The Early Days

Trism: One of the better early entries in iPhone gaming

When the iPhone first arrived on the scene, the quality of games available for the platform varied wildly. It was the wild west of gaming development, and many didn’t know what to do with this new device beyond replicating gaming experiences they’d had in other arenas. So we saw Tetris clones, Bejeweled, and ports of Java games aimed at traditional cellular handsets.

One of our articles about the must-have games for the iPhone near the launch of the App Store tells a tale of kart racers, puzzle games, and clones of popular franchises. Gameloft was in the business of churning out retitled and rebranded versions of console and PC classics, and it was a formula that worked so well major developers like EA took note and started getting in on the action.

How Far We’ve Come

While some things haven’t changed (physics games still show off the real power of the platform), others have. Derivative titles are still successful (look at Gameloft’s Gangstar: Miami Vindication, for instance), but consumers are also clearly rewarding those developers who are focusing on experiences tailored specifically to what the iPhone and iPad bring to gaming.

Angry Birds Sets the Pace

Angry Birds represents everything that's good about iOS gaming.

I mentioned the example of Angry Birds, but it’s hard to overemphasize the effect the Rovio Mobile-developed title has had on the state of iOS gaming. The physics-based puzzle game has dominated the paid App Store charts, and though it recently slipped from the number one spot, it often finds its way back. One reason is the attractive price tag ($0.99), but another is the unique experience it provides, which clones so far haven’t been able to match or capitalize upon.

Other gaming stars of late include Cut the Rope by Chillingo, another physics-based puzzler that takes a cue from Angry Birds but doesn’t feel derivative. If you haven’t tried it, and you like Angry Birds, I highly recommend it. It also uses the $0.99 pice point, as do Fruit Ninja, Doodle Jump and Flight Control. These stars all provide uniquely iOS-enhanced gaming experiences, and they all enjoy consistent, healthy sales.

The Big Fish Adapt

More expensive games are also doing well, though they’re offered by larger studios and probably reflect development budgets. These games, too, released by major studios like EA, Sega and 2K Sports still often have ties to major franchises designed for other platforms, but it’s obvious more attention is being paid to tailoring game experience for iOS.

Instead of getting repackaged versions of games we’ve already seen elsewhere, iOS games are themselves getting the cross-platform treatment and arriving on other devices via things like the PlayStation Store and DSiWare.

A Bright Future Ahead

Cut the Rope: A promising example of things to come.

The iPhone was good for gaming because it presented a challenge to developers. How do you create satisfying experiences for a gaming device that lacks physical controls? It wasn’t a question anyone had really asked before, and there wasn’t a clear answer. Now, there isn’t only one clear answer, but instead a variety of exciting ones that each provide an original, satisfying take.

While the iPad isn’t a brand new challenge, it definitely requires developers to come up with additional, unique answers to new game design questions. The success of universal apps like Cut the Rope, and of fairly straightforward big-screen translations like Angry Birds is a good starting point, but the iPad will have its own maturation process when it comes to gaming above and beyond these kinds of efforts.

Small and Clever Will Supercede Big and Flashy

Despite its current success, the App Store’s gaming section still has a long way to go before it catches up with dedicated gaming companies like Nintendo, at least in terms of revenue. Gamasutra recently estimated that Apple has made around $210 million from game sales in total. Nintendo makes in the ballpark of $400 million on one of its top games alone.

Of course, Apple wants to sell hardware, not software, and games are simply a means to help it do that. That means it will continue to be an appealing choice for developers, because Apple will go out of its way to make sure that it is. As the iPad boosts the already huge pool of iOS users, we’ll see more and more small, agile development firms spring up to fill the demand for games on the platform, leaving major studios to continue to develop major franchises for consoles.

I’m willing to bet that the development cycles and fanfare associated with those games will start to look pretty old-fashioned in tomorrow’s gaming economy, especially when, from a user experience perspective, the enjoyment derived from a well-designed, highly replayable iOS game isn’t that much different from that derived from a complex, lengthy RPG.

