’s Closed Platform

By now you are no doubt aware of Apple’s closed platform of OS X available on the iPhone. In fact, you may be encouraged by the fact that the device will offer future software titles through the user-friendly iTunes stores. However, what you may not also realize is that Apple is closing the door in terms of a varied and diverse software landscape for its technological darling.

Furthermore, Apple is dealing a major blow to the mobile software industry as a whole. By promoting software as a feature of hardware, the company could perpetuate an assumption that software is no longer a separate entity of a mobile device, leaving consumers with the perception that hardware makers are the only providers of high-quality, compatible titles. Almost brings you back to the old days of Mac vs. Windows.

While Mac vs. Windows on the PC platform was partially alleviated when Apple allowed MS Office titles and windows to run simultaneously with OS X, there is no foreseeable end in sight to Apple’s hording of software development rights. In today’s Wall Street Journal Apple CEO Steve Jobs claimed “The iPhone is the most sophisticated software platform ever created for a mobile device.” Adding, “We think software features are where the action will be in the coming years.”

This “action” will most certainly mean increased revenue for Apple and decreased options for consumers. Did I also mention a little something call Microsoft Exchange? Because without it, you won’t be able to effectively accomplish work tasks in conjunction with your Microsoft based software your office most likely runs on. And as for you email and phone call only people, good luck getting the IT department to let you use IMAP for confidential company emails.

The real cost of Apple’s closed platform will not be immediately apparent. In fact, it may not be immediately impactful. However, the mobile software industry will be dealt a significant setback if Apple is able to shift consumer perception to the thinking that software is an exclusive component of the hardware upon which it runs. When in reality, mobile software is, and should be its own entity separate from any particular line of product or hardware.

If this is allowed to happen, the diversity and number of software titles available will slowly dwindle until we are once again, much like the early Mac and Windows wars, tied down to a specific and lone set of applications based upon which device one buys. If I remember correctly, I think Mac was on the short end of the stick in terms of applications and software in those days. And even though Apple’s predicted 10 million units sold seems like a huge number, it is still only a fraction of the mobile device market with Blackberry and Windows Mobile powered smart phones both eclipsing Apple’s sales goal several times over. Thus, Apple will have to create some very killer apps in order to compete with the thousands of developers worldwide working to create software for the Windows Mobile platform.

Surveying the Damage (AT&T Announces Plan Prices)!

Apple announced today that all iPhones will be activated via an internet connection and iTunes account from the “comfort and privacy of their own home or office,” according to Apple CEO Steve Jobs. While I must admit, the idea of skipping the long and drawn out process of activating a phone in-store does sound awfully appealing, there is one element of it that I find particularly unsettling: a $36 activation fee!

If anything, AT&T should be paying the consumer $36 to set up the iPhone on their own, saving them from needing additional employees to handle the activation process for the patrons who had to stand outside in wait for their shiny new toy.

The only thing worse than gas prices this summer seems to be the price gouging Apple and AT&T have inflicted upon the tech-savvy individuals of the US.

AT&T also introduced service plan prices for the gadget. However, they were at a much more reasonable level than the device and activation fee. Plans start at $59.99/month and top out at $99.99/month, all include visual voicemail, 200 SMS text messages, and unlimited data service usage. Additionally, the standard free mobile-to-mobile and rollover minutes are included in the plans’ specs.

Prices/Anytime Minutes/ Nights and Weekends:

$59.99/450 min/5000 min

$79.99/900 min/Unlimited

$99.99/1350 min/Unlimited

Looks like a lot of people will be spending a lot of dough come Friday at 6 PM local time!

Dr. iPhonestein

It’s alive! It’s alive! You can almost hear Steve Jobs screaming from the back of a dimly lit laboratory at Apple HQ. While his masterpiece has been created and is in its infantile stages, he, much like Dr. Frankenstein, may have created a monster.

Let me rephrase that, his PR and advertising people may have created a monster. By becoming the most highly anticipated gadget this side of the Milky Way, any minor flaw or hiccup experienced by first gen iPhone users is sure to cause more than a little indigestion with the folks who’ve shelled out part of their pension to purchase the handheld and switch service providers.

