News for Friday, 18 July 2008

This news is intended to be a small analysis of the new iPhone business model, and especially its relevance with the functions and opportunities opened by the recent release of Firmware 2.0. This is the result of discussions inside and outside Hardmac Editor Team, as well as with developers.
With the first version of the iPhone, Apple intended to first test the market, and get as much money back as possible from exclusive partnerships signed with 4 carriers AT&T, O2, Orange and T-Mobile. If one could agree that as a new comer Apple wanted to be careful (financially but also for its image), and offered the iPhone with bundled advanced wireless services supported by renowned carriers, with the new version supporting 3G such strategy should be revised. One can also imagine that Apple thought it could change the 12 years-old existing system and establish a new one more profitable for mobile designer/manufacturers; it failed.
Yes, Apple changed the iPhone business model with the release of the iPhone 3G, but not entirely and deep enough to really benefit from it, for Cupertino of course, but also for customers, developers and even investors!
Let's look at the first business model, Apple was getting money back from royalties on the subscription plans. Is this policy still being used with the iPhone 3G? I guess nobody really knows for sure as this is part of confidential agreements. However, one would agree that the price of the iPhone dramatically decreased since its launch, and especially after the introduction of the new version. Couples of months ago, as sales of the first generation iPhone were not really rocketing up or as high as expected, Apple decided to dramatically decrease the price of the iPhone. Even during the last WWDC Steve Jobs agreed that the price was a limiting factor for broader adoption of the iPhone. So, here comes the new cheaper and better iPhone 3G... well Apple still has exclusive partnership in the main/key countries (USA, UK, France and Germany), and in many other ones, where only one carrier having a 3G network is selected to distribute the iPhone 3G...
One could have thought from the WWDC keynote that Apple understood that its iPhone business plan was not optimal. Indeed, high price is a limiting factor, and now with Firmware 2.0 the AppStore IS the true money making factor for Apple, as well as for developers.
If you consider that the Firmware 2.0 can be installed on iPhone 2G and iPhone 3G, you will agree that the number of potential customers will not be only limited to the new iPhone 3G owners. Indeed, one will have access to games, applications, music and probably short movies in a near future by simply clicking on a button. Of course MobileMe is also linked to it and be a catalyzer of the AppStore usage by customers and further increase revenues generated by the online store.
Now one should consider that there is a huge number of unlocked iPhone 2G, which will not easily get access to the firmware 2.0, so no access to the AppStore, so iphone owners but not AppStore customers, so no revenue for Apple, or for developers and investors. If one look a step further, many of those owners might be using a jail-braked or SIM-unlocked iPhone, and would be willing to get access to the AppStore, but of course they have no clue how to do it. Will they ever know how?
Indirectly Apple is responsible of this entire situation and is losing money because it did not realize that making the iPhone opened to all carriers will now make it fully adopted and a massive source of revenues. Apple needs to stop its exclusiveness policy, as it is harmful for the company, customers, developers and investors. Let's imagine we have a SIM-unlocked iPhone by default, the customer will get the specific and/or best subscription plan offered by his local carriers. It will then indirectly push carriers to make the best offer possible. Here the customer wins. But Apple will win too, as if it is not bundled to a specific carrier, all mobile phone owners are potential customers as they will not be forced anymore to drop their on-going subscription plan to get a new one locking them to a new carrier for at least 24 months, or at a ridiculous cost. So, more potential customers, more iPhone owners, more visitors of the AppStore, more revenues for Apple, developers and happy investors.
To summarize, with the iPhone 3G, the best business model for Apple would be to have the new model available for all customers, SIM and carrier unlocked. This would be a business model where all parts, from Apple, to customers, including developers and investors would win.
So, how to adapt to the current situation? Well try to get your iPhone legally from those countries (as Belgium) where Apple and carriers are forced by the law to sell the iPhone 3G unlocked then use it as you can with the carrier of your choice. For sure you will not be able to get easy access to the AppStore, and data and web surfing might be expensive, but this is Apple's and carriers' fault, they decided to limit their potential revenues by locking the business model to a rather restrictive number of people.
Do not hesitate to share your comments on our forum.
Other interesting readings:
http://crippledtechnology.wordpress.com
http://crippledtechnology.wordpress.com/2008/07/01/take-action/
http://macenstein.com/default/archives/1494

