Developers of certain high-profile iPhone applications have discovered a stream of significant, new-platform money. Smaller developers have also been able to generate modest income, with the first paychecks for many coders now received from Apple. One category of revenue intake many developers are closely watching is that of free-to-paid conversion. Since no real shareware model exists for the iPhone, some developers have decided to offer free, limited-functionality versions of their applications alongside paid, full-functionality versions. The question is whether or not users will convert to the paid version after having used (or at least downloaded) the free version. Stats from one developer paint a fairly grim portrait, though not one that is wholly out of line with shareware conversion rates for other platforms. Josh Anon, the developer of FlipBook, an application that allows free-form doodling and image manipulation, says that less than 1% of users who download the “lite” version of his application purchase the full edition.

“We’re quite happy with the number of people who have decided to try FlipBook Lite and the great reviews it’s receiving! Of course we’d be happier if the conversion rate to the paid version were higher (it’s under 1%), but we’ll see what happens as time goes on. ”

FlipBook Lite currently holds the #6 spot in the free software category on the iPhone AppStore with 251,360 downloads so far. How is your iPhone software performing? Let us know.

We previoiusly reported on a security hole in the latest iPhone software exposes e-mail, text, and voice messages to whoever gets a hold of the device despite it being password-protected. Basically, clicking emergency call and double-clicking the “home” button brings up the favorites on iPhone 2.0.2. In actuality, however, passcodes can actually be cracked in every version of iPhone software to-date. While the method utilizing emergency calls is likely to disappear in the next version of the firmware, other security bypasses are readily accessible. Per our friend Jonathan Zdziarski:

“Those interested in data security should still be quite concerned about the iPhone. The alternative methods for cracking the passcode - namely, the ones I’ve documented in the book - are by and far more sustainable techniques, which take advantage of flaws in the iPhone’s design itself. Until hardware changes are made to the iPhone, it is very likely going to continue to be very easy to break into one. “The iPhone is a computer, just like a desktop computer, and so it can easily be booted in such a way that one can mount the disk and delete or modify the device’s configuration - including the passcode configuration. Cracking the iPhone’s passcode is about as complex as changing the root password on a desktop machine, given physical access. “I’ve been making these techniques available to law enforcement for several months now. I’ve found even the most novice cop-geeks have been able to crack the iPhone’s passcode and install my forensics toolkit on the device. Agencies ranging from local po-dunk sheriffs to federal and international agencies have used these techniques to conduct lawful, warranted forensic investigation of iPhone devices since late 2007.”

The bottom line: don’t allow physical access to your iPhone, even after the widely publicized emergency call bypass is fixed.

We continue to report on an issue under iPhone OS 2.x in which some third-party applications crash or do not launch, for many users. Previous reports indicated that the issue can be eliminated by reducing the number of applications installed on the iPhone. We also noted a separate fix that involves downgrading to an earlier version of iTunes. We’ve now discovered a more definitive fix that should, in tandem with reducing the number of applications on the phone, resolve this issue in the majority of cases.

1. On the iPhone, select Settings > General > Erase all Content and Settings.
2. On a Mac, delete the following support files from the computer:
   • /Library/Receipts/AppleMobileDeviceSupport.pkg
   • /Library/Receipts/iTunesAccess.pkg
   • /Library/Receipts/iTunesX.pkg
   • ~/Library/iTunes/Device Support (the entire folder)
   • /System/Library/Extensions/AppleMobileDevice.kext
   • /System/Library/PrivateFrameworks/DeviceLink.framework
   • /System/Library/PrivateFrameworks/MobileDevice.framework
   • ~/Library/iTunes/iPhone Software Updates (all contents)
3. On a Windows XP PC, delete the files in settings/[yourusername]/Application Data/Apple Computer/iTunes/iPhone Software Updates
4. On a Windows Vista PC, delete the files in C:/users/[yourusername]/AppData/Roaming/Apple Computer/iTunes/iPhone Software Updates
5. Delete the iTunes application
6. Restart the computer
7. Install iTunes 7.7 (Windows, Mac)
8. When prompted, set the phone up as a new device and restore.
9. Test some applications.

