Tech Industry

 Nikon has withdrawn its sponsorship of a Microsoft online photo competition in which photographers end up with no attribution for the images entered into the race.

The competition – ‘Iconic Britain’ – requires competitors to find images they think are iconic online using Windows Live Image Search.

These image searches must be submitted to the competition, where they will  judged by a panel that was originally to include Simon Coleman, General Manager, Imaging Division of Nikon UK, Brian Blessed, and Joanna Lumley.

However, Microsoft gives no attribution to the images that appear in the competition, driving some photographey groups to recommend suing Microsoft, and, as mentioned, Nikon has withdrawn its support.

Website, Pro Imaging, got a response from Microsoft on the matter, in which the company said: “All images that feature on Iconic Britain are images from the Internet that are already in the public domain.” However, this doesn’t mean they’re copyright-free.

"If copyright was truly respected by Microsoft they would have made sure that no images subject to third party copyright would be selected by Live Search," Pro Imaging said.

A Microsoft statement counters: "When an individual wishes to submit an image into Iconic Britain, it is the subject matter (for example, red telephone box or cup of tea) that they are searching for, not a specific image. The site then repeats the individual’s search and displays a dynamic, visual set of search results from images that are already available on the internet and not one specific image. At no point, does www.iconicbritain.co.uk copy, host, or download any image."

Rumours claiming Apple has reached a licensing deal with ARM continue to intensify following the latter firm’s financial results announcement today, when management revealed an extensive multi-year architectural licensee has reached a deal with ARM.

Naturally, ARM management refused to disclose just who the new licensee actually is, beyond describing it as a "leading handset OEM", adding "which is developing its roadmap for mobile computing devices."

As EETimes observes, there’s no complete evidence of the licensee being Apple, but that company is now a leading handset OEM and is widely known to be developing mobile computing devices. An ARM processor is in the iPhone (to the detriment of Intel) and Apple recently invested in PA Semi, which works on PowerPC chips and has extensive ARM experience.

"Don’t get excited about any revenue on this deal as it’s all tied up with future technology and the revenue will be recognized over several years. But it is very important as far as we’re concerned in terms of securing design wins with that particular OEM and also in the mobile space altogether," said Warren East, CEO of ARM, at an analysts conference.

He also said, "Some handset manufacturers want to have more control over the design of their handset, including the components within it, than others. And it’s as simple as that. And the ARM business model offers one that level of control, if that’s what one wants to do and one has the technical resources available to do it," East added, as reported by EE Times. (You can watch a video webcast of this mornings Q2 financial call from ARM here).

Apple purchased P.A. Semi for $278 million in April. P.A. had one major product and about 150 really smart engineers.  They had lots of venture capital including money from Texas Instruments.  They also had a genius CEO  – Dan Dobberpuhl, with a long history in designing revolutionary chips – including DEC Alpha and the ARM architecture itself….and the one product, the PWRficient chip, was built on StrongARM’s legacy of power efficiency but with a PowerPC core.

Apple boss Steve Jobs has previously said, "PA Semi is going to do system-on-chips for iPhones and iPods."

We think this looks like Apple’s plan for its mobile devices…..who else would be so secretive?

 Universal Music has launched a service to compete with iTunes, called Lost Tunes, which is available now in the UK.

Naturally, Universal isn’t presenting the service as an iTunes threat, and, to be fair, its focus isn’t on selling music to everybody. Instead, the new Universal service offers extremely rare single and album tracks from the labels extensive music back catalogue – better still, songs are being sold in MP3 format at a (relatively) impressive 320kbps – so high quality, near lossless audio downloads of tracks you just can’t find elsewhere. And all tracks work on any platform, and nearly all devices.

Azi Eftekhari, Head of Digital and Media for Universal Music Catalogue told <a href="http://distorted-loop.com/2008/07/30/universal-stabs-itunes-launches-lost-tunes/" target="_blank">Distorted Loop</a>: “We wanted Lost Tunes to replicate the experience of going to a favourite local record shop where browsing and discovering music is a real pleasure and an adventure.  We only include music that we love.”

