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As widely predicted, Steve Jobs this week introduced at Apple's Worldwide Developers Conference the iPhone 3G that was first reported in this column late last year. The $199 price was a welcome surprise but shouldn't have been given Apple's confident predictions that it would sell 10 million iPhones by the end of the year. That's four million more by Christmas in up to 70 countries, so the numbers make sense. Apple, which holds its sales estimates pretty close to the vest, had to do something like this in order to remain the darling of Wall Street. But you know what was the REAL big news in Jobs' keynote? Not his apparent poor health, which I have to admit concerns plenty of people, and for good reason. No, the big news was MobileMe, Apple's Microsoft Killer.

Huh?

Watch the recorded video of the speech (it is among this week's links) at around 1:10 when Phil Schiller takes the stage. He demonstrates a lot of stuff, mainly push e-mail and calendaring, but also a suite of web applications for remotely accessing user data and metadata held in MobileMe, the successor to Apple's .Mac service. He doesn't show a word processor, doesn't show a database or a spreadsheet, and doesn't show a presentation program. In short, he doesn't show the guts of any networked office-type application. He shows applications that are actually far more sophisticated than any of those.

Given the code Apple already has for its iWork applications, how much more effort would it take to webify those apps, too? Not much, I'd say. A year from now I guarantee you that MobileMe will offer a complete suite of web-based Office applications.

Now let's get back to that Microsoft-killing part. Microsoft's success is based on two products and only two products -- Windows and Office. Microsoft is obsessed with the idea that Google will undermine one or both of those monopolies through Google Apps. This is all Steve Ballmer thinks about and is what made him so eager to spend $40+ billion for Yahoo. But what if the real threat isn't Google at all, but Apple?

In every business there is some version of the 80-20 rule that says 80 percent of the business comes from 20 percent of the customers. Smart businesses do whatever they can to play to that powerful 20 percent. If you are a new CEO who needs to turn around a business 10 minutes after walking through the door, there are two things you can do: 1) cut costs, and 2) focus on your top 20 percent customers. That's it -- you are now a turnaround expert and I grant you an honorary MBA.

There's another kind of company, however, that applies the 80-20 rule in a different manner and Apple is one of those companies. They aim everything they do at that top 20 percent and ignore the rest. Sometimes you hit a home run and get 75 percent market share, like Apple did with the iPod and iTunes, but I can guarantee you the business plan was aimed at taking 20 percent, tops, and making a good living with that.

There are other companies that take a similar market approach to Apple, but few of them are in the computer business. BMW and Porsche are good examples.

What if Porsche were in the software business. What sort of word processor would Porsche build in 2008? It would be distributed, network-based, have central file storage and an elegant user interface. That's the key to what Steve Jobs does all day: he sits around and asks questions like, "If Porsche made a media player, what would it be like?" That's it -- you are now qualified to replace Steve Jobs at Apple on days when he's away making trouble for Disney.

There are two delightful aspects of applying the 80-20 rule in this manner. For one, the 20 percent market -- if that's all that you are aiming for -- tends not to be price-sensitive. That market is willing to pay something for elegance or convenience, but better still for elegance AND convenience. That's how Apple could charge $99 per year for .Mac and for the successor to .Mac, MobileMe. There is at least $60 in profit for Apple hiding inside that $99 price.

The second delightful aspect of Apple's application of the 80-20 rule is that Microsoft can't do the same thing. Microsoft can't compete. Bill Gates made the decision decades ago to go for market share -- for the 80 percent part of the 80-20 rule or -- better still -- for all 100 percent. And it looked for a while like he might get his way, until Apple was reborn.

If Microsoft gets only 20 percent of any market it enters, they consider that effort a failure and it would be, because Microsoft's business is scaled and its cost structure is optimized for really, really big numbers of mindless and fairly undemanding customers, most of whom wouldn't pay $99 per year.

That takes care of Microsoft, but here's the real beauty of this Apple strategy: it takes care of Google, too.

Though Google has a very different approach than Microsoft does to almost every product and market segment, in this one aspect they are identical. Google, too, aims for maximal market share, which means they can't expect customers to pay and their cost structure has to be maintained such that they make a profit without being paid.

Which leaves a lucrative niche all to Apple.

Now let's jump back to the automobile analogy and look at Porsche, which is presently buying Volkswagen. This is probably a stupid move on Porsche's part, but makes the point that smaller, highly profitable companies can develop the kind of financial power needed to take over vastly larger, if more poorly run kinda-sorta competitors like Volkswagen.

