Clone Mac maker Psystar has agreed to pay Apple $2.7 million in damages in a deal that will likely bring the company's sale of unauthorized computers preinstalled with Mac OS X to an end.

In a joint filing from Apple and Psystar Corporation in a San Francisco court Tuesday, Psystar agreed to pay Apple $1,337,500 in damages over copyright infringement, breach of contract, and violation of the Digital Millennium Copyright Act. Additional damages and attorneys fees amounted to another $1,337,500, bringing the total to $2.675 million. Psystar had already lost those complaints in a summary judgment from Judge William Alsup in November.

In exchange for the payout, Apple has agreed to not refile claims of trademark infringement, trade dress infringement, trademark dilution, state unfair competition, and common law unfair competition -- items that were not ruled on by Alsup in his summary judgment.

The agreement was signed by attorneys James G. Gilliland, representing Apple, and K. A. D. Camara, counsel for Psystar.

Both parties have also agreed that the terms of the deal will not be argued in favor of or against the venue in the ongoing, separate lawsuit filed by Psystar against Apple in Florida. In that suit, Psystar has alleged that Apple is engaged in "anticompetitive attempts to tie Mac OS X Snow Leopard to its Macintosh line of computers."

But a separate filing from Psystar Monday indicates that the Florida corporation hopes to continue to sell its Rebel EFI product. The $50 application, released in October, allows individuals to install Mac OS X on unauthorized third-party machines. It is compatible with Apple's latest operating system, Mac OS X 10.6 Snow Leopard. That issue will likely be contended by Apple, which previously alleged that the Rebel EFI product amounted to "trafficking in circumvention devices."

At question is Psystar's ability to pay the $2.7 million in damages. The company filed for bankruptcy earlier this year, only to emerge from Chapter 11. But Psystar's total assets, according to court filings, are said to be less than $50,000. Apple, in seeking a permanent injunction to prevent Psystar sales, told the court last week that it believed the company would be unable to pay any damages.

"Even if Psystar could pay damages, the harm to Apple's brand, reputation and goodwill is unquantifiable," Apple said.

The beginning of the end for Psystar came in November, when Alsup ruled in favor of Apple on multiple counts in a summary judgment. Had the two parties not come to an agreement, trial was set to start in January 2010 over the remaining issues.

While rumors of a possible Verizon-compatible iPhone in 2010 persist, one analyst has predicted that Apple will instead bring the iPhone to another GSM-based carrier in the U.S.: T-Mobile.

In a note to investors released this week, Doug Reid of Thomas Weisel Partners said his firm believes that T-Mobile, and not Verizon, will be the beneficiary when Apple's exclusive agreement with AT&T; expires next year. AT&T; has likely realized this, he said, and has changed its advertising focus accordingly to be less focused on the iPhone.

"AT&T; advertising in the United States has in recent weeks clearly shifted away from iPhone as the carrier likely readies itself to lose exclusivity in the United States (to T-Mobile and not to VZ, we believe) while VZ ads promoting Droid and other anti-iPhone devices appear to have intensified markedly," Reid said.

AT&T;'s exclusive contract with Apple for the iPhone is due to expire in 2010. While earlier this year there were reports that the wireless carrier was pushing to extend the agreement through 2011, those rumors have since cooled.

While the iPhone in its current iteration is compatible with T-Mobile's network, it is not capable of connecting to its high-speed 3G network, which operates on a unique 1700MHz spectrum. The iPhone is currently compatible with UMTS/HSDPA 3G connections at the frequencies 850MHz, 1900MHz and 2100MHz. It would be necessary, therefore, for Apple to build a new hardware model that supports T-Mobile's 3G frequency.

Those changes, though, are relatively minor compared to what would be necessary to make the iPhone compatible with Verizon's CDMA network -- a technology that, unlike the GSM network of AT&T; and T-Mobile, is not widely used abroad. Recent rumors have suggested Apple could enter a deal with chip maker Qualcomm. While Qualcomm plans to have a dual-mode chip that would allow connection to both AT&T; and Verizon available in 2010, some have said the new chip would be too cost prohibitive for Apple to adopt so soon.

AT&T;'s advertisements featuring actor Luke Wilson have focused on coverage area and network performance, rather than handsets. Apple recently, however, did join the discussion with a pair of ads that highlight the ability of the iPhone to handle calls and data at the same time -- a capability available on AT&T;'s network, but not from competitor Verizon.

Thomas Weisel Partners have set a price target of $245 for AAPL stock. They expect that 8.2 million iPhones will be sold in the December quarter, along with 20.45 million iPods and 3.06 million Macs. If those numbers prove accurate, it would top Apple's September 2009 quarter -- its best ever -- when the company sold 3 million Macs and 7.4 million iPhones to earn $1.67 billion in profit.

A survey of users of the four major cell phone providers in the U.S. has ranked AT&T;, the exclusive carrier of Apple's iPhone, last in terms of customer satisfaction.

Consumer Reports surveyed more than 50,000 readers in 26 U.S. cities, asking about carriers in a number of different categories related to service and customer support. In 19 of those cities, AT&T; ranked worst.

Overall, AT&T; came in fourth place with a total score of 66. It ranked worst in voice service, and average for messaging and Web/e-mail. Customer service on the phone and via Web ranked poorly, as did staff knowledge and whether the customer's issue was resolved.

Coming in first was Verizon, which ranked highly across all categories: voice, messaging, Web/e-mail, and customer service. Verizon had an overall reader score of 75.

In second place was T-Mobile. Though customers feel the nation's smallest wireless carrier has decidedly average service, the customer support was found to be superior. It earned an overall score of 70.

Sprint came in third with a score of 67, with average service and sub-par customer support, particularly in the area of issue resolution.

The survey is not the only that has found customer satisfaction with AT&T; to be relatively poor. In September, another survey found a significant decline in brand perception for AT&T; after the carrier faced intense scrutiny over the quality of its network following the launch of the iPhone 3GS. That study found that AT&T; lagged well behind competitor Verizon in terms of consumer perception.

