Zannel Launches Web-based IM for iPhone

A new IM service is attempting to tap into the mobile market. Zannel is a mobile instant messaging service, much like AIM, which allows people to have real-time conversations and share video and pictures. The service now has a mobile Web site that takes all of its features and makes them Web-based – of course, for none other than iPhone users.

“The success of the iPhone demonstrates that the next wave of mobile communication has arrived, and the ecosystem is ready for true mobile Web applications like ours,” said Braxton Woodham, CTO at Zannel. “We’re excited about moving beyond the simple list formats inherent to WAP and creating a mobile Web site that a device like the iPhone deserves.”

This is a step above what AOL Instant Messenger has done for mobile media, as the popular messaging service only has Web-based applications that employ the most basic of features for the iPhone.

Unlike its AIM competitor, Zannel’s iPhone mobile Web interface retains sophisticated design elements commonly found on the Web, such as persistent navigation and seamless transitions between sharing, viewing and discussing content. Supposedly, users won’t miss anything from Zannel when using the Web-based app.

For the iPhone, Zannel optimizes the video formats for Wi-Fi and EDGE connections. Beyond mobile phones, Zannel allows users to communicate through custom widgets that are available for MySpace, Facebook and other social networking sites and blogs.

The service is at Zannel.com and requires no download – which is good, since the iPhone doesn’t allow random application downloads.

New iPhone Update Fixes a Few Bugs

This week iPhone users got a new update on their phones. Version 1.1.2 will be automatically installed as soon as a user connects his phone to iTunes. Unfortunately, there are no details of what changed with the new version – Apple only says the update includes “new features and bug fixes.”

In the past, updates have included thwarts against people seeking to unlock the iPhone so it can be used without a contract from AT&T, as well as the addition of Wi-Fi iTunes. Apple has also updated its iTunes software several times to get rid of workarounds for certain features. Most notably, the ability to add ringtones that were not purchased from iTunes was “fixed” last month with a new version of the software.

There are a few noticeable changes, mostly for international users. With the new version users can change the language to French, German or Italian and change the keyboard layout to English (UK), French, German and Italian.

Other smaller changes are also included with update 1.1.2. The phone’s battery charge now shows up in iTunes, next to the phone icon. Apple changed the sorting of ringtones, too; tones from Apple or applications like iToner now show up in a section labeled “Custom,” while ringtones that came with the phone are listed under “Standard.”

The widely reported TIFF exploit has also been fixed with this update. That bug patch is a bit of a mixed blessing for iPhone enthusiasts. While it fixes a critical security vulnerability with the way that the phone renders TIFF images, that flaw had been used by iPhone developers in the unauthorized Jailbreak software that is used to run third-party applications. The update makes it difficult for users of brand-new iPhones to install Jailbreak.

Apple has battled with some developers who have had to circumvent its security measures in order to get their software to run on the iPhone. Apple initially wanted to prevent all third-party code from running directly on its mobile device, but in recent months the company has promised to give developers a way to run their code on the iPhone. This software development kit will become available in February 2008.

Unauthorized software developers have already found a way to stay ahead of Apple’s latest software update.

Users with Jailbreak on their iPhone 1.1.1 systems are being told to first install an application called OktoPrep, according to a post on the Unofficial Apple Weblog. This allows them to update to 1.1.2 without compromising their ability to run unauthorized software on the device.

Orb Brings Music to iPod touch, iPhone without iTunes Syncing

Orb Networks users can now play their PC music collection on their Apple iPhone or iPod touch without having to sync with iTunes.

Responding to a user study that found repeated syncing of the iPhone to a PC to be “a pain in the ass,” Orb enables users to play their PC music on their iPhone or iPod touch from anyplace they have a wireless Internet connection, right away.

“Wait, so, no more syncing? Just hit play?” asked Allison Logue, 18-year-old iPod owner from Fallbrook, California. “That’s like having an iPod the size of your PC hard drive.”

Users can install the free Orb application on the Windows PC where they have their music. Users then access the free service at http://mycast.orb.com from the native Safari browser on the iPhone or iPod touch to play what they want right from their PC.

“What kind of robot always decides ahead-of-time what songs they’re going to be in the mood for when they’re away from their PC?” asked Joe Costello, CEO of Orb Networks. “Don’t sync some. Stream all.”

Orb also enables users to send their friends text messages with links to their PC music.

