Chinese Supercomputer Likely to Prompt Unease in U.S.

The Wall Street Journal

A newly built supercomputer in China appears poised to take the world performance lead, another sign of the country's growing technological prowess that is likely to set off alarms about U.S. competitiveness and national security.

The system was designed by China's National University of Defense Technology and is housed at the National Supercomputing Center in the city of Tianjin. It is part of a new breed that exploits graphics chips more commonly used in playing videogames—supplied by Nvidia Corp.—as well as standard microprocessors from Intel Corp.

Supercomputers are massive machines that help tackle the toughest scientific problems, including simulating commercial products like new drugs as well as defense-related applications such as weapons design and breaking codes. The field has long been led by U.S. technology companies and national laboratories, which operate systems that have consistently topped lists of the fastest machines in the world.

But Nvidia says the new system in Tianjin—which is being formally announced Thursday at an event in China—was able to reach 2.5 petaflops. That is a measure of calculating speed ordinarily translated into a thousand trillion operations per second. It is more than 40% higher than the mark set last June by a system called Jaguar at Oak Ridge National Laboratory that previously stood at No. 1 on a twice-yearly ranking of the 500 fastest supercomputers.

"I don't know of another system that is going to be anywhere near the performance and the power of this machine" in China, said Jack Dongarra, a supercomputer expert on the Oak Ridge research staff who is a professor at the University of Tennessee and recently inspected the system in Tianjin last week. "It is quite impressive."

The development was not altogether unexpected. China placed 24 systems in the so-called Top 500 supercomputer ranking last June; a system called Nebulae, for example, took second place that also used chips from Nvidia and Intel.

But Mr. Dongarra and other researchers said the machine should nevertheless serve as a wake-up call that China is threatening to take the lead in scientific computing—akin to a machine from Japan that took the No. 1 position early in the past decade and triggered increased U.S. investment in the field.

"It's definitely a game-changer in the high performance market," said Mark Seager, chief technology officer for computing at Lawrence Livermore National Laboratory. "This is a phase transition, representative of the shift of economic competitiveness from the West to the East."

Nearly all components of the high-profile Japanese system, called the Earth Simulator, were created in Japan. By contrast, most of the Tianjin system relies on chips from Intel and Nvidia, which are both based in Santa Clara, Calif. So U.S. customers could presumably construct a system with similar performance, noted Horst Simon, deputy lab director at Lawrence Berkeley Lab.

But Mr. Dongarra noted that communications chips inside the machine were proprietary and designed in China, and the country is also working on its own microprocessors.

Moreover, while the Japanese system was a single machine, Tianjin is part of a multi-year strategy by China to develop a range of machines to create a dominant position in both military and commercial applications. "In that sense, I would say this is a much more important event than the Earth Simulator," Mr. Simon said.

The new supercomputer will be operated as an "open access" system, available to other countries outside of China to use for large scale scientific computation, said Ujesh Desai, an Nvidia vice president of product marketing.

It reflects a major design shift to use graphics chips to help accelerate the number-crunching functions most often carried out by so-called x86 chips, which evolved from personal computers and have long dominated supercomputing. Advanced Micro Devices, which makes both graphics chips and x86 microprocessors, is another company besides Nvidia that is promoting the technology shift.

Melinda Gates: No Apple Products in my House

cNet

 

How should one bring up children? Should one give them everything for which they ask? Or should one make them understand very early in life that some things are bad for them, whether it is physically or psychologically?

This flight of philosophical depth comes to me on reading an interview in the New York Times with Melinda Gates, wife of Microsoft's Bill.

I wasn't sure whether to laugh, cry, admire or attempt to plait my eyebrows. You see, the interviewer offered her questions about Apple. The first was quite amusing: "Do you own an iPod, which is made by Apple?"

When I read this i was overcome with a feeling that Halloween had come early. Melinda Gates needs to be told that the iPod is made by Apple? Might this phraseology not have made her shiver too?

Still, her reply was sturdily corporate: "No, I have a Zune."

The interviewer persisted on pushing the buttons of Melinda Gates and her Zuneiness: "What if one of your children says, 'Mom, I have to have an iPod?'"

Again I was disturbed by this phraseology. Do kids really say "I have to have"? Or might they still have a tinge of human politeness and offer "Please can I have?"

Gates again offered a corporately correct response: "I have gotten that argument--'You may have a Zune.'" Note the enormously polite use of "may" in response to the alleged "I have to have".

The interviewer was not to be deterred. She asked Gates whether she owned an iPad ("Of course not"). Gates denied that her husband works on an Apple laptop. "False. Nothing crosses the threshold of our doorstep," she said.

This curious interview of domestic manners reached its highest note when the interviewer asked: "Isn't there room in this world for both Apple and Microsoft?"

Really. Isn't that like asking someone whether there's room for rabbits and porcupines? Voles and raccoons?

But the response might suggest to some that this interview was being conducted via Google Translate. For Gates' reply was: "Microsoft certainly makes products for the Macintosh. Go talk to Bill."

Perhaps you, too, are left with a peculiar sensation in several of your active quarters on reading these exchanges. I wonder, though, what the Gates' kids might make of it all. Surely they must have held an iPod or an iPad in their hands. What if they liked them?

Is deprivation a positive parenting tactic? Or will children grown up to crave what they were denied? Just as those who own Apple products crave Flash. Oh, wait.

MacBook Air Has the Feel Of an iPad In a Laptop

The Wall Street Journal

 

Some of the nicest, if little discussed, benefits of using an Apple iPad tablet are that it starts instantly, resumes where you left off, and has a long enough battery life that you aren't constantly fretting about running out of juice or looking for a place to plug it in. And it can do a lot of things for which people use laptops.

What if somebody designed an actual laptop that worked this way—you know, a computer with a real keyboard and a larger screen that could run traditional computer software and store more files than an iPad? And what if it was almost as light and portable as an iPad? Well, somebody has, and that somebody is Apple itself.

The computer in question is the company's new MacBook Air, which went on sale last week, starting at $999—a price that's very low for an Apple laptop, though hardly a bargain for a Windows one. The new Air comes in two sizes. The base $999 model has an 11.6-inch screen (versus 9.7 inches for an iPad) and weighs 2.3 pounds (versus 1.5 pounds for an iPad). The larger—but still thin and light—model starts at $1,299, has a 13.3-inch screen, and weighs 2.9 pounds.

I've been testing both versions, but especially the 11.6-inch model, and I find that, despite a few drawbacks, they really do offer the different, more iPad-like experience Apple claims they do. Battery life is strong, and the wake up from sleep is almost instant, even after long periods of being unused.

Like their predecessors in the Air family, these are gorgeous, very thin and light, but very sturdy aluminum computers. And, like their predecessors, or like iPads and smartphones, they rely on solid-state storage—flash chips—instead of a conventional hard disk to hold all your files. But Apple has dramatically reduced the physical size of the flash storage to make room for larger sealed-in batteries, so battery life is longer. It has also cut the price from the last version of the Air, a 13-inch model that cost $1,799 with a solid-state drive.

Also, the company has re-engineered the way these new Airs sleep, adding a long "standby" period of very low power consumption that Apple says lasts up to 30 days. This standby mode kicks in after about an hour of idle time, and replaces the traditional hibernation system, where your current activity is saved to a conventional hard disk just before the battery dies. With hibernation, getting back to where you were can be slow and somewhat uncertain. With the new "standby" mode, the process just takes a few seconds, only a bit longer than normal sleep.

These are just the first of a number of changes Apple plans in order to make its computers behave more like the iPad and iPhone, without losing their greater power and more traditional keyboards, touchpads and mice, and ability to run conventional programs.

For instance, Apple has said it will soon introduce an "app store" for the Mac, which would make it simpler to find and download programs for the computers, and notify users of updates. And it will also roll out, in its next Mac operating system, called Lion—due next summer—a system of apps icon screens, like those on iPhones and iPads, that you can flick through with the company's multitouch touchpad gestures.

In my harsh battery tests, I found the two new Air models almost matched Apple's battery claims, even with all power-saving features turned off, Wi-Fi kept on, the screen on maximum brightness and a continuous loop of music playing. The 11-inch model lasted four hours and 43 minutes, versus Apple's claim of up to five hours. The 13-inch model lasted six hours and 13 minutes, versus Apple's claim of up to seven hours.

This means that, in normal use, with power-saving features turned on, you'd be almost certain to meet, or possibly exceed, Apple's claimed battery life. For comparison, I did the same battery test on a new Dell 11.6-inch model, the M101Z, which costs about $450, but is much thicker and heavier than the smaller Air, and uses a conventional hard disk. It got only two hours and 41 minutes of battery life, which means that in normal use you'd probably get three to four hours.

