Like most people who’ve had an iPhone 3GS in their hands, we’ve been extremely impressed with the video capabilities of this little device. Not only Does it take near-HD video, it has excellent basic editing software and video can be uploaded to YouTube over Wifi or the cell networks. Among other things, it is the most useful video camera in the world today. No wonder the video camera market is shaking in its collective boots.

Thank God those iPhones are so expensive, and Apple will only sell 20 million or so of them in 2009. If Apple added cameras to its line of iPods, there would be another 3+million of them hitting the market per month, and the low end of the digital video camera market could be crushed.

Uh oh.

That’s exactly what we’re hearing is going to happen. One of our sources in Asia say that Apple has placed an order for a massive number of camera modules of the type that they include in the iPhone. These are inexpensive cameras, in the $10 range. And the size of the order, our source says, means they can only be used for one thing - the iPods.

Only a couple of days after George Hotz became the first hacker to release a jailbreak app for the iPhone 3GS on Windows, there’s a Mac-compatible version out too. This time, Hotz got some help from two fellow coders to be able to please the Mac folks, but he also made some improvements to the Windows version.

Happy jailbreaking, and in case you didn’t know yet: happy unlocking too.

The new browser wars on on. More than a decade after Microsoft killed off Netscape with Internet Explorer, competition in the browser market has never been stronger. Just last week, Mozilla released Firefox 3.5, which has now been downloaded nearly 14 million times. Earlier in June, Apple released Safari 4. In March, Microsoft introduced Internet Explorer 8, and Google came out with a speedier beta of its Chrome browser.

Some early data is coming in showing relative market share and how fast people are upgrading. If you look at the chart above from Statcounter, it indicates that since March Internet Explorer has lost 11.4 percent market share to other browsers.

Start Mobile has managed to get 18 separate iPhone applications approved by Apple. So you’ll imagine their surprise when one of them was recently rejected. But you may be even more surprised to find out why.

Apparently, Apple doesn’t like the way one piece of art in the app depicts President Obama. Is it out of line or tasteless? Well, you can determine for yourself, because you’ve undoubtedly seen the art in question before: It’s Shepard Fairey’s famous “HOPE” image of Obama that was everywhere during his Presidential campaign.

So why on Earth would this be rejected? Well, here’s the wording in the rejection:

It contains content that ridicules public figures and is in violation of Section 3.3.12 from the iPhone SDK Agreement which states: “Applications must not contain any obscene, pornographic, offensive or defamatory content or materials of any kind (text, graphics, images, photographs, etc.), or other content or materials that in Apple’s reasonable judgement may be found objectionable by iPhone or iPod touch users.”

“Ridicules public figures”? This image is hanging in the National Portrait Gallery at the Smithsonian — yet, Apple apparently finds it inappropriate.

Does embattled music streaming site imeem think it can take on iTunes? For the most part, nearly every streaming song on the site has a download button which links to both iTunes and the Amazon MP3 store. But it is quietly testing its own music download store which bypasses iTunes and Amazon and sells MP3s directly. For instance, this is the case with some Sub Pop artists, such as Iron and Wine and The Shins. When you hit the download button on songs for those artists, a window pops up showing the album where that song came from with with the option to download the entire album or any individual song for $0.99. You can then pay imeem directly by credit card or Paypal and download the song to your computer.

(Screenshots after the jump).

George Hotz, the 20-year old hacker who originally unlocked the iPhone, has released a jailbreaking application for the iPhone 3GS codenamed “purplera1n.” It’s currently Windows-only (Windows 7 not supported), and requires the latest iTunes installed, and an iPhone 3GS with the 3.0 firmware.

Hotz mentions in a blog post that the jailbreak for Mac is “coming soon.” The iPhone Dev Team did release a unlock for 3.0 which did not work on the iPhone 3GS, but Hotz’s version does (although it doesn’t free you from your current carrier).

Yesterday, we wrote about what Facebook was planning for the next major release of its iPhone app, version 3.0. The big update will contain 15 new features, probably none bigger than the addition of event management to the app, finally. But there was one thing Facebook developer Joe Hewitt didn’t mention yesterday, and it’s a big one: Video uploads from the iPhone 3GS.

Hewitt just started working on the feature yesterday, thinking it would be something that would come in the next release, after this one. But he was surprised at how quickly he was able to get it up and running and so he tweeted out today, “3GS video uploading for the Facebook iPhone app is a go — didn’t plan to include it in the 3.0 update, but it was really easy to code.”

