Apple

AT&T has resumed selling iPhones through its Web site to New York City customers, with no indication as to what prompted the halt.

Over the holiday weekend, New Yorkers who tried to order an iPhone through AT&T's Web site were left out in the cold. Making matters worse, explanations ranged from network congestion problems to online fraud to this fine example of corporate-speak: "We periodically modify our promotions and distribution channels."

But at some point on Monday, sales could once again be processed for New York City ZIP codes through AT&T's site. An AT&T representative did not immediately respond to a request for clarification on what knocked out online iPhone sales for Gothamites.

Apple found a nice Christmas gift under its tree this year.

App Store downloads for the iPod Touch were 1,000 percent higher on Friday, Christmas Day, than the average of the three previous Fridays in December, according to a report released Monday by research firm Flurry.

Downloads for the newest generation, the iPod Touch 3G, soared more than 900 percent on Christmas, noted Flurry's "2009 Holiday Report: Christmas Growth." But the 1,000 percent leap in iPod Touch downloads overall may have been triggered by a flood of iTunes gift cards, believes Flurry.

The rising popularity of the iPod Touch also gave Apple reason to celebrate. Of the estimated 58 million iPhone and iPod Touch devices on the market, about 40 percent of those, or 24 million, are iPod Touch devices, according to another Flurry report released in November.

With a large number of Touch devices likely given out as holiday presents (it was one of Amazon.com's top three electronics sellers), App Store downloads for the iPod Touch jumped past those for the iPhone for the first time, outpacing them by 172 percent. The trend continued the following day, with iPod Touch downloads on December 26 exceeding those for the iPhone by 104 percent.

(Credit: Flurry)

The volume in overall App Store downloads also grew by more than 50 percent in December (with estimates for the final week of the month) over November, surpassing Flurry's estimate of only 20 percent.

Flurry's Vice President of Marketing Peter Farago spoke with CNET about the success of the App Store. Though some forecasts question how much further the App Store can grow, Farago thinks this is just the beginning. "The growth has been meteoric for Apple for iPhone and iPod Touch penetration," he said. "They're already past 50 million units in the marketplace for iPhone and iPod Touch."

Farago notes that while the iPhone is a killer device that gives people a portable computer in their pocket, Apple knows it needs third-party developers, which is one reason the company controls the store. And developers will go wherever they can get a good customer base, realizing that they can build an app once for the App Store and draw in a lot of consumers.

Even recent criticisms leveled against the App Store haven't dented its growth. Though some developers have complained that the App Store is hard to deal with, Farago says there are a lot of success stories from people who have created and sold apps through Apple.

Farago also sees the iPod Touch as Apple's silent killer, with a huge market share that will help the company in the years to come. "What I'd be scared about if I were a phone maker is that Apple has a relationship now with all these teens and pre-teens using a device that is basically an iPhone with the radio turned off," he said. "They've got 24 million [customers], and with Christmas, probably add a couple million or so to that. All those kids are getting trained to be iPhone users in the next two to five years."

Google's Android Market can't compare with the App Store at this point, but its recent download volume should offer Android vendors some holiday cheer. December downloads from the Android Market store grew by more than 20 percent over November. Downloads for Motorola's Droid, in particular, rose 93 percent on Christmas Day compared with the three previous Fridays of the month. The Droid also captured 48 percent of all download volume versus other top Android devices, including the myTouch 3G, G1, and the HTC Hero).

(Credit: Flurry)

Farago also sees the Android market off to a promising start. The installed hardware base isn't there yet, but that may start to change next year as Flurry expects about 50 new Android devices to hit the market. Once enough of those devices get into the hands of consumers, more developers may be drawn to create Android apps.

Of all Android devices, the Droid is so far leading the way. "It's the most successful [Android] headset that enables downloading pretty easily," said Farago. "For a phone that's not the iPhone, it's got a pretty good installed base."

Though Android may always play second fiddle to Apple, at least in the foreseeable future, that doesn't mean the Android Market can't have a significantly good business, notes Farago. Flurry predicts that by the end of next year, 150,000 apps will be available for Android phones, up from around 20,000 to 25,000 now.

Flurry provides analytics for mobile app developers to help them track downloads for their applications. As such, the company is able to determine which mobile devices are downloading which apps.

"We're thrilled to report our best quarter ever." Apple CEO Steve Jobs has uttered those words or some variation on them after many of the company's holiday quarters, and this year will be no different, if analysts are to be believed.

Remarking on Apple's December quarter in a note to investors Monday morning, Thomas Weisel Partners analyst Doug Reid said iPhone and iMac sales for the period have been quite strong.

