Source: Net Applications

The iPhone’s growing presence on the Web, having leveled off before the introduction of the iPhone 3G, surged in the month and a half since, according to preliminary data released Sunday by Net Applications, an Aliso Viejo, CA-based Web service company.

The percentage of Web hits coming from iPhones passed 0.2% in June and then dipped in the weeks that followed. But it peaked on August 23rd at a record high 0.48%, according to the new data, before drifting back last week.

Net Applications’ brief report, issued in advance of its August survey of operating system market share data, offered no explanation for last week’s fall-off, but it did attribute the jump in July and August to the flood of iPhones 3Gs sold by Apple (AAPL) and its partners since the device’s July 11 launch.

[In its August survey, released early Monday, Net Applications reported that the iPhone's share of global Web usage increased 58% in the course of the month, climbing from 0.19% in July to 0.30% in August. In other words, one out of every 333 Web hits in August came from an iPhone. See here.]

The iPhone has cast an oversize shadow on the Internet from the moment the original model was introduced in late June 2007. By the time Net Applications issued its July 2007 survey, the iPhone already represented 0.04% of the visits to websites operated by the firm’s clients. That’s more than double what one would expect, given that there were about 1.4 billion computers connected to the Internet at that point, according to Internet World Stats, and only 270,000 or so were iPhones.

You can see the latest data at the New Applications website here. The company’s surveys are based on data collected from the browsers of visitors — some 160 million per month — to its customers websites.

In the August survey issued Monday, the iPhone OS, with a 0.30% share, was the fourth-most popular operating system on the Web after Windows (90.69%), Mac OS (7.84%) and Linux (0.92%).

The first rule of publishing is that anything that can go wrong, will go wrong. (A corollary favored at Time Magazine, where I labored for nearly three decades, is that all copy is guilty until proved otherwise.)

None of this excuses, but it does help explain, how Bloomberg News managed to publish an obituary on Wednesday afternoon of Apple (AAPL) CEO Steve Jobs, who is still quite alive.

Advance work on famous figures’ obits is nothing new, and given Jobs’ well-publicized brush with pancreatic cancer four years ago and recent concerns about his weight loss, it’s understandable that Bloomberg might choose this moment to update its piece on Jobs, although the version that got published contains no details about his health that weren’t already in the public record.

According to a Bloomberg spokesperson, however, it was a routine update of the kind regularly performed by the obit department.

The story — which ran under the byline Connie Guglielmo and the headline “Steve Jobs, Apple Co-Founder, Arbitrator of Cool Technology, XXXX” (the X’s to be filled in with his age at death) — was marked “HOLD FOR RELEASE — DO NOT USE — HOLD FOR RELEASE — DO NOT USE.”  But even that didn’t stop it from getting out. It should have been sent to Bloomberg’s internal wire, but instead it moved on the external wire that carried it to Bloomberg subscribers. The file was pulled within 30 seconds, according to Bloomberg PR, and the following retraction issued:

Story Referencing Apple Was Sent in Error by Bloomberg News

Aug. 27 (Bloomberg) — An incomplete story referencing Apple
Inc. was inadvertently published by Bloomberg News at 4:27 p.m.
New York time today. The item was never meant for publication and
has been retracted.

—Editor: Joe Winski, Cesca Antonelli

But another rule of publishing is that once the cat is out of the bag, you can rarely stuff her back in. And sure enough, a copy of the 17-page story, complete with notes and sources, fell into the hands of Gawker’s Ryan Tate, who gleefully posted what Bloomberg had hoped would be quickly forgotten. You can read it here, if you’re into that kind of thing.

Although long obituaries have fallen out of favor at the major newsmagazines, it’s still standard practice to prepare obits of famous people well before they die. Perhaps the most famous practitioners of this macabre trade are the writers who do it for the New York Times. Alden Whitman, since deceased, was a master of the genre. Before penning their death notices, he often conducted long interviews with his subjects, who knew him as “the ghoul.”

Almost more interesting than Steve Jobs’ Bloomberg obituary is the list of “people to contact for comment” that is attached to it. These include, in addition to ex-colleagues such as Steve Wozniak, Jon Rubenstein and Mike Markkula, such marquee names as Al Gore, Bill Gates and Jerry Brown, as well as Jobs’ ex-girlfriend Heidi Roizen, who is described as “a venture capitalist who once dated Jobs [phone numbers redacted]. Heidi knows a lot of Silicon Valley insiders and may put us in touch with others.”

