Jobs: Hi, Jeff, you’re stealing our intellectual property. It needs to stop.

Bezos: What?

Jobs: You know. Your fucking “app store!”

Bezos: But we call it an “Appstore.” Yours is called “the App Store.” Obviously very different.

Jobs: If you were in an elevator I would so fire you right now.

I draw three conclusions:

1. Apps overtaking digital music is a watershed event. Apps are a new medium: they will impact all other media.
2. As the number of apps attached to any single device continues to increase, apps create increasingly higher switching costs for users.
3. Apps consumption is increasing at a rate to overtake the PC software market.

This is just incredible. The result of point number one will be mind-boggling for culture as a whole.

Enderlee  is now officially insane:

Apple’s Jobs: Rock star of Corporate America – MarketWatch.

All these things show that it really is coming down to just Apple and IBM. If, for some reason, we make some giant mistakes and IBM wins, my personal feeling is that we are going to enter sort of a computer Dark Ages for about 20 years. Once IBM gains control of a market sector, they almost always stop innovation. They prevent innovation from happening.

via Playboy Interview – Steven Jobs.

One thing I’m unclear of is whether I could tether an iPhone to an iPad- I haven’t heard this question addressed directly, although I remember Steve Jobs emailing a month or two ago that iPad wouldn’t tether.

What I really wanted to talk about were two points that I haven’t heard that much about today. First, I have heard a few people talk about the new North Carolina data center coming online this summer. This data center is reputed to be able to transmit over 4 times the data that Apple’s current data center does. This would be the data center that runs iTunes and serves up a LOT of content. Multiplying that by 4 times seems to imply that they are coming out with a new service that is data intensive, and common consensus seems to be around streaming media, usually, the ability to stream any content you have purchased via iTunes to your computer or mobile device. The ability to stream (purchased) iTunes collections is going to put a lot of pull on AT&T’s network.

Secondly, the extorted iPhone had a front-facing camera as well as a rear facing camera with an LED flash. Standard reasoning is that the front-facing camera is there to support video chat, allowing people to video-conference rather than just telephone. With many current iPhone owners ready to upgrade this service might start small, but I think as it grows it will put a lot more bandwidth in play.

In short, we’re about to see data use on AT&T’s network go way, way up. I think overall, for current usage, the new plans seem fairly priced and don’t penalize people unduly for overages. The question remains how much the new services will actually impact the data rates of average to slightly high-usage users.

One thing that the next iPhone makes clear is a large technical leap in screen resolution and processing power–particularly if we are talking about the same processor as the iPad. What gets interesting here with the huge upgrade are the price points. Does Apple dare to raise the price point?

Yes and no. What I think is most likely to happen is the following. Apple is faced with an ever-broadening demographic, from the early power-user adopters that spent $599 buying the first version to (probably) a lot of interested but not so savvy buyers that pick up the iPhone 3G for $99 at Wal-Mart. The Wal-Mart buyer does not need 80 GB of storage. However, the power user does. Particularly if HD video capture and playback is included in the feature set.

What I am getting to is stating the obvious: the broadening of the iPhone line as its popularity surpasses any previous Apple product. We have already seen Steve Jobs change the name of the company from Apple Computer, Inc., to Apple, Inc. Earlier this year the biggest point he wanted to make was that Apple was the biggest “mobile device” company.

One thing this implies is that I don’t expect a second version of Apple TV–I’m waiting for the iPhone and iPad to do the playing on the HDTV, perhaps even this year if the HD recording and playback rumors are true. This could be very conveniently accomplished through a somewhat inexpensive Airport Express type wireless connection with an HDMI output.

My digression is implicit–because it seems that Apple is working towards a convergence of devices now that the iPad is out. What they have set out in front of them is to increase integration. For example, I fully expect the ability to pair an iPhone to an iPad (instead of iTunes on a specific computer) within 2-3 years as the necessity for having a desktop/laptop computer decreases.

So, getting back to the original thrust of the post: with the introduction of the iPad Apple has broadened the iPhone OS platform. I expect this platform to be expanded, by both larger and smaller versions of the iPad, but not this year. Meanwhile, the real question for Apple regarding the iPhone is not “if” but “when.” By this I mean that the iPhone will be on Verizon, but if it were to appear on their current network it would mean that Verizon is paying Apple a very lucrative R&D and subsidy to get the phone out a year before the next convergent chipset tends to equalize the playing field. IF Verizon were to do this, I do not believe that they would have access to the highest performing, newest iPhones. AT&T has made great efforts in the last six months to try to appease Apple for the poor quality of their overburdened network over the past few years, and unlike the somewhat strained response Apple execs gave AT&T last year when they announced tethering, but “not yet” for the U.S., they seem to be on the same page this year. For example, where I live in Iowa City, it took the rollout of the iPad to finally get 3G, something which had originally promised to AT&T store employees in August of 2008.

