Here's how Intel describes the settlement:

Intel Corporation and Advanced Micro Devices today announced a comprehensive agreement to end all outstanding legal disputes between the companies, including antitrust litigation and patent cross license disputes.

So, they're not fighting directly anymore, and the mountains of patent and antitrust disputes are resolved: Intel will pay this ridiculously large sum of money to AMD, and agree to not engage in anything even resembling monopolistic behavior, and both companies will live in harmony, cross-licensing technologies and competing, but softly! Great. Well, sort of: Intel's biggest problems right now don't come from other companies, but from governments: complaints from AMD no doubt helped spur investigations by the European Commission and New York Attorney General into Intel's business practices, and as part of the agreement AMD is withdrawing their complaints with both agencies, but the EC issued their $1bn+ fine quite a while ago, and from the looks of it, the AG's office is eager to move forward with their investigation too. In other words, this probably isn't the end of the pain for Intel.

That, kids, is why you don't engage in anticompetetive practices in a two-company industry. [WSJ Law Blog]

The App Store is a strange new place for developers. Veterans and newcomers engage in bareknuckle combat, driving prices down to levels people wouldn't have imagined charging just a few years ago. Margins drop to razor-thin levels while customers expect apps to get cheaper and cheaper, but with ever increasing quality and depth.

For developers, for other software platforms and potentially for the increasingly fickle customers themselves, it's uncharted, and treacherous, territory. But the most bizarre thing of all is—in an effort to keep people in the App Store, and to prevent competitors from getting a toehold in the mobile app business—Apple's charting a course straight into it.

"The App Store is a very competitive environment," says Caroline Hu Flexer, co-founder of Duck Duck Moose, an indie developer of children's edutainment apps like Itsy Bitsy Spider. "As an independent developer without a large PR budget or well-known brands, it can be very challenging, and you're pretty much at the mercy of Apple."

The Problem

Most iPhone apps had no life before the App Store, and currently have no life outside it. But with those that did, you start to see a pattern. App prices could reasonably be expected to fall over time—an older game is worth less to customers than a newer game, and with other types of software, a late-stage price drop is a great way to scoop up late adopters. What's strange, though, is how prices dramatically collapse after hitting Apple's store.

Two weeks ago we flagged some bizarre differences in pricing between equivalent PSP and iPhone games. Big titles, like Tetris and Fieldrunners, were inexplicably cheaper on the iPhone, even in cases where it was executed better. This didn't make a whole lot of sense. As it turns out, it had nothing to do with Sony and the PSP, and everything to do with the App Store.

As you can see in the chart above, many apps and services take a price dip in the App Store. Zagat's premium To Go guides cost a healthy $4/month for Windows Mobile phones, but sell for just $10/year on the iPhone. CoPilot 7, a navigation app, used to set you back a full $200 on a Microsoft-badged device (later lowered to $100); the much-improved version 8 sells in the App Store for a measly $35 today. The premium version of WeatherBug runs $5 for people who happened to buy BlackBerry's touchscreen phone, but just $1 for anyone who bought Apple's. VR+ voice recorder, a full-featured dictaphone app, runs $30 on BlackBerry, and an incredible $2 in the App Store. So how can this little App Store, itself a subsection of the iTunes store, squeeze so many developers to the point of near-suffocation?

Update: The BlackBerry Weatherbug app boasts a few extra features over the iPhone app, including push notifications. This accounts for some of the price difference

The Economy

Some of this is pure Econ 101: The store serves a massive, captive audience that's pre-trained to spend money in iTunes. The promise of higher volume makes it easier for developers to lower prices, which they use, along with interesting features and clever marketing, to set themselves apart from the competition.

If things work out just right, the App Store can move a lot of software for you. Spread your lower margins over tens of thousands of sales, and your $2 app could make just as much, if not more, than your old, slower-selling $30 app did. The App Store recently passed the 2-billion-download mark, and there are likely well over 50 million App-Store-ready devices in peoples' hands right now. A vast majority of these downloads—averaging an insane 35 per device—will likely have been free. Only Apple knows just how many. But even if just 5% of the 2 billion downloads were paid for, that's one hell of a market.

It's true that prices are falling as more and more iPhone and iPod Touch owners enter the market. But prices won't stop falling. And more and more developers from all over the world are submitting apps, too, so fewer devs are guaranteed visibility. Not all of the people investing time and money in their products are reaping the return they (reasonably!) expected.

Newsweek's exposé on the end of easy money at the App Store goes a long way toward making the case against going all-in as an iPhone dev. Not only are development costs high, while success appears to be basically randomized. But the story doesn't explain exactly what happened to make the situation so grim.

