Cloud hangs over Macworld opening

Macworld, the annual tech gathering for the Apple faithful in San Francisco, opens with a cloud hanging over it.

In a surprise move, the company recently shocked fans by announcing this year’s event is its last.

It also revealed that chief executive Steve Jobs would not present the keynote address, reigniting speculation his health has deteriorated following pancreatic cancer surgery in 2004.

Some analysts, however, see Mr Jobs’ decision as part of a succession plan.

“Steve is clearly beginning to share the spotlight with some other executives and sooner or later someone has to step up to the CEO role,” said Van Baker, vice-president of research for IT consulting firm Gartner.

“I don’t think this is about Steve’s health. I think he is trying to back off from being a ‘one man band’ and he is trying to make way for a possible succession and spread the wealth among the executive team that Apple has,” explained Mr Baker to BBC News.

Apple has said the reason for pulling out of future shows is because it feels the forum does not provide value for money.

In an earlier statement, the company said that “every week 3.5m people visit our retail stores. And like many companies, trade shows are a minor part of how Apple reaches its customers”.

Rumour mill
With Apple refusing to answer questions about Mr Jobs’ health, concern and rumour continues to take on a life of its own. Much of it was sparked off in the middle of last year when he appeared at Apple’s World Wide Developer Conference looking very thin and gaunt.

Just last week Gizmodo.com, a popular tech and gadget website, posted a report from an anonymous source who said Mr Jobs’ health was “rapidly declining”.

Within minutes, Apple stock dipped from $87.92 (£60.60) to $84.72 (£58.42). It rallied at the end of the day but this demonstrates how sensitive the market is to the issue.

Mr Baker, however, believes there really is nothing to worry about when it comes to either the health of Apple’s boss or that of the company he has been credited with turning into such a dominant force.

“I think it’s much ado about nothing, to be honest with you. Of course I could be wrong, but I think if he had anything that was truly life threatening there is an onus on the board and on him to share that with shareholders,” stated Mr Baker.

However, some analysts believe that Apple will suffer without Mr Jobs at the helm.

“Apple can’t survive the way it is without Steve Jobs,” Rob Enderle, principal analyst at the Enderle Group, told the San Jose Mercury News.

“It will have to change dramatically because it’s been so designed around Steve.”

That view is upheld by LA Times columnist Michael Hiltzik, who asks what he calls the crass question – “What is Apple Inc’s plan if CEO Steve Jobs dies?”

Mr Hiltzik wrote: “I hope the day when Apple has to contemplate life without Steve Jobs stays far, far in the future. But the value of the company and the perception of its future are now tied, at least in the short term, to the public perception of his future.”

Silent protest
Mr Jobs’ decision not to present Tuesday’s keynote speech now means the spotlight will be turned on Apple’s senior vice-president of worldwide product marketing, Phil Shiller, who will stand in.

The presentation has in the past been likened to that of a rock concert, with the audience cheering every announcement. It has also been a highly visible platform for Steve Jobs, who has delighted the Mac fans by giving them a first glimpse of new products such as the iPhone, the iPod and the Mac Air book among others.

“This really feels like we are making a pilgrimage to the mother ship to see what Steve is going to give us for the next year,” explained Lesa Snider King, who met her husband at Macworld and planned the wedding around the expo in 2006.

As a long time Mac user, regular Macworld attendee, and Mac training instructor, Ms Snider King told the BBC she was so disappointed at Apple’s decision to pull out of future shows that she had organised a protest. She has called on the Mac community to stay silent during Mr Shiller’s keynote address.

“I don’t want anybody to be rude, or throw things or heckle or anything. Our anger will speak volumes by us not saying anything. This isn’t personal against Mr Shiller but it’s aimed at sending a message to Apple,” Ms Snider King explained.

“There is a whole ecosystem that centres around Macworld and it’s not just about Apple. There are hundreds of mom-and-pop companies who will be adversely affected,” she said.

Ms Snider King added that while she has had a lot of positive response, there has been something of a backlash to her idea.