The service launches with such rarities as the Walker Brothers’ ‘Live In Japan’, three albums by the hugely acclaimed Comsat Angels, Bill Fay’s eponymous album, UK blues Nine Below Zero, Mellow Candle and Oriental Sunshine. A further 500 exclusive download albums are scheduled for addition to the store in the coming six months, including never-before-released material from the Trojan, Fiction and Decca archives. Lost Tunes is powered by UK operator and Apple competitor, 7 Digital. International versions of the site will launch in the coming months.

 This looks incredibly promising….

Your iPhone/iPod touch as a remote control Mac…..

[youtube http://www.youtube.com/watch?v=skZCBvWVu8A&hl=en&fs=1]

"One of the great advantages of this toolkit is that you can develop and test your multi-touch application on your standard desktop Mac, using your iPhone as multi-touch input device."

Thanks to Mac Daily News and the Media Computing Group for this one.

Asus has taken another attempt at Apple, introducing the Windows XP-powered Mac mini alternative, the ASUS Eee Box.

Small, quiet and equipped with an Intel processor, the Eee Box costs just £199 (UK), around $300 (US), and ships later this year (in the UK, at least).

The Eee Box comes with the option to VESA mount on the back of LCD displays, for "the ultimate minimalist space-saving solution".

There’s touch sensor buttons and the company has clearly paid a little thought to design, smooth curves and its paperback-thin construction could make this interesting to floating Mac switchers, scared to leave Windows. 

Though the choice of XP says a great deal about the current situation for that OS. And there’s a Linux version to follow…

Additional detail: Boot time, 8-seconds; "The Eee Box also supports a range of connectivity options including  the latest WiFi 802.11n wireless standard "; operating noise, 26db; apparently green-friendly (company says, "made completely from earth-friendly materials for reduced CO2 emissions; conforming to stringent RoHS and WEEE standards".)

Separate reports claim: 1GB RAM, 80GB storage (other options available, 802.11n as standard, Intel Atom 1.6GHz processor, graphics, Intel GMA 950. 

Ports USB, memory card reader, headphone out, mic in, Gigabit ethernet, DVI out, Line out. 

So I promised y’all some Glass Touchpad information.  Here ya go…

Update: Thanks guys for the lovely comments.  MacBook Touch?  Might be?

 Apple may offer the iPhone in all international markets, liberalising its distibution of the device to include all carriers, a report suggests this morning.

Bloomberg is reporting statements to this effect made by the CEO of Singapore mobile phone carrier, MobileOne. Company boss Neil Montefiore told media: "I think, before the end of the year we will be” carrying the phones in our stores. It will become available in all markets, with all operators.”

Now, this could simply mean Apple will be offering the device in all international markets by the end of the year through operators it has already reached a deal with, or could signal a newly liberal approach.

If the latter, then it’s interesting this news emerges as an earlier report explains Orange will join O2 in offering the iPhone in the UK before the end of the year. Could these two matters be connected?

Singapore Telecommunications in May it won rights to distribute iPhone in Singapore, though a release date hasn’t yet been confirmed. StarHub Ltd.,  also expects to offer the device this year.

 Word reaches us that O2 UK’s exclusive iPhone deal with Apple times out later this year, and competing network Orange is going to step up to the plate, offering the device in the UK market.

Electric Pig claims "credible sources", who let them know the iPhone 3G would be available on Orange, "possibly as soon as October".

Orange already sells (or will sell) the iPhone in France, Austria, Belgium, the Dominican Republic, Egypt, Jordan, Poland, Portugal, Romania, Slovakia, Switzerland and Africa.

The move could reflect Apple’s slow shift away from exclusive deals with carriers in other countries, though it has been left committed to existing exclusive deals in first-ramp iPhone countries, such as France, Germany, UK and and USA.

