Jobs girds his sad, sad loins for the Long iPhone War

We know from experience what kind of horror the Jerk is as a boss, a man who fires people just because he doesn't like the way they look. It won't come as a surprise to the readers of these pages that we loath the very air he breathes. But as a person, a two-legged carbon-based life form, we can feel for him. There is something futile about the way Apple appears to be fighting some of its most ardent fans, those who want to use the full capabilities of the iPhone.

Thursday afternoon, Apple released the scheduled update to the iPhone software. And the gadget blogs confirm that it does, as Apple threatened, wreak havoc on modified iPhones. Some phones have indeed been “bricked.” In others, unofficial applications have been disabled. And there are worries that hacking the updated phone will be harder.

The result: Serious hackers will keep finding new ways to break in. Less technically inclined may well find themselves chastened into technological submission, assuming they can get their pricey toys to work at all. Will Apple really refuse to help people with iBricks?

Speaking in London last week, Steve Jobs, Apple’s chief executive, said the company is in a “cat and mouse” game with hackers.

“People will try to break in, and it’s our job to stop them breaking in,” he said.
David Pogue, our technology reviewer, received a cautionary message Wednesday night from a person familiar with Apple’s plans after he posted a video showing some unofficial, but entertaining, applications that can be installed on the iPhone. Take those applications off your phones now, David was warned, or a software update scheduled for Thursday afternoon could turn your phone into a brick. [David takes a closer look at the iPhone update here.]

On Monday, Apple had issued a press release warning of “irreparable damage” to iPhones that have been modified or unlocked from the AT&T network. It also threatened users that “the permanent inability to use an iPhone due to installing unlocking software is not covered under the iPhone’s warranty.”

This caused a scurry by hackers to develop software that will relock iPhones before software updates. It’s like kids at the slumber party turning out the lights and jumping under the covers each time mom thumps up the stairs.

Apple may well be justified using tough tactics against people who modify their phones so they no longer use the AT&T network. Apple stands to receive several hundred dollars for each phone over the course of two years from AT&T’s service fees.

Some people—actually a lot of people—don’t much like AT&T. Or they don’t want to pay AT&T’s roaming fees overseas and would rather use a local cellular company. And these people will always be looking for ways to defeat Apple’s locking system. The simple way to defuse this fight, of course, would simply be for Apple to sell an unlocked iPhone for, say, $300 more than the locked version.

But this gets at Apple’s propensity for control. The phone is, in some ways, a better experience on AT&T because of its links to voice mail and so on. But does that mean if Apple’s way is better it should always prevent people from using its products in some less optimal way?

Since the iPhone is a very sleek, capable handheld computer, people are going to want to run programs on it. They are going to want to hack and see what they can build. It’s a law of nature. And Apple might as well be fighting gravity.

Many other cell phones are locked down, of course. But few other phones capture the imagination of programmers the way the iPhone does.

Apple did allow for some application development inside its Safari browser. But it is not supporting Java or Flash, the two environments that allow the most flexible applications. And there is no official way to write applications that run on the phone’s operating system. Apple has said that it is worried that some applications could cause trouble for the AT&T network. But it’s hard to imagine that there isn’t a way to wall off and limit network usage without preventing people from developing well-mannered programs.

Apple essentially has two choices. Either it exposes most of the iPhone’s capabilities to developers. Or it will have to gird for an ever escalating war in which it will have to send ever more electronic brick-bombs to its best customers who don’t follow its strict rules.

http://bits.blogs.nytimes.com/2007/09/27/steve-jobs-girds-for-the-long-iphone-war/

Microsoft To Extend Windows XP Sales As Vista Concerns Mount

Responding to some customers' lukewarm embrace of Windows Vista, Microsoft said it will extend by several months availability of the operating system's predecessor -- Windows XP.

The company said it will make the full version of Windows XP available to personal computer manufacturers and retailers through June 30, 2008. It will continue to offer a basic edition in emerging markets through June, 2010.

Microsoft introduced Windows XP in late 2001. The company ordinarily makes operating systems available only for four years after launch date. However, delays in producing Windows Vista -- which debuted in January -- forced Microsoft to continue selling Windows XP longer than planned.

In recent months, Microsoft had pegged Windows XP's official expiration date at Jan. 30. That will fall by the wayside in favor of the new dates, Microsoft said Thursday.

Microsoft's official explanation for the move is that too many customers have yet to complete the transition from Windows XP to Windows Vista. "There are some customers who need a little more time to make the switch," said Mike Nash, Microsoft's Windows product manager, in a statement posted on the company's Web site.

While that may be, a number of signs have emerged in recent months that Windows Vista's problems go beyond timing. A survey conducted earlier this year by InformationWeek showed that an astonishing 30% of businesses have no plans to purchase Windows Vista. It's an indication that many corporate software buyers may take a long look at Linux, the Mac OS, or some other alternative to Vista once Windows XP is no longer available.

Among other things, software buyers have railed against Windows Vista's price, lack of compatibility with existing software, and system requirements that exceed the capabilities of PCs more than a couple of years old.

PC makers have responded to such concerns by continuing to push Windows XP despite the millions of dollars that their partner in Redmond has spent promoting Vista.Dell, Lenovo, and Hewlett-Packard have in recent weeks gone as far as offering customers discs that effectively lets them "downgrade" their Windows Vista systems to Windows XP

http://www.informationweek.com/windows/showArticle.jhtml?articleID=202102847

Rumor: Newton Redux

Graybeards rejoice! At AppleInsider, the other Jade is mongering one of the top ten Apple rumors of all time: the return of the Newton. Stringing together an impromptu comment by Jobs at D: All Things Digital about products Apple was better off not shipping, along with the usual "trusted" sources (like the ones that predicted the demise of the Mac mini?), we now learn the Newton is not only back, but that it never left. It turns out that a PDA device has been in ongoing development for at least 18 months. What will it look like? A giant iPhone.

Externally, the mutil-touch PDA has been described by sources as an ultra-thin "slate" akin to the iPhone, about 1.5 times the size and sporting an approximate 720x480 high-resolution display that comprises almost the entire surface of the unit. The device is further believed to leverage multi-touch concepts which have yet to gain widespread adoption in Apple's existing multi-touch products -- the iPhone and iPod touch -- like drag-and-drop and copy-and-paste.

It's hard to know where to even begin in debunking this rumor.

Let's start with the raging inferno that is not the Ultra-Mobile PC market. Introduced with the infinitely cooler Origami moniker in 2006, the original slate design failed spectacularly, with high price and low battery life complementing a user interface that was ill-conceived for personal computing. Since then, Microsoft has sought to create specifications reflecting what human beings might actually use, and companies like Asus will soon have UMPCs that are fully functional, if stupidly named. The rumored Newton is not going to compete with the Eee PC, which leaves the iPhone as the competition.

How about the idea that Apple would hold back the ability to copy and paste from the iPhone until it can release it, or some other advanced "concept," in a PDA sometime in 2008? That's nonsense, but assuming the rumored Newton is more of an iPhone Pro, how will it be different? An iPhone Pro will be 1.5 times larger than the iPhone, so it will be a tighter fit in the pocket, and it will probably be 1.5 times as expensive, so it will be a tighter fit for the budget. But what will it do that the iPhone can't? The answer is nothing. Honestly, only the zombie company that is Palm sees a future for the PDA. Surely, the company that "reinvented the phone" sees that future as a dead end.

http://arstechnica.com/journals/apple.ars/2007/09/26/rumor-newton-redux

Why Microsoft must dump Vista to save itself

While Vista was originally touted by Microsoft as the operating system savior we've all been waiting for, it has turned out to be one of the biggest blunders in technology. With a host of issues that are inexcusable and features that are taken from the Mac OS X and Linux playbook, Microsoft has once again lost sight of what we really want.

As we're more than aware, Vista Ultimate comes at a premium. For an additional $160 over the Premium SKU price, Ultimate gives you a complete backup and restore option, BitLocker Drive encryption, the ever so popular Windows Fax & Scan, and the "Ultimate Extras." But what started with a promise of "Extras" by summer, quickly turned into an apology from Microsoft and the eventual release of DreamScene and Windows Hold 'Em (among others) today. And while each of the "Extras" runs just fine, Microsoft's "Extras" blunder is just another reason why the company must abandon Vista before it's too late.

