MacRumors

Late last month, Apple made headlines when a series of research firms including IDC, Strategy Analytics and ABI Research all announced that Apple had passed Nokia and held off Samsung to become the world's largest smartphone vendor by volume during the second quarter of 2011. But all of those firms study the mobile phone market based on shipments from the manufacturers out to the distribution channels, not end sales to users.

Gartner today revealed its data based on final end-user sales, showing that Nokia did indeed hold off Apple for the title for the title of top-selling smartphone vendor by that metric. The key to the difference in assessments is that Nokia substantially reduced its handset volume shipped out for distribution, opting instead to dramatically pare down stocks already in the channel.

“The sales efforts of the channel, combined with Nokia’s greater concentration in retail and distributors’ sales, saw Nokia destock more than 9 million units overall and 5 million smartphones, helping it hold on to its position as the leading smartphone manufacturer by volume,” said Ms. Cozza. “However, we will not see a repeat of this performance in the third quarter of 2011, as Nokia’s channel is pretty lean.”

Nokia is transitioning its smartphone lineup from its own Symbian operating system to Windows Phone 7, and thus it makes sense that the manufacturer is prioritizing discounted sales of Symbian handsets already out for distribution to help speed that transition. But even accounting for the distribution channel drawdown, Nokia's smartphone business is struggling, with sales to end users actually falling slightly year-over-year as the overall smartphone market and sales from many of the the top vendors are growing dramatically.

Gartner highlights smartphone sales by operating system rather than manufacturer, showing that Google's Android operating system has continued its momentum that has led the platform to a commanding lead with 43.4% of the smartphone market during the quarter when looking at sales to end users. Symbian took second place with 22.1% of the market while Apple's iOS took third place with 18.2%

While we do hesitate to read too much into Apple's patent applications, a couple of new applications published earlier today are gaining some attention for their connections to other Apple-related people and events that have raised the level of intrigue.

Last week, we noted that Apple had finally been revealed as the owner of the applepico.com domain name, as public registration information for the domain was updated to move from Apple's brand management firm MarkMonitor to Apple itself. And now, Unwired View and Patently Apple report that a newly-published patent application from Apple describes in detail how the company could include internal or external pico projectors with its products and utilize them in novel ways.

In particular, Apple's patent application addresses means by which multiple devices with projectors could be used in concert, either as separate displays or as a single unified display. Either setup could be take advantage of built-in cameras to allow systems to automatically recognize and interpret gestures and shadows, facilitating more dynamic and interactive presentations.

➜ Click here to read rest of article...

Bloomberg reports that Nintendo is facing increasing investor pressure to develop titles for the iPhone and other platforms.

The rift highlights the dilemma President Satoru Iwata faces as consumers shun Nintendo devices to play games on iPhones, iPads and Facebook Inc.’s website. The flop of the 3DS debut prompted the company to slash prices 40 percent in Japan starting today, the first time the games developer has resorted to such a move within six months of a product’s debut.

Nintendo has seen very poor initial sales of its new 3DS platform in the face of slumping DS and Wii sales, resulting in the announcement of a quarterly loss of $328 million late last month. In reaction, Nintendo has slashed prices of its 3DS in order to promote sales, but Bloomberg reports that investors want a more dramatic shift in strategy.

Nintendo's stock, which is currently near a 6 year low, saw a big boost after news last month that an affiliated company of their's, Pokemon Company, announced plans to release a Pokemon-themed iPhone game. Nintendo was quick to deny that they had any involvement and that Nintendo had no plans to bring titles to external platforms. Their stock subsequently saw a corresponding drop. Alternatively, some have suggested that Nintendo should "buy its way into" the smartphone platforms by acquiring companies and technology or developing their own.

