Apple this week bought a fabless chip company called PA Semiconductor and pundits far and wide are trying to explain the deal with broadly varying ideas, some of which are close but none seem to really understand what the deal is about. In the short term this acquisition means precisely nothing to Apple users. In the long term it could be quite significant, however, and gives a number of tantalizing hints about Apple’s hardware strategy.

Why would Apple, having already jumped from PowerPC to Intel, spend $278 million to buy a company that is best known for designing PowerPC chips? Are they preparing to dump Intel? No. Does it have anything to do with Intel? Yes.

This deal has Steve Jobs’ fingerprints all over it. His first formal position at Apple was as head of purchasing and Jobs was known for pushing suppliers to ever lower component prices. He still brings to his work a purchasing manager’s perspective and a desire to beat up suppliers whenever possible. So in that sense this acquisition is all about Intel. And the purchase price, which probably appeared to have been pulled right out of the air by Jobs, who then wouldn’t budge from the figure, is really based on Apple’s target savings over the next two years after forcing Intel to cut prices based on fear of a possible Apple switch back to PowerPC.

{ Robert X. Cringely | Continue reading }

If you use Microsoft’s Windows or Apple’s OS X and for some reason an application crashes, you know the drill. A dialog box opens automatically ready to report what just happened back to Redmond or Cupertino. It is an opt-in procedure so you can decide not to send the report, which is what I tend to do the third or fourth time the same crash happens. For an Apple or a Microsoft this capability of seeing, immediately and automatically, what went wrong is invaluable for planning that next service pack or security update.

Alas, this kind of diagnostic capability hasn’t been available to those developers who don’t also happen to own the operating system as Apple and Microsoft do. But that fact is changing and now there is a way for many third-party developers to put this same capability into their applications.

{ Robert X. Cringely | Continue reading }

photo { Kalle Gustafsson }

{ “I saw this in the toilet of a fairly upmarket bar.” | Thanks Tom }

Apple Inc. filed a federal challenge to New York’s trademark application for a new “Big Apple” logo, saying it’s too similar to the stylized emblem found on iPhones, iPods and iMac computers.

The Cupertino, California-based company says the symbol for New York’s GreeNYC initiative promoting recycling and other sustainable habits is confusingly similar to the logo used by Apple since 1977.

{ Bloomberg | NY Times }

Apple is now the number one music retailer in the US.

The news was announced in an e-mail sent this afternoon to some Apple employees, a copy of which was seen by Ars Technica. It includes a screenshot of an Excel file showing the top ten music retailers in the US for January 2008, and Apple is at the top of the list. The iTunes Store leads the pack with 19 percent, Wal-Mart (which includes the brick-and-mortar stores as well as its online properties) is second with 15 percent, and Best Buy is third with 13 percent. Amazon is a distant fourth at 6 percent.

{ Ars Technica | Continue reading }

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Last week, Apple announced iPhone 2.0. It’s not a new phone model (although that will be coming this year, too)—it’s new software for the existing phone. And in my considered opinion, it will be an even bigger deal than the iPhone itself.

The new software, slated for the end of June, will have two parts. First, it will tap into Microsoft Exchange, the e-mail distribution system used by hundreds of thousands of corporations. You’ll get “push” e-mail, meaning that messages appear in real time on your iPhone. And when anybody changes your calendar or address book on your computer at work, your iPhone will be automatically, wirelessly updated, wherever you happen to be.

All of this is already on the BlackBerry, which is Apple’s obvious target here. Without an actual keyboard, the iPhone won’t kill off the BlackBerry entirely (although I do like the way the on-screen keyboard forces iPhone people to be super-concise). But it will carve away a certain chunk of the BlackBerry’s market.

The big knife is Part 2 of iPhone 2.0. That’s the SDK—the Software Development Kit—which Apple has released in beta-test form. The idea here is that any programmer can now write software for the iPhone. Not illicit, hacky apps like people have been writing so far, but authorized, tested, legitimate software, much of it free, that can tap into all the features of the iPhone.

About two-thirds of the way into it, you can see demos of five iPhone programs that software companies came up with when given two weeks with the SDK. There was an AIM chat program, a sales-force automation tool, and so on, all good-looking and natural-feeling on the touch screen. And there was an Electronic Arts game that exploits the iPhone’s accelerometers, which detect how you’re tilting the iPhone in any dimension. (…)

The release of iPhone 2.0 is over three months away, but I’ll stick my neck out and make a prediction: it will be a gigantic success, spreading the iPhone’s popularity both upward, into the corporate market, and downward, into the hands of the masses. iPhone 2.0 will turn this phone into an engineering tool, a game console, a free-calls Skype phone, a business tool, a dating service, an e-book reader, a chat room, a database, an Etch-a-Sketch…and that’s on Day One.

