The Technophilez

Other PC makers are reportedly looking to slim down their laptops like Apple did this month with its MacBook Air.
Intel (NSDQ: INTC) has reportedly sold a version of the miniaturized Core 2 Duo processor in Apple's recently released MacBook Air to other manufactures, which could then build Windows-based competitors to the ultrathin and light notebook.

Two PC manufacturers have already signed on to use the custom-designed chip, and products powered by the processor are expected to be released soon, CNET and tech magazine PC Advisor reported Wednesday, both quoting a source familiar with the plans.

An Intel spokesman declined to give any sales details but did note that Apple is the only hardware manufacturer that sells a laptop based on this specific Core 2 Duo processor.

"If other OEMs are interested in this 65-nanometer Core 2 Duo processor, we are welcome to talk with them," an Intel spokesman told InformationWeek.

Apple chief executive Steve Jobs unveiled the Air this month at the Macworld conference in San Francisco. The thinness of the notebook was achieved in part by a miniaturized 65-nanometer Core 2 Duo processor that came from Intel's older Merom line. The processor is 60% smaller than the typical Merom chip and uses less power while delivering comparable speeds. The processor, however, is significantly slower than the latest Intel Core 2 Duo processors used in other new notebooks. Performance is not necessarily an issue with Apple as it customizes its operating system to maximize performance out of any processor it uses.

Nevertheless, the size and weight of the Air, which has a 13.3-inch display and full-size keyboard, placed the machine in a class of its own. The notebook weights 3 pounds and is three-quarters of an inch thick at the hinge, tapering to 0.16 of an inch at the opposite side.

Intel is working on smaller chips for ultramobile PCs and handheld devices, including a processor that's built using 45-nanometer process technology. But miniaturizing the Merom processor gave Intel a product that would fit Apple's slim design for the MacBook Air and deliver the necessary horsepower.

In making the Air thinner than other notebooks, Apple also left out a DVD drive, adding instead software called "remote disc" that can recognize an optical drive on a PC or Mac computer through a wireless network. Tapping into those machines, an Air user can install software from a CD or DVD.

The MacBook Air design has also caused some frustration among Mac users who want to use software from older Macs to install the sleek new laptop's operating system. The installation media that comes with other Macs can't be used to install "Leopard" on the MacBook Air, Apple said Wednesday.

Apple TV customers will have to wait a bit longer to be able to rent movies.

The company recently added movie rentals as a feature to its iTunes store. Consumers can now watch those movies on their iPods or computers, but in order to view them on Apple TV, they're going to need to install a software upgrade.

Apple had promised to have the free upgrade available by the end of this month, but the company announced Wednesday that customers will have to wait another week or two for it.

"The new . . . update . . . is not quite finished," the company said in a statement.

Apple TV represents the company's effort to allow customers to enjoy the movies and music available through the Internet on their living room entertainment centers. The first version of the device was a disappointment, as company Chief Executive Steve Jobs acknowledged earlier this month at Apple's Macworld conference. The software update is an attempt to address some of its shortcomings and Apple's video service.

The software delay is only the latest in the past year for the company. Last year, the company postponed the release of both Apple TV and Leopard, the latest version of its Macintosh operating system.

While the Apple TV update is running behind schedule, the company's new Macbook Air computer is not. Apple also announced Wednesday that it has begun shipping the lightweight notebook, right on schedule.

With its focus on getting consumer computers in retail stores, Dell (Dell) on Wednesday said it would close its mall kiosks in the United States.

Dell launched the kiosks in 2002 in order to give people the chance to touch products before purchasing them direct from the company. Faced with lagging sales, the company last year moved quickly to add retailers as an option for people considering a Dell system. The company continues to also sell directly.

Dell said it would close its 140 U.S. kiosks, but facilities outside the country would remain open. "This move fits in with how our broad global retail strategy is evolving," Tony Weiss, VP of Dell's global consumer business, said in a brief statement announcing the closures.

Dell computers are available today in more than 10,000 stores worldwide, according to the company. Retailers include Best Buy (NYSE: BBY), Staples, and Wal-Mart in the United States; DSG International, Carrefour and Tesco in Europe; Courts in Singapore; Gome in China; Bic Camera in Japan; and Carphone Warehouse in the United Kingdom. Wal-Mart is also selling Dell computers in Canada, Brazil, and Mexico.

A majority of customers still choose to buy laptops, desktops and other products directly from Dell, via phone or the Internet. The company, however, decided to seek partnerships with retailers after watching Hewlett-Packard grab market share for more than a year to eventually surpass Dell as the world's largest computer maker.

