For Google Maps, winter is coming. Potentially.

As you’ve undoubtedly seen by now, with the upcoming iOS 6 software, Apple intends to replace the Google Maps aspect of their default Maps application with their own, in-house version. Mark Gurman of 9to5 Mac was the first to report this news, and dives into more of the detail behind it, including the 3D aspect. John Paczkowski of AllThingsD confirmed the change. And after talking to my own source, I can beat the dead horse in confirming the switch.

I’ve also heard a little bit more. First of all, iOS 6, which is expected to be shown off in developer preview form at WWDC in June, is internally codenamed “Sundance”. Second, while Paczkowski’s source said the new maps functionality will “blow your head off”, I’ve been told that’s a bit of hyperbole (you think?). Specifically, while the 3D functionality is cool, it’s also not something people are going to use regularly. Think of it like Google Street View — cool, but how often do you actually use it when compared to the regular Google Maps product? (Having said that, I still expect Apple’s 3D maps to be cooler than Google Street View.)

More interesting to me is the implication of this switch. Let’s assume that alongside this change, Apple will also be replacing the default hooks in the iOS SDK that currently use Google Maps. This is a big deal for third party developers. While some choose to use other maps APIs (like Bing Maps, for example), the vast majority go with Google Maps because it’s baked right in and easy to hook up.

If that changes…

Consider Foursquare. They recently made headlines when they switched away from Google Maps on their website. At the same time, they made a point of saying they weren’t switching away from Google Maps on their mobile applications (where maps are obviously the most important). Why not? Again, because Google Maps are standard in both the iOS and Android SDKs. More importantly, unlike with the web, developers aren’t charged to use these maps on mobile. At least not yet.

Google recently made the change to start charging high volume customers of the Google Maps API on the web. Hence, the Foursquare switch, and several others larger customers are now either switching or considering switching. My guess would be that because of iOS, Apple may be the largest user of the Google Maps API right now. It’s not clear if Google charges Apple for this or not. Or if they’re about to start, as they have with other third-parties.

But it doesn’t matter. Apple can afford any charge Google throws their way, and would undoubtedly pay it if they thought it was worth it to ensure iOS remains the best mobile platform out there. This move away from Google Maps is more about controlling essential technology, as John Gruber points out today.

But the side effect of such a switch could seriously harm Google Maps as the de-facto mapping service. Again, because of their very nature, maps are most vital for mobile usage. And if Apple not only pulls iOS out, but takes millions of developers with them, Google Maps could suddenly go from behemoth to vulnerable. (Which makes their decision to start charging large customers all the more dumbfounding — this cannot be a huge source of revenue for Google, no matter the scale.)

Of course, Apple will have to ensure that their mapping product is flawless, or developers will choose to go with Google Maps anyway (assuming that’s still an option — even if it’s slightly more complicated). But given what’s now leaking out about the product, it would seem that after years of work, Apple is finally ready to take on the mapping challenge. And this may be even more problematic for Google than it seems on the surface.

As a quick aside, while there’s not much other iOS 6 information floating around out there right now, there have been whispers backing up Gruber’s assertion that Siri APIs are another possibility. There have also been whispers about Siri for iPad finally coming. Specifically, I’ve been led to believe it’s more of a UI issue than anything else. After all, Apple is using the technology for the Dictation functionality found on the new iPad. They’ve just been working on what Siri for iPad will look like, I’ve been led to believe.

As we’ve seen the past few days, new iCloud functionality should be a key part of iOS 6 as well. And more deep ties into the forthcoming OS X Mountain Lion should be revealed.

There is also some chatter about iTunes 11. It has been a not-so-well-kept secret that Apple has been trying to completely re-write the software for a long time. There have been several false starts and scrapping of projects. It’s believed (but far from confirmed) that Apple may be zeroing in on the major revamp they’re after. And a part of that may be both Apple and the labels warming to a full-on Spotify competitor…

Pure speculation at this point, but fun speculation.

Update: To back-up the “Sundance” information, Nima Moayedi reminds us that Apple has a history of codenaming iOS builds after ski resorts. Sure enough…

[image: 20th Century Fox]

In September 2010, I wrote a post that ignited an absolute shitstorm around these parts. “Shitstorm” in this case meaning a post with a thousand comments, the majority of which were spewed up by rabid Android fanatics. The title of that post:

Is Android Surging Only Because Apple Is Letting It?

At the time, we were in the midst of a massive Android surge to the top of the smartphone ecosystem food chain. This was happening all around the world, but the focus of this particular post was the U.S. market. Based on some comments made by developer David Beach at the time, I wondered if, as the title suggested, Android was only doing so well in the U.S. because the iPhone was still only available on one carrier, AT&T?

It’s time to revisit that thought because there’s now absolutely no question that this was the case. There’s now data to back it up. What’s more, despite what some surveys suggest, this trend may have fully reversed itself.

Over the past few days, both comScore and NPD have put out data showing that Android still has a healthy hold on the U.S. smartphone market with their best market share numbers yet. According to comScore, Android controls 51 percent of the market. According to NPD, it’s more like 61 percent.

For comparison, Apple is the number two player with 30.7 percent of the market according to comScore, and 29 percent according to NPD.

On the surface, there’s one big glaring problem with these numbers. Actual sales data from the three largest carriers in the U.S. doesn’t seem to back up the comScore and NPD numbers. At all.

In the last quarter, the iPhone accounted for 78 percent of all smartphones sold through AT&T. On Verizon, the iPhone accounted for 51 percent of all smartphones sold. Sprint didn’t report their total smartphone sales numbers, only iPhone sales numbers, but estimates peg the iPhone percentage around 60 percent. The iPhone is not (yet) sold on the nation’s fourth largest carrier, T-Mobile.

That’s 51 percent of all smartphones sold on the nation’s largest carrier (Verizon). 78 percent of all smartphone sold on the nation’s number two carrier (AT&T). And 60 percent of all smartphones sold on the nation’s number three carrier (Sprint). Jay Yarow of Business Insider did the math: all together, the iPhone accounted for 63 percent of the smartphone sales in the past quarter on the big three carriers. The 63 percent number is close to the 59 percent estimated by Raymond James analyst Tavis McCourt last week, as reported by Eric Savitz for Forbes.

And if you believe the Yankee Group, the big three carriers account for roughly 80 percent of the overall U.S. smartphone market. This equates to almost exactly 50 percent of the overall smartphone market in the U.S. for Apple.

It’s hard to see how Android could control 61 percent of the market when there’s only 50 percent to spare after the actual numbers are calculated. Maybe Android is huge with undocumented workers. Undocumented workers who love taking surveys, mind you. But I digress…

And, of course, there are other smartphones out there from RIM, Microsoft, Nokia, and the like. Even giving Android the other 50 percent of the market would mean all of the other players equal zero percent. (Sadly, perhaps not that far off, actually.)

ComScore at least has some wiggle room here. They don’t actually measure phone sales quarter to quarter, but overall market usage. So it’s certainly possible that after a few years of Android sales, they do still control the majority of the U.S. smartphone market. But their numbers get sticky when you look quarter-to-quarter and see that Android’s market share increased nearly four time more than the iPhone’s market share this past quarter. Again, that doesn’t sound right when the iPhone accounted for 63 percent of all smartphones sold on the big three carriers.

When I brought this point up a few days ago, comScore was quick with an answer. They told me that amongst the big three carriers, the iPhone subscriber growth actually did outpace Android subscriber growth, 13 percent to 11 percent. It’s just that overall Android growth from the remaining carriers (meaning T-Mobile and the regional carriers) more than wiped out that difference.

First of all, 13 percent (iPhone) versus 11 percent (Android) growth on the big three carriers still doesn’t sound right if the iPhone accounted for 63 percent of all sales last quarter. Second, if the big three do in fact make up about 80 percent of the overall market, how did the remaining 20 percent tilt the scales 4x in favor of Android (in terms of market share growth quarter to quarter)? It doesn’t make sense.

And then you look at NPD’s numbers. Yarow demolished those earlier. And sure enough, NPD reached out right away with clarifications.

Here’s the real issue: this rapid swing in favor of the iPhone seems to have exposed some serious flaws in the way these market analysts get their data. They’re hiding behind vague technicalities on how their numbers could be what they say, but they still don’t add up. Their problem is that we have actual numbers from the three largest carriers in the U.S., all of which are finally selling the iPhone and boasting about those numbers because they’re huge.

So how do the other guys get their numbers?

Surveys.

In comScore’s case, their MobiLens data comes from “an intelligent online survey of a nationally representative sample of mobile subscribers age 13 and older”. They don’t disclose the number of people surveyed, but you can bet it’s not a massive number (sure enough, it’s not, see update below). In NPD’s case, they survey 12,811 people.

Which numbers do you trust? Millions upon millions of actual sales reported in a legal manner by public companies or surveys of thousands of people?

Further, as Ethan Kaplan points out, “NPD and the like are incentive based surveys so naturally skew a certain way. Teens, college students, etc.” Several others have made this point over the past few days. The numbers comScore and NPD use in their statistically small surveys are likely skewed for a number of reasons. And again, now we have actual sales data that heavily suggests that’s the case.

By now, I probably have the Android fanatics really upset, so let’s throw out all these rational numbers and instead continue on with the dream that Android is “winning” in the U.S. Not winning in revenue or profit mind you — you know, things that actually matter for business, and things which Android will likely never be winning in any sense of the word — but winning in terms of overall market share. If you want to ignore all the above information and insist that Android is still winning there, that’s fine. But let’s jump back to the beginning of this post.

Again, the argument made in September 2010 was that Android was winning in market share in the U.S. because Apple was letting it win by only making the iPhone available on AT&T’s network. If Android still does control half to two-thirds of the market as the surveys suggest, what does it mean that on the three carriers where the iPhone is available, Apple now controls over 60 percent of these markets on a quarterly basis? (Again, this is fact backed up by actual sales numbers.)

It means that Android was/is winning in market share because Apple was/is allowing it to.

Android was previously the top smartphone OS for both Verizon and Sprint. But that was only because the iPhone was not available on either network until last year. When it became available, it quickly shot to the top. One type of phone outsold hundreds of other models combined. That’s pretty insane.

And it doesn’t speak well for the future of Android’s market share, survey or not. At least not in the U.S. (the rest of the world is more complicated for many other reasons). What if Apple finally puts the iPhone on T-Mobile later this year? Given what we now know — again, from actual data — is there any question that it becomes the top smartphone there? What about the other, smaller regional carriers? That’s already starting to happen.

Android’s only hope is to actually have a phone, or a set of phones, that are more appealing to consumers than the iPhone. But that hasn’t happened in the past four years, so what makes us think that will change this year? Or next year? All Apple has to do is say the word and they can win the market share battle in this country.

Actually, again, if you consider the numbers above, it sure looks like they already have won that battle.

Update: comScore notes that their surveys are 3-month averages of about 30,000 mobile phone users.

Two quarters ago, Apple unleashed Godzilla. It was a quarter so spectacular that the only appropriate way to describe it was in pure expletive form. $46 billion in revenue. $13 billion in profit. 37 million iPhones sold. 15 million iPads sold. A gross margin of 44 percent. These weren’t just good numbers, they were obscene.

That’s what made yesterday’s earnings release insane: Apple almost managed to match those numbers last quarter.

While pound-for-pound, Apple’s Q1 is the clear winner, I actually think Apple’s Q2 was more impressive. It was Apple’s Mothra.

In Q1, Apple was coming off a quarter that some considered “disappointing”. It was their first “miss” in forever. I put those terms in quotes because that’s where they belong. Those who actually knew what they were talking about with regard to Apple, knew that Q4 2011 was a fluke that happened for a few reasons — namely the launch of a new iPhone in Q1 rather than Q4 (in terms of Apple’s fiscal calendar, which is different from the ones human beings use). So it wasn’t hard to predict that Q1 was going to be big. Hell, Apple itself even hinted at it.

Of course, no one knew the quarter would end up being that good, but plenty of us were thinking big. But last quarter was more complicated. First of all, it was the quarter after the holiday quarter, which typically sees a good sized drop as buying slows. Second, because of an oddity in Apple’s fiscal calendar, Apple’s Q1 was actually a week longer than their quarters typically are. That means a week less of sales in Q2 compared to Q1. Third, the iPhone 4S was no longer brand new, so the pent-up demand was probably going to dissipate. Fourth, a new iPad was expected, but it wasn’t expected to be on sale until the end of the quarter, creating a sales void leading up to the launch. Fifth, there were no new Macs released in the quarter.