The iOS Exclusive

With Android and now, Windows Phone 7 set to become major players in mobile entertainment, we’ll probably see Apple make some moves to keep its lead in smartphone gaming. One way they could do this is by encouraging and promoting iOS exclusives, the same way Sony and Microsoft do now with home console titles.

Even if Apple doesn’t try to arrange agreements with developers to keep titles exclusive, it may do so indirectly by introducing hardware and API features that make exclusivity (of features at least) a byproduct of design. The gyroscope in the new iPhone 4 is one example of that kind of tactic, and if RFID makes its way into the iPhone 5, that may be another.

Competition Opens Up the Possibilities

For both developers and iOS device owners alike, the next few years should prove an exciting time for gaming. Apple will have to provide more and more access to device features via the iOS API to keep things feeling new and fresh, and introduce new hardware with better capabilities to keep buyers interested. That’ll translate to more opportunities and challenges to spur iOS gaming to even greater heights. Even though the scene’s matured, there’s still plenty of room to grow.

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The iPod dominated. It became synonymous with “MP3 player” in the mind of the buying public. And that would start in motion the rise of Apple into the tech giant it is today. A tech giant, might I add, that as of yesterday is worth more in terms of market value than Microsoft.

At the close of Wednesday’s trading, Apple was valued at $222 billion, while Microsoft was worth $219 billion. Apple’s shares ended the day at $244.11, while Microsoft’s finished at a seven-month low of $25.01. And it isn’t only Cupertino’s successes, but also Redmond’s failures that are responsible for the new power dynamic between the two companies. Overall, Microsoft stock is down 20 percent compared to 10 years ago, while the value of Apple’s has grown tenfold over the same period.

Microsoft CEO Steve Ballmer appears to have his head in the sand regarding the significance of this moment in terms of the two companies. When asked for comment, he told Reuters news service:

It’s a long game, we have good competitors…we too are a very good competitor. We are executing very well and that is going to lead to great products and great success. I’m optimistic.

It sounds like Ballmer, once an outspoken and not very cautious CEO, has checked out, or is downright unwilling to look at the consequences of Apple’s success with the iPhone and now the iPad. Microsoft will continue to drift toward irrelevance as long as the attitude of business-as-usual prevails there. To quote Ballmer once again, “I won’t predict some massive change,” he said. “I don’t sort of foreshadow any change in direction. We just have to accelerate plans.”

I’m less concerned with what happens to Microsoft now, though, then I am with what happens to Apple. Unlike Microsoft, I think Apple has at its core a commitment to ongoing innovation, woven into the very fabric of the company by the strong oversight of Steve Jobs. And that will persist after he’s gone. But ongoing battles with Google and Adobe tell a tale of a company whose industry agenda may still be geared towards being a niche player.

Apple is about control, even though Steve Jobs says quite the opposite in his open letter to Flash. Don’t get me wrong, I’m no big fan of Flash myself, but I do think that Apple’s intentions have more to do with controlling the nature and delivery vehicle of content than with encouraging openness. Otherwise it’d have backed Google’s VP8 open web video standard from the start. The kind of control Apple exerts works well for it as a niche player, but now that it’s arguably the most important tech company in the world, the same rules don’t apply.

Big stays big by being inclusive and cooperative, to a degree. Take Google, which works with so many partners it’s hard to keep track of, with the end goal of satisfied customers in mind. Microsoft, too, works with others more than it shuts them down, as long as the terms are favorable. Apple seems content to remain largely sheltered, even when it would be easier and more expedient to work with a partner. In fact, since the company started making its own chips with the iPad, it looks to be shutting down even further still.

Such an approach may provide some short-term gains, but rising competitors like Google will take advantage of the general bad feeling it will generate among other tech firms to form the kind of partnerships that helped elevate Microsoft to its loftiest heights 10 years ago. And Apple will still be at base camp, stubbornly refusing the aid of other climbers.