The first indication that Microsoft should abandon Vista is its poor sales figures. According to a recent report titled "Windows Vista Still Underperforming in U.S. Retail" from NPD, Vista sales are significantly behind XP sales during its early days. Even worse for Redmond, some are reverting to XP, citing issues with compatibility and overall design. And if that wasn't enough, Macs continue to surge and with the impending release of Leopard, Microsoft may be in for a rough holiday season.

Much talk has been given to Service Pack 1 and how this update should address many of the issues users have with Vista, but I simply don't agree. Will SP1 eliminate the ridiculous Microsoft licensing schemes? Will SP1 drop the price on the higher-end versions? Will SP1 eliminate the need for users to buy a new computer just to use the faulty OS?

SP1 will do nothing but fix the holes and issues we currently know about and create even more. As we all know from the days of Windows ME and even XP, Microsoft is not the best company at finding and addressing security issues, and chances are, Vista will be no different.

One significant problem that I have with Vista is its inclusion of new DRM, specifically the company's decision to install Protected Video Path. To prevent a person from copying (or in most cases, backing up) a movie, the operating system provides process isolation and if an unverified component is in use, the operating system shuts down DRM content. For the first time on any operating system, we're not even allowed to backup our favorite movies? Come on.

I also find it interesting that Microsoft decided to take the user access control concept from Mac OS X and make it much worse. Can someone please explain to me why I need to be asked if I wanted to do something entirely innocuous like open a third-party app from a well-known software company?

Never before have I seen such an abysmal start to an operating system release. For almost a year, people have been adopting Vista and becoming incensed by how poorly it operates. Not only does it cost too much, it requires more to run than XP, there is still poor driver support, and that draconian licensing scheme is a by-product of Microsoft picking on the wrong people.

The road ahead looks dangerous for Vista and Microsoft must realize that. With Mac OS X hot on its tail, Vista is simply not capable of competing at an OS level with some of the best software around. If Microsoft continues down this path, it will be Vista that will bring the software giant to its knees--not Bill Gates' departure.

Of course, categorically dumping an operating system is quite difficult and with millions already using the OS, chances are Microsoft won't find a good enough reason to do it. And while I can understand that argument, there's no reason the company can't continue to support Vista and go back to the drawing board for its next OS. Even better, go back to XP--it's not nearly as bad as Vista.

http://www.news.com/8301-10784_3-9785337-7.html?tag=nefd.only

Microsoft tries to close the Google Gap

Microsoft for now is not even trying to lure users away from rival Google, but it would like to entice users of its MSN portal to more frequently use Live Search

Microsoft thinks its Live Search can match Google in some areas now, but the company has been the underdog in search for so long it's not even trying to lure users away from its rival -- at least not yet.

Showing off a dizzying array of tools to reporters and analysts at its Silicon Valley campus in Google's hometown of Mountain View, Calif., Microsoft executives said several times that the company is focused on providing a better search experience for current users of Live Search, hoping to get them to search there more often.

The Redmond, Wash., company also wants to lure users of its MSN portal to more frequently use Live Search. They compared Live Search's results to those of Google in some cases and said customer research showed its user satisfaction catching up to Google, but didn't talk about grabbing market share.

The numbers are damning: About 37 percent of Web searchers sometimes use Live Search, but only about 11 percent of all searches are done on the site, Microsoft said, citing independent statistics. The average user of Live Search does 15 searches on the site per month, while the comparable number for Google is 55.

Microsoft runs behind Yahoo and Google, and Derrick Connell, a general manager in product management at Microsoft, acknowledged that the search product was actually losing market share in the first four months of this year. But the company hopes to gain ground at least among its current base with the new capabilities.

Over the past three years, Microsoft has quietly invested in basic things such as coverage, expanding its index to more than 20 billion Web documents, executives said. But it's more flashy additions in video, health, local search and maps that may help Live Search make an impression.

http://www.infoworld.com/article/07/09/27/Live-Search-plays-to-its-base_1.html

Let the MP3 Price Wars Begin

It's over. Restrictions on copying digital music are going to be history -- and all hell could break loose in the music retail business.

Amazon.com's move to sell more than 2 million songs free of digital rights management software, or DRM, could well be seen several years from now as the point of no return for this controversial technology. The days of music companies telling consumers when and how they can listen to their songs are numbered.

It won't happen overnight. Amazon's move is -- to lean on that useful but overused buzz phrase -- a tipping point. DRM is a well-intentioned idea that served to drive many music consumers away. You can debate all day long whether DRM is good or bad, but all the arguments are moot. The market has spoken. DRM hurts sales. And that's bad for business.

Amazon's DRM-free store is launching on the same day that Virgin Digital, Sir Richard Branson's stab at an iTunes clone, is being shuttered.

http://www.thestreet.com/s/let-the-mp3-price-wars-begin/newsanalysis
/technet/10381387.html?puc=_googlen?cm_ven=GOOGLEN&cm_cat=FREE&cm_ite=NA

The Lamest Lawsuit We’ve Effen Ever Heard Of….

A year ago, my colleague Katie Hafner wrote a story about the growing number of lawsuits facing Google. The cases ranged from copyright claims, to challenges to Google’s use of other companies’ trademarks in its advertising system, to complaints about how some Web sites were ranked in Google’s search results.

It now looks like some people took the story’s headline — We’re Google. So Sue Us. — a bit too literally.

Last week, a Pennsylvania resident sued Google in federal court alleging that his Social Security number turned upside down and scrambled spells the name Google. In a handwritten complaint, the defendant, Dylan Stephen Wayne, asks for $5 billion in damages.

Now word comes of another case, this one filed in federal district court in Texas last week, alleging that Google stole its name from the Gogo tribe of Tanzania. The suit was filed by Denis Maringo, who according to the complaint is an immigration detainee at the CCA Houston Processing Center, allegedly detained for political reasons. Google rival Yahoo is also a defendant in this case, based on allegations that the Internet portal stole its name from the Yao tribe of Tanzania. In the complaint, Mr. Maringo claims that his paternal grandfather was a Gogo and his maternal grandmother was a Yao.

The suit asks for a permanent injunction barring the defendants from using the names Google and Yahoo, and for $10,000 in damages for each Gogo and Yao tribal member. TechDirt has a copy of the complaint, as well as some more background on this and the Pennsylvania case.

What does Google say about its name? It comes from googol, the mathematical term for a 1 followed by 100 zeros.

That may also come to be a measure of how many different claims can be invented against a company with such deep pockets.

http://bits.blogs.nytimes.com/2007/09/26/whats-in-googles-name/

French court says non to pre-loaded Windows

A French man has won a lawsuit against computer maker Acer over a laptop he bought that came pre-loaded with Microsoft's Windows XP and other applications he didn't want.

Antoine Gutzwiller disputed the fact that he had no choice but to buy the €599 Acer notebook with the ubiquitous operating system and software products including Microsoft Works, PowerDVD, and Norton AV.

The court of Puteaux in France ruled that the PC giant, which is the world's third largest computer vendor, should refund Gutzwiller €311.85 to cover the full cost of software loaded on his machine.

Intially, Acer offered to settle for just €30 for the software bundled on Gutzwiller's laptop, but he rejected that sum and took the firm to court - ending up with reimbursements worth nearly double that of the original cost of the machine.

Under the judgement, the court said Acer should also cough up €500 in fees to cover what it described as "abusive resistance and committed expenses".

Apparently, the dispute had rumbled on for nearly a year. It is unknown whether the French court ruling could set a precedent for future European cases involving pre-loaded software.

Acer has yet to respond to our requests for comment.

http://www.channelregister.co.uk/2007/09/26/acer_laptop_microsoft_windows_french_ruling/

The Halo 3 hype wave finally crests, and Microsoft loves every minute of it

Legions of crazed fans camping on the sidewalk to get a good place in line. People skipping work and school. Near-riots to get a hold of prized merchandise. What could it be? The arrival of iPhone 2.0? Red Sox playoff tickets going on sale? A new generation of Cabbage Patch Dolls?

