In Apple's market cap success, beating Microsoft means nothing

It would seem that May 26, 2010 will be forever considered a day of joy for Apple fans. Many see this day as the time when Apple was able to overtake Microsoft, when the underdog finally bested the incumbent. Late in the afternoon, the market capitalization of Apple (AAPL) crept ever so slightly past Microsoft (MSFT), and set off a celebratory tsunami of blog posts, tweets, Facebook statuses, and obligatory internet forum flame wars. It was almost like Apple fans thought they ‘defeated’ Microsoft in some way. And maybe they did. Market capitalization is a very common and practical tool for evaluating the market worth of a company, both for its ease of use and its ability to quickly give a snapshot the attitude of investors about a company. Specifically, market capitalization is the price of a company’s share multiplied by its total outstanding shares. This allows for the size of a company to be factored into the determination of its value, rather than just the share price alone (Google may have a much higher stock price than, say, Wal-Mart, but that doesn’t say anything about the value of the company in and of itself, due to the sheer size of Wal-Mart). Apple’s stock price has been higher than Microsoft for quite some now, and the reason why that alone didn’t cause as much reaction is because just comparing stock prices doesn’t take into account Microsoft’s size. It’s more important that Apple’s market cap rose above Microsoft, because it’s a more comprehensive evaluation of investment worth. It means that even though Apple is a smaller company, with a much smaller market share and product base, investors still see Apple as a company worth investing in more than Microsoft.

The amount of hype this particular piece of news is generating boggles my mind. Considering the huge consecutive successes Apple has experienced since Jobs retook the throne, which drove market confidence up and up again and again, the fact that Apple became an investor’s gold mine is not surprising in the least. When a company releases an iPod, an iPhone, and then an iPad, each taking the retail market by storm and consuming almost miraculous amounts of market share in their respective segments, financial forecasts will skyrocket. Despite all the controversy surrounding their behavior in certain areas of market etiquette and established wisdom surrounding open-source ideas and policies, Apple has consistently released products that people love. They’ve made product releases an art and a science, and it’s a symphony of beautiful music to investors’ ears. Apple is completely deserving of the accolades, and I wouldn’t dare take the credit away. What I don’t understand is how this has anything to do with Microsoft.

For a long time, it was Apple vs. Microsoft, Jobs vs. Gates, Windows vs. Mac OS, and PC vs. Macintosh. Microsoft made an OS, and it was very successful; Apple made an OS, it tried to compete, and generally failed in the market. In those heady days of old, both companies were software companies. Now, not so much. Apple’s return to the limelight after a few years in exile under a different CEO was marked by the release of a mobile digital music player. While OS X was a huge step in the right direction as far as mainstreaming the OS, nothing brought in revenue and visibility like the iPod. The iPod is one of those rare products that are so pervasive in the consumer market that even music devices that aren’t iPods are called iPods by many people (Think Kleenex, Nerf guns, Band Aids, or “I’ll Google that”). On the heels of the iPod and its various critically acclaimed upgrades came the iPhone, pushing Apple further into dominance in the mobile device market. In fact, Apple COO Tim Cook believes that Apple should be seen as a mobile device company. Following the one-two punch of the iPod and iPhone, the iPad is released, once more dominating the market and selling its first million in less than a month.

While Apple was busy reinventing itself as the mobile device company everyone wanted to emulate, Microsoft took its utter and total domination of the OS market and entrenched itself in the enterprise world. While everyone can agree that Windows Vista was a failure on many counts, and possibly one of the key factors behind the decline of their market cap and overall financial performance, businesses, where the bulk of computing happens, just stuck with XP and waited out the storm. Windows Server 2003 and all its numerous and varied enterprise management tools is what IT professionals use, period. There is no viable substitute for Active Directory, and there is nothing on the horizon that is even thinking about invading that territory. Windows Server 2008 is becoming very popular in the enterprise, especially for its virtualization capabilities, and it’s a matter of time (and a service pack or two) before Windows 7 takes the place of XP as the leading corporate OS. The world’s businesses run on Windows, and that’s where Microsoft has succeeded more than anywhere else. Just the opposite of Apple, every piece of hardware Microsoft puts out seems to be doomed to market failure, and the Zune and Kin platforms are perfect examples of that.