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A new report by BroadPoint AmTech analyst Brian Marshall about the cost of production of the iPad based on the going rate for component parts, manufacturing cost and built-in warranty repair costs reveals quite a wide profit margin on a per device basis. The entry-level $499 model apparently generates $208 in profit, while the top of the line $829 model more than doubles that, raking in $446 per unit.

Marshall estimates that the cost of making the 16GB Wi-Fi model of the iPad runs around $270.50, plus $20 for warranty costs for a total of $290.50. Most of that cost accounts for the 9.7-inch touchscreen display, which Marshall guesses costs around $100. Apple sees considerable savings on its own in-house A4 chips, which run around $15 per unit. With a cost of $290.50 and a selling price of $499, Apple stands to see a profit margin of 42.9 percent with each sale.

On other models that margin ranges from 48 to 55.1 percent, giving the iPad line as a whole an overall profit-generating power of about 50 percent, a number which assumes that the Wi-Fi models will sell considerably more than the 3G-capable devices, a reasonable assumption. Computerworld points out that while the number seems fairly high, it is in fact on par with Apple’s other hardware offerings:

High profit margins are standard for Apple, which earlier in the week boasted that its corporate margin for 2009′s final quarter was 40.1%. Some products, in fact, have estimated margins even higher than Marshall’s iPad numbers: The consensus for the iPhone 3GS is above 60%, for example.

iSuppli, a research firm which is well-known for its Apple product tear-downs and component analyses, has refrained from making any estimates about the iPad’s cost to build as of yet, though it does acknowledge that there’s reason to believe many costs will be similar to those found in the manufacture of the iPhone and iPod touch:

We really want to wait until we know a little more about what’s inside. We’d rather not just throw numbers at it yet. It does seem like a gigantic iPod Touch, which means that although some costs would just scale up from the iPod, like the display and the touch screen, a lot won’t.

Considering that the iPad is a brand new product just getting out of the gate, news that it already enjoys such a wide profit margin is a very promising sign of things to come for future Apple customers. Just like it eventually became profitable for Apple to sell the iPhone 3G at a subsidized $99 price point as parts became cheaper and manufacturing costs went down, so too is it conceivable that we will eventually see a significant dip in the price of the iPad. If the 1G iPad sticks around when Apple eventually introduces a 2G camera-equipped model, for instance, 1G pricing could drop to a point where it would decimate netbook sales.

There’s also the possibility that the iPad will eventually get the same subsidy treatment the iPhone currently enjoys, though Apple doesn’t appear to want to go that route with consumers just yet, preferring instead to keep the device unlocked and therefore theoretically available to a broader buyer-base. Subsidies attached to contracts could reduce the initial purchase price considerably, and I wouldn’t be surprised to see $199 as the cost of entry for the 16GB Wi-Fi/3G model.

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In the recent past, I’ve covered a couple of the different white-label solutions from third-party developers for carriers that offer the iPhone. These offerings are generally meant to correct some oversight on Apple’s part, or answer a perceived desire for some feature on the part of iPhone owners that Apple seems unwilling to offer itself.

For example, there was Mobispine’s MMS workaround, and more recently, JAJAH, which wanted to turn your iPod touch into an iPhone. In both cases, the companies involved weren’t selling individual apps, but rather the chance for interested corporate clients to license their solution, rebrand it, and offer it for sale to individual customers via the App Store.

So far, their hasn’t exactly been a rush of interest from their target market, which is exclusive carriers who offer the iPhone for Mobispine, and primarily that same or similar service providers for JAJAH. So what gives? People seem to want this, judging by the response to Mobispine’s blog post alone, and the frequency with which less complete and effective third-party MMS solutions pop up in the App Store. And if I could use my iPod touch as a WiFi-connected home phone inexpensively, I’d gladly replace my landline. But these companies aren’t selling to consumers. They’re selling to carriers, and therein lies the problem.

