Apple's Profit Soars 63%, Topping Views On iPod, Mac Sales

Apple blew out Wall Street forecasts late Monday and predicted a strong holiday season thanks to its refreshed lineup of iPod portable media players and Macintosh computers.

The tech leader earned $1.01 a share in its fiscal fourth quarter, 63% higher than a year earlier. Sales soared 29% to $6.22 billion.

Analysts polled by Thomson Financial expected Apple to earn 86 cents a share on sales of $6.07 billion.

The normally conservative company also guided Wall Street higher for its fiscal first quarter. It said it expects earnings per share of $1.42 on sales of $9.2 billion. That would translate to year-over-year EPS growth of 25% and sales growth of 29%.

Analysts expect Apple to earn $1.39 a share on sales of $8.6 billion for the holiday quarter.

Apple shares jumped 7% in after-hours trading. They rose 2% ahead of results to a record 174.36. They have more than doubled this year.

Apple sold 10.2 million iPods, up 17% from a year ago, and 2.16 million Macintosh computers, up 34%, during the quarter ended Sept. 29.

The quarter was "amazingly solid," said Morningstar analyst Rod Bare. "They sold a considerable number of Macintoshes and everything seems to be hitting on all cylinders."

Apple sold 1.12 million iPhones in the quarter too, bringing cumulative sales to 1.39 million.

Apple cut the price of the iPhone from $599 to $399 on Sept. 5. The company said it wanted to make the iPhone more affordable ahead of the holiday shopping season. But some analysts questioned whether demand was flagging.

Apple launched the iPhone June 29 in the U.S. with AT&T. (NYSE:SBT) (NYSE:T) It's preparing to roll out the iPhone in Europe. The combination smart phone, widescreen video iPod and mobile Internet device will be available Nov. 9 in the U.K. and Germany and Nov. 29 in France.

Apple said its gross profit margin was 33.6%, up from 29.2% in the year-ago quarter.

During the quarter, Apple came out with new versions of its iPod Nano, iPod Shuffle and iPod Classic music and video players. It also unveiled a new lineup of all-in-one iMac computers on Aug. 7. The iMacs feature 20- and 24-inch widescreen displays encased in aluminum and glass.

"We're looking forward to our best December quarter ever, as we head into the holiday buying season with the strongest product lineup in Apple's history," Apple Chief Financial Officer Peter Oppenheimer said in a conference call with analysts.

That product lineup includes a new version of Apple's Mac OS X operating system, called Leopard, which debuts Friday. Leopard boasts more than 300 new features. They include Quick Look, a new way to instantly see files without opening an application, and Time Machine, a way to automatically back up everything on a Mac.

The Cupertino, Calif.-based company also expects a big quarter from iPhone and the new iPod Touch. The iPod Touch, which launched Oct. 1, is like an iPhone except it can't make calls or take photos. It features the same touchscreen interface, Wi-Fi Internet access, and music and video playback capabilities as the iPhone.

Early data indicate iPod Touch sales are eating into iPhone sales, says Trip Chowdhry, an analyst with Global Equities Research.

Mac product sales accounted for 62% of Apple's revenue during the fourth quarter. Music products, such as iPods and the iTunes online store, accounted for 36%.

Newstex ID: IBD-0001-20414170

Originally published in the October 23, 2007 version of Investor's Business Daily.

Creative's Shuffle blaster

Lighter size dock makes Apple's smallest look like an old-school Nano.

Click to enlarge 1 of 1

Creative's i50 frees up your Shuffle based megamixes.

Now Creative and Apple are best buds, they're getting down to the serious business of punting banging gadgets into our tech hungry palms.

The new Travelsound i50 docking speaker looks like a high end fag lighter and has space at the top for your ever so tiny iPod Shuffle.

You can charge it up using USB, giving you 21 hours of tunes to get down to. Best of all you can leave it plugged in and charge the two bits of kit simultaneously. Clever.

It costs £39.99, but then what price liberating the music on Apple's smallest juke box, huh?

IPhone's Security Rivals Windows 95 (No, That's Not Good)

By Kim Zetter 10.23.07 | 8:20 AM

With Apple's announcement Monday that it shipped 1.12 million iPhones in the three months after its launch, the gadget's apparent popularity rivals some PCs. That has security experts warning of trouble, following revelations that Apple built the iPhone's firmware on the same flawed security model that took rival Microsoft a decade to eliminate from Windows.

"It really is an example of 'those who don't learn from history are condemned to repeat it'," says Dan Geer, vice president and chief scientist at security firm Verdasys.

It wasn't long after Apple released the iPhone in June that researchers discovered that every application on the device -- from the calculator on up -- runs as "root," i.e., with full system privileges. As a result, a serious vulnerability in any of these applications would allow hackers to gain complete control of the device.

The same problem in Windows played a big role in stoking a plague of internet malware-production that began with the Melissa virus in 1999, and continues with the malicious Storm worm today.

With the limited bandwidth of the iPhone, malicious code would be unlikely to slow portions of the internet. But malware could wreak creative havoc of a different kind. It might, for example, cause a phone to call numbers without the user's knowledge, seize text messages and a list of received and sent calls, turn the phone into a listening device, track the user's location through nearby WiFi access points, or instruct the phone to snap photos of the user's surroundings -- including any companions who may be in view of the camera lens.

