MacRumors

Over the weekend, Groklaw discovered a couple of interesting e-mails sent by Microsoft executives Bill Gates and Jim Allchin to other members of the Microsoft executive team revealing that the company had been taken by surprise by Apple's launch of the iTunes Music Store in April 2003. The e-mails were made public as part of an antitrust suit brought against Microsoft in late 2006 for which Groklaw has been documenting the exhibits provided as evidence.

Gates' comments offered a candid assessment of the situation, expressing surprise at Apple CEO Steve Jobs' ability to strike distribution deals with music companies.

Steve Jobs ability to focus in on a few things that count, get people who get user interface right and market things as revolutionary are amazing things.

This time somehow he has applied his talents in getting a better Licensing deal than anyone else has gotten for music.

This is very strange to me. The music companies own operations offer a service that is truly unfriendly to the user and has been reviewed that way consistently.

Somehow they decide to give Apple the ability to do something pretty good.

In trying to understand how best to respond to Apple's move, Gates noted that Microsoft was caught "flat footed" by Apple's music download service and questioned appropriate strategies to respond.

I am not saying this strangeness means we messed up - at least if we did so did Real and Pressplay and Musicnet and basically everyone else.

Now that Jobs has done it we need to move fast to get something where the UI and Rights are as good.

I am not sure whether we should do this through one of these JVs [joint ventures] or not. I am not sure what the problems are.

However I think we need some plan to prove that even though Jobs has us a bit flat footed again we move quick and both match and do stuff better.

Microsoft vice president Jim Allchin offered a briefer assessment of the situation, offering only a pair of observations:

1. How did they get the music companies to go along?

2. We were smoked.

The same court case earlier revealed another e-mail from Allchin from 2004 in which he famously said that he "would buy a Mac today if I was not working at Microsoft." Steve Jobs used the quote to take a jab at Microsoft, displaying Allchin's statement at the beginning of Jobs' keynote at Macworld San Francisco 2007.

Microsoft today announced a sneak preview of Office for Mac 2011, set for release later this year. The preview, scheduled in conjunction with Macworld Expo in San Francisco, details several significant changes including the adoption of a "ribbon" interface similar to that introduced for Windows in Office 2007.

We took your feedback and haven't completely rearranged what you know and love: the new design is an evolution of the Office 2008 Elements Gallery and uses the classic Mac menu and Standard Toolbar giving you the best of both worlds. You can even collapse the ribbon and the Toolbar for more screen space or for the more advanced users who rely on keyboard shortcuts. Together these tools make it easy to find and discover new and frequently used commands.

Also included are new co-authoring tools and integration with Office Web Apps to foster collaboration and easy file access from anywhere.

Another major change highlighted by Microsoft is the replacement of Entourage with Outlook for Mac. As previously detailed, Outlook for Mac will be Cocoa-based and will leverage the Exchange Web Services platform to enhance productivity, particularly in enterprise settings. Newly-announced today is the capability of Outlook for Mac to import .PST storage table files from Outlook for Windows.

Pricing for Office for Mac 2011, which has been expected to ship in the "holiday season 2010", has yet to be announced.

Google today announced the release of a new beta of Google Chrome for Mac, adding several new features such as extensions and bookmark syncing that were left out of the initial beta released in December while also focusing on a "snappy, safe, and simple browsing experience" for users.

With this new version, you'll be able to install any of over 2,200 extensions (and counting!) currently available in Chrome's extensions gallery. Extensions can add useful, informative, fun, or quirky functionality to the browser. You can manage your extensions by clicking on the Window menu and choosing "Extensions."

Bookmark syncing allows Chrome users to keep their bookmarks synchronized among Chrome browsers on Mac, Windows, and Linux machines. Also added in the new beta are bookmark, cookie, and task managers for increased functionality. A new video preview of Google Chrome for Mac has also been posted.

Existing Chrome users should be automatically upgraded to the new beta (version 5.0.307) within the next day.

BNET's Brent Schlender recently spoke with Microsoft founder Bill Gates about Apple's new iPad tablet device in order to get a feel for the thoughts of the man behind Apple's longtime rival and whose company introduced the "Tablet PC" concept nearly a decade ago. According to Schlender, Gates remains relatively unimpressed with the iPad, especially compared to his feelings about the iPhone when it was first introduced in 2007.

"You know, I'm a big believer in touch and digital reading, but I still think that some mixture of voice, the pen and a real keyboard - in other words a netbook - will be the mainstream on that," he said. "So, it's not like I sit there and feel the same way I did with iPhone where I say, 'Oh my God, Microsoft didn't aim high enough.' It's a nice reader, but there's nothing on the iPad I look at and say, 'Oh, I wish Microsoft had done it.'"

While the iPad has certainly seen criticism that some may see as warranted, it is unclear whether Gates truly sees the device as merely a "reader" while ignoring its Internet and media capabilities as well as the App Store offerings available to it. Alternatively, he may view the reader capability of the iPad as its most important and well-done offering, or even simply have been searching for a generic term for the device while not wishing to place it in the same category as traditional tablet computers.

