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Apple reported record breaking profits for the three months to 31 December 2011 of £8.36 billion ($13.06 billion)- more than doubling  up 118% from the same period in 2010.The company also sold 37 million iPhones- more than twice as many as they sold in the last quarter of 2010.

“Apple’s momentum is incredibly strong, and we have some amazing new products in the pipeline,” said chief executive Tim Cook.

The firm is expected to release its iPad 3 in March this year.

“We are very happy to have generated over $17.5bn in cash flow from operations during the December quarter,” said Peter Oppenheimer, Apple’s CFO.

“Looking ahead to the second fiscal quarter of 2012, we expect revenue of about £20.96 billion and we expect diluted earnings per share of about £5.48 ($8.50).”

Apple saw strong sales for both its iPads and its Mac range of computers, rising 111% and 26% respectively compared to the same period in 2010.

Independent estimates suggest more than 6.8 million Android or Apple iOS smartphones were activated on Christmas Day – more than double last year’s number.More than 3.7m Android devices were activated over the Christmas weekend, Google has revealed.

Industry experts believe the rise is partly because entry level smartphones have become cheaper.

The statistics, from Flurry Analytics, suggested 242 million apps were also downloaded on the same day.

The peak time for downloading new apps on Christmas Day was between 7pm and 10pm, the company said.

It gathered its data via its analytics tool which monitored downloads and usage of 140,000 apps in both Google’s Android Market and Apple’s App Store.

Flurry Analytics did not break down numbers for the individual operating systems.

It said the figures showed an increase in activations of 353% when compared to the daily average between 1 and 20 December. App downloads were up 125% over the same period.

The Android operating system can be found on a wide range of models produced by many different manufacturers, whereas Apple’s iOS is only found on iPhone, iPad and certain models of its iPod music player.

Demand for the iPhone has reached such a level that China based manufacturer Foxconn is looking to double production to 400,000 units per day, China Daily reported.

Apple and five publishers are to be investigated over claimed anti-competitive practice in the ebook market, says the European Union’s anti-trust watchdog.As well as Apple, the inquiry will also examine Hachette Livre, Penguin, Harper Collins, Simon & Schuster and Verlagsgruppe Georg von Holzbrinck.

The Commission said it would focus on alleged illegal agreements restricting competition in the EU.

The UK’s Office of Fair Trading has already carried out a similar inquiry.

The character and terms of agreements that the companies made with agencies are to be examined for breaches of EU rules on cartels, the Commission said.

The Office of Fair Trading has now finished its own investigation, but continues to work closely with the Commission, which is extending the scope of the inquiry across the whole of Europe.

The Commission carried out “unannounced inspections” on the companies in March 2011 as part of its investigations at premises in several European countries.

Apple’s iBook store, which supplies ebooks to the company’s iPad tablet computer and the iPhone, is likely to come under scrutiny.

Steve Jobs said he wanted to destroy Google’s Android and would spend all of Apple’s money and his dying breath if that is what it took to do so.The full extent of his animosity towards Google’s mobile operating system is revealed in an authorised biography which is released today.

Mr Jobs told author Walter Isaacson that he viewed Android’s similarity to iOS as “grand theft”.

Apple is suing several smartphone makers which use the Android software.

According to extracts of Mr Isaacson’s book, Mr Jobs said: “I’m going to destroy Android, because it’s a stolen product. I’m willing to go thermonuclear war on this.”

He is also quoted as saying: “I will spend my last dying breath if I need to, and I will spend every penny of Apple’s $40 billion in the bank, to right this wrong.”

Apple enjoyed a close relationship with Google prior to the launch of the Android system. Google products, including maps and search formed a key part of the iPhone’s ecosystem.

At that time, Google’s chief executive, now chairman, Eric Schmidt also sat on the board of Apple.

However, relations began to sour when Google unveiled Android in November 2007, 10 months after the iPhone first appeared.

In subsequent years Apple rejected a number of Google programs from its App store, forcing the company to create less integrated web app versions.

Android has subsequently enjoyed rapid adoption and now accounts for around 48% of global smartphone shipments, compared to 19% for Apple.

But its growth has not gone uncontested. Apple has waged an aggressive proxy-war against Android, suing a number of the hardware manufacturers which have adopted it for their tablets and smartphones.

Motorola was one of the first to be targeted, although it is Samsung that has recently borne the brunt of Mr Jobs’ law suits.

The South Korean firm is currently banned from selling its Galaxy Tab 10.1 in Australia and Germany because of a combination of patent infringements and “look and feel” similarities. A smartphone ban is also pending in the Netherlands.

Samsung is counter-suing Apple for infringing, it claims, several wireless technology patents which it holds the rights to.

