MacRumors

iPhoneography reports that Apple's Phil Schiller has apparently taken action based on a complaint that one App Store developer was boosting their app's ratings artificially with fake reviews:

Please investigate for I have just looked at 44 of the reviewers who posted reviews for this Molinker Inc app "NightCam Pro" & EVERY Review except 2 of the 44+ are ALL FAKE 5 [star] reviews.

The customer suspected that the developer had used their 50 promo codes to leave these 5 star reviews on the iTunes App Store. This customer then emailed Apple's Phil Schiller notifying him of the findings which quickly resulted in removal of this developer's 1900+ apps.

The practice of leaving positive ratings for your own applications is not an uncommon practice in the App Store, though Molinker's efforts appear to be on a much greater scale. Schiller's quick response is just another sign that Apple is taking recent App Store criticisms very seriously. Schiller has been directly involved in many of the App Store decisions and has even given interviews defending their policies.

Apple also recently reversed a much publicized policy to heavily restrict the use of any Apple hardware images within App Store Apps.

Media Memo reports that multiple sources are saying that Apple paid approximately $80 million in its acquisition of streaming music service Lala Media late last week.

Apple ended up paying around $80 million for the company, according to multiple sources. That's less than half of what investors valued the company at in 2008, but it's more than the $35 million the company raised throughout its life. Which means that some investors could get their money back and more.

The report notes that Warner Music Group had invested $20 million into Lala, but wrote down $11 million of that investment back in March. It remains unclear whether it will recoup its full $20 million investment with the sale or the smaller, post-write-down amount.

Lala reportedly possessed about $10 million in cash, meaning that it could have continued operating on its own for a significant period of time, but it appears that it sought a larger partner due to doubts about the company's ability to operate profitably as a stand-alone entity over the long-term.

Apple's exact motivation for purchasing Lala remains unclear, as some reports have suggested that Apple was primarily interested in the engineers behind Lala, while others have claimed that Apple is in fact looking to enter the streaming music business directly. Regardless of Apple's intentions, the purchase barely even dents its cash reserves, as the company reported approximately $34 billion in cash and cash equivalents at the end of its most recent quarterly reporting period.

Update: TechCrunch is now reporting that Apple's purchase price for Lala was only $17 million. Including Lala's reported cash reserve of $14 million, the purchase price would have valued the company itself at only $3 million.

Mobile analytics firm Flurry yesterday released a report promoting an interesting take on Apple's iPod touch market, one that sees its strong performance among young consumers as building a base that will naturally migrate to the iPhone as they mature.

As all industry eyes look to the iPhone, the iPod Touch is quietly building a loyal base among the next generation of iPhone users, positioning Apple to corner the smartphone market not only today, but also tomorrow. In terms of Life Stage Marketing, the practice of appealing to different age-based segments, Apple is using the iPod Touch to build loyalty with pre-teens and teens, even before they have their own phones (think: McDonalds' Happy Meal marketing strategy). When today's young iPod Touch users age by five years, they will already have iTunes accounts, saved personal contacts to their iPod Touch devices, purchased hundreds of apps and songs, and mastered the iPhone OS user interface. This translates into loyalty and switching costs, allowing Apple to seamlessly "graduate" young users from the iPod Touch to the iPhone.

As part of its metrics report, Flurry reveals an iPod touch market that is growing faster than the iPhone market in terms of "user sessions", with the iPod touch increasing its session share by four percentage points over that past five months while the iPhone's share has slipped by seven percentage points.

The New York Times yesterday published a lengthy feature article on Apple's iPhone and the App Store, calling them a "game changer" in the field of telephony and mobile applications. While the article provides little in the way of new information, the prominent story is part of a recent push by Apple executives to share their vision for the App Store and to address concerns from customers and iPhone developers over the App Store approval process.

In discussing the "game changing" nature of the App Store, the report quotes a "giddy" Apple senior vice president Phil Schiller, who has been Apple's primary point person for the media, particularly when it comes to the App Store.

"I absolutely think this is the future of great software development and distribution," Mr. Schiller says. "The idea that anyone, all the way from an individual to a large company, can create software that is innovative and be carried around in a customer's pocket is just exploding. It's a breakthrough, and that is the future, and every software developer sees it."

Addressing the issue of the App Store approval process, the report sees it as a "necessary evil" in order to provide a safe and secure repository of applications for customers' use. Regardless, Schiller claims that the vast majority of applications have little problem receiving approval, although there are occasional issues that crop up and the company appreciates the feedback it receives.

"I think, by and large, we do a very good job there," Mr. Schiller said. "Sometimes we make a judgment call both ways, that people give us feedback on, either rejecting something that perhaps on second consideration shouldn't be, or accepting something that on second consideration shouldn't be."

