Analysts Set High Bar for AAPL

Financial analysts are betting that Apple stock will soon surpass the heights it held in late 2007, targeting as much as $235 per share within the next year. What makes them so optimistic? Apple looks poised to ride the crest of an economic upswing with the strength of its App Store, its activity in China and the possibility of opening the iPhone to new carriers.

It's a good time to be holding Apple (Nasdaq: AAPL) stock -- analysts are more bullish than ever on the company.
The most eye-catching statement came on Tuesday from Needham's Charlie Wolf, who predicted that Apple will trade at US$235 in the next year.
Meanwhile, iSuppli says Apple will remain partners with wireless carrier AT&T (NYSE: T) , which is frantically upgrading its networks. If true, that will make for more stability, which is always good for investors.
Finally, Apple's incursion into the video gaming field with its new iPods, launched Sept. 9, may pay off as game sales begin to pick up.

Analysts Charge Ahead

Not too long ago, the more bullish analysts were pegging Apple's stock price at $200. Needham's Wolf has raised the bar further, jacking up his price target on Apple by 18 percent, from $200 to $235.
This will be driven by the iPhone, specifically by the explosive growth of the App Store, which will drive iPhone sales, Wolf said.
Granted, other smartphone vendors and wireless carriers are launching or have launched their own app stores, but the iTunes App Store is the undisputed king in this field. It has more than 75,000 applications, according to Apple's statement at its media event in San Francisco on Sept. 9.
On Monday, Piper Jaffray announced that it is maintaining an overweight rating on Apple. Overall, it sees Apple's results for this quarter being in line with the Wall Street consensus.
JMP Securities last week upgraded Apple from Market Perform to Outperform, although its target for Cupertino's stock prices was a more conservative $200. It sees the China Unicom deal for the iPhone and the new iPod lineup announced Sept. 9 as the main drivers.
At Tuesday's close, Apple shares were trading at $175.16.

The Apple-AT&T Pas de Deux

Speculation has been rife that Apple might add another wireless carrier or two in the United States as iPhone partners.
However, Cupertino has consistently denied that it will move away from AT&T, and a report that iSuppli released Sept. 10 appears to support its statements. The report's author, iSuppli principal analyst Francis Sideco, dismissed rumors that Apple will switch from AT&T to Verizon in 2010.
"The main reason Apple is likely to stick with AT&T beyond 2010 is the relatively wide usage and growth expected for the HSPA air standard used by AT&T for 3G data," Sideco said. He expects HSPA to have a total of 1.4 billion subscribers worldwide by 2012, compared to 304.6 million for Verizon's EVDO standard by 2013.
HSPA is high-speed packet access, a technology that extends and improves the performance of WCDMA protocols. EVDO stands for Evolution-Data Optimized or Evolution-Data Only. Part of the CDMA2000 family of standards, it has been adopted by many wireless carriers worldwide.
AT&T spokesperson Mark Siegel told MacNewsWorld that the carrier is deploying HSPA 7.2 technology later this year in six cities and will roll out the technology to other cities next year. AT&T is spending up to $18 billion this year to improve its wireless and wireline broadband networks, he said.
However, Julien Blin, principal analyst and CEO of JBB Research, thinks iSuppli is barking up the wrong tree. "Who cares if HSPA will outstrip EVDO?" he asked. "Both Verizon and AT&T are moving towards LTE (Long Term Evolution)."
LTE is the last step toward 4G wireless, which will increase the speed and capacity of mobile telephone networks. To sum up its advantages, it will improve the end-user experience, minimize dropped calls, and let carriers offer mobile broadband services.
Verizon and AT&T will conduct LTE trials in 2010, Blin told MacNewsWorld.
"We will begin testing 4G technology next year, and will begin deployment in 2011," AT&T's Siegel said.

iPods Got Game?

