Under a new deal between the two companies, Netflix users won’t just have to wait 56 days to rent Warner Bros. movies on DVD. They’ll have to wait 28 days to add the movies to their queues.

Also under this new deal, pirated movies remain free of charge, free of non-skippable ads, free of five-minute load times, and are now nearly three months ahead of the competition.

iTunes changed the music industry because it was more convenient than stealing. Most people made the value judgment that ten bucks for a clean, legal digital album was worth the alternative of fishing around for files that may or may not be damaged or infected.

Hollywood continues to completely ignore that lesson. It continues to punish the people who play by the rules with an insufferable customer experience. This is the sole reason piracy is up and profits are down: because doing it right totally sucks. And that’s apparently how the studios want it.

What interests me much more is the by-model breakdown of sales according to NPD. There are currently three iPhone models available — iPhone 4S ($199), iPhone 4 ($99), and iPhone 3GS (free) — and they occupy the top three slots in that order. This may not be an entirely new phenomenon, particularly not for Apple products, but I still find it remarkable. It contradicts what most people keep insisting is conventional wisdom: that cheap and/or free models will always steal volume from premium models. Despite price and variety pressure from various Android models, and even pricing pressure from other iPhone models running the same exact software, the iPhone 4S was still the top-selling smartphone in the United States (according to NPD, at least). And this report is only for October and November — it doesn’t include Christmas.

You can’t explain this with the usual hand wave of “marketing.” If people are opening their wallets for Siri because of the latest commercials, for example, it doesn’t explain why the iPhone 4, without Siri and $99 more than the free 3GS, is #2. At face value, I wouldn’t think Siri is worth $200 to the average consumer, and I definitely wouldn’t think “speed and a Retina display” are worth $99 to them. Surely Apple Retail staffers are pushing the higher-end models, but I still think the average person will gravitate towards free, especially if nearly all the features are there. (Related: my parents now own an iPhone 4 and an iPhone 4S. I had very little to do with it.)

Even though the 3GS finished “last” among the iPhones, it still outscores any individual Android model, which is again remarkable to me. And it shows that despite what many Apple observers like to say, Apple does in fact care about market share — at least for now. I can’t imagine Apple looks forward to qualifying and performance testing new software releases on two-year-old hardware that isn’t significantly improving the bottom line, but that’s what’s happening. (At the moment, iOS 5.0.1  still performs very well on my old 3GS). More than one high-up person has decided that moving these units at any cost is a current priority. The impact on the user base, and the psychological impact of three iPhones on top instead of two, are apparently worth the trouble.

Similar to the 2008 PA Semi acquisition, the Anobit acquisition highlights a continued priority on internalizing improvements to hardware. Most people think of Apple as a hardware company in the industrial design sense, but not necessarily in the R&D or manufacturing sense. However, the last few years have demonstrated that Apple is in fact very interested in controlling and advancing the way its components are built — not just its finished products. Eliminating external dependency is a repeating pattern with Apple, especially in strategically important areas.

The importance of this policy is becoming painfully clear with the Samsung news. It was bad enough for Apple to be giving tons of cash to a competitor for commodities like flash memory, but this A5 news is far more serious. Not only is Apple more dependent on Samsung than we had previously thought, but we now know that Samsung has access to A5 schematics. This is proprietary technology designed in-house for products that make up as much as 70% of Apple’s revenue, and it’s in the hands of a competitor whom Apple is suing for patent infringement. It’s got to be driving Apple nuts.

Just as interesting is the revelation that this new Samsung plant is located in the United States. We’ve been told for years that commodity manufacturing in the US was dead, but here we are with the heart of two industry-leading technology products being built there. Austin’s three-hour flight distance from Cupertino makes supervision cheaper and easier. Even more interesting: Reuters pegs the cost of the plant at $3.6 billion. That’s a lot of money, but not for a company with more than $80 billion in cash and an obsession with controlling its own destiny.

It’s important to remember that Samsung is a Korean company with decades of expertise in this industry. That cost may involve legal and tax advantages that may not be available to Apple, an American company. Samsung’s experience in building and operating these plants cannot be discounted either. At the same time, though, Apple has the gravitas and the cash these days to hire such expertise. And I have to think that more than a few states in this country would give Apple a deal on some land, especially if there were jobs attached. (For real this time.)

Nearly 17 months ago, when Apple had “only” $46 billion in cash, I wrote that I wouldn’t be surprised to see Apple run more and more of its own manufacturing processes. That comment was prompted by the mere threat of product roadmap leaks from a rogue employee. Apple is a lot richer now, and the stakes are a lot higher. Apple is deep into a very serious competitor for both flash chips and processors. And in the last month, it has acquired a flash chip maker and learned the exact price of building a plant right here in the USA.

People are calling this a victory for Apple, for “open standards”, for “users”,  but more than anything it is a victory for Adobe. A belated one, to be sure — perhaps too overdue to even call it a victory — but the company will unquestionably benefit from forgetting the past.

It’s easy to forget that Adobe did not create Flash: it bought it along with Macromedia more than six years ago. Among the other products that came with that acquisition, Fireworks and Dreamweaver have been fairly well-integrated into the Adobe suite. A notable characteristic of those products is that they are tools, just as Photoshop and Illustrator, Adobe’s traditional flagship products, are tools.

Flash is a tool as well, but it is also a platform: a runtime that obscures the browser and operating system in order to give Adobe more control. It is the platform part that has made this saga so unpleasant over the years. Adobe has never been a platform company, yet it felt a need to power forward with Flash. I’m sure that early on there was a serious vision of dominating content delivery over the web, but sometime after 2005 — just as HTML5 technologies were emerging, and ironically right around the time of the Macromedia acquisition — it became a burden. Between the money it paid and the money it had since spent, Adobe’s management seemed unable to just let go. MBAs often call this “escalation of commitment”. It’s now 2011, and only the delusional can pretend that things haven’t changed. After today, everyone at Adobe can exhale and right the ship.

Adobe’s announcement clearly states that only Flash Player for mobile is going away. The tools — the things that Adobe’s customers really turn to Adobe for — can now grow freely to please creatives in new, forward-looking ways.

I truly believe that a long-term Quixotic commitment to Flash Player would have destroyed Adobe from within. It was an expired product that distracted the company from its core competency of making tools for creative professionals. Adobe still has a lot of work to do if it wants to be a real leader in modern web technology, but this is the right first step.

This post had been a work in progress for quite some time. The unpublished draft was much longer, and had the working title ‘Adobe’s Dilemma’. It’s been repurposed and finally published in light of today’s announcement. I like this version a lot more.

Engadget says “Better watch your back, [Square co-founder] Jack [Dorsey].” But Jack was already watching his back, and Square has moved on to Card Case, a product that ditches both the reader and the card by simply knowing when you’ve arrived at your favorite haunts. The vendor knows it’s you because he’s running an app that has your picture, which is associated with your payment account. Watch the Card Case video — the best thing about it is not the cool geofencing technology or the elegant design. It’s the side effect of a business knowing you’re a regular, and perhaps even knowing what you usually order. It’s an irreplaceable improvement to the customer experience. It’s the soul of the service. It’s the part that margin-drunk giant corporations always leave out.

GoPayment is exactly the kind of uninspired thinking I would expect from a scared monopolist teaming up with a phone company.

UPDATE: Jim Dalrymple has informed me that GoPayment was announced in May 2009 on Sprint’s network, which did not carry the iPhone at the time, six months before Square’s public launch on iPhone. It’s bizarre to me that this week’s joint press release — which I did read before posting my reaction — makes no effort to position GoPayment as an existing product, but facts are facts. Crow eaten.

He almost ran me over.

As I walked back from the campus fitness center, a silver Mercedes S-Class launched a wheel onto the sidewalk and nearly took me out. I whipped around and threw a dirty look at the driver. The door opened, and the driver spat an expletive at the curb as he exited. I recognized the face immediately.

It’s him, I thought. Oh God, he’s pissed.

As a college student, I’d read all the stories about Steve Jobs: his high standards; his short temper; his not-so-great parking skills. And now here I was, standing between him and his building.

I kept walking. DO NOT ENGAGE, I thought. DO NOT MAKE EYE CONTACT. But I couldn’t help myself. He kept walking briskly behind me, staring at the ground, visibly irritated about his car and whatever made him come into the office. After I looked back for the third or fourth time, he cracked a smile that said, This kid doesn’t even have the balls to talk to me.

It was a week before Macworld New York. I took a deep breath and spoke.

“Ready for the show?”

He looked up and smiled for real. “Yeah, we’ve got a lot of great stuff. It’s going to be fun.”

“Well, I grew up in New York. Say hi for me.”

Another smile. “OK.”

He walked past me and held the IL1 lobby door open. Steve Jobs. Holding the door for me. What?

That moment changed my life, and other former and current employees surely have moments like it.  Whatever Steve was upset about that day was almost certainly more serious than anything I have faced in my career. Yet he still had the good sense to give me a smile and an act of courtesy. It taught me to never lose perspective and never forget who you’re dealing with, no matter what else is going on.

For the next eight years I made a point of saying “Hi” to Steve every time I saw him. When he surfaced in the cafeteria during one of his medical leaves, I said, “It’s good to see you, Steve.” I was no longer afraid. Steve knew that his people were his company. And while he made us work hard, never settle, never accept mediocrity, he also made us feel like people. Like we were as much a part of Apple’s success as he was.

This is the Steve few people know or write about. And now it’s the Steve nobody will ever know.

I thank him for holding the door and walk in. The second set of doors is protected by employee badge sensors. Steve is behind me now. I press my badge to the door and open it. For a split second, the smartass in me considers asking to see his badge. I think better of it and return the favor he just did me.

“Thanks.” he says. “See ya.”

See ya, Steve. Thanks for everything.

An era has ended, and we now sit to reflect on our good fortune for having lived in a time when a true giant walked the Earth. I had certainly contemplated his passing many times, but now that it has happened, I am struggling to grasp the concept that Steven Paul Jobs is gone and not coming back.

You can love or hate the man, his company, and his products. You can simply not care much either way. But there is no disputing that everything we know and think about technology today has been dramatically influenced in one way or another by Steve Jobs. His vision and leadership have repeatedly changed millions of lives for the better. He is one of the most significant individuals of our generation, of the last century, and when all is said and done, probably in the history of this world.

It’s not every day that the President of the United States writes a two-hundred word eulogy. To really see Steve’s impact on the world, though, you need to turn to his adversaries. Google’s Vic Gundotra, who famously skewered the man and his vision just last year, went out of his way to tell a long story of admiration and respect on Google+ when Jobs resigned as Apple’s CEO in August. Sergey Brin, Larry Page, and yes, Bill Gates have all chimed in following Wednesday’s news. Steve’s passing is a loss for the world. We are now left to think about what could have been.

It was only the day before that we watched an Apple event launching new hardware and software products. Steve was not in the building, but he sure as hell was watching on Tuesday. And I’m sure he was reviewing slides and demos to the very end. He held on for one last launch, the first out from under his tenure, to see for himself that his legacy was intact.

And so more than ever, I find myself inspired. Steve’s untimely death reminds us we can never give up. He could have given up at any point in the seven years since his first cancer diagnosis, but he did not. The vast majority of Apple’s unprecedented resurgence took place while Steve Jobs stared death in the face. How many of us could have lasted this long at all, let alone accomplish all that he did along the way?

Ten years ago today, we still had not yet met the iPod. The last of Steve’s five decades on this Earth ended up being his most accomplished by far. Remember that whenever you think your best days are behind you. We can’t control when our lives begin, and we can’t really control when they end. All we have is what’s in between. Make it count.

Steve did.

To begin, we’re adding a video games upgrade option to our DVD by mail service. Similar to our upgrade option for Blu-ray, DVD members can now rent Wii, PS3 and Xbox 360 games. This is something we’ve been asked to do for years, and we’re pleased to finally provide it.

As we worked on this new addition, we could no longer deny that the DVD and streaming services are growing apart very quickly. These are in fact two very different businesses, with different customer needs. We even have different offices for them! Providing an experience that simultaneously addresses these two very different worlds has become an increasing challenge for us as we grow the company and evolve the website.

That’s why today we’re announcing significant changes to our company. First, we are renaming the DVD by mail business to Netflix Classic. This is the same DVD rental service you’re used to, but it’s more than just a name: Netflix Classic is a new company, operating independently as a subsidiary of Netflix.

Moving forward, Netflix as a company will be dedicated to streaming media. This is a realization of our original vision, and of the company’s name: watching movies over the Internet. The Netflix.com website and mobile apps will exclusively service our streaming library. DVD members will manage their queues at classic.netflix.com.

If you subscribe to both services, you’ll see two charges on your credit card instead of one, but you’ll pay the same total amount per month you do now. This, along with our recent pricing changes, is just a necessary outcome from creating two separate companies. DVD members will of course still receive the same red Netflix envelope that has been familiar to them all these years.

Members can log into both sites using the same login. This will allow streaming-only members to add DVD by mail, and DVD-only members to upgrade to streaming, at any time. The websites, however, will remain separate, so that we can start giving these different worlds the unique attention they deserve.

We think the benefits are going to be huge. We’ll be rolling out the new websites in a few weeks, and you’ll see right away what we’re able to accomplish by providing a dedicated experience for each service. Until then, check out this video we made to see just a few examples of the new sites in action.

We want to thank you for supporting us for all these years, and we are very excited about all the new benefits Netflix and Netflix Classic are about to bring you. We can’t wait for you to try it out yourselves.

Apple has been slowly taking more action in public settings over the last few years: most notably, the It Gets Better video linked above and its contribution against California’s same sex marriage ban in 2008. There’s been inevitable speculation about the timing of this move, now that Steve Jobs is no longer CEO and came under personal fire last week for not giving enough. The truth is this stuff takes a while to put together. I see no reason to believe it’s a response to any event or provocation.

Regardless, I hope it continues. A lot of people admire Apple. The more it can do to publicly support good causes, the better.