Decision Victory for Apple Computer

Original article appeared in Fox Business 

Apple was awarded more than $1 billion in damages following a landmark legal battle with Samsung Electronics in which Apple accused the electronics giant of patent infringement. 

The verdict, which was delivered in a San Jose, Calif., courtroom on Friday, states that Samsung stole Apple’s patents for its “scroll,” “multitouch,” “zoom,” and “navigate” features, as well as some of its design patents for cases and icons. The jury found the South Korean electronics giant willfully infringed on at least three of Apple’s patents.

The jury ruled in favor of Samsung in one instance, claiming Apple infringed on Samsung’s patent on “bounce back.”

All of Apple’s patents were found to be valid.

The jury ordered Samsung to pay $1.051 billion to Apple in damages, a smaller amount than the $2.5 billion Apple was seeking, but one of the largest awards in patent-trial history. The verdict could result in a ban on the sale of Samsung products, Reuters reported on Friday.

The verdict came after just three days of deliberations. Attorneys for the electronics giants presented closing arguments on Tuesday after four weeks in court.

The decision brings to a close a battle that began in April of last year, when Apple filed a lawsuit against Samsung claiming the company infringed on a number of its technology and design patents. Apple followed up with another lawsuit in July and Samsung countersued.

This isn't the first legal battle between the two tech heavyweights. They've gone to court in the UK, Germany and Australia.

Hack of Tech Journalist Reveals Flaws in Cloud Security

Story first reported from USA Today

SEATTLE – The security community is on alert for hackers who might try to emulate the simple trickery used to breach a prominent technology journalist's Amazon, Apple, Google and Twitter accounts. That hacking caper has rekindled concerns about whether Apple's iCloud, Google Apps, Amazon's Cloud Drive, Microsoft's Windows Live and other Internet-delivered services do enough to authenticate users, security analysts say.

"People are being urged to trust their data to the Internet cloud, but then you find that the operational security is alarmingly lax," says Stephen Cobb, security analyst at anti-virus firm ESET.

Hackers devastated Wired reporter Mat Honan's digital life. In doing so, they highlighted how Web companies have been slow to embrace more robust systems for ensuring that users who log into online accounts are who they say.

Merchants, banks, media companies and social networks require varying amounts of information to open and access online accounts. Many ask for only a few bits of information to make changes, such as resetting a password. That makes it easy for hackers to abuse the prevailing systems, which rely on asking users to answer questions.

Many banks and Google Gmail offer an optional service that sends to your cellphone a single-use PIN code that you must enter at their websites, along with your username and password, before you can complete certain transactions.

Such multifactor authentication systems are considered more difficult for the bad guys to subvert but less convenient for account holders to use. Yet the need for wider deployment of stronger systems is intensifying, argues Todd Feinman, CEO of database security firm Identity Finder.

Honan detailed how hackers tricked an Amazon rep over the phone into revealing the last four digits of his credit card number. Next, they used that information to persuade an Apple rep to reset his Apple ID password, which enabled them to wipe clean Honan's iPhone, iPad and MacBook, destroying all of his files, including irreplaceable photos of his daughter. Apple has suspended its phone password-reset service and launched a security review, says spokeswoman Natalie Kerris. Amazon did not respond to interview requests.

Web firms are unlikely to switch to one-time PIN systems anytime soon. "Many … are expensive and difficult to manage," says Chris Brennan, CEO of security firm NetAuthority. "And companies are concerned they could frustrate the user."

Meanwhile, consumer awareness remains low, says Gregg Martin, FishNet Security's directory of mobile security. Consumers will have to demand stronger authentication systems and be prepared to accept "a slight level of inconvenience," Martin says.

ESET's Cobb argues that Web companies should take the initiative. "Improving security is 100% the responsibility of the cloud service providers because they are the ones trying to sign people up to the cloud model."

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Sprint CEO Talks About iPhone Decision, Other Challenges

Story first reported from USA Today

OVERLAND PARK, Kan. – By his own admission, Sprint CEO Dan Hesse isn't ready to hang out a "Mission Accomplished" sign yet. The No. 3 wireless company is in the midst of a turnaround. But, he says, "we're showing good success" in retaining customers, improvements in customer service and other metrics. Sprint last month reported a second-quarter loss of $1.37 billion on revenue of $8.84 billion. "It's blocking and tackling, quarter after quarter, year after year." Hesse hosted a group of journalists at Sprint headquarters this week. Here are highlights of the conversation, edited for space and clarity:

Q: What about the decision to sell the Apple iPhone even though Sprint had to spend billions to get that opportunity?

