The closing of the Internet*

Imagine you are trying to start a news site in your community. Your competitor, part of a national chain, offers instant-on, full-screen HD video and a host of other data-intensive features that load the moment you hit “click.” But though you have a broadband connection, even simple videos that you’ve posted load slowly and play in fits and starts.
So you call your Internet provider — most likely Verizon and Comcast — and ask what’s going on. A sales person explains to you that if you want your readers to enjoy the same rich multimedia content as you competitor, then all you have to do is pay another $1,000 a month.
You can’t. You struggle on. And, within six months, you shut down.

That is a likely scenario if we move away from net neutrality — a vitally important principle that all Internet traffic should be treated the same. The FCC has been trying to mandate net neutrality, only to be shot down in the federal courts. And today the New York Times reports that Google and Verizon have been involved in negotiations to come up with a multi-tiered Internet with different levels of service and different levels of pricing. [Update: Or perhaps not. See below.]
“It’s like the end of ‘Animal Farm’ where pigs and humans sit down at the dinner table,” tweeted new-media strategist Steve Yelvington. In fact, Google at one time had been a leader in pushing for net neturality.
Please understand what net neutrality is not. There is nothing wrong with charging consumers more for better Internet service. Broadband costs more than dial-up, and fast broadband costs more than slow broadband. That’s life.

How will Apple respond to the DMCA revision? They won’t.

Today’s adjustment of the DMCA has far-reaching legal implications, which will only be evident after a few weeks, months, or even years as various parties exploit them however they can. I’m going to let the experts play in that sandbox. But one of the new rules seems to have had a specific target in mind: Apple. To wit:

(2) Computer programs that enable wireless telephone handsets to execute software applications, where circumvention is accomplished for the sole purpose of enabling interoperability of such applications, when they have been lawfully obtained, with computer programs on the telephone handset.

The language is a bit confusing, but the end result is the legalization of jailbreaking your phone and side-loading apps. Not that it was ever illegal, although some Apple store employees thought otherwise. Now that it’s been made official, however, one might reasonably expect a bit of give from Apple on this point, since they have taken such great measures to prevent such actions. But I’m pretty sure that apart from a little lip service, Apple will continue with the exact same policies, with the sort of blithe arrogance that simultaneously compels and repels consumers.
From a legal standpoint, it seems pretty clear that this ruling and Apple’s prohibition of jailbreaking are actually non-overlapping. As I noted in my User’s Manifesto, the only real consequence of your jailbreaking your phone is annulling the license agreement you “signed” when you bought the iPhone — a private contract between a user and a company. The extent of the repercussions is that you’re cut off from Apple; this can be serious, as in the recent case of a guy who actually had a faulty iPad (it caught fire), but Apple refused to return it, as it had been jailbroken. Them’s the ropes, kid.

Apple Is the New Microsoft, Part 2 (Updated)

Apple surpassed Microsoft two months ago as the world’s most highly valued tech company, and is now challenging the Redmond giant on another key metric: In a blowout third quarter, AAPL posted record revenue of $15.7 billion, which should be close to or exceed what Microsoft reports on Thursday.
Apple’s quarter easily surpassed consensus expectations, per Thomson Reuters, posting net income of $3.25 billion, or $3.51 per diluted share. Gross margins were down slightly year over year — 39.1 percent compared to 40.9 percent — and international sales accounted for more than half of all business, 52 percent.
The Thomson Reuters consensus for Microsoft’s revenue is $15.27 billion. Among the 29 analysts polled, the highest estimate was only a tad above what Apple has actually reported, at $15.74 billion. As of today Apple still has a higher market capitalization than Microsoft, but not by much.
Apple’s hardware story in the 3rd quarter is equally impressive:

Apple Passes Microsoft as World’s Largest Tech Company

What a long, strange trip it’s been.
Apple’s market capitalization officially passed Microsoft’s Wednesday afternoon, making the Cupertino, California, company — for the first time — the largest technology company in the world.
With a market cap of $241.5 billion versus Microsoft’s $239.5 billion, Apple also became the second-largest company on the S&P 500, according to Standard & Poor’s analyst Howard Silverblatt. At the moment, only Exxon Mobil is bigger.

