I usually agree with with John Gruber over at daringfireball.net. He’s got a good head on his shoulders. But I can’t agree with his consistent defense of Apple’s recent $200 iPhone price cut.

In a recent entry, he points out what he thinks is an inconsistency with Silicon Valley Insider’s position against the iPhone price cut and their suggestion that Hannah Montana charge $200 instead of $63 for her concert tickets. The idea is that because the tickets are being scalped for prices over $200 anyway, it’s better if the money went to the people actually involved in making the music, rather than scalpers. Gruber says that this is what Apple did with the price of the iPhone. I’m not going to touch the issue of whether tickets should be more expensive (I can’t help but think there are better ways to stop scalping). But I do take issue with the idea that Apple’s pricing strategy was somehow a reasonable choice designed to keep demand from outstripping supply.

Chris Biagini has summed up my reaction to the price cut perfectly (emphasis is mine):

Those of us who’ve already bought an iPhone knew full well that they’d be hot sellers, and that Apple was making a killing off of them at $599. But this price drop shows that Apple was making more of a killing than anyone could have possibly imagined, more than anyone could have possibly thought was fair. I mean, you could probably figure out the raw cost of a pork belly, but an iPhone is a little harder to pin down. In other words, everyone assumed that the iPhone was priced more-or-less as fairly as Apple’s other products and made our valuation decisions accordingly—and we were wrong.

Assuming that the iPhone and iPod touch are now priced more-or-less as fairly as Apple’s other products, this means one of two things happened:

1. Apple gambled on the crazy-high initial price tag and lost.
2. Apple knew $599 was not sustainable if they wanted to meet their sales goals, and they knowingly screwed over the early adopters.

Either way, Apple tried to screw over customers—it’s just a matter of how many. Personally, my money is on Scenario 2. Scenario 1 would require that they underestimated the iPhone’s sales potential. Given Apple’s experience in introducing high-demand products, this seems unlikely. That leaves Scenario 2, which I think is actually a little worse. Both send a big “Thanks, suckers!” to early adopters, but Scenario 2 is just a little more evil.

Remember how Steve Jobs bent over backwards during his keynote to emphasize that it was reasonable to charge the same for the iPhone as what people paid for a smartphone + iPod? I myself defended the price, citing the long development time and other costs that Apple had to recoup, and Gruber himself said that if anything it was too low). We’d never seen anything quite like the iPhone, so it was hard to compare it to other products. We thought we were paying a fair price for the product (fair, at least, compared to Apple’s other product lines). The bottom line is that the early iPhone adopters had no idea that we were paying a $200 premium for getting the iPhone a few weeks earlier than everybody else.

However, I disagree with both Biagini and Gruber about one thing. I have a lot of trouble believing that Apple had a price drop (at least of this magnitude) planned from the start — even if they say so themselves. Not because Apple is too nice to screw over their customers, but because they are too smart not to know how people would react. I think it’s likely that iPhone sales simply weren’t as good as they had hoped. Yes, they were selling well, but not “Nintendo Wii” well, and not as well as you might have expected given the amount of excitement before the launch. Apple knew they couldn’t go into the Christmas season with sales as they were (and keep in mind that most of the hardcore Apple lovers had already bought theirs, so if anything sales were going to go down from the initial numbers). They decided that a drastic price cut was their only choice. I just can’t believe that Apple would plan to slash the price only two months after the iPhone’s release if it really had been meeting all of their sales goals. It’s never been done in their history, and it would take a remarkable tone deafness to their customer base not to know how a move like this would be received by their users and by the press. I imagine that they had the $100 store credit thing as a backup plan in case the reaction was worse than expected (and indeed, it threatened to overshadow the introduction of the new iPods.

By the way, I still love my iPhone (and the iPod nano that I paid for mostly with the $100 store credit is also nice).