Most doubters of the iPhone are immediately recanted by some Apple fan who points to the iPod as an indicator of the iPhone’s assured success faster than you can say Newton, the common iPhone doubter’s comeback. However, both of these arguments take a backseat to another quick phrase: first generation. Although the iPod may be more popular than Luke Perry in the early 90’s, we mustn’t forget that it was, at best, a cast member on the Surreal Life before it was introduced to Windows and had its kinks worked out in subsequent generations.

Where the kinks in the first gen iPod and the potential kinks in the first gen iPhone differ is the fact that there were essentially no expectations for the original iPod. As far as we knew, it was another attempt to make a decent mp3 player by a computer company who had lost its luster over the years, and little more. The iPhone, on the other hand, has become somewhat of a cultural phenomenon. As I write this very entry, there is no doubt a group of techies gathering food and supplies to stock their tent for the next three and a half days outside in the heat in front of an Apple store.

You can imagine the joy they will feel when they get their cellophane wrapped cardboard box filled with the relic they have been lusting over for the past six months. Unfortunately for Apple, you can also see the disappointment on their faces when any minor element of the device fails to meet expectations or has a glitch; and for someone who has been psyching themselves up for such a moment for several months, there is at least one element that is bound to disappoint.

It is quite possible, some might say probable, that Apple will come out with a very good phone. But very good, quite frankly, isn’t good enough. Apple has put its baby up on a pedestal that cannot afford just good reviews. In the words of Wayne Campbell (of Wayne’s World and SNL fame) what the iPhone must do is “Something extraordinary. Something big. Something mega. Something copious. Something capacious. Something cajunga!” for it to meet the expectations of millions of Americans who have already expressed interest in adding it to their mobile repertoire.

With reviewers salivating at the chance to take their jeers and cheers at the “second-coming” of mobile devices, we will most likely find out by Friday evening whether the iPhone is a hit, or whether it will be replacing Screech as the bad boy in the next season of Celebrity Fit Club.

Investors Cautious as Release Nears

Since Apple’s initial announcement of the iPhone in early January, Apple Inc. shares have gone up in price by roughly 40 percent, peaking recently at an all-time high of $127. But with all the buzz surrounding the iPhone, surprisingly, many investors are leaning away from Apple stock.

You may wonder how the ubiquitous buzz surrounding the device can be a deterrent for investors. One would tend to think that any form of media and consumer attention for a product would do nothing but good for a product. However, in this case, the buzz may be TOO good. With expectations for the device higher than any consumer electronics device in recent memory (save perhaps the Playstation 3, and we all know how that went over), some major investors are left to speculate that Apple cannot possibly live up to them.

Hedge fund manager Jay Somaney is just one of a bevy of such investors. “It’s time to take some money off the table,” said Somaney, who plans to sell as much as half of his shares prior to the June 29 release date. Somaney’s reasoning also echoed concerns from stock traders nationwide, "There's just no way reality is going match the hype."

Past incidents of super-hyped disappointment include Microsoft’s Xbox System which continues to lose money for the company despite its widespread popularity, leaving Microsoft to garner much of the revenue from the system through licensing agreements and software titles. Last year’s Christmas season release of the PS3 left purchasers upset as the system was plagued with bugs and lacked significant software titles.

While the iPhone will certainly have its kinks to work out, initial sales forecasts for the device are strong. However, it is the long-term feasibility of the product that has investors concerned for Apple’s overall stock growth. If Apple is able to provide superior service when addressing potential issues and continue to develop improvements on subsequent generations, stock analysts see Apple’s stock with a potential of reaching as much as $160 before June of next year.

Personally, it is this blogger’s opinion that the key to Apple’s long-term iPhone success is the integration of business enterprising software; specifically, the need for Microsoft Exchange Server capability. While Steve Jobs maintains that the iPhone is the all-in-one super device, it will necessitate the advantages of a Windows Mobile device before it can truly eliminate the working businessperson’s pocket pc or Blackberry.