No, it's all about a video game. Correction: Not just *a* video game. it's *the* video game of the year, for many people.

I'm talking about Halo 3, a first-person shooter for the XBox 360 that already has a huge built-in following, owing to the fanatical dedication of players who own Halo and Halo 2 on older consoles. This constituency has been whipped into a frenzy by the prospect of the latest installment appearing in all its high-resolution glory (or, should I say, gory) on the Xbox 360. The fact that Microsoft has been stoking the Halo 3 hype machine for well over a year hasn't hurt either.

Of course, Microsoft is loving it. The company hasn't seen anything quite like this since the Windows 95 launch, and they're using the Halo 3 release -- and any other ammunition they can get their hands on -- to twist Sony's tail over the continued PS3 slump.

Enjoy it while you can, Redmond. You sure won't see crowds lining up to buy the next-generation Zune this Christmas

http://www.computerworld.com/blogs/node/6247

Jerkoff Jobs Will Kill The Infidels

IPhone owners who have unlocked their handsets so they could use carriers other than AT&T Inc. may end up with a phone that doesn't work after the company's next software update, Jobs. warned Monday.

Since the iPhone debuted in June, hackers have posted a number of methods online to make it possible to use the iPhone on cellular networks other than AT&T, which is the exclusive official carrier for the iPhone.

Apple execs say they have discovered that many of those unauthorized unlocking programs cause some software damage to iPhones. Now, a software update that Apple plans to issue later this week that will add features such as accessibility to the iTunes Wi-Fi Music Store may end up making the touch-screen cell phone completely inoperable if it has been hacked into.

"This has nothing to do with proactively disabling a phone that is unlocked or hacked," Phil Schiller, Apple's SVP of worldwide product marketing, said in an interview. "It's unfortunate that some of these programs have caused damage to the iPhone software, but Apple cannot be responsible for ... those consequences."

Schiller said he didn't know how many iPhones are operating on different carriers.

The programs _ including several that can be downloaded for free, and at least one that costs $25 _ appear to be particularly popular with consumers in Europe. Many Europeans have bought iPhones in the United States, but Apple will not be selling them or providing service for them in Europe until November.

"From the consumer point of view, this is extremely concerning to anyone who has unlocked their phone _ especially people outside the U.S., where this is the only way to use the iPhone with any carrier," said Erica Sadun, a Denver computer programmer who developed a graphic interface for one software program that unlocks the iPhone. "Apple has essentially told them, 'Sorry, we cannot work with you.'"

John McLaughlin of Uniquephones.com, in Northern Ireland, has developed unlocking software, but his Belfast-based company hasn't sold or distributed it. He called Apple's warning "something of a scare tactic."

Anyone who has already unlocked their phone could get it back in working condition, he said.

http://www.huffingtonpost.com/huff-wires/20070924/apple-iphone/

Microsoft 'mulls Facebook stake'

Facebook has 40 million users and expects to make $30m profit. Microsoft is reported to be in talks to buy a stake in Facebook that could value the social networking website at as much as $10bn (£5bn). The talks could lead to a showdown with Microsoft's rival, Google, which is also keen to invest in Facebook, the Wall Street Journal says.

The newspaper says Microsoft wants to buy up to 5% of Facebook, for a price between $300m and $500m.

Microsoft and Google both declined to comment on the report.

Facebook already has a relationship with Microsoft, which is the exclusive provider of banner advertising and sponsored links on the site.

"We think it's likely that Microsoft would be considering an investment in Facebook given their existing relationship and the strong growth potential of that market," said Andy Miedler from the US brokerage Edward Jones.

One of Facebook's directors, Peter Thiel, recently said that the site would consider a buyout offer in excess of $10bn.

More than 40 million people use Facebook to set up personal web pages and communicate with each other.

The company expects to make a profit of $30m this year so on conventional valuations a $10bn price tag would look expensive.

http://news.bbc.co.uk/1/hi/business/7011522.stm

Lousy iPod Touch screens blacken Apple’s rep

Shortly after the new iPod Touches hit the streets complaints about a glitch with the screens began popping up on the Web. Those afflicted with the bad iPod Touches report that they play video very darkly, with black shades so exaggerated they resemble an old film negative.

A post on a Web site called Apple-Touch.com actually included videos comparing a flawed iPod Touch playing the same scene side-by-side with an iPhone, which also sports a 3.5-inch screen. The difference in quality and the issue with dark areas in the iPod Touch’s video is obvious.

Some unhappy customers asserted that the flaw resulted from Apple using a poorer quality LCD screen in the iPod Touch relative to the one used in the iPhone. Some exchanged their bad unit for another bad unit. In forums, some customers countered that their new iPod Touches looked perfectly fine.

With accusations flying in every direction, I decided to stop by the Apple Store in Towson Town Center yesterday to have a look at the iPod Touch for myself. The store had four on display. I looked at some video on each one and could detect no hint of the problems I saw depicted on several Web sites. In fact, I thought the video on the iPod Touch looked pretty darn good.

I then moved over to the iPhone table and repeated the exercise (for the record, I played videos stored on the devices, such as the Ratatouille trailer, not YouTube videos). Frankly I could not discern a quality difference between the iPhone and iPod Touch, although I could not study them side by side since all the devices were tethered to their respective display tables.

One of the store employees said the staff there knew of the problem (although they learned of it by reading about it on the Internet; the Mother Ship hadn’t supplied any info yet) but had not seen any defective units, either in the store or brought in by a customer. In fact, he said they checked their entire iPod Touch inventory just to make sure.

My guess is that a bad batch of early-run iPod Touches slipped past the quality checks into Apple’s retail channels. If Apple was leaning on its suppliers to make deadline for the product launch, it’s not hard to imagine them shortchanging quality assurance procedures to satisfy Apple’s demands. I don’t think the iPod Touch screen is innately inferior to the iPhone’s. It is possible, but until there’s hard proof otherwise I’ll give Apple the benefit of the doubt.

Apple can’t afford to appear callous when serious problems surface in any of its products.

http://weblogs.baltimoresun.com/business/appleaday/blog/2007/09/
faulty_ipod_touch_screens_blac.html

Soaring sales mean Microsoft CEO Balmer won’t starve

Thank goodness, no dog food or early-bird specials for Balmer! Microsoft Corp. raised Chief Executive Steve Ballmer's overall compensation 32 percent in 2006 after sales climbed the most in six years. Ballmer got $1.28 million in salary and bonus for the year ended June 30, the Redmond company said Friday in a regulatory filing. Ballmer, with a fortune of $15.2 billion, ranks 16th on Forbes magazine's wealthiest Americans list.

Unlike some technology companies that spend millions on executive security, travel and other perks, Microsoft gave Ballmer a modest $6,750 in matches to his 401(k) retirement plan and approximately $3,000 worth of life insurance and athletic club memberships.

Microsoft won orders last year by putting out new versions of its Windows operating system and Office programs, leading to sales of $51.1 billion, a 15 percent increase. The company cut Ballmer's pay the year before after profit gains slowed.

Ballmer, whose 4.3 percent stake in Microsoft makes him the third-biggest holder, doesn't get stock grants and has a smaller salary than the rest of Microsoft's senior executives. The company determines the size of grants to other executives based on how well they satisfied customers and won them over to new products, and whether they achieved goals specific to their businesses.

Microsoft shares climbed 23 cents Friday to $28.65 on the Nasdaq stock market. They have declined 4.1 percent this year while the Standard and Poor's 500 Index has risen 7.6 percent.

COO Kevin Turner received $8.45 million, about half of what he got a year ago. The old package included a one-time new hire bonus of $7 million and $8.2 million in stock to replace shares he forfeited upon leaving Wal-Mart Stores Inc. to join Microsoft.

Chairman Bill's compensation wasn't listed for the year because of a change in securities rules. Previously, the executives included in the proxy filing were the CEO and the four highest-paid executives, based on salary and bonus.

http://seattlepi.nwsource.com/business/332735_msftpay22.html

Rumor Control: Is Google Laying Pacific Cable?

