Thursday, January 31, 2013

RIM hits the reset button on BlackBerry

Story first appeared on USA Today

Research In Motion is no more.

RIM, the struggling Canadian phone maker that introduced the world to the notion of 24-hour work e-mail, hit the reset button on its identity and operation Wednesday by overhauling its product lineup and changing the name to its more commonly known brand, BlackBerry.

BlackBerry CEO Thorsten Heins took the stage in New York and revealed the BlackBerry 10 line, including a new mobile operating system and two new smartphones that are aimed at competing with Apple's iPhone and other high-end devices that run on the Android or Windows operating systems. BlackBerry Z10 is a 4.2-inch touch-screen smartphone, while Q10 comes with a physical keyboard that BlackBerry loyalists are reluctant to give up.

The new products are the result of a company resuscitation strategy undertaken by Heins, who was hired about a year ago, to ensure its viability. With bearish investors fearing that it may not survive, its stock has plummeted 74% since the beginning of 2011.

"We have definitely been on a journey of transformation," Heins said. "I know innovation is at the heart of RIM."

In changing its name to BlackBerry — a long overdue move, as most already associate RIM with the catchy brand name — the company will change its stock ticker symbol from "RIMM" to "BBRY" on Monday.

BlackBerry 10, which now becomes the fourth major mobile operating system in the U.S., has features that are familiar to users of Android and Apple's iOS, including icon tiles for apps.

But it also introduces an array of unique tools. BlackBerry Hub is the central interface for receiving all types of messages, including e-mail, Facebook updates and Twitter messages. BlackBerry Peek is a feature that allows users to swipe the screen to quickly check e-mail or social media while watching a video.

BlackBerry Balance lets businesses keep work data separate and secure from home data. BlackBerry Remember is a series of folders for managing content. BlackBerry Story Maker is for combining photos and video to create personalized films.

BlackBerry will have to hustle to catch up to competitors in content. BlackBerry World, its content store, currently hosts 70,000 apps vs. hundreds of thousands in both iOS and Android. The company pointed out that many popular apps are now available or coming soon, including Skype, MLB, Dropbox, Angry Birds Star Wars and Where's My Water?

Heins says all eight major studios and major music labels have signed on to add music and video to BlackBerry World.

"They delivered on the promises that Heins made," says Gartner analyst Michael Gartenberg. "There's more than enough here for consumers to be satisfied. They have to continue that momentum and overcome the perception that there might be an app missing."

Z10 will be available on three major U.S. wireless carriers — AT&T, Verizon Wireless and T-Mobile — starting next month.

Only Sprint has committed to selling the Q10 so far. BlackBerry said the model will be available in April. The decision to add a keyboard to Q10 — with a 3.1-inch AMOLED touch-screen display — was driven largely by consumer reaction. "We heard you loud and clear," Heins said. "We built this for all those people (who) said we just have to have a physical keyboarding experience."

To enhance its hip quotient, BlackBerry also named singer Alicia Keys as its global creative director. "We're exclusively dating again, and I'm very happy," she said.

Friday, January 25, 2013

Record quarterly profits reported by Samsung

Story first appeared on Mercury News

Samsung Electronics reported Friday forecast-beating results for the fourth quarter of 2012 as profit from its mobile business more than doubled from a year earlier.

Samsung's October-December net income reached 7.04 trillion won ($6.58 billion), a 76 percent surge of 4.01 trillion won a year earlier. Analysts expected 6.95 trillion won in income according to FactSet.

Sales and operating income were slightly higher than its earlier preview. Sales rose 19 percent over a year earlier to 56.06 trillion won and operating income jumped 89 percent to 8.84 trillion won.

Increased sales of smartphones were the key source of its stellar profit. Samsung, which overtook Apple Inc. (AAPL) as the top smartphone maker last year, said its operating profit from the division that makes and sells smartphones and tablets more than doubled to 5.44 trillion won in the fourth quarter, from 2.56 trillion won a year earlier.

