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Approximately 36 hours after the release of the iPhone 2.0 firmware, existing iPhone customers still can't download it. iTunes says it's unavailable. Apple should have done better.

We already know that on Friday, there were severe activation problems with the iPhone 3G. This isn't exactly a surprise, perhaps, after the new in-store activation procedures and AT&T's dismal performance last year.

What is surprising is that approximately 36 hours after Apple said the new system software would be available for existing customers to access, it still isn't. At least not for everyone.

I have the first-generation iPhone I bought a year ago--and as of midday Saturday, the new v2.0 firmware was unavailable for download. iTunes tells me, incorrectly, that "this version of the iPhone software (1.1.4) is the current version." See the above screenshot.

This is in addition to what my CNET News colleague Erica Ogg reported on Friday: some existing iPhones have been bricked by software update glitches. At least that didn't happen to me.

I'm not exactly desperate to upgrade to the new system software (I'm at a political conference in Las Vegas and am mostly focused on what's happening here).

But this points to a bad miscalculation on Apple's part. Why didn't it come up with a better estimate of how many people would be connecting to its servers and add sufficient capacity? Apple probably is curbing existing customers' access to software updates to prevent its servers from overheating (this is at least a better failure mode than yesterday morning's odd errors).

This is understandable, perhaps, but it's disappointing--especially because this should have been preventable with even a modicum of advance planning.

Update 1:50 p.m. PDT: iTunes is now showing the update as available. I should have noted that I already upgraded to the latest version of iTunes. That wasn't the problem--Apple's servers were.

The Remote App puts control of iTunes--or Apple TV--in the palm of your hand.

(Credit: CNET)

We've had a few minutes to play with the Remote App (download) for the iPhone. The (not surprising) verdict? It's an easy must-have for any iPhone or iPod Touch owner who enjoys listening to music at home.

Once you've upgraded your iPhone (or Touch) to version 2.0, just go to the App Store and search on "remote." (Amazingly, that--not "iRemote"--is the program's official name.) You can download it straight to the phone over a Wi-Fi connection (tap the word "free" on the upper right corner), and it auto-installs, adding a new icon to your home screen.

Kodak's new little black media player.

(Credit: Kodak)

I'm not sure whether I should call the new Theatre HD Player Kodak's answer to Apple TV, but that's the best analogy I can come up with on short notice. Whether it is or not, Kodak is doing its best to get into your living room with a little Wi-Fi-enabled black box that connects to your HDTV, displays images and other multimedia content, and links directly to Kodak Gallery, the company's online photo-sharing service, and Flickr. Due to roll out in September, the Theatre HD Player will retail for $299.99 and continue to add features through firmware upgrades after it's launched.

Kodak calls the Theatre HD Player, "An interactive device displaying personal content--pictures, video, podcasts, music--and Web-based content on a HDTV, while wirelessly connecting to a household's private Wi-Fi network." In a nod to the Nintendo Wii's popularity, Kodak includes gyroscopic remote, and you navigate the onscreen menus much like you would with the Wiimote. Like Apple, Kodak has an alliance with YouTube for video content. RadioTime is onboard for streaming audio.

The Theatre HD Player's connectivity options.

(Credit: Kodak)

In its press release, Kodak notes that the "Theatre HD Player lets consumers relive their favorite, and even forgotten, memories in customized slide shows, incorporating their personal music and video collections, Internet Radio, plus online video- and photo-sharing sites. Consumers can also edit and upload images and videos to popular online content sharing sites on their HDTV from the comfort of their living room." It's able to display high-resolution still images in a 16:9 aspect ratio and 720p video through it's HDMI and component video connections.

