The reports that Apple has signed a deal with News Corp’s 20th Century Fox studio to allow people to rent its content from the iTunes Store could be a fundamental clue as to the company’s next major product focus.

Recall that Apple’s efforts in 2007 were dominated by the iPhone, right from Steve Jobs’ Macworld keynote in January. Yes, the company kept releasing new Macs and refreshed the iPod line for Christmas, but the iPhone was the center of attention all year long. It even drew resources away from Leopard, the latest version of Mac OS X, delaying its release for several months.

I’m guessing of course, but it would make sense for Apple to set video as its theme for 2008, starting with Jobs’ Macworld keynote on Jan. 15. Video currently is Apple’s weakest link, since its other businesses – the Mac, the iPod and the iPhone – are all going gangbusters.

But Jobs, like Alexander the Great, is always looking over the horizon toward his next conquest.

Much has been said this year about the failure of Apple TV to make an impact. Jobs has described it coyly as a “hobby.” Video sales at the iTunes Store have been decent but not great. Of the major film studios, only Walt Disney has made new releases available for purchase (it could be Jobs’ membership on Disney’s board helps a tad).

The television component of the iTunes Store took a giant step backward when Apple’s running spat with NBC Universal resulted in the removal of shows from NBC, the Sci-Fi channel, the USA Network and other Universal properties.

The technical hurdles of selling video over the Internet haven’t helped, either. The large files – a typical movie on iTunes is about 1 gigabyte, or about 200 times the size of a typical pop song. Even for users with broadband Internet connections, gratification is not exactly instant.

It’s the sort of glum confluence of circumstances that can cause even large and otherwise successful companies to throw in the towel. Wal-Mart, for example, announced yesterday that it has canceled its movie download service -- less than a year after it launched.

But one thing Apple has proven in recent years is that it often can succeed where others have foundered, such as with the iPod or its chain of retail stores. Solving video over the Internet is exactly the sort of challenge Apple relishes.

Apple now can put its experience as a video vendor to use as it crafts the most user-friendly option for consuming video over the Internet.

The move to rentals makes complete sense, and probably was inevitable. In the years Apple has dabbled in offering video downloads, it has learned that fewer people want to own video than do music. If people didn’t want to rent videos there would be no Blockbuster or Netflix, not to mention the various “video-on-demand” services provided by cable companies.

The deal with Fox shows Apple is serious about getting video right. The content, according to the Financial Times of London, will be new. It will be encoded with Apple’s FairPlay digital rights management software, but it should play on Macs, iPods, iPhones and on a TV via Apple TV. In other words, users will be able to watch the rented video pretty much on a variety of devices, unlike other services that restrict the user to a single device.

Apple is even licensing FairPlay to Fox for use on its DVDs. This will allow the video to be ripped legally to a computer for transfer to a video-capable iPod or iPhone.

The millions of handheld video-capable devices Apple has sold over the past few years surely supplied a major piece of leverage in securing this deal. In the case of the iPhone and iPod Touch, one could download the content directly to the device through iTunes. What studio wouldn’t want a piece of this action?

The Financial Times article said Apple “is understood to have been in talks with Sony Pictures Entertainment, Paramount and Warner Brothers about making their new releases available on iTunes to buy or rent.”

Expect video to be the centerpiece of Jobs’ Jan. 15 keynote. He almost certainly will announce the Fox deal then and possibly deals with other studios (I can’t imagine that Disney isn’t already signed up to add rentals to its iTunes catalog).

The long-neglected Apple TV figures to get a significant upgrade and be integrated into Apple’s video strategy as one of the ways to access the rentals. If Apple TV 2.0 can connect directly to the iTunes Store and includes some TiVo-like features, it could go from flop to hit overnight.

Apple isn’t far from having a killer video strategy. It has most of the pieces in place already. It just needs to bridge the gaps and then integrate those pieces as only Apple knows how.

Then watch how fast Apple’s “hobby” disrupts the entire movie rental industry.

Posted by David Zeiler at 1:38 PM | Permalink | Comments (8)
                    

I'll be blogging later this week, but right now am enjoying Christmas watching my daughter receive enough new toys to bury Mount Rushmore.

