After a detour through Dallas, Philipp Humm is finally getting to reshape T-Mobile USA.

Humm reinvigorated T-Mobile's German business before parent company Deutsche Telekom sent him to Bellevue in 2010, to rev up America's fourth largest wireless company. But before Humm could make his mark here, Dallas-based AT&T moved to buy his company for $39 billion.

That left T-Mobile in limbo and hemorrhaging subscribers through much of 2011, until the merger collapsed under regulatory scrutiny in December.

Before it was over, T-Mobile took another hit from the new Apple iPhone, which launched in October -- on the networks of T-Mobile's three large competitors.

Once the dust settled, the athletic German sprung into action.

In February he announced a $4 billion upgrade to LTE network technology going online in 2013. In March he consolidated call centers, closing seven of 24 In April, the company began re-branding itself as more aggressive and tech-oriented.

May's initiative -- announced last week -- is a broad restructuring that includes flattening management and cutting slower-growth areas of the businesses. About 900 layoffs resulted, but Humm said 550 positions will be added through the year.

Combined with an effort to build up T-Mobile's business sales, the company should end up with a much larger presence in the Seattle area, Humm said in an interview last week.

Here's an edited version of the conversation.

Q: It has to be tough leading a company through the roller coaster of a failed merger, followed by restructuring. How is morale?

A: I'm very proud about the way, in particular, our management and our employees have taken the news, taken the information and also the feedback we've received, the way we handled it and the way we supported our employees.

Q: What exactly is happening?

A: What we are really doing right now is we are trying to restructure T-Mobile to be ready to invest in different growth areas.

Q: Can you clarify the layoff numbers?

A: There will be about 900 positions which will be eliminated on one side, but at the same time we're creating 550 new positions, which means that we have a net reduction of 350 positions, which I think was often misunderstood.

Q: There are also "business to business" jobs being added?

A: We are creating on top of it another 1,000 jobs, but they will all be in B2B. They will be nationwide and that's a program which will probably take between two and three years to be completed. If you add that into it, we will, at the end of the day be net positive, but we will look very differently.

Q: What areas have less growth potential now?

A: We have looked at different areas where we can improve, for example, our expense or controls or reduce numbers of layers between the chief and the customer so we are more agile as an organization. I don't want to go into specific functions.

Q: Where do you see growth?

A: The business area. We're also investing in different paths of marketing. We simply need new employees with new skills.

Q: What's changed?

A: We have not in the past really focused on the B2B segment per se. That's why we have only a market share of 5 percent in B2B. Obviously, we have different ambitions and want to significantly grow our market share.

Q: For residential customers, will T-Mobile seem different?

A: If you contrast our advertising a year ago with the current advertising, we're really evolving the brand by making our spokeswoman also evolve. We're trying to evolve from "more affordability" to being known for cutting-edge 4G and affordability.

So we want really to make sure that customers start to understand T-Mobile is a very serious tech brand, which has a very strong 4G network, which has a very strong 4G device lineup.

Q: Will affordability continue to be a hallmark of the brand?

A: Yes.

Q: Will there be less affordability -- or price increases?

A: I don't think there is a need for less affordability or changing our price positioning. We have good price positioning now. It's really adding the tech aspect to our brand and really restarting the brand.

Q: Was the restructuring planned before the AT&T deal?

A: Yes and no. Being a challenger in the market, strategically you need to have an organization that is aligned with our strategy. We would have done the restructuring independent of the AT&T merger. Probably the same as we did or a little bit more.

Q: Do you need to sell the iPhone?

A: At the end of the day the iPhone is a good and important smartphone. The question is, do we need to carry it and subsidize it or do we simply open up the network to let people bring the iPhone with them?

We have been quite successful very quietly in really offering unsubsidized rate plans. If you look at our growth ... 45 percent of our growth adds are unsubsidized rate plans. We already shifted the model at T-Mobile quite significantly.

Q: Will you add shared data plans for families, like Verizon is planning?

A: We have a little bit different belief. We have family plans out today which are where, when you add a line, you get a discount or you get tethering included in your main rate plans.

We think that the industry -- that's our opinion -- is probably doing a mistake by trying to copy a very old fashioned voice model for data and now trying to pool data.

Imagine the situation: three people in the house, one of them is a teenager. You have a family rate plan -- say, a rich plan of 5 gigabytes -- and the teenager, girl or boy, watches an HD movie. Your family rate plan is gone. You are at work trying to download data and it suddenly says sorry, game over. You can get for another 10 bucks another half a gigabit or whatever.

I don't think that is a model that really applies to the modern world, and I wouldn't want that to be a rate plan we are putting forward because it will create negative customer perception.

Q: T-Mobile made a commitment to push Windows Phone this year. How is that working out?

A: I think we have a very good relationship with Microsoft, and we discovered that, in particular, for customers who are new to smartphones, they really enjoy the simplicity of the Microsoft [user interface], so they like the design and the ease of it.

Q: Are Windows phones selling as well as you hoped?

A: We are so far quite pleased and I think Microsoft, if you talk to them, [is] quite pleased with T-Mobile.

Q: There have been reports that T-Mobile may merge with a smaller carrier or go public. Will something big happen to your company?

A: We are pretty sizable company; we are profitable and we are on the right path to growth. ... That's really our main point of view, to strengthen our own business and come back to growth.

Beyond that we will always look at opportunities to gain additional scale or additional spectrum or strengthen capital structure in the U.S. market. Those are always things we will be looking into.

Q: Are there too many wireless carriers in the U.S.?

A: Overall we are in the infrastructure business. Infrastructure business always leads to a certain consolidation as a matter of principle. Based on today's model you would expect some sort of consolidation in the years to come.

That being said, if the government throws lots and lots of spectrum into the market, the barriers of entry for new people to come into the market would be lowered and you would have new competition.

Q: Isn't the market saturated, with subscription growth cresting last quarter?

A: We will continue to move customers from nonsmartphone rate plans to rate plans, which is accretive. So data is really the big driver. That's something everybody is doing.

Q: Will T-Mobile's local stature change?

A: The region is a very dynamic region for our industry and associated industries. Just look at Amazon, Microsoft, T-Mobile, all very big and important companies in their respective sectors and working all different forms together. The region itself will continue to be a very vibrant and important region.

Also if you look at our restructuring, the net effect of the restructuring will not lead to a decrease of positions in the Puget Sound area, but actually lead to an increase of positions in the Puget Sound area.

That's the lesson learned by an Illinois man, accused of calling 911 five times to complain about his malfunctioning iPhone, according to this report.

There's an Apple Store about 16 miles from the town of Bristol where he was arrested, but it probably wasn't open in the middle of the night.

Maybe he should have just waited - Apple today released iOS 5.0.1, the promised update that fixes bugs affecting iPhone battery life. Macworld said it also includes security patches, fixes to iCloud file syncing and improved Australian voice recognition.

G'day, mate!

Sprint's going to offer unlimited data consumption with the iPhone 5 it will begin selling in October, Bloomberg's reporting.

Sprint would be the only U.S. carrier to offer an unlimited data plan for the device, since AT&T and Verizon offer it only with tiered data plans.

The companies declined to comment for the article, which cited "people familiar with the matter."

Pricing of Sprint's iPhone 5 plan wasn't specified but the company offers a $100 per month plan that provides unlimited data and voice usage.

Sprint's been rumored to be getting the next iPhone for some time but hasn't confirmed the arrangement with Apple. Sprint is holding a high-profile press event in New York on Oct. 7, which suggests the timing in the Bloomberg story is correct.

The story also said that Sprint postponed the release of a new 4G device that was planned for September to clear the way for the iPhone.

Reuters added to the growing pile of rumors about upcoming Apple hardware with a report today on a cheaper version of the iPhone 4 that could launch "within weeks."

The report said Asian suppliers have begun manufacturing a model with reduced memory - 8 gigabytes instead of the current entry-level 16 gigs.

It's unclear how much the cheaper iPhone would cost and where it will be distributed, though it may be headed for emerging markets.

The report, citing "two people with knowledge of the matter," said Apple will also launch an upgraded version of the iPhone 4 around the end of September. It's been dubbed the iPhone 5, though it's basically the same chassis as the iPhone 4 but with a larger display, better antenna and 8 megapixel camera, the report said. That would bring its specs closer to carriers' flagship Android and Windows Phone 7 devices.

Other sources have been reporting that Apple's testing an LTE version of the iPhone but it apparently won't go on sale until sometime in 2012. That's to be expected since the two largest wireless companies are now operating LTE networks and Apple's a major phone manufacturer. What would be surprising is if Apple weren't yet testing LTE technology.

There's also a very thinly sourced report out of Japan about Apple releasing new Macs by the end of the year. There's speculation that it's a refresh of the MacBook line.

It also seems likely that Apple will eventually offer touchscreen PCs that can take better advantage of touch apps developed for the iPhone and iPad.

My guess is that Apple will time the phone launches to take the wind out of Microsoft's Windows Phone 7.5 "Mango" launch and the debut of the first Nokia Windows phones, which may surface by October.

Similarly, it could time the unveiling of new Macs to steal thunder from Windows 8 and the new generation of Windows PCs running Microsoft's new operating system. The full unveiling of Windows 8 is expected at a developer conference beginning Sept. 13.

Both Windows 8 and "Mango" phones will be highlighted at the Microsoft conference, which is a major event for the company's new mobile platforms. So you can expect the flow of disclosures about exciting new things from Apple and Android will increase in the coming weeks.

A strong voice joined the chorus saying that Apple will release the iPhone 5 in September. Bloomberg's reporting that the device is coming with a more powerful chip and an 8 megapixel camera, up from the current 5 megapixel version.

Apple's also testing a new iPad with a higher resolution screen like the one used in the current iPhone, the report said.

It cites "two people familiar with the product" and said Apple declined to comment.

But the report comes as a wave of competitive new phones are being released, some for the fast new wireless networks that Apple hasn't yet enabled the iPhone to use.

Firmer reports about the new iPhone create uncertainty among phone buyers considering recently released phones, and cast a shadow over Microsoft's Windows Phone launch and new Nokia hardware coming later this year.

The Bloomberg story said the phone will look similar to the current iPhone. It suggests more common hardware between the iPhone and iPad. The iPhone 5 will use the A5 processor that's used in the iPad 2, while the tablet device is getting a display with resolution similar to the current phone.

The report also said Apple's working on a smaller, lower-priced iPhone aimed at overseas markets.

Smith & Tinker, a once high-flying Bellevue game startup, is resurfacing this week with a new Marvel superhero game for Apple's iPad, iPhone and iPod Touch.

"Marvel Kapow!" features characters such as Thor, Wolverine, Spider-Man and Captain America. Players uses touchscreen gestures such as flicks to slash enemies with Wolverine's claws or shoot them with Spidey's web.

Smith & Tinker was started in 2007 by Jordan Weisman, a former Microsoft creative director. The company raised more than $29 million from a-list backers including Paul Allen and a group of venture capitalists.

The money was mostly used to develop a line of handheld game players aimed at young boys and built around a sci-fi monster game called Nanovor that launched in 2009.

That project was dropped last year after a restructuring that eventually cut the number of employees from around 55 to under 10. A recent check found Nanovor gear for 99 cents at Amazon.com, although the game's no longer supported.

Weisman remains on the board and contributes to creative work but the company's now led by Disney veteran Joe Lawandus. The company also relocated from Bellevue to space near the downtown Seattle waterfront.

"We've had a pretty interesting ride over the past few years," Lawandus said.

Lawandus said the company still has enough cash to build at least one more game based on Marvel characters. The company last year reached a licensing deal with Disney, Marvel's owner, that enables it to build casual games based on all characters in the Marvel universe.

"We're super excited about what we think tablets can bring to the mobile gaming space," he said, adding that the company is trying to reach big audiences with the brands used in its games.

"Marvel Kapow!" is available through iTunes in free versions with seven levels and advertising, or ad-free versions with 26 levels and additional characters that cost $1.99 for iPhone and iPod or $3.99 for iPads. Later the company may develop versions for Android and perhaps Windows, he said.

Microsoft buying Skype is like Seattle buying Italian streetcars.

On the surface, it seems like an outrageously expensive indulgence.

But if you can ignore the insane amount of money being thrown around and focus only on how it will help a few businesses, it makes some sense.

Microsoft already has powerful and widely used software for making phone and video calls and communicating over the Internet. Its messaging systems are among its crown jewels and used by far more people than Skype.

Similarly, Seattle is served by a vast and reliable bus system and is building up a light rail network.

But it still decided to spend $60 million - not counting priceless right-of-way - on streetcars that duplicate several bus routes. Sound Transit's going to spend another $132 million more more streetcar service.

Some people think the streetcars are neat, and they add flair and freshness to the mix of infrastructure in Seattle. But they'll never carry as many passengers as Metro and they'll probably never pay for themselves.

The trolley is largely an amenity, increasing the appeal of commercial property mostly owned by Paul Allen.