According to Macworld, the availability of iPhone 3G should be low still for the next 2 to 4 weeks. As many of us have experienced it, it is difficult to find an iPhone 3G. With its official launch yesterday, it was simply impossible to find an iPhone 3G 16 GB model at 10h00, 2 hours after its launch... The 8 GB model was not as popular, but due to the lack of the high-end model, stock of the entry-level are also nearly empty in France, so after one day, there are most likely only few iPhones available in France... and according to our sources it is the same in most countries where the iPhone is legally distributed...
According to some analysts, Apple has underestimated the demand for the 3G model, and did not manufacture enough units for the worldwide launch. Stocks should be back to normal for mid-august, ready for the back to school season. We are not really surprise by this shortage, as Apple has often been conservative in its plan when launching new products, and the current situation with the iPhone was already experienced many times before with iPod, iPod nano, MacBook, etc. Shops started taking names on waiting lists, but maybe the availabilit mid-August will only be real for couple of days if figures from thoses waiting lists exceed the number of units being manufactured...

AMD/ATI should announce the EOL status for the Radeon 3xxx, being phasing out during Q3 2008. Those previous graphic cards have not much appeal considering the gap of performance with the new Radeon 4xxx series.
If we are lucky, they might also spend a bit of time to develop and announce a Mac Edition for the Radeon 4xxx; or try to use Mac users as the last step of a business cycle and try to sell couple of thousands Radeon 3xxx Mac Edition at a ridiculously high price.

As the new revolutionary ferroelectric NAND flash memory chips will not arrive immediately, Samsung and Sun announced the future development of SLC chips-based SSD with extended lifetime. According to the press release, the new device would offer 5-10 million read-write-cycle range, an 100-fold increase compare to other SSD featuring usually only 100,000 cycles for SLC, and 10,000 cycles for MLC. For the moment, this new SLC chips has been developed for offering a new 8 GB server-grade SLC flash memory SSD, that Sun plans to incorporate into its line of servers and storage.
According to Samsung data, the new SLC memory could be used to speed up video streaming, high-transaction data processing, search engine operations and other high-speed server functions. So do not get excited, it will most likely not arrive tomorrow in consumer electronic-dedicated SSD tomorrow, is there currently any?

The French website site for yellow pages, aka pagesjaunes.fr, did some analysis and decided to develop and launch an iPhone-dedicated application that will be available in a near future on the AppStore. Indeed, iPhone owners gets connected to its web service 10 times more than any other mobile users, reaching an average of 50000 connection per month, more than enough to justify the development of a dedicated application. In addition, pagesjaunes.fr does not plan to provide only its search engine, but wants to add a geolocalization tool to compete with Google; it should not be so difficult as they most likely have better maps of France than the Californian company, and offer it already for free via Mappy.fr on the web.

To avoid being swallowed by Microsoft, Yahoo decided to approach AOL and offered a merger between both companies to become to big to be eaten by Microsoft. The Redmond's giant probably frustrated of seeing Yahoo resisting in such way, started discussing of a possible acquisition of AOL with Time Warner. The main goal of this new maneuver is to further isolate Yahoo, and stress their shareholders of seeing Microsoft leaving talks for the second time and most likely definitely. Is Microsoft acting this way to push Yahoo's shareholders to kick out their CEO, and directly discuss with Redmond’s giant about a juicy take over, or is Microsoft really tired of negotiating with Yahoo, and favoring a more friendly acquisition with AOL?

According to the last rumors from the web, Intel does not plan to provide hardware-based support for the Microsoft 3D API set, aka DirectX with Larrabee. If we do not know how the company will program this video chips to speed 3D rendering computing, it seems it will be different way than with this popular API set.
Of course, it would be excellent news for Mac users, as the main break for developing or porting games on Mac is the proprietary DirectX API set, which is not available for Mac OS X. If Intel defines a new way, and considering that the honey moon with Apple still continues, the Mac could regain some appeal for 3D games.