The prohibitively expensive solid-state version of Apple’s MacBook Air is suddenly 16% less so.

While Apple watchers were focused on the upcoming launch of the iPhone 3G, the company quietly lopped $500 off the 64-GB SSD MacBook Air, reducing it overnight from $3,098 to $2,598.

The price cut, just six months after the product was introduced, is at least partly the result of Apple’s transition from expensive single-level cell flash to multi-level cell technology (see here) and steadily falling NAND flash memory prices across the board. But it may also reflect increased competition in the thin notebook market and sluggish sales for the driveless version, which hasn’t quite delivered either the speed or power savings customers had expected.

Kudos to AppleInsider’s Slash Lane, who seems to have been first to note the price cut with a post published at 1:00 p.m. ET.

Special mention to MacRumors‘ Arnold Kim, who caught Apple (AAPL) doing the right thing for customers who ordered the Air at one price and will receive it at another:

To Our Valued Apple Customer:

Apple has announced a price drop for a component(s) of the MacBook Air that you recently ordered. We have automatically adjusted your order to reflect the new lower price.

For up-to-date information on your order, please visit our Order Status website at . After your order is shipped, you can also obtain tracking information on this site.

Thank you for your shopping at the Apple Store.

Sincerely,
Apple Online Store Support (link)

Last Thursday, a week and a half before the expected unveiling of iPhone version 2.0, Apple (AAPL) published a 371-page patent that describes virtually every aspect of version 1.0 — and adds a few wrinkles we haven’t seen before. You can download it here.

Alden Malley at AppleInsider has done a pretty good job of teasing out the details in the patent that aren’t offered in the current iPhone, items that could be taken as a checklist for improvements to look for in the 3G model. Among them:

• Instant messaging
• Inline content in Safari, such as Flash and Quicktime movies
• A dedicated blogging client
• Java software downloads
• MMS picture and video messaging
• Support for voice-activated commands and audio capture.
• An “optical sensor” on the top center of the device (possibly for videoconferencing)
• A GPS module for mapping and geo-tagging

The patent application, No. 20080122796, was originally submitted on September 5th, the same day Apple announced the iPod touch.

Although, as Malley notes, Apple is under no obligation to deliver any of the improvements described here, the document does offer hints — both broad and specific — about the direction the company is headed.

It also offers a rare glimpse inside Apple’s iPhone skunkworks and at the people who work there. Although Steve Jobs is listed first, the filing also lists two dozen Apple employees whose names you rarely hear outside the Cupertino campus. To give credit where credit is due, here they are:

Jobs; Steven P.; (Palo Alto, CA) ; Forstall; Scott; (Mountain View, CA) ; Christie; Greg; (San Jose, CA) ; Lemay; Stephen O.; (San Francisco, CA) ; Herz; Scott; (Santa Clara, CA) ; Van Os; Marcel; (San Francisco, CA) ; Ording; Bas; (San Francisco, CA) ; Novick; Gregory; (Santa Clara, CA) ; Westerman; Wayne C.; (San Francisco, CA) ; Chaudhri; Imran; (San Francisco, CA) ; Coffman; Patrick Lee; (Menlo Park, CA) ; Kocienda; Kenneth; (Sunnyvale, CA) ; Ganatra; Nitin K.; (San Jose, CA) ; Anzures; Freddy Allen; (San Francisco, CA) ; Wyld; Jeremy A.; (San Jose, CA) ; Bush; Jeffrey; (San Jose, CA) ; Matas; Michael; (San Francisco, CA) ; Marcos; Paul D.; (Los Altos, CA) ; Pisula; Charles J.; (San Jose, CA) ; King; Virgil Scott; (Mountain View, CA) ; Blumenberg; Chris; (San Francisco, CA) ; Tolmasky; Francisco Ryan; (Cupertino, CA) ; Williamson; Richard; (Los Gatos, CA) ; Boule; Andre M.J.; (Sunnyvale, CA) ; Lamiraux; Henri C.; (San Carlos, CA).

Notable absence: Apple VP Tony Fadell, who built the iPod and heads the division that created the iPhone. His name had appeared with Jobs’ on earlier iPhone patents.

What is Steve Jobs waiting for?

It’s already April, and Apple has yet to start making large-scale purchase orders for NAND flash memory for 2008, according to a report issued Monday by iSuppli Corp. By this time last year, Apple had already ordered huge quantities of the stuff.

Apple (AAPL) looms large in the NAND flash market. According to iSuppli, it is the world’s third-largest OEM buyer of NAND flash, which it uses in iPods, iPhones and solid state disk drives for the MacBook Air.