You see, we’re comparing apples and oranges (pun definitely intended). The symbolic accomplishment of Apple achieving a higher market cap than Microsoft is fueled by memories of the war that these two technology visionaries once fought long ago. While Mac OS market share is growing, it isn’t even close to becoming a threat to the Windows platform, and Apple understands that. The fact that the Apple has ascended to a cool 2^nd place in the US market capitalization standings is big deal. The fact that they beat Microsoft doesn’t mean anything in the context of Apple winning the old OS wars.

Apple’s market cap conquest will be thrown around for a while as ammunition for the biggest tech flame war of our time. It will be a buzzword in Internet forums when Apple fans want to prove their superiority over Microsoft. It’s a misplaced victory, however, and the fans should be celebrating the fact that their market cap is 2^nd in the country, period. Spinning the victory as a defeat to Microsoft only weakens the real meaning behind the success, and completely misinterprets the perceived competition between Microsoft and Apple.

New iPhone vulnerability leaves your data wide open

A new vulnerability has been revealed today that can access your data on your iPhone, even when your phone is in a locked and un-jailbroken state. PIN codes to protect users from accessing your phone won't stop the vulnerability, according to Engadget.

Bernd Marienfeldt and Jim Herbeck discovered the vulnerability, and said it can even access most of the users data. The vulnerability can even work on an iPhone 3GS running firmware 3.1.3, when you connect it to a computer running Ubuntu Lucid Lynx, even when the phone is in a locked state.

This vulnerability can't be spread like the iPhone iRickRoll'd worm, which changed users backgrounds on their jailbroken iPhones, running SSH and who haven't changed their default password. This new vulnerability appears to only be when the phone is tethered to a computer running Ubuntu Lucid Lynx, so any person wanting your data will need to get a hold of your iPhone first.

With open vulnerabilities like this, Apple will find it hard to turn the iPhone into a prime-time corporate device, where companies like BlackBerry have proven to be reliable and secure. Apple has yet to address the vulnerability or release a patch.

Windows Phone 7 spotted on Samsung prototype, plays Xbox Live game

So far we've only seen three devices running Microsoft's up and coming Windows Phone 7 mobile OS - we've seen the ASUS prototype model that is the main testing device for WP7, the LG Panther which recently was shown on the Engadget show, and the Omnia i8910 which was hacked to run Windows Phone for a "One-off demo".

Engadget is reporting that the Omnia was shown off again this week at an event in France called "reMIX", with a recent build of Windows Phone 7 running on it - which seems to be making great progress - the OS/Phone is fast, responsive and all the features functioning - including GPS and Camera. Videos of the phone running have surfaced, which show the phone performing day-to-day tasks, as well as playing a ported Xbox Live Arcade/iPhone game, which was programmed in one week using a staggering 90% shared code.

Engadget points out that the device "looks like an Omnia" but doesn't have the Omnia's original OMAP3 processor - instead the internals have been swapped out for a more powerful SnapDragon processor.

Windows Phone 7 is Microsoft's highly anticipated update to the older Windows Mobile series, due out in "late 2010". There has been a lot of news surrounding the release, with Skype and Mozilla dropping development of their products due to OS restrictions, and leaks of new phone models surfacing regularly.

To follow Neowin's coverage of Windows Phone 7, use the Windows Phone 7 tag.

New iPhone in June confirmed by AT&T to employees

Boy Genius reports that AT&T has confirmed to its employees that there will indeed be a new iPhone release in June. This comes after the same source reported that there was a vacation freeze for all employees in the same month. The news isn't exactly surprising, as all previous models of iPhone were released in June, and the annual keynote at the World Wide Developers Conference will be held this year coinciding with the logical June release date.