Tips for Making iPods and iPhones Work Seamlessly with Windows

How many people are getting an iPhone or an iPod from a loved one this holiday season? Thousands, probably, all of whom are looking forward to enjoying music, photos and movies all day while barely acknowledging their family members at the dinner table.

Unfortunately, for those using Windows XP and Vista computers, managing music and video content is not as straightforward as they might think. Unlike consumers using Apple’s Mac OS X, which includes integrated software that simplifies digital media content like home videos, photos, calendars and contacts, Windows users need to learn some basic skills to make managing digital content on the popular devices easier.

“Apple’s iPhone and the latest generation of iPods have delivered enormous power and simplicity to the average consumer, but the technology is still complicated and usability is not 100% intuitive, especially for Windows users,” said Dave Taylor, SupportSpace committee member specializing in Macintosh and handheld technologies, editorial director of AskDaveTaylor.com and author of 20 business and technical books. “The key for holiday shoppers who want to avoid holiday frustration is to gain key bits of knowledge so they can enjoy their fabulous new tech toys.”

Taylor says the following are unseen obstacles for Windows users:

1. Audio files are in different formats; Apple iPods prefer MP3 and AAC formatted music, but Windows systems default to Windows Media Audio (WMA) format. Windows users who have a library of music will need to convert the files from WMA to MP3. A hint for major online music companies to offer some sort of free converter software?

2. Windows Media Player and Apple’s iTunes compete for digital files. Users manage all content through iTunes. Without it, copying music on to an iPod or iPhone is not possible, and if iTunes and Windows Media player “compete” for the data, users are in for hours of frustration. Once users learn to use iTunes, which they must install on their computer to get the iPod or iPhone to work properly, they can then manage audio and video content on their computer and have it automatically sync with their handheld device.

3. Adding movie files is complicated by digital rights management and different formats. The constraining digital rights management policy of iTunes software and different video file formats can be difficult to work around and understand.

4. Loading photos is not plug-and-play. For Windows users, managing photos can be difficult because there is no default photo application for Windows that is tightly integrated into iTunes. For Mac OS X users, iPhoto and iMovie functionality is seamlessly integrated into iTunes.

Tips for iPhone and iPod Windows Users
1. Be sure to download the latest iTunes software from Apple. Particularly for Windows Vista users, it is critical to install the latest version of iTunes (Version 7.2 or later).

2. Rip audio CDs in the proper format. Use iTunes to burn audio CDs, or if users want to use Windows Media Player, they must change its settings to create MP3 files, not WMA files.

3. Understand issues about copying DVD movies to iPods and iPhones. Going to the iTunes Store to repurchase and download movies already owned on DVD is the legal way of getting the content onto iPods and iPhones. Copying DVD movies onto the iPod or iPhone is not legal, of course, but can be done easily by purchasing third-party software that circumvents DVD encoding systems. But you didn’t hear that from us.

4. Carefully manage content between multiple computers: iPods and iPhones “pair” to a single computer and will not allow users to copy digital content purchased at the iTunes store between multiple computers. It is important users carefully think through which of their computers should be paired with the device and “de-authorize” computers that won’t be used any longer.

Analysts Predict New Successful Apple Products in the Near Future

It looks like analysts have high hopes for Apple’s success in the future; those from investment bank UBS said this week that sales of Macs this holiday could be better than expected. That in combination with Apple’s upcoming product introductions which could include an ultra-portable notebook and pay-per-view movie service made the analysts raise their estimates and price target on the company.

“Given general concerns about the economy, we are frankly surprised by the ongoing strength of the Mac franchise right now and the prospects for new products we are hearing about for next year,” analyst Ben Reitzes wrote in a research note. “With regard to the near-term, checks show very solid holiday demand, particularly with Macs, outpacing our prior expectations.”

Reitzes, who along with his team recently surveyed over 30 Apple retail stores, said the “Mac phenomenon” should have a positive impact not only on the company’s systems hardware revenue, but also peripherals, software and overall company gross margins.

The analyst anticipates that Steve Jobs will use his January 15 keynote at the MacWorld Expo in San Francisco to unveil several new products and technologies, which could include a “new iPhone model, an ultra portable PC platform and even possibly a pay-per-view movie service” among other things.

“We first outlined the possibility of ultra-portable devices from Apple in June 2006,” he said. “However, it is important to note that we think these compelling ultra-portable Macs don’t seem to be adequately reflected in analyst models at this time.”