Based on the lack of new large-scale orders — and on a February iSuppli report that Apple had “slashed” its expected 2008 flash growth forecast — iSuppli cut its own forecast of revenue growth for NAND flash memory this year by about two-thirds on Monday. iSuppli had previously forecast NAND revenue to rise 27 percent to $17.9 billion. It now expects revenue reach $15.2 billion in 2008, up only 9 percent from 2007’s $13.9 billion.

iSuppli had earlier predicted that Apple’s spending on memory would jump 32% this year to $1.6 billion. The firm now projects the company’s spending will increase only 12% to $1.4 billion in 2008, up from $1.2 billion last year.

iSuppli’s February report of “slashed” orders had surprised Apple watchers and didn’t help its share price, which had dropped 60 points from its December high of over $200 per share.

But the market seems to have shaken off iSuppli’s latest report, perhaps because demand for Apple’s products is so high. Apple can’t make iPhones fast enough to supply demand in the U.S. (see here) and interest in the next-generation 3G iPhones seems to grow every week. Meanwhile, Apple’s MacBooks are moving briskly and even iPods sales, which had slacked off, have picked up in the wake of the shuffle’s February price cut.

If Steve Jobs plans to sell 10 million iPhones in 2008, let’s hope he’s got the flash to put in them.

Michael Mace at Rubicon Consulting, a small research firm based in Los Gatos, Calif., has done anybody interested in the iPhone two favors: 1) He published a first-rate piece of research on the impact of the device on its owners and Apple’s (AAPL) competitors, and 2) He has made his results easily — and freely — available on the Web.

The key findings — based on interviews with 460 randomly selected iPhone users in the United States — are summarized in a dozen Quick Facts and ten Implications, both available here. Some of the bullet points:

• iPhone owners tend to be young and well heeled; 15% are students
• 75% were already Apple customers; getting beyond the early adopters could be a challenge
• 28% say they use the iPhone to replace a notebook computer
• AT&T (T) is doing well by the deal — to the tune of $2 billion extra revenue a year

The full 35-page white paper — with color charts — can be downloaded as a PDF from the same Rubicon site. It’s easy reading and worth your time.

For those of you who don’t make it all the way to the white paper, three charts struck me as particularly useful.

The first is a bar chart showing what people do with their iPhones — daily, occasionally or never. Checking e-mail jumps out as the No. 1 thing most do every day, but it’s interesting how many fewer actually compose e-mail on the device. And it’s also interesting to see what most iPhone users never or rarely do with the device — like buy music, watch videos or read maps.

One function we wish had been included in the first chart — use the iPhone to make and receive phone calls — is explored in the pie chart below. It turns out, one out of three iPhone owners carry around two phones. The RIM (RIMM) BlackBerry is the most popular second phone — used by nearly one in ten iPhone owners. Mace speculates that that will probably change when the iPhone gets Exchange support. But we wonder how many iPhone owners keep a simple, cheap cell phone with them either because they’re running out their contract with their original carrier or because it just works better as a phone.

The third chart is the one that shows whose ox got gored when Apple entered the smartphone market. The big loser was Motorola (MOT); nearly a quarter of iPhone owners traded up from a Razr. Another big slice comes from RIM, but Mace believes that it’s Microsoft (MSFT) — squeezed between Apple and (GOOG) — that faces the biggest challenge down the road. More on that below the chart.

Here’s why Mace believes Microsoft faces “severe challenges” in the smartphone market:

Microsoft’s Windows Mobile is sandwiched between two big competitors, Google and Apple. Apple is crafting hardware-software systems that deliver a great user experience, while Google is giving away an operating system to the very companies that license Windows Mobile today. It’s possible for Microsoft to try to compete on both fronts, but creating a proprietary device and at the same time selling an operating system to others is extraordinarily difficult (Palm tried to do it and ended up splitting the company in two).

We think Microsoft should probably decide whether it wants to compete in devices (in which case it will need to create its own phones, as it did for music players with the Zune) or compete in operating systems (in which case it will probably have to give away Windows Mobile for free).

Both alternatives are very high-risk, and require business models that are outside Microsoft’s core competencies. The company’s recent purchase of Danger, which designed the TMobile Sidekick, may indicate that it intends to go the device route. (link)

Adobe has tipped its hand, and it now seems clear that it needs Apple’s iPhone more than Apple (AAPL) needs Adobe’s Flash. But it’s not at all clear that Adobe (ADBE) will get the foothold on the device it seems to want so badly.

Two weeks ago Adobe turned the other cheek when Steve Jobs’ publicly slighted Flash and Flash Lite, describing the first as “too slow to be useful” on the iPhone and the second as “not capable of being used with the Web.” See here.

Nonetheless on Tuesday, during Adobe’s quarterly conference call, CEO Shantanu Narayen announced that his company has begun development of a version of Flash specifically for the iPhone — surprising even his PR staff.