There’s a long history of untimely obits. Two of the most famous are Alfred Nobel’s (being characterized as the “merchant of death” is said to have inspired him to create the Nobel Prizes) and Mark Twain’s (”The reports of my death,” he told a reporter after it appeared, “are greatly exaggerated.”) An article on “premature obituaries” in Wikipedia lists 10 reasons for such occurrences — along with “brush with death” and “name confusion” is “pressing the wrong button.”

It happens. In April 2003, CNN inadvertently published draft tributes to several luminaries, including Fidel Castro, Dick Cheney, Nelson Mandela, Pope John Paul II and Ronald Reagan. The last two have since departed, but the rest, like Steve Jobs, are still living.

None of this is set in stone — especially as long as Steve Jobs retains the prerogative to change his mind at the last minute — but AppleInsider has posted the most definitive road map to date of Apple’s (AAPL) fall product lineup.

Citing unnamed “people familiar with the situation,” AppleInsider’s Kasper Jade ticks off a schedule of release for a batch of new iPods, overhauled notebooks and refreshed iMacs, confirming several rumors that have been floating around for weeks and adding a few of his own.

Taken alone, none of these announcements sound quite big enough to account for the sharp drop in the company’s gross margins — from 34.1% to 31.5% — CFO Peter Oppenheimer warned analysts to expect this quarter, citing a mysterious “future product transition.” But together, they might do the trick.

Here they are, in the order Jade expects them to be released:

• New iPods in September. Digg founder Kevin Rose, an Apple watcher with a track record considerably more checkered than Jade’s, predicted last Friday that Apple would soon revamp its entire iPod line, cutting prices sharply, making cosmetic changes to the iPod touch and introducing a significantly redesigned iPod nano with a long thin screen (link). Over the weekend Rose specified a date on which all this would occur: September 9 (link). Without endorsing that particular Tuesday as the date, Jade’s sources confirm that Steve Jobs himself will headline a special event tentatively scheduled for the second week of September in which “cheaper and slightly modified iPod touches players and new iPod nanos and related service announcements are expected to take center stage.” (link) One thing that will not be announced at that event, according to Jade’s sources, is the long-rumored Newton-like handheld multi-touch device.
• New MacBooks and MacBook Pros in September or October. Jade’s sources are cagey about the timing here, but they were explicit in saying that new versions of Apple’s hot-selling notebook computers would not be available until some time after the new iPods are introduced. Whether that means they are announced at a separate event — perhaps in October — or whether they will be announced at the same event and shipped some weeks later is one of those mysteries that may not get cleared up until the event actually occurs. Among the changes expected: a MacBook clad in aluminum (like the Pro) rather than plastic; tapering around the edges (a la MacBook Air) to produce a slimming effect; a mysterious new chipset (but still with an Intel (INTC) CPU); and a newly designed battery cover and latch that offer easier access to the hard drive.
• Refreshed 20-inch and 24-inch iMacs in November. This is a brand new rumor, rather than a rumor confirming old rumors. According to Jade:
  • “People familiar with these plans have described the refresh to consist of ’speed bumps’ rather than major internal or external changes. Based on the roadmap presented to AppleInsider, these systems would debut later this fall following the release of the new MacBooks, making their way to market with little fanfare.”

Not expected before the end of the year are refreshes of the Mac Pro or the Mac mini, although Jade’s sources report that the latter, once given up for dead, is getting a “major overhaul — the most significant in the mini’s short history.”

[Timeline and photos courtesy of AppleInsider.]

Even with its flaws, the iPhone is pretty impressive. But from the first, Apple’s TV ads for the device have made it look a little better than it is. Maps pop up without any annoying delay. Apps download almost instantly. Calls are never ever dropped.

Now a government agency has called the company on it. According to reports in the Guardian and the BBC, Britain’s Advertising Standards Authority has ruled that one of Apple’s TV spots misleads consumers and ordered the company to stop airing it in the U.K.

The ad, which showed a weather forecast, stock prices, vacation spots and a map to Heathrow airport, included a voiceover that read:

“You never know which part of the Internet you’ll need … which is why all the parts of the Internet are on the iPhone.”

At least two viewers complained to the watchdog agency that because the iPhone doesn’t support Flash or Java, there are many parts of the Internet that can’t be viewed through the device’s Web browser. The ASA agreed, concluding that “the ad gave a misleading impression of the internet capabilities of the iPhone.”

According to the Guardian, Apple argued that none of the content in the ad was Java or Flash-based and that the line “all parts of the internet” meant Web site availability, “not every aspect of functionality.”

You can view the ad here and judge for yourself.

Ironically, as Apple’s ad was being banned in Britain, Apple (AAPL) was being attacked in the United States for banning publication of a comic book on its App Store. See Murderdrome here.

