The Gillmor Gang - Mike Arrington, Jason Calacanis, Doc Searls, and Robert Scoble - go 3G with Steve Jobs’ iPhone 2 announcements. Recorded Monday, June 9, 2008.

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Gillmor: Hi, this is Steve Gillmor. Welcome to the Gillmor Gang. It’s Monday, a couple of hours after the Apple event, and Steve Jobs came out. Mike Arrington, you were there.

Arrington: I was, yes.

Gillmor: And what do you think?

Arrington: Well, tired. I got up real early this morning. I got up at 6:00 — which is real early, real early for me — to get to the event by 8:00. So we were there a couple of hours before to make sure we were checked in properly.

I think the event was largely a success, largely what we were all hoping for. I haven’t checked out Apple stock. I heard it’s down a bit today. Is that still true?

Gillmor: I think it was down, and then it was coming back a little bit after the pricing announcement.

Arrington: Yeah, so it would be good to actually check that. Yeah, well it’s definitely down today. What is it at now? It’s down a bit. It’s been all over the place.

The main announcements were a couple of things. One is they announced a bunch of apps that will be launching whenever the App Store launches. It sounds like that’s July 11th, I think is what we’re looking at, maybe a little bit before that. We saw a number of apps.

The really cool apps are the ones, the games, where people use the iPhone accelerometer to actually use the iPhone as a controller. We saw a driving game, a couple of action games, a fighting game, and things like that. It was just absolutely stunning. The graphics are really cool. It seems to work really well as a controller. So we saw a number of applications there.

We also saw some stuff from eBay. We saw some medical applications and a few others. Six Apart had a blogging application. The one I actually think is most exciting are the social network applications. Loopt was the one showing, but there’s a bunch of others coming out as well. And the idea is, I just imagine, Facebook knowing where you and your friends are all the time. It can help you meet new people as well, who are around you who might share your interests. I think that’s a really exciting area. So, those are the applications.

The second big announcement that they made is the renaming o.Mac to — What do they call it? Me.com, or MobileMe they call it. I think me.com is the domain name. They call the product MobileMe. What this is, is wha.Mac should have been all the time, which is the synching of email, calendar, photos, and the other office apps.

We have a video up on our post about this. I don’t think it’s up anywhere else yet. That allows you to synch across multiple Mac devices. Also, Windows devices, you can use Outlook and things like that, which is new.

And the other cool thing it does is allows you to post your photos that you take with your phone on the web and share them. Right now, it’s pretty hard to actually get your photos off the phone; you end up emailing them to yourself, things like that. Maybe downloading them into iPhoto, but for the most part, it is a pain. There will be an option, every time you take a photo, to upload it to the web. You can share it publicly or privately.

I’m pretty excited about that. I run four Macs plus my iPhone, and synching is a real problem. In fact, beyond email, where I just use an IMAP server, synching is really non-existent. So, I’m really hoping that this starts to work. .Mac has never worked properly for me. So, I’m really excited about that.

Do you want me to keep going?

Gillmor: Yeah. Also — Doc, you there?

Searls: Yeah, I just got here.

Gillmor: OK. Well, go ahead, Mike.

Arrington: The big announcement, the last announcement was the 3G iPhone. In fact, it was sort of getting awfully late. I think this almost ran two hours. We had all run out of batteries. At one point I had to start SMSing in my updates to the team so they could have it. We were basically offline. We were sort of able to see it through to the end.

They did announce the 3G iPhone. Key things to remember from the 3G iPhone. It will be available July 11th. The battery time is increased, supposedly significantly. We will see. It is slightly thinner than the old iPhone, but it is hard to tell from the pictures exactly how much thinner it is.

Download speeds are significantly improved. So, website loading speeds are about 3x, three times as fast as current loading speeds. In the demo they showed us, loading a page that was heavy with images and formatting, took 59 seconds on the current iPhone and only took, I think, 22 seconds on the new 3G iPhone. Downloading emails is also significantly faster, again about 3X. So, that is exciting stuff.

The phone also will start at only $200, basically half the cost of the same phone now. I think you need a two-year commitment to get it at $200, though, with AT&T. The 16 gigabyte version is $299. The 16 gigabyte version also comes in white. The normal one only comes in black, actually, which is a little different than the existing one, which is brushed aluminum.

So, those are the big announcements. There was again, two hours of content, so that’s a big summary. But, that’s what we saw today.

Gillmor: So, what I thought was most important part of the announcement was the price.

