And Then Steve Said, ‘Let There Be an iPhone’

The 55 miles from Campbell to San Francisco make for one of the nicest commutes anywhere. The journey mostly zips along the Junipero Serra Freeway, a grand and remarkably empty highway that abuts the east side of the Santa Cruz Mountains. It is one of the best places in Silicon Valley to spot a start-up tycoon speed-testing his Ferrari and one of the worst places for cellphone reception. For Andy Grignon, it was therefore the perfect place for him to be alone with his thoughts early on Jan. 8, 2007.

This wasn’t Grignon’s typical route to work. He was a senior engineer at Apple in Cupertino, the town just west of Campbell. His morning drive typically covered seven miles and took exactly 15 minutes. But today was different. He was going to watch his boss, Steve Jobs, make history at the Macworld trade show in San Francisco. Apple fans had for years begged Jobs to put a cellphone inside their iPods so they could stop carrying two devices in their pockets. Jobs was about to fulfill that wish. Grignon and some colleagues would spend the night at a nearby hotel, and around 10 a.m. the following day they — along with the rest of the world — would watch Jobs unveil the first iPhone.

But as Grignon drove north, he didn’t feel excited. He felt terrified. Most onstage product demonstrations in Silicon Valley are canned. The thinking goes, why let bad Internet or cellphone connections ruin an otherwise good presentation? But Jobs insisted on live presentations. It was one of the things that made them so captivating. Part of his legend was that noticeable product-demo glitches almost never happened. But for those in the background, like Grignon, few parts of the job caused more stress.

Grignon was the senior manager in charge of all the radios in the iPhone. This is a big job. Cellphones do innumerable useful things for us today, but at their most basic, they are fancy two-way radios. Grignon was in charge of the equipment that allowed the phone to be a phone. If the device didn’t make calls, or didn’t connect with Bluetooth headsets or Wi-Fi setups, Grignon had to answer for it. As one of the iPhone’s earliest engineers, he’d dedicated two and a half years of his life — often seven days a week — to the project.

Grignon had been part of the iPhone rehearsal team at Apple and later at the presentation site in San Francisco’s Moscone Center. He had rarely seen Jobs make it all the way through his 90-minute show without a glitch. Jobs had been practicing for five days, yet even on the last day of rehearsals the iPhone was still randomly dropping calls, losing its Internet connection, freezing or simply shutting down.

“At first it was just really cool to be at rehearsals at all — kind of like a cred badge,” Grignon says. Only a chosen few were allowed to attend. “But it quickly got really uncomfortable. Very rarely did I see him become completely unglued — it happened, but mostly he just looked at you and very directly said in a very loud and stern voice, ‘You are [expletive] up my company,’ or, ‘If we fail, it will be because of you.’ He was just very intense. And you would always feel an inch tall.” Grignon, like everyone else at rehearsals, knew that if those glitches showed up during the real presentation, Jobs would not be blaming himself for the problems. “It felt like we’d gone through the demo a hundred times, and each time something went wrong,” Grignon says. “It wasn’t a good feeling.”

The preparations were top-secret. From Thursday through the end of the following week, Apple completely took over Moscone. Backstage, it built an eight-by-eight-foot electronics lab to house and test the iPhones. Next to that it built a greenroom with a sofa for Jobs. Then it posted more than a dozen security guards 24 hours a day in front of those rooms and at doors throughout the building. No one got in without having his or her ID electronically checked and compared with a master list that Jobs had personally approved. The auditorium where Jobs was rehearsing was off limits to all but a small group of executives. Jobs was so obsessed with leaks that he tried to have all the contractors Apple hired — from people manning booths and doing demos to those responsible for lighting and sound — sleep in the building the night before his presentation. Aides talked him out of it.

Fred Vogelstein is a contributing editor for Wired. His book “Dogfight: How Apple and Google Went to War and Started a Revolution” will be published in November.

Editor: Dean Robinson

Pogue’s Posts Blog: Yes, There’s a New iPhone. But That’s Not the Big News.

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Cheaper iPhone Will Cost More in China

But the cost of the phone — more than $700 in China — will still keep Apple’s phones beyond the reach of most Chinese consumers. And that predicament only underscores what has become increasingly clear in recent months: that Apple’s fortunes in China largely depend not on any phone, but on reaching a deal with China Mobile, the country’s largest cellphone carrier.

On Wednesday, Apple took another step in that partnership, when the Chinese government said that Apple’s phones could run on China Mobile’s new cell network, essentially paving the way for a deal between the companies.

An agreement would instantly give Apple access to China Mobile’s 700 million customers, and reaching it might require Apple to bend on price. China Mobile has been holding out on a deal for years, and it is now positioned to ask for better terms with Apple.

“The only way they’ll have a significantly better time in China over the next 12 months is if they can sign China Mobile,” said Jan Dawson, a telecom analyst for Ovum. “A small percentage would be a large number of new customers for Apple. So it’s even more crucial now that Apple gets that deal done.”

Apple has recently pursued an aggressive strategy for China. For the first time, Apple’s new phones will be released in China at the same time as they are in the United States. Analysts say the new gold color being offered for the higher-end iPhone 5S was probably designed for wealthy Chinese who enjoy flashing smartphones the same way they show off jewelry. And Apple has tailored some software features of its products for the Chinese, including easier setup for Chinese e-mail services.

China’s cellphone market is growing quickly, surpassing the American market last year. But so far, most Chinese consumers are gravitating toward cheap Android smartphones that can be bought for as little as $100 at full price from handset makers like Xiaomi, Huawei and ZTE.

Apple has been left as No. 6 in the Chinese market, and sales of its products in the country were down 4 percent in the second quarter compared with the same period last year. Though Apple is still enormously successful, its profit growth has slowed and its stock price has struggled. On Wednesday, the company’s shares fell more than 5 percent.