To try to compensate and say sorry for the bad service to it’s users last week Blackberry has announced that it will give away a dozen apps for free.Classic games such as Bejeweled and The Sims are being offered free to Blackberry owners. The games, plus personal productivity tools and utilities, are an attempt at compensation for the three day global blackout.

A faulty switch at a data centre in Slough left millions around the world unable to use messaging and web browsing services on their handsets for three days.

In a statement announcing the giveaway, Mike Laziridis, chief of Blackberry owner Research in Motion, apologised again for the three day service stoppage.

“We are grateful to our loyal Blackberry customers for their patience,” he said. “We are taking immediate and aggressive steps to help prevent something like this from happening again.”

In total, 12 apps are being offered to customers and RIM said more would be made available in the coming weeks.

As well as games such as Texas Hold’em Poker and Bubble Bash 2, users can get Photo Editor Ultimate and DriveSafe.ly pro.

The programs, which Blackberry claims are worth more than £66, will be free until 31 December 2011.

The software is available via the Blackberry App World store.

RIM faced serious criticism over the stoppage. Thousands of people turned to Twitter and other social media networks to express their poor opinion of the company and its stuttering efforts to fix the problems.

Business customers are being offered a free month of technical support. Those who already have a support contract will be offered a month of Blackberry’s enhanced support service.

Mobile operators are also mulling compensation packages for customers. Spanish telecoms firm Telefonica, which owns the UK’s O2, said it would offer a package to customers but it is not clear what form it will take.

The watchdog regulator Phonepayplus, has issued plans for more protection for consumers from rogue traders in the UK phone industry.PhonepayPlus is the organisation that regulates phone paid services in the UK

The premium rate regulator has uncovered two cases of smartphone apps charging users without their knowledge or consent.

In one case an app automatically sent and received text messages that could cost the user £4.50 each.

It was shut down by the regulator.

Now Phonepayplus has started 10 week consultations on app based mobilw payment proposals that consumers’ consent to charge is clearer, password requirements are strengthened to prevent children buying items, and there is more explanation of the cost of virtual credit.

“We need to be nimble and flexible in our approach. We know that the best regulation is one that works collaboratively with industry to pre-empt problems that harm consumers and damage markets,” said Paul Whiteing, Phonepayplus chief executive.

“We will not hesitate to use our robust sanctioning powers to drive out rogue providers who could damage a vital part of the UK’s growing and innovative digital and creative economies.”

You’ve built your business’s smartphone mobile app- but how are you going to make money out of it?If you’re thinking of a suitable price tag for it and hoping that it will take the various app stores charts by storm- you could be in for a nasty surprise.

Mobile app downloads are expected to have increased from over 7 billion in 2009 to almost 50 billion in 2012- which works out a growth in revenue from £2.5 billion to £10.9 billion.

But although 80% of the 2009 figure is accounted for by paid apps, by 2012 that is expected to drop by around half.

The rest is made up of a mixture of advertising, virtual goods (things bought within the app environment, such as tools in social games such as Farmville), and other revenue models.

Sometimes giving your app away for nothing may mean a bigger payoff in the future.

Top 5 revenue streams

• Paid apps
• In-app advertising – you get paid for each ad seen
• Virtual goods – for example buying tools in Farmville
• Subscription – charging a monthly fee, for example to access news content
• Marketing – a free app used to promote a product
• Hybrid- free initially then charging for premium content

As such, different business models need to be developed for different types of content. To do this, you need to measure two things – stickiness and utility.

Utility means how much the user values the time using your app.

The general rule is the higher the utility of the app, the more the consumer is prepared to pay for the app up front.

If it’s a relatively simple application, like a web app like chat or messaging, the consumer is less likely to pay anything at all and you have to go for other models.

Stickiness refers to how often you end up using an app – if you ‘stick’ with it.

The majority of games that are only played three or four times and are very unsticky, however some apps like Facebook are extremely sticky.

Stickiness means that advertising might be a good option.

If you have an unsticky app and choose to go with advertising, you will only display it three or four times. As the current rate is £1 for a thousand impressions, you won’t make much.

If you have a high utility but low stickiness you go for a paid app. High stickiness and low utility, like web applications, then advertising is the choice.

Virtual goods – for example things players need to enhance a game – have been pioneered by companies like Zynga, the creators of Farmville.

Considerations include whether your target market can easily pay for things – for example are they underage and have no access to a credit card?

And you need to weigh up the rates taken by the market place for a paid for app with the rates charged for using advertising.

Apple, for example, takes 30% of the face value of every app sold in its iTunes store.

But if you simply want to promote a product – a shiny new BMW, for example – then making your app free and recouping the cost in increased sales is the sensible option, says Mr Laurs.

As long as the app is perceived as free for the consumer then the marketability of the app is generally 50 times higher than any paid app.