Searls: It was amazing.

Gillmor: Do you agree?

Arrington: I don’t, because it’s subsidized. And it hasn’t been in the past, so it’s hard to know how much the price has really dropped when you factor in that they lock you in for two years.

Searls: You mean it’s subsidized by whom, and how?

Gillmor: Doc, it’s really hard to hear you.

Arrington: Well, we’re making assumptions before the announcement. The top post on TechCrunch right now is an interview with Glenn Lurie at AT&T, who gave us some information on this. And I think a press release is coming out a little later on this. But he did not say that the phone is subsidized. I think there just has to be an assumption made that there is a two-year commitment to get the phone for $200. That AT&T must be kicking something back to Apple to help them get the price down.

Gillmor: So, even if you have one now, do you have to get another 2-year contract?

Arrington: I don’t know. And I don’t know if they’ve announced that yet. I would assume based on current rules around mobile phones that if you are going to buy a brand new phone, you are going to have to at least get a new two-year commitment, and there is still the problem of your old commitment. So, I don’t know exactly how those details will be worked out.

They have sold six million iPhones already. A large chunk of those people are early adopters, who aren’t very price-sensitive and they are going to immediately want the new phone. And they are going to want the number changed over. And they are going to want to figure this thing out pretty quickly. So, I think we are going to have to wait for details on that.

Gillmor: What about the ability to — I mean, right now I use Gmail with the iPhone. Do you think there is going to be an advantage to have to pay $100 a year in order to get push email, as opposed to waiting a few minutes or just pulling it interactively when you need it?

Arrington: Enterprise users that have had push email in the past swear by it. I have never had push email, and I just do not mind hitting a button. And I am pretty email dependent. So, it has never bothered me at all. I’ll use me.com because I use Macs for everything. So, if calendars properly synched, it’s worth it for me. And the fact that I can get photos uploaded to the net immediately is also valuable to me. So, that’s going to be pretty important.

If you use Gmail, and you’re happy doing pull-email, and you don’t have calendar issues and things like that, me.com is probably not going to be compelling to you.

Gillmor: I just find it problematic to lose Gmail. I don’t know why I would want to go for a second-class web application, which I never use. What is the value?

Arrington: Well, their web app is pretty good. It is more Outlook-like. And that’s the other thing about me.com, I didn’t say this. They also are web versions, althoug.Mac supposedly has this as well. Again, they are great looking apps. They just don’t work. They will allow you to access email and your calendar online, as well.

But that again is awesome for me. But if you’re just a big Gmail junkie and you just can’t get over the fact that pull all the similar emails into one line, and then you know, yeah, you got to stick with that.

Gillmor: Jason Calacanis and Doc Searls. Are you back, Doc?

Searls: I’m back. Can you hear me?

Gillmor: Yeah, that’s much better.

Searls: OK, sorry about that. The land line I like to use here at Berkman is being actually torn out today and being replaced with something else and so I can’t use that. So I did Skype before and now I’m using this.

I don’t know what you guys have been talking about but probably not the things I’m about to say. One is that I’m really curious as to how this thing works as a phone. The iPhone as it stands is a very mediocre telephone. It is at best average as an actual telephone. So that’s one thing I’d like to know, is it any better. I think that’s one reason for the plastic back. I think that the…

Gillmor: What?

Arrington: Explain that, explain that. Are you talking about AT&T or the iPhone?

Searls: I’m talking about the electronics in the iPhone. Consumer Reports talked about that. They measured it against other phones and said it was very average. That the one place where it was — it was an absolute revolutionary product, yadda, yadda, but as a phone, it was average. You’d like it if it was an Apple product and if it’s still flashy to be better as a phone than other things.

I’ve seen it many times in the presence of other AT&T phones and it does not do as well as some. It probably does better than others. But it should do really well.

And as I’m saying I think that one reason for not having the metal back is the same reason why they changed from — you know, the original titanium if you recall, MacBook or PowerBook had the antennae on the inside of that titanium case and had no WiFi range at all.

And you know so that’s probably one reason for the plastic back. I’m sure that’s it needs — you can tell it needs more range. It needs to be better. You know, that’s what I meant.

Gillmor: They did say that there was improved audio capabilities.

Searls: Yeah, it’s not that great either. It was good but not great. And another is that the–you couldn’t use a regular headset with it. I don’t know if the new one is any different, but the headset was a little..

Gillmor: I think we talked about a flush, a..

Arrington: Yep.

Searls: What is that?