"Our checks suggest December quarter sales of iPhones are tracking ahead of our prior estimates, driven by increased market penetration in the United States, additional carrier agreements in multiple countries, and first-time launches in Korea and China," Reid wrote. "Mid-December Apple Store and carrier checks indicate that the 2009 holiday shopping season has seen a sharp increase in the purchase of iPhone as a gift option. We also estimate better than expected iMac sales in the quarter following a successful product refresh (announced on October 20). Our checks indicate strong demand throughout the holiday season for the new iMac line."

Seems that the shipping delays associated with Apple's new 27-inch iMacs haven't undermined sales nearly as much as some had feared. Reid says that demand and in-store availability of both 21.5-inch and 27-inch models remains strong, so much so that he's raising his iMac unit estimate for December quarter from 655K to 721K. Demand for the iPhone, too, has been strong thanks to the annual holiday consumer binge and the end of carrier exclusivity agreements in some markets.

"Mid-December Apple Store and carrier checks indicate that the 2009 holiday shopping season has seen a sharp increase in the purchase of iPhone as a gift option," Reid notes. "The ability to add iPhones to existing family service plans with carriers has been a key driver in C4Q09, our checks indicate. In addition, industry checks also suggest that AAPL is benefiting from the addition of second or third carriers in markets (e.g. UK, Canada) and from a strong initial sales ramp in Korea."

How much of a benefit? A sizable one. Reid figures Apple will sell 8.21 million to 8.89 million iPhones during the December quarter. And he expects it to sell 31.59 million to 32.27 million in fiscal 2010.

$5 and a ratty "Think Different" t-shirt says Apple shares will hit another new 52-week high today.

Story Copyright (c) 2009 AllThingsD. All rights reserved.

Update at 1:50 p.m. PST December 28: AT&T has resumed sales.

AT&T has stopped selling the Apple iPhone in the New York metropolitan area through its Web site, perhaps due to data congestion, credit card fraud, or routine sales strategy changes, depending on whom you believe.

Online sales of the phone were apparently suspended Sunday. Prospective customers attempting to buy an iPhone through the Web site and using a New York area ZIP code get a message saying, "We're sorry, there are no Packages & Deals available at this time. Please check back later." However, changing ZIP codes to other U.S. metro areas yields a bevy of iPhone choices.

An AT&T representative's statement to CNET suggested that the move to not offer any iPhones online to buyers in the Big Apple was a routine strategic decision.

"We periodically modify our promotions and distribution channels," said Fletcher Cook, an AT&T spokesman.

However, customer service representatives, who are likely not authorized to comment officially for the company, painted divergent pictures.

One customer service representative hinted that data congestion may be the reason for the suspension, telling The Consumerist that "New York is not ready for the iPhone. You don't have enough towers to handle the phone."

In light of AT&T's tarnished reputation for its 3G service, this is certainly a plausible explanation. For more than a year, iPhone users have complained about dropped calls and poor service on the 3G network. The problems appear to be particularly acute in densely populated urban areas, such as New York and San Francisco.

However, another representative suggested that credit card fraud is responsible. Sales were suspended due to "increased fraudulent activity in that area when ordering the iPhone," the other representative told the Gearlog blog. However, the iPhone is apparently still for sale at Apple stores in the New York area.

No word on what the nature of the alleged fraud may be, but as others have certainly pondered, isn't online fraud as likely to happen in Dallas, Seattle, or San Francisco?

Apple's iPhone has topped Microsoft's Windows Mobile in U.S. market share of smartphone operating systems for the first time, putting it in the No. 2 spot, according to a report from ComScore released Thursday.

In February, 5.2 million respondents to ComScore's survey reported using Apple's iPhone, while 6.8 million reported using phones running Microsoft's Windows Mobile, according to a report on FierceDeveloper. ComScore, a market research firm, averages results in a three-month period.

In May, Apple's number rose to 5.7 million, then 6.6 million in July, and finally to a high of 8.9 million for October, the most recent period for which results are available. In comparison, Microsoft rose in May to 7 million, dropped in July to 6.6 million, and went back up in October to 7.1 million.

The highest market share numbers in the survey go to Research In Motion's BlackBerry. It registered 9.6 million in February, 12.2 million in May, 13 million in July, and 14.9 million in October.

It's interesting to note that Palm's number rose from 2.3 million to 2.8 million in 2009, and Google's Android operating system rose to a high of 1 million by October.

The survey asked U.S. mobile subscribers, who had to be over the age of 13, what type of phone they use. ComScore then figured out what operating system they were using and calculated the data for the report.

Many people I know are frightfully attached to their iPhones. They treat them as if they were a peculiar and exotic lover, one they can hardly believe they have managed to seduce.

The finely calibrated minds at Strand Consult have taken this analysis to a particularly simple conclusion: iPhone users are, the consultants say, really quite nuts.