A: I've said everything has to make sense economically. But we knew our customers wanted the ability to choose the iPhone. We clearly looked at economics both short-term and long-term. Over time it starts to be cash-flow positive. We saw no reason to bet against Apple. You really don't want to be on the outside of that. From a brand perspective, you like having your brand associated with very strong great brands, and nobody can debate just what a great brand Apple has. We thought the benefits greatly outweighed the risks.

Q: You were a vocal opponent of the AT&T/T-Mobile merger. Are you satisfied you can compete now that the merger did not go through?

A: We're certainly working very hard. There's no question that the industry does have an issue with the size of the duopoly of AT&T and Verizon. I believe that over time we'll see more consolidation in the industry outside of the big two, because the gap in size between two and three is so enormous. Consolidation is healthy for the industry as long as it's not AT&T and Verizon getting larger.

Q: What are your thoughts on Google's acquisition of Motorola Mobility?

A: There'll be protections between the Android organization and Motorola. I can't say what will happen internally. But I honestly believe they will try very hard to keep Android's independence. We're actually looking forward to seeing what new devices the new Motorola will bring to the market.

Q: How are you positioning the Virgin and Boost brands, which offer prepaid wireless service?

A: Right now, generally the Boost brand is more kind of "talk and text." Virgin is focused a bit more on data and text. Boost tends to be a bit more urban; Virgin more suburban. Those are the basic differences.

Q: How does the growth of traditional wireless plans with contracts (postpaid) compare with the prepaid business?

A: We see increasingly that prepaid will be an opportunity for value and for customers who don't necessarily want to be tied into a contract for a couple of years. The iPhone on Virgin is an example of what we think is possible.

The (traditional wireless) business is the largest segment of the industry and, historically, it has been the most profitable. The Sprint brand is basically our (vehicle) to go after that industry. The prepaid business is growing more rapidly than the postpaid business. We doubled-down on the prepaid business a few years ago when we acquired Virgin. And we are expanding our offerings. As hockey great Wayne Gretzky reportedly once said, skate not to where the puck is but where it's going. The puck is going more to prepaid.

Q: Do you see a day when the typical household has multiple devices on the Sprint network?

A: As we look at growing overall revenue in the industry, what we're counting on is many more devices than one. We used to think five years ago that growth in the wireless industry is dead when you get to 100% penetration. Now we see numbers much north of that as customers have a variety of devices — wireless chips in your shirts, in your car, in many other areas. It's just another opportunity for us to increase revenues as an industry. We hope that over time there are a number of devices that are enabled by the Sprint platform.

Q: Will Sprint have an iPad, especially as you move to faster LTE networks?

A: I can't comment on that. But it's a very good question.

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Apple Closing in on All-Time High

Story first reported from CNN.com

 

Remember all the investor disappointment about Apple's latest earnings report? That's no longer an issue. Shares of Apple were up nearly 1.5% Monday to about $625. The stock has rebounded more than 8% since a 4% pummeling the day after it missed forecasts and guided lower. In fact, the stock is now just 3% below the all-time high of $644 it set back in April.

It appears that any lingering concerns about Apple's rare case of under-performing and under-delivering have been replaced by excitement about new products (iPhone 5 is rumored to be unveiled and go on sale next month) and the upcoming dividend payment to shareholders. As such, several traders on StockTwits believe that it would be a mistake to bet against Apple.

Research firm analyzes 6 million social conversations to conclude:"the launch of the
Apple may one day screw up royally and release a product that nobody wants.

But take one look at the share prices of Research in Motion, Nokia, Hewlett-Packard and Dell and ask yourselves if you think any of them will soon make hardware that's sexier than iEverything? (Or that EL James book it seems everybody but me is reading.) Didn't think so.

Sure, Microsoft, Google and Samsung are all fierce competitors too. But Apple deserves the benefit of the doubt ... assuming there still are any doubts of course.

Apple's $2.65 per share dividend will be paid out on August 16 to any shareholders of record as of August 13. So if you are silly enough to be shorting Apple, it makes sense to cover before the dividend is paid. Otherwise you would have to return (i.e. buy back) the shares you borrowed and also pay the dividend on top of that.