Arrington: That’s like you use normal headsets with that.

Searls: Oh, you can?

Gillmor: Yeah, that’s the other thing that he imagined. Jason, are you there?

Calacanis: Yeah, I’m here.

Gillmor: OK, any thoughts?

Calacanis: Pertaining to…?

Gillmor: The iPhone.

Calacanis: Yeah, I’ve got an iPhone. It’s pretty great. Oh, the iPhone 2, the iPhone 2. Yeah, it’s filling in a lot of gaps that it should have had in the first version and it’s the right price. You know, it’s standard procedure for Apple to charge something ridiculous then charge something reasonable, be imperfect at first and then solve a lot of the problems that everybody thought would be obvious second.

And you know, they’re going to get suckers like me that throw away my iPhone I paid $600 for and buy another one for $199 or $299. [laughs] Just like I have five iPods sitting in a drawer, I’ll eventually have five iPhones sitting in a drawer.

It’s a great device and I think they’re going to make the — this whole cloud computing thing is the biggest part of the story. Cloud computing is really the big story here. The theme of the store, “Everything under the Cloud,” this is cloud computing coming to the masses.

Gillmor: But it’s already available for the masses. I mean, all they’re offering is the storage of pictures. I mean, what’s the big deal here here?

Arrington: The Exchange thing is rather significant.

Calacanis: The Exchange this is huge.

Arrington: It’s really huge.

Calacanis: It’s really the most basic things that are the most important. You know, I still can’t get my BlackBerry and my GCalendar to sync properly. I thought this was a problem with Exchange, Exchange servers are so expensive. So once again Apple is taking a huge pain point and is totally making it easy for people. So, it’s good.

Arrington: The calendar was one of the weakest things that came from Mac for a long time, really. The iCal did nothing but subtract value from it. I’m really curious to see how well they do this because their execution on their calendar in past has been really awful.

Gillmor: I just completely disagree with the notion that Mini-Me or whatever this thing is called is going to be a value proposition. I mean, so they have an Ajax app. I mean everybody has an Ajax app these days.

Searls: No, no.

Gillmor: No persistence, there’s no persistence related to this app. It means we’re going to start using the on board Mac client on the phone. I’m not going to use it. I don’t care about it. It’s just bullshit.

Arrington: Yeah, I understand that. I as a Mac user though, do use it. And for me it’s perfect. But if you don’t use it you’re not interested in the feature, right? That’s one less reason you buy the phone. But it’s cool to use it.

Gillmor: No, I’m not buying the phone because it costs $199 bucks. I mean, that’s — to me that just takes away. There’s nobody talking about the fact that the battery is not replaceable. They basically have made the case now that the…

Calacanis: Oh, you’re still on the battery issues. Stop with the battery issue. Nobody cares but you.

Gillmor: That’s what I just said. I said that they’ve now made the case that this is a replaceable unit that will be replaced every year with a new model. You know, that’s very, very smart. They’ve taken the price down to a point where everybody will be willing to pay for it. It’s essentially $20 a month or less. Right?

Calacanis: Yeah.

Gillmor: OK. So that’s big news. The other big news is I think that the service that they have that they’re selling to developers which will I think debut in September, which is a push capability, so that they can take it and use it with Gmail for example and give us the same functionality as what Mini-Mac is going to provide only it’s using Gmail. That’s a big deal, I think.

Searls: So, Mike, what did they pay for me.com?

Arrington: Free trial, $100 for..

Searls: No, I mean what did Apple pay for the domain name?

Arrington: I don’t know. I have no idea. Maybe they’ve owned it for 20 years. Maybe they bought it yesterday, I don’t know.

Searls: It would be interesting.

Arrington: Two-letter domains are generally pretty expensive. expensive.

Calacanis: Yeah, they’re going to be seven figures, two-letter domains that.

Gillmor: Is nobody surprised that they had nothing else to say except basically there’s an upgrade for $200?

Searls: What do you mean by that exactly?

Gillmor: What I mean is that I think that all they had to say was, “Yeah, we have developers who’ve been working on these apps. We showed later versions of the same apps that we showed at the March roll-out, that nothing’s going on. There’s this big cloud computing push which puts them in third or fourth place now after Microsoft and Google and you know Amazon or eBay. I mean, what’s the big deal?

Searls: The big deal is they’re taking over the world. They’re becoming the new Microsoft and it’s pretty amazing. I mean, if they actually have ME,– you remember Mobile Edition? I mean, it’s just like an insult. I think it’s amazing.