I’ve been writing a “blog” over at the MacNN forums where I am a moderator about my impressions of the iPhone, including waiting in line, unboxing, activation, and use. Give it a look if you’re still not sick of all of the iPhone coverage on the net.

http://forums.macnn.com/103/ipod-iphone-and-apple-tv/340588/icruises-iphone-blog-now-camera-photo/

Why does the DS outsell the PSP? Lots of people have theories. They say there aren’t enough good games (something that a glance at the top rated games for each system will disprove). Or maybe they say it’s too expensive. And people will go on about how innovative DS games are in comparison with many PSP games. But the reality is that most people play crap like Hannah Montana DS or the Suite Life of Zach and Cody. It’s not the quality of the games that makes the real difference here. I think the answer is simple. At least to some extent, Sony misread the portable game market.

A huge number of Game Boy owners were kids. Why? Because the system was affordable, portable, and under their complete control. And of course, this also led to a lot of games being produced that appealed to kids. Nintendo pretty much kept this up with the DS (although it was originally a little on the large and pricey side compared to the Game Boy).

Sony on the other hand, went a different way. They priced their portable machine well out of the reach of most kids, and made games that were not very accessible to them as well. $40 for a game is a lot of money for a kid, and with a few exceptions, the PSP just doesn’t have the kind of games that kids like. Even games that should be kid friendly, like LocoRoco, are actually a bit on the hard side. The result is that the PSP is a system mostly for older teens and adults. Contrast this with the DS, which can be enjoyed by BOTH young kids and adults. Maybe Sony thought that the market for high-end portables with multimedia capabilities was higher than it actually was. Maybe they overestimated the appeal of playing console-style games on a portable. But I think it’s clear that alienating children as a market was a mistake.

In short, I think the biggest reason behind the difference in sales between the two systems is simply that the PSP just isn’t very kid-friendly. In fact, if you removed kids from the equation, it wouldn’t surprise me if the two systems were nearly even in sales. It’s possible that the decision to target an older market was the correct one to make, however. If Sony had tried to compete directly with Nintendo for kids’ gaming dollars, they might have failed miserably rather than becoming a respectable second-place player in the portable gaming market.

Thoughts? (I personally prefer the PSP to the DS, but I think Nintendo did a lot of things right in marketing the DS.)

The rumored black Xbox is now official. It’s basically the same as the Xbox 360 Premium, but with a 120GB hard drive and HDMI. And it’s in black. It doesn’t use a smaller, cooler CPU, and doesn’t have integrated wi-fi or HD-DVD.

The thing is, it actually makes the 20GB PS3 look like a bargain. For an extra $20, you get a Blu-ray player, after all. I personally think this is the wrong direction for MS to go with the system. Adding a “deluxe” model like this isn’t going to strike fear into Sony’s heart. Not when their low-end model already beats it (with a few exceptions, like storage space, of course). They need to be making their system even cheaper.  I figured MS was going to try and be aggressive about their pricing, maybe introducing this model at the same price point as the current premium model and getting rid of the core system.

BTW, the price for the 120GB HD by itself is $179…

A couple of days ago, Sony released version 1.6 of the PS3 software, which included the ability to run the Folding@Home client. Folding@Home is a project run by Stanford university that uses the combined power of thousands of computers to perform calculations that would otherwise take expensive supercomputers months or even years to complete. The data is part of research on curing diseases like Alzheimer’s or Parkinson’s (more information can be found in this CNN article). The amazing thing is that since the PS3 has been added to the mix, it has quickly pulled ahead of all other platforms. As of this writing, it had almost twice as many TFLOPS as all of the other platforms combined. That’s about 19,000 PS3s beating out about 200,000 other computers! I’m currently letting my PS3 fold when it’s not in use and I suggest anyone who has one do the same.

EDIT: Just to be fair, it has been pointed out to me that the PS3 and PC clients aren’t doing precisely the same thing. The PS3 is a lot faster than the PC at the work that it is being given, but the PC is doing some calculations that the PS3 can’t do.

I’m not a big fan of what is commonly called “J-Pop” but when I lived in Japan I made a conscious effort to find some Japanese artists that I did like. I rented a lot of CDs (yes you can rent CDs in Japan — a good thing, since they are close to $30 apiece) and eventually found quite a number of artists that a liked a lot. But when I moved back to the US, I was pretty much cut off. It is possible to import Japanese CDs to the US, but it’s expensive and you certainly can’t do much experimenting with new bands that you’ve never heard of before.