Although for Apple loyalists, the holiday season doesn't really end Jan.1. Steve Jobs' Macworld keynote is Tuesday, Jan 15, and for us it will be Christmas all over again.

Posted by David Zeiler at 12:36 AM | Permalink | Comments (0)
                    

I know I’m going against popular sentiment here – almost everything I’ve read in the past two days has berated Apple over its settlement with Nick Ciarelli of the rumor site Think Secret. But it’s very clear that what Ciarelli did was wrong, and that Apple was well within its rights to go after him.

For those who somehow missed it, here’s the news: In December of 2004, two weeks before Macworld, Ciarelli published information on his Think Secret Web site about the forthcoming $499 Mac Mini and iLife ’05 software – information obtained from at least one Apple employee who had signed a non-disclosure agreement. Ciarelli was spot on, and Apple was irked.

So Apple sued Think Secret to get the names of the employees who had blabbed to Ciarelli in violation of their NDA. Ciarelli, with the help of the Electronic Frontier Foundation, countered with a First Amendment defense, even filing a motion under California law intended to prevent baseless lawsuits that inhibit free speech.

Yesterday’s settlement was the first development in the case in over two years. Ciarelli agreed to shut down Think Secret and Apple agreed to give up on getting the names of its rogue employees. While the details of the settlement are confidential, most observers believe Ciarelli received a substantial cash payment from Apple to end the litigation.

Virtually every Mac Web site, and quite a few mainstream news sites, have interpreted the settlement as “bad for journalism” and evidence “Apple is a bully” that answers Web critics with lawsuits.

Such knee-jerk reactions fail to take into consideration the facts of the case, and the laws that apply to it.

The Apple employees who passed on the information -- considered trade secrets -- broke the law. The NDA they signed is a legally binding agreement. Apple’s unannounced products fit the definition of a trade secret: “a process, method, plan, formula or other information unique to a manufacturer, which gives it an advantage over competitors.”

One can violate the federal trade secret law in several ways. Transmitting the information, as the Apple employees did, is one way. Receiving information “knowing the same to have been stolen or appropriated, obtained, or converted without authorization” is another. That’s what Ciarelli did. He even solicited such information with a “Got dirt?” message and phone number on the Think Secret site, a second violation. Even an attempt to commit one of the offenses breaks the law.

Over at the All Things Digital site, John Paczkowski compares what Ciarelli did to what Piper Jaffray’s Gene Munster and other analysts do when they survey Apple’s suppliers to ascertain what the company is working on. He suggests Apple doesn’t sue them or media like the New York Times because they’re large, powerful organizations. Wrong. Apple doesn’t sue them because they don’t break the law in obtaining their information. It’s unlikely any major newspaper would publish information in violation of a federal law unless that information was vital to the public interest.

Furthermore, Apple can’t sue people just for criticizing the company. In this blog I have frequently criticized Apple and never have received so much as an e-mail of complaint. The First Amendment protects commentary on public companies and public figures (like Steve Jobs). It’s not designed to protect people who publish information that violates other laws.

It’s easy to paint Apple as a bully in this scenario. Ciarelli, 13 when he launched Think Secret, was still a teenager when Apple (now a senior at Harvard), the multi-billion dollar corporation, sued him. Many have hailed Ciarelli as a talented journalist who dug up info no one else had while heroically protecting his confidential sources.

As a journalist myself for more than 20 years, I view Ciarelli with ambivalence. Yes, he got the goods, but he obtained it illegally. Even journalists need to obey the law. News of the new Mac Mini was not worth violating the law.

Ciarelli did protect his sources, and I commend him for that. Those people would have lost their jobs at Apple immediately had he exposed them. But then, Ciarelli’s actions put them in jeopardy in the first place.

Many also have questioned why Apple would seek to punish an Apple-boosting Web site like Think Secret, which they say benefited Apple by fostering interest in the company and its products. True, but beside the point.

Apple’s intent was not so much to intimidate a scrappy young journalist who stepped over the line but to protect the secrecy of its products. Not only does hiding its unannounced innovations from competitors until the last possible moment serve Apple’s business interests, but secrecy is also a key to its marketing strategy.

How much media coverage does Dell or Hewlett Packard get when they announce a new model of PC? Does anyone even notice? Consumer electronics companies bring out new products all the time, many of them quite good, but no one gets the avalanche of media attention Apple does.