At Apple's Sept. 9 media event, the company unveiled new iPods targeted at video gamers. Phil Schiller, the company's vice president of worldwide product marketing, said iTunes has 21, 178 gaming titles, compared to 607 on Sony's (NYSE: SNE) PlayStation Portable and 3,680 on the Nintendo DS platform.
With this push into gaming, Cupertino may be preparing for the future. According to the NPD Group, video game sales continued to fall in August for the sixth straight month, but the decline was less than in previous months.
Meanwhile, game hardware sales increased, except for the Sony PlayStation 2 . The PlayStation 3 saw unit sales shoot up 72 percent over July's levels, and NPD analyst Anita Frazier attributed this to Sony's price cuts, which took effect in the final days of that month.
"Madden NFL 10," the top-selling game, sold nearly 1.9 million units -- and its publisher, Electronic Arts (Nasdaq: ERTS) , took the stage on Sept. 9 to show off a version of the game for the iPod touch and iPhone.
Sales of iPods, Needham's Wolf predicts, will fall as the music player industry continues to shrink, but the iPod will continue to dominate the market. "The iPod will maintain a 60 percent share of the worldwide market," he said. Also, if video game players begin using the iPod, that might provide a whole new area of growth.

iFrogz Timbre Earbuds a Deft Mix of Sound, Looks and Price

iPhone owners looking for a step-up from the earbuds that come with the device may want to consider iFrogz's EarPollution Timbre set. Their wood/brushed metal aesthetic is eye-catching, their sound quality is an improvement over the basic iPhone buds, and the microphone is much better at picking up phone conversations.

There are hundreds of decent sets of headphones and earbuds available for iPods, and there are dozens made specifically for the iPhone, including the now ubiquitous white earbuds that ship with the devices. But what if you'd like something a little different, yet aren't willing to shell out audiophile-level cash?

ifrogz EarPollution Timbre earbuds with mic
Enter the iFrogz's EarPollution Timbre With Mic. The sound-isolating earbuds boast a natural wood body that caught my eye when they were released this summer, but it took a while to get a pair sent over for review -- apparently there were some good deals online, and iFrogz sold out more quickly than expected.

iFrogz Who?

iFrogz is also a silicone case manufacturer, focusing on cases and accessories for Apple's (Nasdaq: AAPL) iPod and iPhone lines -- with some additional accessories for similar devices from other manufacturers. On the sound front, iFrogz's claim to fame is its line of customizable EarPollution headphones, like the NervePipes, which are over-the-ear headphones. Buyers can customize the headband, hinges, speakers, and ear cushions with a dizzying set of color choices and trendy artwork. Of course, they're readily available online in a variety of pre-selected choices, too.

Good Looks, Great Mic

Keeping with the overall theme of iFrogz products, the EarPollution Timbre with Mic buds are designed to look sharp. With a wood base and chamber, coupled with a brushed silver metal band and black earbuds, they have a clean style that you don't see every day.
They also feature a high-definition microphone that supports the iPhone and most BlackBerry models. Like Apple's earbuds that ship with the iPhone, the mic is placed in a similar position on the right earbud. Click it to answer calls or pause tracks.
The mic itself worked surprisingly well. First, when recording using the built-in recorder on my iPhone, it picked up my voice well, even with background noise and some wind. Where it really shined, however, was in conversation -- callers on the other end reported that they could consistently hear me well. I was surprised because of my experience with Apple's standard earbuds and mic -- callers would report losing my voice or the loudness dropping, and I'd have to resort to holding the cord so the mic was consistently positioned near my mouth. Not a problem with the EarPollution Timbre.

How's the Sound?

While Apple's standard iPhone earbuds are OK, they aren't sound-isolating earbuds, which means they can move and shift inside your ear. When in the right position, they can sound great, but shift your head too fast and suddenly they sound like a tin can and string. With in-the-ear earbuds, of course, the speakers are positioned in one place, and they tend to stay there. This immediately gives you a listening advantage, which is one reason why Apple's premium US$79 Apple In-Ear Headphones With Remote and Mic are the in-ear variety.
When I first inserted the Timbre earbuds and started listening, frankly, I was disappointed -- and then I remembered that there's a whole school of thought that believes that speakers need a break-in period before they work out the stiffness and sound richer. I'm not sure if this true or a trick of the imagination, but I promptly stuck them into my MacBook (but not my ears) and let them run for a few hours. The result?
Definitely better, at least to my non-audiophile ears. I can't say that I was blown away, but they were entirely usable -- and certainly better than the standard units that shipped with my iPhone.