City leaders who took flak for this quasi subsidy may now feel vindicated by Allen's success redeveloping South Lake Union. The area along the trolley route has transformed into a vibrant, active neighorborhood anchored by Amazon.com's new headquarters.

You can't say the area blossomed because of the trolley but it helped.

With Skype, Microsoft now has a groovier, Web-native service that complements its established, industrial-strength communication systems.

Skype and particularly its video calling capabilities will be a focal point for the bundle of online services Microsoft will offer to consumers and businesses. Having one killer app in the bundle is enough to get people to enter Microsoft's online realm, or at least prevent them from logging into a competing suite of online services.

My guess is that Skype and video messaging will also be a cornerstone of Windows 8 or whatever the next version of Microsoft's flagship operating system is called. It's designed to work well on portable devices running the tiny processors used in smartphones, where video calling is coming to be expected as a standard feature.

Apple and Google have already developed video calling services for mobile devices and PCs but they don't yet have the critical mass of Skype. Microsoft has struggled to build a critical mass in search and now it has a head start as the next phase of online messaging is developed on fast, new 4G wireless networks.

Meanwhile Microsoft's going to use Skype to boost the appeal and reach of its Xbox, phone, Web mail and communication software products.

In its release, Microsoft noted that Skype has acquired the intellectual property powering its network. Perhaps that's a signal that Microsoft will assert its ownership of the patents, which could limit what competitors can do in the space or require them to send royalties to Redmond.

Skeptics expect Microsoft to fumble Skype somehow. To avoid this, Microsoft took the unusual step of creating an entirely new, autonomous group for Skype, giving the relatively small business organizational stature comparable to that of the massive Xbox, Office and Windows groups. Skype Chief Executive Tony Bates will be president of the Microsoft Skype Division, reporting to Steve Ballmer.

Microsoft actually has done pretty well with its messaging acquisitions. Key elements of Outlook were acquired, and it's now the most widely used email system in the world and an essential tool for most business PC users.

Microsoft also spent crazy money buying Hotmail in 1997 for around $400 million, when it was competing with AOL and Yahoo and was building out its suite of dotcom-era online services.

Microsoft's anxiety about falling behind Apple and Google no doubt led the company to overpay for Skype. But if the team in Redmond can avoid crashing their new trolley and it helps deliver a few big hits, the cost won't matter in the long run.

Android devices are now the most preferred choice among people shopping for a smartphone, according to a Nielsen survey released today.

Google's phone platform is the preference of 31 percent of U.S. consumers shopping for a smartphone. Or at least it was when the surveys were done between January and March.

Apple's iOS was the preference of 30 percent of those surveyed. Another 11 percent are interested in RIM BlackBerry devices and 20 percent are unsure of what to choose next.

That's changed from surveys last summer, when Apple was the clear choice, Nielsen said in a blog posting today. Surveys done from July to September found 33 percent of smartphone buyers wanted an iPhone and 26 percent and 13 percent wanted a BlackBerry.

Poor Microsoft. Just 6 percent of buyers are interested in Windows smartphones. Their interest has actually fallen since the Windows Phone 7 launch last October, before which 7 percent were intrigued by the platform.

A few charts from Nielsen's release:

Hooking up with Nokia will help Microsoft overtake Apple's iPhone and Research In Motion's BlackBerry within a few years, according to a new report from research firm IDC.

The combination should boost Windows phones to second place among smartphone platforms worldwide by 2015, IDC said in its latest Mobile Phone Tracker report.

For now, the big story is Google's Android software. IDC expects Android will become the most-used smartphone platform this year, after zooming up to second place in 2010.

"For the vendors who made Android the cornerstone of their smartphone strategies, 2010 was the coming-out party," Ramon Llamas, senior research analyst, said in the release. "This year will see a coronation party as these same vendors broaden and deepen their portfolios to reach more customers, particularly first-time smartphone users."

Overall sales of smartphones will continue growing but not at the same pace as 2010, it predicted. Smartphone sales are expected to grow 49.2 percent this year - to 450 million units - as consumers and business users continue upgrading their devices, it predicts.

Llamas said the Nokia deal will reverse Microsoft's phone slide.

"Up until the launch of Windows Phone 7 last year, Microsoft has steadily lost market share while other operating systems have brought forth new and appealing experiences," he said in the release. "The new alliance brings together Nokia's hardware capabilities and Windows Phone's differentiated platform. We expect the first devices to launch in 2012. By 2015, IDC expects Windows Phone to be number 2 operating system worldwide behind Android."

The chart from the release:

Google's Android operating system topped the U.S. smartphone market in January for the first time, with 31.2 percent of the market, according to a new comScore report.

The firm said Android's market share grew 7.7 percent from October through January, while Research In Motion fell 5.4 percent and Apple was nearly flat at 0.1 percent growth. Microsoft's share fell 1.7 percent.

Among handset makers, Samsung led the U.S. market with 24.9 percent of the market in January. The market leadership didn't change much; Samsung was followed by LG, Motorola, RIM and Apple.

The report's based on a survey of more than 30,000 U.S. mobile subscribers.

Here are the charts from the news release:

Remember those rumors about a Facebook phone?

It turns out HTC and Facebook spent several years developing two of them that are being announced today in Barcelona.

HTC worked with Facebook to integrate the social network into the phones, adding a dedicated Facebook key with the "F" logo that pulsates when you're doing something shareable on the phone.

When taking pictures, you can press F to upload them to Facebook, for instance, or when using Google Maps, you can press it to share your location.

"HTC has brought Facebook to these two new devices in an innovative way enabling people to connect and share easily whenever they want, wherever they are," Henri Moissinac, head of Facebook's mobile business, said in the release.

Jason Mackenzie, president of HTC North America in Bellevue, said Facebook's logo appears on the special key but "we will not brand this as the Facebook phone or anything."

Mackenzie said the "ChaCha" model with a 2.6-inch touchscreen and exposed keyboard will compete with the BlackBerry Curve.

The second model is a touchscreen-only phone called the Salsa, with a 3.4-inch screen.

They'll be available in the second quarter, at prices to be announced later.

UPDATE: AT&T is going to carry the phones, perhaps exclusively, according to Ina Fried.

Both are based on version 2.4 of Google's Android software and have Facebook integrated into the HTC Sense interface.

When calling or receiving a call from a Facebook friend, the software displays friends' latest status and photos and alerts you if their birthday is coming up.

HTC's also announcing a tablet computer, the "Flyer," that will go on sale in the second quarter. It's intended to be a high-end device, with an aluminum housing, a 7-inch diagonal touchscreen, a 1.5 gigahertz Qualcomm Snapdragon processor, 32 gigabytes of RAM and HSPA+ wireless capability.

It's launching with Android 2.4 but will be upgradeable to the upcoming "Honeycomb" version of Android that's optimized for tablets.

HTC designed a new version of its Sense interface for the larger screen of a tablet, with a carousel for navigating icons and widgets.

The Flyer also comes with a stylus for taking notes on the device. Mackenzie said this is needed in part because it's a more polite way to take notes than typing on a tablet or laptop during a meeting.

HTC is playing up the Flyer's media capabilities. It will feature HTC's new "Watch" video download service and come preloaded with the OnLive streaming game service, taking advantage of a $40 million investment HTC is making in the Palo Alto, Calif.-based startup.

The Flyer also has a 5 megapixel camera plus a 1.3 megapixel front-facing camera for videoconferencing.

The price of the Flyer and bundled services such as OnLive will be announced later, Mackenzie said.

Also being announced is a new version of HTC's Desire model, with an aluminum unibody design; the Incredible S with a 4-inch screen (up from 3.7-inches on the previous Incredible); and a lower-end Android phone called the Wildfire S that's intended to be a more affordable smartphone sold for $100 or less by wireless carriers.

The Desire S, the Incredible S and the Wildfire S in four flavors:

If you haven't heard enough about the Verizon iPhone yet, there's a new analysis of its components from iFixit.

The company's teardown reveals that the phone contains a Qualcomm chip that supports HSPA+ data rates up to 14.4 megabits per second, even though Verizon uses a different technology.

The same chipset is used in the Droid Pro world phone that supports both GSM and CDMA technologies, iFixit notes. It makes you wonder if Apple's working toward a universal model that would run on multiple carriers.

Verizon's iPhone also has a different vibrator than the iPhone 4 carried by AT&T. Verizon's has a linear vibrator for call and message alerts, unlike the rotational electric motor with a counterweight.

The result, according to iFixit tests, is that "the new vibrator has a quieter, softer feel and makes a better sound when on a table."

The results of our poll of Seattle-area iPhone users are pretty interesting.

Despite all the fretting about AT&T service that you read about, the majority of iPhone users responding to the poll believe the network's fine or even great.

The poll, which ran in my blog for the past 24 hours, received 1,837 responses before I shut it down a few minutes ago. The results were pretty mixed, which isn't surprising given the variation in cell service that people experience in different locations.

Asked if they're happy with their iPhone on AT&T's network in the Seattle area, 53 percent said yes and 5 percent said they don't care too much about the network. Another 44.8 percent said the network is not great or awful.

That satisfication tracks to the percentage of iPhone users wanting to switch to a Verizon model.

Asked if they'll buy a new Verizon iPhone to get better service, 58 pecent said no or probably not. About 4 percent said they don't care.

Among those leaning toward a Verizon iPhone, 15.5 percent said they're absolutely making the switch, right away; 23 percent said maybe.

Next we'll have to see how the Verizon iPhone buyers feel about their new service, and whether they're affected by Verizon's plans to limit data usage and degrade iPhone photos and videos if needed to maintain service levels.

Thank you to those who participated in the survey.

It's hard to tell what's really going on with iPhone network coverage in the Seattle area.

AT&T coverage problems in New York and San Francisco are magnified because of the concentration of media outlets in those cities.

Some reports have suggested AT&T is actually better in the Seattle area than Verizon, but you wouldn't know it from the attention the Verizon iPhone is getting.

So i've got to ask iPhone owners - is your AT&T coverage that bad, and are you going to switch to Verizon? (Especially now that word's out that Verizon may throttle heavy data users ...)

(UPDATE: After getting a lot of response I've upgraded this account so the poll should run faster. I'll post the tally Friday.)

(UPDATE 2: The poll closed after 24 hours and the results are posted here. Thank you for participating)

How can you resist a video interview of the Utah eighth-grader who wrote Bubble Ball?

Since the game for the iPhone and iPad was released Dec. 29. it's been downloaded more than 2 million times, topping the list of free iTunes apps.

The boy, Robert Nay, has more poise than Facebook's Mark Zuckerberg.

Take that, Tiger mom.

Apple rumors are a dime a dozen, but Boy Genius Report is pretty convinced that the new iPads and iPhones coming out later this year won't have a home button.

The one physical button on the front of the gadgets would be replaced by on-screen touch controls, using the multitouch capability in a new beta version of the iOS software, according to the report based on an "Apple source."

This may provide room for a bigger display and/or front-facing camera. It could also reduce Apple's manufacturing costs.

Removing the button would also be an opportunity for Apple to demonstrate its expertise in interface design. It would be a challenge to remove the devices' most obvious and consistent control and continue to improve their usability, but the pull of minimalism is strong for some.

From the BGR report:

In addition to the home button disappearing from the iPad, we're told that this change will make its way over to the iPhone as well. Our source said Apple employees are already testing iPads and iPhones with no home buttons on the Apple campus, and it's possible we will see this new change materialize with the next-generation iPad and iPhone devices set to launch this year.

Now that AT&T's exclusive hold on the iPhone in the U.S. is over, with Verizon announcing that it will start selling Apple's device on Feb. 10, other carriers are ready as well.

Bellevue-based T-Mobile USA would like to offer the phone on its network, which uses the same sort of wireless technology as AT&T.

T-Mobile USA's new chief executive already has a relationship with Apple. Philipp Humm previously led T-Mobile's business in Germany, where he introduced the iPhone in 2007.

"We would be interested in offering the iPhone, but ultimately it is Apple's decision," a T-Mobile spokeswoman said.

I've asked an Apple representative whether the iPhone will come to T-Mobile and haven't heard back yet.

My guess is Verizon has an arrangement with Apple giving it premium play until it begins offering the iPhone, after which we'll hear about other carriers.

T-Mobile accepted this sort of second position during the Windows Phone 7 launch last fall. AT&T ponied up to be the official launch partner and not a lot was said about T-Mobile options until the AT&T launch event took place.

SAN FRANCISCO -- If Microsoft's Joe Belfiore thought he was roughed up by Walt Mossberg, he should have stuck around to hear Mossberg interview AT&T's Glenn Lurie at the Dive Into Mobile conference.

Mossberg opened the conversation by noting a new Consumer Reports story that panned AT&T service as the least reliable in the country.

"You've kind of become associated with the idea of dropped calls or failed to initiate calls," Mossberg said.

"I agree with the perception to a point," Lurie replied.

Lurie, president of AT&T's emerging devices business, said the company welcomes the feedback and it's spending heavily to keep upgrading its network as data usage explodes.