All of this seemed to be setting Apple up for a fairly significant drop quarter-to-quarter.

Nope.

Instead, what happened was that iPhone sales remained insane. 35 million for the quarter. While the phone grew its command of the smartphone market in the U.S. percentage-wise, the absolute sales numbers were down (again post-holiday and post-launch). But it was a different story in China. Because the phone was introduced in Q2 in that country, sales went through the roof. And it nearly offset the drop-off in the post-holiday and post-launch U.S. market.

Since the iPhone is Apple’s most important product revenue (and profit)-wise, this bolstered the overall numbers — especially with regard to profit (more on that in a bit).

Much was made yesterday about the iPad’s “miss” in terms of sales. Because Apple “only” sold 11.8 million of them, plenty of folks were disappointed. Those folks are idiots.

The new iPad only went on sale in the last two weeks of the quarter. But everyone knew it was coming. As a result, buying of the old iPad slowed in anticipation. This isn’t rocket science.

Further, Apple had trouble meeting demand for the new iPad in those two weeks on the books. If they can get the inventory up to speed, it will be this quarter which will be the big one for iPad. You release a new product, people buy more of them when they’re available. That’s generally how it works.

But again, this iPad dip did little to slow Apple’s quarter because of the iPhone sales. And more broadly, Apple’s overall business in China is booming. As Kim-Mai pointed out yesterday, Apple’s revenues for the quarter in China reached a record $7.9 billion, which was up threefold year-over-year. If you look at the graphs at the bottom of her post, you’ll see that Apple is becoming a much more global company. This means that their numbers are less susceptible to the ebbs and flows of the U.S. market.

But the most amazing number from Apple’s Q2 was 47.4. That was their gross margin for the quarter. It’s hard to describe how ridiculous that number is, but I’ll try.

In Q1 — again, the Godzilla quarter — Apple’s gross margin was 44.7 percent. It was so high that Apple CFO Peter Oppenheimer noted during the earnings call that the company didn’t expect to match such lofty levels ever again. Instead, they destroyed the number in Q2.

Why?

It was mainly because the iPhone made up an even larger percentage of overall revenue in Q2. The iPhone is Apple’s biggest money-maker and their product with the best margins, thanks largely to carrier subsidies (though more in the U.S. than other countries). The iPad also has great margins, but they’re significantly less (the iPad is not carrier subsidized anywhere). Less iPad sales (both in quantity and percentage-wise) and strong iPhone sales meant a higher margin. That’s why Apple’s revenue dipping $8 billion only equated to profit dipping less than $2 billion.

For some other margin context, look at this chart that Horace Dediu of Asymco put together. For the first time, Apple’s operating margin (different than gross margin, but just as important) surpassed that of both Google and even Microsoft. Apple is predominantly a hardware company. Google is predominantly an advertising company. Microsoft is predominantly a software company. This is not supposed to happen.

Going forward, those margin numbers almost have to drop. Not only will the iPad sales be big this quarter (again, the first full quarter the new iPad is on sale), but the $399 iPad 2 is apparently selling very well. That will drag margins down (but likely drive revenues up and make Apple less of an iPhone company).

The bigger questions will be if China sales continue on their torrid pace and if/when Apple finally gets around to releasing some new Macs.

While there is some confusion as to the timing of the next iPhone (due to the history of the launches), it seems pretty safe to assume that Apple will stick to the fall timeframe. Apple announced WWDC 2012 today, and while iOS was mentioned, it will probably be an iOS 6 developer reveal followed by a new iPhone in the fall again. This means iPhone sales should remain strong this quarter and will weaken in the following quarter leading up to a new device.

Apple is expecting revenues of $34 billion in Q3, which means they actually expect to destroy that number in Q3. I’ll probably have to come up with another Kaiju at that point.

[image: Toho Kingdom]

Five years ago, Microsoft reported revenue of $14.398 billion. They reported a profit of $6.589 billion. Last week, for the same quarter, Microsoft’s revenue was $17.407 billion. Their profit was $6.374 billion. The company is still growing, but not fast. And they’re actually making less money.

Compare that with Apple. Five years ago, revenue was $7.1 billion. Profit was $1.0 billion — the first quarter with a billion dollar profit in company history. Last quarter, the company reported $47 billion in revenue. And they recorded $13 billion in profit.

On the surface, an apples-to-oranges comparison, perhaps. But it points to something that has happened. Apple has completely taken over the consumer market, while most of Microsoft’s growth these days comes from the enterprise side of things. Apple has destroyed Microsoft as a consumer technology company.

Sure, Microsoft is still making plenty of money — billions — off of their consumer goods. But the decent quarterly numbers they reported last week in some ways mask what is really happening: Microsoft is slowing morphing into a full-on enterprise company.

Everyone got all excited that the Windows division actually managed to grow last quarter. Because the broader PC market has been stagnant and Windows 8 is in testing mode, expectations were extremely low. 4 percent growth was considered a big win.

But Microsoft as a whole saw 6 percent growth year-to-year when it came to revenue. It wasn’t Windows driving it, it was the Business Division (9 percent growth) and the Servers & Tools Division (14 percent growth). Again, the enterprise side of things.

The Business Division is now by far the largest Microsoft division in terms of revenue. Meanwhile, Servers & Tools almost surpassed the Windows Division this past quarter. The last time that happened was the tail end of the Vista nightmare. It’s going to happen again. Microsoft’s two biggest businesses will be their enterprise businesses.

Even on the Windows side of the equation, this was the key statement in the earnings release:

Strong Windows 7 adoption continued with enterprise desktops on Windows 7 now up to 40% worldwide.

Nothing about the consumer side of Windows, just the enterprise side. That’s what led to the 4 percent growth surprise.

Windows 8 is due out at the end of the year, and I’m sure the Windows Division revenue numbers will jump as a result. But as these charts by Horace Dediu show, the jump is likely to be short-lived. Microsoft saw a huge revenue (and profit) spike when Windows 7 was released, then it immediately dropped and plateaued. It was back to the revenue grind and the profit stagnation.

Windows 8 could be better for the company, or it could be worse. The world is drastically different than it was even just three years ago. The iPad exists, for one. While Microsoft is going all-in (or at least half-in) on their tablet strategy with Windows 8, there’s no indication it will actually work. If it doesn’t that could significantly hurt the Windows Divisions’ numbers.

Another key difference over the past five years is, of course, the iPhone. Five years ago, no consumer had one. Microsoft controlled nearly 35 percent of the U.S. smartphone market. It was going to be a huge business for them. Today, that percentage stands at roughly 5. And even with Windows Phone, it’s shrinking, as Dan Frommer points out today.

Microsoft’s last-ditch attempt insert themselves into the mobile picture isn’t working. At least not yet.

Consider this: Apple’s iPhone business alone is bigger than all of Microsoft’s businesses combined.

And that matters because again, that’s where consumers are today. Smartphones. Tablets. The PC business is going nowhere. Let’s just admit it: that’s not going to change.

The wildcard is the living room. This is the one consumer space where Microsoft has done better than Apple over the past 5 years. The Xbox 360 has been a big hit, and accessories like the Kinect have moved the market forward. Apple’s first Apple TV was largely a dud. The second one is much better and seems to be selling well, but it’s not a consumer hit in the same way the Xbox is.

But last quarter, a funny thing happened: Microsoft’s Entertainment and Devices Division actually lost money. That had not happened since 2009. And it was the worst loss since 2007 — again, five years ago.

Since Microsoft reports Windows Phone numbers under E&D, some assumed the poor numbers were a result of things like Microsoft’s Nokia payout dragging the division down. But Microsoft themselves noted that the 16 percent decrease in revenue was the result of “a soft gaming console market”. This was later backed up by more numbers. The drop in revenue and the swing to a loss was all about Xbox demand evaporating.

Now, obviously, the Xbox is old — some may say “ancient” by gaming console standards. And a new one isn’t due until next year. That device will undoubtedly do well, but you have to wonder if Microsoft wasn’t surprised by this swift drop to a loss for the division. If they weren’t, why not aim for a new console this year? It sure seems like they were counting on things like the Kinect to extend the life of the device, and that worked for a while, then collapsed.

Meanwhile, gaming on iOS continues to grow. Anyone who doesn’t view the iPad as a legitimate living room gaming contender now is simply fooling themselves. And it’s a device that’s refreshed with the lastest hardware once a year. The Xbox is coming in three, four, or even five year intervals. That simply cannot compete given the rate of change we’re seeing.

Microsoft is smart to move more into the broader entertainment space, securing content deals for the Xbox. But again, Apple will be there as well. At first through the existing Apple TV (with a killer assist from the AirPlay functionality). Down the road, perhaps with their own actual television.

And then there’s the Online Service Division. Despite their “operating loss improvement“, they lost another $479 million last quarter. The total losses for the division over time are approaching $10 billion as they chase Google down a rabbit hole to claim a consumer market they’re never going to win.

To me right now, Microsoft’s consumer business feels like Nokia’s smartphone business a few years ago: the numbers look fine, and in some cases even good, but the world is quickly changing. If you just look at the past five years of what Apple has done versus what Microsoft has done, it’s not hard to imagine Microsoft’s business being completely dominated by the enterprise side of the equation in another five years. That will still make for a great business, but it’s not the Microsoft that many of us have known.

Everyone you know goes away in the end, I suppose.

Will Apple make a 7 inch iPad? That’s the question being batted around yet again today. The true answer right now is easy: I don’t know. No one does. Most likely not even Apple. They’re undoubtedly thinking about it. And may even have to make a call soon. But it has probably not been decided just yet. But that’s a lame answer. Let’s sexy it up using history, logic, and common sense.

Will Apple make a 7 inch iPad?

Yes.

This topic came up today because of remarks John Gruber made during a podcast he records on a weekly basis with Dan Benjamin. When Benjamin asked Gruber about the possibility of Apple making a 7 inch tablet, Gruber responded: “Well, I don’t know. What I do know is that they have one in the lab. A 7.85 inch iPad that runs at 1024×768. It’s just like the regular iPad shrunk down a bit.”

This should surprise no one. Apple has many prototypes of various devices in different stages of the product lifecycle. They probably have a few other variations of the iPad as well, and they probably have for years (pre-dating the iPhone even). Most prototypes never see the light of day. But I believe this one that Gruber is talking about will.

Again, I have no actual inside information here. But just think about it for a second.

Apple views the iPad as the future of general computing. They already sell in far greater quantity than Macs (and every other PC). And Apple drops hints from time to time that the category may even eventually be bigger than the crown jewel of their entire kingdom: the iPhone.

Apple may or may not be able to take the iPad to such heights with one form factor. But it will be a lot easier if they have two.

Apple often starts product lines with the Henry Ford mentality: “You can have any color as long as it’s black.” Mac, MacBook, iMac, iPod, etc. As the product matures, so does the offering. New form factors. New sizes.

The one major exception, of course, is the iPhone. It has always had the 3.5 inch screen even as the competition has gone bigger — sometimes ridiculously so. But you can certainly make the argument that the iPhone exception is the right call. A mobile phone has to be portable enough to carry around all the time comfortably. And you want to be able to use it with one hand (thumb reach). And given Apple’s preference towards pixel-perfect design, keeping the screen the same size ensures apps are relatively uniform.

The iPad doesn’t have the same constraints. At 9.7 inches, you obviously can’t carry it in your pocket. Nor can you use it with one hand. The proportional design aspect remains true (the iPad ratio exactly doubled the iPhone ratio), but as Gruber points out, a 7.85 inch screen running at the original iPad’s 1024×768 resolution would keep things simple for developers. It could work. And it will.

But wait, won’t users have to whittle down their fingers with sandpaper to use a 7 inch screen? Steve Jobs did in fact suggest this a few times. But he said a lot of things. In fact, if you look throughout the history of Apple, you can often predict that Apple is eventually going to do something if Jobs implied in the past that they never would. Look at your iPad right now. There’s plenty of room to shrink things a bit. Apps and their attributes just have to remain basically in proportion.