Apple may need to take a page out of its own book. When users were first allowed to run windows simultaneously with OS X on the company’s consumer computers, Apple was praised for opening its doors to an endless amount of software titles and usability. If the iPhone is able to run a virtual version of the new and improved Windows Mobile 6, it will have a fighting chance at achieving long-term stability in the smartphone market. Until then, my sentiments are aligned with Jay Somaney: sell , sell, sell!

IT Departments Leary of iPhone

By now, we’ve all heard about the various shortcomings of the iPhone in terms of business solutions. There’s the corporate email incompatibility, security issues, and the general lack of any semblance of enterprise software. Despite the obvious flaws, IT departments across the nation are receiving multiple requests from employees wondering when they will be able to supplement their worn and tired Blackberry with the hottest gadget it recent memory. While all the buzz surrounding Apple’s June 29 launch of the iPhone has in large part created this phenomenon, they have done little to make the iPhone business friendly.

Many IT departments see the lack of tangible enterprise value the iPhone can ultimately contribute. Security and compatibility, the two biggest strikes against the iPhone, are what keep popping up for reasons IT professionals stray away from the idea of an enterprising iPhone. In addition to headaches for personnel, the increased cost of employing a secure means of using the device for businesses internally is another mark against it.

Industry analysts are also bashing the iPhone for its lack of business practicality. Gartner analyst Ken Dulaney has been quoted as saying “This is basically a cellular iPod with some other capabilities and it’s important that it be recognized as such.” Most analysts agree, while the iPhone seems to be a great consumer multimedia device, it possesses very few redeeming qualities from a business user standpoint.

Things are looking extremely dreary for the iPhone from a business use standpoint. Until further notice, the iPhone seems to be targeted strictly at consumer markets. Its lack of security, compatibility, and availability amongst business entities will serve as serious barriers of entry to the mobile enterprise arena. This is not to say that the handheld won’t garner serious attention from companies. Conversely, it may be this attention that drives Apple toward enterprise solutions and the realization of an all-in-one device. The introduction of third party software, enhanced security features, and email compatibility will warrant the iPhone significant relevance within business application. With demand brewing steadily for the past 6 months, sales in the consumer market would seem to be rather positive, while the business market appears bleak at best. For now, Apple will have virtually no relevance in the mobility solutions sector of the business world.

No SDK? No Way!

Steve Jobs’ World Wide Developer Conference left many attendees disappointed with the confirmation that the iPhone will not include or allow a software development kit. Furthermore, the iPhone will allow only web-based AJAX applications.

The same old excuse resurfaced for why Apple will not facilitate the integration of SDKs: security and user experience. But what about the users who want to customize their experience on the iPhone? In a world of double mocha, half-caff, non-fat lattes; customization is a highly valued component of the consumer experience. Why not include the popular Cocoa application since the iPhone will be running a full-blown version of OS X?

Perhaps Apple is trying to strengthen their grip on the iPhone and the revenues generated from software creation? However, one would assume that there is more money to be made from the licensing of such titles produced in mass quantities from various third party developers. While no one is currently able to produce software for the iPhone besides Apple, it is more than likely that the iPhone accessories market is already hot as can be. There is an infinite amount of accessories available for the iPod. Why not the iPhone? What’s another $300 in accessories on top of the initial price tag? I think I may have to take out a second mortgage just to afford the thing.

From an enterprise standpoint, this is yet another strike against the iPhone. While it is initially targeted at only the consumer market, the possibilities for enterprise software seem miniscule if no one other than Apple will be producing software; who’s track record is anything but stellar in the business apps world. For the iPhone to maximize its potential, it will absolutely need to open its doors to third party software. Without it, the phone remains exclusively in the consumer market. With employees clamoring for an iPhone to replace their Blackberry, Apple may be missing out on a huge earnings potential. On the other side of the coin, the employees who want the Blackberry replacement are in store for a huge disappointment.

Sales Manual Leaked from AT&T

An employee sales manual from an AT&T store has been leaked to the press this week. With Apple’s “hush hush” policy on the details of the phone, you can imagine my excitement to get the scoop on one of most sought after pieces of technology in recent memory. Just as expected, the manual provided a substantial amount of insight into the details of Apple’s handheld darling. Unfortunately, not all of the news was good.

