The iTunes Application store is open for business. The offerings that will further separate, differentiate, and personalize your iPhone have finally arrived. Want to turn your iPhone into an Etch-a-Sketch (and really, who doesn’t)? Now you can. Looking for games to stave off boredom? There are plenty. Hoping to be more productive? Well you can do that to, but as to why you would want that is a mystery to me. There are many sites highlighting the best Apps so I won’t retread that ground here, but I will link to them below.

The Apps store will definitely something for everyone, but after spending a few hours perusing it this morning I was thinking of some yet to be released applications that could be particularly useful. These ideas were borne during the time I was writing Yankee Group’s 2008 Device Survey in January. I wanted to learn more about how consumers researched products and turned that education into action. User reviews and peer group were the most used resources and the most influential. Price also played a critical role. Those factors shaped the applications I would like to see:

1. Mobile User Reviews.  Getting unbiased products reviews while at retail is nearly impossible. The end result of this is buyers seeing products, going home to research them, and then going back to the store to buy (or instead buying online). This is bad for retailers who want to invoke buying action immediately and in an era of $4+ gas all that additional travel is also bad for consumers.  This application addresses that. It would provide a compilation of unbiased reviews scoured from the most frequent sites on the web, Amazon.com, Bestbuy.com, Circuitcity.come, CNet.com. A buyer simply loads the app, inputs the device they are interested in buying and receives a roll-up of ranking from each site. Drilling down would provide the verbatims users rely so heavily on online. This can be extended to anything really, CE, books, etc.

2. Compare Pricing. The internet freed us from waiting for the Sunday paper to arrive to compare prices. Now its time to take it one step further. This application would allow users to input the price of a specific device at the retail location they are currently in. The application would then scour the web for other retailers prices and use GPS to show which locations in your vicinity offer the same product for less. Naturally, the mapping software would then provide turn by turn directions to help you get there. 

3. What will this work with? In the ever evolving world of technology, CE buyers are challenged to determine if something is interoperable with the rest of their devices. This application would let users input all the devices they own. When making a purchase decision they would input the new device and it would provide information as to what devices in the home it will and won’t work with. 

Ultimately, these applications would simplify the buying process and help bring the means to independently research a product directly at retail. No longer will users have to go home to ensure that the router they want to buy works well, fret over buying something that is cheaper next door, or worry that what they buy won’t work with what they own. This is the epitome of Anywhere - consumer’s accessing what they need when they need it wherever they are. Now all we need is some developers to actually make these applications and everything will be perfect.

Sites providing great insight into the best iPhone Applications

Tech Crunch

Engadget

Gizmodo

One of my favorite site, The Consumerist, has long been the bastion for frustrated consumers to hold companies accountable for their bad behavior. The interesting aspect of sites such as The Consumerist, is that they bring together consumers in such a way that demands attention. Two announcements today (as well as one a few weeks ago when Netflix chose to keep the profile feature) further demonstrate what recent YG survey data has shown, early adopters can create or kill a market/company/product.

1. Rogers backs down.  Rogers, which stirred up a storm with its iPhone pricing had every right to charge whatever it wanted for the iPhone - and people still would have bought it. However,  many consumers vowed not to buy the product which pulled Apple into the maelstrom of negative publicity and Rogers relented by dropping the price. So powerful are Anywhere Consumers that before even realeasing a product, Rogers had to back down and offer a more attractive package to consumers, even if they are only doing it in a promotional manner.

2. Charter Renegs. After having a contest that offered a 65″ TV, Charter refused to deliver the goods to the winner. While this issue remains unresolved at this time, (Charter has offered two smaller TVs) in the consumer empowered world of today one must wonder how long it is until the ngative PR finally engulfs Charter and they are forced to make good. With AT&T, Verizon, Dish, DirecTV, and other SPs antsy to pick off their subscribers bad PR could result in a door opening for Charter’s competitors.

Individuals have historically been challenged to force change, but as a group consumers can accomplish Herculean tasks. This is the promise and the threat of the market leaders known as the Anywhere Consumers. They have major sway over those that adopt after them and with the ubiquity of consumer sites available, user reviews on sites, and a peer group looking to them for buying advice -  failure to meet their needs will require companies to change as Rogers did or suffer the consequences of bad publicity. With increasing choice and ease of finding alternatives available everyday it would be wise for companies to please these early adopters (and all consumers in general) or suffer the consequences later.