But even at a high level, all of this is too technical. The bottom line is that there isn’t a week that goes by without someone coming up to me and gushing about the iPad, but wishing it was a bit smaller. Not everyone feels this way, of course. And that’s why Apple will keep the 9.7 inch model as well. But there are plenty of folks out there who want a smaller version.

The fact of the matter is that the iPad is great at many things and the list is constantly expanding. But it’s not great for holding up for prolonged periods of time in certain settings. This is problematic for say, reading in bed. It’s not that it’s too heavy, it’s not. But the large size does make it a bit clunky at times. A 7 inch iPad would be perfect in many of those situations.

Of course, that alone would not be enough for Apple to do the smaller iPad. But like the iPod mini (and nano), Apple understands the mentality that smaller is often better in the eyes of many. The mini and nano eventually became far more popular than the original iPod. (Some) options are important. None more so than pricing options.

The Kindle Fire has a 7-inch screen. It’s $199. By most accounts, it’s pretty poor when compared to the iPad. But that isn’t stopping millions of people from buying them. $199 to $499 (the entry-level new iPad) is a big jump. Even $199 to $399 (the iPad 2′s new price) is a big jump. If Apple can sell the iPad 2 at $399 with a healthy margin, imagine what they could do with a smaller-screen iPad? I wouldn’t rule out $299.

Paying $199 for a 7 inch Kindle Fire versus $299 for a 7.85 inch iPad would be a significantly harder call for many consumers. For many others, it would be an obvious one: get the iPad.

Also consider the forthcoming Google-branded tablet. While few details are known about it, everything leaking out suggests a very competitive price compared to the Kindle Fire, and as such, likely a similar form factor. In the two years since the iPad first launch, everyone has tried and failed to compete directly against Apple. The only avenue getting any traction is this smaller and cheaper Kindle Fire. And it’s only getting some traction because it’s a space where Apple is simply not competing. Yet.

Consider the 11-inch MacBook Air versus the 13-inch MacBook Air. I’ve had both models. The reality is that they’re not all that different. The 11 is (obviously) smaller and lighter, but the 13 is pretty damn small and light compared to just about any other notebook ever created. Still, Apple offers both. Consider also the MacBook Pro line: 13 inch. 15 inch. 17 inch. The reality again is they’re not all that much different on a macro level. But Apple still offers all of them.

You could certainly argue that a 7 inch iPad versus a 9 inch iPad is a more meaningful difference since you have to be holding it all the time to use it. You’ll notice it more. Some people will prefer one size. Some will prefer the other. In some cases, it will depend on the circumstance. Plenty of folks will probably buy both. A 7 inch for the kids, a 9 inch for the grownups, for example. Or maybe a 9 inch for work and a 7 inch for home.

I also suspect that like the difference in laptop sizes, the smaller iPad would come less juiced-up in the spec category. Since the spec is dead, Apple probably won’t play this up much, but to keep costs down, maybe the smaller iPad would have a last-generation chip. Or maybe it would have a slightly less powerful one than the current generation 9 inch iPad.

Maybe it would also have less storage. Or maybe the high range of the storage options would simply be less. Apple will clearly soon move to a 128 GB option for the 9 inch iPad and drop the 16 GB option. Maybe a 7 inch iPad would start at 16 GB and only give the option to go up to 64 GB.

Maybe the 7 inch would have slightly less battery life due to less physical space for a battery. Or maybe it would be the same because the smaller screen would draw less power.

Lots of possibilities. The point is, I suspect that with the 7 inch iPad, Apple would vary more than just the screen size. It would be the most important difference, but not the only one. And it would result in Apple selling a ton of both models. And it would drive even more revenue and profit Apple’s way while keeping their rivals at bay.

I’m basically writing this post so that when Apple does release a 7 inch iPad at some point in the future, I can point back here and say “I told you so”. Cause I did. The option is just sitting on the table waiting for Apple to pounce. This is about the future of computing. It’s about expanding the brand. It’s about securing the stake. It makes sense. It will happen.

Attention George Foreman: report to an Apple Store near you immediately. There’s a hot (literally) product, you simply must buy the entire inventory of to keep your grilling empire alive: the new iPad.

Or at least, that’s what the latest nonsense from Consumer Reports would have you believe.

We’ve seen this ridiculousness from Consumer Reports before. In June 2010, at the height of “Antennagate”, Consumer Reports figured out the art of click-bait. If you say something outlandish, even if it directly contradicts something you previously said (and sometimes that’s even better!), you must harp on a story to keep those precious pageviews flowing in. And so harp they did.

The reality of the Antennagate situation was always this: it was real, but it really wasn’t a big deal. The fact that the iPhone 4 went on to sell tens of millions of units — record numbers for Apple at the time — bringing in billions of dollars for the company with very few returns, sure seems to suggest Consumer Reports blew the situation way out of proportion. And what they’re doing today is arguably worse.

To be clear, it is true that the new iPad gives off more heat than the previous models. We were among the first to report this in our initial review of the device last week. Guess who didn’t note it in their initial report? Consumer Reports. A week ago, everything was peachy keen: The new iPad is shaping up as the best tablet yet.

But that review apparently didn’t generate the pageviews they would have liked. So today, we have the outlet firing back: Our test finds new iPad hits 116 degrees while running games.

While there’s nothing factually wrong with that title (presumably, I don’t have my iPad thermometer handy), it is misleading for average consumers — you know, Consumer Reports core audience. 116 degrees sounds hot. Really hot. Death Valley hot. It sounds like the thing is a grill.

The reality is that 116 degrees isn’t that hot for a computer. In fact, it’s only about 10 degrees or so hotter than the not-complained-about iPad 2 ran. And this is at the extreme, when graphic-intensive games that max out the new A5X chip are running. Even at this temperature, Consumer Reports notes:

During our tests, I held the new iPad in my hands. When it was at its hottest, it felt very warm but not especially uncomfortable if held for a brief period.

That’s pretty much what we noted last week:

One other slight downside which I have to assume is related to either the battery or the LTE functionality is that unlike previous iPad models, the new iPad does get noticeably warm in the lower left corner after prolonged use. It’s never hot, just warm. But again, I never noticed this on other models.

Warm. Not hot. But that didn’t stop Consumer Reports from giving their “scoop” to CNBC this morning and “upgrading” the new iPad from “not especially uncomfortable” to “uncomfortable”.

And that continued. As Consumer Reports spokesman James McQueen told the AFP today:

People need to exercise caution. We are not saying it is a dangerous product, but 116 degrees can be a little uncomfortable.

That, in turn, led the mainstream media and analysts to do what they do best: use jackassery in an attempt to pray on the masses and reap the rewards. One example:

Consumer Reports confirms iPad heat problems, could cause burns :usat.ly/GBGvmC

— Rob Enderle (@Enderle) March 20, 2012

“Could cause burns” — what the hell? I’ve been using the new iPad for nearly two weeks now. A lot. Not only has it not come close to rising above “warm”, I don’t even notice the heat anymore. Certainly, it’s still runs much cooler than almost every single laptop on the market today. And that’s something you have to put on your lap. Body exposure is maximized.

But a story about laptops being hot is boring. Everyone already knows that. No one would read it. The iPad is the sexy new thing. And it runs a little warm sometimes!!! AHHHHHHH!!!

Now we have “Warmgate” — complaints so ridiculous, they read like satire. But it doesn’t matter, Consumer Reports has done their job. Not their actual job, mind you, which is protecting consumers. They’ve done their new job: generating pageviews by any means necessary.

We will absolutely have a follow-up story from them tomorrow. And probably another one the next day. Then one contradicting what was previous said (which they’ve already done, of course).

We need a Consumer Reports to protect us from Consumer Reports.

EXCLUSIVE: Consumer Reports cannot recommend Hansel — too hot right now.

— MG Siegler (@parislemon) March 20, 2012

Earlier today, AT&T announced record sales and activation numbers for the new iPad. During the Apple dividend/buyback call, Apple CEO Tim Cook spoke of a “record weekend” for the new iPad. Unfortunately, neither had actual numbers to share. And that was odd since normally when Apple has a new record number to crow about, crow they do. This was more of an Amazon maneuver where “records” are set by products selling 4x of another unstated number.

Turns out Tim Cook just didn’t want to spoil the surprise. Apple has just issued a release with their actual sales numbers for the first weekend of the new iPad. And the numbers are big. Very big. Three million iPads sold in the first three days big.

So how does that stack up to the previous versions of the iPad? Well, Apple didn’t officially announce first weekend sales for the iPad 2, likely because they were very constrained. Analyst estimates pegged the number sold somewhere between 500,000 to somewhere just north of 1 million. So even using the bullish numbers, this iPad launch was roughly 3x as large as the launch last year.

Two years ago, Apple sold 300,000 iPads on the first day of sales. Again, the pace here seems to be about 3x that. For comparisons sake, Apple sold 4 million units of the iPhone 4S in its first weekend late last year.

Our full review of the new iPad.

Over the weekend, a few analysts were jumping over one another to be the first to predict timid sales of the new iPad. Those analysts, once again, now look like huge assclowns.

The quote part of the release below:

“The new iPad is a blockbuster with three million sold―the strongest iPad launch yet,” said Philip Schiller, Apple’s senior vice president of Worldwide Marketing. “Customers are loving the incredible new features of iPad, including the stunning Retina display, and we can’t wait to get it into the hands of even more customers around the world this Friday.”

The new iPad nears. Apparently Walmart will be selling them in just a few short hours, well before Apple itself does tomorrow morning. Meanwhile, the first direct-to-consumer shipments should be hitting anytime now. Long story short, a lot of people are going to be getting the new Retina display iPad over the next several hours. Unsurprisingly, the Retina-ready apps are already flowing in.

When I asked Apple for a list of third-party Retina-ready apps (all of Apple’s apps are already upgraded) a few days ago for my iPad review, I was told that there would be a list ready to go for the actual launch on Friday. Sure enough, today Apple came back with an early list of apps. And they’ve pushed a new section of the App Store devoted to the new Retina apps. But I’ve also found several others that aren’t on their list yet. Below, find a list of the new apps you’ll want in order to take full advantage of the new screen.

Keep in mind that it’s not the easiest thing in the world to upgrade an app to Retina-level graphics, so give developers some patience here as many of them work to roll out updates over the next several weeks. But at least it appears that the App Store won’t be as barren when it comes to Retina apps as some would have had you believe.

• ABC Player
• AIM for iPad
• Another Monster at the End of This Book
• Art Authority
• Barefoot World Atlas
• Calcbot
• The Daily
• Day One
• Diamond Dash
• Dwellable
• The Early Edition 2
• Echofon
• Evernote
• Evernote Peek
• Flight Control Rocket
• Flipboard
• Foosball HD
• Galaxy on Fire 2 HD
• Grace
• Incredibooth
• Infinity Blade II
• Instacast
• iStopMotion for iPad
• Joining Hands
• Kindle
• Labyrinth 2 HD
• Martha Stewart Cookies
• Mass Effect Infiltrator
• Mint
• MLS MatchDay 2012
• Modern Combat 3
• NBA GameTime
• NYTimes for iPad
• OmniFocus
• Order & Chaos Online
• Quotes Folder
• Readability
• Real Racing 2 HD
• Redfin
• Reeder for iPad
• SketchBook Pro for iPad
• Skitch
• Sky Gamblers: Air Supremacy
• Solar Walk
• Soundcloud
• Star Walk for iPad
• StockTouch
• TouchGrind BMX
• Trulia
• Tweetbot for iPad
• Twitter
• Twitterrific
• Vimeo
• Zillow

In addition to the ones above, Apple expects the following apps to be approved shortly:

• Facebook
• Roambi Analytics
• Roambi Flow
• Wired

(Disclosure: CrunchFund, where I am a General Partner, is an investor in Redfin, one of the dozens of apps listed above. Our money clearly helped them gain an unfair Retina advantage here.)

I remember watching the HD DVD vs. Blu-ray wars closely a few years back. I wanted one to win so I could go out and buy a next generation movie player. But the battle went on and on, and by the time Blu-ray won, I had set my sights on a new frontier: digital distribution. I never did get that Blu-ray player. And now I’m quite certain I never will. The new 1080p Apple TV is here.