While the manual did display some very cool features, such as simultaneous web-browsing and phone conversations along with user-friendly intuitive controls, the device is somewhat lacking on otherwise standard features one would expect from a $100 phone, let alone a $600 phone.

The first glaring shortcoming is the iPhone’s inability to harness GPS technology. With the introduction of Verizon’s ultimate media Razr and the Motorola Q far behind us, GPS would seemingly be standard on any current release of a new smartphone. What’s more, AT&T’s TeleNav solutions, currently offered on various other AT&T phones, is a no show on the iPhone.

Perhaps the most troubling of the iPhone’s faults is its behind-the-times concept of messaging. Unlike various Windows Mobile devices, iPhone users will not be able to conduct IM conversations with instant messaging users. However, SMS text messages will look like IMs under the iChat interface. Translation: you may want to reach for that unlimited text message plan. I mean, hey, you’re already paying out of you know where for the device and contract agreement. What’s another six bucks a month?

Staying with the messaging theme, photos and videos via SMS are not supported. This is purely unacceptable from a consumer standpoint. While these services have all but become standard on most phones, the iPhone lacks it. This will be a major gripe with users who have been promised an experience unlike any other. I distinctly remember Jobs saying “We have reinvented the phone.” Well apparently this revolution will not be built upon sending multimedia. How this fits in to the plan, I have no idea.

The iPhone is supposed to set the mobile world on fire with its intuitive interface and multimedia capabilities. While Apple has taken great steps to bring about some astounding features, it seems to have forgotten the eggs and milk after bringing home the new pizza rolls with extra cheese. Hopefully the iPhone will have some sort of software update to bring these industry standards up to speed within its own device. One thing is for certain, any shortcomings displayed by the iPhone will be cannon fodder for other wireless device producers.

The iPhone and Corporate Email

The iPhone has been abuzz amongst employees in the corporate landscape. IT departments across the nation have become inundated with requests and queries as to the availability of the iPhone for corporate accounts. It seems that many are eager to ditch their “Crackberry” and jump on the Apple bandwagon. However, the IT department has other plans. Recent discussion about the iPhone’s capabilities within corporate email systems has many concerned about its applicability in the mobile enterprise world.

The first major concern about the iPhone from an enterprise standpoint is its incompatibility with various existing email servers that use technology from Blackberry creator Research in Motion, Microsoft, and Motorola owned Good Technology Inc. Translation: many iPhone users won’t be able to send and receive emails through corporate systems. There are options for forwarding messages through third-party services such as AOL or Yahoo mail. However, this process poses a significantly higher risk of security breaches.

Security itself is a major concern amongst IT departments regarding the device. If a business email system were to sync up with an iPhone, it must use the popular email format known as IMAP. While often times an effective and safe email platform, many large companies are hesitant to use the IMAP format as it lacks certain security controls that other systems offer; namely, certain levels of encryption. Outside of IMAP, there is no other sufficiently secure way to send and receive confidential company messages and documents to and from the device, not to mention the lag often experienced by email systems that allow multiple handheld devices to use the same system. Additionally, there is no firewall protection and no way to remotely wipe the device of its data in the event it is lost or stolen.

The last major concern, and perhaps the greatest from a productivity standpoint, is the handheld’s closed operating system and lack of support for Microsoft mobile productivity tools such as pocket office and several third-party work force automation applications. It is no secret that the business world is, in large part, powered by Microsoft products, Apple’s greatest foe. Whether it be outlook, word, excel, or a number of others, the need for integration of a mobile device with these programs is quite obvious for any level of significant productivity improvement. The iPhone currently lacks integration with business productivity software relevant to most enterprises. That being said, the iPhone could very well be a useful tool for corporate email accounts, once Apple solves the aforementioned issues with security.

Without compatibility with corporate email systems, the iPhone essentially becomes useless from an enterprise standpoint. Email is the most basic function you would want out of your business handheld. A lack of email constitutes a lack of essence needed for productivity. Forget pocket office apps and third party software, the iPhone must tackle these email issues before any business marketing can be attempted.

iPhone Makes a Rare Public Appearance at CTIA

After initially planning to snub the Cellular Telecommunications & Internet Association’s annual conference, Apple COO Randall Stephenson discussed, and even showed off, the iPhone during a keynote session speech at the summit. Not surprisingly, the actual sight of the iPhone was the talk of the conference.