"The main point I'll say is we're always looking for feedback," said Lurie, a Seattle Pacific University graduate.

AT&T spent $18.5 billion in the past year and $18 billion the year before to keep up with data usage that's grown 5,000 percent over the past three years.

"Aren't you like the dog chasing the car and you're never going to catch it?" Mossberg said.

Lurie, a former professional soccer player, did a little sidestep when asked about Verizon getting the iPhone that's been exclusive to AT&T since its launch in 2007.

Pressed on the question, Lurie said AT&T's not worried.

"We have come out very publicly and said we're not concerned about it at all ... If and when that ever happens, we are in a position to compete with anybody who has any device any time," he said.

Lurie said AT&T is also pleased with the sales of Android and Windows Phone 7 devices.

"The key is when you have 93 million customers that you have everything," he said.

AT&T may be losing its iPhone exclusivity, but it's still tight with Apple. Lurie said he talks all the time with Apple's chief operating officer.

"I talk to Tim Cook pretty much every day," he said.

All networks are going to be under similar pressure from soaring data consumption through new devices and applications, Lurie said, making a bid for the 2010 Positive Spin Award.

"All the carriers are going to deal with this," he said. "We had the good fortune of dealing with it first."

Here's Sunday's "Up Front" show with Robert Mak on King 5, which has some guy talking about Windows Phone 7, near the end of the show (when it shows about 5:20 remaining).

More details are coming out about Verizon's LTE (4G) rollout and the rumored arrival of the iPhone on the company's network.

For starters, don't count on an actual 4G iPhone from Verizon anytime soon.

The company's LTE network will go live in Seattle and 37 other metro areas by the end of the year but will only work with laptop wireless cards and USB sticks to start. Verizon won't be selling LTE phones until the middle of 2011.

It doesn't sound like Apple's iPhone will be the debut smartphone on the network. Verizon today said Google Chief Executive Eric Schmidt will be on stage in January when the first batch of LTE devices are announced, according to Tricia Duryee's writeup of Verizon's CTIA press conference today.

That means Android phones will be the first on Verizon's LTE network.

At the same CTIA event, Verizon President and Chief Operating Officer Lowell McAdam tamped down the latest rumors of a Verizon iPhone, a story in the Wall Street Journal saying a Verizon iPhone will be available in early 2011.

McAdam said the story "is something that rolls out every few weeks," Tricia reported.

The key McAdam quote suggests Apple may be aiming toward the LTE network, but that would mean mid to late 2011 at the earliest:

"Apple has to be the one that makes that announcement. I expect at some point in time our business interests will align and I think LTE is a reason why they'd want to have a device or tablet on our network."

In the meantime, Verizon's LTE network will bring superfast mobile speeds but incomplete regional coverage. The company's announcement said service will extend from Lynnwood to Fife and Issquah to Seattle's waterfront, but a spokesman told me Vashon will also be included.

Kitsap County will have to wait, as will much of Pierce and Snohomish counties and the rest of Washington.

"This is just the first phase. Each year we'll be adding substantially," spokesman Scott Charlston said.

The Journal story on the iPhone quoted anonymous "people briefed by Apple" saying it was developing a CDMA version of the iPhone 4 for Verizon, to sell in early 2011. That means it would be another 3G phone with a misleading "4" in the name, but maybe switching to CDMA will fix the antenna flaw.

You've got to wonder if the leak to the Journal was perhaps intended to keep Apple stock's momentum going. Otherwise it could have been a rough week, heading into Monday's launch of Microsoft's Windows Phone 7.

On Tuesday Apple lost a $625 million patent suit, for infringing on a Yale professor's work.

The same day, Nielsen reported that Android phones overtook the iPhone in smartphone sales over the last six months. That lead's probably going to continue with the new Android G2 and MyTouch phones announced recently by T-Mobile USA, the first to use the fast HSPA Plus service.

AT&T is also preparing HSPA Plus service, promising 4G-like speeds until its LTE network is ready, but the faster speeds will require a new phone.

Meanwhile, AppleTV's arrival late last week was underwhelming, and may be overshadowed by GoogleTV announcements today and Tuesday.

Quick, someone float the Verizon iPhone story again!

The second phone to take advantage of Clearwire's 4G network will be the Samsung Epic 4G, a special version of the Samsung Galaxy S going on sale Aug. 31 for $250.

It follows the Evo 4G that debuted in June. Both use 4G where available and 3G everywhere else, and work as mobile hotspots for an additional fee.

Sprint's release billed its new Android slider phone as "A Movie Theater in Your Hand." Samsung's preparing a "media hub" service with a video store to buy or rent movies and TV shows via the device, which has a 4-inch Super AMOLED display.

The phone's also going to work with Samsung's "AllShare" service that wirelessly shares music, photos and HD video with TVs, cameras, printers and other devices with DLNA certification.

Inside it's running Android 2.1 on Samsung's 1 GHz processor; Apple uses related processors from Samsung in the iPad and iPhone 4. The Epic 4G has a 5 megapixel camera that takes 720p HD video and a front-facing camera for video chat.

The price is after a $100 rebate and with a two-year commitment to plans starting at $70 per month. Pre-orders begin Friday.

Sprint's announcement coincides with a new report from Gartner saying that Android has overtaken Apple's iOS to become the world's third-most popular mobile operating system, behind Symbian and RIM, during the second quarter. In the U.S., Android's now ahead of RIM, the report said.

Samsung, meanwhile, is the world's second-largest phone maker behind Nokia and ahead of LG.

Kirkland 4G broadband provider Clearwire today announced a special version of its mobile hotspot for people using Apple's iPhone, iPad and iPod Touch.

The iSpot is a puck modem similar to 4G Sprint Overdrive, but it's white and "made exclusively for Apple mobile products," Clearwire said in its release.

The iSpot also supports more simultaneous users - up to eight devices can connect at once via WiFi, versus the five with the Overdrive.

Clearwire's selling the iSpot for $100. An introductory data plan costs $25 per month and provides unlimited data at speeds of 3 to 6 megabits per second, with bursts up to 10.

Strangely, the iSpot will only support Apple devices with a $25 per month plan. Higher priced plans are available to open the hotspot to all WiFi devices, similar to the Overdrive. A spokesman said the device limits access to Apple devices by filtering MAC addresses, allowing only devices in the range used by the Apple products.

Today's jaw-dropper is the amazing growth of Android-based phones - up 886 percent in the second quarter, according to research firm Canalys.

The surge also made Android the largest smartphone platform in the U.S., where it took 34 percent of the market in Q2.

Crazy growth in the overall market for smartphones continues as mobile phone buyers, especially in the U.S., upgrade to the more capable devices. Canalys reports that smartphone sales grew 64 percent in the quarter.

Worldwide Nokia still leds with 38 percent of the smartphone market in Q2, with its shipments growing 41 percent year-over-year to 23.8 million in the quarter, Canalys reported.

RIM's BlackBerry grew 41 percent, holding second place with 18 percent of the global market, while Apple's iPhone sales grew 61 percent after the iPhone 4 launch and it now has 13 percent of the smartphone market, according to Canalys.

"Expect to see smart phones accounting for a growing proportion of the wider mobile phone market as they become increasingly affordable to more customers," Canalys Senior Analyst Pete Cunningham said in the release. "By 2013, smart phones will grow to represent over 27% of shipments worldwide, with the proportion in some developed markets in Western Europe surpassing 60% and 48% in North America."

The chart - with U.S. and China stats only - included in the Canalys release:

Steve Jobs came out on the defensive during a press conference this morning responding to the iPhone 4 antenna problems, according to live blogs from the event at Apple headquarters in Cupertino.

Jobs acknowledged that there is a problem with his company's new phone but said it's only affecting a small number of users.

In response the company's giving free cases to iPhone 4 buyers through Sept. 30 and refunds to people who bought the $30 "Bumper" cases (the green accessory pictured here) from Apple already. The company can't make enough Bumpers for everyone right away so Apple will offer alternate cases. Buyers can apply for the cases and refunds on Apple's Web site next week.

Apple's also waiving restocking fees and providing full refunds within 30 days for people who want to return their phones.

The response is probably comparable to what Apple would have been forced to do if it lost in class action lawsuits filed over the phone's problem.

But the Sept. 30 deadline is curious and raises the question of what will happen to people buying the phone later. It may be a clue that Apple's working on a hardware fix that it hopes to have done by then.

Apparently investors aren't terribly worried about the moves, which will cost less than a recall of the phone. Apple stock (AAPL) is hovering a bit below its opening price of $253, trading recently at $251.

The company this week updated the iPhone software to fix its signal strength overstatement and a bug it had working with Microsoft's Exchange message system. Jobs said the company's also fixing a problem with the iPhone 4's proximity sensor and is finally going to start shipping white versions of the phone at the end of July.

Jobs was asked if Apple's going to do more to address the antenna situation and perhaps change the hardware. He said "I don't know" whether changing the design will help, according to Engadget's blog.

Jobs also denied Apple knew about the antenna problem before the phone was released.

Despite the antenna glitch, Apple sold more than 3 million of the phones since it launched three weeks ago.

Jobs said the company's been "working our butts off" to find a solution to the antenna problem, even though only 0.55 percent of users have called AppleCare about the problem. (So at least 16,500 people have contacted Apple about the problem.)

AT&T data shows the iPhone 4 drops a bit more calls than the iPhone 3GS, but it's still less than 1 percent more than the 3GS. Jobs provided the number of dropped calls in relation to Apple's earlier phone, but apparently didn't provide an overall percentage of calls dropped.

It has also been apparently working hard to find other phones that have a similar problem; Jobs asserted that the BlackBerry Bold 9700, Samsung Omnia II and HTC Droid Eris can have an antenna drop if held a certain way.

Jobs also talked about how much testing Apple does and how well the iPhone 4 has been received, even mentioning Consumer Reports on a slide describing the iPhone 4 as the "#1 Smartphone."

UPDATE: Nokia - which Jobs used as an example of another company with similar antenna issues - distributed a statement defending its antenna design. Nokia noted that it chooses phone materials carefully - a subtle dig at Apple for making the antenna part of the iPhone 4's stainless steel exterior band:

Antenna design is a complex subject and has been a core competence at Nokia for decades, across hundreds of phone models. Nokia was the pioneer in internal antennas; the Nokia 8810, launched in 1998, was the first commercial phone with this feature. Nokia has invested thousands of man hours in studying human behavior, including how people hold their phones for calls, music playing, web browsing and so on. As you would expect from a company focused on connecting people, we prioritize antenna performance over physical design if they are ever in conflict. In general, antenna performance of a mobile device/phone may be affected with a tight grip, depending on how the device is held. That's why Nokia designs our phones to ensure acceptable performance in all real life cases, for example when the phone is held in either hand. Nokia has invested thousands of man hours in studying how people hold their phones and allows for this in designs, for example by having antennas both at the top and bottom of the phone and by careful selection of materials and their use in the mechanical design.

Microsoft today confirmed that the coolest feature of its Kin phones is still alive.

That would be the companion website that Kin phone buyers get for viewing and sharing photos and other files on the device. Photos taken on the phones automatically show up on the website, where they can be viewed, saved or moved around.

Today the company confirmed, via the Windows Phone Blog, that similar pages will be provided to people using devices based on its upcoming Windows Phone 7 software. The post appeared as Microsoft executives were pitching the phone and other products at the company's annual partner conference in Washington, D.C.

Microsoft is calling them Windows Phone Live companion sites. They'll give people "a central place to see pictures they've published, view their Windows Live calendar and contacts, exchange OneNote files and access other information shared between the phone and the Web," according to the post by Aaron Woodman, a director on the mobile team.

Here's an image from February a Windows Phone 7 device and its "Picture Hub" desktop.

A Microsoft distinguished engineer, Mike Toutonghi, developed a similar automatic photo synchronization system at a Seattle startup called Vizrea starting in 2004. It closed in 2007 and sold its technology to Microsoft and Toutonghi returned to the company.

The companion sites announced today will have more than just photos. They'll extend the phone activity to computers and bigger displays, and connect to other services like Microsoft's free SkyDrive online storage service and "Find My Phone," which helps people map their phone's location if it's lost or make it ring so they can find it around the house.

These sites also differentiate Microsoft's phones from those running Google's Android software and Apple's iPhone, which requires users to sync up files by connecting to a computer running iTunes.

Windows Phone 7 devices will also connect to Xbox Live and the Zune service for music and video content.

Woodman's post also previews how Microsoft will emphasize the quality and usability of its software and services when pitching its mobile platform this holiday season.

"The bottom line is that we believe it's not enough to have exciting games, intuitive email, rich music, extensive social networking tools or even beautiful hardware to house it all. The magic comes when all of these things work together to bring the people and things you care about closer, while smoothing out your everyday tasks so that your day is a little bit easier."

During Chief Executive Steve Ballmer's speech Monday, a slide was shown listing companies that will offer "7" series Windows phones later this year. They include HTC, Dell, Samsung, LG, Toshiba and Sony Ericsson. Also listed was "Garmin-Asus," suggesting a Windows version of the Garmin navigation phone is coming as well.