The new models are designed to hardly ever require a traditional bootup or reboot. The idea is that you'd only reboot if you had a problem, or installed software that required a reboot, or if the machine had been idle and unplugged more than a month. But even booting is very fast.

In my tests, a cold boot took 17 seconds and a reboot, with several programs running, took 20 seconds. By contrast, the Dell I tested took more than three minutes to fully boot up and be fully ready for use.

Unlike on many netbooks, these two new Apples also have high screen resolutions so you can fit more material into their relatively small sizes. The 13-inch model has the same resolution as Apple's 15-inch MacBook Pro and the 11-inch Air has greater resolution than the 13-inch MacBook Pro. Also, unlike on many netbooks, they feature full-size keyboards, though the 11-inch model has reduced-size function keys.

The new Airs aren't meant to be the most robust machines. They use last-generation Intel processors and have only two gigabytes of memory in their base configurations, and their storage is well below typical hard-disk capacities.

For example, the 11-inch, $999 model has a paltry 64 gigabytes of storage; the 13-inch model starts at a still-weak 128 gigabytes of storage, and even the high-end version of the larger model, which costs $1,599, has just 256 gigabytes of storage. And neither the storage nor the memory can be expanded once you choose your initial specs.

I'd recommend buyers of the 11-inch model spend $200 more to double the storage to 128 gigabytes. And people doing a lot of video editing might want to double the memory on either model to four gigabytes, for an extra $100.

Also, as with the earlier Air models, these two lack a DVD drive and an Ethernet port. Apple sells an external drive for $79 and an Ethernet adapter for $29. If you add in all these extras, prices can climb quickly.

They also lack ports called HDMI ports, becoming common on Windows PCs, for easy connection to televisions, and their keyboards aren't backlit. The two new models do, however, have two USB ports instead of the single USB port in the older Air.

I was surprised to find that even the base $999 model was powerful enough to easily run seven or eight programs at once, including Microsoft Office, iTunes and the Safari browser with more than 20 Web sites open. It also played high-definition video with no skipping or stuttering.

So, if you're a light-duty user, you might be able to adopt one of the new Airs as your main laptop. If you're a heavy-duty user, who needs lots of power and file storage, they're likely to be secondary machines.

Overall, Apple has done a nice job in making these new MacBook Airs feel more like iPads and iPhones without sacrificing their ability to work like regular computers. But, as always with Apple, you'll pay more than you will with Windows PCs.

Apple Opens Chinese App Store

The Wall Street Journal

 

BEIJING—Apple Inc. announced Tuesday that it launched an online store and a simplified-Chinese version of its App Store for customers in China, the latest move in an aggressive expansion by the company after years of neglecting the market.

Chinese customers can now order Apple products, including the iPhone 4 and the iPad, online and have the products delivered. Prior to this move, iPhone buyers had to order the devices on Apple's Chinese website and pick them up at one of Apple's four mainland Chinese Apple Stores in Beijing and Shanghai.

According to the new Chinese online store, Apple is shipping iPhones in China in one to two weeks, and iPads in 24 hours as of Tuesday morning.

The company's expansion in China comes as competition in China's nascent but fast-growing smartphone market is heating up, with Taiwanese smartphone maker HTC Corp. also planning an expansion here.

Apple, which had only one Apple Store in China last year and relied largely on authorized resellers to reach other customers, has said it plans to open 25 Apple Stores in the country by 2011. It has also sped up the release of new products in China, the world's largest mobile market and second largest personal computer market after the U.S.

With e-commerce booming in China and consumers spending tens of billions of dollars in transactions each year online, the move could help boost the company's distribution in China. Apple had 7.1% of China's smartphone market as of the second quarter, ranking fifth after Nokia Corp., Samsung Electronics Co., Motorola Inc. and Sony Ericsson, according to research firm Analysys International.

According to research firm IDC, Apple has less than 1% share of unit shipments in the PC market.

Still, e-commerce is a more complicated business in China, where many customers prefer to pay cash on delivery for their purchases, and it can be more difficult to make deliveries to remote regions due to a lack of infrastructure development. And unlike in the U.S., where many brands have their own successful e-commerce websites, three-quarters of online shopping in China is done through Taobao.com, a retail website operated by Alibaba Group.

Apple's online store warns customers outside of large urban areas that their deliveries may take one to two extra business days. The store says it accepts credit and debit cards, as well as bank transfers and cash deposits.

Releasing a Chinese version of Apple's Chinese App Store, an online marketplace where customers can purchase software applications for their iPhones, iPads and iPods, also removes a barrier for Chinese users to access the store. But other hurdles remain, including the requirement for users to have dual-currency credit cards in order to make purchases within the store—a requirement that has led many users to either hack their iPhones in order to use applications from other sources, or make purchases in the App Store using false identities and fraudulent gift cards.

An Apple spokeswoman said payment requirements for the Chinese App Store remained unchanged as of Tuesday.

Apple, Blackberry spar over Smartphone

Sydney Morning Herald

 

Canada's Research In Motion (RIM) fired back at Apple's Steve Jobs on Tuesday over his claims that the iPhone is outselling the Blackberry and that 18cm tablet computers have no future.

"We think many customers are getting tired of being told what to think by Apple," RIM co-chief executive Jim Balsillie said in a blog post responding to the comments made on Monday by Jobs.

"For those of us who live outside of Apple's distortion field, we know that seven-inch tablets will actually be a big portion of the market," Balsillie said after Jobs dismissed seven-inch (18cm) tablets as too small.
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Blackberry is developing a touchscreen tablet computer called the PlayBook which features a seven-inch (18cm) screen in a bid to challenge Apple's iPad, which features a nearly 10-inch (25cm) screen.

Jobs, speaking to financial analysts during a conference call on Monday, dismissed seven-inch (18cm) tablets as "tweeners" saying they were "too big to compete with a smartphone and too small to compete with an iPad".

He suggested makers of seven-inch screens "include sandpaper so users can sand down their fingers" to be able to tap onscreen keys.

Balsillie struck back with criticism of Apple's refusal to allow Adobe's Flash video to play on the iPad.

"We know that Adobe Flash support actually matters to customers who want a real Web experience," he said.

"We also know that while Apple's attempt to control the ecosystem and maintain a closed platform may be good for Apple, developers want more options and customers want to fully access the overwhelming majority of websites that use Flash."

During his earnings call, Jobs also said that the iPhone "handily" outsold BlackBerry during the quarter and he didn't see the RIM handsets catching up any time soon.

Apple sold 14.1 million iPhones during the quarter, up 91 per cent from a year ago.

"RIM has achieved record shipments for five consecutive quarters and recently shared guidance of 13.8 to 14.4 million BlackBerry smartphones for the current quarter," Balsillie said.

"Apple's preference to compare its September-ending quarter with RIM's August-ending quarter doesn't tell the whole story because it doesn't take into account that industry demand in September is typically stronger," he said.

"As usual, whether the subject is antennas, Flash or shipments, there is more to the story and sooner or later, even people inside the distortion field will begin to resent being told half a story," the RIM co-CEO said.

Row 44 hires former Vegas.com Chief Executive

LA Times

 

Row 44 Inc., which provides broadband Internet connection for airline passengers, announced Monday that former Vegas.com Chief Executive Howard Lefkowitz recently joined the company as chief commercial officer.

In his new role with the firm, Lefkowitz will be selling advertising opportunites to businesses on Row 44's inflight Internet portal. He will have a role in marketing to airlines.

This is key because the Westlake Village company recently raised $37 million from investors to persuade international carriers to outfit their planes with Row 44 equipment that gives passengers Wi-Fi connection while flying.

Row 44 hopes Lefkowitz can build on business connections that he made during his nine-year tenure as president and chief executive of Vegas.com.

When Lefkowitz joined the travel website in 2001, it was a small startup with about 20 employees. When he left in August, the site, with  400 workers and 2.5 million Internet visitors a month, described itself as the "largest city destination travel website in the world."

As a 25-employee firm, Row 44 hopes Lefkowitz can bring the same stroke of luck.

Row 44, named after the last row on a DC-10 commercial jet, uses a network of telecommunications satellites belonging to Hughes Network Systems. By tapping into Hughes' network, Row 44 has the potential capability to provide worldwide Internet access.

In January, Row 44 landed a contract with Southwest Airlines to provide Wi-Fi service on the airline’s fleet of more than 540 planes.

HP Sued by Shareholders Over Kickback, Foreign Bribery Claims

Bloomberg

Directors at Hewlett-Packard Co., the world’s largest computer maker, were sued by shareholders over claims they permitted or encouraged violations of federal kickback and foreign bribery laws.