In exchange for adding Apple to its lineup, China Mobile may demand that Apple help subsidize the cost of the iPhones. It might ask for a better cut of each iPhone sale. Or it could just ask for a more lax contract, in which it can reduce the prices of the phones. In the United States and some European markets, Apple has forbidden carriers from discounting the price of the iPhone.

“With every passing month, China Mobile is getting stronger and Apple is getting weaker,” said Tero Kuittinen, a mobile analyst for Alekstra. “We have a moment where all of the cards are in China Mobile’s hands.”

When the new iPhones, the 5C and 5S, are released on Sept. 20, they will be available through two other Chinese mobile carriers, China Unicom and China Telecom, which together have more than 400 million subscribers.

Apple said on its Web site that the iPhone 5C, the cheaper model, would start at 4,488 renminbi, or $733, without subsidies from mobile operators. The new flagship iPhone 5S will start at 5,288 renminbi, or $864. That price is more than one-third higher in China than the $650 unsubsidized cost for the iPhone 5S in the United States.

Apple products have always been more expensive in China than in the United States — even though iPhones are actually assembled in China. That is because iPhones sold in China are subject to a 17 percent value-added tax, while those that are exported can be sent abroad tax-free.

The cost in mainland China is also higher than it is in Hong Kong, where there is no value-added tax or sales tax. There, Apple announced a price of 4,688 Hong Kong dollars, or $604, for the iPhone 5C.

Yet even with that 17 percent factored in, Apple appears to be marking up the iPhone 5C substantially in China, potentially giving the company room to maneuver later. Chinese carriers do not generally subsidize the handset price for consumers, but they often discount their monthly bills. So the eventual cost to consumers has plenty of room to come down.

Some analysts said Apple might have announced a high initial price in China to justify eventual price cuts. If an agreement with China Mobile were to come soon, Apple could then reap a marketing benefit by cutting prices just as it gained access to a vast new consumer base.

Ben Bajarin, a technology analyst for Creative Strategies, a consulting firm, said it was possible that China Mobile could trim the cost of the iPhone 5C and use the device to lure customers into paying for more expensive smartphone plans.

“That’s the one thing the iPhone’s been remarkably good at,” he said, “is driving value to the premium data service.”

Eric Pfanner reported from Tokyo.

Eric Pfanner reported from Tokyo.

This article has been revised to reflect the following correction:

Correction: September 13, 2013

An earlier version of this article misstated the price of the least expensive unsubsidized iPhone 5S in the United States. It is $650, not $550.

Bits Blog: A Day in the Life of My iPhone

Labor Rights Group Accuses iPhone Maker of Abuses

The rights group, China Labor Watch, based in New York, said it had found violations of the law and of Apple’s pledges about working conditions at factories operated by the Taiwanese company, Pegatron.

Conditions in Chinese factories that produce iPhones and other popular Apple products have been under scrutiny after complaints about labor and environmental violations by another Taiwanese supplier, Foxconn.

Apple said in a statement that it was “committed to providing safe and fair working conditions” and would investigate the claims about Pegatron.

In a separate statement, Pegatron’s chief executive, Jason Cheng, also promised to investigate. China Labor Watch said its investigation covered two factories in Shanghai and one in nearby Suzhou that employ a total of 70,000 people. It found violations including discrimination against ethnic minorities and women, excessive work hours, poor living conditions, health and safety problems and pollution.

Pegatron assembles products including the iPhone 4, iPhone 4S and iPhone 5 for Apple, according to the report.

Apple said it had confirmed one accusation by China Labor Watch — that the identity cards of some workers were being held by management — and had told Pegatron to stop.

Apple has published a code of conduct for its suppliers and joined the Fair Labor Association, a worker rights monitoring group.

The association inspected Foxconn factories early last year and said in August that improvements it had recommended were being carried out ahead of schedule.

Conditions in factories in China are a sensitive issue for foreign companies that outsource the production of shoes, consumer electronics and other goods to contractors.

In its report Monday, China Labor Watch said the majority of Pegatron production employees worked 66 to 69 hours a week, far above China’s legal limit of 49 hours. It said pregnant women were sometimes required to work 11-hour days, more than the eight-hour legal limit, and employees were under pressure to falsify time cards to conceal the violations.

The group accused Pegatron of “discriminatory hiring practices” including refusing to hire those older than 35 or members of the Hui, Tibetan or Uighur ethnic minorities.

The group said production line workers sometimes dumped water laced with hazardous chemicals from cutting tools into sewers.

Apple, based in Cupertino, California, said it would send auditors to three Pegatron facilities this week to investigate the report’s claims.

The company said it had conducted 15 comprehensive audits of Pegatron facilities since 2007, including surprise audits in the past 18 months. It said the audits had covered more than 130,000 employees.

“Apple is committed to providing safe and fair working conditions throughout our supply chain,” the company statement said. “If our audits find that workers have been underpaid or denied compensation for any time they’ve worked, we will require that Pegatron reimburse them in full.”

The company said its own audit had found that Pegatron employees making Apple products worked 46 hours per week on average.

Pegatron, founded in 2008, also manufactures desktop and notebook personal computers, LCD televisions, broadband and wireless systems and other products.

“We take these allegations very seriously,” Mr. Cheng, the Pegatron chief, said in a statement. “We will investigate them fully and take immediate actions to correct any violations to Chinese labor laws and our own code of conduct.”

Bits Blog: The iPhone Hasn’t Saved T-Mobile USA Yet

Reuters John Legere, chief executive of T-mobile, at an event in March to announce the carrier’s new iPhone offering.

There’s no question that finally being able to sell Apple‘s iPhone was good for T-Mobile USA, the struggling carrier that bled many subscribers to its rivals over the last few years, partly because it lacked the iPhone. Now the question is when — or if — adding the phone will help lead the company to a meaningful comeback.

Kantar Worldpanel, a research firm, published a report on Monday suggesting that T-Mobile has an awfully long way to go. The company’s share of the wireless market was 10.1 percent in the three months ending in May, down from 13.5 percent over the same period last year.