Apple's iPhone 4 is a beautiful device, one of the nicest in the growing field of amazing smartphones on sale this summer.

The software gives its touch-screen controls a buttery smoothness, plus a few handy new features.

Inside is a snappy processor and a new battery that keeps the phone going all day with moderate use.

Apple gave the phone a new case that's more blocky, masculine and Teutonic. It looks like a robot's ice-cream sandwich â€" two slabs of glass with a stainless steel middle.

The iPhone 4 also works better than its predecessors as an actual phone, with dual microphones that help cancel out background noise.

Overall it's a great upgrade for the standard-bearing smartphone.

Which makes it too bad there's an elephant in this elegant, ultra modern room. The iPhone 4 has a glitch that can lead to its wireless signal abruptly dropping if you hold the phone a certain way.

Microsoft is dropping its Kin phone after poor sales, reassigning the team and shifting its focus to the upcoming Windows Phone 7 platform.

The surprisingly decisive move comes just three months after the Kin phones were unveiled, a month after they went on sale and a few days after Verizon Wireless slashed the phones' prices.

It's also a big step toward sorting out the confusing mix of phones Microsoft is developing in its desperate competition with Apple's iPhone and Google's Android platform. Kin had been positioned as a phone for younger consumers, families and social-network enthusiasts while the Windows Phone is being cast more as a business device.

Kin failed to catch on despite its twangy name and a few technical advances, including a unique, Facebook-inspired interface and a system for synchronizing photos and messages with free Web pages that Kin users received.

Microsoft and Verizon will sell out the remaining stock of Kin phones in the U.S. where they went on sale May 13. Microsoft is also dropping plans for a fall launch in Europe. No more Kin phones will be produced.

Verizon on Monday cut the price of the unusual compact-like Kin One from $50 to $30 after a $100 discount, and the Kin Two -- a more standard slider phone -- from $100 to $50.

Andy Lees, the senior vice president in charge of Microsoft's mobile business, announced the decision internally earlier today. He told the group that initial sales didn't meet expectations and they should focus on the Windows Phone 7 platform launching this fall.

The Kin team -- which includes people who came through Microsoft's $500 million acquisition of phone maker Danger -- will be folded into the Windows Phone team.

Microsoft released a statement explaining the move, initially to Gizmodo:

"We have made the decision to focus exclusively on Windows Phone 7 and we will not ship KIN in Europe this fall as planned. Additionally, we are integrating our Kin team with the Windows Phone 7 team, incorporating valuable ideas and technologies from Kin into future Windows Phone releases. We will continue to work with Verizon in the U.S. to sell current Kin phones."

A Verizon spokesman provided a statement via e-mail: "The Kin phones remain an important part of our portfolio."

Here's a Microsoft video from the splashy Kin launch:

"Just avoid holding it that way," Steve Jobs told a customer who complained that his new iPhone 4 loses reception when he touches the metal band framing the device.

That's according to an e-mail posted at Engadget.

Unbelievable. I hope other business leaders don't try to emulate Jobs this way. Especially the ones making cars and airplanes. Imagine this exchange:

"Hey Boeing, we've got some cracking in the tail of our new 787 and it looks like there's an assembly problem with the horizontal tail. Any plans to fix this?"

"Just avoid flying it that way."

Don't tell the thousands of people who lined up at Apple stores around the world to buy the iPhone 4 today - or the 14 (!) Associated Press reporters covering the story - but a few early glitches with the device are being reported.

One of the top searches today on Google is for "iPhone 4" problems, displacing the Droid X that appeared on Google's hot list yesterday. But who knows, maybe Google, Microsoft, HTC, Nokia and RIM assigned hundreds of thousands of employees to spend today Googling that term.

The issues include a yellowing of part of the display that may be the result of a glue used in its assembly, according to the word surfacing on AppleInsider.com. New Jersey Twitterer Jasmine LeChelle said the "screens have jaundice." That sounds like something that can be sorted out in the factory and addressed with warranty coverage; AppleInsider.com called it a "temporary" problem.

Another - acknowledged by Apple after spreading on Web comment threads - is a possible hardware design issue that reduces wireless signals when a user's hand touches the bottom-left side of the phone. Some are saying this degrades the signal by interfering with the antenna built into its metal frame. MacRumors.com posted a users' YouTube video demonstrating the signal drop and how it can be remedied with an add-on plastic case:

UPDATE: Apple spokesman Steve Dowling acknowledged the antenna issue, telling the New York Times that it can be an issue with any cell phone. An excerpt:

"Gripping any phone will result in some attenuation of its antenna performance, depending on the placement of the antennas," Mr. Dowling said. "This is a fact of life for every wireless phone."

Dowling declined to say whether Apple experienced the issue during testing of the phone and suggested that users not hold the phone in a way that covers both sides of a small black strip on the lower left side. Alternatively, he said, they could use one of many available cases.

You've got to love the spat between Apple and Google. Especially if you're shopping for a new phone.

Today, the day before Apple launches its iPhone 4, Google, Verizon and Motorola announced their cutting edge smartphone -- the Droid X -- with a noisy press event in New York.

Apple's phone is more svelte, has a new high resolution display, dual cameras and more available apps. (The Wall Street Journal's Walt Mossberg loved his early review unit - "It has some downsides and limitations ... But, overall, Apple has delivered a big, well-designed update that, in my view, keeps it in the lead in the smartphone wars" - and the New York Times' David Pogue thinks his is "beautiful, and since there's no more plastic, it feels solid and Lexus-like.")

But the Droid X has a better camera, a bigger screen and supports Adobe's Flash platform.

Both of them add tethering -- so you can use the phones as wireless modems for your computer -- but it costs an extra $20 per month.

They both have 1 gigahertz processors, start at $199 and require data plans.

Most people won't be able to get either one for a month or so.

Apple doesn't have a lot of iPhone 4's ready to sell yet. It will have a limited supply at its stores starting Thursday, and AT&T stores will have some on June 29. Both companies are pointing customers to the Web where they can order iPhone 4s to be shipped by July 14

Verizon is going to start selling the Droid X on July 15.

Meanwhile, smartphone shoppers can decide whether they want a Chevy or a Ford, a Whopper or a Big Mac.

Or they may consider something more cutting edge, like the HTC Evo from Sprint, which is still the only phone available with 4G mobile broadband service.

If they spend enough time shopping, instead of leaping at the launch, more options will become available.

Rumors are circulating about a coming version of the iPhone for Verizon's network, Microsoft's Windows Phone 7 phones are coming this fall, and more 4G phones beyond the Evo are just around the corner.

Here are some specs of the Droid X:

Talk time: Up to 480 minutes
Standby time: Up to 220 hours
Band/Modes: CDMA 800/1900, EV-DO Rev. A
OS: Android 2.1, update to Android 2.2 late summer
Weight: 155 g / 5.47 oz
Dimensions: 2.6 x 5.0 x 0.4 (z) inches
Browser: Webkit HTML5 based browser; Adobe Flash 10.1 after update, pinch-to-zoom
E-mail Support: Gmail, Push E-mail, Corporate Sync, IMAP/ POP3
Connectivity: Stereo Bluetooth2 Class 1.5, Version 2.1+EDR, 3.5mm, USB 2.0 HS, OTA, HDMI, Over the Air Sync, PC Sync, DLNA
Display: 4.3" WVGA (854 x 480)
Display Resolution: WVGA display houses 400,000 pixels
Video: 720p HD Capture, HD Playback via HDMI or DLNA, H.263, H.264, MPEG4, WMA v10
Camera: 8.0 megapixel, Digital Zoom, Auto Focus, Dual LED Flash and image editing tools
Memory: 8 GB onboard, 16 GB microSD pre-installed, supports up to 32 GB micro SD - total memory expandable up to 40 GB
Location Services: aGPS (assisted), sGPS (stand alone), Google Maps, Google Maps Navigation, Google Maps with Google Latitude, Street View, and eCompass

AT&T clarified how it's going to roll out the iPhone 4, which is going to appear in its stores five days later than expected.

AT&T stores will have the phone starting on June 29, but it expects the supply to be limited. It's also fulfilling orders for customers who pre-ordered the phone on June 15.

Pre-orders were 10 times higher than they were for last year's iPhone "so we are working hard to get these devices into customers' hands as soon as possible," the company said in a release.

Even so it's a relatively jumbled launch, suggesting Apple pushed hard on the release schedule.

AT&T is starting to call customers this week who pre-ordered for store pick-up, to let them know when their phones are ready.

On June 29, AT&T will sell its inventory on a first-come, first-service basis and then take orders for delivery or store pick-up.

Meanwhile, some people are starting to receive pre-ordered phones shipped early.

Apple stores will have a "limited" quantity of the $200 to $300 phones available on Thursday, June 24. Its Web site says phones ordered online today will ship by July 14.

That's all despite news that users of the new iPhone won't be able to turn off Apple's location tracking capabilities.

Microsoft's adding a new "social" search feature to Bing today that shows trending topics on Facebook and Twitter.

The beta feature was demonstrated by Senior Vice President Yusuf Mehdi at the SMX Advanced search conference this morning. It's supposed to appear on Bing later today (here's the Bing announcement and link to bing.com/social).

It's the first time the full "firehose" of Facebook updates has been incorporated into a search engine. Bing did the same thing with Twitter last October and is now blending both networks' update streams into its social feature. The sources appear in the left column of the page, which appears designed to add additional sources in the future.

UPDATE: The social feature still isn't live late this afternoon but a Bing manager said it's coming shortly. He said it's happening in concert with back-end upgrades.

Mehdi said Microsoft plans to continue its massive investment in Bing's technology and marketing to lure new users to the company's search service. Although it still trails Google by a mile, Mehdi said Bing's showing progress and getting new users.

"We've grown every month since we launched. That's truest proof case of whether its working or not," he said.

"Knock on wood, long ways to go, it's working."

To demonstrate how far Bing has to go, Mehdi showed a handwritten page of market research done by his elementary school-aged daughter, showing only four Bing users and a long list of her friends using the competition.

"She goes, 'Daddy, we have a lot of work to do.'".

Host Danny Sullivan pressed Mehdi for details on Microsoft's deal with Apple that put Bing onto the new iPhone. Mehdi said the discussion started when Microsoft developed a Bing iPhone app and was helped by Bing's visual interface that works well on the touch interface.

"They said our customers said they'd love to Bing and choice is good for consumers," Mehdi said, adding that "It was a very easy discussion."

Sullivan pressed Mehdi on whether Microsoft paid for Bing's placement on Apple's phone but Mehdi declined to say or provide details on the business arrangement.

Talking about Bing's office tower in Bellevue, Mehdi said they're interested in putting Bing's logo on the side of the building but "there's some issues with the city or the policy."

Mehdi hopes to revisit the sign issue but in the meantime an employee figured out how to have the building's interior lights spell out "Bing" at night.

"We find ways to overcome," he said.

It ended with Sullivan presenting Mehdi with a cake to celebrate Bing's one year birthday and the audience of search marketing experts singing "Happy Birthday."

"I don't think we deserve cake and candles - we have a lot of work to do definitely ... but it's been a great year," Mehdi said, thanking the industry for its support.

It's a tough day for Microsoft to be talking up its new Windows Phone 7 platform, but Paul Bryan, a senior director on its mobile communications business, gave it a shot on the official Windows blog.

In a post keyed to Microsoft's TechEd conference in New Orleans this week, Bryan explained the company's portfolio of phones and how the WP7 devices coming out later this year are aimed largely at business users.

This kind of thing won't sway the people who can't wait for an iPhone 4, but it may help corporate IT buyers and developers thinking about if and how Microsoft phones fit into their plans.

A few excerpts from Bryan's post:

"By adding Windows Phone 7 to our portfolio, Microsoft is well positioned to address the needs of customers with active personal and business lives who desire a single device that delivers rich end-to-end experiences and navigates seamlessly between work and play. Demand for Smartphones that play as hard as they work is fueling the continued growth for new devices, with IDC projecting 31% growth in Smartphone units in 2010 and another 22% in 2011."

The customer:

"More than 90% of our target customers for Windows Phone use their Smartphone for business purposes and 61% use their phones equally or more for business than personal use. This is why we designed Windows Phone 7 to combine a smart new user interface with familiar tools such as PowerPoint, OneNote, Word, Excel and SharePoint into a single integrated experience via the Office hub."

But the phones won't look like tiny Windows PCs:

With Windows Phone 7, rather than attempting to replicate the experience of the desktop, we focused on delivering end-user experiences that are uniquely optimized for the phone through tighter integration with Exchange and Office, the addition of SharePoint and our Silverlight development platform for delivering new user experiences.

The Windows lineup, and why some companies may still want Windows 6.5:

"Windows Phone 7 is the newest addition to the Windows Phone portfolio that includes Windows Mobile 6.5, more specialized CE based devices for ruggedized or task-worker scenarios, and the new KIN phones targeted at social communicators. We understand that while Windows Phone 7 will bring a new level of business productivity to a broader range of customers than we've ever reached before, for more highly managed corporate scenarios or where customers have made significant investments in applications on Windows Mobile 6.X, Windows Mobile 6.5 may remain the best choice in the near-term."

