- August 11th, 2008
- 1:54 pm
Apple has sold nearly 60 million iPhone applications till date, revealed Steve Jobs to WSJ.
According to the company’s Chief Executive, Apple is taking more than $1 million per day from the iTunes App Store.
“This thing’s going to crest a half a billion, soon,” Jobs says, adding that it will possibly be worth double that at some point in time.
Apple is keeping 30% of the total proceeds from application sales while developers take the rest, but Jobs believes the real benefit to Apple will be from the extra iPhone and iPod Touch sales that the store will generate.
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- August 2nd, 2008
- 10:31 am
Now the iPhone developers can keep a track of how the applications are doing in the App Store with daily updates. All they have to do is go to iTunes Connect to find out how many times the apps are being downloaded daily.
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- September 11th, 2007
- 10:39 am
Mobile operator Vodafone is to offer customers the chance to download an unlimited number of music downloads direct to their mobile phones for just £1.99 per week.
The service, called MusicStation, will be available on Vodafone’s new range of mobile handsets and lets you choose from one million tracks from all four major record labels.
Though many new mobile phones are able to store and play MP3 files, there are currently few services that let you download music direct to your phone, though Nokia plans to launch a similar service later in the year and iPhone owners in the US can use the iTunes Wi-Fi store.
“This is a first for music on the mobile in the UK and means a fundamental change to the way people experience music on their phones,” said Tim Yates of Vodafone.
There are 18 new handsets from manufacturers such as Nokia, Samsung and Sony Ericsson, which will offer mobile internet access as well as the MusicStation package, which will go live some time before Christmas.
One of the record labels involved, Universal, hailed the new service.
“MusicStation is the most compelling music experience on mobile today. Giving users unlimited access to our and other labels’ catalogues, all for £1.99 a week, it creates the UK’s first digital music experience on mobile that has true mass market appeal,” said Rob Wells of Universal.
www.vodafone.co.uk
A well-known hacker claims to have overcome restrictions on Apple Inc.’s iPhone, allowing highly technical users to bypass AT&T Inc.’s network to use the phone’s Internet and music features.
In a post dated July 3 on his blog, Jon Johansen, 23, a prolific hacker of consumer electronics gadgets since he was a teenager in Norway, said “I’ve found a way to activate a brand new unactivated iPhone” without signing up for AT&T service.
“The iPhone does not have phone capability, but the iPod and Wi-Fi work. Stay tuned!” he wrote on his long-running blog, which is combatively named “So Sue Me.” The post was entitled “iPhone Independence Day,” a play on the July 4 U.S. holiday.
The site contained technical details for other hackers, as well as links to software necessary to complete the process.
One potential use would be for an iPhone user living or traveling outside the United States to access the iPhone’s music player and Internet service over Wi-Fi connections without using the phone.
AT&T spokesman Mark Siegel said it was necessary to activate the iPhone on AT&T’s network to ensure optimum performance. Using the phone without AT&T’s two-year service contract was unauthorized under the phone carrier’s exclusive network service contract with Apple, Siegel added.
“Any other use of the device is not authorized and we can’t guarantee the device will perform as intended to. We’ll monitor situations like this and if necessary we will take appropriate action,” he said. “Our terms and conditions are very clear.”
He did not elaborate on potential action AT&T might take.
Apple spokeswoman Natalie Kerris declined to comment on Johansen’s claims.
Apple has yet to reveal network operator deals in markets outside the United States. But the iPhone is a quad-band GSM phone and will work in many parts of Europe and Asia with international roaming deals arranged by AT&T, Kerris said.
Neither Apple nor AT&T have disclosed sales figures since the iPhone went on sale in the United States on June 29, but some analysts have estimated sales of up to 700,000 units for the costly coveted phone’s first weekend on the market.
Johansen became known as “DVD Jon” earlier this decade for helping to reverse engineer the code used to protect DVD movies against piracy, saying he did so in order to play them on his Linux computer.
