It's been just over a year since we officially noticed that Apple was pushing towards gaming on the iPod touch, and while their advertising hasn't stopped pushing, the actual push hasn't quite gotten to a shove. If you look at this holiday season, certainly the iPod touch is a popular device, butt kids are still asking for the PSP Go and the Nintendo DSi, handheld units meant specifically for gaming. If Apple wants to trounce gaming the same way they've trounced the smartphone market with the iPhone, they've got a long road to travel.

But don't count them out yet, says analyst Michael Pachter -- he says the iPod touch is the "most dangerous thing that ever happened to the [major video game] publishers, ever." Apple's main handheld gaming device is $200 this Christmas, but he says next year it'll be $149, and the year after that, maybe $129. When, in the future, you can put down $99 and walk away with an iPod touch, says Pachter, then "every nine year old kid is going to have one of those instead of a DS or a PSP, and if you train kids that this is the game that you want to play... How about Tetris? Why would you pay USD 20 for Tetris when you can get it for USD 6.99 or USD 3.99 on iPod touch?"

Interesting point. It's true that console manufacturers have been hesitant to lower prices on their products (in fact, Sony's latest version of the PSP actually had a price increase), while Apple seems committed to pushing the prices on iPods ever cheaper. And yes, as long as companies keep releasing the same games on both devices for $30 on the DS and less than $10 on the App Store (and why shouldn't they -- no packaging, no distribution costs), people will go for the cheaper one. I don't expect to see the iPod touch as a huge winner this year (as a gaming competitor, I mean -- of course it'll sell by the truckloads), but Pachter seems right: wait until the prices drop, and the iPod touch might have traditional gaming devices shaking in their D-pads.

It's the end of an era for the relationship between Google and Apple -- Google has announced that Dr. Arthur Levinson has resigned from its board of directors, meaning that the last common member between the boards of the two companies has now "chosen a side," so to speak.

I doubt it was that serious, but you never know: the Department of Justice had announced that they were looking into the connections between the two boards, with both former Apple boardmember and Google CEO Eric Schimidt being one link, and Levinson being the other. Not that the DoJ was really breathing down any necks (they'd only requested documents, and there were no signs at all, other than, you know, Google Maps being an original iPhone application, that there was any collusion between the two companies).

But it is possible that between them, they decided to play it safe, and with the two companies getting closer and closer to competition every day (with Google's Android OS and the continuing saga of Chrome going on), this is probably for the better. Levinson and Schmidt, meanwhile, will both still continue to make millions of dollars anyway. So they have that going for them. Which is nice.

Maybe the submissions by Apple, Google and AT&T helped, or maybe they hurt, but the FCC is going to take a closer look at the U.S. cellphone industry and if competition is helping consumers. [Link to FCC announcement in PDF format]

Today the Commission said:

As communications technologies and services become more essential, and the communications market more complex, information is key to consumer protection and empowerment. The Commission seeks comment from communications service providers, academic researchers, consumer groups and third-party analysts on how best to ensure consumers have the information they need to make informed decisions in the communications marketplace.

The FCC has been particularly interested in the Google Voice app for the iPhone, which Apple has said is still undergoing scrutiny. The FCC has questioned AT&T about whether or not it advised Apple to not approve the app. AT&T has denied it had any say.

AT&T has admitted it is wary of apps like Slingbox Mobile, and that app was rejected by Apple, then allowed back in for sale, but without access to the 3G network.

It's pretty clear that FCC Chairman Julius Genachowski thinks there is more to be done to get consumers the best deal, and he's putting the cellular carriers on notice that they will be closely looked at.

Readers: Are you happy with cellular service as it stands today? Do our friends in Europe get a better deal?

Reflecting on my last post -- and how unbelievable the AT&T statement was that they have nothing to do with what gets approved in Apple's App Store -- convinced me I needed to refresh my dimming memory banks.

Remember all the flames about whether Skype would come out for the iPhone last year? Then, at the 2008 conference last year, none other than Steve Jobs told the assembled multitudes that he would love to see a VoIP application for the iPhone as long as it used Wi-Fi and not the cellular data network. That, of course, was designed to protect AT&T, and while AT&T might not have insisted, Jobs knew he couldn't allow a full version of Skype or any other similar voice client.