As a result, Reitzes said he believes this new product category could make his estimates conservative over the long-term and help offset any potential slowdown in the iPod market due to market maturation and potential saturation of the digital media players in the US.

“Regarding features in the ultra-portable, we believe Apple would be looking at integrating the ‘touch’ capability from its iPhone into the ultra-portable device with Leopard obviously as the OS,” he said. “We believe Apple would only enter this market if its devices could be priced in the $1,500 range.”

Meanwhile, Reitzes also speculates that the company’s iPhone announcements next year could involve a watered-down version of the iPhone with a lower price tag, as well a 3G model.

“Our checks continue to indicate solid demand in the US following the $200 price cut with significant interest into the holidays,” he said. “Should Apple introduce another lower-priced iPhone in the $200-$250 range, we believe we could see another significant pop in unit sales not unlike what happened to the iPod when the mini was announced in 2004.”

Finally, Reitzes advised clients that his current iTunes estimates may prove conservative given the possibility that Apple could introduce a new “pay-per-view” movie service and additional content partners.

Such a service using the company’s digital rights management software is possible and could also work in helping entice additional movie content providers to join iTunes. Perhaps rental fees could be a fair $2.99 or $3.99.

In terms of new products, the analysts believe Apple is working on improvements for Apple TV, perhaps adapting the concept and focusing on advanced and increased networked storage for the home – which could be accessed by a computer or a TV.

It is also possible at some point for Apple to enter the HDTV flat-screen business, with built-in Apple TVs and hard drives.

For the current December quarter – Apple’s fiscal first of 2008 – Reitzes now expects the company to earn $1.56 per share on sales growth of 32.5% to $9.4 billion, still factoring in iPod unit growth of 17% year-over-year and 2.1 million iPhones, but now including increased Mac unit growth of 40% yearly to 2.24 million units.

The analyst also raised his 12-month price target on Apple to $235 per share, up from $220.

50% of US Mac Users Paid to Download Music v 16% of PC Users

The NPD Group released data that says consumers who own Macs are much more likely than PC users to pay to download music. NPD quarterly releases its Digital Music Monitor, and in the third quarter of 2007, it said that around half of all Mac users have paid to download music from iTunes and other similar sites, but only 16% of PC owners have done so. Mac users were also more likely to purchase CDs, with a little over 32% of Mac and about 28% of PC users reporting buying CDs in Q3.

A thing to keep in mind about these results, however, is that Mac users make up less than 10% of the total PC market, so it takes a tremendous amount more PC users to hit that 50% mark than it does Mac users.

“There’s still a cultural divide between Apple consumers and the rest of the computing world, and that’s especially apparent when it comes to the way they interact with music,” said Russ Crupnick, VP and entertainment industry analyst for The NPD Group. “Mac users are not only more active in digital music, they are also more likely to buy CDs, which helps debunk the myth that digital music consumers stop buying music in CD format.”

NPD’s data shows that the unit-volume sales shares for Macs increased from under 6% in 2006 to almost 9% for this year, January to October.

Around 56% of Mac users listen to music on their computers, while about 31% of PC users do. Mac users were also proportionally more likely watch videos on mobiles and their computers.

“The more consumers become comfortable paying for digital music, the more chance they will evangelize to others. And at this point in the game, it’s the growing base of Apple consumers that are the industry’s low-hanging fruit when it comes to converting from physical to digital music,” said Crupnick.

Nokia Accelerates Change of Pace in Mobile Industry

-Bridges the Divide between Mobility and Internet
-New Music Service to Make Applesauce of iTunes

After the unfolding of Nokia World 2007, held this week in Amsterdam, it’s apparent that the Finnish handset maker is prepping to become a key player in the overall mobile market. “Consider all the new words that became part of the industry lexicon in the past 12 months: N95, iPhone, Android, Ovi. They are words that represent new directions and new competition in our industry, which is ultimately great for the consumer,” said Nokia president and CEO Olli-Pekka Kallasvuo in his keynote to a crowd of approximately 2,700. “We are at the dawn of a new era in mobile communications driven by the rapid convergence of the Internet and mobility, and Nokia is setting the pace of change.”

