All Things Digital

Apple’s much lauded iPhone captured 28% of the smart-phone market in the States by the fourth quarter of 2007–just six months into its launch. Today it holds something less than that–about 19.2%. But to look at the headlines, you’d think it controlled the market in its entirety. A quick search on Google returns 19,035 results for “iPhone”– from Jun. 2, 2008 to today. Why? Because in a few hours, Apple CEO Steve Jobs will address the company’s Worldwide Developers Conference in San Francisco, at which he is expected to unveil the next version of the company’s iPhone.

And for Apple’s (AAPL) sake, I hope he does. Because with expectations running this high, I’d hate to see what happens if he doesn’t. Although the new Apple Store housed in a life-size replica of the Golden Gate Bridge pictured in the invite would certainly take some of the heat off …

Anyway, I’ll be live-blogging from inside Moscone West in San Francisco starting at 10 a.m. PDT. Here’s something to read while you wait …

• From Moscone West: This is crazy. They just opened a single door to let cameras in and the media rushed the gate. Its like that 1979 Who concert in Cincinnati.



• The hall in Moscone West is filling quickly to the sounds of Jerry Lee Lewis. From the looks of it media and developers are here in equal numbers.
• Jobs takes the stage. I’m sitting about 20 rows back, but even I can see he’s looking pretty thin from here. He gets right into it, pulls up a slide of a stool and describes Apple as a three-legged company. Macs, music and the iPhone.
• Jobs will spend the morning talking about the iPhone. This afternoon Apple will discuss OS X “Snow Leopard.”

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We’re telling IT executives to not support it because Apple has no intentions of supporting (iPhone use in) the enterprise. This is basically a cellular iPod with some other capabilities and it’s important that it be recognized as such.”

–Gartner analyst Ken Dulaney, July 2, 2007

Today’s an important one for Apple (AAPL). The company is hosting a “town hall” meeting to discuss an iPhone software roadmap. Presumably, this event will see the release of more details about the eagerly anticipated iPhone SDK, but perhaps not the debut of the SDK itself. Certainly, that’s the impression given by the invitation to the event–”Please join us to learn about the iPhone software roadmap, including the iPhone SDK and some exciting new enterprise features.” Enterprise features? Ready to eat your words, Dulaney?

But whether the SDK is released to developers today or not, this event promises to be a watershed one. Because it heralds a vast new addressable software market for developers. After all, the iPhone and iPod touch run OS X, and presumably most future iPod models will as well. Which likely means that applications written for Mac in Xcode–Apple’s development toolset–will be deployable on any OS X device. They’ll be “write once, run anywhere”–anywhere there’s OS X, that is. And word on the street has it that we may see a few of them as early as today.

The event begins at 10 a.m. PT (1 p.m. ET). Updates to follow …

UPDATES:

• The event’s begun. You’ll find streaming video of the event here.
• The next iPhone software update will include support for Push Email, Push Calendar, Push Contacts, Global Address List, Cisco VPM, Certificates and WPA2/802.1x, Security Policies, Device Config, and Remote Wipe. Wow.
• Responding to customer demand for Microsoft Exchange on the iPhone, Apple has gone ahead and licensed ActiveSync for the device.
• Exchange will be native to the iPhone. Jobs must be muttering multiple “BOOMS” from backstage.
• Nike and Disney have been testing Exchange for iPhone and are pretty happy with it.
• Scott Forstall is now taking the stage to talk about the iPhone SDK. Apple giving developers the same tools and APIs it uses to develop iPhone apps.
• Apple took Cocoa and created Cocoa Touch, a new framework for building apps.
• The OS X kernel is the same for desktop and iPhone.
• Xcode has been expanded to support iPhone. It will code complete APIs for the iPhone SDK. (See? What’d I tell you: write once, run anywhere there’s OS X.)
• SDK includes Interface Builder and iPhone Simulator that allow developers to run their apps on their desktops. “It runs on a Mac and simulates the entire API stack on your computer,” Forstall says.
• Forstall builds a quick “Hello World” app, drops it on the iPhone and runs it. Quick and easy.
• “This is an app I just built in two minutes. But we wanted to see what we could build in two days. So we built Touch FX,” Forstall says. It’s an image editor that allows you to warp photos by pinching them.
• Forstall then demos Touch Fighter, a point-and-shoot game.
• Did I mention the SDK is available today? Good luck downloading it …
• Whoa. Travis Boatman from Electronic Arts takes the stage and demos an iPhone version of Spore. They’ve already ported 18 levels. (Hope SDK includes tool for building spare batteries.)
  