The company's component divisions that make semiconductor products and display panels also benefited from a rise in demand for smartphones. Sales of mobile processors that power popular devices such as Apple's iPhones and Samsung's own Galaxy smartphones boosted the bottom line.

The recovery in the display panel division was also led by strong sales of advanced mobile-phone screens called OLED, which are mostly found in high-end Samsung smartphones. The display division posted 1.11 trillion won in profit compared with a small loss a year earlier.

Analysts said Samsung will likely to see a continued rise in smartphone sales this year, especially in low- and mid-priced models where it sees no competition from Apple. Analysts forecast Apple, which keeps its iPhone price high, will sees iPhone sales plateau in coming years as more consumers snap up cheaper phones and more variety in screen sizes. Bullish analysts forecast Samsung smartphone shipments to rise as much as 50 percent this year from 2012.

Market researcher ABI Research said last month Samsung's 2012 smartphone market share topped 30 percent. In comparison, it said Apple's market share will peak at 22 percent in 2013 and remain flat through 2018, seeing a widening gap with Samsung.

Still, Apple's business has been more profitable because of the high price of the iPhone, which generates a larger profit per sales. Samsung, which makes dozens handset models a year and customizes them for mobile operators, also sells cheaper smartphones and spends about three times more on the expense called selling, general and administrative expense that include marketing and advertising costs for to promote its Galaxy brand.

Samsung's SG&A expense amounted to 12.67 trillion won ($11.84 billion) in the fourth quarter, 23 percent of its sales. Apple's SG&A expense was $3.85 billion in the same period, just 7 percent of its sales.

Thursday, January 24, 2013

Turbulence! Apple’s speeding profit rocket slams into air pocket

Apple's multi-year profit-building streak hits air pocket as holiday earnings go flat -

Apple's blockbuster revenue growth is slowing drastically, as iPhone sales plateau and the company finds itself lacking revolutionary new products.

The company's warning, issued Wednesday as part of its financial results for the holiday quarter, sent Apple Inc.'s stock plunging by more than 10 percent, wiping out a year's worth of gains.

Analysts said the warning suggested Apple can no longer sustain its growth without some completely new products. Its last revolutionary creation, the iPad, was launched in 2010. Co-founder Steve Jobs, who was the engine behind the creation of the iPod, iPhone and iPad, died in 2011.

"It has been an overriding concern with Apple that they would not be able to generate revenue growth just rolling out new versions of old products," said Jeff Sica, president and chief investment officer of SICA Wealth Management. "Now they've proven it in their numbers."

On a conference call with analysts, Apple CEO Tim Cook rebutted that idea, but as usual, gave no details.

"We're working on some incredible stuff. The pipeline is chock full," he said.

Before he died in 2011, Apple co-founder Steve Jobs told biographer Walter Isaacson that he had figured out how to create a groundbreaking, easy-to-use TV set. Since then, company watchers have been waiting for the company to bring out something in that vein to re-energize sales. Cook said the company was still working on it.

"I tend to believe that there's a lot we can contribute in the space, and so we continue to pull the string and see where it leads us," he said.

Apple said it expects sales of between $41 billion and $43 billion in the current quarter, which ends in March. That would usually be little cause for concern, even though analysts were expecting $45.6 billion, because Apple usually lowballs its forecasts. But Chief Financial Officer Peter Oppenheimer said the company is changing its practices and providing a reasonable range rather than a single, easily achievable number.

That means Apple is looking at sales growth of about 7 percent from last year's January to March quarter, a striking number for a company that's posted double-digit increases in every quarter except one since 2008.

Apple's stock fell $55.58 to $458.43 in extended trading, after the release of the results. The shares are down 35 percent from their all-time high, hit Sept. 21, when the iPhone 5 launched.

Fueled by earlier versions of the iPhone, Apple's market capitalization decisively overtook that of Exxon Mobil in early 2012, making it the world's most valuable company. With Wednesday's drop, Apple is worth just 5 percent more than Exxon.

