Digital Media

(Credit: CNET)

On Tuesday, the first promotional codes that will make iPhone apps free to some users began trickling out of the App Store.

Apple is finally bequeathing apps developers with a way to let some media testers review an app at no expense and reward or attract a few lucky users. (The first invite has already floated into my in-box.)

This is Apple, so there are limits. Fifty promotional codes per product, to be exact.

Also, as wonderful as it is to see the passcodes allowed and implemented, they are not free trials. Developers angling to hook new customers will still need to lure them with free, light versions of the software or the less popular approach of offering an app free for a limited time and then ratcheting up the cost when the window closes.

Still, we're happy to finally see some leeway for developers, who will also get a reprieve from issuing gift certificates that often lose them money as a workaround for letting select reviewers evaluate apps for free.

(Via MacRumors)

Apple CEO Steve Jobs admitted it was a "mistake" to roll out the company's MobileMe service at the same time it launched the iPhone 3G and other big products, tech news site Ars Technica reported late Monday.

Ars Technica cited an internal memo sent by Jobs to employees that acknowledged MobileMe had flaws and was released too soon. In the memo, Jobs said the launch of the service could have been handled better, the article said. He also acknowledged the service was "not up to Apple's standards." And he said the individual MobileMe services could have been launched slowly instead of all at once.

"It was a mistake to launch MobileMe at the same time as iPhone 3G, iPhone 2.0 software and the App Store," Jobs said in the e-mail, according to Ars Technica. "We all had more than enough to do, and MobileMe could have been delayed without consequence."

MobileMe is the next evolution of Apple's .Mac service. It's essentially a cloud storage solution that allows subscribers to synchronize e-mail, calendars, contacts, photos, Safari bookmarks, Dashboard widgets, and more, among Macs, the iPhone, and the iPod Touch. It allows for 20GB of storage on Apple's servers, and it even cooperates with Outlook on Windows computers. Because it is Web based, subscribers can access the online applications from any Web browser.

But from its launch on July 10, MobileMe had problems. Most notably subscribers had trouble accessing the site, and some even lost e-mail.

In a blog started by Apple to keep subscribers up to date on the status of MobileMe, the company acknowledged that some people lost 10 percent of their e-mail between July 16 and July 18 during the height of the outage.

That said, Apple asserts that only 1 percent of MobileMe users were affected by the e-mail issues, which were apparently caused by a "serious problem with one of our mail servers," according to the Apple blog.

MobileMe subscribers also had problems accessing calendars and contact information, which was caused by a misjudgment in demand, according to the Apple blog.

In this most recent memo to employees, Jobs urged them to learn from the mistakes and move on.

"The MobileMe launch clearly demonstrates that we have more to learn about Internet services," Jobs was quoted as saying in the memo. "And learn we will. The vision of MobileMe is both exciting and ambitious, and we will press on to make it a service we are all proud of by the end of this year."

Amid the shaky launch of the iPhone 3G, Apple's new MobileMe service--a juiced-up revamp of its .Mac offering--also took a blow. Apple has consequently opted to entitle eligible members to 30 days free as a we're-sorry gift.

.Mac accounts had been scheduled to "migrate" to MobileMe last Wednesday evening, but instead produced an outage in which neither service was available. New subscribers, meanwhile, had experienced issues signing up.

"The transition from .Mac to MobileMe was a lot rockier than we had hoped," a details page from Apple explained. The offer isn't for everyone: only .Mac members whose accounts were active on July 9, and MobileMe members who registered before 7:00 p.m. PDT on Tuesday (i.e., amid the activation chaos) are given the 30 free days.

It's automatically added to eligible accounts, Apple's site explained.

Steve Wozniak sits with friends before he allegedly got up to cut in line at a San Jose Apple store

(Credit: Doug Broussard)

Updated at 10 a.m. PDT with comment from Steve Wozniak.

Steve Wozniak helped create Apple. He's worth millions. He's a hero to geeks the world over.

Would he really pretend to wait in line for Apple gadgets?

That's the claim of some perturbed customers who say that Wozniak--contrary to media reports--did not wait in line all night in front of the Apple Store at Westfield Valley Fair Mall in San Jose, Calif., to buy an iPhone 3G.

In fact, according to Doug and Patrice Broussard, Woz actually never waited in line at all. The couple, who were there, said the Apple co-founder lounged on some of the mall's nearby sofas for about four hours and then ambled up to the front of the queue when the store opened at 8 a.m and simply cut in line. No discussion.

And he wasn't alone. He had his posse in tow, say the Broussards, who photographed the Woz playing big shot. Didn't anybody say anything?

