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OPINION: Steve Jobs saved the most important part of his iPhone 4.0 announcement today till last — the new in-app advertising system, called iAds.

The iAds system is important because it allows the App Store to create a completely self-sustaining app economy that is sealed off from the wider Web.

Tech guru Tim O’Reilly says the App Store is already becoming a rival to the web itself. The App Store, he says, is “the first real rival to the Web as today’s dominant consumer application platform.” Consumers will have no need to visit the web on their iPhones and iPads if they get everything they need from apps, which is bad news for companies like Google.

“This is a new phenomenon,” Jobs said about apps at today’s presentation. This is the first time this kind of thing has ever existed. We never had that on the desktop, so search was the only way to find a lot of things.”

The App Store economy is already pretty well developed. There is the app purchase mechanism itself through iTunes, and in-app purchases, which allow consumers to buy stuff from inside apps themselves. But there was a big hole: advertising. Ads are already a big part of the app economy, but clicking on them typically takes consumers out of the app and into the browser, an experience Steve Jobs describes as jolting.

But now Apple has built a sophisticated ad-serving mechaninsm right into the iPhone (and iPad, natch), which will make the App ecosystem like AOL in the early days —  a walled garden. And one that has it’s own economy: in-app purchases, and now in-app advertising. There will be no need to go to the wider web anymore — and that cuts out Google.

“What’s happening is that people are spending a lot of time in apps,” Jobs said today. “They’re using apps to get to data on the internet, rather than a generalized search.”

No wonder Apple and Google are at war. Google swooped in a bought AdMob just to keep it out of Apple’s hands (so Apple snapped up Quattro instead). Of course, Google isn’t on the ropes yet. Android is Google’s attempt to keep it relevant in mobile, and so far it’s holding its own against the iPhone.

But if early numbers are any indication, the iPad is going to be an iPhone-sized hit. Combine the iPad, iPhone and iPod touch, and that’s a lot of mobile devices in Apple’s walled garden.

Carrier T-Mobile has announced a bounty of sorts for iPhone switchers. The carrier will pay up to $350 when you trade in your iPhone for a HD2 from HTC. If your turn in a working iPhone, you could get $100 credit toward the Windows Mobile handset, according to a report Thursday.

To obtain the bounty, iPhones must be in working condition and the screen intact. T-Mobile retail locations are participating through May 19.

Right after the announcement of the many new and exciting features going into iPhone OS 4.0, Steve Jobs walked into a Q&A and, asked about widgets on the iPad, casually made this Old Testament reference:

Q: Why have you veered away from widgets on the iPad?
A: We just shipped it on Saturday. And then we rested on Sunday.
Q: So widgets are possible?
A: Everything is possible.

Interesting. You know who else rested on the Sabbath, right? Say what you will about Steve, but he always leaves his ego check in at the door.

[image via Gizmodo]

I think I speak for everyone at Cult of Mac when I say that the last hour has been incredibly exciting. I didn’t expect much from a small, post-iPad event about iPhone OS 4.0: multitasking and iAds, sure, but I still expected it to be something of a snoozer.

Instead, Apple blew my socks off. iPhone OS 4.0 is a huge game changer… and it’s a massive challenge not just to Google’s Android operating system, but their whole mobile advertising business.

When Jobs took the stage, he promised the presentation would touch upon seven “tentpoles” of iPhone OS 4.0. Here’s a short breakdown of each.

Well, looks like that purchase of Quattro really paid off. Steve Jobs just announced iAd, Apple’s own mobile advertising network for app developers.

According to Jobs, an average person spends 30 minutes in an app each day. If an ad is served every 3 minutes, it’s ten ads a day. Multiply that by 100 million devices, and it’s a billion ads a day.

iAds will function in-app. You click on them, but you never get pulled to a browser: they work like innate features of the app. You can even make them games.

It’s a great idea: ads can be freely explored without stopping what you’re doing or psychologically breaking up the experience of an app with getting information.