From 2007 to 2009, HP violated the federal anti-kickback law by paying government vendors “influencer fees” to win contracts to design information technology systems, according to the complaint filed in federal court in San Jose, California. The company is also under investigation for possible violations of the U.S. Foreign Corrupt Practices Act.

Current and former directors at HP “consciously condoned HP’s illegal and unethical marketing practices,” according to the Oct. 19 complaint. The misconduct has “put the company at risk of having its U.S. government contracts rescinded,” the shareholders claim, adding that HP sales to U.S. agencies from 2007 to 2009 totaled more than $880 million.

The case relies in part on HP’s announcement in August that it agreed to pay $55 million to settle a Justice Department probe of whether the company overcharged taxpayers through a General Services Administration contract. That settlement also resolved a False Claims Act lawsuit, first filed by a whistleblower and joined by the government, alleging that the company paid kickbacks.

While the U.S. made HP aware of its illegal marketing practices in “late 2006/early 2007,” the directors allowed the unlawful conduct to continue until Dec. 31, 2009, according to the shareholder complaint.

The complaint also cites HP’s disclosure last month that the Justice Department and U.S. Securities Exchange Commission joined a probe by the German Public Prosecutor’s Office examining whether the Palo Alto, California-based company engaged in bribery overseas.

“It is painfully obvious that HP’s board has not and will not act as a disinterested and independent check on illegal corporate action, and that to remedy this misconduct, HP’s shareholders need to bring suit,” according to the complaint.

The case seeks to recover the False Claims Act fines and repayment of the salaries paid to the directors serving from 2007 to 2009.

HP spokeswoman Mylene Mangalindan didn’t immediately return a call seeking comment. John McCool, an outside spokesman for the company, said HP is reviewing the complaint.

Square lets iPads, iPhones, Androids read Credit Cards

USA Today

 

The father of Twitter has hatched a start-up that he hopes does for financial transactions what Twitter did for communication.

Square, the venture from CEO Jack Dorsey, devised a tiny plug-in that turns digital devices into a credit card reader. Square opens its virtual doors for business Friday.

The Square, a free plastic device slightly smaller than a quarter, plugs into iPhones, iPads, iPod Touches and Androids. With a free downloaded application, it lets small businesses and consumers process credit card transactions. Merchants are charged 2.75% of the purchase price, plus 15 cents to swipe a credit card; no contract, set-up fee or monthly charge.

"In America, people do not leave their home without keys, their cellphone and their wallet, but they rarely carry cash. And credit cards can't be used everywhere," Dorsey says.

About 50,000 devices were shipped to small businesses and consumers nationwide — ranging from coffee shops and pizza deliverers to doctors and piano teachers — while the service was tested.

Dorsey, 33, who co-founded Square with Jim McKelvey, a local glass artist, expects his company to hit $1 billion in transactions by June 2011.

The year-old firm, whose motto is "zero to $60 in 10 seconds," gets its name from the expression "all squared" and is backed by venture-capital firm Khosla Ventures and angel investors.

Square's foray is a new wrinkle in an estimated $120 million mobile-payment market. Several tech companies are taking a mass-market approach to democratizing payments via smartphones — including PayPal and GoPayment, an application by software maker Intuit.

But there are plenty of opportunities for start-ups and established companies, analysts say. "The market is so nascent and fragmented, new technologies that pop up in it are expanding the reach of the market," says Morgan Stanley analyst Adam Frisch.

Doug Povich, co-owner of Red Hook Lobster Pound DC, a food truck in Washington, D.C., said a point-of-sales system would have cost him up to $10,000. Instead, he bought an iPad and loaded it with Square. "It's extremely simple to use."

Nokia Swings to Profit, Plans Job Cuts

The Wall Street Journal

 

Nokia Corp.'s new chief executive unveiled plans to cut 1,800 jobs and speed delivery of new products, part of his strategy to turn around the company's struggling smartphone business.

Chief Executive Stephen Elop, in his first address to investors since replacing Olli-Pekka Kallasvuo last month, said the Finnish company would have to undergo difficult changes to catch up again to rivals such as iPhone maker Apple Inc. and smartphones based on Google Inc.'s Android software.

"Nokia has been characterized as an organization where it is too hard to get things done," Mr. Elop said in a conference call following the report. "More than anything else, the changing market dynamics demand that we must improve our ability to aggressively lead through changes in our environment." He added that Nokia's board of directors has given him a clear mandate for change.

The company said it plans to streamline its smartphone operations and cut 1,800 jobs, about 2.8% of Nokia's global work force excluding Nokia Siemens Networks, its telecom-equipment joint venture with Siemens AG.

Nokia executives said the moves would be part of an effort to get new products to market faster, a key failing in recent years. The company also said it would streamline its services organization.

In the quarter ended Sept. 30, Nokia swung to a quarterly profit of €529 million ($740 million) from a year-earlier loss of €559 million when the result was hit by heavy impairment charges. Third-quarter revenue rose 4.7% to €10.27 billion.

Nokia said mobile-device shipments in the third quarter increased 2% from a year earlier to 110.4 million units, though its market share fell to 30%. The average selling price increased to €65 from €64—the first such increase in years.

Nokia's American depositary shares were up 4.2% to $11.28 on the New York Stock Exchange in 4 p.m. composite trading Thursday.

The smartphone market is booming. Research firm Strategy Analytics reported Thursday smartphone shipments jumped 78% in the third quarter from a year ago to 77 million units. But Nokia's share of the market fell to 34.4% from 37.8% a year earlier, Strategy Analytics said.

Nokia has struggled to compete at the high end of the market with the iPhone and the growing number of devices based on Google's Android. In September Nokia replaced Mr. Kallasvuo with Mr. Elop, formerly of Microsoft Corp., to help stem the slide and rebuild Nokia's market value, which fell by 70% , or $90 billion, over the last three years of Mr. Kallasvuo's tenure.

Mr. Elop, a Canadian who is Nokia's first non-Finnish CEO, has a strong background in software and services, which are becoming increasingly important to sales in the mobile world, and has experience working in North America, a market where Nokia has struggled.

During the conference call, Mr. Elop reiterated the company's support for its Symbian operating system even as rival manufacturers switch to other operating systems such as Google's Android and Microsoft's Windows Phone 7.

Last month Nokia introduced its new line-up of smartphones based on its upgraded Symbian software, though the results of those efforts won't show up until the fourth quarter or later.

Nokia also expects to ship the first devices based on the MeeGo operating system, intended for Nokia's next generation of devices, in 2011, Mr. Elop said.

Nokia forecast fourth-quarter sales of its devices and services unit would be between €8.2 billion and €8.7 billion. The company also raised its full-year operating margin guidance at its devices and services segment to 10%-12% from 10%-11% previously.

Nokia Siemens Networks reported a 7% year-on-year sales increase to €2.9 billion, but still posted an operating loss of €282 million as gross margins fell.

Review: Microsoft's New Windows Phone 7: Novel But Lacking

The Wall Street Journal / Walter Mossberg

 

 

Nearly four years after Apple unveiled the iPhone, and more than two years after Google introduced its first Android smartphone, Microsoft is launching its effort to catch up. On Nov. 8, AT&T and T-Mobile will begin selling the first phones powered by the software maker's new Windows Phone 7 operating system.

I've been testing two of these initial Windows Phone 7 phones, the Samsung Focus from AT&T and the HTC HD7 from T-Mobile; each will cost $200. Both are slender phones with large screens and virtual keyboards, though the Samsung is thinner and lighter than the HTC.

Microsoft has imposed tight requirements on the new Windows Phone 7 phones—including fast processors, decent screens and adequate memory. However, in my testing this time, I didn't focus on the hardware. Instead, I bored in on the new Microsoft operating system, set to show up on nine phones this year, including some with physical keyboards.

My conclusion is that Microsoft has used its years in the smartphone wilderness to come up with a user interface that is novel and attractive, that stands out from the Apple and Google approaches, and that works pretty well. Instead of multiple screens filled with small app icons, or the occasional widget, Windows phones use large, dynamic tiles that can give you certain information, like your next appointment, at a glance. And it has special "hubs" for things like contacts and entertainment that use bold, attractive interfaces and offer personalized, updating information.

However, despite having all that time to study its rivals, Microsoft has inexplicably omitted from Windows Phone 7 key features now common, or becoming so, on competitive phones. These missing features include copy and paste, visual voicemail, multitasking of third-party apps, and the ability to do video calling and to use the phone to connect other devices to the Internet. The Android phones and the iPhone handle all these things today.