A report from an Australian trade news service, Communications Day, has rekindled speculation that Google is interested in becoming a major telecom player. The article mentions a consortium of telecom companies, led by Google, that are working on a new trans-Pacific undersea cable called "Unity." The aim, according to Communications Day, is to have a cable in place by 2009.

Google itself would theoretically own a large portion of the multi-terabit cable, giving the company a leg up on rival internet companies by providing significant cost advantage for trans-Pacific data transmission.

Google spokesman Barry Schnitt remained tight-lipped about the company's plan and would only say that Google is interested in a Pacific cable.

"Additional infrastructure for the internet is good for users and there are a number of proposals to add a Pacific submarine cable. We're not commenting on any of these plans," Schnitt said in a Google statement.

http://blog.wired.com/business/2007/09/rumor-control-g.html

Starbucks giving away free iTunes downloads

For 37 straight days beginning next week, Starbucks will give away free iTunes music downloads, including songs by Bob Dylan, Joni Mitchell and Paul McCartney, to kick off a new partnership between the coffee titan and Apple Inc.

Up to 1.5 million daily giveaways will begin Oct. 2 and run through Nov. 7 at more than 10,000 company-owned and licensed U.S. stores, Starbucks said. When the promotion ends, Starbucks expects to have given away more than 50 million songs.

"It's a great moment for us when you look at the overall relationship we have with iTunes," Ken Lombard, president of Starbucks Entertainment, said in an interview with the Seattle P-I. "We feel it's definitely groundbreaking."

Lombard said the artists and record labels are providing the music for the promotion, which is "not costing us anything." The deal is expected to drive traffic to Starbucks and Apple's iTunes store, where customers can buy additional tracks after sampling various artists. With single songs costing 99 cents apiece on the iTunes store, the giveaway is valued at roughly $50 million.

Lombard said the partnership would help Starbucks, which last year put its Hear Music catalog on iTunes, become more of a destination for coffee and music lovers. Starbucks has increased its promotion of music and other media, such as books and movies, as a way to differentiate itself from rivals McDonald's and Dunkin' Donuts, which have peeled away customers with lower-priced coffee drinks.

While still highly profitable, Starbucks has seen its stock price decline in the past 12 months as the company has not met Wall Street's expectations because of intense competition and rising dairy and employee costs. Starbucks, in its most recent quarterly earnings report, had a $158 million profit on $2.36 billion in revenue. But the company's stock price has fallen 19 percent in the past 12 months.

Two analysts who cover Starbucks called the iTunes giveaway "interesting," and both said that while the deal is unique, it likely will not significantly raise profits.

"They are just trying to draw some attention," said Dan Geiman of Seattle-based McAdams Wright Ragen. "It will never be big business for them. ... It will be incremental income for them, and it's generally a complimentary business."

Patricia Edwards, a Seattle-based analyst with Wentworth, Hauser and Violich, said the giveaways could drive an older demographic to iTunes.

Starbucks' "core customer is not the teeny-bopper who downloads a lot of music. Their core customer is someone between 30 and 40 who may not have ventured out into the digital world," Edwards said. "It's a good way to introduce that customer to an online experience."

Edwards, a self-described music download addict, said getting someone turned on to iTunes is "kind of like getting hooked on caffeine."

Starbucks declined to disclose its financial arrangement with Apple should the coffee company drive sales at iTunes, but Edwards believes Starbucks is receiving some kind of promotion fee.

Apple did not return calls seeking comment.

During the promotion, Starbucks will pick an artist each day and provide its customers with a complimentary download card that can be redeemed through the end of the year at the iTunes store. Some of the other artists are Joss Stone, Dave Matthews, Bebel Gilberto, Annie Lennox and Keith Urban.

http://seattlepi.nwsource.com/business/332837_sbuxmusic24.html

Apple is at the core of a music rip-off, despite what Jobs says

Steve Jobs (a.k.a. The Jerkoff) was in London this week promoting the wildly exciting but colossally overpriced iPhone – yours for £900 in the first year – with the phone alone costing £69 more than you would pay in the US. Apparently, the Apple boss believes that the costs of business are much higher in the UK (what do we do??), although this is not news.

A song on iTunes in Britain will set you back 79p, in Europe it is 99 cents, or 69p. In the US, it is 99 cents again, which translated into our money is 50p, although the difference with the States, but not Europe, is that sales tax is excluded and when that is factored in the price is more like 55p. And the pennies add up. Last year the value of music sold at retail in the UK was £1.75 billion, and digital ran at 6 per cent of the total. Let’s assume that Apple dominates digital sales and accounts for 4 per cent of the whole market: that represents roughly £43.9 million.

However, if Jobs’s company had been charging American prices, it would have received only £30.6 million. It would be better still if the consumer had a choice, but Apple’s control over proprietary technology means that potentially cheaper rivals, such as HMV, cannot sell songs for download on to the market-leading Apple iPod. So the market is skewed.

Yet in a digital era, it should be easy to buy songs abroad to take advantage of the cheapest price. Apple, though, ensures that consumers are tied to their home country music store by insisting that purchases be made via a credit card registered to an address in that country – an obstacle that is not insurmountable, but at a quarter past midnight, when that dance track is one click away, it is too much like hard work to make a friend in the US buy it, burn it and send it over.

This is now under investigation by the European Commission. Unfortunately, such inquiries take years, appeals and all – this one dates back to 2005. While they rumble on, Apple can carry on as before, on an innocent until proven guilty basis. More to the point, the word on the boulevards of Brussels is that the Commission is having trouble making its case stick. To do so it has to prove that Apple is dominant, which it may be in the fast-changing world of digital music, but is not in overall music sales. And it is usually a principle of competition that emerging industries do not get thwacked with regulation.

So it is hard to force a price cut.

http://business.timesonline.co.uk/tol/business/industry_sectors/media/article2500469.ece

Why Microsoft no longer matters

Historians famously scorn generals who prepare to fight the previous wars. But what would they say about regulators still struggling to set proper rules of engagement for the technology business?

Up until the mid-1990s, computer and software companies escaped close regulatory scrutiny. (IBM's 13-year battle with the United States Justice Department the notable exception.) But once IT grew into a multibillion dollar industry, the number of billion-dollar companies mushroomed and governments could no longer resist the temptation to have a bigger say--even if they were condemned to lag a step or two behind the times.

The latest example of this was last Monday's decision by Europe's Court of First Instance to uphold a previous antitrust ruling against Microsoft. Europe (old and new), which tends not to cut big monopolies much slack, hailed the decision as an important pro-consumer move. But the United States' antitrust chief, Thomas O. Barnett, countered that the ruling would do just the opposite, "chilling innovation and discouraging competition."

The depth of difference between otherwise sober bureaucrats underscores how very differently Europe and the U.S. approach the role of government and the limits of free enterprise. We haven't had this big a trans-Atlantic snit over the same data points since inspectors went hunting for Saddam's weapons of mass destruction.

Government regulators come and go but Microsoft's bigger headache these days comes from new technology offerings. To wit, IBM just introduced a beta collection of free software applications to compete against Microsoft's Office. And Google, which long ago surpassed Microsoft in the sizzle category, keeps adding to its store of free applications. Meanwhile, Yahoo is spending $350 million to buy a Web-based e-mail and collaboration package comparable with Microsoft Exchange and Outlook.

And that's just from the well-known companies. What about under-the-radar Internet startups Microsoft's never heard of? Those are the bogeymen who inhabit Microsoft's nightmares, the ones unsheathing the killer app nobody anticipated.

This may be putting too fine a point on things for Neelie Kroes, the European Union's top regulator. She's playing to her constituency and it wants to see Microsoft weighted down with more regulatory restraints. It may come to that. Europe's bureaucrats seek to protect what they believe to be the public's best interests. By then, however, the terms of the technology race likely will have moved on.

http://news.zdnet.com/2010-9595_22-6209284.html

SCO faces financial crunch after Unix defeat

If you can believe Outlaw.com, the company at the centre of an intellectual property dispute with IBM that has lasted for years is facing the prospect of financial ruin. The SCO Group said it may be unable to continue operating as a company.