Mobile applications and gaming have seen huge growth over the past few years, clearly impacting both Nintendo's and Sony's portable gaming systems. In line with that interest, a number of major acquisitions have taken place with iOS-related gaming companies such as Ngmoco, Open Feint and Chillingo. Despite these trends, according to Bloomberg, Nintendo President Satoru Iwata has said that Nintendo will only make titles for its own products as long as he's in charge.

Apple passed ExxonMobil as the most-valuable publicly traded company several times yesterday, but ExxonMobil ended the day ahead of Apple. Both companies' stock prices were down today, but XOM fell quite a bit farther, making Apple the most valuable public company in the world.

Apple closed the day at $363.49, with a market cap of $337.17 billion. Exxon Mobil ended at $68.03, with the company valued at $330.88 billion.

Apple might be worth more than Exxon Mobil, but XOM remains a much bigger company. Exxon made $10.7 billion in profit on $121.4 billion in revenue in the June quarter with 83,600 employees.

Apple made $7.3 billion on $28.6 billion in revenue with 46,600 employees last quarter.

Yesterday Apple revealed the changes it is making to the iconic Fifth Avenue Cube in a drawing on the side of the temporary construction barriers. The multi-million dollar upgrade will reduce the number of glass panes from 90 to 15 by using larger, seamless pieces of glass, and will give the cube a much cleaner, more streamlined look:

The above rendering of the new cube, provided to Gothamist by Apple, shows what the improved structure will look like. Compare the simplified glass structure in the rendering above to the much more complicated glass in the old cube:

The tall, huge pieces of glass bring to mind the glass frontages in newer Apple Stores like the Pudong location in Shanghai or the Upper West Side location in Manhattan. IFOAppleStore has additional details about the new glass technology behind the building.

The upgraded cube is scheduled for completion this November.

Gizmodo notes that the San Mateo County District Attorney has released an official statement announcing that misdemeanor charges have been brought against two individuals involved in the sale of an iPhone 4 prototype found in a bar back in March 2010 and subsequently sold to Gizmodo.

Gizmodo, parent company Gawker Media, and Gizmodo editor Jason Chen have been officially cleared and will not be charged in connection with the case. From the district attorney's press release:

The San Mateo County District Attorney’s Office has filed misdemeanor charges against two individuals for the misappropriation of an iPhone 4 prototype that was lost by an Apple employee and subsequently recovered in a Redwood City establishment by the defendants on March 25, 2010. Brian Hogan, 22, of Redwood City was charged with one count of misappropriation of lost property, and Sage Wallower, 28, of Emeryville, was charged with misappropriation of lost property, and possession of stolen property. Their arraignment is scheduled for Thursday, August 25, 2011 at 9:00 in Redwood City. After a consideration of all of the evidence, it was determined that no charges would be filed against employees of Gizmodo.

Hogan was the person who came into possession of the prototype iPhone in a Redwood City bar, with Hogan claiming that he had been handed the phone by another patron after Apple engineer Gray Powell left the phone on a bar stool as he left the establishment. Wallower has been said to have served as an intermediary who worked to shop the device to various tech sites before ultimately selling the iPhone to Gizmodo.

Last April, police officers entered Chen's apartment and seized a number of computers and other property thought to potentially be involved in the case. Controversy surrounded the seizure as Gizmodo and others claimed that the website and its employees should be protected under California laws shielding journalists from such actions as connected to their work. The search warrant was later withdrawn as Gizmodo agreed to cooperate with authorities and provide all relevant information pertaining to the investigation.

Wal-Mart today announced the debut of its VUDU video rental and purchase service for the iPad, avoiding Apple's required 30% cut of revenue for app-based content purchases by launching as a web app.

Beginning today, iPad users can go to VUDU.com and browse through VUDU’s entertainment content library, which includes more than 20,000 blockbusters, Hollywood classics, independent films and TV episodes, then rent or purchase and watch them instantly. For one touch access to VUDU, customers can add a VUDU icon to their iPad desktops by clicking the “Add to Home Screen” button when on VUDU.com.