When the iTunes Music Store opened in Japan, I had hoped that it would allow me to buy Japanese songs, much as the US version of the iTS had helped me keep in touch with American music while I was in Japan. But unfortunately, they required you to have a credit card with a Japanese billing address just to open an account. You can listen to the 30-second previews, but not download anything — even the weekly free songs.

However, I recently found out that if you buy an iTS prepaid card from Japan, you can use it to create a Japanese iTS account without any credit card at all, allowing you to download Japanese songs. There are even places on the net (such as J-List) that sell Japanese cards for this express purpose. There are instructions on the J-List page telling how to go about creating an account with a prepaid card. You need to have the card first, though, since if you try and create an account without it, it will insist that you have a credit card. The only tricky part is that you have to have a Japanese address of some kind (even though it will likely never be used). I don’t know how strict the system is about putting in a real address, but J-List has said that you can even use their address as a dummy. However, I couldn’t find their Japanaese address on the site, though, so you might need to contact them if you want to try that.

Anyway, I can finally download Japanese music now, so I’m happy. Here are some of my favorite Japanese artists. Clicking the links will take you to their iTS page. Unfortunately, the iTS doesn’t have the greatest selection for some of them — I have 13 albums by my favorite band Spitz, and only one of them is on the iTS. They do have a couple of greatist hits albums that have some of their best stuff, though. There are also some major artists that aren’t on the iTS at all, such as Mr. Children and the Southern All Stars.
Spitz
Utada Hikaru
Ulfuls
Yamazaki Masayoshi
Inoue Yousui
Makihara Noriyuki
UA (prononuced Ooh-Ah)
Aska
Chage and Aska
Yaida Hitomi

If you spend any time at all discussing the next-gen consoles, someone is bound to bring up the idea that the PS3 is overpriced. But is that really the case? There’s no mistaking the fact that it’s expensive — too expensive, in fact for many people to afford. But of course that’s also true of the Xbox 360. It’s too bad that this generation of game consoles (with the exception of the Wii) seems to be out of reach of so many. I think this is a big reason why the portable systems and the PS2 are so popular. But is the PS3 really overpriced? (More after the jump.)

The rallying cry of many Xbox 360 fans seems to be that the PS3’s $600 price tag is outrageous, and that it isn’t worth paying $200 more than the Xbox 360. But that’s a misleading argument for one simple reason: it doesn’t make sense to compare the 60GB PS3 with the Xbox Premium System. Just because they are the “high-end” versions of each system does not mean they are comparable. If you want to make a meaningful comparison, you have to compare the models that are most similar. In this case, it is the 20GB PS3 and the Xbox 360 Premium System.

Look at their specs. Both the 20GB PS3 and the high-end Xbox 360 have 20GB hard disks, wireless controllers, and wired internet. The PS3 doesn’t come with component cables or an audio headset like the Xbox 360, but it does include an HDMI port and a Blu-ray drive. When you look at the price of Blu-ray/HD-DVD drives, the $100 price difference between the PS3 and the Xbox 360 seems quite reasonable. After all, the Xbox 360’s add-on HD-DVD drive costs $199, and there’s no way to add HDMI even if you wanted it.

The 60GB PS3 should not be thought of as the “real” PS3. It should be thought of as an “upgraded model” that includes wireless networking, an additional 40GB of hard disk space, and a memory card reader for an extra $100 over the price of the 20GB model. For people who need these extra features, it’s a reasonable deal. After all, Microsoft charges $99 for their wireless Internet add-on alone. In fact, if you were to outfit an Xbox 360 as closesly to the PS3 as possible, you would spend considerably more. (An Xbox 360 with HD-DVD drive and wi-fi costs $697 — almost $100 more than the 60GB PS3, and it still has less hard disk space and no card reader).