“We believe Flash is synonymous with the Internet experience, and we are committed to bringing Flash to the iPhone,” he said. “We have evaluated (the software developer tools) and we think we can develop an iPhone Flash player ourselves.” (link)

Presumably Adobe intends this version to fit what Jobs described as “missing product in the middle” between Flash and Flash Lite.

But there are other ways to deliver rich-media applications to the iPhone. Sun Microsystems (JAVA) has announced that it is developing a version of Java for the iPhone, for example, and Apple has some home-grown solutions of its own. (See Kontra’s Runtime Wars (1) and (2) for a summary of Apple’s options.)

And it’s not clear that even this new version of Adobe Flash will thrive in the iPhone ecosystem unless Apple decides to allow it.

Daniel Eran Dilger at Roughly Drafted Magazine has already expressed his skepticism, arguing that it’s no more in Apple’s interest to become dependent on Adobe than it would be to become dependent on, say, Microsoft (see here).

Daring Fireball’s John Gruber is even more dismissive. “Adobe Smoking Same Dope as Sun,” was the headline of his post on the subject. He points out that the iPhone SDK explicitly states that no “interpreted code” can be downloaded and used in an application except those that are run by Apple’s published program interfaces (APIs).

“Without approval from Apple (including APIs beyond those in the current third-party SDK),” Gruber writes, “they can distribute it in the same alternate universe as Sun’s supposedly-in-the-works Java port.” (link)

UPDATE: Gruber is right about that, as Adobe acknowledged in the clarifying statement it issued on Wednesday:

Adobe has evaluated the iPhone SDK and can now start to develop a way to bring Flash Player to the iPhone. However, to bring the full capabilities of Flash to the iPhone Web-browsing experience we do need to work with Apple beyond and above what is available through the SDK and the current license around it. (link)

What does Microsoft see in Adobe Flash that Apple doesn’t?

Two weeks after Steve Jobs signaled that Apple (AAPL) would not be building Flash support into the iPhone, Microsoft (MSFT) on Monday took the opposite stance — signing a licensing agreement with Adobe (ADBE) for both Flash Lite and Reader LE in its competing Windows Mobile platform. (link)

This despite the fact that Microsoft is working on a product — Silverlight for Mobile — that is expected to compete directly with Flash Lite.

What’s going on here?

First a bit of background. Flash (short for FutureSplash, one of its early incarnations) is a set of multimedia technologies widely used by advertisers, game companies and Web developers to integrate video and other rich media into Web pages. Flash Lite is a subset of Flash used to deliver multimedia content on many Internet-ready cellphones, but not the iPhone.

Asked at the March 4 shareholders meeting when Apple planned to bring Flash to its mobile Web browsers, Jobs said that the PC version of Flash “performs too slow to be useful,” and that Flash Lite “is not capable of being used with the Web.” (see here and here and here)

That’s not quite right. Adobe points out that there are more than 500 million Flash-equipped mobile handsets shipped worldwide, a number that it expects to grow to 1 billion by 2010. (link)

But not if Jobs can help it.

What does he really have against Flash? According to Daniel Eran Dilger at Roughly Drafted Magazine, it has less to do with performance and everything to do with proprietary standards.

Flash video is encoded using a proprietary codec licensed from On2 and served on the web via a Flash-based controller. … By pushing alternatives to Flash, Apple gets a shot at knocking out the headlights of Verizon and all of the hardware rivals lined up behind Adobe’s Flash Lite, including LG, NTT DoCoMo and Sony Ericsson, all of whom hope to use Flash Lite to provide their Symbian phones with a consistent graphical interface.

Were Flash Lite to gain momentum, it might make Adobe the Microsoft of mobiles, and Flash Lite the new Windows. That also makes it obvious why Apple wants to choke Flash to death before it falls into position as the new lowest common denominator in proprietary platforms on a new crop of mobile devices.

Adobe likes the idea of establishing Flash Lite as a banal yet good enough layer of uninspired user interface technology to act as a glue to bond together the fractured Symbian platform. Cutting a deal to stir Flash Lite into the toxic BREW of Verizon also made for a good press release suggesting wide adoption of Flash Lite.

Add in Adobe’s AIR/Apollo system for developing “rich Internet applications” that depend upon Flash, and you have the makings of a Windows-wannabe strategy, giddy to send the increasingly open, cross platform web back into a proprietary prison with Adobe, not Microsoft, holding the key. (link)

Microsoft, of course, would much prefer that it and not Adobe hold that key. But if it comes down to a question of open technologies versus proprietary, guess where Redmond will take its stand?

Apple, of course, is no stranger to proprietary platforms. It just prefers them to be its own.