We’ve been curious as to just how long Apple plans to keep with its exclusive carrier deals for the iPhone, and while we have to take this report with a pinch of salt, it makes sense for the company to attempt to harmonise its international deals with operators.

Added to which, the requirement to be locked onto specific networks in order to use an iPhone has become one of the last few key criticisms causing potential iPhone customers to resist purchasing the Apple mobile.

According to Forrester Research, Windows vista is the ‘New Coke’ of Operating Systems.  After being on the market for over a year it still hasn’t captured 10% of the enterprise space according to Enterprise Trends: Vista Is Rejected; Mozilla And Apple Make Small Gains by Thomas Mendel, Ph.D.  Other fun facts for Microsoft’s flagship operating system:

• 8.8% Vista Penetration
• Microsoft says it has sold 180 million licenses (including downgraders)
• The share of Macs grew to 4.5% in June from 3.7% in January 2008
• Linux’s share of desktops, meanwhile, fell significantly, to 0.5% in June from 1.8% in January
• 19.4% of enterprise users are using Firefox, up from 16.8% at the beginning of the year. Meanwhile, Microsoft Internet Explorer’s share only slipped slightly, from 79.1% in January to 77.6% at the end of June.
• Both Flash and Java were nearly ubiquitous. Flash Player Version 9 was on 97% of desktops, while Java was on 99.9% of them. But application developers shouldn’t try too hard to jazz up their apps with Flash elements — "business users don’t want to hunt for navigation nor do they crave excitement," Mendel wrote.
• Forrester also discovered that despite ever-increasing screens and screen sizes, the largest slice — 34.1% — of business users are using screens between 15 and 17 inches in size with resolutions of 1,024-by-768 pixels; another 25.2% use screens between 17 and 19 inches in size with resolutions of 1,280-by-1,024 pixels.

Google CEO and Apple board member Eric Schmidt is pretty pleased with the iPhone 3G, telling Fortune it "shows the power of a device that is a step forward".

Schmidt was speaking yesterday at the Brainstorm Tech event. He noted, "The iPhone has a fully functional browser. We can show desktop ads, not mobile ads. That’s a huge change from our perspective."

Naturally conversation soon turned to Android, Google’s own mobile phone software. Handset makers will deliver the first Android phones by the end of the year, the report claims. And the success of the iPhone is good news for Google and the Android platform.

"The iPhone’s competitors all have devices or devices coming out. It’s really simple," Schmidt added. "A phone is a GPS, a camera, a computer, and a browser,” he said. Schmidt sees more opportunities for Google as a result.

Schmidt also predicted the best social networking applications will now move to the mobile world, telling of one Android application which will tell users where they are, what’s around them and what businesses are in the local area. “The most interesting social applications will be mobile-based because people are always moving,” he said.

 Microsoft CEO Steve Ballmer gave his grimmest promise yet that he intends going to battle with Apple in a statement to company staff last night.

Ballmer confirmed a grim plan to beat Apple at its own game, saying: "In the competition between PCs and Macs, we outsell Apple 30-to-1. But there is no doubt that Apple is thriving. Why? Because they are good at providing an experience that is narrow but complete, while our commitment to choice often comes with some compromises to the end-to-end experience."

He has a plan, saying, "Today, we’re changing the way we work with hardware vendors to ensure that we can provide complete experiences with absolutely no compromises."

It doesn’t stop there. Microsoft plans to start its photocopiers in the mobile phone segment, also, Ballmer confirmed, "We’ll do the same with phone – providing choice as we work to create great end-to-end experiences."

Microsoft also seems set to come back with a series of ads, potentially designed to answer Apple’s successful series of ‘Get A Mac’ ads. "In the weeks ahead, we’ll launch a campaign to address any lingering doubts our customers may have about Windows Vista," he said. "And later this year, you’ll see a more comprehensive effort to redefine the meaning and value of Windows for our customers."

What are your thoughts on Microsoft ‘innovation’?

