Blizzard just made $2M selling a pony

[I originally was going to post this at lategaming.com but it’s more about the economics of internet stuff rather than games related] It’s a “sparkle pony” to be sure, but in the end it’s just a skin on their pony entity and some attributes. It is one of the few mounts which can work as … Continue reading “Blizzard just made $2M selling a pony”

[I originally was going to post this at lategaming.com but it’s more about the economics of internet stuff rather than games related]

It’s a “sparkle pony” to be sure, but in the end it’s just a skin on their pony entity and some attributes. It is one of the few mounts which can work as a ground mount and a flying mount (and therein is the tactical advantage) but really it’s a picture of a sparkly pony.

From TerraNova:

In case anyone thought that virtual item sales weren’t a big deal in the traditional MMO world, this morning Blizzard announced the online sale of a new “celestial steed” for use in WoW. These mounts cost $25 (on top of the retail price plus $15 monthly subscription). So in a world of free games and virtual items selling for a dollar or two, how popular could a $25 sparkly flying pony be?

Well, the queue for their purchase was at least up to over 91,000 people waiting in the queue earlier today. When I took a screen shot, it had fallen to “only” about 85,000.

90,000 X $25 = $2,250,000.

In one day. From one item. In a game that isn’t free to play anyway.

Something tells me we really, really haven’t mapped the extent of the market for fast, frictionless sales of online goods — “objects” that have a low cost of creation and essentially no cost of duplication. Even 90,000+ times.

On the other hand, getting a picture of a sparkly pony from an artist on the Internets is probably going to run you $25 at least anyway and if this one gives you a tactical advantage in a game that you play a lot anyway then it seems like a bloody bargain (I don’t play WoW FTR).

The cost of duplication and use is something that is extremely important here. This is a sure-fire illustration of how the Internets can be used to make money but it’s giving a ‘bad’ message here in a market which is trending towards free (as Chris Anderson would put it). This is a one-off feature in a software environment that has a subscription model. Think how the record companies should be responding to this. Music has a much larger target market obviously and all of the musicians I know would be extremely happy to have 90,000 people queuing up to buy anything, even something priced at $1 (but imagine how happy they would be if it was $10).

It seems ironic that there is still a question over the AppStore with the prices trending towards $1 (if you include flash sales) and that is whether apps have been priced much too low. And I think that in many cases they have been. And we’re likely to see it repeated with the iPad.

But Blizzard is showing here that with a dedicated core of fans, you can make a lot of money in a day selling something that is entirely digital, limited in use, limited in lifespan and only works inside their environment.

Whiskey. Tango. Foxtrot.

WTF. This sort of logic is daft and alarmist. Does Word close off the Internet? Does “God of War” sanitise the net? Does “Photoshop” have a net negative impact? These are just apps, little applications that people want – that the market wants. They don’t sanitise the Internet, they don’t restrict anyone. As long as … Continue reading “Whiskey. Tango. Foxtrot.”

Silly

WTF. This sort of logic is daft and alarmist.

Does Word close off the Internet? Does “God of War” sanitise the net? Does “Photoshop” have a net negative impact?

These are just apps, little applications that people want – that the market wants. They don’t sanitise the Internet, they don’t restrict anyone. As long as you have a web browser you can go anywhere you want.

Except for Flash, of course.

But then when Adobe was locking up the ‘net in closed, proprietary DRM’ed Flash, with entire web sites developed in their inaccessible muck, no-one listened because no one cared. So the difference here is simply hypocrisy.

Apple at least is telling people to build their web sites using open standards. At least they’re pushing a Flash-free future and they’re not telling you to create apps to replace them – YOU’RE ASKING FOR THEM. We all want features that don’t yet exist in HTML5. We want these things and we want them now.

Every time I visit a web site which is 100% built in Flash with no open standard fallback I think “This company is scum”. Strong words but that’s what happens when you subscribe to total lock-in.