But I’m just really — I hate to say it — I’m in a degree of awe at how well they’re executing this stuff. Piece by piece by piece by piece by piece they’re — you know..

Calacanis: Perfect. They’re perfect and their relentless.

Searls: They’re doing… They’re relentless. They’re just really, really good at this.

Calacanis: It’s relentless and it’s perfect. That’s the thing. People criticize them like oh, they’re not releasing these fast enough. Why wasn’t it 3G now? How come it’s no copy and paste? People are very critical of Apple.

They move slowly but they do it perfectly. And you know what? We’ve been in this business for 30, 40 years now, it’s like… I mean, Steve Gilmart’s been here for 80 years, but the rest of us have been here for 20, 30, 40 years.

It’s so refreshing for people to just focus on getting something simple right. There are so many things that we do are broken, like calendars, you know like instant message on phones, like touch screens and bigger phone screens.

I mean, they’re just taking very basic ideas and doing them perfectly. iTunes were another example of it. There are no heroes in innovation in terms of iTunes. They just relentlessly made it perfect and easyIt’s why they’re going to beat Microsoft on the consumer basis. Now we’re out of the PC era, and we’re in the consumer electronics era. They are the new Sony. I’ve been saying this for 10 years.

Arrington: They are the new Sony. They’re eating the phone. They’re going to eat the TV. There’s a matter of time before you’re going to buy a big screen that says “Apple” on it.

Calacanis: I’ve been saying that for two years.

Gillmor: I think they’re wide open vulnerable.

Arrington: And it’s going to be tied in with everything else you’re doing.

Gillmor: They’re wide open vulnerable to Android now. That’s what I think.

Arrington: I would be the last one to say that Android has a problem. I don’t. I actually think Android is really great. I think because Apple’s doing as well as it is with the phone business, that a lot of the other carriers are going to move toward Android. In fact, I’ve already gotten some intelligence to that effect.

And it’s a good thing. We need an open phone. We need open everything. We need to be able to Lego together the world that we want. Apple doesn’t want us to do that, and that’s where they’re vulnerable. But in the fully-integrated, you-don’t-have-to-worry-about-it world, they are just kicking butt in a huge way. I’m in full respect and awe of that, that they can do that.

Look at the stores. Oh my God.

Gillmor: The stores are great. Everything about the device is great. “Mini-Me” is bullshit and it’s not going to work. They’re not going to get $99 for that service. Right now, they’re giving it away for the first two months for free. And then two months from now, if people have to switch off of Gmail in order to use this, they’re going to lose 70%-80% of the signups. It’s just not going to happen.

Arrington: You can route your Gmail to this thing, can’t you? You can route Gmail to any address.

Gillmor: Right, but then you lose…

Arrington: The user interface from…

Searls: You lose what, Steve? I’m not sure.

Gillmor: You lose the synchronization. The unread marks. Right now, I have an iMac hooked to Gmail on the iPhone. So when I read something on the iPhone, it’s marked red on any other device that I’m using.

Searls: OK. And you’re doing that in Safari, right?

Gillmor: Well, yeah. Sure. Safari on the iPhone.

Arrington: Yeah. It would be very Apple to prevent that from working.

Gillmor: That’s true.

Arrington: So they use their system, and that’s working.

Gillmor: Right. And if they deliver this ping service to keep an IP connection open back to the iPhone for things like IM services, they can bootstrap on top of that to enable Gmail, to provide IM services, and Gchat, which will be interesting.

Searls: There’s an interesting question. Could Google perform in the open, Lego-block, build-it-yourself, we-can-put-the-pieces-together world where you are working right now, Steve, with Gmail as one particular application. It works with the Android companies and such that made that happen, a virtual Apple that’s a competitor to this. Do you think that could work?

Gillmor: Well, that’s what it looked like at the Google I/O conference when they showed this thing. It wasn’t the same semantics as the Apple semantics, but it was perfectly legitimate. It was a slightly different way of doing things, but it wasn’t rocket science to figure out. It was the same touch screen. It was the same capabilities. They’re going to sell a lot of those phones.

And when you bring the price point down to $199, which is what they’re doing, they’re essentially triggering a war. This becomes the razor blade, and the razor blades are where they’re all going to make the money. Google’s got as good a shot, if not better, than Apple does. To me, it sets a far more level playing field than I had anticipated a month ago.