VUDU's service is limited to standard definition and omits some titles such as those from Disney, but has proven to be a popular option for those looking for on-demand streaming, particularly for new releases not available through Netflix.

On a separate note, Digital Music News reports that Wal-Mart has also announced to its music partners that it will be shutting down its MP3 download store later this month. From the letter sent to Wal-Mart's distribution and licensing partners:

After eight years in business, the Walmart Music Downloads Store located at mp3.walmart.com will close on August 28, 2011. All content in the Store will be disabled and no longer available for download from the store.

"The sale of physical record music products on Walmart.com as well as in Walmart US retail stores will remain unaffected. Walmart Soundcheck (soundcheck.walmart.com) will remain operational as a live streaming site without any download options."

Wal-Mart notes that it will continue to provide support to customers who purchased tracks through the download store, but content will no longer be available for sale. The download store has been in existence since late 2003, but has had little success eating into the iTunes Store's dominance in the digital music download market.

While Apple has been engaged in a number of high-profile patent lawsuits with its competitors offering Android-based hardware, one of the quieter disputes has gained new attention today following a discovery by FOSS Patents that Apple has in fact sued Motorola in Europe, claiming that the Motorola Xoom tablet infringes upon the design of Apple's products. The revelation comes in a court document filed in Germany and associated with the preliminary injunction granted against Samsung yesterday barring sale of the Galaxy Tab 10.1.

Prior to or simultaneously with the motion for a preliminary injunction against Samsung, Apple also filed a complaint with the same court over the design of the Motorola Xoom tablet. Here's a passage from the Samsung complaint that mentions two other lawsuits Apple instigated against iPad competitors -- Motorola and a local German company named JAY-tech...

The document does not state whether Apple has pushed for a preliminary injunction against the sale of the Xoom in the European Union as it did for the Galaxy Tab 10.1, but Apple is presumably seeking a more permanent injunction against Motorola's tablet offering.

Apple also notes in its filing that a preliminary injunction against JAY-tech was granted and further upheld "in its entirety" following a hearing. Apple does not specify exactly what model of tablet from JAY-tech was the subject of the injunction, but JAY-tech last year began offering a budget 7-inch Android-based tablet, and the company no longer appears to be selling that product.

Motorola fired the first shot against Apple last October, claiming infringement of a series of 18 Motorola patents by a broad array of Apple's Mac and iOS products. Apple responded a few weeks later with a lawsuit focused on multi-touch functionality and targeting Motorola's Droid and other smartphones.

Things have generally been quiet between Apple and Motorola since the initial filings last year, but today's revelation makes clear that Apple has continued to press its case and gone on the offensive against not only Motorola's smartphones but also its tablets.

DigiTimes reports that Apple has been forced to shift some of its orders for iPad 2 display panels from LG Display to Samsung and Chimei Innolux after quality issues at LG resulted in unacceptable yields with the panels failing to pass drop tests. Apple has reportedly suspended new display orders with LG, which had been the largest panel supplier for the iPad 2, until the issues can be addressed.

LGD's 9.7-inch panels for the iPad 2 reportedly failed to pass drop tests, during which their backlight units (BLUs) failed, the sources said, adding the panels' yield rates were unable to meet Apple's requirements.

While LGD is working on solutions, the maker's monthly shipment goal of four million units has become unlikely. July shipments of the 9.7-inch panels reached only 2.5-2.6 million units, the sources said.

Much of the slack appears to have been taken up by Samsung, which reportedly produced nearly two million iPad 2 display panels during the month of July, significantly higher than its usual monthly output of slightly over one million panels.

Problems at LG and competitive issues with Samsung could serve to benefit Chimei Innolux, which is attempting to increase its share of display production for the iPad 2. The company's close relationship with iPad manufacturing firm Foxconn could also drive more production to Chimei Innolux going forward.