What benefit, from an iPhone carrier’s point of view, does offering any of these white-label services bring with it? Even going beyond the examples mentioned above, imagine if there was a white-label, background push notification service available to carriers. It’s something every iPhone user would love to have, but for a cellular company, it represents an unnecessary, low-return risk at best. It all goes back to the old maxim, “If it ain’t broke, don’t fix it.” iPhone sales are strong, so why would a carrier incur extra cost or the risk of having the app rejected to (possibly) boost sales that need no boosting?

Sadly, Mobispine and others are barking up the wrong tree when they try to sell their services to people who can make money with or without them. There is money to be made with white-label and turn-key solutions for the iPhone and iPod touch, but you have to go after those who don’t yet have access to the money that’s swirling around in that new ecosystem, and badly want in. The music, TV, and movie industries, for instance, have shown themselves quite eager to grab a piece of the iPie.

As for us, we’d better stop holding our breath for our carriers to come in and save us from cruel, withholding Apple. And why would they, when we’ll buy the phone regardless? Sure, we grumble a bit as well, but plugging your ears against grumbling is a lot cheaper than doing something to silence it altogether.

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Normally, industry analysts are a talkative, confident bunch, but generally speaking, they are like old fisherman, spinning yarns and telling tales that have become exaggerated through constant retelling.

Recent comments by leading Apple analyst Toni Sacconaghi, however, actually came out of discussions with a very good source: Tim Cook, Apple COO and acting head honcho at Cupertino during Steve Jobs’ medical leave. Not only that, but CFO Pete Oppenheimer and head of marketing Phil Schiller were there, too.

Which is why this time, when he says Apple is likely still working toward producing a netbook, I didn’t just roll my eyes and go about turning my Eee PC into a hackintosh. Not that Sacconaghi provided any firm details, just the tantalizing info that Cook “hinted” that Apple was still turning over “ideas” surrounding a netbook. Not a lot to build hope on, but better than the usual “predictions” based on “market trends.”

Other developments Sacconaghi foresees coming out of his all-star confab include pricing changes to the iPhone line-up, and new devices in the smartphone category. This, again, is speculation based on Cook’s own words, which are quoted by Sacconaghi as follows:

Tim Cook stated that since Steve Jobs announced his leave of absence, he was spending more time on new products, how Apple could take the iPhone into new markets and examining iPhone’s business model.

Cook has been hinting at new products for quite some time, so we’re bound to see some before Jobs’ scheduled return in June. Sacconaghi predicts those will be new iMacs, which might come as early as next month. It’s true the iMac is overdue for an update, and that predictions of possible new quad-core models have been surfacing lately. That said, this appears to be more Sacconaghi’s analysis and less anything said by Cook, so don’t go throwing your old iMac out the window just yet.

The unusual move on the part of Apple’s top brass to meet with an industry analyst (albeit the top rated analyst, according to Institutional Investor Magazine) is perhaps more newsworthy than the predictions themselves. They suggest a Cupertino that is willing to openly court some media speculation, even if they are still playing their hand very close to the chest. Maybe rumors of a growth slowdown are true, in which case Apple might be looking to fuel the speculative fire that represents so much of their publicity machine.

The good news for us as Apple users is that if Apple is inviting this kind of attention, they’re probably planning to deliver something soon that will benefit from it. In other words, they’re turning down the house lights and getting ready to raise the curtains. Let’s hope the show starts soon.

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As you may or may not be aware, TechCrunch reported yesterday that a larger format, 7 to 9-inch iPod touch was in the works at Apple and would arrive by next fall. They claim to have received the information from three seperate, independent sources, one of which is said to have actually handled a prototype of the device.

TC’s sources say that Apple has been working on a large format device internally for a while now, but that they were not sure how the public would receive such a device, and whether there would be sufficient demand to justify production. The success of the App Store is said to be the tipping point that finally pushed them to pursue it seriously.

This rumor has quickly been taken up by many, if not all, of the major Apple blogs on the web. And for good reason. Looked at in context, it actually has a lot going for it.