“There have been quite a number of very vile, mean personal attacks over it which I have found shocking. I never dreamt in a million years that I would have people calling me names that I don’t dare repeat. But this is important. Apple pulling out of Macworld has the potential to kill the show.

“Apple have always had this thing about eating their young and I feel that is what they have done here,” said Ms Snider King.

Blackberry Storm proves worthy rival to iPhone

To its fiercest devotees, one of the best things about the BlackBerry is its carefully designed physical keyboard, which the skilled BlackBerry addict can play like a violin. These folks scorn Apple’s popular iPhone, whose keyboard is virtual and must be operated by tapping on the screen.

But, on Friday, Verizon Wireless and Research in Motion, the BlackBerry’s maker, will do the unthinkable: They will introduce a BlackBerry model without a physical keyboard, one where typing and navigating require tapping on glass, just as users do on the iPhone. This new model is called the BlackBerry Storm, and will sell for $250 with a two-year contract, though a $50 mail-in rebate can bring the price down close to the $199 that Apple charges for the base model of the iPhone.

Despite its lack of a keyboard, the Storm is a real BlackBerry in every other respect, with push email, corporate features and the familiar BlackBerry menus. In many respects, the Storm is a touch-based, large-screen version of the recently released BlackBerry Bold, which is the most polished version of a traditional BlackBerry. It is also the latest member of the new class of hand-held computers, the super-smart phone category kicked off by the iPhone last year and joined by the Google G1 earlier this year.

The Storm sports a large, high-resolution touch screen that fills most of its surface and automatically switches from portrait to landscape mode when the phone is turned. There’s also a forthcoming souped-up download store for third-party software, meant to be similar to the ones on the iPhone and the Google phone. And the Storm can even be used in European and other countries where most Verizon phones don’t work.

However, the biggest innovation in the Storm is a clever feature RIM hopes will give it a big advantage over the iPhone. When you strike a key or icon on the Storm’s screen, you feel a physical sensation, as if you were pressing down on a real key or button. That’s because you are, in fact, pressing a real button. The entire glass display is one large button, mounted on a mechanical substructure that allows it to be depressed when pressure is applied.

The idea behind this feature is to make typing on glass feel much more like typing on a real keyboard, and thus to make the virtual keyboard, and the touch interface, more acceptable to people used to physical keyboards and buttons. This push-down screen also replaces the side-mounted scroll wheel or track ball on other BlackBerrys for activating menu choices and icons.

But, in my tests, this physical feedback feature, which RIM calls SurePress, didn’t magically turn the Storm’s touch interface and virtual keyboard into their physical counterparts. The feature does provide a more reassuring confirmation that a key has been struck or an icon has been clicked than the mere visual feedback one receives from the iPhone. But neither I, nor any of the several BlackBerry addicts I asked to try it out, considered typing on the Storm’s keyboard to be very similar to using the keyboard of a traditional full-sized BlackBerry.

In my opinion, using the Storm’s keyboard is much more like using the iPhone’s keyboard than a traditional BlackBerry’s. I found that I could type quite well on the Storm after awhile, but that a greater adjustment, and more practice, were required than with a physical keyboard.

The Storm also has a keyboard oddity that I found annoying, and that may put off others. It presents you with a full virtual keyboard only when you are holding it horizontally. When you hold the Storm vertically, you get a mashed-up keyboard, like the one on the narrower BlackBerry Pearl, which has multiple letters on each key. This keyboard design relies on software to guess which letter you meant to press. You can also switch to a virtual cellphone-style keypad that requires you to hit each key multiple times.

This is a curious design decision. Once a company ditches a physical keyboard for a virtual one, it can create all kinds of keyboard variations. RIM could have offered a full, vertically oriented keyboard, even if it would have had smaller, more closely spaced keys.

RIM also failed to customize the Storm’s virtual keyboard for some common, specific tasks. For instance, on the iPhone, when you are typing in a Web address in the browser, the keyboard morphs to offer a convenient key that automatically enters “.com”. Not so on the Storm.