Apple is not competing fairly…

For the last three years, the tech world has been agog with mobile, mobile, mobile. Apple with the release of the iPhone kicked a hole in the market and then occupied that hole. While many pundits point to Nokia shipping more smartphones and the upstart Android gaining market share, these pundits ignore the rampant fragmentation … Continue reading “Apple is not competing fairly…”

For the last three years, the tech world has been agog with mobile, mobile, mobile. Apple with the release of the iPhone kicked a hole in the market and then occupied that hole. While many pundits point to Nokia shipping more smartphones and the upstart Android gaining market share, these pundits ignore the rampant fragmentation in both the Nokia- and pre-Nokia Symbian operating system market and the growing fragmentation in the Android market. Nokia needs to kill off the notion they are doing well in this market – there’s no great success in being the master of a dying market of consumers who don’t buy anything. Symbian was economically inactive in apps beforehand and it’s just floundering now. They need to set better standards – look to their N900 handheld as the future. And Google needs to focus on Android fragmentation as a priority – we’ve seen this on Linux before but the differences in hardware, software versions and carrier ‘additions’ is creating a mess of a single unified idea.

Sadly though for both of these companies, Apple is not competing fairly. While Nokia and Google among others scramble to regain mindshare in the smartphone market, Apple has surreptitiously started to hack out a niche for themselves in the portable gaming market. The console gaming market is wholly owned by Microsoft, Sony and Nintendo but until recently the portable market was solely occupied by Nintendo and Sony. While Microsoft will be releasing a compelling product linked to their Windows Phone products, Apple has already carved a niche in the portable gaming market – see this report from Flurry.

iPhone_USportableGameShare_2009

You can see that Apple now commands more portable gaming market share than Sony (and anecdotal evidence suggests that games with other handhelds are just carrying their iPhones for the quick portable gaming fix).

And in two weeks, iPad will cause another bloodbath.

The Multitask Myth

For years and years we’ve been buying new computers with faster and faster processors in an attempt to get to the supposed nirvana of all actions taking place in an instant and never having to wait for anything. Of course that dream died and now we’re frantically adding additional cores to the devices we use … Continue reading “The Multitask Myth”

For years and years we’ve been buying new computers with faster and faster processors in an attempt to get to the supposed nirvana of all actions taking place in an instant and never having to wait for anything. Of course that dream died and now we’re frantically adding additional cores to the devices we use which will undoubtedly stop when we have n+1 cores (where n is the number of processes we can run).

Multiple cores don’t, however, make it easier for humans to use computers. My father has a lot of difficulty managing his open windows on Mac OS X (due to being partially sighted) and will probably never work out how to switch applications properly.

There must be another way.

While I think that Apple hasn’t done it 100% right, I do think the future of modern computing devices is going to be in providing good task control. We have to remember that there already is a movement towards single-taking. For example: Writeroom – distraction-free writing software (which was extensively copied for other platforms.).

main-screen

In watching users at work, it seems that actual tasks are the things people manage to fit into a work day in between checking their email and Facebook status. If you can’t run more than one app, is there an argument that productivity might rise?

Some folk may believe this is Apple Apologism at it’s worst – and they’re partially right. But Writeroom shows there is precedent. I’m excited about the potential for elegant apps which would be cramped on an iPhone but which would be able to flourish on the additional screen space on an iPad. All said, I expect a form of multi-tasking to appear with iPhone OS 4.0 – perhaps a combination hosted service with push/pull – but something nonetheless.

Compromise: pull and background

I have a deep-seated desire for multi-tasking on the iPhone (and now the iPad). I understand their reasons for not including it and I understand the tradeoffs of performance, stability and user experience. I don’t want to be bothered using an app to micromanage device resources – that smacks too much of using Mac OS … Continue reading “Compromise: pull and background”

I have a deep-seated desire for multi-tasking on the iPhone (and now the iPad). I understand their reasons for not including it and I understand the tradeoffs of performance, stability and user experience. I don’t want to be bothered using an app to micromanage device resources – that smacks too much of using Mac OS 9.