No. Doug Broussard said it all happened too quickly and, well, who's going to send the creator of the Apple II to the end of the line?

Still, the Broussards said the people who saw it were unhappy.

Who doesn't know the politics of waiting in lines? Taking cuts is bad form, even for VIPs. But those who give them to friends--six friends--risk a butt kicking from those behind in line.

On Friday, when the iPhone 3G went on sale, Apple stores were letting in only about 30 people at a time. This means seven people who might have spent hours in that mall waiting could have gone home sooner had it not been for the Woz and his buddies.

Wozniak could not be reached to comment Saturday night, but he did respond to this report in the CNET News' TalkBack section, asserting that he had been invited by the store staff to be in the front of the line and that store staff had cleared it with those already in front (read his entire response here):

I told them I would come at 10 AM and get in line and they told me back that the line would be short and they had talked to the people in front and that the people in front WANTED me to go first. I discussed the fact that I'd be with a small group too. The Apple store staff also said that the chairs and table in front of the store would be reserved for me. So sitting in those chairs I was in line. I am thankful for the chairs. I'm actually older than almost everyone in the lines these days.

Woz, just after he and about six friends jumped to the head of the line.

(Credit: Doug Broussard)

Is this the end of the world? Not likely. But if the Broussards' account is accurate, it was unfair and, in Wozniak's case, unnecessary.

Besides, by his own admission, he doesn't even have to wait. He's boasted in the past that Apple's other Steve would send him an iPhone special if he asked. If Wozniak pulls these stunts to prove that even he is willing to wait for the iPhone, then it's a cheap PR move at best.

If he's trying to show that he's still one of the geeks who is willing to camp out for the hottest gadgets, he shouldn't bother if he's only going to demand perks.

What I do know is that Wozniak enjoys a positive public image in Silicon Valley. He's seen as the approachable and humble genius, which contrasts nicely with the aloofness of Steve Jobs, Apple's other co-founder and CEO.

Why mess with that?

"I certainly don't mean Woz any ill will," said Doug Broussard. "But his resources and pull in the Valley should be used for more than jumping in line when the new gadgets come out."

A bleary-eyed Greg Sandoval, the News.com reporter who spent a night on the street for a chance at the iPhone 3G, interviews blogger Robert Scoble.

(Credit: James Martin/CNET Networks)

SAN FRANCISCO--The first bad omen for our experience with Apple's iPhone 3G came late Thursday night, when some of us waiting outside the Apple store here may have insulted a priest.

Sitting on the sidewalk in front of the store, a group of us, giddy with excitement about Apple's new handset, noticed a priest walk by. "Hi, Father," I quipped. "Tomorrow, will you bless our iPhones?"

The priest wasn't amused. Things really took a turn for the worse when someone tried to explain to him why the iPhone was worth the money and a night on the streets.

"You have to understand," the man said, straight-faced. "It's the Jesus phone." Of course, he was referring to one of the iPhone's popular nicknames used by fans to describe what they consider awesome power. It dawned on me that I must be the only one in the group who went to Sunday School. I quickly explained that the man didn't mean any disrespect.

Now, I can't help wondering whether there was anything divine involved with Apple's system troubles on Friday morning, which resulted in delayed transactions and spotty phone activations, as well as some disappointed customers. Isn't Apple's customer service typically a slice of heaven?

During last year's launch of the original iPhone, customers were moved in and out of the store rapidly. In San Francisco on Friday, however, the experience was anything but speedy.

After spending about 11 hours in line (I entered at 9:30 p.m. PDT on Thursday), I was one of the lucky first let into the store at 8 a.m. Friday. I didn't leave until 57 minutes later. Out of the first 40 or so people who entered the store, I was the first person to walk out with an iPhone 3G. (Apple employees failed to activate it.)

I felt sorry for the poor souls at the tail end of the line. Their day promised to be a long one.

The first sign of trouble came after entering the store when Joe Wilson, an Oracle software engineer and the guy who stood in line ahead of me all night, turned to me red-faced and said, "The journalists are taking cuts."

Apple let a dozen or so cameramen and photographers into the store to record customers coming in. Some of them decided to hop in line instead of shoot their pictures and video. Not in front of us. Wilson told them very quietly but sternly to move back. To their credit, they did.

Then, one by one, each of the customers was instructed to follow an Apple employee to a workstation. That's when the iPhone experience began to look as disorganized and mediocre as that of any other phone retailer.

First, I was given the pitch for MobileMe, Apple's package of Internet services and software. This was followed by an explanation of the benefits of a two-year warranty. That was followed with a short discussion about accessories. Then came the big blow: the male employee helping me looked up from his handheld computer and quietly said, "I'm sorry, we're down."

