AT&T is defining its HSPA+ network as 4G, but by the very definition of HSPA+, theoretical speeds aside, it doesn’t qualify as 4G. […] This is clearly, without any doubt, a continued marketing ploy by AT&T and Apple has allowed the carrier to dupe consumers.

Shawn Blanc tweeted:

I wonder if the iPhone showing AT&T “4G” on 5.1 is a part of the negotiations to keep the new iPad’s LTE data plans low.

That was my first thought as well. I definitely think it must be related to the new iPad that supports LTE.

Here’s how AT&T shows their 4G coverage (this is what Apple links to, though I’ve zoomed in one level because the true nationwide map only shows where they support any data; you need to zoom in one level to see the breakdown of 4G, 3G, EDGE, etc.):

The dark blue areas are what AT&T calls 4G.

Verizon has a page that compares their coverage with AT&T for “true” 4G. Here’s their view of AT&T’s coverage:

and their own 4G coverage (they do also have a more complex map that looks more like AT&T’s version above for detailed coverage):

Imagine if Apple hadn’t made the change in iOS 5.1 to allow AT&T to label their HSPA+ network as 4G. The coverage comparison would have been just as Verizon shows on their site. This would have been disaster for AT&T in the short term for sales of data plans for iPads. AT&T claims that their 4G LTE network is “planned to be largely complete by the end of 2013″. That’s a long time to spend behind Verizon. The situation would only get worse when the presumed iPhone with LTE support is released later this year.

AT&T has been petitioning Apple to call their HSPA+ network 4G on the iPhone since the iPhone 4S was released. At that time, they were trying to get ahead of Verizon. Now with the iPad, they’re trying not to fall too far behind.

After a week off, I’ll be starting at Google.

Today, as part of Apple’s OS X Mountain Lion announcement, the new Messages OS X was revealed. A Beta version of Messages is available for download today¹.

From my original post:

Assuming Apple will provide iMessage functionality on the Mac, I see four options:

1. A new iMessage app in the App Store
2. An update to the FaceTime app currently available in the App Store with iMessage integration
3. An OS X Lion update that includes an updated version of iChat with iMessage integration
4. A new app in the App Store that combines the functionality of iChat, iMessage, and FaceTime in one place

Their current solution partially matches #1², #3, and #4. I think the closest match is #3. They did basically just add iMessage support to iChat, but also renamed the app from iChat to Messages.

Interestingly, chat windows that are using iMessage have a button to initiate a FaceTime chat, but the button opens up the FaceTime app ready to make a call rather than having the FaceTime functionality built in. Perhaps that consolidation will come with a future version of Messages³.

In my first post on this site, Why Lion Doesn’t Have an iMessage Application (Yet), I predicted that Apple would provide an application for OS X that could “chat” with iOS devices using iMessage once iOS 5 was released.

It’s been almost three months now. There have been two point release updates to Lion, 10.7.1 and 10.7.2¹, yet there is still no iMessage app for OS X.

What a great way to start off this site!

An Aside on FaceTime

FaceTime was introduced with the iPhone 4 in June of 2010, and later brought to OS X in February of 2011. With the initial launch, Apple promised that it would be made into an open standard. To my knowledge, this has still not yet happened.

Perhaps Apple has changed its mind and prefers to keep FaceTime tied to Apple products (iOS and OS X).

Could iMessage Follow the Same Path?

It would appear that Apple is taking a similar approach with iMessage. So far, it’s limited to only iOS devices. I assume that an OS X app shouldn’t be far off, but there’s no promise of that. Even unlikelier would be an open standard that would allow iOS devices to talk to Android, Windows Phone, Windows desktop, etc.

Such a feature would be great for users (of all devices, not just Apple devices), but as the phone carriers have shown, they won’t quietly let Apple take away the massive profits from text messaging. After Apple announced iMessage, AT&T “simplified” their messaging plans by cutting all non-unlimited plans. Prior to the iPhone 4S, I had been an AT&T customer and paid $10/month for more text messages than I needed. Now, I would have to pay twice as much². Thanks for the simplicity!

Still, even if Apple is planning on following the path blazed by FaceTime, there should still be an OS X client. FaceTime is “locked down” to iOS and OS X through the use of a client-side certificate in the communication with the FaceTime servers at Apple. The same approach could also be used to lock down iMessage.

I Could Still Be Right

I still do think iMessage will make its way onto OS X. It’s just going to take longer than I expected³.

