Apple’s press event invitations are works of art. On the surface they’re clear, but they usually have a deeper meaning that is intended to make sense only after the big reveal. It’s a way that Apple generates even more interest about its announcements. When people are clamoring for any clue they can, they get a single image or phrase from Apple, an official but obfuscated message from on high, which inspires another fresh round of speculation about what surprises will be revealed at the event.

This year’s iPhone event invitation is clever and simple, but with a single data point which has caused a lot of discussion:

The date, time, and place icons are all straightforward. The phone icon with a ’1′ badge has got analysts and pundits alike wondering if we’re getting a single phone this season, and the camps are split on whether it’s the 4s or the 5.

I think we’re missing the point.

When Apple puts a clue into an invitation, it’s a clue about a feature or other positive. Hinting about a single phone amidst widespread speculation about two phones is lowering expectations, and this is not in keeping with Apple’s track record on how they use invitations. If one wanted to be so literal, they might also note that the ’1′ badge would only appear on an iPhone if someone missed a call, or if there was a voicemail waiting, but of course those don’t make sense in this scenario, so we’re left to guess, and I think most folks are guessing wrong.

So what does the ’1′ mean? Yes, it means one phone. But not ’4s or 5′. It means GSM+CDMA.

One phone for the world. One phone for all 288+ carriers.

One phone for the user. One phone for a person regardless of whether they decide to switch carriers after a year or two.

As for the 4s vs. 5 debate, I’m still firmly in the ‘both’ camp but, as I’ve said before, the 5 will be the star of our show. The 4s will be mentioned as a welcome revision to an old model, making it an excellent low cost option.

Which is more likely, that Apple would put a ’1′ where we’re expecting and hoping for ’2′ (models) or that they’d use a ’1′ where ’1′ is better than the current ’2′ (GSM and CDMA)? I guess we’ll see.

Happy Christmas Eve!

PS: For those coming here for the first time, here are my predictions for what Apple will be announcing and a short follow-up.

It’s a rare thing lately to be so close to an Apple Event and not yet have the surprise spoiled. Sure there will be a new version of the iPhone, but what will it be? I’ve written up my best guesses and many others have done the same. I especially liked John Gruber’s recent post about the inelegance of the teardrop design.

With just a few days to go though, there’s still a great deal of speculation as to what the new phone will look like, or even if it will be anything beyond a processor bump of the current design. That kind of uncertainty is so much more fun than the spoiled surprise of a lost iPhone in a bar, followed by the letdown felt by the child who peeked into the back of the closet early and was left without a surprise on Christmas day.

Given last year’s Gizmodo iPhone 4 debacle it wouldn’t surprise me if Apple hasn’t let a single iPhone 5 off of the Apple campus. The only glints of evidence we have for a new form factor are 3rd party cases already arriving in stores, and many have doubts of their credibility. This time around it’s very unlikely that Apple has given case makers the form-factor in advance, an opinion bolstered by the fact that those companies revealed to be making ‘iPhone 5 cases’ are not the major brands. I wouldn’t be surprised if a Foxconn employee snuck some silicone putty into the factory to make a 3-minute mold of new iPhone hardware, considering how valuable a month’s head start on case design would be to accessory manufacturers.

Do the cases accurately portray the next iPhone? Are we getting nothing more than a bump to an 8MP camera and A5 processor in an iPhone 4 case? I’ve heard smart people say that each of these is true and the other is not, but more than any rumor I believe that Apple has taken information segmentation further year by year, and that even many members of the iPhone team are only given enough information to perform their role, and they may get surprises as well.

The uncertainty is exciting, and even as the tightest lips seem to loosen in the days and hours before a big event, I hope to be in the dark up until Tuesday’s reveal, because while guessing is a lot of fun, who really wants to be the Grinch?

[This is the third in a series of posts leading up to Tuesday's iPhone announcements. For more, check out Preview: This Year's iPhones and Shuffling up the iPod line.]

As more rumors swirl in the run-up to Tuesday’s big reveal, I have a few more thoughts to share, an in one case, reiterate.

One iPhone or two?

There’s been a new round of speculation that the iPhone 5 will be the only new iPhone, because the event invitation had a ’1′ badge on the iPhone icon. I think it’s still very likely that there will be an iPhone 4S, though it won’t be talked about much at the event. Much like the current 3Gs, the 4S will be downplayed by Apple, given a brief moment of attention as a ‘budget iPhone’ plus a brief mention that it has Apple’s latest A5 processor, but it will never be given the stage. This is the iPhone 5′s coming out party, and nothing’s going to steal its sunshine.

