The smartphone wars, one year later

The iPhone leads the pack, Android is gaining, everybody else is losing share

[Originally posted Nov. 24, 2009 on Fortune.com]

It's been a year since Google (GOOG) released Android OS, the open-source smartphone operating system widely perceived as the most likely to overtake Apple's (AAPL) iPhone in the long run.

As it happens, Google this month also purchased AdMob, the world's largest purveyor of mobile phone advertising. So this seemed as good a time as any to take a snapshot of the changing smartphone marketplace, as measured by ad requests to AdMob's network.

We reviewed a year's worth of AdMob data -- including the October numbers released Monday -- and charted it on the graph at right (reproduced full-size below the fold).

There's a bias in the data, since AdMob ads run better on iPhone OS and Android devices than on, say, Research in Motion (RIMM) BlackBerries. But the trends are clear.

Jailbroken iPhones infected, again

Security experts report that a malicious worm is tunneling its way through Dutch iPhones

[Originally posted Nov. 23, 2009 on Fortune.com]

This may be one of those "I told you so" moments that gives comfort to people on both sides of the Apple-Microsoft divide: Those who claim that Apple's (AAPL) products are no more immune to malware attacks than Microsoft's (MSFT), and those who insist that Apple's operating systems are nearly impenetrable, as long as you play by the rules.

According to the Dutch security firm XS4ALL, a software worm has been spreading through the Netherlands that can seize control of iPhones without their owners' knowledge and hand it over to a server in Lithuania.

"This worm is doing really bad things," XS4ALL's Scott McIntyre told security.nl.
Only a few hundred iPhones have been infected so far, according to the BBC. But if the worm gets into large Wi-Fi networks, thousands could be at risk.

This is the third reported iPhone malware incident in as many weeks and by far the most dangerous.

Does AT&T turn into a pumpkin in June?

Its Cinderella contract with Apple for the iPhone runs out in seven months, says one analyst


[Originally posted Nov. 22, 2009 on Fortune.com]

Broadpoint AmTech's Brian Marshall, who has replaced Piper Jaffray's Gene Munster as the most bullish of the mainstream Apple analysts, made several assertions of fact in an Bloomberg TV interview Friday that -- if true -- struck me as newsworthy. Chief among them:

• The contract that gives AT&T (T) exclusive access in the U.S. to Apple's (AAPL) iPhone expires in June 2010.
• Apple is now getting a $450 subsidy from AT&T for each iPhone it sells; after June, that subsidy will be reduced to $300 for all carriers, domestic and international.
• The 4% of AT&T subscribers who use the iPhone consume roughly 40% of the network's bandwidth.

Here and in a research note issued last late month, Marshall has been lobbying heavily for Apple to start selling the iPhone through Verizon (VZ). It turns out he may have personal reasons for doing so. He told Bloomberg's Pimm Fox that whenever he travels to New York or San Francisco with his iPhone he gets dropped calls "all the time."

"A very frustrating experience," he said, "but I'm not going to move away because Apple has their hooks into me"

You can hear all this, plus what Marshall has to say about the Chinese iPhone market, Windows 7's effect on Mac sales and Apple's 2010 earnings, in the interview posted below the fold.

UPDATE: Financial Alchemist's Turley Muller takes issue with virtually everything Marshall says in this interview. See here.

[Follow Philip Elmer-DeWitt on Twitter @philiped]

Mac ads haunt Steve Ballmer

Shareholders press Microsoft's CEO about Apple's marketing campaign

[Originally posted Nov. 20, 2009 on Fortune.com]

Those Get-a-Mac ads make "you all look like a buffoon," one long-time shareholder (and father of four Mac-using children) told Microsoft (MSFT) CEO Steve Ballmer at the company's annual meeting Thursday. "I'm just wondering why your marketing group can't do something to try to rein in this next generation, because you've got a real bad image out there."

"We all watch television," Ballmer responded, before quickly changing the subject to Microsoft's market share.

"The truth of the matter is, we do quite well," he said, according to TechFlash's Todd Bishop, who seems to have taken the best notes. "Even among college students, we do quite well. Do we have an opportunity for improvement? We do. Some of that is marketing, some of that is phase of life. It is important to remember that 96 times out of 100 worldwide, people choose a PC with Windows; that's a good thing. Even in the toughest market, which would be the high end of the consumer market here in the U.S., 83 times out of 100 people choose a Windows PC over a Mac."

Ballmer acknowledged that Apple (AAPL) had "picked up a couple of tenths of a percent of market share," an achievement some in the audience seemed to find laughable.

