The Macalope: An Apple blog

Time's Anita Hamilton wonders why you can't have your iPhone application cake and eat it, too (tip o' the antlers to John Gruber via email).

It's probably been a while since you bought new software.

Is a month and a half a long time?

That's because so many tech firms -- buoyed by ads placed in Web-based applications like the Google Docs word processor and the thousands of apps on Facebook -- can now afford to give their programs away for free. But don't expect the same deal when you're shopping for add-ons to bling out your iPhone.

Right. Well, except for the free ones.

Oh, and the kids aren't saying "bling" anymore. Also out are "rad", "extreme" and doing the Lindy.

On July 11, Apple will launch its hotly anticipated iPhone App Store -- and it'll be anything but a bargain.

Yeah! That paying for things you use and get value out of is for suckers! Next time you're in the grocery store, just stuff a ham down your pants! It's a great way to beat the system and the summer heat!

Sure, customers will get to gorge on hundreds of new games and utilities for their iPhones. But they'll have to pay for many of the goodies they find there.

Indeed! What happened to the Communist paradise of each working to provide for free what he or she is able to make and receiving the like in turn from his or her comrades as was promised us by the great thinkers of the 19th century?

And who put International Socialist Review in the Macalope's Time?

So why can't all iPhone apps be free?

Totally! And what's all this crap the Macalope's been hearing about fair market value?!

Well, quite simply, because people are still willing to pay for them.

Send them to the camps for reeducation!

Apple currently generates most of its revenue from up-front sales -- whether it's for MacBooks, iTunes or iPhones. And the pay approach for mobile games, ringtones and videos has long been used by other tech purveyors like Verizon and Research In Motion, and even third-party app stores like Handango. "It is a historical business model," notes Kevin Burden of ABI Research.

That's probably because Apple is mostly a company that sells products and not services. Hamilton also missed the point that there are several other business models at play here. Google gives applications away to end users and makes its money by ad sales and by selling its back-end solutions to companies. Other vendors give away applications by showing you ads in the software.

Buyers are willing to pony up, though, because of the cachet of the Apple brand.

Um, no. Buyers have been willing to pony up because Apple's products are worth something.

If Apple ever does decide to let all iPhone apps be free, it would be a radical departure from its typical way of doing business. To switch to an ad-supported model, it would have to partner with a company that already has a huge inventory of interactive ads. Google would be the most obvious choice, but the search giant is already poised to be Apple's top rival in the mobile arena once its Android handsets go on sale this fall. Such an alliance might be a little too close for comfort.

Why would Google care? All Google wants to do is put the ad in front of you. That's why they made Android in the first place. That's why they're giving it away. If Apple decided to go with ads, Google would be thrilled to get them on the iPhone. After all, the number of current iPhone users is counted in the millions while the number of current Android users is counted in the, well, zeros.

It still makes little sense for Apple because its customers generally prefer a user experience that isn't crapped up by forcing you to chase an animated bunny (the bunny of real savings at the Larchmont Outlet Mall!) across the screen before you can use an application.

The Macalope keeps hearing from so-called analysts how the future will be ruled by ad-based software services that everyone will love because they'll be "free!" (with ads!). Personally, he thinks you can keep your Buy n Large future. He's happy to pay for a better user experience.

UPDATE: Mr. Gruber, who gets invited to more and better parties than the Macalope does (that's the problem with being elusive), says :

There will be free-but-with-ads apps from the App Store, but the ads will be sold by the developers of the apps.

UPDATE 2: Dan Moren gets more philosophical on the issue.

On Friday, John Gruber noticed the Macalope's point that iPhone unlocking is in danger of extinction.

Today Jason Kottke checks out eBay (if you don't remember what eBay is, ask your parents about it!) and notices iPhones are going for a premium. The ability to unlock can net you $200 over the price of an iPhone 3G.

OK, not everyone's going to get that much. But, just for fun, let's say you bought an 8 GB iPhone the day they were released for $599. Months later you got an Apple Store gift certificate for $100 when the price was cut, meaning you're effectively out only $499 (yes, assuming you were going to buy something from the Apple Store anyway). Now, you turn around and sell it on eBay for $400.

Your total cost for that 8 GB iPhone?

$99 plus tax.

The Macalope doesn't know about you, but he's trying really hard to feel like a sucker and it's just not working.

Maybe he's doing it wrong.

Now, dear readers, you know why the Macalope drinks.

Todd starts by rightly dinging the horny one for failing to note that he did say Jobs did not actually go so far as to literally say iPhone purchasers were suckers, even though Todd put it in quotes. So the Macalope will agree he shouldn't have bothered making an issue of that particular point.

The rest, however, is like getting sprayed in the face with a bottle full of carbonated stupid.

1st iPhone came out and was priced for purchasers at $499. New iPhone comes out and I can buy it at $199. In Macland this is more expensive...

Here is where he plays with facts. The phone IS $300 cheaper.