Apple announced last week that it plans to release a software-development kit in February, to open the way for third-party developers to create applications for the iPhone. More applications, though, invariably means more attack routes for hackers. Apple CEO Steve Jobs said in his announcement that the company was taking time to release the SDK to deal with security issues, suggesting that a future operating system update to the phone might only run applications approved and digitally signed by Apple.

But this wouldn't solve all of the security problems.

"As long as everything runs as root, there are going to be bugs and people are going to find them (to take over the device)," says Charlie Miller, principal security analyst for Independent Security Evaluators, who, with colleagues, discovered the first reported bug with the iPhone earlier this year. The bug, found in its Safari browser, would have allowed hackers to take control of a phone. The researchers criticized Apple in their paper (.pdf) for designing iPhone applications to run as root.

Although Apple issued a fix for the Safari vulnerability in July, the company never responded to criticism about the root problem with its phones. Apple also didn't respond to calls from Wired News for this story.

Last week, H.D. Moore, a security researcher who developed the Metasploit Framework security and hacking tool, posted information on his blog about a vulnerability in the iPhone's tiff library that is used by the phone's e-mail , browser and music software. He also supplied detailed instructions on how to write code to exploit the bug and provided an exploit to gain remote control of an iPhone.

Computer security professionals call the iPhone design flaw a fundamental mistake, and say that Apple should have known better.

"The principle of 'least privilege' is a fundamental security principle," says Geer. "Best practices say that if you need minimal authority to do (something on a system), then you don't need to have more authority than that to get it done."

Microsoft has been roundly criticized for years for releasing early versions of its Windows operating system with administrative privileges automatically enabled. This gave hackers who gained access to Windows machines complete privileges to modify the operating system and take control of the machine.

It took a while for the company to get the message, but Redmond finally closed the hole with its Vista operating system this year, which included a User Account Control feature to control the level of privileges required for various functions on a Vista machine.

" I guess Apple hadn't learned those lessons and is now going to learn them the hard way," says Geer.

Miller says that Apple will need to redesign the entire firmware to fix the problem -- which would require owners to install a pretty hefty update.

"If you start from the beginning with security in mind and you design your product thinking about security as you go, it's not really any harder to design a secure product than an insecure product," he says. "Once you've already got it out in everyone's hands, it's a little harder to go back and add security. And that's really what they need to do at this point."

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iPod and iPhone effect boosting Mac

Remember... Apple also makes computers

Dan Grabham

Analysts are predicting yet more big things for Apple. But this time they're not talking about the iPod. Or the iPhone. This time, it's all about the Mac.

Getting ready for Leopard

Figures announced last week by analyst Gartner showed Apple with an 8.1 per cent US market share for the third quarter this year, beating Toshiba and Gateway into third place behind HP and Dell. Mac sales grew by 37.2 per cent, double the industry average.

"The Macintosh has a lot of momentum now," enthused Steve Jobs of the stats. "It is outpacing the industry." Jobs' comments were reported by the New York Times ahead of Friday's launch the latest version of OS X - Leopard.

Read: Apple grabs 8.1% of PC sales

From what we've seen Leopard's feature set is impressive and would appear to match Windows Vista for polish and function at almost every level. But it won't necessarily make you run out and buy a new Mac.

Despite the enhanced feature set, analysts predict Leopard won't have a direct effect on sales of new Macs - rather like Vista hasn't boosted PC sales the way it was predicted to.

Jobs sees regular Mac upgrades

There's no doubting the Mac still reserves a special place in Jobs' heart. Despite the all-conquering nature of the iPod, Jobs gives the impression at each keynote he delivers that he'd love to see a Mac in every classroom and every home. And he seemed to play down reports of a break between this version of OS X and the next generation of the Mac OS.

"I'm quite pleased with the pace of new operating systems every 12 to 18 months for the foreseeable future," continued Jobs. Apple has become renowned for its pace of development that compares favourably to Windows Vista's five year-plus gestation period.

Jobs also couldn't resist a dig at Microsoft's latest OS, saying "everybody gets the Ultimate edition [of Leopard]." Of course Jobs is implying that, unlike Windows releases, Leopard is only available in one flavour for £85. He would, however, seem to be forgetting about the five-user license and server versions. Details, details...

Mac OS X Leopard is released on Friday 26 October. We'll be bringing you our first impressions of the system then, as well as installing it on Macs new and old.

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Opinion: iPod touch is a business tool, too

By Seth Weintraub, Computerworld

Editor’s Note: This story is reprinted from Computerworld. For more Mac coverage, visit Computerworld’s Macintosh Knowledge Center.

Apple’s new iPod touch is a revolutionary device, much like its iPhone cousin. It offers in one svelte package a host of cool features, everything from Web browsing over Wi-Fi to VPN access and a host of enterprise-useful apps. Sure, you can listen to music, but there's also a practical side, the side that makes it a perfect tool for business. (I know what a lot of you are thinking: In your dreams. Just stick with me a minute.)