 Word coming out of the inner circle says there’s no illness around Apple CEO Steve Jobs, and that reports of his ill health have been exagerrated.

There’s been numerous rumblings of concern at the Apple co-founders health in recent weeks. Questioned this week about the ill health rumours Apple’s chief operating officer, Tim Cook, said: "Steve loves Apple. He serves at the pleasure of Apple’s board. He has no plans to leave Apple. Steve’s health is a private matter."

Privately, it seems that there’s no cancer affecting the visionary Apple leader. "In recent weeks, Jobs has reassured several people that he is doing well and that four years after a successful operation to treat a rare form of pancreatic cancer, he is cancer-free," said the International Herald Tribune this morning.

However, Jobs reportedly "did have a surgical procedure this year to address a problem that was contributing to a loss of weight." The sources for this news declined to reveal themselves because they are not authorised to discuss the health of the company CEO,

Jobs’s appeared thinner when he launched iPhone 3G last month, leading to speculation his cancer may have returned. An Apple spokesman at that time said Jobs had simply suffered a "common bug" inthe weeks before the event and had been taking antibiotics.

Jobs has reportedly told people he is dealing with nutritional problems in the wake of his cancer surgery, which can lead to weight loss and low energy, even when the cancer has gone.

That the CEO’s health is under question is understood to have shaved some dollars of the company stock price. ”While the topic is delicate, we believe the absence of a straightforward denial of health issues will increase speculation of a worst case scenario,” Deutsche Bank analyst Chris Whitmore said, according to the Santa Barbara News.

While many say the company should answer critics with a statement on the health of the CEO, corporate government specialists say Apple is under no pressure so to do so. ”It’s only material if it affects his ability to carry out his responsibilities. Up to that point, it’s up to him," said Charles Elson, director of the Center for Corporate Governance at the University of Delaware.

 Despite economic challenges and investor jitters at Apple’s proposed lower-than-anticipated profit margins, current weakness in the stock is a buying opportunity, said American Technology Research analyst, Shaw Wu.

"We continue to see Apple as the best play on digital media in the home and a large beneficiary of the shift to mobile computing," Wu wrote. 

Wu also thinks the recession’s bite will be felt first among value-conscious consumers, rather than the slightly higher income customers who form Apple’s base. "In two of its three big franchises, Mac and iPhone, penetration is very low and starting in the higher-income demographics. The disturbance in the macroeconomic environment is within lower-income demographics and financial institutions with exposure and impact to overall liquidity.

"This could certainly spread, but we believe Apple’s business will remain strong in the near- to medium-term. Enough high-end consumers are still buying technology, though commodities inflation could pressure future margins," he observed. 

On Apple’s conservative guidance for future quarters, the analyst said he agreed the economic situation could make for some component price instability. 

"Apple is offering students a free iPod Touch with purchase of a Mac in a back-to-school promotion. The cost of the rebate is applied contra-revenue against the Mac and iPod sale on a pro-rata revenue basis. For the overall company, the cost of sales on the promotional iPods is a drag on the gross margin. Assuming 20 per cent of Macs sold in the September quarter are under this promotion, we estimate a 90-100 basis point drag on the overall gross margin."

The analyst also offered a few bullet points:

The Bulls Will Point To:

– Europe (22%) and Asia-Pacific (8%) sales were strong, up 42% Y/Y and 44% Y/Y, respectively, while the Americas (46%) grew 28% Y/Y.

– Sales in Japan (5%) were down 14% Q/Q but up 42% Y/Y against an easy comparison. Nonetheless, this business continued to show progress in FY08 vs. sluggish results in FY07.

– Mac shipments came in at 2.5 million units, up 42% Y/Y.

– iPods came in 11 million units, above our forecast of 10.5 million and at the upper-end of expectations of 10-11 million.

– The gross margin came in at 34.8%, above its guidance of 32% but below our estimate of 33.5% and consensus expectations of ~34%.