What you CAN criticize the PS3 for is not giving the consumer as much choice as the Xbox 360. Sony’s inclusion of the Blu-ray drive in the PS3 is largely what drove up the price, and Microsoft’s decision to keep the HD-DVD drive optional has allowed them to achieve a lower theoretical price. Still, when you make your comparison based on features, the real price difference between the two systems is at most $100, which gets you the ability to watch HD movies and allows games on the system to make use of the massive storage of Blu-ray discs. With new games now costing $60 apiece, I’m not sure it makes much sense to choose your console based on a $100 price difference. Especially when that $100 gets you so much.

(Note: This isn’t meant to be a jab at the Xbox 360 — I have one and think it’s a great system. But I’m tired of people claiming that Sony is bilking their customers when it’s simply not true.)

I suppose having all of the consoles in a particular generation isn’t that unusual, but it’s also true that most people only buy one console (and maybe one portable). So I thought I would write something from the perspective of someone who has owned and used all of the next-gen systems. I have a longer piece on the back burner examining each of the consoles in detail, but I don’t know if I’ll ever get the time to finish it, so I thought I’d go ahead and get this abbreviated version out while it’s still topical. (More after the jump.)

Xbox 360

As you probably know, the Xbox 360 was the first next-gen machine to market, with nearly a year’s head start on both Sony and Nintendo. As such, it has by far the best library of games. This is to be expected, of course. If history has taught us anything, it’s that head starts do not always mean success.

The Good
Great graphics.
Nice selection of games, with quite a number of stand-out titles.
Great online service in Xbox Live (including innovations like Gametags and Gamerscores, voice chat, HD video downloading, Xbox Live Arcade).

The Bad
Noisy DVD drive (seriously, how did Microsoft think that this was acceptable?)
Questionable hardware reliability
Little Japanese support (although Blue Dragon is a step in the right direction)

Nintendo Wii

It’s funny to think that just a few months ago, people were arguing about whether a controller like the Wii remote could really sustain a console. I don’t think anybody predicted that the Wii would be such a success, although there is the danger that the novelty will wear off.

The Good
Wii remote opens up new kinds of game play.
Great party system.
Virtual Console allows you to play games you used to love or try ones that you always meant to play.
Miis!
By far the cheapest next-gen system.

The Bad
Last-gen graphics with no HD support.
Motion controls shoe-horned into cross platform games.
Aside from Zelda, not a lot of good one-player games in launch lineup.

Sony PS3

Sony’s next-gen console has already been through a lot, and it launched less than 2 months ago. It started with the announcement that the system would cost $499 and $599. Then manufacturing problems meant that quantities were extremely limited. In addition, auction prices of the Xbox 360 shortly after its launch in 2005 led people to believe that the PS3 would be selling for several times retail price, spurring many non-gamers to stand in line for days to get a system, specifically to eBay it. PS3s are now pretty easy to find if you want one, however. Whether this means that they aren’t selling or that Sony is finally producing them in reasonable quantities is yet to be determined.

The Good
Great graphics (although so far not much different from the Xbox 360).
Should have good developer support, including Japanese developers.
Plays Blu–ray HD movies.
Quiet.
Free online play (although the Playstation Network is not really comparable to Microsoft’s pay service at the moment).

The Bad
Expensive (although actually pretty comparable to the Xbox 360 — more on that later).
Mediocre launch library.
Doesn’t work properly with older HDTVs that don’t support 720p.

My Conclusion
If you want the best games available *right now* the Xbox 360 wins hands-down. When you look at the long term, though, things become a little less clear. While I doubt that Sony will dominate the game market quite the way they did in the last generation, anyone expecting them to go from #1 with around 70% markeshare to a distant third will almost certainly be disappointed. Microsoft is doing a better job with the Xbox 360 than with the original Xbox in providing a variety of game types in addition to the everpresent first-person shooters, but I still expect the PS3 to have a better all-around library. In particular, Sony’s robust support in Japan (on the part of developers and consumers) will mean that a fair number of games (role playing games in particular) will get released for the PS3 and not the Xbox 360. This happened last generation and I expect it to happen again. The ability to play HD movies out of the box and to use the vast storage capacity of the Blu-ray disc for games will also be an advantage for the PS3 in the years to come.