To be clear, because of the way it’s compressed, iTunes 1080p content is not equal to the 1080p picture you’ll get from a Blu-ray disc. It’s very close, but it’s not quite there yet. I imagine it will get there as digital compression technology continues to improve. But even if it doesn’t, this is something that won’t mean a thing to the vast majority of consumers. Thanks to the marketing of television sets over the years, they know “1080p”. They don’t know that the quality can be inconstant. Fair or not, it won’t matter.

That’s one reason why the new Apple TV is such a huge win here. Previously, it was limited to displaying 720p content which undoubtedly gave some would-be purchasers pause. But a new chip (a single-core A5), some 1080p content in iTunes, and the same $99 price changes that.

But there are cheap Blu-ray players out there now, so why does the Apple TV trump those? And what about other boxes like the Roku, which can also do 1080p streaming content? One word: AirPlay.

Having used the previous iteration of the Apple TV almost a year now, I’m absolutely infatuated with AirPlay. The love affair is so deep that I’m sickened to think about going on the road and it not being available in most hotel rooms. It absolutely should be. And if we can just get past some open WiFi issues (imagine someone pushing content to another, unsuspecting room), and some greedy hotel chains (who love their rip-off pay-per-view content), it will be. The boxes should be as ubiquitous in hotel rooms as iPod/iPhone chargers now are.

AirPlay is one of those things that still seems like magic every time you use it. How on Earth am I streaming an HD movie wirelessly from my iPhone or iPad to my television while I continue to use that device? If it’s possible, why does anything need wires anymore?

I think people are often tricked when they first hear about the Apple TV. Certainly, Apple does everything in their power to downplay its importance to the company. And yes, that probably has something to do with other, more substantial television hardware coming down the line. Right now, people look at the Apple TV and think, “okay, cool, a tiny device to access iTunes content from my television”. At $200 to $300, it made little sense. At $99, it made some sense. But it still lacked that killer feature.

The true key to the Apple TV is AirPlay. And the latest version supports 1080p streaming as well. And soon, with the release of OS X Mountain Lion, you’ll be able to AirPlay your entire desktop to your television. Meanwhile, the potential for gaming here is just starting to be tapped.

There’s no reason why every person with an iOS device (and soon a Mac) shouldn’t get an Apple TV. And that’s a problem for the makers of Blu-ray players. Again, just slightly better quality will no longer be enough. Apple’s latest Apple TV is going to continue the trend they began with the MacBook Air — the killing off of optical discs.

As for the rest of the new Apple TV, it’s great, just like the last version was. The outside looks the exact same and it’s just as easy to set up. The included aluminum remote control is still pretty lame (try searching, or doing anything that involves typing with it), but you can get around this if you have an iOS device — get the Remote app ASAP.

Alongside the new Apple TV announcement, Apple rolled out new software for the device. It’s a significant improvement over the previous software. You’ll note right away how app-y everything looks. When you consider this along with the fact that the Apple TV technically runs a version of iOS, it’s clearly only a matter of time before more apps come to the device. Currently, Apple has a very limited set of third-party partners (Netflix, MLB.TV, etc) on the device. But they could easily open it up. (Though, again, they may not ever have to thanks to AirPlay.)

The good news is that the Apple TV software update also works on the last iteration of the Apple TV. So unless you really want access to 1080p content, there’s not a huge incentive to buy a new one. (Even with the new software, the older Apple TV is limited to 720p.)

And because Apple has moved all of their TV catalog and much of their movie catalog to iCloud (some studio deals are still being negotiated, but sound close to being done), all applicable HD content can be automatically upgraded to 1080p from 720p (SD content will remain SD).

So no, Apple didn’t give a huge incentive for current Apple TV owners to upgrade to the newer box. But they gave a huge incentive to millions of people without an Apple TV to get one. And that’s bad news for Blu-ray.

Even if you have perfect vision, indulge me here for a second. You know when you go in for an eye exam and you’re asked to look at a combination of letters and numbers on a chart against a far wall? You read the first few lines, then realize you actually can’t go any further. Then you get prescribed glasses (or contacts) and you can all of a sudden read every letter and number. And even the ones you could read before are now so much clearer.

That’s what it’s like looking at the new iPad versus the older iPads.

It’s weird because I was never one of those people who thought the original iPad’s and the iPad 2′s screen was poor (but there were plenty of those people in the post-iPhone Retina world). I guess it’s just like a pre-glasses world — you never realize how blurry things are because that’s just how you’ve always seen everything. And then you put the glasses on and you wonder how you ever managed without them.

Once you see and use the new iPad, there will be no going back.

Perhaps it’s unfair to say the older iPad screens look “blurry” compared to the new iPad. It’s more along the lines of “fuzzy”. After using the new iPad for an extended period of time then switching back to an iPad 2 (or 1, for that matter), you’ll cringe at the pixelated cloud the appears to surround every app icon. Text will look murky. Colors will look muted.

The iPad 2 is still far and away the best tablet on the market today (the iPad 3 officially comes this Friday, of course), and the new iPad screen manages to make it look like antiquated technology. That’s not to say you shouldn’t get an iPad 2 at the new $399 price, it’s just that if you go that route, don’t bother looking at the new iPad first. It will ruin the iPad 2 for you. Again, this is the best tablet out there right now that we’re talking about.

Ever since Apple unveiled the “Retina” display on the iPhone 4 over a year and a half ago, there’s been speculation about a Retina iPad. To some, it seemed inevitable. To others, it seemed impossible.

There’d be no content. It would cost far too much to make. It would require too much power for a portable machine. Or it would be too thick to accommodate the required huge battery. These were arguments made just a year ago. But Apple has done it.

What we have is a 9.7-inch slab of aluminum and glass that when illuminated, becomes an absolutely stunning display of light and color. At first glance, the new iPad is almost indistinguishable from the iPad 2. The same Smart Covers even fit on both. But it doesn’t matter what the device looks like. What matters is what you’re looking at: the screen.

Web pages look almost as if they’re being displayed in a high-quality glossy magazine. Photos look like photos — the printed out kind. Text is razor sharp and crisp, just like print.

And while the screen is the single biggest selling point of the new iPad, there are a few other things I’ve been enjoying nearly as much in my week testing out the device.

The most notable of these is the LTE functionality. Put simply: it’s fast. Really fast. Faster-than-my-WiFi fast.

Yesterday, I clocked the new iPad using LTE at over 40 mbps down and 20 up on Verizon’s network. That’s about twice as fast as my current home cable broadband. For good measure, I tethered the new iPad to my iPhone 4S to compare it to Verizon’s 3G speeds. It’s about 40x faster for downloading.

(My LTE speed tests ranged from about 15 mbps down to 42 mbps down and 10 mbps up to 20 mbps up. Most of the time I was in the upper range in both categories.)

I never saw the point of getting the 3G version of the iPad because WiFi is available in many places, and where it’s not, you could just tether to your phone. But I will absolutely get an LTE iPad. Again, it’s faster than most WiFi networks I usually connect to.

And the Verizon version of the new iPad comes with LTE hotspot functionality right out of the box at no additional cost beyond the standard data plans. AT&T does not yet offer tethering from the new iPad, though apparently they’re talking about it.

Apple’s stated reasons for not including LTE technology earlier in their products include both design and battery considerations. They’ve clearly solved both issues with the new iPad. The battery life is said to be the same (10 hours on WiFi, 9 hours using a cellular connection) as the iPad 2. In using it, I’ve found this to be the case. LTE may drain the battery a bit quicker than 3G did, but it’s not noticeably worse. Battery life overall is still excellent.

As for LTE being a burden on the design of the product, Apple has been able to keep the shell of the new iPad almost exactly the same as the previous iteration. It’s ever-so-slightly thicker (0.37 inches versus 0.34 inches), which you can only really tell when you hold the two at the same time. The new iPad also weighs slightly more than the iPad 2 (1.46 pounds versus 1.36 pounds — for the cellular versions), but the weight difference is basically indistinguishable.

So how was Apple able to keep the battery life the same while adding LTE and without drastically changing the design? It appears that they’ve had a fairly major breakthrough in their battery technology. While the new battery clearly isn’t much bigger than the old one, it can hold much more juice (42 watt-hours versus 25-watt-hours). The downside of this is that I’ve found it takes quite a bit longer to charge the new iPad. As in several hours — you’ll probably want to do it overnight.

One other slight downside which I have to assume is related to either the battery or the LTE functionality is that unlike previous iPad models, the new iPad does get noticeably warm in the lower left corner after prolonged use. It’s never hot, just warm. But again, I never noticed this on other models.

Another big upgrade in this new iPad: the camera. Previously, the iPad camera was more or less a joke for still photography. Apple’s line on this is that it was really only meant to shoot 720p video, but plenty of people would use it to take pictures — and the resulting 0.7 megapixel images were well, not good (see below).

Seeing that use case, Apple included a much, much, much better 5 megapixel five-element lens. It has a ƒ/2.4 aperture and a hybrid infrared filter. I honestly don’t know what half of that stuff means, all I care about is the fact that the images from the new iPad look very good now. There is no flash on the new iPad, but the flash on the iPhone tends to be fairly poor anyway.

This new lens can also shoot 1080p video (again, up from 720p) at 30 frames-per-second. And it features video stabilization.

The front camera, meanwhile, remains the ho-hum VGA-quality variety. But Apple bills that as being primarily for FaceTime (and presumably, higher-quality images would lead to lag). One sad aside here: despite the fact that the LTE networks are so much faster (faster than my WiFi even), Apple says that FaceTime will still be WiFi-only for now.

In terms of speed, the new iPad feels very fast. But the iPad 2 felt very fast. There’s probably a good reason for this: reports have the A5 chip being similar to the new A5X chip. One key difference is in the graphics capabilities. It takes a lot of GPU horsepower to run the Retina display. The A5X’s quad-core graphics are the key there.

And the boosted graphics should also lead to some major advances in iPad gaming. Apple showed off a few demos during their keynote last week, but sadly, those games are not yet available.

The new iPad also reportedly comes with double the RAM (1GB versus 512MB), Apple never gives out that spec, but tear-downs don’t lie. Again, I haven’t noticed too big of a bump from this, but it’s the early days and apps aren’t yet optimized for the new device.

Speaking of apps, Apple has upgraded just about all of their own applications to be Retina-ready. The result are apps that look amazing while still being responsive. I tested out iPhoto, Pages, Keynote, Numbers, iMovie, GarageBand, and a few others.

iPhoto is the clear star, as it’s the brand-new app that Apple unveiled last week. Combined with the better camera, it works great for most photo-editing needs. There are slight bits of lag here and there when doing things like adjusting brightness by dragging your finger over a large image, but overall it’s very solid.

And if you want to take images with the still-better 8 megapixel camera on the iPhone 4S, you can easily move them over to edit on the iPad via the Beam functionality.

The only third-party app which I could find that was available as Retina-ready at the time of this review was Tweetbot, a Twitter client made by Tapbots. Pushed to the App Store yesterday, the difference side-by-side with the iPad 2 version is readily apparent.

Apple tells me that more Retina-ready apps should be ready to roll by the actual iPad launch on Friday. But unless your favorite apps are graphics-heavy, they shouldn’t look too bad since iOS will automatically upscale the text in each app on the new iPad. Even scaled-up iPhone apps look significantly better on this new screen.

The one downside of the new Retina-ready apps is that they’re going to take up more space. Apple has raised the cap on download limits over wireless, but for many apps, you’ll need WiFi to download them. And you should think about this storage requirement if you’re considering the 16 GB version of the new iPad.

Another thing to consider: with the new iPad, you’ll obviously want HD versions of movies and TV shows and those tend to be twice the size of the standard definition versions. Apple adding movies as a part of iCloud (they previously added TV shows) mitigates some of this, but it’s still something to note.

So how do HD movies look on the new screen? Very good, but not perfect. Remember, the new iPad has a resolution of 2048-by-1536 — that’s significantly higher quality than the top-of-the-line 1080p movies (which Apple now offers). Amazingly, the iPad has more pixels than my 60-inch HD television which has a resolution of 1920-by-1080. But unless Hollywood starts making 1536p videos, which is highly unlikely (though eventually, they’ll go even higher), movies will not be Retina-ready.