The Tech Specs

The driver unit is 10 mm; impedance is 16 ohms; sensitivity 103 dB; frequency response is 20 Hz to 20Khz. The cord length is a perfect 1.1 meters, and the plug is, of course, 3.5 mm.
Unfortunately, the mic control unit doesn't let you adjust the volume, nor does it let you skip ahead to the next track in a playlist.
If you're buying the EarPollution Timbre with Mic from the iFrogz.com online store, they'll cost you $49.99, but I found them as low as $20.32 (with $6.96 shipping) on Buy.com , with a couple of other reputable outlets coming in in the mid-30s.
Overall, the EarPollution Timbre with Mic gives iPhone users a compelling, inexpensive option for in-ear earbuds. They look great, sound fine, and most importantly, they come in at a palatable price point -- particularly if you shop around.

Will Motorola Scratch Android's Back?

The long-anticipated march of the Androids onto the mobile device playing field has begun, and Motorola is near the front of the line with its new Cliq smartphone. The company is looking to the open source operating system to lift it out of the doldrums it's been in for the past few years. Motorola could be just as helpful to Android, though, which has been a little slow to take off.

When Motorola (NYSE: MOT) announced its Android-powered Cliq late last week, it took what many view as a critical step toward regaining its former prominence in the mobile phone arena.
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The Motorola Cliq
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"Motorola was the No. 1 handset maker in the 1990s -- they lost that position to Nokia (NYSE: NOK) and have been trying to recapture the market ever since," telecom analyst Jeff Kagan told LinuxInsider. "They did well with the Razr a few years ago, but never had anything else to follow up."
Over the past several years, Motorola fell to No. 3 and then No. 4 in the market.
"Could Cliq be the next Razr? Maybe -- if it is great," said Kagan.
"I think Motorola still has a strong brand name and can recover quickly if they can come up with a series of hits. If this Cliq is a hit, it will be a great first step," he added.

Tit for Tat?

As much as the Linux-based Android platform has to offer Motorola, however, there's at least the potential for Motorola to give a reciprocal boost to Android as well.
The platform, first announced nearly two years ago, has taken some time gaining momentum in the form of hardware and carrier support. However, as the fourth quarter approaches -- along with the holiday shopping season -- the announcements are beginning to roll out.
On Monday, for example, LG -- the industry's third-largest player -- announced the LG-GW620, its first Android-powered phone, complete with a 3-inch full touchscreen and slide out Qwerty keypad.
Meanwhile, HTC unveiled its Tattoo device last week, while earlier this month Sprint (NYSE: S) joined T-Mobile as a supporting carrier.

'Important for Android'

Indeed, it is on support from both handset makers and carriers that many Android hopes ride, in terms of its ability to do battle with Apple's (Nasdaq: AAPL) wildly successful iPhone.
Motorola's phone "will be important for Android," Kagan said. "If successful, it will punch Android onto the map."
It could help the platform, In-Stat principal analyst Allen Nogee agreed.
'A Good Sign'
"Motorola phones are quite popular in the U.S. and Asia," Nogee told LinuxInsider, "and Motorola was at one time quite big in China."
Many Americans, in fact, support Motorola for being "more of an American company" than many others, he added.
Android will likely claim an increasing proportion of the market in the next five years, according to In-Stat.
"Overall, I think seeing more and more manufacturers go to Android is a good sign," Nogee said.

An Army of Individuals

Where there is just one iPhone and just one supporting carrier, Android will have what many call an "army" of handsets for consumers to choose from, each with its own distinguishing spin on the platform.
"What each handset vendor wants you to walk away with is, yes, you have an Android handset, but you also have their own take on it," Ramon Llamas, a senior research analyst with IDC, told LinuxInsider.
The competing Windows Mobile platform, by contrast, is "pretty much the same across different companies' handsets," he noted.