Surprises in iOS 5

Today Apple released iTunes beta 9, and this marks the first time this beta cycle that an iTunes beta hasn’t been accompanied by a corresponding iOS beta. Given that the final version of iOS 5 is reported to have been handed off to the Asian manufacturers earlier this week, it would be unusual for the developer community to not be given a Release Candidate or Golden Master version prior to wide release.

This leads to the likely conclusion that there are surprises in the final OS that were left out of the betas, but couldn’t be left out any longer for final internal testing or (naturally) in the final release. There’s widespread speculation that that ‘something’ is much broader voice recognition integration throughout the OS, and this seems very likely. I wouldn’t count out another new app or two as well.

Tossing the Classic

Yesterday, Apple removed click-wheel games from the iTunes store. The first games ever sold in the store, they were specifically for click-wheel-based iPods like the Classic and the previous generation Nano. With the elimination of these games, the rumor of the Classic’s demise is virtually certain. One has to wonder if they’ll be replaced by games for the Nano, and/or if an iOS-based Nano is in the works. It wouldn’t be the first time that Apple released a product without iOS, only to port it to iOS without any major changes to the front-end experience. That claim to fame goes to the Apple TV.

This still leaves the question of whether the Shuffle will join the Classic on the bench, and whether such a cut would be accompanied by a big Nano price cut.

Last month some folks were speculating that the iPod touch would be on the chopping block, a rumor I disagreed with in my post, “Cancel the iPod touch? Lunacy.” Now, folks are suggesting that the iPod shuffle and the iPod classic may be on the chopping block. This would leave the iPods nano and touch as the only iPod devices, adjacent to the iPhone and iPad.

Ditching the Classic makes a lot of sense. The last torchbearer of the original iPod’s form factor only exists today because its use of a hard drive enables it to store 160GB of media, 2.5x as much as the 64GB Touch, at just over half the price. With the release of iCloud and Music Match, 160GB is no longer needed. Those deep tracks can be downloaded to your device on demand, so as long as you have wifi or a mobile connection you’ll have your whole catalog.

Eliminating the Shuffle is where things get dicey. It’s not an iOS device and it doesn’t pretend to be, unlike the Nano who’s multitouch UI seems like iOS though it’s completely different under the hood. Getting rid of the Shuffle would clean up the product line, but would leave a huge hole in the bottom end. The Shuffle costs $49 but the Nano starts at $149, and $149 is just too high a price for an entry-level music player with no video capability or mobile connectivity. The 16GB Nano is only $30 less than a new Kindle Fire tablet.

Could the Shuffle be eliminated next week? Yes. But only if the price of the Nano was lowered a great deal. I would guess that $79 would be the sweet spot, though Apple may keep the price as high as $99. Pricing the Nano at $79 would represent a 47% cut from the current price, but the manufacturing and material costs for a Nano continue to drop, and this would probably still represent a healthy profit margin, while keep Apple’s market share at the low end of the product space.

If they drop the Classic, I wouldn’t expect them to mention it during next week’s presentation. If they drop the Shuffle and move the Nano farther down the line, they might mention that.

The more interesting question to me is, what is the long term future of the iPod and iPhone? The nano is squarely an iPod, the Touch is an iOS device arbitrarily called an iPod, while the iPhone is not. There’s no arguing that the iPod touch is more iPhone than Nano, so at some point the iPod brand needs to either consume, or be consumed by, the iOS brand. But that’s probably a strategy for another time. A time which, at the minimum, the nano-class device is a true iOS machine.

As I write this it’s Tuesday evening. Tomorrow morning Amazon’s going to unveil the much-anticipated Kindle Fire, and most of the tech blogs are writing their previews from the ‘tablet war’ standpoint. Reportedly built on Android, the Fire is being compared to other Android tablets out there as well as the iPad, but tomorrow’s grand reveal won’t primarily be the hardware but rather the new channel Amazon has created for delivering and consuming a wide variety of content.

Tomorrow Amazon will present its new business model as a digital media ecosystem with both subscription plans and a-la-cart content. The Kindle Fire is an important piece to the puzzle, but it isn’t the star of the show.

Take a look at how Amazon’s primary navigation has changed in just the last 12 months:

Books, Amazon’s bread and butter, have gone from the top slot to #8. It’s not unusual for the top slot or two to be used as a promo to raise awareness of a new product category, but not the top seven.

Taking a closer look, the list is clearly divided into ‘digital’ and ‘physical’ sections. Going forward, this distinction will be much more important, as the Kindle Fire is a device intended to be the portal for accessing every item in the ‘digital’ list.