It’s worth noting that the iPhone didn’t become available on T-Mobile until April. And Dominic Sunnebo, an analyst at Kantar, said T-Mobile’s strength with the iPhone appeared to be attracting people who were buying smartphones for the first time. Of T-Mobile consumers who bought an iPhone, 53 percent had previously owned a traditional cellphone, also called a feature phone, he said. The problem for T-Mobile, though, is the dwindling number of people still using feature phones. Earlier this year, global shipments of smartphones surpassed feature phones.

To stage a true comeback, T-Mobile will need to lure subscribers from rivals like AT&T and Verizon. That still appears to be a difficult task, and not only because both AT&T and Verizon have long offered the iPhone. Both those carriers are significantly ahead of T-Mobile in the race to deploy fourth-generation wireless networks — and when it comes to choosing a carrier, customers care about the coverage and speed of their service. T-Mobile only recently started turning on its fourth-generation network, called LTE, in a small number of cities, whereas AT&T has deployed 4G LTE in about 300 markets, and Verizon Wireless has LTE in about 500 markets. T-Mobile is expected to make more announcements about its network on Wednesday at a press event in Manhattan.

For now, T-Mobile is trying to separate itself from the competition with its phone plans. In a marketing campaign, the company calls itself the “uncarrier” — a wireless company that is different because it cares about what customers want. Part of the campaign involved breaking away from traditional two-year contracts and offering unlimited data plans.

Gadgetwise Blog: Wireless Charging on the Go for the iPhone 5

The PowerSnap kit from Duracell includes the AccessCase and the SnapBattery.

Duracell wants to make sure you never have to beg for a phone charger or hunt for a power outlet again.

The copper-top battery maker recently introduced a charging case for the iPhone 5 that works with its Powermat, a charging station for mobile devices that was introduced in 2009.

The Powermat charges devices that are laid on it through inductive technology. Unfortunately, that technology has yet to be incorporated into Apple devices, so Duracell has come up with the PowerSnap Kit, which includes an AccessCase and a SnapBattery, both designed for the iPhone 5.

The case comes in two parts: the top snaps on the phone and the bottom includes a Lightning connector. They clip together, but a single unit would have been better. The case feels fragile, as if it would crack easily if the phone were dropped.

Once encased, the phone will charge when placed on a Powermat. A magnet ensures the phone is aligned properly; the mat chirps when the alignment is correct, and again when the phone is removed. I was able to fully charge my phone on the Powermat in two hours.

If a Powermat is not available, the SnapBattery is a capable backup. It attaches to the back of the AccessCase, adding a little bulk but also more protection. It was a little tricky to slide into place, but once it was there, it held firm. The battery can be charged on a Powermat or via a USB cable.

The PowerSnap Kit costs $100; it is available on Duracell’s e-commerce site and at other retailers. The Powermat is sold separately, but Duracell has partnerships with sporting arenas and airports to install Powermat stations that are free to use.

Duracell is also testing the Powermat in Starbucks locations in the Boston area. On a recent trip to Boston, I took the opportunity to check out the Powermat stations, which were inlaid in a long table inside a Starbucks. They worked remarkably well, even the one that was cracked, charging my phone the instant I laid it down.

Duracell is negotiating with wireless carriers to incorporate the technology inside smartphones, but it faces competition. Wireless charging stations could become as ubiquitous as Wi-Fi hot spots, but it remains to be seen whether Powermat will dominate.

State of the Art: Microsoft Office for the iPhone Is Here. Yawn.

Office for iPhone is big news, but not because the software is earthshaking. No, it’s a big deal primarily because of the politics of the situation — the optics, as public relations people say.

Here is Microsoft — the once-mighty software global overlord, years into its repeated failures to produce a successful smartphone — creating an app that lets you edit Word, Excel and PowerPoint files on the gadget that defeated it, the iPhone. It’s as if somewhere along the line, Microsoft executives started wearing “If you can’t beat ‘em, join ‘em” T-shirts.

Microsoft, of course, doesn’t see it that way. The company reports tiny but measurable upticks in sales of its own Windows Phone (which actually is a terrific phone). So why, then, did Microsoft create Office Mobile for the iPhone?

Here’s a hint: You can’t buy the Office Mobile app outright. It’s free with your paid subscription to Microsoft’s Office 365 plan, which costs $100 a year. It’s a service that lets you download Word, Excel and PowerPoint to up to five Mac or Windows computers.

Since Office 365 arrived, Microsoft has been busily trying to sweeten the offer. Office 365 membership gets you one hour of free phone calls a month using Skype. It also gives you 20 extra gigabytes of storage on the SkyDrive, an online hard drive for backing up or transferring documents. (Nonsubscribers get 7 gigabytes free.)

And now it gets you this app for iPhone (iPhone 4 and later) and iPod Touch (5 or later). That’s why its impressively clunky full name is Office Mobile for Office 365 Subscribers. (Office Mobile is already available on Windows Phones, and doesn’t require any subscription.)

You can run the app on up to five iPhones. If you ever stop paying for your Office 365 membership, the app stops working. Your documents are safe in that case, however. They’re both on your phone (until you delete the app) and on your free SkyDrive.

To use the app, you enter your Office 365 name and password. Once you’ve signed in, you see a list of all the Word, Excel and PowerPoint files that you’ve stashed on your SkyDrive. When you select a document’s name, it rapidly downloads to your phone, and you can work on it without an Internet connection. Next time you’re online, the changes get sent back to the SkyDrive original. You can also use Office Mobile to edit documents that people sent to you as attachments in the iPhone’s Mail app.

But once you tap a document to open it, you quickly discover that this app isn’t anything like the full Microsoft Office — it’s more like the Microsoft Vestibule. It’s extremely stripped down. It offers only the features Microsoft thinks you’ll realistically use on a bus or in the doctor’s office with nothing but your phone in hand.