Mystery Device Caught Browsing

In October, according to the NY Times, a mysterious Apple device was caught browsing the web via an unnamed search engine. At the time, the information seemed not exactly solid, but given this new report from TC, it begins to appear a lot more plausible, and makes more sense than the netbook wich Jobs seemed so set against at the time. The screen size of the strange device? Somewhere between an iPhone and a MacBook, which fits with the 7 to 9-inches from TC’s sources.

P.A. Semi Acquisition

They acquired P.A. Semi, we speculated that the move was related to developing new mobile chips, we haven’t seen any yet. A low powered chip for a portable device must be forthcoming, and a large format iPod touch would be the perfect candidate, since it would likely require something different than what the current models use. Probably, in fact, something more like Intel’s Atom. Acquiring P.A. Semi allows them to work on the tech without alerting anyone in advance.

Quanta Set to Work On Apple Products

Just today, another corroborating rumor popped up, courtesy of Electronista. According to the government of Taiwan, one of their major local manufacturers, Quanta, is set to count among its clients two top-tier tech companies in 2009. The companies in question? Sony and Apple. As Electronista notes, Sony is planning a netbook, which is the obvious candidate for Quantas, but what they’d be working on for Apple is more of a mystery. Quanta could very well be the Asian OEM mentioned in TC’s article that Apple’s tapping for mass production.

While at first glance, TechCrunch’s report seems somewhat dubious, if we look at the larger picture, it begins to seem a lot more plausible. That said, just because it walks, talks, and sounds like a duck, doesn’t mean it’s a duck. It might be a goose. Or, in this case, a netbook. Either way, at this point it’s safe to say Apple’s got something mobile up their sleeve.

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I still used my iPhone for work purposes, but not in a way that was fully integrated or supported by our in-house IT. It’s the type of thing that Forrester Research’s Michele Pelino sees as becoming more prevalent as we move in to 2009. Small and medium-sized businesses (SMBs) like the one I mention, according to Pelino, will see more of the iPhone, since their IT infrastructure is less strict, and open to a hodge podge of solutions supplemented by employees’ own equipment. Because of this, she sees iPhone adoption climbing to as much as 10 percent among SMBs.

SMBs are one thing, but what about large enterprise? Will the iPhone make inroads into this traditional bastion of BlackBerry users? Can they, when hardware is generally company-purchased, company-issued, and strictly mandated? According to Pelino, the Storm will reap the benefit of the large enterprise’s resistance to change. End users are clamoring for a touchscreen phone, and now they can provide one, without going outside of, or reexamining corporate mobile tech policies. The Storm, according to many accounts, doesn’t live up to the standards of the iPhone, but from a business standpoint, it’s a much more fiscally responsible solution, at least in the short term.

Bottom line? Don’t expect massive iPhone uptake from large corporations in 2009. Still, that doesn’t mean it’ll stay locked out forever. The upward trending SMB adoption bodes well for the iPhone down the line, in fact. Traditionally, smaller businesses anticipate the crest of tech trends, since they have the flexibility to do so. Enterprise-wide adoption is far easier on a smaller scale, so small companies are often incubators of big ideas that later sweep the business community. Especially when you consider that small businesses are career incubators as well. People often begin their professional lives at SMBs, and move on later to influential roles in larger companies. They bring with them their habits, working styles, and IT preferences, which can lead to innovation.

The groundwork is being laid, but as Pelino suggests, we probably won’t see major enterprise iPhone adoption in the coming year. Do expect, however, to see more offerings like KBOX from KACE, an iPhone management solution for those who are implementing enterprise-wide iPhone implmentation that allow companies to deploy, manage, and track handsets and users. KACE recognizes the growing appeal of the iPhone to business users, and are getting an early start at providing a framework for when big business catches up. Don’t expect any huge moves in corporate IT departments until after we’ve successfully emerged on the other side of the current economic situation, but if the iPhone continues to dominate the consumer market, look forward to big shifts when the dollars are there to spend.

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It seems everyone is lowering their sights regarding Apple’s projected earning for next financial year. But some, at least, are predicting more “wow” factor to shore up those numbers.