There’s another glaring deficit in the Storm: It lacks Wi-Fi capability. This means that, unlike on the Bold, the iPhone or the Google G1, if high-speed cellphone data service is absent or pokey, you can’t fall back on speedy Wi-Fi connections in public places. And, at home or in the office, you can’t take advantage of Wi-Fi connections that are often much faster than cellphone data networks.

The Storm has some important advantages over the iPhone. Its screen, while 7% smaller physically, offers about 13% higher resolution. Photos and videos look beautiful on it. It has much better battery life for phone calls than either the iPhone or the Google G1. While the latter two phones deliver just under their claimed five hours of talk time, in my tests, the Storm lasted a bit over six hours, which is actually half an hour more than its claimed 5.5 hours of talk time. And the Storm has a removable battery, unlike its Apple rival.

This new BlackBerry comes with more memory than the similarly priced base model of the iPhone — nine gigabytes versus eight gigabytes. And, unlike the iPhone’s memory, the Storm’s is expandable, via larger flash cards.

The Storm’s camera is much better than the iPhone’s, at 3.2 megapixels, versus just 2 megapixels for the Apple device. It also has zoom and flash, features the iPhone’s camera lacks. And, unlike the iPhone or the Google G1, the Storm can record videos. In my tests, all of these camera features worked well.

Also, the Storm has copy and paste functionality; MMS (a service for sending photos directly to other phones without using email); voice dialing; and the ability to act as a modem for your laptop. It also allows you to edit, and not just to view, Microsoft Office documents. All of these features are missing from the iPhone out of the box.

The Storm also has a better speaker than the iPhone, and a noise-canceling microphone system. Phone calls, even on speaker phone, were crisp, clear and plenty loud. Physically, the Storm is attractive but hardly svelte. While it’s about the same length and width as the iPhone, it is 15% thicker and 17% heavier — almost as heavy as the chunky G1.

The Verizon high-speed network on which the Storm runs is older and better-established than either the T-Mobile high-speed system the G1 uses or the AT&T 3G network used by the current iPhone. Where Verizon’s high-speed data coverage is strong, the Storm flies.

But, because it lacks Wi-Fi, the Storm can be much slower at Web access than its main competitors. I tested these Web speeds in two hotels in Silicon Valley. In the first, where Verizon reception was strong, the Storm trounced the iPhone on cellphone data speeds, averaging over 800 kilobits per second to the iPhone’s 621 kbps over AT&T. But, when I switched the iPhone to use the hotel’s Wi-Fi network, it beat the Storm by 100 kbps or so.

At the second hotel, barely a mile away, the Storm’s lack of Wi-Fi hurt much more. There, Verizon’s signal was poor, and data speeds on the Storm averaged a horrible 96 kbps. But the iPhone on AT&T averaged 459 kbps, and on Wi-Fi the iPhone averaged 785 kbps.

My test Storm, which was a near-final model missing only a few minor software tweaks, was also sluggish at some tasks. It took noticeably longer than the iPhone to flip the first photo from landscape to portrait orientation, or to start the process of flipping through a series of photos by swiping them with a finger. And some other tasks were also slow. It’s possible that production models will be quicker.

BlackBerry Storm’s touch screen switches from portrait to landscape mode when turned, and aims to make typing on glass feel more like typing on a real keyboard.

Rim has tweaked the familiar BlackBerry user interface for the touch screen, and in general these changes worked well. You select the menu item or icon you want with a light touch, then press down on the screen to activate or confirm your choice. There are even a couple of cool new touch features. For instance, in a list of emails, if you lightly touch and hold one entry, the Storm shows you all messages in that thread.

But this combination of a light touch followed by a hard press on the large screen took some practice, just like typing did. It befuddled several BlackBerry veterans at first.

And some common tasks took more steps than on the iPhone. For instance, emailing a link from a Web page required four steps on the Storm, versus two on the Apple device. The Storm’s email system will be familiar to every BlackBerry user. It has the same corporate email features as other BlackBerrys, and I was easily able as well to use a BlackBerry Internet email account and to set up several personal email accounts, including Gmail.