Mac OS 9 About This Computer

And that’s the world you live in with Android and Windows Mobile multitasking. The resources on a mobile device are sufficiently limited that you are forced to manage your apps to maintain the best performance. That’s obviously something that Apple wished to avoid.

Windows Mobile task managertaskmanager_menu

In my entirely unscientific survey (which consists of standing about with other geeks and moaning about how we wish there was some multitasking on iPhone), I have come to consider the compromises.

Ahhhh, Push It!
Salt-N-Pepa pre-empted the Apple faithful with the refrain “Push it” when anyone considered multitasking to be necessary. This was meant to be the first compromise – notifications could be pushed from the ‘cloud’ (the new word for ‘server on the internet’) to specific installed apps on the iPhone which gave a semblance of being able to interact with more than one application at a time. You could set notifications based on receiving messages on Twitter, a server being down or anything that can be reported (for example, a GPS with sender sending a Push notification that your car alarm has activated). But – push is one way and limited in scope so rather than just demanding multi-tasking, wouldn’t it be better to consider other compromises?

Push notification

Pull
If we can push to an iPhone, what about the server setting up a pull mechanism? Essentially it’s a push designed to ‘get’ data rather than just ‘set’ data. That would mean you could have a service running in the cloud which pings your phone for a location update or a state change in a document and updates the server copy. You could obviously set the frequency, you set the amount and quality of data to be pulled and Apple can provide a simple interface. Heck – build it into MobileMe or demand a MobileMe subscription for it – I have MobileMe anyway and they use part of this already for the “Find my iPhone” feature. So – why not extend this and open a Pull API for iPhone and iPad?

MobileMe Find My iPhone

Pull puts intelligence in the cloud. It makes you want to run server-based applications which will hold your calendar, pull in your location, intelligently warn you when you’re going to be late. Pull makes a difference by putting apps in the cloud.

Background
The more I think about it, the more I realise that I don’t need true multitasking on a phone or a tablet. iPhone (and by extension iPad) are fast enough that there’s no significant delay in launching apps at all. But I do want some apps to be ‘backgrounded’ when certain events occur rather than quitting. I might want to run Spotify on my iPhone (I currently don’t use it) while browsing the web. At the moment I can’t do this – but if Spotify could be identified as a Backgrounded app so that when I hit the Home button, it goes into the background rather than quitting (a little like the Voice Memos app) and only quits properly when something would directly conflict (like an incoming phone call) or when I tell it to quit by holding down a button sequence (the system in place to quit a running app is hold down the Sleep button and then hold down the Home button). There has to be a simple way to do it and, frankly, it’s a pain that Apple can do it with iPod, Phone calls and Voice Memo and third party developers can’t.

Backgrounded phone call

Even just having one backgrounded app would be great – especially when you’re in the middle of something like a multiplayer game – the ability to send a ‘pause’ to the other player because you’ve got a phone call rather than just kicking you out of the game! Backgrounding apps should be a toggle you enable in Settings. Apps that I would background right now would be relatively few but I would consider:

  • iSSH – for keeping alive the connections I’ve made to servers while I check something on the web (thanks to MartyMc for the inspiration on that.) Losing the SSH connection can be a pain. This will become more important on larger screen devices like iPad.
  • ‘TrafficMob’ – an as-yet unwritten app which just runs in the background on your phone, uses your GPS and records your position every 30 seconds. It then uploads this data to a server which plots the points on a map, crowdsources the lot of them and shows you when and where the traffic snarl ups are.
  • Skype – this is obvious. Skype is powerful for me because I talk to people all around the world. I can’t currently just leave it running on my iPhone because then I can’t do anything else and it’s annoying when a call comes in on cellular while I’m in Skype as it takes precedence. This needs a real backgrounding option.