The article also compares the App Store's revolutionary impact on mobile applications to the iTunes Store's impact on the digital music industry, noting that while the App Store is part of the iTunes Store experience, it is a vastly different operation.

"A rocket ship is even too small of an analogy," says Eddy Cue, Apple's vice president for iTunes, of the App Store's popularity. "We've been able to leverage a lot of our iTunes technology for the App Store. But it's completely different. We're reviewing all of those apps. We really don't have to review each and every song."

But Apple is not alone in the industry, and the report highlights efforts on other platforms and how they differ from Apple's approach. Some companies, such as Research in Motion and Microsoft, acknowledge Apple's huge lead in the application market with over 100,000 applications and instead claim to be focused on the quality of their smaller application libraries. Others, such as Palm and Google, are offering a simpler or non-existent review process, touting unfettered access and content as their selling points.

Regardless of how things turn out in the future, the report's conclusion is that Apple's iPhone and App Store will almost certainly be seen as a "turning point" in the mobile communications industry, marking the transition of mobile phones into mobile computers.

In case you missed it, Apple acquired a streaming music service called Lala Media late last week. The acquisition has generated the obvious speculation about what Apple might do with a streaming music service. Apple's official response was, of course, unrevealing:

"Apple buys smaller technology companies from time to time and we generally do not comment on our purpose or plan."

While a New York Times article suggested it was primarily a talent acquisition with Apple's interest lying with the engineers, a Reuters source over the weekend suggests Apple is indeed looking towards adding streaming to iTunes:

"Apple recognizes that the model is going to evolve into a streaming one and this could probably propel iTunes to the next level," said the person.

The source also stated that Apple was looking into new ways to expand iTunes beyond being a download service for songs.

BrightSideofNews claims that Apple is refusing to accept Intel's upcoming mobile Arrandale chip which incorporates Intel's integrated graphics chipset:

According to sources close to the heart of the matter, Apple allegedly refused to adopt Intel's Arrandale and the Calpella platform in its default form. In order for Apple to implement Calpella design with their next refresh of Mac mini / MacBook / MacBook Pro lines, Intel will have to provide Apple with the 32nm version without the integrated graphics part. Again, we cannot confirm the information about the replacement CPU, we only know that Apple rejected Arrandale.

The report has generated some debate in our Waiting for Arrandale thread both due to the untested source of the rumor as well as the technical implications of creating a custom chip just for Apple.

Intel's addition of integrated graphics into the Arrandale processor comes at an interesting time with the legal battle ongoing between Intel and NVIDIA. Apple had switched from Intel to NVIDIA chipsets for their most recent line of notebook computers. The transition from Intel to NVIDIA in that case resulted in significantly improved integrated graphics performance in the latest round of MacBooks and MacBook Pros. Due to a licensing disagreement with Intel, NVIDIA has since exited the chipset market. Intel's new integrated graphics chipset included in Arrandale is said to be a significant improvement over their previous offerings. Apple, of course, would still be able to offer additional "discrete" graphics cards in their notebooks in conjunction with Intel's system.

The benefit of a custom graphics-less Arrandale, however, is less clear, though Intel and Apple have been known to collaborate on custom chip designs, as in the CPU found in the original MacBook Air. The past report had suggested that Intel and Apple were continuing to work on more projects that were "equally aggressive".

We're not sure what there is to these claims, though based on timelines, the MacBook Pro line is due to be refreshed in the first half of 2010.

It appears the last minute reports of Apple's interest in streaming music company Lala media were true. Both the New York Times and Wall Street Journal are reporting that Apple has indeed acquired Lala Media.

Lala is a four year old startup company that offers customers streaming music not unlike the popular Pandora music service.

Lala's engineers have built a service that music enthusiasts say is very easy to use. Lala scans the hard drives of its users and creates an online music library that matches the user's collection, making it painless (and free) for people to get their music in the cloud.

Like Pandora, Lala's music is streamed from the internet rather than stored locally. This allowed users to listen to a catalog of over 7 million songs for free as a stream over the web -- much like internet radio. If you wanted to buy the right to listen to a particular song on demand an unlimited amount of times from the web, it would cost $.10. In order to permanently download the song to your hard drive or device, however, it would cost the more traditional $.79-$.89 per song.

Of the acquisition, Apple spokesman Steve Dowling said "Apple buys smaller technology companies from time to time and we generally do not comment on our purpose or plan."

Apple's interest in Lala sparks a number of possibilities for the direction of the company. Pandora's iPhone app, in particular, has been enormously successful by allowing individually tailored music to be streamed over cellular and Wi-Fi connections. It's natural to believe that Apple may offer a competing service for the iPhone based on this acquisition or Apple could also use the technology to bolster their iTunes Genius recommendations with personalized streaming music.