Having spent some time with Apple’s latest iPod, which hit the market in September and starts at $299, I think there’s a lot of on-the-job use you can get from this little guy—so much so that you might even be able to expense it at work. Not only does it arrive out of the box with useful software, but apps that can be added to it with a little tweaking make it feature-filled enough to keep almost any road warrior happy.

Not convinced? Let me break these down by application, and feel free to file this list away for any future iPod touch purchase order justification. That way, when you sit down with the CFO to explain why you want, er, need one, you’ll have a ready-made checklist handy.

The Web

First and foremost, the iPod touch has a darn good almost-full-featured Web browser—not just a mobile browser, but a real browser. Safari on the iPod Touch is much better than anything else out there. The scrolling, panning and zooming around that’s possible put it in a usability league with far larger devices like tablet PCs.

While it doesn’t do Java or Flash (yet), it will still handle 90 percent of the business Web apps out there. And you can open up eight or more different Web windows at a time. That’s great for multitasking productivity.

Mobility

It sounds obvious, but it’s worth repeating: The iPod touch can go with you everywhere—in the conference room, at a client’s office, in the car, tucked away in your shirt pocket, even in the bathroom. It weighs just over 4 ounces and is 4.3 inches long, 2.4 inches wide and less than one-third of an inch thick. And it still boasts the best 3.5-inch screen I’ve ever seen.

VPN

As more office apps move to the Web, the browsing functions make this device more valuable. It’s not just for public Web apps, either. For companies with a VPN, Apple has included some of the most widely used VPN software out there—Cisco notwithstanding—to allow you to connect to Windows and Mac VPN servers. Once connected, you’ll have access to all of your internal Web applications. Talk about an ultraportable office!

Contacts

A few years back, companies bought contact books for their employees. As the digital age progressed, those contacts got rolled into laptops and smart phones.

The iPod offers yet another extension of that evolution, allowing users to browse through contacts on a large but mobile screen. With touch-screen ease, just tap, flick, tap again and your contact info is staring you in the face. It is also easier to add contacts from a business card to the iPod touch than to a typical phone because of the iPod's QWERTY keyboard, large screen and large tapping area.

Clock and Calculator

The world clock is extremely useful when traveling across time zones, crucial for the jet-setting international exec. The same is true for the built-in alarm clock.

And while it’s as simple as they come, the Calculator application works just as you’d expect, whether calculating mileage reimbursement costs or figuring out the tip on that two-martini business lunch. Everyone needs one once in awhile—the calculator, not the martini.

Photos, videos and music

The iPod includes a great photo viewer for finding and quickly displaying image files for clients. It also offers relatively high-resolution playback of videos, whether commercial, instructional, artistic or just plain fun.

And the music software is great for listening to audiobooks and language tapes—being a recent Paris transplant, I can attest to this—and frankly, there’s a lot of learning that can take place during the inevitable downtime between business meetings or flights.

Calendar

While Apple handed iPod users a major blow by disabling the write functionality in its calendar app—you’ll need an iPhone for that—the scaled-back software on the iPod Touch is still a useful tool for taking your desktop timetable on the road—even if you can’t edit or sync it on the fly.

Hacking the iPod

That limited functionality brings me to my next point: This gadget could be so much better if Apple just let us play with it a little bit. And while the company has announced plans to offer a software development kit for the iPhone and iPod touch next year, there’s nothing out yet, at least not officially. I decided it would be fun to see how much more business functionality I could get out of the iPod touch after applying a few much-touted hacks.

Note: If you have to tell the CFO you plan to hack your iPod, you’re not likely to get an OK. And besides, why risk invalidating your warranty? So don’t try this at home. All I’m pointing out is how much potential the device has, and how much more value it will offer, once new apps are created. And they will be created.

Having a hacked iPhone, I lifted a lot of the applications I already own directly from that device and transferred them to the iPod Touch. Some preferences files and bundles needed to be moved as well. Once installer.app was on my iPod, hacking it took only a few minutes. Here’s a sampler of what I added, which should give you an idea of how powerful this device could grow to be.

The first thing I added was the Notes application from my iPhone. This is a simple, yet extremely elegant program that allows you to take notes using the keyboard on the iPod. It will also sync with the Notes in Leopard. Apple should have included it in the iPod Touch as a default application.

Next, I added the Maps app. While it is of little use in the car without AT&T’s EDGE Network—which is what the iPhone uses when a Wi-Fi connection isn’t available—Maps is great for plotting out trips beforehand and works just as well as it does on the iPhone. Think of it as Google Earth in your pocket.

The most important thing for me is having an offline mail client. What better than Apple’s mobile Mail app for the iPhone? It works fantastically well on the iPod with four concurrent IMAP clients. My only gripe is that you can’t set the frequency for checking the e-mail servers to less than five minutes. However, because you can write offline and sync when you hit a wireless access point, it is a natural fit. Why Apple chose not to include it is beyond me, unless it wants to upsell users to the iPhone.

The Weather app—another iPhone fav of mine—is great for quickly checking forecasts in your favorite destinations. It also caches this information for offline use, making it another good fit.

Apple’s iPhone applications aren’t the only ones that work well with the iPod Touch; hacked third-party apps work pretty well, too.