For the text of the ASA’s ruling, click here.

Murderdrome is not Ulysses, Lolita or Lady Chatterley’s Lover. It’s a dark, bloody comic strip marked by the type of over-the-top violence that has made its genre so popular among young readers with a lot of pent-up rage.

But Murderdrome has now joined the pantheon of suppressed fiction as the first digital book banished from Apple’s App Store by censors in Cupertino.

News that the work had been rejected by Apple was spread Tuesday evening by its publisher, Infurious Comics, which posted the entire first episode for free, along with a plea for support.

“PLEASE leave a comment,” wrote the strip’s creator, Paul Jason Holden. “We’ll forward ALL of these to Apple, so that we can ensure that not only Murderdrome, but that ANY comic submitted to Apple doesn’t fall foul of the same censorship.” (link)

By Wednesday morning, the post had drawn dozens of responses — all sharply critical of Apple — and PJ Holden’s cause had been picked up by half-dozen sympathetic bloggers (see Techmeme).

Murderdrome’s most energetic defense was posted by blogger Mike Cane, who rattled off (with live links) several equally violent works of fiction published without fuss or warning on the iTunes store, including South Park, Reservoir Dogs and Lock, Stock and Two Smoking Barrels.

Strictly speaking, what Apple banned was not a book but an application — called Comic Reader — designed to make it easy for comic book authors to publish their work on iPhones and iPod touches. But Murderdrome was the premier title, included with the app when it was submitted for Apple’s approval. It was rejected on the basis of a paragraph in the iPhone 2.0 Software Development Kit that reads:

Applications must not contain any obscene, pornographic, offensive or defamatory content or materials of any kind (text, graphics, images, photographs, etc.), or other content or materials that in Apple’s reasonable judgement may be found objectionable by iPhone or iPod touch users.

The language gives the company a lot of latitude — more than it probably wants. Rather than take on the role of Internet censor, and risk alienating some of its most enthusiastic and vocal fans, Apple (AAPL) might be wise to do what Infurious suggests: institute an e-book rating system like the one already in place on the iTunes Store for movies, video games and rock lyrics.

Meanwhile, Infurious has moved on. “Right now,” PJ Holden told TechRadar, “the plan is to hold Murderdrome and concentrate on our other titles, which will be more Apple friendly.”

And what about Murderdrome? “We’re more than happy to resubmit under any ratings system that Apple suggests.” (link)

If you’re getting bad reception on your iPhone 3G, blame your carrier, not your iPhone.

That’s the conclusion Wired.com’s Gadget Lab draws from a survey of 4,200 iPhone 3G owners. The results, posted Monday morning, show marked regional differences that Wired.com believes are primarily due to the maturity — or lack thereof — of the local 3G network, and not some underlying problem in Apple’s (AAPL) hardware.

The study, which invited users to measure their local 3G speeds and enter the data on an interactive map, was less than scientific. The participants were self-selected and a third of them provided data so incomplete the information was unusable.

But the 2,636 data points that were usable — and which Wired.com plotted on a Google map of the world — offer a window into the nature of the iPhone bandwidth problem that has drawn so many complaints.

The most striking differences in 3G reception emerged when the study compared the United States with Europe. Users in Germany and the Netherlands reported the world’s fastest average 3G download speeds — about 2,000 Kbps. The most “0″ results — indicating no 3G signal whatsoever — came from users in the United States.

Other results from the survey:

• European T-Mobile (DT) users reported the fastest 3G download speeds: 1,822 Kbps on average. [Wired notes that Europe has some of the most mature 3G networks, which have been in development since 2001. AT&T (T), by contrast, introduced its 3G network in the United States in 2004.]
• Canadian carriers Rogers (RCI) and Fido tied for second fastest with an average download speed of about 1,330 Kbps on average.
• U.S. carrier AT&T tied for third with Telstra (Australia), Telia (Sweden) and Softbank (Japan), where users reported average download speeds of roughly 990 Kbps.
• Australian carriers Optus and Virgin users reported the slowest speeds of about 390 Kbps on average.

The survey also shows striking differences from one neighborhood to another. Manhattan’s Rockefeller Center and upper Fifth Ave. got very strong signals, for example, while coverage in the rest of the city was spotty. [Reception in my Brooklyn neighborhood was reported to be particularly weak, which jibes with first-hand experience.]

One explanation for the poor bandwidth in metropolitan areas like New York and San Francisco is offered by Dave Nowicki, developer of the femtocell, a technology that extends the reach of wireless networks. He suggests that although these cities are richly supplied with 3G antennas, they are also the places where the most iPhone users reside, resulting in overloaded networks and pokey bandwidth.