A companion post today provides new details of Windows Phone Marketplace, Microsoft's response to the iTunes App Store and Android Market.

It said developers will pay an annual registration fee of $99 that allows unlimited paid app submissions and five submissions of free apps, after which each one is $19.99.

Microsoft's also giving developers 70 percent of the revenue from their apps and providing services such as a push notification service and a trial API for offering trial versions of apps to customers.

Steve Jobs announced iPhone 4 -- the redesigned, iPad-like model that surfaced in April in prototype form -- during his morning keynote at Apple's Worldwide Developer Conference in San Francisco.

Apple is also adding Microsoft's Bing search engine to the phone, confirming speculation that has swirled for several months. Bing is a listed search engine option on the phone, along with Yahoo and Google.

The iPhone 4 will cost $199 for a 16 gigabyte model and $299 for a 32 gig and come in white or black. It goes on sale June 24. The iPhone 3GS will now cost $99, and AT&T will let people out of their contracts up to six months early to upgrade.

Jobs said the iPhone 4 is 24 percent thinner the iPhone 3GS. It has glass on the front and back and a metal band forming the border and supporting the antenna. The phone also has a front-facing camera, HD video capture (720p) and a screen with Apple's new higher-density "retina display."

(Photo by Justin Sullivan/Getty Images)

As expected, the phone's software -- which also runs the iPad -- is being upgraded to support multitasking.

It's biggest advance, though, may be in battery life. Jobs claims it has seven hours of talk time, six hours of browsing on 3G networks, 10 hours on Wi-Fi, 10 hours of video playback and 300 hours of standby. If the battery claims prove true, it will be more interesting to some buyers than which network the phone uses.

Apple is calling it iPhone 4 because it's the fourth generation of the iPhone, not because it has 4G wireless service.

Thankfully, Apple didn't call it the iPhone 4G, but the name may still confuse some consumers and provide fodder for online comment spats between iPhone 4 and HTC Evo 4G fans. One point for the Evo crowd: The iPhone 4's new iPhone-to-iPhone video chat feature will only work on Wi-Fi this year, while the Evo's streaming live via Qik.com.

I'm watching the live blogs along with a jillion others this morning.

Engadget noted that Jobs also had a demo gaffe when the iPhone 4 he was showing froze while downloading The New York Times. "Deadly silent here," the blog noted. Later Jobs said it was because there was so much Wi-Fi activity in the room and asked the audience to shut down their network cards and mobile hotspots. I wonder how the phone will work a busy conference session or an office with a bunch of different networks running.

Earlier standouts were the announcements that Netflix will stream to the iPhone starting this summer and that PDF support will be built into the iPad via an update coming later this month.

Jobs said the iPad's bookstore has captured 22 percent of the electronic book market already, and saw 5 million downloads in the first 65 days. The big question, though, is whether all those iPad buyers will continue to use the thing as an e-book after their initial burst of downloads.

He also noted that more than 5 billion apps have been downloaded via iTunes, and Apple's royalty payments to developers recently crossed $1 billion.

The iPhone's new software will be provided free to owners of the iPhone 3GS and 3G and iPod Touch but the latter two won't support all the new features.

RANCHO PALOS VERDES, Calif. -- They aren't scheduled to be on stage together, but Steve Jobs and Steve Ballmer are both appearing this week at the D8: All Things Digital conference, organized by the Wall Street Journal's Walt Mossberg and Kara Swisher.

I'll be blogging from the event starting with the Jobs appearance at 6 p.m. today. As if Jobs wasn't interesting enough, the session also includes News Corp. Chief Executive Rupert Murdoch.

Jobs could shake it up by demonstrating the upcoming version of the iPhone. I'll also keep an eye on barstools at the Terranea Resort just in case.

Microsoft's show begins Wednesday morning when Mossberg and Swisher will demonstrate the Project Natal controller that's coming to the Xbox this holiday season. It's a relatively public appearance for the motion/voice controller, which Microsoft's been showing behind closed doors for more than a year and will formally launch on June 13 and 14 at the E3 game conference up the road in Los Angeles.

The Natal demo follows appearances by Comcast President Steve Burke, DreamWorks CEO Jeffrey Katzenberg and Dow Jones CEO Les Hinton.

Others appearing Wednesday include FCC Chairman Julius Genachowski, Facebook founder Mark Zuckerberg, Qualcomm CEO Paul Jacobs and movie director James Cameron.

Ballmer is highlighting a session Thursday with Ray Ozzie, Microsoft's chief software architect, before sessions with Microsoft allies, HTC Chief Executive Peter Chou and Ford CEO Alan Mulally.

Also appearing at the event are the chief executives of eBay, NPR and AOL (plus AOL co-founder Steve Case).

Tech companies doing formal demos at the event include Kno, a company making a tablet computer for students; Dell, which is apparently going to show its upcoming Streak tablets that I saw in Belltown recently; OnLive, a new on-demand game service; and Wordnik, an online dictionary.

People used to say Seattle was the best place in the world to have a heart attack, because of our great Medic One emergency response system.

Now we know the best place in the world to lose a phone: San Mateo County, Calif., where a coalition of police investigators is pulling out the stops to find the person who picked up a prototype phone left in a Redwood City bar.

The highest profile police action in California isn't going to stop with Friday's raid of a Gizmodo journalist's home. CNET is reporting that the criminal probe is going to expand, perhaps beyond Gizmodo.

The phone is safely back in Apple's hands, so perhaps the manhunt's really about hunting down and punishing the opportunist who sold it to Gizmodo.

(UPDATE: The Silicon Valley Business Journal's reporting that police found and interviewed him, but they haven't charged him with anything yet. "We're still not saying it's a crime," said San Mateo County Chief Deputy District Attorney Steve Wagstaffe told the paper.)

Imagine what would have happened if someone took an Apple employee's prized car. They'd probably activate the National Guard, with the "Terminator" leading the charge.

I wonder if "CSI: Apple" checked for DNA left on the phone and used credit card records and traffic cameras to interview everyone who was in the bar that fateful night. Perhaps they used GPS and AT&T records to triangulate the location of the opportunistic gadget enthusiast, who apparently tried the phone before Apple remotely shut it down.

The story will really get interesting if the manhunt expands to other Gizmodo contributors with a keen interest in Apple's next phone.

Like Bill Gates, who wrote for Gizmodo last summer. As long as the police are on a fishing expedition, they should know the really big ones are on east shore of Lake Washington.

Steve Jobs is apparently trying to go Jack Bauer on Gizmodo, the blog that ended up with an iPhone prototype that an Apple engineer left in a bar.

Apple has the phone back, and Gizmodo has already run its story. Plus followups, such as a piece explaining how the guy who found the phone tried to return it to Apple but was rebuffed by customer service.

Nevertheless, police in San Mateo County, Calif., raided the home of Gizmodo editor Jason Chen and seized computers, cameras, business cards and other equipment. Word of the Friday seizure is coming out today, including a report in the New York Times where Gizmodo's parent company argues that the home was used for journalistic endeavors and the search warrant was illegal.

A search warrant Gizmodo posted alleges the property was used to commit a felony.

This ought to erase some of the good will Apple built up with the media when it sent Steve Jobs around to big newspapers this spring, encouraging them to sell iPad subscriptions.

P.S. I've had a few people asking where I'm coming from here.

Here's my take: Apple opened the door for the police by characterizing the missing phone as something taken from the company. If Apple had chosen to characterize it as a lost or misplaced phone, it's unlikely police would have sought or obtained a search warrant.

When was the last time police raided a house after a phone was misplaced, especially after the phone was already returned?

P.P.S. Yahoo News is reporting that the raid was undertaken at the behest of a computer crimes task force, and Apple's on the task force's steering committee. Bloomberg talked to a deputy prosecutor who suggested the target is the person who found the phone.

Scott Adams penned a pretty funny pair of Dilbert cartoons riffing on Apple's lost iPhone prototype, but decided not to publish them in print.

So he published them on Dilbert.com, as an online bonus for fans.

The first one starts with Wally asking to borrow a prototype phone ...

Rhapsody released a new version of its app enabling iPhone and iPad users to store and play music from its online music service, even when the devices are offline.

The app lets subscribers store a Rhapsody playlist on the device. By the end of June, it should let people also download individual albums or tracks, the company said. (A workaround in the meantime is to create a playlist for a particular album and download it to the device.)

From the announcement, by Jon Maples, product lead:

Here's how it works: say you've built the perfect road-trip playlist (mine includes all of Sheryl Crow's Tuesday Night Music Club, a bunch of Joe Strummer and Clash songs, plus a smattering of "Weird Al" Yankovic). Simply launch your Rhapsody app, open the playlist and click the Download icon. You'll need either a 3G or WiFi connection to do this initially, but once the songs are saved to your device, you can rappel into the deepest crevices of the Grand Canyon and still be able to play them back.

Rhapsody's initial app for the iPhone was downloaded more than 1.5 million times since its debut last fall. It lets subscribers stream music from Rhapsody's 9.5 million-track library to connected devices. Android and BlackBerry versions are coming later this year.

Whether or not subscription music services like Rhapsody catch on, the app's ability to stream digital music to mobile devices showed how far along wireless networks have come. Now the download feature is demonstrating the sophistication of today's digital-rights technology and content-licensing schemes.

The app is free but requires a $10 per month subscription supporting a single mobile device. Up to three devices are supported with a "premier" plan that costs $14.99 per month.

It's optimized for the iPhone screen. It works on the iPad but an iPad-specific version that looks better on the larger screen is still in the works.

The new iPhone is going to go down in tech history, not because of its innovation, but because of the incredible things that have happened to its prototypes.

Last summer a worker at Apple's iPhone factory in China lost a prototype, then apparently killed himself after his employer -- Foxconn -- searched his apartment.

Today's story of the day is that another prototype -- this one apparently a near final, working model -- was lost at a bar in Redwood City, Calif., and ended up in the hands of gadget blog Gizmodo. A screen grab of the page:

The new phone looks more like the iPad, with a squared and beveled metal border. Gizmodo says it has a bigger battery and smaller (but sharper) screen than the iPhone 3GS. It also has a better camera and a flash. It speculated that it's going on sale sometime in 2010.

Apple made it known through blogger John Gruber that it "considers this unit stolen, not lost."

If Apple puts pressure on Gizmodo, maybe the blog should remind Apple about this story it ran last year -- about Apple refusing to return a stolen iPhone to a woman in New York.

UPDATE: Gizmodo revealed the name of poor the Apple engineer who lost the phone - a 27-year-old who apparently hasn't been fired yet. The guy left it on a bar stool and the guy sitting next to him picked it up. This opportunistic tipster apparently received $5,000 from Gizmodo for the device, even after figuring out who owned it by a Facebook profile it displayed.

Watching his 3 year-old daughter nearly get run over by a texting driver inspired a Seattle landscape contractor to jump into the phone application business.

Erik Wood, 43, was walking home from Queen Anne's Coe Elementary with his daughter last fall when a woman in a black Volkswagen shot out of an alley while texting with both hands, passing within a few feet of the girl.

The driver drove on without ever seeing the pedestrians, but Wood was so shook up he started researching safety issues around texting drivers. Then he decided to create an application that could help.

"People live in this false reality that 'I can get away with texting and driving,' " he said. "The problem is they don't know what they're missing, they don't get the wake-up call until it's a T-bone, violent crash."

He and his wife tapped their children's college fund, withdrawing more than the cost of a new truck, and spent seven months working with software developers to produce an application called Otter that was released on the Android phone platform April 5.

"I think we realized that we had survived our first nearly fatal text-and-drive encounter but with two little girls growing up, the statistics proved this wouldn't be our last brush with this," he said. "That's what inspired us to do something about it.''

The Otter application interrupts text message notifications when the phone's GPS radio detects the device is moving at least 10 miles per hour. It doesn't block the messages outright, but sends an automatic reply to the sender, saying,"Otter says BTH (Break the Habit)."

Otter -- which stands for one touch text response -- also has parental controls so parents can activate it on their children's phones.

Wood is joining a growing number of companies producing applications and other systems to block or prevent texting while driving. He said Otter has a cost advantage because it doesn't carry recurring monthly fees like some competing applications. It's a one-time $3.99 download from the Android Market.

Versions for the Windows and BlackBerry phone platforms should be done in three to six months. Wood would like to do an iPhone version but its new software apparently won't provide access he needs to the phones' notifications or SMS services.

It's a moneymaking venture, but Wood said he had to give it a try no matter what.

"You know when you come to those forks in the road where you don't have any other choice?" he said. "This was definitely one of those."

Multitasking on the iPhone and iPad is a nice addition to the platform, but I think the jaw-dropper at Apple's news event this morning was the mobile ad platform called iAd that Steve Jobs unveiled.