The first one I tried was VNSea.app, a VNC remote desktop client. The installation was painless, it connected to my Mac OS X and Windows servers quickly, and the remote functionality worked well.

The only downside is the obviously small screen, which doesn’t have the ability to pan. That means you only control the upper 320-by-480-pixel portion of your screen. I found that if I put my important apps up top, I was in pretty good shape. It also makes a great Wi-Fi remote control for your Mac mini media center.

Next, I added the Apollo IM client. Although I prefer the interface of another mobile application, MobileChat, Apollo lets me connect to my corporate MSN network as well. So for my purposes, it gets the nod. This is a perfect example of an application the iPod Touch needs. If Apple won’t add it, then it should at least let others do so.

Another biggie for me is RSS feeds. Google Reader on mobile Safari is great, but again, it’s not very helpful when offline. Thankfully, the hacker community has stepped in with RSS.app. It works exactly as an offline RSS reader should. Add in the feeds you want, and it polls them at regular intervals. Whenever you have a little downtime on the road, use it to catch up on your favorite news.

Perhaps the most glaring hole in the iPhone/iPod software lineup is the lack of GPS. That’s where Navizon’s Soft GPS application comes in handy. It makes a great companion to the mobile Maps application, and while not always accurate to the precise street or neighborhood, it makes a great starting point. On the iPod touch, Soft GPS uses data about your Wi-Fi IP address, leaving a lot of room for error. (The iPhone version uses cellular radio tower triangulation and is much more accurate.)

Also missing from the iPod—and from the iPhone, for that matter—are offline reference libraries and e-book readers. I installed weDict.app and Books.app. The weDict application allows you to install a number of offline encyclopedias, and there are more than 20 available online.

Books.app is an e-book reader. Apple is missing a huge market by not putting these types of applications on its mobile devices. The iPod touch screen, like the one on the iPhone, is amazingly bright, and the fonts are smooth and easy to read. Text-centric apps are a natural.

So where does this leave the intrepid business traveler about to make his case to the finance folks at the office? It’s a pretty simple message: Apple has created a fantastic device with some amazing software that makes it a competitive piece of business hardware right now—and opens the door for even more advances down the road.

Sure, it looks as though the marketing gurus at Apple decided to differentiate and delineate the iPhone and iPod as, respectively, “iPro” and “iToy” devices. Be that as it may, the iPod touch offers a number of useful tools for business users already. Spell that out to the CFO and he might just agree. Heck, the CFO might suddenly see the need for an iPod touch, too.

[Seth Weintraub is a global IT management consultant specializing in the technology needs of creative organizations, including The Paris Times, Omnicom and WPP Group. He has set up and managed cross-platform networks on four continents and is an expert in Active Directory/Open Directory PC and Macintosh integration.]

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iPod News: XtremeMac Announces Tango Studio

XtremeMac, a leading maker of iPod accessories, has announced a new speaker dock called the Tango Studio. Tango Studio is a compact audio system perfect for a bookshelf or desktop. The system is powered by two full range loudspeakers and a full stereo high-dynamic amplifier to deliver excellent audio performance.



Its sleek design features a retractable iPod dock that is compatible with all dock connector iPod models, plus an FM radio. Tango Studio also has a blue LED display that relays the volume level, operating mode and radio frequency information. The display is elegantly concealed behind a cloth grill when not in use, yet easily visible when the display comes on.
Tango Studio includes a wireless remote that allows you to control the system from across the roomup to fifty feet away. The auxiliary line-in jack on the back of the unit allows you to connect other devices such as an iPod shuffle or gaming system.

With a built-in FM radio, auxiliary line-in jack and included wireless remote, Tango Studio is the only room audio system you will ever need.

FEATURES

• High-dynamic full range speakers for superior sound
  
• Built-in FM radio and auxiliary line-in jack
  
• Advanced remote for iPod and radio
  
• Retractable universal dock well fits any iPod
  
• Easy to read display behind sleek cloth grill
  
• Compact design perfect for home, office or dorm
  
• Designed for iPod touch, iPod classic, iPod nano (1G, 2G, & 3G), iPod with video, iPod (4G), iPod mini
  

DIMENSIONS

• 11.5" wide
  
• 6.5" tall
  
• 3.875" deep
  

The Tango Studio is available for preorder at XtremeMac's web site for $79.95.

: - ( The iPod Touch Fails to Wow

Apple's newest iPod adds wireless downloads and Web access, but sacrifices some of the very things that have made the iPhone and other iPods so popular

Apple Chief Executive Steve Jobs typically ends his public appearances by unveiling some innovative product that's sure to stir a frenzy. The iPod Touch isn't that device—at least not yet.

Although it's a great incremental addition to the iPod lineup, the Touch seems mostly an interim gesture. It strikes me as a way to tide over would-be iPhone owners who were turned off by the need to sign a cellular contract with AT&T (T), even if they only wanted to use Wi-Fi on that device.

Don't get me wrong. The Touch—like virtually every Apple (AAPL) product coming out of Cupertino, Calif., these days—is a beautiful device. Relieved of cellular and Bluetooth radios, the Touch is thinner and, at 4.2 oz., half an ounce lighter than the iPhone. It shares the same sleek scratch-resistant glass screen and metal finish.