The computer activist has engaged in a cat-and-mouse game with Apple to bypass copyright controls on various Apple products, including QuickTime, iTunes and Apple TV.
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Shares of Apple Inc. rose more than 3 percent on Thursday as investors bet on strong demand for its media-playing iPhone, almost a week after its U.S. launch, and speculation mounted over plans to sell the device in Europe.
Analyst estimates for iPhone sales in its first weekend run as high as 700,000 units and investors are expecting that momentum to continue.
AT&T Inc., the exclusive U.S. provider for the phone, said it had virtually sold out of the device in that time, though neither company has provided sales data.
“The stock is obviously anticipating very very strong sales for the iPhone and very good follow-through sales,” said Andy Hargreaves of Pacific Crest Securities. “The stock isn’t going to be a one-month wonder.”
Apple has said it will start selling iPhones in Europe this year and in Asia in 2008, but gave no further details.
European media reports this week have said Apple may be close to deals with carriers in France, Germany and Britain, a three-country strategy that would mimic the launch of its popular iTunes online music store in Europe in 2004.
Apple shares have increased more than 50 percent since the company unveiled in January the cell phone that combines Web browsing with the music and video playing capabilities of its best-selling iPod device.
“People are anticipating strong sales to continue through next year,” said Hargreaves. “If you don’t believe that’s true then definitely the stock is expensive. we’re kind of on the side that the momentum will continue.”
Hargreaves has a 12-month price target of $130 for the shares. That does yet not include full expectations for events such as widening iPhone distribution to electronics retailers including Best Buy.
Hargreaves said he expects Best Buy to start selling the phone in time for back-to-school shoppers.
Investors are also keeping close watch for news on how quickly Apple is able to replenish stocks of the phone and indicators of its financial impact. Research firm iSuppli said on Tuesday the phone would generate a 55 percent profit margin, after hardware and manufacturing costs.
In Europe, wireless operators including Vodafone Group Plc.,T-Mobile, owned by Deutsche Telekom and Orange, owned by France Telecom have been cited as potential iPhone partners.
Telefonica’s 02 said on Thursday that it had not signed a deal with Apple after reports that it was poised to clinch the first European agreement in what would be a blow to Vodafone, which operates in multiple countries.
“It would be a somewhat of a disappointment” if Vodafone did not reach a deal with Apple since it is such a large carrier size, Hargreaves said.
Apple shares were up $3.18, or 2.5 percent, to $130.35 on Nasdaq in the early afternoon, after trading as high as $131.75 earlier in the session. AT&T shares were down 31 cents to $41.19 on the New York Stock Exchange.
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Apple’s iTunes, Amazon, eBay, RIM’s BlackBerry, and Google — both for search and AdWords — rank among the 10 most significant developments in e-commerce over the past decade, the Software & Information Industry Association (SIIA) said on Wednesday.
The Washington, D.C.-based industry trade group also included broadband penetration, open standards (especially HTML), Wi-Fi, and user-generated content on its list. The list is intended to mark 10 years since the Clinton administration released the “Framework for Global Electronic Commerce,” a policy document that aimed to foster business and consumer confidence in the Internet.
“So many choices that today seem so obvious, were not at all obvious back then,” said Ken Wasch, president of SIIA. “Ira Magaziner had to fight off the International Telecommunications Union that thought it ought to regulate the Internet. There were some people who argued for an FCC-like regulatory structure. The only regulatory structure was ICANN, which, for all of its problems, worked.”
At least as interesting as the 10 developments singled out by the SIIA are some of the ones that didn’t make the cut. The passage of the Digital Millennium Copyright Act (DMCA), voice over IP, the founding of Salesforce.com, the Apache Web server, and the plummeting cost of digital storage are among the innovations and events that the SIIA’s 75 “policy and business wonks” passed over, said Ken Wasch, president of SIIA.