Feedback? info@iphoneatlas.com.

One of the most disconcerting areas of dearth for the iPhone’s native software set is nonsupport for MMS messaging and instant messaging outside of AIM. If it weren’t for Palringo these two complaints would still stand. Palringo is an iPhone application that lets you connect to your instant messaging accounts from which you can send text, picture and voice instant messages from your iPhone. The best part of this is that you do so without SMS charges since all traffic is directed over your EDGE/3G cellular or Wi-Fi networks. Palringo itself is free at the iTunes App store. The application has a clean interface and is fairly easy to navigate. It also supports multiple protocols: Apple iChat, AIM, Google Talk, Yahoo Messenger, Gadu Gadu, ICQ, Jabber, and Windows Live Messenger. You will need a Palringo account to use the App, but this is easily accomplished the first time you launch the application. Configuring your chat accounts is similarly easy. After configuration, you are ready to send text, picture or voice messages. The pictures can come from the iPhones camera or photo albums. Voice memos are recorded on the phone itself and sent immediately. Picture messaging is not a true MMS replacement since the image you send is actually uploaded and stored on a Palringo server for approximately 10 days. Therefore the picture does not pop-up immediately on your chat friends screen. Instead, they receive a link to click that will let them see the picture. Not exactly what you’d expect, but significantly more convenient than the default MMS/URL mechanism on the iPhone that is essentially useless because of the lack of a copy/paste function. Voice messages are sent by clicking cartoon bubbles to open chat window. You then press and hold a button on the screen - record your message, release and off it goes to the recipient.

A serious security hole in the latest iPhone software exposes e-mail, text, and voice messages to whoever gets a hold of the device despite it being password-protected. Basically, clicking emergency call and double-clicking the “home” button brings up the favorites on iPhone 2.0.2, which opens up the address book, the dial keypad and voice mail, according to a report on Engadget, which got the tip on the hole from the MacRumors Forum. Then, clicking on the blue arrows next to the names gives access to private information in a favorite entry, clicking in a mail address opens up the mail application, clicking on a URL in the contact information opens up Safari, and clicking on “send a text message” in a contact gives full access to the text messages. The report suggests using the “home” setting so that double-clicking on the home button will take whoever is holding the phone to the unlock screen page. Engadget reports that a fix for the hole will be included in the next firmware update, but it’s not known when that update will come. Representatives from Apple did not respond to e-mails seeking comment. [Posted by Elinor Mills to our sister site News.com]

Though such a procedure is sure to void your warranty, you can (fairly) easily remove the iPhone 3G’s screen, gaining access to internal components and allowing possible resolution of certain longstanding manufacturing issues as well as repair of hardware damage. A post to the Hackintosh forums offers steps for doing so with a standard suction cup, such as the one used by some windsheild-mounted devices. The poster, flash31, describes using the procedure to resolve the “light leak” issue that has affected some units:

1. “Pull the suction cup toward you and the screen should come out (bottom first)
2. You will see 3 cables running from the top right corner of the screen to the main board of the phone. 3 cables are numbered 1, 2, and 3. Remove the cables in that order. (Note: in the picture, my number 1 cable has already been detached, number 3 is underneath number 2)
3. Once the three cables are detached, the entire LCD unit is now separate from the main board. I found two youtube videos that might aid.
4. Look on the left side of your iPhone LCD unit; you will notice that Apple has already applied a small strip of electrical tape to the metal casing. Unfortunately, this strip is sometimes misaligned, causing light leakage. Simply add more electrical tape to anywhere you experience light leak. Note: the tape does NOT have to cover the black rubber gasket (the part that meets the bezel when assembled). Simply apply electrical tape to anywhere on the metal frame supporting the LCD unit. Apply tape to all the places you experience light leak.
5. Reassemble the phone, reconnecting cables 1, 2, and 3, and then re-screw the two screws holding the LCD unit in place.”