And if something does come in, some notification or call or anything – give me the choice to continue what I’m doing rather than divert my attention.

NOVA with overlaid Push Notification

I’m sure that the talented software engineers and designers at Apple have gone through dozens of permutations trying to find the right one. I just hope that something like this makes it into iPhone OS 4. They’ve already got the UI down, it’s now the engineering challenge of making it work.

Skype on iPhone: a complete arse

Can’t use over 3G. This is a complete arse. I get an excellent 3G connection most places I go to, I never use over my minutes and therefore I’m hardly going to abuse it. So, Apple, O2, what the fuck? Lack of Push Notification. It would be lovely if Skype would implement this so that … Continue reading “Skype on iPhone: a complete arse”

  • Can’t use over 3G. This is a complete arse. I get an excellent 3G connection most places I go to, I never use over my minutes and therefore I’m hardly going to abuse it. So, Apple, O2, what the fuck?
    IMG_0788
  • Lack of Push Notification. It would be lovely if Skype would implement this so that when someone contacts me on Skype, it tells me and gives me the option of answering. As an outgoing-only solution, it’s a complete arse.
  • Lack of multitasking. Why is this a problem? Two words: Incoming call. When someone calls my mobile number, the frontmost application quits. This is okay if it’s music or a game I’m playing but it’s a complete arse when I’m mid-Skype. Also means you can’t do anything else when in a call.

A workaround for some of this?

  1. First of all, get a MiFi (a 3G router). I have one from Three (3) and it means we have WiFi everywhere. Three don’t give a damn about you using Skype over their network.
  2. Consider an iPod touch (or put on Airplane mode and then switch WiFi on). This will remove the annoyance of an incoming call.
  3. Leave Skype running. Constantly. This may mean getting a second iPhone. Or alternatively just use your bloody computer.

Wake up, Mac, time to die.

From one point of view, Apple, with the Macintosh, won the computing industry. They revolutionised computing in the early 70s with the Apple II and did it again in the 80s with the Macintosh. Nowadays you can’t sell a personal computer that doesn’t, in some way, bear some homage to that tiny, slow, expensive machine. … Continue reading “Wake up, Mac, time to die.”

From one point of view, Apple, with the Macintosh, won the computing industry. They revolutionised computing in the early 70s with the Apple II and did it again in the 80s with the Macintosh. Nowadays you can’t sell a personal computer that doesn’t, in some way, bear some homage to that tiny, slow, expensive machine. Apple turned cursor computing into pointer computing and for the last 25 years we’ve been interacting with computers the same way – inputting data with a keyboard and using a single finger to poke at the virtual world.

In the late 90s I wrote a website which theorised the future of computing and I included the idea that we could have two pointers. We would have new methods of interaction as we could hold objects with one pointer and ‘tear’ objects with the other. I hadn’t considered touchscreens because my HCI year at the University of Ulster told me that touchscreens had lots of issues – not least that your pointing device gets in the way of your display. Who could have known that the success there would be with smaller screens.

MG Siegler of Techcrunch writes:

And it’s potentially even bigger than that. Last week, I argued that the reason everyone is so excited about this tablet is because there is the very real possibility that it will alter the role of computing in our lives just as the iPhone has. Daring Fireball’s John Gruber took that concept further: “I think The Tablet is nothing short of Apple’s reconception of personal computing,” he wrote.

It’s my feeling that on the 26th anniversary of the Macintosh, Apple intends to bring multi-finger computing to everyone, not just those smart enough to already be using an iPod touch, iPhone or new Unibody Mac. The gestures available on a Mac right now are minimal, the screens on iPod and iPhone are too small to effectively use more than two fingers – so something is coming. I can taste it.

One of the most obvious things about the proposed Tablet is that Tablets are not new. They’ve been around for years in many forms and Apple even had their own foray into it in the 90s with the Newton. Tablets have never been terribly successful however and have been limited to semi-lucrative vertical market deals for education and medical. For this reason, some pundits tell us that we don’t need an Apple tablet and if all things were equal, they’d be right.