The Strand thinkers released an opinion entitled "How will psychologists describe the iPhone syndrome in the future?." It focuses on the sorts of people who buy into Apple's great success.

Here's a flavor of the somewhat-skeptical nature of Strand's feelings: "Apple has launched a beautiful phone with a fantastic user interface that has had a number of technological shortcomings that many iPhone users have accepted and defended, despite those shortcomings resulting in limitations in iPhone users' daily lives."

The consultants' likening of iPhone buyers to kidnapped hostages may raise more than the eyebrows of many an Apple fanboy (fanperson?). Indeed, it already has the Mac world aflutter.

Is this evidence of an iPhone hypnotising a user?

(Credit: CC Gonzalo Baeza Hernandez/Flickr)

"When we examine the iPhone users' arguments defending the iPhone, it reminds us of the famous Stockholm Syndrome--a term invented by psychologists after a hostage drama in Stockholm. Here, hostages reacted to the psychological pressure they were experiencing by defending the people that had held them hostage for six days," Strand declared.

The implication is surely that Apple has mugged millions of people with its beauty, dragged them off to a very dark cellar in some barren land, turned them into slightly bonkers Barbarellas, and then recruited them as soldiers for the cause.

This is the sort of thing of which the Church of Scientology is normally accused. But for some strange reason, it's a rather chilling but pleasant shower to read something that isn't mere worship.

Strand claims that it closely analyzes the financials of mobile operators. And if you also happen to order its wonderfully free report "The Moment of Truth, a portrait of the iPhone," you will discover the 10 great myths about the iPhone. Here are just two: it doesn't attract new business for operators, and it is not a technologically advanced mobile phone.

I know you'll be rushing to read these fine tracts, and I feel sure that a couple of you might wish to drop Strand Consult a note. To encourage you a little, I'll warn you that Strand also seems to believe that some of you Apple customers are, well, liars.

The consultants put it quite sweetly: "In reality, the iPhone is surrounded by a multitude of people, media, and companies that are happy to bend the truth to defend the product they have purchased from Apple."

Apple customers are liars? The media too? Surely not.

Most college professors will tell students to put away their iPhone or iPod once class starts. But not Ken Joy. His class requires them.

Professor Joy teaches ECS 198H, Introduction To iPhone Application Development, to undergraduates at the University of California at Davis. On the first day of class in late September UC Davis became one of a growing number of schools that are tailoring classes and focusing academic resources on the making and selling of applications for Apple's popular mobile platform.

A professor for almost 30 years, Joy has mainly researched computer graphics and visualizations, until he and a former grad student came up with the idea to offer a class that teaches to the iPhone SDK (software development kit). Joy didn't have much experience in mobile platforms, but he was game for teaching something "relevant" that would keep his students motivated.

"Nothing is more relevant than the iPhone or iPod Touch right now," Joy said in an interview this week.

One of the apps developed in Professor Joy's first iPhone app making class.

(Credit: Sunny Dhillon and Fei Li)

He's not the first to teach this class to undergrads. Stanford University has offered the class for a year, as have Florida's Stetson University and the New Jersey Institute of Technology.

But while those schools have taken advantage of Apple's iPhone Developer University Program--which provides free access to the SDK, Apple hardware, and Apple employees as teachers--Joy's course is a bit more of a grassroots effort.

ECS 198H wasn't approved as a university course until 10 days before the fall quarter started in September--in other words, students already had their class schedules set. But less than four hours after Joy placed it in the registration guide, the class was filled to its 35-student capacity, with another 40 people staking out wait-list spots.

"I saw the e-mail (about the class) and I thought, 'Oh gosh.' I jumped right on my computer and signed up for the class as soon as I saw it," said Kip Nicol, 22, a computer science and engineering major. "It was a pretty hot class."

Jules Houts, 21, also studying computer science and engineering, jumped at what looked like a "fun" class, he said. "It seemed better than operating systems or something like that."

Besides room on their schedules, students also had to provide their own iPhone, iPod Touch, or Mac that can run the SDK, thanks to the UC system's well-publicized budget problems.

"We had no choice; students had to find resources themselves," said Joy.

And they did. So did several faculty and university employees who chose to audit the class, or sit in without getting a grade, illustrating much of what we already know: the App Store is popular. Apple's online marketplace for iPhone and iPod Touch programs has been bombarded with submissions from developers in the year and a half it's been open for business. There are more than 100,000 applications currently for sale and 8,500 new and updated programs submitted every day. And its competitors want a piece too: Research In Motion, Google's Android, Palm, Nokia, and Microsoft's Windows Mobile have followed suit, opening up application marketplaces, though none has university professors teaching courses about them. Or at least not yet.