The conference featured a host of announcements that included the introduction of its new Comes with Music service, the expansion of additional services for its Ovi portal, the launching of the eco-friendly Evolve handset and a partnership with Telecom Italia. Overall, the event served as a means for Nokia to announce its vision for the mobile industry – and to warn those companies who stand in its peripheral vision.

Comes with Music Hopes to Make Applesauce of iTunes
At the event, Nokia launched Comes with Music, an app that offers a selection of unlimited music for a year from a variety of current and past artists. Comes with Music is pre-loaded onto newly purchased devices and is a result of a partnership with Universal Music Group International, Nokia is currently in talks with the remaining major labels about getting them to participate. After the 12-month period expires, users can opt to purchase a subscription to the service. Interestingly, and unlike any other subscription service, listeners can still keep the tracks that they’ve downloaded regardless of whether or not they pay for the service.

“We set out to create the music experience that people are telling us they are looking for – all the music they want in the form of unlimited downloads to their mobile device and PC. Even if you listened to music 24 hours a day, seven days a week, you would still only scratch the surface of the music that we’re making available,” said Anssi Vanjoki, executive VP and general manager of multimedia for Nokia. “Comes with Music fulfils our dream to give consumers all the music they want, wherever they want it, while rewarding the artists who create it.”

Additionally, Nokia will expand its Ovi portal to PCs and the Internet. Previously, Ovi’s features, which include music access, games, social networking, content sharing and mapping, were only accessible through an on-device WAP portal. Now, users will be able to access Ovi through personalized mobile and PC Web-based portals, or “dashboards,” which will offer integrated access features like contact list synchronization.

Mike Grant, head of broadband and media at telecommunications research company Analysis Mason Group and a conference attendee, said the implications of Nokia’s launchings are extremely important to operators. “Should Nokia successfully execute these developments and attract even a small proportion of their current one billion customers to this service, both operators and other OEMs will have a mountain to climb to offer the same compelling proposition. Nokia is laying down the gauntlet, saying effectively that Apple have got it right, and they intend to compete for consumer loyalty across mobile, PC and the Internet. Moreover, while Apple have a strong presence in the US, Nokia’s global market reach and scale make it a powerful competitor to all in this space,” said Grant.

Partnering with Carriers
Nokia also announced that it will be partnering with Telecom Italia to provide mobile services to customers by enabling Ovi and additional Telecom Italia services on select Nokia handsets. Nokia’s N95 8GB and N81 will be the first models whose menus will be customized to provide access to both services. “Ease of use has always been at heart of Nokia devices and this collaboration is an important step in creating the same for Internet services,” said Jyrki Salminen, senior VP of Nokia multimedia. “Nokia devices and services are based on open standards making it easy for us to work with forward thinking operators such as Telecom Italia to provide consumers with a choice about which internet services they want to access from their mobile device.”

Last month, Nokia and Vodafone collaborated to integrate a number of Vodafone’s Internet and software services with Nokia’s Ovi portal. According to Faultline, the Telecom Italia deal and a previous partnership with Vodafone Italy enable Nokia to access more than 80% of the Italian market as well as significant sections of Western Europe.

Bridging the Mobility-Internet Divide
The event also announced the acquisition of Avvenu, a US-based start-up whose services let consumers access and share files stored on their PC on their handset over the Internet.

Finally, Nokia addressed its commitment to environmental issues by launching the Evolve 3110, a candybar-style handset composed of bio-covers made from approximately 50% renewable materials. The device’s energy-efficient charger uses 94% less energy than the Energy Star requirements and comes in a small, 60% recycled content package.

Overall, companies like Apple need to heed Nokia’s battle cry to the mobile industry. Even though Apple has seen success with its products like iTunes and the iPhone, customers still aren’t completely satisfied with their overall mobile experience, one which Nokia hopes to rectify – and take some additional mindshare away from Apple while it’s at it. “Nokia has stepped out ahead of the rest of the industry in bridging the divide between mobility and the Internet. Successful execution appears to be their one remaining challenge,” said Analysis Mason’s Grant. “We shall watch the company’s progress in 2008 with interest.”

NBCU Pulls All Its Content from Apple’s iTunes

– Had Accounted for 40% of iTunes Video Sales
– NBCU Was Getting $15m a Year from iTunes
– Apple Blames NBCU for Trying to Jack up the Price

NBC Universal has pulled all its content from iTunes, just as it had promised it would if it could not get Apple to allow it to try variable pricing. NBCU CEO Jeff Zucker blamed it on Apple, saying Apple insisted on selling TV shows only at $1.99 per episode. NBCU asked for more pricing flexibility, even just to test variable pricing, Zucker said.