Looks like that worked out pretty well for them. 6,613.81% growth over fifteen years.

Gene thinks Apple TVs will come in a range of sizes, in contrast to most Apple products, which are one-size-fits-all. Part of Apple’s goal here, Gene says, will be to appeal to young Apple fanatics who can’t afford or don’t have room for a 50-inch flat screen.

and

Gene thinks Apple’s TVs will be priced at TWICE the prevailing market price for a normal TV: $1,600, for example, for a TV of a similar size from another manufacturer that might cost $800. (If this is really the case, Apple will be able to preserve its extraordinary profit margins).

I had to read these two quotes three times to make sure that I wasn’t missing something…

How can you say that Apple’s target is young Apple fanatics who can’t afford a 50-inch flat screen, then say that they will charge twice (actually, “TWICE“) as much? Aren’t those conflicting statements?

Even if Apple’s goal is to match “its extraordinary profit margin” with a TV, they wouldn’t need to double the price. Apple’s gross margin for the first three quarters of 2011 has been between 38.5% and 41.7%. Even if Apple includes all the components from an Apple TV inside their TV set, they could still maintain their standard margin with a markup of about 50%. Not that I think they would feel the need to maintain that margin with TVs¹.

Also, I’m not sure I understand the purpose of the TV if it still requires me to subscribe to a TV provider like cable or FiOS. I don’t see much of a benefit over the current Apple TV device unless the Apple TV set can take in, and more importantly, control the feed from the cable/FiOS. Even then, what’s the benefit over the current Apple TV?

There are two main changes in this version:

1. A new setting has been added to provide a default zoom level. All web sites that do not have a specific zoom level set will zoom to the level specified in this setting.

2. ZoomBySite now works on Gmail (at least on mail.google.com). Unfortunately, I haven’t solved the greater problem of working with all sites with iframes, but I have provided a solution specifically for Gmail.

As always, ZoomBySite is available for download from my site.

First, a chart showing changes in pricing since 2005 for OS X, iLife, Aperture, and iWork. The 100% level of the chart is the price of the software in 2005 (when iWork and Aperture were introduced). The rest of the years show the percent of that initial price that the software cost. See the bottom of this post for the actual data including release dates and prices.

For the prices prior to the App Store for iLife and iWork, I’ve divided the price by the number of applications in the package (I only counted iPhoto, iMovie, and GarageBand for iLife – these are the applications that survived the move to the App Store and they are the applications that have received major upgrades with each new release of iLife)¹.

Pricing Trend

The trend in pricing is fairly obviously downward. Why is this?

One possible answer is that as the Macintosh market share and overall market size grow, Apple sells more of these applications. The cost to create the applications doesn’t grow, so Apple can afford to lower the prices and still maintain profits.

Horace Dediu wrote an article comparing Apple and Microsoft’s financial performance. One chart in the article showed Apple’s income from software being fairly flat over the last four years.

Apple could likely have increased their profits by not lowering the prices as aggressively, so I think there’s actually another answer as to why the prices are dropping.

Another Horace Dediu article on Apple’s liquid assets contains a chart which shows the massive increase over the last six years (from less than $10 billion in 2005 to over $80 billion in 2011). Numerous financial analysts have asked what Apple plans to do with this large hoard of cash. Apple could lower their prices and decrease their famously high profit margins on their hardware products. They could also afford to lower prices on their software products, which is seems like they have been doing.

It should be noted that OS X and iLife are both included with the purchase of every Mac. The prices here would just be for upgrades. It remains to be seen how upgrades of iLife and iWork applications will work with the App Store. Assuming updated versions of the applications are still available every 12 to 18 months, will they be free? Will they show up as new applications in the App Store? Will the App Store add support for update pricing?

The real profit for Apple comes with the hardware sales. Making great software cheaper (or free) can help drive hardware sales.