I'm still not sure I believe the stock split chatter though ... even though a split could make the shares even more attractive to retail investors and the people who manage the Dow Jones Industrial Average.

It will be interesting to see what Apple's stock does once the iPhone 5 is released. The next milestone for the company would be exceeding $600 billion in market value.  Apple is currently only about 3% below that level. That may seem obscene. But as I've said repeatedly in Buzz columns, videos and over on Twitter -- aka the thing that Apple is never going to buy no matter what the NY Times and other media outlets are reporting --  Apple remains a cheap stock.

Apple is valued at just 14 times fiscal 2012 earnings estimates -- despite its market dominance, stellar growth prospects (forecasts of 20%+ EPS growth on average for the next few years) and squeaky-clean balance sheet with well north of $100 billion in cash. Now you add on the dividend -- which will yield a relatively 1.7% -- to boot?

I had my colleague David Goldman ask Siri if it's a good idea to short Apple stock. (I merely possess a Siri-less iPhone 4.) Her response? "I cannot help you pick stocks, Dave." That was very diplomatic of her. But trust this lowly carbon-based life form. The answer is no.

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HP says Oracle Violated Contract, Seeks Billions

Story first reported from reuters.com

Oracle Corp violated a clear contract with Hewlett-Packard Co when it decided it would no longer make new versions of its database software compatible with HP's Itanium-based servers, a lawyer for HP said in court.

The two technology companies faced off on Monday for opening statements in a bitter lawsuit over Oracle's decision to end support for Itanium. An Oracle attorney, meanwhile, said Oracle never agreed to give up its business flexibility in the "brief, breezy" contract language cited by HP.

The trial, in which HP seeks up to $4 billion in damages, comes just days after Oracle lost a separate high-stakes case against Google Inc over smartphone technology.

Oracle decided to stop developing software for use with Itanium last year, saying Intel made it clear that the chip was nearing the end of its life and was shifting its focus to its x86 microprocessor.

But HP said it had an agreement with Oracle that support for Itanium would continue, without which the equipment using the chip would become obsolete. HP said that commitment was affirmed when it settled an earlier lawsuit over Oracle's hiring of ousted HP chief executive Mark Hurd.

In court on Monday, HP lawyer Jeffrey Thomas said the Hurd settlement clearly bound Oracle to continue offering its "best products" to HP.

As a sign of the importance of the contract, top executives from both companies -- including Oracle President Safra Catz and then-HP enterprise chief Ann Livermore -- negotiated the deal, Thomas said.

"It is impossible to offer best products going forward without porting new versions of those products," Thomas said.

However, Oracle attorney Dan Wall said the Hurd settlement language was merely designed to settle employment litigation that HP had initiated against Oracle. It was not backed by the kind of painstaking negotiation that takes place over a strategic business partnership, he said.

Itanium is a declining product, Wall said.

"HP is trying to force Oracle to support a technology, Itanium, that Oracle does not believe in," Wall said.

Instead of a jury, Santa Clara Superior Court Judge James Kleinberg will decide the first phase of the trial -- namely, whether there is a contract between HP and Oracle, and its terms.

If Kleinberg decides in HP's favor, then a jury will decide whether Oracle violated the contract, and damages.

In court last month, Kleinberg compared the case to a divorce, saying "this case appears to be the end of a marriage" between the technology giants.

Top officials from both Oracle and HP could take the stand, with HP's Livermore, who is now a board member, set to testify first.

Intel Corp is not a party in the lawsuit, although its CEO, Paul Otellini, might also testify.

The case in the Superior Court of the State of California, County of Santa Clara is Hewlett-Packard Company v. Oracle Corporation, No. 11-CV-203163.

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Judge: Oracle Obligated to Make Software for HP Servers

Story first reported from bizjournals.com

A judge in California has ruled that Oracle Corp. is obligated by contract to develop software for some flagship server systems sold by Hewlett-Packard Co.

The Wall Street Journal reported the ruling was an important victory for H-P, because its sales have been hurt by the possibility that future versions of Oracle's program would run on some of H-P's high-profile servers. Similar partnering issues have involved shipping software.

The ruling will allow further arguments on the case before a jury, in a case in which H-P is expected to ask for as much as $4 billion in damages from Oracle, the Journal reported.

Oracle said it will appeal Wednesday's ruling and will pursue its counterclaim that H-P misled Oracle, the Journal reported.

Hewlett-Packard is the parent company of Plano-based HP Enterprise Services.

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