I got a look at the unit last night at an event for the product's unveiling (along with a few other Kodak products) and thought it had some nice features and an elegant menu system. There's some promise here. However, the Theatre HD Player is going to pose a marketing challenge for Kodak. Company reps seemed to shrug off the fact that the little black box's price tag approaches that of the Playstation 3, which not only has built-in memory card slots (and a hard drive), a good photo viewing application, and the ability to play back music and video files from your computer, but there's that built-in Blu-ray player--and oh, it plays games and has a Web browser. In my humble opinion, this device needs to cost less than $200 and probably closer to $150 to be viable. Of course, I keep telling Apple TV reps the same thing about their device, but that hasn't seemed to have had much of an impact.

Anybody interested in buying this thing? And, at what price? Or would you rather go for Apple TV or a PS3 for that matter?

If you're planning on waiting in line for an iPhone, be sure to do your homework and bring all the necessary items with you. Or, watch Wednesday's edition of the Daily Debrief where I talk to CNET News' Tom Krazit about the lines and the purchase process. Apple has finally disclosed that stores will start selling the phones at 8 a.m. The company has also said it will let customers into the stores in groups of 30. This part of the system sounds similar to last year, but this year's big unknown is what the activation process will be like. Simple and easy in 10 minutes? Or mired in paperwork and chaos to the tune of 30 minutes?

Some critics have already gotten their hands on the phone and have written largely positive reviews. But, for those of you abstaining from the Apple Kool-Aid, one of our CNET News colleagues, Marguerite Reardon, takes a look at seven other smartphones that rival the iPhone.

(Credit: Apple)

Update at 10:08 a.m. PDT, with clarification on how users' e-mail will be handled.

Apple's MobileMe service is primed to be relaunched this week, ahead of the Friday launch of the iPhone 3G. That means subscribers to .Mac will find the service taken offline for a six-hour stretch as Apple makes the transition, according to a post in MacRumors.com.

The www.mac.com site will go down on Wednesday from 6 p.m. to 12 a.m. PDT, leaving .Mac subscribers unable to access the site or use .Mac services, except for .MacMail via their desktop applications, iPhone or iPod Touch. In fact, existing .Mac users may have already noticed the ability to receive and send e-mail at an @me.com address if they so request. Other mac.com subscribers will be grandfathered in, allowing them to continue receiving e-mail at their mac.com address, while also receiving a new me.com address.

When the site relaunches as MobileMe, users will find a few changes, according to MacRumors.com:

The revamped .Mac service will offer Web-based e-mail, calendar, address book, photo gallery, and storage capabilities as well as "Push" sync services.

A one-year subscription to MobileMe will cost $99, which is similar to the .Mac price, but purchasers of an iPhone 3G will be able to score a subscription for $69 on Friday, the report notes.

The Apple MacBook Air has been a ground-breaking first-generation product (in my opinion). So, what will Apple do to top it when an update comes later this year? There are some telling indicators already. This is what I expect--and hope for--as a user.

(Credit: Apple)

First, a disclaimer. I am not an Apple fanatic. The MacBook Air is the first Apple product I have ever used for more than a few days. For well over a decade, I have been wedded to Wintel (Windows-Intel) laptops.

Before I dive into upcoming features, I should also mention that I have been extremely pleased with the Air and have used it almost daily for the last four months. But I would be remiss if I didn't say it is overpriced, as all subnotebooks are.

• Overpriced but still an amazing design Apple made a very studied decision to exclude certain features. This makes the Air an Air. Apple could have included more ports and a little more of this and pinch of that--but then it would have been just another subnotebook.

So, I expect Apple to maintain the uniqueness of the Air for the next refresh.

But improvements are always welcome. And here are a few things that potential buyers can expect to see when a new Air is rolled out.

Apple has begun to give us hints of things to come. A $500 price cut for the solid state drive (SSD) model is one of the biggest indicators so far.

• A bigger, better solid state drive The next Air will offer drives that range in size to more than 100GB. A likely offering would be 128GB from vendors like STEC. (Samsung supplies the current SSD.) Intel and Micron Technology can't be ruled out. Their drives will come in 80GB and 160GB capacities.

These SSDs will also likely use multiple-level cell (MLC) technology, in contrast with current drives that use single-level-cell (SLC). MLC allows higher-capacities but presents power and data reliability challenges, which suppliers claim to have overcome.