AT&T;'s issues prompted the company to launch an aggressive public relations campaign in which the carrier publicly acknowledged customer complaints and promised to address them.

AT&T; came under scrutiny again in October, this time directly from competitor Verizon, which launched a series of ads mocking the iPhone's "There's an app for that" tagline with the slogan "There's a map for that." The commercials, which contrast Verizon's 3G coverage map with AT&T;'s, have led to a lawsuit in which AT&T; has alleged the TV spots are misleading.

This year, numerous reports (1, 2, 3) have suggested that a Verizon-compatible iPhone will arrive in the summer of 2010. For that to happen, Apple would have to build a new handset that could operate on Verizon's unique CDMA network.

Google is reportedly looking to get into the pay-per-episode TV business with YouTube by offering streaming content for purchase via a service that would compete with iTunes downloads.

According to Peter Kafka of MediaMemo, multiple sources have indicated that YouTube hopes to offer streaming TV episodes for a fee. The plan would be similar to what Apple already offers with iTunes: a $1.99 cost per episode. Both sides are said to currently be in early negotiations, but are "optimistic" that a deal can be reached.

But a key difference for consumers would be the fact that the YouTube stream would cost the same price as iTunes, even though it would seem to offer less functionality. iTunes TV and movie downloads are saved locally on the user's system, where they can be shared with a host of Apple devices, including iPods, iPhones, the Apple TV, and other machines.

But YouTube and TV executives reportedly feel that this is simply a "perception problem," and have cited studies that most people who download TV episodes only watch them once.

"It’s also possible that YouTube may skirt the issue by launching a TV rental business without the big hits that Apple and Amazon offer," Kafka said. "One possibility: It could start by moving immediately to long and mid-'tail' shows and videos that aren’t available other places, and don’t have to match existing prices."

Google acquired YouTube, the Internet's largest video destination, in 2006 for $1.65 billion. The Web site already offers some ad-supported TV shows for free, and is looking to get into the movie rental business as well.

YouTube also plays a strong role in the iPhone, with a native application included on the device.

As YouTube looks to land a deal for TV episode purchases in 2010, Apple has reportedly been negotiating with networks to provide a $30-per-month subscription plan to deliver TV episodes via iTunes. Reports have suggested that Apple also hopes to launch its new service in early 2010.

Apple's subscription proposal is said to be based on the existing iTunes desktop software, and is not based on any forthcoming hardware like a new Apple TV or the company's long-rumored touchscreen tablet. Industry executives are said to be "intrigued" by the prospect of an iTunes subscription plan, though cable networks are reluctant to sacrifice existing relationships with providers like Comcast.

In October, Apple updated its Apple TV software to version 3.0. The redesigned interface includes a new main menu that gives users instant access to content, including the integrated YouTube.

After 17 months of litigation between Apple and clone Mac maker Psystar, the whole ordeal may soon be at an end, with an agreement between the two parties expected to be revealed this week.

Psystar on Monday filed a new document with Judge William Alsup in a San Francisco court revealing that it and Apple had entered into a "partial settlement" that will be filed with the court on Tuesday. The revelation came as part of a response to Apple's request for a permanent injunction, filed last week.

Based on Psystar's claims, the agreement would seem to cover the sale of all clone hardware with Mac OS X preinstalled. Apple originally filed suit against Psystar in July of 2008 due to the Florida company's selling of unauthorized machines with the operating system installed.

Per the terms of the alleged deal, Psystar would pay Apple damages of an unspecified amount, and Apple would agree to drop the bulk of its case.

"Psystar has agreed on certain amounts to be awarded as statutory damages on Apple's copyright claims in exchange for Apple's agreement not to execute on these awards until all appeals in this matter have been concluded," Monday's court filing reads. "Moreover, Apple has agreed to voluntarily dismiss all its trademark, trade-dress, and state-law claims. This partial settlement eliminates the need for a trial and reduces the issues before this Court to the scope of any permanent injunction on Apple's copyright claims."

Further details of the settlement are due to be filed in the California court Tuesday.

But Psystar hopes that the court will not extend any potential injunction to its Rebel EFI product. The filing made Monday notes that Rebel EFI, which allows third-party installation of Mac OS X on unauthorized computers, is a "product that has not been litigated in this case, that has not been the subject of discovery in this case, that is presently the subject of litigation in the Florida case, that is composed exclusively of Psystar software, that is not sold in conjunction with any hardware, and that is sold entirely apart from any copy of Mac OS X or any computer running Mac OS X."

Revealed in October, Rebel EFI is a $50 application that allows certain Intel-powered PCs to run Mac OS X 10.6 Snow Leopard. In its filing last week, Apple alleged that Psystar has taken to "trafficking in circumvention devices," a practice that will irreparably harm Apple.

While Psystar claims it has agreed to pay damages to Apple, the Cupertino, Calif., company suggested last week that the Florida corporation would be unable to offer any money. Psystar filed for bankruptcy this May, only to emerge from Chapter 11.

The beginning of the end for Psystar came in November, when Alsup ruled in favor of Apple on a number of summary judgment points. Alsup concluded that Psystar infringed on copyrights owned by Apple and was in violation of the Digital Millennium Copyright Act.

Despite the summary judgment, a number of issues remained to be resolved in court prior to the alleged settlement: Apple alleged that Psystar engaged in breach of contract, trademark infringement, trademark dilution, and unfair competition, among others. The trial was scheduled to start in January 2010.

Global Mac sales recently grew 16.4 percent year over year, while the rest of the PC market expanded just 2.3 percent -- just more evidence of the iPhone halo effect, according to one analyst.

In his latest installment of the "Wolf Bytes" investor note, Needham & Co. analyst Charlie Wolf said that the significant increase in Mac sales in September came in spite of the fact that Apple has refused to enter the inexpensive netbook market that only months ago was booming. Apple made the right decision to stick with its high-end, premium segment, he said.