Financial Times reports that Apple is set to begin a trial coinciding with the launch of the iPad that will reduce the price of certain TV downloads through its iTunes Store to $1 from the current $1.99. The trial will reportedly begin in April. Financial Times first reported late last month that Apple was seeking to persuade television networks to go along with the plan, and at least some of them seem to have accepted the trial in an attempt to spur demand.

Some television networks agreed to the lower prices after months of negotiations, and having initially resisted Apple's push. Media executives are under pressure from declining DVD sales and cut-rate rental services such as Redbox, that offer rental DVDs for $1.

It is not yet clear which or how many of the US free-to-air and pay-television networks have agreed to the lower pricing. Some media executives said they have not been approached with the new prices.

Apple has also been rumored to be pursuing a monthly subscription package of "best of TV" downloadable content, and today's report indicates that Apple has not yet given up on that front either.

TechCrunch reports that popular video site Hulu is working to bring its content to the iPad, despite the lack of support for Flash content on Apple's new tablet device.

One rumor I've heard from an industry insider is that Hulu is working on an iPad-friendly version of its site that should be ready by the time the iPad hits the market. Hulu itself is still vague about its plans. When asked directly by Om Malik whether Hulu has any plans for the iPad, CEO Jason Kilar recently hemmed and hawed about how he is a big believer in mobile, but wouldn't confirm or deny anything.

The report notes that porting its content to a non-Flash player would not be completely trivial given Hulu's investment in having created a unique Flash-based platform, but the company would be "more than capable" of making the transition. With Hulu's videos already encoded in the H.264 format used on the iPhone and iPad, whether or not to develop a Flash-less player for the content appears to be more of a business decision than a technical one.

We have received multiple reports today that Apple has released an Apple TV 3.0.2 software update, but we have yet to learn the details of changes included in the update. Readers have so far not reported any obvious changes, so the update may simply offer some under-the-hood enhancements such as compatibility with Aperture 3, which was released yesterday.

Users who wish to force updates of their Apple TVs should follow the instructions outlined in Apple's support document on the topic.

Apple TV 3.0 was launched last October and was quickly followed with a 3.0.1 update to address an issue with disappearing content.

Bloomberg BusinessWeek reports on new estimates from market research firm iSuppli detailing component costs for Apple's lowest-priced iPad at $219.35 plus an additional $10 in manufacturing costs, compared to a retail price of $499. While the component cost calculations do not include such expenses as research and development, software, marketing, distribution, and patent licensing, the tally still suggests that Apple is set to make a healthy profit on its new tablet device.

The most profitable of the six iPads is the 32-gigabyte version with 3G network access, Sideco says. Its combined materials and manufacturing cost of $287.15 amount to 39.4% of the retail price. The least profitable is the 16-gigabyte non-3G version, which sells for $499. Its combined costs amount to $229.35 or 46% of the retail price, leaving the slimmest potential profit margin of the six.

iPad models offering 3G wireless connectivity will carry a $130 price premium at retail over the corresponding Wi-Fi-only models, while iSuppli calculates that the additional cost to Apple is only approximately $27.10 ($24.50 for 3G components and $2.60 for GPS). Other items of interest included in the estimates are the 9.7-inch multi-touch display at $80.00 and the custom Apple A4 system-on-a-chip serving as the brains of the device at $17.00.

A report earlier this week claimed that Apple executives have left the door open to iPad price cuts if consumer demand fails to meet expectations, and iSuppli's estimates appear to suggest that the company may have sufficient profit margin on the device to lower retail prices if necessary.

AT&T today announced that it has reached an agreement with existing partners Alcatel-Lucent and Ericsson to provide equipment for the carrier's next-generation LTE (4G) cellular network, opening the door to significant improvements in data speeds and performance. The company also confirmed that it is continuing to plan for field trials of LTE technology later this year and a full rollout beginning next year.

The selection of the two suppliers paves the way for AT&T's planned field trials of LTE technology later this year, with commercial deployment scheduled to begin in 2011. AT&T's LTE rollout schedule aligns with industry expectations for development of LTE technology and widespread availability of equipment and compatible LTE mobile devices. The supplier agreements also complement AT&T's plans to make the nation's fastest 3G network even faster in advance of LTE networks and devices scaling, allowing the company to continue delivering the most advanced mobile broadband experience in the nation.

Last month, the company announced that it had completed software updates on its cell sites to allow the provider to double data speeds on compatible devices (including the iPhone 3GS) as upgraded backhaul connections can be made. Those backhaul upgrades are also setting the stage for AT&T's 4G deployment, with the carrier planning to offer seamless compatibility between 3G and 4G networks as next-generation handsets become available and 4G coverage expands over time in 2011 and beyond.

AT&T currently serves as the exclusive service provider for Apple's iPhone in the United States. Despite the expiration of many of Apple's original exclusivity contracts for iPhone service around the world, other U.S. carriers have yet to announce future iPhone availability on their networks. And while many have expected that AT&T's exclusivity arrangement will expire this summer after three years, a growing chorus of analysts have been suggesting in recent days that Apple's renewed partnership with AT&T for 3G service for the iPad may be indicative of a stronger relationship between the two companies than previously thought, with some speculation placing continued iPhone exclusivity for AT&T into 2011.