You're right, again, Todd. The iPhone 3G is cheaper... assuming you don't want to actually use it. As a paperweight, it is $300 cheaper.

[Commenter colonelpanic points out that Todd is calculating off a different base by going back to the iPhone's original price, so his number don't jibe with Gizmodo's or the Macalope's. Some of this may be confusion over the Macalope's use of "original iPhone" to mean the original hardware at the May 2008 price. The Macalope has already conceded that the price drop from the iPhone's launch price to the price as of three weeks ago was necessary to stay competitive, the point is that Steve Jobs effectively announced no real price drop at WWDC, contrary to Sullivan's posts of last Monday. Todd's trying to reset the goal posts to justify his contention that the iPhone 3G is "cheaper". Sure, it's cheaper than it was last July, but it's not cheaper than it was three weeks ago.]

But depending on your data usage plan with AT&T, you may end up spending about the same or $100 or so more AFTER TWO YEARS.

No, not "may", "will". The data plan for the 3G starts at $10 more. You must buy a data plan to use the phone. OK, if you use no SMS, the Macalope supposes you don't have a charge there, but even without that it's still $40 more expensive after two years than the original iPhone.

If you are not a heavy text user, the phone and its plan are CHEAPER.

Wrong, wrong, wrong. It's still $40 more. The math is not that hard here, Todd. Read Gizmodo's chart.

Or, better yet, please, for the love of God, just stop writing about the iPhone.

Todd would have you ignore the total cost of the iPhone and focus solely on what you shell out to get the device in your hand. Who makes decisions like this? The Macalope can only imagine what life is like at the Sullivan house.

"Dad, can I get a zeppelin?"

"A zeppelin? I don't know. Sounds expensive. How much is it?"

"It's free! [With a $6,000 per month payment for five years. Some restrictions may apply. Void where prohibited by law. Adjustable rate loan, monthly payment may fluctuate as high as $9 bazillion.]"

"Free?! Well, sure, honey! Have fun! And watch out for cell towers! Ha-ha! Kids!"

(See, that was all obviously ironic as opposed to not obviously ironic, so... oh, never mind.)

Also Mac, what about the 1/4 to 1/3 of iPhones purchased that are eventually unlocked? Aren't they stunningly cheaper, or are we just ignoring them because they do not fit our argument?

Actually, those would be cheaper, obviously... if you can actually get out of the door with one without being tasered by AT&T's jack-booted thugs. See, Todd, AT&T has wised up and will be forcing customers to activate their phones before leaving the store.

Got it? You won't be able to leave the store without a contract. A two-year contract. One you must pay for. Contractually. For two years. With money.

Sure, some are still going to "fall off of a truck" in the Bronx every now and again and it might be possible to still get phones out of the store without a contract in other countries -- all of which have different hardware and plan prices which the Macalope won't go into because we're just talking about the U.S. here -- but if you are buying an iPhone 3G from Apple or AT&T in the U.S. it will be more expensive than its predecessor.

It's like beating your antlers against a brick wall.

The Macalope has been putting this off for days but, as he's often said, this is the beat he chose and there's no use crying about it now.

After last week's announcement that the iPhone 3G would sell for $199 in the U.S., the pointy one realized there'd be one silly pundit who would be crowing over this as some kind of victory for his steel trap of a mind. Apple had dropped the price, as was long foretold in his dire prophecies!

Well, you can see why the brown and furry one put off surfing over to Todd Sullivan's place. He cleaned his woodland home. He finally got around to finishing those thank-you cards he's been meaning to get out. He buffed his hooves. Twice. He read some National Geographic magazines that had been piling up since 1972.

But it had been over a week and, well, there just isn't anything left to do here. So, the Macalope finally bit the bullet.

Turns out he was wrong! Todd didn't jump on the Internets right after Jobs' keynote and throw out his rotator cuff giving himself a hearty pat on the back for a job well done!

He did it on Monday morning before the keynote. Then he threw out the other rotator cuff patting himself on the other shoulder just after the keynote and jacktastically put quotes around "suckers" as if it were something that Jobs actually called people who bought the original iPhone. Quotation marks, Todd. They mean something. You might want to brush up on their proper ironic usage.

Sadly, Todd's brilliant analysis would hold a little more weight were the iPhone 3G not actually more expensive than the original iPhone. Of course, it provides more functionality so there's no reason why it shouldn't be a little more expensive. As John Gruber has noted, if you don't already own an iPhone, it's a compelling buy. If you do already own one, it may or may not be, depending on how much you use the AT&T network and think you'll use GPS.

Well, the Macalope's sure it's just a mistake and Todd will be issuing a correction post haste.

Or not. Whatever.

The Macalope is certain that you're sitting at home asking yourself, "I wonder if the Macalope's going to buy an iPhone 3G?"

Don't be embarrassed. It's OK. It's not unusual to wonder what a mythical creature who's part man, part antelope and part Mac would want in a phone.

Well, OK, maybe it is. But the horny one much prefers this kind of question to when you've called him late at night and asked what he's wearing.