Apple initially struggled to meet strong demand for the iPad 2, with production constraints resulting in lower than expected sales during the device's launch quarter. But shipments grew last quarter to over 9 million units as Apple's production finally ramped up to meet the demand, and just last week the company dropped shipping estimates for new iPad 2 orders to the minimum "within 24 hours".

Last month, we saw a leak of the design specification which claimed to be for the iPhone 5. Chinese case manufacturers seem to be betting on that design as they've already started producing cases based on that design document. We'd even requested and received some early renders based on the case designs.

Given how predictive the case designs have been in the past, we commissioned CiccareseDesign to create high quality renderings made as closely as possible to the original leaked case designs. Measurements were taken against the original case design leaks, and then imported into 3D modeling software.

The designs show manufacturers what areas need to be open or exposed for cases, but reveal little else. In the past, this has caused some misunderstandings about future features. iPad 2 cases seemed to suggest an extra port at the top of the device, but that turned out to be a space for a microphone hole. Similarly, there are a few areas on the iPhone 5 case designs that are open to interpretation. Click on the images for a larger view.

The elongated hole for the home button has suggested that the home button may itself also become more oval in shape. That is the direction our designer took as well. It's also possible, however, that the home button will retain its round shape and Apple has simply allowed extra space for swiping across the home button in a left to right or right to left manner. These's been some speculation that Apple could allow such a gesture for users to quickly switch between multitasking apps.

The exact screen size is another aspect that was hard to determine on the design drawings alone. Our renderings have enlarged the screen size to the space shown on the case designs. But, Apple has introduced a "swipe down" from the top of the screen notification system in iOS 5 that could benefit from some extra finger-space near the top of the screen in order to properly register. So, it may be that the screen isn't quite as large as depicted by the cases, and simply Apple allowing for extra space for these swipes. The representation here, however, does show a 4 inch screen which preserves Apple's current screen ratio. Rumors have suggested that Apple may be enlarging the screen size in the upcoming iPhone models.

The back of the device has tapered edges which makes it look much closer to the iPod touch. As well, there had been rumors that Apple would be abandoning the glass backing of the iPhone 4 and instead moving back to an aluminum design.

The final dimensions of the new design are calculated to be: 4.33" x 2.36" and .27" thickness at the top and .21" at the bottom In comparison, the iPhone 4 dimensions are: 4.5" x 2.31" x .37". So the new design is actually shorter than the existing iPhone 4, but slightly wider and thinner.

Assuming the leaked case designs are accurate, the iPhone 5 should be close in appearance to these renderings. The iPhone 5 is expected to be released in September or October of this year.

Amazon has quietly launched a new web app called "Kindle Cloud Reader" that allows Chrome and Safari users to access their Kindle eBooks through their browsers. The Cloud Reader also supports the iPad version of Safari, giving Amazon a workaround to Apple's new subscription rules requiring any in-app sales to go through Apple's purchasing system.

As noted by TechCrunch, the new system is already live at http://read.amazon.com and works quite well on the iPad:

The iPad version is especially good because the store is fully optimized for the device. And you can easily switch back and forth between the store and your own library. It feels like a native app, but it’s not.

The web app even supports local storage so that you can read your Kindle books even without a web connection.

Apple has been at odds with many content providers after implementing their new subscription rules preventing native iOS app publishers from selling content outside of Apple's own in-app system. Amazon complied with the rules by removing the Kindle Store button from their native application, but for the iPad now has this web-based option that does directly integrate with their sales system.

Apple has begun sending emails when AppleID's are used to make purchases on iOS devices not previously associated with the account. It is likely these emails are being used as one way to combat increasingly frequent app purchase fraud.

MacRumors reader Michael had his iPhone replaced at an Apple Retail Store. After the first App Store purchase on the replaced phone, he received the above email. The email doesn't require confirmation of the purchase, but is instead a simple notification that a new device has been used and requests the user change their password if they don't recognize the activity.