MarketWatch yesterday briefly noted comments from Disney CEO Bob Iger during his company's earnings conference that signaled his company's excitement over Apple's iPad and the possibilities for Disney's content on the device. According to the full transcript of the call, Iger was specifically asked about the impact of the iPad by analyst Doug Mitchelson of Deutsche Bank, and his responses indicated that Disney has already been thinking about how to take advantage of the platform.

We think it could be a game changer in terms of enabling us to create essentially new forms of content. Obviously it will be a great device to play games on and to watch videos because of the clarity of the screen. But the interactivity that it will allow on a portable device with such a high quality screen is going to enable us to really start developing products that is different than the product that you typically see on an internet connected computer or on a television set.

In addition to promoting possibilities for Disney eBook-like content, Iger also raised the possibility of television tie-ins, such the ability to create an interactive experience for shows from Lost to ABC News. And in particular, Iger pointed to Disney's ESPN ScoreCenter iPhone application and how the iPad opens up tremendous possibilities for enhancing the delivery of sports scores.

ESPN Score Center which is a great App on the iPhone and provides relatively rudimentary information scores basically suddenly we have an opportunity with a platform we can really make the scores come to life.

Apple and Disney have held a relatively close relationship in recent years, with Apple CEO Steve Jobs serving as a member of Disney's Board of Directors and largest individual shareholder by virtue of the company's purchase of Pixar in 2006. In recent months, Disney has been seen as a possible lead partner in Apple's rumored plans for a television subscription service, while Disney reportedly drew on Steve Jobs' and Apple's experience in developing plans for a makeover of the company's retail stores.

Opera Software today announced that it will preview an iPhone version of its Opera Mini mobile browser at next week's Mobile World Congress in Barcelona.

"This is a unique opportunity to introduce the fast, feature-rich Opera Mini experience for the iPhone, and to showcase our latest beta releases of Opera Mobile and Opera Mini on other platforms and devices. Opera's mission is to bring the Web to the world, and by making Opera Mini available on yet another platform, we are one step closer."

According to Reuters, Opera Mini for the iPhone has not been submitted to Apple for review, and it remains unclear whether Apple would consider approving a direct competitor to the iPhone's included mobile version of Safari.

"We have not submitted it yet to the Apple App Store. However, we hope that Apple will not deny their users a choice in Web browsing experience," said Jon von Tetzchner, co-founder of Opera.

Opera's compression technology is also claimed to allow six times faster downloads and ten times smaller data traffic than Apple's Safari for iPhone.

In addition to Opera Mini for the iPhone, the company is also planning to show off beta versions of its existing Opera Mini and Opera Mobile products on a variety of other platforms.

iPhoneinCanada notes that, just days after its last developer seed, Apple has released Mac OS X 10.6.3 Build 10D552 to developers. Developer seeding of this third maintenance release for Snow Leopard began in early January.

According to reports, today's build focuses on AirPort, Graphics Drivers, and Quicktime. The build further includes:

- Performance improvements for 64-bit Logic
- Addresses compatibility issues with OpenGL-based applications
- Includes changes to QuickTime X that increase reliability and enhance security
- Improves printing reliability and compatibility with 3rd party printers
- Addresses an issue that causes background message colors to display incorrectly in Mail when scrolling

With dwindling focus areas for testing and the short interval between developer releases, a public release of Mac OS X 10.6.3 may occur in the relatively near future.

Apple has released to developers the iPhone SDK 3.2 Beta 2 for iPad. The 3.2 SDK was first released in January so developers could begin adapting their iPhone applications for the iPad.

The SDK supports the 1024x768 screen size of the iPad amongst other new interface features. Early word on the new SDK shows few major differences between the first and second betas though additional details may leak out over the next few days.

TBI Research reports that not all major book publishers are enamored with the "agency model" being pushed by a number of publishers inspired by Apple's forthcoming iPad tablet device and iBookstore online store to assert more control over their content.

However, one major book publisher we spoke with sees no reason to shift to that model right now or anytime in the near future.

The reason is that book publishers make less money from the agency model than they do from the traditional wholesale model (in which Amazon buys a book license at the full wholesale price, and then sells each copy for whatever it wants, often losing money on the sale). The agency model, therefore, also leaves publishers less money to pay authors and agents.

Despite the lower costs to consumers and higher revenues to publishers available under the existing pricing model, some publishers feel that the loss of control over their own content threatens the long-term viability of the publishing industry and have been striving to set their own pricing by adopting an agency model, with a 30% share of the sales price for each unit going to the distributors such as Amazon and Apple instead of selling units for a flat price and allowing distributors to set their own retail pricing. Rumored price points for new releases from publishers moving to the agency model have been in the $12.99-to-$14.99 range, while Amazon currently offers such releases at a maximum of $9.99.

The resistance on the part of at least one major publisher to the agency model could result in differing distribution arrangements with its partners, potentially allowing Amazon to undercut Apple's prices for certain titles. But at the very least, the future of eBook pricing and Amazon's dominant market position remain in flux as Apple prepares to enter the arena as a likely major player in the industry.