Calacanis: Right now we are in the golden age of competition. These companies are at scale right now. The Internet companies and the hardware companies are not one or two points over. We’re talking about Web versus PC era companies. Apple and Microsoft are converging on the same space that Google and Yahoo are coming into. Then you have the media companies coming into the space that Google and Yahoo are on. Ergo, it’s only a matter of time before media companies start thinking about being in Apple’s business. I know that sounds incredibly crazy, but it would sound crazy to think that Apple was going to be in the phone business five years ago.

Gillmor: Right. And they have a line to be able to do that.

Calacanis: All of these companies are going to be one at some point. A Google/Time Warner/Apple conglomerate, with media, hardware, and Internet services. It’s all going to become one company. You’ve got a race, now, to see who can actually make the end-to-end run, totally thread the needle from services and content to hardware to media. It really is the golden age.

Arrington: So what happens when Apple does the deal with Disney and two other movie companies to give favorable bandwidth treatment that’s very non-neutral out of AT&T? Not just for cell phones, but for delivery at home as well, and turns the Net into a sluice for content. Is that going to happen?

Gillmor: Who’s going to do that?

Arrington: Apple. Apple’s got the guts to do it. They can go to AT&T, and they can say, “OK, here’s what you do. We’re going to shake down Disney and we’re going to make sure that the paths between Disney and all of the big content producers, and the largest possible number of bandwidth users will be most favorable for those forms of content. We’re going to bias the Net for that.” The supply cycle pays premium, and the demand cycle will get it paid for by advertising. Do you think that’s going to happen?

Gillmor: Well, I think they’d have some problems moving the iTunes model to video. Do I think they’re going to try? Yeah. Do I think it’s going to be ubiquitous? There were no announcements about a new Apple TV.

Arrington: Let’s look at the carrier side of this, and what they can muscle the carriers to do.

Gillmor: I guess, but they opened the marketplace by locking in AT&T.

Arrington: Right.

Gillmor: If Android comes on three different carriers with reasonably similar services, what has Apple got for leverage with Hollywood studios? I don’t think they have much.

Arrington: Well, here’s what the Hollywood studios want. They want a substitute for television, because television’s going to hell. Apple has a very clear idea of where television’s going to go, and they’d like to help it get there. The carriers want to be able to shake down the sources of big content that have lots of bitwidth for some money. They’ve been talking about that for years. Ed Whitacre talked about it. The new CEO of Virgin Mobile talked about it. He told the BBC that he wants them to pay a special rate to make sure that their bits are where they’re going to put them on the “bus lane.” That’s a quote.

These guys are looking for ways to pay for their cap-ex in building that fiber to everywhere. They’re very used to looking at TV, a one-way distribution model, as the way of doing that. At some point, the deals get done where television gets replaced by something that’s Internet-like, but really isn’t the Internet as we know it. But it’s still going to be really pretty and easy to do. It’ll look like channels and it’ll look like. the rest of it. But now it’s going to be on your iPhone, and now it’s going to be on your Apple movie thing.

Calacanis: The entertainment products just make product and have some way of monetizing it. They’re not sophisticating in anything other than making and distributing stuff.

Arrington: That’s it. But their distribution system’s going away, if we have it. So television as we know it is almost dead as it is, because it’s been hollowed out from the inside by IP.

Calacanis: I think you’re talking about “dead” theoretically.

Arrington: I am talking about dead technically, so over-the-air TV, the notion of channels, the ocean of live broadcast, a lot of this stuff is being alerted utterly even as we speak and it will finish being alerted next February when channels two to 13 go off the air and everybody else jumps to different channel and everybody discovers that the new stuff has no range at all, so you are going to have to get it on cable.

And then what happens, at some point everybody who wants to make money a new way, is going to build at somebody who has it all figured out. I think Apple has it all figured out, they have it all figured it out right now. It is not something I like by the way, it is something I hate and I don’t want to see, but I think it is what we are up against.

I think what we are up against is having the net turned into television, but it is Television 2.0 and it is going to be coming over IP, but it is going to be — you have your AT&T fiber-to-the-home and you are going to be that Hollywood is going to be paying more to AT&T to guarantee DRM content getting through to their paying subscribers at the other end of the cables of the new cable system that will be running on IP.

Gillmor: And the problem with that vision is, the only thing that Apple has going for them is scale in terms of number of devices out there. You are going to have a worldwide distribution of what.

Arrington: I mean they have leverage. I mean they have leverage over AT&T now that they did not have before.

Gillmor: Not for very long though.

Arrington: Why?

Gillmor: Because Android is going to come into this marketplace big time in like three months.