All About Distribution

So, while Android is undoubtedly a significant part of Motorola's hoped-for recovery, Motorola's support is just one piece of what Android will need to be successful.
"If you're a developer, you want to get your apps out onto as many devices as you can," Llamas explained. "We're still in the very initial phases now when it comes to Android."
Distribution is "the name of the game," he added, so application makers "want to be on as many people's handsets as possible. Now that Motorola's is added, that's great -- but they'll also want to be on all the other devices too."

Game-Changing Potential

Android will "end up on many different manufacturers' devices and many different networks," Kagan agreed. "They will all look a little different and even work a little differently from each other. If successful, there will likely be competitive offerings as well."
Much the way Apple changed the smartphone segment, "Android has the same kind of potential, but it will look different," Kagan predicted. "It will be available everywhere on a variety of devices, meaning it won't be a huge seller in any one category, but it can still be successful in general."
In other words, Kagan added, "we are all guessing what it will look like going forward at this point."

Do You Know How Much Radiation Your Cellphone Emits?

The U.S. Senate is investigating new research that suggests there may indeed be a link between cellphone radiation and brain cancer. At 0.57 W/k, the BlackBerry Storm is on the low-radiation end among smartphones. The iPhone clocks in at 0.97 W/kg. Among the highest are the BlackBerry Bold and the Curve, at 1.51 W/kg and 1.54 W/kg, and T-Mobile's myTouch 3G, at 1.55 W/kg.

The focus of a U.S. Senate hearing Monday afternoon is the potential danger of cellphone use -- specifically, the risk of brain cancer. That link was suggested as long ago as last decade, when cellphones were slightly smaller than a shoebox and just beginning to become part of the everyday landscape.
As cellphone use became ubiquitous and researchers repeatedly discounted health concerns, the perception of risk faded among the general public.

Under Review

Now, that may be changing. The Senate review was prompted in part by a new report from the Environmental Working Group, a Washington, D.C.-based nonprofit that recently evaluated the top cellphones and smartphones, measuring the levels of watts per kilogram.
The results include a list of top 10 "good" and "bad" cellphones and smartphones, along with tips for safe usage and levels for all currently available and legacy models. Pennsylvania Senator and cancer survivor Arlen Specter is chairing the hearing in the Subcommittee on Labor, Health and Human Services, and Education and Related Agencies, which began at 2 p.m. ET.
A representative from EWG is among those scheduled to testify.
EWG is not the only group to be concerned about the link between cancer and cellphone use, cancer researcher Devra Davis told TechNewsWorld. Davis is also testifying at the hearing.
"There are good strong reasons for concern, which is why Finland, Sweden, Denmark, Norway, Iceland, Israel, India, and some cities in Austria and Brazil have issued warnings for all users," she said.
"We do not have ample evidence that cellphones are safe and urgently need research," she said. "Any assertions that cellphones are safe are misleading. We are especially concerned about our young people and must protect the brains of children which are still developing."

Surprising Range

There have been a number of studies -- mainly conducted overseas -- that do, in fact, show a link between cancer and cellphone use. A joint study by researchers in Denmark, Finland, Norway, Sweden and the United Kingdom, for example, found that people who had used cellphones for more than 10 years had a significantly increased risk of developing glioma, a usually malignant brain tumor, on the side of the head they had favored for cellphone conversations.
In a study of 420,095 Danish adults, it was found that long-term cellphone users were 10 to 20 percent more likely to be hospitalized for migraines and vertigo than people who had taken up cellphones more recently.
The EWG study differs in that it focuses on particular devices and offers some hope that they can still be used, despite the apparent long-term risk.
The group found several phones that emitted less radiation than others. These are the phones, obviously, they recommend.
In fact, EWG was surprised at the wide range of values, Nneka Leiba, a researcher with the group, told TechNewsWorld. A number of phones came very close to 1.6 W/kg -- the standard established by the FCC in 1993.
"We saw some phones emit eight times more radiation than other phones," said Leiba.
The Samsung Impression (SGH-a877) offered by AT&T is the safest cellphone on the market, while the worst is the Motorola MOTO VU204 offered by Verizon Wireless, according to the report.