That caused the internet advocacy group Free Press to complain to the FCC, but nothing really happened. Now there is a new president, with a different view of net neutrality than that held by the Bush Administration. There's a new FCC Commissioner as well, Julius Genachowski.

I would expect this whole area of restricting freedom of access to be a big issue in the coming weeks and months. We may not hear what answers Google, AT&T and Apple give to the FCC queries right away, but they'll likely leak out eventually.

We may yet see some changes in some of these restrictive policies and more competition among cell phone providers and carriers. That benefits just about everyone. Perhaps the fight over crippled or banned apps like Skype, Google Voice and the SlingPlayer for iPhone has ignited a debate that could finally change things.

It's going to be interesting to watch the next few weeks as AT&T, Apple and Google respond to the FCC questions about which apps get approved for use on the iPhone.

Yesterday, AT&T responded to press questions about this by sending a P.R. email.

"AT&T does not manage or approve applications for the App Store. We have received the letter and will, of course, respond to it."

You betcha. The problem is that AT&T already publicly copped to keeping the Slingbox software off the Apple iPhone, while letting other bandwidth eaters like YouTube and MLB At Bat live video run without interference. And of course the Google Voice app and the Slingbox app are running fine on BlackBerry phones on the AT&T network. Slingbox is also running on Windows Mobile Smartphones. In conversations with one of the Slingbox developers, I was told Apple was fine with the app until AT&T got involved.

Of course, looking at the statement, it is carefully worded. AT&T does not manage or approve applications. Correct enough. In the case of the Slingbox software, they told Apple to knife it. I don't think the FCC will be amused by that particular dodge.

One wonders about the deteriorating state of friendship between Apple and AT&T. Recently, AT&T hinted that they don't expect to be the exclusive iPhone distributor forever, and Apple certainly held them up to a bit of ridicule at the June developer conference on MMS and tethering.

It must be fun on those Apple/AT&T conference calls as they prepare their responses to the FCC.

The U.K. advertising watchdog, the Advertising Standards Authority, says Apple is correct when it claims its App Store is better than the Google store for the Android.

In a TV ad Apple claimed that the iPhone had apps for "just about anything". Fans of the Google Android, or at least ten of them, complained that their phone offered a similar and equal function.

Apple responded that it made the claim "only on the iPhone" because its App Store "provided users with a unique experience unmatched by any other application marketplace, including the Android Market".

"Because Apple had shown there were far more applications available for the iPhone than the G1 phone, and user experience of the iPhone and the App Store was distinct from its competitor, we concluded that the claim 'only on the iPhone' was justified and not misleading," said the ASA in its ruling.

The Apple App Store has about 50,000 applications, while Google offers about 2,100.

In the past, Apple hasn't done too well with the ASA. In November an iPhone ad was banned for misleading customers about the speed of the phone on the internet. Apple also had to pull ads for its first generation iPhone in August of 2008.

The French government's competition watchdog told Apple that it must allow other carriers besides Orange to offer the iPhone. Orange is a subsidiary of France Telecom.

In September, Orange competitor Bouygues Telecom SA filed a complaint with the Competition Council about the exclusivity agreement. While a decision hasn't been reached on the merit of Bouygues' argument, today's order was a "protective measure" as the Council continues its investigation, likely to take a year or more.

Both SFR (the second-largest carrier in France) and Bouygues Telecom (the third largest) hope to begin selling the handsets soon.

In a statement, the Competition Council said that the Apple-Orange agreement posed a "serious and immediate threat" to competition among carriers, and higher costs for customers.

France Telecom plans to appeal the decision.

[Via BusinessWeek and Reuters.]

A few weeks ago, we told you about this year's Insomnia Film Festival -- a contest for high school and college students to create a 3-minute film in only 24 hours. However, eager contestants were greeted with some unfortunate news yesterday when they loaded the Apple Insomnia website.

Apple notes that "due to unexpected challenges" the film festival will be postponed until after the holidays. Many TUAW readers let us know they were unable to register, so server errors could be to blame for this postponement.

If you have already registered, Apple will contact you shortly with the new, rescheduled date. If you haven't registered for the film festival, and would still like to, you can do so on the Apple website.

Thanks to Michael, David, and others for their tips!

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.

Link may require registration.

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]