Free iPhone 4 Cases to Cost Apple $175 Million

Apple’s solution to Antennagate — free cases — is likely going to cost the company $175 million in revenue.
Apple posted record earnings this quarter. However, its recent success has been marred by controversy over the iPhone 4’s reception issues, specifically how holding it by its lower-right side can decrease reception.
Apple held a press conference last week to address the issue. Its solution to the problem: free cases for all.
Cases don’t grow on trees, though. During today’s Q3 earnings conference call, Apple revealed that it predicts that the free iPhone 4 cases and bumpers will result in $175 million in deferred revenue. It hits Apple’s books as a liability — essentially a debt or a negative balance on the bottom line. Apple says that it will expense the cost of the cases, which will help mitigate the overall cost on the bottom line.
In other words, Apple is accounting for $175 million in lost revenue on its Q4 balance sheet, all due to free bumpers and cases.
While no company wants to lose out on $175 million in revenue, the alternative — reduced iPhone 4 sales due to Antennagate — was far less palatable. And it’s important to note that this is just Apple’s cost estimate — the actual number could end up being more or less than $175 million, depending on iPhone 4 sales and how many customers take advantage of the free case offer.
Still, it looks like Antennagate will be just a drop in the bucket for a company that made $15.7 billion last quarter alone.

Inside Apple’s Antenna Design Lab

After a press conference Friday addressing the iPhone 4’s antenna, Apple gave journalists a private tour of its radio-frequency test facility to provide a glimpse into the process of designing wireless products such as iPhones and iPads.

Japanese Author Circumvents Publishers to Release New Novel on the iPad

Well-known Japanese novelist Ryu Murakami is releasing his next novel, A Singing Whale, directly to iPad owners via Apple Japan’s App Store, circumventing his traditional publisher in the process.
According to The Wall Street Journal, Murakami is working with a software company to release the novel alongside video content and music by Academy Award-winning composer Ryuichi Sakamoto. Pending App Store approval, A Singing Whale will be available for 1,500 yen (about $17). Apple will receive 30% of the revenue, with the remainder to be divided among Murakami, Sakamoto and the software company.
Although the author advises publishers to “read it and weep,” this doesn’t mark the beginning of the end for the publishing industry — at least not yet. What Murakami is releasing is not an e-book in the traditional sense, but a full multimedia experience that can’t be replicated in print. In some respects, it’s similar to Alice for the iPad, an app that brings Lewis Caroll’s beloved Alice () in Wonderland to life with full-color animations and interactive features. Furthermore, the author is also still in talks with its publisher, Kodansha, about releasing a hard copy of the novel.

Apple’s iPhone 4 Strategy: Free Cases for All

At its press conference to address the iPhone 4 reception issues, Apple laid out its response plan.
The first part of the strategy was the press conference itself. Apple has acknowledged that there is a problem and that it is committed to making its customers happy. Although the data shows that the rate of dropped calls on the iPhone 4 are higher than on the iPhone 3GS, the increase in dropped calls is less than 1 per 100 calls.

Apple made it clear that it is committed to making its customers happy and providing the best products it can offer. With regards to the iPhone 4, this is what the company said it was going to do:

• Release a Software Update to Better Report Cellular Signal — This was actually included in yesterday’s iOS update 4.0.1. The software fix does not actually improve call reception, however. Instead, it adjusts the algorithm to better report the actual signal. That should make the drop in bars when gripping a caseless iPhone appear less significant (even though the end result is exactly the same).
• All iPhone 4 Owners Get a Free Bumper or a Refund for Their Existing Bumper — Apple believes that part of the reason that the dropped call ratio has increased (however slightly) is because fewer users have cases for their new iPhone 4. With the iPhone 3GS, the iPhone form factor didn’t change, which meant that not only did more existing users already have a case, but more cases were available at launch. That didn’t happen with the iPhone 4, and so Apple is going to give all iPhone 4 users who purchase the phone from launch date through September 30 a a free bumper or a refund on their existing bumper. Additionally, because Apple can’t make enough bumpers to satisfy demand, customers can choose another third-party case as well. The company says it will have a form on its website late next week that customers can fill out to request their new bumper or to get a refund on their existing bumper.

• Unsatisfied Customers Get a Full Refund — If the new case or bumper still doesn’t solve the problem, Apple will provide a complete refund to the iPhone 4 owner. Presumably you can also just exchange your iPhone 4 for another unit.

