Apple

Consumer demand for smartphones seems to be unstoppable.

In the third quarter, vendors shipped a record 43.3 million devices, up 4.2 percent from last year's third quarter and up 3.2 percent from this year's second quarter, says a report released Thursday by market researcher IDC.

(Credit: IDC)

Among smartphone vendors, Nokia still enjoys the greatest market share, according to IDC, with a 37.9 percent slice for the third quarter. ... Read more

Last month Apple CEO Steve Jobs made his first public appearance since coming back from medical leave after receiving a liver transplant earlier this year.

(Credit: Stephen Shankland/CNET)

Love him or hate him, you have to admit that Apple CEO Steve Jobs has had a helluva decade.

Consider that, under his helm, Apple defined the portable music player market with the iPod, has shaken up the mobile industry with the iPhone, rocked the retail music business with iTunes, and re-invented the computing business with OS X in a way that the PC business--with less than 10 percent of market share--is no longer the bread-and-butter of the company.

Add to that the brilliant marketing behind Apple and the loyal, almost cult-like following of Apple's fans, and it's no wonder that Fortune Magazine today named him the CEO of the decade. The opening lines of a story written by Fortune editor-at-large Adam Lashinsky (which also includes a nice video segment) explain it nicely:

How's this for a gripping corporate story line: Youthful founder gets booted from his company in the 1980s, returns in the 1990s, and in the following decade survives two brushes with death, one securities-law scandal, an also-ran product lineup, and his own often unpleasant demeanor to become the dominant personality in four distinct industries, a billionaire many times over, and CEO of the most valuable company in Silicon Valley. Sound too far-fetched to be true? Perhaps. Yet it happens to be the real-life story of Steve Jobs and his outsize impact on everything he touches.

Read more of "Congratulations to Steve Jobs, Fortune's CEO of the decade" at ZDNet's Between the Lines.

As Apple and Research In Motion have won a greater share in the Wi-Fi handset market over the past year, Nokia has lost share.

Though Nokia is still the leading vendor for dual-mode smartphones (Wi-Fi and cellular), its market share dropped to 35 percent in the second quarter, compared with 50 percent in the same period a year ago, according to a report released Monday from In-Stat.

The report "Wi-Fi in Mobile Phones: Dual Mode Becomes the In Thing" tracked the major Wi-Fi phone vendors, including Nokia, Apple, Research In Motion, HTC, and Samsung. Among those, Apple has enjoyed the greatest growth in market share, from 3 percent in the second quarter of 2008 to 20 percent in this year's second quarter.

Market share for both RIM and Samsung has also weakened the past few quarters, though less so than Nokia's. RIM's 15.7 percent chunk of the market for the second quarter of the year was down from its first-quarter high of 17.6 percent. Samsung's share has been relatively flat but usually dips a bit from the first to the second quarter, notes In-Stat.

In sheer unit volume, Nokia has done well the past few quarters, with 9.3 million Wi-Fi handsets shipped in the second quarter of the year compared with Apple's 5.2 million shipments. However, Nokia's shipments have dropped since the first quarter of 2008 when it saw 12 million units fly out the door. Over the same period, Apple, RIM, and HTC have seen their shipments grow.

As the No. 2 Wi-Fi handset vendor, Apple has also outsold third-place RIM in dual-mode phone shipments, says In-Stat. Though RIM still has a larger market presence, not all of its Blackberry devices include Wi-Fi. HTC and Samsung rounded out In-Stat's list as the fourth and fifth top Wi-Fi handset vendors, respectively.

(Credit: In-Stat)

The report also detailed the growth of the Wi-Fi smartphone market overall. The industry shipped 37 million handsets in 2007, and 103 million units in 2008. That rise is because of several factors, notes In-Stat, including greater functionality, lower prices, and carrier promotions. Initially targeted to the business market, smartphones are also now an entrenched hit with consumers, which In-Stat attributes to the success of the iPhone.

Wi-Fi handset shipments are expected to rise just 25 percent to 128.4 million units for 2009. That compares with a nearly 180 percent jump in 2008.

But In-Stat sees gains ahead. By 2010, the growth rate is likely to climb to 43 percent. Though that rate may not be sustainable, it should remain strong in the coming years. Wi-Fi will also become more prevalent in mobile phones. This year, 11.5 percent of handsets include Wi-Fi; by 2012, that figure will grow to 25 percent, predicts In-Stat.