Lower Signal, Higher Risk

EWG is not expecting consumers to abandon their cellphones, Leiba said. The organization is hoping for more Congressional scrutiny of the standard -- as well as some publicity in promoting safer cellphone use. The first step towards the later is to use a low radiation phone, a complete list of which can be found in the EWG's report.
EWG also wants to focus more study on the impact of cellphone use on children and teenagers. Children's skulls are softer and thinner and thus more vulnerable to radiation, Leiba noted.
Other advice includes urging people to text in favor of making voice calls; to invest in a headset, which emits far less radiation; and to avoid using the phone when signals are low.
"That is when the phone is emitting the most radiation," Leiba said.

The Ho-Hum Sound of Google Voice

Google Voice is an application for computers and mobile phones that ropes all of your various phone numbers into one place, manages your voicemail and text messages, and facilitates cheap international calls. The application has some neat tricks, but it can be cumbersome to use and it doesn't necessarily save you money or cellphone minutes.

Google (Nasdaq: GOOG) gives away a lot of good stuff for free.
That struck me last year when I downloaded the free Google Maps app to my smartphone. It turned the phone into a handy navigation system and killed my desire to buy a US$100 standalone GPS unit.
So I was intrigued to try Google Voice. That is a service that gives you one phone number that connects to all of your phones. It also manages your voice and text messages and gives you a way to make cheap or free international calls. It comes as a downloadable application for cellphones and as a Web-based program.
The program has the potential to upend the business of phone calls -- or at least you might get that impression from the hubbub surrounding it. Apple (Nasdaq: AAPL) has held up approving Google Voice for use on the iPhone, and the Federal Communications Commission jumped in to ask why.
However, I don't get the hype. Google Voice hasn't changed my world.

Take a Number

I used the free Web-based system, although the app is available on BlackBerry phones and devices that use Google's Android operating system. Because of the hefty cost of rolling the service out, for now it's available on an invitation-only, first-come, first-served basis. I asked to be included last month the same way as anyone else and got an invite a few days later.
I picked a new Google Voice phone number, linked it to my mobile phone, and was off to the races. For now, you can't use your existing phone number as the one you manage through Google Voice, although allowing such "number portability" is something the company is considering.
Google Voice offers discounted phone calls much like inexpensive phone cards that require you to call a toll-free number and enter codes before you dial someone. The advantage of Google Voice is that you can skip the extra steps of dialing a 1-800 number and a code from the phone card.
After firing up my phone's Web browser and going to the Google Voice page, I can enter a number and hit call, or pick someone off my contacts list. Google Voice first calls my phone, then the receiving party's. For those with the Google Voice downloadable app, the phone just calls the party after rerouting through an intermediary link. This allows the recipient to see your Google Voice number appear on his caller ID.
The sound quality was fine but I noticed a delay. Sometimes my regular cellphone calls have this too, so that might not be anything to blame on Google Voice.
Here's the catch, though. I'm still using up my regular cellphone minutes. I have a ton, so there's no added expense. However, it makes the service feel like less of a breakthrough.

