Oh you complainers, I hear you: «There’s nothing revolutionary about the new iPhone,” you say, with all the tact, understanding and charm of the spoilt kids round the perfect Christmas tree who wanted a new pushbike but in the end had to «make do» with a Segway. Spoilt, insolent children who want Santa Apple to surprise them each and every time. You’re irrelevant, wrong, and I blame the parents.

Look at Apple’s new device: already the company has let us know that a million — that’s a big number, so I’ll run it past you again, particularly you at the back with the silver spoons and no talent for math — a million iPhone 4S units were pre-ordered within the first 24 hours of sale.

I told you this would happen. I told you that this Holiday Season will be Apple’s holiday season.

The Holidays are coming

Millions of iPhone 4S smartphones will ship in the next few weeks because:

It’s a fantastic new device
Partly out of pent-up demand
Partly because the wait has been so long many owners of the more recent models can already upgrade
Partly because, for a lot of us, grabbing this season’s smartphone will form some kind of small and personal tribute to the man many of us can’t stop missing, Steve Jobs.
And no one listens to the critics any more anyway.
Superficial people, television’s people

Me? I’m with Ticonderoga Securities analyst, Brian White, who last week called the initial criticisms of the new smartphone «superficial» and a «knee-jerk reaction».

He’s right.

It’s just the usual people celebrating the usual crush and the Android people trying to find fault as they desperately shore up their soon to be flagging, insanely insecure, patent-breaking so-called «mobile operating system».

Critics. You want to love them, but so many seem to lack integrity. The way I see it, if you want to find fault with something, do so by all means, but at least find an expression that’s original rather than retreating into some small time collegiate «group-think» mode. It just isn’t sexy or impressive.

Coming also before Christmas, Apple seems set to begin offering the iPhone 4S via China Mobile, the world’s largest mobile operator.

Given the huge (and it is huge) popularity of Apple’s products in the world’s largest and — at least at present — most stable economy, then don’t be surprised to see Apple’s iPhone sales numbers fly off the charts. Some are predicting 25 million plus sales, and this is going to dent everyone else in the smartphone space race. Apple is rock and roll, everyone else is Rebecca Black — good for a while, but lacking in staying power.

Super-fast, super-smart, smartphone

I’m on a roll, I can feel it coming through. Perhaps I’m channelling, but let’s have a chat about performance, shall we? I don’t want to make other manufacturers anxious, as we all know anxiety can impact performance, but take a look at the latest benchmark figures, which tell us the new Apple smartphone is the best-performing smartphone on the planet.

The results, obtained by AnandTech show that in terms of Javascript performance the 4S exceeds the competition, while Geekbench results show it as the best-performing smartphone around. Graphics performance is 122,7, versus the Galaxy S II and its 67,1 score. This smartphone is superfly, superfast, and, with Siri, super-smart.

Super-smart? Think on Apple’s Siri assistant. Despite the whimpers there really is no equally effective assistant on any other platform. Critics. Huh. What to do they know? Only what their daily Google AdSense statements tell them. Google doesn’t just make AdSense, by the way, it also makes Android.

The critics don’t get it

I’m going to punch out some predictions now. We’re going to hear a very sombre financial results announcement from Apple on October 18. Executives will be moderately upbeat about their results, tempered by knowledge of the economic challenges and the tragic and far too early loss of Steve Jobs.

I’m anticipating iPhone sales in the period will look robust, but don’t expect too much growth as consumers looked toward the next iteration. For the sake of argument, let’s imagine a flat sales trajectory, or 20 million iPhone sales in the period.

The Holiday quarter will be different. There’s iPhones for every budget now, and while few will pick an iPhone 3GS, many will opt for 4 and millions will get hold of an iPhone 4S. I’m with analysts expecting around 23 million sales in the period, but warn this could climb dramatically if the China Mobile deal goes through.

Also in the Christmas basket could be the re-vamped Apple TV box, which some say may support Siri. I am looking forward to talking to my TV to ask it to find something worth watching. Sadly, even an intelligent assistant will likely be unable to find anything truly worth watching on today’s TV schedules.

