This is the basic problem:  Apple announced at Macworld they they’ve sold 4 million iphones while AT&T announced that they’ve only activated around 3 million iPhones.  This has caused pundits to go stir-crazy, with some predicting dire financial repercussions for Apple.  Oh the humanity!

Where are the iPhones?

That’s the 1 million dollar question.  Are they in inventory?  Have they been unlocked in the USA?  Or have they been unlocked and sold in the back alleys of Hong Kong?  Are they in King Tut’s tomb?  There are two facts we can take away from all of this hoopla.

1. There IS a significant discrepancy between Apple’s numbers and AT&T’s; and
2. this whole story is completely overblown.

For starters, Apple is still making significant margins on each iPhone sold.  An unlocked iphone, however, doesn’t provide Apple with a monthly revenue stream from AT&T.   That said, a significant number of the unlocked iphones are rumored to be overseas in countries that don’t yet sell iphones, in which case Apple is not currently missing out on any revenue that they could potentially be earning from AT&T.  If the missing iphones are affecting anyone, it’s AT&T, not Apple.

Furthermore, it speaks to the desirability of the iPhone that people are willing to pay big money for a phone that’s not even out in the market where they reside.  And not only that, but they are willing to purchase a phone with no warranty, no support, and the knowledge that their unlocked iPhone might be made unworkable by future software updates from Apple.  And on top of that, users are paying a premium for these unlocked iphones.  Someone has to be making a profit after all.

Again, many of the iPhones seem to be thriving in overseas markets where Apple has yet to strike deals with wireless providers.  If anything, iPhone sales in these countries can be seen as a temporary bonus for Apple’s bottom line.  So yes, the iPhones are missing because people want them so damn much they’re willing to pay extra for an unlocked version.  Not that bad a problem to have, all things considered.

It seems that no matter where you turn lately, you can’t escape the word Apple when it comes to technology news. AT&T is helping to continue that trend as they earlier this week revealed their Iphone business plan. While there might have been a slight lull on Iphone conversation with all the other topics going on recently, I expect we can get ready to hear about it anew as excited employees across the country prepare to retire their current business phone to be the paper-weights they’ve always felt they were.

In my office, the Blackberry has been the phone of choice and rarely does a day go by that I’m not helping one person or another with a variety of Blackberry issues. Yet in our building filled to the brim with diehard Blackberry fans and self-proclaimed Apple haters, time and time again do I get asked by my coworkers, as they pause between tracks on the newest model Ipod, “when will we get to use the IPhone?”. Despite the fact most of them live and breathe by their Blackberry and that I do not know a single one of them who uses AT&T as their service provider, their desire for the IPhone is loud; a lion roar to my ears. I can almost hear their joyful, child-like glee as their minds race with fantasies about being able to open their Excel spreadsheets on their phone.

While I’d be interested to support the technical issues of the IPhone, (simply because that means I could play with them more often) after doing so with the Blackberry this long, I do not know how keen our Higher Ups will be to fork over the funds that AT&T is asking for, especially considering the excellent deals we have in place through a variety of providers. I would imagine this outlook applies to many businesses, yet the demand for the IPhone is so high it will be impossible to ignore. High enough that AT&T can confidently charge over two times what they do for consumer packages. And they can go to bed smiling, because we’ll pay it.

Those familiar with AT&Ts consumer rates will see the leap in price right away. With their business plans, they currently offer a total of three enterprise data options (each require a minimum two-year contract):

IPhone 200: 200 SMS, unlimited domestic data, visual voicemail – $45
IPhone 1500: 1500 SMS, unlimited domestic data, visual voicemail – $55
IPhone Unlimited: Unlimited SMS, unlimited domestic data, visual voicemail – $65

While I find the jump from 200 SMS to 1500 SMS for only a 10$ increase fair enough, it’s hard to swallow the IPhone 200 plan starting at $45 when the same level consumer plan will run you around $20, though the unlimited data certainly counts for something. In addition, AT&T is currently offering a $25 monthly credit to new accounts that are activated before the end of March, so that lessens the sting quite well, letting only those who miss this deadline take the brunt of the venom.