This is such a simple innovation, but it’s huge. Apple’s done something truly unique here: they’ve figured out a compelling way to compete with Google in the mobile advertising space. I didn’t think it can be done.

And what do developers get out of this? 60% of the revenues, after Apple has sold the ads.

Holy cow. I think iAds just made “Free” the new “$0.99” on the App Store.

[image via Gizmodo]

Boy, this one’s a mixed bag for guys like me with rather prodigious OpenFeint achievement scores: Apple’s just announced their own social network for gamers.

Think of it like Xbox Live for your iPhone (or a native OpenFeint, for that matter). You can use the app to make friends, earn achievements, compare scores and even invite friends to play multiplayer matches against you.

This is fantastic, but I feel really bad for the OpenFeint guys. They’d really made some headway, and now Apple’s just going to casually crush their business.

[image via Gizmodo]

If you haven’t got an iPad, you’ve probably been depressed that iBooks isn’t available on your iPhone.

As if that was going to last for long.

Steve Jobs just announced iBooks support in iPhone OS 4.0. It works very similarly to the way it does on the iPad: in fact, it’s almost a one-to-one translation.

The real improvement here, actually, is the way that iBooks will now automatically sync your page and bookmarks across devices, just like the Kindle. What that means is if you leave your iPad at home, you can read your iBook on the iPhone from the page you left off.

Wow. Apple sure is getting serious about reading… given that the company’s headed by a man who once claimed people didn’t read anymore.

Sick of all your iPhone apps being arranged higgledly-piggledly across multiple screens? iPhone OS 4.0 takes care of that. Now you get folders.

The way it works is you just drag an icon from one app onto another app to create a folder containing both. For example, drag Plants vs. Zombies onto Sword of Fargoal and you create a games folder.

Now, when you want to play a game, all you have to do is tap on the folder, then tap on the game you want.

This is such a brilliantly simple, down-to-earth take on app classification. Say goodbye to the ten horizontal swipes it takes you to get to the end of your iPhone apps: folders will organize everything nicely under a single page.

The third tentpole feature of iPhone OS 4.0 Apple just announced isn’t as big as the last two, but is still quite nice: persistent location.

Basically, it’s just a setting you select under Location Services. When persistent location is on, a special icon shows up on the status bar.

The big deal here is the iPhone will save battery power by not enabling the GPS unit all the time, but by triangulating a phone’s location according to which cell towers it’s near. that’s good enough for most apps, and if you want to be more precise (like in Tom Tom or Foursquare), you just go through GPS like normal.

This doesn’t seem like such a big deal to me at first… but I can’t wait to see what developers do with the API. Things I haven’t dreamed of yet, I bet.

This iPhone OS event is turning out to be a lot less boring than expected. Apple has just announced the next major new API for the iPhone, and it’s a doozy: VOIP.

Skype demoed the concept. Essentially, now, if you want to run a VOIP program on your iPhone, it doesn’t have to be open: it just runs in the background. Want to get incoming calls while you’re on your iPhone through Skype? It’s not a problem… they just pipe right on in, and can be answered at your leisure like a regular call… right down to the same default ring.

This is big, and something I don’t think anyone expected. It also shows some maturity on the part of Apple’s wireless partner, AT&T: it seems like they realized that data’s data, and it doesn’t much matter how you make your call, as long as you pay them.

Sick of third party programs not being able to offer background audio like iTunes does on your iPhone? Guess what? Apple just changed that.

As one of seven new APIs being offered to developers, now anyone can make their app run audio in the background. The big winner here is Pandora, who takes the stage and shows how their music streaming app can now work in the background after only a day of work: the existing iPod controls on the lock screen continue to function and everything! Now let’s see Spotify!

Brilliant solution by Apple here: they’ve enabled multitasking by offering a very limited but comprehensive checklist of services that can run in the background.

Next up: VOIP!

Well, almost everyone called it, but almost three years after the first plaintive cries about the lack of the feature arose, Steve Jobs has just announced that the iPhone OS will be getting multitasking, come summer. Developers can start playing with the preview today.