(Which is where radio may regain its place, alternative music fans may even enjoy the all-new Radio Dandelion app, from the family and estate of the great John Peel and a home for new music from all over the world).

We understand that Apple has barred Microsoft and Amazon from discussing what would otherwise be a high-profile deal, especially for Microsoft’s fledgling Azure cloud service.

But Reg sources close to Microsoft this week confirmed rumours circulating in June that Apple’s iCloud is running on Azure and Amazon. Customers’ data is being striped between the pair. iCloud was released as a beta in August and is expected by the end of this year.

Apple and Amazon did not respond to our requests to comment, while Microsoft told us: «At this time, we don’t have any comment around whether Apple is a Windows Azure customer.”

According to our sources, Microsoft insiders see the iCloud deal as a validation of Azure. So far, Microsoft has pushed Azure using the marketing 101 playbook. Redmond has flagged up the start-ups and websites it has attracted in an attempt to prove to other devs that Azure is «cool». It is also promoting those corporate customers who’ve floated onboard to prove its cloud is being taken seriously by business users.

iCloud puts Azure into a different league, given the brand love for Apple and the Apple management’s fanatical attitude to perfection. It is a «huge consumer brand, a great opportunity to get Azure under a very visible workload,” our sources told us.

Apple is understood to have elected to outsource the plumbing of iCloud because its core competence lies in «building great consumer experiences». It didn’t make sense for Apple to become a cloud provider.

By selecting two suppliers, both very different in their services and their level of maturity, Apple is reducing its risk of becoming hostage to a single supplier.

Microsoft and Amazon will now need to ensure they keep up with the other on reliability, new features, security, and price.
More to learn

Apple has had a recent unpleasant experience in providing online services: in a famous memo, Steve Jobs admitted his company had «more to learn about internet services» following the outages and failures of his precursor to iCloud for email, contacts, calendar, photos and other files — MobileMe.

Also, there’s the cost and delay involved in building the infrastructure that iCloud requires as well as assembling and building the core services. Buildings, power, servers, storage, the recruitment of personnel and having the facility certified would cost a minimum of $100m. A more realistic cost for full-scale roll-out could be closer to $1bn.

Microsoft has already built several mega data centres to run Azure, in addition to its search engine Bing, in anticipation of big customers. The company has at least 24 data centres running Azure worldwide.

To give you an idea of the scale, the first phase of one of these in Chicago is 700,000 square feet; it uses a modular design based on containers. Chicago has a capacity of 112 containers, with each holding 224,000 servers — Microsoft uses Dell.

That said, Apple could be biding its time in using Microsoft and Amazon.

Apple is building a $500m data centre in North Carolina. If reports of the hardware going in there are correct, the centre’s data capacity should run into tens of petabytes and be more than suited to running iCloud — for now, at least.
Striping

iCloud is believed to be running on the full Azure service — the Windows Azure compute and controller part and SQL Azure storage which hosts tables, queues and flat files. It’s not clear how many of Microsoft’s Dell servers are hosting iCloud.

The iCloud data is being striped between the Amazon and Microsoft clouds. That means Apple or Microsoft or Amazon or all three have to implement through the software a way of identifying which user’s information is stored in what locations and then to route requests to the correct server.

If the data is duplicated, then software would handle load-balancing or randomly send user’s requests to one cloud or the other, or change access policies depending on things like network speed and server availability.

The striping process segments logically sequential data such as single files so segments can be written to different physical devices. The process can help speed up access to data because you don’t rely on read/write access speeds of a single disk in a machine.

The challenge in running two clouds under an overall service, if there is one, will be in smoothly managing a unified system where the controllers could well be running on different operating systems or be written in different languages.

This is a very real possibility; while AWS and Azure emulate virtual servers, most AWS users run on Linux while all Azure users have to run on Windows. Even if a cross-platform language like Java is used to bridge the gap, then tuning the software for both will mean additional cost and complexity.