Both additions were expected but the ambition and scope of iAd was surprising.

It's a huge potential market for the company if users accept the advertising that may soon be woven deeply into their Apple devices.

"The average user spends over 30 minutes every day using apps on their phone," Jobs said, according to Engadget's live blog at the event. "If we said we wanted to put an ad up every 3 minutes, that's 10 ads per device per day. That would be 1 billion ad opportunities per day."

Users may benefit from more free apps supported by ads. Maybe that will offset any resentment about immersive ads on a mobile device for which they pay monthly fees to use, and temper app price escalation that came with the iPad.

Apple's going to take 40 percent of the revenue from iAds that it's going to sell and host. In response to a question, Jobs said developers can use other ad systems besides iAd, according to the Wall Street Journal's coverage of the event.

I wonder how it's going to work to have multiple systems feeding ads into the apps. Will other ad systems have the same access the new ad serving and display capabilities Apple's building into the operating system without paying the 40 percent?

As if Apple needed any more buzz the week before its iPad goes on sale, the Wall Street Journal today is reporting that a new iPhone is coming this summer and Apple's preparing a CDMA version of its hit phone for Verizon Wireless.

It credits "people briefed on the matter" and received no comments from the companies.

After spending a few days with the latest phone that Steve Jobs doesn't want you to have, I'm not sure what all the fuss is about.

I'm talking about the HTC HD2, a striking gray slab with an enormous 4.3-inch display - the largest touch-screen of any phone now available in the U.S.

Two weeks after being sued by Apple for patent infringement, Taiwanese phone maker HTC is responding with a formal statement defending itself against the allegations.

The company's statement is a prelude to a legal response, still being drafted, that challenges the patent suit Apple filed in federal court, as well as a complaint it made to the International Trade Commission.

An HTC executive at its U.S. headquarters in Bellevue said the company has the support of partners such as Google. That reinforces the notion that Apple's suit is part of a bigger feud under way between tech giants that are all building roughly similar touchscreen smartphones.

"HTC strongly disagrees with Apple's actions," said Jason Mackenzie, vice president of HTC America in Bellevue. "We plan to use all of the legal tools that are at our disposal to both defend ourselves and set the record straight to the general public."

Mackenzie noted that HTC introduced touchscreen smartphones long before Apple's iPhone appeared in 2007.

"We started working on the first touchcscreen smartphone way back in 1999," he said.

That work led to the Pocket PC phone launched in 2002 with Bellevue's VoiceStream Wireless, which is now T-Mobile USA.

Since then, HTC has released more than 50 smartphones and worked with all U.S. phone companies, "vs. one single product at one single carrier," Mackenzie said, in another dig at Apple's iPhone business.

"We would not have achieved what we've achieved today -- including the partnerships weve developed with people like Microsoft, Google, all the U.S. operators, Qualcomm -- if we were a company that did not respect intellectual property rights."

Apple accused HTC of making and selling products that "incorporate, without license, many technologies developed by Apple and protected by patents issued to and owned by Apple and its wholly owned subsidiaries, including NeXT."

It asked the trade commission to block the importation of a number of phones, including the Nexus One that HTC makes for Google, the myTouch 3G sold by T-Mobile, the Droid Eris sold by Verizon and the new HD2 based on Windows Mobile.

Apple's suit specifically calls out phones running the Android platform backed by Google. A Google spokesperson referred by HTC, Jill Hazelbaker, didn't say whether the company would participate in HTC's legal defense, but provided a statement praising HTC for helping to make Android a success.

"The Android platform has seen tremendous adoption all over the world, and we are proud of all our partners who have made it such a success," she said via e-mail. "In less than a year and a half since HTC shipped the first Android device, there are now 26 devices with 60 carriers in 49 countries and 19 languages powered by Android."

Mackenzie wouldn't comment specifically on the lawsuit but said Apple's responding to HTC's success.

"We are experiencing more success than we've ever had in the U.S. market today. We've got great products at all the major operators," he said. "We're obviously having this conversation because of that and because of those successes we've had."

So far the lawsuit hasn't had an effect on HTC's business or plans for upcoming phones.

"I haven't seen any impact to our business since this case,'' he said.

People are underestimating what a hit Apple's iPad will be, according to Morgan Stanley analyst Katy Huberty.

In a note to clients today, Huberty predicted Apple will sell 6 million iPads this year -- way more than the 3 million to 4 million consensus estimate.

Huberty believes "recent negative sentiment" since the iPad unveiling have set Apple's stock up for a bounce after the device launches in March and new iPhones appear in June.

She reiterated her target of $250, up from the current $205 (the stock's up about 3 percent today).

The report predicted new iPhones coming in June will have new capabilities, perhaps including new gesture controls, and lower cost of ownership -- suggesting a lower device price and perhaps lower service plan options.

From her comment on the iPad:

We expect Apple to ship its first iPad and announce additional content deals in late March to better than expected demand. We see the iPad targeting the sub-$800 consumer notebook market, which equates to 30M annual units just in the US (120M globally). We expect iPad points of distribution to expand through CY10, both in the US and International markets, which could add 500K-1M units from channel fill alone.

From her comment on the iPhone:

"We expect Apple to launch new iPhones in June that offer both a lower total cost of ownership and new functionality, potentially including gesture-based technology. As we've highlighted in the past, the cost of device + service plan is currently the biggest barrier to incremental demand in both mature markets like the US and emerging markets like China."

Taiwanese manufacturer Pegatron Technology was chosen by Apple to build the next-generation iPhone coming out later this year, according to a report in Taipei-based DigiTimes.

It noted that Microsoft has also hired Pegatron to build the "Project Natal" controllers for the Xbox 360 that will go on sale later this year.

Imagine if they jumbled things up and shipped motion-sensing iPhones or Natal controllers that synced to iTunes.

Pegatron "has reportedly landed a contract to undertake OEM production of the next-generation iPhone scheduled for launch later in the year, joining Foxconn Electronics which manufactures current iPhones for Apple, according to industry sources," the report said.

Not much was said about the Natal device, which has been kept largely under wraps. Here's an image I took of one of the prototypes that Microsoft has provided to studios developing Natal games; this one's mounted on a camera tripod:

Here's a quick little gallery of some iPadalooza pics I sent earlier to Twitter. This will be my last iPad post for awhile, promise.

Steve Jobs perusing his new bookstore:

The MLB app for the iPad will stream live games to the device and display stats and other information. But will you be able to order beer like you can on the Nintendo DS?

Fake Steve Jobs - in red - finally getting his hands on an iPad:

Chasing Jobs, just like America:

Today's column is a Q&A with RealNetworks founder Rob Glaser on his departure as chief executive, plans for the future and outlook for the digital media industry.

Here's a longer version with more Q&A than what fit into the paper:

Rob Glaser's resignation last week from RealNetworks seemed abrupt, but it was actually in the works for several years.

Glaser said he had the first "serious conversation" with Real board members about stepping down more than two years ago, not long after his first kids were born.

But the discussion was interrupted before it went too far.

"When the great recession hit, I just put my head down and I'm like 'I can't even think about this for 2008, most of 2009. I've just got to focus on helping the company through this rough period of time,'." Glaser said Friday in a wide-ranging interview about his past, future and final days running the pioneering Seattle digital media company he founded in 1994.

Glaser, who turned 48 Saturday, stepped down as chief executive Wednesday afternoon, then flew to Washington, D.C., for a White House meeting with a group of executives providing advice on federal technology spending plans. It was the longtime Democrat's second visit in the last month; President Obama also invited him and his wife to a Christmas party in December.

On Friday, Glaser was back in Seattle, reflecting on where he and the digital media industry are headed next. He already helped Real develop a new strategy that will be revealed in a few weeks by Bob Kimball, its general counsel and now acting chief executive.

Glaser has been under pressure from investors who watched Real's leadership position and value erode over the past decade. But he characterized the decision to find a new chief executive as his, and one made amicably.

"I feel very, very happy with the decision," he said. "It's something I wanted to do for a long time. I'm very proud of the company and thrilled I get to stay associated with the company in my capacity as chairman, a signicantly shareholder."

Here's an edited transcript of the interview:

Q: It seemed abrupt when you stepped down and immediately left town.

A: Literally, I sent the message to employees and did the final tweeting of it sitting on the plane going to D.C. It was one of those photo-finish kind of deals.

Q: You said you'll get more involved in civic projects. Like what?

A: There are two or three projects associated with the [Glaser Progress] Foundation that I'm very excited about. There's some AIDS relief work we're involved with in Rwanda, a team on the ground in Kigali that does amazing work. I'm hoping to get there this summer. That's an example. Rather than going to Rwanda every five years maybe I can go every one or two years now.
After our kids were born in 2006 I pulled back. I have not engaged in much of that because my life was 110 percent full being a husband and a dad and my day job.
Before 2006 we would give two, three or four political fundraisers a year; since then we've probably given one a year. To some extent it's about getting back to the level of civic engagement I had before we had kids.

Q: Will you run for office?

A: I think that's pretty unlikely. As much respect as I have for [politicians]) and as mch respect I have for the importance of what they do, I'm not sure that role on an executive level or a legislative level is the best fit for me personally.
I think you've got to say 'never say never' when you're 48 years old, and you've had the incredibly lucky life that I've had, but I would say it's definitely in the unlikely category.

Q: What's next for Real?

A: We kicked off a strategy process in the middle of last year, the most thorough and rigorous review in the company's history. We did great work. Bob and the team will talk more about it soon, when the time is right. It's not my place to initiate the discussion about it.

Q: Is there animosity between you and the board?

A: These are people I've known for a long time . The right way to think about this is, once you decide to do something like this, the interesting debate is, "Do you do it slow or do you do it fast"?

Q: Looking back, what are you most proud of, and what would you do differently?

A: I can give you the proudest one: I'm incredibly proud of the team here and the innovation that we've created. I can think of three or four things we've done that had never done before, going back to creating streaming audio 1995, making streaming video practical in 1997, what we did with sort of birthing the casual games industry in the early 2000s, weathering the dot-com crash in some pretty intense competition that might have involved questionable practices from an antitrust standpoint.
But rather than curling up in a ball we weathered that and came out stronger on the other side, pivoted the company in some interesting ways around first consumer services and then carrier applications and services solution like ringback tones and music on demand and video on demand and the like.
There's some stuff in the pipeline that will rival those innovations in my view if we do a good job with it, rolling it out in the market, so I feel like I'm passing the baton at a time where not only did we weather the downturn . The pipeline for where we go next is in great shape.

Q: What's going to happen to the digital media business five years out?

A: Speaking from a conceptual level, when I got involved in this I thought digital media is going to be a 25-year thing, which is to say there's going to be a long period of time before the innovation flattens out. We're 15 years in -- we launched RealAudio in April 1995. The industry as a whole has taken tremendous strides and there's a lot of work to do.
Think of it from a consumer standpoint. You want to be able to watch any piece of video you have a right to watch anywhere at any time. There are pieces of the solution, but the thing you really want is that seamless "it just works." It's not 10 minute videos on YouTube or buying things on your iPhone that you may already own.
There's enough of the pieces in place where you can envision how it all comes together, but it will be three to five years before that seamless thing that Jeff Bewkes of Time Warner dubbed "TV Everywhere." Rhapsody is the best of that in the music world, but today those are not mainstream, seamless experinces that work for tens, 100s of millions of people. Big picture, for audio-video, that's the biggest set of things that I think are coming.

Q: It seems like pieces are falling into place like 3G and 4G networks and cloud services.

A: I would say the barriers at this point are as much business models and alignment of rights as they are technology. I knew it 16 years ago, but I would say I understand it more vividly now. The technology is a necessary foundation element but it's not sufficient.
You have these industries that set up windowing of content, methods of distribution, different rules for rental vs. purchase that make sense in a physical context. But in a digital world you need to harmonize and integrate all those rules and business models and it's a hard thing to do that.
Really, in my view, it's the intersection of the technology and the business model/economics. That's where the complexity lies and frankly where the opportunity lies if you can fit those pieces together in a way that works for everybody.

Q: Why is Apple now the dominant digital media company and not Real?

A: Fundamentally we've been in area where it didn't all work seamlessly. The best way to make it work seamlessly was to go vertical. You make the hardware, you make the software, you connect it to your services. That's a totally different business than the historical business that most companies were in that were in the software-services business.
On one hand, you can count all the companies that have fit all those pieces together. It's a huge undertanking. I'd say BlackBerry pulled it togoether in their space of messaging. Apple's done it twice, first witht the iPod and now with the iPhone/iPod Touch, and you could say Amazon's on the road to doing it with the Kindle.
Think of the IT industry. IBM was vertical. The minicomputer industry was vertical, then the PC came along and it was horizontal. Those of us that grew up in that area made the supposition that the horizontal model was going to the dominant model in this business.
It's very complicated to go from being horizontal -- like Google is or like Microsoft and Real -- to go vertical. There are many successful companies but you have to say that in the digital media space the biggest successes have been these vertical successes. That's something that's incredibly hard for a startup to do.
If I knew in 1995 what I know now, would I have approached the vertical-horizontal thing differently? Maybe, but the wreckage of companies that tried to go vertical - Go/Eo, WebTV, I can go down the list, there are dozens of companies -- it's super, super hard to do that vertical thing. I'm very proud of the success and scale we got to taking the horizontal approach we did.
If you take the long view - the next five or 10 years view -- I think there's going to be a renaissance of that horizontal model as the standards come together to link together all these things.
This next decade, I think it's a very interesting strategic question, which model is going to be dominant.