SCO challenged IT giants IBM and Novell over the rights to the Unix operating system in a set of court cases which began in 2003. On 10 August the company lost its case against Novell when a court ruled that Novell and not SCO owned copyrights to the Unix system.

One month after the ruling the company filed for Chapter 11 bankruptcy, a US process in which the company is shielded from creditors while it reorganises itself. The company has now lodged a filing with financial regulator the Security and Exchange Commission (SEC) which casts doubt on the future of the company.

"As a result of both the Court's 10 August, 2007, ruling and the company's entry into Chapter 11, there is substantial doubt about the company's ability to continue as a growing concern," said the filing.

The court ruling meant SCO now owes royalty payments to Novell, rather than the other way round. Novell is seeking $30m plus interest from SCO.

"If a significant cash payment is required, or significant assets are put under a constructive trust, the carrying amount of our long-lived assets may not be recovered," said SCO's filing.

When the company filed for bankruptcy protection last week, chief executive Darl McBride had said customers will be able to rely on the firm. "We want to assure our customers and partners that they can continue to rely on SCO products, support and services for their critical business operations," McBride said.

But in this week's filing, the firm explicitly recognised the possibility of its being unable to emerge from the bankruptcy process. To add to the company's financial worries, it has been told that it will be de-listed from the Nasdaq stock exchange as early as next week. It has asked for an appeal hearing, but it will have to present a Nasdaq committee with a viable business plan if it is to be given permission to stay on the exchange.

http://www.theregister.co.uk/2007/09/21/sco_financial_woes/

Jobs Subpoenaed for Deposition

Buck, what buck?. The Jerk must have passed it along…….

If can believe the good folks at Bloomberg (and mostly we do) Apple Inc.’s chief jerkoff, Jobs, was subpoenaed by the U.S. Securities and Exchange Commission to give a deposition in a backdating lawsuit against the company's former general counsel, two people familiar with the matter said.

The subpoena isn't part of an SEC investigation, one of the people said. It seeks Jobs's testimony in the SEC's lawsuit against Nancy Heinen, who was sued April 24 for allegedly backdating stock-option grants to Jobs and members of his executive team, said the people, who requested anonymity because deposition subpoenas aren't made public.

Heinen was sued for allegedly backdating a 7.5 million share-option grant to Jobs in 2001 and an earlier grant to his executive team. Jobs recommended some favorable dates on options other than his own, Apple said Dec. 29. Heinen's lawyers sought to depose 45 people, including the recipients of the grants, according to a court filing.

``These include the range of individuals involved in the stock option granting'' at Apple, including ``the grant recipients themselves,'' according to an Aug. 31 document filed by the SEC and Heinen's lawyers in federal court in San Francisco.

Steve Dowling, an Apple spokesman, declined to comment. Mark Pomerantz, an attorney for Jobs, didn't return a call to his office after normal business hours. Marc Fagel, an SEC attorney in San Francisco, declined to comment.

The SEC alleges Heinen directed her staff to prepare documents that falsely stated the company's board approved the grants on the earlier date, the SEC said in its lawsuit. She has denied the claims. Deposition testimony is used at trial or during evidence gathering. Miles Ehrlich, Heinen's attorney, didn't respond to a message left after business hours.

The SEC said April 24 that it wouldn't sue Apple over the backdated options and declined to say whether the investigation of the Cupertino, California-based company was still active. Apple found ``no misconduct'' by Jobs and said he wasn't aware of the accounting implications of backdated options, the company said in December.

Stock options allow holders to buy shares at a later date, usually at the trading price on the day the options were granted. Through backdating, companies retroactively change the grant date to a day with a lower stock price, giving recipients built-in profits. Unless disclosed and recorded as an expense, the practice is illegal because it hides costs from shareholders and regulators.

Heinen was general counsel at Jobs's software firm Next Inc. starting in 1994 and moved with him to Apple, where he became CEO in 1997 after the company bought Next. Heinen quit in May 2006.

http://www.bloomberg.com/apps/news?pid=conewsstory&refer=conews&tkr=
AAPL:US&sid=aDqQnJPg5PPg

Microsoft Office under fire

A host of internet-based rivals are aiming at Redmond’s fattest cash cow.

Never mind the brutal verdict handed out against Microsoft by Europe's competition regulator on Monday. This week three rivals – IBM, Google and Yahoo! – gave notice of their intentions to compete head-on with Microsoft Office, recently the software giant’s biggest earner by far. The stalwart suite of office tools, which includes Word and Excel, accounted for revenues of $4.6 billion – a third of Microsoft total sales – in the company’s most recently reported quarter.

Gallingly for Microsoft, given its dependence on Office licence fees, much of the threat comes from software given away gratis over the internet – a dramatic departure from its licence-based model, in which software is hosted on a user's desktop machine.

IBM this week unveiled Lotus Symphony, a suite of free desktop applications that includes document, spreadsheet and presentation software.

Hours earlier, the newly acquisitive Yahoo! announced that it had bought Zimbra, a start-up that specialises in online e-mail tools similar to Microsoft Exchange and Outlook – key parts of the Office family – for $350 million (£174 million).

At the same time, on the paid-for-software front, Google, the search giant widely regarded as the chief threat to Microsoft’s dominance, unveiled Google Presentations, an online version of PowerPoint, the Microsoft presentations tool known to millions of executives around the globe.

Microsoft is in danger of loosing the Office licence fees it has milked for nearly two decades, some suggest, as customers opt for alternative subscription-based services that are hosted by providers. Its business model – built around the PC – will not survive the internet age, they argue.

http://business.timesonline.co.uk/tol/business/industry_sectors/technology/
article2495951.ece

Apple to double iPhone production

The technology group is now looking to manufacture about 2.7 million iPhones in the next quarter, up from the 1.54 million originally targeted, according to thestreet.com, the financial news website, which cited sources close to the company. That would mean that Apple is now preparing to ship nearly 5 million iPhones this year, up from a previous target of 3.6 million.

Analysts suggested that a production increase could be related to the recent price cut of the iPhone in the United States and the device’s roll-out in Europe.

Earlier this month, Apple cut the price of the iPhone by 33 per cent only 68 days after its launch in the US. The $200 cut, to $399 (£197), was unprecedented for an Apple product in its speed.
It also fuelled fear that shares in its sector – Apple’s stock is up about 60 per cent this year – could be overvalued.

Steve Jobs, Apple's Jerk-CEO, was later forced to admit that his company had failed to look after iPhone customers.

On the Apple website, he said: “Even though we are making the right decision to lower the price of iPhone, and even though the technology road is bumpy, we need to do a better job taking care of our early iPhone customers as we aggressively go after new ones with a lower price.”

Apple is to offer people who bought the iPhone before the price cut a $100 credit note to spend in Apple stores. There will be a full $200 refund for those who bought in the past 14 days. Mr Jobs said: “Our early customers trusted us, and we must live up to that.”

Speculation over a production increase fuelled the view that the much-hyped device is meeting Apple’s expectations..

Apple officials were not immediately available for comment to Times Online today.

http://business.timesonline.co.uk/tol/business/industry_sectors/technology
/article2497064.ece

American-style casino opens in Iraq

Check your Kalashnikov at the door

Not to be outdone by the establishment of the American University of Iraq in the northern Iraqi city of Suleimaniya, a ballsy Russian businessman, Vitaly Kouznetzov, has helped bring another, sexier, slice of American life to the Iraqi Kurds: he's brought a touch of Las Vegas to that same Kurdish cultural capital with the launch of an American-style casino. Take that, al-Qaeda.

Suleimaniya is located near the border with Iran, and has long been considered a bastion of liberalism in a part of the world known more for intolerance and chaotic bloodshed. Public Radio International (PRI) interviewed Mr. Kouznetov today, and in it he explains to his bemused interviewer, Lisa Mullin, just how he has managed to open a casino in a Muslim country riven by civil strife and religion-inspired killing.

Money to be made?

Very good customers, he notes - just look at their cars.

Not at all worried about security, huh?