Pod Peeves

Judged against its iPod peers, however, I was surprised to find the Touch lacks some of the intuitive, user-friendly features that have made the product line so successful. Two versions are available, one with 8 gigabytes of storage for $299, and one with 16GB for $399.

As with the iPhone, when you first turn on the Touch, you need to connect it to an active iTunes account. This syncs it with information such as how much money you have available for wireless music downloads. I found this requirement a little annoying, since you can't use the device until you do it.

Another annoyance: If you happen to have more than one iTunes account, you'll have to remember to log into the desired one on your computer before you sync the device. The device will automatically use that account later when you connect via Wi-Fi, at which point you won't be able to switch accounts.

Manually Managed

Once that was all cleared up, I wirelessly downloaded the new Jennifer Lopez single, Do It Well, from iTunes over my Wi-Fi Internet connection. While I was pleasantly surprised by how quickly and easily it downloaded the file, that little "I love Apple" moment quickly turned to frustration when I plugged the Touch back into my computer. I kept waiting for the downloaded music to sync back to the music library on my iMac, but nothing happened. Three tries later—nada.

Turns out, because I initially checked "manually manage my account," the Touch wouldn't automatically sync downloaded tracks to my computer. The quick-start guide and online instructions were little help, so it took trial and error to figure out how to sync. Fortunately, these are problems you typically work through once and never have to deal with again.

With just two buttons on the device—one below the screen for calling up the home screen and one on the top left edge for turning off the display—the icon-based touch screen makes navigation both a snap and a pleasure. As with the gee-whiz features of the iPhone's screen, you can use a finger to zip through music playlists, or finger tabs and pinches to zoom in and out on a Web page or photo.

Some Missing Apps

Having reviewed the iPhone as well, I couldn't shake the feeling that Apple has a few applications waiting in the wings to make the Touch even more attractive. While the Web-browsing and YouTube features are cool, they're inaccessible when there's no Wi-Fi hotspot available. With the iPhone, you have the slower cellular data connection to fall back on for Web access. This limitation with the Touch will improve only slightly as Starbucks (SBUX) rolls out free access to the iTunes store over the coffee chain's Wi-Fi routers, but you still won't be able to browse the Web.

Video presents another unexpected obstacle: While the Touch is equipped to play video clips, you can't download them wirelessly to the device from iTunes. I transferred a few episodes of the Colbert Report from my computer, and they played without a hitch. The shiny glass screen doesn't make for the best viewing under bright lighting, but the 3.5-in. display puts the product several notches above the iPod Classic's 2.5-in. screen for video.

The Touch also lacks the iPhone's e-mail application, as well as its microphone, camera, and Bluetooth connection. To be sure, omitting a microphone and Bluetooth isn't much of a surprise, since enterprising users might have exploited them for calls with Skype or another Internet phone service. Also missing are the iPhone's widgets for gathering stock quotes, weather forecasts, and other information.

Sound Off

On Oct. 17, Apple announced that it will let third-party software developers create applications for both the iPhone and the Touch starting in February. That could go a long way toward addressing my feelings that the Touch's suite of applications isn't strong enough to make it worthwhile.

But perhaps more than anything, I was sorely disappointed by the lack of built-in speakers, since the key feature distinguishing the Touch from other iPods is its ability to wirelessly download music. So for example, because there are no speakers, you can't sample a new clip with a companion who might offer that extra advice on whether you should shell out 99¢ for the track.

An Apple spokesman says the company consciously decided not to include a speaker since the focus of the Touch is high-quality playback of music and video. I would argue that even a tinny-sounding speaker is better than none at all.

In short, the Touch may be the coolest new kid on the iPod block, but it will appeal to a smaller audience than the Classic or Nano because of its limitations and inflated price tag.

Editor's Rating:

The Good: Built-in Wi-Fi for music downloads and Web access; large screen

The Bad: No built-in speaker; no dedicated volume button for music

The Bottom Line: Better iPods are available, but not with wireless music downloads and mobile Web access

Apple relents, but is it enough?

Yesterday, Apple CEO Steve Jobs announced that his company will release a software development kit (SDK) for the iPhone in February. Today comes word from the Paris-based International Herald Tribune that Apple has struck a deal in France with Orange, a division of France Telecom, to sell officially unlocked iPhones.

Apple was forced to make the move because French law forbids telecom service providers from tying handsets exclusively to their networks; the law continues to insist that cellphone users can move to a different service provider and take their phones with them. So Orange will sell two iPhones: a locked model, and an unlocked model.

One catch with the unlocked iPhone is that buyers must prove they live in France. Another catch is that it will be more expensive than the hefty $560 (U.S.) Apple plans to charge French customers for the locked version.

Meanwhile, Apple has signed deals that resemble the exclusive one it made with AT&T in the United States with companies that do not operate under French laws: O2 in Britain, the wireless division of Spain's Telefonica, and Germany's T-Mobile, a subsidiary of Deutsche Telekom.

It must have galled Jobs, a notorious control freak, to loosen his grip on the iPhone innards. I can understand some of his reluctance to delay the SDK, which could leave an Apple product vulnerable to hackers and virus makers. Apple has, after all, managed to stay afloat on a reputation that its products are almost impervious of viruses, worms and various other villainies.

