The worst thing that can happen to Apple now is for them to lose their core fan-base. From his excellent article Microsoft’s Long, Slow Decline, John Gruber makes an excellent point on a certain phenomenon of industries with an active fan-base:

Microsoft has lost all but a sliver of this entire market. People who love computers overwhelmingly prefer to use a Mac today. Microsoft’s core problem is that they have lost the hearts of computer enthusiasts. Regular people don’t think about their choice of computer platform in detail and with passion like nerds do because, duh, they are not nerds. But nerds are leading indicators.

This is true in many markets with broad appeal, not just computers. Microsoft is looking ever more so like the digital equivalent of General Motors. Car enthusiasts lost interest in GM’s cars long before regular people did; the same is happening with Windows.

But I fear that just as Apple is about to reclaim its dominance in the computer market, they are going to lose exactly what Microsoft lost several years ago. Apple’s most critical fan-base is its developers that have risked a lot to build the iTunes app store to what it has become, and secure the iPhone as a long-term leader in the smartphone market. The reason why I don’t see Android, Palm, and Windows Mobile taking serious share from Apple anytime soon is the iPod functionality and the abundance of applications in the app store. But if Apple keeps screwing around with its core base, this dominance won’t last forever.

The solution? Overhaul the app store and its approval process by separating the iTunes music store from the iTunes app store.

Why did Apple start out with the app store as a part of the iTunes store? It was the easiest way to get it the iTunes app store online – they just had to build on the iTunes music store infrastructure. iTMS also provided guaranteed great amount of traffic to kickstart the app store and ensure its success. But now we are seeing the downsides of the app store being a part of the iTunes store. The app store has had an incredible start, but it’s long due for an overhaul.

In iPhone OS, Apple does not bundle the app store with the music store. They are separate icons: “App Store” and “iTunes”. The way it should be. The desktop version of iTunes is so bloated, it’s ridiculous. How come an application that is supposed to be a music player is now the hub of all our digital content? Why is iTunes in charge of my photos, my calendars, my contacts, and my applications?

I remember there were rumors a few years ago that Apple was going to rename iTunes to something like “iMedia”. I don’t see this happening. Instead, I envision iTunes becomes the lean music and podcast player that it used to be, and a new application that will be in charge of everything else. iTunes will no longer sync with iPods and iPhones. The new application (I have no idea what it would be called), would be in charge of all syncing of data, and will be the host of the new App Store.

When Apple separates the app store from the iTunes music store, they need to reimplement the approval process. Clean up iTunes Connect. Provide a more scalable approval process that doesn’t piss developers off because they have a faulty app on the market an they can’t get an update out for a week or two, in the meantime suffering from negative reviews that will destroy the application and the developer’s reputation for a long time.

And while Apple’s at it, they can do some other things to help ensure continued success by reorganizing the store to ensure more fair visibility for applications. Probably the biggest issue with the app store now is that the majority of apps are $.99. This means less revenue for developers and Apple. This has all happened because of the way Apple sorts the applications. The solution? Introduce new sections, the a “Top Rated” section. Also, make the “Top Paid” application list not sort by the number of applications sold, but the revenue generated by the number of applications sold. Then applications that are a little bit more that don’t sell quite as many will get a higher position in the Top Apps list. When this happens, developers will no longer be pressured to sell their apps for the dirt-cheap price of $.99. For this reason alone, I believe that Apple is already working on an iTunes store overhaul.