On the iPad I’m testing out, I have three pages of apps, a few hundred photos, one HD movie, and one music album. It’s really not that much stuff, but it takes up over 20 GB of storage. The apps alone are over 10 GB of that.

One thing that is surprisingly lacking on the software side of things is Siri. When Apple’s digital personal assistant launched with the iPhone 4S, many assumed it would make its way to new (and faster) iPad as well. For some reason, Apple has chosen not to do that, at least not yet (the popular theory is that they’re still working on scaling issues with the product in beta). One key component of Siri did make the jump however: Dictation. Clicking the microphone button on the virtual keyboard allows you to talk rather than type wherever there is a text input box. It works well.

I would not be shocked to see Siri come to this version of the iPad in a software update somewhere down the line.

Features and technical aspects aside, how does the new iPad feel? Amazing. It’s the best device out there, made even better. And it’s the same price as it previously was. There’s really nothing not to like beyond a few minor nitpicks.

Leading up to the new iPad unveiling last week, several folks (including myself) predicted the inevitable post-event let-down. The reason is obvious: Apple is a victim of their own success. Because the iPad 2 is already so much better than the competition (and you could certainly argue that the iPad 1 still is as well), the only device Apple could beat is their own. And the iPad 2 was already really good and hard to top.

And because the new iPad looks largely the same at the iPad 2 from an industrial design perspective, many were lulled into believing that Apple was getting complacent. Let me be clear: the new iPad is a huge technological leap forward. It has by far the best screen I’ve ever seen anywhere and it’s something I can hold in my hand and touch and use for 10 hours at a time.

Remember a few years ago when everyone was using CRT monitors with resolutions of 800-by-600? They needed to be plugged in and to sit on a desk with plenty of room behind it. And they weighed upwards of 30 pounds. Think about that when you hold this new iPad.

And think about the days — again, just a few years ago — when most people connected to the Internet via dial-up connections. Speeds were 14.4 kbps or 56 kbps and required a phone landline. This new iPad will connect to the Internet all over the United States at speeds faster than my current broadband connection. And it can do that for about 9 hours without being recharged.

Technology is amazing, and this new iPad is amazing. Also amazing: the only company competing with Apple right now in this particular space is Apple. So the only real question is: do you upgrade if you have a previous iPad model?

If you have the original iPad, I say this is a no-brainer. If you have an iPad 2, it’s a tougher call since it still seems nearly as fast as the new iPad. But if you choose not to upgrade (or to spend $399 for the 16 GB iPad 2 now), again, treat the new iPad as if it were Medusa when you’re in an Apple Store. Do. Not. Look. At. It.

If you’re at all interested in LTE in an Apple product, obviously, get a new iPad. If you read a lot on your iPad, get the new iPad. If you take a lot of photos and videos (yeah you, the joker in the front row of the concert with your iPad in the air), get the new iPad. If you play a lot of games on the iPad, get the new iPad.

If you don’t yet have an iPad, get the new iPad.

The new iPad screen:

The iPad 2 screen:

Photo taken with new iPad:

Photo taken with iPad 2:

The old Tweetbot icon up-close on the iPad 2:

The new Tweetbot icon up-close on the new iPad:

It’s sort of funny that the only major thing those in the rumor business got wrong was the name of the new iPad. It’s not the previously presumed “iPad 3″, nor is it the “iPad HD”. It’s just the iPad. And that’s what it will be from now on.

This was surprising because our expectations were set for a new name. But it really shouldn’t be all that surprising. My iMac is not the “iMac 11″. My MacBook Air is not the “MacBook Air 4″. The iPod line changes, but the name remains the same. This will undoubtedly happen to the iPhone line as well. Just as the spec is dying (more than partially ushered to the grave by Apple), the ascending number naming race is dying too. It’s about simplicity.

Apple can pull this off because they have so few products and they’re in complete control of all of them. Their software isn’t licensed to other OEMs. The iPad doesn’t have to be called the “iPad 3X HD S” just to beat the “iPad 3X Turbo” made by a competitor. There are no real competitors. Not yet, anyway. The naked “iPad” name alone is enough to win.

Enough about the name. The real key to today’s event was a theme Apple is going to hit on again and again for the foreseeable future: the “Post-PC Revolution”. These were some of the first words out of Tim Cook’s mouth when he took the stage today. Yes, it’s a theme that began with Steve Jobs, but after Apple’s insane last quarter (the first under Cook as permanent CEO), it has never been more clear that Apple has evolved far beyond a mere PC company. They still make them. But they’re a sliver of the business.

Apple has sold 315 million “Post-PC” devices (read: iOS devices) in total. In just the past year, Apple sold 172 million of them. And last quarter alone, they sold 62 million, as they made up 76 percent of Apple’s revenues. This Post-PC segment is now the heart of the company. And the movement is accelerating. “Apple has its feet firmly planted in the Post-PC future,” Cook said.

Right now, the iPhone is king of the Post-PC world. But Cook and others at Apple have had no reluctance in predicting that the iPad business could be even larger one day. Something Cook said on stage today reiterates that stance. “We think the iPad is the poster child of the Post-PC world.” The iPad. Not the iPhone.

Cook then put up his stunning graph. The iPad sold 15.4 million units last quarter. That was more than any PC manufacturer sold of their entire PC line worldwide. HP sold 15.1 million PCs. Lenovo sold 13 million PCs. Dell sold 11.9 million PCs. Acer sold 9.8 million PCs. A year from now, don’t be surprised if this gap is significantly wider.

“Apples to oranges! Apples to oranges!” I hear you. But you’re wrong. Apples to Apple. Stats like this do matter because they show where we’re headed. It’s not necessarily that the iPad is beating the PC, it’s that iPad beat the PC in under two years of existence. This drives PC people batty, but the numbers don’t lie. PC sales have peaked. In many cases, they’re going the wrong way. The iPad is just getting started.

What’s more likely — 5 years from now, your primary home computing device is a PC? Or 5 years from now, your primary home computing device is a tablet? Just two years ago, this question would have been an absolute joke. Now it’s a joke to think it will take a full five years.

There’s strong push-back to this idea because people generally don’t like change. It’s hard to understand. We take comfort in the familiar. It’s hard to think about and write about the future because it’s always unknown. The risk of being wrong is great. But here the writing is very clearly on the wall.

“We set out not just to create a new product, but a new category,” Cook said of the iPad. And they did. But a few years from now, it could very well be the case that the PC gets lumped into this very category as a small portion of the market.

Apple doesn’t want the iPad to be put into the PC category because it’s limited and decaying. The PC people don’t want the iPad to be put into their category because it makes them look even worse. But again, 5 years from now, which will be your main personal computing device? That’s all that matters.

As for the new iPad itself, it looks amazing. I got to play with one for about 20 minutes in the hands-on area after today’s event. Devin did as well and wrote up his initial thoughts already (be sure to check out his text comparison picture).

Yes, it largely looks the same as the iPad 2. Yes, it’s ever-so-slightly, but noticeably (to those who use their iPad a lot, like me) thicker. I couldn’t tell a difference in weight (though it does weigh slightly more). What really matters, of course, is the screen. It’s glorious.

It’s one of those things where it may be a little hard to tell at first because the images on the screen are the same. But when you look closer, you get it. And you’ll never be able to use a non-Retina iPad again. The new iPad display makes everything look like a printed photograph. By comparison, the old iPad display makes everything look as if I’ve taken my glasses off. Blurry.

The new iPad seems fast, but the iPad 2 seemed fast. I imagine it will be hard to tell the speed difference between the two until apps that really test the RAM and graphics chip appear. The new Infinity Blade game that was demoed during the keynote is probably one of those apps, unfortunately, it wasn’t available on the demo units.

The new camera is much, much, much, much, much better. Funny how that works when you go from 0.7 megapixels to 5 megapixels.

The highlight for me personally was iPhoto on the new iPad. I never use iPhoto on my Mac to edit photos, I simply use it to organize them. I will absolutely use iPhoto for the iPad to edit photos. It makes it fun. It’s the way non-professional photo editing should absolutely be done. It’s all touch and slide-based. For someone like me who has gotten more into photography because of brilliant iOS apps like Instagram and Camera+, this is the next step.

The other aspect of the new iPad that I’m really looking forward to is the 4G LTE capabilities. Unfortunately, the iPads in the demo area were on WiFi, so I didn’t get a chance to test it out. But I feel like this functionality isn’t getting its full due. These new iPads will be able to go anywhere in the U.S. (and Canada) and connect to the web at speeds faster than many broadband connections. This is a part of the “Post-PC Revolution” as well. Not only are you not tethered to a desk anymore, you’re not tethered to anything. You don’t need to be near a WiFi hotspot. The new iPad is a WiFi hotspot (I hope the carriers don’t screw us over there, we’ll see — I’m a little concerned that Apple isn’t saying anything about this right now).

As predicted, some folks were disappointed by the iPad announcement today. They’ll undoubtedly remain disappointed as they wait in line to buy the new iPad next week.

For whatever reason, we’re wired to only think something is truly new if it looks completely different. But that line of thinking is foolish. Apple didn’t change the form factor of the device because it works. They have the sales figures to prove it. You don’t call back your homerun and say you wanted a double instead.

No other tablet is close to the iPad right now. That was true yesterday, it’s even more true today. If and when that changes, that’s when Apple will undoubtedly switch things up from a design perspective. There’s no use in competing against yourself. Lure the competition to come to you as you’re about to sprint the other way. Next year.

As for the rest of this year, “you’re going to see a lot more of this type of innovation,” Cook said. “We’re just getting started.” Which sounds like a great promise to the customers and a giant threat to the competition.

*I haven’t actually seen it yet. I’m not actually sure what features it will have. I’m quite sure I’m a jackass for saying so right now. But hey — FIRST!!!!

There was a time not too long ago when the day before an Apple event was the time for everyone to get their last-minute predictions in. For the most part, it was a moment of pure wonder. These days, it seems it’s the time to pre-reflect on what Apple “will” announce. The shark has been jumped. The snake eats its own tail.

The problem — if you want to call it that — of course, stems from the fact that the tech sites with the best sources have gotten very good at nailing many of the key surprises which Apple ends up unveiling. (That’s why OS X Mountain Lion was so surprising — it was an actual surprise!) Most of them don’t get everything right. And they’re quite often wrong in many ways too. But there are so many people sniffing around now that eventually by way of process journalism, a consensus is reached and most of the good stuff is unearthed.

For tomorrow’s event, it sure seems like all of the following will be true: there will be a new iPad unveiled. It will be called the “iPad HD” and not the “iPad 3″. It will feature a “Retina” display that is twice the resolution of the previous iPad display. It will feature 4G LTE technology on some models. It will have more RAM than the previous versions. It will be slightly thicker. It will have a better camera. It will launch March 16. The prices will be the same. It will have a button.

Hell, we even seem to know that a new Apple TV is coming as well.

All of this knowledge leads to something inevitable: an initial letdown amongst some. This now seems to be a regular occurrence at Apple events. Again, people have gotten better at guessing what’s coming, but they want to be surprised. And yet, despite these “letdowns”, Apple is doing better than ever. The iPhone 4S was a “disappointment” and it’s Apple’s best-selling device. Last year’s iPad was also a “disappointment“. Again, massive success. Apple made $46 BILLION DOLLARS last quarter. Maybe they were shorting their ability to surprise and massively buying up shares of disappointment. But I don’t think so.

There’s a very real disconnect between some of those in the tech press and actual human beings, it seems.

It’s not just about advanced knowledge, of course. Some people probably have posts prepped and ready to go right now pointing out what a “disappointment” tomorrow’s announcement will be. The contrarians. It’s no secret that on days with huge news that everyone is writing about, this is the easiest way to drum up more pageviews.

And now there’s something else that feeds this beast. Because Apple continues their insane ascent to the top of the mountain, everyone wants to be the first to call “top!” and successfully predict the downfall of the company. You only build up companies to knock them down, after all. The past several years have left these people looking like total assclowns. But it doesn’t matter. Everyone forgets who said what two years ago. Or six months ago. Or a week ago. All that matters is if you were right this time.

And all that is fine if only because we’re used to it. What’s getting really ridiculous this year is pre-calling the “disappointment” for an event that hasn’t yet happened for a product that hasn’t yet been revealed. It’s almost like these are the pre-prepped contrarian posts that people are now just deciding to post before the event just for the hell of it. Why wait, right?