The miniature Word module, for example, offers comments, outline view, bold/italic/underline/strikethrough styles, font and background colors and highlighting. You type, cut, copy and paste using variations on the iPhone’s standard finger gestures. And when you open a Word document, it jumps to the spot where you were last reading on your computer. Slick.

Notably absent: style sheets (normal, heading 1 and so on). Spelling checker. An undo command. The ability to change the font or insert a graphic. You can make the type bigger or smaller, but you can’t specify a size by number. Layout-intensive documents — lots of boxes, embedded graphics and so on — sometimes don’t come through to the phone fully intact.

The Excel module is by far the most fully featured app. It displays most elements of a spreadsheet, including charts and graphics. You can scroll around with your finger, zoom in or out with two fingers, lock a row or a column so it doesn’t scroll, rotate the phone for a wider view, edit comments, flip into outline view, edit formulas, create graphs, change numbers, sort, find, filter and format text and numbers. If the sheet has multiple pages, you can switch among using bottom edge tabs, exactly as on a computer. There’s an undo command. (Why here, and not in Word?)

Notably absent: you can’t rearrange rows or columns (although you can adjust row heights and column widths), and you can’t insert new ones.

Bits Blog: Positive Response to New iPhone Antitheft Feature

Eric Risberg/Associated Press Craig Federighi, Apple’s senior vice president for software engineering, demonstrated the new Activation Lock feature at the company’s annual developer’s conference on Monday.

Thefts of Apple iPhones have become so widespread that the police have coined the term “Apple picking” to describe the crime. Apple says it has come up with a solution for the problem, and legal officials are already showing thanks to the company.

Apple on Monday said its next mobile operating system, iOS 7, due out in the fall, will include a feature called Activation Lock that should help deter theft. The feature disables the iPhone even if a thief has turned it off or erased the data on the phone. It can be reactivated only after the user logs into it with the right Apple ID and password.

George Gascón, the district attorney of San Francisco, and Eric Schneiderman, the attorney general of New York, have been pushing smartphone makers to do more to protect customers. They have arranged a meeting in New York on Thursday with representatives from Apple, Motorola Mobility, Samsung and Microsoft to discuss ways to deal with the issue.

After hearing about Apple’s Activation Lock, Mr. Gascón and Mr. Schneiderman issued this joint statement:

‘Apple Picking’ is a huge epidemic in the United States. We are appreciative of the gesture made by Apple to address smartphone theft. We reserve judgment on the activation lock feature until we can understand its actual functionality. We look forward to having a substantive conversation with Apple and other manufacturers at our Smartphone Summit on Thursday. We are hopeful that the cellphone industry will imbed persistent technology that is free to consumers that will make a phone inoperable once stolen, even if the device is off, the SIM card is removed, or the phone is modified by a thief to avoid detection.

The wireless carriers last year started a nationwide database that was supposed to blacklist phones reported stolen, preventing them from being reactivated on an American network. But the police say the carrier database has been ineffective. Phone theft has only gone up. In fact, in several metropolitan cities it has reached a record high.

Gadgetwise Blog: Finding Inner Peace, iPhone in Hand

The Inner Balance app from HeartMath.

HeartMath, a creator of science-based solutions to reduce stress, recently turned to a stress inducer, technology, to create a tool to help users achieve serenity.

HeartMath may seem like an odd name for a stress reliever; the word “math” can cause some people to break into a sweat. But its new app, called Inner Balance, is a better indicator of what the company is offering.

The app, available free for Apple iOS devices, provides instructions and feedback on techniques for breathing and focusing. It works with the company’s sensor, which costs $99.

Clip the sensor to your earlobe, and Inner Balance reads your pulse and develops a pattern to help you synchronize your heart and breathing rhythms. A typical session takes about three minutes.

The sensor does not have a Lightning connector, so it is not compatible with the iPhone 5. It does include an adapter for other iOS devices, so I downloaded Inner Balance on my iPad and prepared for my journey to inner peace.

I found the app simple to use and remarkably soothing. Once I focused my attention on the rainbow flower on the screen, I was able to match my breathing to its pulsating pattern. After only a few minutes, I felt calmer and more rested.

After a session, you get lots of charts, graphs and numbers (again, math). But the app does a thorough job of tracking your progress and providing goals for improvement without feeling too New Agey.

In fact, HeartMath went a long way to make Inner Balance appear scientific. A little too far, because the interface felt technical and cold, like something you might encounter in a doctor’s office. I don’t need Deepak Chopra whispering positive affirmations in my ear, but some calming music or even white noise would help me relax.

The HeartMath app and sensor can be beneficial tools for reducing stress, but with dozens of competitors it doesn’t feel worth the cost. Heck, you could just close your eyes and count to 10, free.

Gadgetwise Blog: A Fitting Screen Protector for the iPhone 5

While clear film phone screen protectors can be a good idea, applying them requires a lot of patience and some skill. Otherwise you end up with a bubble-filled membrane that is hard to type on and see through.

A diagram of the Tru-Fit assembly.

Trü Protection is trying to simplify the process for iPhone 5 owners with a mounting system intended to automatically align a phone and a screen protector.

It’s called Trü-Fit, and here’s how it works.

Inside the package are screen cleaners, two protective screens and a tray.

Obviously, use the cleaners to clear your phone screen. When the glass is prepped, take the protective screen cover and slide it into the tray. You then peel back a tab that exposes an adhesive. Then the phone goes into the tray, face down, over the sticky screen protector. Press your phone into the tray firmly, then pop it out of the tray. The screen protector should be affixed.

It should, but I failed at my first two tries. By the third, I figured out exactly how to line up the protector in the tray, which must be just so.

It is easier than applying a protective screen without a tray, but still requires some attention and patience.

By the third try the protective screen came out reasonably well centered and I was able to press the few small bubbles out from under the protector to the edges where they disappeared.

The screen protectors are $20 a pair and have a matte anti-glare finish. I thought the matte finish made the screen easier to see once I increased my screen brightness, but that eats more battery power.