Image courtesy of Gizmodo

The much anticipated phone comes on the heels of heated controversy over Apple's handling of leaked (or just misplaced) information about the phone. Many times, the controversy overshadows the real story, which is the phone itself. It has been rumored and pretty much confirmed for quite some time that there will be a front-facing camera that will have video chat capability, as well as an updated backside camera with LED flash. According to Gizmodo's perusal of the prototype they found/bought, the screen looked like it was sporting a higher resolution than previous models, 960x640 pixels. All in all, it will be an exciting release, and I'm sure much of the controversy over Apple's behavior as of late will die down once users can get their hands on the new iPhone.

Apple overtakes Microsoft to become the world's most valuable tech firm

It's official, Apple's market cap is now bigger than Microsoft's.

As of early afternoon today, Apple's market capitalization on the NASDAQ stock market is higher than Microsoft's. Market cap is one of many ways that the financial markets measure the value of a company. It is worked out by the value of the stock versus the amount issued. As it stands right now Apple is valued at nearly $227 billion compared to Microsoft's $223 billion. Although Apple's market cap is higher right now, Apple does not issue dividends to its share holders whereas Microsoft does and this affects the comparison. Companies can not be compared on market cap alone, however this is a significant milestone for the folks in Cupertino and for the industry as a whole.

What does this mean for Microsoft?

It's a clear wake up call and solid proof that Apple's gains in the mobile market and MP3 player market have turned the company around. In the past five years alone Apple's stock has risen nearly 560% whilst Microsoft's has risen a mere 4%. The New York Times names Apple the new King of Technology. Despite Microsoft's domination with its Windows and Office software the company struggles to compete in search, mobile the MP3 player market. All three markets are huge areas of growth, innovation and provide opportunities for huge profit gains. With the recent news of Microsoft's re-organisation just beginning to settle, it's clear the company has a huge task ahead to regain market share, mind share and most of all to swing consumers taste. It's clear that over the last five years consumers needs and tastes have shifted from business focussed devices and software to devices that work well, are simple to use and are good looking. Consumers also want something that works quickly with a simple user interface. Apple and Google have successfully filled a gap that Microsoft missed. Microsoft dropped the ball on Windows Mobile but will Windows Phone 7 be too late too?

Image Credit: Businessweek

New iPhone will feature video chat

Apple really can't seem to keep a lid on information regarding its not-so-secret, upcoming fourth generation iPhone. According to some recent spy work by Engadget, it seems that video chat has now been indisputably confirmed for the 4G iPhone. Some recent tweeting has revealed that American Beauty director, Sam Mendes, is in the midst of creating a bunch of commercials for the launch of the next iPhone. As per Engadget's inside tipster, at least one of the commercials will showcase a video chat conversation using the front-facing camera.

Engadget feels very confident about their source. Combined with video calls debugging screenshots unearthed by Boy Genius, it would be a complete shock if the next iPhone didn't contain a video calling feature. The interesting thing will be to see how AT&T's network reacts to all the extra traffic. Networks like that of Verizon and Sprint, which are rumored to also be getting the phone, seem better suited for such a data intensive feature. There's always the unlikely possibility that, just like with MMS, AT&T will shut off the feature until their network is ready to cope with the extra traffic (or just limit it to Wi-Fi only). Whatever the case may be, the world won't have to wait much longer to find out.

The next iPhone is set to be announced by Steve Jobs on June 7th at Apple's annual World Wide Developers Conference. A release date has not been set.

Thanks to Apple, FTC unanimously approves Google-AdMob deal

According to a press release by the Federal Trade Commission, the investigation into Google's acquisition of AdMob has been dropped in a five to nothing vote. AdMob is one of the world's largest mobile advertising companies and serves over 7.1 million mobile ads per month. After much deliberation, the FTC decided that the deal is unlikely to harm competition.