The Mercury News Service: “iPad 3 may disappoint”

CNET: “Apple should be blowing us away with the iPad 3, but it probably won’t.

The AP: “New iPad expected to have modest upgrades”

Etc, Etc, Etc. Being pre-disappointed is the new disappointed.

Again, we think we know everything — but what if we don’t? Or even if we do, is tomorrow really going to be disappointing? Apple is upgrading a dominant product in the market in a way that is likely to make it even more dominant. If the rumors are true, they’re giving us pretty much everything we can ask for. Seriously, what else do we want? “A fusion energy source? Teleportation? A camera that sees into the future?,” asks John Gruber.

All of this leads to posts where some of us call-out people who are likely to look like absolute morons six months from now when they declare tomorrow a disappointment. And posts that call-out people who are pre-declaring tomorrow to be a disappointment. And now there are even posts that pre-predict posts like this one. My head hurts.

Tomorrow is going to be amazing, and no one will be happy. Except, of course, the consumers who end up buying the product that absolutely sucks*.

[image: flickr/wangsy]

With the countdown underway to 25 billion total app downloads, there’s no disputing the success of Apple’s App Store. We live in a world of hyperbole, but Apple’s entry into this space really has changed the entire mobile world. But the App Store is far from perfect. And with its immense scale, a few problems have been revealed. The biggest one is app discovery. There are now over 500,000 apps — how do you find anything?

Right now, it’s hard and getting harder by the day. The strong get stronger while new apps often have trouble breaking in. But with an acquisition that Apple has just made, they hope to change that. Apple has bought the app search and discovery platform Chomp, we’ve learned.

We first covered Chomp in November 2009 to announce their seed funding. Since then, they’ve grown their scope to include not only iPhone apps, but Android apps as well. In fact, Chomp currently has a deal with Verizon to power all of their Android-based app searches. That relationship, obviously, is going to get a bit awkward with this acquisition.

My understanding is that such deals will remain intact for now but are likely to end once the Chomp team and product fully transitions over to Apple. The same is likely true for Chomp’s stand-alone products.

I haven’t been able to learn the exact terms of the deal, but I hear that all the investors should be very pleased with the outcome. This is not a cheap “acqui-hire”, Apple has bought the Chomp team and technology and plans to use both to completely revamp App Store search and recommendations, I hear. And they clearly have the money to do it: Apple has nearly $100 billion in cash (and cash equivalents) in the bank now coming off their monster quarter.

Chomp had raised a little over $2.5 million over two rounds of funding. The company has 20-some employees all of whom should be heading over to Apple.

Chomp CEO and co-founder Ben Keighran wrote a guest post for TechCrunch a year ago entitled: For Mobile Apps, It’s 1996 All Over Again. His company was obviously a big bet in that direction. And it just paid off big time.

Update: 9to5 Mac has a good follow-up:

Chomp team already working at Apple. CEO Keighran joins iTunes Marketing, CTO Edwards now a Senior iTunes Engineer. 9to5mac.com/2012/02/23/app…

— Mark Gurman™ (@markgurman) February 24, 2012

Microsoft and Apple should hate one another right now. I mean, really hate each other. After decades of domination, Microsoft has watched their rival move from death’s door to become the most valuable company in the world — over $200 billion more valuable than Microsoft itself. And it was Microsoft who helped get Apple there, remember, with a timely cash infusion in 1997.

Steve Ballmer laughed off the iPhone, which eventually helped kill off Windows Mobile — and it’s now bigger than all of Microsoft’s businesses combined. And the company shrugged off the iPad, even as it established a category, tablets, which Microsoft itself had been trying to establish for years.

Now Apple’s iOS ecosystem threatens the very fabric of Microsoft. Given the rise of the iPhone and iPad, and the halo-effect they’re having on the Mac, products like Windows and Office don’t hold the same importance that they once did in the computing world. And their shine is ever-diminishing. People are realizing that they just don’t need them anymore. Apple’s rise is slowly killing the Microsoft we’ve all known for years.

And yet, Microsoft rarely bashes Apple publicly anymore. In fact, they often take their side on arguments or come to their defense on issues. Again, these were once bitter rivals. And these times should be the battleground for their bloodiest battles yet. Instead, it’s all holding hands, s’mores, and Kumbaya.

Why? Because Microsoft has an enemy they hate much worse than Apple. And Apple has the same enemy. Google.

This is nothing new, but the animosity continues to build between the parties. Look at the news today, for example. Following last week’s headlines that Google was bypassing privacy settings in Apple’s mobile Safari browser, Microsoft today says that Google is doing the same thing to their own IE browser. Meanwhile, Google says that Microsoft is full of shit, while Apple is probably off in the corner smiling.

It wasn’t long ago that Apple and Google were aligned against Microsoft. Remember, then-Google CEO Eric Schmidt was on Apple’s board and the two sides worked closely on projects like the original iPhone. Then Android came along and destroyed that relationship. While Google probably didn’t consider it at the time, this set the stage for Microsoft and Apple to align on things like the Nortel patents.

Microsoft should probably be going all-in to combat the rise of iOS, but instead they seem far more concerned with spending obscene amounts of money to bolster Bing as a Google competitor. And they seem to truly enjoy undermining Android by way of licensing agreements with key OEM partners.

Meanwhile, Apple seems downright bored if you ask them about Microsoft as a competitor. But ask about Google (Android in particular) and the knives come out.

Maybe this all just means that Google is doing something right. They have all the biggest technology companies in the world pointing guns right at them. You don’t get to the top without pissing off people along the way. But the way Google has managed to unify all of these main rivals against them should at the very least give them pause. Microsoft and Apple are the two biggest examples. But Facebook and Twitter are finding common ground against Google as well thanks to the search giant’s foray into the social realm.

All of this makes for a fascinating situation in the tech world. On one side there’s Google. On the other side there’s basically everyone else, with new members seemingly joining on a daily basis. And this side is filled with rivals that under any other circumstance would hate each other. But here they’re allied. The enemy of my enemy is my friend.

[image: New Line Cinemas]

At Apple’s WWDC event last June, Twitter made a new best friend: Apple. The tech giant announced that it would bake the social network into every single iOS device by way of the new iOS 5 software. This left many stunned for two reasons. 1) Apple rarely does such deep partnerships with third-parties. 2) It wasn’t Facebook.

It was all-around a huge win for Twitter. And a win for Apple as well, as it has been proven throughout the years that they don’t get social — a subject which was a topic of debate again yesterday coincidentally. Apple needs to build it’s own social network, Dan Frommer argued! No, they need to get their social platform right, argued TechCrunch editor Eric Eldon. Well, today they’re taking a big step: by doubling down on Twitter.

Apple has just revealed that Twitter is also going to be baked into the latest version of OS X, Mountain Lion. This means that every single new Mac sold beginning this summer will have Twitter functionality built in. And all of the older ones that upgrade will have it too. There are now just over 60 million Macs out there. Again, a huge win for Twitter.

Twitter CEO Dick Costolo said in December that following the iOS 5 integration, Twitter monthly sign-ups jumped 25 percent. iOS already has a much larger user base than the Mac does, but still, Twitter could see another double digit jump from this integration as well.

More importantly, Twitter has now firmly established itself as not just the iOS go-to social service, but Apple’s go-to social service. Sure, Apple could always rip Twitter out of iOS and OS X at any point in the future, but doing so would now piss off users who are being trained to expect it as an Apple core OS feature. For a service still not making a ton of money and as such, has its future questioned constantly, this is important. It’s a huge endorsement.

It’s also big news for Twitter because it opens up a whole new world for the service as a method of authentication. With iOS, apps can choose to use Twitter to ease new sign-ups — allowing people to get going with one or two clicks. Now Mac apps will be able to do the same thing. I don’t think there’s any question that Facebook still dominates this authentication space, but Twitter’s Apple alliance is making them much more compelling for this purpose — for developers, at the very least.

Just last week, some were criticizing Twitter for seemingly wayward focus. Today, they just scored a second massive partnership with the most valuable company on the planet. That sure seems like a sign of good focus to me.

Confirmed: Apple can still surprise.

On July 20 of last year, Apple began a journey. With OS X Lion (aka OS X 10.7), the company started taking some of what they had learned from iOS, and the iPad specifically, and putting it in their more mature OS. Today, that transition continues with OS X Mountain Lion.

Yes, Apple is already ready to show off the next version of OS X — technically 10.8 — just seven months after the last version was released.

Actually, it hasn’t even been a full seven months. But given how quickly iOS development is moving, Apple wants to make sure OS X can keep up.

For the past week, I’ve been using an initial demo version of OS X Mountain Lion. To be clear, it’s not quite complete yet, but it’s already fairly polished. With that in mind, Apple will be releasing a developer preview of Mountain Lion today to Mac developers. And the plan is to release the new OS sometime this coming summer.

So what’s new?

The best way to think of OS X Mountain Lion may be to think back to OS X Snow Leopard (10.6). If you recall, Apple positioned it to be a smaller upgrade to OS X Leopard (10.5), hence the naming convention. My sense is that the same is true here — and again, hence the naming — but Apple isn’t really positioning it that way. Instead, they view it as the next step towards a more unified Apple ecosystem.

To be fair, while Snow Leopard mainly focused on improvements in speed and size, Mountain Lion actually packs a bunch of new features. Much like they did with OS X Lion, Apple is focusing on ten key ones (though there are dozens of other changes).

I’ll give the rundown of those first.

iCloud

Apple says there are now over 100 million iCloud accounts. With Lion, iCloud had a number of points of integration. But they were tacked on after the initial release. With Mountain Lion, the connection is much deeper. Actually, from the first screen in the setup assistant, you’ll now be asked to set up iCloud.

One key addition is Documents in the Cloud. In iOS 5, apps like Pages take advantage of automatic saving to iCloud. With OS X Mountain Lion, the circle is complete as all documents in the iWork suite of apps will save this way as well.

In the Document Library, you’ll actually now see a realtime list of all your documents stored in iCloud sorted by application. And you can create folders of documents simply by dragging one on top of another. Again, very iOS-like.

And the editing process between Mountain Lion and iOS 5 is seamless. You can change something on your Mac and almost instantly, the change will happen to an open document in iOS as well. Very nice.

Messages

This is a new app built right into the OS itself. It technically replaces iChat, but with some tweaks, you can find that old interface as well. But the focus now is on a unified dashboard of all your messages, meaning yes, iMessages as well as IM messages.

Heavy iMessage users are going to love this. Apple says there are already over 100 million registered iMessage users and that 26 billion iMessages have been sent since the iOS 5 launch in October.

The best elements of iMessages now come over to Messages, including delivery and read receipts. You can drag and drop both photos and videos from OS X to send them to iMessage users on iOS. You can also FaceTime right from within the app. And there’s group messaging.

Yes, the good old IM protocols still work as well. You can still hook up AIM, Google Talk, Jabber, and Yahoo Messenger by default.

One thing you can’t do is message between the various services to iMessage. So, for example, you can’t send an iMessage to an AIM users and hope to continue that coversation on your phone later. And, of course, SMS won’t work with Messages, it’s iMessage-only.

Good news: Apple is actually releasing Messages as a public beta today on Apple.com. The final version will ship with Mountain Lion in the summer.

Reminders

If you’re using iOS 5, you know what Reminders is — it’s Apple’s to-do list app. Now it’s coming to OS X as a stand-alone app. Previously, these were awkwardly baked into Calendar in OS X, not anymore.

As you might imagine, thanks to iCloud, all of your Reminders will stay in sync between iOS and OS X Mountain Lion.

Notes

Same deal as with Reminders, Apple has taken an iOS app and built a stand-alone OS X version. But the new version is beefed up, you can include photos. And you can pin a note to your desktop (like a sticky note — “Stickies” still exists as a separate app too, FYI).

This works with iCloud too, obviously. And yes, Notes has been removed from its former awkward home in the Mail app in OS X.

Notification Center

One of the hallmark features of iOS has long been Push Notifications, now they’re coming to OS X in Mountain Lion. And to make them manageable, the OS is getting a Notification Center, not unlike the one iOS gained in version 5.