Arrington: Listen, I love Android, but who is going to make an Android phone?

Gillmor: I don’t know, we saw one that was being demo’ed on stage, that was obviously not a finished phone but it was working just fine. The form factor was there. It was doing 90% of what the iPhone does. You notice that they didn’t change much about the iPhone in these announcements. So they have window of opportunity of maybe six months in which to make hay on the fact that they move to 3G. And after that..

Calacanis: And reduce the price to $199 for the most sought after desirable phone in the market when other comparables are $60 dollars.

Gillmor: I think that’s fantastic, but how many of those people are going to be out there using their phones to replace television. I don’t think that many.

Arrington: I am not talking about you using their phones to replace television, I am talking about using their leverage with AT&T to move to the online side and not just the cell phone side.

Scoble: This is Robert Scoble and I just saw something that will turn a Windows mobile phone into a better phone than an iPhone including playing Flash videos, so I think that Steve Gillmor is right on point. Somebody is going to come back into this market and take away thought leadership from Apple if Apple doesn’t….

Arrington: Bullshit, what is it you saw?

Gillmor: Who said that?

Arrington: What is the thing you saw, was it a device, attached to a phone, is it software, what is it?

Scoble: It is a new browser that you load into Windows mobile smart phone and comes with the Nokia. And it’s going to kick ass.

Arrington: Robert, we had to find out about that from you, OK? And in the meantime the whole world is looking at what Apple just did today. There is the difference.

Gillmor: The whole world isn’t. I am as big of a Mac fan as anybody on this call. All I am saying to you guys is that you are overlooking the fact that they essentially came in with about a third of the announcements that they usually make at any one of these events. This is the maturing product that they have.

The biggest part of this announcement in my opinion was not the web play, the “Mini-Me” play, it was the price. And I haven’t heard anything that anybody has talked about yet that really gets beyond that. And the problem with the price cut is that it puts a lot of other players in the game if they have a platform on which to compete.

And I was the only person on this call I think who was actually at the Google I/O Conference. So I saw this thing upfront. I was ignoring it, I was typing into my Mac Book Air and didn’t even look up until I suddenly noticed that this thing was pretty damn cool. So you are not that far away from it.

Arrington: Steve?

Gillmor: Yeah.

Arrington: I think one of the differences is Apple has always excelled at closed systems and they have shown particularly with the iPod that closed systems and proprietary hardware and software can create very compelling user experiences. And the one thing that Android isn’t, is it is not a closed system.

So you are dealing with lots of versions of software for different handsets. I mean that’s great, it makes them flexible, but it also causes lots and lots of problems, the same reason why we need lots and lots of slightly different versions of Windows for all the different computers out there and all these different drivers and compatibility issues and things break. And the demo video at Google I/O why I agree because I saw the same video…

Gillmor: Now what is the video, this was a live demo?

Arrington: OK, well I saw a video I guess of the live demo, and it was awesome and it was great. Android seems to be a brilliant way to possibly help us break out of the carrier lock, particularly the software lock that you have on phones in the US. And I think it is absolutely wonderful, but I think it will end up sort of pushing Windows mobile largely to the side and that we are seeing…

Gillmor: That is the takeaway. I completely agree with you.

Arrington: We are going to be seeing an open, happy, cuddly, warm Android that a lot of people are going to use and a lot of the developers are going to use.

Gillmor: You already said the thing that I think’s really important.

Arrington: And I think it’s going to continue to do really well too. If Apple can only hold — if Apple only gets 10%… I am sorry if I said your point and you wanted to stop, but I just feel like talking for a second.

Gillmor: No, no, I want to be able to respond to the parts of what you are saying.

Arrington: OK, but let me just finish, three more seconds and then I will be done and who is talking in the background, that is more annoying than me going on and on.

If Apple only has 20% of the cell phone market in the U.S., they are still going to make a boatload of money because of all the margins built in across the board especially with App Store now. So now I am done.

Gillmor: OK. So I agree completely with your analysis right up to the point and particularly the points where you say that this is going to really push Windows Mobile to the side. That is where I completely disagree with Robert.

Android is a better strategy than Windows Mobile strategy is, because Microsoft has always had to keep their hardware from people in line with the promise of baiting them and switching them around Windows and Office and all that other bullshit that it is about to get completely disintermediated by this new platform. Who is this talking?

Searls: I am sorry, the room got noisy, so I got to get out of here, sorry.

Gillmor: That’s all right.