Apple's enviable profit growth also hit a wall in the October to December quarter. It said net income in the fiscal first quarter was $13.1 billion, or $13.81 per share, flat with a year ago. That still beat expectations, as analysts polled by FactSet had forecast earnings of $13.48 per share.

Revenue was $54.5 billion, up 18 percent from a year ago. Analysts were expecting $55 billion. Sales were held back by the fact that the latest quarter had 13 weeks, one less than the corresponding 2011 quarter.

Apple shipped 47.8 million iPhones in the quarter, about 1 million less than analysts were expecting, and 22.9 million iPads, also about 1 million short.

Most surprisingly, Mac sales were also 1 million short, at 4.1 million. That's a 22 percent drop from shipments a year ago. Oppenheimer said this was because Apple couldn't get the new iMac desktops out before December.

Cook said iPhone supplies were short too, and the company could have sold more of both the iPhone 5 and older iPhone 4 if it had been able to make more.

Most technology companies would be ecstatic if they posted 18 percent sales growth and $13 billion in profit for a single quarter, but Apple is held to a high standard, set by the shocking, iPhone-propelled success of the last few years.

"Apple has been growing tremendously and that level of growth can't be sustained by any company," said Sarah Rotman Epps, senior analyst at Forrester Research.

Investors have already been concerned that Apple's strategy of keeping the price of the iPhone high means it's losing out on sales, particularly overseas. Consumers are instead opting to buy cheaper smartphones running Google Inc.'s Android software, which has propelled South Korea's Samsung Electronics to the world's largest maker of smartphones. The average wholesale price of the iPhone is $640, hundreds of dollars more than smartphones with comparable hardware.

There's speculation among company watchers that the company will produce a cheaper iPhone, but that would cut into its profit margin and could tarnish the company's image as a purveyor of premium products.

Apple had warned that the holiday quarter's profits would be lower than Wall Street was initially expecting, because it had so many new products coming out, including the iPhone 5 and iPad Mini. New production lines are more expensive to run and yield more defective products that need to be redone or thrown out rather than sold.

Monday, January 21, 2013

Is Java Safe?

Story first appeared on USA Today

Q:  Why is Java on our browsers if it so vulnerable?  What does even do?  If it is “disabled” what will I no longer be able to do on my computer?

A: Once again, Oracle's Java software is in the news as a hazard to your Mac or PC. Six days after the discovery of a severe vulnerability led Oracle to rush out a patch, on Wednesday security writer Brian Krebs reported a different such "zero-day exploit" that could be used to attack this widely-deployed program.

This is not what people, myself included, hoped when Sun Microsystems released the first versions of Java in the mid-1990s. Back then, the idea was to make the Web more than a way to display words and pictures; you could instead embed a small Java program in a page, and anybody with Sun's Java virtual-machine software installed could run that "applet."

But three funny things happened along the way to that future.

Java's promise of cross-platform compatibility — "write once, run anywhere," as Sun's pitch went — didn't pan out either, leading to Web developers joking about "write once, debug everywhere" and shying away from the software.

Those same developers figured out how to make complex, interactive Web pages without using Java or any other plug-in software. You can edit a spreadsheet in Google Docs, crop a photo in Yahoo's Flickr, and manage your e-mail in Microsoft's using nothing more than a modern browser.

Malware authors, meanwhile, realized that Java's extensive deployment — Oracle, which bought Sun in 2009, estimates that it is on more than 850 million personal computers — made it a tempting target. That has led to attacks such as last spring's Flashback, which took advantage of Java's cross-platform compatibility to hijack Macs as well as Windows PCs.

That's why I advised turning off Java last year. Fortunately, it's now easier to do that: In Oracle's current release of Java, its Windows control panel and Mac System Preferences pane have an "Enable Java content in the browser" option under a "Security" heading. Click to clear that checkbox, and you're done worrying about hostile Java applets.

