This morning, the latest Fring update brought videochat to the iPhone. It only works in one direction, from a computer to your iPhone. It uses Wi-Fi instead of the 3G connection, even while 3G is capable of supporting videoconferencing (in fact, it was one of its major selling points, back in the day of its introduction). The only reason for not having bi-directional chat is simple: The iPhone doesn't have a front camera.

The main thing is that it works. A third-party has created a videoconferencing app for the iPhone that communicates with desktop computers, just using Apple's standard iPhone programming toolbox. The question now is: If it's that easy, why don't we have a camera and iChat AV on the iPhone?

Could it be because AT&T is fearing that videoconferencing on the iPhone would bring their already overloaded 3G network to a total collapse? That's a valid reason. But if that's the case, just enable the videoconferencing under Wi-Fi, and be done with it.

Maybe the iPhone doesn't have enough processing power to do bidirectional videochat? Nonsense. The processor in the iPhone is plenty fast to handle simultaneous H.264 encoding and decoding for videoconferencing applications. In fact, the iPhone 3GS' PowerVR SGX processor has dedicated pipes to encode and decode H.264 in real time. And even Apple highlights the use of H.264 for videoconferencing applications in other 3G mobile devices, most of them a lot less capable than the iPhone.

Perhaps the VGA camera required to capture the video is too expensive or too big? That doesn't make any sense either. Not only do other phones have these cameras, but the latest generation is so tiny and inexpensive that I wouldn't be surprised if they gave one away integrated in every Corn Flakes box soon.

If there's no technical reason for not having videoconference in the iPhone, then why oh why Apple doesn't give us an iChat AV client and an iPhone that doesn't require an stupid contraption to use it? After all, they were the first company to push videoconferencing across their whole product line, and they keep working on it actively. The latest generation of iChat AV—rolled out with Snow Leopard—has more efficient codecs than the previous version.

My only guess: They just want to milk the hell out of their user base. They know their game, these Cupertino boys and girls. They know they have the market by the balls. They know they can keep churning out marginal upgrades because, like Tim Cook said: "frankly, I think people are still just trying to catch up with the first iPhone 2 years ago." And people will keep sinking dollars in the marginal upgrades like there's no tomorrow, as shown by the iPhone 3GS.

Why release an iPhone with AV conferencing now when they can hold it for a little longer, as they wait for the rest of the market to catch up? Exactly: There's no need. And that's why we will have to wait. Wait until they smell that Google is about to release a phone that supports Gtalk with videoconferencing. Or until whenever they have it planned in their roadmap. Yes, that private roadmap that already has three or four generations of this thing ready to launch.

In other words: Prepare to wait, and keep sucking hard on the Apple Kool-aid, because this is not happening until they feel a real threat from someone else.

On the upside, the covers only cost $15 (portrait), $17 (landscape), or $20 for both. Problem is, you're supposed to slap them on and off when you want to continue using the iPhone's touchscreen. That's not only a pain in the ass, but I'm sure the adhesive won't last too long, either. Update: The 4iThumbs team got in touch to clarify that the overlay doesn't actually adhere to iPhone screen—it slips and clicks into 2 black strips that remain on the top and bottom portions of the face. You can't see it in the shots because they integrate into the design of the phone and allow the screen to be inserted and removed as much as you want.

So maybe 4iThumbs might interest those who type novel-length emails and texts, or those who really suck at the touchscreen keyboard. What do you think? [4iThumbs via Engadget]

I love to take naps in hammocks, but that's not why I think the iHammock is cool. The designer didn't like the loud sound his iPhone made when vibrating on his desk so he thought to put it on something soft and elevated, like a hammock.

Its cocktail like-umbrella isn't just to protect iPhone sunburn, it would work as a solar battery charger. That would jack the price up on this baby if it ever comes to market, but I'd be willing to pay for my phone to get a little R&R. [Petitinvention via iPhone Savior]

Q: Is the Palm Pre making a dent into the iPhone market?
A: Aaah... It's-it's doing well, but you can almost put the iPhone, to be fair, in a separate category. The Apple brand and that device have done so well, it's almost not... it's like comparing someone to Michael Jordan.

Well, not really, Dan. It is exactly the same category. It's just that Apple owns the category. So yes, you are right that the iPhone is like Michael Jordan, but the Palm Pre plays in the NBA too. In any case, don't give up so soon. We—the consumers—need the battle so Apple doesn't get so frigging lazy.