Bells and/or Whistles

On international calls, Google charges rates that are competitive with Skype , which routes calls over the Internet, and with phone cards -- all of which are way cheaper than just dialing abroad straight from my cellphone. Google even gives new members a 10-cent credit to begin. (You refill your account by paying with a credit card online.)
Google isn't necessarily the cheapest option, though. If you want to call Afghanistan, for example, you're better off using the 2 NayPinoy phone card from PhoneCardSmile.com, which charges 26.3 cents per minute. Google would charge you 29 cents, and Skype 35.5 cents. However, only Google and the phone card work for my mobile phone. Skype requires an app that's not compatible with my phone, which runs the Windows Mobile operating system.
Google Voice isn't the first to offer this sort of savings on international calling. Services from Rebtel and Jajah do pretty much the same thing, and have the added advantage of working from phones that aren't Internet-enabled. But Google offers some bells and whistles that make its system somewhat more compelling.
For instance, I can screen the people who call my Google Voice number. If it's someone who isn't in my contact list, he gets asked his name, which is played to me at the top of the call, after which I can send him to voice mail.
Voice mail is automatically transcribed and sent to me by e-mail and text message. The result is good enough to get the gist and the caller's name and number, despite a few garbles. One annoyance is that if the message is fairly long, the top is chopped into three parts and sent via separate texts, using up the message quota on my wireless plan -- although you can turn off forwarding of the transcripts.
Voice mail playback can be clunky. On my Windows Mobile phone, I have to save an audio file to memory, and use Windows Media player to play it back. It comes out of the speaker on the back of my phone instead of the earpiece, crimping my privacy. If you use the app, you can choose whether to play voice mail from either the earpiece or speaker.
On a PC, voice mail plays fine inside the Google Voice page, even highlighting the transcribed words as they are spoken, sort of like a karaoke machine.

Button Fatigue

Text messaging, even internationally, is free, which I found surprising and useful. Even though I have to fire up the browser and text through it, it saves me about 50 cents each time. Replies are forwarded to my phone's regular messaging system, chopped up if they are too long. Or they appear in full in a Web browser, either on the phone or a PC.
Fortunately for me, Google Voice offers free calls to my native Canada (compared to 2.1 cents a minute on Skype and a penny on some phone cards).
However, the downside to Google Voice is that it requires too many keystrokes to become part of my everyday phone use. Although this certainly could take a bite out of phone companies' revenue, I'm not sure why Apple fears it on the iPhone. Google may be trying to take over the world, but it hasn't yet taken over my phone.

Without Buttons, iPod Touch Can't Touch DS or PSP

This week, Apple made it a point to position the iPod touch as a portable gaming device, and judging by the upcoming titles on display, the touch will no doubt be a winner in gaming. But why bring up the DS and PSP? Unless and until the iPod touch incorporates physical buttons into the hardware -- or introduces some amazing haptics -- putting it up against these top dedicated portables is not an apt comparison.

Apple (Nasdaq: AAPL) may be the best technology marketing company on the planet, if not the best personal technology manufacturer to date. However, when the company tries to say that the Nintendo DS and Sony (NYSE: SNE) PSP aren't cool, I'm just left scratching my head. Let's back up. What's the context here?
At Wednesday's Apple media event -- where the company announced a new version of iTunes and new iPods, including an iPod nano with a built-in video camera -- the company went to great pains to position the iPod touch as a portable gaming device.
In setting up his talk about the new iPod touch, Phil Schiller, Apple's senior vice president of worldwide product marketing, took time to dis the Nintendo DS and Sony PSP portable game devices. "When these things came out they seemed so cool," he said. "But once you play a game on the iPod touch, you know, they don't really stack up anymore. They don't have this amazing multi-touch user interface."

Huh? What? Really?