In an industry where products are freely displayed and shared, Apple’s secretive approach to the iPhone’s existence is fairly unheard of. Stephenson himself remarked that it was only the second he had actually held the unit. "I held it one time in a Cingular board meeting," but that unit wasn't operational, he said. "Today was the first time I could navigate it."

With expectations riding high for the unit, Apple’s reluctance to show it off has this blogger a little apprehensive about its capabilities. Why not show off what you’ve got? While the unknowingness of the iPhone has certainly generated buzz, most consumers will want to know as much as they can about the handheld before shelling out 5 or 6 hundred greenbacks of their hard earned cash. At least this consumer does. Strangely enough, however, Apple has already collected information from a million people who want to be contacted when the iPhone begins shipping in June. While there is no guarantee that these one million will buy the unit, Apple seems to be well upon their way toward their goal of 10 million units sold.

While I was hoping for a groundbreaking display of the iPhone’s capabilities at the conference, I am left to speculate and hope. Hope that the iPhone will bring about some sort of business application. Perhaps my hopes were misguided all along. I mean, realistically, Apple wasn’t even initially going to attend the conference. Who was I to think they might release some tangible information?

As for now, I’m left with more unanswered questions. Let’s hope that as the launch date nears, we’re able to get some more info on potential application.

Mixing up the Market

In the world of mobile enterprise, there have always been two main competitors: the Blackberry platform and the Windows Mobile platform. With Palm OS sputtering into irrelevancy, the iPhone has reignited the battlefield of mobile enterprise handheld devices, allowing another contender to come into the ring with a serious reputation and the fan base to become the next heavyweight champ. But is Apple even positioning itself within this market? We all know that the iPhone is the essential Taj Mahal of mobile multimedia. However, we also know that no third-party development is in the works, leaving consumers without significant enterprise applications necessary for increased mobile productivity.

In the ongoing war between Blackberry and Microsoft for the business market, Blackberry has always been the industry leader, putting Microsoft in a very unfamiliar role: the underdog. But will the success of the iPhone in the consumer market mean increased sales for Microsoft in the business market? Let’s think about this. The iPhone aims to put multimedia, entertainment, and overall fun in the hands of individual consumers. The Blackberry, on the other hand, aims to put productivity and business solutions in the hands of major corporations and sole proprietorships alike. This being said, it appears that the iPhone is not competition for the Blackberry. The iPhone will undoubtedly sway some Blackberry users, but the needs the two devices meet are drastically different.

Enter Windows Mobile, whose platform not only allows for mobile entertainment and multimedia, but also includes the most productivity and enterprise tools out of the three. With the apparent dichotomy of Blackberry and iPhone, Microsoft would be wise to point out the fact that they can do both. Apple may very well be positioning Windows Mobile for a significant gain in the business enterprise market. The complaint among users has always been that there is not an all-in-one device for their needs. Pockets are often loaded with a cell phone, iPod, PDA, and whatever other gadgets one uses on a daily basis. If Microsoft is to turn the iPhone launch into a home run for their own platform, they must make users aware of its capabilities.

Now I’m not saying that Windows Mobile is going to have as great a multimedia platform as the iPod, but integration of the company’s Zune MP3 player may turn into a major selling point in an attempt to achieve the aforementioned all-in-one status. Whether Microsoft shares my views about the opportunities created by the iPhone launch is unknown. But I’m betting that they’ve got a plan as Microsoft is generally on top of the ball.

No Third Party…and I’ll Cry if I Want to!

In a recent interview with Newsweek’s Steven Levy, Apple CEO Steve Jobs dropped a bomb on the mobile world and all those interested in purchasing the iPhone. NO THIRD PARTY APPS! Jobs citied security issues as the main cause for the absence stating, “You don’t want your phone to be an open platform,” meaning that anyone can write applications for it and potentially gum up the provider's network.” Further stating, “You need it to work when you need it to work. Cingular doesn’t want to see their West Coast network go down because some application messed up.”