• Apple really pulling out all the stops on this one. Chuck Dietrich from Salesforce.com onstage now.
• Salesforce ported one of its automation tools to the iPhone, one that graphically displays how salespeople are performing against their goals.
• Next up: AOL. AIM for iPhone. Took five days to build.
• Larry Ellison takes the stage to announce Oracle Database 11g for iPhone.
• Kidding.
• Epocrates demo. Clinical reference app for doctors.
• Ethan Einhorn from Sega up next.
• Ha! Super MonkeyBall for iPhone. “This is not a cellphone game. This is a full console game. … We had to fly in a developer to upscale the art for the iPhone,” Einhorn says.
• Jobs back onstage. Announces the iTunes App Store. “You’re a developer who just spent two weeks or a bit longer writing an application. What’s your dream?” Jobs asks. “To get it in front of every iPhone user.”
• Apps can be downloaded wirelessly or sideloaded via iTunes. “This is the exclusive way to distribute iPhone applications,” Jobs says, adding: “We are controlling distribution.” (We will control the horizontal. We will control the vertical. You are about to participate in a great adventure. You are about to experience the awe and mystery which reaches from the inner mind to… The iTunes App Store.)
• Developers price their own apps and they get 70% of the revenues they generate. Apple takes 30% for running the App Store. ” … To be clear, we don’t intend to make money off the App Store. We’re basically giving all the money to the developers, and the 30% that pays for running the store, that’ll be great.”
• Apple plans to release an iPhone 2.0 software update in June that will include enterprise capabilities, App Store, etc.
• One more thing …
• Oh, look: It’s KPCB’s John Doerr. Must be here to demo i’MRich for iPhone.
• Doerr announces the iFund for iPhone developers.
• $100 million to start. Boom.BOOM. BOOM! “That should be enough to start about a dozen Amazons, or even four Googles! … If you want to invent the future, the iFund wants to help you build it,” Doerr says.
• END

(Spore photo courtesy Gizmodo)

I’m not so sure that the whole issue really is one of commercial avoidance. It really is a matter of convenience–so you don’t miss your favorite show. And quite frankly, we’re just training a new generation of viewers to skip commercials because they can. I’m not sure that the driving reason to get a DVR in the first place is just to skip commercials. I don’t fundamentally believe that. People can understand in order to have convenience and on-demand [options], that you can’t skip commercials.”

–ABC President of Advertising Sales Mike Shaw, July 2006

Leave it to ABC to devise a service that offers all the convenience of video-on-demand with all the annoyance and vapidity of broadcast TV in one joyless package. This morning the network and its affiliates announced fast-forward-disabled video on demand, which prevents viewers from bypassing commercials.

Designed to combat the now nearly ubiquitous DVR, the service offers viewers the chance to watch ABC shows like “Lost” and “Desperate Housewives” for free, at any time they choose, as long as they’re willing to suffer through the advertisements that accompany them. And just to make sure that they do, participating affiliates will disable their video-on-demand services’ fast-forwarding capability. “This does counter the DVR,” Anne Sweeney, the president of the Disney-ABC television group (DIS), told the New York Times. “You don’t need TiVo if you have fast-forward-disabled video on demand. It gives you the same opportunity to catch up to your favorite shows.”

And your not-so-favorite commercials. Which would seem to make it about as uncompelling a proposition as … well, as over-the-air broadcast TV. But ABC, which has been testing the service with Cox Communications in Orange County, Calif., insists it’s got an audience. The company says 93% of users it surveyed said they would be willing to give up the fast-forwarding option and watch the commercials if they were given VOD programming for free.

So perhaps the 30-second TV ad has a few more years left in it still. But only a few. According to a study by the Association of National Advertisers and Forrester Research, 62% of marketers believe TV advertising has become less effective in the past few years. And 87% said they plan to increase their online ad spending this year, while many said they will cut their TV ad buys substantially when DVR penetration tops 50%.

Tonight, tech’s highest roller gave what may have been his final Vegas performance. Sadly, it was far from his most memorable. All glitz and very little glory–certainly not the sort of glory befitting such an iconic figure. In the end, the memory of the event that lingers longest is not Gates reflecting on his storied career in tech or prognosticating about the future, but Gates singing “Big Pimpin’ ” to rap star Jay-Z. Which was funny as hell, but not exactly “The Road Ahead” material. Anyway, here’s what we got, more or less in reverse chronological order as I live-blogged his keynote:

7:40 p.m. A few more moments of guitar wankery from Slash and … well, I guess that’s it. Bach, not Gates, ends the keynote. “I’ll see you again next year,” he says as Gates waves briefly and leaves the stage. Must be rushing off to that billion-dollar-a-hand poker game at Caesars … And the lights go up. That is it. Quite a disappointment. Take away the celebrity appearances and what’s left is a well-rehearsed series of anticlimaxes and rehashes of demos past. A pity, really.
7:38 p.m.: Gates: She’s pretty good. But I’ve got my own ringer here … (Pleeeeease let it be Wayne Newton)
Nope. It’s Carrot Top. Kidding … It’s Slash it’s from Guns n’ Roses playing “Welcome to the Jungle” for real. He doesn’t miss a note either. Dry ice smoke and flashing lights.
7:36 p.m.: Bach challenges Gates to a Guitar Hero 3 match. Bach invites Guitar Hero champion Kelly Clarkson to play against Gates. … She plays Guns n’ Roses’ “Welcome to the Jungle” and doesn’t miss a note.
7:35 p.m.: Gates using the device to navigate video archives of keynotes past. Microsoft’s version of iTunes’ ‘Cover Flow.’ Messy.
7:33 p.m.: Gates uses the device to scan a photo of the Vegas skyline behind him. Clicks on the Venetian. The screen displays information for his keynote address. Pops another note indicating Ballmer’s playing nickel slots at another casino. Laughter.
7:31 p.m.: Bach brings Gates back onstage to discuss the future. … Gates takes the stage again with a handheld video recognition device. He points it at Bach and clicks. It recognizes Bach, displays his name onscreen, along with a note saying he owes Gates money.
7:29 p.m.: Fellow presenter uses Tellme to search out a movie theater, browse movie listings, purchase tickets for a movie and then send them to a friend. Pretty slick, especially given the size of the mobile advertising market.
7:27 p.m.: On to Windows Mobile and Microsoft’s Tellme service.
7:26 p.m.: Bach and fellow presenter now demoing “Sync”–an in-car voice-command technology that enables Zune owners to sync their Zunes to their car stereos and then navigate their music libraries with voice commands.
7:24 p.m.: Bach talks about Zune Social as a service that drives music transactions from discovery to purchase. Find a song you like on a friend’s page, click on it and purchase from Zune Marketplace. Again, haven’t we heard all this before?
7:22 p.m.: Listening habits are tracked via “cards.” Bands can create their own Zune Social pages as well. Essentially, MySpace for music.
7:20 p.m.: Zune Social apparently tracks your listening habits in real-time. It’s all about “people-powered music discovery.”
7:18 p.m.: Bach talking up the Zune now. … Demoing Zune Social.
7:17 p.m.: British Telecom is to begin selling Xbox 360s as Media-Room based set-top boxes. Price of relocation to UK not included with activation fee …
7:15 p.m.: In addition to this, MGM will also be adding its film library to Xbox Live. End result: Twice as many hours of on-demand programming as any cable provider out there.
7:14 p.m.: ABC and Disney will be bringing their programming to Xbox Live.
7:13 p.m.: Gates brings Robbie Bach onstage to talk about Xbox 360.
7:11 p.m.: Using Microsoft Silverlight technology, NBC and MSN will put some 3,000 hours of high-definition footage of the Beijing Olympics online. Wow: 3,000 hours of video. What a massive effort. First of its kind.
7:10 p.m.: Gates commenting on broadcast television: “It simply isn’t as fulfilling an experience as online video.”
Here comes another video segment. … Bob Costas pitching.
7:09 p.m.: Moving on to Silverlight. Gates says NBC has chosen Microsoft as its exclusive online video partner for the 2008 Olympics.
7:08 p.m.: He finishes up the design, lays his phone down on the screen and it automatically emails his design to friends for review.
7:07 p.m.: Gates, thankfully, back onstage for another demo. Wait, what’s this. Another Surface demo?! Didn’t we see this last year? Yes, we did–but given by Steve Ballmer, not Gates. Gates using Microsoft’s Surface multitouch computer to demo a snowboard-design service.
7:05 p.m.: The big achievement being touted here seems to be the connection between these services and the single log-on. As Dan Aykroyd might say: Isn’t that AMAZING?
7:04 p.m.: Windows Live Photo Gallery … in browser photo editing, sharing (via email or Flickr) and exporting to blog. Bor-ing. They would have been better off playing the farewell video again. That ‘Bib Pimpin’ segment was comedy gold.
7:02 p.m.: First up: Windows Live Calendar now with … wait for it … multiple calendar overlays (YAY! sigh…)
But wait, there’s more … Windows Live Events, an invitation/event organizing service. They really should have called it Windows Live eVites …)
7 p.m.: Gates brings Mika Krammer, a director of product management for Windows, onstage to demo some new features of Windows Live.
6:59 p.m.: And here comes the product line-up overview: Windows Vista, Windows Live, Windows Mobile ….
6:58 p.m.: A key building block of the second digital decade, the centerpiece building block will be. … (drum roll, please) … Microsoft Windows!
6:56 p.m.: “Devices will know our context and location,” Gates continues. There will be new modes of interaction and natural interfaces. “We’re very interested in simpler ways of navigating our technology.” If he were going to announce Microsoft Bob 2.0, now would be the perfect time to do it. Nope. Ah, well. “The software industry will build these new modes of interaction–touch, voice, gesture–into the software.”
6:55 p.m.: And now for a few predictions. “In the future Microsoft products and services will run on the desktop and in the cloud,” he says. Would that be the cloud with all the Google AdWords all over it? “And 3-D environments will exist for Web experiences, high-quality video and audio in a pervasive way.” Make way for Third Life …
“Devices and services will be connected.” As an example, Gates talks about photos automatically being uploaded to digital-memory application.
6:54 p.m.: Gates back onstage discussing the coming transition in leadership at Microsoft when he will step down from his day-to-day role as the company’s chairman. He says Microsoft is aligned well for success with Steve Ballmer, Ray Ozzie and others.
Moving on … “The second digital decade heralds the following: high definition experience is everywhere.”
6:52 p.m.: Video ends to thunderous applause. UPDATE: Here’s the video:

6:50 p.m.: Footage of Gates cleaning out desk, taking box of office supplies to his Ford Focus. Ford Focus–now that’s funny.
Cut to Peter Jennings: “Let’s face it, all of us here at NBC News will miss reporting on this brilliant, powerful, sexy man who just doesn’t like to pay more than $7 on a haircut.”
6:49 p.m.: Gates calls Jon Stewart and asks about a co-anchor job. Stewart turns him down.
Gates calls Hillary Clinton. She turns him down as a running mate, so he calls Obama:
Gates: It’s Bill.
Obama: Bill Shatner?
Gates: No, Bill!
Obama: Bill Clinton?
6:48 p.m.: Steven Spielberg reviews Gates’s audition reel (”X-Men” and “Matrix” re-enactments; Gates in Wolverine get-up, Gates and Ballmer in Matrix-style black trench coats) and denies him a part in his next film.
6:47 p.m.: Footage of Gates calling Bono in the middle of a U2 concert. Gates plays guitar riff on “Guitar Hero” for Bono. Bono tells him there’s no place for him in U2. Which is OK, I’m sure, since there’s certainly no place for Bono at Microsoft.
6:46 p.m.: My God … Gates in recording studio with Jay-Z… Holy … Gates singing “Big Pimpin’.” Wild laughter and applause. “It was great,” Jay-Z tells Gates, before turning to the camera and muttering, “not so much.”
6:45 p.m.: Various Microsoft execs talking about Gates. Clip of Gates in office playing with action figures: “Never doubt the power of software.” Laughter.
Quickly followed by Gates in gym working out with Matthew McConaughey, who doesn’t really strike you as a Windows user.
6:44 p.m.: “This is my last keynote. Come July, it will be the first time I won’t be working at Microsoft since I was 17.” And here comes the inevitable farewell video ….
6:42 p.m.: He mentions the progression of digital entertainment–music, movies, photos. The trend is clear: all media and entertainment will be software driven in the second digital decade. And in the third, it will all be driven by Microsoft Windows! Muahahahahaha. Kidding … Moving on … “I’ll soon step down as chairman.”
6:40 p.m.: Gates finally takes the stage. He recalls his first keynote in 1994, a time when Windows ‘95 was first coming together. “It was the beginning of the first digital decade.” Ah yes, “The Digital Decade.”
6:39 p.m.: Here comes another silly video, this one set to “Believe in Magic,” featuring people from all walks of life extraordinarily happy to be using Microsoft products. They look like they’re all on Ecstasy. And it’s probably safe to say that nobody has ever looked like that while using a Microsoft product.
6:35 p.m.: Shapiro says Gates has given 10 CES keynotes, eight consecutively. He’s spoken at CES 11 times. Guess he must be the Guinness World Record holder. How ’bout that, huh?
6:33 p.m.: And here comes Gates. Wait–that’s not Gates. It’s Consumer Electronics Association President Gary Shapiro. OH RAPTURE! Disappointed applause. “In my opinion these are the best four days of the year,” says Shapiro. (Tell that to Steve Jobs next week.)
6:30 p.m.: Silly CES promo video… Correction: advertisement.
6:29 p.m.: Getting started right on time. Guess Jim Allchin and the Vista development team didn’t do Gates’s makeup this time around. Lights dim….
6:25 p.m.: In a few moments, Bill Gates, the Frank Sinatra of the Dat(a) Pack (Steve Jobs presumably in the Dean Martin role), will deliver his 11th Consumer Electronics Show keynote–and by many projections his last.
6:00 p.m.: The ballroom of the Venetian Resort Hotel Casino is pretty much packed, and like most things in Las Vegas it’s BIG. But it has to be the worst pre-keynote music EVER: from 1982 video game soundtrack to passed-out-after-the-rave techno to European disco to new wave. Really covering all the genres. At this rate, Bill Gates could take the stage to the theme from “The Dukes of Hazzard” or the “Annie” soundtrack.