{ NY Times | Continue reading }

Apple is reportedly in talks to sell an iPod and iPhone that would give customers access to all of the six million songs on its iTunes database. Customers would pay either a fixed price or monthly fee and in exchange they would be able to download all the music on the website for the lifetime of the device.

{ The Telegraph | Continue reading }

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I have been a Sprint customer for at least ten years, I think. They are losing customers at a very serious rate. Some two million are expected to leave this quarter. I am one of them.

My new Treo phone stopped working. It is only a few months old. I gave it to my assistant to take to Sprint and get it exchanged, as I have insurance on it, which I pay $5 a month for. Also, Sprint has the worst customer service. It can take hours to get through the lines at their nearest store, and you can be on hold for a long time on the phone, so I let my assistant deal with them. After waiting forever in line, she got to the desk and explained the problem. They took the phone and came back and said they would not replace it as I must have dropped it in some water, since it was corroded on the inside. They are not responsible if I drop it in the water. She had to get out of line and call me.

I told her I had not dropped it in the water and I wanted a new one like the contract said. I spend almost $5,000 a year with Sprint, and I wanted them to honor that contract. She once again had to get in line, waiting for an hour to get to another clerk, who told her he could not do anything, but we could call customer service. After she endured yet another conversation and waited another hour, I told her to come on back to the office.

I called my friend who is an expert in the cell phone business, and he said AT&T was the best. I got in the car with my daughter, we drove five minutes to an AT&T store, and in an hour I had a new iPhone from Apple, at a lot less per month than Sprint. No waiting in line. Very friendly and knowledgeable service.

Tiffani has bought a new Apple Macbook Air. It is amazingly thin and light, with a full keyboard and lots of cool features. She loves it. I liked the look, but did not want to spend the time learning a new system. I have always teased people who use Macs as being members of a cult.

Then I started using the iPhone. I am simply blown away. I love this thing. Yes, there are some features I wish they had, but not major ones, and I bet the next versions will have them in a year or so.

So, I let Tiffani persuade me to go to the Apple store near my home. We actually set up a private 30-minute appointment online with a sales representative. When we met, he carried a sign that said we were in a private meeting. I was blown away by the MacBook Air. I am going to get one before my next trip. It will reduce my carry-on weight by 4 pounds or so.

And for $99, they will let me come in one hour a week for a whole year for one-on-one personalized tutoring on any program or aspect of anything Apple makes. Any question I want.

It is likely that when we move next, we are going to convert the office to Apple. I can run my Microsoft software but not have to deal with viruses and garbage.

I wonder how many people like me are going to get an iPhone and start to think about other Apple products.

{ John Mauldin }

Every now and then, someone who is brilliant says something stupid — often the result of spending too much time riding a jet stream of high praise. Steve Jobs, the co-founder and chief executive of Apple Inc., did such a thing last month when he all but declared the death of reading.

Asked about Kindle, the electronic book reader from Amazon.com, Jobs was dismissive. “It doesn’t matter how good or bad the product is,” he told John Markoff of The Times, “the fact is that people don’t read anymore. Forty percent of the people in the U.S. read one book or less last year.”

This is nonsense on several levels. But before we get to reading, let’s stipulate that Jobs is deserving of his 2007 ranking by Fortune Magazine as the most powerful person in business. Anyone who can cause revolutions in five industries, as Fortune noted, is a titan — capable of touching a billion lives.

His life story is inspiring. An adopted child, he drops out of Reed College in Portland, Ore., but remembers the calligraphy classes when he designs the typography for the Macintosh. Gets rich. Gets fired. Gets cancer. Survives all three. Takes acid, wanders around India, dates exotic older women. Marries. Has kids. Loves the Beatles, and cites their creative tension as a business model. Gives great commencement speech at Stanford, concluding: “Your time is limited, so don’t waste it living someone else’s life.”

The Mac, Pixar, the iPhone, the iPod, iTunes. This stuff is cool. Lighter than air. iGetit. But it’s just product, dude.

Reading is something else, an engagement of the imagination with life experience. It’s fad-resistant, precisely because human beings are hard-wired for story, and intrinsically curious. Reading is not about product.

{ NY Times | Continue reading }

image { Apple II “Simplicity” Brochure, 1977 | Mac Mothership }

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{ Apple II introduction ad, 1977 | Mac Mothership | more | Thanks Fabien }

First let’s look at the MacBook Air, which is a cool product with a bad name, though I guess it worked well for Michael Jordan, so what the heck. It is very doubtful that Apple will sell a million Airs in the next year. It is doubtful Apple will sell even half a million Airs and Steve Jobs knows this. What’s important here is not the subnotebook computer but the bits of it that will likely make their way into much more interesting Apple products to come.