Silicon Alley Insider reports that Apple has been told to pay a $21.7 million patent infringement judgment to OPTi Inc., a former semiconductor company that abandoned its business to focus on pursuing patent claims against other companies.

The patent in question involves "predictive snooping" technology for transferring data and the suit was initially found in OPTi's favor by a jury back in April with Apple ordered to pay $19 million to OPTi. For unknown reasons, the judgment is only now being finalized, with Apple being ordered to pay an additional $2.7 million in pre-judgment interest.

The decision was made in the plaintiff-friendly U.S. District Court for the Eastern District of Texas. Because Apple did not willfully infringe on the patent, it does not have to reimburse any attorney fees.

Obviously $21.7 million is couch change to Apple, and they have every incentive to keep fighting a patent troll. So it's possible it will appeal.

As Digital Daily notes, OPTi previously won a $10 million verdict and ongoing licensing fees from NVIDIA, and has also sued AMD over the same patent.

In other patent lawsuit news, The Loop reports that Apple has been sued by St. Clair Intellectual Property Consultants over several patents it claims are being violated by Apple's iPhone camera.

Filed in the United States District Court in Delaware, the lawsuit claims that Apple's iPhone camera infringes on four separate patents including the '459, '219, '010 and '899 patents the company holds.

Apple is again not alone in being a target for St. Clair, as the group previously won significant judgments against Sony and Canon and has brought suits against a wide variety of major camera and technology companies.

CNET reports that Apple is in "advanced" negotiations to acquire music streaming firm Lala. The news comes from two sources who reportedly have knowledge of the discussions between the two companies.

Talks are very advanced, said the sources. One of the sources said that the sides have already agreed on terms and have only to sign a final agreement.

Steve Dowling, Apple's spokesman, said the company doesn't comment on rumors and speculation. A representative from Lala was not immediately available.

The report notes that it is unclear what Apple's plans would be for Lala, as it already holds a dominant position in the online music industry. Lala's streaming service, however, allows users to store music on the company's servers and stream it to any Web-enabled device. Such services have become more popular with consumers, and Apple may be looking to make a foray in that direction.

Lala recently partnered with Google to offer music samples in Google's search results.

CNET reports on new data from market research NPD showing that Apple models grabbed the top spots in both the desktop and notebook computer U.S. retail sales lists for the month of October. Among desktops, the company's new 21.5" iMac grabbed the #1 spot, with the 27" iMac taking the third spot. In the notebook category, Apple's entry-level 13" MacBook Pro took top honors, with three other Apple notebooks finishing in the top ten.

NPD previously reported that Apple had recorded nearly half of U.S. desktop retail revenue during October, pointing to the launch of new iMacs and a slowdown in Windows-based computer sales ahead of the release of Windows 7 as factors contributing to the company's strong performance during the month. NPD's Stephen Baker again cited those factors in the release of its latest data.

"Apple gets a bounce whenever they come out with new computers," Baker said. "For the most part, October was a down month on the Windows side because [PC manufacturers] were working through inventory before the Windows 7 launch."

NPD's data covers only online and retail store sales and does not include direct sales, resulting in an incomplete picture of the true market. It does, however, provide an interesting glimpse into the performance of Apple and other manufacturers.

In mid-October, it was reported that Apple's Safari for Windows browser was slated to receive prominent placement on a "browser ballot" designed to allow Windows users in Europe to select which Internet browser they wished to use. The ballot process was included by Microsoft to address anti-competitive concerns there, where the company has been found at fault for its integration of Internet Explorer with Windows.

Apple benefited from the proposed ballot plan due to Microsoft's proposal that the top five browsers be listed in alphabetical order by company, placing Apple's Safari browser for Windows in the primary position ahead of Google's Chrome, Microsoft's Internet Explorer, Mozilla's Firefox, and Opera. The arrangement, however, drew criticism from a variety of sources, unsurprisingly including Mozilla and Opera.

Yesterday, Bloomberg reported that Microsoft has revised its plans for the browser ballot, and among the revisions was a change that will randomize the list of top five browser each time the list displayed.

Under the modified settlement, computer users with Windows will see a "ballot screen" that randomly lists the top five Web browsers that compete with Internet Explorer, the people said. Users would then click on a browser's icon and the program would be downloaded from the Internet.

Redmond, Washington-based Microsoft, the world's largest software maker, agreed to changes in the ballot screen following complaints from Opera, Google Inc., and Mozilla Corp., maker of the Firefox browser, according to the people.

Despite the change, Apple still stands to gain from the inclusion of Safari on the primary ballot screen. Safari 4 for Windows held only a 0.29% share of the total worldwide market, suggesting that Apple may have much to benefit from in its inclusion with other major Windows browsers on the ballot.