It had originally been feared that a Google-AdMob deal would raise major antitrust issues. Because of this, it seemed certain that the FTC would move to block the deal from taking place. However, recent events by Apple have changed the minds of the Commission. Back when Apple announced the iPad, the company unveiled its new mobile advertising endeavour, called iAd. Because of this increase in competition, the Commission felt there to be plenty of room for the combination of Google and AdMob to flex its muscles in the mobile ad market.

"As a result of Apple’s entry (into the market), AdMob’s success to date on the iPhone platform is unlikely to be an accurate predictor of AdMob’s competitive significance going forward, whether AdMob is owned by Google or not. Though we have determined not to take action today, the Commission will continue to monitor the mobile marketplace to ensure a competitive environment and to protect the interests of consumers."

As evidenced by Google's new mobile ad demonstrations at its I/O developer conference this week, Apple and Google have very different approaches to mobile ads. While both systems share some similar characteristics, Google will continue building upon its already lucrative ad network and its partners, as well as allow third-party ad networks to freely display their money makers on the Android platform. Apple, on the other hand, is new to the ad game and seems to be targeting advertisers who are willing to shell out millions of dollars for a place on its iProducts.

iPad is outselling Macs nearly 2:1

When the iPad was first announced back in January, consumers looked at the device as a possible failure. With a lack of features at launch, like a built-in webcam and flash, many expected the device to be the next Microsoft Origami.

Not many expected the iPad to take off as it did, where shoppers are finding it hard to even find it in stores, and retailers are selling the device almost as fast as it comes in. According to All Things Digital, last weeks reported sales of the iPad mean it outsold Mac's. The iPad sells approximately 200,000 units a week, while Mac sales were estimated around 110,000 units per week, in the US.

The iPad sales might be strong, and outselling Mac's almost 2:1, but it still doesn't outsell the year old iPhone 3Gs. The iPhone 3Gs is said to be selling an estimated 246,000 units a week, about 25% more than the iPad; the iPad sold 300,000 units in the first day of sales.

With Mac sales at an all time high, up 33% in the 2Q of 2010, Apple is showing strong sales all around with its iProducts, including the iPod touch.

The iPad is scheduled to go on sale next week in Australia, Canada, France, Germany, Italy, Japan, Spain, Switzerland and the UK. Other international countries are expected to get the iPad on July 10 of this year.

Image credit: RBC Capital Markets

Ballmer: Apple's Mac growth is a "rounding error"

Microsoft's CEO Steve Ballmer is a man who's not afraid to talk down his competitors. When Apple initially released the iPhone, he stated that it had no chance of gaining a significant market share. Now, when speaking to a group of market analysts, he has said that the growth that the Cupertino company is seeing with their Mac product range can be attributed to a rounding error.

Whilst he was at the 2009 Financial Analyst Meeting, Ballmer said, "Share versus Apple, you know, we think we may have ticked up a little tick, but when you get right down to it, it's a rounding error. Apple's share change, plus or minus from ours, they took a little share a couple quarters, we took share back a couple quarters." He then added, "Apple's share globally cost us nothing. Now, hopefully, we will take share back from Apple, but you know, Apple still only sells about 10 million PCs, so it is a limited opportunity." Ballmer noticed that, in the crowd of the meeting, there was a large proportion of Apple computers. He noted, "I can see the Apple logos versus the PC logos. So we have more work to do, more work to do. Our share is lower in this audience than the average audience. But don't hide it. I've already counted them. I have been doing that since we started talking."

He did note that Apple is known for their higher quality machines that PCs usually are, saying, "At least when Apple attacks us, the primary attack that comes from Apple is, 'Hey, at the end of the day, we have the coolest hardware.' When you see the hardware, the PC designs that will come out this Christmas with Windows 7, I think that conventional wisdom can begin to really change. There is some really amazing, amazing work. So it is possible to get great hardware innovation, even when hardware and software comes from separate companies."

Ballmer describes Windows as falling in between OS X and Linux to get what consumers want; a product that's not too cheap, and not too expensive. About Apple, in this regard, he said, "We do not, say, like Apple, believe in low volume, very high prices, very -- Apple is a great company, does a fine job. But their model says high margin, high quality, high price. That's kind of how they come to market. We say we want big market share. But with big market share, you take a lower price."