Actually, security is quite good, he says, much to Mullin's surprise. Of course everyone is armed. Everyone carries Kalashnikovs, but we have a room by the door where they can check them, one hour, two hours, however long they need.

Booze? Just beer. Well, that's better than nothing. We hear it's hot there.

http://www.theregister.co.uk/2007/09/20/casino_iraq/

O2 be in England now that the iPhone is there

The Apple hype machine went into overdrive yesterday as that nice Mr. Jobs turned up in London to announce the not-so imminent arrival of his wunderkind offspring – the iPhone – to the shores of good old Blighty.

Nailing rumours that have been circulating for weeks, it was finally announced in a confirmation of the industry's worst kept secret, that O2, the UK mobile operator now owned by Spain's Telefonica, has secured the deal to be the exclusive network and sales contractor for the iPhone for at least two years.

The device will finally be available to UK customers with effect from November 9. As is usual for transAtlantic imports, the iPhone will, of course, cost more here than it does in the US. Indeed, it is priced at a 35 per cent premium over the American market and it will also be more expensive on the O2 network than on AT&T's network in the US.

The 8Gbit/s handset will be priced at £269 and customers will also have to sign-up to an 18-month contract with O2. Three calling plans will be available costing either £35, £45 or £55 a month. The £35 a month deal provides the user with 200 minutes of airtime and 200 texts, the £45 comes with 600 minutes and 500 texts and the top-of-the-range £55 product provides for 1200 minutes and 500 texts. All three plans include what is described as "unlimited data transfers".

What is remarkable about the contract with O2 is that the carrier is said to have agreed to remit to Apple a massive 40 per cent of call revenues made on the device.

The rumoured 10 per cent deal would have been revolutionary but at 40 per cent it has driven an Eddie Stobart road train through the financial model that has pertained in the mobile industry since the sector began. Never before have operators paid a percentage of call revenues to manufacturers for the privilege of providing their handsets. What will happen hereafter is anyone's guess, but the genie is out of the bottle now and it'll never go back in. And let's not forget, although O2 will actually be paying that 40 per cent to Apple, it is the subscriber who ultimately foots the bill – hence the cost of becoming an iPhone user.

The iPhone model being introduced into the UK is the same as the one currently available in the US. Thus it is not a 3G phone but will operate instead on O2's EDGE and GPRS networks. However, at present,they provide coverage to just 33 per cent of the population of the British Isles.

Back in the US of A, Apple has already lopped close to 30 per cent of the cost of the handset and it remains to be seen whether, and, if so, how quickly the price will drop in the UK. No doubt that will depend on the number sold in relation to Apple's internal sales targets. It is believed that the company is looking to shift 10 million iPhones by the end of next year.

http://web20.telecomtv.com/pages/?newsid=41893&id
=e9381817-0593-417a-8639-c4c53e2a2a10

EU official backs Microsoft ruling

According to the AP, a U.S. official's criticism of a European Union court ruling dismissing Microsoft Corp.'s monopoly abuse appeal was "totally unacceptable," EU antitrust chief Neelie Kroes said Wednesday.

Kroes said it was wrong for a representative of the U.S. administration to criticize "an independent court of law outside its jurisdiction."

"The European Commission does not pass judgment on rulings by U.S. courts and we expect the same degree of respect from U.S. authorities on rulings by EU courts," she said. "It is absolutely not done."

U.S. Department of Justice assistant attorney general for antitrust Thomas O. Barnett said late Monday that the U.S. had a particular interest in the EU's Court of First Instance decision and was concerned that the legal standard it set had "the unfortunate consequence of harming consumers by chilling innovation and discouraging competition."

Kroes said if parties directly involved in the case - Microsoft - wanted to contest the ruling it could appeal to the EU's highest court, the European Court of Justice. It has two months to lodge a challenge.

She was keen earlier in the week to stress that EU regulators consult regularly with U.S. authorities on antitrust cases - despite their sometimes different approaches - saying she would discuss the case with them when she visits the U.S. later this month.

The court ruling on Monday affirmed the EU's nine-year pursuit of Microsoft Corp., rejecting the software maker's appeal and strengthening the bloc's hand as it pushes ahead with cases against other major technology companies.

It said the European Commission was correct in concluding that Microsoft used its dominance in desktop computers to muscle into server software and media players in the 1990s and upheld a record €497 million ($613 million) fine imposed on the company in 2004 - the largest ever levied by EU regulators.

http://money.cnn.com/2007/09/19/news/international/bc.apfn.eu.fin.eu.microsoft.ap/

Google Program Jumps on Mini-Sites as Selling Tool for Advertisers

Google is seizing on the popularity of widgets — small online tools that function like mini-Web sites — for its latest push into advertising. The online giant will announce today a Gadget Ads program that will provide tools for advertisers to run widget ads in Google’s AdSense network.
Marketers can use space within these display ads on Google’s network to show videos, offer chats with celebrities, play host to games or other activities. If consumers like the widget ad, they can save it onto their desktops or on their profile pages online on sites like Facebook and MySpace.

The new widget ads represent a more aggressive push by Google to attract big brand advertisers who like flashy ad units rather than the simple text ads commonly run in Google’s ad network.

One big advantage of the technology is that the consumer does not have to click through to a Web site. A weather widget, for example, would constantly update the weather report in a particular area. Similarly, marketers could feature content to attract consumers while constantly updating their own messages.

More than 48 percent of Internet users in the United States — over 87 million people — now widgets, according to comScore, the online measurement company. Some of the most popular widgets on Facebook, for example, are the “Top Friends” tool, which allows people to go to their best friends’ profiles with a single click, and iLike, which lets users add music to their profiles.

“Consumers are pulling in content from multiple sources” said Christian Oestlien, a business product manager at Google who is overseeing the new ad program. “It is what we are calling the componentization of the Web. The Web is sort of breaking apart into smaller pieces.”

Many widgets have been built by media outlets, like Lucky Magazine’s shopping widget, which features hot fashion and beauty products. And some companies like Slide are developing networks of widgets made by individuals that advertisers can place ads within.

But consumer brands like Sierra Mist and Honda Civic have also been creating their own widgets as a way of providing content or tools to potential customers. Google is hoping marketers will pay to place these widgets throughout its AdSense network.

Advertisers bid for keywords to place their widget ads in Google’s network in the same way they do other Google ads. Since many users will interact with the ads within the ad units and not click through, Google has developed a new interaction measure to document the interest in the ads.

Google tested its Gadget Ads program this summer with a group of 50 marketers. To encourage more advertisers to make such ads, Google is offering to be host of videos for the ads in YouTube’s servers — a cost-saving for advertising agencies. And Google provides tools for updating the ads, even if marketers do not bid for ads in Google’s network. Marketers pay Google only for the ads that run in its networks and not for any downloading or saving of those ads that consumers may choose to do.

“We’re not trying to monetize every single event that happens in a creative,” Mr. Oestlien said, adding that they wanted advertisers “to make rich creative ads that are really useful to the end user.”

http://www.nytimes.com/2007/09/19/technology/19google.html?_r=
1&ref=technology&oref=slogin

Yahoo! hopes Mash will be a monster

360! take! two!

Yahoo! has launched a new social networking site, its second such foray into the field.

Mash is a new service from Yahoo! currently in beta mode. The social networking project can only be accessed by invite at present, and opened to a handful of users on 14 September.

The new project follows the failure of Yahoo! 360, the firm's previous effort at infiltrating the social networking sphere, to gain a significant foothold in the market.

Mash adds to the stable of Web 2.0 sites that have either been acquired or developed by Yahoo!. These include Flickr, the photo sharing service, del.icio.us, a website for sharing links on the internet and Upcoming.org, an event planning service.

This latest move is part of Yahoo!'s efforts to revitalise its internet business, which has suffered from slower growth relative to that of its chief rival, Google. Industry commentators have long suggested that Yahoo! look at moving into the social networking space in order to give its business the kick start it needs to compete more effectively.

Yahoo! is more than a little late to the social networking party though and has a lot of catching up to do with its fellow revellers who have impressed investors.