Recently I’ve been asked by several publications to comment about mobile security, and more specifically about the security issues that we are seeing on smart mobile devices. Jim Finkle at Reuters did a nice job rounding up the usual suspects in a widely-circulated article that I recommend highly. In it, he quotes Symantec COO Enrique Salem (a smart cookie) and McAfee’s CEO Dave DeWalt (someone I have not met, but who is also said to be a smart cookie). He also solicited some insightful comments from Mark Rasch, a cyber-security lawyer I haven’t met, but whose SecurityFocus columns I have been reading and enjoying for years. I contributed my own little soundbite, which attempted to put things in perspective. All of these parties have interesting things to say, but a multi-interviewee story like Jim’s cannot give you the True Yankee Perspetive. So here it is.

Our take on “mobile security” has always been contrarian, and different from that voiced by the most popular interview subjects, namely security vendors. That camp’s position, grossly simplified, is this:

• Computers, particularly the Windows operating system, has long had a “malware problem.”
• Mobile phones are increasingly taking on computer-like features
• Because mobile phones are like computers, they will soon have malware too
• And because everyone has a phone, everyone will soon have malware

The general point is that endpoint security vendors see mobile phones as just another endpoint that will obviously have the same issues as other platforms they provide products for. In other words: mobile phone security is an adjacent market that they can safely expand into, because we all know that the problem space is the same, right? Right?

Elementary enough on its surface, the logic breaks down under casual scrutiny. The logical flaws remind Yankee Group of the old Woody Allen syllogism from Love and Death: A) Socrates is a man. B) All men are mortal. C) Therefore, all men are Socrates.

My folksy-philosopher dad likes to say that the old saying “seeing is believing” works in reverse, too. In other words: if you believe that a mobile malware maelstrom is approaching, you will see storm clouds everywhere.

Even when the storm clouds are just vapor.

Now, I won’t deny that certain mobile platforms (for example, Symbian) have had some problems with mobile malware. Most security analysts who follow the mobile world are well aware that there are many variants of CommWarrior and Skulls circulating out there. And yes, we know that BlueTooth auto-discovery could well allow phones to be hijacked at close range. Thank you, Sophos, for staging a media event that demonstrated this. Brilliant and well done. We also know that some end-users will be frustrated and occasionally tricked by SMS messages they receive from fraudsters. But misdirection and mischief (social engineering) is not the same thing as malware.

Where I part company with the vendors is the notion that somehow the mobile malware maelstrom is inevitable. Yankee Group has long maintained a consistent position on the coming mobile malware epidemic: there won’t be one. Breathless predictions of impending maladies — regularly recited by sellers of miracle tonics — cannot disguise the fact that the necessary preconditions for pervasive mobile malware do not exist, and never will. Here’s why the tonic-sellers’ logic is fatally flawed:

• Mobiles don’t have a monoculture operating system. Symbian, Windows Mobile, Android, iPhone and RIM all have significant shares, and we won’t see any of them gain more than 50% of the market.
• Malware has no obvious mass-infection vector. Short-range, rifle-shot BlueTooth promiscuities don’t count.
• Less-open operating environments. Most of the smartphone OSes (Symbian, iPhone, RIM for starters) require some form of digital signature to run a third-party application. This provides an audit trail, and gives the OS vendor (or carrier) an opportunity to revoke the certificate if the app misbehaves. I happen to like Apple’s model, because there’s one certificate issuer and thus one point of accountability. No, rogue apps run in jailbroken phones don’t count because they won’t be substantial.

None of these inconvenient facts seem to trouble security vendors too much, and every few months Yankee hears about another mobile security product launch. But mobile anti-malware software isn’t selling. John Thompson (Symantec CEO) more or less admitted it at this year’s Vision conference in Las Vegas, where he said that substantial investments in mobile security software wasn’t a very good use of shareholder money. Hats-off to JWT for telling the truth.

Setting the record straight on mobile security means talking straight about what is actually needed, and what is just hype. Enterprises certainly need the ability to remotely kill devices that have been stolen or lost. And certain kinds of mobile phones will probably also need encryption to keep sensitive contents safe from casual prying eyes. But on-board anti-malware software to prevent phones from contracting hypothetical future maladies? As Mike Rothman might say, “not so much.”

I’ve just begun researching a report with a working title of “Best of the Mobile Web.” As a result, I was pleasantly surprised to see that not only does OpenTable now seat three million diners a month, but it also has launched a mobile version of its web site. For those unfamiliar with the company, the premise is simple: it allows you to electronically find and book restaurant reservations. It is a great solution for those times when you want to plan a great meal in a new area, or simply want to explore new restaurants.