Reeder has been sculpting mythological figures with modern gadgets for awhile (you can even buy them for a lofty price on his site), but they have been recently been put on display in San Fransisco. He (like most artists) obviously seems to prefer Apple products as he gave both Atlas and Pan iPods. Though his version of the Drunken Satyr passed out with a video game controller in his hand.

Hey Adam, let's put an Apple Tablet in the hand of Aphrodite, shall we? [Adam Reeder via AP]

Dissatisfied with apps It is actually impressive to see how much planning went into this iPhone call recorder. Since time is money, we are gonna say shelling out the money for apps like Recorder 10 or SpoofApp (though requires jailbreaking) is worth it. [Make via AwaitingInspiration]

Though we already knew that RIM made a whole potload of moola, Fortune reveals that the rise in popularity of BlackBerry smartphones (and apparently the fact that, the Curve outsold the iPhone during the first half of this year) contributed to RIM's 84 percent rise in profits.

Trailing behind the Canadian company on the "100 Fastest Growing Firms" list is U.S. chipmaker Sigma Designs. Apple hits at 39 on the list. [Fortune and BBC]

Palm Pre Reviews
• Our review
• What other reviewers said
• 10 things you should know about the Pre

Known Pre Issues
• Tethering? Maybe not
• iTunes syncing could go away
• Hooray for homebrew!
• How's that reception?
• Screen scratchy? Heat distortion?

Apple iPhone 3GS Reviews
• Our Review
• What other reviewers are saying
• iPhone 3GS Complete Feature Guide

Known 3GS Issues
• 3GS-exclusive apps from the App Store; definitely better graphics for 3GS
• Tethering? Probably gonna cost extra
• Already jailbroken and SIM-unlocked
• What, no Verizon?

Easy Advice
• A flowchart
Stay tuned for more issues and revelations with the 3GS when the phone finally ships to customers, and people start the inevitable complaining.

What about the original $99 iPhone 3G? And while we're at it, what about the best BlackBerry and Android phones? Hey, that's why we wrote up the Smartphone Buyer's Guide: The Best of the Best. You can thank us later. Or now, below, in comments.

And of course, there's always the choice of buying none.

The article goes on to state that the move could dramatically increase Apple's smartphone marketshare and production of the new devices is thought to begin in July. But AppleInsider is skeptical of these claims, pointing out that the analyst in question, Kathryn Huberty, has a poor track record Apple predictions. I guess we'll have to wait and see, but this does seem to fall in line with recent 4GB iPhone rumors. [FT via AppleInsider]

Jump to minute 2:00 to get into the test itself:

Yes, the iPhone wins. Even with its software keyboard, it proves more accurate than the netbook's tiny keys. I think I see him doing some finger sliding with the iPhone at one point—which is a good way to get accurate typing under stress conditions—but my guess is that the iPhone word prediction and correction did the rest of the trick.

Some will argue that this test is too extreme and it will not happen in real life. Obviously, those people have never ridden the New York City subway, which sometimes gets pretty close to this experience. Specially in some of the express lines, which feel like a amusement park crazy ride rather than a train. Sure, maybe the subway turns don't generate three times the force of gravity, but to me it feels close enough. [Crave UK]

Following in the footsteps of Sony Ericsson, Apple doesn't seem to be satisfied with just the ability to switch between landscape and portrait orientations or simple screen-tilting in games. Just to name a couple of examples, with more gesture controls, you could switch between different webpages with a slight tilt, or change songs by shaking the gadget. That sounds pretty cool and all, but how will that work with my allergies? Sneeze or song change? Apple won't know. [Unwired View]

I like how the matte screen looks. And definitely, I love how fast this thing is. The Interface icons are fugly, but the combination of colors and the rounded buttons remind me of the computer consoles in Star Trek: The Next Generation. Not bad at all. Actually, someone should try something like that for real: A total ST:TNG makeover of the iPhone interface. [eBay via Nowhere Else]

Unlike other approaches, it works with the two apps that matter most, Mail and Safari, and gets around Apple's onerous App Store terms through a clever combination of javascript bookmarks and web services.

In fact, it doesn't require anything to be installed, so it avoids the App Store altogether. As you can see in the video, Pastebud—as the service is called—works using two bookmarks in Safari. One prepares and loads the page you are viewing, ready to select text at the touch of a finger. From there, you can copy any text you want and create a new mail message with that text in it. In addition to that, you will be able to copy and paste in the text field of a different web page.