It’s an enviable record, and if Jobs credits his reluctance to lift the lid on his products as the reason for that record, then it will be hard to dissuade him.

There are two thoughts that come to mind in light of these events.

First, that the United States has lagged behind Europe in its attitude toward business. Under the guise of not interfering with the marketplace, U.S. lawmakers have backed off corporate restrictions to protect consumers. And guess what? Corporations have seized the bit and are heading furiously toward monopolistic practices. In high tech, that has resulted in the arrogance of Microsoft, which thought that the European Union would collapse as easily as Washington did before the gods of free enterprise, but got soundly slapped around by the EU anti-trust forces; the same mule-headedness forced Apple to decide whether to maintain its control of the iPhone and kiss the French market goodbye, or to relent and offer an unlocked version to comply with French law.

The kind of pro-consumer hardball played by the EU and France is actually forcing companies to give competitors a level playing field. Laying off corporate greed is not the way to encourage competition, despite what Washington has come to believe.

Second, it’s really astonishing that Apple wanted to protect its mobile operating system from application developers, even for the first few months, when companies such as Microsoft have clearly shown that the more access you give developers, the stronger the product becomes.

Soon, Google is rumoured to release its hush-hush mobile GPhone with an open-source operating system, Skype is rumoured to be considering its own competitive product, and FIC has announced it will release its Neo1973, which runs on the OpenMoko Open Source operating system.

What’s common to these competitors is that they’re all using open-source software. Soon, the iPhone will be swamped by serious competition.

No doubt the Apple iPhone will still look better — no one can match Apple’s design team — but the damage has been done: Apple is behaving like a stodgy manufacturer desperately hanging on to its product and trying to control the way you use it and the way you buy it.

It won't wash.

Apple's new Leopard OS could stalk Windows

JEFFERSON GRAHAM, USA TODAY

A Leopard is set to join the Apple family, the latest in a string of animal-named products aimed at taking a bite out of the competition.

Apple calls Mac OS X Leopard its biggest operating system upgrade ever. At $129, it's due in stores Oct. 26 and promises 300 new features.

Leopard, which replaces OS X Tiger, arrives as Apple is having a record year. Its stock has doubled in 2007, from about $85 a share in early January to nearly $170 now. It has sold more than 1 million iPhones, the year's most hyped and discussed tech product. And Apple's iPod business remains strong. New iPod units recently introduced include a video-capable Nano, a small media player that is the most popular in the line.

While much of Apple's attention has been focused on non-computer activities, Leopard is aimed at a core goal - selling more Macintosh computers. The new operating system has loads of new stylistic bells and whistles, with two notables:

• Time Machine automatically backs up files without your involvement and lets you "turn back time" to retrieve a lost file. It's different from other backup utilities in that with "a couple of setup clicks, you're done," says Apple Senior Vice President Phil Schiller. "Everything is automatic."

• Boot Camp gives you the ability to run Windows on a Mac. All you need to do is buy a copy of Windows software, and you can run both platforms on one machine.

Boot Camp was first introduced in early 2006 as beta software that could be accessed from Apple's Web site. Apple says it was downloaded 2.5 million times.

With the release of Leopard, the software will no longer be available as a free download. At any rate, Wolf Bytes analyst Charles Wolf says the broader audience of 100 million shoppers who frequent Apple retail stores will pay closer attention to an operating system feature than a download.

"Most Apple Store visitors are Windows users, and once they see how they can use Windows on a Mac, so many more will be switching," says Wolf. Apple's computer market share is 3 percent worldwide and 7.8 percent for the non-business U.S. market, says Roger Kay, an analyst at Endpoint Technologies. "Market share is clearly increasing for Apple. It's up 50 percent from the 2 percent Apple had from 2000 to 2004."

Kay thinks the idea of millions of Windows computer users switching to Apple with the Leopard release is just not about to happen. "You have to buy Windows, install it and hope it works," he says. "That's a cumbersome process."

Buying Windows XP or Vista will tack an additional $200 onto the price of the Apple computer.

Microsoft launched Vista in February, the latest overhaul of its operating system. It offers advanced multimedia capabilities and improved security but has left some consumers grumbling over upgrade and software incompatibility woes.

Mike McGuire, an analyst at research firm Gartner, says those kinds of issues are rare with Apple operating system upgrades.

"Vista was a whole new platform, while the Mac OS X platform was first rolled out in 2001," says McGuire. "It's been revived and enhanced since, but it shares the same core platform, so I don't expect any upgrade issues."

While Microsoft says Vista is doing just fine - about 60 million copies have been sold - several computer manufacturers are now offering the previous Windows version, XP, to consumers who prefer it.

"Apple has a real chance to play off Vista unsatisfaction," says Kay.

The lowdown on Apple's Leopard

• Price: $129

• Goes on sale: Oct. 26 at 6 p.m.

• Own a new Mac? If you bought a new Macintosh computer from October through the launch date, Leopard will cost you $9.95 (for shipping and handling).

• Buying a Mac? Purchasers of Macs on the opening weekend of Leopard sales will find installation discs packed with their computers. Pre-installed versions of Leopard will begin showing up on new Macs within days after the Oct. 26 debut.