We certainly don’t recommend performing this procedure in-house, though it does reveal the iPhone 3G’s internals as significantly more accessible than those of its predecessor.

AT&T announced Tuesday it’s expanding its iPhone international data plans, in a move designed to cut consumers’ reliance on pay-per-use data services. Under the expansion, which is slated to begin Wednesday, iPhone users can add one of two international plans to their existing service. The 100MB iPhone plan will cost an additional monthly fee of $119.99, while the 200MB plan will run an additional $199.99 a month. Both plans can be added or dropped from users’ existing plans at any time, without penalty. On a pay-per-use data basis, users could pay as much as 0.0195 cents per kilobyte, which translates into nearly $40 for 2MB of data, according to AT&T. “AT&T has worked diligently to provide affordable options for international roaming because the feature-rich mobile experience of iPhone is indispensable to users,” Bill Hague, AT&T wireless operations international executive vice president, said in a statement. “With these new international data plans, iPhone users can access more data in more countries for less cost.” Although AT&T’s two expanded data plans offer the discounted data roaming package in 67 countries, such as China, India, Israel, and the United Kingdom, the rate outside of these areas is higher. A 1 cent per KB rate is charged for areas outside the 67 countries, but a higher rate of nearly 2 cents, or 0.0195, per KB applies in 20 countries such as Bolivia, Mongolia, Saudi Arabia,Turkey, and Venezuela. AT&T also advises iPhone users to save data costs by taking several steps, such as using Wi-Fi whenever possible, turning off automatic e-mail checks, and keeping data roaming in the preset off position. [Posted by Dawn Kawamoto to our sister site, News.com]

Several users have reported an issue in which the iPhone’s Mail application suddenly fails to retrieve new messages, generally after switching from one connection method to another (e.g. WiFi to EDGE or vice versa). As desribed by one Apple Discussions poster:

“If I switch from edge to wifi or visa versa, the phone will no longer retrieve new mail without me doing a restart. It seems whatever mode it’s in on startup won’t let go of the control of mail until a restarts. “Last night I was using WiFi and receiving mail fine. Early this morning I turned WiFi off as I was going out and would not have WiFi access. A few minutes ago, back at home, I switched WifI back on and got a flood of several emails from as early as 10:30 this morning.”

The only genuine workaround for this issue appears to be a full restart of the iPhone. Hold the sleep/wake button then slide to power off the device, then turn it back on. Alternatively, you can try force-quitting the Mail application by launching it (if it is not already active) then holding the home key for several seconds until the Mail app disappears and you are returned to the home screen.

A number of users have reported an issue in which movies previously playable movies are suddenly unplayable after an iPhone sofware update. One user writes:

“I had the same issue with some of my Videos that were converted using Visual Hub. Once I upgraded my iPod Touch to 2.0 they stopped working. I eas confused at first as all of the the ones that still worked were in 4:3 aspect ratio. Anyway after trying many different solutions and settings. I found that if I used ffmpegX instead of Visual Hub to encode I had no problems with any of the resulting my videos-both 16:9 and 4:3 aspect ratio and different frame sizes.”

Per the above user’s commentary, re-encoding movies may be the most viable fix for this issue. Try using an alternative video encoder or a lower resolution/bitrate.

A small snippet of text on an online forum at Myst Online reveals a new project that will bring the classic adventure game to the iPhone. The post reads:

“iMyst: This is a small project that probably a very few of you know about. We are porting Myst to the iPhone. Ok, before some of you start groaning, this is an outside funded project that is keeping a few developers employed… but it is really more than that. It is an interesting and fun project. This is also a very small team with three of us (which includes Derek, Rand (not Randy) and myself).”

If you are an old hand at computer gaming then you will remember when Myst was first released on the Mac, September 24, 1993 then ported to a number of platforms. It was the best selling PC game of all time, eclipsed only by The Sims in 2002.