Calling the netbook craze "the implosion of PC prices," Wolf noted that Mac sales did slide in March of 2009 by 0.7 percent, but Apple's share continued to grow as overall PC sales fell 6.7 percent. As both PC and Mac sales turned for the positive through September, Apple has continued to widen the gap, which now sits at 14.1 percentage points.

"We have consistently argued that Mac price cuts were a misguided strategy," Wolf said. "Such cuts would not have stimulated much demand because the price elasticity of demand for the Mac -- the one differentiated product in a sea of commodities -- was simply too low. They would end up decimating Apple's gross margin with little to show for it."

That "pricing discipline," as he called it, has led Apple to a worldwide revenue share of about 10 percent, while its market share hovers just north of 4 percent. In the U.S., the revenue share of PC sales for Macs rests above 20 percent, while the unit share is just above 10 percent.

Wolf credits continuing Mac expansion to the popularity of the iPhone, which, much like the iPod before it, has created a "halo effect" that encourages consumers to switch to the Mac. Only this time, he said, it seems as though the iPhone is even better at pulling in new users.

"We believe that the halo effect emanating from the iPhone should be even stronger than that surrounding the iPod," he said. "After all, the iPod is a relatively simple device while the iPhone is arguably a mini-computer wrapped in a phone's form factor."

Wolf has been a proponent of the iPhone halo effect theory for some time. As the iPhone cannibalizes iPod sales, the handset is expected to fill the role once carried by the media player.

Interestingly, the 16.4 percent growth in Mac sales in September was led overseas. While Mac sales increased 9.8 percent in the U.S., they spiked 38.7 percent in Europe and 27.1 percent in Asia.

Most of the success of the Mac of late has been thanks to the home market. Apple's home sales grew 28.8 percent worldwide in September, versus only 18.1 percent for the rest of the market. Education sales, too, were strong, growing 15.6 percent, while overall PC sales sagged 2.5 percent in schools. Apple, though, lost 12.4 percent in the business market, and 76.8 percent in government sales.

Last quarter, Apple sold a record 3 million Macs along with 7.4 million iPhones, increasing the company's profit more than 46 percent to $1.67 billion. The Mac maker is expected to sell an additional 2.9 million machines this quarter.

Cyber Monday, the largest online electronics shopping day of the year, is in full effect, with a number of valuable discounts on Apple products.

Through Wednesday, VMware is offering steep 30 percent discounts on its line of software. The full version of VMware Fusion 3, regularly $79.99, is available for $59.99, while the VMware Fusion 3 Upgrade, usually $39.99, is on sale for $27.99.

In addition, VMware Workstation 7 has been knocked down from its regular price of $189 to $132.90. Similarly, the VMware Workstation 7 Upgrade, regularly $99, is available for $69.30. These offers began Monday and expire at 11:59 p.m. PST on Wednesday, Dec. 2.

Discounts remain on Microsoft Office 2008 for Mac Home & Student Edition. Amazon, MacMall, and MacConnection are all selling the regularly $149.95 suite for just $89.99.

In addition, MacConnection is still holding its Black Friday sale, extended from last week. Buyers can save up to hundreds of dollars on a new MacBook, MacBook Pro, MacBook Air, iMac, Mac mini and Mac Pro. Strong discounts from Mac resellers are believed to have already led to booming sales for Black Friday and over the weekend.

Full details are available in AppleInsider's up-to-date Mac Pricing Guide.

Customers are increasingly turning to the Internet for their holiday sales: Overall online purchases increased 11 percent this year, while Apple drew 39 percent more visitors to its Web site on Black Friday than in 2008, according to comScore.

As reported earlier Monday, Apple is also running its own Cyber Monday promotions on some accessories. The company has discounted Dr. Dre-branded headphones by $30, the mophie Juice Pack Air iPhone case and rechargeable battery by $8, the Eye-Fi 2GB Geo SD card by $6, Vestax Spin DJ by $25, and a LaCie Starck 500GB USB drive by $15. Apple is also offering free shipping on products purchased through Dec. 23.

Another report claims that a Google-branded phone will arrive soon, and an application that served as a promotional tool for the Motorola Droid was rejected by Apple for distribution in the iPhone App Store.

Google phone "a certainty"

Citing a "trusted source," Gizmodo reported Monday that a Google phone running a new, different version of its Android mobile operating system is still in the works. Prototypes of the device are expected to arrive on the company's campus "over the next few weeks."

The source said that the new version of Android will run on handsets with large screens, and it was spotted on a laptop in addition to phones. In addition, it was reported that the current Android is not the "real" Android.

"So what makes for a "real" version of Android?" the report said. "Our best guess is an Android OS with Google Voice at its heart."

Weeks ago, the rumored "Google Phone" was said to be coming in 2010. The custom-built hardware will allegedly allow the company to control all facets of the hardware, much like with Apple and the iPhone.

iDroid rejected

The "iDroid" application was a free downloadable advertisement for the Droid, an Android-powered handset that aims to compete with Apple's iPhone. It was created by Swavv Apps, the developer behind iPhone applications "Beer Pong Pro" and "Spin the Bottle Pro."

According to TechCrunch, Apple rejected the software from the App Store because it is an advertisement for a competing product.

"All it did was display the glowing red Droid eye," the report said of the iDroid application. "If you tapped on the eye, it then showed some marketing bullet points about the competing phone such as the fact that it can run simultaneous apps and has a slide-out keyboard (something the iPhone lacks). The second page also shows a picture of the Droid with its keyboard out."

The Motorola Droid has been positioned as an iPhone competitor by its manufacturer as well as its wireless carrier, Verizon. The handset was introduced in early November to positive reviews.

Apple has been accused by anonymous industry sources of utilizing "bully" tactics to manipulate NAND flash memory prices to the hardware maker's advantage.