Lastly, AppleInsider added on Ballmer's thoughts about Microsoft's 'Laptop Hunters' advertisement range, saying, "And are the ads working? In an independent survey, we asked 18- to 24-year-olds—or they were asked, 'Who offers the best value, Apple or Microsoft?' You can kind of see Apple was comfortably ahead despite the fact they — well, despite whatever the facts are. Our ads started in April of '09. You can see kind of what the perception changes have been so far."

iPhone bug to hijack phone by SMS will be revealed tomorrow

Forbes is reporting that two researchers plan to reveal an un-patched iPhone bug that could virally infect phones via SMS.

The hijack was discovered by iPhone hacker Charlie Miller. Miller is a well known security researcher, famous for hacking a Macbook within seconds earlier this year at Pwn2Own 2009.

Miller plans to unveil the attack methods during a talk he is holding at tomorrow's Blackhat security conference in Las Vegas. Miller claims he is able to take over the iPhone with a series of malicious SMS messages. "This is serious. The only thing you can do to prevent it is turn off your phone," Miller told Forbes. "Someone could pretty quickly take over every iPhone in the world with this."

The flaw

The flaw exploits an issue with the way the phone handles SMS messages. The attack developed by Miller works by exploiting a missing safeguard in the phones' SMS software that prevents code in the messages' text from overflowing into other parts of the device's memory where it can run as an executable program. Miller and his colleague Collin Mulliner plan to demonstrate how a series of 512 SMS messages can exploit the bug, with only one of those messages actually appearing on the phone, showing a small square. If you receive a text message on your iPhone any time after Thursday afternoon containing only a single square character, Miller advises turning the phone off as soon as possible.

The series of SMS messages will give hackers complete power over any of the smart phone's functions. This includes dialing the phone, visiting Web sites and sending SMS messages.

According to Miller, Apple has been made aware of the issue but no patch has been put in place.

Windows Mobile affected too

Miller also claims he has found a bug in Microsoft's Windows Mobile devices that that allows complete remote control of the device. Miller discovered the bug last Monday and it's currently un-patched by Microsoft. It's not clear whether Miller plans to unveil full details of the Windows Mobile bug tomorrow or limited details until Microsoft has been made aware.

Apple tablet computers may be available as soon as September

AppleInsider reports that Hon Hai Precision Industry Co. will be assembling tablet computers for Apple that may appear for sale as early as September.

The report, which was published by the Taipei, Taiwan Apple Daily paper and later carried by Dow Jones, cited unnamed sources in reporting that Wintek Corp. would supply flat panel displays for the device and that its battery would be built by Dynapack International Technology Corp.

According to sources known to AppleInsider, Apple's expected new tablet device which will be equipped with a 10-inch display and integrated 3G wireless service is not anticipated to arrive before early 2010.

That suggests that the report made by the Taipei, Taiwan Apple Daily in regards to Hon Hai may actually reflect the upcoming third generation iPod touch, which could easily be described as a "tablet computer" and is expected to be announced in September when Apple typically announces new revisions the iPod touch.

However, the paper specifically cites the device in its report as having a 10-inch screen along with 3G wireless service and describes it as being an "enlarged iPod", and not just a refresh of the existing iPod touch. The report indicates the model will hit the market in September or October in order to hit the Christmas holiday season, but notes that reports in the "foreign media" are not expecting it to arrive until the first quarter of next year.

The next generation of music

Apple seem to have a passion for trying to re-invent the way we use certain technologies. With this in mind, the FT website has published an article which talks about Apple's plans to come together with major record labels to tackle the lull in album buying in the recent years.

The popularity of download-able content has shot through the roof, especially music, leaving many people with bare CD cabinets. However, have no fear because Apple seems to think it has the answer. Working closely with EMI, Sony Music, Warner Music and Universal Music, Apple are hoping to to stimulate digital sales of albums by designing interactive booklets, sleeve notes and other interactive features to go along any with music downloads.