Searls: I’m in a building.

Gillmor: Put mute for a second.

Searls: I can’t, unfortunately not in my hands.

Gillmor: All right, Doc, thanks for showing up.

Scoble: Steve, the thing I just saw is called Spotfire is not just for Windows Mobile, it’ll also be on Nokia phones. So I think Windows Mobile isn’t helped by what I just saw, although it makes Windows Mobile a hell of a lot…

Arrington: Robert, you talked about a browser, right. You were talking about a browser?

Scoble: It’s a software browser, yes.

Arrington: But it can’t pull in rich information, it can’t pull in GPS. The app can have persistence if you change websites. I mean we’re back in iPhone like Safari days from last year, is it any more interesting that is up that it shows Flash, is that really the selling point?

Scoble: That’s a biggest addition for me.

Arrington: But it shows Flash video?

Scoble: Yes.

Arrington: You are throwing that up as something that can kill — on Windows Mobile.

Scoble: On Windows Mobile it makes TechCrunch look like TechCrunch on Windows Mobile, which it doesn’t look like right now.

Arrington: Well, it’s fine on the iPhone, which is all I really care about. I mean if you are on Windows Mobile, I really don’t even want you to look at TechCrunch. You are not a welcome reader.

Scoble: What is that?

Arrington: If you are on a Windows Mobile phone, you are not even welcome on TechCrunch, you shouldn’t be reading the web page.

Scoble: [laughs]

Arrington: You should be reading CNET or one of the dinosaurs, because that is clearly where your mind is though.

Scoble: [laughs] well you know, I have an iPhone, so. It just matches iPhone’s thought leadership in a lot of areas and goes beyond it because it brings me things that the iPhone doesn’t currently do.

Gillmor: I don’t think it has to go beyond it. That’s a fallacy.

Scoble: We watch videos. I can play Quick videos that TechCrunch recorded this morning at the iPhone launch.

Gillmor: Yeah, so what happened?

Scoble: Here it’s about Flash.

Arrington: Here it is about Flash. You said another proprietary plug in. I mean you don’t need that.

Searls: So does anybody use Live Maps at all?

Scoble: No.

Arrington: You mean Microsoft?

Searls: No, Live.com, Microsoft owns it, have you seen Live Maps?

Gillmor: No.

Searls: Here is an interesting thing, Live Maps is an absolutely fabulous thing, but it is at least as fabulous as whatever is that Robert is talking about with the Windows Mobile phone. And the amazing thing too is that Microsoft has one of the best names they could possibly have for this. It is called Live. They can’t market it to save their frigging lives. It is amazing.

Arrington: What do you like about Live Maps? Why do you think it is competitive with Yahoo or Google?

Searls: Since you are not looking down at terrain from straight up, you are looking at angles. Go to Live.com, go to Maps, go to look up your house and then look at with bird’s eye-view. It will blow your frigging mind how good it is. It is really outstanding and yet nobody knows about it. How can that happen?

Arrington: Do they same API functionality? That might be a part of it.

Searls: Yeah, I don’t know but it is…

Scoble: Doc?

Searls: What?

Scoble: I have had that on my show many times, I have seen it, I have tried, I love it, about 99% of the time when I want a map, I just want a 2D map. The pictures on a phone or on a notebook do not help you get anywhere, and that is why it hasn’t taken off. And they are just use cases that don’t really matter.

Searls: No, they do matter. My point though is that when I show it to people, it not only blows their mind, it tends to change it. For example, you want to look at real estate, you are out looking at houses, that is not a small market. One, you see what something looks like because you are going there and not just getting the route to it.

My point though is that Microsoft can be doing a hell of a lot more with it and they are not. And it is a wonderful — it is a grace note rather than a tune and it should be a tune, but it is not.

Scoble: And also it is slower than Google Maps when I try and Google Maps is more embeddable. It is nicer looking when I embed it on something.

Searls: Yeah, Google has done a much better of integrating it. So my point actually has to do with whatever the tool this thing is.

Scoble: That is a use case that is probably not the real estate; in the real estate, use case doesn’t matter. How many times in your life do you buy a new house? I bought…

Arrington: I will tell you what, Robert, this new mobile browser that you just found also doesn’t matter. So I mean…

Scoble: OK, I think — fine.

Gillmor: All right, so I want to go around the table and then I want to wrap this up. I want everybody to say who is going to be number one in six months, number two and number three?

Searls: At what market, maps?

Gillmor: No, in these devices.