Which is pretty stupid, really. What's he wearing? Come on. Fur. He's wearing fur. And nothing else. That much you can learn by picking up any good D&D bestiary.

But to answer the other question, no. He's not going to trot out and buy one on July 11th.

Sure, sure, the Macalope's said that about many an Apple product and then eventually succumbed to its siren's song (which is why the sirens are totally off his Christmas card list), but if you already have an iPhone, the first year of an iPhone 3G is going to set you back an additional $319 (the Macalope prefers to look at just the first year rather than the full two years of the contract since it's likely that another iPhone will be released a year from this one). Now, depending on your usage, that's pretty reasonable for faster data, GPS, better battery life and, let's face it, bragging rights to your superior powers of conspicuous consumption.

But the Macalope's usually not far from his trusty MacBook or a WiFi connection, so the speed gain isn't worth the additional cost to him. Reasonable adults can make their own decisions.

Description of Monday's announcements have ranged from a "Microsoft-esque" yawn-fest (tip o' the antlers to Danny Gorog via email) to Steve Jobs is your boyfriend now. Thurrott's piece is so tedious, inaccurate and bitter it's frankly too embarrassing to go through. The second piece goes a bit far even for the brown and furry one's tastes. While the Macalope thinks the iPhone 3G is a great evolutionary step for the product line and should -- with the added countries -- ensure Apple blows past the 10 million units mark and give it a nice share of that delicious market pie, even he doesn't think the iPhone 3G is enough to unseat Blackberry.

Again, it's good, but is it $319 better than an original iPhone with the 2.0 software? Your mileage may vary.

John Gruber points to a piece of "analysis" that's simply too good not to share as far and wide as possible.

Just how will Apple meet expectations? Using the patent application as a guide, Apple appears to be making room on the iPhone for flash memory, which means an end to Apple's standoff with Adobe that's kept iPhones from easily viewing a plethora of Internet videos.

Apple has said that Adobe's flash media player, which is on hundreds of other phones, doesn't perform up to Apple's standards for the iPhone.

So flash memory means support for Adobe Flash. Brilliant.

It's almost hard to believe, isn't it? Charny diligently notes:

An Apple spokesman would not comment.

Well, to be fair, it's hard to talk when you're doubled over with laughter, milk shooting out your nose, etc.

Might Apple announce Flash support on the iPhone come Monday? Meh. Maybe? Probably not? The reasons it wouldn't have more to do with multimedia gamesmanship and the poor state of political relations between the two companies. And neither of those has changed much in the year and a half since the iPhone was announced. The Macalope thinks the possibility of a cross-marketing deal with DC Comics is more likely.

Rik Myslewski takes a look back at Apple's experience with cloning in the mid-1990s. It's an important lesson as some are once again calling for the company to license OS X for non-Apple hardware. Either these people weren't around in the mid-1990s or they've suffered some severe head trauma or they really just want Apple to do something monstrously stupid.

An ancient Zen koan reads, "Who is the more jacktastic? The jackass, or the jackass who quotes him?"

Which brings us to this Information Week piece by Eric Zeman: Analyst: Don't Buy iPhone 2.0.

No guesses as to who the "analyst" is. Yep, it's Rob.

It's hard to argue with some of the advice given by Rob Enderle, principal analyst with Enderle Group, about iPhone 2.0.

Rob Enderle, in regards to anything Apple, is not an "analyst", Eric. He is a quote machine. And, thus, the horny one will not be linking to or bothering to dissect the source of Zeman's piece.

The Macalope, amongst others, has explained this ad nauseam, but when literally everything that comes out of your mouth is anti-Apple, it's clear there's no analysis going on, just cynical attempts to get quoted. That's Rob's shtick. That's his business model. Anyone who quotes him, therefore, is either lazy, ill-informed or willfully bashing Apple for no reason other than to bash Apple.

This is not to say that all Apple-bashers or Apple-bashing is wrong. It's to say that if you have a point to make about Apple, quoting Rob Enderle is simply detrimental to your case.

Not that Zeman has a case to be made. It's really just another spin on the "Why would you get the iPhone 2.0 when someone else might deliver something better months later?!" Zeman claims Enderle's sterling "analysis" indicates there's something different about the iPhone versus other smart phones.

So why the cautionary advice about the iPhone? Because it is more computer than phone. Computers bring with them more complexity, more issues, more places for things to go "wrong".

This is absurdly over-simplistic. And Enderle's complaints about the problems with the launch of the original iPhone are overwrought. Sure, there might be issues with the next iPhone when it first comes out. If you're risk-averse, if you use your phone for mission-critical purposes, if you're currently running for president, you might want to wait a little while. The amount of time being proportional to you level of risk aversion and/or the number of delegates you have.

What's more important here is process. Yes, Apple -- like all technology companies -- is willing to live with a certain amount of bugs in order to ship product. But its track record of shipping something with a high signal to noise ratio is solid.