No one seems to think they can sustain the kind of numbers they showed this past year, especially regarding iPhone sales, since analysts see the device’s massive success to date as leaving less room for new customer growth in the future. Many customers will probably stick it out for the duration of their contracts before considering a hardware upgrade.

Barclays Capital analyst Ben Reitzes is the latest to cut projections for the Cupertino-based tech company. Reitzes lowered his EPS (earnings per share) estimate for FY 2009 to $4.95, lower than his initial projection of $5. FY 2008 numbers had the EPS at $5.36.

Reduced earning predictions are based on a tough consumer market and lower growth opportunity, although Reitzes offers intriguing predictions regarding hardware introductions that could help the company pick up some customers in new demographics and niche markets.

He believes the gap between the $399 iPhone and $999 MacBook is just clamoring for a bridge product, and Barclays is putting their money on a touch-capable ultra-portable form factor. This will not, however, be a netbook. Steve Jobs has said that Apple doesn’t know how to make something of quality at that price point, and they won’t. They’ll go more up-market, producing a premium device in the $600 range, instead of joining in the race for the bottom.

According to Reitzes, the device would be perfectly positioned for partnerships with wireless carriers, a possibility we reported earlier. He also mentions more MobileMe integration, and it’s true that a cloud computing device with multiple-band connectivity would be a match made in heaven for wireless broadband providers.

The Barclays report also introduces the interesting possibility of a cheaper, entry-level iPhone to appeal to non-smartphone cellular customers. Though they don’t specify, it’s possible this could be a media-phone instead of a smartphone, emphasizing music and movie playback and forgoing the bells and whistles of the App Store for those who wouldn’t make much use of it anyway. This last prediction, while possible, doesn’t seem like it will be a priority for Apple, considering today’s news that the iPhone has unseated the RAZR as the most popular U.S. mobile handset.

Personally, the possibility of an ultra-portable is far more tantalising than a netbook. If I buy an Apple computer, I want it to be a proper computer, not just a mobile web browser and chat client. Do you think an Apple UMPC is more likely than an Apple netbook? Which do you think is more useful/appealing?

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Sometimes it’s hard to tell the difference between professional industry analysts and Apple fanboys coming up with dream specs for their ideal notebook. Such is the case with the most recent prediction by Neil Mawston of Strategy Analytics. His call for the (immediate) future of the MacBook? 3G HSDPA connectivity.

Cellular broadband connectivity built-in to notebooks is no revolutionary move, but what does Apple specifically stand to gain from including it in their own machines? According to Mawston, the chance to take advantage of network operators frothing at the mouth to cross-sell the notebooks to existing iPhone 3G customers. But are they really so eager?

Despite tantalizing images of dollar signs that may be dancing in their eyes, providers are no doubt brought back to earth by inescapable considerations like infrastructure limitations. Take for instance AT&T’s apparent trepidation at going forward with the rumored plan to offer official, native tethering in conjunction with Apple. Their 3G network already took an early hit when the iPhone was initially released, so it’s not difficult to imagine that even with considerable investment, it wouldn’t stand up well to a sharp spike in usage.

Still, 3G dongle sales are on the rise, and WiMax networks are beginning to go live worldwide, so demand is definitely there for wireless broadband computing. Building in 3G capability would also be the first logical step towards subsidized notebooks being offered in data subscription bundle packages, the possibility of which we reported on earlier. O2 now denies any imminent bundles including Apple-branded hardware, but the trail has still been blazed by others like Asus.

So is this a logical “next move” by Cupertino, as Mawston suggests? If Apple were actually in the netbook game, like Acer and Asus, than 3G inclusion would indeed be the obvious progression. In reality though, both internal and external factors argue against the likelihood of Mawston being correct. At least for American markets, the infrastructure build required by AT&T to support added demand is at least a year or two off, and Apple is not in the habit of releasing frequent iterations of their hardware with minor changes under new product codes, like Asus with its Eee line.