Although Wasch praised the way the government’s policy helped the Internet develop, he expressed disappointment that not everything worked out as well as was hoped at the time. “There was more of a belief back then that somehow the Internet would be a democratizing force,” he said. “And that has proven not to be the case.”
Beyond the starry-eyed optimism of Internet boosters in the mid-90s that overestimated technology’s capacity to change entrenched cultures, the Internet’s failure as a force for democratization can be laid at the feet of prominent Internet companies such as Google, Microsoft, and Yahoo, which punted when confronted by anti-democratic regimes. Rather than stand up for the principles they espoused in the U.S., Google, Microsoft, and Yahoo asked the U.S. government to stand up for them. However, such failure to rise to the occasion seems positively heroic when compared to the technology vendors that arm anti-democratic regimes with censorship tools.
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Ecamm Network, a two-person Massachusetts software company, has launched a product that turns the Apple iPhone into a storage device for people who want to take files from their Mac on the road.
The iPhoneDrive launched late Tuesday works only on Macs with installed software, and transfers files to and from an iPhone using a Finder-like interface familiar to Mac users. “That’s pretty much it,” Glen Aspeslagh, who founded ECamm with his twin brother Ken in 2002, said. “It’s a very simple niche product that fills a missing feature.”
The brothers got the idea for the product, which costs $9.95, from the Apple iPod, which includes software that can make the music player’s hard drive appear as another drive on a PC or Mac. “The iPhone doesn’t have that functionality, so we thought we’d try to write a program to add the feature,” Aspeslagh said.
In the future, Ecamm could add new features to the iPhoneDrive, such as automatic backup. However, the options are limited, since Apple doesn’t give developers access to the operating system on the combo mini-computer and mobile phone. “We’re not actually adding any functionality to the iPhone operating system. As you know, that’s pretty closed off,” Aspeslagh said. Instead, Ecamm’s software uses the same application-programming interface as Apple’s iTunes software to move files back and forth.
Aspeslagh would like to see Apple provide developers with tools that go beyond just using the iPhone browser to run Web 2.0 applications. Apple chief executive Steve Jobs crowed at the Worldwide Developers Conference last month that developers “can write amazing Web 2.0 and Ajax apps that look and behave exactly like apps on the iPhone, and these apps can integrate perfectly with iPhone service.”
Aspeslagh said developers aren’t buying it. “I don’t think anybody believes his spin.” The general feeling among Mac developers is they’ll have to wait and see whether Apple gets more generous. “I’m sure they’ve had their share of developers asking them to open up the iPhone,” he said.
Ecamm, based in Somerville, Mass., primarily sells plug-ins for Apple’s video-conferencing software iChat. The plug-ins include tools for recording conference calls and for adjusting video images.
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Apple is warning users of its hot new iPhone that contact files stored in the digital communicator’s software may not synchronize properly with their Microsoft Outlook files on PCs.
In a technical bulletin posted on its Web site, Apple said iPhone’s contact software won’t play nicely with Microsoft Outlook on a number of fronts.
For instance, Apple said that because Outlook limits the number of URLs that can be associated with a given contact, some URLs added to an iPhone contact may not show up in Outlook after the data has been synchronized.
Apple also cautions that contacts created with iPhone’s “Custom” labeled phone numbers feature will show up in Outlook’s “Other” files because of software incompatibilities between the two platforms.
Additionally, if notes in an iPhone contact record contain any blank lines, unexpected formatting — such as bold text — may occur when the data is ported from iPhone’s software to Outlook.
Compatibility problems between products from Apple and Microsoft — two companies that have become increasingly prone to public jabs at each other — are nothing new.
Earlier this year, Apple warned iPod users that they needed to follow a series of special procedures to safely undock the music player from Windows Vista PCs or risk corruption of the devices. Microsoft later released a patch to solve the glitch.
Also, users of Apple’s PC-based iTunes software reported that they were unable to play songs legitimately purchased and downloaded from the iTunes store after upgrading their computers from Windows XP to Windows Vista.