According to The Korea Times, Apple has leveraged its power against major companies like Samsung and Hynix Semiconductor through the popularity of the iPhone and its line of iPods. The company has been accused of suppressing flash memory prices by ordering more chips from semiconductor makers than it actually buys.

Quoting a nameless "senior industry official," the report stated that Apple has asked Korean semiconductor companies to make a certain amount of chips. But the Cupertino, Calif., company allegedly does not purchase the volume it requests.

Instead, sources said, Apple simply waits until chip prices fall to levels the company finds acceptable. Then it purchases its allotment at a price that meets its internal expectations.

Another official called Apple's tactics "absurd," and suggested that the strategy will hurt the health of the NAND flash industry. Prices of flash memory chips are said to have dropped 4 percent this month.

Twice recently, Apple was accused of causing a worldwide NAND flash shortage. Demand for flash memory was said to have been outstripped by supply for major manufacturers as the iPod and iPhone continue to sell millions of units. Demand in the third quarter of 2009 was said to have exceeded supply by 1.3 percent.

The capacity of memory in Apple's flash memory devices has grown exponentially over the years. In September, the company unveiled its largest-ever 64GB iPod touch for $399, doubling the previous largest 32GB offering.

Despite Apple offering modest discounts for Black Friday, huge Mac sales for the year's biggest shopping day have been projected, thanks to third-party resellers.

Analyst Shaw Wu with Kaufman Bros. issued a new note Monday that reported low inventory and out-of-stock Macs at many resellers. He said he believes his above-consensus forecast of 2.9 million Mac sales for the December quarter could be low.

"Promotions through third-party retailers including Amazon.com, Best Buy, Wal-Mart and Target were more aggressive than usual," Wu said, "with discounts as much as 20% vs. previous years of 11%-13%. Some even bundled generous gift cards (as much as $50 for iPods and $150 for Macs) to entice buyers. So far, many third-party discounts (though maybe not as aggressive) are continuing beyond Black Friday."

Apple offered modest discounts between 4 percent and 10 percent through its retail stores and Web site, but third-party retailers were more aggressive than usual, likely boosting sales, he said. That pushed Mac inventory to limited or no availability at usually in-stock locations like Amazon.com and Best Buy, Wu said.

"This includes both models of iMacs (entry-level 21.5-inch and higher-end 27-inch versions) as well as the entry-level MacBook," he said. "From our understanding, this is due to unexpected strong demand and what makes this intriguing is the strength and Windows 7 and Macs commanding 2x-3x the (average selling price) of PCs. While it is still early with five weeks left in the December quarter, we believer our forecast looking for 2.9 million Macs is likely conservative."

In addition, he said that foot traffic at Apple's retail stores was "strong," and sales of Macs, iPhones and iPods appeared brisk. The Black Friday weekend is said to account for about 10 percent of holiday sales.

Competing analyst Gene Munster with Piper Jaffray initially said Monday that Black Friday retail sales were seen as slower than in 2008, indicated by in-store checks of Mac sales on the day after Thanksgiving. However, the firm updated its note later Monday to note that online sales were up 39 percent year-over-year, likely offsetting the possible decrease in retail sales.

Wu previously said that the new iMac and Magic Mouse will provide a significant boost to previously sagging desktop sales. He said that the new iMac in particular offers value and is positioned to be a "sleeper hit." In addition, the new Magic Mouse was said to be a "key differentiator" for the Mac platform.

Kaufman Bros. has maintained its price target of $235 for AAPL stock and reiterated its "buy" rating.

Many retailers have extended their sales on Apple products through Cyber Monday. Shoppers can find the best prices on Macs by using the AppleInsider Mac Pricing Guide:

Apple and chip maker Qualcomm are said to currently be in talks for a future deal, fueling rumors of a possible 2010 iPhone arrangement that have surfaced in recent weeks.

Citing "market sources," Taiwanese trade publication DigiTimes reported Monday that Qualcomm is in talks with Apple "for interest in future cooperation." The report said that Qualcomm is concerned about its future as popular smartphones, including the iPhone, do not utilize its 3G handset chips. Fierce competition has allegedly "pressured" the chip maker into looking to make a deal with Apple.

Currently, Qualcomm supplies chips to Samsung and LG in Korea, and HTC in Taiwan. But the iPhone, BlackBerry, and Palm Pre do not rely on the company.

The iPhone currently utilizes an Infineon chipset for its GSM and 3G networking. Palm uses chips from Marvell, while RIM contracts with Freescale.

In November, two separate reports indicated that a Qualcomm-powered iPhone was in the works. One suggested the device would use a new hybrid chip created by the company to allow dual compatibility with both the AT&T; and Verizon networks in the U.S.

However, another analyst said that although he has heard that a Qualcomm deal is in discussion, a dual-mode iPhone would be impossible to release in 2010, as it is not currently in field trials. Such a handset was predicted to arrive in 2011 at the earliest.

However, CMDA inventor Qualcomm has announced that it plans to release dual-carrier chips that would enable future phones to work on both CDMA/EVDO carriers like Verizon and Sprint, as well as rival 3GPP carriers that use UMTS/HSPA+ technology like AT&T; and T-Mobile. The new chips also provide future support for LTE, the next-generation 3GPP standard that most carriers plan to begin testing for deployment globally in the next few years.

Analyst Ashok Kumar with Northeast Securities, recently told AppleInsider he believes that Verizon and Apple would like to release a CDMA handset at a contract-subsidized $99 price point, which would make the new dual-mode chip cost prohibitive. Qualcomm expects commercial launches of handsets based on its dual-mode chip to be introduced in the second half of 2010.

Checks with Apple stores last week suggest that 2009 Black Friday Mac sales could see a year-over-year decrease, according to a new report.

Analyst Gene Munster with Piper Jaffray said his team spent nine hours counting Mac sales in three different retail stores on the day after Thanksgiving. The firm counted an average of 8.3 Macs sold per hour, down from 13 per hour in 2008.