The Notfication Center in Mountain Lion resides to the right of any screen you’re on. Hidden by default, you trigger it by hitting the dot-within-a-circle button in the upper right hand side of the menu (or by doing a two-finger swipe on a multi-touch trackpad — though this wasn’t working yet in the version of Mountain Lion that I tested). Doing this will shift your desktop to the left to show all your notifications in a way very similar to iOS.

There are also two types of Push Notifications you can get in Mountain Lion: Alerts and Banners. Alerts pop-up and give you the option to “close” or “show”. Banners show up for five seconds in the upper right of your screen then fade away (think: Growl). These notification types are configurable (and you can choose not to receive notifications for any app).

In the version of Mountain Lion that I used, only Apple apps (Calendar, Safari, Reminders, Messages, Mail, App Store, and Game Center — more on that in a bit) could receive Push Notifications, but fear not, there is a developer API. This means that all third-party apps will potentially have access to the feature as well — or at least those sold through the Mac App Store, I believe.

Share

In iOS, it’s easy to share something from just about all of the core apps. In OS X, it hasn’t been. With Mountain Lion, you’ll now see a Share button (the right-facing arrow you’ve see in iOS) in many of the apps.

In Safari, for example, you’ll now be able to send any website you’re on with two clicks to Mail or the new Messages app. In other apps, you’ll be able to send directly to AirDrop from the drop-down. And depending on the app, you can do the same for photos, videos, and documents as well.

One nice touch is that Share isn’t limited to Apple apps — Apple has worked with Vimeo and Flickr so that you can send videos and pictures to those respective services from the drop-down.

And there will also be a developer API for the Share box. Though my understanding here is that this will only be on a per-app basis. Meaning a Facebook app, for example, could include a “share to Facebook” link in the Share button drop-down but only for that app. System-wide sharing options will require dealing with Apple — again, as Vimeo and Flickr did.

Long story short, no, Facebook isn’t in the system-wide drop-downs. At least not yet.

But another app is…

Twitter

Just as with iOS 5, Twitter integration is coming to OS X Mountain Lion as well. And again, this is system-wide, meaning you can share just about anything from anywhere to Twitter with two clicks.

If you’ve used the integration in iOS, the Tweet Sheet will look familiar to you. Geotagging will work from here as well. And, of course, attachments. You’ll be able to attach photos, web links, and even Mac App Store links.

You’ll be able to sign in to your Twitter account from the settings area in Mountain Lion (technically, it’s under Mail, Contacts & Calendars). However, unlike iOS, I’m told that you won’t be promoted to download the Twitter for Mac client. Instead, Twitter is mainly meant to work in the background for when you want to socially share something. (Meaning there is no built-in way to view your Tweet stream.) But Tweet notifications for @replies and DMs should eventually come into the new Notification Center in Mountain Lion, I’m told.

Third-party developers will be able to take advantage of this Twitter integration as well, just as they have been with iOS. And you’ll be able to update your Contacts app with Twitter profile pictures.

Game Center

As I alluded to before, another app making the jump from iOS to OS X is Game Center. Apple says that their gaming social network now has over 100 million registered users. And there are over 20,000 Game Center-enabled games for iOS. That should get a considerable shot in the arm now that there will be Mac support as well.

What’s really promising about Game Center in Mountain Lion is that it’s not just about Mac-to-Mac gaming, it will enabled Mac-to-iPhone, Mac-to-iPad, and Mac-to-iPod touch gaming as well. Obviously, this is going to require game developers to custom tailor their apps for seamless gaming, but I’ve seen it in action — someone playing a racing game on a Mac versus someone on an iPhone — and it works very well.

You can probably expect a rush of iOS games being ported to the Mac by this summer.

AirPlay Mirroring

AirPlay is maybe my favorite feature of iOS right now simply because it seems like it’s magic. You can not only push things like movies to the Apple TV from your iPad or iPhone, you can push your entire iOS experience as well.

And with Mountain Lion, you can push your entire OS X experience as well.

In the menu area of Mountain Lion, you’ll see a new option to push your entire desktop to an Apple TV via Airplay. This will essentially turn your television inot a massive monitor.

I’m told there will be no limit on content that can be pushed, though developers may have the option to block certain content down the road (HBO is an example of one iOS app that doesn’t work with AirPlay, which is lame). There’s resolution matching to 720p HD video.

Gatekeeper

This is an entirely new security feature in Mountain Lion. While Apple feels like they’ve largely avoided some of the major malware problems out there, they acknowledge that the threat is still very real. With Gatekeeper, they offer a solution. And it’s going to be controversial.

Essentially, Gatekepper gives you control over the kind of apps that can be installed on your computer. There will be three options: allow apps from anywhere (the way it works today), allow only Mac App Store apps, allows Mac App Store apps and identified developers.

The reason why this will be controversial is because the final option will be the default one. To be clear: this means that by default, you won’t be able to install any app from the web on your machine.

Now, hold on for a second. Calm down. You can easily change this in the settings (it’s actually not all that different from Android’s default setting, oddly enough). And the truth is that this is likely to be a good thing for many people who might otherwise download bad apps by accident.

Apple is not requiring that all apps go through the Mac App Store (though, again, this is an option), but the Mac App Store + Identified Developers option gives them a way to still offer a higher level of protection to the average user.

The other controversial element will be the way you become an “identified developer” — you’ll have to sign up to be a Mac app developer (which is $99 a year). Again, this doesn’t mean you’ll have to sell your software through the Mac App Store — nor will your apps be pre-screened by Apple — but it will make it so Apple can know who you are as a developer. And if they find out one of your apps is bad, they’ll quickly pull your credentials.

China

Apple is thinking a lot about China. And it’s hard to blame them — it’s the area accounting for their fastest growth. With Mountain Lion, there are a number of new features specially tailored for Chinese users.

First, there are improvements around the Chinese input methods. Apple notes that the Chinese language is evolving quickly, so they need to be able to update it quickly for things like word suggestions. And they also now have the ability to mix Chinese and English words (without switching keyboards), which apparently is a popular thing to do.

Apple is also integrating the Chinese search engine Baidu, into Safari by default for Chinese users. This makes sense as it’s by far the market leader in that country. Along those lines, they’ve added Tudou and Youku support for video uploads. And they have Sina weibo (sort of the Chinese Twitter) integration for microblogging. And there are several popular Chinese email providers as options in Mail now as well.

I’m told these special Chinese features have nothing to do with blocking any kind of information that would otherwise be a part of OS X — though I still wonder if the Twitter integration will fully work, for example.

Other Things

While the things above are the 10 key new features that Apple is highlighting in Mountain Lion right now, there are dozens more not mentioned. A few of the ones I’ve found so far:

A unified search/URL bar in Safari. Yes. YES!!!! (And yes, like Chrome.)

A “VIPs” area of Mail to mark your favorite contacts. (Yes, sort of like Priority Inbox for Gmail.)

A search box in Launchpad (to see for apps if you have a ton).

Better date editing in Calendar (a calendar drop-down finally).

A much better way to add/remove widgets in Dashboard (more app-like).

There’s a new galaxy background (!).

Running “Software Update” now re-directs to the Mac App Store. It’s not clear if that’s the way all updates are going to come from now on or if that’s just due to the preview status of Mountain Lion.

AirPlay Mirroring will require an Apple TV software update.

Running “Shut Down” and “Restart” now remembers your last-used “Re-open windows” setting (finally).

There wasn’t a noticeable difference in real-world use speed between Lion and Mountain Lion. I ran both on a 1.7 GHz MacBook Air with 4GB of RAM.

Startup and shutdown speed was noticeably slower with Mountain Lion (but again, this is the first release, that may change).

Battery life doesn’t seem to be altered by OS X Mountain Lion versus Lion. If anything, it’s maybe a little better (though the machine was also newer).

Apple says that over 19 million copies of Lion have now shipped (including both Mac App Store and new Mac numbers). This means the software makes up about 30 percent of the total OS X user base in under seven months. They say that it took Windows 7 twenty-one months to reach that milestone.

Now the next race is on. Microsoft will release the first Windows 8 beta in two weeks at Mobile World Congress. The final software is due out before the end of the year. Apple beat them to the punch with the Mountain Lion preview. And they should beat them to the punch with the release this summer as well. (No word on the exact price of OS X Mountain Lion just yet, but Apple says it will be very competitive, just as Lion was — Lion was just $29.99. As you might expect, Mountain Lion will also be distributed exclusively through the Mac App Store.)

If the initial developer preview is any indication, Mountain Lion won’t be as big of a sea change as Windows 8 will be. Instead, it’s more of a continuation of what Lion started. Apple has far more iOS users than OS X users at this point. Now it’s about getting everyone on the same page. This early build is a great start.

More Coverage:
As OS X Mountain Lion Proves, Twitter Is Apple’s Social Network
Apple’s iCloud Is No Dropbox Killer (It’s Much More)
With Mountain Lion, OS X Prowls Closer To iOS

In a few weeks, Apple will unveil the next generation iPad, John Packowski of AllThingsD confirms today. If history (and carrier code) is any indication, it should go on sale shortly after that. Maybe even just a few days later. And that’s interesting because it doesn’t give developers a lot of time to prepare. And they’ll want to prepare for the higher resolution “Retina” display that the device will pack.

The situation is similar to the Summer of 2010. That year at WWDC, Apple unveiled the iPhone 4, the first device to feature a Retina display. That conference took place on June 7. The iPhone 4 first went on sale on June 24 — two and a half weeks later. That timeframe allowed some developers to get their apps Retina-ready, but for many it took quite a bit longer. Again, this year, the window may be even more condensed.

But as Steve Jobs noted at the iPhone 4 unveiling, the Retina display made existing apps “look even better”. One reason for this is that the version of iOS that shipped with the device automatically rendered text to be optimized for the new display. Expect the same for the Retina iPad. But Jobs also noted that apps which updated to higher-resolution artwork would look “stunning”. “We suggest that you do that,” he said at the time.

And that will undoubtedly be the suggestion again. Luckily, because the Retina display iPad has been rumored for a long time and because many developers remember the initial Retina transition, some developers have jumped the gun and prepared the graphics in their iPad apps to be Retina-ready as well.

The first two iPads had a resolution of 1024 x 768 — which actually isn’t all that far from the Retina display iPhone resolution of 960 x 640. The new iPad will have a resolution of 2048 x 1536. Earlier this week, it was revealed that Apple was now requiring developers to submit Retina-level screenshots of their apps to the App Store (for new apps, at least). Some assumed this was related to the gradual fade out of the iPhone 3GS. But it may also be related to this new iPad. Because Apple allows the iPad to run iPhone/iPod touch apps with the option to scale them up 2x, non-Retina iPhone apps (480 × 320) will undoubtedly look pretty bad on the Retina iPad.

Given how many visually-focused apps there are for the iPad, some developers are worried how their apps will look on the new device. Apple, of course, isn’t talking yet. While there may be a handful of larger developers that will get an early peek at (or a heads up on) the Retina iPad, most will get to see the thing the same time the rest of us do — on stage in early March.

Some aren’t just worried about the iPad either. Rumors have been circulating for a few months that Apple may also be on the verge of launching high-resolution Mac displays. It’s looking increasingly likely that Apple will do a one-two high-resolution punch with high-res Macs (probably MacBook Pros or maybe even a new MacBook Air) and Retina iPads in the coming weeks.

Recent code changes in OS X with added HiDPI support suggest the former may be coming very soon.

If you think a 2048 x 1536 iPad sounds great, think about a 2880×1800 MacBook. Unlike resolution changes in the past, elements on the screen wouldn’t get smaller, they’d just get crisper. But to take advantage of all those pixels, Mac developers will also have their work cut out for them updating all the graphical elements in their apps.

My suggestion is that developers get ready. The future is looking crisp.

Yesterday, Gizmodo ran a story about a supposed bug in iOS, specifically related to iMessage. The title: The Apple Bug That Let Us Spy on a Total Stranger’s iPhone. Essentially, Gizmodo got ahold of an iPhone that was receiving iMessages not intended for that phone. The fact that some of these messages were quasi-sexual in nature and that the phone belonged to a teenage boy made the story more salacious. But here’s the thing, fear mongering aside, this “bug” is something that is so convoluted that it’s almost not worth even addressing. Almost.