Nearly everyone who tries it is going to LOVE MobileMe, which Apple -- calling it "Microsoft Exchange for the rest of us" -- will madly market to small and medium-sized businesses, of which there are six million in the U.S. alone. Those outfits will buy iPhones, MobileMe accounts, and eventually Macs and MacBooks for their workers. IPhone enterprise customers will do the same. Organizations that find Google Apps too hard to use (have you actually tried to build a wiki using Google Sites? I have and it is HARD - far worse than using JotSpot, from which Sites supposedly evolved) or aren't big enough for Exchange will buy MobileMe instead and never look back.

And that's just in the U.S. What about those other 69 countries that will have iPhone service by the end of the year and the 62 that will allow Apple's App Store?

This will become a juggernaut driven not by the iPhone, not by the Mac, not by Apple's media distribution business, but equally by ALL THREE businesses.

There are ways it could be made even better. For example, the smartest thing Apple could do with its cash hoard right now would probably be to buy SalesForce.com and fold that into MobileMe, instantly taking the high ground among the road warrior set.

Steve Jobs is brilliant and patient. He has a plan and is executing on it to perfection. Bill Gates couldn't pick a better time to retire and let someone else take the fall.

A few weeks ago I told you about the perpetuation of print newspapers here in Spain, and in that post I mentioned the fact that you don’t see a whole lot of laptops being used on the streets of Barcelona or Madrid. One might think that this is an indication of a lack of love for gadgets. Quite the contrary: You may not see laptops, but what you do see are cell phones — and tons of them.

To say that Spain is crazy for cell phones is an understatement. Approximately 44 million people live in Spain, but in January of this year the number of cell phones in the country reached 50 million. There are more phones than people here. While Americans might also be addicted to the cell, the Spanish relationship with the cell phone has evolved differently from ours for reasons that are clear and others that remain a mystery.

Cards, Phones and More Phones

The mobile phone isn’t just a communication tool but also an omnipresent character in Spanish culture. Proof of this is seen constantly on television. Commercial after commercial begs you to send SMS code XXXX to whatever number to get the latest Rihanna ringtone or the anthem of the Barcelona soccer team for your phone. Or to get a popular reality show logo for your cell phone wallpaper. Or to comment on a topic on the news.

Here in Spain, this is what most people think of when you say “mobile content.” A lot of money is spent on accessorizing the mobile by ordering games over SMS or on being afforded the right to see your comment crawl across the TV screen when you’ve got something to say, moments after sending a text message to your favorite show. I can’t see most Americans shelling out money for this kind of thing, but Spain leads the entire European region in purchasing this type of “content.” Recent projections show that Spaniards will download over 17 million games for their cell phones this year over WAP or SMS. Like a pampered pet, the cell phone is forever in hand, and is being primped and well taken care of by its owner.

When I first came to study in Spain in 2002, it didn’t take long for me to get a cell phone. My roommate at the time, another graduate student, produced one for me after gasping at the fact that after 3 days in the country I still didn’t have a mobile (what I didn’t tell him is that I didn’t even have one in the U.S.). He quickly pushed a standard issue Nokia on me with SIM card included, and told me what my new phone number was. I didn’t get it. How did he do that? Did he work for the phone company? His answer: “Cards!”

He was talking about a pre-paid SIM card, which allows for a cell phone line with no contract and virtually no relationship with the provider. Unlike in the U.S., you can easily get pre-paid SIM cards in Europe and get talking immediately. In countries like the UK or Germany, you can even buy a SIM card out of a vending machine. You use up your minutes on the card, and then “charge up” the card later at an ATM machine, a grocery checkstand or an Internet cafe. Unlike in the U.S., nearly half of cell phone users in Spain are not under contract with any carrier. Some people have one cell phone with a SIM from Vodafone, and another with a SIM from Orange or some other carrier.

My roommate’s generosity in gifting me a cell phone and telephone number was appreciated, but it was no skin off his nose. He had several handsets lying around as he constantly replaced the older ones with newer ones with better features. I thought this was specific to him but realized soon that most of the people around me in their mid- to late 20s had the same obsession.