The Cupertino Courier reports that the Cupertino planning commission voted earlier this week to rezone a 7.78-acre portion of a 50-acre property assemblage owned by Apple to allow the company to build its planned second corporate campus just a few miles from its headquarters. Apple announced in April 2006 that it had purchased the properties and planned to consolidate at the new campus its scattered leased facilities acquired as the company underwent rapid expansion.

The site, which is south of the Hewlett-Packard campus, houses two office buildings currently occupied by Apple employees.

The buildings were already on the property from the site's industrial days. Before Apple purchased the property in 2006, the city rezoned the industrial site to residential in anticipation of a 130-unit townhouse and condominium project that previous property owners Morley Brothers had proposed.

Apple reportedly does not yet have specific plans for the new campus, but required the rezoning, which had been considered but not approved by the planning commission earlier this year, in order to begin its planning and design process.

Aside from its main headquarters at 1 Infinite Loop, Apple has employees spread out in buildings along De Anza Boulevard and throughout the city. Jobs described the far-flung nature as frustrating. He said he hoped they would be able to consolidate all Cupertino employees at the current Infinite Loop campus and at a future campus.

A one-acre section of the property, which lies directly adjacent to Interstate 280, will remain zoned for a public park.

Apple has quietly upgraded its Mac Pro offerings, adding the option of a 3.33 GHz quad-core processor and adding the ability to configure both the quad-core and 8-core models with 2 TB hard drives, doubling the machine's total build-to-order hard drive capacity to 8 TB.

The additional option of configuring the Mac Pro with 2 TB hard drives, an increase from 1 TB drives available previously, expands the official total hard drive capacity of the Mac Pro, which carries four hard drive bays, to 8 TB. The 2 TB hard drives are priced at $550 each.

The current generation of Mac Pros were introduced in March 2009, receiving early access to Intel's latest Nehalem processors before they had even been officially announced.

Update: Apple has also upgraded its configurable options for its Xserve rackmountable servers, now offering 2 TB hard drives for a total hard drive capacity of 6 TB. The company has also begun offering 4 GB RAM modules, doubling the official total memory capacity of the quad-core Xserve to 24 GB and the 8-core Xserve to 48 GB.

Motorola announced this week that they have invested in a multi-touch company named Sensitive Object. This startup company is working on a new form of multi-touch using "acoustic tactilization" that is said to offer "lower cost and higher performance" than competing technologies. Motorola plans on using the technology in their phones in the future.

Sensitive Object first revealed their technology back in April. The new system uses sound waves to provide touch-sensitivity to the entire surface of products, including screens but also any other parts of the product. Materials such as glass, aluminum and plastics can be turned into touch sensitive objects.

This new platform provides flexibility to designers, manufacturers and software editors as Sensitive Object technology offers the capability to add multi-touch parts anywhere, and associated functionality specific to running applications (e.g.: a game application running on a mobile phone uses both the top, bottom, or rear of the handset as touch sensitive parts; while an email application only needs one edge to scroll the text).

The flexibility is intriguing with the possibility of having a device like the iPhone with touch-sensitive inputs on the back-side of the device. Apple explored this exact possibility in a patent application from 2007, though it was unclear what technology they planned on using. This acoustic touch technology could presumably also be extended to the surfaces of notebook computers. The amount of Motorola's investment is unknown.

Apple, of course, has invested heavily in multi-touch technologies over the past few years featuring it prominently in the iPhone and iPod Touch. They have since extended its use to laptop trackpads and most recently into the Magic Mouse, a multi-touch mouse. Apple is expected to feature multi-touch prominently in their rumored tablet and there has been speculation that they may revive some sort of multi-touch keyboard/pad.

Despite there being a vocal outcry for Apple's iPhone to transition to the Verizon network, a couple of analyst reports this week cast doubts that we would see a Verizon iPhone in the near future. Both reports, however, seem to be based on speculation rather than any particular inside source.

Thomas Weisel analyst Doug Reid kicked off the week saying that there appears to be a growing divide with Verizon/Google/Droid on one side and AT&T/Apple/iPhone on the other. He offers T-Mobile as a possible alternative for Apple to break the iPhone's single carrier exclusivity in 2010. T-Mobile, however, has a much smaller customer base than Verizon with only half as many users. Reid expects that Verizon may opt to offer the rumored Apple Tablet or wait for an iPhone that supports 4G networks which are expected in 2011-2012.

Meanwhile, Kaufman Bros Shaw Wu echoed similar thoughts on Wednesday, noting that both Verizon and Apple have become increasingly competitive and offers T-Mobile or Sprint as possible alternatives.

Again, both reports are speculative, but are perhaps a good reminder that very few credible sources have actually confirmed that the iPhone will be offered by Verizon. The expiration of AT&T's exclusivity (believed to be) in mid-2010 makes the move possible, but the best evidence so far has been the rumor that Apple may be manufacturing a Verizon-capable phone in late 2010.