The Web browser is much improved over the one in older BlackBerry models, and offers multiple ways to view and navigate pages, including one in which a finger moves a cursor, just as on a PC. But I found that panning and zooming in the browser was a bit slower and more awkward than on the iPhone. And, to make some Web sites work properly, I had to dig through menus to change options.

Using the BlackBerry desktop software, I was easily able to synchronize my calendar and contact data over a cable from a Windows PC. (There’s also Mac software for the same task.) But, unlike the iPhone or the G1, the Storm doesn’t offer wireless synchronization from consumer services, only from corporate servers.

The Storm’s multimedia software isn’t as fancy as the iPhone’s, but it’s better than the G1’s, and worked very well in my tests.

Overall, the Storm is a very capable handheld computer that will appeal to BlackBerry users who have been pining for a touch-controlled device with a larger screen. And it offers yet another good option for anyone who is looking to buy one of the new, more powerful, pocket computers.

Apple: The cheaper alternative?

I can’t believe what I’m reading. All across the Web, reporters are saying that at Apple’s press event next week, the company will unveil an $800 Mac to appeal to those looking to spend less on an Apple computer.

Anyone who has followed Apple since its inception knows that the very idea that Apple could actually compete on the same level as its competitors on price is a shocker. For years, the company has wanted to be considered a boutique vendor that doesn’t submit to price leadership to sell units.

Steve Jobs went out of his way to create good-looking devices with a unique experience so he wouldn’t have to charge less for his computers and it worked like a charm.

Mac sales have never been higher, and it’s quickly becoming apparent that people are more than willing to spend the additional cash to own a Mac. And yet, the rumors that Apple will sell an $800 Mac simply won’t go away.

Now, I’m a firm believer that Apple should start lowering its prices to appeal to more consumers and take the fight to Hewlett-Packard and Dell, but if Apple’s plan next week is to offer cheaper Macs, I can’t help but wonder if this is Apple’s new strategy going forward.

I think it is.

Remember when we all made a fuss over how high the price of the original iPhone was? Do you remember when we all rejoiced as Apple announced that the lower-end iPhone would retail for $199?

And if you look at the iPod, now you can spend as little as $49 for the iPod Shuffle, $149 for an iPod Nano, and $229 for the iPod Touch. And just in case you want an Apple TV, the entry-level price of $229 isn’t too bad for a set-top box with that kind of functionality.

Do you see what I’m getting at here? Apple is quickly becoming a company that offers high-quality products at a relatively affordable price. And if it decides to sell a Mac for $800, I don’t think there’s any debating the fact that Jobs has decided to change his company’s business model.

And what a change that would be. As I mentioned, Apple is a boutique vendor on a number of levels and has decided that it would rather offer products for a higher price than play the pricing game. But as economic conditions change and people need to think more about their wallets than they may have over the past few years, Apple feels it needs to change its course and compete more effectively against HP and Dell.

Will it work? I can guarantee that it will. But what will it do to Apple’s image? As long as the company continues providing high-quality products that easily eclipse the competition, I don’t think it will have anything to worry about on that front either.

Apple’s decision to offer a cheaper Mac is a smart one. But it goes beyond a cheaper product. In reality, Apple is now a changed company that will compete on price. And it’s because of that that its competitors should be scared.

Citizen hits Apple stock with false Steve Jobs heart attack rumor

Apple’s stock took a temporary 10-point hit this morning after a false report surfaced on CNN’s iReport that Steve Jobs had a heart attack. The report has been removed, but only after Silicon Alley Insider and others confirmed with Apple that Jobs did not have a heart attack. SIA captured the original report:

Steve Jobs was rushed to the ER just a few hours ago after suffering a major heart attack. I have an insider who tells me that paramedics were called after Steve claimed to be suffering from severe chest pains and shortness of breath. My source has opted to remain anonymous, but he is quite reliable. I haven’t seen anything about this anywhere else yet, and as of right now, I have no further information, so I thought this would be a good place to start. If anyone else has more information, please share it.