I'm told that the iPhone 3G itself will make up for the morning aggravation. Truth be told, I had a blast hanging out with the so-called Apple fanboys and gadget freaks. Sharing food and exchanging news about the iPhone and the new applications, trading insults with people who thought we were goofy for waiting in the cold for "a toy." All of it was worth the trouble.

As it turns out, the best thing about Apple is its customers.

I shot this video just after being allowed to enter the store and minutes after I was told Apple's system went down. You can see the guy helping me is trying to reboot and other employees are prevented from helping customers.

A jubilant Robert Scoble poses with his new iPhone 3G at the Apple store in San Francisco.

(Credit: James Martin/CNET News)

SAN FRANCISCO--The perks of being a famous tech blogger include not having to stand in line all night for the latest gadget.

I was out in front of the Apple store near Union Square here at 9 p.m. PDT on Thursday standing in line for the iPhone 3G that makes its debut today. Robert Scoble walks up at 7:15 a.m., 45 minutes before the doors are scheduled to open, and a fan lets him take cuts in line.

It would be easier to be bitter if Scoble wasn't such a nice guy. It's 15 minutes before Scoble and 29 other people are let in. The crowd, which numbers around 250 people, is whooping it up as they break down folding chairs, drink coffee, and talk about the new iPhone apps they want to buy.

A legion of marketers are handing out coupons for iPhone skins and other accessories. There's some apprehension among some of those who are well back in the line about how long the activation process is going to take. We'll see.

Update 9:40 a.m. PDT: OK, it would have been easier to get pissed at the congenial Scoble when Apple's doorman started letting the first batch of people inside the store and stopped at me. It was only a few seconds' delay before they granted me access.

Dale Larson, first in line outside San Francisco's Apple store sits near his tent and answers the curious.

(Credit: Greg Sandoval/CNET Networks)

SAN FRANCISCO--The twenty-something woman trash-talking us is definitely no fan girl.

"They'll be selling these stupid phones on eBay in a year," she snarls as she stalks past the 25 of us lined up outside Apple's store here late Thursday evening.

She's wearing a sweatshirt from a college in the Midwest and toting a shopping bag so someone barks back: "tourist!" But she's not the only one who mocks us for camping out all night--braving this city's shivery summer air--for something as ho-hum as a cell phone. "Is it really that serious?" asks a man wearing a tweed sport coat and smirk.

Forgive them Steve Jobs. They know not what they do.

The iPhone 3G debuts Friday morning and across the country, Apple fans, iPhone lovers, and people curious about why friends say the device has changed their lives, are sleeping on the streets. They want to be the first to enter Apple's retail stores when doors open at 8 a.m.

The questions from passerby this evening, whether legitimately curious or intent on snickering at us, generally follows the same line: "Why put yourself through this just for some consumer good?"

Consumer good? To the bleary-eyed people standing in line with me, the hope is that they will be among the first to own the next transcendent and culture-changing Apple gadget.

The iPhone, many of them believe, is ready to take up a spot alongside the Mac and iPod.

Harcore iPhone fans lined up outside San Francisco's Apple store.

(Credit: Greg Sandoval/CNET Networks)

"This device has changed my life," declares Ilan Fehler, a 21-year-old student at the University of Arizona, who considers himself lucky to be third in line.

Dale Larson is customer No.1 at this store. The 39-year old consultant on mobile products said says he's not particularly tied to Apple gear but he acknowledges he started camping out on Wednesday evening.

He pitched a tent and stayed the night. He said he felt a little embarrassed when Apple's watchman said goodnight and he was the only person in line. "I thought there would be so many more people here," he said.

Still, nothing dampened his enthusiasm for the iPhone. "I would get excited over any product that works as well," Larson said. "But nothing does. This device opens everything up. Developers can develop and consumers can take advantage of their innovation."

Larson said that the first version of iPhone was enough to generate intense interest in version 2, with it's faster 3G network and cheaper price.

So If you're reading this and happen to be in downtown San Francisco in the wee hours this morning, don't bother asking why we're out here. Just read the T-shirts handed out to everyone in line by employees of Fastmac.com, a company that sells Apple accessories.

Written on the T-shirt is: "You had me at..." and it ends with the symbol of a phone."

UPDATE: About 50 people are in line here at 4:50 a.m. PT. I made a rough count of those videotaped by my colleague Caroline McCarthy outside of New York's Fifth Avenue Apple Store and there are at least three times as many there.

Come on San Francisco, you're being out-teched by New York. The shame...