I mean, don't get me wrong -- there are dozens of killer features built into every iPod touch against which the DS and PSP fall short, but the gaming experience isn't nearly as bad as the picture Schiller wants to paint. More to the point, the DS and PSP come with a huge advantage no matter how Apple wants to spin it: the DS and PSP have buttons.
What do buttons provide? Tactile feedback and super-consistent responses to a gamer's intent. Apple multi-touch touchscreens are fantastic and responsive, but in no way do they replicate any sort of quick-and-precise action particularly well. In fact, just using my iPhone and iPod touch screens for basic applications, including Apple's built-in applications, I sometimes have to tap and swipe buttons several times to get a reaction, leaving me to wonder if my fingers have suddenly lost their faint electric charge.
Look, I'm not the first person to point out that the iPod touch doesn't have buttons and that it'll never be able to do fast action games like first-person shooters particularly well. Sure, the overall design of the DS is a bit clumsy, and the PSP a bit chunky, but they do let you play some complex, immersive games pretty darn well. Besides, there's already several decent first-person shooters in the app store (which are still hobbled by the touchscreen controls -- sorry, fans, that's right, I said "hobbled").
In a New York Times interview with über tech reporter David Pogue, Apple CEO Steve Jobs said that customers started seeing the iPod touch as a gaming device. OK, but I'm guessing that these customers don't really represent the same gamer demographics found in the sales of the DS and PSP. As near as I can tell, most DS purchases are made by parents, and I'm guessing that most parents learn about the DS from their kids, who learn about it from other kids. The PSP, on the other hand (I'm guessing) seems to sell to an older, savvier population of kids, as well as tech-savvy gamers of all ages. Both the DS and PSP are usually bought primarily for games.
As for the iPod touch, even after all the TV ads showing off cool games, I'm just not buying the idea that most of its sales are due to its gaming prowess. That is, I believe most customers are most definitely not buying the iPod touch to play games first, and to oh, play music, browse the Web, watch movies, etc., second.

People Like Games, So the iPod Touch Must Be a Gaming Platform

It's almost as if Apple slapped a palm to its forehead and said, "Oh, wow, look at how all these App Store games are selling. 'Tap Tap Revenge,' 'Flick Fishing,' 'Sheep Launcher Plus!' We are kicking butt and taking names. Our multi-touch interface must be way better than the competition!"
So now the iPod touch is the gaming device. Not a bad way to differentiate it from the iPod nano and iPhone, but what I don't get is going after the PSP and DS. Why bother trying to knock them down at all? Apple doesn't need to, and more troubling yet, when Apple tries to knock them down, they just come off as some old guys talking on a stage. Schiller lost a lot of cred when he said the DS and PSP weren't so cool anymore compared to the multi-touch iPod.
All Schiller had to do was focus on the positive, noting that the iPod touch has evolved into an awesome gaming platform with an astoundingly vast and diverse variety of applications. Better yet, the games come in friendly price points, they are easy to buy and download, and they'll keep kids and adults alike amused for years. Tired of games? Switch to music. Or a TV show. Or a movie. Or read your email and browse the Web. There's so much goodness to talk about with the iPod touch, I'm still astounded over the belabored comparisons to the DS and PSP.

What About Buttons?

If Apple really wants to turn the iPod touch into a killer gaming device, it has to get over its multi-touch fetish and make some real buttons. Apple could do it cleanly so it wouldn't adversely affect the svelte design, and if Apple can't be bothered with buttons, the company could at least create or license an add-on device (which could work for iPhone owners, too). And you don't need a gazillion buttons, particularly with the accelerometer.
Sure, there is one problem: Game developers will need to code games that will work with a new interface that includes buttons. It might also mean they'll need to create an interface for both buttons and buttonless screen-only play. Either way, it's going to be a bit more difficult, but if there's one thing we should all have learned by now it, it's that the iPod touch audience is growing fast, is interested in games, and is willing to spend money. Development investment for killer games that use buttons will come.
And really, market size is why Ubisoft is working on "Assassin's Creed 2" for the iPod touch.

Faster Processors

The new iPod touch in the 32GB and 64GB models is up to 50 percent faster than previous-generation units, plus they feature improved performance and support for OpenGL ES Version 2.0, which Apple says lets developers create games with superior graphics. Games launch faster, and you'll get better texture and detail. This is all well and good. But where are the buttons?
Perhaps Apple is working on some amazing haptics technology that will let the screen vibrate in ways that produce the sensations of buttons and textures. Maybe if Jobs lets his designers make real buttons, he fears that haptics will never become a reality on his iPod touch.
The bottom line is, Apple's iPod touch will continue to explode as a "killer" gaming platform, but it won't be because its customers think the touchscreen interface is the best ever -- despite the fact that "Madden NFL 10" will let you draw your own passing routes on the field of play. The iPod touch will continue to do well because it a) does everything else so well, giving non-gamers an easy entry into gaming, and b) has a massive game store with a big audience that will continue to attract game developers, and c) parents see the ads on TV and they understand that they can kill two birds with one stone -- give the kid a highly desirable iPod for music and media, and give them a gaming unit, too. Besides, they also know the kid won't grow out of the iPod touch.
At the Apple media event after a games preview, Schiller noted, "Those games are just amazing, and every day we're seeing new titles come out that just blow our mind." He's right. Where he's wrong is trying to convince the world that the multi-touch interface is the best, be-all, end-all gaming interface in the world. If Apple would just give us a couple more buttons, the iPod touch could turn into a game-dominating monster.
And I think most everybody could agree and understand that.