Apple Goes on the Offensive

CUPERTINO, Calif. — Many expected a mea culpa from Steven P. Jobs, Apple’s chief executive. Instead, he turned the iPhone 4’s antenna problems into a marketing event on Friday.

Raymond M. Jones/The New York Times

The so-called iPhone “death grip.”

At a news conference at Apple’s headquarters here, Mr. Jobs acknowledged that there were issues with the antenna, which wraps around the outside of the device.
But he insisted that the problems, which can result in dropped calls when the device is held a certain way, affect all smartphones — a claim that was challenged by some Apple competitors. And he accused the news media of exaggerating the scope of the issue, saying customers and reviewers were thrilled with the new phone.
“This has been blown so out of proportion that it is incredible,” he said.
Mr. Jobs said that to put the controversy behind it, Apple would give free bumpers — cases that wrap around the rim of the phone and seem to reduce the problem of dropped calls — to all iPhone 4 buyers who want them.

Apple Tried To Buy Palm Before HP Won The Bidding War -- And RIM Completely Blew The Deal

The race to buy Palm earlier this year was fast and hot, with the company's bankers contacting 16 companies about the deal, including five serious potential suitors.
HP won the bake-off, acquiring Palm for $1.2 billion in late April.
But other companies involved in the talks included Silicon Valley's increasingly competitive rivals, Apple and Google, as well as BlackBerry maker Research In Motion, we have learned from a source familiar with the negotiations.
According to our discussions with this person:

• Apple was mostly interested in Palm's huge library of intellectual property and patents (450+ patents on file, another 400+ applications on file). And unlike some other bidders, Apple even seemed committed to funding Palm's operations, perhaps to challenge RIM's dominance in the keyboarded segment of the smartphone industry, our source says. (There's a bunch of problems with this idea, such as the idea of Apple supporting two rival app platforms, but that's what this person says.) Ultimately, Apple didn't bid high enough, while HP offered an amount the board couldn't say no to. (Recall that Steve Jobs tried to buy Palm years ago in its first life, too, when it was owned by 3Com.)

• RIM basically had the deal in its hands and "had to work incredibly hard to blow it," our source recalls. RIM initially came in higher than HP, but HP upped its bid, our source says.

• Google, likely interested in Palm's intellectual property, supposedly only wanted it because Google thought Apple might want it. But Google supposedly didn't know Apple was actually bidding for Palm, so it didn't proceed.

• Nokia, bizarrely, wasn't anywhere near the deal. That may prove to be a stupid move, which we'll expand on later.

Millennial Media: Apple OS Grows By 36 Percent In June, Android Up By 23 Percent

Mobile ad network Millennial Media, which claims that its network reaches 82 percent of 72 million mobile web users in the U.S., is reporting that globally, Apple OS requests are up by 36 percent in June, after dropping 33 percent in May.
Android requests continued to rise, and grew another 23 percent month over month. Android is now up a whopping 439% since January. iPad requests are also increasing at a fast rate, growing 206 percent in June, after rising 160 percent in May. RIM ad requests increased percent month-over-month, posting a 41 percent increase in requests since January.
In terms of ad impressions, Apple’s OS remained the leading Smartphone OS on Millennial’s network in June with a 56 percent share of impressions and an 8% growth month-over-month. RIM was the second largest Smartphone OS for the eleventh consecutive month, representing a 17 percent share of impressions for June, dropping by 2 percent from last month. Android’s OS remained the third largest operating system in for the fourth consecutive month, representing 11 percent of impressions, dropping by 4 percent from May.
When splitting ad impressions by device manufacturer, Apple had the largest share increase of 4 percent with approximately 30 percent share of impressions in June. Motorola moved into the number four position, passing HTC and LG, with the mobile company’s devices representing an 8 percent share of impressions for the month. This growth is largely driven by the Droid device, says Millennial.

Microsoft Pays Mobile App Developers to Help It Catch Apple

July 14 (Bloomberg) -- Microsoft Corp. is paying developers to build mobile applications for its Windows Phone 7 system to help it narrow a lead by rival products from Apple Inc. and Google Inc.

