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.

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