It’s the biggest of the “tentpole” features Apple is announcing today for iPhone OS 4.0. It works as expected: Jobs double clicks the home button and loads an app switcher, which allows him to cycle through running apps. The app switcher takes the place of the dock. Smooth! Finally!

A great start to a great presentation. Let’s hope, though, that Jobs is being honest when he says they solved the battery drain issue for third party apps, and Apple hasn’t just caved to demand when the feature, while always possible, really wasn’t ready for prime time.

The iPad’s still fresh in every one’s minds, and there’s no shortage of analysts who have wanted to guess how many Apple’s sold yet, but Jobs doesn’t want us to forget how much the iPhone and iPod Touch are kicking ass and taking names.

Here’s the big numbers from Steve’s presentation:

• 50 Million iPhones sold to date

• 35 million iPod Touches

• Safari on he iPhone captures 64% of the US mobile browser usage space, with Android at 19% and BlackBerry at 9%.

• 4 Billion iPad Apps Downloaded through the App Store

• 185,000 Apps available for download

[Image via Gizmodo]

Steve Jobs just took the stage for today’s iPhone OS 4.0 event and started things out with an overview of the pertinent iPad numbers so far.

• 450,000 iPads sold

• 600,000 iBooks downloaded

• 3.5 Million iPad Apps Downloaded

Then Steve showed the slide above, showing a happy little girl hugging her iPad. Enjoy it now, little girl: when the proletariat rise, the consumers shall be the first at the firing line!

[image via Engadget]

httpvhd://www.youtube.com/watch?v=jt-Jaz1oRAU

They’re called bullet hell SHMUPS (shoot-em-ups): Galaga style arcade shooters where enemies puke so many bright bad bullets at you that surviving even for a few seconds requires muscle memory down to the pixel… and Cave’s one of the most devious development houses out there at creating them.

Consider me more than impressed, though, by this video from Cave, demonstrating their upcoming iPhone port of ESPGALUDA II. You wouldn’t think a SHMUP requiring pixel-perfect positioning would work on the iPhone, but it’s amazing how good the controls here look.

According to Cave, ESPGALUDA II will be released on Saturday and cost $4.99. Considering beating a game this difficult at the arcades would cost you a couple grand in quarters, that’s a steal: for an unabashedly clumsy and inept SHMUP fan like me, that’s basically like buying a game and getting a MacBook Pro for free.

Carved unibody aluminum may well end up being to the gadget design of the late oughts what wood paneling was to the gadget design of the late 70s, so why not ironically set the trend and transform your MacBook into a laptop Mike Brady could be proud of with these laptop skins from Karvt?

httpvhd://www.youtube.com/watch?v=Qd_IDvDMeQE

The “Get A Mac” series may be over, but Apple’s app-centric iPhone campaign is still as effective as ever. In the latest ad, “Shopper,” a husband explains how he used his iPhone 3Gs and the RedLaser price comparison app to get his wife a new espresso maker.

Unlike other iPhone ads, this one is unique in that it focuses on a sole app, but these ads still really hit the right note to me: they’re down-to-earth messages aimed at the every man focusing on the one indisputable thing the iPhone still does better than every other smartphone out there: software.

He may be homo sapiens‘ answer to a hipster Droopy, but after Steve Jobs, Justin Long is the avatar of the Apple experience thanks to the popular series of “Get a Mac” ads. Now he tells the Onion AV Club that the campaign might be through.

Although Apple said it sold 300,000 iPads just on April 3, that figure has more than doubled as of Thursday morning. More than 600,000 iPads have gone online, according to a running tally begun earlier this week by advertising network Chitka.

California, unsurprisingly, has the most dense iPad per population ratio in the country, with one tablet device per 1,441 citizens of the West Coast state. At the other end of the spectrum is Wyoming with one iPad per 8,247 citizens of the big sky state.

Just days after Apple began sales of the initial iPad, the Cupertino, Calif. company is readying a smaller, less-expensive version for 2011, a report suggested Thursday. The unit would be 5- to 7-inches and carry a $400 price tag, according to a Taiwan tech publication.

