Next week, Daniel Lyons, a.k.a. the Fake Steve Jobs, steps out of character to start a three-city book tour to promote Options: The Secret Life of Steve Jobs (A Parody) [Da Capo Press; $22.95]. That means hard-copy versions of the book — galleys of which have been floating around reviewers’ offices for more than a month — will start to arrive in bookstores, where loyal readers of FSJ’s website can see for themselves how the fake Apple (AAPL) CEO’s online persona translates into print.

The good news is that this is not just a compilation of FSJ’s online posts, although some of his best set pieces — including Hillary Clinton shaking down the Silicon Valley VCs for campaign cash and Yoko Ono insisting that iTunes list the band as “John Lennon and the Beatles” — appear in the book more or less intact. This is, by and large, an original work of fiction, with lots of new material and something resembling a plot — with a beginning, middle and end.

The bad news — which struck this reader at about page 31 — is that this is not really a novel either, with three-dimensional characters who live in a fully-realized fictional world. It was on page 31 — when Jobs, devastated by the possibility that the options backdating scandal might cost him control of his company, goes home, smokes some pot, and calls his house manager at her boyfriend’s house to come over and make him a mango smoothie — that it occurred to me that the real Steve Jobs doesn’t live alone. He lives in a real house with a real wife and real children. And he probably doesn’t have the luxury of getting stoned, dropping acid, running off to San Francisco with his friend Larry Ellison to shoot paintball guns at the homeless, or any of the other reckless things FSJ does on a whim in this book.

For whatever reason — perhaps the pressure of writing a novel on deadline on top of his regular online posts and his day job as an editor at Forbes — the challenge of bringing Fake Steve Jobs convincingly to life was too much for Lyons. Instead we get what is in effect a 248-page blog entry populated by paper-thin characters who just aren’t that funny. It’s a lesson in how literary tricks that made for truly brilliant short-form writing can grow lame when played again and again at book length

The novel also suffers from the timidness of Da Capo Press and its libel lawyers, who have shorn Lyons of one of the features that made his blog must-reading among Silicon Valley insiders: his willingness to skewer real computer industry executives, from Microsoft’s Bill (”the Beastmaster”) Gates to Sun’s Jonathan (”My Little Pony”) Schwartz, without pulling any punches. With the exception of Ellison, almost all the identities in Options have been fudged, turning what might have been a razor sharp parody into a coy roman a clef.

It’s been a tough few months for Danny Lyons, between his outing by the New York Times and the rush to get this book out on schedule. The best part is that none of it seems to have slowed his online output — or his willingness to call ‘em like he sees ‘em. His Sept. 3 rant against the TV Networks is as good as anything he’s written to date — and as smart a critique of the broadcast industry as you’re likely to read anywhere.

Drilling down into Apple’s (AAPL) recent string of boffo quarterly reports, analyst Toni Sacconaghi Jr. of Bernstein Research finds both strength and vulnerability in Steve Jobs’ relentless pursuit of high-margin computer sales.

In his second report since Bernstein initiated coverage of Apple (see here for the first one), Sacconaghi notes that:

• Apple’s global PC market share has increased in 10 of the last 11 quarters,
• unit sales have grown 28% or better in each of the last four quarters
• U.S. notebook sales have been particularly strong, accounting for 47% of Apple’s Mac unit growth and 52% of its revenue in Apple’s most recent quarterly report.

But amid all that good news, he sees risks ahead for Apple investors. It’s tempting, he says, to look at Apple’s slim 3% slice of the global market for PCs and assume that Jobs can easily grow his Mac business at least two fold in the next five years or so — an assumption that helps explain the high multiples in Apple’s current share price.

But if you look at the high-priced markets Apple chooses to play in, says Sacconaghi, you see that it already has a surprisingly dominant market share — without much room for growth.

Take, for example, the market for the most expensive notebook computers. Dividing notebook price ranges into fifths, or quintiles as the statisticians call them, Apple already has a 29% share of the U.S. market for notebook computers in the highest quintile — up “stunningly,” notes Sacconaghi, from 8% three years ago. In the consumer and education market (i.e. excluding business computers), Apple share of the top quintile notebook market is nearly 46%.

While other PC makers have been lowering their average selling price, Apple has been steadily increasing its price premiums relative to the rest of the market — great for keeping profit margins high, but not so good for growing market share.

“Accordingly,” Sacconaghi concludes, “we believe Apple faces a trade-off in its Mac business over the next 2 - 3 years: either lower price (and margin percentage) to sustain share gains, or retain its current price premiums and face slowing unit growth.”

Below the fold, a graph from the Bernstein report showing the rapid growth in Apple’s share of the premium notebook market from 2000 to today.

If the 980 students who participate in Piper Jaffray’s bi-annual survey of American teenage buying patterns are any guide, a significant percentage of Apple’s (AAPL) iPhones sold are ending up in the hands of adolescents.