One way to avoid managing different code bases and ensuring the best levels of performance could be for iCloud to also run on Windows on AWS. This would be a potentially even bigger victory for Microsoft as it would mean iCloud isn’t just running on Azure from Microsoft but is also running on Windows while on Amazon. ^®

The Smart Blood Pressure application is available for download for free from the iTunes App Store and you can use it together with the physical device to measure your blood pressure and pulse instantly. You can also create automatic backup of your data and carry the device wherever you go.

Readings can be compared with the World Health Organization readings via the app.

Track Your Blood Pressure Wherever you are With the Smart Blood Pressure Monitor

Withings Smart Blood Pressure Monitor seems to be a great gadget for those who want to track their health status at any time and is available at Gizoo for £119.95.

RBC Capital Markets said the deal value of $12,5 billion equates to 0,7 times trailing twelve months (TTM) of equity value-to-sales. In RBC Capital’s view, rising intellectual property (IP) threats to Android (and its original equipment manufacturers) from Microsoft Corp. and Apple Inc. were the major driver of the acquisition.

«Google gets Motorola Mobility’s portfolio (17,000 patents), and while this deal may not necessarily mitigate some of the intellectual property (IP) wars under way (e.g. Apple and Motorola already suing each other), it may position Google to defend itself against more fundamental IP attacks, and increase counter-threat and leverage in global patent negotiations and litigation,” said Mike Abramsky, an analyst at RBC Capital Markets.

Implications for Apple

Apple’s smartphone patents relate to multi-touch, object-oriented operating systems, and user interface — so this may not necessarily mitigate some of the IP Wars currently underway (Apple was suing Motorola Mobility for patent infringement — and vice-versa — already so this unlikely to change).

However, Google’s acquisition of more fundamental wireless patents may avoid deeper threats from Apple, Microsoft and also offer Google/Motorola Mobility leverage in cross-patent licensing negotiations, Abramsky said.

Abramsky said Google may in time need to assert some fundamental patent and/or trade lawsuits against Apple and Microsoft using the Motorola Mobility portfolio in order to rectify the balance.

In the longer term, this combination could offer more competition to Apple in Smartphones, depending if Google can leverage Motorola Mobility and the control over hardware/software together to further new innovations, Abramsky said.

Abramsky said Google/Motorola Mobility may reduce Android fragmentation and improve software/hardware integration, so Google/Motorola Mobility may become a better competitor to Apple at the high end of the market.

However product, market and organizational integration between Google/Motorola Mobility may be disruptive in the near term, and may offer Apple some interim competitive advantages, especially with iPhone 5 and iOS 6 due out in the Fall.

From a developer perspective, this may throw some Android developers a curve ball as they try to figure out how this all sorts out for them (regarding original equipment manufacturers versus Android/Motorola Mobility, platform roadmap, etc) and they may even focus efforts around iOS in the meantime.

Apple may de-emphasize some Google services on iPhone given Google is now a direct hardware competitor. The proposed acquisition may give a boost to Google TV, as Motorola also makes set top boxes, and Google TV could become integrated into those devices.

Implications for RIM

Abramsky said the proposed acquisition at 0,7 times TTM of equity value-to-sales equates to $14,4 billion equity value for Research In Motion (RIM) or $33 per share or 34 percent premium.

From an industry consolidation perspective this may make RIM more interesting, but from Google’s perspective, Motorola Mobility using Android made it a better fit (they may have already talked to the BlackBerry maker) plus of course Google wanted the Motorola Mobility patent portfolio.

Abramsky said RIM’s focus on its own OS, its proprietary message-centric hardware, enterprise focus, its mobile data sync-oriented patent portfolio, and its recent struggles may have made it a less favorable takeout versus Motorola Mobility.

However, for some possible acquirers including HP, IBM and Android original equipment manufacturers (OEM) like Samsung, RIM could be viewed more attractive in light of pending industry consolidation.