Was this just a short seller trying to make a quick buck, or someone trying to see how fast and far they could spread a false rumor? And what does it say about the value of citizen journalists?

CNN’s iReport site lets anyone put up posts and videos about the news. Its tagline is “Unedited. Unfiltered. News.” Sometimes these reports get on CNN proper (presumably, after being vetted). But as this incident shows even the an unvetted report carries more weight than if it had appeared on Twitter or a random blog because it is on a CNN site. And that may be purely because it gets distributed more broadly.

Nokia tries Apple’s tune

Nokia wants some of Apple’s rhythm. On July 1 the Finnish mobile-phone maker said that Warner Music Group has agreed to participate in Nokia’s fledgling music service, making Warner the third of the major record labels to join in the effort. The move is one more step in Nokia’s effort to compete against Apple for the people who want to carry around music libraries in their pockets.

Nokia’s service, which will officially launch in the second half of this year, is called Comes With Music. It will be built into certain Nokia handsets and will allow customers to download unlimited amounts of music from participating labels. The downloaded music can be kept on a PC or mobile-phone forever. In theory, a consumer could download every single song from the labels’ catalogs; they’d simply need a very big hard drive on which to store the files. Nokia and its partners have not disclosed pricing for the service, but they believe it has plenty of potential. “We believe this will be a significant contributor of revenue over a long-term basis for Nokia,” says Liz Schimel, global head of music for Nokia.

(Almost) All Aboard
The record labels seem to be buying that argument. Universal Music Group in December signed up with Nokia, and Sony BMG Music Entertainment partnered with the service in April. A spokesperson for EMI Group, the sole major label yet to join, says the company is talking with Nokia, although no deal has been reached. Nokia says it is in talks with independent labels as well.

For the music industry, the Nokia venture represents a departure from the old ways of doing business. Susan Kevorkian, program director of consumer markets at research firm IDC, says there is “broader experimentation” as CD sales decline and music revenues slide overall. For record companies, it may make sense to look for new ways to sell the work of their artists. Ringtones, for example, have become a multibillion-dollar business in only a few years. “We have a long-term sustainable business for Nokia, the music industry, and the artists,” says Schimel.

It’s hard to evaluate the service before pricing and other specifics are known. Nokia remained tight-lipped about the details of Comes With Music as it unveiled the Warner Music partnership. But Apple has said that it makes little money on music sales through its iTunes store, instead generating profits from sales of iPods and other hardware. Will the music business for Nokia and its partners also be of marginal financial benefit? Schimel says such comparisons are off-base. “We feel it is apples and oranges,” she says. “We are offering a structure that will attract new customers and new revenues.”

Will It Pay?
Some analysts are skeptical that Comes With Music will help Nokia attract new customers for its mobile phones. James McQuivey, a principle analyst at Forrester Research says, “There won’t be the same rush to buy Nokia phones” as there is for iPhones. Apple is expected to sell 10 million iPhones by yearend. McQuivey guesses that at most Nokia could sell between 2 million and 4 million handsets in the year following Comes With Music’s launch. The amount of revenue the company earns from downloads will depend on how much Nokia intends to charge consumers. But it is sure to be insignificant at a company that made $10.6 billion last year on sales of $75 billion.

IDC’s Kevorkian sees this as part of a bigger move by Nokia and the music industry. “It is a slim revenue margin, but it makes sense as part of a volume play for Nokia, who is in the midst of transition,” she says. Kevorkian sees Comes With Music as fitting into Nokia’s Ovi service, a broad effort to sell services to mobile-phone users.

Still, McQuivey thinks Nokia and its partners may find few takers for the new music service. He argues that music enthusiasts won’t be satisfied with a phone that’s merely adequate for listening to tunes, while other people won’t be willing to pay money for such music services. He says it’s a lot like digital cameras. Some people use their phone as a digital camera, but people taking lots of photos will generally purchase a separate, higher-quality digital camera. “It’s a mismatch in market opportunity,” says McQuivey.