When Apple released the iPod, there was a lot of choice in the MP3 player market. But no-one seemed to be getting it right. The DRM controls were a nightmare, the storage capacities were tiny (or alternatively the player was immense), the user interfaces were arcane and battery life was rubbish. Pundits stood up to tell us how wrong it was, how it was doomed to failure (just as they had with the iMac, the iBook) and almost a decade later you’d be crazy (or ignorant) to buy any MP3 player other than an iPod.

It’s a dangerous life for a pundit, being expected to support one competitor over another and being influenced by the advertising dollars which flow through your web site. In many cases, I think they delight in being wrong as folk out there are more likely to link them, more likely to comment and therefore more likely provide statistics (nomatter how meaningless) on readership and market penetration.

Pundits have, so far, been completely wrong on the iPhone (it’s still selling well, still growing, still being improved and still better than pretty much anything else out there). And as it grows, people are buying apps and increasing the investment they have in the platform – this becomes an assurance, part of a war chest that Apple will leverage for future products, be they iPod touch, iPhone or new, unannounced products. This war chest, the Halo effect’, will help ensure that the next product you buy has an Apple logo.

So – yes – we’re being played by one of the Silicon Valley computing companies.

Steve Jobs said:

“If I were running Apple, I would milk the Macintosh for all it’s worth — and get busy on the next great thing. The PC wars are over. Done. Microsoft won a long time ago.”
— Fortune, Feb. 19, 1996

Pretty much a year later, he was running Apple. He killed off the old Mac, introduced his own operating system (skinned to look like a Mac) milked the name for a decade, reduced Apple’s reliance on the Mac (with the iPod), introduced a new killer OS platform (a next great thing, iPhone OSX-based) and is about to introduce another OSX-based platform, another next great thing, which will help to cement the company in the future and further reduce the reliance on the Mac which, in it’s essence, is based on a 25-year old interaction metaphor.

Wake up, Mac, time to die.

Ten Apps I Want…

Ten Apps that I’d like to see on the iPhone. I’m also suggesting names for these. To be honest, I’d like to pull together a team to build them but that seems to be a lot more difficult than I’d hoped. If anyone wants to call me and work with me to pull together funding, … Continue reading “Ten Apps I Want…”

Ten Apps that I’d like to see on the iPhone. I’m also suggesting names for these. To be honest, I’d like to pull together a team to build them but that seems to be a lot more difficult than I’d hoped. If anyone wants to call me and work with me to pull together funding, then you know where to get me.

  1. MeetFreak/TrendSeek
    Helps people find each other by abusing Twitter trends and trying to suck Location Data in there. This is a lot easier now that Twitter is supporting GeoTags. So, let us see a map of trends? People are talking about #RED, where are they talking about it? Let us see every tweet with the Trend on a map that we can see. Then you’re more likely to be able to congregate with people
  2. Multitool
    Uses the five tabs along the bottom to give you a view of
    1) IMAP account
    2) Web Browser
    3) Twitter
    4) Mapper
    5) Converter/Calculator
    Redirects all http:// and mailto: seen inside the app, to the app and not outside so doesn’t launch Safari or Mail. A lot of this is kinda redundant when we have decent clients for much of this inside Safari. But some offline caching is a big deal for those of us who tend not to be inside the city centres where you can get decent 3G.
  3. Screen shot 2009-12-01 at 11.32.12

  4. Verifriend, Reputato
    This is an online reputation profiler. Yes, it’s going to be a popularity contest but essentially it all depends on trust. Adding your rating to someone is not something to be done lightly. In some ways it needs to be a trust engine – and it can be as simple as giving a trust rating to a new friend based on the trust ratings that others have provided. There needs to be some sort of anonymity (maybe like the reviews process on iTunes you only get a rating when a certain number of reviews have been processed) but unlike FaceBook it should provide that extra level of security.
  5. Screen shot 2009-12-01 at 11.30.26

