Apple has released version 2.0.1 of their iPhone / iPod Touch software. Apple has simply stated that the update fixes some features and some bugs.

Apple hasn't posted what exactly the changes on this new version entails, but some users have discovered the following changes after installing the update:

• You can now drag an app icon across multiple pages in one motion, rather than having to drag it, drop it, pick it up again and drag it over to next page, and repeat.
  
• Contacts are now more responsive.
  
• After installing 2.0.1, each successive backup is much faster.
  
• Apple may have changed the calibration of the iPhone's reception "bars" while connected to a 3G network to reflect a stronger signal than before.
  
• Keypad loads quicker.
  
• Screen rotation in Safari appears to be smoother.
  
• Some apps may ask to be updated after the firmware upgrade.
  

When Amazon starts handing out $25 - $200 rebates on Macs, one starts to suspect that some new Macs may be out soon. Traditionally, new Macs arrive in early September, just past the end of Apple's "Back-to-School" promotions (in which students can get an $299
iPod Touch 8GB for free). Interestingly enough, Amazon is offering a 5-8% discount on all the iPods as well, which haven't had a model refresh in some time.

The news this morning in the tech world seems to be that Apple has managed to negotiate the same date of release on iTunes as DVD retail release; new titles are 14.99, and older catalog titles are 9.99. Part of the reason this is such a major victory for Apple is that when this was done on the music side, there was a noticeable increase in iTunes sales, and a decline in retail sales of albums. For music, I can understand the appeal; consumers were buying music, ripping it into MP3, and then copying it onto their music player; iTunes managed to save them the work and know-how of putting their music CD into a format their music player could use. For movies, it isn't quite as simple; iTunes Movies aren't a format TiVo or other DVRs understand, and putting a movie onto an iPod takes up a substantial amount of space.

One of the small victories that Apple has won by doing this, of course, is making it easier for consumers to get the latest releases. Apple's rentals business is certainly interesting; most consumers want to pay to own their media, not rent it, and it is especially true for movies, but until Apple can get the AppleTV capturing the living room market, the way the iPod has captured consumers on the go, I just don't see downloadable video replacing DVD sales anytime soon; it may be for this reason that movie studios have gone ahead with this agreement; previously, DVD sales had a 30-45 day head start on iTunes, in order to preserve the revenue stream of DVD sales. I never saw this as much of a problem, as those who download and those who purchase DVDs are two entirely different audiences; the customers who purchase a DVD are different from those customers seeking to download a movie to watch on their computer. Until Apple can get iTunes onto the living room television, iTunes isn't really competition for DVD sales.

In this ad for Numb3rs, they parody the Apple Mac ads pretty cleverly:

It occurs to me that I've been a bad journalist today, and I haven't really explained just why Apple's iPhone SDK is such a big deal; I certainly didn't go as nuts about the Android SDK and spend the entire day writing about it, but it's because the iPhone SDK changes things in a big way when it comes to mobile.

First of all, the iTunes App Store. It functions the same as iTunes, making software downloading and installation a snap. Have you ever tried to install a program on your cellphone? On my previous phones, it was near impossible. Things have gotten better with the inclusion of mini-USB ports so that cellphones can be hooked up to computers, but the process isn't an easy one. For the average consumer, or even a more tech-savvy one, mobile program installation is hard. A couple touches at the App Store, and it's done.

For the developer, things are also complicated -- there are multiple approaches to distributing their software. The first and most profitable means is to get their program bundled with the handset. Developers could also negotiate with the cellphone carrier to have their program on the carrier's website to download. Another method would entail setting up a website from which they can take payments and then send the program to the customer's cellphone. Of course, before any of this can happen, the program must be written and compiled for the proper handset. Apple's App Store simplifies this process greatly -- no need to worry about compatibility, because there's only one iPhone -- installation of the program is a snap for users, Apple sets up the website, so the program is on a central location, Apple splits the revenue with the developer if there's money involved, freeware doesn't cost anything. Most developers are going to be happy with the 70/30 split -- the distribution of software alone is going to be worth it.

The new App Store simplifies it both on the consumer end, and the developer end.

Although the business applications of the iPhone were certainly not nearly as glamorous as their gaming cousins, Enterprise software is a big segment of the smartphone market, and Apple is very smart to embrace their needs as well. One of the things that Apple is going to do for the Enterprise is to set up a App mini-Store just for that business, and that's certainly going to change how things get done.

For instance, an e-mail can just be sent notifying the employees to update their iPhones with the latest version of whatever proprietary iPhone app they're running, and with a couple of touches, they're finished.

Today, Fake Steve Jobs wrote:

"Yeah, we rocked your friggin world, right? I mean 29 June 2007 might be the day the world changed, but today it just changed again. BlackBerry is dead. Microsoft is dead. Windows Mobile is dead. Amazon is dead. Kindle is dead. Nokia is dead. Motorola was already dead but now they are even more dead. Google's Android is dead. Samsung is dead. LG is dead. Sony is dead. UTStarcom is dead. We've thrown $100 million into an iFund so people can build iApps to sell on iTunes and give us 30% of their iMoney. The coming onslaught of new applications will make iPhone the only smart phone that anyone in the entire world will ever want to use."