I remember asking another roommate, on more than one occasion, if the cell phone she had was new. The answer was almost always yes. The bottom line seemed to be that because cell phones were so accessible and the relationship with the carriers so no-strings-attached, there was an incentive to always get a new one. Not being under contract or getting penalized gave these guys the ability to upgrade their phones when they got tired of them (which was quite frequently). They could then exploit the new features of their devices to the max with add-ons they ordered off TV.

Spain: Land of SMS

A few days into my new Spanish life back in 2002, someone said to me: “I’ll send you a message” I had no idea what they meant. An email? A message in a bottle? Whatever. Later that evening my phone made a beeping noise and there it was: a message. An SMS message. I hadn’t heard of one nor seen one before, but I soon found out that they were — and are — the language of choice in this country. Spaniards of all ages must spend half of their waking hours sending text messages, and they were doing it back then, when I hadn’t a clue what SMS was.

As if adjusting to a new country weren’t enough, I then had to learn a new language: text messaging. While Americans were in the dark ages of SMS, Europeans had long since embraced the technology. And that’s why Spaniards’ SMS messages — much more evolved — often look like ciphers requiring the intervention of some code expert. Ask someone to go out with you, and they might reply “NT1D” (“I don’t have a cent”). You might tell them you’ll pay and will meet them “>o<” (downtown). If they ask why you are so kind, answer “pqtqm” (“because I like you a lot”). Good thing there’s a dictionary.

This strange code has developed over the years as a way for young people to communicate within the standard 140-character limit for text messaging and to save money on their pre-paid cards by only having to send one instead of multiple messages. Along with the jargon in Spanish, it has developed in parallel (but to a lesser degree) with the other official languages of Spain, such as Catalan and Basque.

Such has been the influence of SMS language here that linguistic experts are calling it “the biggest revolution in the language ever.” The same thing has happened in other parts of Europe, and recently French President Nicholas Sarkozy lamented “what text messaging is doing to the French language.”

Whatever it has become, in the beginning it was just a way to save money when communicating. Another very interesting (presumably Spanish) cost-related work-around that I was introduced to and quickly adopted was “the missed call.” If you are going to meet up with someone, they might say “I’ll do a missed call when I get there.” That means they will ring your cell when they arrive so you know to look for them.

The missed call means neither phone is charged a cent, and saves the caller 15 cents or so normally spent on a text message — perfect if you don’t have any more credit left on your phone card. As you might imagine, this isn’t a perfect science. If two people are just calling and hanging up on each other back and forth and not really communicating any information of substance (like their exact location), you still might not find the person you’re looking for.

Different Mobile Histories

When I returned to the U.S. the following year, I brought text messaging with me. Attempting to evangelize people I knew, I found that not a single friend in my inner circle knew what I was talking about. My close friend Andrea, now an ardent text messager, commented recently that she remembers the first time she received an SMS — from me. I remember her saying at the time “I didn’t know my phone could do that kind of thing!”

Why didn’t Americans catch on to this sooner? In looking for the answer, I found several theories. One mobile marketer in the UK, Troy Norcross, wrote something back in 2006 which seems to make a lot of sense. He said that it boiled down to two things: ubiquity and cost. Until recently it wasn’t possible to send messages to another carrier’s number in the U.S.

“Until April 2003 there were no inter-carrier agreements for text messaging,” Norcross wrote. “So if you were on Verizon you couldn’t send a text message to a subscriber on the Sprint network. The problem in the U.S. was further complicated in that there are at least three different mobile network technologies in use.”

And calling in Europe is just a lot more expensive than it is in the U.S. You can easily burn through a 10 euro mobile phone card in less than 10 minutes. With costs like that, it just isn’t realistic to make calls if you don’t have a cell phone contract. So people found a way around it, and it was SMS.

I asked tech consultant and blogger Michael Mace, who wrote a very detailed and enlightening blog post about the differing mobile cultures, why he thought the use of SMS in Europe evolved the way it did.

“Fixed-line phones were hard to get in Europe and expensive, so mobile phone usage took off there much more aggressively than it did in the U.S.” he said. “Prices for texting in Europe were lower than prices for phone calls, so people had an economic incentive to text. In the U.S., mobile service was not as reliable as in Europe, fixed-line phones were cheap, many more people had PCs, and IM was completely free. So texting never became the big force here that it is in Europe (and in much of Asia).”

SMS in Asia is extremely popular; analyst firm Gartner recently projected that the region will send 1.7 trillion text messages in 2008. In Korea for example, according to a study published late last year, Korean youth opt for SMS over email even though email is free, with people considering email “outdated.” On the other hand, in Japan, mobile email is far more common than text messaging.