While this is not full copy and paste capabilities, I, for one, welcome the ability do exactly this, which is basically what I want to do 95% of the time. According to Jed Schmidt, creator of Pastebud, they have been testing it for about a week and they are now "putting the finishing touches on the web site before launch".

[I personally don't know anyone who bought a RAZR, but they are carried on every US carrier. Just goes to show how disconnected gadget heads are from the rest of the world in their tastes. —B.Lam]

The NPD Group: iPhone 3G Leads U.S. Consumer Mobile Phone Purchases in the Third Quarter of 2008

Overall consumer mobile phone purchases declined 15 percent year-over-year

PORT WASHINGTON, NEW YORK, NOVEMBER 10, 2008 – According to The NPD Group, the leader in market research for the wireless industry, Apple’s iPhone 3G surpassed the Motorola RAZR as the leading handset purchased by adult consumers in the U.S. in the third quarter (Q3) of 2008. RAZR had been ranked by NPD as the top-selling consumer handset for the past 12 quarters.

Even with stronger consumer sales of iPhone, and the mobile phone market’s normal seasonal uplift after Q2, domestic handset purchases by adult consumers declined 15 percent year over year in Q3 to 32 million units. Consumer handset sales revenue fell 10 percent to $2.9 billion, even as the average selling price (ASP) rose 6 percent to $88.

Top-selling handsets and mobile phone brands

“The displacement of the RAZR by the iPhone 3G represents a watershed shift in handset design from fashion to fashionable functionality,” said Ross Rubin, director of industry analysis for NPD. “Four of the five best-selling handsets in the third quarter were optimized for messaging and other advanced Internet features.”

The top handset models in rank order, based on unit sales in Q3, were as follows:

1.Apple iPhone 3G
2.Motorola RAZR V3 (all models)
3.RIM Blackberry Curve (all models)
4.LG Rumor
5.LG enV2

Popular features

When it comes to the specific features that motivated U.S. consumers to purchase their handsets, 43 percent of handset buyers cited the need for a camera and 36 percent noted the ability to send and receive text messages. Mobile phones with a QWERTY keyboard experienced the greatest year-over-year rise in sales; 30 percent of handsets were sold with this feature in Q3 2008, versus just 11 percent the year prior. Also this quarter 83 percent of phones purchased were Bluetooth enabled (versus 72 percent last year), and 68 percent of phones purchased in Q3 were music enabled (versus 49 percent last year).

“A growing data divide continues in cellular handsets,” Rubin said. “Those who see the value in wireless Internet access are justifying the investment, whereas voice-centric users have little incentive to upgrade, which is obviously detrimental to operators who seek to sell data plans and media-access services to their subscribers.”

Methodology: NPD compiles and analyzes mobile device sales data based on more than 150,000 completed online consumer research surveys each month. Surveys are based on a nationally balanced and demographically representative sample of U.S. adults. Results are projected to represent the entire population of U.S. consumers age 18 and older.

Apple has eliminated so many annoying little hang-ups that you might run into when using the old one. The GPS pinpoints to meters instead of blocks. The 3G connection slashes web loading times by minutes to seconds. The more rounded case feels great in the hand. And most importantly the new software polishes the OS and opens the phone up to nearly unlimited capabilities through the countless programs that are already being written by the brilliant legions of faithful developers. It's kind of cool.

If you want to cut to the chase, the software is what we're most excited about—so much that we ran the first half of this review earlier extolling the iPhone 2.0 virtues in detail, including the fact that it's a free upgrade for the people who snapped up the first iPhone, perhaps before it was ready.

On the software side, the iPhone has the most advanced touchscreen OS out there today. Scrolling, dialing, panning, zooming, touching and pinching are all actions you can do to get around your photos, your maps, your movies, your music and of course, your phone calls. The iPhone 2.0 update improves on the already great communication features such as desktop-class email and web browsing by adding MobileMe and Exchange support—both of which push emails to your phone as soon as they're received, just like on the BlackBerry. These two new additions also allow your phone to always sync contacts and calendar events with your computer or your office's system directly over the air, without ever needing to dock, or take any action. There's also the App Store, which gives you access to a gigantic library of third-party applications to add features such as controlling your iTunes, instant messaging, 3D gaming and To Do lists. One drawback is that Apple may not support the cool (illegal) apps like the NES emulators and video recording programs that don't work through the SDK. Lots of unofficial third party apps may never make it to the store. One, Instinctiv, a super iPhone music shuffle app, was recently denied store sales because it is against the terms of agreement to enhance the iPod or iPhone music playback in any way. Huh?! Apps also take a long time (minutes) to install and uninstall, and backups now take awhile longer than before. Annoying, but still worth the wait.

