What’s next for the Apple (AAPL) iPhone? A flurry of new features — starting with a “locate me” pseudeo-GPS function on Google Maps — according to leaks that have been making the rounds of the Apple blogs.

The scoop goes to GearLive.com, which for the past two days has been exploring what appears to be a pre-release version of firmware update 1.1.3. The improvements (documented with screenshots) that it has discovered so far include:

• Edit Home Screen - Rearrange icons on your home screen
• Drag icons around with your finger
• Locate Me integration with Google Maps (apparently by triangulating cellphone towers)
• Send SMS to multiple people
• Add Safari Bookmarks to your Home Screen (example)

Responding to commentary that questioned the veracity of their claims, GearLive’s Andru Edwards and Nate True have posted an eight-minute video walkthrough of the new features that seems to have made believers of the skeptics. YouTube has removed its mirror version, but you can see the original here.

It’s not clear how the pre-release software made it out of Cupertino’s secretive skunkworks two weeks before Steve Jobs’ Macworld keynote. Ars Technica reports that it may have been leaked by someone at Apple as a Christmas present to an iPhone hacker to aid in jailbreaking efforts. As with the last update, version 1.1.3 disables unlocked iPhones and breaks third party applications that run on jailbroken phones.

With 2008 only a day away, most of the 2007 year’s-best lists have come in, and Apple (AAPL) placed at or near the top of more than its share. Among the prizes its products took home this year:

• Amazon Most Loved Computer: Apple MacBookPro
• Amazon Most-Gifted Computer: Apple MacBook
• Amazon Most-Wished-For Electronics: Apple 4 GB iPod nano
• Amazon Most-Gifted Electronics: Apple 4 GB iPod nano
• Amazon Most-Loved Software: OS X 10.5 Leopard
• NY Times “Pogies”: iPhone’s visual voicemail (No. 1)
• PC World’s Most Innovative: iPhone (No. 2 after Google Gears) and Time Machine (No. 4)
• Macworld Hardware “Eddys”: AirPort Extreme, iPhone, iPod nano
• Macworld Software “Eddys”: iWork ‘08, OS X 10.5 Leopard
• TIME Magazine’s Invention of the Year: iPhone
• TIME Magazine’s Top 10 Gadgets: iPhone (No. 1)

There are few things Steve Jobs loves more than a dramatic Macworld surprise announcement, but three weeks before his annual keynote speech, someone - my guess would be Rupert Murdoch - just stole his thunder.

Several sources this morning - including the Financial Times and the Wall Street Journal - are reporting that Apple (AAPL) and News Corp. (NWS) have struck a deal for a new video-on-demand service that could change the way digital movies are distributed, viewed and paid for.

Citing an unnamed “person familiar with the situation,” the FT reports that the two companies signed an agreement that would allow customers to download the latest 20th Century Fox movies through the iTunes store and watch them for a limited time. No pricing details were available, but earlier reports suggested that Fox and Apple were talking about charging $2.99 for 30 days viewing. That’s considerably cheaper than competing services from BlockBuster and NetFlix, neither of which work with iTunes, Macs or iPods.

In addition, Apple is reportedly extending its FairPlay digital rights management system for the first time to another company’s product. As part of the same deal, Fox will sell its new releases on FairPlay DVDs that permit customers to transfer, or “rip” the content to a computer or video iPod. As the FT points out, there is software available to rip movies today, but using it is considered piracy and can land you in jail.

Disney is the only other studio that makes new releases available on iTunes, but only to buy, not to rent. Paramount, Metro-Goldwyn-Mayer and Lionsgate sell older library titles. But the tide may be turning, and Apple is reported to be in talks with Sony, Paramount and Warner Brothers.

“Fox and potentially other ­studios are coming around to the idea that there is nobody out there to challenge iTunes,” Jonathan Weitz, a principal with IBB Consulting, told the FT. “This deal is a sign that media mobility is coming to the mainstream.”

The best instant analysis of the deal this morning is on Silicon Alley Insider, where Dan Frommer seems to have stayed up all night trying to work the angles. See his winners and losers column here and his six questions here. Among the latter, our favorite is No. 6:

How will Blockbuster, Amazon, Netflix, Microsoft, Sony, cable, telco, and cellphone companies, and other rivals respond? Apple’s iPod line dominates the portable media player market, and the iPhone is taking a big chunk of the smartphone market. And now, it appears, there will finally be digital rentals compatible with Apple’s gadgets. Surely Jobs’ rivals haven’t been sitting around doing nothing. How will they fight back? Lower rental prices? More portability/less DRM? This should be a fun one!