So, perhaps not saving the high street stores, but changing the dynamic of the iTunes store. According to the FT, Apple "hopes it will change buying trends on its online iTunes store."

The big names of music production along with Apple are heading towards a release date for September for the project.

"It's all about re-creating the heyday of the album when you would sit around with your friends looking at the artwork, while you listened to the music," said one executive familiar with the plans."

"It's not just a bunch of PDFs," said one executive. "There's real engagement with the ancillary stuff."

So, now every track buyer will hopefully be able to enjoy footage, lyric sheets, and linear notes in addition to their musical content. Apple think this will add a new dimension to the way music is provided in the future and hope further, that it will increase online sales of music through the iTunes store. The music companies according to the FT website, declined to comment on this matter.

Album sales in the US fell 14 per cent in 2008 to 428.4m units, according to Nielsen SoundScan, which tracks retail sales data.

AVG update breaks iTunes

A recent AVG signature file update is incorrectly identifying iTunes/iPod files as viruses, as reported by forum users on the Apple website.

The AVG Virus scanner identifies all iTunes/iPod related files as the 'Small.BOG' trojan - a trojan which does not seem to exist, as revealed by a quick Google search. The update, which is unidentified, but confirmed to be a false positive, is removing all files, and deleting them. Once these files have been "cleaned", iTunes will not run, and is not fixable by a reinstall.

A fix has been pushed by AVG in the latest signature update - but users may need to reinstall iTunes. A fix can be found here on the Apple Forums.

AVG is a free/paid antivirus solution offered by AVG Technologies, and is renowned for it's high virus detection rate, and is currently rated 4th in Neowin's "Definitive Best Antivirus 2009" poll on our forums.

iTunes has also been in the news lately due to Apple deciding to remove the Palm Pre's ability to sync like an iPod, by pushing an update which prevented iTunes from synchronizing with devices that falsely identify themselves as an iPod. Palm has updated WebOS to utilize a new way of spoofing the Pre's identity.

iPhone encryption can be cracked in under two minutes

One major barrier to entry into the business world is security. RIM has earned a solid reputation with reliable and secure data transmissions along with Microsoft. As Apple attempts to show that its platform is ready for the business world, a well known hacker is claiming that the phones encryption can be cracked in less than two minutes.

The ease of use of the iPhone is what is attracting many to the platform. With its finger friendly OS and an application database that is growing at incredible rates; compatibility is expanding each and every week.

Encrypting message is something every organization relies on in-case the mobile equipment accidentally falls into the wrong hands to prevent trade secrets from being stolen. Jonathan Zdziarski, a well known iPhone hacker, claims that "I don't think any of us [developers] have ever seen encryption implemented so poorly before, which is why it's hard to describe why it's such a big threat to security." He claims that he was only using off the shelf software and compromised the iPhone in under two minutes.

Until Apple has proven the strength of its encryption it may take longer for widespread corporate adoption. As the user base of the iPhone continues to grow it will become a larger target for malicious users who wish to inflict harm on individuals and corporations; security can never be overlooked.

Apple introduces the second iteration of Logic Studio

If you keep track of the Apple world, you'll know their online store went down worldwide some hours ago. This generally means one thing... a new release of sorts. Apple quietly introduces smaller products, though generates hype by keeping their store down for an hour or two, instead of the conferences they hold for major announcements. This most recent introduction was a long awaited product, the second version of Apple's Logic Studio, and comes with a bunch of new features, as MacWorld happily reports.

There's a bunch of new features in this iteration (over 200, apparently), all of which will appeal to musicians. According to MacWorld, "the suite includes Amp Designer and Pedalboard plug-ins, features similar to the guitar tracks and stompbox effects introduced with iLife '09's GarageBand. Amp Designer includes 25 amplifiers and 25 matched cabinets that can be captured with one of three virtual microphones. You can mix these amps and cabinets—for example, to play a Mesa Boogie-like amplifier through a Marshall cabinet. Each amp includes 5 EQ and 10 reverb presets."