It is impossible to say how much protection you get from a film like this, though. As I have written before, there is no standard for testing these protective films. At the very least, it’s not likely to do any harm.

Gadgetwise Blog: Seal Your iPhone in a Vault

The ProGear Vault iPhone 5 case from Pelican.

Pelican has made a name for itself as a maker of protective gear for industrial and military equipment. Last year, it enlisted outdoor adventurers to endorse ProGear, a new line of products aimed at everyday consumers.

Recently, Pelican expanded the ProGear line to include two cases for the iPhone 5, the Vault and the Protector.

The Vault is indeed a sturdy case; my iPhone would not feel more secure if it were locked in an actual vault. But it takes a bit of effort to attain that level of protection.

For starters, you have to seal your phone into the case with four tiny, stainless steel hex screws. Fortunately, Pelican includes a tiny hex wrench for the task. If I had tiny hands, I’d be set — but I have large, clumsy hands, so it took some time fumbling with the screws before I could close the case.

Once a phone is sealed inside, Pelican claims that the Vault’s elastomeric copolymer rubber provides impact protection from a drop of as much as 72 inches. The case’s design defends against wind-driven snow, rain and dust. A durable screen cover protects from scratches but does not interfere with the iPhone’s touch-sensitive technology. And the case is guaranteed for life.

All that security comes with a tradeoff: the phone is slightly heavier and a little harder to use. The case weighs nearly 3 ounces, and it covers all the buttons and ports. The ports are accessible by way of water-resistant caps, and the case incorporates an aircraft-grade aluminum dial and several buttons to control the iPhone’s functions. They worked well enough, but after a few days, my thumbs grew weary.

At $80, the Vault provides top-notch protection for outdoor enthusiasts. For iPhone owners not planning to scale the Alps, the $40 Protector case offers excellent protection but with less hassle. Cases for the iPad and Samsung Galaxy S phone are forthcoming.

Bits Blog: Ellen DeGeneres’ iPhone Game Quickly Becomes a Sensation

On her talk show, Ellen DeGeneres plays a game with celebrity guests where she holds a card up to her forehead showing a word or name, like “Justin Bieber.” The guest then gives clues to Ms. DeGeneres to help her guess the word.

It’s a game that many have played in college dorms or bars. Some call it Celebrity; others might call it Charades. Why not turn this into an iPhone game?

That’s the idea the producers of the Ellen show came up with in October. They hired an iPhone app development studio, Impending, to design and code the game, and released it Thursday in Apple’s App Store.

“Big news!” Ms. DeGeneres said on her Twitter account. “I’ve got a brand new game! Its called ‘Heads Up!’ and you’re appsolutely gonna love it.” Within several hours, Heads Up! had soared to the No. 1 spot on Apple’s list of best-selling apps.

In Heads Up!, you can pick a category like blockbuster movies, animals or music. Then you hold the iPhone up to your forehead with the screen showing the word, and your friends shout clues at you. After you guess it correctly, you put the phone face down and hand it to the next player, who gets a new word. The players pass the phone around, guessing as many words as they can until time runs out.

Unknown to most new players, the front-facing camera on the iPhone is recording a video of the whole game session. The players can save the video, share it on Facebook or even “Send to Ellen.” Sending the video to Ellen posts the video on the Ellen show’s Facebook page, and producers will pick out their favorite videos to play on the television show.

“We have 700 videos uploaded already,” said Daniel Leary, digital producer of “The Ellen DeGeneres Show” and a creator of the app. “We’re getting a video a minute, it’s pretty crazy.”

The game costs $1 in the App Store. Mr. Leary declined to comment on how the revenue would be divided between Warner Brothers, the Ellen show and the app developers. But Bob Mohler, a senior vice president of Telepictures Productions, which produced the game, said its purpose was to expand Ms. DeGeneres’ brand in digital media. The show already has accounts on Twitter, Facebook and Pinterest, he said.

“We expand Ellen’s digital footprint pretty broadly,” Mr. Mohler said. “We’re just constantly trying to find the next idea to continue to grow.”

Crime Scene: Chasing Down a GPS Blip to a Stolen iPhone

Devices like hers were stolen 16,000 times last year in New York City. But what happened on this afternoon was anything but commonplace. The closest comparison that leaps to mind is a classic chase scene from a 1971 thriller.

The teenager, soon out of sight, had every reason to believe his getaway was whistle clean. The woman, with just as many reasons to believe that was the last she would see of her phone, flagged a police officer, who put a call over the radio with a description of the young man wearing a yellow hooded sweatshirt. Another officer pulled out his own iPhone, and together with the victim, logged into the Find My iPhone feature, which should work if the thief had not turned the victim’s phone off.

He had not. A telltale dot appeared on the screen of the officer’s phone. The victim’s phone was nearby, at 126th Street and Roosevelt Avenue.

“That’s a block away,” Police Officer Haaris M. Hamid, 28, said. He got behind the wheel of an unmarked car, his sergeant beside him. “I can get there and get the guy,” the officer said.

They arrived at the corner where the phone should have been, under an elevated stop on the No. 7 train. The officer and the sergeant looked around and then ran upstairs. Nothing. A train had just pulled away.

Officer Hamid called his colleague with the Find My iPhone feature and asked him to refresh the search. This time, it came up at 111th Street and Roosevelt.

The thief had to be on the subway.

They ran back downstairs to the car. The chase was on. Officer Hamid, his car siren blaring, wove through traffic and blew through intersections while the sergeant called out on the radio, looking for a means of stopping the train.

They arrived at the 111th Street station, still lagging behind the subway, and lingered long enough to make sure the people exiting the station did not include the suspect. They raced on, to the 103rd Street stop. Same thing: train leaving, no yellow hoodies.

Onward the officer drove, around cars beneath the subway tracks, like Gene Hackman’s character, Detective Popeye Doyle, in “The French Connection.” Of course, Popeye was after a cop-killing henchman for a drug smuggler, while Officer Hamid was chasing a teenager who had stolen a woman’s iPhone. But, as they say, the city has changed.