Going Beyond Texting

Upon returning to Spain to live five years later, what’s interesting to observe is that while so much has changed in the mobile space in the U.S., not much has changed here. People are still constantly upgrading their cell phones and texting all day long, and still ordering ringtones and screensavers for their phones. But other ways of interacting with the mobile haven’t caught on or at least not as much as back home.

Here, most all of my friends are professionals but none carry Blackberries and none have an Internet data plan on their phones. They don’t surf the web on their devices, and they don’t send emails. A 2006 study estimated that only 300,000 workers in Spain used mobile email) and most don’t do anything except call and text.

Because Spain seemed so much ahead of the U.S. in using mobile for something more than just calls, one would think that media consumption on phones would be the next logical step, but that hasn’t been the case. In 2002, Americans didn’t know what SMS was but in 2008 we are texting, watching videos, reading RSS feeds and even using VOIP on our cell phones. In Spain, most people are doing none of that — but you will see a grandmother shoot off text messages like a teenager.

Europe is a large and diverse region, and Spain shouldn’t be considered by any means the country that sets the standard for what’s going with mobile content in the EU (though Barcelona does host Europe’s biggest yearly mobile conference, testament to the interest in the topic here). What I have seen happen here is that people adapt their mobile habits to their circumstances. If calls are expensive, they use SMS. And if calls are so expensive, so are data plans, so forget about using the mobile Internet. So media is inevitably left out of the mobile equation.

This begs the question: where does this leave the iPhone — the mobile Internet lover’s phone — which will be arriving here next month? It’s hard to say. I think the shiny newness factor could go over well here, but the inability to text properly on the last version of the iPhone has been blamed for weak sales in Europe.

But I also think that when it comes to content, most people here will rely on their traditional regimen of print newspapers for news and TV and standard Internet for entertainment, unless Spain follows the most recent trends in Europe, which show mobile data growth of 40% in the EU compared to last year.

What do you think? Why do you think cell phone use varies so much from region to region and culture to culture? What are people using the phone for in Europe that they aren’t using it for in the U.S. or vice-versa? Share your thoughts in the comments below.

Jennifer Woodard Maderazo is the associate editor of PBS MediaShift. She is a writer, blogger and marketer, who also covers Latino cultural issues at VivirLatino.

Text message image by fluzo, SIM card image by manu contreras and cell phone collection image by Dr. Won, all on Flickr.

Mark Glaser is traveling this week, but we’re happy to have students from the Medill School of Journalism at Northwestern University filling in again as special guest bloggers. They were in a class studying “locative media,” a new form of journalism that tells stories via cell phones based on your location.

Lojo Connect, our ten-week project that has explored ways that newsrooms can use location-based storytelling, including online interactive maps and GPS-driven stories, is coming to a close. You can read our previous posts on MediaShift to learn more about our project and limitations we encountered along the way.

On May 31, our team road-tested our location-based story with a public event in Washington Park, the proposed site of the Olympic Stadium if Chicago wins the 2016 Summer Games bid. Using HP iPAQ mobile devices, our participants listened to several GPS-triggered stories while walking through the park. Stories included narratives about the park’s rich historical role in the 1893 World’s Fair and Columbian Exposition, as well as the community’s thoughts about the social and economic impacts that the Olympics could bring.

By combining the feedback we received from our public event participants with insights from our industry research, we created the following list of big takeaways from our project. Although the technology is still evolving, we believe there are ways for news organizations to begin offering location-based content immediately.

12. Think geographically.

Geography is a key tool for making content relevant to media users. It is becoming a powerful interface for information search and organization. News organizations should “geo-tag,” or embed geographic data in stories, so they can be easily identified by their relevant locations. Rather than searching by keyword, people can now browse a digital map for relevant information for a particular location. For example, Google Earth now includes a New York Times layer that allows users to track news geographically.

11. Capitalize on mobile technology for geo-content.

Mobile technology is ideal for delivering geographically relevant content. And the recently announced GPS-enabled iPhone will certainly help raise awareness of geo-targeted services. Key advantages of mobile devices include portability, location awareness that can be used to customize content, and the fact that people almost always have their cell phones with them. Mobile devices make it increasingly possible to target content for users based on their location or geographic interests.