In a report to clients issued this morning, analysts Gene Munster and Michael Olson report that

• 3% of students surveyed own iPhones and an additional 9% expect to buy an iPhone in the next 6 months.
• 4.2% of 212 parents surveyed own iPhones.

Of course, Piper Jaffray’s survey group may not be a fair sample of the broader teen population — and some quick back-of-the-envelope calculations suggest that it isn’t. There are roughly 28 million teenagers in the U.S., and it seems unlikely that they account for 840,000 of the 1.1 million iPhones sold so far. It’s far more likely that Piper Jaffray’s sample is tilted heavily toward a tech-savvy, upper-middle-class demographic.

Still, Munster and Olson’s numbers are useful for showing trends, especially in the MP3 market they’ve been tracking for several years.  Their results show that among U.S. teens:

• iPod market share remained steady at 82%.
• Interest in buying a portable media player in the next 12 months increased to 47% (up from 42%).
• Of the 36% of students who legally purchase music online, 79% said they use iTunes (down from 89%).

See chart below the fold.

Columbus Day was a busy one for the two dozen or so renegade programmers who have taken it upon themselves to re-do what Apple (AAPL) undid with its latest software update for the iPhone. Firmware update 1.1.1, released 10 days earlier, had wiped out virtually every unauthorized program written for the device.

At noon yesterday, Erica Sadun, a writer and programmer who has emerged as the unofficial spokesperson for the so-called iPhone Dev team, announced on The Unofficial Apple Weblog (tuaw.org) that her “guys” had managed to “jailbreak 1.1.1″ — opening a crack in the updated iPhone’s firmware that might allow some of the third-party applications to slip back in.

“Right now,” she wrote, “they’re nowhere near releasing a general-use tool but the first steps have been made. Congratulations to dinopio, asap18, netkas, Martyn, mjc, Niacin, BloomFilter, pytey, tE_gU, pumpkin, roxfan, sam, SmileyDude, NerveGas, Nate True, Arminius, DirectriX, Edgan, ixtli, kroo, xorl, and the rest of the team.” (link)

By 8:25, Sadun was able to announce that iPhone hacker asap18 had managed to seize control of SpringBoard — the iPhone’s home screen — and port up to 15 third-party apps onto the device. By early evening, several of these apps had been tested and were working fine.

Meanwhile, in separate news flash, Sadun reported that the iPod Touch — the top-of- the-line multi-touch iPod that had so far resisted hacking — had also been hacked. At 8:00 pm she wrote:

It looks like iPod touch hacker Niacin has achieved read access to the iPod touch root. Following up on the iPhone jailbreak earlier today, this is another step forward into opening up both the iPhone and iPod touch for general read-write access and third party application support. More news as it develops. (link)

This news is particularly significant because although the iPod touch has all the capabilities it needs to be a general purpose Wi-Fi pda, Apple has not provided the applications — a Mail client chief among them — that would allow it to be used as such.

(Note that none of these developments affect iPhones unlocked to work with carriers other than AT&T. They are still “bricked” by update 1.1.1.)

The problem with both the iPhone and iTouch breakthroughs is that they are dependent on the so-called TIFF exploit in Safari — a security hole that was first reported more than a year and a half ago and has long since been closed in other platforms. It’s probably only a matter of weeks before Apple issues another software update that shuts it down — and wipes out the third-party apps one more time.

How long Sadun’s friends have the energy to keep playing cat-and-mouse with Steve Jobs’ programmers remains to be seen.

See also How Apple “Bricked” the iPhone.

[Image of third-party iPhone apps courtesy of tuaw.com.]

With three weeks left before the promised ship date of OS X Leopard, the long-awaited and much-delayed sixth major update of Apple’s (AAPL) flagship Macintosh operating system, Piper Jaffray’s Gene Munster is already calculating its impact on the company’s revenue stream.

In a note to clients issued this morning, Munster observes that OS X Tiger, Leopard’s predecessor, was also released at the end of the first month of a fiscal quarter (April 29, 2005 vs. Oct. 26, 2007). He writes:

At that time, the OS X installed base was 12 million and Tiger sales added $125 million to the quarter. The Mac OS X installed base is now approximately 23 million, so we expect Leopard to add approximately $240 million to the Dec. 2007 quarter. This assumes similar uptake rates to the Tiger launch, which saw 15% of the user base upgrade in just 6 weeks (eventually 66% of the user base upgraded to Tiger).

Looking ahead to the next Macworld, Steve Jobs’ favorite venue for announcing new products, Munster anticipates one of two possiblities:

• a multi-touch PDA slightly larger than an iPhone (which some are calling the new Newton)
• an ultra-portable Mac that’s smaller than the smallest MacBook (which AppleInsider has dubbed the ThinBook)

“If Apple launches a new product at MacWorld in January,” Munster writes, “we believe it will likely fall into one of these two categories.”