Q: Has Seattle's opportunity passed?

A: No, I would say the opposite. The Seattle high-tech community is alive and well for sure. Hopefully, we played a role helping seed the ecosystem.

Q: Will you get involved with other companies, as well as civic affairs?

A: I don't know what the mix is going to be yet. I turn 48 tomorrow [Saturday], not 84. I feel like I have time in my life to pursue a mix of things depending in what captures my passion."

BillShrink.com updated its handy dandy phone cost comparison chart, adding Google's Nexus One.

Bottom line: It'll cost you $2,579 over two years, a hair more than a Palm Pre but less than an iPhone or Droid.

FoxNews.com nudged up speculation about Apple launching some sort of Tablet or supersized iPod Touch in January.

The news site on Wednesday said "a source inside Apple" confirmed there will be a "big" event that "will focus on the mobility space" in San Francisco.

It follows a Financial Times piece last week that broke the story of Apple planning a January 26 launch event at Yerba Buena Center for the Arts, where Steve Jobs launched the newest iPods in September.

A big batch of information about mobile phones and carriers is appearing in the January issue of Consumer Reports, including results of a survey ranking the top carriers in 26 U.S. cities.

Verizon is tops -- nailing customer support, voice and data service -- "but it tends to be costly," with one in five saying high cost is their top complaint, the mag's release said.

T-Mobile USA was the next highest rated provider "in overall satisfaction, and worth considering as a good value for some. However, the carrier received lower marks in voice, messaging, Web and e-mail services."

Sprint and AT&T were ranked lowest, taking hits for customer service. "While AT&T's main weak spot is voice connectivity, they also scored below average in every attribute except Web access and texting," the release said.

"America is in love with the cellphone, but they are lukewarm about cellphone service," said Paul Reynolds, electronics editor at Consumer Reports. "They're especially concerned about its cost in these tight economic times."

Yet the magazine and its survey respondents are still huge fans of the AT&T exclusive iPhone. Here's a summary of its phone picks, by carrier.

On Verizon: The $100 LG enV Touch is "an impressive phone and multimedia device enhanced with touch-screen navigation and a Qwerty keyboard for easier e-mailing and texting." The $40 LG VX8360 "is a very good, straightforward cellphone at a bargain price."

Verizon's $147 Samsung Jitterbug has "large buttons, free directory assistance and a comfortable earpiece. Negatives include pricey service and a thick phone that lacks common features."

Among Verizon's smartphones, the mag likes the $200 HTC Touch Pro2 and $50 BlackBerry Storm 9530.

On T-Mobile: Consumer Reports especially likes the $200 Samsung Memoir with its 8 megapixel camera and the $130 Samsung Comeback "with a keypad that facilitates phoning and a 2.6-inch screen and keyboard to satisfy texters."

Among Tmo's smartphones, it called out the $150 myTouch 3G as "the best choice for multimedia use with intuitive navigation, easy access to main functions and direct downloading of music, games, applications and services."

(I'm partial to the T-Mobile BlackBerry Bold 2 9700 I began using a few weeks ago, and found out yesterday that its power cable -- which I'd misplaced -- uses the same connector as Amazon's Kindle.)

On Sprint: Consumer Reports calls out the $80 Samsung Exclaim as "a good bargain" with a "dual-slider design that slides up to reveal a keypad for phone calls and slides right to reveal a keyboard for e-mail and text messaging." Sprint's $150 Palm Pre "is a good bet for multitaskers with the ability to link contacts, calendars and messaging."

On AT&T: The magazine recommends the $150 LG Xenon, $125 Samsung Impression and $100 Samsung Solstice, which all have "large touch-screen displays and are compatible with AT&T's Video Share, which streams live, one-way video to a compatible phone."

The magazine said the $200, 16 gigabyte iPhone 3G S and $100 iPhone 3G from AT&T "ranked highly for multimedia use, with the best MP3 player Consumer Reports has seen in a phone to date." Its survey found a "staggering 98 percent of iPhone users were satisfied enough that they would buy the phone again, despite below-par ratings for AT&T."

Only 54 percent of readers it surveyed were completely or very satisfied with their mobile phone service, and 38 percent had switched carriers in the past two year to get a specific phone.

Relief is coming to iPhone users and others using AT&T's heavily used 3G wireless network in Seattle.

The company today announced a "substantial upgrade" of its network in the Puget Sound region from Everett to Tacoma, using additional wireless spectrum in the 850 MHz band.

"While specific benefits of the additional spectrum will vary by location, AT&T 3G customers should see improved quality and coverage throughout Seattle, Tacoma and surrounding markets," the release said.

The company said the upgrades are happening in Seattle, Tacoma, Everett, Renton and Auburn and Pierce and King Counties.

This comes as AT&T faces new competition in the region, where Clearwire is on track to roll out its faster, 4G network starting next month, and Verizon Wireless has been testing a new 4G service in Seattle with plans for service by next year.

The company's also in a spat over Verizon ads poking fun at AT&T's smaller 3G coverage in the U.S.

Meanwhile, AT&T's wireless traffic has quadrupled in the last year, driven by the iPhone and other smartphones used for Web access as well as calling.

The company's also providing 3G access to other devices such as the electronic books sold by Amazon.com and Sony.

Seattle-area upgrades have been made to its current 3G network using the 850 spectrum. They begin next year on a faster, HSPA 7.2 version that will be done in 2011.

The company's simultaneously adding nearly 1,900 cell sites nationally and new backhaul connections to support the mobile data traffic.

With one of AT&T's former lawyers now the incoming mayor of Seattle, the company may not expect much trouble getting permits for the new towers around here.

Here's a great chart from BillShrink.com comparing total cost of ownership for the Motorola Droid versus the iPhone, Palm Pre and MyTouch 3G.

Something to think about while Christmas shopping -- the cost of smartphones smarts.

The bottom line: Ouch.

Here's Ethan Lowry showing the new reservation feature of Urbanspoon, which is detailed with screenshots in this post.

Something big is shaking at Urbanspoon, the Seattle company behind a hugely successful iPhone restaurant-finding application.

The company is launching a reservation service called "Rez" that adds a new dimension to its eponymous app and Web service.

Well-to-do parents who get lost or bored taking their children to the zoo have a new lifesaver: The Woodland Park Zoo just released an iPhone App.

The 99 cent program uses the phones' GPS system to pinpoint location and nearby exibits, play areas, restrooms and concession stands. It also provides a schedule of activities, animal fact sheets and a "friend finder" that locates other iPhone users at the zoo.

Additionally, the app ties into Facebook and Twitter, so users can keep their online pals updated while roaming the zoo.

The zoo contracted with Austin, Texas-based Avai Mobile Solutions to develop the software. Proceeds from its sale "go toward the zoo's animal care, education, conservation and operations costs," the release said.

A photo by the zoo's Ryan Hawk:

It's been awhile since we've heard about Starbucks working with Apple, but the coffee giant today is releasing two iPhone apps, including a mobile payment system it's testing in Seattle and Silicon Valley.

The first app, "myStarbucks," is a locator that shows where you can find a Starbucks in case there isn't one across the street. It displays information such as whether a particular store has a drive-through, hot food or a Clover coffee machine. It can also be used to store and share favorite drinks and other items and check drinks' nutritional details.

The second app, "Starbucks Card Mobile," brings the chain's payment card to the iPhone and iPod touch. You can add money to your card account from the app, and spend it at Starbucks stores by rendering a 2-D barcode on the device's screen.

Other apps are available to locate coffee shops and even display barcodes on mobile devices, but the Starbucks brand and promotions will probably drive a lot of downloads.

Both apps are free, and, no, you can't use either one to order ahead and jump the line for a finished, pre-paid beverage.

A spokeswoman said the company looked at pre-ordering with the apps, but it's difficult to be sure the timing will be just right, and that customers don't arrive to find a cold, stale beverage sitting on the counter waiting for them.

Here's the list of stores testing the "Starbucks Card Mobile" payment trial. In Seattle, they are at Key Tower, Columbia Center, 1st Interstate / Wells Fargo, 40th Floor Columbia Tower; Seventh & Stewart; Seventh & Pike; University Village II; and Madison Park.

The California stores include:

20520 Stevens Creek Blvd., Cupertino
5180 Stevens Creek Blvd., San Jose
1037-C El Monte Ave., Mountain View
Shoreline & Pear, Mountain View
Castro @ High School, Mountain View
Miramonte & Cuesta, Mountain View
Charleston & Independence, Mountain View
1687 Hollenbeck Ave., Sunnyvale

Apple chose not to hassle Real Networks over the Rhapsody iPhone app, apparently. It's on iTunes today, perhaps because Apple expects limited uptake given the price of Real's service.

The app itself can be downloaded for free, but it only streams music from Rhapsody if you pay for Real's $15 a month "Rhapsody-To-Go" mobile service, which is a premium over the standard $13 Rhapsody service and only works with Windows PCs.

(To clarify - if you have the standard "ultimate" service, you can upgrade for $3 more a month to use the app.)

It's a cool application - it streams songs from Rhapsody's library of more than 8 million songs to iPhones and iPod Touches and can be used to create playlists or play Rhapsody radio stations - but iTunes apps generally have to be cheap to be hits. How many iPhone users will be interested in a $15 month music service on top of their already expensive service plan?

Investors seem to think a lot - Bloommberg noted that RNWK climbed as much as 14 percent today on news of the app approval. Wow.

At last check it was up about 7 percent, to $3.63, but maybe Wall Street is more impressed with the buzz around Rhapsody releasing the new Jay-Z album "The Blueprint 3" two weeks early.

The $15 cost isn't shown on iTunes, although the app's description mentions - in the third paragraph - that a subscription is required.

Real provides a seven-day free trial of the mobile service, which is stingy compared to the 30-day trial offered on the desktop service.

Real's announcement said the company will release an Android version later this year and is looking into versions for Windows Mobile, Palm Pre and other phone application outlets.

Sounds like a thin batch of Cupertino cider today, judging from the testy coverage of Apple's hyped "rock and roll" press conference today.

Silicon Alley Insider: "Good to see Steve again. But a snooze fest for any Apple fans expecting new, must-buy products."

Engadget on the new iPod nano: "We came and we saw ... but there's not much to say. It's exactly the same save for that new coating, bigger screen (which does help), and tiny little camera around back. Video quality looked decent, but you really can't tell on the small screen. If you've ever held a nano -- this is the same experience."

Engadget on the new iPod Touch: "We just got done handling the new model, and really, there's not much to say. It's a little snappier, but we didn't do any heavy game playing, and otherwise it's exactly the same. We thought it seemed thinner, but the cold hard specs stopped that idea in its tracks."

Gizmodo: "I don't expect Apple to deliver on rumors. After all, most rumors are crap, even John Gruber's iPod touch camera prediction. But that doesn't stop me from asking questions: Why the hell there is no camera on the iPod touch?"

Ars Technica: "All of the updates are unsurprising, and for the most part keep the various iPod models up to date. The nano obviously received the bulk of the attention this time around, making it arguably the value leader among the various options. We are still scratching our heads over the ho-hum refresh of the iPod touch, though. Despite the bump in speed and capacity, ignoring the other possible upgrades, especially the camera, seems like a very un-Apple-like blunder."

9to5 Mac: "Having rushed back from the European briefing, got to say the general consensus is that while the new improvements in iTunes look good, and while the iPod nano has been given some great new features, most felt a little underwhelmed."

I wonder if the off-put pack of gadget journalists will find anything to love in the redesigned Zune launching on Tuesday, or if you they won't be satisfied until MP3 players finally get 12 megapixel cameras, 4G wireless and terabyte flash drives.

Meanwhile, the new $150 nano+video camera is probably going to top holiday wish lists of well-off kids across the nation.

The antidote to iPhone App fatigue may be a pint or two at the Fremont Oktoberfest, but how do you choose from all the different beers?

With the new Oktoberfest iPhone application, of course. The show this week released a free app to "help streamline navigation of the festival" taking place Sept. 18-20.

The app details the styles of beer being poured, plus it has the ability to rate beers on a one to five mug scale. Ratings are shared with other users, so you can beeline to the best offerings.

There's also a map, including locations of entertainment and the bathrooms.

If this sounds cool, you may want to also download Avvo's "Last Call" beer counter app, which estimates blood alcohol content and suggests taxi services and DUI attorneys.

RealNetworks went public today with its pending Rhapsody iPhone application, which will stream music from its 8 million track library to the device and allow users buy MP3s.