In fact, mobile phone messaging that is based on a recipient’s location already exists. For example, JotYou allows users to send text messages that are only delivered when a recipient enters a previously specified location. With this kind of technology, news organizations could let people opt-in to get the latest score of a Cubs game as they drive by Wrigley Field or receive other geo-targeted breaking news alerts.

10. The media should be experimenting now with mobile content.

U.S. media companies have been relatively slow to develop mobile content. Foreign competitors experimented with electronic newspaper kiosks and established mobile newspaper versions several years ahead of major American media companies. Also, consumers are increasingly “urban nomads” who are not tied to their offices and homes.

There’s a push for Internet experiences on mobile devices that are more similar to experiences on the desktop computers in terms of look and usability. Google’s new Android open mobile operating system could help make this transition more seamless.

9. Streamline content delivery.

Consumers may be reluctant to use podcasts and other portable content because the delivery process is time-intensive and often takes multiple steps. Streamlining this process might increase the number of users. As WiFi technology improves and becomes more widely available, news organizations should also try for on-demand and wireless content delivery if possible. Also, sites like Skweezer) allow web pages to be optimized for mobile devices.

8. Target a young adult audience.

Young adults are particularly avid users of mobile technology. For them, mobile technology’s value will only increase as social networks go mobile. They also tend to be more tech-savvy early adopters and less likely to worry about privacy issues and location tracking because they have grown up in a world with Facebook and other applications that make people’s private lives very public.

7. Maximize existing resources.

Mobile journalists are proliferating in newsrooms and are ideal producers of locative content because they are already outfitted with the necessary technology, tools and mindset. Not only are they in the field with portable laptops, voice recorders and video cameras, they are also on the hunt for hyper-local content. News organizations can easily re-purpose audio, video and images from other kinds of stories.

6. Harness the power of audio.

Audio has been under-appreciated, but now that portable devices are becoming more popular for consuming content, people need to overcome the notion that audio is only for radio. Audio is powerful, immersive and often useful because people tend to use portable devices while multitasking.

News organizations should remember that walking tours often work best when they are mostly audio-based. The participants in our public event consistently told us that the photographs we included in the multimedia story distracted them and distanced them from the physical surroundings. Video is still very powerful, but should be reserved for the web for location-based storytelling.

The New York Times, for example, has started to use the audio tour format for storytelling. Their website offers several audio narratives of Manhattan neighborhoods, including tours of the places that defined P.T. Barnum’s New York and the Underground Railroad routes in Brooklyn.

5. Different locative stories deserve different treatment.

Locative stories are more likely to catch on if they’re organic experiences. Consumers will be more likely to embrace this storytelling form if it fits the flow of their daily lives and does not force them into a location and an experience. Breaking news alerts trigged by a user’s current location could be really valuable. For example, users could be alerted of a big demonstration taking place up ahead and decide whether to avoid it or to attend.

4. Avoid “Google Maps fatigue.”

Newspapers widely and frequently use interactive online maps now. More information is being attached to geographic coordinates, but this information needs to be better organized and differentiated, so that content avoids looking repetitive.

3. Explore location-based advertising.

Location-based advertising has been called the Holy Grail of mobile marketing. CBS and Loopt recently announced plans for localized banner ads on certain CBS mobile sites. The ads are only carried by select mobile subscribers and are available to owners of GPS-enabled phones who opt in. More partnerships of this kind are expected, although privacy concerns persist.

2. Encourage user feedback and community involvement.

We live in an era of user-generated content and participation. Young adults, in particular, are used to sites that allow comments, ratings or reviews, and sharing. In offering locative content, news organizations should capitalize on this trend. Following the lead of community storytelling initiatives, such as The Organic City in Oakland, Calif., newsrooms should engage community members in story development and promotion.

1. Just do it!

Locative journalism is relatively new, but holds a great deal of promise. We’re accustomed to using linear interfaces, such as alphabetized directories and timelines, to organize and access information. But our experiences in the real, physical and non-digitized world are usually not linear. They’re spatial, dynamic and intuitive. Locative technology has the power to capitalize on that instinct.

Hilary Powell, a native of Indianapolis, is a graduate student at Medill, majoring in new media. She is interested in digital journalism that combines television reporting with online news production.

Hope Needles studied International Affairs and Statistics at The George Washington University. She has interned for NPR, Dateline NBC, Newser.com, and recently completed a residency for the BBC in London.