Abramsky said the deal highlights and perhaps elevates the value of RIM’s patent portfolio. In a takeout, it suggests RIM’s patents could be worth 2—3 times his prior estimated value ($2-$3 billion), perhaps $4-$6 billion.

However, Google would be paying top dollar for Motorola Mobility’s patents, and its unclear if other buyers would be equally motivated.

According to the United States Patent and Trademark Office, RIM has just over 2,300 U.S. patents (excluding international), smaller than Motorola Mobility, but more important for Smartphones (covers mobile data sync — email and other data).

Also, RIM is not being sued by Apple, who may see RIM’s patents as valuable, and some of Motorola Mobility’s portfolio may already be widely licensed on FRAND, i.e. licensed to the industry on a fair and reasonable basis as required by standard-setting organizations.

In addition, RIM and Motorola settled all patent lawsuits in 2010 and agreed on cross-licensing agreements (2G, 3G, 4G, 802,11 and wireless email).

Mixed implications under competitive landscape — positively, this deal highlights the value of an integrated software/hardware platform (like RIM has) for competitive advantage, Abramsky said.

However, this may put additional pressure on the success of RIM’s pending QNX Super phones strategy, if Google/Motorola Mobility is able to leverage tight hardware/software integration to increase innovation.

If Microsoft were to formally acquire Nokia Corporation in response, the resulting consolidation would further limit the future candidates for 3rd platform (after Apple and Android), Abramsky said.

However, the Google/Motorola Mobility takeover may give RIM an advantage (if QNX is successful) over Android OEMs (Samsung, HTC) who may be left to seek their own software solution.

Implications for Microsoft

Abramsky said the proposed deal shows that Microsoft and Apple have to-date had some success pressing their IP attacks on Android.

While Google/Motorola Mobility deal was appropriately positioned by Google as strengthening and protecting their mobile strategy, in Abramsky’s perspective Apple/Microsoft also forced Google to disrupt its OEM model for Android, creating potential channel conflict with its OEMs, and become directly involved in the hardware business.

While the proposed deal may not be positive for Microsoft, IP strategy (licensing Andriod OEMs and developing a revenue stream), it may force OEMs to adopt Microsoft WP7 (Windows Phone 7, Microsoft’s Mobile OS) alongside or even as an Android alternative.

Abramsky said the proposed deal may raise the possibility of Nokia being bought by Microsoft — however Microsoft now de facto oversees Nokia’s software and internally Microsoft typically shuns acquisitions (Skype the exception) if it can achieve its goals via partnership, also Microsoft likely wouldn’t want to disrupt the current OEM relationships it has, like Google has done.

Abramsky said possible Google/Motorola Mobility integration challenges (similar to what Nokia/Microsoft went through) could offer some competitive distraction, helping Microsoft in the near-term.

Abramsky said Microsoft would now be the only leading non-Android OEM software vendor (versus Apple, RIM, Google) that does not own hardware, which — if this becomes the standard for user experience — could present a challenge (he doesn’t consider MeeGo, backed by Intel, or WebOS/HP as yet mainstream, although they too could get an OEM boost from this deal).

As well, Google is likely to press its ad-supported-business model into Smartphones further, which may be disruptive to Microsoft.

According to the Data Center Knowledge website, Kevin Timmons, previously Microsoft’s general manager of Datacenter Services, will take up a leadership position at Apple in the coming weeks. Microsoft has confirmed Timmons’ departure from the company, saying he «has decided to pursue other career opportunities and is no longer working at Microsoft».

Microsoft did not specifically mention what these «career opportunities» entailed. But Dave Ohara, who has worked in data centres at Apple and Microsoft, stated that Timmons was going to move to Microsoft. However, Ohara said that Timmons was not going to replace the late Oliver Sanche, who was Apple’s top data centre executive, but passed away suddenly last year.

Though it is unclear what position Timmons will take at Apple if the reports are correct, speculation about Apple’s cloud computing plans is already in full swing. Last week Macworld reported that Apple had bought up 12 petabytes of storage from Isilon Systems.