The mini iPad would focus on consumers needing a smaller device and tasks not requiring much text input, Digitimes said, citing the publication’s research analyst. The analyst made the claims based on “talks with upstream component sources,” according to the Digitimes Web site.

Last week’s release of iTunes 9.1 was largely noted for enabling the use of the iPad, no small feat. Of potentially far more use for those of us who haven’t yet managed to scrape together the pennies to buy an iPad is the ability to downsample all music for devices, whether iPad, -Pod, or -Phone, to 128kbps AAC. What this means is that you can keep high-quality (even lossless) audio files on your computer, and still carry a ton of songs without investing in a 160 GB iPod classic.

This is incredibly welcome news for me. I have a 28.07 gigabyte iTunes library, more than enough to take up nearly all the room on the highest-capacity iPhone 3GS. And lately, it had gotten to the point that I couldn’t even update my larger apps unless I deleted some music. So I synced my iPhone, clicked on its icon in iTunes, and then checked the box under Options reading “Convert higher bit rate songs to 128kbps AAC”. And voila — my phone was out of commission for eight hours! Seriously, don’t stop this process if you start it — there are grave consequences for interruption.

But when I woke up, the magic had been done. I went from eight spare megabytes (really) to 8.5 spare gigabytes — a thousandfold improvement. It’s like Apple upgraded me to a 40 GB iPhone while I slept. The music isn’t noticeably worse (to my ears, anyway), and it means I can carry a lot more of it. Brilliant. Thanks, Apple.

As noted by new iPad owners (including the Cult’s editor, Leander Kahney), the iPad is a hungry baby, and sucking at the teat of some older USB ports leaves it screaming for more juice.

What about keeping the iPad topped up on a road trip via the USB car-charger you bought last year? No can-do — the one or half-amp those older chargers generally put out is fine for the iPhone, but just like other aging USB ports, starves the iPad.

Which means you’ll end up having to pop for something like Griffin’s new PowerJolt for iPad or Kensington’s PowerBolt (yeah, no potential confusion there), both $25 — about $5 more than what the old, lower-rated units sell for; the chargers are backward-compatible and play happily with all current iPhones and iPods.

Current iPhone users will likely stay iPhone users, indicates new research released Wednesday. More than 9 in 10 iPhone owners stay Apple fans, an analyst said.

“While we believe that this retention can change rapidly, anecdotally during our survey we even received emails from three respondents asking when the next iPhone will be available,” wrote UBS analyst Maynard Um. Um expects Apple will announce 7.5 million of the iconic handsets were sold during the first three months of 2010.

A curious report emerged Tuesday surrounding the seeming never-ending attempt by Verizon Wireless to break into the exclusive U.S. iPhone market. While previous reports have used anonymous sources in the will they, won’t they soap opera, the latest voice heard came from Verizon’s CEO.

Ivan Seidenberg, speaking before the Council on Foreign Relations, said his company has told Apple it would like to sell the iPhone, according to the AP. Although Seidenberg provided no details, such as when Verizon made the request or Apple’s response, the CEO did use a recent Wall Street Journal article to peg his hopes. The WSJ reported that Apple was developing two new iPhones – including one compatible with the CDMA technology used by Verizon.

The second-generation iPad may include a camera, an analyst told investors Wednesday. Omnivision, which makes sensors for digital cameras is “well-positioned” to be a supplier to Apple’s iPad, as well as the iPhone, according to J.P. Morgan analyst Paul Coster.

In a related note, RBC Capital analyst Mike Abramsky said Tuesday most consumers interested in buying an iPad are waiting until the second-generation tablet device is released before pulling the trigger and purchasing the gadget. Abramsky speculates 60 percent of interested consumers held back from the April 3 launch, perhaps explaining why analyst forecasts were far higher than the 300,000 sales Apple reported Monday. A second-generation iPad would likely address items such as a camera, Flash and USB ports missing from the first iPads released.