Plus, because it has waited so long to enter the super-smartphone market, Microsoft is starting way behind in the all-important category of available third-party apps. At launch next month, the company hopes to have about 1,000 apps available for the Windows Phone 7 platform, compared with nearly 100,000 for Android phones and around 300,000 for the iPhone. That means Windows phones will, by definition, be less versatile than their main competitors, at least at launch.

In addition, Microsoft, unlike Apple, has ceded prominent home-screen real estate to the phone makers and carriers so they can push their own apps, like subscription-based TV and navigation services.

To be sure, Windows Phone 7 has a few advantages. These include built-in mobile versions of Microsoft Office (present for years on earlier Microsoft-powered phones) and of its popular Xbox Live gaming service, which also interacts with Xbox game consoles. There is a nice feature that allows the camera to be used quickly, even if the phone is locked. And search works particularly well, including a mode that allows you to enter search commands by voice from any screen. Phone calling also worked just fine, with few failed calls, good voice quality and easy connection to a Bluetooth device I tried.

But I couldn't find a killer innovation that would be likely to make iPhone or Android users envious, except possibly for dedicated Xbox users. Even the built-in Office can be replicated with third-party Office-compatible apps on competing platforms; and the iPhone and Android phones also can interoperate with Microsoft's corporate Exchange email, calendar and contact system.

So for now, I see Windows Phone 7 as mostly getting Microsoft into the game, and replacing the stale, complicated Windows Mobile system that preceded it. It will get better. The company is already working on a copy and paste system, and said it is coming early next year. But, today, I see Windows Phone 7 as inferior to iPhone and Android for most average users. It's simply not fully baked yet.

The main feature of Windows Phone 7 is the Start screen, which takes the form of a long vertical list of tiles that can represent either an app or a hub. The phones lack multiple home screens or traditional folders for grouping apps. These tiles are dynamic: They can show things like rotating photos of friends, or how many unread emails you have.

Microsoft doesn't intend for you to place every app or feature on the Start screen. Instead, some apps, like games, go automatically into one of the special tile hubs, which combine related functions. And all other apps pre-installed or added to your phone go into another long master list you can see by flicking aside the tile view or tapping an arrow.

It's a clean, simple, different approach. But there is a downside. As you "pin" your favorite apps, contacts, photos or Web sites to the Start screen, the list of tiles grows longer, and you have to scroll further and further to reach some. There is no shortcut for getting back to the top of such a list, as there is on the iPhone.

The hubs have a level of social and functional integration seen on some Android phones and on Palm's webOS operating system, now owned by Hewlett-Packard. For instance, in the People hub, you not only see your local contacts, but those synced from Facebook or Microsoft's own Windows Live service. This hub, like the others, borrows the elegant interface from Microsoft's failed Zune music player, so you can flick left and right to see just recent contacts or to see your friends' status updates. But the People hub doesn't have Twitter.

Microsoft sees this combination of tiles and hubs as a "glance and go" interface for quickly seeing important information without opening apps, as on the iPhone. But I was disappointed that more information wasn't presented on the tiles. For instance, unlike in some Android apps and widgets I've used, a stock market tile and a weather tile I downloaded didn't show on their surfaces the latest information.

The calendar, which syncs with Exchange, Windows Live, or Google, can't sync with Yahoo or MobileMe, and lacks a week view. The email program syncs with a variety of services, but lacks a unified inbox, so you have to clutter your Start screen with separate tiles for each account.

Another downside for some users: The phones can be used in horizontal view for photos and Web pages, or for typing email, but some screens, like the Start screen and hubs, are fixed in vertical mode.

Microsoft has done a good job with the Web browser, which I found generally comparable in speed and features to the iPhone and Android browsers. But unlike on some new Android phones, it doesn't support Adobe Flash content.

The built-in Office suite is very nice. It can link to Microsoft's SharePoint corporate online document system. One of its apps, OneNote, also synced in my tests with Microsoft's consumer-focused SkyDrive Web file-storage system. It has a nice feature that makes it easy to jump to sections of long documents, allows for making comments on files, and lets you see presentations broadcast over the Internet.

However, this new mobile Office failed to open a simple Word document I tried. Microsoft says this plain document had some hidden corruption, but it opened on an iPhone and Android, and was editable in their Quickoffice app. Microsoft says it is working on a fix.

Music, video and photos all worked well, and you can use a Zune subscription on the phone. I was easily able to sync media files with a Windows PC using a new version of the Zune software, and I also tried a pre-release version of the new Macintosh Zune software, which is more limited, but also worked properly.

The Microsoft app store, called Marketplace, worked fine, and has a nice try-before-you-buy feature for some apps.

Last but not least is the Xbox Live hub, the center for gaming. It contains games from Microsoft and other developers, and includes your avatar from the Xbox Live service. You can socialize with, and play against, others on the service. For Xbox Live fans, this is mobile heaven.

Overall, I can't recommend Windows Phone 7 as being on a par with iPhone or Android—at least not yet. Unless you're an Xbox Live user, or rely on Microsoft's SharePoint corporate Web-based document system, it isn't as good or as versatile as its rivals.

Apple Updates MacBook Air, Macintosh Software

The Wall Street Journal

 

Apple Inc. moved to infuse its Macintosh computers with popular features from its newer iPhones and iPads, including a new online store for Mac applications.

The company also introduced a restyled version of its ultrathin MacBook Air notebook. Like the iPhone, the new notebook uses chips known as flash memory rather than a disk drive for data storage, contributing to longer battery life and smaller size and weight.

Chief Executive Steve Jobs described the machine as a result of combining features from the iPad with those of the Mac. "We think all notebooks will be like this one day," he said at a press event at Apple's corporate headquarters.

Mr. Jobs said Apple was aggressively pricing the new MacBook Air, which previously started at $1,499. The new models start at $999 for an 11.6-inch display and $1,299 for a version with a 13.3-inch display. That narrows the gap with the iPad, which costs between $499 and $829, but remains well above low-end netbook PCs.

Apple said the new Mac App Store, similar to the one for its portable devices, will launch within the next three months. Apple also demonstrated a new version of its Mac operating system, due out next summer, and a Mac version of a technology called Facetime for conducting video calls that had previously only been available for its latest iPhone 4 and iPod Touch devices.

Once Apple's mainstay business, the Macintosh computer unit is now eclipsed by the iPhone and comprises just 24% of the company's overall revenues, but it has continued to grow strongly.

Apple Inc. moved to infuse its Macintosh computers with popular features from its newer iPhones and iPads, including a new online store for Mac applications.

The company also introduced a restyled version of its ultrathin MacBook Air notebook. Like the iPhone, the new notebook uses chips known as flash memory rather than a disk drive for data storage, contributing to longer battery life and smaller size and weight.

Chief Executive Steve Jobs described the machine as a result of combining features from the iPad with those of the Mac. "We think all notebooks will be like this one day," he said at a press event at Apple's corporate headquarters.

Mr. Jobs said Apple was aggressively pricing the new MacBook Air, which previously started at $1,499. The new models start at $999 for an 11.6-inch display and $1,299 for a version with a 13.3-inch display. That narrows the gap with the iPad, which costs between $499 and $829, but remains well above low-end netbook PCs.

Apple said the new Mac App Store, similar to the one for its portable devices, will launch within the next three months. Apple also demonstrated a new version of its Mac operating system, due out next summer, and a Mac version of a technology called Facetime for conducting video calls that had previously only been available for its latest iPhone 4 and iPod Touch devices.

Once Apple's mainstay business, the Macintosh computer unit is now eclipsed by the iPhone and comprises just 24% of the company's overall revenues, but it has continued to grow strongly.

In the September quarter, Apple said Mac sales rose 22% from a year ago to $4.87 billion. According to research firm Gartner Inc., Appple increased its U.S. market share in the third quarter to 10.4% from 9.3% even as PC makers Dell Inc. and Acer Inc. lost ground.

Analysts had initially been worried the iPad would cannibalize Mac notebook sales, but so far, the iPad and the iPhone have helped feed demand for Apple computers, despite their premium prices. Mr. Jobs acknowledged the relationship in his presentation by discussing the "virtuous circle" of the three products.

Apple has always bundled internally developed software to boost the appeal of the Mac. On Wednesday, it showed off a new version of its iLife suite of programs, which includes photo, audio and video editing programs. The newest version, which includes enhanced ability to synchronize photos and comments from user's Facebook accounts, is free on new Macs or $49 for existing Mac users.

But Macs have suffered from a relatively small number of titles from independent software developers, who have long have focused their efforts on the bigger market for PCs that run Microsoft Corp.'s Windows operating system. But the situation is reversed in the smartphone market, where the hit App Store has become a focal point for thousands of developers.

An app store for the Mac, analysts said, could create new titles for the computer and drive more user adoption of the computer line.