• Have an older Mac? Apple says Leopard will work fine on most recent Macs. The minimum specs are 512 megabytes of RAM and processing speed of 867MHz. Entry-level iBooks and the since discontinued eMacs will not do well with Leopard, Apple says.

Apple opens iPhone software

APPLE moved yesterday to placate restless software developers by announcing plans to allow software makers to create programs for its iPhone mobile handset.

The announcement marks a change of tack for Apple, which has long resisted opening its products to outsiders in favour of closed systems in which it controls the features loaded on its hardware.

It is likely to spark a flurry of software development as programmers rush to build applications that take advantage of the iPhone's touch-screen interface and its ability to make calls, browse the internet, and store photos and music.

"You're going to get a lot more applications than you would if you have a closed environment," said Van Baker, an Apple analyst at market research group Gartner.

Such applications could include contact management and other business software - a lack of which has limited the iPhone's appeal to corporate customers, who are among the biggest buyers of smartphone handsets.

In a statement on Apple's website, company co-founder and chief executive Steve Jobs said it planned to provide a development toolkit to outside programmers by February.

"We are excited about creating a vibrant third-party developer community around the iPhone and enabling hundreds of applications for users," Mr Jobs said.

Apple has sold more than 1 million iPhones since the handset was launched in June.

By Kevin Allison

October 19, 2007 09:43am

Apple and T-Mobile Announce Exclusive Partnership for iPhone in Germany

BERLIN—September 19, 2007 — Apple® and T-Mobile today announced that T-Mobile, the leading network operator in Germany, will be the exclusive German carrier of Apple’s revolutionary iPhone™ when it makes its debut in Germany on November 9. iPhone combines three devices into one—a mobile phone, a widescreen iPod®, and the best mobile Internet device ever—all based on Apple’s revolutionary multi-touch interface and pioneering software that allows users to control iPhone with just a tap, flick or pinch of their fingers. Apple sold its one millionth iPhone just 74 days after it went on sale in the U.S. on June 29.

“We’re thrilled to be partnering with T-Mobile to bring the iPhone to Germany,” said Steve Jobs, Apple's CEO. “Customer response to iPhone in the US has been incredible, and we can't wait to introduce T-Mobile customers to the most revolutionary mobile device on the planet.”

“We are convinced that we can get our customers excited about experiencing the mobile internet with the iPhone,” said Hamid Akhavan, CEO, T-Mobile International. “I am proud that Apple and T-Mobile have become partners. The best mobile device currently on the market will soon be operating on the best network in the country.”

In addition to all the revolutionary features that made iPhone so popular in the US, iPhone users in Germany will have access to Apple's latest music offerings on iPhone including the recently launched iTunes® Wi-Fi Music Store. The iTunes Wi-Fi Music Store offers customers the ability to browse, search, preview, purchase and download songs and albums from iTunes over the built-in Wi-Fi on their iPhone. No computer is required and when the customer connects their iPhone back with the PC or Mac, their music automatically syncs back into their iTunes library.

The T-Mobile network will also support iPhone’s unique Visual Voicemail feature, which enables users to immediately randomly access those messages that interest them most.

By the end of 2007, T-Mobile will be the only network operator in Germany to offer EDGE throughout its entire GSM network. EDGE accelerates the mobile data transfer rate to over 220 Kilobits per second, which makes it almost four times as fast as ISDN in fixed-line networks. With EDGE, the German market leader offers its customers 100 percent broadband – anywhere and at any time. With 20,000 HotSpots worldwide, T-Mobile is the biggest Wi-Fi provider in the world. Of those HotSpots, 8,600 are in Germany, where HotSpot users can achieve download speeds of up to 11 megabits per second.

Pricing & Availability
iPhone is scheduled to go on sale on November 9 and will be sold in Germany through Telekom Shops of Deutsche Telekom and the T-Mobile web shop. iPhone requires a new 2-year T-Mobile tariff and will be available in an 8GB model for €399 including V.A.T. and will work with either a PC or Mac.

iPhone activation will require an Internet connection; an iTunes Store account or a major credit card; the latest version of iTunes available at www.itunes.de and a PC or Mac with a USB 2.0 port and one of the following operating systems: Mac OS X v10.4.10 or later; Windows XP Home or Professional with Service Pack 2 or later; or Windows Vista Home Premium, Business, Enterprise or Ultimate Edition.

T-Mobile International is one of the world’s leading companies in mobile communications. As one of Deutsche Telekom’s three strategic business units, T-Mobile concentrates on the most dynamic markets in Europe and the United States. Almost 112 million mobile customers were served by companies of the Deutsche Telekom group by June 30, 2007. The common technology platform is based on GSM, the world’s most successful digital wireless standard. This also makes T-Mobile the only mobile communications provider with a seamless transatlantic service.

Apple ignited the personal computer revolution in the 1970s with the Apple II and reinvented the personal computer in the 1980s with the Macintosh. Today, Apple continues to lead the industry in innovation with its award-winning computers, OS X operating system and iLife and professional applications. Apple is also spearheading the digital media revolution with its iPod portable music and video players and iTunes online store, and has entered the mobile phone market this year with its revolutionary iPhone.