Easy there Steve-o, Cingular’s entire West Coast Network? That may be exaggerating a tad. After all, there are plenty of third party apps on Palm and Windows Mobile devices that have yet to topple the great pacific coast. Which leads this blogger to an interesting theory; Jobs is using this scare tactic as an excuse for the iPhone’s lack of third party capabilities. While Apple has no immediate plans for integrating third party developers into the iPhone realm, any sort of practical business application will necessitate the use of software other than that of Apple’s.

Many have speculated that the iPhone will be the next “Blackberry Killer.” The difference being that this killer will have a well established market due to the success and wild popularity of the iPod. However, with the lack of third-party applications, how is the iPhone supposed to compete not only with the enterprising qualities of Blackberry, but also the ever-growing versatility of the Windows Mobile platform. With the introduction of Windows Mobile 6 ever near, Apple will have to find a way to increase mobile productivity through the use of its new gadget and perhaps most importantly, integrate productivity apps that are compatible across a largely Windows-dominated industry. This is of course without even mentioning the need for the inclusion of various corporate email configurations.

Aside from the boring stuff, this announcement also raises questions regarding the iPhone’s ability to do the fun stuff we all know and love from Apple’s entire product line. Will mobile TV fall along the wayside? What kind of games will be available when only Apple is allowed to develop them? And perhaps most importantly, will I ever be able to play Bubble Breaker on my iPhone? It is these questions that trouble a mobile enterprise enthusiast who realizes that all work and no play make him a very dull boy.

As for now, I’m holding on to the hope that Steve will wake up and smell the need for third party software. Otherwise, I might as well tape my cell phone to the back of my iPod and save myself 600 bucks.

And So it Begins!

Welcome to the iPhone Mobile Solutions blog. With yesterday’s announcement of the highly-anticipated iPhone, I am launching this blog to spark discussion (and maybe even a little controversy) about the mobile world’s next great gadget!

Apple CEO Steve Jobs unveiled the iPhone yesterday in front of a crowd of more than 4,000 at the annual MacWorld Expo. As expected, the device solicited a very positive reaction from the crowd. Included in the jubilation was Jobs himself. "This is a day I have been looking forward to for two and a half years," said Jobs. "We have reinvented the phone."

Let me write that again, “We have reinvented the phone.” I don’t know about you, but that gets a mobile junkie like me very, very excited. And when you take a look at the specs, Jobs may be right. The iPhone’s functions include a 2 Megapixel camera phone, multimedia player, mobile phone and internet services including email, text messaging, web browsing, visual voicemail, and wireless connectivity. The real kicker is that the face of the iPhone has only one single button, with the remaining user input accomplished by use of a fully functioning touch screen. In the process of creating this multimedia powerhouse, Apple has filed more than 200 patents related to its technology.

And now for the bad news. Retail price for the 4 GB iPhone starts at a whopping $499, and that’s with a 2-year service agreement from Cingular wireless. If you’re feeling extra saucy, you can pick up the 8 GB model, along with that 2-year service agreement, for $599; and you thought your PS3 was highway robbery.

Despite the hefty price tag, Apple is confident that they will move units. Jobs stated that the "killer app" in the iPhone is that it will feature a full version of Mac OS X. Stating, "It is not the crippled stuff you find on most phones. This is real desktop-class software.” Boasting the same music and video playing apps as the iPod, the handheld also includes the Safari web browser, IMAP and POP3 email access, address book and Apple widget mini-apps such as calendar and weather reports.

With all this flair, we here at the blog think the iPhone may be the next big pocket multimedia powerhouse by combining the practical uses of your phone and iPod. However, Jobs failed to mention any tangible business application the iPhone may have. Productivity tools were not mentioned, nor were other forms of email that are used in many corporate systems. We’ll have to keep our ear to the ground for further discussion regarding the iPhone’s mobile enterprising qualities.

If you decided by now that you can shovel out the five or six Franklins to obtain this device, you’ll have to hold on to your britches. The iPhone is expected to hit shelves sometime during the fourth quarter of 2007.