“I was like, ‘Oh my God, this is crazy,’ ” Officer Hamid, a seven-year police veteran, recalled. “It was seriously like a movie.”

A police captain called the Metropolitan Transportation Authority, and the subway’s conductor was ordered to stop the train short of the next station, at Junction Boulevard. Officer Hamid, his sergeant, and a captain and a lieutenant who had joined the chase ran upstairs.

The conductor opened the door. “I was pretty much at the end of the line,” Officer Hamid said. “You’ve got to let the bosses go first and everything.”

The bosses and officer went car to car, looking at faces. Around the fourth car, Officer Hamid saw a young man whom he recognized from Flushing. He was wearing a blue sweatshirt. But still. “I go, ‘Sarge, that’s him.’ ”

Asked where he was coming from, the young man replied, “Brooklyn.” The No. 7 train makes exactly as many stops in Brooklyn as it does on Uranus.

Other passengers were watching with interest. So were the bosses. Officer Hamid hoped he had the right guy. The victim was on the street below, with other officers. Officer Hamid called down and asked someone to dial the victim’s phone.

“It rang,” Officer Hamid said. “In his back pocket. I was like, ‘Thank God.’ ” Passengers broke out in chatter, and the suspect’s eyes opened wide. “Like, ‘Uh-oh,’ ” Officer Hamid said. The suspect, Jordan Osborne, 19, had a yellow hooded sweatshirt in his backpack. He later told officers, “I took the phone to sell it,” according to a criminal complaint. “I was short on cash.” The police and the suspect left the train, which resumed its journey to Manhattan.

The suspect remains at Rikers Island while the case is pending.

Simple arithmetic suggests there were 42 other phones or electronic devices stolen in New York that day.

E-mail: crimescene@nytimes.com

Twitter: @mwilsonnyt

Bits Blog: Samsung Galaxy S 4 Will Cost More Than iPhone on AT&T

Samsung’s new Galaxy smartphone is expected to pose a serious challenge to Apple’s iPhone. But shoppers may be turned off by the Galaxy’s higher price tag.

Richard Perry/The New York Times The Galaxy S 4.

AT&T on Thursday said that customers can order the Galaxy S 4 on April 16 for $250. That is $50 more than the cheapest iPhone 5 on a contract. Generally, the price tag is the most important factor when consumers consider purchasing electronics, so the $50 difference between the starting prices of the two phones may steer AT&T customers toward the iPhone.

It is unclear why the Galaxy S 4 costs more than an iPhone. Samsung’s last flagship phone, the Galaxy S III, matched the iPhone’s price. Jan Dawson, a telecom analyst at Ovum, pointed out that according to estimates by IHS iSuppli, a components research firm, the parts for the Galaxy S 4 cost more than the iPhone 5’s. The S 4’s bigger screen, new processor and new sensors are adding to its cost, according to iSuppli.

AT&T and Samsung did not immediately respond to requests for comment.

The iPhone 5 was the best-selling smartphone model over the holiday season, but Samsung, which sells multiple models of smartphones, is the biggest seller of smartphones in the world over all. Analysts have said the Galaxy S 4, which will be available on all four major American carriers, presents a major challenge to the iPhone, especially overseas. But they agree that the iPhone is likely to retain the No. 1 spot in the United States this year.

IPhone Contracts With Carriers Under Scrutiny in Europe

Although they have not filed formal complaints, a group of European wireless carriers recently submitted information about their contracts with Apple to the European Commission, according to a person briefed on the communications with the carriers who asked not to be identified.

This person said the accusations focused on Apple’s contracts with French carriers, though other countries may also be involved.

In a statement, the European Commission, the union’s administrative arm, which oversees antitrust enforcement in the 27-nation bloc, confirmed that it was examining Apple’s carrier deals. But it said it had not begun a formal antitrust investigation. The commission is not obligated to act until it receives a formal complaint of anticompetitive behavior. That it is already examining the contracts suggests that it is taking the carriers’ concerns seriously.

“We have been contacted by industry participants and we are monitoring the situation, but no antitrust case has been opened,” said Antoine Colombani, a spokesman for Joaquín Almunia, competition commissioner of the European Union.

Elaborating at news conference in Brussels on Friday, Mr. Colombani reiterated that no formal complaints had been brought against Apple, and suggested that regulators would need to judge the relevance of any allegations in such a dynamic sector before taking any steps that could lead to a formal antitrust case.

An Apple spokeswoman, Natalie Kerris, said, “Our contracts fully comply with local laws wherever we do business, including the E.U.”

It was unclear how many carriers were in discussions with the European Union. Based on several interviews with people briefed on iPhone contracts, it appears that Apple’s contracts with some smaller European carriers were stricter than those with larger companies.

People briefed on the carriers’ relationships with Apple, who declined to be named because Apple does not permit them to speak publicly about the contracts, said the terms that some European carriers must accept to sell iPhones are unusually strict, making it difficult for other handset makers to compete.

The issues do not appear to apply to carriers in the United States; an executive at an American carrier said the terms of its contract with Apple were aggressive but not unreasonable. Apple is well known for tightly controlling the design of its products, down to the smallest of details, and closely controlling its manufacturing. Its relationship with carriers, long cloaked by strict nondisclosure agreements, offers a window into the similar levels of control Apple exerts on business partners who want to sell the iPhone.

While European carriers quietly grumble about Apple’s muscle in the marketplace, Apple does not force any of them to sell the iPhone — it does not need to. Carriers are petrified at the thought of not having the smartphone because it remains a huge hit with the public, driving waves of customers to their stores, especially in the months after the latest models are introduced and heavily advertised.

Apple’s contract differs with every carrier that sells the iPhone. Such sales accounted for 56 percent of Apple’s $55 billion in revenue last quarter. In most cases, Apple sets a quota for how many iPhones the carrier needs to sell over a set period of time, usually three years. If it does not agree to the quotas, it does not receive the iPhone.