I think the mobile web version of this service is a perfect example of what the mobile web is good for. It has a simple, clear function, namely making restaurant reservations. It works on many mobile platforms; the fact it works on my BlackBerry’s limited browser is testament to its versatility. And it eschews Flash, graphics, and scripting in favor of a standard HTML pages that load quickly, even over slow wireless networks.

It’s too early to claim that OpenTable will be one of the best mobile web sites for my report. Every site has to be evaluated according to 25 Anywhere web criteria, so great content alone isn’t enough to land a spot on the list. Nonetheless, I have to say that OpenTable.com certainly has Anywhere appeal. After all, what’s the point of ubiquitious connectivity if you can’t find a place to eat dinner?

The Wall Street Journal yesterday raised a few Anywhere eyebrows with this paragraph at the end of an article titled Firms Hitch Wagons to iPhone. The paragraph that caused this fuss was as follows:

And those that have been sanctioned by Apple are finding out too late that they have guessed wrong about the depth to which Apple is willing to help them. Makers of location-based software expected to benefit from the new iPhone’s global-positioning system. Yet they are finding out that Apple won’t support “applications designed or marketed for real-time route guidance.” The clause in the iPhone developer tool-kit agreement essentially voids months of work by TomTom NV and other navigation providers.

Could this be? Could Apple be an Anywhere spoilsport and refuse to allow location-based applications?

Now, being a registered developer, I have the software development kits (SDK) for both the Apple iPhone and Google Android [shameless research plug: Yankee Group clients should look for a Decision Note comparison of the two SDKs and how developers should choose between them to be published soon]. Unfortunately, the Apple SDK license terms are confidental so I can’t quote chapter and verse here (software license restrictions and end user license agreements are a rant for another post). However, I can provide my personal interpretation of Apple’s legaleze, which luckily isn’t too tricky. Full disclosure: I am not a lawyer, and this opinion should not be construed as legal advice. Always consult your own attorney on legal matters.

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The devices we use to access the Anywhere Network are truly legion — and getting more so. Gartner Group got a lot of headlines this week noting that one billion PCs are now in use worldwide. As one of the articles notes, that means that there’s a PC nowadays for one out of every 6.7 people on Earth. That’s an amazing accomplishment.

What’s I’ve been struck by lately, though, is how last century this business of counting PCs is. Yes, they are incredibly important devices. But PCs took an amazingly long time to reach this billion units from their humble beginnings with the Apple I introduced in 1976. Meanwhile, another personal device technology — call them PDs — invented around the same time has grown to more than 3.44 billion units, according to Yankee Group’s latest Global Mobile Forecast. That’s 1 PD for every 2 people on Earth. Of course, we know PDs better as mobile phones.

Today’s mobile phones make calls, keep our contact lists, take pictures, exchange email, do instant messaging, and can even help you navigate — and yet unlike PCs, these devices fit in our pockets. Unlike PCs , we rely on our PDs to always work, to be secure, and to become electronic extensions of ourselves. For example, in Japan, many teenage girls decorate their cell phones and their nails to match — you don’t see that happening with PCs. And, according to a recent study, people are more likely to leave their homes without their keys and cash than they are without their mobile phones; PCs, not so much.

And Yankee Group’s research shows that this trend of PDs outgunning PCs for the hearts and minds of consumers isn’t likely to stop soon. As we’ve noted in our Yankee Group Teens and Technology surveys, texting has wedded an entire generation of teen-age users to their mobile phones with a loyalty that their PC-centric and voice-addicted elders just don’t understand. And an upcoming Anywhere Enterprise report will discuss the future of Anywhere mobile applications. Hint: it’s easier to wean executives from their laptops than their BlackBerry PDs nowadays.

So bravo to the billion PCs in the world. Just don’t expect the 3.5 billion PDs on the Anywhere Network to wait for them to catch up.

I had to read this article about the AT&T lawyers telling the FCC that early termination fees for mobile phones are good for consumers a couple times (including the Ars Technica article it links to) to make sure I understood what AT&T’s lawyers were saying. Specifically, Gizmodo cut to the heart of the matter with this:

“In this case, with the iPhone 3G, it [subsidies and early termination fees] basically lets you walk away with a iPhone 3G that you can use on T-Mobile for $374.”