"The 95% of the people out there not using a Mac are going to want to migrate over to Apple's platform because it's so cool and because it's so familiar now." said Brian Marshall, an analyst at Gleacher & Co.

Clive Downie, the vice president of mobile game company Ngmoco Inc., said it is excited to see Apple "broadening the opportunity for developers and publishers." He said his company, which was just acquired by Japanese social videogame developer DeNA Co., would continue to mainly focus on the smartphone market, but plans to look at the new opportunity.

Another app store also could generate more revenue for the company. Kaufman Brothers estimates Apple, which takes a 30% cut of app sales, currently makes roughly $2 to $2.5 billion on a yearly basis from the App Store.

The new version of Mac OS X, dubbed "Lion," also adds more features from its mobile devices to the Mac—including enhanced multi-touch features to let users access applications and resize photos with a track-pad or mouse. Mr. Jobs said the operating system would be available next summer.

A demonstration of the new operating system showed how users can display icons for their applications in a similar way as the iPhone, iPad and iPod Touch and manipulate them with a swipe of their fingers.

Google's spending Spree tests Nerves on Wall Street

Reuters

Wall Street wants Google Inc's new products and initiatives to start paying off, as its accelerating spending spree nibbles away at margins and alarms investors.

The Internet giant's free-spending -- from more than 20 acquisitions this year alone to internal projects such a self-driven cars and big bets in wind energy -- has weighed on the company's stock, which has underperformed the market this year.

Headcount, capital expenditures and operating expenses will be key issues for investors when Google reports third-quarter results Thursday, particularly after a rare profit shortfall in the second quarter wiped 7 percent off its shares in a single day.

But with Google's shares up roughly 20 percent since mid-August, analysts are betting it will justify its spending with details of improving business prospects.

"People don't mind expenses if you're growing revenue," said BGC Partners' analyst Colin Gillis.

Google has two-thirds of the Internet search market, but is facing a renewed threat from Yahoo Inc and Microsoft Corp which have forged a search partnership.

At the same time, social networking companies such as Facebook are attracting increasing amounts of online advertising, posing a growing threat to Google's business.

Google is also shelling out cash to develop new technology and build a viable smartphone business based on its Android phone software to take on Apple's iPhone juggernaut.

This week, it also announced it was joining an estimated $5 billion undersea cable project to carry power from offshore windfarms to the east coast of the United States.

The spending spree is taking a toll. Operating margins slipped to 35 percent last quarter from 37 percent in the first, while headcount increased by roughly 2,000 employees in the first six months of the year alone.

Google has roughly $30 billion in cash and marketable securities.

INSTANT GROWTH?

Analysts expect Google to report revenue, excluding the fees that Google shares with website partners, of $5.26 billion in the third quarter, up 3.3 percent from the second but up roughly 20 percent from a year earlier, with adjusted earnings of $6.68 a share.

Some of Google's attempts to find the next big thing have failed. For example, it pulled the plug on its much-hyped Wave product that combined instant messaging and online collaboration this year. Nevertheless, analysts say some initiatives are beginning to help business.

Its new Instant technology, which speeds up searches by predicting queries, could improve revenue by prompting web surfers to click on ads more frequently, say analysts.

Paid clicks and cost-per-click, the two metrics that investors use to gauge the health of Google's search ad business, should both improve compared to the second quarter, said UBS analyst Brian Pitz, citing Instant search as one of several factors.

"There's some strong fundamental trends that look pretty positive, whether it's product search doing well, Instant search driving some growth, and just generally positive monetization trends," Pitz said of business in the third quarter.

Its fledgling Android software for smartphones came from nowhere two years ago and is now challenging Apple's position in the market.

A recent report by industry research firm Gartner predicted Android would overtake Apple's iOS this year to become the No. 2 operating system for cell phones, after Nokia's Symbian.

While it does not break out financial results for its mobile business, some analysts say Android is becoming an important part of the company's efforts to establish itself in mobile advertising.

Citigroup analyst Mark Mahaney estimates that revenue from Google mobile SEO could reach a run rate of $450 million by the end of the year.

Amazon Drops T-Mobile G2 Smartphone Price To $99

Information Week

The HTC-manufactured device comes with a two-year agreement and free shipping for new customers.

Online retail giant Amazon is offering the recently released T-Mobile HTC G2 Android-based smartphone for $99.

The hitch is you have to agree to a new, two-year contract to take advantage of the deal. In exchange, users won't have to deal with mail-in rebates like they would if they were buying the phone directly from T-Mobile, and can take advantage of Amazon's free two-day shipping offer. The offer is ideal for new customers, since those who want to upgrade have to pay $199.

Both T-Mobile and Best Buy are charging $199.99 with a two-year contract for the G2, or customers can opt for no contract and pay $499.99. Radio Shack recently cut the price of the device to $149.99 with an instant rebate and two-year agreement.

On Tuesday, the carrier reportedly released an over-the-air update for the device with Wi-Fi calling added, along with Internet tethering and some performance upgrades. The upgrade also may include a new radio and the ability to update Google Goggles, according to reports.

The T-Mobile G2 has reportedly had some recent issues surrounding hacking into and rooting the phone in order to make modifications. Reports have said the phone has an "internal cop" that detects when it is rooted, and once that happens, the modifications are undone and phone is restored to its original condition because the system has been corrupted.

The G2 has a 3.7-inch display and runs on Android 2.2 OS over T-Mobile's 4G HSPA+ data network. It has a full QWERTY keyboard and an 800MHz Snapdragon processor, support for 32GB microSD cards, a 3.5mm headset jack, Wi-Fi, GPS, and Bluetooth. It also features a 5-megapixel camera with LED flash and autofocus. The device's dimensions are 4.7 x 2.4 x 0.06 inches and it weighs 6.5 oz. It provides talk time of up to 6.5 hours.

The G2 price cut isn't one of Amazon's better cell phone deals; over the summer, the retailer offered the Samsung Vibrant for a penny.

Apple's new records: 14.1M iPhones, 4.2M iPads, 3.9M Macs

Mercury News

Apple reports record quarter

 

Apple -- the Cupertino maker of Mac computers and "i" devices (iPad, iPhone, iPod) -- this afternoon reported a $4.31 billion profit for its most recent quarter, up 70 percent from a year earlier. Revenue jumped nearly 67 percent to a record $20.34 billion.

"We are blown away to report over $20 billion in revenue and over $4 billion in after-tax earnings -- both all-time records for Apple," Apple CEO Steve Jobs said in a statement accompanying the results. "iPhone sales of 14.1 million were up 91 percent year-over-year, handily beating the 12.1 million phones RIM sold in their most recent quarter. We still have a few surprises left for the remainder of this calendar year."

The company also reported record sales for the Mac, at 3.89 million, up 27 percent from a year earlier. Sales of the new iPad tablet computer were 4.19 million. (According to the Business Insider blog, some analysts had been expecting 4.7 million to 5 million iPad sales.) As for the iPod, Apple sold 9.05 million, down 11 percent.

Apple's fiscal fourth-quarter earnings came in at $4.64 a share. By contrast, analysts had expected earnings of $4.06 a share on revenue of $18.86 billion, according to Thomson Reuters.

For the current holiday quarter, Apple expects another record: about $23 billion in revenue, Chief Financial Officer Peter Oppenheimer said.

"We're thrilled with the performance and strength of our business, generating almost $5.7 billion in cash flow from operations during the quarter," Oppenheimer said.

Apple released its results before the stock markets closed this afternoon. The shares finished regular trading at $318, up $3.26, or 1 percent, from Friday's close -- after earlier hitting an all-time high of $319. With iPad sales below expectations, Apple stock was down in after-hours trading.

Indian Firms in Talks to Get CDMA iPhone

The Wall Street Journal

MUMBAI—Two Indian wireless operators are in talks with Apple Inc. to offer a version of the iPhone based on code division multiple access, or CDMA, technology, people familiar with the matter said.

Apple is in talks with Reliance Communications Ltd. and Tata Teleservices Ltd., whose networks run on CDMA technology. The discussions come amid news that Apple is making a CDMA version of its iPhone that Verizon Wireless will sell early next year in the U.S.

"Tata has been in talks with them [Apple] for four to five months now," one of the people familiar with the negotiations said. It is unclear though when any launch may take place, these people said.
Anand Baskaran, an Apple spokesman for India, declined to comment.

Separately, Apple is adding two more iPhone carriers in Germany. Telefonica SA's O2 and Vodafone Group PLC both said Tuesday they will sell the iPhone 4 within the next weeks in Europe's largest economy, ending the exclusivity of Deutsche Telekom AG ahead of the Christmas holiday season.