If you don't see that, you may need to update your Java first; check your version at Unfortunately, Oracle has continued Sun's abusive practice of bundling third-party junk in the Java installer. You'll need to opt out of it adding an browser toolbar and changing your search default to that site.

(On a Mac, you may only have Apple's older Java software, which should already be disabled in Safari but may require some manual configuration in Mozilla Firefox and Google's Chrome.)

Uninstalling Java outright through the Windows control panel will make you even safer, but some desktop programs — for example, the Minecraft game, TiVo Desktop and the open-source Microsoft Office alternative LibreOffice — may require it for some features. I can see keeping Java around for those cases, but I can't justify anybody at home keeping it active in the browser, and I certainly can't endorse any Web developers continuing to use it on their sites.

Years after competitors rolled out this feature, Yahoo quietly added an option to its Yahoo Mail service that will encrypt your use against snooping attempts — not just while you send your username and password, but even as you read and write e-mail.

This encryption — called both HTTPS, short for "hypertext transfer protocol secure," and SSL, for "Secure Sockets Layer" — became an option at Gmail in 2008 and the default there in 2010. Microsoft's various mail services added this choice in 2010 as well. Yahoo, however, contented itself with encrypting only your login; a hostile network, such as a rogue Wi-Fi hot spot, could have still read your e-mail.

Yahoo hasn't made much of a fuss about this change, aside from a Twitter reply by CEO Marissa Mayer: no press release, no posts on its corporate or mail blogs.   Currently, there is only one help file with an explanation of how to enable it: Log into your Yahoo Mail account,  click the gear icon at the top right, select "Mail Options" and click the checkbox next to "Turn on SSL."

Friday, January 11, 2013

Gadget Watch: Electronic fork nags you on eating

originally appeared in The Associated Press:

If you've always wanted a fork that spies on your eating habits, you're in luck: A company has developed a utensil that records when you lift it to the mouth.

The electronic fork is one of the gadgets getting attention this week at the International CES in Las Vegas, an annual showcase of the latest TVs, computers and other consumer-electronic devices.

WHAT IT IS: The HAPIfork is a fork with a fat handle containing electronics and a battery. It's made by HapiIabs, which is based in the land of slow, languorous meals - France.

HOW IT WORKS: The fork contains a motion sensor, so it can figure out when it's being lifted to the mouth. If it senses that you're eating too fast, it warns with you with a vibration and a blinking light. The company believes that using the fork 60 to 75 times during meals lasting from 20 to 30 minutes is ideal.

Between meals, you can connect the fork to a computer or phone and upload data on how fast you're eating, for long-term tracking.

The electronics are waterproof, so you can wash the fork in the sink. If you want to put it in the dishwasher, you have to remove the electronics first.

WHY YOU'D WANT IT: Nutritional experts recommend eating slowly because it takes about 20 minutes to start feeling full. If you eat fast, you may eat too much. The fork is also designed to space your forkfuls so that you have time to chew each one properly. It's like having your mom in a utensil!

WHAT IT DOESN'T DO: The fork has no clue about the nutritional content of your food or how big your forkfuls are. It can't tell if you're shoveling lard or stabbing peas individually.

AVAILABILITY: The company is launching a fundraising campaign for the fork in March on the group-fundraising site Participants need to put down $99 for a fork, which is expected to ship around April or May. Those forks will connect to computers through USB cables.

Later this year, the company plans to start selling Bluetooth-enabled forks to the general public. No price was disclosed for that version.

Friday, January 4, 2013

FICO moves headquarters to San Jose

originally appeared in The San Jose Mercury News:

FICO, the company that invented the credit score, is moving its headquarters from Minneapolis to San Jose to be closer to Silicon Valley's engineering talent pool.

The company's spokeswoman confirmed the move Thursday. The company already has 90 people in San Jose.

The move is another testimonial to the drawing power of the valley's expanding base of companies involved in cloud computing and "big data" -- the analysis of large troves of data collected by computers. There's a brisk competition for employees skilled in those fields.