I have had the chance of updating my iPhone to 2.1, and here are a few things I’ve noticed:

• My current iPhone is a replacement. I noticed once I got the replacement that the screen seemed washed out compared to my old iPhone 3G and my original iPhone. A thread on Apple’s Support Discussions forum had multiple people experiencing this exact same issue with their iPhones. However, upon updating to iPhone 2.1, I noticed the colors are much more vibrant and rich.
• The number of bars on my iPhone have increased dramatically. On Apple’s iPhone 2.1 Software Update page, they include “Improved accuracy of the 3G signal strength display” in a list of improvements. I find this somewhat controversial, as it leads one to believe Apple significantly boosted the reception, when in actuality just boosted the number of bars for all db levels.
• iPhone backups that used to take literally two hours now only take two minutes.
• I installed two apps and both installed within minutes. The delay that used to exist at the end of installing is now gone.
• Overall, the interface seems more nimble and responsive. I have yet to see any significant interface delays that once existed with 2.0.
• The new “3G” and “EDGE” icons are much nicer and easier to distinguish.
• Apple has updated the iPod application to feature the new Genius feature. For all the songs I have tested, Genius has worked really well. The songs it recommends are unique and compatible. Podcasts and songs now display more information.

Update: I’ve done some more real-life testing and now want to add a few more notes:

• Around town, I seem to have five bars nearly everywhere I go. I find it interesting Apple did not “improve accuracy of the 3G signal strength display” in iPhone 2.0, instead waiting for this release. I have a feeling this might cause some controversy.
• Interface animations are much smoother now, especially with rotating the screen and rearranging icons on the springboard.
• My iPhone 3G speaker seems even louder.

Filemark maker can convert any PDF, text, MS Word, Excel, or high-definition picture file into a bookmarklet. (There is a 6mb filesize limitation). Just drag-and-drop any file onto the Filemark Maker application droplet and Filemark Maker lets you bookmark that file from within Safari. So the next time you sync your iPhone’s bookmarks, all of your files you saved into Safari are now accessible on your iPhone or iPod Touch.

In case you are wondering, these special bookmarklets work by converting the data stored in the file into a javascript statement. Filemark Maker composes the javascript and allows you to save it in the form of a Safari bookmark, which can be synced to your iPhone or iPod Touch. Since all of the data needed is stored in the bookmark, the iPhone is able to render the file on-the-fly without the need to load any information from a server. What’s great about bookmarklets is they don’t require a user to hack or jailbreak their iPhone or iPod touch. It’s an efficient and secure way to store and view your static documents on-the-go.

There are some other bookmarklets out there that utilize javascript that enable an iPhone or iPod Touch user to do other cool stuff with MobileSafari. There’s a handful of them available at LifeClever, including a “find on this page” function. PixelSpread has created another awesome bookmarklet that allows you to override a site’s iPhone webclip icon and replace it with one of your choice.

Filemark Maker is freeware and is available for download from the Monkey Business Labs website.

Let’s start small with the Shuffle.

New pastel colors. Still $79 and same memory capacities. Yep, that’s pretty much it. Let’s move on.

The New Nano

One of the biggest announcements at the Keynote was the new video-playing, “stubby” Nano. Now that the Nano has video, all iPods with a screen have video. The Nano is still offered only in 4GB and 8GB models. I have 4 hours of video in my library and thats 3Gb. So for me, the 4GB would not be able to handle my video and music library. Now let’s say I upgrade to the 8GB. This leaves me about 4GB of music. But why would i do that. For $50 more I could buy myself an 80GB Classic with a .5 inch bigger screen. I don’t understand why Apple added video to the Nano. They now have mixed all of their iPod customers into one type. Now your only buying screen size and capacity.

For me, the Nano is definitely not the iPod for me. For people who really plan on watching video, they need to consider the iPod Classic or iPod Touch. I think Apple just added video functionality for casual occasional videos – maybe video podcasts or music videos. However, I do think the Nano is still great for running, especially with the Nike+ iPod kit.

By the way, the new Nanos have games too, but I don’t look forward to playing games on such a tiny screen. If I want to game, I’ll buy a PSP or DS. However, it will be interesting what homebrew cooks up for the iPhone and iPod Touch for games. So far, we’ve got NES, “Lights Out”, Yahtzee!, Blackjack, Minesweeper, and more.