  6. Director
    Allows me to text directions to someone who asks me on the street. In plain text. Or Bluetooth them. Or even just email them. Or something. Or magic them straight into their brain. Any of these things would be fine. Just so I don’t have to try to explain the directions to someone.
  7. REDACTED
    This one was so good, someone asked me to take it down. 🙂 Suffice to say it was AR related.
  8. Tweet16
    Twitter lists are all very well but they don’t solve th problem I have. I follow about 1000 people but there’s probably less than 150 or so (that magic Dunbar number) whom I regularly interact with. There’s probably only 10% of those whom I really want to pay attention to. I’d like a Twitter client that shows me my timeline, my mentions, my DMs and finally, my Tweet16 – 16 people from whom I see all of their public messages rather than not seeing the ones who are at people I don’t follow.
  9. Plannity
    So, I fill in all of this information into my calendar and that includes times and dates and, most crucially, locations of my meetings. Why hasn’t there been a social app that runs via Exchange/Outlook, on iPhone, iCal and other formats which takes this location information, munges it up with my social network and allows me to see when I can grab lunch with friends or when I’m in the same town as someone I like. I think that Tripit is meant to do this and today I read about Plancast which promises to do something about this. But this is a hot topic, guys. Location is the big thing for 2009/2010.
  10. Echelon (or TwitterBug)
    I mentioned this a week ago – a cool idea for Twitter and other social networks which again uses location. So – get this – all of your messages are geotagged, or if not now, a lot of them will be. So, Echelon ‘listens’ in for anything said in an area rather than things said about trends or by your friends. The default set is seeing tweets which are in your immediate area – the killer part though is being able to drop a ‘bug’ (for bug, read ‘pin’) on a map and be able to sample the Tweets going through that area and the surrounding radius. So, in effect, you’ve dropped a Twitter Bug somewhere and you’re able to listen in. The Freemium version could monitor one location, the PayFor version could monitor several. ( ECHELON is a name used in global media and in popular culture to describe a signals intelligence (SIGINT) collection and analysis network operated on behalf of the five signatory states to the UK-USA Security Agreement (Australia, Canada, New Zealand, the United Kingdom, and the United States)
  11. photo

  12. The Official CIA Manual of Trickery and Deception
    Perfect for the Sandbagger or Spook among us, this is a recently published book derived from an official manual. As most of them are small pictorial sessions, they’re ripe for viewing on the iPhone, turning the iPhone into the ultimate tradecraft manual. You can see clips from the book on Gizmodo. So scan it, make it searchable so you can quickly flick through and find the perfect tradecraft for the perfect moment.
  13. Pollenator
    For public debates, a simple push notification which opens the app and gives you a simple couple of choices accompanied with text, audio or video. Push one, it’s recorded (with time, place, ID, IMEI and whatever other data you have collected and after a certain amount of time, the poll times out. Poll answers should be “Yes”, “No” or “Whatever”. If you choose to ignore or “Whatever” it, then you’re counted as an abstention. I’d love to see this app running and see visualisations of what it could bring in terms of demographics, location and other meta data. I sat with Stuart and Phil (and with PJ on the end of a Skype call) one evening and we mocked up some stuff for this based on Stuarts idea of “Pirates versus Ninjas”. But the actual implementation could have led to entirely other applications.
  14. Polls widget from Google Wave
    Polls widget from Google Wave

I’d love to see all of these on my iPhone. Id love to talk more about these apps to people who are interested. I’d love even more to be involved in the group/company/whatever that was going to make some of these.

Please comment if they inspired you or if you’re working on something similar.