– Apple shipped 1.7 million iPhones, above our estimate of 1.5 million and within the higher 1.7-2 million expectations.

– Inventories remained low at $545. Most of the sequential increase is related to the iPhone ramp while Macs are still at 3-4 weeks of inventory.

– Net cash grew to $20.8 billion, up from $19.5 billion last quarter, helped by strong cash flow from operations. Net cash per share is now $23.00 per share, up from $21.63 per share.

– DSOs remained at low levels of 20 days vs. 19 last quarter.

– Strong iPhone ramp could provide significant operating leverage in model as iPhone deferred revenues are recognized in out quarters.

The Bears Will Point To:

– Its September quarter guidance is somewhat conservative going back to AAPL’s typical pattern. The company has now given conservative guidance seven out of eight quarters.

– Its gross margin guidance of 31.5% and longer-term of 30% is materially – While Mac units were strong at 2.5 million units, its unit growth of 42% Y/Y shows a deceleration from 51% last quarter. Moreover, it was at the lower-end of 2.5-2.6 million expectations.

– ASPs were under pressure with Mac ASPs at $1446 (down 5% Q/Q) and iPod ASPs at $152 (down 11% Q/Q).

– There was continued uncertainty about Steve Jobs’ health as the company maintained its policy of his health being a private matter.

– Early adopters are driving the current strong iPhone demand. Mainstream users could balk at the high monthly subscription costs.

– Apple may be susceptible to a slow-down in consumer spending.

– Apple accounting treatment of iPhone and Apple TV revenue where hardware revenue is amortized over 2 years or 8 quarters remains somewhat confusing and is unprecedented.

Expect faster, cheaper and better Macs as Apple uses price to maintain its growth spike, the analysts at Needham & Co. said, revealing slightly reduced estimates on the company stock,.

Analyst Charles Wolf notes Apple easily beat third quarter consensus estimates, reporting earnings per share of $1.19 on revenues of $7.46 billion, observing, "But the stock was crushed after the release by gross margin guidance that was materially lower than the historic numbers both for the fourth quarter and fiscal 2009. Our take is that Apple wants to continue the Mac’s momentum and will use pricing to do so."

The purported plan follows a stupendously strong Mac sales quarter, Apple reached 2.5 million unit sales, up almost three times the market growth rate. 

Apple’s proposed fourth quarter margins sent some investors into a tizzy. Apple’s gross margin was 34.8% in the third quarter.  But Apple expects it to fall to 31.5% in the fourth quarter and to average around 30% in fiscal 2009. "This guidance sent a shockwave through the investor community," Wolf notes.

"Our take is that Apple appears willing to accept a lower gross margin in exchange for continued Mac market share gains and faster revenue growth," he advised. "The guidance for 2009 suggests that Apple may reduce the prices of its high volume iMac and MacBook lines to continue their surge."

"We’ve raise our 2009 Mac shipment forecast from 12.9 to 14.2 million units. We’ve cut our  2009 earnings per share estimate from $6.95 to $5.95 solely because of 

the expectation of a lower gross margin than we previously anticipated. We continue with our strong buy rating. We are maintaining our $240 price target for now," the analyst said.

The New York Post has set out more concern this morning at the health of Apple CEO Steve Jobs.  Market manipulation?  You be the judge.  Apple’s stock is significantly down on the news.

Apple will reveal its quarterly results during a conference call this afternoon at 2pm (PDT), but, according to the report, people meeting him in recent weeks appear concerned at his "thin appearance". "Apple’s hedge fund investors are very worried," a Wall Street source who has spoken with some of the company’s stakeholders told the newspaper.

Concerns at the health of the Apple co-founder emerged last month after a thinner-looking Jobs took to the stage at WWDC to introduce the iPhone 3G. Responding to these concerns, Apple later said Jobs had been suffering from a "common bug", from which he was expected to make a full recovery, blaming his weight loss on the antibiotics he had to take.