Apple already requires credit card users to reenter the 3 or 4 digit CID number from the back of their credit card (front in the case of American Express) to authenticate the new device, however users with balances from iTunes Store Gift Cards aren't required to perform any special authentication other than entering their AppleID password.

A class-action lawsuit has been filed against Apple and 5 of the 6 major book publishers, alleging they "colluded to increase prices for popular e-book titles to boost profits and force e-book rival Amazon to abandon its pro-consumer discount pricing."

The lawsuit, filed this afternoon in the Northern District of California claims Apple and Hachette, HarperCollins, MacMillan, Penguin, and Simon & Shuster illegally worked together to enable an "agency model" as the standard for e-book sales, rather than the "wholesale model" that is used in the physical publishing industry. The complaint argues that the strategy was unfair and anticompetitive because e-book prices rose after the agreements were in place.

From the lawsuit:

In November 2007, Amazon revolutionized the book publishing industry by releasing the Kindle, a handheld digital reader for electronic books or “eBooks.” Using proprietary “electronic ink” technology, the Kindle replicated the appearance of ink on paper and introduced numerous efficiency-enhancing characteristics, including portability and other advantages of a digital format.

A major economic advantage to eBook technology is its potential to massively reduce distribution costs historically associated with brick-and-mortar publishing. But publishers quickly realized that if market forces were allowed to prevail too quickly, these efficiency enhancing characteristics would rapidly lead to lower consumer prices, improved consumer welfare, and threaten the current business model and available surplus (profit margins). So, faced with disruptive eBook technology that threatened their inefficient and antiquated business model, several major book publishers, working with Apple Inc. (“Apple”), decided free market competition should not be allowed to work – together they coordinated their activities to fight back in an effort to restrain trade and retard innovation. The largest book publishers and Apple were successful.

When Apple introduced the iBookstore, it used a so-called "agency model" where publishers set the price for their content and Apple takes a 30% cut. It's the same pricing model that Apple uses on the iTunes Store for music, and on the App Store. It's a change from the "wholesale model" that Amazon had been using for e-books and it and brick-and-mortar stores like Barnes & Noble continue to use for physical book sales.

Eventually, Amazon and the various book publishers came to agreements regarding the agency model and e-books have been priced that way ever since. Random House was the only major publisher to resist the agency model -- making it a late entry to the iBookstore. Random House books finally joined Apple's bookstore earlier this year.

Publishers were concerned that Amazon's aggressive $9.99/book pricing strategy -- where the bookseller sold books for a loss, presumably to drive adoption of its new Kindle platform -- would quickly erode the profits and reduce the perceived value of their books. Random House was concerned the agency model would lead to a price war between the publishing houses.

This lawsuit alleges that as a "direct result of this anticompetitive conduct as intended by the conspiracy, the price of eBooks has soared" and "bring claims under federal and state antitrust laws to enjoin the illegal conduct and to obtain damages."

We've uploaded the filing to Scribd.

Facebook has released Facebook Messenger, an iPhone app focused on chat and messaging. The dedicated app allows users to send messages directly to friends whether they are on phones or using the Facebook website.

Messenger is a separate app, so it only takes one click to get to your messages or send a new one. Messages are delivered through notifications and texts, so your friends are more likely to get them right away.

You can use Messenger to reach all of your friends -- whether they're on Facebook or in your phone contacts. All you have to do is type the person's name.

The app is integrated with the Facebook messaging and chat service and all conversations are archived as part of ongoing conversations on Facebook. The app allows users to share their location and attach photos to conversations. Users aren't restricted to chatting with one friend either, group conversations are easily created as well.

Facebook Messenger is a direct challenge to other messaging services like BlackBerry Messenger and Apple's forthcoming iMessage. Like those products, Facebook Messenger uses data, not text messages to communicate, which means the service isn't restricted by per-message charges or separate mobile phone charges.

Facebook Messenger is a universal app available for iPhone, iPad and iPod Touch, free from the App Store.