The fact that the free software's advantages are available on the original iPhone means that the reduced subsidized price $199 for the 8GB and $299 for the 16GB are good, but maybe not good enough to justify a trade-in. (The $10 extra a month for 3G access is a wash, frankly.) Quite a conundrum for those of you tempted.

Onto the hardware. Let's start with the husk: Once, I sat down on a twisted key, putting a giant scar across the aluminum back of my iPhone. With that one exception aside, my iPhone's abused-to-hell case still looks strong and shiny.

The new case is made of smudge-able plastic, and last time I checked geek material lust hierarchy, plastic was a distant ranking of 452342 places behind aluminum. The effect is that the case, feels lighter, warmer and thicker but also cheaper than before. And in your hand, picking up a slightly warm iPhone, it feels almost more organic. Between that and the the rounded shape, which fits far better in the hand, it's like you're cupping a warm baby bird. The old phone by comparison feels like its a better quality device, with the spiritual heft of a German machine. The new case is lighter but actually thicker; still, it feels less significant and durable. The case did survive being put in a bag full of keys and rubbed vigorously. Only some of the silver Apple logo on the back got visibly scratched. The case is also a lot easier to send radio waves through than the previous case—useful as this phone has many more radios—although reception improvement was not noticeable. [UPDATE: Actually, it is much better, in both EDGE and 3G mode] Also, if you place the new model on a table, it rocks when you tap the screen, so you can't use it as a table top computer anymore. And the case is very easy to smudge. The black color is available in both sizes, but the white only comes in pricier 16GB, much to the chagrin of boyfriends who promised to buy their significant others one in the pale tint.

The screen is slightly warmer in color temperature (more yellow than blue), slightly brighter (even when considering decay over time) and the daylight viewing is better, but it's the same 3.5-inch, 480x320 resolution screen. And it's still gorgeous.

Oh, the headphone jack isn't recessed anymore, so you can use whatever headphones or adapters you want. And the lock and volume buttons are recessed slightly more and are metal. The speakers and earpiece have a metal grill behind them. All this, to great effect.

To mention the 3G is to bring up painful memories, the time I've lost waiting for web pages to load on the iPhone, or standing on street corners waiting for maps to load.

Our tests in AT&T's aggressively built-out NYC area showed the 3G connection is 4.8 times faster than the old EDGE connection. When you turn off 3G and do an EDGE-to-EDGE test between older and newer models, they both perform the same. The GPRS (850, 900, 1800, 1900) and UMTS/HSDPA (850, 1900 and 2100 MHz) cellular radios have the advantage of some design improvements, including the use of the steel ring around the screen as an antenna and the electronic transparency of the now all plastic back.

Wi-Fi reception is better. In a side-by-side test with the old iPhone, we walked away from an access point, the old iPhone's connection died at 100 feet and the newer one lasted to about 120 feet. And there's a new Airplane mode that turns off cellular but powers up Wi-Fi for airline internet.

At the end of a day with lots of email and browser use, or media playback, my old iPhone would be begging for a serious dock charge. How does the iPhone's 3G connection affect that?

The downside of such speedy downloads is a reduced battery life, something the original couldn't stand to lose much of. We're do more testing of that soon. But here's an interesting thing: According to the data out there, the iPhone 3G has better battery life using 3G than the old iPhone does using EDGE. Let me explain. Apple's official browsing battery life rating on Wi-Fi is 6 hours for both models. They never rated the EDGE battery life but most testers found it to be about 25% less than Wi-Fi. That's 4.5 hours. The iPhone 3G rating is 5 hours of browsing. Apple is claiming that it's 5 hours for both the new iPhone 3G and the EDGE on the old one. We shall investigate such claims soon. But I wish Apple would take me up on my idea for using the 3G only for active browsing, maps and certain apps that need it, dynamically switching to EDGE for IMing, email downloading and weather checking.