Among consumers, HP (NYSE: HP)'s strength has been in selling through retailers, as well as direct, eye-catching machines with lots of horsepower for entertainment applications. In trying to gain share in the consumer market, Dell has recently shipped its own brand of high-end entertainment PCs.

As computers take on a bigger role beyond business in people's lives, the market has grown, and manufacturers have had to turn to design to catch consumers' attention, while also making sure the machines have the capabilities people want.

The importance of how a computer looks has made retail stores more important than ever for Dell and other manufacturers. People want to see the computer, touch it, and operate it next to other machines.

Some customers that pre-ordered the MacBook Air are receiving notification that the notebook has shipped. The MacBook Air was first introduced during Apple CEO Steve Jobs keynote speech at Macworld earlier this month at Macworld Expo.

The first notifications from Apple -- one of which was received by a Macworld employee -- said the MacBook Air would arrive on February 1, 2008. That is slightly over the two week time period that Apple set out for delivery during its introduction, but only by a few days.

Shipping times are listed at 2-3 weeks on the online Apple Store this afternoon.

Microsoft Corp. Monday gave users of its Office 2003 application suite a 30-day warning that it will begin pushing the software's Service Pack 3 via Microsoft Update next month.

The notice followed a dustup earlier this month over new security settings in Office 2003 SP3 that blocked access to a swath of older file formats. After users complained on the company's support forums, and a software rival asked why its files were being barred, Microsoft apologized and posted work-arounds to make it easier for users to unblock the formats.

Monday, Microsoft announced that it would add Office 2003 SP3 to its Microsoft Update listings beginning Feb. 27. Microsoft Update, a companion service to Windows Update, downloads patches and other fixes for the operating system as well as a number of the company's applications, notably Office.

"Those customers who have not already installed SP3 and that have chosen to receive updates automatically will start to receive the service pack as early as February 27," a Microsoft spokeswoman said today in an e-mail. "[But] the distribution through [Microsoft Update] is a gradual process and so not every customer will see the service pack on February 27."

Microsoft Update and Windows Update take their instructions from the client PC's Automatic Updates settings; those let users specify whether updates will be automatically downloaded and installed, downloaded but not installed, or not downloaded.

Users who do not wish to automatically upgrade their copies of Office 2003 must set Automatic Updates to the second or third option above.

Microsoft's Office and Update teams said that the warning is in keeping with a policy that debuted with Office 2007 SP1, when the company promised that it would give users a 30-day warning before turning on an automatic service-pack update. In December, Reed Shaffner, worldwide product manager for Office, promised that Microsoft would not use Microsoft Update to deliver Office 2007's SP1 for at least three months, perhaps longer.

"This policy seems to have worked really well with SP3 because it gave the market plenty of time to evaluate the service pack, gave us time to address concerns, and now we can push it to the hundreds of millions of users who depend on us to keep them secure," said the two teams in a combined posting to a company blog.

Office 2003 SP3 was unveiled by Microsoft last September and has been available for downloading from the company's Web site since then.

Bidding remained stalled Tuesday on a key piece of spectrum in the U.S. government's wireless airwaves auction, prompting concern regulators will have to modify rules requiring some of it be shared with public safety agencies.

After 12 rounds of bidding over four days, the Federal Communications Commission still has received only one bid for a portion of the 700-megahertz airwaves known as the "D" block, that could also be used by police, firefighters and other public safety officials.

Top bids for all five spectrum blocks on offer reached nearly $8.66 billion on Tuesday. The auction is widely expected to net the federal government at least $10 billion.

The lone $472 million bid for the D block spectrum, which came in the first round of the auction last Thursday, is far below the $1.3 billion minimum price set by the FCC.

Rep. Edward Markey, chairman of the House Subcommittee on the Internet and Telecommunications, told a hearing on Tuesday that the lagging interest in the D block was "discouraging."

A lack of bidders for the D block could be a reflection of the credit crunch that has hurt the ability of companies to raise capital, according to industry analysts.

Under rules adopted by the FCC, the winner of the D block airwaves will be required to negotiate an agreement with public safety agencies, build out a nationwide network and then give those agencies priority use during emergencies.

If no bidder meets the minimum price for the D block, the FCC can re-auction that piece of the spectrum and possibly modify the requirements.

Several "anonymous sources" have this weekend emerged from the woodwork to spread news of the 80GB PS3 being pushed aside to make giving way to a new larger SKU.

Stories suggest that the 80GB SKU currently on sale in US is due for the chop, with a 120GB version set to replace it.

This would go hand-in-hand with a previous statement from SCEE president and CEO, who hinted last year that a 120GB PS3 could be possible.

"The difference between 60 and 80GB is very small, we just feel that going up 20GB is not worth it," he said, adding: "if you go to double it, it's worth it ... so maybe you'll see something a little bit later."