Who better than AT&T to filter the Internet for widespread copyright infringement? After all, the company has a fair bit of experience with just this sort of thing, having aided and abetted the National Security Agency in its warrantless domestic-surveillance efforts.

Anyway, together with NBC and Disney, AT&T has invested a combined $10 million in Vobile, a company whose VideoDNA is rumored to be the gold standard of video content recognition systems and is considering deploying it at the network level.

The mechanics of the initiative haven’t all been sorted out, but sources tell BusinessWeek that one scenario involves traffic on AT&T’s network being routed through racks of Vobile servers that would scan it for NBC Universal and Disney content. And perhaps child pornography as well, you know, just to make the idea of network-level monitoring a bit more palatable to the masses.

Such a strategy, if AT&T were to pursue it, would make the company the first major Internet carrier to implement a network solution to copyright enforcement. And it would beg a number of questions: Will AT&T police the Internet traffic of its customers alone? Or will it police traffic over all its backbones and peering points (IE: traffic from other ISPs)? The answers could be troubling.

Suffice to say privacy advocates who’ve been railing against AT&T over the NSA debacle and issues of Net neutrality aren’t exactly thrilled with the company’s latest move. “They better be very careful,” warned Lee Tien, a staff attorney with the Electronic Frontier Foundation. “This is serious, serious stuff, to basically invade the privacy of all of your subscribers.”

The Writers Guild of America has got it all wrong. The architect of its financial mistreatment in the entertainment industry isn’t the Alliance of Motion Picture & Television Producers. Nor is it that lousy DVD deal it agreed to 20 years ago, which gives writers, directors and actors a combined 20 cents for each DVD sale–30 cents less than the sum given to manufacturers of DVD packaging material. It’s that damned Steve Jobs who, with his iTunes and economies of digital distribution, has mucked up a perfectly good end-of-life business model.

At least according to former Disney CEO Michael Eisner who, in his keynote conversation at the Media and Money conference today, suggested that Apple is eating up the digital media profits the Writers Guild wants a larger share of. The studios “make deals with Steve Jobs, who takes them to the cleaners,” Eisner said. “They make all these kinds of things, and who’s making money? Apple! They should get a piece of Apple. If I was a union, I’d be striking up wherever he is.”

Club Penguin, the online virtual world for children that is part of a worldwide trend, has finally been sold. Not to News Corp. for $200 million. Not to Sony for $450 million. But to Disney for a sum that could eventually hit $700 million. The Mouse House will pay $350 million up front for Club Penguin and an additional $350 million if it meets certain performance goals through 2009. Not bad for a site created by three 20-something fathers from the British Columbia Interior and built largely by word of mouth.

Not bad for Disney, either. The site currently boasts 12 million registered users, 700,000 of whom pay $5.95 a month for the ability to customize their penguin characters and decorate their igloos. How many more will do that once Disney throws its global marketing might behind the site? “Disney’s technological know-how, online capabilities and international reach will support global expansion of the Club Penguin franchise,” Disney CEO Bob Iger said yesterday during the company’s earnings call. “We plan to rename it Disney’s Club Penguin and to immediately use our Disney-branded properties such as Disney.com, Disney Channel, Radio Disney and our parks and resorts to raise its profiles. … We believe virtual worlds can extend and expand on the life of a franchise, expand our global reach for our entertainment content, and allow us direct contact with our consumers in a more personalized and engaging way.”

In other words, it’s only a matter of time before Buzz Lightyear and the Disney princesses appear as Club Penguin costume options and great piles of Club Penguin Puffles show up in local Disney stores. As Walt Disney’s brother Roy once said, “The sale of a doll to any member of a household is a daily advertisement in that household for our cartoons and keeps them all ‘Mickey Mouse Minded.’ ”