However, Munster said it is "too early" to make any calls on the overall December quarter. The analyst has retained his prediction of 2.8 million units sold during the frame, citing NPD Group numbers from October.

"While the average number of Macs sold per hour was down slightly y/y, we do not think we can make a call on Macs in the Dec. quarter with this data point alone," he said.

In October, U.S. NPD retail data suggested Mac sales were up 7 percent year over year. They were bolstered by the release of new iMacs, a unibody polycarbonate MacBook, and faster Mac minis late in the month.

Expectations for Apple are high. In the September quarter, the Cupertino, Calif., company reported its best quarter ever, based on sales of 3 million Macs and 7.4 million iPhones. The company's profits rose more than 46 percent in the three-month period that concluded on Sept. 26.

As for online Black Friday sales, Apple's Web site traffic was one of five retail sites that surpassed 4 million unique visitors, according to comScore. Apple saw 39 percent year-over-year growth in its online traffic.

In all, the company reported that $595 million was spent online in the U.S. on Black Friday, an 11 percent increase over 2008.

Apple also discounted prices on some accessories for "Cyber Monday," the term used for the Monday following Black Friday. The day is said to be the busiest in the year for the purchase of electronics. The company has discounted Dr. Dre-branded headphones by $30, the mophie Juice Pack Air iPhone case and rechargeable battery by $9, and the Eye-Fi 2GB Geo SD card by $6.

In addition, Apple is offering free shipping on products purchased through Dec. 23.

"The $595 million in online spending this Black Friday represents the second heaviest online spending day of the season-to-date and a double-digit increase from last year," said comScore Chairman Gian Fulgoni. "While this acceleration in spending suggests the online holiday season may be shaping up slightly more optimistically than anticipated, it may also reflect the heavy discounting and creative promotions being put forth by retailers that now encompass the use of social networks such as Facebook and Twitter. Cyber Monday -- the traditional kick-off to the online holiday shopping season -- and the subsequent weeks will be the real test for how online retailers fare this season. That said, this is a very encouraging start."

Signs of a new iPhone hardware model being tested online and Apple's interest in updating the handset's built-in Maps application have been revealed.

A handset identifying itself as "iPhone 3,1" was tracked by PinchMedia in its application iBART for San Francisco public transportation. According to MacRumors, iPhone 3,1 appeared in its usage logs during November.

The reference could signify a new iPhone model with major hardware changes, as Apple only changes the first number in a product's identifier string when it receives a significant upgrade. The current iPhone 3GS carries the identifier iPhone 2,1 while the original iPhone identifies itself as iPhone 1,1, and the iPhone 3G -- which featured minor architectural changes from its predecessor -- is iPhone 1,2.

Apple's use of 3,1 implies major and distinct changes, a practice that it also uses with its Mac lineup. References in software to an iPhone 3,1 have existed for some time, but the alleged use of the unreleased hardware would be a first.

Early this year, signs of iPhone 2,1 began appearing online. That hardware was eventually released months later, in June, as the iPhone 3GS.

Apple has released all of its iPhone updates in the summer. Recent rumors have suggested that the company could release a Verizon-capable phone in 2010.

Also revealed this weekend was a new job listing from Apple for a software engineer to work on the iPhone Maps application. The listing seeks a full-time employee to work in Cupertino, Calif., on the software.

"The iPhone has revolutionized the mobile industry and has changed people's lives and we want to continue to do so," the listing reads. "We want to take Maps to the next level, rethink how users use Maps and change the way people find things. We want to do this in a seamless, highly interactive and enjoyable way. We've only just started."

The description is particularly interesting because Apple quietly purchased a Google Maps competitor, Placebase, this summer. The worldwide mapping company offered products that would aggregate data on subjects such as demographics, home sales, crime, mortgage lending, school performance and more.

In addition, the existing Maps application has been a point of contention between Apple and Google. Apple rejected the Google Latitude app because it was reportedly thought the software would only be confused with the default Maps application. Google instead released a Web-based version of the software.

Google has added additional functionality to its own Android-powered handsets with Google Maps Navigation, a free turn-by-turn voice guidance system part of the new Motorola Droid. Google has said it would like to bring the software to the iPhone, if Apple approves.

Earlier this month, AppleInsider revealed that Apple is looking to higher an in-house game developer to create original content for the iPhone and iPod touch. To date, Apple has only released one first-party game for the iPhone, Texas Hold'em. The job listing could signify that the handset maker is looking to create more of its own games.

Performance numbers of Intel's new six-core Xeon were prematurely revealed by Polish website PCLab, showing strong increases in performance for the chip rumored to be in the next iteration of the Mac Pro.

Hardmac reported that test and performance results of Intel's new 6-core Xeon chips code-named "Gulftown" were briefly featured on PCLab before being taken down at the request of Intel. According to the test results, the new chips are nearly 50% faster than the previous quad-core Xenon during parallel tasks, and use up to 50% less power.

This chip will, according to sources, be featured in future Mac Pro models that could arrive as early as the first quarter of 2010. The "Gulftown" chip will be sold under the Core i9 name and will be Intel's first six-core, dual-socket processor. The 32 nanometer chips feature 12MB of L3 cache. If paired with another chip, as Apple usually does in its high-end workstations, the processors will offer 12 physical and 24 logical cores.

In a previous story, Hardmac reported that the new Mac Pro will have a modified motherboard with a 10Gbit/second Ethernet port and will support 8GB and 16GB RAM modules, allowing for a maximum of 128GB of RAM. The report also stated that it is likely that Apple would have short-term exclusive use of the i9 processor. Apple has enjoyed short-term exclusivity during the release of the previous two Mac Pro lines.

Apple early Friday morning kicked off its annual Black Friday sale, offering $101 off MacBook Pros and iMacs. However, the Mac maker's authorized resellers have far undercut the company, slashing up to $300 off MacBook Pros and $180 off iMacs. Find the best prices on Macs and iPods with AppleInsider's finalized Black Friday price guides.