Much of that has to do with the element of surprise. Apple publishes no product “road maps” as do other tech companies, and employees are legally bound with NDAs to keep quiet. When Steve Jobs announces a stunning new product, it’s a surprise to everybody – and consequently news.

If Apple allowed its employees to yak to the Mac rumor sites unchecked, there would be no Macworld surprises (or any surprises, ever). Apple would lose some of that fawning free publicity and a chunk of its mystique as well.

I realize everyone feels sorry for Ciarelli and the loss of Think Secret. Hey, I enjoy reading Apple rumors as much as the next guy. But let’s keep it in perspective. This settlement threatens no one on the Mac Web who follows the rules.

Ciarelli is lucky Apple elected to settle (probably to avoid the bad publicity of a full-blown trial). He could have ended up leaving Harvard not for a “promising career in journalism,” but for an extended stay at a federal prison.

Posted by David Zeiler at 6:02 PM | Permalink | Comments (14)
                    

Apple has done a great job of marketing the Intel-based Macs ability to run Windows, but has confused some ordinary users into thinking all new Macs come with a built-in ability to run Windows software and use third-party devices designed only for Windows-based PCs.

Twice this week I have had co-workers seek my counsel with this type of query. Both had bought peripheral devices for a Mac user before discovering the device was not Mac compatible.

Both said they had heard new Macs could run Windows and expressed hope the destination Macs still would be able to use the devices. I had to tell them that while the newer Intel-based Macs can indeed run Windows, the user must buy and install a retail copy of Windows to enable that capability.

Though disappointed, they understood.

I’m not sure what Apple should do to clarify this point for its growing legions of non-technical users, but it might behoove Cupertino to give it some thought. People who hear “Macs can now run Windows” not unreasonably may expect it to do so out of the box.

Apple does not need thousands of annoyed customers calling its tech support personnel to ask why this or that Windows thingy won’t work with their new Mac, only to be told the feature requires a bit more money and effort on their part.

Of course, the real culprit in this scenario is neither Apple nor the innocent user, but those companies that continue to manufacture third-party peripherals incompatible with Macs.

In this blog I have noted often the Mac’s steadily increasing market share, particularly in the United States. Those market share increases are coming mostly from consumers switching from Windows – consumers who buy lots of peripherals.

When the Mac’s market share was mired in the sub-5 percent zone, it was easy for tech companies to dismiss it. The numbers for the Mac this year have consistently shown growth; in October Gartner reported overall Mac share at 8 percent (which translates to much higher consumer market share, given the Mac’s low profile in the business world). Last week ChangeWave Research released data from November revealing that 29 percent of those who intend to buy a computer in the next 90 days would choose a Mac.

At some point the Mac user base will become too large to ignore with impunity. Companies that refuse to make their peripherals Mac compatible will start to lose business to the ones that do. Such market forces eventually should make the absence of Mac compatibility among peripheral devices a rarity.

Perhaps someday we’ll even see “Not Windows Compatible” devices. Heh heh.

Posted by David Zeiler at 12:34 PM | Permalink | Comments (6)
                    

Japan is the iPhone’s next target, according to today’s Wall Street Journal.

Apple is negotiating with at least one of Japan’s top three cellular providers, notably its largest one, NTT DoCoMo Inc. The news is consistent with previous announcements from Apple that it plans to launch the iPhone in Asia in 2008.

Many iPhone watchers in the United States were thrilled at this news. Since the major cellular networks in Japan use the faster 3G technology (as opposed to the 2.5G GSM technology in the current iPhone), the talks with the Japanese carriers has been taken as confirmation that Apple indeed plans to release a 3G version of the iPhone in 2008.

The Journal article points out that although Japan is an ideal market for the iPhone – its 100 million cell phone customers “are already used to shelling out hundreds of dollars for expensive phones with advanced features” – nowhere is the competition among handset makers more fierce. Given its track record so far, I think the iPhone will fare well in Japan.

But before the iPhone can measure itself against the Japanese competition, Apple needs to make a deal with one of those cellular providers. As usual, the holdup is Apple’s demand for a portion of the carrier’s monthly revenues, which have been estimated at between 10 and 20 percent.