The Wii is sort of in a category by itself. So far, it has shown itself to be a great machine for (non-online) multiplayer and quirky games that use the remote, but it’s not clear whether third-party developers will support the Wii more than they did the Gamecube, or if Nintendo will be able to avoid the game droughts that plagued that system. Personally, I think the Wii’s unimpressive graphics are the biggest stumbling block and they prevent me from recommending it as a main system for anyone but the most casual gamer. Its reasonable price does make it a good secondary system for someone who already has a PS3 or 360, though.

All in all, though, I think this is a great time to be a gamer.

By now you probably know that yesterday Apple announced the iPhone, a combination iPod and smartphone. I for one am still in shock, since this is the first time in a long time that Apple has delivered something that makes even the rumors and mockups look bad. Let’s take a look at it. (More after the jump.)

The Name
This is actually one of the biggest surprises. Only a couple of weeks ago, Cisco announced a product that they called the iPhone, so everyone had assumed that Apple would be coming up with a different name. Apparently Apple has negotiated a deal with them to obtain the iPhone name. I guess they thought it was important enough to spend some money on. And since they appear to be trying to make another monolithic brand like “iPod” they are probably justified in this.

The Look
I think they did pretty well with the appearance of the phone. It’s simple and clean (very Apple-like) and also easily identifiable. It doesn’t look quite like any other phone out there.

The iPhone as a Phone
This is where Apple has really outdone themselves, if the demos on their web site and the keynote address are any indication. I’ve been using cell phones for a number of years and I’ve always been baffled by how terrible they are. The software is confusing and hard to use, the screens are tiny, and the text entry methods are a joke. One reason I use a Motorola RAZR now is that I gave up on ever having a phone with a truly excellent user interface and decided to settle for a phone with an excellent form factor.

The iPhone looks like it will change all that, and I can only hope that it will spur other manufacturers to examine their own offerings. Making calls should be such a simple thing, and yet so many phones make it so complicated. If you haven’t looked at the demos, I suggest that you do so and tell me that doesn’t look much better than whatever phone you’re using now. The visual voice mail (which allows you to select voice mail messages from a simple list in any order) is such a simple and natural idea that you wonder why nobody was able to do it before.

Some people are complaining about how the iPhone is only going to be available through Cingular for the foreseeable future, but I think a partnership like this was unavoidable for Apple to break into the market. They apparently had Cingular make some changes to their cellular network to support some of the advanced features of the iPhone, and this wouldn’t have been possible if, for example, they had released the iPhone unlocked. Some are also upset that it only supports EDGE and not the faster UMTS. I don’t believe UMTS is available in my area (or indeed in much of the US) so this doesn’t directly affect me, although I can see why some would want that feature in such a high-end phone.

The iPhone as an iPod
Yes, the iPhone is a fully functioning iPod, albeit one like we’ve never seen before. First of all, it has no scroll wheel. You control it entirely by touching and screen with your fingers. Rather than use a “virtual scroll wheel” as many had conjectured, it uses more straightforward gestures, and I think this was probably a good decision. The scroll wheel is much better than a normal button-based interface, but if you can touch songs and scroll through them directly, there is no reason to simulate a scroll wheel.

The iPhone is the first widescreen iPod. I’m pretty confident that this and the touch screen interface will show up in future iPod models. All I can say is, it’s about time. Having the screen be widescreen and 1″ larger than that of the video iPod will mean that widescreen TV shows and movies will appear a LOT bigger when viewed on the iPhone.

The only real issue I see with the iPhone’s iPod capabilities is that it only comes in capacities of 4 and 8GB. This is because it uses flash memory for its storage, like the iPod nano (which also tops off at 8GB). Presumably using a hard drive would have made the phone a fair amount thicker, and probably introduced other issues like shorter battery life. It’s a little disappointing that the iPhone can’t completely replace a video iPod in terms of its capacity, especially since it has the best screen of all of the iPods — it cries out to be used for video. Still, 8GB is a reasonable amount and should be enough to store a nice selection of music, movies, TV shows, and photos, if not one’s entire collection.