XCake Belfast November

XCake, the local developer group for folk who use XCode had an interesting meeting last night. It was held in the very impressive University of Ulster Belfast campus and was catered for with cake and traybakes by Digital Circle. The first presentation lasted about an hour and detailed the developments in the OneAPI, a GSMA … Continue reading “XCake Belfast November”

XCake, the local developer group for folk who use XCode had an interesting meeting last night. It was held in the very impressive University of Ulster Belfast campus and was catered for with cake and traybakes by Digital Circle.

IMG_0649

The first presentation lasted about an hour and detailed the developments in the OneAPI, a GSMA Reference model for interoperability of network services for telecommunications operators. That’s the long way of saying it’s an easy way for developers to get access to call control, SMS and location services from cell networks. We had three clever folk (Seamus, Richard and Michael) from Aepona who very ably demonstrated the services and answered developer questions. More usefully, however, they were asking the developers about their opinions regarding the use of SOAP and JSON. This is all above me – but it was entertaining to hear the opinions (which were essentially: making XML for SOAP isn’t an issue for most developers but JSON is lighter and simpler).

After that we had a short discussion about our future meeting with Translink, the developments we’ve had with accessing their data and the renewed enthusiasm considering that the Ordnance Survey in Great Britain is opening up it’s 1:10000 map dataset to the public. I hope you’ll join me in encouraging the Ordnance Survey in Northern Ireland to do the same. For what it’s worth, we also have our baleful eye cast in the direction of the Postcodes held by the Royal Mail. At the end of the day if there was government money (our taxes) used to pay for datasets, then I’m determined not to pay for them again.

And we finished with a discussion of future events:

  • An Intro to InterfaceBuilder
  • NimbleKit, PhoneGap and Titanium: do they do what they say or is it all bollocks?
  • Developing for iPhone without InterfaceBuilder
  • Unit Testing for iPhone

We’re kinda unaware of other developer-related events in Belfast but we did mention that Monday night is Demo Night at MobileMondayBelfast.

Coolest Brand: iPhone. And soon on Orange and Voda.

Hot on the tail of Orange announcing they have secured the iPhone onto their network, Vodafone have also announced they’ll be joining the Apple tsunami. Vittorio Colao, Vodafone’s chief executive, has said that not having the iPhone was a key reason why the operator lost 159,000 customers in its latest quarter. O2 dropped the ball … Continue reading “Coolest Brand: iPhone. And soon on Orange and Voda.”

Hot on the tail of Orange announcing they have secured the iPhone onto their network, Vodafone have also announced they’ll be joining the Apple tsunami.

Vittorio Colao, Vodafone’s chief executive, has said that not having the iPhone was a key reason why the operator lost 159,000 customers in its latest quarter.

O2 dropped the ball by keeping the iPhone pricing high and seems to have hinged it’s hopes on the Palm Pre which it unleashes on the network on October 16th. The Pre has awareness in probably 1% of the UK and their App Catalog policy seems to be as bad, if not worse, than Apple’s.

It’s going to be a tough battle for the Pre in the UK, of course, with Apple holding 3 of the top 5 brands (according to CoolBrands) and iPhone being currently the #1 brand in the UK. Certainly the iPhone has penetrated suburbia – at a house party at the weekend, nearly half the attendees had iPhones and the rest were a mix of Nokia and Blackberry devices (and a smattering of lesser manufacturer fashionphones). And this was not a geek party – it was a party of bankers, firemen, teachers, HR personnel and homemakers (and I was the only geek there).

The investment that people put into their apps is an anchor to a platform. This worked well for Windows back in the day as people couldn’t do without certain apps and it was hard to convince them to re-buy their apps on the Mac (or just do without on Linux or BSD). The same goes for the iPhone. Some people have hundreds (or even thousands) of pounds worth of apps on their iPod touch and iPhone devices – it’s going to be hard to convince them to move to another platform and their loyalty to iPhone will now start to convince hold-outs who resisted the iPhone due to the networks it was available on. After that – once they’ve bought one Apple device, it won’t be long until they buy another. That’s the halo effect in operation.