Here’s what happened: a kid was having trouble with his iPhone. His mother took that iPhone to an Apple Store. When there, an Apple Store employee screwed up. Rather than following protocol and using a test SIM to debug the phone (Apple has test SIMs in their stores for this exact purpose), he oddly used his own SIM. This essentially turned the kid’s phone into the retail employee’s phone. The employee probably thought this was fine since it would only be temporary while he fixed the phone. The problem — which one has to assume he didn’t realize — is that even after you take the SIM out of the phone, the pairing leaves behind an imprint of that SIM. In this case, the iMessage account.

iMessage has made a lot of headlines in the past few months as it’s Apple’s brilliant way of helping to destroy the rip-off that is SMS. One key element of iMessage is the ability to pin an Apple account to the service alongside your phone number. This needs to happen in order for users to take full advantage of iMessage. Because of this connection, Apple can automatically figure out whether to use standard SMS or iMessage within the iMessages app. And iMessages has a bonus: the ability to work with many devices at once, ensuring your messages stay in sync.

These upsides — trying to make something that’s somewhat complicated as user-friendly as possible — lead to a downside like this. If you happen to be swapping SIM cards, you might transfer your iMessage credentials over to this other phone. But let’s be honest, how many people are going to do that? In the U.S., most people have no idea what a SIM card even is. And if they do, it doesn’t matter since most iPhones are locked. In other countries, SIMs are obviously popular, but this issue would involve you swapping SIMs with someone with an unlocked phone (and not wanting to set up your own iMessages account when you swap back).

But none of that is even what happened here. In this case, an Apple retail employee simply made a mistake. Reached for comment, an Apple spokesperson acknowledged this:

“This was an extremely rare situation that occurred when a retail employee did not follow the correct service procedure and used their personal SIM to help a customer who did not have a working SIM. This resulted in a temporary situation that has since been resolved by the employee.”

The bigger issue here is if your phone is stolen. Ars Technica actually addressed this about a month ago. This is still an edge case (as the vast majority of phones aren’t stolen), but Apple should come up with a way to remotely disable iMessages on a per-device basis. The way to do it right now seems to be to disable your Apple account, which is unfortunate (see: update). Of course, having your phone stolen in the first place is unfortunate. And unless it’s remote-wiped immediately (which rarely happens), any crook can get access to things likely much worse than your iMessages. This is a downside of life and scumbags.

Speaking of scumbags, it sure was nice of Gizmodo to run several of this Apple retail employee’s private messages and images along with the name that everyone knows him by. Part two of this story will probably involve kidnapping him, locking him in a basement, and liveblogging his emails — which were not secured because Apple doesn’t have a security feature to auto-lock and wipe phones when someone is hit over the head by a two-by-four.

Update: Apple has pointed out the following things that can be done if your device is stolen to ensure the problems above don’t occur:

Remote Wipe and then call your carrier/de-activate your SIM (de-register must be within 24 hours after Remote Wipe)

or

Activate a replacement phone with a replacement SIM using your same phone number

or

Change your Apple ID password (only works if you use an Apple ID with iMessage)

[photo: flickr/anonymous9000]

When Steve Jobs took the stage at Macworld in 1998, he did something unusual. For the first time in any presentation he had ever given, he ended with a slide reading, “Oh, and one more thing…” This phrase would of course enter the Apple lexicon in the subsequent years. But what was it that was hidden behind this first “one more thing”?

“Think Profit.”

You see, Jobs had just been named interim CEO in September 1997 after successfully pushing out the man who brought him (back) in, Gil Amelio. And he had good reason to do that: under Amelio, Apple had lost $1.04 billion in the prior year and was less than ninety days from being completely broke. Just a few months later, as he announced on stage, Jobs had the company back in black: a $45 million profit — the first profit the company had seen in more than two years.

Jobs’ move wasn’t magic. He slashed thousands of jobs and killed off dozens of products. Walter Isaacson details this time in his Steve Jobs’ biography. One part in particular stuck out to me.

In 1997 Apple was selling StyleWriter color printers that were basically a version of the Hewlett Packard DeskJet. HP made most of its money by selling ink cartridges. “I don’t understand,” Jobs said at the product review meeting. “You’re going to ship a million and not make money on these? This is nuts.”

I was thinking about this in relation to Amazon’s recent earnings. The company posted a record $17.4 billion in revenue in Q4 2011, but from all those sales, they were only able to squeeze $177 million in profit. Compare this to Apple’s most recent quarter in which they posted a record $46.33 billion in revenue and, more importantly, a record $13.06 billion in profit. The margin difference could not be any more stark.

Obviously, the first thing everyone jumps to is to say that Amazon and Apple are in two different types of businesses. Amazon is a retailer while Apple sells hardware. But the line is increasingly blurring between the two companies. Amazon now sells a number of hardware products thanks to its Kindle line. Apple, meanwhile, sells plenty of content via iTunes.

The thing is, even with Amazon entering the hardware game, they’re not making the kind of money that Apple is. In fact, with the new Kindle Fire tablet, it’s believed that they’re losing a small amount of money on each one sold. “This is nuts,” you could imagine Steve Jobs saying once again.

But is it nuts?

Amazon clearly views products like the Kindle Fire as a loss-leader to keep customers happy and keep them shopping for more content. Apple’s model is the exact opposite. Content sales are a loss-leader to keep customers happy and keep them buying new hardware.

At least for now, one model is working, one isn’t. Not only did Amazon only make $177 million on sales of $17.4 billion last quarter, they’re warning that they could actually lose money this quarter. They have enough money in the bank to sustain this for sometime, but at some point, they’re going to have to get back in the black in a meaningful way. And if they keep selling hardware, investors are going to look at their margins compared to Apple’s and wonder what the hell is going on?

Amazon has said time and time again over the years that they’re perfectly happy to live in the low-margin space. But these most recent margins are likely getting too thin for comfort. The Q4 profit numbers are 58 percent lower than they were a year earlier. Presumably, they have a plan that justifies these losses for the sake of the bigger picture. But again, it’s not unreasonable to think that this bigger picture will eventually pit Amazon against Apple directly.

Amazon may find itself in a race to get to Walmart-size revenues before there’s true competition in the space. Last quarter, Walmart pulled in $109.5 billion in revenue, which led to $3.3 billion in profit. As with Amazon, the margins are awful, but at that scale, it doesn’t matter. Walmart’s quarterly revenue more than doubled Apple’s which resulted in profit less than a quarter of what Apple saw — but at the end of the day, Walmart still walked away with over $3 billion in their pockets. That’s all that matters.

As their dance with the dreaded red line proves, Amazon isn’t anywhere close to operating the way Walmart does yet. In fact, Amazon’s margins are so slim that Facebook, which just filed to go public today, recorded nearly double the profit of Amazon last year ($1 billion versus $631 million). That’s pretty crazy when you think about it.

Jobs’ decision to exit Apple from the printer business 15 years ago proved to be a smart move. Of course, had Apple been selling ink — which has ridiculously high margins — it may have been a tougher call. Amazon’s problem is that the “printers” they’re selling have crappy margins and the “ink” they’re selling has crappy margins. It’s starting to sound a little nuts.

$46.33 billion in revenue. It’s a number the biggest and best tech companies in the world can only dream to hit in a year. Apple hit it in one quarter. $13.06 billion in profit. It’s a number no tech company would ever aspire to in one quarter because it’s ridiculous. The only companies that have ever thought about such numbers are oil companies. And even then, only 3 of them have actually hit it. Ever.

Until yesterday.

I’ve already tried to give some context to the stunning Q1 2012 results that Apple posted. But the truth is that they’re still unbelievable. Perhaps the next step should be to figure out how they could post such numbers.

The simple answer is that Apple’s iPhone sales were off the charts. 37 million units sold is mind-boggling when the previous record was 20 million, set in Q3 2011. A year ago, in the same holiday quarter, Apple sold “just” 16 million iPhones. That was also a record at the time and lead to record revenue and profit at the time. This year, Apple quite simply took things to the next level — and then went a level beyond that.

Because the iPhone is over 50 percent of Apple’s revenues, amazing iPhone sales equates to amazing revenues. Again, the simple answer. But to figure out why this quarter was so far ahead of any other quarter, you have to go deeper. It was really a confluence of events.

First of all, this past quarter was set up by the preceding quarter, which saw Apple fall short of Wall Street expectations for the first time in years. But as we noted at the time, this was misleading. Apple surpassed their own expectations (which isn’t surprising given that they’re always low), but failed to meet Wall Street’s simply because Wall Street’s numbers were lazy. Analysts didn’t take into account the fact that the new version of the iPhone did not launch in the summertime, as it had in years past. Because it did not — and again, the iPhone is about half of Apple’s revenue — there was no burst in iPhone sales that Apple usually sees in Q4.

Instead, that burst came in Q1 — last quarter. And unlike previous years, this burst was compounded because Q1 is also Apple’s holiday quarter. A new iPhone plus holiday shopping season is apparently like gasoline on a fire. Now we know.

But it would be foolish to think that Apple’s big numbers were only about the iPhone. Remember, Apple set new records in Mac and iPad sales as well. The iPad in particular is interesting because while it’s Apple’s newest business, it’s already the second-largest in terms of revenue. This past quarter, 20 percent of revenue came from iPad sales.

The third-biggest source of revenue is Mac sales — they accounted for 14 percent of Apple’s revenue last quarter. In other words, 87 percent of Apple’s revenue last quarter was from products that all saw record sales.

The lone dim spot in Apple’s numbers were iPod sales, which continue to decline year-over-year. But because the other businesses have grown so massive, so quickly, the iPod only accounts for 5 percent of Apple’s revenues now. Pretty soon — maybe even next quarter — the iTunes Store itself will be a bigger money-maker for the company. When you consider that iTunes (including the App Store) was initially set up to be run as a break-even business, this is impressive.

Something else to consider: the iPhone, iPad, and Mac have the highest margins amongst Apple major products. The iPhone 4S, because it is largely based off of the design of the iPhone 4, probably has one of the best margins that Apple has ever seen. That rings especially true when you hear that Apple’s overall gross margin for the quarter was 44.7 percent. It’s a number so big that Apple CFO Peter Oppenheimer said he couldn’t recall ever seeing a number so high in his 15 years of service. And he was skeptical that Apple would ever hit it again.

That huge margin meant huge profit. In fact, it meant profit the likes of which had never been seen before by a technology company.

Something else: Q1 2012 for Apple happened to span 14 weeks. This was unusual, and Apple was quick to note as much in both their press release and on the earnings call. Normally, quarters span 13 weeks (do the math: 13 x 4 = 52). You simply cannot discount an extra week of sales. And you especially cannot discount it during the holiday quarter.

And one more thing: the passing of Apple co-founder Steve Jobs in October drove people all around the world to Apple Stores to pay their respects. When people visit Apple Stores, they don’t often walk away empty handed. And what better way to pay respect to Jobs than to buy a product from the company he cared so much about? It’s a delicate subject, but worth mentioning.

Again, this monster quarter was all about a confluence of events. It was about a new iPhone launch during Apple’s typically busiest quarter merged with a newer product, iPad, coming into its own, and the Mac continuing its methodical growth. Add to that amazing margins plus one more week of sales — and the fact that Apple as a whole has been killing it for several years now across the board — and you get a jaw-dropping quarter. It all came together.

Next question: will Apple be able to replicate the magic next quarter? Well, no. The quarter after the holiday one is typically weaker as consumer spending cools. And when you consider that it will span the regular 13 weeks instead of 14, you have two things working against it. Add to that the fact that the iPhone 4S will no longer be a new product, and you have another dip. There could be a new iPad in the quarter — but it may only go on sale at the tail-end. Or it may not be on sale until the following quarter — we’ll see. Either way, that probably dings iPad sales a bit next quarter too.

But even with all those things working “against” Apple next quarter, Oppenheimer still gave guidance of $32.5 billion in revenue. That would be Apple’s second-best quarter ever. And again, Apple always low-balls such numbers, so perhaps $35 billion in a more reasonable guess.

In other words, Apple may only have the second-best quarter of any tech company ever in terms of revenue next quarter. And profits may only be near the bottom of the all-time top 20 amidst the oil empires. Boo hoo.

[photo: flickr/ConvenienceStoreGourmet]