Calacanis: And how much you personally enjoy them and want to root for them.

Searls: Yeah, absolutely.

Gillmor: However you want to rate those, I want three, not four, but three. Go ahead. Mike Arrington?

Arrington: OK. The iPhone launch was a historical event, in the sense that 100 years from now people will look back and still talk about it. The 3G launch was an evolutionary step forward from that. I think Android is also a historical event. Who has more market share? I think Android will have more market share than the iPhone over the long run.

Who will make more money? I think Apple is going to make a lot more money on the mobile space than Google in the medium term at least. God knows what Google will do in the long run and whoever else is out there doesn’t really matter.

Gillmor: OK, perfect. Jason?

Calacanis: Yeah, Apple is making historic devices and headways we are seeing basically the birth of Microsoft Version 2.0 and Sony Version 2.0 and Apple right now, Apple will have significant double-digit market share in desktop PCs and obviously they have that already in iPods and they will also have it in iPhones and just in phones.

So I think what is going to happen is as the world gets more complex, people will crave simplicity in function and stability over bells and whistles; bells and whistles will become secondary to symmetry and Apple is the symmetry play. And how much Google can dent Apple’s business, I am not sure. Microsoft is the odd man out.

Gillmor: OK. Doc?

Searls: Yeah, I agree that the iPhone announcement was a historic event. I agree with Mike also that Android was. I wouldn’t count out Nokia. I think that the..

Gillmor: If you are not going to count them out, then that means you are counting out Microsoft?

Searls: Oh, I count them out totally. I count out Microsoft totally. I think it is going to be — I think the main players are going to be Apple, Nokia and the everybody else that is going to be using Android or something like it. And it is going to be open versus closed and Apple is going to be the winner in closed and god knows who is going to be the winner in open. And there are probably a number of those companies and that is how it is going to play out.

And it is not going to play out just in the cell space, it is going to play in the wired net as well and that is going to be a really critical and important area, because we have gotten carriers that want to stuff the entire Internet back in the pre-1984 model and they have been waiting for a chance to do that. And Apple might very well help them with it and I am not looking forward to fighting them at it.

Gillmor: OK. And I think that Arrington is closest to the truth, which is that short term it is Apple…

Scoble: What about me, Steve.

Gillmor: Rob, go ahead, I am sorry I forgopt.

Scoble: I am carrying three phones right now, one iPhone, two Nokia phones. I am not giving up the Nokia phones because they have far superior cameras, and I didn’t hear a single thing today about video or cameras on the new iPhone.

Gillmor: Right, you are giving up on Microsoft completely?

Scoble: Absolutely. I think Microsoft [...]

Gillmor: So you are Apple, Nokia, and then Google?

Scoble: Yeah.

Gillmor: OK. So I will finish what I was saying which is that I think that Arrington is closest to the truth, which is that it is going to be Apple in the short term, it is going to be Android big time in the medium term. I think that Android and Microsoft have played together around mesh and open standards and I think that Nokia is complete toast.

Searls: Interesting.

Calacanis: You will see the camera announcements from Apple at the next thing. They basically do one feature every six months really well.

Gillmor: I agree.

Calacanis: The camera stuff and they will have Quick running on it, it will have Ustream running on it, there will be frigging HDE, it will make everybody look stupid.

Arrington: No, we will [...], because Quick has already told us we can’t talk about it, but yes it’s coming. They are already talking to everyone about it. So we know that video for the iPhone is coming, but my big question is like how does FriendFeed and Twitter affect your thinking on this, you haven’t brought them up at all?

Calacanis: Oh please don’t go down there, Mike, please. We are having a reasonable discussion.

Arrington: Oh, I went there.

Calacanis: You know, you just tool a reasonable discussion….

Scoble: And now I know I’m on the Gillmor Gang. [laughs]

Calacanis: All right, this has been a great show. I would like to thank our sponsor TechCrunch 50, occurring September 8th, 9th and 10th. You will need registration to the conference, but you don’t have to pay $18,500 and we have visionaries getting together, Marc Andresen,[...], all the greatest people in the industry will be there, Mike Arrington judging as well. Tickets are only $19.95 now for a limited time with TechCrunch50.com. We also want to thank our sponsors, Audible. Go to Audible.com/twit, “This Week in Tech.”

I would like to thank everybody and we will see everybody next time if there is a next time. I would like to also thank those who came today and I’d like to thank even more those who didn’t show up.

Gillmor: This is Steve Gillmor, bye-bye.

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