MacBooks

For in-store pickup only, Micro Center is offering arguably the best Mac systems deal of Black Friday, Apple's new 2.26GHz 13.3" white MacBook for $799.99 after this Visa Prepaid Card $200 mail-in rebate. There's a strict limit of one per customer.

The cheapest price on this model that doesn't involve a mail-in-rebate comes from Amazon.com, which is offering it for $884.98 with the option for Saturday delivery. For shipping orders that leverage rebates, MacConnection offers the lowest price at $849.99.

MacBook Pros

MacConnection also maintains the lowest pricing on all MacBook Pros with mail-in-rebates. The online reseller's Black Friday deals offer $150 off the 2.26GHz 13" MacBook Pro, $200 off both the 2.53GHz 13" MacBook Pro and 2.53GHz 15" MacBook Pro, $250 off the 2.66GHz 15" MacBook Pro, and $300 off both the 2.80GHz 15" MacBook Pro and 2.80GHz 17" MacBook Pro.

iMacs

For iMacs, MacConnection is also extending the best deals, cutting $150 off both the 3.06GHz Dual 21" iMac and 3.06GHz Dual 21" ATI iMac, $170 off the 3.06GHz Dual 27" iMac, and $180 off the 2.66GHz Quad 27" iMac.

Mac minis, Mac Pros and MacBook Airs

For its part, MacMall maintains the largest savings on MacBook Airs, Mac Pros and Mac minis.

Side-by-side price comparisons from all of Apple's top Mac authorized resellers can be seen in AppleInsider's Mac Price Guide, below. Lowest prices are in bold typeface.

iPods

Apple's Black Friday sale offers the best prices on the iPod touch by a few dollars. For the remainder of the iPod family, authorized resellers combine for the lowest prices, as can be seen in AppleInsider's iPod Price Guide, below.

This year's Black Friday Mac software deals include savings of over $300 on Office 2008 for Mac, 78% off student editions of Creative Suite 4.0, $30 off Parallels 5.0 and Fusion 3.0, $40 off Photoshop Elements 4.0, and $50 off QuickBooks 2010.

Adobe Creative Suite 4.0

Amazon.com is offering 78% off CS4 Design Premium Student Edition ($403.99), CS4 Design Standard Student Edition ($295.49), and CS4 Web Premium Student Edition ($349.49).

Adobe Creative Suite 4.0

Adobe has slashed the price of Photoshop Elements 8 by $40, bringing it down to $59.99 after instant and mail-in rebates. Free shipping included.

Mac Virtualization Software

Parallels has knocked $10 off the price of Parallels Desktop 5.0 direct downloads, while VMware is offering $16 off direct downloads of Fusion 3.0 with coupon code dsktp20sale.

For physical retail copies of the Mac virtualization software, Amazon has the lowest price on Parallels 5.0 at $44.49 while MacMall has the lowest price on Fusion 3.0 at $49.99.

Office 2008 for Mac

Price drops on the various versions of Office 2008 for Mac range from $80 to $328.96. B&H; has Microsoft Office 2008 for Mac Home & Student Edition for $69.95, Amazon has the standard edition for $199.98, Microsoft has the Business Edition for $249.95, and Amazon has the Special Media Edition for $170.99. Savings can be seen in the price comparison chart, below.

QuickBooks 2010 for Mac

Intuit has cut the price of direct downloads of its new QuickBooks 2010 accounting software for Mac to $159.96 while Amazon has knocked the cost of the retail version down to $152.49. MacMall is a few bucks cheaper at $149.95.

&camp;In addition to its Mac and iPod price drops, Apple authorized reseller Amazon.com is holding Black Friday deals that offer more 50% off most GPS units, 40% off Canon printers and certain digital cameras, 50 and 60% off Flash memory cards, and 20 to 48% off some Blu-ray players.

GPS Units

Amazon's GPS & Car Electronics sale offers as much as 50 and 60% off many popular TomTom, Garmin and Magellan GPS units. Percent savings are noted in parenthesis.

TomTom ONE 130 3.5-Inch $79.99 (60%)
TomTom ONE 130-S 3.5-Inch $89.99 (64%)
TomTom XL 330S 4.3-Inch (Factory Refurbished) $89.99
TomTom ONE 140-S 3.5-Inch $99.99 (50%)
TomTom GO 630 4.3-Inch $159.99 (47%)
TomTom GO 740 Live 4.3-Inch $279.99 (44%)

Garmin nüvi 205 3.5-Inch $89.99 (31%)
Garmin nüvi 255 3.5-Inch $119.86 (52%)
Garmin nüvi 260W 4.3-Inch $119.99 (48%)
Garmin nüvi 265W/265WT 4.3-Inch $159.99 (54%)
Garmin nüvi 780 4.3-Inch $178.00 (75%)
Garmin nüvi 855 4.3-Inch $199.99 (60%)
Garmin nüvi 765/765T 4.3-Inch $209.99 (58%)
Garmin nüvi 785/785T 4.3-Inch $249.99 (55%)

Magellan RoadMate 1220 3.5-Inch $89.99 (44%)
Magellan Maestro 4250 4.3-Inch $99.99 (67%)
Magellan RoadMate 1440 4.3-Inch $119.99 (40%)
Magellan RoadMate 1424 $119.99 (20%)
Magellan RoadMate 1470 4.7-Inch $139.99 (44%)
Magellan Maestro 4700 4.7-Inch $179.99 (40%)
Magellan RoadMate 1700 7-Inch $197.00 (34%)

Printers

Canon PIXMA MP490 Inkjet Photo All-In-One $49.00 (51%)
Canon PIXMA MP560 Wireless Inkjet All-In-One $79.99 (47%)
Canon PIXMA MX860 Wireless All-In-One $144.99 (27%)