An internal AT&T memo that was leaked today is full of very impressive number regarding the iPhone 3GS — numbers that once again show why AT&T’s exclusive contract with Apple to sell the iPhone in the U.S. is so important.

The iPhone 3GS’s launch gave AT&T its best sales day at its retail stores — ever, its second largest traffic day at retails stores, the most transactions it has ever processed in a day, the most orders through att.com in a single day ever and the biggest features sales day at att.com ever. Oh, and it led to the most upgrade eligibility checks ever, which is not surprising at all, though most were probably disappointed.

What’s crazy about all this though is that while many people were expecting the iPhone 3GS launch to pale in comparison to the iPhone 3G launch, it actually exceeded it in just about every way when it came to actual sales (at least through AT&T’s stores and online). The lines may have not been as long at stores because of pre-sales, but sales overall exceeded the 2008 launch day numbers, and all of the heavy holiday shopping times. And apparently iPhone 3GS sales exceeded the iPhone 3G launch day sales by noon Central time.

It looks like Apple has already started sending out the beta version and SDK for the next iteration of the iPhone OS, 3.1, to developers.

The iPhone 3.0 software was released just about two weeks ago, ahead of the iPhone 3GS launch. By most accounts it’s pretty stable, though some users have been having battery issues. That’s why it’s a bit odd that Apple would iterate up to version 3.1 already, instead of something like 3.0.1, which it tends to do for minor updates and bug fixes. Could we be seeing a larger update to the OS already?

I’m told that there’s nothing much of interest in the release notes to indicate anything major that is new or changed.

Disclosure: I have not bought an iPhone 3GS — I’m still unsure if I will. Apple gave me a review unit to play with for 60 days.

I’ve had the new iPhone 3GS for a little over a week now. Using it day-to-day over the course of that time, I have a pretty good feel for it. A good enough feel to answer the question that every single person seems to be asking: “Should I get it?”

The answer to that is not so simple. And so I’m going to break it down a bunch of different ways based mainly on the device’s functionality and who I think is considering buying it. I’ll lay out what someone may be interested in the device for, and then give a “yes” or “no” (or a couple “maybes”) answer on if I think it’s worth it. I’ll follow that up with an explanation.

Here we go:

We’ve been a bit baffled by the system Apple has in place when it comes to ratings for applications in the App Store. Is it allowing apps with nudity? Not allowing them? Allowing them with a 17+ rating? We’ve talked to some developers willing to break their NDAs because they think the App Store approval process in general is messed up, and would like to see Apple do a better job handling it. So here’s how the ratings system currently works for the App Store.

The Ratings

When you go to submit your app through iTunes Connect, one of the steps takes you to a ratings matrix that you must fill out. This contains 10 questions listed under “Apple Content Descriptions.” For each of the 10 questions you must say “None”, “Infrequent/Mild”, or “Frequent/Intense.” Depending on what answer you give for each of these, the rating of your app in the upper right corner will change. These ratings go from “4+” to “9+” to “12+” to “17+” to “No Rating.”

That last one is key. If your app gets the “No Rating” label, a warning written in red appears underneath it stating that: “This content will not be sold via iTunes.” So what triggers such a rating? Well, not a lot. Basically, it comes down to the final two questions in the 10 question matrix. Let’s run through them in descending order:

Steve Jobs is officially back at work, according to Apple PR. Even though he had a liver transplant earlier this year, a detail which was leaked to the Wall Street Journal and conveniently reported on a Friday night after the markets had closed. Last week, Jobs was spotted back on Apple’s campus and was even quoted in a press release! Today, Apple is hammering home the message that Jobs is back on the job, telling multiple news organizations from ABC News to Bloomberg to the New York Times to Reuters the exact same canned quote (sometimes attributed to spokesman Steve Dowling, sometimes not).

Steve is back to work, Jobs is at Apple a few days a week and working at home the remaining days. We are very glad to have him back.

While it’s not being talked about too much, the $99 iPhone 3G is a very interesting play by Apple. It takes what was previously a just out-of-reach device for many, and puts it at a magical price-point. Sure, it still won’t sell everyone, like the people who only care about getting the phone that their carrier is offering for free, or those looking for the cheapest possible monthly plans. But just look at the iPhone compared to the other $99 phones out there.

That’s what we did. And originally we set out to compare the various specs. But looking them over, it’s really a joke. And you can basically see all you need to see simply by looking at the devices being offering by the major carriers in the U.S. at this price point.

