Andrew Keen On New Media

How 3G iPhone cements Apple's ownership of the digital consumer

Forget all the hype about Web 2.0 – the biggest new media story of the week, the month, probably even the year was the release last Friday of the iPhone 2.0, Apple's second-generation, 3G mobile telephone. It's an event that represents the emergence of Apple as the dominant player in the fast-converging personal computing, cellphone and internet industries. And it's a story that once again affirms the reputation of Apple CEO Steve Jobs as Silicon Valley's most brilliant strategist.

The 3G iPhone itself is not huge news, its look and feel being pretty much the same as Apple's original smartphone which was launched a year ago. The new phone retains the same iconic Apple interface, the same impressive widescreen, the same internet browsing functionality, the same controversial touchpad keyboard and, unfortunately, the same sub-par onboard camera. The first change is the addition of a GPS chip that will add improved location sensing to the device. But the major hardware upgrade is the new iPhone's ability to run on advanced 3G cellular networks which, of course, gives it significantly faster internet access than the original 2.5G iPhone.

The first really significant change is in its pricing. With the new iPhone, Jobs has normalised Apple's relationship with the carriers, meaning that, rather than sharing the income from hardware sales, it is now the carriers who both subsidise the price of the iPhone and keep all of that sales revenue.

So whereas the original iPhone cost $599 (£301), the 8-gigabyte 3G iPhone is available for $199 (£100) to new subscribers. Combine this with the fact that the 3G iPhone is available in 70 countries this summer – as opposed to six for the original iPhone – and it's not hard to understand why industry analysts forecast that Apple will sell around 10 million of the second generation iPhones by the end of the year.

So what, exactly, will these 10 million new consumers be buying? Beyond a beautifully designed, intelligent cellphone with a built-in internet browser and, of course, the world's leading digital music player, they will be buying access to the future of mobile computing.

Alongside the release of the 3G iPhone on Friday, Apple opened its App Store which is selling more than 500 third-party software programmes designed specifically to run on the device. This explosion of new iPhone software essentially turns the device into a next-generation computer platform. So what these 10 million consumers will be pocketing over the next six months is a personal computer that will run the latest software from leading companies such as eBay, AOL, Facebook and Google.

These consumers will also be buying convenience and simplicity. The 3G iPhone now offers users access to Microsoft's Exchange ActiveSync service, thereby giving business people access to their corporate email, calendar and addresses.

But perhaps the most exciting new feature on the 3G iPhone is something Apple is calling MobileMe (www.me.com) – an upgrade of their .Mac service which enables consumers to store and automatically synchronise all their emails, addresses and photos not only on their new iPhones but also on their iPod Touches and their PC and Apple computers. The $99-a-year MobileMe service will offer "push" technology, meaning that, as with the rival BlackBerry platform, emails will be sent automatically to the phone.

Apple, of course, isn't the first company to offer third-party applications on a mobile computing platform. Nor are they the first company to offer push technology or 3G internet access or a digital music player or GPS functionality or a sub-$200 smartphone. But they are the only electronics company that is uniting cutting-edge hardware, software and internet services in a beautifully designed device that is simultaneously a high-end cellphone, a mini-personal computer and an interactive entertainment centre.

This new iPhone is a significant milestone in Steve Jobs' audacious strategy of owning the digital consumer. The old fox is locking them into his beautiful walled garden. With the 3G iPhone, there's less and less reason to step outside of Apple's idyllic digital world. By the end of the year, 10 million fresh converts will have entered this garden. I suspect that many more millions of new consumers will be joining them over the next decade.

You can be a TV station ... if you have talent

A few years ago, the idea that anyone could launch their own television station would have seemed about as realistic as anyone being able to launch their own spaceship to the moon. Today, however, all anyone needs to launch a television station is a personal computer and broadband internet access. A new company called Mogulus (www.mogulus.com) claims to look after the rest. Mogulus is an internet television platform that claims to give you "everything you need to launch your own live 24/7 station on the internet."

Founded by a former Verizon executive, Mogulus is a scrappy New York City and Bangalore based start-up which essentially offers a live television studio in a box to digital broadcasters. Incorporating a virtual television studio and an embedded video player, Mogulus provides both a free limited service to amateur broadcasters and a "pro" pay-per-usage service for media professionals.

So does Mogulus work? I've been playing around with the online studio and I'm pretty impressed with its simple interface and a myriad of cool features. It really does seem to enable any half computer-literate slob like me to produce a live Web-TV channel and broadcast professional looking live events to large audiences. I'm not alone in being intrigued with this internet television platform. Mogulus's early clients include the Mozilla Corporation, the Indianapolis Star newspaper and FOX Chicago.

What, of course, Mogulus doesn't provide is talent. Anyone might now be able to launch their own live television station, but the vast majority will fail because the content they broadcast is poor. Creative talent remains the key scarcity in the media economy. No new technology will ever change that.