This is a problem, Wired.com concludes, that won’t be easy for Apple to fix:

In our view, this data is a strong indicator that performance of the mobile carrier’s network is affecting the iPhone 3G more than the handset itself. This also furthers our thesis that it’s highly unlikely that Apple is going to wave a magical wand and say, “3G problems, be gone,” with a software update. Before Apple can make such a claim, it needs to wait for all of its carriers to optimize 3G network behavior — in terms of number of towers, how they’re positioned and how much bandwidth each tower can handle. (link)

To see the results from your city or town, click here and zoom in until the blue dots resolve into bar graphs.

A real queue: NYC two weeks after launch

Queues — some real, some made for hire — formed outside cellphone stores in 21 countries Friday as Apple executed the second major overseas roll-out of the iPhone 3G.

The scale of Friday’s operation, which reached from India and Singapore to Colombia and Argentina, was almost lost in the news that some of the eager “customers” lining up in Warsaw were actors paid by the mobile carrier Orange to hide the fact that demand for the iPhone is considerably weaker overseas than it was in the U.S. (link)

How important was the launch? According to a report to clients issued Friday by Piper Jaffray’s Gene Munster, Apple (AAPL) enlarged the iPhone’s potential market 78% in one swoop — a fact he says has not been factored into the company’s share price.

After the 7/11 launch, the iPhone 3G was available in 22 countries with, by Munster’s calculation, a combined cellphone subscriber base of 370.5 million customers.

The 21 countries Apple added on Friday boast a total cellphone subscriber base of of 290 million, increasing the iPhone’s reach to 43 countries and 660.5 million potential customers.

Earlier Friday, several news outlets reported that three Russian carriers, with 144 million subscribers, have agreed to sell the iPhone this year, perhaps as early as October.

Of course, nobody knows how many of those potential subscribers will actually buy iPhones. Apple’s only publicly stated goal is that it hopes to capture 1% of the worldwide market in calendar year 2008, which would require selling 10 million iPhones by December 31. Many analysts believe Apple may sell that many before the end of September.

“We believe shares of AAPL will trade on iPhone unit volumes for the next several quarters,” Munster wrote, “so we expect the iPhone unit upside to be a positive catalyst for the stock.”

Below: Munster’s list of the 21 countries where the iPhone began selling on Friday, with their subscriber base.

Piper Jaffray analyst Gene Munster has upped his estimate of the number of iPhones he expects Apple to sell in its 4th quarter, from 4.1 million to 4.47 million, according to a report to clients issued early Wednesday.

In the same period last year, Apple (AAPL) sold 1.12 million first-generation iPhones.

Munster’s new estimate is based 1) on Apple’s report that it sold 1 million iPhone 3Gs in the three days following the device’s July 11 launch and 2) on 25 hours of in-store checks across the United States conducted over the past two weeks.

His team counted sales in both flagship and “regular” Apple stores and concluded that Apple sold an average of 95 units a day in each of its 188 U.S. stores over the next 27 days. He combined these results with estimates of the number of iPhones sold at AT&T’s 2,200 outlets and the number sold by overseas carriers to get a grand total of 4.47 million.

On Tuesday, Fortune.com reported on the findings of an independent analyst, Michael Cote of the Cote Collaborative, who estimates that 3 million units were purchased worldwide during the iPhone 3G’s first 30 days on the market. (link)

Piper Jaffray’s estimate is probably conservative, says Munster, because it doesn’t take into account iPhone sales in the 22 additional countries scheduled to start carrying the iPhone on Aug. 22. Moreover, he reduced to 31 his estimate of the number of iPhones sold per day for the remaining 51 days in the quarter, which ends on Sept. 30, based on a 10% falloff in sales his team observed between the first week of observation and the second.

The charts below summarize his findings:

In a move that will significantly expand its retail presence in time for the holiday season, Apple has agreed to let retailing giant Best Buy sell the new iPhone 3G through its nationwide chain of Best Buy Mobile outlets starting early next month.

Best Buy markets cell phones in the United States through 970 full-size stores and 16 stand-alone Best Buy Mobile shops. All U.S. Best Buy stores will carry the iPhone except for a handful of outlets located in areas where AT&T does not provide cell phone coverage.

The deal, first reported on Tuesday by Apple Insider and confirmed by Best Buy Mobile president Shawn Score (see here), could serve both companies well.

For Apple (AAPL), which has been struggling to meet the extraordinary demand for its second-generation iPhone through its smaller network of Apple and AT&T retail stores, the deal puts its hottest-selling product in the hands of one of world’s savviest retailers. Best Buy, a Fortune 100 company, is the world’s largest consumer electronics retailer, with a 21% share of the U.S. electronics market and a 3.6% share of the cell phone market, up from 2% last year.