Two weeks ago, Apple’s negotiations with two of China’s popular carriers – China Mobile and China Unicom -- reportedly broke down over the revenue sharing issue. China Mobile has said it’s still talking to Apple, but resistance to sharing revenue seems higher among the Chinese carriers than it has been in other nations.

Apple likely will succeed in Japan the way it has in other countries, by playing the cellular providers off each other. If the dominant DoCoMo doesn’t bite, the No. 3 carrier, SoftBank Mobile Corp., probably will. Just as with AT&T in the U.S., SoftBank’s rationale would be to pay Apple its iPhone membership dues as a strategy to gain market share.

However, as Apple continues to introduce the iPhone in more countries I wonder how often the tactic will prove ineffective, as appears to be the case in China.

A Reuters story from Nov. 14 quoted an anonymous Chinese telecom executive saying that their “business model does not entail sharing revenue with terminal producers – we don’t share revenue. That’s a Chinese rule.”

Another problem with the iPhone in China that could crop up elsewhere is that the SIM cards in Chinese mobile phones are not “locked” as are those in Apple’s product. The same anonymous executive said the iPhone’s locked SIM cards might have compatibility issues with the Chinese cellular networks.

All of which only serves to strengthen my belief that Apple should be thinking about offering a universal, unlocked iPhone that would work on any network in any country.

A universal iPhone would cure the compatibility headaches that vary from nation to nation while saving the company the trouble and expense of battling those resourceful iPhone unlockers.

Apple also would no longer require a partner carrier in each country in order to sell the iPhone (although I think it still would have a “preferred” carrier in most countries that could sell an iPhone with a contract at a lower price.)

The iPhone carries the promise of being at least as successful as anything Apple has ever done, including the mighty iPod. If only Apple would let the beast out of its cage ...

Posted by David Zeiler at 8:42 AM | Permalink | Comments (1)
                    

Talk about ungrateful.

A story in yesterday’s New York Sun (no relation to the Baltimore Sun) reports that the pension fund for New York City’s public employees re-filed a lawsuit last Friday seeking damages from Apple’s backdating of stock options several years ago.

“The complaint says Apple’s shareholders, including NYCERS [New York City Employees’ Retirement System], which owns about 1 million shares, suffered damages when the stock price ‘fell over 14% following disclosures’ in 2006 about how Apple had accounted for stock options,” the Sun reports. “Since 2005, Apple’s shares have risen about 500%.”

The New York Sun reporter went back further than necessary to emphasize the rapid rise in Apple’s stock price. If you go back to July 14, 2006, when the backdating imbroglio had many on Wall Street in a stew, AAPL hit its low for the year at $50.67. Yesterday AAPL closed at $184.40, an increase of 364 percent.

Perhaps a better way to look at it is that over the course of 2006 AAPL went up, erasing any temporary setbacks caused by the backdating issue. The stock opened the year at $71.89 and closed it at $84.84.

What possible damages could Apple owe any shareholders after achieving such extraordinary gains?

Judge Jeremy Fogel of the United States District Court for the Northern District of California agreed when he threw out the first incarnation of this lawsuit last month: "While the subsequent disclosure that the options were backdated might require a restatement, without a discernible drop in the stock price there is no basis upon which to establish an injury to shareholders,'' Fogel wrote in his opinion.

As he rejected their claims, Fogel suggested NYCERS could re-file a derivative lawsuit, which had said CEO Steve Jobs and other Apple officers failed to perform their jobs correctly and lied to shareholders about the backdated options. However, winning this lawsuit would only result in the backdated options or profits gained from them to be returned to company. No damages would be awarded to the plaintiffs.

For reasons unexplained in the New York Sun article, NYCERS has decided to file a new version of its lawsuit anyway. And it will land right back in Judge Fogel’s courtroom at a hearing in January when he will determine whether the case can go forward.

Not only is this lawsuit utterly futile, it could harm the very pension fund it is supposed to protect. Did NYCERS ever consider that filing and re-filing lawsuits against Apple could negatively affect the stock price?

Wall Street has mostly forgotten about the whole thing; NYCERS would be wise to forget about it as well and save itself the lawyer’s fees.