With the big boom around big data analytics and a significant talent pool in Silicon Valley, this is really a great place to be headquartered, she said.

FICO's president and chief executive officer joined the company last January and already works at the San Jose office.

Operating from our base in Silicon Valley, we can more readily build upon our company's deep talent pool, collaborate with other big thinkers in the world's premier technology hub, and provide our customers worldwide with powerful innovations that will help them compete more effectively in the era of Big Data, according to their president.

A new headquarters is under construction near Mineta San Jose International Airport. The company said the office, which will be completed in February, will become an innovation and development hub in the heart of Silicon Valley.

The company is returning to the area where it was founded more than 50 years ago. We view this move as a homecoming, he said.

FICO was started in 1956 as Fair, Isaac by engineer Bill Fair and mathematician Earl Isaac, who met while working at Stanford Research Institute in Menlo Park. Its first headquarters was in San Rafael, where there is still an office, but the headquarters was later moved to Minneapolis.

While the name FICO is associated with the credit score by that name, the company is not a credit-rating agency. Instead, it licenses its credit scoring algorithm and formula to other credit rating agencies.

The company says its decision management technology is used by thousands of companies in more than 90 countries to target and acquire customers and to reduce fraud.

A FICO product, Falcon Fraud Manager, is used by credit card companies to screen for payment fraud. A separate product, Insurance Fraud Manager, screens for fraudulent insurance claims. The analytics are used to determine whether a claim or charge is legitimate.

About 2 billion credit and debit cards are protected by Falcon, according to the company. Falcon screens about 9,000 transactions per second or about 24 billion transactions per month.

A leader in the growing field of analytics, FICO exemplifies the type of innovation that makes San Jose the capital of Silicon Valley. By returning to its roots in Silicon Valley, FICO will have greater access to talent as well as global business and technology partners, San Jose' Mayor said in a statement.

FICO went public in 1987 and is traded on the New York Stock Exchange.

The company has 2,300 employees worldwide.

Wednesday, January 2, 2013

Tech Giants Brace for More Scrutiny From Regulators

originally appeared in The New York Times:

Silicon Valley lobbied hard in Washington in 2012, and despite some friction with regulators, fared fairly well. In 2013, though, government scrutiny is likely to grow. And with this scrutiny will come even greater efforts by the tech industry to press its case in the nation’s capital and overseas.

In 2012, among other victories, the industry staved off calls for federal consumer privacy legislation and successfully pushed for a revamp of an obscure law that had placed strict privacy protections on Americans’ video rental records. It also helped achieve a stalemate on a proposed global effort to let Web users limit behavioral tracking online, using Do Not Track browser settings.

But this year is likely to put that issue in the spotlight again, and bring intense negotiations between industry and consumer rights groups over whether and how to allow consumers to limit tracking.

Congress is likely to revisit online security legislation — meant to safeguard critical infrastructure from attack — that failed last year. And a looming question for Web giants will be who takes the reins of the Federal Trade Commission, the industry’s main regulator, this year. The director of the commission’s Bureau of Consumer Protection, has resigned, and there have been suggestions that its chairman would step down.

The agency is investigating Google over possible antitrust violations and will subject Facebook to audits of its privacy policy for the next 20 years. Its next steps could serve as a bellwether of how aggressively the commission will take on Web companies in the second Obama administration.

Now that the election is over, Silicon Valley companies each are thinking through their strategy for the second Obama administration, according to a law professor at Ohio State University and a former White House privacy official. The F.T.C. will have a new Democratic chairman. A priority for tech companies will be to discern the new chair’s own priorities.

In early 2012, an unusual burst of lobbying by tech companies helped defeat antipiracy bills, which had been backed by the entertainment industry. Silicon Valley giants like Facebook and Google feared that the bills would force them to police the Internet.

At the end of the year, Silicon Valley also got its way when the Obama administration stood up against a proposed global treaty that would have given government authorities greater control over the Web.