So think about that; should this scenario be true, you would be able to buy an ATT-less iPhone 3G for $199+$174 early termination fee — that’s less than the locked version one iPhone. We live in interesting pricing times.

Lest anyone get too excited, it seems to me that the authors left out some details, namely that the iPhone 3G would have to be unlocked for it to work on T-Mobile. I don’t think AT&T’s early termination fee is going to do that for you, nor will iTunes activate your iPhone 3G on T-Mobile. And this is still a GSM device, meaning you’ll never use your iPhone 3G on Verizon’s CDMA network.

But assuming that third parties will develop unlocking software for the iPhone 3G just as they did for the original iPhone, this technique could make entrepreneurial iPhone exporters very happy — they’ll get a nice price cut too.

With Apple’s iPhone launching on July 11 for $199 in the US with a 2-year AT&T contract, everyone (including me) is assuming that there’s a roughly $200 AT&T subsidy baked into that price. That assumption seems especially reasonable since AT&T is raising its unlimited data service subscription price by $10 per month and will no longer share subscription revenue with Apple. Those two factors means that AT&T is accruing about $480 more ($240 from the higher data service price and $240 from not sharing subscription revenue with Apple) per 3G subscriber over the two-year contract, leaving them plenty of room to pay Apple roughly $399 up front for 3G iPhones and still sell them to consumers for $199.

But there’s an intriguing twist to this story that may surprise people. According to Porteligent and as reported by EETimes, the parts cost of the 3G iPhone may be as low as $100. That means that even at $199, Apple’s price includes a roughly 50% gross margin over its parts cost, which is in the ballpark of the gross margins on traditional iPods. If AT&T is adding in a $200 subsidy, then the iPhone 3G is anything but a a phone requiring a carrier subsidy. In fact, if these numbers are true and the carriers are subsidizing the phone, the iPhone 3G could end up being the most profitable product Apple makes. But more likely, this means that Apple has a lot more pricing flexibility than analysts have given them credit for.

Now as one of those analysts, I have to apply a caveat here. It’s highly unlikely that Portelligent actually has an iPhone 3G to tear down, so their parts cost analysis is probably just an educated guess informed by current cost data from parts suppliers. But that said, Apple has a history of aggressively buying parts to achieve a market advantage. For example, Apple paid $1.25 billion in 2005 to guarantee flash memory for iPods through 2008; that purchase made it nearly impossible for other flash music players to have competitive supplies and profit margins. Apple reportedly negotiated another similar deal in 2007. In my opinion, the Portelligent’s cost is probably closer to right than wrong, simply because Apple never sells loss-leader products. And given Apple’s intent to sell this phone in more than 70 countries this year, it undoubtedly worked hard to ensure low parts costs regardless of significant currency fluctuations too.

So what’s the takeaway here? It’s simple: Apple’s 3G phone isn’t a loss-leader product needing subsidies to survive. It’s designed to be an Anywhere phone that puts your online life, media, and connections in your pocket, yet be simple enough for your grandma to use. But for Apple, it’s a business platform designed to make money — and the details of that business design may surprise more analysts than the product itself.

2.0 is all about comparative advantage and nothing more. Adam Smith would be proud.

In this whole 2.0 world, I just can’t keep things straight. Was I born at 1.0 or 0.1? And where am I today? Am I in my 3.0s or just 1.9.2? Because I’d say that it looks like my 4.0s or my 5.0s are on the horizon, and I definitely feel like I’ve learned lessons from my 2.0s. And what will version 2.1.7b be like when we get there?

Unless I’m in the world of technology…which feels the need to 2.0 everything. Whatever you were doing is 1.0 and whatever you will be doing is 2.0. So according to the recent Advertising 2.0 conference, I’m destined to do tomorrow what I’ve been doing for years, which is going to conferences and looking for cellular signal. Or looking for a way to cram a day’s worth of work into the 30 minutes between sessions.

The biggest take-away from Advertising 2.0 is that, no matter what happens, the best that digital advertising can do is to grow its comparative advantage against other media. This is a difficult concept to grasp, but it’s very important. Everyone looks at Google, and they think that digital advertising is the land of milk and honey where riches abound.

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The blogging world is abuzz at Apple’s new $199 iPhone 3G, with most writers (including Yankee Group) bemoaning the lack of surprises in Steve Jobs Keynote. But my analysis of the press releases that came out after the event actually produced more surprises than I would have expected, including:

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