IPhone (the sequel)

It costs less, comes with more features and faster connectivity but doesn’t come with nearly as much hoopla and media coverage as last year’s model.

It’s Apple’s latest iPhone, which the company rolled out during its Worldwide Developers Conference in San Francisco June 9th.

Of course, price is the big news. The new iPhone, which goes on sale July 11th, is priced at $199 for the 8-gigabyte version, while double the storage will cost $299.

It’s a different story from when Apple rolled out its better mousetrap last year. When iPhone debuted in June 2008, Apple charged $499 for the 4GB model, and $599 for the 8GB version. And even though Apple lowered the 8GB to $399 just three months after the cell phone/music player/Web device’s launch, consumers have viewed iPhone as the phone equivalent of a Lexus or BMW – a high-priced yet reliable product with a classy brand name.

But Apple wants more than a major piece of the high-end cell phone pie. The Cupertino, Calif., company wants it all. And with iPhone’s latest upgrades coupled with lower prices, the House of Steve Jobs just might get what it wants.

Speed is one of the biggest upgrades for iPhone, as the mobile handset is often seen as an Internet device that happens to make phone calls.

In fact, if you want to be specific, it’s not iPhone anymore. Instead, Apple refers to the new model as iPhone 3G, with the "3G" declaring that the device supports 3G networking, the third generation of cell phone standards technology. For iPhone, 3G functionality means faster wireless Internet connections, a must-have for a device that bills itself as a Web tool as well as a music device.

The new iPhone also sports GPS capabilities, one of the most asked-for features from users. Other additions include a new App Store for iPhone, where users can purchase various applications including games, business, travel, news, sports, reference and health.

One of the main differences between this year’s iPhone upgrade and the product launched one year ago is that last year’s initial June launch was limited to the United States. This time Apple is rolling out its new iPhone in more than 62 countries.

The price puts iPhone within reach of more consumers than Apple fans needing the latest whiz-bang technology fix from Steve Jobs’ drawing board. With iPhone 3G starting at $199, those who could only gaze upon the gadget with envy will now be able to slip one in their pockets.

But don’t attribute those price cuts to Jobs’ generosity. Like last year, AT&T is still the exclusive U.S. carrier for iPhone. However, this year the service provider is subsidizing the phone’s price.

When iPhone launched last year with a starting price of $499, AT&T agreed to share subscription revenue with Apple. But now the two companies have an agreement similar to other phone manufacturers and service providers where the provider subsidizes the phone, resulting in lower prices.

But making money on iPhone sales during the short term might not be Apple’s primary directive. Instead, the company might be eyeing world dominance in the international cell phone biz as its major goal.

And they just might do it. Cell phone companies rarely inspire loyalty among consumers. Someone who bought Nokia last year might opt for Samsung this year and perhaps Sanyo next year. However, Apple is known for consumer loyalty, and the person who bought an iPhone this year will probably buy one the next time he / she purchases a new cell phone. To do otherwise might be the cellular equivalent of trading in a 2008 Lexus for a 2005 Yugo.


Universal’s Demo Derby

Everyone who has ever been anyone in the music biz, or has toiled along companion trades like radio or music journalism, probably has a collection of albums displaying stickers or imprints reading something along the lines of, "For demonstration use only. Not for resale."

But the directive that’s accompanied demos for decades might amount to nothing more than wishful thinking on the labels’ part. A federal judge recently ruled that whomever possesses a demo album is free to do whatever he or she wishes with the tunes. Including selling the album on eBay.

The case was UMG Recordings v. Troy Augusto. Universal took issue with Augusto selling demo CDs on eBay that he had purchased in used record stores. The label asked the online auction house to remove the listings, and then it sued Augusto.

Universal argued that it retained ownership of the discs in question and that the CDs were licensed only to the recipients for personal use. Furthermore, the label claimed it retained the exclusive right to distribute and sell the promotional CDs.

In writing his decision, Judge S. James Otero ruled that Augusto was protected by the First Sale doctrine, which holds that the copyright owner has the exclusive right to sell a new product but does not have any control over the product being resold as a used item.

"With software vendors, laser printer manufacturers and patent owners trying to strip consumers of their first sale rights with unilateral labels, licenses and notices, today’s ruling sets an important precedent holding the line against these efforts," wrote Fred von Lohmann of the Electronic Frontier Foundation, which co-chaired Augusto’s legal defense. "Here’s hoping this ruling is another nail in the coffin of ‘label licenses’ that try to strip consumers of their privileges under copyright law."



Black Gets Viral

Comedian Lewis Black has lent his inimitable talents to the Service Employees International Union, and the result is pure, patented rant – Black style.

It’s all part of "No Free Lunch," a short film appearing on viral video sites such as YouTube. The vid is the first of a series of films starring entertainers and focusing on income inequality and perceived economic injustices in the United States.

"No Free Lunch" targets Henry Kravis, co-founder of private equity firm Kohlberg Kravis Roberts & Co., which specializes in leverage buyouts. In the film, Black lambasts Kravis for buying into companies and then allegedly running them into the ground only to scoop them up at bargain-basement prices.

"They buy companies around the world … not just here. Put a buck in, and the company they’re buying puts, like, nine bucks in," describes Black while sitting at a diner’s lunch counter. "The company they’re buying goes into debt … so they can buy the company. Somebody explain that math to me."

But Lewis is just getting started, as the comedic master pumps up the volume and digs deeper into his nemesis.

"Then they make a ton of money," continues Black. "How do they do that? By downsizing and doing some things. But the worse thing is, they end up letting go of some workers. They let go of the people who actually do the work."

Aside from laying off workers, Black is also ticked at Kravis’ blocking of efforts to raise the tax rate on carried interest, which is the share private-equity partners take in from deals that make money. Currently, the carried interest tax rate is 15 percent, but proponents of raising the tax want to see it set at 30 percent.

But Black doesn’t spend all his ire on Kravis. He has plenty to devote to Bear Stearns, as he slams the investment banker and brokerage company for its role in the sub-prime mortgage debacle.

"These guys made a ton of money," says Black. "And what’s worse is that the taxes that they have to pay – the money they make back from their investments – the taxes they pay on that are less, rate-wise, than for a teacher that makes $50,000 a year. That’s extraordinary."

But Black doesn’t stop there, for the comedian goes on to diss what he maintains executives like Henry Kravis do with all the money.

"Do they build a new school?" asks Black. "Do they buy football uniforms for kids? No! Instead they get a ninth Arabian horse, or a new townhouse in Hooblaha."