Digital Cameras

Flip Ultra Camcorder 2nd Generation, 120 Minutes $89.00 (40%)
Flip Mino Series Camcorder Bundle with AC Adapter $99.99 (46%)
Fujifilm FinePix J28 10MP Digital Camera $79.99 (38%)
Canon VIXIA HF200 HD Flash Memory Camcorder $521.47 (30%)
Kodak Zi6 HD Pocket Video Camera $99.00 (38%)
Nikon Coolpix S620 12.2MP Digital Camera $149.99
Samsung SMX-C10 Touch of Color Camcorder $141.19 (29%)
Olympus FE-46 12MP Digital Camera Blue Crayola Kit $99.88 (33%)
Sony Cybershot DSC-W180 10.1MP Digital Camera 89.98

Flash Memory Cards

HP 8 GB Class 4 microSDHC Flash Memory Card L1885A-EF $14.99 (59%)
HP 8 GB SDHC Class 4 Flash Memory Card Q6276A-EF $14.99 (59%)
HP 4 GB Class 4 microSDHC Flash Memory Card L1882A-EF $9.99 (67%)
HP 16 GB SDHC Class 4 Flash Memory Card Q6305A-EF $29.99 (41%)
Kingston 4 GB Class 4 microSDHC Flash Memory Card with SD & miniSD Adapters $11.99 (61%)

Blu-ray Players

Samsung BD-P1600 1080p Blu-ray Disc Player $149.99 (25%)
LG BD270 Blu-ray Disc Player $103.98 (48%)
Samsung BD-P3600 1080p Blu-ray Disc Player $229.99 (23%)
Panasonic DMP-BD60 Blu-ray Disc Player $124.99 (37%)

And to go along with the players, Amazon also lists several popular Blu-ray movies for $7.99 to $12.99.

One Apple authorized reseller upped the ante overnight in the ongoing Black Friday Mac price war, slashing Mac notebook prices by up to $300 and iMac prices by up to $180.

Macs

Responding to steep discounts offered by MacMall, and later matched in part by Amazon.com, MacConnection on Thursday shaved another $50 off Apple's most popular Mac product lines, namely MacBook Pros and iMacs.

When combined with mail-in-rebates, the online reseller's latest deals offer $150 off the 2.26GHz 13" MacBook Pro, $200 off both the 2.53GHz 13" MacBook Pro and 2.53GHz 15" MacBook Pro, $250 off the 2.66GHz 15" MacBook Pro, and $300 off both the 2.80GHz 15" MacBook Pro and 2.80GHz 17" MacBook Pro.

For iMacs, the reseller has cut $150 off both the 3.06GHz Dual 21" iMac and 3.06GHz Dual 21" ATI iMac, $170 off the 3.06GHz Dual 27" iMac, and $180 off the 2.66GHz Quad 27" iMac.

MacConnection has also bested all other resellers with a $849.99 price tag on Apple's new white 2.26GHz 13" MacBook, a savings of $149 off the suggested retail price. Meanwhile, rival MacMall continues to offer the best deals on MacBook Airs and Mac minis.

A detailed price comparison can be seen in AppleInsider's Mac Price Guide, below:

iPods

At the same time, several resellers have begun to shave down the cost of Apple's iPod line ahead of tomorrow's shopping bonanza. Current pricing on the players can be seen below in AppleInsider's new iPod Price Guide.

Both price guides will be continuously updated throughout the week.

Apple has taken iTunes LP and Extras public, encouraging independent developers to begin work on interactive digital content for distribution in iTunes starting early next year. The new move signals a big move in taking on Adobe Flash, pushing the adoption of web standards, and creating an new business model for content that could impact how the company's forthcoming tablet is sold and used.

Fears that Apple would reserve iTunes LP solely for big music labels were alleviated by the debut of new templates and development guides to help anyone create the new digital interactive material. Apple is publishing the new information on its iTunes website, which notes that "Automatic, electronic submission of your iTunes LP or Extra is scheduled for the first quarter of 2010. Until then, the submission process is manual and limited. Please contact your label or studio rep for details and consideration. An existing iTunes contract is required. Your iTunes LP or iTunes Extras will be reviewed by the iTunes team for appropriateness of content and for technical quality."

Using the supplied templates and how-to guide, anyone can create interactive content that can be played back by iTunes 9 or Apple TV, including links to listen to album songs and view lyrics, liner notes, photos and videos (such as artist interviews). The virtually identical iTunes Extras format is designed to present a movie with interactive menus, bonus content, and chapter navigation, similar to those supplied by DVD or Blu-ray authors.

As AppleInsider was first to report, Apple's new interactive content formats are entirely open and based on web standards. Essentially, they're self contained websites that use special scripts and links within iTunes to present content from the user's library, along with bonus content, animated effects, and visualizations that can play along with the music. Apple refers to its JavaScript package of animations, controllers and other scripts as TuneKit.

The interactive content is linked to iTunes downloads, and is offered through iTunes to sweeten the deal when users buy albums or movies. Once Apple automates the upload process, any artist with an iTunes contract (or represented by a label associated with iTunes) will be able to submit the interactive content to enhance their music or video content. The iTunes LP and Extras formats can also link to other related material available for sale in iTunes.

ITLP and ITE files

The interactive packages are delivered as a folder of content which on Mac OS X appears to be a file (it can be opened up in the Finder by right clicking and choosing "show package contents"). Windows presents the package as a folder, as that platform has no concept of bundles (folders that look and act like a discrete file).

Within the iTunes LP or iTunes Extra bundle are folders of audio, video, and image files, as well as a standard index.html file that serves as its home page. The bundle also includes two files generated by the iTunes store during purchase: a standard jpeg or png file called iTunesArtwork that serves as an icon for the bundle, and iTunesMetadata.plist, which provides a listing of the bundle's description, genre, artist and XID mappings that iTunes uses to associate the interactive content to other media in the user's iTunes library.