When Nokia launched its Ovi Store for mobile applications a month ago, it was clear that - despite its less than stellar launch - it would be a mistake to simply dismiss the Finnish mobile juggernaut’s efforts as meaningless. The company may be struggling to stay relevant on the software and services side, but with a reach like Nokia’s on the handset distribution level I think it goes without saying that a lot of eyes are firmly fixed on Nokia’s initiatives in the field.

There was some criticism about the lack of content on the Ovi Store at launch day, particularly because of the fact that a lot of big names were lacking, but I figured I should give it at least a month to see if and how many developers would flock to the platform. Now, I think it’s time to take a look at where they stand after that month, and I thought I’d start by comparing the content offering to that of Apple’s App Store.

Apple is nearly tripling its stake in UK-based Imagination Technologies, boosting its interest to 9.5 percent with the purchase of 2.2 million new shares at £1.4275 ($2.35) each - the mid market close price on 25 June - and another 11.52 million shares.

In total, Apple is spending £3.14 million (approx. $5.17 million) for the new shares, exactly the same amount it paid last December when it purchased a 3.6 percent stake in the microchip maker.

Okay, the situation surrounding the App Store and its approval process continues to get weirder and weirder.

As you may have heard, an application featuring nudity first appeared in the App Store yesterday. Today, that app was removed, which everyone presumed was a move by Apple. But the developers said that the removal was its own doing because its servers were getting slammed with picture requests. Then more applications claiming to have nude photos started appearing. And now Apple is apparently saying none of these apps will be allowed in the App Store. But that seems to contradict its own rating system that now clearly allows for nudity.

This makes no sense. To the point where I’m not sure there is anyone actually in charge of all of this for Apple. Instead, I’m starting to think this whole system is run by a group of people, all with different thoughts on the approach Apple should take with apps. And none of whom seem to communicate with each other very well.

Today, we got the latest version of the live-streaming app Qik, a version that will work on the iPhone 3GS. No, we didn’t get it through the App Store, because Apple or AT&T or both still won’t allow for applications that stream live video from the device to be accepted into the store. So instead, just like before, we have to settle for the ad-hoc version, which is fine, but severely dampens the application’s potential reach.

So how does the iPhone 3GS version of Qik compare to the one that worked on the iPhone 3G? Overall, video quality-wise, I would say the iPhone 3GS version of Qik and the iPhone 3G version look about the same. This is despite the 3GS having a nicer camera (3.2 megapixels versus 2). And even though the iPhone 3G didn’t have video camera capabilities, Qik was able to build its own encoders to use the regular camera for video capture. The iPhone 3GS of course, can do video, and it has APIs that give developers access to it. But it would seem that Qik is still limiting the quality of the video that gets streamed, to ensure better live performance.

The drama in iPhone porn world continues. Yesterday, Hottest Girls, the first app with nudity was accepted into the App Store. But early this morning it was made unavailable, and everyone presumed Apple was behind it. But apparently, the app has not been pulled from the App Store by Apple, but rather by the developers because of high demand.

The guy team behind the app, Allen the Geek, writes on its site:

The Hottest Girls app is temporarily sold out. The server usage is extremely high because of the popularity of this app. Thus, by not distributing the app, we can prevent our servers from crashing. Those who already have the app will still be able to use our app. To answer the question on everyone’s mind: Yes, the topless images will still be there when it is sold again. -ATG dev team

So is this BS? Is this just them covering up for Apple pulling it? I don’t think so.

The tech blogosphere was abuzz yesterday with the news that Apple seemingly started accepting applications that contain nudity into the App Store. Now, it appears someone over at Cupertino as ultimately decided to reject the first such app to get into the store after all. In our tests, we could still locate the app via the iTunes link, but were unable to purchase it and download it to our devices.

Other applications with the new rating (”Rated 17+ for “Frequent/Intense Sexual Content or Nudity.”) could still be downloaded without a problem, so it seems Apple just let ‘Hottest Girls’ slip through the cracks - something we suggested as a possibility yesterday as well - and has now fixed it.

AdMob has released its metrics report for May 2009 (PDF download link), and looked closely at the actual distribution of users of the iPhone apps in their network this time. The main take-away? There may be tens of thousands of applications available for the iPhone, but a whole lot of them simply never actually make it onto the device.

Out of 2,309 tracked applications (representing 15.1 million unique iPhone and iPod Touch users), no less than 54% are actively used by south of 1,000 persons. That’s a very long tail there, and not an economically interesting one at that. Only about 20% of the tracked apps have more than 10,000 active users, and only 5% (or 116 apps) boasts more than 100,000 active users. For the record, an active user is considered to be someone who used the app at least once in May.