The Culture

Giz stories rage about app prices all the time, and in your own private way, so do most of you. Buying $1 songs and $2 TV shows has given us an expectation that apps should be cheap, no matter what their use. The glut of free apps you see filling out the app charts every day doesn't help either. Software is worth less to us now, even though we use it more.

I spoke with Steve Andler of Networks In Motion, the company that makes Gokivo. It's an app that we savaged for its introductory price of $10 a month, which then dropped to $5 a month a few weeks ago.

Andler explained reaching the unrealistically low costs with one thing: diminished features. Their app pulls up-to-date map, traffic and POI data from NIM's servers in real time, meaning that—beyond developer costs—they have to constantly pay for new, fresh data to pass on to their customers. But even at $5 a month, it's just about impossible for Gokivo to compete with an app like MotionX GPS Drive, which is $3 a month, or $25 per year.

Andler says there are subtle differences in services offered, which is true—MotionX, for example, doesn't yet read street names aloud when it gives you directions—but your average user probably doesn't know this, and there's a good chance MotionX might add it in an update later on, as their market share and revenues grow. But the damage is done. The app-buying customer is spoiled: As far as we are concerned, turn-by-turn GPS apps should now cost no more than $3 a month, period. This is the new retail, and it's weird.

Loren Brichter, father of Tweetie, is used to getting yelled at by jaded app shoppers. He's charging $3 for Tweetie 2, an update—but a whole new version, really—of his well-established Twitter app. Offering the software as a free upgrade isn't realistic for him:

I priced Tweetie at $2.99 not based on how much work I put into it (it would have been more), or to try and undercut other apps (it would have been less), but simply because I felt like $2.99 was a reasonable price to pay for a Twitter client. Impulse purchase, but not bargain-basement. I never liked playing pricing games either—a popular pastime of other App Store devs. It's always been $2.99, and will probably always be $2.99.

His decision wasn't easy. And even though his app is the darling of the tech press, and has hundreds of great user reviews, he's being lambasted for charging three measly dollars for a high-quality app that people will use again and again and again. Before the App Store, a complaint this petty wouldn't have even made sense.

Apple

From the outside, it appears that Apple is encouraging a race to the bottom. The top 10 lists in each App Store category—one of the only ways for an app to get any meaningful amount of iTunes visibility—are almost exclusively the territory of low-priced impulse buys, and are hard to cling onto for more than a few weeks at time. Flexer, of Duck Duck Moose, says she's experienced it firsthand:

The ranking by volume (as opposed to revenue) on the App Store seems to drive the prices of apps down. Aside from being featured by Apple, exposure of an app is dependent on its ranking in the top lists, so developers lower prices to obtain a higher ranking.

This is echoed and amplified by the makers of Twitterific, an app that, in a bid to stay competitive, saw its price fall from $10 to $4, despite active development and a growing featureset:

While these changes represent perks for users, it also means that sustaining profitability for a given piece of software in the App Store is nearly impossible unless you have a break-away hit.

And if things don't change?

Myself and others like me will have no choice but to focus our development efforts elsewhere.

With yesterday's announcement that Apple is allowing free apps to include in-app purchases, things just got even more tumultuous. Depending on how this is handled, the top "free" apps could all be paid apps in disguise. Either that or the paid app rankings will be dominated by free-on-a-trial-basis teasers. In either case, the rankings open themselves up for opportunistic abuse, and the highest goal for any honest, talented app developer—to just crack that list—just became more uncertain.

This is disastrous for developers, even if it's mostly incidental, and a function of Apple trying to sell apps like they've been selling music for years, despite a totally different set of product types and customer needs. But Apple's effect on pricing goes well beyond incidental. At least in some cases, Apple calls the shots.

A high-profile dev team that has sold a number of apps in the store since the earliest of days, and who accordingly wishes to stay anonymous, told us as much. When they approached Apple with their first app, they had a price in mind. Apple told them it was too high, and that they'd need to cut it to succeed. They chopped it in half. Even then, Apple told them to "be careful."

This company made out fine, since they were in a position to adapt. However, to play the volume game, they had to restructure their entire philosophy around a pricing structure that, just months before, would've seemed ridiculous.