Instead of filing lawsuits, NYCERS should be writing Apple thank-you notes. Sheesh.

UPDATE: The New York Sun published an editorial Dec. 20 calling NYC mayor Michael Bloomberg on the carpet for not stopping NYCERS' "meritless" lawsuit despite publicly criticizing such suits. Read it here.

Posted by David Zeiler at 8:55 AM | Permalink | Comments (3)
                    

Reinforcing other recent reports of the Mac’s continued strength in the market, a survey taken in early November by Rockville, Md.-based ChangeWave Research indicates that more potential buyers than ever plan to buy a Mac in the near future.

Of the respondents who said they planned to buy a computer in the next 90 days, 29 percent said they’d get a Mac laptop and another 29 percent said they’d get a Mac desktop.

Apple’s laptop number is actually the highest in the survey – Dell came in second at 28 percent, followed by Hewlett-Packard at 21 percent. Amazing.

On the desktop side, Dell was first with 31 percent with Apple’s 29 percent good for second. Hewlett Packard was third with 24 percent.

The numbers are even more impressive when compared to the historical data in the survey. In September 2006, only 17 percent were planning on buying Apple laptops and 18 percent Apple desktops. If you go back to October 2005, the numbers fall to 16 percent for laptops and 11 percent for desktops.

Questions on customer satisfaction offered at least one clue as to why Macs have grown more popular – Apple leads in this category by a huge margin.

A chart showing the percentage of respondents who were “very satisfied” shows Apple with 80 percent, far ahead of all the PC vendors, which range from Dell at 61 percent to Lenovo at 49 percent. Another 18 percent were “somewhat satisfied.” Only 2 percent were “very unsatisfied” with zero reporting in the “somewhat unsatisfied” category.

The combined “unsatisfied” scores for Apple’s rivals ranged from 6 percent for Dell to 14 percent for Lenovo.

Still more positive news for the Mac turns up in the operating system segment of the survey.

Asked if Leopard, the latest version of the Mac OS X, would make them “more likely” or “less likely” to buy an Apple computer in the future, 24 percent said “more likely” while 66 percent said it would have no effect. None said it would make them less likely to buy a Mac.

Another question asks. “Which operating system would you like to have preinstalled on the computers(s) you plan to buy in the next 90 days?”

Leopard was the choice of 28 percent – the highest individual number, though the Windows percentages were split by the assorted flavors of Vista and XP. Vista’s totals add up to 42 percent, with Vista Home Premium the choice of 20 percent.

Microsoft might be concerned that more than a year after the launch of Vista 40 percent of potential PC buyers would prefer Windows XP on their new computer.

As pleased as any Mac loyalist would be with these survey results, one must wonder a little at how Apple’s numbers could be so high, particularly the percentages of people planning to buy Macs. Even the most optimistic U.S. market share surveys have pegged the Mac at only about 8 percent overall, with about 12 percent of the laptop market.

How could 29 percent of a survey sample be planning to buy Macs? It just doesn’t seem possible.

It turns out it depends on who you survey. ChangeWave does not randomly select its samples, but queries a group of 13,000 “senior technology and business executives in leading companies” it calls the “ChangeWave Alliance.”

This explains why Apple does so well in its surveys – what else would you expect from such a group of highly educated and tech-savvy people?

It also bodes well for Apple much further into the future than the 90 day period asked about in the survey. The members of the ChangeWave Alliance are the type of people others look to for leadership and guidance. If nearly one in three of them are going Mac, it could signal a substantial increase in Mac market share over the next year or two, perhaps to the mid-teens or beyond.

It’s almost scary, isn’t it?

Posted by David Zeiler at 9:07 AM | Permalink | Comments (4)
                    

While shopping at Target over the weekend I was fortunately able to prevent what could have been a Christmas morning tragedy.

In addition to shopping for my daughter – whose birthday falls exactly one week before Christmas – I was doing my part to enhance Apple’s December quarter results by purchasing an iPod Nano for that special someone in my life.

While I was in the iPod aisle, a middle-aged lady came by and, seeing the display for the rival Zune directly across from the iPods, declared, “There’s the iPods!”

I quickly informed the lady that the product she’d discovered was not the iPod, and that the person for whom she was shopping would almost certainly be disappointed if they had in fact asked specifically for an iPod. I pointed out the iPod display behind her.