CNN is reporting that more than 1,000 people waited in line for the iPhone 3G in Tokyo.

2nd UPDATE: Way to go S.F.. It's 6:45 a.m. PT and there's easily 150 people standing in line, including some of my competitors from VentureBeat. They're showing me up a bit by handing out some delicious donuts in a shameless marketing gimmick. For the record, I'm ahead of them in line (The non hackers didn't show up until midnight).

The blog must be getting big if Matt Marshall or Dean Takahashi aren't out here. Missed you guys.

Click here for CNET News' complete iPhone 3G coverage.

It gets updated.

(Credit: Corinne Schulze/CNET Networks)

Although Friday's launch of the iPhone 3G is grabbing all the headlines, there's no need to put the original iPhone out to pasture just yet.

With the iPhone 2.0 software update, the first iPhone is getting another day in the sun, and it's a nice toasty sunshine at that. Although Apple has yet to release the update officially--it should happen Friday as well--the software became available on Thursday through the magic of the Internet.

As we reported during Apple's Worldwide Developers Conference last month, the 2.0 software update adds a number of important features to the original iPhone, including Microsoft Exchange server support and access to the App Store. After installing the new iTunes 7.7 (available for Windows and Mac) update on our PC, we downloaded the update and installed it on our phone. Here's what we found.

Download process
At the moment, the downloading process is a bit convoluted, though that experience will change, once Apple releases the software update officially. But once we started the process of installing it on our iPhone, it proceeded successfully without any hiccups.

The whole process took about 10 minutes from start to finish. Since the iPhone treats the update as a system restore, it will erase any saved information. Fortunately, iTunes creates a one-time media backup of your files. Although some users have reported that iTunes failed to create a backup file for them, we didn't have any problems.

Ready for your work e-mail.

Exchange server support
One of the most coveted additions is the full support for Microsoft Exchange server. Adding an account was ridiculously easy, once we had the correct settings from our IT department.

Once you've chosen to add a new e-mail account in the main Settings menu, you'll be taken to the standard list of available e-mail systems. "Microsoft Exchange" and (we'll try that later) will appear at the top of the list just above the choice for Gmail. You'll then be prompted to enter the applicable e-mail address, domain/username, server, and password.

The authentication process took just a couple of minutes, and we were up and running fairly quickly. Installing CNET's security certificate posed a bit of a challenge--we ended up mailing it to ourselves through Yahoo--but we installed it eventually.

Once you're ready to go, it will sync your Outlook e-mail, contacts, and calendar. Be advised that the iPhone can sync only with one calendar or contacts list at a time. If you have a separate personal calendar, your work calendar will replace it, once you start the sync (you'll be notified before it happens).

As an alternative, though, you can sync e-mail without syncing your contacts and calendar. Also, you can keep work and personal e-mail accounts open at the same time. You'll just have to switch between the two.

When using Wi-Fi, the syncing was very quick most of the time. As new messages came in, the iPhone registered them almost immediately. It seemed to get bogged down when we received a large clump of messages at one time. In those cases, we had to update the phone manually.

By and large, those updates were quick, but there was at least one instance where it took a couple of minutes. In fact, it was so long that we thought that the phone had frozen. We also noticed that if the iPhone loses its Wi-Fi connection, the syncing is interrupted. But even with these caveats, the experience was satisfactory. Syncing via EDGE took a few seconds longer, but it wasn't too bothersome.

When we deleted a message on our phone, the same e-mail vanished on our PC just a couple of seconds later. Messages deleted on the PC took longer to disappear from the phone; typically, we had to do a manual update to see them gone. Messages deleted on the phone will show up in your PC's Recycle Bin and vice versa.

You can access all folders in your in-box and move messages from your in-box to a specific folder. You can't search for messages, but you can call a contact if they include their phone number in their e-mail. Opening attachments worked as promised, and we like how the software update now lets you save attached images directly to your photo gallery simply by tapping the image. To e-mail photos, you will need to do so in the traditional manner by opening the photo, selecting the e-mail option, and choosing which account you'd like to send from.

Though according to AT&T, using Exchange server support on the iPhone 3G will require the business data plan (the one that costs $45 per month), we received no notice on the original iPhone advising us of any data plan issues (not that we would). It will be interesting to see how AT&T enforces this policy on the iPhone 3G.

The iPhone Apps Store

Third-party applications
Once the software update installed, an icon for the App Store appeared on our iPhone's home screen. When selected, you're taken to the Apps Store main menu, which somewhat resembles the mobile iTunes store in design. You search applications by name and category and you can browse through the lists of Featured applications or the Top 25. There also is a feature for seeing if your purchased applications have any updates.