Rhapsody Sings in Harmony With iTunes on the iPhone

Apple has approved a music application from Rhapsody for distribution at the App Store. The subscription service may appear to be an iTunes competitor, but there's a key difference: iTunes facilitates downloads; the Rhapsody app will stream music selected by the user for a recurring monthly fee. If someone wants to buy the song and keep it saved, Rhapsody sends the user straight to iTunes.

It's been a big week for Apple (Nasdaq: AAPL) . CEO Steve Jobs returned to the spotlight Wednesday after a liver transplant, video cameras were added to an iPod nano for the first time ever, and now the iPhone App Store will feature a competing digital music service to iTunes: Real Networks' Rhapsody.
The app, available now at the App Store, is free for seven days; if users want to keep the service, they'll need to pay US$14.99 a month after that. However, Rhapsody officials say for that price, they'll get instant access to more than 8 million songs, without 30-second previews, on two of the more popular mobile platforms out there: the iPhone and the iPod touch.
The decision to allow Rhapsody on the iPhone comes after a summer full of criticism of the way Apple decides which apps make it to the App Store -- or which ones get pulled after initially gaining approval. The fact that Rhapsody is a rival to the iTunes digial music service is generating plenty of talk in the tech mediasphere, but Rhapsody officials are downplaying the negotiations that went on to make it happen.
"The approval process was very smooth," Rhapsody America vice president of business management told MacNewsWorld. "Following the submission of the app, our development team and the folks at Apple worked closely to make a few minor tweaks, and then it was approved."

The Song Remains the Same

With the Rhapsody app, iPhone users and iPod touch users who have WiFi access will be able to stream music to their devices. The fact that Rhapsody will send subscribers to iTunes for the actual purchase and download of songs raises a question: Is Rhapsody truly a competing music service? Not really, said Frost and Sullivan digital media analyst Mukul Krishna. He called it more "co-optition" than competition.
"If you have enough disposable income that you're paying 15 bucks for subscriptions and you're ready to purchase a song and download it locally, you'd be doing that through iTunes," Krishna told MacNewsWorld. "Rhapsody will send you there and there will be a revenue sharing model between Apple and Real for that. With the information available, it seems to be a win-win for everybody."
Apple's real goal, according to Krishna, is to use the relationship as a potential way of selling more iPhones, since the App Store has become such a success for the company. "And the incremental revenue off Rhapsody subscribers who are interested in buying a song off of iTunes, that's icing on the cake."
As for Rhapsody and Real Networks, it's the mobile platform that counts -- and more deals are on the way.
"We believe that connecting subscription music with the devices consumers care about most -- their phones -- is critical to driving mainstream adoption of the subscription music model," Smith said. "We're excited to debut this on the iPhone and plan to bring the same unlimited access to additional mobile platforms like Android."

Key Differences and Regulatory Scrutiny

Why would you want access to Rhapsody if you're getting your music via iTunes on your iPhone or iPod touch? "Rhapsody provides instant gratification," Smith said. "The song you want to listen to, right then, without having to worry about paying 99 cents to scratch that itch. Combine this with the ability to do everything on the go, from listening to radio stations to creating playlists, and you've created a great music listening experience for consumers."
Apple also might be creating some breathing room between itself and federal and European regulators who might be curious about the App Store approval process. "It decreases the chances of getting chastised by regulators," Krishna said. "Allowing those that seem like competitors to also have apps on the iPhone -- there's not a lot there that people can complain about."