Despite fierce competition from machines with more than twice the memory and price points hundreds of dollars lower, Apple’s (AAPL) white 120 GB MacBook has captured the top spot on Amazon’s (AMZN) list of bestselling computers this Christmas eve.

Helped along by rebates ranging from $75 to $150, three Apple-brand notebooks are on the top 10 list this morning. The other bestsellers are the 80 GB MacBook (No. 7) and the 120 GB MacBook Pro (No. 10).

Price cutting among the competition is even steeper. HP’s (HPQ) 250 GB Pavilion (No. 5) is selling for $999.99, 27% off the $1,375 list price.

The least expensive computer on the list, at No. 8, is the $381 Linux-based Asus Galaxy with a 7-inch screen and 4 GB of flash memory rather than a hard drive. Many expect Steve Jobs to announce at Macworld that Apple is entering the market for flash-based notebook computes. Apple’s thin MacBook, however, is likely to be larger, carry more memory, and cost a whole lot more than $381.

In Amazon’s list of top-selling electronics, a late surge by a heavily discounted portable hard drive has pushed an iPod off the stack. Apple had five of the top 10 spots for much of the pre-Christmas shopping period; it’s now down to four. See here.

UPDATE: As of 2 p.m. ET, the MacBook has been edged aside at No. 1 by an HP Pavillion with 160 GB hard drive marked down 37% (including rebate) to $679.99.

BOXING DAY UPDATE: This morning, the day after Christmas, the MacBook is back on top.

Online shopping is up nearly 20% this Christmas, according to comScore Inc. (see here), and electronics is one of the hottest categories, up 24% from last year. So what gadgets are Americans buying this holiday season?

Judging from Amazon’s (AMZN) list of top sellers, a lot of iPods and iPod touches.

With only a couple shopping days left before Christmas, five out of the top 10 items on Amazon’s “bestsellers in electronics” list are Apple (AAPL) products, including the 4 GB iPod Nano (No. 1), the 8 GB nano (No. 4), the iPod touch, (Nos. 6 and 7) and the 80 GB iPod Classic (No. 8).

Apple does even better in the “most gifted in electronics” list, with six out of the top 10.

Also selling well on Amazon are GPS navigators (No. 2, 9 and 10), the Kindle reader (No. 3, on backorder) and a Canon digital camera (No. 5).

In Amazon’s computer department, the MacBook Pro and MacBook come in at No. 4 and 7, respectively, among a lot of HP (HPQ) and Asus machines.

The iPhone is not available on Amazon, but is reported to be selling briskly both here and in Europe. The rumor site 9to5Mac, citing unnamed sources, claims Apple is preparing to announce the sale of the 5 millionth iPhone next month at Macworld. That may be overly optimistic. Even as bullish an analyst as Piper Jaffray’s Gene Munster doesn’t expect Apple to have sold more than 3.7 million iPhones by mid January. (See Silicon Alley Insider here.)

SUNDAY UPDATE: Nearly 24 hours after this was first posted — and two days before Christmas — the list of Amazon top sellers in electronics is remarkably stable. The same five Apple products are still in the top 10. The Kindle and the Garmin nuvi 350 navigator have switched places at Nos. 2 and 3. And a Toshiba HD DVD player has moved, like a British Prime Minister, into No. 10.

CHRISTMAS EVE UPDATE: A late surge by a USB 160 GB portable hard drive from Western Digital (sale price: $99, down from $149) has pushed an iPod off Amazon’s top 10 list in electronics. Apple is down to four of the 10 spots. In the computer department, however, the 120 GB MacBook has moved into the No. 1 position, a smaller MacBook has taken No. 7 and a MacBook Pro is No. 10, giving Apple Inc. three out of the top 10 bestselling computers on Amazon this Christmas eve. (See here.)

Nearly three years after Apple (AAPL) sued Think Secret — a rumor-gathering blog launched by a teenager that had become a thorn in Steve Jobs’ side — the site has ceased publication as part of a settlement with the company.