It’s obviuosly easier to get consumers converted to free apps than to pay for them. It’s human nature.

Apple’s new rules for iPad and iPhone apps payments have been criticised after they forced Amazon to change the Kindle app to make buying new books more complicated.The new terms and conditions, which mean publishers must give Apple 30 per cent of the price of any content they sell via apps, came into force on 30 June.

In response, in July, Amazon removed a “Kindle Store” link within its app in order to preserve its profit margin on e-books.

Kindle app users are still able to buy more books, but they must exit the app and navigate to the Kindle Store via the iPad or iPhone web browser.

But the change has left users confused and angry. On the iTunes page for the app, some indicated they didn’t understand the new purchasing process.

“Pointless update,” said SJH31. “Wish I didn’t update now. What’s the point if I can’t buy books.” and “In reality Apple didn’t like the competition and so has hamstrung apps like Kindle. Shameful from Apple.”

Those who did understand the change overwhelmingly blamed Apple.

Apple is competing with Amazon via iBooks, which still allows users to make purchases from within the app. The rule change has forced Barnes and Noble, Kobo and Google to make similar changes to their e-books apps too.

Apple’s rivalry with Amazon is expected to intensify, with the online retail giant reportedly poised to expand its range of gadgets beyond e-readers to include a full colour touchscreen tablet.

Steve Jobs originally announced the new apps payments regime in February.

Apple has since softened it slightly by allowing publishers to charge more for content in apps than they do on their own website, where they do not have to pay a 30 per cent cut to a third party.

Apple announced last week that in just 3 years 15 billion apps have been downloaded through it’s online store.
With a sizeable revenue cut of paid programmes, it has become the accidental goose who has laid the golden egg for Steve Jobs.

And although Apple did not invent the smartphone application, its system has defined the user experience. iOS apps are simplicity at every turn – payment, installation and use.

Others have followed-suit, with great success. Android Market passed three billion downloads in May.

But after a period of rapid growth, native smartphone apps are facing a fight for survival.

That threat comes from web apps – software that runs in a browser rather than being downloaded and installed on the device’s operating system.

Mubaloo, one of the UK’s biggest mobile app developers, estimates that requests from clients for web apps has doubled in recent months – enough to make them the third big player in app development.

The reason for that is simple – developing web apps solves several headaches.

Firstly, like the regular internet, a good web app can be made to adapt to a wide variety of devices rather than forcing the developer to create different products for each platform – be it iPhone or Android, smartphone or tablet.

Secondly, by circumventing the strict guidelines associated with official stores, Mr Mason’s clients can have exactly what they want, and can say for certain when it will be ready for the public.

Should any changes need to be made once the app is live, they can be made instantly, rather than wait several days for approval.

And then there’s the matter of money.

Put an app in the App Store and 30% of each sale goes to Apple. Android takes the same, but the cash goes to payment processors and mobile carriers. Microsoft and BlackBerry also get a cut of what sells in their stores.

Web apps offer developers the chance to cut out the middle man.

If that was not enough of an incentive to fly solo, in February of this year, Apple announced that it would also be taking 30% of revenue from in-app subscription payments.

It is that levy which may have proved be the final straw for cash-strapped publishers relying on a lucrative digital strategy to keep operations moving.

The first major player to adopt a web-apped approach to mobile subscribers was the Financial Times (FT). In June, the newspaper released its debut web app. Since launch it has attracted 200,000 users.

FT bosses have said subsequently that future app development will be focused on web platforms rather than native.

Key improvements in smartphones’ ability to power staple web components mean the FT web app does almost everything the company would expect from a downloaded app – including offline reading.

Smartphones and their mobile apps have been added to the official basket of goods used to calculate UK inflation rates.
The Office for National Statistics (ONS)  updates its 650 item basket of goods and services annually, to better reflect changing public spending habits.

The shifting of goods and services in and out of the basket gives an insight into the changing nature of shopping habits and new technology in the UK.

The ONS collects about 180,000 separate price quotations of this basket of items in 150 areas of the UK.

These are then used to calculate the Consumer Prices Index (CPI) and Retail Prices Index (RPI) measures of inflation.

Smartphone applications have replaced mobile phone downloads, such as ringtones and phone wallpaper, in the ONS’s estimate of a typical shop.

Also added to the 2011 basket were sparkling wines and oven-ready joints, with vending machine cigarettes and pork shoulder being taken out.

The ONS ensures that items or distinct markets where consumers’ expenditure exceeds about £400m a year are explicitly represented in the basket, unless adequately represented by other items.

Where spending on items falls below £100m a year, there should be good reason for their continuing inclusion in the basket, the ONS said.

For example, while spending on acoustic guitars and power drills is relatively low, both are included in the basket to represent wider markets, namely musical instruments and electrical tools.