A MacBook outfitted with mobile broadband capability is a good idea, and one that we may yet see, but if Jobs is unwilling to buy into Blu-ray and netbooks, it’s unlikely that he’ll jump on the 3G bandwagon right now just because it seems to be gaining steam.

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First, IBM is reluctant to see Papermaster go to Apple. Understandably so, considering the former VP’s role as one of the main architects of IBM’s POWER microprocessor technology, which formed the basis for the Apple-IBM-Motorola developed PowerPC architecture. As Apple competes directly with IBM in server, PC, and microprocessor tech (owing to the recent purchase of P.A. Semi), IBM is claiming that Papermaster would be violating his non-compete clause and potentially transferring valuable IP and trade secrets to his new employer.

While it is unlikely that any ruling body would ultimately find in favor of IBM (such a precedent would seriously hamper healthy executive level staff flow in Silicon Valley), that doesn’t mean the two companies could become entangled in a protracted and expensive legal battle. So why is IBM is even threatening? They want a parting gift for the loss of Papermaster, most likely information on what he’ll be working on at Apple, although they might even try to force a limited IP share on the grounds that their proprietary knowledge is being used in the ex-VP’s work.

It’s a shrewd move, but Apple can always decide to just drop Papermaster and look elsewhere if IBM pushes too hard. Although they’re hard-pressed for time now that it’s official that engineer Tony Fadell will be stepping down next month as SVP of the iPod division.

Fadell, iPod chief since 2005, is cited as leaving for “personal reasons.” It is possible he was asked to leave by Apple, however, on the heels of the recent drop of iPod revenue to 14.2 percent of Apple’s overall earnings. While the drop is due partly to increases in computer and iPhone sales, Apple is not known for resting on its laurels, and is likely looking to shake up the iPod line, lest it become an under-performer. Replacing the top brass is a common tactic in a product-line shakeup, and Papermaker definitely has the know-how to provide a major revamp, at least in terms of the iPod’s internals.

Expect to see Papermaker’s processor experience extend to the iPhone as well, should he develop new, in-house designed low power chips for the iPod platform. The possibility is also there that we could see an Intel Atom competitor come out of Apple’s new exec, for use in an Apple-branded netbook. Steve Jobs did claim, after all, that they weren’t offering one because they didn’t know how to make something good at that price range. It might be Papermaker’s job to figure out how, with the iPod chieftaincy just a distraction to throw us off the trail. His official title, after all, is SVP Hardware Engineering, which in my mind allows for a pretty broad scope of duties.

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When I wrote about the MacBook earlier, I mentioned that Apple’s strategy to make it more of a MacBook Pro “lite” was rather amazing.

Rather than bring down their laptop’s entry level, as everyone insisted and expected it would do, Apple chose to dramatically bring down the laptop’s “pro” level instead. The smaller screen (actually an advantage in terms of size and weight), lack of FireWire, and less powerful (but still greatly improved) graphics are the main differentiators. Well, except for that $700 price difference!

Time will tell if this proves to be a successful move, but I think it will. A lot is made (rightly so) of the economy. Apple can’t control that, but what they can control, they did a great job on. Further, while in such economic times it’s true that people tend to spend less, it’s also true they tend to strive harder to get bang for their buck. The new MacBooks are going to be viewed as “pro” models for consumer prices. That will be their appeal, and I don’t think it should be overlooked. Heck, I’m even considering buying a new MacBook and I didn’t even think I was in the market.

Meanwhile, Apple did take yesterday’s entry level White (plastic) MacBook and dropped the price to $999. Sadly, analysts who refuse to even consider replacing one strategy (from a company that’s been pretty darn good at strategic thinking) with one they’ve been married to for a few weeks seem to think that that was the significant announcement today.

I sometimes wonder how these people get their jobs. This is not the first time Apple has offered a laptop at this price point. Yet, that $999 iBook didn’t exactly take the computing world by storm. And I can’t help but wonder why there are there such high expectations for this machine when a similar occurrence four years ago has already been forgotten by the very pundits claiming it’s so important today, and a first for Apple.

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