Last spring, TUAW asked how much you would pay for iPhone software. Well, it looks like $0.99 and $1.99 are the new $39.99 and $49.99 as far as mobile distribution goes. The App Store bucked the trend of high-priced phone software and now is ratcheting those prices down even further.

Developers are responding to high application supply and dwindling demand by lowering their prices across the board. As the App Store novelty wears off and consumers forget about once-"hot" items, the typical price tag continues dropping. Games that cost $9.99 at launch are almost universally $4.99 and less.

Apps like Koi Pond proved that $0.99 can generate a lot of sales. Short term sales are quickly being eclipsed by long term price drops. We typically get our tips about upcoming price changes directly from developers; 148Apps has introduced a automated price drop detector.

As the App Store continues to evolve from "get rich quick" to make money slowly, devs are working to find that sweet spot -- charging enough to earn a living but not so much that they aren't out-competed.

Based on these downward pricing trends, I expect ad-supported apps to really start taking off soon, the way they are doing in the jailbreak world. If developers can't build their revenue stream from charging higher prices, they may turn to alternative monetizing models instead.

You've heard about the Apple bubble, right? The prevailing belief that Apple's stock is overpriced and about to explode? Turns out there's definitely a Microsoft bubble, too. Different kind, though. One that surrounds Bill Gates in his day-to-day role at Microsoft.

Microsoft employs a technical assistant dedicated to deleting Mr. Gates' email. "It is a corporate policy not to make a permanent record of Bill's works...The job duties of the technical assistant require him to delete email files from Mr Gates' computer weekly." Apparently this directive appeared after the recent US Government antitrust case, where many emails showed Microsoft's anticompetitive policy.

Still waiting to get to the Apple punchline of this whole post? Turns out that in a (non-deleted) 2004 email, a senior executive told Gates that if he didn't work for Microsoft, he'd buy a Mac. Which shows that you really can find good people for senior management. It also makes you wonder how many deleted emails discuss the preference for iPods over the Zune.

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John Gruber has penned an interesting observation of how Microsoft might very well have missed the mark from the get-go when they made the strange decision to take on the iPod and iTunes. Since the player's initial wiz-bang sales period is essentially over (as in: it more or less set a decent sales barometer, at least for now), John wrangles some interesting statistics from Amazon's charts on exactly where the Zune stands in comparison to Apple's players (including year-old models), as well as its ranking in the overall electronics category. To spoil the surprise: the Zune isn't doing so well. We've looked at Amazon's charts before, but as of this writing, a record player is beating out the best selling Zune on the electronics list, while iPods - specifically the small, flash-based nano and shuffle - dominate most of the top 10 spots.

John then uses this data and good ol' fashioned people watching to conclude that Microsoft shouldn't have taken what could be their only swing at the plate in producing a hard drive-based iPod; they should have cranked out a flash memory model to go head-on with the nano - inarguably the home run slugger in Apple's lineup. While I tend to agree with John, I also see a problem with going down this road: Microsoft would likely have had even less room to maneuver, and even fewer things to market ('Beam your tunes') and invent lame, dead-end lingo for - they actually refer to sharing your music wirelessly as 'squirting'. Who wants to bet how excited Steve Ballmer's kids are to 'squirt' at school?

Sure, when you look at what you're up against in the DAP market, Apple's iPod nano and SanDisk's respectable 2GB Sansa player (expandable via an SD slot, and at #11 on Amazon as of this writing) are the top dogs to beat - but what could they have offered? I highly doubt they could have fit their DRM-crippled and arguably worthless (though admittedly buzz-worthy) Wi-Fi sharing feature into a nano-sized player, even if they made it slightly larger and uglier like the Zune is to its 30GB iPod rival. A 'Zune nano' with nothing unique to offer would dry up on its own in a market already dominated by Apple, SanDisk and Creative, and Microsoft's exclusive, 3rd party bitch-slap of a music store would have even less of a leg to stand on.

In summary: I think John's right - Microsoft made a bad move in copying the 30GB hard drive-based iPod, but it was the only move they had. In this light, it kinda makes you wonder why they bothered in the first place.