Does it make sense to spend a lot of money retrofitting an iPhone to work on an outdated network? It all depends on how desperate Verizon is. Their last quarterly results definitely showed some iPhone pain. But what if Verizon actually asked to have a low-level 3G or 3GS phone made to be compatible for their network? The free (subsidized) iPhone may be a matter of time, or it may not.

One of Apple’s strengths is perceived value. They can convince savvy consumers to pay twice what they would pay for a bargain basement cheap PC notebook to get an entry-level MacBook or MacBook Pro. I feel that overall the company would like to maintain this pricing philosophy/methodology with the iPhone, with one proviso: they don’t want to lose market share the way that the Mac lost the market share race with Windows.

What does this mean? It depends on how scared Steve Jobs is of Google and Android. I think it’s evident at this point that Microsoft’s Windows Phone Series 7 has little chance of success against Blackberry and Android. Android has the momentum (and I’m not talking about Hillary Clinton Pennsylvania momentum).

One thing Steve Jobs realizes is that Apple generates press because of its secrecy, and that the App store generates more than its share of press. In the case of App Store rejections, I tend to side with the opinion of “no press is bad press.” Apple may look bad temporarily in a particularly egregious App Store rejection, but if they are indeed wrong then they have, in most cases, fixed the problem.

Can you remember this ever happening on Android, Windows Mobile Series whatever, or Blackberry? Does the fact that this doesn’t matter help show the primacy and importance of the iPhone platform?

I can’t make up my mind. Google’s partners will soon be offering free but subsidized Android phones. Apple wants to move the platform forward while still maximizing profits. I think it is possible that Apple might move the iPhone 3G down from $99 to $0 with contract, but this is unlikely, as iPhone OS 4.0 requires them to try to push better hardware going forward. It benefits Apple to have as much storage as possible on the iPhone so that people can fill it up with content purchased through the App Store and iTunes.

I expect the iPhone 3G to evaporate and be replaced by the 3GS in the $99 spot, probably the 16 GB version. I think it likely that the 3GS will still be offered in 16, 32, and possibly 64 GB models. I expect the iPhone HD to be offered in 32 GB, 64 GB, and, apparently, 80 GB models based upon the leaked specs.

This isn’t special thinking, these kinds of predictions are pretty obvious at this point. But back to the title of the post: if Apple is really scared of Android, then I can see them actually not having to get Verizon to subsidize the engineering to make the current generation iPhones compliant with their network. If they are very scared of Android then an underpowered iPhone 3G or 3GS, but still iPhone OS 4.0 could be a feasible Verizon entry, even at the free but subsidized $0 entry point.

I think that this is a possibility, but not likely, as I think Apple would prefer to maintain the value-added pricing philosophy in the iPhone. If they were to provide a free iPhone (with subsidy) I would be a little surprised. Consumers like perceived value and this is one thing that Apple knows in and out. If they were to have a free iPhone on Verizon I would be even more surprised, because this would signal that the war for market share with Android was one that Apple was not certain of winning.

I haven’t spent time with an Android phone, but people overall seem to be happy with it. Whether its popularity with users is something Apple is even concerned about will be revealed with the new pricing this summer. However, it is obvious that if Apple adopts an aggressive pricing strategy with the new iPhones (as they did with the iPad) then fear of Google is on the table. If they were to offer a free (subsidized) iPhone on Verizon then it would mean that Apple was very scared of Google’s Android.

I don’t think that this is necessarily the case: the iPhone is doing great and firing on all cylinders. But Apple has been known to preemptively kill products and not behave like the rest of the industry when it comes to things like product lifecycles. The nuclear bomb? Only if Apple is truly afraid of Android, which I doubt.

Flash CS5 Will Build Native iPhone Apps
John Nack:

Today at Adobe MAX, the company announced that Flash tools will be able to build applications for iPhone that can be distributed through Apple’s App Store. A beta version of Flash Professional CS5 with this new capability is planned for release later this year. These aren’t Flash SWF files, they’re native iPhone apps.

This is not a port of the Flash runtime. You can’t use this to load Flash content over the web. What it means is that Flash developers can export native iPhone apps — compiled ARM binaries in .ipa packages — which can then be submitted to Apple through the normal App Store process. There are already eight such apps (built using beta versions of the new Flash developer tools) available in the App Store.

This is very interesting technology. That Adobe would go to this length perhaps suggests that they suspect that Apple will never allow the Flash runtime on the iPhone.

I will add this: I think it also suggests that Adobe realizes that the iPhone is or will become the dominant mobile platform.

Prediction: Within the year, Adobe-branded photo apps for the iPhone: probably will warrant some keynote demo time.

1.) I wish they would have kept the top browser tabs. Vertical real estate is a premium on modern computers, particularly laptops, and I was looking forward to this.

2.) The progress bar went from meaning something to a meaningless spinner, that might as well be the spinning beachball of death.

3.) The most heinous. Why did they move the reload button far to the right in the address bar? Why??? Because you should really mouse out of your way to use it, you don’t want to reload pages very often. I would like to hear the design arguments to support this idiotic decision.