“All we asked was for an opportunity to be able to set a different variable price structure – even with one program, even to just test it one time,” Zucker said at a meeting with investors. “And Apple didn’t want to do that. We did not feel it was the game-changer for us … certainly that it is for Apple.”

The situation might be likened to Apple’s somewhat controversial price reduction on the iPhone. Suppose AT&T had refused to allow Apple to reduce iPhone’s price, assuming AT&T had the contractual right to do that, which it didn’t. Apple was too smart to let AT&T get the power to dictate iPhone pricing. The studios and TV networks, seeing how unhappy at least three of the four major music companies are with Apple, did not want to let Apple get in a position where it could dictate terms and conditions, Hence the short contracts the networks gave Apple.

Universal Music, for example, the world’s largest record company, was so dissatisfied with Apple’s inflexibility that it has not yet given, and may never give, Apple the rights to sell its DRM-free tracks that also are of higher quality than the copy-protected tracks currently available on iTunes. EMI appears to be Apple’s mainstay in the music industry, having been the first and so far only label to give Apple DRM-free, higher-quality tracks.

NBCU was getting only what would have been about $15 million annually from selling its content on iTunes, according to Zucker.

Zucker said content from the company’s NBC TV network and its USA and Bravo pay-TV outlets accounted for about 40% of iTunes’ video business.

“There’s no place that I can think of where the retailer also gets to set the wholesale price,” he said.

NBCU will continue to make TV episodes available for free at its ad-supported NBC.com and other company Web sites, as well as the Hulu.com venture it has with News Corp. The company offers ad-free episodes through Amazon Unbox for $1.99 each and is testing a free, ad-supported download service called NBC Direct.

Apple was contrite, but blamed NBCU for trying to jack up prices. “We are disappointed to see NBC leave iTunes because we would not agree to their dramatic price increase,” said Eddy Cue, Apple’s VP of iTunes. “We hope they will change their minds and offer their TV shows to the tens of millions of iTunes customers.”

Zucker admitted that all of NBCU’s Internet outlets would not bring in $15 million in the next 12 months. He said Hulu.com has about 60,000 users and seven advertisers. The official launch is expected early next year. Zucker said he hoped Apple and NBCU can eventually come to an agreement.

Apple’s strength’s are:

– The gazillions of iPhones and iPods that are now and will be in use. All of its users are at least somewhat affluent and ready to buy content. They love their Apple “iDevices” in ways that users of other portable media players don’t seem to. One recent survey showed that the biggest single group of iPod buyers were people that already owned one but wanted to get a newer model.

– The ease-of-use and integration of Apple’s hardware and the various iTunes – the iTunes music player, the iTunes media manager and the iTunes online store. NBCU and the other TV networks have no easy way to access the iPhone/iPod market.

– Apple has a solution for playing videos on TV sets. Apple TV makes it easy to wirelessly send video from iTunes to a TV set. Offsetting that, Apple is losing 40% of the video that iTunes was selling. The question is whether it can assemble a library of “must see” content without NBCU that is sufficient to get consumers to buy Apple TV’s.

When the negotiations between the two companies began to falter this summer, Apple said it was because it did not want to pay “more than double the wholesale price for each NBC TV episode, which would have resulted in the retail price to consumers increasing to $4.99 per episode from the current $1.99.”

Zucker said, “Apple sold millions of dollars worth of hardware off the back of our content, and made a lot of money. They did not want to share in what they were making off the hardware or allow us to adjust pricing.”

There are loopholes in NBCU’s arguments – piracy, for one. Despite numerous attempts by the networks, studios and record labels, a lot of Web sites still exist that make content available without the copyright owner’s approval. Also, what if Hulu.com flops? Then where does NBCU find an outlet that can produce potentially billions of dollars in revenue a year.

Or, are the networks doomed to follow in the tracks of the labels with online revenues increasing but not enough to replace plummeting broadcast revenues? The three-way UK venture by the BBC, ITV and Channel 4 will provide a good indication of where things are headed for Internet video. The three, which operate the dominant UK TV networks, have committed to making their current and archived content available over the Net in both a free and ad-based manner. There’s no iTunes in their plans.