Apple said it resolved compatibility issues between iTunes and Windows Vista with the recent release of iTunes version 7.2. IPhone users are doubtless now waiting for some patches to fix the Outlook glitches.
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The iPhone’s launch in the U.S. June 29 over AT&T’s GSM/ EDGE network met the intense hype that surrounded the device since it was announced in January, with over 500,000 have been sold over the weekend, surpassing analysts’ expectations.
While a launch in Europe is expected by year-end, Apple has yet to finalize an operator to partner with.
A deal could, however, be imminent. Latest indications are that the list has narrowed down to Vodafone and T-Mobile, with Vodafone said to be the frontrunner.
But Apple is widely have been in talks with each of Europe’s regional players: not just T-Mobile and Vodafone, but also France Telecom Orange and Telefonica O2. It has also been said that Apple may sign-up with the FreeMove alliance, which includes T-Mobile, Orange, Italy’s TIM and TeliaSonera.
At one time or another each of these operators has been rumored to be ‘close to’ sealing a deal with Apple. But so far, none has.
It has been suggested that Apple is finding it difficult to find a European partner because of operators’ reluctance to accept its radical iPhone business model.
Befitting a company with a military definition of secrecy, little is known about the details of Apple’s exclusive five year deal with AT&T.
What is known is that the scope of the deal goes far beyond AT&T simply selling the Apple device for use over its network.
Under the deal, AT&T is understood to have agreed to install Apple equipment in the heart of its network, giving Apple wide-ranging access to and information about each iPhone user. One much-touted application, Visual Voicemail, won’t work without the Apple-installed hardware.
Apple is also understood to have a revenue share deal with AT&T that sees it earn a percentage of the US$59.99-US$99.99 monthly contract the iPhone is offered with. No figures are available, but it’s probable that, based on the industry average, the revenue-sharing deal is in the range of an 80/20 split in favour of AT&T.
Under these terms, it’s safe to say that Apple and AT&T are fully sharing ownership of each iPhone subscriber.
For all intent and purposes Apple has become an MVNO while side-stepping much of the business risk associated with becoming a full-blown virtual provider of wireless services. It has also ensured that it retains 100% focus on its core business - designing software and products.
For its part, AT&T points out that iPhone users will receive an AT&T bill, and that any problems with the iPhone will be dealt with by AT&T. This, it says, means that Apple is not an MVNO.
While AT&T shrugs off the suggestion that Apple acts an MVNO over its network, the nature of the deal suggests the MVNO moniker is apt.
Having ceded so much to Apple, what will AT&T gain from the iPhone?
AT&T is the largest mobile operator in the U.S. The Apple brand is iconic. AT&T can only benefit from this relationship, unless, that is, the iPhone seriously fails to deliver on promise.
Regardless of the varying passions that Apple inventions elicit - they’re loved or loathed to a degree that no other consumer electronics products are - being associated with the Apple brand will rocket AT&T to new heights of street credibility and cutting-edge technological savvy. The fact that iPhone users will need to register the device via iTunes will intensify AT&T’s association with all-things Apple.
Most importantly, AT&T’s tie-up with Apple will clearly improve its revenues.
Look at the figures. Every iPhone subscriber will generate at least US$59.99 in revenue a month over two years, from which AT&T and Apple will each take their respective share.
Assuming 500,000 iPhone’s were sold in the first weekend, that’s at least US$720 million in new revenue right off the bat.
There are obvious brand and revenue incentives for AT&T to give in to Apple’s iPhone demands.
Is iPhone forbidden fruit for European cellcos?
Apple aims to sell 10 million iPhones worldwide by end-2008, equivalent to 1% of the total handset market.
On a global scale, assuming that the iPhone is offered for at least US$59.99/ month two year subscription in each market, that’s around US$14 billion in revenue for Apple and for its operator partners.