Software Pricing Data

OS X

• April 29, 2005 – $129 for OS X 10.4

• October 26, 2007 – $129 for OS X 10.5

• August 28, 2009 – $29 for OS X 10.6

• July 20, 2011 – $29 for OS X 10.7 (in App Store)

iLife

• January 22, 2005 – $79 for iLife (iPhoto 5, iMovie HD 5, and GarageBand 2 – average of $26.33 per application)

• January 10, 2006 – $79 for iLife (iPhoto 6, iMovie HD 6, and GarageBand 3 – average of $26.33 per application)

• August 7, 2007 – $79 for iLife (iPhoto 7, iMovie 7, and GarageBand 4 – average of $26.33 per application)

• January 27, 2009 – $79 for iLife (iPhoto 8, iMovie 8, and GarageBand 5 – average of $26.33 per application)

• October 20, 2010 – $49 for iLife (iPhoto 9, iMovie 9, and GarageBand 6 – average of $16.33 per application)

• January 6, 2011 – $44.97 for iLife (iPhoto 9, iMovie 9, and GarageBand 6 – $14.99 per application in App Store)

Aperture

• November 30, 2005 – $499 for Aperture 1.0

• September 29, 2006 – $299 for Aperture 1.5

• February 12, 2008 – $199 for Aperture 2.0

• February 9, 2010 – $199 for Aperture 3.0

• January 6, 2011 – $79.99 for Aperture 3.1.1 (in App Store)

iWork

• January 22, 2005 – $79 for iWork (Pages and Keynote 2 – average of $39.50 per application)

• January 10, 2006 – $79 for iWork (Pages 2 and Keynote 3 – average of $39.50 per application)

• August 7, 2007 – $79 for iWork (Pages ’08, Keynote ’08, and Numbers ’08 – average of $26.33 per application)

• January 6, 2009 – $79 for iWork (Pages ’09, Keynote ’09, and Numbers ’09 – average of $26.33 per application)

• January 6, 2011 – $59.97 for iWork (Pages ’09, Keynote ’09, and Numbers ’09 – $19.99 per application in App Store)

A few quotes from the book that I found interesting…

Walter Isaacson talking about Steve Jobs feelings on John Sculley (page 299)

For Jobs, the problem was that Sculley never became a product person. He didn’t make the effort, or show the capacity, to understand the fine points of what they were making. […] He wasn’t naturally passionate about products, which was among the most damning sins that Jobs could imagine.

Steve Jobs on Tim Cook (pages 651-652)

… After adding a bit more praise, [Jobs] quietly added a reservation, one that was serious but rarely spoken: “But Tim’s not a product person, per se.”

Walter Isaacson on plans for Steve Jobs’ succession at Apple (page 774)

[Jobs] had often discussed with the board, in executive session, his thoughts about who could take over if anything happened to him, presenting both short-term and longer-term combinations of options. But there was no doubt that, in this current situation, Tim Cook would again take charge of day-to-day operations.

A Possible Analysis

If you combine the first two quotes from the book (which were from 25 years apart), it seems as though Steve might have the same complaints about Tim Cook as he did about John Sculley.

Add in the third quote from the book and you wonder whether Tim Cook is just Steve’s short-term answer to his replacement.

Apple did give Tim Cook a $5 million bonus and a stock grant of 75,000. He was also granted 1 million shares, of which half vest in 2016 and the rest in 2021, assuming he is still an Apple employee at that time. If Tim Cook is not the answer for Apple, it seems as though a decision would be made before August of 2016, when 500,000 shares vest for him.

What Do I Think?

With all that being said, I do think that Tim Cook has been invaluable to Apple over the years and is a big part of Apple’s current profitability. He definitely understands Apple’s reason for success:

We believe that we are on the face of the earth to make great products, and that’s not changing. We are constantly focusing on innovating. We believe in the simple not the complex. We believe that we need to own and control the primary technologies behind the products that we make, and participate only in markets where we can make a significant contribution. We believe in saying no to thousands of projects, so that we can really focus on the few that are truly important and meaningful to us. We believe in deep collaboration and cross-pollination of our groups, which allow us to innovate in a way that others cannot. And frankly, we don’t settle for anything less than excellence in every group in the company, and we have the self-honesty to admin when we’re wrong and the courage to change. And I think, regardless of who is in what job, those values are so embedded in this company that Apple will do extremely well.

Tim Cook is not like John Sculley.

To me, the question is who is the ultimate arbiter of excellence at Apple? Who can make the decision to scrap products that other companies would launch as Steve Jobs did? Who will provide the game-changing vision that Steve did?

I just found a Knowledge Base article at Apple that describes things that are controlled by the carrier settings, such as:

Carrier settings include updates to Access Point Names (APNs), MMS settings, features such as tethering, and default apps such as Stocks, Maps, and Weather.

It does mention the Stocks app, as I had noticed, but doesn’t mention Safari (though their list begins with “such as”, so it’s not complete).

Not only does a new phone come with these configurations, but the carriers can occasionally provide over the air updates to these carrier settings files, allowing them to make changes in the future.