With over 2 billion data points to graph and filter to their heart's content, Apple understands the App Store climate better than anyone else possibly can. As such, their advice is probably golden. Which is okay if you're a relatively nimble, single-purpose company, and you can afford to risk restructuring everything you do around their store, and your costs can be covered at whatever price you evidently need to set to sell at a certain volume. But you'll just want to keep in mind that their advice is self-interested. Apple wants cheap apps, to keep people buying them, and to keep other stores firmly in the second tier—and they're not afraid to say it. From Apple's last quarterly report to investors, a line they've been echoing since the store opened:

[Apple] also expects competition to intensify as competitors attempt to imitate the Company's approach to providing [digital app distribution] seamlessly within their individual offerings or work collaboratively to offer integrated solutions...While the Company is widely recognized as a leading innovator in the personal computer and consumer electronics markets as well as a leader in the emerging market for distribution of third-party digital content and applications, these markets are highly competitive and subject to aggressive pricing.

You don't need to look back any further than the launch of the iTunes music store to see an Apple that will do everything it can to push other peoples' prices down for their benefit. Of course, they can't really fix prices for apps—they're not songs or movies, and each one does something different—but they can nudge like hell.

What Happens Now

So what does the App Store Effect mean, right now? In the short term, we'll get lower prices. This is great. But in the long term, it might not be sustainable.

The promise that sales volume will make up for the rock-bottom prices you need to charge just to be seen in your app category seems increasingly hollow, and to put it bluntly, if developers don't have a chance in hell of recouping their fees, they'll stop trying. And I'm not talking about 99-cent iFart app spammers here—I'm talking about big players who already make money selling software. If the navigation companies, the big game studios and the premium content providers can't thrive in the App Store, they'll have to leave; even playing in Apple's sandbox threatens and undercut their (sometimes much more crucial) product lines elsewhere.

And don't forget, Palm and Android fans, this App Store Effect sends ripples well beyond the App Store. Customers expect to see functionally identical apps priced the same way across platforms, because to us, that's what makes sense. Can devs really afford to port an app to the webOS to sell to the tens of thousands of Pre owners, when they're expected to tag it with iPhone prices, calculated for a base of millions? Whether by Apple's design or totally by accident, everyone who doesn't own an iPhone will suffer for it.

The App Store Effect illustrates a new kind of economy, and it's not going to go away. In fact, it's going to get worse. Developers will either adapt, die or leave. But where will they go? Until there are 50 million Android handsets and 50 million Pre offspring out there, the rest of the mobile software world is pretty much screwed.

Don't worry! He's still the richest man on the planet, but he's less richer than everybody else than last year. Other losers on this year's Forbes 400 include Paul Allen, who lost $4.5 billion, Michael Dell, who lost $2.8 billion, and Steve Ballmer, who lost $1.7 billion.

Amazon's Jeff Bezos, unlike all the other tech mavens on the list who lost money, actually made $100 million this year, bringing his value up to $8.8 billion. Good for him! I'm sure that made a fucking difference. [Forbes via Fortune]

What does this mean for Dell? Well first of all that they just spent a crapload of money to expand its enterprise expertise. They are banking heavily on forging head first into IT services. Not only does this give them an added IT package but it means they will be able to sell more and more computers (maybe even that soon to be announced Latitude Z) to Perot Systems' global customers and thus compete to take back the crown of the number one computer manufacturer (HP knocked them off years ago). [Dell]

Sony's suffered through management shakeups and a lack of vision lately, and while this specific news is a little industry-insider, it will definitely have an effect on the juggernaut's product lineup. Sony may well leave certain sections of the industry behind, most probably their Sony Ericsson imprint, but Sony's pretty much getting kicked around on all fronts. They're a legendary company and they're not going anywhere, but we really hope they change their ways and start busting out some exciting, groundbreaking new products like back in the glory days. [New York Times]

The technology relies heavily on our cellphone being used to transfer data and payments—a philosophy that has already taken hold in countries like Japan and even in some major US airports. That's all well and good, but I'm looking for machines that automatically ring-up everything in my grocery cart. Seriously, it's the 21st century. I shouldn't have to wait for a cashier to slowly scan countless items for an old lady writing a check. [FastCompany]

This particular rendering was made through Google SketchUp, Google's 3D modeling software. Measurements were taken of a $10,000 stack of $100 bills (just half an inch thick!) and pretty much multiplied from there using simple geometry. In that trillion dollar shot, each pallet holds $100 million...and the pallets are double stacked.

As for that red blob on the left? It's a human. [PageTutor via BoingBoing]

Even though service would have likely continued uninterrupted had the freshly-merged company actually filed for bankruptcy, Sirius XM's days of luring in top radio jock talent on big contracts would have likely been over. Now, thankfully, we can carry on without skimping on the Howard Stern. [NY Times]

The $1 iPhone app has 50 different dollar bill origamis to choose from and each has its own step-by-step instructions. The origamis range from animals, clothing, rings, structures, Yoda, and more. There's a few extra features like a self timer for testing your speediness and a sequence builder for creating your own origamis. But I was unable to really utilize this app to its full potential for one simple reason, I'm horrible at making origamis.