If quotas are not met, the carrier is obligated to pay Apple for unsold devices, according to one person who negotiated with Apple while at a European carrier.

That remains a largely theoretical risk at this point, however, because demand for the iPhone still exceeds supplies almost everywhere it is sold. Apple’s iPhone 5 was the best-selling smartphone in the world during the fourth quarter of 2012, outselling competing models from Samsung, the biggest maker of mobile devices in the world, according to Strategy Analytics.

Charles Duhigg contributed reporting.

City Room: Crime Is Up, and Bloomberg Blames iPhone Thieves

Jeff Chiu/Associated Press

Updated, 11:50 a.m. | Hold onto your iPhones!

Major crime in New York City inched up this year, and Mayor Michael R. Bloomberg on Friday fingered the culprit: too many iPhones and iPads were being swiped.

A rise in thefts of shiny Apple products accounted for the slight increase in the city’s annual crime index, a statistic that covers a number of felonies, including murder, grand larceny and robbery, Mr. Bloomberg said on Friday morning during his weekly radio show.

As of Monday, the Police Department recorded 3,484 more major crimes in 2012 than for the same period last year. The increase in Apple product thefts: 3,890.

In a more serious vein, Mr. Bloomberg and Police Commissioner Raymond W. Kelly also announced that as of Friday morning, New York City had recorded 414 homicides, putting it on pace to record the lowest annual number since the city started tracking comparable homicide figures in 1963. The current low, 471 homicides, was set in 2009.

Still, city officials said the overall crime figure was skewed by the Apple figure.

“If you just took away the jump in Apple, we’d be down for the year,” said Marc La Vorgna, the mayor’s press secretary.

On the radio, Mr. Bloomberg said that Apple products appeared to be the preference for many thieves, noting that he was not including thefts of competing devices, like the Samsung Galaxy, in his count.

And he offered some practical advice for listeners, urging them to keep their devices in an interior, hard-to-reach pocket.

“Put it in a pocket in sort of a more body-fitting, tighter clothes, that you can feel if it was — if somebody put their hand in your pocket, not just an outside coat pocket,” the mayor said.

IPhones have long proved irresistible to city thieves, particularly on the subway, where crime rates shot up in 2011 after police investigators discovered that robbers were targeting the expensive, high-tech gadgets. The Police Department has used dozens of decoy officers and unusual methods to try to stanch the thefts, which usually occurred as trains entered and left stations, allowing for a quick getaway.

“The proliferation of people carrying expensive devices around is so great,” Mr. La Vorgna said. “It’s something that’s never had to be dealt with before.”

Through Monday, the city had recorded 108,432 major crimes for the year, up from 104,948 over the same period in 2011, a rise of 3.3 percent.

Bits Blog: How Google's Maps App for iPhone Hurts Nokia

The iOS mapping apps from Google, left, and Nokia.

Apple isn’t the only company that should feel nervous about Google’s release of a new maps app for the iPhone. Nokia may have lost whatever chance it had to get iPhone owners hooked on its mapping service.

Just hours after the Google Maps app was released Wednesday night, it skyrocketed to the No. 1 spot on Apple’s list of most downloaded free apps, with thousands of five-star reviews. Nokia’s maps app, Here, got a lot of buzz when it came out in November, but a majority of users rated it one star.

A chart on AppData, an analytics service that tracks the rankings of apps, shows that downloads of Nokia’s Here app took a nosedive in late November. Now Nokia’s maps don’t appear to be gaining any traction in the App Store.

This could put Nokia at a competitive disadvantage in the mobile industry over all. In November, Stephen Elop, Nokia’s chief executive, said the company made its maps available to iPhone owners so that it could improve its location database. The more people who look up directions or search for locations on its maps, the smarter its system gets. And if Nokia’s maps get better, the company could build more powerful location-based features just for its Lumia smartphones.

Now that iPhone owners are gravitating toward using Google or Apple maps, Nokia will have to rely on people using its Lumia phones to improve its location database. But the Lumia phones haven’t sold very well. Tony Costa, a Forrester analyst, said the overnight success of Google’s app complicated Nokia’s goals of selling handsets and bolstering its maps.

“Their core business has to succeed for Here to succeed,” Mr. Costa said. “That’s one of the challenges for them. They have to compete on the handset side, and the Here stuff will come along with that to some extent.”

Mr. Costa said that Nokia still had an opportunity to get people to use its maps through third-party apps. Nokia offers a toolkit for software developers to integrate its maps into their apps across multiple platforms, including Windows phones, iPhones, Android phones and the Web.

Nokia did not immediately respond to a request for comment.

State of the Art: Google Maps App for iPhone Goes in the Right Direction - Review

As everybody knows by now, Apple got lost along the way. It was like a 22-car pileup. Timothy Cook, Apple’s chief executive, made a quick turn, publicly apologizing, firing the executive responsible and vowing to fix Maps. For a company that prides itself on flawless execution, it was quite a detour.

Rumors swirled that Google would create an iPhone app of its own, one that would use its seven-year-old, far more polished database of the world.

That was true. Today, Google Maps for the iPhone has arrived. It’s free, fast and fantastic.

Now, there are two parts to a great maps app. There’s the app itself — how it looks, how it works, what the features are. In this regard, few people complain about Apple’s Maps app; it’s beautiful, and its navigation mode for drivers is clear, uncluttered and distraction-free.

But then there’s the hard part: the underlying data. Apple and Google have each constructed staggeringly complex databases of the world and its roads.

The recipe for both companies includes map data from TomTom, satellite photography from a different source, real-time traffic data from others, restaurant and store listings from still more sources, and so on. In the end, Apple says that it incorporated data from at least 24 different sources.

Those sources always include errors, if only because the world constantly changes. Worse, those sources sometimes disagree with one another. It takes years to fix the problems and mesh these data sources together.