• Processors Invariably, all notebooks get upgraded with better processors and graphics. I think the Air's current performance is superb for a subnotebook. I have owned many subnotebooks over the years and anemic performance can render them practically unusable as an everyday machine. But I haven't had this problem with the Air (see note at bottom).

Intel's upcoming 45-nanometer "Montevina" (Centrino 2) low-power offerings should make this experience even better. Though an initial Montevina refresh is slated for July 14, low-power versions won't appear until this fall. Intel refers to these as SFF (small form factor) processors. They will come in high-performance, low-voltage, and ultra-low-voltage variants.

SFF Montevina processors will range from 25-watt (2.4GHz) to 17-watt (1.86GHz) to 10-watt (1.2GHz). The current Intel processor used in the Air is rated at 20 watts at 1.8GHz.

Whether Apple chooses one of these or opts for something not currently on the Intel roadmap of course remains to be seen.

• Graphics Graphics will get upgraded. Montevina will come with Intel's GMA X4500 graphics, which Intel has said repeatedly will be three times faster than current X3100 integrated graphics.

• Battery Insufficient battery life is a problem that plagues all subnotebooks. It has often been suggested that Apple include a removable battery (for easy replacement), but that could compromise the ultraslim design. Having said that, I have been pleased with the battery life compared with other notebooks I have owned.

Hazarding a guess at other features such as upgraded hard disk drives, better screens, and external extras like a docking station is too speculative (and the latter would also compromise the design), so I'll refrain from making any predictions.

But the Air shouldn't change too much. With a simple performance upgrade, it would be an even more remarkable computer.

(Note: No, the Air is not as fast as a 14-inch Hewlett-Packard 6910P, for example, but no PC maker can squeeze that kind of performance into a Air-like form factor.)

The line for the Apple iPhone 3G began to form Friday--an entire week before the device goes on sale.

Frankly, one shouldn't encourage such behavior by actually covering it. But if I were in Manhattan--instead of Austin, Texas--I, too, would have interviewed them in person by now.

The queue outside of Apple's Fifth Avenue store, covered first by GearDiary and then Engadget, apparently hasn't been formed by iPhone co-dependents, though.

It is instead made up of a group of people who may want to 1) set a world's record for standing in line to buy a product and 2) have a social-agricultural-political message they want the world to hear. However, it was difficult from the video interview on Engadget to determine what the group actually stands for.

On Saturday, the Apple 2.0 blog seemed to get further with the group's agenda. The group, which started off with about 10 on Friday and was slimmed down to 5 by Saturday morning after a night of rainfall, apparently supports organic farming and sustainability for the planet. According to Apple 2.0, they may be interested in turning the White House Lawn into an organic garden and they may be planning to buy iPhones for the presidential nominees.

The seemingly ad hoc group is certainly savvy in deciding to use the iPhone 3G to garner some publicity. However, to be perfectly honest, most mainstream journalists feel more comfortable interviewing gadget nuts rather than alternative souls hoping to use the media to change the world.

Update at 10:52 a.m. PDT: Information about monthly text messaging added

AT&T reaffirmed pricing for the iPhone 3G on Tuesday, noting that eligible customers can snag the new smartphone for a discount: $199 with an 8GB flash drive and $299 for 16GB.

AT&T will begin offering Apple's iPhone 3G at its retail stores beginning July 11 at 8 a.m. local time. AT&T is the exclusive iPhone carrier in the U.S.

Under the plan, the discounted price will be available to customers who have purchased any iPhone before July 11, who are activating a new customer line with AT&T, or who were eligible for an upgrade discount at the time of purchase. (Eligibility for an upgrade discount, the carrier said, is generally determined by amount of time remaining on a current contract and the payment history.)

To be eligible, customers must also sign a two-year contract. Apple had revealed the $199 and $299 pricing for the iPhone 3G at its Worldwide Developers Conference in June.

