Apple has opened negotiations with the major record labels by offering only $20 per customer for a proposed unlimited plan at the iTunes music store, according to the Financial Times. Nokia is offering $80, but then cell-phone manufacturers have the price of phones subsidized by carriers who've gotten used to paying hundreds of dollars to acquire new customers. Apple has traditionally made its profits on the devices themselves, since iTunes margins are paltry, and are already slashing prices on units in order to meet sales forecasts. Labels are looking to get as much as $100 from iPod buyers and $8 a month from iPhone subscribers. Both sides are really fighting over how much of the profit from music they'll keep. Me, I'll stick with vinyl. (Illustration by Gizmodo)

iPhone's software has much the same outlook on life as an unemployed writer living in a Bushwick bedsit. Type in the word "hell" when setting up locations for the Apple smartphone's weather page, and the following alternatives show up. Did you mean New York, NY? [via Digg]

Some fanboys say the iPhone actually provides something better than the "real Internet," because it lacks Flash. You kidding? What's the point of Internet-on-the-can without all that embedded Web video? While his holiness Steve Jobs won't go there, Microsoft mobile exec Derek Snyder will, signing Microsoft to license Adobe's Flash Lite technology.

Ever since Mark Zuckerberg launched an iPhone-friendly version of its website last August, MySpace's Tom Anderson and Chris DeWolfe have been scrambling to catch up. The two have put a small team, likely under Jason Ling, MySpace's head of mobile development, on a MySpace app for the iPhone. Electronista thinks the rumored app is being worked on by part-timers. Our sources say it's a larger project, with the codename Operation IFMD. Anyone know what that stands for, other than "I'm F—-ing Matt Damon"? And while we're at it, screenshots?

Digg founder Kevin Rose lost his cell phone last night. Today, all is right in the world. Kevin got a new iPhone. Kevin, try not to smash this one, okay?

At the Apple Store SoHo: "I'm sorry, sir, I've already sold you five iPhones. I'm not allowed to sell you any more."

Everyone's seen the iPhone stopwatch reach a thousand hours. With that in mind, we decided to Digg a Digg story. Would it rip a hole in the fabric of our existence?

The paid-for-by-British-TV-owners BBC has rolled out an iPhone compatible version of its on-demand streaming video service, iPlayer. Neat, right? Yeah, kinda. It's Wi-Fi only and, oh yeah, available strictly in the U.K. What's the point of all that, then, if I can't watch new episodes of EastEnders?

It's fitting; the Second Coming of the phone will get a game from On High. Alongside Apple's SDK demo today, Electronic Arts' Travis Boatman showed off a version of Will Wright's magnum opus Spore running on the iPhone. The release date hasn't been finalized, but the hope is it will coincide with the game's multi-platform release this September. That BART ride just got a helluva lot more interesting.

At Apple's iPhone SDK announcement today, Steve Jobs had "one more thing..." to reveal. Venture capitalist John Doerr of Kleiner Perkins came onstage to announce a $100,000,000 "iFund" to help "young developers with funding." This is a huge amount of money for developers, but no details on how it will be invested or allocated. Compare this to the $10 million Android programming contest that Google introduced with its Android mobile phone platform. Thanks to the dedicated gadget-hounds at Gizmodo for the pic and info.

The development kit for the iPhone has been released to the wild and Apple's servers are getting slammed by people looking to download it. I can barely get through to the info page and am having no luck actually downloading the SDK. I guess Steve Jobs should have gotten Amazon's S3 storage service.

The best thing about the iPhone has always been how it allows you to avoid work emails. "Sorry, dude, it doesn't support Exchange! Text me!" If you wanted to give your boss an electronic leash, you'd have bought a BlackBerry, right? No longer true: Apple is adding enterprise support to the iPhone. In a presentation at Apple's headquarters, CEO Steve Jobs announced that Microsoft Exchange-compatible email, calendar, and contacts software would be added soon. Also on tap: Cisco VPN support and other security enhancements. Congratulations, early adopters: Your symbol of indie cred is now a tool of the man. This will increase Apple's sales, but somehow that just makes it worse: Jobs will laugh all the way to the bank as you cry into your no-foam soy latte.

At the iPhone SDK Roadmap event at Apple today, Steve Jobs revealed this tidbit about the iPhone: 71% of mobile browser usage is from Safari. On top of that, Apple has 28 percent of the U.S smartphone market, number two behind RIM's 41%.

Some whiners say what the iPhone provides isn't the real Internet, because it lacks Flash. No kidding, donkeys: It's way better. Thank you, Steve Jobs, for saving us from Flash websites — the 2008 version of the <BLINK> tag. [Macworld]

A pair of analysts lowered their price targets on Apple today. RBC analyst Mike Abramsky is concerned Apple's next-generation 3G iPhone could be delayed this summer by carrier testing and fine-tuning. Banc of America Securities analyst Scott Craig lowered sales estimates for the iPod and iPhone in the face of weakening consumer demand. [WSJ]

AT&T is Apple's exclusive U.S. carrier for the iPhone because AT&T CEO Randall Stephenson let Steve Jobs have his way on pricing plans when other carriers would not. AT&T also pays Apple $18 a month per iPhone. So what has all that flexibility bought? An exclusive deal through 2012. But after that, no promises. Yesterday Apple's Tim Cook told Goldman Sachs investors the one-carrier model may not be around much longer."We're not married to any business model," Cook explained. "What we're married to is shipping the best phones in the world." And the carriers? They're just girlfriends. (Photo by andycarvin)

Apple's long-awaited software developers kit for the iPhone won't arrive in February like Steve Jobs promised at Macworld, but the first week in March is pretty close, right? That's what the fanboys wil tell themselves, at any rate, rather than contemplate the reality that their hero failed to deliver. Apple is holding a "Town Hall" event on its Cupertino campus next Thursday. Let's hope it's not Jobs and Phil Schiller drinking beers in front of a webcam. (Photo by AP/Kevork Djansezian)

The software that allows programmers to build third-party software for the iPhone will be delayed one to three weeks beyond its February 2008 ship date. Shipping delays have become de rigueur for the company: In January, the Apple TV 2.0 software upgrade was delayed by two weeks. Last April, Apple announced it would be delaying the release of its next generation operating system to October because of the iPhone's pending release. No reasoning was given this time, but we wonder if Apple has sufficient human capital to turn all of Steve Jobs's fantasies into reality. (Photo by AP/Paul Sakuma)

Rumors are flying about a secret event Apple is holding next week in New York City. Potential introductions include long-expected software which would allow developers outside Apple to make applications for the iPhone and iPod Touch. Other rumors are circling about new high-end notebooks, a new iPhone, or more labels offering DRM-free music on the iTunes Store. Rock band Linkin Park posted a note on its blog about a special show in NYC in with Apple. "Shh... it's a secret..." Got more details? Drop us a line. (Photo by AP/Jeff Chiu)