So the first great thing about Google’s new Maps is the underlying data. Hundreds of Google employees have spent years hand-editing the maps, fixing the thousands of errors that people report every day. (In the new app, you report a mistake just by shaking the phone.) And since 2006, Google’s Street View vehicles have trawled 3,000 cities, photographing and confirming the cartographical accuracy of five million miles of roads.

You can sense the new app’s polish and intelligence the minute you enter your first address; it’s infinitely more understanding. When I type “200 W 79, NYC,” Google Maps drops a pin right where it belongs: on the Upper West Side of Manhattan.

Apple’s Maps app, on the other hand, acts positively drunk. It asks me to clarify: “Did you mean 200 Durham Road, Madison, CT? Or 200 Madison Road, Durham, CT?”

Um, what?

And then there’s the navigation. Lots of iPhone owners report that they’ve had no problem with Apple’s driving instructions, and that’s great. But I’ve been idiotically misdirected a few times — and the trouble is, you never know in advance. You wind up with a deep mistrust of the app that’s hard to shake. Google’s directions weren’t great in the app’s early days either, and they’re still not always perfect. But after years of polishing and corrections, they’re right a lot more often.

The must-have features are all here: spoken driving directions, color-coded real-time traffic conditions, vector-based maps (smooth at any size). But the new app also offers some incredibly powerful, useful features that Apple’s app lacks.

Street View, of course, lets you see a photograph of a place, and even “walk” down the street in any direction. Great for checking out a neighborhood before you go, scoping out the parking situation or playing “you are there” when you read a news article.

Along with driving directions, Google Maps gives equal emphasis to walking directions and public transportation options.

This feature is brilliantly done. Google Maps displays a clean, step-by-step timeline of your entire public transportation adventure. If you ask for a route from Westport, Conn., to the Empire State Building, the timeline says: “4:27 pm, Board New Haven train toward Grand Central Terminal.” Then it shows you the names of the actual train stops you’ll pass. Then, “5:47 pm, Grand Central. Get off and walk 2 min.” Then, “5:57 pm, 33rd St: Board the #6 Lexington Avenue Local towards Brooklyn Bridge.” And so on.

Even if public transportation were all it did, Google Maps would be one of the best apps ever. (Apple kicks you over to other companies’ apps for this information.)

This article has been revised to reflect the following correction:

Correction: December 14, 2012

The State of the Art column on Thursday, about a new Google Maps application for the iPhone, misstated the type and, because of an editing error, the number of businesses for which interior views are available. It is 100,000, not 100, and the number includes many kinds of businesses, not just restaurants.

Apple Profit Rises 24% on iPhone 5 Sales

That forecast for the holiday quarter was the main blemish on an otherwise solid financial report. Apple said its fiscal fourth-quarter profit jumped 24 percent, largely because of a surge in sales of the iPhone, a product that now accounts for nearly half of the company’s sales.

The quarter ended Sept. 29 was the first to reflect sales of the iPhone 5, which was introduced Sept. 21. Apple has struggled to deliver enough of the devices to meet customer demand, making them tough to find in many retail stores. The company’s shares have fallen 9 percent since the product hit the market, in part because of investor concerns about short supply.

In a conference call with analysts, Timothy D. Cook, Apple’s chief executive, said that demand for the new iPhone was “extremely robust” and that the company had a significant number of back orders for it. He said production had picked up substantially since earlier this month.

The profit report was slightly below analysts’ expectations, and Apple’s stock was largely unchanged in after-hours trading. It fell 1.2 percent to $609.54 in regular trading.

Underscoring how drastically Apple’s business has been transformed by mobile products, revenue from the iPhone rose 56 percent to $17.13 billion, making up 48 percent of the company’s total revenue. It sold 26.9 million iPhones, 58 percent more than a year earlier.

Apple said its net income was $8.22 billion, or $8.67 a share, compared with $6.62 billion, or $7.05 a share, a year ago. Revenue for the period rose 27 percent to $35.97 billion, and revenue for the full fiscal year was $156.5 billion. To put that in perspective, Apple’s revenue for the year exceeded that of Microsoft, Google and Facebook combined.

Analysts surveyed by Thomson Reuters had expected Apple to report earnings of $8.75 a share and revenue of $35.8 billion. The results were well ahead of Apple’s own forecast of $7.65 a share in earnings and $34 billion in revenue for the period.

It was the company’s projections for its current holiday quarter that raised eyebrows among investors. The company forecast earnings of $11.75 a share and revenue of $52 billion for the period, typically its biggest of the year. That implied a gross profit margin of 36 percent, lower than the 40 percent margin Apple reported in the fourth quarter, said Rob Cihra, an analyst at Evercore Partners.

Apple executives attributed the decline to higher costs associated with building its new products, which tend to get less expensive over time as Apple gets better at manufacturing them. While this pattern is familiar, the company said the sheer magnitude of its product-line overhaul made the decline in gross margin more severe. In addition to the new iPhone and iPods, Apple has announced new Macs and a smaller version of the iPad, called the iPad Mini.

Mr. Cihra said the company might be lowballing its estimates. “They have a history of beating their guidance,” he said.

Apple said its revenue from the iPad rose 9 percent to $7.51 billion.

As with most Apple products, the iPad Mini’s arrival was widely anticipated after months of rumors and leaks about the product in the news media. Mr. Cook said the rumors led people to postpone tablet purchases.

At the iPad Mini event, Apple hinted that sales of the iPad had been slower than expected when it revealed that the company had sold 100 million of the devices since their introduction two years ago, causing some analysts to trim their forecasts for the quarter.

“I think on balance it was pretty in line with reduced expectations,” said Toni Sacconaghi, an analyst at Bernstein Research.

At a starting price of $329, the iPad Mini is more expensive than many people were hoping, and well above the sub-$200 bar for smaller tablets set by Amazon and Google. But the device could still open the iPad to a new swath of customers who were put off by the larger size of the original.