The key to the industry’s successes in 2012 was simple: it expanded its footprint in Washington just as Washington began to pay closer attention to how technology companies affect consumers. Privacy and security became top-tier important policy issues in Washington in 2012, accordion to the director of security policy and global privacy officer at Intel.

Industry has realized it is important to be engaged, he continued, to make sure government stakeholders are fully informed and educated about the role that new technology plays and to make sure any action taken doesn’t unnecessarily burden the innovation economy while still protecting individual trust in new technology.

At the end of 2012, tech companies were on track to have spent record amounts on lobbying for the year. In the first three quarters, they spent close to $100 million, which meant that they were likely to surpass the $127 million they spent on lobbying in 2011, according to an analysis by the Center for Responsive Politics, a Washington-based nonpartisan group that tracks corporate spending. Even the venture capital firm Andreessen Horowitz hired a lobbyist in Washington who was a former mayor of the city.

Technology executives and investors also made generous contributions in the 2012 presidential race, luring both President Obama and Mitt Romney to Northern California for fund-raisers and nudging them to speak out on issues like immigration overhaul and lower tax rates.

In a blog post in November, the center said Silicon Valley’s lobbying expenditures have ballooned in recent years, even as spending by other industries has fallen.

Facebook more than doubled its lobbying outlay in the year, reporting close to $2.6 million through the third quarter of 2012. Google spent more than any other company in the industry, doling out more than $13 million in the same period and more than double its nearest competitor, Microsoft, which spent just over $5.6 million in the same period.

Among Google’s advocates on Capitol Hill is a former Republican congresswoman, Susan Molinari, who heads Google’s office in Washington.

Google has particular reason to be engaged. It faces a wide-reaching antitrust investigation by the Federal Trade Commission, just as Microsoft did a decade ago. At issue is whether Google’s search engine results favor Google products over its rivals’.

Although the agency was ready to settle that case before the holidays, without harsh remedies, late last month it shelved the inquiry and put stronger penalties back in play. A resolution is expected in January.

The commission has already fined Google on a separate matter. In 2012, the company paid $22.5 million to settle charges that it had bypassed privacy settings in Apple’s Safari browser to track users and serve them targeted advertisements.

Facebook has vastly expanded its Washington presence in recent years. It has set up a political action committee, hired a stable of seasoned, well-connected insiders from both parties and offered tips to lawmakers in an effort to make its site indispensable to politicians seeking re-election.

Facebook scored a win on Capitol Hill in late 2012 when it nudged Congress to amend a 1988 law, the Video Privacy Protection Act, that had protected the privacy of Americans’ video rental records. Facebook and its partner, Netflix, the video streaming service, advocated for changes in the law so that movies watched on Netflix could be shared on Facebook. That kind of data can be valuable for behavioral advertising, a principal source of revenue for Web services like Facebook.

The company also attracted increased scrutiny from the F.T.C. The agency negotiated a consent order with Facebook to settle charges that it had engaged in unfair and deceptive practices when changes in its settings revealed personal information that Facebook users had regarded to be private. As part of the settlement, Facebook agreed to audits of its privacy policies for 20 years.

Facebook faced renewed public outcry last month when its subsidiary, Instagram, proposed to deploy users’ pictures to serve targeted advertisements. The company has backtracked on that proposal, but the outcry, say consumer privacy advocates, is an indication of public sentiment.

Yes, the industry managed to hold off privacy legislation this year, according to the executive director of the Electronic Privacy Information Center. But if the end-of-year protests over the Facebook and Instagram changes are any indication, users will be pressing for better privacy protections in the next Congress.

Silicon Valley’s lobbying efforts are also likely to expand across the Atlantic in 2013. Both Facebook and Google have faced off with European regulators over privacy issues. Now, the European Parliament is weighing an overhaul of data protection laws that apply across the Continent.

One of the proposed changes requires Web companies to ask European Union citizens for their explicit consent before collecting personal data for targeted Web advertising. Web companies vigorously oppose that and other proposals.