I started off pretty ambitious and jumped right into the cool looking TIE Fighter. After 15 minutes and many sighs of frustration I gave up. Here's what my Dollar Bill TIE Fighter looks like, yea I know it's pretty pathetic.


Even though the TIE Fighter killed my dreams of becoming a professional Dollar Origamist I decided to try my luck at folding a T-shirt. Well the sleeves aren't exactly perfect but I guess I did it?

[Dollar Origami]

Here's our list of five apps that make tracking, remembering, and motivating your resolutions easier than willpower alone. All of them (except RunKeeper) run on both iPhones and iPod touch models.

RunKeeper for motivating your run

Running is one of, if not the best, exercise plan for those who like immediate, measurable proof of their progress. RunKeeper, a free app that Adam used to roll his own Nike+ iPhone for free, is the data-hound's running companion. Using the iPhone's GPS powers, where and how far you went is mapped out (if with a few glitches), your calories burned and average speed marked, and it can all be searched through and/or synced to the RunKeeper web site. For a similar solution with a different mix of strengths and features, try Fitnio. (RunKeeper Free and Pro)

Weightbot for, well, your weight

For just $2, you can grab an app that makes measuring your body weight sort of (seriously) fun. The previously toured iPhone/iPod touch app has a really slick look to it, and takes your weight down in tenths-of-a-pound increments, along with auto-calculating your Body Mass Index. Your day-by-day progress can be graphed out and tracked against a goal weight, and if you're concerned about friends prone to "Ooh, let me see your iPhone apps!" fever, Weightbot can be password locked before giving away the stats. (Store link)

Remember the Milk for everything else

This one's a bit pricier, but you're getting more than just a nagging reminder to do this or don't do that. With a $25/year Remember the Milk Pro account, its iPhone/iPod touch app (which offers 15 free days to any account) gives you pretty much complete access to all your lists, tasks, alerts, reminders, and whatever resolution you're plugging in. Plus, using geo-location features, you can goad yourself into stopping by Goodwill to finally drop off those clothes, since you're already shopping in the neighborhood. As noted in its Top 10 entry, though, RTM's real benefit is that it syncs itself everywhere at all times. So remembering to buy a better paper filing box while you're at your desk can pay off the next time you're in an OfficeMax. (store link)

iOwn to stop hoarding stuff

Most of us can probably do with a little less stuff, and we're all prone to buying things we already own—I'll point you to a drawer full of barely-used duct tape, if you'd like. iOwn is a one-stop spot for keeping track of those things you always tend to buy more of, or just want to have more details about the stuff you already have at your fingertips (does the DVD player take component cables, or just S-Video?). You can give any item as many attributes as you'd like, and the full $5 version lets you store, and backup online, as many items as you can think of (the free, Lite version is a 10-item trial). It's pitched as a total-home organizer, but if you've just got one collection or acquisition habit you're looking to reign in—spices, music, photo frames, whatever—it's pretty indispensable. (via LA Times Blogs; iOwn free and lite links)

Mint for managing your money

Mint.com's a streamlined webapp for graphing, tracking, budgeting, and otherwise keeping tabs on your money. Its free iPhone/iPod companion is no less a handy tool, and it's just as secure and informative. Check your basic balances, browse your last few days' cash flow, and peek at multiple budgets you set up for yourself from a series of sliding screens. If you fear losing your device and opening up your financial world to the thief, you can remotely deactivate the read-only tool from your Mint.com profile. If you can get your head around Mint's money management, you'll really benefit from this app. (Store link)

That's our flight of five apps, but we want to hear what free or paid iPhone/iPod apps work for goals and resolutions. Share the app names in the comments.

Many an unwitting shopper can be lured into a store with an enormous "50% OFF!" sign strung across the storefront. Even more so when the closure of a chain of stores is highly publicized like the recent closure of Circuit City. Unfortunately, the entire process of liquidating the stock of a store is rather deceptive. Walking past the "Everything must go!" signs and picking up a box marked 50% off could actually mean paying full retail.

First, a brief summary of what liquidation is. When a company is facing dire straits or has already hit the wall of bankruptcy they will— either voluntarily or by legal order—try to convert as much of their assets into cold hard cash as possible to pay off debts and hopefully return some money to their stockholders. The process is usually handled by an external company whose sole goal is to turn the pile of assets into profit—and minimize their risk in the process.

What does this mean to you, the consumer? It means that for the first portion of a liquidation sale you'll likely be ripped off. Let's use an HDTV from a fictitious company to illustrate how you're not actually getting the deep discount you think you are.