The news was announced in a Think Secret press release issued Wednesday:

Apple and Think Secret have settled their lawsuit, reaching an agreement that results in a positive solution for both sides. As part of the confidential settlement, no sources were revealed and Think Secret will no longer be published. Nick Ciarelli, Think Secret’s publisher, said “I’m pleased to have reached this amicable settlement, and will now be able to move forward with my college studies and broader journalistic pursuits.” (link)

The case drew national attention because it raised important questions about press freedom, trade secrets and how First Amendment protections extend to blogs. It was triggered by a pair of Think Secret items that described the $499 Mac Mini and the iLife ‘05 software suite — two weeks before Jobs was to unveil them at Macworld.

Both posts have been removed from Think Secret’s site, but at least one of them is still available on the Internet Archive here. It began:

EXCLUSIVE: Apple to drop sub-$500 Mac bomb at Expo

December 28, 2004 - With iPod-savvy Windows users clearly in its sights, Apple is expected to announce a bare bones, G4-based iMac without a display at Macworld Expo on January 11 that will retail for $499, highly reliable sources have confirmed to Think Secret.

Apple sued the site a week later, charging that it had illegally solicited Apple employees to violate confidentiality agreements. “Defendants’ knowing misappropriation and disclosure of Apple’s trade secrets constitutes a violation of California law and has caused irreparable harm to Apple,” the suit alleged.

What the suit didn’t mention was that “Nick dePlume,” Think Secret’s editor, was an undergraduate at Harvard. In fact, Nicholas Ciarelli was 13 when he launched the website from his parents’ home in upstate New York and did much of his best reporting on Apple while he was still in high school.

The specter of Steve Jobs, a billionaire computer executive, seeking damages from a teenage Apple fan for stealing the thunder from a Macworld keynote address caught the eye of the national press, including the New York Times and the Washington Post. The Electronic Frontier Foundation helped arrange legal representation and Ciarelli was soon firing back at the company. As Think Secret reported:

“Apple’s lawsuit is a affront to the First Amendment, and an attempt to use Apple’s economic power to intimidate small journalists,” [it] wrote in court filings seeking dismissal of the suit. “If a publication such as the New York Times had published such information, it would be called good journalism; Apple never would have considered a lawsuit.” (link)

Apple’s lawyers complained in particular about a box on Think Secret’s front page headlined “Got Dirt?” that invited Apple insiders to submit anonymous tips. They claimed the solicitation was a violation of The Uniform Trade Secrets Act, adopted in one form or another by California and 44 other states.

Such statutes forbid you from acquiring or publishing without authorization information you know or have a reasonable basis to know is a trade secret. They are usually invoked when the secret that is revealed gives a competitor an advantage. In this case the primary effect was to spoil the surprise of a piece of classic Steve Jobs event marketing.

The First Amendment is often cited in defense of trade secret violations, but it hasn’t always fared well in the courts.

Apple will sometimes give the press a preview of major product announcements, but it is usually done under nondisclosure agreements and only with handpicked outlets with a national reach. A few weeks before it released the iPhone, for example, it issued review units to the New York Times, the Wall Street Journal, Newsweek, and USA Today.

It’s unlikely that Apple was able to collect much in the way of damages from Think Secret — which didn’t have a lot of assets to begin with. Nor did the company succeed in prying the names of the blog’s sources out of Ciarelli. But the suit sent a warning shot across the bow of dozens of similar rumor sites — and it did manage to shut down one of the originals.

Ciarelli, who became an editor at the Harvard Crimson and is scheduled to graduate this spring, may be forgiven if he wants to move on with his life. Cult of Mac has already offered him a job contributing to Wired News, but he probably has bigger things in mind.

Apple (AAPL) has picked a spot for its long-rumored Upper West Side store, according to the New York Post. It’s an oddly-shaped site on the corner of Broadway and 67th Street currently occupied by a Victoria’s Secret lingerie outlet.

According to the Post, Apple plans to tear down the existing structure and rebuild from scratch, filling the 8,500 square foot space with rectangles of glass.

The address, 1981 Broadway, was once home to the Cineplex Odeon Regency Theater. That building was torn down by the Brandt Organization to make way for the white box that Victoria’s Secret moved into six years ago.

ifoAppleStore checked city records and reports that no permits have yet been issued for construction at the site.