To compile the report, In-Stat relied on its own data as well as interviews with Wi-Fi equipment vendors.

Parallels on Wednesday released Parallels Desktop 5 for Mac, a new version of its virtualization software that allows Intel-based Macs to run Windows and Linux alongside Mac OS X.

According to Parallels, the new version of its software is up to 300 percent faster than the previous version, Parallels Desktop 4. The company also hired Crimson Consulting Group to do performance testing on Parallels 5 and said it was 22 percent faster than its nearest virtualization competitor when running Windows 7 64-bit on a MacBook Pro.

While the competitor wasn't named by Parallels, it is widely thought the virtualization market is ruled by Parallels and VMWare's Fusion for Mac.

Speaking with CNET, Parallels CEO Serguei Beloussov said company had three main goals when making Parallels 5 for Mac: make it faster; make it smarter and easier; and make it more powerful.

Beloussov said the company achieved those goals by adding support for gestures, supporting a broader range of 3D features, and optimizing Parallels to handle virtual hardware and drivers more efficiently.

Parallels 5 also adds a new viewing mode called Crystal, which is similar to Coherence, where Windows completely disappears from your desktop. However, Crystal adds the Windows taskbar items on the top of the Mac OS X menu, allowing easy access.

Apple also offers a way to run Windows on an Intel-based Mac. It's called Boot Camp, but it requires the user restart the computer and run Windows separately from the Mac OS. While that may be inconvenient for many users, the native speed of running on the hardware was always seen as a major advantage. Parallels says they can now beat that.

"Parallels is faster than Boot Camp," Beloussov said. "Most slow downs with Windows is not because of computational problems, it's handling drivers. We offer optimized virtualized hardware and drivers, making it faster."

Parallels Desktop 5 for Mac is available for $79.99 or $49.99 for an upgrade.

More than 100,000 apps are now available for download from Apple's App Store, making it the largest such retailer in the world.

App Store icon

(Credit: Apple)

The App Store launched in July 2008 with just 500 applications. The store is now available in 77 countries, which has contributed to what Apple said Wednesday is well over 2 billion downloads.

Apps from the App Store work with both the iPhone and iPod Touch.

When introducing its new iPod Touch in September, Apple positioned the device as a superior gaming platform to Sony's PSP or Nintendo DS. Apple said its rivals charged too much for games and didn't offer enough selection. At the time, Apple had more than 21,000 game titles in the App Store, while Nintendo had 3,600 titles and Sony had 600.

The message apparently has gotten through.

"The App Store has forever changed the mobile gaming industry and continues to improve," Travis Boatman, vice president of Worldwide Studios at EA Mobile, was quoted as saying in Apple's press release Wednesday.

Not everything has been perfect with the App Store, however. Most notably, Apple's app approval process has caused frustration with developers, who are sometimes left in the dark about the reason an app is rejected.

This is a screenshot of the SMS the hacked iPhone users received.

(Credit: Tweakers.net)

A hacker in the Netherlands broke into some jailbroken iPhones and sent text messages to the owners asking them to pay to find out how to secure their phones, according to postings in a Dutch forum called Tweakers.net.

One of the victims posted a screenshot from his iPhone of the SMS received. It said: "Your iPhone's been hacked because it's really insecure! Please visit doiop.com/iHacked and secure your iPhone right now! Right now, I can access all your files."

The URL provided now displays a message indicating that it was reported for spam or phishing abuse and has been deactivated.

Ars Technica reports that before the page was removed, it asked that victims send 5 euros ($7.36) to a PayPal account and then await an e-mail with instructions on how to secure the phone. The fix probably would involve restoring the factory settings, according to the Ars Technica post.

"If you don't pay, it's fine by me," the hacker's page said. "But remember, the way I got access to your iPhone can be used by thousands of others--they can send text messages from your number (like I did), use it to call or record your calls, and actually whatever they want, even use it for their hacking activities! I can assure you, I have no intention of harming you or whatever, but, some hackers do! It's just my advice to secure your phone."

The iPhone didn't get quite the reception in China as it did in other markets.

The exclusive carrier for the device in the country, China Unicom, said Tuesday that it signed up 5,000 iPhone subscribers in the first four days it was available. While that's certainly not a blockbuster opening weekend, the carrier says it's pleased nonetheless.

The mob scene at the iPhone's 2007 debut in San Francisco. The phone's reception in China was a bit cooler.