Those who are not eligible for an upgrade discount can buy the iPhone 3G for $399 for the 8GB model or $499 for the 16GB version. Both require a two-year contract as well.

Customers who purchase the phone without a contract will pay $599 for the 8GB version or $699 for the 16GB model.

The phones will come with the iPhone 2.0 software preloaded on the devices, which includes such business-class e-mail through Microsoft Exchange ActiveSync and the iPhone Software Development Kit for creating customized applications. AT&T will also offer its Yellowpages.com Mobile for iPhone on the devices.

There will be an activation fee of either $18 for existing customers eligible for an upgrade, or $36 for new customers.

AT&T is requiring customers to activate their phones in the stores, as the carrier looks to reduce the number of customers who may try to unlock, or hack, the phones to run on other carriers' networks.

AT&T is launching four voice and unlimited data plans for the iPhone 3G.

The AT&T Nation Unlimited plan will include unlimited anytime minutes for $129.99 a month, while the AT&T Nation 450 plan includes 450 anytime minutes and 5,000 night and weekend minutes for $69.99 a month.

The carrier is also offering its Nation 1350 plan, which includes 1,350 anytime minutes for $109.99 a month, and Nation 900 plan that includes 900 anytime minutes for $89.99 per month. Both of these plans include unlimited night and weekend minutes.

And for folks who engage in tons of text messaging, AT&T is charging $5 for every 200 text messages; $15 for every 1,500 messages; and $20 for unlimited text messages.

For more details on the device, see Crave's iPhone 3G FAQ.

Verizon Wireless has upped the ante in its efforts to take on Apple's iTunes store in the digital music market by offering DRM-free music for all purchased music plus a new subscription service. But will it be enough to make a dent in Apple's dominance?

On Monday, Verizon Wireless will announce the revamped V Cast music store, which will be loaded with digital music that is free of the pesky digital rights management encryption on all songs that are purchased through the store. Verizon is joining Amazon as the only other digital music distributor that will be selling DRM-free music from all four of the major record labels, including, Sony BMG, Universal Music Group, Warner Music Group, and The EMI Group.

The company is also offering its first ever music subscription service courtesy of its relationship with Real Networks' Rhapsody America service. Verizon announced it was partnering with Rhapsody last year. And through this partnership, the company has redesigned its music store and the V Cast user interface.

The new service clearly puts Verizon Wireless in a new category when it comes to digital music. Verizon cell phone subscribers as well as nonsubscribers can download the DRM-free music onto a PC and sync it to any MP3-enabled device for $0.99 a song. Songs can be purchased over Verizon's cell phone network onto a Verizon phone for $1.99 a pop. And the new V Cast service also allows Rhapsody subscribers to sync their phones to the subscription service, much the same way AT&T subscribers can access the Napster subscription service.

But even though it has potential to become a major player, it's still unlikely that the cell phone company's moves will have much impact on market leader Apple. Instead, experts believe that Verizon is much more likely to help grow an already underperforming market.

"The issue isn't whether Verizon can take down iTunes," said Russ Crupnick, a senior analyst at the NPD Group. "But rather, can it help grow the market? And I think the answer to that is yes. Verizon is very well-positioned for that."

The music industry is in dire straits. Sales of CDs have been plummeting over recent years, and the industry hasn't been able to make up for the losses through digital distribution. Apple is by far the leader in digital downloads, hitting the 5 billionth song download mark from its iTunes music store just a couple of weeks ago. According to Crupnick, over three-fourths of the full music tracks downloaded come from the iTunes store. Amazon is a distant second, with other players such as Wal-Mart trailing even further behind.

So far, freeing music downloads from DRM protection hasn't done much to move the needle. Amazon and Wal-Mart have been offering DRM-free music for almost a year, and they still lag behind Apple. The reason for this could simply be that Apple is so far ahead in terms of market share that few people have reason to see DRM protection as a problem.

"When you have 80 percent market share on Apple devices," Crupnick said, "there isn't much demand from people to get unprotected music. They don't seem to encounter any issues with it."