Apple relents. Bobble reps rule!

An iPhone app illustrated with caricatures of the 111th Congress finally gets the green light


At least someone at Apple (AAPL) has a sense of humor.

Less than a week after the iPhone Developer Program rejected as "objectionable" and "defamatory" an application illustrated with caricatures of U.S. Senators and Congressmen, the company has  reversed itself and approved the app.

Bobble Rep for the iPhone and iPod touch was conceived by director Ray (Super Capers) Griggs and illustrated by Mad Magazine caricaturist Tom Richmond. The drawings serve as an entry into a data base of information about the politicians, whose oversized heads bobble when shaken or flicked with a finger. The app is now available for sale here for $0.99.

"I'm glad Apple came to their senses," says Richmond, "and realized that this app is not only not derogatory or insulting to our congressional representatives and senators, it's a beneficial program and a little fun as well."

Richmond spent months drawing the heads of all 540 members of the 111th Congress, including nonvoting members from Puerto Rico and Guam.

Fox News on Saturday was taking credit for Apple's decision to approve the app, although it was Richmond himself who drew national attention to its rejection earlier this week with a widely read entry in his blog.

See Apple bans Nancy Pelosi bobble head.

[Follow Philip Elmer-DeWitt on Twitter @philiped]

The iPhone wars: AT&T vs. Verizon

Ma Bell strikes back with a letter, another lawsuit and its own coverage maps

[Originally posted Nov. 13, 2009 on Fortune.com]

Claiming "irreparable harm," AT&T (T) has filed its second lawsuit in two weeks asking a U.S. District judge to force Verizon (VZ) to pull its new TV ads -- cartoons that depict the iPhone as the latest arrival to the "island of misfit toys." The issue, once again: coverage maps that AT&T claims are "false" and "misleading."

On Thursday, AT&T followed up with a "set the record straight" letter reminding customers and the press that it, not Verizon, carries the "most popular smartphones" -- i.e. Apple's (AAPL) iPhone -- and that its customers, not Verizon's, have access to more than 100,000 applications.

The letter includes a link to the version of AT&T's coverage map -- shown above -- that the company thinks Verizon should be showing in its ads.

We're not so sure. Let's look a little closer at this map -- and some others -- below the fold.

Rumors: A Verizon iPhone in 2010

Two sources say Apple is building a hybrid "worldmode" phone that Verizon could use

[Originally posted Nov. 12, 2009 on Fortune.com]

Judging from reader comments in this space, there are a lot of cellphone owners in America locked into Verizon (VZ) contracts who would buy an iPhone in a minute if they didn't have to switch carriers to get it.

Verizon has made it pretty clear that it would cut a deal with Apple (AAPL), were it not for a couple of impediments: 1) the contract that makes AT&T (T) the iPhone's exclusive U.S. carrier, and 2) the fact that Verizon's network (based on CDMA2000 technology) is incompatible with Apple's smartphone (which uses W-CDMA (UMTS)).

The first roadblock -- AT&T's contract -- is set to expire next year, according to a widely cited 2008 USA Today article that included an interview with chairman Randall Stephenson. (Stephenson declined to comment on the details of the contract.)

The second barrier could also disappear were Apple to build a new iPhone that is compatible with both AT&T and Verizon's networks.

Apple bans Nancy Pelosi bobble head

A Mad Magazine cartoonist's guide to the 111th Congress runs afoul of Cupertino's censors

UPDATE: Apple relented. App approved. See here.

- - - -

Someone at Apple (AAPL) needs to take a refresher course in American history -- and maybe a lesson in libel law.

Last summer Tom Richmond, one of Mad Magazine's top illustrators and two-time winner of the National Caricaturist Network's "Caricaturist of the Year" award, began drawing a likeness of every Senator and Representative in the 111th Congress -- 540 caricatures in all, including non-voting members from Puerto Rico, Guam, etc.

The idea, he explains, was to create an illustrated database for the iPhone and iPod touch that would allow users to find the name, party affiliation, phone number and website of their senators and congresspeople via zipcode or GPS. Each head was placed on one of 12 cartoon bodies and would bobble when shaken or flicked with a finger.

The project was the idea of Ray Griggs, director of the movie Super Capers (rated PG for mild language, rude humor and brief smoking), for which Richmond did the art. Griggs had shown the finished app around and stirred up some interest. He was booked to appear as a guest on Fox News next week with Glenn Beck and Mike Huckabee.

You can probably guess what's coming next.