One of the clever things that Apple did when they made the iPhone SDK was tailor it to XCode and the Intel-Macs -- you won't be able to use an old PowerPC Mac to develop for the iPhone, and the XCode IDE is included with every Mac, making it pretty easy to get started on. In making this Intel-Mac only, one can definitely sense the shift that is about to occur in Cupertino, with the next MacOS likely to follow the same trend away from PowerPC.

Every mobile phone developer wants to make a program for the iPhone, or at least port over an existing app to the iPhone, and that means they're getting a new Intel-Mac (if they don't already have one); the long term effect of this of course, is that things will slowly shift from PC workstations to Mac environments for developing on the iPhone. I find that the Mac actually satisfies my needs for an development operating system pretty well -- it functions as a Mac, a Unix box, and a Windows box if I so choose.

The uncompressed SDK runs about 5GB in total, but the installer includes gcc, which no doubt accounts for a large chunk of the SDK. Some of the installed apps in the SDK are pretty buggy; in trying to run the Instruments.app, I ran into an infinite loop when it came to trying to quit without saving, and was forced to Force-Quit the app.

This SDK was likely rushed out the door, but it should suffice for the time being, allowing developers to get started on their projects to port (or to create) programs for the iPhone in time for the June launch of iPhone 2.0

I'm really looking forward to seeing some of the programs that are released for the iPhone, though I must admit, the addition of AIM is what I look forward to the most.

It's an old adage that one should never buy the first generation of an Apple product, because it's usually packed with bugs and missing features that become standard in later versions of the same product; I can say from experience that this is usually the case, and there's no truer case than this with the iPhone. The bugs with the iPhone are rather minor things and after 14 revisions of the firmware, most of them have been fixed. Save for a newly upped storage capacity on the iPhone, nothing significant has changed since the release in June of last year.

Apple's strategy in the past has been a "same-day-announcement-release" of their products -- to a certain extent, this works well, but judging by the reception of the iPhone at MacWorld 2007 and the release in June, having a long release period doesn't seem to dull the enthusiasm much. There are design issues with the iPhone, and while I believe the external casing for the 2.0 iPhone won't change much, I think we're going see some some pretty substantial improvements for the hardware inside. There's two things ways that Apple can approach iPhone 2.0: all new hardware, or old hardware which is faster, smaller and more efficient. Since the biggest gripe about the iPhone is 3G, I suspect that once the iPhone 3G is released, the griping on the iPhone will shift from "it doesn't have 3G" to "The 3G iPhone's data plan is too expensive!"

I also think that we're going to have a good number of upgraders when version 2.0 comes out, of people who bought a version 1.0 iPhone and want to move up to the latest and greatest -- now what happens to their old iPhone? I suspect a great majority of them will be given away to other family members or be resold to fund iPhone 2.0.

While I think it's possible for Apple to sell both EDGE and 3G iPhones at the same time, I don't think this going to be the case for the iPhone, unless they can make the EDGE iPhone substantially cheaper than the 3G iPhone; I'd envision the 3G iPhones slotting in at the same price as their current EDGE products, so a 8GB iPhone with 3G would be $399, and the 16GB iPhone would be $499 -- the only reason this would be able to work is if the price of memory continues to drop, and they keep the hardware more or less the same; the cost of the chips required to make the iPhone EDGE capable were priced at around $16, the cost to include 3G is in the ballpark of $20, yielding a $4 increase in cost of manufacture, which definitely means that it benefits Apple to continue selling EDGE as long as they can (or to increase the price of the 3G iPhone by $50, but I have a feeling that the resulting numbers of $449 and $549 are too ugly).

We all know that 3G is coming, so why not announce it today? Because this would negatively impact the sales of their current iPhones; keep in mind that for the first iPhone, the waiting period for the iPhone was 6 months -- people neglected cellphone upgrades during that period in order to line up and be one of the first to own these devices. In that case, having an early announcement benefited Apple; competitors didn't get potential iPhone users when they knew the iPhone was coming. With only 3 months to go before the announcement/release of the 3G iPhone, Apple is likely benefiting more by continuing to keep sales brisk through this quarter. When the 3G iPhone appears, it will be available that same day -- make no mistake, Apple wants to make that 10 million iPhone goal, and having people hold off purchases for any period of time runs counter to their purposes. 3G is not as widely available as GSM coverage, but it's getting better -- the last thing Apple wants is a bunch of returns after launching iPhone 3G with customers complaining about 3G coverage.

The iPhone started with a per-unit profit margin of about 50% -- in three months, the price was cut, and the profit margin amounted to only 35%, and the 4GB was discontinued, yielding a 17% profit margin on their remaining inventory. This $200 price drop had a huge effect on sales of the iPhone, and refurb iPhones sell out quickly (I suspect the majority of these iPhones are bought by the gray market and resold internationally, I know very few people who have purchased a refurb). My guess is that the current product lineup maintains a 35 - 40% profit margin, and that this is the price that Apple wishes to maintain -- too much of a shift in either direction would not be good for sales. When 3G is released, I expect Apple to drop the price of EDGE handsets to quickly move them out, and I suspect the biggest push is going to happen at the end of the year, around October. What's currently hurting Apple's sales of the iPhone right now is their rollout internationally; once they secure more deals with carriers, they should be able to make their 10 million sales easy; what's stopping them is that a fair chunk of them use CDMA and 3G as the network technology, not GSM.