Techcrunch's Michael Arrington has penned an interesting piece on why the upcoming .Mac webmail revamp is so important. Be sure to check it out, but in summary: Michael believes the combination of a killer AJAX-infused webmail service that both allows users to manage multiple accounts and syncs with a desktop client will give Apple a significant advantage and appeal over competing email services. Now, putting aside the fact that Gmail allows you to transparently send and receive email from non-Gmail addresses, I agree with Michael and I'm pretty darn excited about the first .Mac webmail revamp since the stone ages. However, I think he's missing a major point that many others overlook when discussing, praising or damning .Mac: it isn't webmail.

Or to be more specific: it isn't just webmail. Michael compares .Mac webmail to competing offerings from Google and Yahoo! - individual and free webmail services that can integrate with other offerings from their respective providers - or not. Google has their news, RSS reader (which just had a killer overhaul, by the way) and countless other sister products, just like Yahoo! has their own tool belt of web services. But the crucial fact here is that .Mac webmail is an unconditional component of a suite of products for which users have to pay a hefty yearly fee. You can't get .Mac webmail by itself, let alone for free, and while everyone is excited about the UI revamp (well, almost everyone), the mounting orchestra of criticism against .Mac still stands. The service overall, especially webmail, is sorely missing fundamental features that competing services have had for years, and our own Dave Caolo nailed one of the most significant on the head in his eulogy for .Mac: server side spam filtering. .Mac doesn't feature it, but it's become a standard (as in: four-wheels-on-a-car standard) with virtually any other service, webmail, POP or otherwise.

[Update: A reader named 'random' pointed out that .Mac apparently does feature server-side spam filtering, courtesy of Brightmail, as outlined in this support doc. While this is nice, it doesn't seem to work well (especially compared to the likes of Gmail and Yahoo!), and it doesn't allow users to adjust its sensitivity or peruse server-specified messages as spam in case some legitimate messages are being inaccurately marked. In other words: it's terrible.]

Stepping back from fundamentals and specifics, however, I think Michael is placing a little too much hope in this .Mac webmail upgrade. I highly doubt it will rake in the new users, even with the unique abilities Michael hails. At best, I think it will serve as a very welcomed upgrade that could convince a good portion of existing users to go the 'eh, ok fine I'll renew' route for just one more year. Don't get me wrong: as a member myself, I'm welcoming the upgrade and I was planning on renewing in a month before I knew about the webmail refresh. I just don't believe an update to one (admittedly major) part of .Mac will hold that much weight with those who aren't interested in the entire retail package, especially when competing services can stack up pretty well for the general user, and keep $99 their pocket to boot.

I've noticed a couple reports from analyst firm Gartner Research that claim Apple's pricing on the new iPods betrays an increased interest in profit margins at the expense of market share. These reports focus on the iPod nano's pricing of $199/4GB and $249/8GB as being a bit high, given their estimated materials cost of $90 and $130, respectively. Admittedly, similar players from competitors such as Creative do beat out Apple in pricing; the ZEN V 4GB player is only $159.99 - but what rulebook dictates that a higher price on one particular member of a product family (by and far the most popular member) definitively means the company doesn't care about market share?

These reports don't seem to mention anything about the nano's big brother (unless MacNN and Playlist used some sneaky cut and pasting techniques), where Apple is competing quite well: they dropped their 30GB iPod price to match that of Creative's 30GB ZEN Vision:M ($249), and the 60GB ZEN Vision:M (if you can find it on their site), is reportedly $399 - a full $50 more expensive for 20GB of less storage.

Gartner's claim that competitors like Creative and Microsoft's new Zune could start chomping at the iPod's market share, based solely on the profit margins of one member of the family, also doesn't seem to take into account the value of the full package that Apple's iPod offers, such as seamless, 'it just works' integration with a leading digital media store (maybe Gatner simply forgot that the existence of Apple's margin-thin digital store leans fairly heavily on the popularity of the iPod).

While there are plenty of consumers out there to whom a $40 difference between an iPod nano and a ZEN V can (understandably) make or break a purchase, the are still other important factors consumers can evaluate for a DAP purchase. Unfortunately, some of these elements aren't capable of being factored into an analyst's equations, but Apple is clearly still banking on their weight with a consumer's dollar.

Its been a big week for Phill Ryu. The shareware developer who only began blogging at the beginning of the month has already been featured on these very pages, as well as Digg and Slashdot. To celebrate his success and stimulate the creativity of the Mac blogosphere, Phill has announced The Fake Leopard Screenshot Contest.