Unless Apple decides that Rhapsody diminishes the experience of using iTunes and rejects the application.

Apple and Real have gone at it before, but Real's timing is pretty smart: With regulators looking into its rejection of Google Voice, Apple doesn't need any more bad press about rejecting competitive apps.

Real's also developing an Android version of the Rhapsody application.

The buzz around the Rhapsody app may get more subscribers, but if Real really wants to invigorate its service, it will have to cut the $13 to $15 per month price to compete with Napster's $5 per month offering.

Here's a video of the Rhapsody app that Real released as part of its geurilla app application campaign:

Rhapsody on iPhone from Rhapsody on Vimeo.

It's still early days in the mobile application marketplace and Apple's App Store hasn't won yet, competitors told game developers during a panel at the Casual Connect conference this afternoon.

A new version of Microsoft's equivalent, a Windows Mobile marketplace, will start taking submissions from developers on July 27, said Steve Hegenderfer, Windows Mobile group product manager. The company's still trying to figure out things like whether to set price tiers.

Hegenderfer said Apple has "early mover" advantage but the industry is still in its infancy, with all sorts of new opportunities, he said.

"If anyone thinks Apple is going to run this thing they're sorely mistaken," he said, adding that "we are so early, we are barely scratching the tip of the iceberg, and it's exciting."

Nokia launched its "Ovi" mobile application store on May 23, said Patrick Stanton, the Finnish phone company's director of content operations.

Stanton didn't comment directly on how it will compete with Apple's App store, but noted that the Ovi store software is being preloaded on Nokia phones and the company ships about 300 million units per year.

There will eventually be half a dozen big marketplaces and developers are going to offer their applications in all of them, Stanton said.

"We're all playing in similar spaces so you're going to have to look at how these things evolve over time,'' he said. "It's going to be a competitive marketplace for some time to come."

Hegenderfer said the winning mobile marketplaces will be the ones that enable developers to make a living.

"That's what its gong to come down to ... who is going to allow you to make more money than anyone else," he said.

But developers in the audience said it gets complicated to develop for platforms with multiple devices.

"If I build for you I've got to build for nine form factors," one told Hegenderfer, before telling Stanton that writing for Nokia's Symbian platform "doesn't do me any any good on the PC platform or Mac platform" and "it's wickedly hard to develop for because of your memory model."

If an Apple representative was in the room, he continued, he'd tell that company to open up its platform.

Hardware analysis firm iSuppli has posted one of its fascinating teardown reports, on the iPhone 3G S, showing the source of components and estimating the manufacturing costs.

It estimated the 16 gigabyte phone's parts cost $172.46 and manufacturing costs are $6.50, for a total of $178.96. That's up just a bit from iSuppli's $174.,33 estimate for the previous 8 gigabyte iPhone 3G.

Backing up the speed claim, the new device has a 600 Mhz ARM processor made by Samsung, up from the previous model's 400 Mhz processor.

One intriguing tidbit: Apple switched to a Broadcom wireless chip that has FM radio capability, as well as Wi-Fi and Bluetooth. Previously the iPhone used a Marvell WLAN chip and a Cambridge Silicon Radio Bluetooth circuit.

Could FM capabilities finally be coming to the iPhone and iPod Touch? An Apple spokeswoman declined to comment.

Here are few images from the iSuppli report, used with the company's permission:

Heading to Paris or Rome with your iPhone?

You lucky dogs may be interested in new iPhone Apps from Edmonds travel guru Rick Steves.

The apps are multimedia walking tours that show your location and can be tapped to present more information about nearby sites, history and viewpoints.

A compass icon can be used to find nearby hotels and restaurants, with prices and phone numbers, plus the nearest restrooms.

The latter feature could be worth the $4.99 price per tour.

Publisher Avalon Travel today announced the first four apps, which are sold individually: Rick Steves' Historic Paris Walk & Tour, Rick Steves' Louvre Tour, Rick Steves' Orsay Museum Tour, and Rick Steves' St. Peter's Basilica Tour. Coming by July are tours of Versailles and the Roman Forum and Colosseum.

The apps also include a "pull-down" audio player to hear Steves talk about sections of a tour or work. Some sights also include video clips from his PBS travel show.

They're also self-contained, so they won't cause roaming charges after they're downloaded (other than the price of the trip ...).

Seattle developer Ubermind Inc. built the apps.

Talk about a nice debut: Fremont software development shop Rogue Sheep won an Apple Design Award for its very first iPhone App.

Rogue Sheep started working on its "Postage" app a few months ago and finished just in time to enter the design contest, which concluded at this week's Apple Worldwide Developer Conference.

"Postage" is a $4.99 application $4.99 (but on sale at $2.99 until June 17) for turning photos into post cards before they're sent from an iPhone. Apple's award site said "Postage sets a new standard for attractiveness and ease of use in an iPhone app."

Rogue Sheep was started five years ago as an Adobe development shop by former Adobe engineers Christopher Parrish, Daniel Guenther, Matt Joss and Jeff Argast.

Parrish said they're hoping to consult with companies looking to develop iPhone apps and build more apps on their own. They've already seen a surge of traffic since the award was announced Tuesday night.

"It definitely looks like it's going to be one of the bigger bumps we've had,'' he said.

Download speeds of up to 7.2 megabits per second (theoretically) will be available on AT&T's 3G network after upgrades are completed this year, the company said today.

The catch is you'll need a new phone or laptop card to get the fastest speeds. Users should also expect "typical real-world" speeds to be "less than the theoretical peak and will vary based on a number of factors, including location, device, and overall traffic on the local network at a given time."

There's a flurry of mobile phone rumors and tidbits today, which is distracting from the actual news from Sprint and Palm. Wonder if that's a coincidence ...

Sprint and Palm today announced pricing and launch details for their hot new Palm Pre smartphone, which they're blatantly pitching as an iPhone killer. The phone will be available June 6 for $199 (actually $299, with a $100 rebate and obligatory two-year contract).

Here's a Sprint-provided image of the Pre, which has a 3.1-inch touchscreen, a slideout Qwerty keyboard, a 3.0 megapixel camera, 8 gigs of memory and a tablike interface for flipping through applications, which can be run simultaneously:

Simultaneously, new details of the next iPhone were "leaked" to an enthusiast Web site, which I couldn't access but which was pounced on by gadget blogs. It said iPhone 3.0 will launch July 17 with a 3.2 megapixel camera and more memory -- 16 and 32 gigabytes.

Whether it's real or not, the info from Appleiphoneapps.com is tantalizing:

-- 32GB and 16GB to replace current capacities
-- $199 and $299 price-points to be maintained
-- 3.2 megapixel camera
-- Video recording and editing capabilities
-- Ability to send a picture and video via MMS
-- Discontinuation of the metal band surrounding the edge of the device
-- OLED screen
-- 1.5x The battery life
-- Double the RAM and processing power
-- Built-in FM transmitter
-- Apple logo on the back to light up
-- Rubber-tread backing
-- Sleeker design
-- Built-in compass
-- Combination of the camera, GPS, compass, and Google maps to identify photo and inform about photo locations.
-- Turn by turn directions

Other challengers joined the rumble.

Microsoft today opened the beta version of its My Phone Web service to the public. The free site gives users an online repository where they can store and sync contacts, appointments and photos from their mobile phones. The site can be used to backup and restore information on a phone, or share photos taken from mobile phones. So far it only works with Windows Mobile 6, though.

Also surfacing is a glimpse of the new Android "Rosie" interface being developed by Google, HTC, to distract the Android crowd from the Pre and iPhone 3.0 perhaps?

A video of "Rosie" from ">Androidguys.com:

Anonymously sourced story of the day: BusinessWeek reports AT&T may lower prices on iPhone data plans, starting with a $10 per month reduction this month:

"The possible price cut likely reflects the back-and-forth between AT&T and Apple as they work out whether and under what terms AT&T would remain the sole U.S. iPhone carrier."

Looks like a companion piece to the "Verizon getting iPhone" stories that emerged a few weeks ago - hardball negotiations are underway, with press leaks applying pressure.

Seattle-based Web music service iLike today announced a suite of new tools for musicians to publish updates on social media services, including Twitter and MySpace (its arch rival in the social media "artist services" space).

But the showstopper may be the suite's "self service" iPhone App creator, a technology that seems as if it has broader potential. The automated system provides a wizard that lets musicians choose which content they'd like to put in an iPhone App, which iLike then creates and submits to Apple on their behalf.

Most of the musician services are free, but iLike's charging a fee for App creation and for new premium Web analytics.

"This is probably the most significant technology announcement we've made since we first launched,'' Chief Executive Ali Partovi said of the suite.

The startup employs about 24 people and became cash-flow positive last October. Rumors have swirled about iLike being acquired but Partovi wouldn't say if anything's currently in the works.

Maybe buyers will be intrigued by the new console, which further platformizes the iLike "artist dashboard," now being used by about 300,000 musicians.

With today's update, the console can be used to synchronize musicians' iLike pages with Twitter feeds, YouTube channels, MySpace concert listings, Facebook page "Music" tabs, Web sites and Ticketmaster pages.

It's hard to get too worked up about iPhone applications now that jillions are available, but the new Zillow iPhone App debuting tonight is amazing.

It could be one of those bits of software that convinces iPhone holdouts that, maybe, it's finally time to get the hardware.

Especially if they're real estate voyeurs, as two-thirds of Seattle has become over the past decade.

Everybody wants to play with Verizon, apparently.

First rumors began swirling about Apple working with Verizon on a budget iPhone and Web tablet device.

Now Microsoft has joined the party, offering Verizon a touchscreen, multimedia phone, according to a new report from the Wall Street Journal.

The story suggests this is the Microsoft mobile product code-named "Pink," which has been linked to the Zune group by previous speculative articles.

According to the Journal, it involves Microsoft software on phone hardware another company will manufacture.

Here's my guess: The device Microsoft is offering to Verizon will be a blend of what Microsoft believes are its best mobile software products -- a melange of the upcoming Windows Mobile 7, with groovy design input from the Danger group and Zune's music discovery and social networking features.

I'm winging it there. More authoritative is BusinessWeek's new piece on what Apple's working on with Verizon. An excerpt:

One device is a smaller, less expensive calling device described by a person who has seen it as an "iPhone lite." The other is a media pad that would let users listen to music, view photos, and watch high-definition videos, the person says. It would place calls over a Wi-Fi connection. One of these devices may be introduced as early as this summer, one person says.

Highlights from Apple's preview of the new iPhone software: It's finally getting cut-and-paste capability and MMS.

Apple's also offering new tools for companies to produce digital book stores for the iPhone and subscription services through the App Store, adding some of the key business capabilities in Amazon.com's Kindle.

I wonder if the New York Times and other papers will stop offering free news apps on the iPhone, now that Apple's giving them tools to charge for subscriptions.

The 3.0 software upgrade is coming this summer. A few of the features -- including MMS and A2DP Bluetooth -- won't work on the first generation iPhone. The upgrade is also available for the iPod Touch, for $10.

This is culled from live blogs from the Cupertino event include Engadget and Eric Savitz.

Meanwhile, on the other side of the country, Amazon was sued today in Delaware by Discovery Communications, which alleges the Kindle infringes on Discovery's patented copy protection technology.

That's the latest question posed by Seattle venture capitalist Peter Zaballos on his new blog, Open Ambition.

Zaballos, vice president at Frazier Technology Ventures, today described his personal Apple museum, including a Newton MessagePad 110 he bought in 1994.

When his family had a similar laugh trying the new Google voice search app on his iPhone, he recalled playing the same game with the Newton's imprecise voice translation feature. Even Doonesbury and "The Simpsons" mocked the system.

All the rest of what made the Newton incredibly revolutionary got swept aside, and to a large degree pronounced a premature death sentence on the product line, and the whole category until Palm, and now the iPhone.

So, where are the comics ridiculing Google's voice search for the iPhone?

That should get more attention than his previous, but equally thoughtful, postings on topics such as "The nuance of Series B financings."

Seattle mobile application developer Zumobi's jumping on the reality TV train today, releasing the "official" "American Idol" app for the iPhone.

Chief Executive Ken Willner said the $1.99 app is built around content, including exclusive material such as interviews and behind-the-scenes clips. It also has a "buzz" section with blogs, news feeds and other updates, plus a module devoted to show participants, with biographies and photos.

Willner has some history with "Idol": In his previous job as vice president of advertising and media at AT&T Wireless when it built a major campaign around the show, including public voting by text messages.

Those connections helped Zumobi pitch for the iPhone app contract but "it was a competitive process and we won based on the quality of the work we delivered and the team we have here,'' Willner said.

The app won't have interactivity live during the show, but it does have a bracket feature fans can use to rank their expected winners, and show their predictions to friends. (Maybe Zumobi should partner with BuddyTV's new reality fantasy league service.)

Revenues from the app -- and advertising that may eventually appear -- will be shared with "American Idol." Apple's also participating as a marketing supporter, Willner said.

Willner said the application will be exclusive to the iPhone during this season of the show.