Reports from the Disney side of Jobs’ life also fret at health worries, the report explained: "Another source close to Disney, who spoke with executives after the board meeting, said they were remarking on his weight loss," the report explains.

Behind all the concern lies Jobs’ bout with cancer in 2003, when he was apparently cured by the removal of a pancreatic tumour.

Concerns at the health of Apple’s visionary co-founder are exacerbated by the company’s seeming lack of a successor in wating. These worries are bound to mute Wall Street’s response to what should be a blow-out quarter for the company, which recently rose to become the third-biggest computer seller in the US, surpassing Acer for the first time. Apple is expected to deliver a profit of $1.08 per share on revenue of $7.36 billion, according to First Call.

 Looks like Apple is moving to accelerate its delayed laptop range upgrade, according to reports emanating all the way from Taiwan.

Seems the company has put out a major order for components for the new MacBooks, reportedly requesting 20 per cent more circuit boards for them than it requested in spring.

Compeq Manufacturing, Gold Circuit Electronics (GCE), Nanya Printed Circuit Board (NPC) and Tripod Technology are the four manufacturers Apple’s claimed to have approached for the new boards.

Sure, this doesn’t mean new models are definite, but we’ve expected them a while, and believe their introduction to have been delayed when Intel hit some last minute processor production problems with Centrino 2.

Centrino 2 was scheduled for release at Computex Taipei 2008, which took place on June 3 – 7, 2008, but was delayed until July 14, due to problems with integrated graphics and wireless certification. 

 Analyst Rob Enderle of the Enderle Group is a frequent Apple critic, and his comments against the iPhone are perhaps good advice.

He’s warning business users not to be too quick to adopt the iPhone 3G, warning that any flaws in the product may take time to surface.

Oh, but he’s always good for a soundbite, check this from VNU:

"Apple is one of those companies that could sell refrigerators to Eskimos, but that does not suggest that Eskimos should actually buy them," he said. "The problem is that Apple tends to lead on hype and does a good job controlling initial product reviews."

Pretty true, but the business-friendly iPhone offers support for Exchange, Cisco VPN security and GPS – and word is many business users are tempted by the gadget.

Caution, advises Enderle, "It would be better for employees and their companies if purchases of the iPhone 3G were delayed until at least September," he warns.

Read more.

Steve Wozniak says education was one of the key uses he saw for computers from the beginning. Filmed at Blackboard Inc.s Las Vegas conference this week, here he talks about his passion for education and the early days of Apple.

http://p.castfire.com/MfFMz/video/17080/video_2008-07-16-125209.flv

 Sega of America president Simon Jeffrey has some pretty nice things to say about the iPhone, describing the Apple mobile as being as "powerful as the Sega Dreamcast".

Jeffery also said he’s delighted with how the iPhone version of Super Monkey Ball has been received, "Were deliriously happy," he said, interviewed by Kotaku.com.

He spoke a little on the relationship between Sega and Apple, "Our relationship with Apple is such that they talk to us really early about their gaming plans," he said. "We’re one of the small number of publishers with content on the original iPod," he added. "It’s very gratifying our content is so popular…we think the iPhone is everything that the N-Gage wasn’t, as a device," he admitted.

Jeffray is disparaging about most mobile phone games played on tiny screens, admitting he personally doesn’t see the attraction – but he does with the iPhone.

It gets better, though – the Sega exec’s confirmation that the iPhone is as powerful as a Dreamcast is followed by the revelation that, "we’re looking pretty sensibly at what we can do on the iPhone and what we can bring to that market. Bringing across some of the Dreamcast games to the iPhone makes perfect sense.

Jeffrey also confirmed Sega to be working to bring many more games to the iPhone, including "some pretty cool stuff". He predicts the iPhone gaming market will become extremely actve, "every games company is moving to it," he said.

Gartner and IDC just released their most recent numbers on PC Marketshare and Apple, as expected, climbed up the ranks again.  Depending who you ask they are either slightly ahead or slightly behind the Acer/Gateway/Packard Bell mashup which puts them around tied for third place.  The interesting thing is iPod touches and iPhones aren’t counted as computer sales.  Should they be?

