By Michael Santo
Executive Editor, RealTechNews

Toni Sacconaghi, an analyst at Bernstein Research, has backed off his initial assertion that tons of iPhones are sitting on warehouse shelves. Rather than that, Sacconaghi estimates about 1 million iPhones have been unlocked - which is possibly worse news for Apple.

This number came about by taking Apple’s numbers, subtracting AT&T’s activations and those iPhones estimated to be sold in Europe already, as well as a reasonable number on the shelf. While some may say this is still good for Apple, as a sale is a sale, Apple loses a lot of revenue because it’s not getting its percentage of the monthly plan fee paid to the carriers.

In fact, Sacconaghi estimates that an unlocked iPhone generates about 50% less lifetime revenue and about 75% less profit for Apple than one running on one of Apple’s carriers. And, he said, if the percentage holds constant and 30% of the 10 million iPhones Apple estimates it will sell this year were unlocked, then the company’s earnings could be as much as $0.37 / share less in each of the next two years. Whew.

At the same time, analyst firm Piper Jaffray estimated that just under 850,000 iPhones - or 25% - were sold unlocked last year. Either way, a huge number, and it shows just why Apple is so anxious to keep the device locked down on networks.

By Jimmy Daniels of The Grid Live
Contributing Writer, RealTechNews

I just finished reading this article from Reuters that talked about U2’s manager taking ISP’s to task for not ending illegal music downloads and protecting the musicians, i.e., his cash cow. He goes on to say that the government helped the ISP’s create a “thieves’ charter” and that the ISP’s need to share some of the money they are making from music. How are they making money from illegal music downloads?

To great applause from the audience of music managers, McGuinness insisted that disconnection enforcement would work. “I call on ISPs to do two things. First, protect the music, and second, to make a genuine effort to share the enormous revenues. They should share their ingenuity as well as the money. We must shame them. Their snouts have been at our trough for too long.”

Later, musician Peter Gabriel added his support, agreeing that a lot of money is being made out of music by ISPs. He expressed concern, though, about blanket deals. Source: Reuters

We Say: I know the ISP’s can charge more money for people to get/use more bandwidth, etc, but exactly how do they make money from illegal music downloads? He’s just a moron right, or am I missing something?

By Michael Santo
Executive Editor, RealTechNews

As I indicated yesterday, I’ll believe it when it happens: free, legal, unlimited downloads from all the major labels and more. Right. So far it hasn’t worked out that way.

For one, the site keeps pushing back its launch. It was supposed to be over the weekend. Then it was 12:01AM Monday. Now the site says it’ll be tonight.

Also, Qtrax said it had deals with all four major labels. This sounded too good to be true, because it was hard enough for Amazon MP3 to sign all four labels with a more conventional offering. Well, although the Times Online announced the new service this morning, it also later posted a later story embarrassingly (for Qtrax) titled “Music file-share site Qtrax forced into humiliating U-turn.” Yep, as many (including myself) suspected, it appears all the deals that Qtrax had been talking about haven’t happened.

All four labels deny any deal with Qtrax, although Universal did indicate it was in discussions with Qtrax.

Alan Klepfisz, CEO of Qtrax said,

“We are not idiots. We wouldn’t have launched the service in front of the whole music industry unless we had secured its backing. We feel we have been unfairly crucified because a competitor tried to damage us. Everyone is very upset. We do have industry agreements including the major labels. Even today we are working on more deals.”

He added that although “ink hadn’t dried” on some of the deals, Qtrax still planned to deliver on its promises “within months.”

We Say: Hadn’t dried? If you listen to the labels, it sounds like the ink hasn’t even been put down on paper yet.

In addition, as we know, with the Qtrax app being required for searching, downloading and playing of tracks, despite their assertion of “no spyware,” you know there is some “phoning home” going on in order to provide the number of times each track is played for revenue purposes. Sounds like something that will get privacy advocates’ hackles up.

And with no iPod support (at least for now, if ever), will this service be DOA? If it was me, I’d hold off … unless you want to try out their software just for comparison purposes.

By Michael Santo
Executive Editor, RealTechNews

Despite how users drool over the iPhone’s version of Safari, mobile browsers still have a tough time rendering pages that with lots of Ajax, Flash, Java, JavaScript, QuickTime, and on and on. For one thing you don’t have a Core 2 Duo in that smartphone, now do you?

Today at Demo ‘08, Skyfire unveiled a new mobile browser that promises PC-like browsing on a smartphone. Skyfire is a free (for now, at least) downloadable browser. It currently works on Windows Mobile 5 and 6 (PPC and Smartphone editions). Symbian, according to Skyfire, is coming soon as well as “other platforms and geographies” (PalmOS?).