So why might European operators, well-used to partnering with MVNOs, shy away from partnering with Apple if it is simply trying to replicate the terms of the deal it has agreed with AT&T?
For sure, Apple’s demands in return for exclusive use of the iPhone have proven too much for Verizon Wireless, for one, to bear. After Apple announced the AT&T deal, Verizon made it be known that it had also held talks with Apple, and that they broke down over, among other things, share of revenues.
European operators have in the past been averse to signing revenue sharing deals with content partners. However, while they initially struggled to find the right business model with content providers, in the last few years this has been overcome. This is evidenced by the numerous content partnerships operators have signed, including with such Web 2.0 giants as Google, Yahoo and YouTube.
Such experience will, at least conceptually, mean that operators in Europe should be at ease with Apple’s proposed MVNO-like business model.
The sticking point is much more likely to be in the details of what Apple is proposing, namely, precisely how much money it makes from each iPhone subscriber’s monthly subscription.
If the U.S. example is anything to go by, in Europe Apple will only allow its operator partner to charge a monthly fee that incorporates flat-rate data use, of which Apple will take a share.
Operators in Europe are now coming round to thinking like Apple in the area of flat-rate data pricing. Vodafone, France Telecom and T-Mobile have each recently launched price plans that either are or closely resemble flat rate charging.
In Europe an iPhone tariff will likely be launched with an entry-level monthly tariff of around EUR45 (US$61.16) for 300-400 free minutes and unlimited data; £35 (US$90.50) in the UK.
The device will also almost certainly only be offered on a two-year contract, ensuring at least EUR1,080 (£840 in the UK) per user in revenues over the lifetime of the contract.
Analysts at Credit Suisse estimate that Apple could sell as many as six million iPhone’s in three years in Europe. Assuming two million new subscribers a year, this would equate to at least _2.2 billion in revenues within two years of launch for Apple to divvy up with its operator partner.
iPhone users will generate enough revenue to make Apple’s revenue-share business model financially compelling.
Based on AT&T’s initial prices, Apple/ AT&T are pricing unlimited mobile data usage at US$20, including 200 SMS (compared to the US$39.99 monthly rate for a comparable voice-only tariff from AT&T), equating to 33% of the US$59.99 monthly fee.
By comparison, average data revenues in the U.S. are currently around 15% of total monthly revenues.
Similarly, European operators can expect to easily beat the region-wide mobile data use average with the iPhone, of 18% of revenues at end-4Q06.
If the evolution of the iPod is anything to go by, Apple will introduce slimmed-down and cheaper versions of the iPhone within two years, which will significantly broaden its market appeal.
As such, a five year deal with Apple should see at least two iPhone model launches, which will see Apple comfortably beat its target of gaining 1% share of the global handset market.
Apple will wean operators off their subsidy habit
A new area for European operators: no handset subsidy. Operators should be more than willing to accept Apple’s demand not to subsidize the iPhone.
Apple will relieve operators of a burden they have long-hoped to be rid of. Operators will not go wanting for consumers willing to pay the full amount for the iPod, which is retailing for US$499 and US$599 in the U.S., depending on hard drive size.
The EDGE, 3G issue
European operators have a major problem not faced by AT&T: none, except France Telecom, has comprehensive EDGE coverage, meaning that services such as internet browsing would typically be used only via GPRS connections.
With an EDGE device operators would be right to be worried about high user expectations for internet browsing via the iPhone, especially when there is no EDGE network and the device falls back onto GPRS connections.
It is ironic that a device that offers one of the best opportunities operators have yet had to encourage 3G mobile data use would work poorly on clunky 2.5G networks.
If the iPhone becomes a WCDMA device, operators in Europe will be much keener to sign a deal with Apple, and more inclined to cede ground over terms.
Because of this, Apple will likely only launch the iPhone in Europe with 3G capability.