So while I’ll continue to wait patiently for the actual device itself to lower in price, I will be sorely tempted if my bosses end up breaking under the demand and decide to take advantage of these business plans. In the meantime I’ll have to be satisfied with my metal can with the string tied to it.

More details of the IPhone and AT&T’s service plans may be found on their website: AT&T IPhone Business Plans

I don’t ask that sarcastically, but rather as a matter of curiosity. I just can’t seem to figure out who this computer is being marketed for. Let’s take a look at the specs: The base model is 1.8 ghz with 2mb ram , an 80gb solid-sate drive, and a 13.3 inch screen. It comes with an iSight camera, as do all Macbooks, a full-size and backlit keyboard, and a multi-touch gesture supported trackpad. All cool stuff. But what’s noteworthy about the MacBook Air isn’t what it has, but what its missing.

The MacBook Air is missing an optical drive, though an external is available for purchase from Apple. It’s also missing an ethernet port and a firewire port, which is extremely important if you’re hoping to import any video onto your mac. Also noticably absent is a user replaceable battery. As opposed to other electronic devices, average consumers actually make use of replaceable batteries for their laptops. The most important thing it’s missing, however, is a cheap price tag. For you see, this lightweight baby is gonna set you back at least $1800 bucks — and that’s before you add on an external optical drive or more HD space. This begs the question: Who would actually buy this machine?

For nearly $700 less, users can purchase a regular MacBook with much more impressive specs. And though not as thin or light as the MacBook Air, the regular MacBook is no slouch itself. The most recent iteration of the MacBook weighs a measly 5 pounds, only 2 more than the MacBook Air.

Too weak for Pros, and too expensive for everyone else?

The MacBook Air is clearly not versatile or powerful enough to be the computer of choice for power users, and its hefty price tag is sure to put off users looking for a primary computer. I guess the computer could appeal to heavy travellers who might want the thinnest computer available, but with the regular MacBook being significantly cheaper and only mildly heavier and larger, is the MacBook Air worth the extra price? I simply fail to see what void the MacBook Air is filling and maybe that’s where the answer lies. The MacBook Air seems best used as a secondary computer, a road companion of sorts.  But given it’s extremely thin build, is it durable enough to be the computer of choice for heavy travellers?  In the end, perhaps it will be a luxury product that will sell surprisingly well on account of its shockingly small form factor. And for all I know, seeing and using a MacBook Air in person might be so impressive that it might convince people to lay out the extra cash right there on the spot.

Some are already calling the MacBook Air a disappointment, and I myself have my doubts as to how it will fare in the marketplace. But you can’t deny that Apple is once again pushing the limits of what engineering can do and that’s precisely why they’ve succeeded in the past. And because the bosses over here at Itola weren’t kind enough to cough up the cash so that I could hit up Macworld, I’ll have to wait two weeks before I can get my hands on one and give it a full review.

Nevertheless, many media journalists believed adult content was going to help determine the winner of the now defunct battle between Blu-ray and HD-DVD. As will be explained below, porn on Blu-ray is not the real issue, but if anything, these stories conjure up memories of the Sony Betamax and JVC VHS wars of the late 70’s and early 80’s. Let’s take a look back.

Betamax vs. VHS and Porn: A trip down memory lane

Sony’s Betamax was released in 1975, one year before JVC introduced its well-known VHS player.

After a battle that lasted for almost 10 years, VHS emerged victorious despite the fact that Sony’s Betamax was largely recognized as the technologically superior player. The reasons behind VHS’s victory cannot be traced back to one deciding factor, but one egregious difference between the two formats was that Betamax players could, at first, only play tapes that lasted up to an hour in length, clearly not long enough for a standard Hollywood movie.

Another popular theory, though impossible to substantiate, is that Sony’s refusal to allow adult content on its Betamax player allowed VHS to pull away and become the de-facto home video standard for nearly two decades.

Does porn on blu-ray even mean anything?

Sony’s stance regarding porn on Blu-ray is completely irrelevant for a few reasons. For one, Blu-Ray already seems well positioned to overtake HD-DVD as the next HD standard, porn or not. But more importantly, sales of adult-oriented DVD’s are slowing down significantly as consumers are flocking to the Internet to get their adult content for free.