Ed Ruth, director of digital music for Verizon, said that the company is simply trying to offer customers choices.

"Of course we recognize that Apple has done a great job," he said. "They have helped tell the digital music story quite well, and they've tilted the ecosystem in one direction. But in some ways they have trapped people into one experience. And that's the problem we're trying to solve."

Meanwhile, Verizon could also have an uphill struggle in getting people to use the Rhapsody subscription service, which costs about $15 a month for unlimited access to millions of songs. In the online world, only a small niche of music aficionados use services like Rhapsody and Napster. And so far, the model hasn't proven to be much more successful in the mobile world. AT&T has been offering the Napster music service, and even though the company hasn't published figures on how many customers are using the service, analysts say it hasn't been a runaway success.

But some analysts think that a service that does a good job of integrating Verizon's V Cast with Rhapsody could help attract new users to the subscription model.

"If they can make the experience of Rhapsody on a handset complimentary to what they are already doing with V Cast, I think it will make Verizon a stronger player by attracting new music subscribers," said Susan Kevorkian, an analyst at IDC.

While Verizon may never be able to beat Apple in the online music game, there's reason to believe that the company could beat out its fellow cell phone carriers and other music downloading services for market share. And in such a nascent market, Verizon still has an opportunity to make a significant amount of money from its music store and help move the carrier away from simply being a phone company.

Verizon claims that record labels have told it that in terms of revenue, it is already second to Apple when it comes to the money that is made from full track downloads. And in a recent survey of Internet users conducted by NPD Group, Crupnick said that over half of the respondents had heard of the V Cast music service. This was higher than awareness for music services from other cell phone companies such as Sprint Nextel or AT&T. But it was also higher than some well-established music brands, such as Microsoft's Zune music store, Rhapsody, and Napster. Still, only about 7 percent of the respondents said they had ever used the V Cast music service to download songs.

But Crupnick believes this consumer awareness could someday translate into growth for Verizon's V Cast service. Verizon also has other attributes that some of these other music distribution channels don't have. In addition to selling full track songs, Verizon is also able to help the record labels monetize the same songs in multiple ways by selling ringtones, ring-back tones, and wall papers of the artists. The company has even begun working to help produce some albums using a mobile recording studio.

What's more, Verizon has access to a wide variety of music playing devices, something that Amazon and Wal-Mart don't readily offer themselves. And it already has an established billing relationship with most of the customers that will likely use its site to download music. All of this bodes well for Verizon. But is it enough to really challenge Apple's dominance?

The answer is probably no. But it could be enough to make it a strong alternative. At the end of the day, Verizon's Ruth said that it's all about forming good relationships with the music industry and providing a great service to customers.

"Our approach is to be as good a partner to the music industry as we can be, " he said. "And we always keep the customer experience and expectations in mind when designing and delivering the service. I think we've done that so far and as a result have earned the trust of our customers."

After talks broke down earlier this year between Apple and China Mobile over the (non-pirated) introduction of the iPhone, Apple's concession to non-U.S. carriers that they don't need to share revenue has apparently restored progress with the world's largest carrier.

This comes as China's government reports mobile accounts are nearing the 600 million mark. China Mobile alone has more than 400 million accounts. These numbers don't mean there are that many people with cell phones, however. I and many others have multiple SIM cards. I use one for visiting friends, but others use second cards, which can be purchased for under 10 USD, to keep various types of calls separate.

From AFP:

China Mobile said Friday the main obstacle keeping iPhone out of the world's largest mobile phone market had been cleared now that Apple has dropped its revenue-sharing demands.

Apple chief executive Steve Jobs said this week he would like to see the device introduced in China later this year, and a senior China mobile executive confirmed the two companies were back in talks.

"We've broken through the biggest obstacle and we are negotiating at the working level," Gao Songge, deputy director of China Mobile's general department, told AFP.

Now if only the U.S. iPhone would allow choice of carrier...