Apple opened its first Manhattan store in Soho in 2002, its second on Fifth Avenue in 2006 and its third on West 14th Street just two weeks ago (see here).

Victoria’s Secret has nine other stores in New York City, including one at Broadway and 85th Street.

Here are two pictures worth a couple thousand words. They’re from a study commissioned by Symbian (jointly owned by Nokia, Ericsson, Sony Ericsson, Panasonic, Siemens and Samsung), but published so quietly that we might never had heard about it if Daniel Eran Dilger of Roughly Drafted had not dug it out.

What the study shows, among other things, is that, in its first full quarter of sales, Apple’s (AAPL) iPhone outsold all the smartphones in the North American market except for RIM’s (RIMM) Blackberry. That puts it ahead of the entire field of devices running Microsoft’s (MSFT) Windows Mobile, Linux or Palm OS.

As Dilger puts it, the iPhone’s debut at second place is particularly noteworthy because …

… the iPhone was only being sold in the US, and is only available through AT&T; all of the other mobile platforms are available to Sprint, Verizon Wireless, and T-Mobile as well as AT&T. The iPhone wasn’t available in the significant markets of Canada and Mexico, along with parts of the US that AT&T does not service, including much of Vermont, North Dakota, South Dakota, and Alaska.

For more analysis of the study and what it means for Microsoft, Symbian and beleaguered Palm (PALM), see Roughly Drafted’s full report here.

Citing “people familiar with the situation,” the Wall Street Journal reported Tuesday that Apple (AAPL) CEO Steve Jobs recently met with NTT DoCoMo president Masao Nakamura to talk about bringing the iPhone to Japan. (link; subscription required)

Japan’s No. 1 mobile operator would seem a logical choice to carry the iPhone except for one thing: as Engadget notes, DoCoMo doesn’t run a GSM/EDGE network. Japanese consumers hoping for an iPhone would have to wait for the 3G model, not due out before mid-2008.

Demand for the iPhone in Japan is expected to be high. According to the Journal, its 100 million mobile-phone users buy new models every two years. Apple’s products are already popular there. The iPod and iTunes have dominated Japan’s MP3 market since 2005 (see here). Mac sales in Japan have grown slowly in recent years, where smaller laptops are preferred, but according to several reports (see for example here), Leopard is selling rapidly. The thin Macs many expect to be unveiled at MacWorld should do well in Japan.

Apple is also reported to be talking to Japan’s No. 3 carrier, Softbank, about carrying the iPhone. Although Apple’s revenue-sharing demands are said to be, as usual, a sticking point in negotiations, the Journal’s source doesn’t expect Apple to have much difficulty coming to an agreement with one operator or another.

What does Apple (AAPL) have in store for Macworld? Four weeks before Steve Jobs’ Jan. 15 keynote, Piper Jaffray analyst Gene Munster has offered his best guess. The report to clients he issued today hews pretty closely to conventional wisdom, but provides a handful of new details.

• Macintosh: Munster expects that in addition to updates across the Mac line Jobs will introduce that long-awaited thin Mac with an 11″ to 13″ screen, 64 GB of NAND-based solid state memory and (maybe) a iPhone-like multitouch touchpad. Price: somewhere between the $1,099 MacBook and the $1,999 MacBook Pro.
• iPhone: Apple could up the storage to 16 GB while maintaining the $399 price point, but it’s too early for the 3G iPhone 2, says Munster. He now expects that phone in May or June 2008 (His earlier predictions had pegged it for sometime between Sept. and Nov.)
• iTunes: “We also expect Apple to announce new content partnerships with one or more movie studios, which may involve the launch of iTunes movie rentals,” Munster writes. “We believe there is a 50% chance the download service is announced at Macworld, and a 90% chance by mid 2008.”

Meanwhile, UBS analyst Ben Reitzes has issued a bullish report based on a survey of more than 30 stores in which his research team found Mac demand “outpacing prior expectations.”

“Even with prospects for a slowing economy,” he writes, “we believe Mac demand can keep going strong with new products that we have detected in the supply chain. Given higher margins for the ‘Mac ecosystem,’ including software - we are raising estimates.”

For more on the UBS report, see AppleInsider here.