According to an insider at Isilon, Apple plans to use this storage space to manage the video downloads of its iTunes customers. This is not the first time that Apple’s ambitions to move into the video streaming space have been rumoured. Last month a Morgan Stanley analyst claimed that the company was working on a Smart TV prototype.

Data Center Knowledge also points out that Apple is planning to build more data centres in Europe and the US. Timmons has experience of building data centres in Chicago and Dublin for Microsoft, reportedly delivering the projects on time and on budget.

Apple (NASDAQ: AAPL) reported profits of $6 billion for the first quarter today along with record revenue of $26,74 billion, both of which beat analysts’ expectations. The results are a substantial gain over the same quarter a year ago when Apple reported revenue of $15,68 billion and a quarterly profit of $3,38 billion.

«We had a phenomenal holiday quarter with record Mac, iPhone and iPad sales,” Steve Jobs, Apple’s CEO, said in a statement. «We are firing on all cylinders and we’ve got some exciting things in the pipeline for this year including iPhone 4 on Verizon which customers can’t wait to get their hands on.”

Apple COO Tim Cook, who will be running day-to-day operations during Jobs’ absence, joined CFO Peter Oppenheimer in answering analyst’s questions during a conference call with analysts following the release of earnings.

Cook touted strong sales of Apple’s iPad and iPhone and the continued growth of Macintosh computers that he said far outstripped the growth of the PC industry as a whole.

Datamation has the details on what else was mentioned on the earnings call, including what Cook described as a key investment Apple made in recent quarters to secure supply of an important technology. Cook said Apple made a similar move back in 2005 when it spent over a billion dollars to ensure it would have an adequate supply of flash memory. «That was a fantastic use of Apple’s cash,” he said.

Whether it was Apple’s objective or an incidental side effect, one thing’s for certain: The stream of gossip-generating goodies strewn throughout Apple’s world works brilliantly. Apple’s wall of secrecy, combined with its well-placed collection of clues, may have created the best cost-free, user-generated marketing network a company could possibly envision.

iPhone 3.0 Rumors

The latest round of rumors includes speculation about upcoming iPhone and iPod devices, as well as some scuttlebutt about advanced features that could end up in future releases.

First, the devices: While looking through the murky bowels of the iPhone 3.0 software, someone found references to codes suggesting the eventual support of at least four new models. One appears to be iPhone-related, one appears to be iPod-related, and the other two are anyone’s guess. The mystery items are referred to as “iFPGA” and “iProd.”

The iFPGA is still puzzling most people (FPGA generally stands for “field-programmable gate array” and indicates a chip that can be configured post-manufacturing). Rumors are already running rampant about the “iProd,” however, with theories ranging from it being a tablet-like device to it being a code for an iPod Touch HD.

The other, slightly less speculative findings include a “Find My iPhone” option within MobileMe, a “Publish Video” screen under an image publishing tool, and some hidden settings accidentally found for iPhone-based USB tethering.

The Brilliance of the Buzz

You can rest assured the blogosphere will be bursting with discussion of the discoveries for weeks, probably even months. Somehow, that always seems to be the case with Apple — more so than with any other company I can think of. When I joke about the “Apple rumor of the week,” it’s often not much of an exaggeration. Sometimes the gossip is good, sometimes it’s bad — but it always makes Apple one of the most active topics within the tech community.

Few people know how much Apple attempts to promote the process — it could quite possibly be a pure result of user excitement and anticipation. As long as the talk doesn’t involve the fabricated death of the company’s CEO, though, the chatter almost always works in Apple’s favor. And I assure you there’s no shortage of other tech giants just wishing they could create the same reaction with something as simple as a single square image.

When it comes to this latest buzz, of course, the truth is that no one outside of Apple knows the real scoop. Still, that won’t stop countless people from working nonstop to figure it out — and while the folks at Apple won’t say a word, I suspect their closed lips are quietly smiling at all the speculation.

Now, if you’ll excuse me, I’ve got to get back to trying to decipher this damned iProd.

Connect with JR Raphael on Twitter (@jr_raphael)