Last year SuperPow television company released the SuperPow H9000 HDTV. The manufacturer suggested retail price (MSRP) was $2500. It was sold at HappyBox electronics stores for $2200 when it first came out and as newer models arrived it was eventually sold for $1250. HappyBox has a bad run and ends up filing for bankruptcy. Their inventory is now controlled by a liquidation company. The company responsible for the liquidation advertises that products in the store are deeply discounted, some things are even 50% off already! You walk in to check on the SuperPow H9000 and see that the price is $1250. You remember the TV was really expensive and that seems like a great deal for a nice TV, after all it's 50% off! The only problem is that you're getting 50% off the MSRP, which nobody paid even when the TV was the hottest model on the market. It may be a month or two into a large liquidation before that TV is actually marked down 50% from the actual street value to a wallet-friendly $625—and most likely someone not realizing they aren't getting a very good deal would have bought it well before that. Photo by mobil'homme.

How can you make sure you're not the sucker that the liquidators count on to reap their profit? With a little knowledge and some handy tools, you'll get the most for your money.

Know The Market

Don't go shopping blind. If you're heading to a going-out-of-business sale, take a few minutes to do some cursory research on whatever it is you're looking to buy. Compare prices with price comparison engines like BeatMyPrice and make sure to check out deal-tracking forums like SlickDeals and FatWallet—both were reader favorites for finding the best deals online. You may not even know the exact model you're going to find at the store, but checking deal sites like FatWallet will give you an idea what the general price ranges are for things and what deals can be had on them. A 40" HDTV "marked down" to $1500 won't look so appealing when you know that similar models are going for half that thanks to a little research. Photo by Refracted Moments.

Use Your Phone as a Price Checker

If you have an internet-enabled phone with you, it's easy to compare prices right in the store. The quickest, if least specific, method is to plug the product name or model number into the mobile version of Google Product Search. If you're without internet access but you can text message, you can take advantage of the Amazon/eBay price-comparison mashup provided by MobSaver. Text the ISBN or UPC code of an item to save@mobsaver.com and it sends you back the current prices on Amazon and eBay. When you're really in a bind you can use—as I've often done—the most analog method and call a friend to run a quick price search online for you. A few minutes pecking on your phone or making a call can save you hundreds. Photo by gabofr.

It's never a good sign when companies are shuttering their windows—for the economy or for the displaced workers—but that doesn't mean you should pay extra for their bad luck. Armed with the tips above you'll never be the sucker paying MSRP for 2007's castoffs. If you have your own learned lessons about liquidation sales, sound off in the comments below and help save your fellow readers some cash.

Some of the pirates have drown while trying to escape with their booty.
[NYT]

Siddiqui's downfall came when another exec found a spreadsheet with backroom deals for contracts (he was a buyer for Fry's). He'd then get vendors to sell stuff at an inflated price, pocketing the difference. Ausaf was able to do this because he convinced other execs that HE would be the one to deal with vendors, eliminating sales reps and saving the company money. Or so he claimed.

Then, he had vendors pay kickbacks of up to 31%. Which made him $65M in three years.

A formal charge is coming, but what I want to know is how this will affect Fry's itself (one of my favorite stops for electronics here in the Bay Area). Hopefully, it brings down prices overall, even though Fry's itself is denying any pricing problems were passed onto the consumer. [CBS13 - Thanks Bryan Adams!]

Image Credit

Its handset division led sales for the whole company, selling almost 52 million phones, and pulling in roughly a third of its $13.4 billion revenue. Interestingly, they're using the Nokia strategy, with big pushes at the high- and low-end of the mobile market. If Samsung's any indicator of the rest of the electronics industry—it's probably a better one than Sony—times are tough, but the storm is weatherable. [RCR]

Massachusetts, Wyoming, and Washington are gearing up for their bills, just to name a few. It's actually kinda surprising it took this long for the taxes to start piling on. Most of the initial considerations about squashing a nascent market are nearly moot this point, in any case, with the digital market booming. I mean, when 30 percent of music revenues in the U.S. are digital, and the biggest music retailer in the world deals exclusively in digital content, you know the tax collector is going to be slinking close behind.

The one thing that might save us from being taxed is geography. States can only tax businesses that have a physical presence within their borders. Congress could change the law (and they probably will at some point), but in an election year, it's unlikely (one reason to be glad the circus is in town until November). It'll be interesting to see how this plays out—digital taxes seem like an inevitability, however. CNet points to NY as a bastion of tax-free sanity, but they're trying to squeeze Amazon right now, so it seems like a safe bet the money they could bring from taxing downloads will look pretty damn tangible. [Cnet]