One of the bigger announcements was that the new iPod Nano now comes with a new user-interface (and possibly a brand new OS) that allows for Cover Flow and some more eye candy.

So the Nano. 4GB, only silver for $149. 8GB, silver, blue, green, black, and red for $199. Thinner, wider, and now with video.

iPod Classic

Honestly nothing revolutionary here. The biggest surprise was probably the name change. No longer can you buy simply an “iPod”. A big surprise for others is probably the amazing memory capacity available.

The new iPod Classics are now all metal. The front plastic from the 5G iPod has been replaced to the same metal Apple is using with the Nano. Apple has curiously kept the back the same metal as the 5G iPod. I believe this will raise appeal. Now the outside won’t scratch (at least it wont be as easy to) and the memory capacity is amazing for people with serious video and/or audio libraries.

The new iPod also comes bundled with the new OS Apple has written for the Nano. The iPod Classics are available in 80GB and 160GB models. They are $250 and $350 respectively. Silver has replaced white, and will probably now make the black model even more popular.

iPod Touch

The iPod Touch was probably the most exciting announcement. Well, you know the iPhone. Take away the phone and you’ve got the iPod Touch. It’s an iPod with a 3.5 in touch screen. It has Safari with Wifi, the whole thing. It also has YouTube, MobileCalendar, MobileAddressBook. However, Apple did not include a Mail application or the stock, weather, or Google Maps applications. MobileOSX includes Cover flow with the accelerometer.

The iPod Touch models are both a bit thinner than the iPhone. The iPod Touch does not have a microphone – which will make it hard for hackers to possibly turn the Touch into a VOiP iPhone. There is an 8GB and a 16GB version. Only $299 and $399 respectively.

iPhone

The iPhone’s price has been reduced to $399. It’s now only available in 8GB version. IMO Good move Apple. Anyone with a budget to buy the iPhone would buy the 8GB version for only $100 more. But now with only an 8GB model available and the price drop Apple has told us a lot. Plus anyone who bought their phone before this price drop gets a $100 rebate. The new smaller price difference between the iPhone and iPods will probably make potential iPod buyers consider an iPhone. Apple’s recent aggressiveness will really pay off with one of the best fourth quarters ever.

What else could there possibly be?

Actually, a lot. The biggest “side-announcement” was probably the new Wi-Fi iTunes music store. You can browse a full iTunes music store and download them straight to your iPod touch or iPhone. This is what people have been asking for since the first video iPods were released. I can see this significantly boosting iTunes music sales. Apple has setup a great convenience for people to buy that song they are listening to on the radio on impulse with just a few “taps”. Now Apple has caught the impulse buyer too. I think this will boost the iTunes Store to the next level in music sales.

What else could Apple do to please us? What about the iPhone owners who were extremely upset after the price drop? Steve Jobs personally acknowledged the dissatisfaction from early iPhone adopters and has written a short open letter to all iPhone customers. In the letter, Steve clarifies why they dropped the price and then apologizes that Apple hasn’t really taken care of its most loyal customers and announced a soon-to-be-available $100 in-store rebate. Isn’t Steve the best?

Apple is also taking advantage of the potential with custom ringtones? In iTunes 7.4, it is now (actually will soon be) possible. Once you buy a song in the iTunes Store you pick a 30 second section and apply fade-ins and/or fade-outs. It does cost $0.99 though. But $1.98 for a song and ringtone is cheaper than just a normal ringtone from your normal provider. Hackers have successfully circumvented this process by simply renaming m4a music file with an “.m4r” extension and then syncing their iPhones. It’s a relatively simple process, however it seems to have already been patched by Apple with iTunes 7.4.1. But software applications such as iToner ($15) and the free iPhone application “SendSong” are able to make ringtones without having to pay the extra 99 cents every time.

So, after reconnecting to iTunes, I am pleased to find this message inside iTunes.

Could this possibly mean a firmware update is on the way?