A separate bundle file, manifest.xml, lists all the external content the bundle references, and describes its version number and platforms it is compatible with. This indicates that the format was designed to be extended in the future, with provisions to accommodate new types of devices. AppleInsider first predicted a tweak to make the content play on AppleTV, which was delivered within about a month of the format's release as part of Apple TV 3.0. It is also expected that the new format will be adapted to allow playback on a new tablet device released in the first half of next year.

Views, Controllers and CSS: a clean format for interactivity

Also within the package are folders of views, which represent all of the HTML pages that may be presented. Each view has a corresponding controller, which includes all of the action elements of each page as well as the navigation and animated transitions that play between page views. A folder of CSS files define the positioning of elements in each view, including buttons, images, blocks of text, and interactive elements and animations.

The regimented format of the iTunes LP and Extras packages makes it easy to create content that is virtually unlimited creatively, but which is also easy to author (particularly for anyone with even a basic background in web development) and simple to display. The new formats compete directly against convoluted DVD authoring and poorly performing Adobe Flash content. Rather than presenting a similar default structure of folders, the Flash format allows developers to create messy animation files that require lots of processing power.

Flash loads all of the individual content files (graphics and videos) into a single binary file, complicating delivery and de-optimizing performance, and mixes together content, presentation, and code. While minor Flash animations run acceptably on powerful PCs, they don't run well on platforms outside of Windows (the only platform Adobe has optimized its Flash runtime) and are particularly problematic on mobile devices where processor performance and battery life are very limited.

A business model for the web

Apple's new iTunes formats signal an intention to create an entirely new business of selling interactive content, in addition to the music, TV and movie, and iPhone mobile software that the company has incrementally built into a series of online market empires. Rather than just being a way to enhance album and movie sales, Apple's recent talks with newspaper and magazine publishers indicate that the interactive iTunes formats are really designed to allow traditional print publishers to enter the digital age with a business model that is more substantial than the web's current adware/spyware model, where users's preferences are tracked with cookies and relevant ads are shown in an effort to monetize content.

The free web, supported entirely by advertising, has revolutionized the flow of information but has devastated traditional journalism by giving uniformed bloggers and astroturfing advertising campaigns an equal presence next to legitimate news sources, erasing any sense of journalistic integrity and reputation. It has also enabled widespread content theft, where news and information published by a reputable source at significant cost can be freely plagiarized by anonymous individuals who then get money from their own adjacent ad placements on their "splogs" or spam blogs, something that ad marketers like Google have quietly benefitted from and thus have made little effort to eradicate.

Apple's simple interactive content formats, paired with its very popular iTunes delivery system, is guaranteed to create a real market for web content independent from contextual advertising. This will enable the company to do an end run around Google's ad empire and Microsoft's belated efforts to copy Google, and offer content producers such as newspapers, book publishers, magazine editors, and other vendors of proprietary information a marketplace where they can sell their content directly to consumers, just as Apple provided a functional market to music labels, movie studios, and mobile software developers.

This new strategy appears to be the linchpin that will make Apple's forthcoming tablet a viable product, as consumers will be buying it not just to surf the ad-sponsored web, but also to navigate a new generation of interactive, animated digital content: newspapers and magazines that incorporate video and voice and hyperlinks just like the web, but without ads. Similar to premium TV channels, this will result in a market for premium content as an alternative to the puerile garbage that fills most of the space between commercials on free TV channels and the web.

By selling access to this professionally-created premium content to a large target audience, publishers will be able to charge very little per issue but still make sustainable profits, something that has been completely illusive on the web as traditional print publishers have failed to find web users interested in subscribing to their content, and as the scant revenues from ad placement evaporate as users find out how to block ads or simply ignore them. Additionally, as Google has monopolized the web ad market, the value of online advertising to content producers has plummeted.

Pulling off the futuristic digital newspaper has long remained a pipe dream, as traditional print publishers faced an uphill effort to convince readers to trade paper for far more expensive digital readers. Apple has the unique capacity to pull this off because of its existing iTunes business in selling high volumes of content via micropayments, combined with its unique position as the maker of the top selling iPod and iPhone and the Mac platform. Apple has attracted a loyal audience of customers who actually pay for content, in stark contrast to the torrent music and movie scene supported by adware, the hobbyist mobile software community, and the ad-supported web.

Rival content formats being promoted by Adobe, Amazon, Microsoft, and by groups of traditional publishers themselves all either rely upon ads to sell the content, or lack a hardware reader, or lack an online store to sell content, or lack the technology to deliver colorful, interactive, animated multimedia content.

Daniel Eran Dilger is the author of "Snow Leopard Server (Developer Reference)," a new book from Wiley available now.

Apple has captured nearly half of all desktop revenue in the United States as iPhone sales in China have lagged.

According to numbers released by NPD, Apple's share of retail desktop revenue in October was 47.71 percent, up from 33.44 percent last year at this time. Betanews reports that these numbers are slightly artificial due to the fact that Apple released new, faster iMacs during this period while PC sales lagged in the face of the Windows 7 launch later in the month.

Apple's position in the notebook arena is strong at 33.6 percent of retail revenue share, but is actually lower than the 38.13 percent share of last October. Last October, Apple introduced new Macbook Pro models and the higher revenue share numbers can be attributed to this. Apple often sees large bumps in sales in the wake of new product launches, something that obviously cannot be sustained year-to-year.

Apple's average retail selling price during this period for desktops was nearly $900 more than the average Windows PC, while the average Mac laptop was also close to $900 more.

Memory supplies strong due to slow iPhone sales in China

Distributors of Samsung NAND and DRAM flash memory recently remarked that supplies have stabilized after two months of shortage. This was due to priority being placed on Apple products. The supply shortage has ended mainly due to slow iPhone sales in China, reports Digitimes. According to industry sources, Samsung has increased total chip output in response to seasonal demand.

AppleInsider reported in October that demand for flash memory had far outstripped supply for major manufactures due to the popularity of Apple devices.