The idea is as simple as it sounds; design and present a concept of what you think Leopard will (or should), look like. Three winners will be selected by a panel consisting of some of the top OS X shareware developers along with the staff of MacThemes. The three lucky winners will receive a software library that would otherwise cost over $900 bucks to amass. Each winner will also receive a trophy designed and engraved by Adam Betts of MacThemes, creator of the Adium duck we know and love. Entries are due at noon EST on the 22nd, and the winners will be announced 2 days later.

This looks like a lot of fun, and will surely bring some fabulous ideas and designs out of the woodwork. It's great to see the shareware community working together like this on something that is fun for everyone, even those who don't enter.

Honestly: I'm always down for some competition; it keeps (some) companies innovating and (hopefully) on their toes. But wow... if you're going to openly take on a device like Apple's beautiful and simple 6-button Remote, it might be a good idea to make sure you're firing on all cylinders.

Check out this video at CNET of Don McDonald, Intel's VP and general manager of their digital home group, demoing a voice-activated remote for Windows Media Center. Mr. McDonald brags that the remote has absolutely no buttons, but forgets to mention it has almost no functionality either. Watch, as he tries not once, not twice, not thrice - but a whopping four times (with some serious lag on his last attempt) to ask the remote "what time is Family Guy on TV." Also, note how much they trust the abilities of their 'zero button remote'... with all the buttons it actually contains.

I'd say you and your team earned an A for effort Don, but you might have to whip out those tablet PCs and get back to the drawing board on the voice-activation bit. Just be careful the next time you try using it to dictate your product design notes.

[via digg]

Napster's CEO, Chris Gorog, has pointed a finger at Microsoft for the dominance of the iTunes iPod combination in the digital music market. The frustrated CEO is upset with Microsoft's DRM technology and its relationship with hardware manufacturers, commenting on what many feel is the root of iPod competitors'  problem: “It’s a lot more complex to get organized properly than it is to build one device and one service as Apple has done." While the debate surrounding whether Apple should license their iTunes DRM or open iPod hardware platform has many layers, there is certainly something to be said with how solid Apple is able to build this platform simply because they manage it from start to finish.

Check out the rest of the Reuters article for interviews from both Napster and Real on the state of the digital music market, as well as a humorous prediction from Gorog: "Ultimately, the consumer electronics giants ... are all going to come to this Windows Media party," he said. "This is really going to be the ubiquitous format."

[via iLounge]

Looks like Dell is throwing in the towel as far as their hard drive-based Jukebox digital audio players are concerned. DailyTech reports "stiff competition from Apple and others" resulted in the decision to discontinue the line, although they will continue to sell their flash based DJ Ditty player.

From what I can tell, the Jukebox has already disappeared from Dell's product site, so it seems it might already be too late to jump on the now extinct players.

[via digg]

I'm getting kind of annoyed at seeing more and more posts like this since Apple's Intel announcement, claiming that "we can finally settle this Mac OS X / Windows performance war, once and for all." Apparently there's a whole legion of people out there that think just because you might be able to hack and slash Windows to run on an Intel Mac, or you can do some tinkering and get Mac OS X to run on a PC box or notebook, that suddenly we'll have a side-by-side, no holds barred final showdown to prove which is the bigger, badder and faster OS. (Don't mind, for now, the conversation about how much a match like this really matters.)

Ladies, gents, boys and girls: the showdown isn't going to happen. At least not anytime soon, and certainly not when, like in this Lifehacker post, OS X is having fairly significant performance issues running on hardware it was never intended to - which brings me to the crux of my rant: until Apple sits down with Dell (haha) and spends days/weeks/months to optimize OS X to run on their (crappy) hardware, or Microsoft drops by the Apple campus to bang out a version of Windows to run on a Macintel, we won't nearly begin to have an even playground for these two OSs to duke it out. You might as well race identical cars, pouring sand in one of their gas tanks.

I'm not saying I don't have faith in the many enterprising hackers who will inevitably hack out a way for this fence-hopping to (somewhat) work. What I am saying is that this isn't a simple black and white boxing match that's going to be over after round 1 - and who knows: it might never be. Just make sure you don't spend too much time arguing over the inevitable digg.com post claiming there's a clear winner. After all, this is just the internets.