Take that specially packaged Intel CPU, how did that come about? Steve Jobs didn’t beat the heck out of Intel CEO Paul Otellini to get a little CPU that would go into fewer than half a million boxes. Steve did what he always does. He beat the heck out of Paul Otellini with the promise that this little CPU — for which we can expect Apple will hold some exclusive for the next six months — will end up in millions and millions of Apple products, nearly all of them costing a lot less than a MacBook Air.

Apple is very important to Intel. Though nobody says it out loud, Apple is the last of the major computer companies that uses 100 percent Intel processors. And Apple’s ability to do more with less has to be a continual inspiration to its competitors. As Apple slides further and further into the consumer electronics and networking markets, Intel will be right there, too. I still expect we’ll see an Apple tablet this year, for example, and it will use this same Intel CPU. (…)

What about the Air’s lack of an optical drive? It’s hard to find a place for an optical drive in such a thin computer, but isn’t Steve Jobs the guy who when he returned to Apple railed against notebooks without removable media, like the PowerBook 100 and 2400 and the various PowerBook Duos? Why did Steve change his mind now? Because Steve wants to replace optical drives of any sort with bits provided over the network, preferably from iTunes. That’s also why we didn’t see an Apple Blu-ray announcement this week and — if Jobs has his way — we’ll never see one.

{ Robert X. Cringely | Continue reading }

photo { Apple.com }

It was a late morning in the fall of 2006. Almost a year earlier, Steve Jobs had tasked about 200 of Apple’s top engineers with creating the iPhone. Yet here, in Apple’s boardroom, it was clear that the prototype was still a disaster. It wasn’t just buggy, it flat-out didn’t work. The phone dropped calls constantly, the battery stopped charging before it was full, data and applications routinely became corrupted and unusable. The list of problems seemed endless. At the end of the demo, Jobs fixed the dozen or so people in the room with a level stare and said, “We don’t have a product yet.” (…)

This 4.8-ounce sliver of glass and aluminum is an explosive device that has forever changed the mobile-phone business, wresting power from carriers and giving it to manufacturers, developers, and consumers.

And what would AT&T think? After a year and a half of secret meetings, Jobs had finally negotiated terms with the wireless division of the telecom giant (Cingular at the time) to be the iPhone’s carrier. In return for five years of exclusivity, roughly 10 percent of iPhone sales in AT&T stores, and a thin slice of Apple’s iTunes revenue, AT&T had granted Jobs unprecedented power. He had cajoled AT&T into spending millions of dollars and thousands of man-hours to create a new feature, so-called visual voicemail, and to reinvent the time-consuming in-store sign-up process. He’d also wrangled a unique revenue-sharing arrangement, garnering roughly $10 a month from every iPhone customer’s AT&T bill. On top of all that, Apple retained complete control over the design, manufacturing, and marketing of the iPhone. Jobs had done the unthinkable: squeezed a good deal out of one of the largest players in the entrenched wireless industry. Now, the least he could do was meet his deadlines. (…)

But by the end of the push, just weeks before Macworld, Jobs had a prototype to show to the suits at AT&T. In mid-December 2006, he met wireless boss Stan Sigman at a suite in the Four Seasons hotel in Las Vegas. He showed off the iPhone’s brilliant screen, its powerful Web browser, its engaging user interface. Sigman, a taciturn Texan steeped in the conservative engineering traditions that permeate America’s big phone companies, was uncharacteristically effusive, calling the iPhone “the best device I have ever seen.” (Details of this and other key moments in the making of the iPhone were provided by people with knowledge of the events. Apple and AT&T would not discuss these meetings or the specific terms of the relationship.)

Six months later, on June 29, 2007, the iPhone went on sale.

{ Wired | Continue reading }

photo { Steve Jobs with an apple }

After decades of popsicle promotions that included prizes printed on the stick, Brazilian ice-cream company Kibon (Unilever) will manufacture 10,000 specially made propsicles, identical in size and color to the actual popsicle, but frozen with iPod shuffles inside.

We talked to Mentor Muniz Neto—creative director for Bullet Brazil, the company who got the idea—about how they worked with Apple to achieve this. (…) The obvious solution was putting the shuffles inside a real popsicle, but this was ruled out as the humidity would have destroyed the shuffle in no time, even with plastic around it. The other idea: a fake ice cream that looked exactly like the real thing. (…) Even if the propsicle could protect the iPod against humidity, they still had to check if the special fake ice cream could protect the electronic circuitry against temperatures between -4 and -22 degrees Fahrenheit (-20 and -30 degrees Celsius). After a never-ending number of tests, they saw it worked and Apple gave the go-ahead from California.

{ Gizmodo | Continue reading }

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photo { Garry Winogrand }