UPDATE: Battery life has been noted to drain very quickly, but because I find myself using the phone a lot more often thanks to the added usefulness of apps. 3D gaming is also a killer on battery, far worse than anyone has claimed so far, thanks to the constant use of CPU, GPU and LCD backlight. Here is a roundup of nine battery tests taken from the best reviews, averaging about 5 hours for 3G talk (good) and 3-5 hours for "mixed use". Regardless of life, here are some tips on increasing iPhone 3G endurance and some gadgets that can help extend battery life.

Phone-wise, I decided to lower my minute plan. I completely have stopped using my old iPhone for voice in San Francisco's spotty network, and even when I'm connected, everyone sounds like they have marbles in their mouth. Network problems aside, the good news is that basic voice quality issues have been fixed.

Doing side-by-side calls, the difference when using the new phone and old is like the difference between talking to someone with their hand over their mouth and with their hand taken away. While the new iPhone's speaker and mic definitely improve sound quality, it seems packets do matter too. When the the phone is running on a 3G network (in downtown NY), calls sound especially clear compared to the old iPhone. But when both iPhones are on EDGE, the call difference is noticeable, but not night and day. Even the speakerphone's audio is much louder and so, music played through the mono speaker is also improved. As for reception back in spotty coverage areas, I'll have to do a side-by-side soon to let you know how that goes. UPDATE: I could make no calls before in my house. Now I can, in both EDGE and 3G mode, with good (not great clarity). This is fantastic.

The old iPhone's location detector was accurate within a few blocks, using Skyhook's system of logging cellular towers and Wi-Fi spot MAC addresses and pairing them with physical addreses. I thought it was fine for making sure when I searched for an ATM machine, it would only return local results. The new A-GPS system is accurate within meters, though, opening up the iPhone to more useful location-based apps, maps and geotagging of photos.

The A-GPS helps get quicker fixes in the city, compared with a typical PND. However it doesn't refresh as quickly (every 5 to 15 steps), and won't give you a "heading-up" view, so when you're walking, it takes a bit longer to figure out where you're going. This is clearly optimized for walking, though in a pinch it could help lost drivers. The greater accuracy isn't the only reason it's better than the older iPhone: The ability to track your path is a nice enhancement too. The time to GPS lock is between 1 and 10 seconds, using a combination of Wi-Fi and cellular as well as GPS. But don't even think about using this for regular car nav: there is no voice prompting, nor is there automatic turn-by-turn.

Apple didn't write a dedicated turn-by-turn navigator for driving, with voice, but now we hear that companies are making them, so we look forward to revisiting this once real navi apps are out.

The old iPhone's software can take a photo and email it or send it to a MobileMe gallery, but the camera itself is relatively weak. It won't capture video, and I've lost countless YouTube hits by not having a video device at the ready. This situation has not been improved much.

UPDATE: One nice thing we've finally confirmed is that the dreaded buzz you got with speakers and tape adapters too close to the iPhone with the GSM connection running during calls or data disappears when you're running 3G.

The new camera has the same 2MP shooter which returns 1600 x 1200 pixels. There still isn't video capture. Image processing seems to be slightly less grainy but it's not something you would notice. The MP count would be fine, but the low-light quality is still terrible. Nokia and Motorola have built thin phones with better imaging, why not Apple? And Apple's forte is software, so why can't they beef up the software tools, by adding image stabilizers and noise reducers, not to mention Photo Booth-type frames and effects?

Inside the box: A new smaller USB charger the size of an ice cube, headphones, a sync cable and a SIM eject tool. There is no longer a dock included to use with the cable.

This is really not a revolutionary phone. It's more like the iPhone we wished Apple made last year. But basics, like cut, copy and paste are still missing. (As is MMS, thanks for the reminder, commenters.) As well are the ability to use the phone like a hard drive. Other than that, we're hoping for some more revolutionary changes to come by software update. And let's take a moment to remember how many developers are making killer iPhone programs right this second. There's the revolution.

So the hardware is interesting in the iPhone 3G, but the real story here is the new iPhone OS 2.0 firmware, which we've written about in depth here. You manage to install that, old iPhone users, you've got about 80% of this new iPhone's mojo. But if you're not making your calls on an iPhone yet, well, what are you waiting for?

[Our iPhone App Review Marathon, iPhone 2.0 Firmware Review: Forget 3G It's the Code That Counts]