Consider how each item on the list would apply to a 7″ media tablet:

• Unlimited Instant Videos – Netflix replacement, streamed to the tablet (or other device).

• MP3 & Cloud Player – iPod, iTunes Cloud replacement. Store music on the device, or play from the cloud.

• Amazon Cloud Drive – Dropbox replacement. View, edit and print some media types, send others.

• Kindle – Expect this to be renamed to ‘Kindle Books’ tomorrow.

• Appstore for Android and Digital Games & Software – Expect these to combine into an app store for the Kindle, with a distinctly separate app store for mainstream Android devices. Expect many Android titles to overlap, but the Kindle App Store will be more heavily curated to assure a more quality experience.

• Audible Audiobooks – Round out the offering by letting you listen to books on the tablet.
  

While other Android-based tablets try to sell users on the hardware and the OS, Kindle Fire’s form factor and OS will just be aspects of the experience. The greater point is that this is Amazon, in the palm of your hand.

The latest estimates are that Amazon may sell the Kindle Fire for $149-199. While I wouldn’t be surprised at that price point, I expect we’ll also see a contract deal folded in with Amazon Prime. Imagine a free Kindle Fire with a 3-year commitment to Amazon Prime, or a $99 Kindle Fire with the purchase of a 1-year subscription to Prime.

Personally, I’m even more excited about the potential keyboard-less e-ink Kindle, since I can justify having that and an iPad, but not an iPad and a Fire, and I expect we’ll see some creative Amazon Prime promotional tie-ins at the e-ink Kindle level as well. After all, if the trend continues, Amazon should start giving Kindles for free by this Fall.

Shortly after leaving Facebook last year, I got approached by a number of companies looking for a director of product or user experience. Joining up with another outfit right away was the last thing on my mind but this startup was being led by an old co-worker of mine, was well-funded, and was working on something I was interested in.

Moreover, they’d been looking for the right design lead for a long time, and one of the founders confided in me:

We’ve spent almost a full year sitting around here asking ourselves “what can we do to attract someone like Kevin Fox?” Seriously.

I told them I was very flattered, but wasn’t looking for a new gig, but would be happy to come in to the office and give them feedback on what they’ve got. Their product was ambitious (and in much need of UX help), but I had my own ideas of what I wanted to be doing and this wasn’t something I was interested in jumping in to.

They explained that they had a very generous referral program and they asked me if there was anyone else I knew who would be a strong candidate. I gave them two names of people who I knew were happy with their current jobs but who’s skill sets and design sensibilities would be a good fit for the project.

I didn’t think much more about the company until about 6 weeks later when one of the people I referred, let’s call them ‘John Smith’, IMs me:

So I’ve been talking with [startup]. They told me they’ve spent several months sitting around asking themselves, “What can we do to attract someone like [John Smith]. Seriously.” It was really flattering.

Who knows how many times they used the line, and maybe they meant it every time, but suddenly I felt like the company was a sharp well-dressed guy hitting on everyone in the bar, telling each person in sequence how they’re the prettiest girl in the room. Ick.

Apple’s rapidly heading toward the announcement of the next generation of iPhone, with the smart money riding on an October 4th announcement. As has become tradition, I’ve stirred together the various rumors out there with my own educated guesses and cooked up my predictions for what we’ll be seeing from Apple in the iOS realm next month.

As always, this is a work of speculation and does in no way represent leaked or privileged information. I never ask my friends at Apple about what they’re working on, and I’m certain they wouldn’t tell me anything if I did.

So what will we see coming out of Tim Cook’s pocket a week from Tuesday? The iPhone 4s, iPhone 5, and an update to the iPod Touch.

iPhone 4s

This will be the entry-level iPhone. Unlike the current low-price iPhone 3Gs, this time around Apple won’t simply discount last year’s model and call it the budget option. Android has seen huge adoption in the last 18 months and, thanks to having many competing OEMS, Android phones come in a wide range of price points. It’s no longer reasonable to tell budget-minded customers to buy a phone that’s over two years old, (which the iPhone 4 would be before the subsequent iPhone product cycle) so even though the iPhone 4s will be a refresh of the current iPhone 4, it will differ in a few important ways:

• CDMA+GSM – Simplifying the product line, the 4s will come in one flavor world-wide. Now that the universal chipset has matured, the premium for supporting both standards has dropped a great deal, and comes with the benefit of simplifying supply chains.
• A5 Processor – With nearly double the processing power of the iPhone 4′s A4 processor, adding an A5 to the iPhone 4s would mean every iOS device Apple sells will be running on the same chip (AppleTV notwithstanding). It’s vital that both the high and low-end iPhones run the same processor because developers need to be optimizing for as few platforms as possible. One of the iPhone’s key advantages over Android is that the user can expect an optimized level of performance when running an application. Android developers have a much harder time creating a seamless experience when they don’t know if they’ll be running on a powerhouse processor or a weakling, with dedicated graphics hardware or without.

  If the iPhone 4s kept the A4 processor while the higher end iPhone 5 had a processor that was twice as fast, we would inevitably see developers including some processor-intensive features that would be ‘iPhone 5 only’. This is antithetical to the Apple’s design philosophy, and though there will always be older devices that eventually show their age, Apple’s not going to simultaneously sell a ‘fast phone’ and a ‘slow phone’ now that they’ve widened the development cycle to iterate both lines in tandem.

• Same storage options – Flash memory is expensive, and iCloud should reduce memory needs enough that 16/32 gig options won’t be any kind of hardship.
• Not much else different – By keeping changes to a minimum, Apple’s keeping development costs low, and most of the processes and parts developed for the iPhone 4′s fabrication will continue to be used cheaply, now that the expense of designing them has been amortized away with last year’s iPhone 4 sales. The same logic has recently been applied at Boeing, where after much deliberation they decided to re-engine the venerable 737 rather than design a replacement plane from scratch. Re-engining only costs 15% of the R&D that a clean sheet redesign would cost, freeing up expense and resources. Airplanes are different than smartphones (hmm… carbon fiber iPhone…) but the general principle still applies. If Apple is going to start making two levels of phones that it iterates in tandem, only one can be a significant redesign.

This paves the way for development of a new front-runner…

iPhone 5

The iPhone 5 will be positioned as a ‘no compromises’ device, with a higher price tag in order to give premium components to people willing to pay for them.

So what’s in an iPhone 5? Let’s see:

• The new iPhone 4s stuff – An A5 processor is a given, and CDMA+GSM very likely.
• Sleeker, brushed aluminum form factor – Think of the Macbook Air’s design aesthetic applied to an iPhone. An aluminum back, flat in the middle and rounded/tapered at the sides similarly to the iPad 2. I wouldn’t be surprised if the back uses the same milled aluminum process used for unibody Macs. Like the original iPhone and 3G iPads, a portion of the back will not be metal to accommodate internal antenna reception. I’m guessing it’s at the top of the phone, but it’s anyone’s guess. It’s conceivable they found a way to provide reception through the front glass, leaving the back a solid piece of aluminum, but that’s pure speculation.
• A larger screen with the same number of pixels – The leaked parts and rumors are too strong to conclude anything other than that the iPhone 5 will have a larger screen with a very thin bezel on the sides. The screen can get 18% larger while staying above 300 DPI, retaining its ‘Retina Display’ designation by Apple’s own metric. It won’t be that big, but it will be noticeably bigger, both in absolute terms and relative to the phone. The phone will likely be a bit wider to accommodate the display, which may mean they can opt for a flatter, wider battery to keep the phone thinner than the iPhone 4. The display will absolutely be the standard 960×640 pixels.
• 8MP camera in the back – Widely rumored, and seems highly likely.
• FaceTime HD camera in the front – Current front-facing cameras are still 640×480, just like the old iSight cameras in MacBooks, iMacs and Cinema Displays. This year Apple started upgrading the iSight cameras to FaceTime HD cameras, which bump the resolution up to 720p (1280×720). I wouldn’t be too surprised if they opted to put such a camera in to the iPhone 5, considering it’s the flagship device for FaceTime.

Lest we forget…

iPod Touch

While some have speculated that the Touch may fade away, being replaced by a contract-free iPhone 4, I sincerely doubt this is the case. The iPod Touch is much thinner, cheaper to manufacture, and, let’s face it, sturdier than the iPhone 4. A lot more parents would give a Touch to their kids than an iPhone 4, because it fits better in their hands and it knows how to take a spill without cracking.

I think we’ll see a bump in the Touch, but nothing breathtaking. Something like this:

• The iPhone 4′s rear-facing camera – The iPod Touch’s current camera is an embarrassment. Low resolution, low quality, a clear compromise to fit into the Touch’s extremely slim case. My guess is that either the last 18 months have brought down the size of a quality 5MP camera, or Apple will make the Touch just thick enough to accommodate it.
• Retina Display – Probably. It already has one. My bad.
• WiFi+3G model – Operating in exactly the same way as the iPad 3G, an iPod Touch WiFi+3G would be sold without contracts, with negotiated cheap monthly packages from the major carriers. It’s not a phone, but 3G would let you rely on the Touch as a primary internet device when out and about.

Loose ends

There are still a few open questions:

• NFC chips – Only a few Android phones currently have NFC chips to support a true digital wallet, but with their faster product cycles and the huge resources Google is putting into the Google Wallet initiative, you can bet that most Android phones sold in 2012 will have NFC built in. NFC as a payment method is already very popular in Europe and Asia, and I find it hard to believe that Apple would go until late 2012 (or early 2013) before they start offering an iPhone that supports NFC. Considering that Apple has bragged about having one of the largest credit card payment databases in the world, they’re clearly very interested in this space. If they do introduce devices with NFC chips this time around, I would guess it will be in both the iPhone 5 and the iPhone 4s, but not the Touch.
• LTE – I’m going to have to go with a big ‘no’ on LTE this year. LTE is still only available in limited areas, and Android phones that support it have abysmal battery life while using it. Also, download speed has rarely been a real-world problem for iPhone users, certainly not a big enough issue to cut into battery life, an issue that Apple puts a heavy priority on.
• Release date – Friday, October 14th. The sooner the better, and 10 days is just about as short as Apple can stand between the beginning of an iPhone press cycle and the peak of fervor that’s so important for a successful launch. And as Apple has shown, they like to launch on a Friday, when people can spend the weekend waiting in lines.

One more thing…

What will it be? Possibly nothing. Definitely not the iPad 3. Certainly much of the presentation will be the public release of iOS 5 and iCloud. There’s a good chance there’s a new app or two that will be rolled in to iOS 5 at the last minute.

I’ll be watching along with the rest of you in a couple weeks, but I feel pretty comfortable with these predictions. More so than usual.

Today Apple announced to its US employees that it will match their charitable donations, up to $10,000 per employee, per year.

I’ve never seen a company match more than $3,000 before. Nice.

Hire a CEO who has experience building consumer web properties. Someone who has experience working with engineers and product designers and is eager to do so. Someone who’s claim to fame isn’t schmoozing, swearing, or otherwise leading a company in a different industry.

Take a look at the companies where your talented engineers, product managers, VPs and designers have gone, and consider that maybe those guys know what they’re doing. You might find a leader from within one of those companies.

Your problem is making and maintaining compelling products, not media partnerships. You’ll have a better chance choosing a leader who knows more about that stuff than making movies or CAD software.

Update: Yahoo!’s interim CEO, Tim Morse, joined the company three months ago after leaving Altera, a company that makes programmable logic devices.

John Gruber and VintageZen think it would be a good idea to cancel the iPod Touch, replacing it with a contract-free $200-300 iPhone. I think this is crazy.

Yes it’s nice to have a simpler product lineup, but that’s the only plus here. They argue that it would help Apple’s smartphone market share numbers to sell an unlocked device that many buyers would never actually buy a data plan for, but Apple doesn’t care about analysts arbitrary market share numbers and even if they did, a device without a calling or data plan shouldn’t be tallied as a smartphone in the first place, unless you want to start including Nooks and personal media players.

Why is it in Apple’s benefit to sell people an unlocked device that they could upgrade to a real phone by contracting with a carrier? Does anyone think Apple could negotiate a revenue share arrangement with a carrier for an unlocked phone they sell directly to the user? Maybe for a data-only device like the iPad 3G, but not a phone. The lock-in of a 2-year contract is too important to the carrier business model. So what would Apple’s motivation be, when they could instead upsell the iPod Touch customer to an iPhone at a later date?

There’s also a zero-sum stigma about phones, in that a person only needs one of them. If a device is marketed as a cheap iPhone-that-you-don’t-have-to-use-as-a-phone it still has the zero-sum taint, along with the mental inhibition of paying for a product you know you’re not going to be making full use of. This floor wax / dessert topping use-case complexity nullifies any advantage gained by simplifying a product line.

But the biggest reason for keeping the iPod Touch is because for someone who doesn’t want an iPhone the Touch is a better, cheaper, smaller, lighter product. The iPhone 4 weighs 36% more than the Touch. It’s 32% thicker, which makes a big difference in a pocket. The current iPhone 4 costs $400 more than a comparable iPod Touch, and if Apple can drop the price of a budget iPhone to the $200-300 range, you can bet they’re able to lower the iPod Touch price point south of $150, opening it up to an ever larger market.

No, if the product line is simplifying anywhere, it’s going to be the elimination of the Shuffle in favor of the Nano.

Further thought: An iPod Touch WiFi+3G, analogous to the iPad WiFi+3G, with an on-demand data plan option, would be really interesting.