• iPhones have the same specs as laptops had about 5 years ago.
• They can do most of the things a full computer can
• They are as functional as UMPCs which are tallied in the total.
• They are used in much the same way as computers, replacing computers much of the time for people on the move
• Unsubsidized cost?  I’d venture to bet 50% of Dell and HP machines are less expensive that unsubidized iPhones
• Some pretty smart people say they are computers

If you do count iPhones and iPod touches…you get a whole new ball game.  That three million computer lead that HP and Dell have on Apple starts to shrink.  Apple sold a million iPhones last week.  iPods are also flying off the shelves and with the 2.0 software, they do Exchange, Cisco VPN, Office apps, IM,  and have 1000 3rd party apps waiting for them.  That is a pretty good computer platform if you ask us! 

As these things converge with computers, Apples marketshare should explode!

 Demand for the iPhone remains "unabated" since the product launch last week, pitting Apple and Research In Motion (RIM) in a two-horse race for dominance of the smartphone industry, and at least one analyst believes it’s not RIM which holds the winning hand.

Needham&Co. analyst Charlie Wolf this morning downgraded RIM stock from Hold to Underperform, warning that sales of the iPhone 3G seem poised to "blow through everyone’s forecasts."

Apple this week confirmed one million iPhone 3Gs were sold in just three days. While we all experienced problems both at retail and when trying to activate the devices as the iTunes servers just couldn’t cope with the demand, Seeking Alpha today called the launch the "biggest consumer electronics launch ever".

Consumer it may be, but Apple’s made a pitch to the enterprise, also – and RIM is bound to be impacted, Wolf warns: "While RIM’s dominance of the enterprise market appears secure, at least for now, the company’s great growth driver-the consumer market-is bound to come under siege because of the iPhone. We’re cutting RIM from a hold to an underperform rating and reducing estimates."

RIM earned $482.5 million in its  first quarter which ended 31 May, double the revenue of the year before, but under expectations. The company hopes to take on Apple with the BlackBerry Thunder, a touchscreen device, and says it expects to achieve better results on strength of sales in the consumer market. But will the plan work? Wolf is clearly unconvinced.

"Much of Blackberry’s success stemmed from a paucity of competitive offerings from other smartphone manufactures. That ended on July 11 with the introduction of the iPhone 3G. Apple announced that it sold over one million phones in just three days. And our checks indicate 

that demand has continued almost unabated since then."

The analyst warns that while its no fight to the death between the two firms, the iPhone will cut into BlackBerry’s incredible growth in the consumer smartphone market.

And RIM has no guarantees: "RIM’s counting on new iPhone look-a-likes to stem the tide," the analyst notes. "While these models should enjoy some success, they have no hope of matching the secret sauce of the iPhone – the tight integration of hardware and software that creates a unique user experience. Nor do they have any chance of evolving into an application development platform like the iPhone. wireless solutions for the mobile communication market worldwide."

It’s the iPhone’s software development that lends it its extra sauce, the analyst explains in his in-depth briefing to clients.

"The interest of the software development community has been overwhelming. Unlike the PC market, there has never been a viable application software market for smartphones because of the dramatic difference in the form factors of PCs and smartphones," he notes.

"Over 800 titles have been released for the iPhone through the iTunes App Store. We expect this number could top 10,000 within a year," he said, pointing out that the device’s ability as a games console means it will become a "must-have product for teenagers already addicted to their iPods.  

"The lock-in effect the iPhone software creates should insure a staggering installed base for the device," he adds.

Wolf doesn’t believe RIM can match this. "It’s the superb integration of hardware and Apple’s OS X operating system that makes the device one of a kind. BlackBerry’s Java development tools are primitive in comparison. In our opinion, RIM has no hope of catching up on the software front, which promises to be the next battleground in the smartphone market," he writes.