If you're a proficient live musician, you'll have a couple new tools at your disposal; MainStage 2 comes with two new plug-ins. The first of which is for triggering pre-recorded backing tracks, which can be trigged either by using a MIDI controller, or a USB one. The second is called Loopback, and it allows you to record something whilst on stage, and then tack on additional audio layers with each 'pass of the virtual tape'. It finishes off by bringing in a wealth of handy new functionality to make studio recording that much easier. Drum Replacer will replace a drum track with a triggered sample, apparently, and Flex Time will allow you to move audio snippets forwards and backwards in time, as well as a few other things.

The new version of Logic Studio costs $499, though to upgrade it'll only cost $199. If you own Logic Express, you can upgrade for $299.

iPod Touch with camera, the new landline

Previous rumours regarding a new generation of Nano with inbuilt camera functionality seem to have faded to dust. According to Wired magazine's website, this has paved the way for a fresh bout of rumours, this time regarding the next generation of iPod Touch.

Perhaps its a case of Apple finally noticing that they could attract more people to their media player with this simple addition; or simply because it seems to be the next logical step, either way there is now talk of camera functionality on the next generation of the Touch.

These are just rumours however, but it doesn't mean we can't get excited about them. According to Wired's 'very well connected source' Apple are readying a new version of the iPod Touch with a camera and microphone. All you've got to do is add a Skype account to this mix and apparantly you've made your home phone line redundant in seconds. This could easily transform the smart media player into almost-an-iPhone, thanks Wi-Fi hotspots and 3G-to-Wi-Fi hubs. Imagine, the only home telephone you need is infact the iPod Touch. Seems a little too much to achieve in my opinion.

According to a short article by Gizmodo, this is something At&T (The service provider for the iPhone in the US) should be a little nervous about, regarding: "The prospect of Apple eventually gaining carrier independence with a 100% VoIP solution."

According to Wired's well connected source, Apple's factories in China are already getting into the manufacturing process, however Apple PR have declined to pass comment on this rumor. Wired's source expects this new generation of the Touch to go on sale in two or three months time.

Wired also concurs with the opinion given by Gizmodo in light of this rumor:

"They will transform the entertainment-oriented iPod Touch line into a voice communications tool wherever WiFi is available."

"In addition to these voice-over-IP capabilities, which should have telephone providers quaking in their boots, the microphone (and camera) would enable the iPod Touch to understand voice commands, capture video and images, and work with a wider variety of programs in the App Store."

Apple earnings up 15 percent for the third quarter

Apple has reports its earnings for the third quarter of 2009, ending June 27, with surprising results, jumping up 15% over the last quarter of 2009. Apple posted revenue of $8.34 billion (US) and a net quarterly profit of $1.23 billion (US). These results are compared to last years third quarter revenue of $7.46 billion (US) and a net quarterly profit of $1.07 billion (US). Shares have risen from 1.19 per diluted share in the third quarter of 2008 to $1.35 per diluted share this quarter of 2009.

Apple's revenue came from over 2.6 million Mac computers sold in the last quarter, selling more than 10.2 million iPods over the last quarter, down 7% from last years quarter, selling more than 5.2 million iPhones, up a staggering 626% over last years quarter reporting and downloaded more than 1.5 billion applications from the AppStore.

Apple's revenue and profits can be justified by the newly launched MacBooks pros, offering customers a higher quality MacBook pro with a cheaper price tag, seen at this years WWDC, aswell as the slashing prices of the iPhone 3G to just $99, and the launch of Apple's new iPhone 3GS.

The company has estimated profit earnings of $1.18 to $1.23 a share for it's fourth quarter and its revenue to come in at $8.7 to $8.9 billion (US)

Apple engineering a new App Store ranking system

Apple's just finished their conference call, regarding their financial performance in the quarter that's just gone by; as usual, they allow a Q&A session afterwards, and Arnold Kim over at MacRumors has the details about it.