As a funny aside and perhaps a testament to the glorious nature of 1080p!, many porn stars are opposed to Blu-Ray, and HD in general, because it reveals blemishes on their bodies that would otherwise not be noticeable. But I suppose that porn in HD would allow for some interesting titles. Move over “Debbie does Dallas” and say hello to “Patti does Pittsburgh as she goes to a Pharmacy to get Pro-active for her Pimples” and “Vainy Vixens 4″.

According to the experts, there’s a clear-cut winner in the prolonged and drawn out battle between Blu-ray and HD-DVD.

Earlier this week, Warner Brothers dealt what many consider to be the death knell to HD-DVD by announcing that beginning in May ‘08, it would release new movies exclusively in the Blu-ray format. Interestingly enough, the impetus for Warner Brothers decision was that its customers overwhelmingly prefer Blu-ray over HD-DVD. This leaves Paramount and Universal as the last 2 major studios standing behind HD-DVD, although rumors are circulating that they will both abandon ship once their contracts to support HD-DVD expire. Universal, however, issued a statement today denying that it would opt out of its contract and would continue to support HD-DVD. Tellingly, Microsoft, which has long opposed a Blu-ray supported Xbox 360, recently changed its tune and said that it would consider Blu-ray support for the Xbox 360 if there’s enough consumer demand.

With that said, a larger question to ponder is how consumers are going to get their HD content in the future. Assuming that Blu-ray has in fact won its battle with HD-DVD, consumers will rush to hook up their HDTV’s to the aggressively priced Blu-ray players. As someone who has seen a Blu-ray player hooked up to a full screen 1080p Sony Bravia, I can testify under oath that it will blow you away.

Will Blu-ray dominate the living room?

So will Blu-ray soon become the key component in everyones living room? Not exactly. This isn’t the year 2000 and hooking up an external device to your TV is not the only way to access digital content. The iTunes music store allows you to download movies and stream them to your Television set with an AppleTV set top device. Also, Netflix also allows its users to stream movies onto their computer. Moreover, Netflix recently partnered up with LG Electronics to produce a set top box that will stream Netflix movies from a users computer to their TV. In essence, it’s another version of Apple TV. The wrinkle is that iTunes and Netflix do not yet have HD content available for download, so if optimal picture quality is what reigns supreme, then Sony can sit back and smile as the millions roll in. But don’t expect Apple and other competitors to just sit back quietly.

If anyone has perused the iTunes store for movies, it’s clear that Apple will have to step it up BIG TIME if they want to be a player in digital movie content. Again, the movies are not HD, and their selection of movies is lackluster at best. But with MacWorld a week away, there are already rumors that Apple is going to announce new partnerships with a variety of movie studios that will beef up its current selection of paltry movies.

The War Over Digital Media Is Just Getting Started

So while Blu-ray seems to have won its battle vs the Microsoft/Toshiba supported HD-DVD standard, the war for digital multimedia is just beginning. If streaming HD Content from a computer to an HDTV set becomes common, I imagine people would be less inclined to purchase a Blu-ray player. When you add cable companies into the mix, it becomes a full-fledged battle royale. There is a lot of money to be made with HD movies and cable companies are in a unique position to enter the fray. Comcast, for example, is planning to significantly increase the number of movies it offers to customers via its on-demand service. It’s only a matter of time before people will have the option to choose from watching HD movies on their Blu-ray player, as a video stream via iTunes or Netflix, or through their cable provider. The consumer is clearly the winner in all of this.

If people are particular about their 1080p, however, then Blu-ray will have an early advantage. You see, if iTunes or Netflix comes out with HD content sometime soon, it will be in 720p. 720p is still HD, but 1080p is what Blu-ray is all about! The rub is that the difference between 720p and 1080p is negligible on TV sets smaller than 40 inches. Confusing? Yes. Which is why Warner Brothers taking sides with Blu-Ray is so important. Up until now, the battle between HD-DVD and Blu-ray was a bottle neck that prevented mainstream adaptation of High Def consumer electronics. With the brunt of that battle almost behind us, we can now focus on the new battles that are starting to take shape between some of the big name players in the HD Arena.