Facebook reportedly walked away from a $1bn offer from Yahoo! last year while MySpace was bought by Rupert Murdoch's News Corporation for $580m in 2005.

http://www.theregister.co.uk/2007/09/18/yahoo_mash_social_networking/

Yahoo! prays Mash will be a monster

Maybe this time......

Yahoo! has its fingers and toes crossed. It has launched a new social networking site, its second such foray into the field.

Mash is a new service from Yahoo! currently in beta mode. The social networking project can only be accessed by invite at present, and opened to a handful of users on 14 September.

The new project follows the failure of Yahoo! 360, the firm's previous effort at infiltrating the social networking sphere, to gain a significant foothold in the market.

Mash adds to the stable of Web 2.0 sites that have either been acquired or developed by Yahoo!. These include Flickr, the photo sharing service, del.icio.us, a website for sharing links on the internet and Upcoming.org, an event planning service.

This latest move is part of Yahoo!'s efforts to revitalise its internet business, which has suffered from slower growth relative to that of its chief rival, Google. Industry commentators have long suggested that Yahoo! look at moving into the social networking space in order to give its business the kick start it needs to compete more effectively.

Yahoo! is more than a little late to the social networking party though and has a lot of catching up to do with its fellow revelers who have impressed investors. Facebook reportedly walked away from a $1bn offer from Yahoo! last year while MySpace was bought by Rupert Murdoch's News Corporation for $580m in 2005.

http://www.theregister.com/2007/09/18/yahoo_mash_social_networking/

Redmond’s loss is real bad news for Apple, Google

If you can believe Fortune, the verdict is in: Europe's tough antitrust authorities have the power they were looking for to crack down on U.S. companies they believe are illegally limiting competition and harming consumers.

That's the clear message a European appeals court sent Monday when, in a historic decision, it reaffirmed nearly $1 billion in fines against Microsoft for abusing its Windows operating system monopoly to keep competitors out.

While the decision socks it to Microsoft in the pocketbook, it's also a big blow to several U.S. tech giants that have run afoul of E.U. regulators in recent years.

Intel , for instance, is being investigated for the way it prices its computer chips. E.U. watchdogs are also probing Apple's pricing of music downloads. And Google's planned buyout of advertising giant DoubleClick has raised fears over the search giant's power to set ad rates in the digital world.

Indeed, U.S. tech companies might find that emboldened E.U. regulators are worse for them than for Microsoft. Redmond, after all, is no longer the 800-pound gorilla it once was, and the focus of the E.U.'s antitrust case was on two products that are not the software giant's core business.
In the case of Intel, Apple and Google, regulators are questioning products that are each company's bread and butter, which means any restrictions on their business practices could have a severe impact on revenues.

Randal C. Picker, an antitrust law professor at the University of Chicago, said it's early to draw conclusions from the densely worded decision, which runs close to 250 pages.

But, he noted, the appeals court found that Microsoft broke the law by refusing to make its dominant Windows software interoperable with competing products. Dominant technology businesses, the court ruled, must allow competitors' products to work on their platforms.

Interpreted broadly, the rules could be used to force Apple to make the iPod work with rival music services, or to make iTunes work with rival music players. Some might even try to use the wording to push Google to reveal how its top-secret search algorithm prioritizes web pages.

"Apple has had a number of situations where it has effectively blocked interoperability [of the iPod and iTunes] with competitors," Picker said. "So if this decision says that interoperability is important in the situation of someone who has a dominant position, Apple obviously has interoperability issues as well - pretty directly so."

At a press conference before the appeals court decision, Microsoft general counsel Brad Smith also singled out Apple.

"Look at the world of digital media today," Smith said, speaking in Brussels. "Apple has something like a 70 percent market share for digital music; iTunes is far and away the leading source for music on the Internet; the iPod is far and away the leading hardware device for digital music."

And yet, Smith noted, Apple refuses to allow competing products to work on its devices -- the same behavior that landed Microsoft in hot water.

An Apple spokesperson did not return a call for comment Monday.

http://money.cnn.com/2007/09/17/technology/microsoft_ruling_analysis.fortune/index.htm

Microsoft Loses EU Antitrust Appeal

A monopoly is a monopoly is a monopoly

Microsoft Corp. lost its appeal of a European Union antitrust ruling, forcing the world's biggest software maker to pay a record 497 million-euro ($689 million) fine and help rivals connect their products to the Windows operating system.

The European Court of First Instance in Luxembourg today backed the EU's 2004 decision that ordered the U.S. company to disclose proprietary data and strip music and video software from a version of Windows. The judgment can be appealed to the European Court of Justice, the EU's highest court.

Microsoft, whose settlement with U.S. authorities is due to expire in November, has argued that the European Commission sought the illegal disclosure of trade secrets and a veto over features on software that runs on about 95 percent of the world's personal computers. The ruling bolsters probes by Competition Commissioner Neelie Kroes of Intel Corp., Rambus Inc. and Qualcomm Inc.

``This is deeply troubling for business, the state of the law and trans-Atlantic relations,'' said Philip Marsden, a competition lawyer and senior research fellow at the British Institute of International and Comparative Law. ``The ruling shows a total diversion between the U.S. and Europe.''

Shares of Redmond, Washington-based Microsoft fell 32 cents, or 1.1 percent, to $28.72 in Nasdaq Stock Market trading at 4 p.m. in New York.

Microsoft General Counsel Brad Smith said the company will study the decision carefully before deciding whether to appeal. He said at a press conference that the company is ``committed to complying with the antitrust decision.''

New Steps'

``We will take new steps to broaden our interoperability partnerships with others in our industry,'' he said. ``We look forward to taking those steps not in the months and years but in the weeks to come.''

The conclusions of today's ruling were read out by Bo Vesterdorf on his last day as the court's president. He was replaced by Marc Jaeger, a Luxembourg national.

``Microsoft has not shown that the commission erred in assessing the gravity and duration of the infringement or in setting the amount of the fine,'' the tribunal said in its 248- page judgment.

The bundling of Windows and the Media Player software ``allowed Microsoft to obtain an unparalleled advantage,'' the court said.

The court upheld one part of Microsoft's appeal. The judges said the commission was wrong to give an external expert access to the company's documents, premises and software source code.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aCiXwwEclkGQ&refer=home

Irony Alert: Google Calls For Global Privacy Standards

Google honchos say they want to start a discussion about international privacy standards which work to protect everyone's privacy on the Internet.

In a post on the Google Public Policy blog on Friday, Peter Fleischer, Google's Global Privacy Counsel, said that privacy standards need to be harmonized worldwide.

"As I've noted before, everyone has a right to privacy online -- and governments have an obligation to keep their citizens safe," said Fleischer. "Yet despite the international scope of even the most ordinary Internet activity, the majority of the world's countries offer virtually no privacy standards to their citizens and businesses. And even if every country in the world did have its own privacy standards, this alone would not be sufficient to protect user privacy, given the Web's global nature. Data may move across six or seven countries, even for very routine Internet transactions. It is not hard to see why privacy standards need to be harmonized and updated to reflect this reality."

As Fleischer notes, concern about the ease with which data can be disseminated around the world and the impact that access to that data has on privacy isn't new. In 1980, the Organization for Economic Cooperation and Development issued guidelines that laid out fair information practices.

Former Sun CEO Scott McNealy's now infamous declaration twenty years later that "privacy is dead" hints at how effective the OECD guidelines have been. Just because there are guidelines -- we have both 1948's Universal Declaration of Human Rights and ongoing human rights violations around the globe -- doesn't mean those guidelines will be widely respected.

Nonetheless, Google deserves credit for trying. Having fought the U.S. Department of Justice's demand for search data when its competitors caved and having agreed to anonymize search records after 18 months, the company clearly isn't deaf to privacy concerns, even if it hasn't matched bolder moves from Ask.com.

...Google is calling for a discussion about international privacy standards which work to protect everyone's privacy on the Internet," said Fleischer. "These standards must be clear and strong, mindful of commercial realities, and in line with oftentimes divergent political needs. Moreover, global privacy standards need to reflect technological realities, taking into account how quickly these realities can change."