The usual question popped up about netbooks (Apple says they'll only enter the market when they have a product to be proud of), but there was a new piece of information that was revealed during the session. According to the Cupertino-based company, they are currently working on a new ranking system for their App Store that will aim to remove the "race to the bottom" pricing found at the moment. The Top 100 lists that Apple currently have built in are, by far, the best sources of purchases for developers; you get to the top of that list, and you're doing pretty well... the issue is, it usually means that people get to the top by lowering their prices to a dollar. As it stands, applications are ranked up based on unit sales, and not by the amount of revenue they pull in, so of course, lower priced applications will be more successful at getting higher on the list. Apple wishes to remedy this by re-engineering their ranking system, so that software won't be bumped up just by the number of units sold, but rather the cash they pull in.

This is not only good news for developers, but for consumers too. Companies creating applications are currently a bit discouraged from putting in more effort to make higher quality titles, because they'll get quite easily beaten out and buried by arguably 'worse' software due to simple price drops. Again, this means that you'll hopefully see higher quality titles hitting the Top 100 list soon, and maybe higher quality titles in general.

To finish it off, Apple noted that they're also "looking for ways to categorize apps differently", saying that there's a definite room for improvement there, so we'll see what the future brings in that respect.

Apple drops to 5th position in US computer sales

According to an article by Electronista, Apple has dropped to 5th in US computer sales, citing early reports by IDC.

Apple has shipped 12.4% fewer computers than it did last year, falling to 1.21 million Macs. Its market share will remain the same at 7.6% but will have been eclipsed by Toshiba, which could jump to ship 7.7% of PCs in the US.

The only other firm to lose market share is Dell. If this is correct, it will still have the most US market share at 26.3% but will have shipped 18.9% fewer PCs than it did in spring 2008 and would have shipped just 40,000 more computers than HP at 4.17 million.

In terms of growth. HP's growth is poised to remain flat at 2.3%, but the lack of change was enough for Dell to regain the lead it had lost winter of last year. Acer will have grown the quickest, jumping 51% to reach 2.01 million PCs shipped and 12.6% of the US market.

Overall, the US's computer business shrunk 3% compared to last year. This is less than predicted by the IDC.

In terms of the worldwide market, HP still has the lead, shipping 13.1 million PCs and earning 19.8% of the market, where Dell will have shipped 9.11 million PCs and have 13.7% of the market. Acer, Lenovo and Toshiba will maintain their third, fourth and fifth places with 12.7%, 8.7% and 5.3% respectively.

Apple locks the Palm Pre out of iTunes

When Palm announced that the Pre would sync with iTunes by spoofing its identity it was only a matter of time until Apple stopped this practice. With the latest iTunes update 8.2.1 syncing with the Pre no longer functions according to Businessweek.com.

It should not come as a surprise that Apple stopped supporting the device as it only wants authentic iPods and iPhones to be able to use their software. Palm did post a statement saying "Palm's media sync works with iTunes 8.2. If Apple chooses to disable media sync in iTunes, it will be a direct blow to their users who will be deprived of a seamless synchronization experience. However, people will have options. They can stay with the iTunes version that works to sync their music on their Pre, they can transfer the music via USB, and there are other third-party applications we can consider".

Apple responded to the Palm's comment by stating that "iTunes 8.2.1 is a free software update that provides a number of important bug fixes," says Apple spokeswoman Natalie Kerris. "It also disables devices falsely pretending to be iPods, including the Palm Pre. As we've said before, newer versions of Apple's iTunes software may no longer provide syncing functionality with unsupported digital media players".

What Palm does from here will be an interesting move. Will they admit defeat and no longer say that the Pre can be used with iTunes or will Palm take the low road and continue to look for alternative ways to get iTunes to recognize the Pre?

Unfortunately in this situation it's only the consumer who, again, is being put as a second class citizen by not being able to use the software of their choosing. This is not limited to Apple software as iPod users who would like to use the Zune software are also unable to do so.