Inside Apple's industrial design lab

A rare visit with the man who designed the iMac, the iPod and the iPhone

[Originally posted Nov. 9, 2009 on Fortune.com]

"I guess it's one of the curses of what you do," says Jonathan Ive, Apple's senior vice president for industrial design, "is that you are constantly looking at something and thinking 'Why why why is it like that? Why is it like that and not like this?'"

Ive's five-minute appearance in Objectified is one of the centerpieces of Gary Hustwit's 2009 documentary about contemporary industrial design. It's a follow-up to Hustwit's amazing Helvetica (2007), the only full-length film about a typeface.  Objectified may not be as surprising or groundbreaking, but it does feature this rare inside look at Apple's (AAPL) secretive design lab, an inner sanctum on the Cupertino campus only slightly less guarded than Fort Knox.

"I remember the first time I saw an Apple product," says Ive as the camera pans across a busy Apple Store. "I remember it so clearly because it was the first time I realized when I saw this product I got a very clear sense of the people who designed it and made it."

Below fold, unless Hustwit has pulled it, a YouTube clip of that video.

Droid vs. iPhone: The reviews are in

Motorola and Verizon invited comparisons, and that's what they got

[Originally posted Nov. 5, 2009 on Fortune.com]

The Droid lands in stores Friday, and on Thursday the heavyweight reviewers -- which is to say the Wall Street Journal's Walt Mossberg and the New York Times' David Pogue -- weighed in.

Given that Motorola (MOT) and Verizon (VZ) pitched the Droid in its first TV ad as everything Apple's (AAPL) and AT&T's (T) iPhone was not, it was perhaps inevitable that every reviewer so far, including these two, treated its arrival as a grudge match.
 
Mossberg's review is positive but tepid -- especially the video version. He plods through the comparisons item by item like a slightly boring homework assignment. His top-line summary:

The man who put the 'i' in iMac

Meet the creative director who named a generation of Apple products


[Originally posted Nov. 4, 2009 at Fortune.com]

The TBWA\Chiat\Day creative team was horrified in 1998 when Steve Jobs pulled back a cloth and revealed the bulbous teardrop that came to be known as the Bondi-Blue iMac.
But then Jobs wasn't so crazy at first about the name they proposed for it.

No one had ever seen anything like the new computer, veteran creative director Ken Segall tells Cult of Mac's Leander Kahney in an exclusive interview published Tuesday evening.

"We were pretty shocked but we couldn’t be frank," Segall recalls. "We were guarded. We were being polite, but we were really thinking, 'Jesus, do they know what they are doing?' It was so radical."

Segall eventually came up with "iMac," a name that connected the original 1984 Macintosh with the rapidly expanding Internet. But Jobs took some convincing.

Below the fold, excerpts from the story as Kahney tells it:

The man who put the 'i' in iMac

Meet the creative director who named a generation of Apple products

[Originally published Nov. 4, 2009 on Fortune.com]

The TBWA\Chiat\Day creative team was horrified in 1998 when Steve Jobs pulled back a cloth and revealed the bulbous teardrop that came to be known as the Bondi-Blue iMac.

But then Jobs wasn't so crazy at first about the name they proposed for it.

No one had ever seen anything like the new computer, veteran creative director Ken Segall tells Cult of Mac's Leander Kahney in an exclusive interview published Tuesday evening.

"We were pretty shocked but we couldn’t be frank," Segall recalls. "We were guarded. We were being polite, but we were really thinking, 'Jesus, do they know what they are doing?' It was so radical."

Segall eventually came up with "iMac," a name that connected the original 1984 Macintosh with the rapidly expanding Internet. But Jobs took some convincing.

Below the fold, excerpts from the story as Kahney tells it:

Brit blog names iPhone 'world's worst'

In June, Apple's smartphone was the editors' choice at CNET UK. How times have changed.



[Originally published Nov. 3, 2009 on Fortune.com]

"The iPhone may be the greatest handheld surfing device ever to rock the mobile Web, and a fabulous media player to boot," writes CNET UK's Flora Graham in a mock award citation posted Tuesday. "It may be the highest-rated mobile phone on CNET UK, rocking the pockets of half of our crack editorial team. It's certainly the touchscreen face that launched a thousand apps. But as an actual call-making phone, it's rubbish, and we aim to prove it."

What follows is a litany of complaints no iPhone owner hasn't heard -- or expressed -- before. But to read them in a publication that four months earlier named Apple's (AAPL) device the "world's best touchscreen phone" is unexpected. And in Ms. Graham's voice, sort of fun.

To quote a few of her sharper lines: