The devices, which are to the Samsung Galaxy line of phones what the iPod touch is to the iPhone, will hit retail shelves on Oct. 16. A model with a five-inch screen will sell for $269, while a similar device with a four-inch screen is priced at $229. Both include a 3.2 megapixel rear camera, a VGA front camera and eight gigabytes of memory, which can be expanded with a microSD card. The five-inch model weighs just over six ounces, while the four-inch model weighs 4.27 ounces; the former has a significantly larger battery.

Samsung showed the devices at the CTIA trade show in Orlando in March and said then that it expected the devices to ship in May.

The Wi-Fi models represent an interesting option for those looking to try Android without committing to a phone (and accompanying two-year contract). While the iPod touch has clearly found a significant market, it is unclear how large the demand is on the Android side of things.

Also yet to be seen is if these products, like other Android models from Samsung, draw the ire of Apple’s legal department.

These days, though, smartphones and tablets make up more than half of such connections, according to new data released on Tuesday by Boingo Wireless. February was the first month that mobile devices outnumbered laptops; by May, such devices amounted to 59 percent of Wi-Fi connections.

A year ago, laptops represented two-thirds of Boingo’s connections, and two years ago, just a quarter of machines accessing the airport Wi-Fi networks were mobile devices.

“Since the launch of the iPhone in June 2007, we’ve seen a marked growth trend for non-laptop devices, but the exponential growth in iPhones and iPads in the last year pushed mobile devices past laptops, showcasing just how disruptive the trend is,” Boingo VP Dawn Callahan said in a statement.

Boingo notes that laptops aren’t going away — mobile devices are just proliferating much faster. There are twice as many laptops, for example, than there were in 2007. However the smartphone has taken off, fueled by the launch of the iPhone in June of 2007.

Apple’s iOS continues to dominate the mobile space, accounting for 83 percent of the mobile total. Combined, all Android devices are still a distant fourth place behind the iPhone, iPad and iPod Touch when it comes to popularity on Boingo’s network.

The findings mirror a rise in mobile devices using inflight Wi-Fi, such as that offered by Gogo. In the air, iPads account for more than a third of big-screen connections, compared to about 20 percent for Macs and 41 percent for Windows PCs. Android devices trail Apple’s mobile products on Gogo’s networks as well.

Mobile devices are also gobbling up a lot more data than they did just two years earlier, Boingo said. On a monthly basis, the average mobile device consumed 211 megabytes of data in June, compared with 114 megabytes in May 2009. And the devices are also consuming that data in less time, gulping an average of 8.9 megabytes in every 10 minutes of use, compared with 3.7 megabytes in the same period two years earlier.

Carousel, which initially will work on Macs and iOS devices when the service launches later this month, is designed to allow people to access, share and edit their entire photo libraries from all of their devices, though support for Windows and Android isn’t planned until next year.

The $60-a-year service (or $5.99 a month) allows users to upload an unlimited number of photos and have them synchronized to all of their Macs, iPhones and iPads. Adobe will also offer new users a month of the service free to kick the tires.

With a subscription, Carousel users can create up to five different photo collections, each of which can be shared with up to five additional people. Those with whom photos are shared can add photos of their own or edit pictures without needing their own subscription. Individual photos can also be shared through Twitter, Facebook, Tumber or via email.

On the editing side, the tools are a mix of image effects, which Carousel calls “looks,” as well as slider tools for controlling settings such as contrast, white balance and exposure. And no matter what edits are made, the original photo is preserved.

The photos themselves are stored in the cloud as well as, typically, on a primary machine. The Mac version of Carousel creates its own photo library, meaning that users will need a lot of extra hard drive space if they plan to store their full collection of pictures in Carousel.

Carousel is the latest effort by Adobe to create products that work across computers and mobile devices. Earlier this year, the company showed off several tools that aim to allow the iPad to work in conjunction with Photoshop in various ways.

The chief selling point for Carousel over various products from Adobe and others is the fact that the product synchronizes edits and photos automatically. That, says Adobe’s Chris Quek, is what users expect out of mobile photo services.

“It has to work right out of the box,” Quek told AllThingsD. “If it is difficult to set up and doesn’t integrate with the rest of their lives they are not going to use it.”

There are some significant limitations. On the Mac side, Carousel requires Lion — the just-released version of MacOS X. Support on the iOS side is a bit broader, working with iPhone 3GS and iPhone 4 as well as all iPads and the latest version of the iPod Touch.

Adobe will also find a number of competitors in this area, including Apple’s soon-to-launch iCloud as well as a variety of other photo sharing and editing services.

First, Apple investors will freak out.

Second, Apple will do what Apple has planned to do for all these years.

For years, since Jobs’s first bout with pancreatic cancer was disclosed, Apple has taken a lot of criticism from analysts, shareholders, activists and tech and business columnists on the subject of succession planning. The main complaint has always revolved around the fact that Apple seemed not to have a plan for the day that Jobs would cede the helm either by choice or happenstance.

The fact is that Apple does have a plan, and chose, I think wisely, to keep most of the details related to it confidential. On the very last page of Apple’s Corporate Governance Guidelines (PDF here) you find that the company designates its compensation committee, a subset of its board of directors, as the body responsible for succession planning.

Here’s what the text says (emphasis mine):

XIX. Management Review and Succession Planning
The Compensation Committee should conduct, and review with the Board, an annual evaluation of the performance of all executive officers, including the CEO. The Compensation Committee is expected to use this review in the course of its deliberations when considering the compensation of the CEO and senior management. The Board also reviews the CEO performance evaluation to ensure that the CEO is providing effective leadership of the Corporation. As part of the annual evaluation, the Board and the CEO should conduct an annual review of management development and succession planning for senior management, including the CEO.

And for the record, the members of the compensation committee are as follows: Millard Drexler, the chairman and CEO of retailer J. Crew; Al Gore, the former vice president of the United States; and Andrea Jung, the CEO of Avon, is the committee’s chair.

All of them, Gore especially, know a little something on the subject of succession planning. Yet the market has over the years generally assumed that Apple has had no plan for a post-Jobs Apple.

Expect that assumption to be the order of the day when the markets open tomorrow. Apple shares have already taken a 5 percent hit, dropping $19.08 in after-hours trading tonight, and you can bet that’s just a precursor for what’s coming tomorrow. Over the coming days, the so-called “Jobs premium” will be erased.

So what happens next? First off, tomorrow will be Tim Cook’s first day as CEO — not acting CEO, but as the actual CEO of Apple. Long credited as the man who brilliantly runs Apple day to day, he’s now in charge.

And that’s an encouraging thought. Formally designated Apple’s number two in 2005, he has overseen it during its most exciting and world-changing years. On his first business day as COO, Apple shares closed at $54. Today before the news broke, it closed at nearly seven times that price.

During those years Apple has largely remade much of the world around it: Music, media, communications are all indelibly and fundamentally different because of the work that has come out of Apple during this six-year period. To assume that this stops because Steve Jobs doesn’t show up at the office tomorrow or next week is failing to understand the Apple way.

If you follow Apple long enough, you know that Apple has a long-term vision. I think enough time has passed that I can share the following anecdote. In 2007, right after the introduction of the first iPhone, I attended a meeting with Jobs and the editors of the magazine I was working for at the time.

The meeting included a Jobs-led, hands-on demo with prototype iPhones, during which I asked Jobs a question: “Will you do a version of this without the phone?” The answer — which surprised me that he even gave it — was yes. In that moment I got a very tiny glimpse of the long path that lay ahead. I could see way off in the distance the logical progression leading first to the iPod touch and from there to the iPad. It was a revelation.

And we all know exactly what the iPad is doing to the established order of the PC industry: It is tearing it down. Hewlett-Packard’s decision to get out of the PC business is just one very big and recent example of the degree of that change.

That in mind, I find it hard to accept the argument that there isn’t a similar long-term vision that Apple is executing on at this very moment. My suspicion has long been that a pipeline of products — some of them incremental improvements on existing ones, others radically new and disruptive — are in various stages of the design process. I think it is a safe bet that Apple’s strategic plans for the next five years are more or less mapped out. Beyond that, it’s harder to see, and circumstances can certainly change a great deal in that amount of time.

But consider where Apple was five years ago and what has happened since. Yes, the Apple story was interesting in 2005 and 2006, but who could have predicted that Apple would become the biggest company by market capitalization in the entire world, eclipsing ExxonMobil, if only for a few days.

Markets will do what markets must do. And so must Apple. The next phase of what has turned out to be the most interesting business story in living memory has begun.

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Andy Miller (pictured here), the high-profile VP of mobile advertising at Apple, is planning on leaving the company, according to sources close to the situation.

Sources said Miller — who sold Quattro Wireless, the mobile advertising company he co-founded in 2006, to Apple in early 2010 for $275 million — will become a general partner at Highland Capital, the Boston-based venture firm that had funded Quattro.

Apple will search for a replacement for Miller, whose staff was told of the impending departure today.

Since Miller got to Apple, he has reported directly to its CEO and co-founder Steve Jobs, who noted after the acquisition:

“We tried to buy a company named AdMob, but Google came in and snatched them from us. So we bought Quattro, and they are teaching us. We are making ads that are different than anything I’ve ever seen.”

But Apple’s ad aspirations have been a bit of a bumpy road, as the company has tried to fine-tune the offering, even as competition — from Google, Facebook and a range of start-ups — has increased in the fast-growing space.

Not surprisingly, Apple shut down Quattro in favor of its much ballyhooed iAd platform a year ago. Via iAd, Apple has promised to serve up interactive rich-media ads on iPhone and iPod touch apps.

Some marketers balked at Apple’s tight control over iAds and their high prices, but recently the company has tried to give Madison Avenue more flexibility.

That’s because, while still small, mobile advertising will be a huge market. As The Wall Street Journal recently reported: “Marketers spent just $743.1 million on mobile ads in the U.S. in 2010, up 79% from $416 million in 2009, according to research firm eMarketer.”

At Highland, Miller will be working on a range of digital investments from its Silicon Valley office, sources said, and not just in the mobile space.

He has a varied background: Miller worked for mobile content company m-Qube and also WatchPoint Media, an interactive television start-up.

I have contacted Apple PR for a comment, but have not yet heard back.

Gogo tells AllThingsD that iPhones make up nearly two-thirds of the mobile devices using its inflight Wi-Fi service. Android devices make up just 12 percent, trailing even the iPod touch, which accounts for 20 percent of handheld connections.

The BlackBerry accounted for 6 percent (think suits paying for e-mail and tweens for BlackBerry messenger). Meanwhile, Windows Phone and other phones are used on Gogo about as often as those air sickness bags stuffed into the seat pocket. (Although parent-of-two Kara Swisher tells me those bags are still used more often than one would like to think.)

Mobile devices pay slightly lower fares on longer flights on Gogo, with access maxing out at $7.95, as compared to $12.95 for using a Mac or PC on those cross-country trips.

Tablets like the iPad were not included in these mobile numbers as such devices are counted with computers (and also pay the higher PC rates).

But the iPad is a popular frequent flier as well, accounting for more than a third of large screens using Gogo in June. All versions of Windows totalled 41 percent with Mac OS machines making up just under 20 percent.

The device will now have a suggested price of $169.99, down from $249.99.

Initially, Nintendo was eager to report how well the game unit would sell, but even after its first month on sale, the older DS continued to outsell the newer device.

Clearly, Nintendo had to offer more incentives to buy it, despite more game releases and a major software update in June.

Since going on sale in the U.S. on March 27, Nintendo says it has sold 830,000 units.

While the device got off to a bumpy start after Nintendo warned viewing 3-D may be bad for some children, it’s more likely the overall game environment that is impacting sales.

Nintendo must compete against the iPod touch, which has access to countless free and 99 cent games. With this price drop, The 3DS now will now cost less than the 8 gigabyte iPod, which runs $229.

Additionally, if 3-D was the draw for consumers, now it is built into a handful of consumer electronics, including the EVO 3D smartphone.

The 3DS also tried to compete against the iPod and smartphones by integrating new features, such as providing a free Netflix application, which allows members to instantly watch TV episodes and movies on the device.

Additionally, starting on Sept. 1, Nintendo will begin giving away some games for free. 3DS Ambassadors will be able to download 10 virtual console games at no charge, games such as Super Mario Bros., Donkey Kong Jr., and The Legend of Zelda. Ambassadors are users who sign into the eShop at least once before midnight on Aug. 11.

Reporting third-quarter results in July of 2010, Apple offered its first report on cumulative iOS device sales, noting that they’d surpassed 100 million.

A few months later, sales had risen 20 percent to 120 million. They hit 160 million in January 2011. And according to Apple’s lawsuit against Samsung, they’d reached 187 million by March. In June of this year they’d passed 200 million, giving Apple a nice, big, round number to trot out during its annual WWDC conference in June.

And now, just a month later, they’ve turned in another spectacular growth spurt, thanks to a very strong June quarter.

To date, Apple has shipped 222 million iOS devices, according to COO Tim Cook, who revealed the figure during Apple’s Tuesday earnings call.

It’s hard not to look at that number without thinking in superlatives. For a new platform — established by a company that’s been in the mobile space less than five years — that is absolutely tremendous growth. And it’s a testament not just to Apple’s dominance in the space, but the significant opportunities ahead of it. As Cook said Tuesday, “Sales of iPad 2 have absolutely been a frenzy … We sold every iPad 2 we could make this quarter. There is no shortage of demand.”

The number of new developer project starts for Android fell from a 36 percent share in the first quarter of 2011 to a 28 percent share in the second quarter, according to new data from mobile analysis firm Flurry Analytics. Meanwhile, the number of iPhone/iPod touch project starts rose to claim a 57 percent share, up from 54 percent. At the same time, iPad project starts rose to 15 percent from 10 percent.

In other words, total iOS project starts increased to nab a 72 percent share, up significantly from the 64 percent share they had in the quarter prior. The platform is clearly winning some developer attention away from Android. As Flurry notes, this is the second quarter-over-quarter decline for the OS, which enjoyed steady growth throughout 2010, peaking at a 39 percent share in the fourth quarter.

So what happened?

Two things: The launch of the iPhone on Verizon and the debut of the iPad 2, which gave developers two more good reasons to focus their resources on iOS rather than Android.

“We believe that wholesale consumer acceptance and adoption of tablets, which just a year ago was questionable within the industry, is further luring developers to build for iPad instead of Android,” says Flurry’s Charles Newark-French. “… With developers pinched on both sides of the revenue and cost equation, Google must tack aggressively at this stage of the race to ensure that Apple doesn’t continue to take its developer-support wind.”

When it goes public, the Facebook game developer will be the first major U.S. company supported primarily by the sale of virtual goods to do so.

To get an idea of what such an animal might look like, I talked to a handful of accountants, lawyers and game companies to get a sense of what we might find under the hood.

What’s immediately clear is that there are no obvious answers.

The Securities and Exchange Commission and other governing bodies have not yet come up with a legally prescribed method for taking into account the sale of virtual goods.

That leaves companies to come up with their own best guesses.

“There are no rules about this stuff,” said Bob Komin, the CFO and COO at Linden Lab, which operates Second Life, the four-year-old online virtual world. “I haven’t heard anything about a standard, but it’s probably the number one thing we talk about before we get audited every year.”

Revenue recognition on the sale of virtual goods is not exactly a sexy topic (unless we’re talking about an avatar’s undergarments!). But as more companies shift to a free-to-play model, where games are monetized through microtransactions and virtual goods, the subject will become more commonplace.

Zynga may be the first out of the gate, but many others are waiting in the wings — Facebook being the most prominent. Zynga declined to comment for this story.

Here’s what is known about Zynga

Four of its titles dominate the most popular applications on Facebook: CityVille (No. 1); FarmVille (No. 2); its newest title, Empires & Allies (No. 3); and Zynga Poker (No. 4).

All of those games are free and monetized through the sale of virtual goods, such as purple cows, energy boosts, clothing or premium buildings.

In-game items like these are either purchased directly on Facebook or through gift cards purchased in the store. Zynga also makes money from advertising and mobile games, but revenues from those are presumed to be far less.

In total, Zynga reportedly generated about $400 million in profit last year on about $850 million in revenue, although subsequent sources told AllThingsD’s Kara Swisher that the filing will reveal much more robust numbers.

But it’s not the sheer magnitude of Zynga’s business that has created problems for bean-counters. It’s the details on how to account for every last penny.

In a white paper, accounting firm Ernst & Young writes that there are three typical models being used today.

Here’s how they break it down:

• Game-based model: The company recognizes revenue over the life of the game.
• User-based model: Revenue is recognized over the estimated life a user plays the game.
• Item-based: Revenue is recognized based on the implied or explicit life span of the item — in other words, how long it would last in the real world. Examples of more durable goods are virtual vehicles, furniture or weapons. Revenue from these would be recognized for as long as the player stays active in the game. Revenues from a more consumable item, like a virtual cup of coffee or a jolt of energy, would be recognized almost immediately.

And there are still other factors to take into consideration, such as whether the goods were paid for with virtual currency or real cash, and how much information a company has for establishing the averages.

Lack of rules won’t stop companies from filing to go public

It can get really confusing really fast.

Kirk Soderquist and J. Dax Hansen, attorneys at Perkins Coie in Seattle, are looking at the legal ramifications of virtual goods.

“You have a bunch of alternative financial services companies that have sprung up on the Internet around social networks and gaming because there’s a need to deal with money in an innovative way. But the laws aren’t clear on how they apply to the Internet and the gaming space,” Hansen said.

Despite the lack of clear regulations, they said, they don’t believe that’s keeping any companies from filing for a public offering.

The one major aspect for a company to consider is unclaimed property laws. If a user purchases credits or coins but doesn’t use them, a company can’t necessarily set an expiration date and count them as revenue. In many states, it is considered “unclaimed property” — like an unused gift card — and the government can collect the revenue.

“Investors and acquirers will be interested in how you deal with that,” Hansen said. “If they are dependent on breakage for their business model, then they have another think coming.”

Linden Lab recognizes revenue over three years

Linden Lab’s approach for Second Life most closely resembles user-based accounting, which recognizes revenue over the average lifespan of a player, which is three years.

That time frame was picked, Komin said, because players tend to stick around for two to four years. “So, three years is not a bad estimate,” he said.

Komin prefers the long timeline because it evens out the revenues, making the company look like it has a very predictable and recurring business model. “If you have recurring and repeatable revenues over three years, it means that even if you are growing really fast, your reported numbers would be growing less quickly, but it would be more predictable. The other far extreme would be to report everything in the current period, and you’d see the growth as it was happening — but it would be more volatile.”

In other words, if Zynga does the same thing and reports FarmVille revenues over more than the two-year period it has been popular and revenues from Poker over three-plus years, revenues will be very consistent and not reveal much in terms of how well its games are currently performing.

Likewise, sales won’t spike when they release a new title, like Empires & Allies — which has jumped from the seventh most popular game to the No. 3 spot in the past week, according to AppData.com.

The iPhone is an example of the two accounting models

A good example for this is how Apple originally accounted for its iPhone.

When the first iPhone came out, Apple used subscription-based rules to account for the revenue. That meant that sales from the iPhone were spread out over many months, rather than right after a customer bought the phone. Wall Street analysts found the practice annoying because the company’s revenues barely budged despite selling two million devices in one quarter.

Apple was forced to report it this way because it technically wasn’t selling a finished product. Over the life of the product, Apple planned to push down free updates to the device. (This is also why Apple once charged for iOS updates for the iPod touch, so it could recognize all revenue immediately.)

The laws have since changed.

“Apple is a great analogy,” Komin said. And just as Apple figured it out over time, “I think there will be some adjustment as people figure [virtual goods] out.”

To be sure, Komin has his preferences for how he wants to do it, as the company considers an IPO.

“Generally speaking, investors don’t reward you for volatility,” he said. “Recognizing revenue that matches [a user's] life cycle feels better than recording it immediately. But whichever way we go, and whichever we choose to do, we have to make sure investors understand the business.”

Whatever Zynga decides, investors (and journalists!) will thank it for being transparent.

Its camera may well pick up a few megapixels, but the big improvements in photography are likely to come from the software features Apple has already demonstrated. And however many millimeters thinner it might be, the iPhone will get much of its utility from iOS 5 features, such as improvements in notifications, Twitter integration and other niceties that Apple demonstrated earlier this month. And, of course, there’s the iCloud synchronization service that is also slated to debut alongside iOS 5.

The same holds true for the next version of Windows Phone. Although the hardware is yet to come from folks like Samsung, HTC and Nokia, Microsoft has said much about the next version of its software, code-named Mango. In addition, I’ve been playing around with a test build of Mango, running on a current generation Windows Phone, the Samsung Focus.

Microsoft is moving in some of the same directions as Apple, and some different ones. Mango, like iOS 5, also focuses on Twitter integration and improved notifications. And while it lacks the full iCloud experience, it will add the ability to share documents to the cloud. Both are also getting new types of messaging, with Apple introducing iMessage and Microsoft bringing together Facebook Chat, text messages and Windows Live Messenger.

Of course, Microsoft is starting further behind when it comes to features.

While iOS 5 is about keeping Apple ahead, Microsoft is still playing catch-up with Mango, adding things like visual voicemail and multitasking that have long been a part of rival operating systems. And one of Mango’s other key features is a vastly improved browser that is nearly identical to the desktop version of Internet Explorer 9, albeit without support for plug-ins like Flash. The operating system will also support direct access to hardware features such as the camera, a level of support needed to enable certain types of games and virtual reality applications.

That’s not to say that Apple isn’t picking up a few tricks from its competitors, including Windows Phone. The ability to take a photo straight from the lock screen is one grabbed from Microsoft’s playbook, while Apple’s new notification mechanism borrows deeply from the approach Google has taken with Android.

To those things, Apple is adding plenty of its own new tricks. Beyond the improvements to the camera and additions of basic photo-editing tools, Apple is adding a Newsstand showcase for newspaper and magazine apps, as well as a new reminder tool that can prompt the user to take action based on either a specific time or location.

Perhaps most notable is Apple’s move to enable the iPhone to work without ever connecting to a computer. Historically, one has needed a PC or Mac to both set up and to update their iPhone. With iOS 5, both steps will be possible without even owning a computer. For those that do have a computer, the cord will still be rendered less important, thanks to the addition of Wi-Fi synchronization.

There are also features that Apple didn’t get time to show on stage, things ranging from the ability to set a custom vibration pattern for different contacts to being able to tweak the dictionary to add shortcuts and those words the iPhone is constantly miscorrecting.

Microsoft, for its part, is trying to refine the notion that a truly smart phone need not have an app for each step a user wants to take. One of the notions introduced with Windows Phone 7 — and being expanded on in Mango — is the concept of hubs. The people hub, for example, brings together lots of different connections to a particular person, from their contact information to one’s recent contact history to the photos they have posted on Facebook. With Mango, Microsoft is adding Twitter integration, as well as the ability to create groups and interact with multiple contacts at once via text or email.

“Our friends aren’t apps — they are people,” Microsoft’s Greg Sullivan said in an interview last month.

Other Mango features include Facebook check-ins and the ability to tag photos from the device, as well as improvements to search that give users information on what is nearby, the ability to search using the camera, and a Shazam-like service for identifying a song that is playing nearby. Microsoft is also working with a group of enthusiasts to enable small “home brew” developers to allow them to add apps they have developed to their own device, in an effort to encourage even the smallest of developers to pursue an interest in the Microsoft operating system.

So, while I can’t tell you what the next Windows Phones or iPhones will look like on the outside, I think we do have a pretty good sense of what they will look like on the inside, thanks to the sneak peeks that Apple and Microsoft have both provided of their next operating systems.

Apple has said iOS 5 will show up this fall and be a free update for the iPhone 3GS and iPhone 4, as well as running on all iPads and the last two versions of the iPod Touch. Microsoft has said that Mango is also due later this year as a free update for existing Windows Phone 7 devices as well as on a new generation of hardware, including from its new best buddy Nokia.