In India, Apple's iPhone is currently available through operators Bharti AirTel Ltd. and Vodafone Essar Ltd., a unit of Vodafone, which offer services under the global system for mobile communications, or GSM, technology. Vodafone is also joint owner of Verizon Wireless with Verizon Communications Inc.

Launching a CDMA phone will give Apple access to more customers in the world's fastest-growing telecom market, which is adding around 18 million users a month. India currently has about 670 million wireless users, of which roughly 20% use CDMA phones. GSM phones make up most of the market.

For the two local operators, offering a CDMA iPhone would help them battle shrinking revenues and margins due to intense competition. Currently, the cheapest iPhone in India costs more than $670 and is considered expensive for a country where 42% of the population earns less than $1.25 a day.

Still, analysts say Apple may find it tough to generate significant revenue from a CDMA-based iPhone in India given that it is not as widely used as a GSM phone, and because there is stiff competition for smartphones from companies including Nokia Corp., Motorola Inc., HTC Corp., Samsung Electronics Co. and Research In Motion Ltd.

Moreover, Google Inc. is pushing to its presence in India through little-known Indian handset makers that are poised to launch low-cost devices that include its Android operating system in coming months.

"While the possibility of a CDMA iPhone through Reliance Communications or Tata would help Apple, it is unlikely to generate significant volumes in India," said Daryl Chiam, a senior analyst at research firm Canalys.

Apple accounted for less than 1% of India's smartphone market share in the first half of 2010, said Mr. Chiam, adding that in contrast, Nokia shipped 1.8 million smartphones in India and accounted for 71% of the market during that time.

Fiercer Smartphone Battle on Tap for Handset Makers

Reuters

Cellphone vendors' views on sales during the year-end holiday season will be in focus when top handset makers report quarterly results, starting with Sony Ericsson on Friday.

The cellphone market overall is set to grow around 11 percent this year, led by smartphone sales which are expected to increase more than 50 percent as high-end focused vendors like Apple and HTC see a surge in demand.

Further increasing the rivalry at the high-end, Microsoft is starting its last-ditch attempt to stage a comeback with nine new phone models.

"We expect price erosion and margin pressures, which have characterized 2010, to intensify in the final quarter with an increased supply of high-tier devices," said Geoff Blaber, analyst with wireless research firm CCS Insight.

In the July-September quarter the cellphone market is forecast to grew 10.1 percent from a year ago, helped by recovering economies and boosted by strong growth in smartphones, a Reuters poll of 32 analysts showed.

Among top smartphone vendors, HTC and Research in Motion have already reported strong demand in the quarter.

"The big question mark here is European consumer demand, which may have been a bit muted in the August-September period," said Tero Kuittinen, analyst at MKM Partners.

MOST PROFITABLE

Helped by good demand for its new Google phones, Sony Ericsson, the world's fifth-largest handset vendor by volume, is expected say it sold 12 million phones in the September quarter, when it reports on October 15.

Google's Android phones also helped Taiwan's HTC Corp, the world's No. 4 smartphone brand, which reported a near doubling in third-quarter profit on October 6.

Apple, No 6 in volume but the most profitable handset maker, is expected to unveil sales of 11.5 million iPhones when it reports on October 18. Nokia, the volume leader, will report on October 21, and No 7 Motorola on October 28.

Nokia Chief Executive Stephen Elop will present results for the first time having taken the helm of the company last month. The group is expected to have sold 115 million phones in the quarter, growing slightly but losing some market share to Samsung Electronics and Apple.

Korean cellphone vendors Samsung and LG Electronics are due to report at the end of the month.

Samsung showed a strong recovery last quarter, driven by the success of its Galaxy S smartphone which sold more than 5 million units since its June launch. It last month raised its 2010 smartphone sales target to 25 million units from 18 million.

LG, however, is facing more challenging times ahead. It replaced its group CEO and named a new head for its loss-making telecoms division as it battles to turn around the struggling business.

Analysts expect it to post a record loss of between 300 billion Korean won ($265.5 million) and 380 billion in the quarter on mobile phone sales.

"It would be difficult for LG to make a quick turnaround as its products still lag the competition to a large extent," said Kim U-no, an analyst at Hanwha Securities.

"LG needs stronger lineup in the popular Android segment but it has no immediate rollouts planned. It'll be another disappointing quarter."

Fair Showcases Alternative Fuel, Electric Vehicles

The Desert Sun

Turn on Nissan's new all-electric Leaf and here's what you hear — nothing.

“There's no rev,” said Greg Tabak, director of Business Sales for Enterprise Rent-A-Car, which is set to introduce the electric car into its rental fleet in 2011.

“There's no transmission (noise). When you hit the accelerator, it just goes,” he said.

Tabak and the Leaf were in Palm Springs Friday for the city's first Electric and Alternative Fuel Vehicle Fair, which brought a small fleet of electric, hybrid and alternative fuel vehicles — and more than 150 residents and visitors — to the Palm Springs Convention Center.

“I think it's the nicest,” said Mark Thomas, 46, of Cathedral City, who was checking out the Leaf. “It seems the back seat has a lot of space. The only problem is it's all electric so the range is going to be short.”

Tabak said the car has about a 100-mile range, a little more depending on how you drive.

Electric vehicles such as the Leaf and the supercharged Tesla roadster, which goes 0 to 60 mph in less than 4 seconds, can travel as fast as 245 mph and comes with a six-figure price tag, were the stars of the event.

“It's fantastic. I've never run out of juice,” said Tesla owner Gary Warner, 64, of Indio. “The only thing that makes noise is the battery for the air conditioning.”

But beyond the flash, the purpose of the event was to focus valley officials and businesses on getting ready for the range of electric and hybrid vehicles coming to the market in 2011.

Enterprise plans to add the Leaf to its rental fleets in San Diego and Los Angeles locations — where Nissan is introducing the car — before gauging the market in the Coachella Valley, Tabak said. The roll-out to smaller markets could be in 12 to 18 months, he said.

Hertz will also be offering the Leaf and Mitsubishi's i MiEV beginning the end of the year, but again in larger, metropolitan markets to start, said Annette Zackey, a sales representative for the company.

With more and more car companies introducing electric models, Michele Mician, sustainability manager for Palm Springs, says the valley needs a network of charging stations for visitors and residents.

“We have to have infrastructure,” she said. “You have to be able to run errands, to move around the valley and plug in.”

Valley residents ready to take the leap will be able to install chargers in their homes, sold by local businesses such as the Green Bay Group in Palm Desert.

The company has a 240-volt home charger that can recharge a car in six to eight hours, said Jeffrey P. Bay, company president. Installing the device is similar to installing a dryer hookup, he said.

And Dick Cromie of Southern California Edison, said electric models such as the Leaf would cost about $1,100 to $1,300 a year less to operate than comparable gas cars.

Assemblyman V. Manuel Pérez said electric vehicles can only add to the valley's profile as a renewable energy powerhouse, with wind, solar and geothermal resources.

“We have a window of opportunity that has never existed in the past,” he said. “Let's incorporate electric vehicles; let's incorporate infrastructure. We can create good-paying jobs; we can recover as a state and a nation, while reducing our greenhouse gas and carbon emissions.”

US studying Australian Internet security program‏

Associated Press

 

The government is reviewing an Australian program that will allow Internet service providers to alert customers if their computers are taken over by hackers and could limit online access if people don't fix the problem.

Obama administration officials have met with industry leaders and experts to find ways to increase online safety while trying to balance securing the Internet and guarding people's privacy and civil liberties.

Experts and U.S. officials are interested in portions of the plan, set to go into effect in Australia in December. But any move toward Internet regulation or monitoring by the U.S. government or industry could trigger fierce opposition from the public.

The discussions come as private, corporate and government computers across the U.S. are increasingly being taken over and exploited by hackers and other computer criminals.

White House cybercoordinator Howard Schmidt told The Associated Press that the U.S. is looking at a number of voluntary ways to help the public and small businesses better protect themselves online.

Possibilities include provisions in the Australia plan that enable customers to get warnings from their Internet providers if their computer gets taken over by hackers through a botnet.

A botnet is a network of infected computers that can number in the thousands and that network is usually controlled by hackers through a small number of scattered PCs. Computer owners are often unaware that their machine is linked to a botnet and is being used to shut down targeted websites, distribute malicious code or spread spam.

If a company is willing to give its customers better online security, the American public will go along with that, Schmidt said.

"Without security you have no privacy. And many of us that care deeply about our privacy look to make sure our systems are secure," Schmidt said in an interview. Internet service providers, he added, can help "make sure our systems are cleaned up if they're infected and keep them clean."

But officials are stopping short of advocating an option in the Australian plan that allows Internet providers to wall off or limit online usage by customers who fail to clean their infected computers, saying this would be technically difficult and likely run into opposition.