A well-polished iPod

Of the more than 100 million iPods Apple Inc. has sold, not one of them has been as polished and unblemished as the new iPod nano.

Nicknamed ‘Fat Boy’ when photos of the device were leaked online a few weeks before its Sept. 5 release, the third generation nano is anything but chubby. Sure, it’s shorter and wider than previous nanos, but it remains so skinny owners may be tempted to crack it open to see how so much is crammed inside so small a package.

iPod nano Packs a Punch

Editor's Rating:

The Good: Beautiful video and music in a tiny package

The Bad: Could have used more internal storage capacity given the new emphasis on video

The Bottom Line: The nano is the most popular iPod of them all and should remain so

From the moment the first one was launched in 2005, I never really liked Apples iPod nano line, favoring instead the bulkier, hard-drive equipped portion of the iPod family. I have a lot of music, and I dont like to think about which bit Im going to leave at home on any given day. Moods switch, and one minute Im in the mood for some John Mayer, and the next I need a shot of John Coltrane or an obscure Van Morrison bootleg.

So I stuck with my 40-gigabyte iPod—until a year ago. That was when, on a lark, I decided to buy a second-generation nano with just 8 GB of memory. Already weighed down by a cell phone and a Blackberry (RIMM), the tiny nano compared favorably with its heftier sibling. It quickly became my main iPod, and I started using the larger one less.

Picture perfect

Now it all makes sense to me why the nano has, in two short years, become the most popular iPod. Apple (AAPL) doesnt break out figures on the mix of sales, but educated guesses suggest that nanos account for about half of all iPods sold.

The latest edition of the nano, unveiled in September, was overshadowed by the launch of iPod touch, a new line with Wi-Fi and a wide-screen display. Nevertheless this third-generation nano sports some impressive enhancements, starting with a video-capable screen.

Being the most popular member of the iPod team clearly made video a must. Yet given its size, you might think the notion of watching video on it silly. The nano's screen measures just 2 inches diagonally, which is half an inch smaller than the display on the iPod classic, and not much more than half the size of the 3.5 inch screen on the touch.

But small has its advantages, and I've been pleasantly surprised after a few weeks of watching videos on the nano that I am barely aware of the screen size. The image quality is gorgeous, especially with animated fare like Japanese anime. Its bright enough and clear enough that the size matters less, which is the point. The screen density—the number of pixels crammed into each square inch of screen space—is the highest of any iPod that Apple has ever shipped, and the end result shows it.

Quality sound

In fact, compared with larger iPods, the new nano makes it easier to sneak a quick video break. I found myself watching Comedy Centrals South Park during a break in the action at work. Seriously. Just try it. Since it's so small, there's a better-than-average chance the boss won't see it if he or she happens by while you're watching.

The model I tried had 8 GB of storage capacity, which is enough to hold eight hours of video, though I dont think my aging eyes could watch it for quite that long. But if you cram it with video, there won't be much room for music. So if you're intent on toting around gobs of both audio and video content, you may be better off with the 160-GB capacity of the latest iPod classic.

Beyond size and storage considerations, the nano sounds as good as any iPod. The chips responsible for playback are the same as those in the classic, so forget any notion that a smaller device might be inferior in terms of sound quality. The fidelity is as good as ever. And browsing albums on the screen with Apple's Coverflow—a special effect that makes the covers look like they're whizzing by as you scroll through them —is incredibly cool, though I found I didnt use it much. Its better on the iPhones touch screen.

Music vs. video

Measuring 2.75 inches tall, 2.06 inches wide, and about a quarter of an inch thick, this nano is slightly wider than its predecessor, but shorter and narrower. I actually had trouble finding it in a pocket amid my office ID card, ATM card, and wad of cash. A few times I thought I had forgotten it only to find it later.

Given the choice, I would have tolerated a thicker unit for a little more flash memory. Since the iPod touch maxes out at 16 GB, I would have liked to see the nano go that high as well. At $149 for a 4-GB model and $199 for 8 GB, the nano is fairly priced. But I would be willing to pay more, say $250, for one with more storage.

Clearly, the addition of video to the mix of media I carry around forces the unpleasant choice that intermittently drives me back to my spacious, hard-drive based iPod. But for sheer multimedia portability it's hard to beat the new nano.

Suit Accuses Apple, AT&T of Monopoly

SAN JOSE, Calif. (AP) — Complaints over Apple Inc.'s use restrictions and recent software update for the iPhone have erupted in two lawsuits alleging Apple and its carrier partner, AT&T Inc., engaged in illegal monopolistic behavior.

Two separate lawsuits were filed Friday in San Jose — one in federal court and the other in state court and both seeking class-action status.

The federal case accuses the companies of unfair business practices and violations of antitrust, telecommunications and warranty laws. The state case raises some of the same allegations.

Apple spokeswoman Susan Lundgren and AT&T spokesman Mark Siegel both declined to comment on them Wednesday.

The federal case was filed by the firms of Hoffman & Lazear in Oakland and Folkenflik & McGerity in New York on behalf of iPhone owners Paul Holman and Lucy Rivello. The state case was filed by Saratoga attorney Damian Fernan