“This isn’t the same thing?” she asked, looking at the Zunes.

“It’s made by Microsoft,” I replied. “Need I say more?”

The lady nodded in acknowledgement and turned around to face the iPod display. Another successful intervention by Apple Man! (Though my black cape and tights with the white Apple logo on the chest were at the cleaners that day).

This isolated incident has me wondering whether the iPod’s market dominance eventually could have the unwanted side effect of turning the brand name “iPod” into a generic term, like Kleenex or Band-Aid. In other words, the technically challenged among the population could start calling all MP3 players regardless of manufacturer “iPods.”

If people shopping for iPods don’t realize that only Apple Inc. makes the genuine article, there is some risk that they could inadvertently purchase a rival product such as the Zune, just like the lady I saved at the Target.

Apple someday may need to take this into consideration in their marketing of the iPod to avoid it becoming a “genericized trademark.”

Either that or Apple will need to recruit an army of superheroes to watch over the electronics sections of all retail outlets where iPods are sold.

Posted by David Zeiler at 12:08 PM | Permalink | Comments (30)
                    

Pardon me while I momentarily channel MacDailyNews, but I read a column that appeared in The Times of Johannesburg that begs to be mentioned to Microsoft-loathing Mac lovers.

The writer, Toby Shapshak is an award-winning technology journalist and editor. He writes that has dutifully used Windows for years “in part because I didn’t want to be one of those journalists who didn’t muck it out with the masses, and in part because Office is the default work tool of my industry and XP had matured to crashing only every second day.”

Shapshak declares Vista a major disaster for Microsoft and backs it up with plenty of merciless barbs. I offer here a few choice excerpts:

“I haven’t met a single person, outside of those who work for Microsoft, who have a good thing to say about Vista, while the blogosphere has torn the world’s largest software maker to shreds.”

“Vista is too slow, too clunky, too unresponsive, too unwieldy. There are nine ways to turn Vista off or put it in standby, because there were 43 different people working in various teams on the shut-down function.”

“Hardware manufacturers have privately expressed their despair and frustration to me, as has everyone who foolishly bought a new computer with Vista on it.”

Amen, brother.

To extract the maximum schadenfreude, read the entire column here.

Posted by David Zeiler at 9:15 AM | Permalink | Comments (9)
                    

Three –count them – three investment research firms have concluded this week that Apple faring very well during this holiday shopping season.

This comes as no surprise to those of us who have watched Apple prepare for a very merry Christmas by unleashing the iPhone in June, new iMacs in August, new iPods in September and a new version of Mac OS X, Leopard, in October.

But let’s hear what the experts have to say.

First, Shaw Wu of American Technology Research: “Well, it’s looking like Apple’s most optimistic guidance in eight quarters is turning out to be conservative after all,” the analyst wrote in a report released Wednesday. “Back in October, we had concerns that Apple might have been too aggressive in its outlook, but our recent checks with supply chain sources lead us to believe it is positioned to deliver upside.”

Wu cited strong iPod sales, predicting 25 million units sold, and strong Mac sales, predicting 2.3 million “driven by Mac OS X Leopard and switchers.” However, Wu did foresee iPhone sales falling “slightly below” expectations.

Next up, we have Mike Abramsky of RBC Capital. Abramsky sees “a massive Mac Christmas quarter” with shipments of 2.4 million units. That would break the record for Mac sales in a quarter. For calendar year 2008, Abramsky envisions a boost in the Mac’s U.S. market share to 9.3 percent from 7.2 percent and global share to 3.7 percent from 3.1 percent.

Finally, Bear Stearns analysts Andrew Neff, Bill Hand and Ted Chung sent a note to clients Thursday raising its AAPL stock price target for 2008 from $243 to $249. The team based its optimism on “favorable feedback from retail channel checks (strength in notebooks, higher iPod sales), feedback from Asia checks (which indicate sequential uptick in Mac units vs. guidance for sequential decline) and strong acceptance of the new Leopard OS.”

As for the Christmas, they see the company “well-positioned for the holidays given the confluence of product cycles for Mac (new Mac, low channel inventory, Leopard OS, Best Buy store expansion) and iPod (strong new product acceptance).

In 2008, Bear Stearns sees the Macworld show in January setting the tone for the year (as it often does): “While we’re encouraged by AAPL’s evolution into a company with multiple growth engines – including our thesis that iPhone is emerging as a personal digital lifestyle device and view that video could be the next big driver – we note that AAPL will need incremental products (e.g., 3G iPhone, ultraportable Mac, other products TBA) in early “08 to buck seasonality issues.”

Not coincidentally, a new subnotebook and a 3G iPhone have been two of the hottest Macworld-related rumors on the Web in recent weeks. Jim Goldman of CNBC gave both rumors a major boost on Thursday when he reported that a “source close to some of the Asian manufacturers partnering with Apple Inc.” had confirmed the subnotebook for Macworld and the 3G iPhone by June.

Following this onslaught of positive reports (and a decent week on Wall Street), AAPL rose $12.08 for the week, closing at an all-time high of $194.30.

As great as 2007 has been for Apple, is it possible that 2008 will be even better?

Posted by David Zeiler at 6:27 PM | Permalink | Comments (2)
                    

Almost lost in yesterday’s tech news was Google’s announcement that it has released an application for the iPhone that consolidates several of its Web services such as e-mail, search and calendar functions into a single interface.

Owners of an iPhone (or an iPod Touch) need only visit Google.com to access the new goodies; no download is required. A single Google software engineer, Steve Kanefsky, envisioned the feature after being impressed with the iPhone’s large touch screen as well as the inclusion of the full Safari Web browser.

“I set out to create an application that would preload my favorite Google products and allow me to switch between them instantly,” Kanefsky wrote in the Google Mobile Blog, a group blog for the Google Mobile development team.

After sharing a prototype with others at Google, “things started moving pretty quickly,” Kanefsky said. Within weeks they had the software ready for release.

This move should put to rest any suspicions that Google’s recent ventures into the mobile phone space threaten Apple. In particular, some wondered what Android, Google’s in-development platform for “smart phones,” will mean for the iPhone.

The purpose of Android is to move Google’s Web services to mobile phones. The iPhone already is a great platform to achieve that. Google’s strategy is to include all agreeable parties. Apple and Google already have demonstrated a willingness to work together by including Google Maps on the iPhone.

“Google’s overall goal is to provide users with access to information, wherever they are,” the company stated in its press release announcing the iPhone application. “This commitment is device-independent, and we are working to develop new mobile technologies that are faster, easier to use, and available on more devices.”

So Android itself will not compete against the iPhone, although rival handsets that use it will. That essentially leaves Apple where it is today, going against the likes of Samsung and Nokia, but retaining the advantage of its legendary hardware design savvy.

Though the iPhone won’t run the Android software, given Google’s strategy I would expect many Android features to be ported to the iPhone. As Android is based on the Linux operating system, a cousin to the BSD Unix at the heart of Mac OS X (which the iPhone runs), such a feat should prove a trivial for Mr. Kanefsky and his cohorts. That task will get even easier after Apple releases the iPhone SDK to developers next year.

Add to all this the natural synergy between Apple and Google -- the companies share an overall philosophy of making the world a better place through technology -- and you get a formidable alliance. It also doesn’t hurt that Google CEO Eric Schmidt sits on Apple’s board of directors. Or that fellow Apple board member Al Gore is a Google advisor.

Yesterday’s announcement strengthens further the nascent Apple-Google alliance. That could mean headaches for the old guard in the cellular industry, but good things for mobile phone customers in 2008 and beyond.

UPDATE: As if we needed any more evidence of this ever-more-cozy relationship, Google today unveiled its "Mac Developer Playground." According to a company blog post, the Web site is a place "where the Mac community can look for new and interesting open source projects and demos from our Mac team."

Posted by David Zeiler at 12:29 PM | Permalink | Comments (5)
                    

I was hoping it wouldn’t come to this.

Over the weekend Apple removed most of the remaining NBC Universal video content from the iTunes Store. No longer can fans download episodes of The Office, Heroes or Battlestar Galactica.

The falling out between the two companies has been public since August when NBC Universal announced it would not renew its contract to sell content on the iTunes Store. Apple retaliated the very next day with a biting press release announcing that iTunes would not carry new episodes of NBC programs premiering in the fall season.