In their accompanying press release, Skyfire CEO Nitin Bhanari said,

“For too long consumers have been promised the ‘real Web’ on their phone, only to be disappointed by slow rendering, error messages, no Flash support, watered down WAP pages or second-rate mobile versions of their favorite site. Skyfire has remedied those ills at a speed not seen before on the mobile platform. By extending the PC Web experience to smartphones, we fully expect Skyfire to fundamentally change the way people use their phones.”

Wait, wasn’t that Safari’s aim?
More

By Michael Santo
Executive Editor, RealTechNews

When Amazon MP3 launched last year, you can bet it was looked upon by Apple as just another minor threat to iTunes’ dominance. But with the signing of Sony BMG, Amazon is the only retailer selling DRM-free music from all four major music labels. And now it’s a major threat.

Sunday Amazon announced that Amazon MP3 is going global, spreading DRM-free music worldwide.

In a press release, Bill Carr, Amazon.com Vice President of Digital Music said:

“We have received thousands of e-mails from Amazon customers around the world asking us when we will make Amazon MP3 available outside of the U.S. They can’t wait to choose from the biggest selection of high-quality, low-priced DRM-free MP3 music downloads which play on virtually any music device they own today or will own in the future. We are excited to tell those customers today that Amazon MP3 is going international this year.”

No doubt they are being bombarded with emails, but this certainly isn’t going to slow them down. You can except “when, when, when?” emails to start filtering in to Amazon.com.

I’ve always said that the fact that Amazon MP3 used the standard MP3 format rather than AAC as Apple does with its DRM-free selections is a major advantage. To be honest, friends and others I’ve spoken to are all moving to Amazon MP3 for their purchases. Yes, it’s not quite as easy as buying straight through the iTunes application, and it’s still in beta, but then how many years has Gmail been in beta, right?

We Say: Unfortunately Amazon can’t be more specific than 2008, as that could be as long as 11 more months, and that gives Apple plenty of time to get its act together - although you can bet Jobs and company have already felt a measure of concern over Amazon MP3 already.

By Michael Santo
Executive Editor, RealTechNews

It’s no secret that a war has broken out between a group of hackers calling themselves Anonymous and the Church of Scientology. However, it appears the first innocent casualty has fallen.

The group has subjected the Scientology servers with DDos (Distributed Denial-of-Service) attacks in what’s known as Project Chanology. The war was started in earnest when the Church forced sites to take down the creepy Tom Cruise video you may have heard of or seen.

Of course, all wars have collateral damage.

The Church of Scientology has hired Prolexic, a company that protects websites from DDOS attacks by publicly substituting a Prolexic server for the attacked server, filtering out the bad traffic and passing the “good” traffic to the real server.

Well, if you knew what the ip address of the real server was, you could bypass the substituted server and attack it directly. According to Wired, one of the moderators on 711chan.org, Splongcat, was given info from a friend about the server’s real address on Friday.

However, the info was wrong, and instead of targeting the COS server, the attack targeted the of Etty Hillesum Lyceum, a school in the Netherlands (students pictured above). Poor intelligence data, eh? Remind you of anything?

Once the mistake was discovered the word went out at the IRC chat room hosted on 711chan.org (currently down) and the school’s site recovered. Splongcat apologized for not doing due diligence and checking before signaling the attack.

If you’re interested, Anonymous’ video manifesto is on YouTube, and you can watch it below.

By Michael Santo
Executive Editor, RealTechNews

The News York Times, home of “All The News That’s Fit to Print,” launched “All The News That’s Fit to Text” on Friday. The new service will deliver features and columns from the NYT as well as features from The Times Magazine via text message to cell phones and mobile devices.

To use it, send a keyword to 698698 (NYTNYT) and you will either get the latest three articles from that given section or the most recent column from their favorite columnist in a particular section.

Nice idea, but the limitations of text messages (160 characters or less) make the service less than ideal. What you get back from the NYT will be a short blurb with an URL to the story, or a short blurb asking you to reply with “m” for “more” or “3″ or some other digit for “desc” which I assume means description. I could never get it to work.

Trying to get more information using the reply function leads to frustration, and using the URL defeats being able to use the messaging feature to eliminate the need for a data plan to surf to the site. I mean, if you have to web surf there anyway, why not just use your browser in the first place?

Also, a few times I sent a keyword, and never got anything back. Looks like there are still bugs to work out.

The list of sections is above. You can go to the press release to see the list of columnists, etc. Just remember: the service still has a lot of issues, as I indicated. If they can work the kinks out, it might not be bad, but the limits of text messages will always place a limit on the usability of this service.