For Best Buy (BBY), which has been angling for the iPhone business for more than a year, the deal will add Apple’s cachet to its expanding smartphone offerings and help drive traffic to new Best Buy Mobile departments within its stores. Best Buy is aggressively marketing a variety of smartphones, from RIM (RIMM) BlackBerry Curves to Palm (PALM) Treos, and is the exclusive reseller, with Sprint (S), of the Samsung Instinct, one of the iPhone’s nearest competitors.

Apple and Best Buy have been slowly expanding their relationship since the retailer began carrying iPods in 2002. Best Buy started selling Macs in selected stores in 2006, and recently expanded the program to more than 600 outlets.

The deal can be seen as a victory for Best Buy’s “consumer centricity” marketing strategy, by which it caters to the needs of specific types of customers in specialty boutiques within its full-size stores. Last week Best Buy announced that it had completed a nationwide roll out of its Best Buy Mobile store-within-stores, a joint venture with Britain’s CarPhone Warehouse that began in 2006 and has led, according to Best Buy, to a 10-fold increase, year-over-year, in high-end multimedia phone purchases (link).

Best Buy, based in Richfield, Minnesota, operates more than 1,150 stores in the United States, Puerto Rico, Canada, China, Mexico and Turkey. Earlier this year it purchased a half-share of CarPhone Warehouse, which has 2,400 outlets in nine European countries.

Apple operates 219 stores, 187 of them in the United States, where customers have been queuing up for the iPhone 3G since early July. AT&T (T) sells iPhones in some 2,000 stores, but the current waiting period for customers who want to buy one from AT&T is 7 to 10 days.

It’s been a month since the iPhone 3G and the App Store made their debut, and Steve Jobs used the occasion to offer up some selected facts and figures:

• Users have now downloaded more than 60 million programs for the iPhone and iPod touch, or roughly 2 million per day.
• Revenue from those applications came to about $30 million. 70% went to the developers; Apple kept 30%. (Free apps apparently accounted for the vast majority of the downloads, since average revenue per download is 50 cents.)
• If sales continue at the current pace, Apple stands to clear at least $360 million a year. “This thing’s going to crest a half a billion, soon,” Jobs told the Wall Street Journal. “Who knows, maybe it will be a $1 billion marketplace at some point in time…. I’ve never seen anything like this in my career for software.”
• Of the $21 million that developers cleared in the first month, roughly $9 million went to the creators of the top 10 best sellers. Sega Corp., for example, says it sold more than 300,000 copies of its $9.99 Super Monkeyball game in 20 days.
• Jobs believes a rich array of applications is what will distinguish the iPhone from competing cell phones. “Phone differentiation used to be about radios and antennas and things like that,” he told the Journal. “We think, going forward, the phone of the future will be differentiated by software.”

Apple had earlier reported that 10 million apps were downloaded in the first three days after launch. By July 21, that number had reached 25 million (see here). The latest number suggests that downloads have accelerated in the last 10 days, from July 21st’s 1.25 apps per day to the current 2 apps per day.

Relations between Apple (AAPL) and its developers have not been smooth, however (see Trouble in the App Store). Jobs commented on one of the hot-button issues: He confirmed that the iPhone operating system contains a kill switch that gives Apple the capability to reach into an iPhone (presumably during a sync operation) and remove a malicious application.

“Hopefully we never have to pull that lever, but we would be irresponsible not to have a lever like that to pull,” he said.

Separately, an Apple spokeswoman defended the decision to pull a program called I Am Rich, which cost $999.99 and did nothing but display the image of a ruby on the iPhone’s screen, off the App Store shelves. She characterized it as a “judgment call.”

Jobs did not use the occasion of the iPhone 3G’s one-month anniversary to report how many of the devices Apple has sold. He may be saving that number for another day — and another round of headlines.

[Fortune's Scott Moritz reported Monday that at least one analyst puts iPhone sales for the first month at 3 million units. See here.]

UPDATE: Gigaom’s Om Malik, who says he has downloaded three dozen apps but only likes four of them, adds some interesting data about how many of those 60 million apps are in active use. He cites research by New York-based Pinch Media, which reports that free downloads to paid downloads is about 10 to 1. Moreover:

“According to data collected by Pinch Media, on average, less than 20% of an application’s overall unique users return to an application each day. [CEO Greg] Yardley also pointed out that people are using the apps for just under five minutes at a time, on average. The majority only use the applications once per day - average number of uses per day is around 1.2.” (link)