The iPhone as a PDA
That’s right, I said it. The iPhone is a PDA. While the iPods have had some PDA-like features for some time, the lack of any input method or networking made them information viewers and not true PDAs. The iPhone, on the other hand, not only includes the PDA-like features of the previous iPods (Calendar, address, notes, etc), it adds a much higher resolution screen, an input method in the form of an on-screen touch keyboard, and also adds things like email and web surfing.

Safari on the iPhone looks very impressive — certainly better than any cell phone browser, and also better than the PDA browsers I’ve seen.  Having a browser of this caliber with you all the time is just amazing. I can still remember when the Palm VII was released about 7 years ago (also at a price point of around $600)). Its big draw was that it allowed you to access the Internet from anywhere, but it was in black and white, glacially slow and only allowed you to access sites that were specially written for it. It’s incredible how far we’ve come in such a short time. And the iPhone’s email capabilities look equally impressive. I just hope that it’ll be fast enough to allow me to view the large amount of email I have stored on my .Mac mail server.

The main concern I have with the iPhone’s PDA capabilities is that it’s not clear whether third parties will be able to develop software for it. If Apple follows the iPod model, it will only be possible to use programs developed by Apple (or directly approved by Apple, as in the case of the games sold on the iTunes Store). Opening up the iPhone to third-party developers would make it so much more useful. I hope that Apple will realize this and release a development kit specifically for the iPhone.

The Price
There’s no getting around it. $499 or $599 is a lot to pay for a phone, but that’s actually pretty fair for a phone with capabilities like this. Compare it to other smartphones and it doesn’t seem expensive at all. Still, the price will certainly make it more difficult for the iPhone to achieve mass market acceptance like the iPod. It may take a generation or two before it comes down in price enough for it to be accessible to most cell phone users. But as a start, it’s a very good one.

The Release Date
One of the biggest surprises about the iPhone announcement was that it won’t be available for several months — in June to be exact. Apple does not generally pre-announce products so far in advance.  Maybe speculation about the iPhone had gotten to the point that they felt they had to make an announcement. Maybe they wanted to give people enough notice so that they wouldn’t sign a contract for another phone or provider in the meantime (this certainly worked for me — no way I’m getting another phone in the next few months). Or maybe they just wanted to make the Zune look even worse that it already did. Who knows? The hardest part will be the waiting.

The Questions
The are still a lot of unanswered questions. The issue of third-party software is a big one, as is battery life, since it looks like the iPhone doesn’t have a removable battery. When you combine a media player and cell phone in one, battery life is a major issue. We also don’t know the details of the plans that Cingular will be offering for the iPhone. Hopefully we’ll get the answers to these questions sooner rather than later.

This article at Next-Generation gives the sales figures for video games in November:

PS3: 197,000 units
Nintendo Wii: 476,000 units
Xbox 360: 511,000 units
PS2: 664,000 units

Obviously the PS3 and Wii sales are constrained by supply — they’ve both sold out completely. The interesting news here is that the PS2 is actually the top selling home console. I think its price — about half that of the next cheapest console (the Wii) — is a major factor, combined with its unmatched game library.

Sales of portables were as follows:

PSP: 412,000 units
DS: 918,000 units

Obviously the DS is doing very well, but the PSP’s sales are also very respectable, having increased almost 50% from the same time last year. One thing the article doesn’t mention is Game Boy Advance sales. I’m very interested to know how many GBA SPs and Micros were sold. I’m sure it’s in the hundreds of thousands of units, despite the fact that the system is clearly in its last days.

EDIT: This article has an interesting paragraph that answers my question:

“Nintendo hardware outsold all others combined. Nintendo sold 476,000 Wiis, 918,000 Nintendo DS portables, 641,000 Game Boy Advance handhelds and 64,000 GameCube consoles that have them selling 2.1 million of the 3.9 million systems purchased for the month.”