Though Google may grasp the technological realities of privacy better than most, its call for discussions about international privacy standards suggests a naive attitude about the ease with which "divergent political needs" can be brought "in line." Things which diverge, by definition, don't line up. Harmonizing privacy rights across U.S., Europe, China, Russia, and the rest of the nations of the world might well be compared to herding cats with a lightning rod during a thunderstorm. It won't be quick or easy.

And when it comes to dealing with difficult issues like censorship -- which is closely related to privacy -- Google, like Microsoft and Yahoo, has found it easier to pass the buck to the U.S. government than deal with the issue itself. All three have asked Uncle Sam to treat censorship as a trade barrier, and to press censorious countries to be more open, so they don't have to.

http://www.informationweek.com/news/showArticle.jhtml?article
ID=201806614&subSection=News

Did Jobs blow Mac's big chance?

If you're the owner of a Windows PC who is looking for a replacement computer, the choices are grim. You can step into the world of hurt that is Vista, the latest version of Microsoft Windows that was released in January. Or you can seek out a new machine that still comes loaded with the comparatively ancient Windows XP.

Maybe, you might say, the moment has arrived to take a look at the Mac. You can easily order one online, of course. But if you would like to take a test drive before you commit, odds are that you will have to look far and wide for a store that sells it. The Mac's presence in the retail world remains limited, a shame given the rare opportunity for Apple to gain market share that opened up when Vista arrived.

The Mac's worldwide market share was 3 percent as of June, according to Roger Kay, president of Endpoint Technologies Associates, a consulting firm in Wayland, Massachusetts. That forlorn number looks even worse compared with Apple's peak worldwide share of 14 percent in 1984, the year the Macintosh was introduced and sales of Apple II computers were the company's mainstay.

Kay noted that Apple's share was as low as 2 percent as recently as early 2004. He said the increase to 3 percent might be a result of the "halo effect" produced by the success of the iPod. It could also just as easily be attributed to Apple's simply offering better products at more competitive prices, he added.

For Jobs, Apple's CEO, better known on these pages as The Jerkoff (and we use the term affectionately), a 3 percent share seems unlikely to be a satisfying attainment after more than 20 years of selling the Mac. Consider whether Jobs would be able to deem the iPod a success if it had gained only 3 percent of the market for portable players. After all, he gave Microsoft's poor Zune exactly one month to succeed before he mocked the device's 2 percent market share at the Macworld conference in January.

The best time for gaining market share is when your main competitor stumbles while introducing an entirely new version of its core product. Thanks to Microsoft's lumbering pace, The Jerkoff had six long years to look forward to the moment when XP would be replaced by Vista.

When the long-awaited moment arrived, Vista turned out to be in just as sorry a state of semi-completion as Jobs could have hoped for. Many pieces of hardware that customers already owned, like printers, turned out to be incompatible with the new Vista models. The spectacle of Microsoft's customers scrambling to avoid buying machines with Vista was a sight to be savored for those watching from Apple's offices in Cupertino, California. Dell had to retract its initial all-Vista policy and reintroduce an XP option to appease distraught customers.

The Mac was seemingly well positioned for the moment in many ways. The transition to Intel microprocessors was complete. The OS X Tiger was a sleek, feature-rich, polished operating system. Leopard, the next iteration, is scheduled to be released in October.

The I'm-a-Mac/I'm-a-PC commercials that began in 2006 found endless ways to draw entertaining comparisons between the joys of owning a Mac and the hassles of owning a PC. The evolution of the software industry also worked in the Mac's favor: Users spent far more time within a browser, insulated from operating system-specific software, and the Mac's new Intel foundation made it easy to run Windows applications speedily on a Mac.

The official line from Apple is that all has gone swimmingly. The company said it shipped 1.52 million Macs in the first quarter of this year, up 35 percent from a year ago. In the second quarter, through June 30, it shipped 1.76 million Macs, up 32 percent from a year ago, a quarterly record.

Funny thing, though: Based on the ratio of Windows and Macs actually in use, no gains can be seen for Apple. The Mac's share of personal computers has actually edged a bit lower since Vista's release in January, and the various flavors of Windows, a bit higher, according to Net Applications, a firm in Aliso Viejo, California, that monitors the operating systems among visitors to 40,000 customer Web sites.

To try to win over customers when Vista appeared, The Jerkoff and his managers did not enlist retailers for the Mac with the same enthusiasm they showed in building the network of retail stores for the Apple. In the war for operating system share, there is no substitute for boots on the ground to retake territory, shelf by shelf.

http://www.iht.com/articles/2007/09/16/news/digi17.php

Next Up for Google: Launch MSFT Powerpoint Killer

Henry Boldget, famed Silicon Valley cheerleader, reports that after initially being skeptical of Google Docs and Spreadsheets, we now use them incessantly. We still use Word and Excel, but only rarely, and the former usually off-line or because people still occasionally send us Word documents (hint: don't! Just publish using Google Docs and send the link). We assume Microsoft finally understands the seriousness of this challenge--it's classic disruption*--but we can't understand why it is taking the company so long to respond with an online Office suite of its own. In the meantime, however, Google Apps are now being adopted by corporations and the company is about to launch its PowerPoint killer--which we, for one, can't wait to use. The Inquirer has more:

The coming-out party for the [Powerpoint Killer] is any day now. Called Presently, the slideshow program is likely to be based in part on code Google bought through the acquisitions of Zenter and Tonic Systems earlier this year.

Google had a bit of a coup last week when it said that ancient white-collar services group Capgemini will push Google Apps. Presently will be a near certainty to go into that suite, alongside web-based WP, spreadsheet and communications tools. Call it a PowerPoint killer or PowerPoint clone but, with Presently, Google now has a suite of the main productivity tools office dweebs spend one third of their lives in.

http://www.alleyinsider.com/2007/09/next-up-for-goo.html

Apple, AT&T: Bosom budds or odd couple?

AT&T is straddling a precarious line between partnering and competing with Apple in the mobile music market. The company’s exclusive deal to sell Apple's iPhone for use on its network in the United States has been the envy of the wireless industry for more than nine months. But managing its own mobile music strategy while working with a tight-lipped and controlling partner like Apple is proving a challenge for AT&T, particularly as Apple launches new products and services that may compete with AT&T's own.

Like many partnerships in the tech industry, the Apple-AT&T combination is increasingly looking like "co-opetition," a term used to describe business partners that also compete. Apple, of course, is no stranger to co-opetition: For years, Microsoft, to name one company Apple works with, has sold software to run on the Macintosh operating system despite its own, more dominant Windows OS. Now AT&T is learning that the blurring of self-interest and cooperation is the price of doing business with a fast-moving outfit like Apple.

"With this deal, AT&T thought like a traditional phone company, focusing mostly on driving subscriber growth," said Michael Goodman, director of digital entertainment for market research firm Yankee Group. "But the partnership with Apple won't make AT&T a successful provider of digital entertainment."

AT&T is no stranger to mobile music. The wireless company, which until the merger of AT&T and BellSouth was known as Cingular Wireless, introduced its first music-capable phone, the Nokia 3300, in July 2003. Two years later, it introduced the Motorola Rokr, the first iTunes-enabled cell phone. But the phone (which was panned by critics for its 100-song capacity and was upstaged by the simultaneous unveiling of Apple's iPod Nano) is considered a flop.

Apple by far outpaces sales of all three major cell phone operators who sell music to mobile subscribers. In fact, all three carriers--AT&T, Sprint Nextel and Verizon Wireless--sold as much music for all of 2006 as Apple sells on average in three or four weeks, according to Yankee Group's Goodman.

Around the same time as the eMusic deal, AT&T launched its partnership with Apple, the leader in the portable music market with its popular iTunes music store and iPod music-playing devices. Under the contract, AT&T is the only carrier in the United States to provide cell phone service to the iPhone.

But unlike other phones sold by AT&T, the iPhone is largely controlled by Apple. And while it supports Apple's own iTunes software, it does not work with AT&T's own music store

http://www.news.com/Apple,+ATT+Bosom+buddies+or+odd
+couple/2100-1041_3-6207628.html