Granted, squeezing the entire learning and development process into a 10-week academic quarter was a challenge. The first five weeks were spent learning the SDK, some Objective C programming language, and making simple apps like an RSS reader, while the last five weeks they split into two-person teams building their apps.

Joy said he is impressed with what his newbie iPhone developers came up with: an app for properly tuning a piano, one for tracking location of the GPS-equipped UC Davis student-run bus system, and one application for all UC Davis students, including information about student groups, maps of the campus, class locations, to name a few. That one will be in the App Store next quarter, Joy is already predicting.

The class was deemed a success, but it's unclear if it'll be back on the schedule come next fall. "We hope to offer it next year, but with the budget problems of the University of California system, no one quite knows what's going to happen."

Either way, Joy says teaching to the SDK is one of the most hands-on real-world classes he's ever taught to undergrads.

"We got to develop some apps for the real world. Students got to see a really good SDK...This is something we normally don't get in a university," Joy said. Most classes "tend to solve limited problems and don't really deal with real world that much. These that do, trying to develop bigger applications, get the students closer to the experience of industry. Which is very good."

"It was one of the funnest classes I've taken because it was project-oriented, and it created a community of developers," said Houts, who created the piano-tuning application.

But besides teaching the programming language to build iPhone apps, Joy's class also included business how-tos for those who may want to create their own iPhone app developer companies.

Some students, like Houts, are already thinking that way. As a member of UC Davis' lacrosse team, he plans on making an iPhone game based on his sport, a market he believes has some good potential.

"There's nothing except for a lacrosse stats (app) on the App Store. I want to make a little lacrosse game, and be the first to get on that market. There's a new lacrosse Xbox game that just came out, so it's still a new market right now."

If all goes well, Houts said he could see himself starting an iPhone app-making business. "I think I'll submit the first couple apps under my name, and if they're successful then I might start something."

There are many things driving the popularity and growth of the Apple's iPhone, but as we enter 2010, one analyst believes the addition of Verizon will be the iPhone's big new feature.

(Credit: Apple)

Gene Munster, senior research analyst for investment bank Piper Jaffray, said in a research note to clients 0Wednesday that he believes there is a 70 percent chance that Apple will launch a new iPhone with Verizon in 2010. Munster puts the timing of such a move around the middle of the year.

That makes sense, since Apple has used June and July to launch all three of its iPhone models. The company also used the summer months to debut the App Store in 2008. It seems reasonable to speculate that Apple would continue with its schedule of introducing a new iPhone in mid-2010.

Munster said a move to Verizon would more than double Apple's current potential market by 89 million subscribers, adding to the already 82 million available on AT&T.

Of course, at this point the big problem is Apple's arrangement with AT&T as its exclusive carrier in the U.S. That deal is widely thought to end in 2010, although talks between the two companies are said to be ongoing, according to The Wall Street Journal.

The analyst's report also cites the iPhone's apps as playing a major role in the future growth of the device.

"We have seen a shift in the reason why consumers buy an iPhone. Initially, it was the touch screen and easy access to the Internet" said Munster. "Today, apps are cited as one of the top three reasons consumers buy an iPhone."

Industry insiders are accusing Apple of manipulating the price of NAND flash memory chips used in its popular iPhone and iPod products, according to a report in The Korea Times on Monday.

Citing unnamed sources, the article says Apple asks manufacturers to produce more chips than it eventually buys from Samsung Electronics and Hynix Semiconductor. The sources said Apple waits for the price of the chips to fall before making its purchase.

(Credit: Apple)

The practice of not buying all of the product originally ordered, semiconductor analyst Jim Handy told CNET, is "not uncommon in the industry."

Handy, of market research firm Objective Analysis, explained that these contracts are normally negotiated with a cancellation clause, with provisions to protect the supplier and buyer. He said companies usually work closely with the buyers, so changes to orders are normally small and don't cause many problems.

Supply and demand in the NAND market are currently about even, Handy said, adding that with the popularity of the iPhone and iPod, he's heard estimates that 20 percent to 30 percent of the worldwide NAND flash memory goes to Apple. In its fiscal fourth-quarter results, the company reported selling 10.2 million iPods and 7.4 million iPhones for the three months ended September 26.

Chipmakers Samsung Electronics and Hynix Semiconductor declined to comment for The Korea Times, as did Apple's Korean office. Contacted by CNET, representatives of Apple in the United States also declined to comment for the story.

The iPhone sales numbers continue to increase, as does the number of applications available for the device. Apps are one reason the iPhone has become as popular as it is among so many different categories of users in such a short time on the market.

Apple currently has more than 100,000 apps available for download, with users having downloaded more than 2 billion apps as of November 4.