The company is providing financial incentives ranging from free tools and test handsets to funds for software development and marketing, said Todd Brix, a senior director at Microsoft who works with app developers. In some cases, Microsoft is providing revenue guarantees, and will make up the difference if apps don’t sell as well as expected, he said.

Microsoft revamped its flagship mobile operating system to recoup market share lost to Google and Apple. To win consumers, the world’s largest software maker needs an ample supply of games, music and navigation apps when handsets with Windows Phone 7 reach stores later this year. Some developers may be reluctant to sign up before they know Windows Phone will lure enough customers, said Kevin Burden, an analyst at ABI Research.

“In no way do they want to say, ‘Trust us, there will be apps at some point,’” said Burden, who is based in Hopkinton, Massachusetts. “If that means paying developers, so be it. It’s a good strategy for them.”

While Microsoft, based in Redmond, Washington, has used similar compensation programs for previous versions of its mobile operating system, it’s devoting a larger sum this time, Brix said. He declined to say how much Microsoft will spend.

Apple Acquires Mapping Company Poly9 [REPORT]

According to French-language newspaper Le Soleil, Apple has acquired Poly9, an online mapping company based in Quebec.
The translated article reports that since the acquisition, the majority of Poly9 employees have moved from Quebec to Apple’s offices in California. As Apple Insider notes, the Poly9 website is down, although parts of the Poly9 Globe site are still accessible.

The Poly9 Globe was described as “a cross-browser, cross-platform 3D globe which does not require any download.” Think of it as a JavaScript-based 3D globe that can be manipulated with your mouse to adjust its axis and rotation points. The software then offers users statistics on their virtual locations. Basically it’s Google Earth () in the browser.
While the product is now listed as “discontinued,” you can see it in action from some its partners like Skype () and ConduitLive.

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Second Mapping Acquisition for Apple

Lab Tests of iPhone 4 Confirm Reports: It’s the Antenna, Stupid

File this under “we told you so.”

Lab tests by Consumer Reports have confirmed what Wired and its readers have been telling you all along: The problem with the iPhone 4’s reception has nothing to do with how the signal-strength bars are represented, and everything to do with the phone’s faulty antenna design.

Consumer Reports took three separate iPhone 4s into the controlled environment of their radio frequency-insulated testing chamber. That room is insulated from all outside RF signals, so there’s nothing to interfer with the tests. Once inside the chamber, the testers set each iPhone to connect with a base station emulator — a piece of testing equipment that acts like one of AT&T’s cellphone towers. They then tested the iPhones’ ability to connect when held various ways.

10 Fascinating Facts You Didn’t Know About Apple

It can be argued that no consumer electronics company has captured the public’s fascination the way Apple has. Over the years it has morphed into more than just a company or corporation, but for many it has become a representation of a lifestyle or culture, and a status symbol complete with a larger fan base than most pop stars.
Here at Mashable (), we’re also quite fascinated by Apple and its achievements. The company is known just as much for its veil of secrecy and ability to get the Internet () buzzing with rumors, as it is for the actual products. You’re probably in on the gossip, but there are likely a few things you don’t know about Apple.
So read on for the origins of product names, factoids about the Apple logo, what Wozniak sold to finance the Apple I, and more wonders dug up from the archives of Apple’s past.

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1. The First Apple Logo Featured Isaac Newton

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Although the now-retro rainbow logo is arguably Apple’s most well known, the very first Apple logo featured Sir Isaac Newton sitting under a tree, with an apple about to hit his head. (Legend has it that he was literally hit on the head with an apple and that led to the concept of gravity.)
The Newton logo was designed by the lesser-known Apple founder Ronald Wayne (the guy who sold his stake — that today would be worth $22 billion — to Steve Jobs and Steve Wozniak for $800 – ouch!) and was only used briefly in 1976, since its high level of detail didn’t really show up that well when shrunk down and stuck on a product.
The rainbow apple, designed by Ron Janoff, replaced Sir Isaac and remained the symbol of the company for many years until the simpler monochromatic apple logo was introduced in 1998.