For Apple, it's the 10 million mark that matters, and 3G is the way they're going to do it.

Today the iPhone SDK was revealed, along with a roadmap of the next couple of months. In effect, it looks like this:

• March 2008: SDK, iPhone software 2.0 beta
  
• Late June 2008: iPhone software 2.0 final
  

The iPhone is a great little mobile platform, and while the business tasks are no doubt interesting in how they can make a difference at their workplace, I can't help but to think that the iPhone is going to be a great platform for gamers -- making a game for an iPhone is going to be similar to developing a great Nintendo DS game. I'm not sure I can make the same claim for the Android SDK, since the hardware will be so varied.

I think we're going to see an explosion of indie and casual game developers on the iPhone -- yes, the platform is small, and hopefully that'll force the game devs to focus on the important aspect of the game: the gameplay.

One of the things people have been asking for since the announcement of the iPhone, is an actual iPhone SDK -- previously iPhone apps had been limited to web apps which ran in Safari. An SDK allows writing custom apps specifically for the iPhone without needing network connectivity. There are already many iPhone apps out which require the iPhone to be jailbroken in order to install them, and an SDK will help legitimize these efforts. I can say from experience that developing apps for a much more limited device involves a certain amount of reductionist philosophy, as it is the core of the application that really matters.
Apple released the information about the SDK, and here are the talking points:

• Apple has licensed ActiveSync for the iPhone to talk directly to Exchange, which includes the ability to remotely wipe the iPhone.
  
• iPhone SDK includes Core OS, Core Service, Media and Cocoa Touch
  
• iPhone simulator and Instruments for measuring performance on an iPhone.
  
• OpenGL for graphics and OpenAL for audio
  
• EA demos touch version of Spore running on the iPhone
  
• AOL demos AIM on the iPhone
  
• Sega demos Super Monkey Ball on the iPhone
  
• Also, Salesforce and drug UI lookups for more business related apps (not nearly as exciting)
  

There's a list of program types that are excluded from being part of the App Store, which include porn, privacy, bandwidth hog, unforseen, malicious and illegal.

iPhone software 2.0 goes beta today, with a final release in June for free. iPod touch will get similar updates, but there will be a slight charge for it.

SDK is available on website for free, and joining the iPhone developer program costs $99. The iPhone SDK weighs in 2.1 GB, so as you can imagine, Apple's developer website is getting pretty slammed right now.

New VC fund called iFund, $100 million initiative from Kleiner Perkins, in order to fund young, innovative developers.

One of things I noticed at GDC 2008 was the intensely high Mac to PC user ratio. Almost everyone I saw presenting had brought a laptop, either to run a Powerpoint presentation or to demo their work, and with the exception of the Square Enix people, everyone was using a MacBookPro or a Powerbook. People taking notes at GDC, I'd say the audience of Mac users was about 75 percent. If I saw a laptop, it was usually a Mac. Now, the reason I find this somewhat surprising is that the platform targeted for most computer games, is in fact the PC, by a somewhat large margin. The hardcore Mac game market is mostly dominated by World of Warcraft, and includes a small selection of triple-A titles ported over from the PC. For games, the PC market has shrunken down, while most of the games now are being released for the console. I have been to many GDCs, but I've never seen such a high percentage of Macs being used before.

Part of this, I credit to the affluence of being a game developer; being in the industry and being able to attend the GDC means you have a certain amount of cash -- during the breaks in the sessions, I saw plenty of PSPs and DS Lites, as well as iPhones. I believe that there are several factors in effect here: the iPod halo effect is definitely present; these are folks who probably would have never considered a pre-intel Mac (my ancient Titanium G4 Powerbook was definitely the Methuselah at the conference), but also coming in play is that for programmers who are not working in the Microsoft .NET architecture, the Mac is an overall better programming platform -- UNIX support is standard, and if you need Windows, there are enough ways (VMWare, BootCamp) to install Windows on a Mac with minimal effort, whereas installing Windows and Linux (or using Cygwin) is simply a daunting task. Couple this with the the MacBook Pro's capable gaming performance (for a laptop), and you have an ideal portable notebook for a developer.

I did not see a lot of MacBooks here, nor did I spot in this gathering of developers a single MacBook Air. I did see an black eeePC, and someone from EA had an OLPC. Most laptops seen were in the 13-15 inch range, I did not see any 17 inch laptops, although I did see one XPS Dell laptop being used by an attendee during lunch. Keep in mind that not everyone here brought a laptop; presumably, most of the work they do is on a desktop computer in the office, most likely running some variant of Windows.

I believe we are just starting to see the shift away from Windows in laptops; I suspect that within a few years time, with the withering of the computer as a gaming platform, the choice of computers will largely be based on the preference of the user.