(Credit: Erica Ogg/CNET)

"We are satisified with iPhone sales so far, and we aim to have an additional 1 million new 3G subscribers each month in the near future," China Unicom Chairman Chang Xiaobing told Reuters.

It's a difficult comparison when you measure the first weekend sales in China against the 146,000 AT&T signed up in the U.S. during the original iPhone's first weekend in June 2007. Besides having to sell the device without WiFi, China has to contend with something U.S. carriers largely do not: a vast market for iPhone knockoffs.

Referred to as gray-market handsets, these are cell phones made in China that are not legally licensed by the government. Manufacturers don't pay taxes on them and they use fake Mobile Equipment Identity numbers. As a result, the phones are cheaper and can be used with prepaid wireless accounts, and, perhaps unsurprisingly, they're increasingly popular.

China's gray-market phone shipments are expected to reach 145 million units this year, a 44 percent increase over the 101 million shipped in 2008, according to market research firm iSuppli. For perspective, the worldwide (legally licensed) cell phone market is 1.13 billion, so the 145 million is a sizable chunk of that, almost 13 percent.

Still, Apple analysts are already calling the phone's debut in China "a disappointment." Piper Jaffray's Gene Munster said he was expecting China to contribute 1 million to 2 million iPhone sales to the worldwide total of unit sales for next year. Based on the weak opening numbers, he is revising China's contribution to 550,000 next year.

China is also in the middle of building out more of its 3G network, so it could take time before devices like the iPhone truly takes hold, the way it has in other markets.

"We believe that eventually China will emerge as a major market for iPhone sales," wrote Jaffray in a research note Tuesday, "but it could take a year or two to gain meaningful unit traction as it did in the U.S."

Intel on Monday said it is investigating a glitch that prevents an Apple iPhone from synching with certain PCs that use a new Intel chipset.

"Our leading theory is a BIOS or system configuration issue, but we are still investigating," Intel said Monday. The BIOS, or basic input/output system, is the initial code that runs when a PC is powered on. The BIOS identifies and initializes system devices such as the chipset, graphics card, and hard disk drive. Makers of PC circuit boards, aka motherboards, typically offer their own BIOS.

The problem is thought to be tied to the Intel P55 chipset and desktop motherboards from certain manufacturers, according to a report in The Register.

The Intel P55 Express chipset supports the Intel Core i7-800 and Core i5-700 series processors, according to Intel. The chipset is new and has only been available since summer.

As depicted in an "Apple Discussions" thread, on certain PCs or motherboards with the P55 chipset, Apple iTunes 9 for Windows will recognize the iPhone, but when a sync is attempted, an "error 0xE8000065" is generated, indicating an iPhone connection failure. Windows 7 is also cited as a common problem, particularly the 64-bit version of Windows 7.

"Microsoft has not seen this particular question posed in the Microsoft Answers for Windows 7 community forum, nor in any of our call centers," Microsoft told the The Register on Friday. "If we determine this to be a problem specific to Windows 7, we will post an update on the Microsoft Answers site."

The Apple Discussions thread proposes a number of possible solutions.

Apple could not immediately be reached for comment.

Would you pay $30 a month to watch TV via iTunes?

That's the pitch Apple has been making to TV networks in recent weeks. The company is trying to round up support for a monthly subscription service that would deliver TV programs via its multimedia software, multiple sources tell me.

Apple isn't tying the proposed service to a specific piece of hardware, like its underwhelming Apple TV box, or its long-rumored tablet/slate device. Instead, it is presenting the offer as an extension of its iTunes software and store, which already has 100 million customers.

A so-called "over the top" service could theoretically rival the ones most consumers already buy from cable TV operators--if Apple is able to get enough buy-in from broadcast and cable TV programmers.

That's a big if: Apple has told industry executives it wants to launch the service early next year, but I have yet to hear of a single programmer that has made a firm commitment to the company, which has tasked iTunes boss Eddy Cue with promoting the idea.

But industry executives believe that if anyone jumps first, it will be Disney, since CEO Bob Iger has shown a willingness to experiment with Apple and iTunes in the past: In 2005, Disney was the first player to sell its programming on iTunes, via a la carte downloads. And Apple CEO Steve Jobs is Disney's largest single shareholder, a result of Disney's 2006 acquisition of Jobs' Pixar animation studio. Apple didn't respond to requests for comment.

Network executives I've talked to are intrigued with the idea--they are eager to find new revenue streams--but are also wary, for multiple reasons.

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