"In my view, the United States is probably going to be well behind other nations in stepping into a lot of these new areas," said Prescott Winter, former chief technology officer for the National Security Agency, who is now at the California-based cybersecurity firm, ArcSight.

In the U.S., he said, the Internet is viewed as a technological wild west that should remain unfenced and unfettered. But he said this open range isn't secure, so "we need to take steps to make it safe, reliable and resilient."

"I think that, quite frankly, there will be other governments who will finally say, at least for their parts of the Internet, as the Australians have apparently done, we think we can do better."

Cybersecurity expert James Lewis, a senior fellow at the Center for Strategic and International Studies, said that Internet providers are nervous about any increase in regulations, and they worry about consumer reaction to monitoring or other security controls.

Online customers, he said, may not want their service provider to cut off their Internet access if their computer is infected. And they may balk at being forced to keep their computers free of botnets or infections.

But they may be amenable to having their Internet provider warn them of cyberattacks and help them clear the malicious software off their computers by providing instructions, patches or anti-virus programs.

They may even be willing to pay a small price each month for the service - much like telephone customers used to pay a minimal monthly charge to cover repairs.

Lewis, who has been studying the issue for CSIS, said it is inevitable that one day carriers will play a role in defending online customers from computer attack.

Comcast Corp. is expanding a Denver pilot program that alerts customers whose computers are controlled through a botnet. The carrier provides free antivirus software and other assistance to clean the malware off the machine, said Cathy Avgiris, senior vice president at Comcast.

The program does not require customers to fix their computers or limit the online usage of people who refuse to do the repairs.

Avgiris said that the program will roll out across the country over the next three months. "We don't want to panic customers. We want to make sure they are comfortable. Beyond that, I hope that we pave the way for others to take these steps."

Voluntary programs will not be enough, said Dale Meyerrose, vice president and general manager of Cyber Integrated Solutions at Harris Corporation.

"There are people starting to make the point that we've gone about as far as we can with voluntary kinds of things, we need to have things that have more teeth in them, like standards," said Meyerrose.

For example, he said, coffee shops or airports might limit their wireless services to laptops equipped with certain protective technology. Internet providers might qualify for specific tax benefits if they put programs in place, he said.

Unfortunately, he said, it may take a serious attack before the government or industry impose such standards and programs.

In Australia, Internet providers will be able to take a range of actions to limit the damage from infected computers, from issuing warnings to restricting outbound e-mail. They could also temporarily quarantine compromised machines while providing customers with links to help fix the problem.

Android Makers Took Share From Apple, ISuppli Says

Bloomberg

 

Google Inc.’s Android operating system helped smartphone makers who use the software win market share from Apple Inc.’s iPhone in the second quarter, researcher ISuppli said in a report today.

HTC Corp., which makes some of the Droid models for Verizon Wireless, increased shipments 63 percent from the first quarter, boosting its share of the global smartphone market to 8 percent, ISuppli said. Samsung Electronics Co., which released the Galaxy line of Android devices, increased shipments by 56 percent.

Android is gaining popularity as more manufacturers take advantage of the software that Google offers for free. ISuppli has projected that it will be used in more phones worldwide than Apple’s software by 2012. Second-quarter shipments at Apple, the third-largest smartphone maker, declined 4 percent worldwide from the first quarter, ISuppli said.

Google gained $2.55 to $541.39 at 4 p.m. New York time in Nasdaq Stock Market trading. The Mountain View, California-based company has lost 13 percent this year. Apple added $3.18 to $298.54.

Nokia Oyj, the largest smartphone maker globally, increased its market share to 40 percent in the second quarter from 39 percent in the previous period after boosting shipments by 12 percent. Research In Motion Ltd., the No. 2 smartphone maker, maintained its market share as shipments of its BlackBerry device grew 7 percent sequentially.

The Android platform is already the most popular smartphone software in the U.S., according to a separate study from Gartner Inc.

Apple Patents Anti-Sexting Device

TechCrunch

 

Today the US Patent and Trademark Office approved a patent Apple filed in 2008, which, get this, prevents users from sending or receiving “objectionable” text messages.  The patent’s official title? “Text-based communication control for personal communication device” which actually doesn’t use the pretty ridiculous noun/verb “Sexting,” but come on, we all know what they mean.

The “Sexting” patent background info states that the problem it solves is that there is currently “No way to monitor and control text communications to make them user appropriate. For example, users such as children may send or receive messages (intentionally or not) with parentally objectionable language.”

And the patent itself:

In one embodiment, the control application includes a parental control application. The parental control application evaluates whether or not the communication contains approved text based on, for example, objective ratings criteria or a user’s age or grade level, and, if unauthorized, prevents such text from being included in the text-based communication.

If the control contains unauthorized text, the control application may alert the user, the administrator or other designated individuals of the presence of such text. The control application may require the user to replace the unauthorized text or may automatically delete the text or the entire communication.

Ladies and gentlemen this means that Jobs and company have just sealed the deal on a solution to the number one fear of parents across America, kids sending “unauthorized texts.” As it looks like whatever algorithm or control the system is comprised of will basically censor the transmission of R-rated content on iPhones, is this the first sign of the end of “Sexting” as we know it?

Yes and no, as those interesting in “Sexting” will probably find some clever workaround to express how much they want to bang, screw, hit it or a myriad of other words that don’t immediately set off the censorship sensors.

On a positive note, it looks like whatever it is preventing kids from sending salacious texts will also help them learn languages, just not the naughty words.

IBM Rises to Record as CEO Palmisano Focuses on Software, Services‏

Bloomberg

 

International Business Machines Corp. rose to the highest level since it went public in 1915 as investors show support for Chief Executive Officer Sam Palmisano’s strategy of remaking the 99-year-old company.

IBM gained 88 cents to $138.72 at 4:01 p.m. in New York Stock Exchange composite trading, topping the previous record of $137.88, adjusting for stock splits, reached in July 1999. Palmisano has focused on services and software, making the company once known for mainframe computers into the world’s biggest computer-services provider.

Since Palmisano became CEO in March 2002, IBM shares have risen a third as he divested hardware units, including the personal-computer business sold to China’s Lenovo Group Ltd. in 2005. In May, he said he expects Armonk, New York-based IBM to almost double operating earnings to $20 a share by 2015, as he continues to focus on more profitable software and services.

The shares are also benefiting as investors predict corporate customers will invest in information technology, said Lou Miscioscia, an analyst at Collins Stewart Plc.

“There was a big concern investors had about IT succumbing to the macro slowing -- that was overblown,” said Boston-based Miscioscia, who has a “buy” rating on the shares and has the highest price target of any analyst tracked by Bloomberg, at $160. “Companies continue to want to invest.”

IBM has also boosted shares by buying its own stock. Since 2002, the company has spent more than $68 billion on buybacks, equal to almost 39 percent of its current market value.

Help From HP

Of the 26 analysts who rate IBM, 18 recommend buying, including nine who predict the stock will reach at least $150. Eight analysts recommend holding the shares and none recommend selling them.

The Dow Jones Industrial Average, which includes IBM, lost 19.07 points today to 10,948.58.

IBM shares are also likely gaining as investors leave its closest rival, Hewlett-Packard Co., amid uncertainty at the company, Miscioscia said. HP’s CEO Mark Hurd retired Aug. 6 after an investigation found he violated business-conduct standards. Last week, HP hired Leo Apotheker, former CEO of software maker SAP AG, to replace him.

“Given that the new CEO at HP has to prove himself, that does create more of a cloud of uncertainty,” Miscioscia said. HP shares have dropped 12 percent since the announcement of Hurd’s departure.

The company that became IBM was incorporated on June 16, 1911, as Computer Tabulating Recording Co. Created by a merger of three businesses, CTR sold items ranging from punched cards to cheese slicers, according to the company’s website.

Watson, Gerstner

Thomas J. Watson Sr., known as IBM’s founder, joined the company in 1914. He became president less than a year later, and began focusing on building large tabulating machines for businesses. In 1924, after expanding the company outside the U.S. and building other corporate machines, he changed the name to International Business Machines Corp.

By 1993, the company had posted three straight years of losses, including $8.1 billion that year. The company faced a possible breakup when IBM chose Lou Gerstner as its chief that year -- the first time IBM went outside the company for a CEO.

He helped increase the share price about ninefold by cutting thousands of jobs, keeping the company’s units together and marketing software and services along with hardware. Gerstner wrote a book about his experience called “Who Says Elephants Can’t Dance?”

IBM Investments

Palmisano continued the transition of what was once the world’s largest computer maker. The focus on software and services has helped expand IBM’s gross-profit margins more than 8.5 percentage points since he took over. He’s spent more than $20 billion on over 100 purchases.