We purchased two applications from the iPhone: AP Mobile News and a currency rates application. Downloads over Wi-Fi were pretty quick; it took just about 10 seconds total. Though wireless iTunes song downloads are available only through a Wi-Fi connection, you can purchase applications over EDGE. Just keep in mind that downloads will take a lot longer.

We also purchased applications through the online iTunes (7.7) store. Though you could access the applications store only through a back-door method this morning, it's now prominently featured in the store. We downloaded Super Monkey Ball and then synced it to our phone--a new applications tab appears under the iPhone menu. The process was quick and painless. What's more, navigation through the online apps store is easy.

What's most remarkable about the online applications store is the sheer breadth of titles available. As of this writing, there are 27 pages available in a staggering range of categories. If there is one thing about the software update that changes the original iPhone for the better, it's the Apps Store--even if not all the applications are keepers. Of course, before you get carried away, remember that some apps are free but others will cost you.

Contacts search
A search bar now appears above your contacts list. Typing in any portion of the same will take you immediately to that person. The software update also added a special Contacts to the home screen, which is something we weren't expecting.

iWork documents and PowerPoint
We haven't tried iWork documents just yet, but we were able to view PowerPoint e-mail attachments. The attachment was rather large (1.3MB) but it didn't take very long to download.

The new scientific calculator

Bulk delete and move
This works in your e-mail boxes only. In your in-box you'll see a small "edit" button at the top right-hand corner. When you press the button a small circle will appear next to each e-mail. Touch the circle to highlight as many messages as you like and then select the "delete" or "move" options.

Scientific calculator
As Steve Jobs said in his WWDC keynote, you'll now get a scientific calculator when you turn the phone on its side. You'll see a lot more buttons that will set a mathematician's heart aflutter. Jobs said a lot of people asked for this but again, I'd like to know who they are.

Parental controls
You now will find a "Restrictions" selection under the General tab of the main Settings menu. There you can restrict access to the Safari browser, explicit songs, YouTube, and the iTunes and iTunes Apps stores. You can select as many restrictions as you like.

Your choice of keyboards

Language support
The software update will brings language support and typing keyboards in French, Canadian French, UK English, German, Japanese (QWERTY and Kana), Dutch, Italian, Spanish, Portuguese, Brazilian Portuguese, Danish, Finnish, Norwegian, Swedish, Korean, Simplified Chinese, Traditional Chinese, Russian, and Polish. You can select as many languages you want by opening the "International" selection under the General tab of the main Settings menu. For Chinese you choose from Pinyin or a graffiti-style application for writing characters. As you enter characters, suggestions will appear to the right. To change between menus, choose from the small globe icon next to the space bar.

GPS
As the iPhone Atlas reports, the 2.0 software update also brings GPS tracking. We tested both while walking in downtown San Francisco and riding in a taxi. Considering that the tracking is relying solely on cellular towers and Wi-Fi hot spots, it was pleasantly accurate. When walking we could see the little bull's-eye moving along with us. Not surprisingly, the tracking was a bit off when we were in a car. The bull's-eye jumped block by block as we came to stoplights. On the whole it works well, but it's no replacement for a standalone GPS system. Also, remember that while you can get directions through Google Maps, the iPhone does not support real-time turn-by-turn directions.

What we didn't get
As we've told you already, the software update didn't give us a lot of things we were hoping for. But if you'd like to see the list again, Nicole Lee has the details.

That's it for now, but check back tomorrow as we divulge into more details on the software update and delve into our full review of the iPhone 3G.

Click here for CNET News' complete iPhone 3G coverage.

In conjunction with the App Store that launched earlier this morning, there's an upgrade available for iPhone users to bring their devices up to speed with the compatible iPhone 2.0 software.

There's not an easy path to it yet, but the firmware is on Apple's servers, MacRumors.com reported Thursday.

Twitter users reported that the software is 225 megabytes in size. The download is free for iPhone users and $9.95 for iPod Touch users.

The iPhone 2.0 software allows existing iPhone and iPod Touch owners to have access to the software features that will be available on the new iPhone 3G that hits stores Friday morning (but not to the hardware upgrades, which include 3G Internet access and GPS). This means not only the 500+ third-party applications already in the iPhone App Store, but also support for Microsoft Exchange ActiveSync.

Third-party applications range from games and electronic books to iPhone versions of big social networks like MySpace and Facebook. Facebook and MySpace's iPhone applications will let users seamlessly upload photos to albums on the social networks, and Facebook's will let members with location-aware iPhone 3G devices see which of their friends are nearby.