Many observers (yours truly included) thought the bluster was mostly public posturing and that the two companies would resolve their differences before the December deadline.

But when NBC CEO Jeff Zucker launched another verbal tirade against Apple and iTunes a month ago, any prospects for a deal evaporated. “Apple sold millions of dollars worth of hardware off the back of our content, and made a lot of money,” Zucker said. “They did not want to share in what they were making off the hardware or allow us to adjust pricing.”

That statement made it clear Zucker had declared Apple the enemy and had no interest in further negotiations. Apple has claimed NBC wanted to raise prices too high and objected to variable pricing, which contradicts the general iTunes Store policy of uniform pricing.

Now that this game of corporate chicken has ended in a head-on collision, pundits have tried to sort out who has suffered the most damage.

According to Forrester analyst James McQuivey, it’s Apple. In a report released Monday, he wrote: “Don’t let the Macgeeks posting angry blogs against NBC fool you [DZ: should I be insulted?]. The loser here is Apple, which relies on NBC Universal to deliver 30 (percent) of video download sales. Any supposed backlash against NBC will not materialize because NBC has made its content available, for free, on NBC.com and six other major portal sites.”

Maybe so. But without iTunes, viewers have no option for downloading shows to watch them on an iPod or other video device. I won’t go so far as to predict a “backlash,” but if you don’t give the customer what they want, they’ll seek it elsewhere. And when I say elsewhere, I’m talking pirate sites. And it’s unlikely the pirate sites will be sending NBC Universal millions of dollars – as did Apple -- when its users download NBC shows.

I’m not saying losing NBC’s content won’t hurt the video arm of the iTunes Store. It obviously will. But it won’t have that much impact on Apple’s bottom line, either. Video is Apple’s least successful venture so far (see: Apple TV). As long as the Mac, iPod/iTunes music combo and iPhone businesses are thriving, video is not critical.

The situation as it stands leaves both companies worse off. NBC Universal, for all its trash talk, will lose money while angering viewers. Apple will lose money in addition to some of its stature as a provider of video content.

But by far the biggest losers are the fans of the TV shows who would rather legally download their favorite programs from iTunes as opposed to the inferior options NBC is giving us.

That’s you and me, dear reader. And sadly, there’s not much we can do about it.

Posted by David Zeiler at 8:22 AM | Permalink | Comments (12)
                    

While browsing through a Toys “R” Us catalog over the weekend, trying to figure out which of the many items my daughter had marked that Santa could actually afford, the image of a MacBook caught my eye.

My daughter’s blue “X” is right beside the Barbie Girls Connect MP3 player. At first glance I thought the $50 gizmo could have possibilities. Apparently when the thing connects to a PC it links to the barbiegirls.com Web site and unlocks features otherwise inaccessible.

Seeing the photo with the device plugged into the USB port of what is undoubtedly a MacBook – and assuming therefore it was Mac compatible -- I went online for further investigation.

The final sentence of the product description turned my interest to annoyance: “With 512MB of memory, an expandable miniSD slot that holds up to 2GB, this MP3 player is Windows XP and Vista compatible, but not Mac compatible.”

Any young girl who plugged a Barbie Girls Connect player into a MacBook would not be smiling for long.

Unfortunately some unethical marketing bumble brains have no reservations about showing a Mac in an advertisement for a computer accessory that cannot be used with a Mac. I’ve seen it before.

Veteran Mac users know to look at the fine print before rushing out to buy a product pictured with a Mac, but a lot of recent switchers from the Windows world might not realize how commonplace such shenanigans are. They have my sympathies.

Of course, everyone knows Macs are prettier than Windows PCs and look better in ads. A flashy new iMac or MacBook will enhance the appeal of almost any product. But that’s no excuse for deceit.

I suppose the marketing folks– who probably use Macs themselves – just might be assembling the ads without knowing or bothering to check if the product at hand actually works with Macs. But that doesn’t help the hapless shopper, who only knows what he or she sees in the photo.

Needless to say, there will be no Barbie Girls Connect under my Christmas tree this year. And I’m thinking seriously of doing all of my toy shopping at Target.

Posted by David Zeiler at 10:33 AM | Permalink | Comments (4)