Indeed, Apple CEO Steve Jobs has said that he chose to launch iPhone with EDGE only because AT&T has ubiquitous EDGE coverage. Jobs’ comments suggest that he will not launch an EDGE-only iPhone if there isn’t a comprehensive EDGE network to support it, and it’s hard to imagine he’s restricting himself to France Telecom just to ensure iPhone margins.
Margins. One reason for not including 3G in the iPhone launch for use on AT&T’s 3G network could be because of margins. iPhone margins are said to be as high as 50%, and a 3G chipset, because of the additional royalties, will erode these considerably.
Still, the bottom line is that Apple will just have to give-in on margins to ensure a successful iPhone launch in Europe.
iPhone = paradigm shift
In short, the launch of the iPhone represents a definite paradigm-shift for the mobile industry. Apple will succeed in doing what operators have long-struggled to do: give a compelling reason to use mobile data and the mobile internet.
The iPhone will mark the beginning of mass-market use of mobile email and the mobile internet, especially when 3G iPhones come to market.
Apple’s software/ application prowess, along with its close ties to Google (through which to YouTube) and Disney/ Pixar, will give operator partners a privileged window onto the future of the internet and how premium content will be distributed on it. As such, Apple will succeed where operators have so fair failed: making dumb pipes intelligent and buzzing with network traffic.
And it is an indication of how much operators need outside help to engender mobile data uptake that Apple will be able to all-but dictate the terms of an iPhone agreement to them. It will be Apple who will chose the operator it wants to partner with, not the other way round.
Only European operators’ in-built and unswerving belief that they have the ability to one day create the future will be stopping them from falling over to meet Apple’s iPhone demands.
Despite a hefty price tag of either $US499 or $US599 ($582 or $699), depending on size of the memory, analysts say Apple has sold between 310,000 and 700,000 of the gadgets since its US launch on June 29.
Now the question is which European countries, and crucially which operators, will be first to benefit from the much-hyped device that combines the wildly popular iPod music player with a mobile telephone, email and internet access.
Apple would limit the launch of iPhones in Europe this year to France, Germany and Britain. The rest of the continent would follow suit with Asia next year.
O2, the British unit of Spanish telecommunications group Telefonica, was set to be the first European mobile phone operator to reach a deal with Apple over the device.
A day earlier, T-Mobile the mobile arm of German telecommunications giant Deutsche Telekom, had beaten rival Vodafone in the battle to win marketing rights for iPhone in Germany.
A spokesman for O2 dismissed them as “speculation”, saying it had “not signed a deal with Apple”.
France Telecom, another potential candidate, has also remained silent.
There is also speculation about the price of the new iPhone. Internet rumours suggest it will cost E899 or E999 ($1429 or $1588), far more than in the US, although specialists predict a cost of between E400 and E500.
Another question is whether the iPhone will be equipped to use the 3G network that European operators have spent so much money on — in the US, it only uses the slower 2.5G network.
Despite these concerns, the author of the first European study on the impact of iPhone on the continent, Stephane Dubreuil of Sia Conseil consultancy, said operators were engaging in a “real battle” over the device.
The product “has such an attraction that it will enable them to win new clients over their competitors”, he said, adding: “This is typically a product that firms prefer to see among their own, not among the competition.”
Apple has never hidden the fact that it would choose market-leading operators, but only on the condition they accept its demands - which may demand sacrifices from the firms involved.
Mr Dubreuil said the “real revolution” of iPhone is the appearance for the first time of a telephone that “short-circuits the operator and establishes direct contact with the client”.
The prospect “concerns” European operators and might force them to revise their economic models, he said.
Apple has put its iTunes platform at the heart of the iPhone, allowing clients to buy music, video and games content. In doing so, many sources of mobile phone revenue now pass from the operator to the phone maker.
With AT&T, iPhone’s exclusive distributor in the US, the situation is different. There, the mobile phone operator keeps the majority of the revenues from telephone communications.
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Apple has sold more than 60 million iPhone applications (USA)