Augmented Worlds Video Part 1 – Recognition

I am busy consulting, commercial projects and presentations (eg: SBTUG this eve) on Augmented Reality and the near future benefits for storytellers, a range of businesses and service industries. Key questions often crop up as to the relevance of AR to their ‘bottom line’ as well as usuability issues – beyond showing a range of videos from Layar, Junaio and the like it is difficult demonstrating how ‘consumer/users’ of AR devices may be interacting with them in the near, 1 to 2 year out, future. So based on a certain large tablet released recently I created a device that gave a much ‘bigger’ experience than current AR enabled mobiles, had a cleaner interface (as in less clutter POI dots on the screen – most of the time) and fitted into a series of AR future videos ‘AUGMENTED WORLDS’. Please find below Part One looking specifically at the Business Opportunities around type 3 of my AR types - Recognition (Outline) and more on how it was made and a description of the sketch interface below…
AUGMENTED WORLDS Pt.1 - Business Opportunities: RECOGNITION.


An ‘iPad 4.0 – like prototype’ stroll around an augmented Sydney. Video, music devised & created by GARY HAYES of MUVEDesign.com
Music – BTW if you like the music please subscribe via iTunes or other fav podcast tool to download over 250 of my euphoric/progressive trance, organic real harp/guitars or cinematic soundtracks via garyphayes.com or direct feed here.

Sorry, There's No Way To Save The TV Business

The traditional TV industry--cable companies, networks, and broadcasters--is where the newspaper industry was about five years ago:
In denial.
There are murmurings on the edges about how longstanding business models will come under pressure as Internet distribution takes over.  But, so far, the revenue and profits are hanging in there, so the big TV companies don't really care.
Specifically, the TV industry's attitude is the same as the newspaper industry's attitude was circa 2002-2003: Stop calling us dinosaurs: We get digital; We're growing our digital businesses; We're investing in digital platforms; People still recall ads even when they fast-forward through them on DVRs; There's no substitute for TV ads.  And traditional TV isn't going away: Just look at our revenue and profits!
After saying all this same stuff for years, the newspaper industry figured out the hard way that, eventually, reality intrudes, that you can't stuff the genie back in the bottle.  And over the next 5-10 years, the TV industry will figure this out, too.
Here's the problem in a nutshell:
As with print-based media, Internet-based distribution generates only a tiny fraction of the revenue and profit that today's incumbent cable, broadcast, and satellite distribution models do.  As Internet-based distribution gains steam, therefore, most TV industry incumbents will no longer be able to support their existing cost structures.
Specifically, TV business models for the past half-century, from broadcast to cable to satellite, have been built on the following foundation:

Exclusive: The New Touching Stories App Brings Four Interactive Films to the iPad

How many times when you've been watching a movie have you just wanted to reach out and poke an annoying character? Maybe help a fleeing victim by making them run just a little bit faster? A new interactive experience by production company Tool of North America uses the capabilities of the iPad to allow viewers to do just that as they interact with--and seemingly change the outcome of--live-action video. Part video game, part immersive entertainment, Touching Stories is available today as a free, downloadable app, and we've got an exclusive behind-the-scenes video that gives a peek into the process of making it.

100 things you didn’t know about Apple and Steve Jobs

100 things you didn’t know about Apple and Steve Jobs

If you’re into interesting facts, few companies have as secretive, cool and intriguing histories as Apple and its leader, Steve Jobs. Anything missing? Leave a comment.

1. Apple didn’t have two founders. It had three. Steve Jobs, Steve Wozniak, and Ronald Wayne.
2. Steve Jobs and Jonathan Ive share the same middle name: “Paul.”
3. Before working at Apple, Jonathan Ive worked for a company called Tangerine.
4. The original Apple 1 computer sold for $666.66.
5. The Apple Store on Fifth Avenue in Manhattan (the cube) is said to be one of the most photographed landmarks in the world.
6. Nine U.S. states don’t have Apple stores: Alaska, Arkansas, Idaho, Montana, North Dakota, South Dakota, Vermont, West Virginia and Wyoming.
7. Before co-founding Apple, Steve Jobs worked for Atari.
8. Jonathan Ive has worn the same shirt in every Apple product intro video since 2000.
9. Steve Jobs is a Buddhist.

There’s No iPhone 4 Recall, No Matter What Twitter Says

There’s No iPhone 4 Recall, No Matter What Twitter Says

The Daily Mail reported this morning than an iPhone 4 recall is underway, but don’t believe it; the UK publication’s source was a tweet from a fake Steve Jobs Twitter account. Apple hasn’t announced any plans to recall its new phone.