In May, Palmisano said he plans to spend another $20 billion in acquisitions through 2015. Last month, IBM announced three acquisitions, including the $1.7 billion deal for storage- analytics maker Netezza Corp. and a purchase of software maker OpenPages Inc. for an undisclosed sum.

IBM is investing in markets such as analytics software, which helps companies predict trends, and cloud computing, which lets them store and access information on shared servers. The company is also developing services to monitor highways, electrical grids and other infrastructure systems to help them run more efficiently.

Increased sales of those technologies, along with growth in markets such as Brazil and China, will add $20 billion to revenue by 2015, IBM has said. The software segment, the company’s most profitable, will make up about half of total profit by then.

Ed Baig's first impressions of Windows Phone 7

USA Today

 

You'd be hard pressed to tell that the new Windows Phone 7 devices that Microsoft publicly unveiled Monday come from the same corporate lineage as the Windows Mobile phones of yesteryear. For Microsoft — and Windows Mobile users put off by clunky interfaces and cumbersome menus — the new mobile operating system represents a refreshing change.

The latest handsets boast new designs and a new strategic approach. My initial impressions are mostly positive; a full review will come later.

Microsoft's hardware partners in the U.S. are Dell, HTC, LG and Samsung. AT&T (on Nov. 8) and T-Mobile are the first wireless carriers to offer Windows Phone 7 devices in the U.S., but Sprint and Verizon Wireless devices are to arrive in 2011.

The first devices — the Samsung Focus, HTC Surround and LG Quantum — all will cost $200 with a two-year AT&T contract. T-Mobile and HTC aren't saying what the new HTC HD7 I spent a little time with will cost.

Best I can tell, there's nothing you can do on Windows Phone 7 devices that you can't do on an iPhone, BlackBerry or Google Android device. But Microsoft isn't so much emphasizing third-party apps for Windows Phone 7 as focusing on the experiences that consumers want to do with their phones. (That's probably smart, given how far Windows is behind the iPhone and Android in the apps sweepstakes.)

The Windows Phone 7 screens, which I like, are built around customizable "tiles" and "hubs" that are tied to Web services, and in some cases, some third-party apps. You make hubs come alive by tapping them; no more reliance on styluses.

In the People hub, you can pull in fresh feeds from Facebook and Windows Live. In the Photos hub, you can arrange automatic uploads to Facebook. The Music & Videos hub is closely connected to Microsoft's Zune experience. If you subscribe to Microsoft's Zune Pass service, you can play on the spot any of the thousands of songs that are available in the "cloud."

Business people will likely appreciate the Office hub; you can jot down notes in a mobile version of OneNote, edit and view PowerPoint documents and more. The Games hub makes nice with Xbox Live and some Electronic Arts titles.

The first devices all have snappy Qualcomm processors. Designs vary, but all the phones (at Microsoft's insistence) have the same three buttons below the screen — back, home and search. Bing search and maps play a major role. Microsoft dictated most of the terms, though its partners do have freedom in the apps and features they offer. For example, AT&T is making a version of its U-verse TV platform available on Windows Phone 7 devices. T-Mobile is offering a tile called Family Room, kind of a mini-Facebook with updates and calendar entries for your family.

Will Web-scale Servers Find a Role in the Enterprise?

PC World

An emerging class of extremely low-power servers is helping Internet companies and hosting providers to slash their energy bills, and proponents say they could have a role in the enterprise as well.

The servers, offered by established players such as Dell and SGI as well as start-ups such as SeaMicro, cut power use by reducing server components to a minimum, aggregating fans and power supplies across several servers, and employing low-power processors normally used in netbooks and other mobile devices, such as Via's Nano processor and Intel's Atom chip.

Examples include Dell's "Fortuna" server, which crams 12 mini servers based on Via Nano processors into a 2U chassis. It's a fully functioning server with its own storage, memory, management controller and dual 1GbE cards, but each server consumes less than 30 watts of power at full load -- far less than a typical server of the same size. Dell developed the server with Web hosting companies in mind.

More radical is SeaMicro's SM10000, introduced in June, which crams 512 single-core Z530 Atom chips into a 10U system, or about a quarter of a standard server rack. SeaMicro's breakthrough is a custom ASIC that replaces most of the components on a typical server board, including storage and networking controllers, leaving just three chips: the processor, DRAM and ASIC.

"The big processors are like taking a spaceship to the grocery store for most problems today," says Andrew Feldman, SeaMicro's CEO. "What you really need is a Prius."

SeaMicro says the boxes provide equivalent performance at a fraction of the power of traditional rackmount servers, and in far less space. It can cram 2,048 Atom CPUs in a fully loaded rack that burns just 8 kilowatts.

The low-power processors are not powerful, but they are well suited to workloads that can be broken into many smaller, separate tasks that are executed independently, said John Abbott, chief analyst at The 451 Group. "That's what the big CPUs from Intel and AMD aren't good at; they have to be fully utilized or they're not being efficient."

Web-scale companies such as Yahoo and Microsoft use the low-power servers for jobs like dishing up search results or displaying status updates. They are also popular among hosting providers who want to offer customers a dedicated server at minimal cost.

Data mining and more

While those companies are the main target for these low-power servers today, proponents say they could be used in the future for certain tasks at large corporations. The example most often cited is large-scale data mining, where the servers can be used to uncover trends among terabytes of data such as financial transactions, customer records and weblogs.

"I'm not advising anybody to migrate enterprise workloads to these new platforms. That would be a disaster," says Forrest Norrod, who run's Dell's server division. "But when you are doing new development, new services, you've got to start considering these new cloud architectures because they are going to offer the lowest marginal cost to compute."

For data mining, tools such as Apache Hadoop, which is open source software inspired by Google's MapReduce, allow petabytes of data to be distributed across a cluster of commodity servers and then searched and analyzed at high speed. Aster Data and Greenplum, recently acquired by EMC, also offer tools for distributed data mining.

"The big Web guys use this technology to ingest their weblogs," says Mike Olsen, CEO of Cloudera, which makes a commercial supported version of Hadoop. "They want to watch their user behavior at a very fine, granular level -- what pages do they visit, how long do they spend there, where do they go next."

But some financial services companies are running Cloudera for similar tasks, Olsen says. He cites one customer, a large bank that has acquired dozens of smaller banks throughout the United States. Each has customer data locked in siloed applications for tracking credit cards, debit cards and home mortgages.

"You want to be able to analyze that data to do a risk assessment, which is critical, but there's no way to easily search across all that data where it resides or to identify multiple instances of the same guy," Olsen says.

The bank copied the data into a large Hadoop cluster where it can search for patterns in a way it was unable to do previously, he says. For example, it can look for customers that defaulted on loans and analyze their transaction history during the preceding months, to uncover patterns that might help identify customers likely to default in the future.

Another potential use case is running the middleware used to authenticate and connect mobile workers to back-end ERP and CRM systems. "When everyone with a smartphone logs onto your corporate network at 8 o' clock on Monday morning, there's a server-side app that has to secure and maintain each connection," Norrod says. "That area is exploding and it's ideal for this type of system."

High-performance computing applications are also fertile ground. Scientists at the University of Kentucky are using a cluster of Dell C6100 servers, which were designed to offer high compute density, to simulate and analyze the movement of molecules. Vince Kellen, the university's CIO, says the systems could also be used for simulations in drug design or mechanical engineering, or for processing large audio and video files. "It's potentially useful wherever a large file can be broken into many pieces and analyzed," he says.

For sure, there are obstacles to the adoption of such systems in the enterprise. Big Internet companies tend to have homogenous workloads and can fine-tune their data centers for a particular set of applications, says Andy Bechtolsheim, a systems designer who co-founded Sun Microsystems and now leads product development at Arista Networks. "They have in many ways a simpler problem than enterprise data centers," he says.

He believes that "the jury is still out" on whether servers based on low-power Atom and Arm-based processors are really more energy-efficient. "What matters is not absolute power consumption but rather power efficiency, i.e., power used per application throughput," Bechtolsheim says.

Applications that will run across such a distributed architecture must usually be custom written, and there are technical limitations to the types of workloads that can be moved to a cluster of low-power systems.

"The things that become a challenge are the input/output resources and the cache resources, which are not something that these systems are known for," says Bill Mannel, vice president of product marketing at SGI. "So as soon as you get in a situation where you need to move a lot of data in and out, that's when you see a fall-off."

But SeaMicro's Feldman argues that pressure to reduce costs is forcing companies to explore alternatives.

"Today's databases are punishingly expensive and historically they run on expensive servers," he says. "People are doing anything they can to avoid buying more of them, and that's where software like Hadoop comes in."