Sony UK, however, dismissed this weekend's reports as "rumour and speculation".

If the rumours turn out to be true, the 80GB console will be the third SKU axed in just over a year since the console's release. But does Sony really need to release another new PS3 so soon? It might be a different story once PlayTV is up and running.

Advanced Micro Devices today introduced a high-end graphics card whose core will also be part of its next-generation Fusion processors.

The ATI Radeon 3870 X2 graphics card combines two chips from its predecessor, ATI Radeon 3870, on one board, doubling its performance, said Patrick Moorhead, vice president of advanced marketing at AMD. The ATI Radeon 3870 had one chip on the card.

The chips, manufactured using the 55-nanometer process, are more power efficient and deliver better performance than the previous graphics processors, Moorhead said.

AMD will incorporate a graphics-processing core based on the X2 in its upcoming Fusion processor. Fusion will integrate a graphics processor and CPU (central processing unit) on one chip, said John Taylor, an AMD spokesman.

There are no overt tie-ins between Fusion and the X2, but the graphics-processing cores are expected to be similar, Taylor said.

While X2 is designed for maximum graphics performance, the graphics-processing core will be adapted for notebook platforms and implemented in Fusion, Taylor said.

AMD last week said the Fusion family's first processor, code-named Swift, will be based on the Phenom core and optimized for power management with the latest graphics and processing technology on a single chip. Notebooks with the Fusion processor are expected to be out in the second half of 2009.

Targeted at PC users who want high-end graphics, the X2 graphics board supports Microsoft's DirectX 10.1 gaming platform, Taylor said.

The graphics board plugs into a PCI Express slot, and supports up to 1G byte of memory. It includes DVI (digital visual interface) and DisplayLink ports to support external multimedia devices.

The card will support CrossfireX technology by the end of this quarter, which will allow up to four graphics cards to work together to scale multimedia performance, AMD said in a news release.

Priced at $449, the card is available worldwide.

Wall Street analysts have begun to search the globe for 1.7 million lost iPhones.
Apple said that it has sold 3.75 million iPhones through the end of last year, but AT&T has activated a bit less than 2 million phones. There was a moment of panic as investors imagined more than a million unsold iPhones piled up in the stock rooms of AT&T stores.

Upon reflection, several analysts have come to the conclusion that the vast bulk of these have been bought and unlocked to use on carriers other than AT&T in the United States and on European carriers who are Apple’s partners.

I was skeptical of this, as unlocking an iPhone is rather complex and risky proposition. But as I talked to Gene Munster, of Piper Jaffray, and A.M. Sacconaghi, Jr. of Sanford C. Bernstein, who were both convinced that there is widespread buying of unlocked phones, my skepticism abated a bit.

What about people who got the phones as Christmas presents and did not get around to activating them before the end of the year, I asked.

Mr. Sacconaghi said he believes that most people who got phones as gifts activated them right away.

“Typically people activate a phone within three days, and the holiday season is when you have the most time and if you are excited about a gift,” he said.

There are not, however, 1 million people who are going to steep themselves in the art of iPhone hacking. Rather, both analysts suggested that there are organized groups of gray market dealers who are buying up iPhones, unlocking them, and reselling them, largely overseas.

Mr. Munster, in fact, dispatched spies to monitor Apple stores in New York, San Francisco, and Minneapolis, who found that some 40 percent of the phones were sold to people who purchased more than one phone at a time.

“The majority of the people who were buying more than one phone were Asian, and they were bringing small buses of people who all buy more than one phone,” he said. Mr. Munster conjectured that many of the phones are being resold into Asia. It is hard to get an iPhone there and, he said, “With the value of the dollar, the cost of the phone is much less here.”
Mr. Munster estimates that of the 1.7 million phones not activated by AT&T 350,000 were sold through Apple’s partners in Europe, 512,000 were in inventory at AT&T and the European carriers, and 838,000 were sold and unlocked. Mr. Sacconaghi figures slightly fewer phones were sold in Europe and are in inventory, leaving 1 million unlocked phones.
I called Apple’s public relations department, which, as usual, declined to comment. On its conference call with analysts earlier this month, Apple said that a significant number of phones were sold and unlocked.

On the face of it, this isn’t good news for Apple. The company receives a payment estimated to be about $15 a month, from AT&T and other carriers, for iPhone accounts that are activated. So every unlocked phone is $360 of revenue forgone over the two year life of a contract.

But there are a few reasons why we shouldn’t shed a tear for Apple on this one.

For one, it shows great demand for the iPhone, especially because Apple has not made it easy for people deal in unlocked phones. With each software update it tries to close the software loopholes that allowed previous versions to be connected to unauthorized carriers (although hackers seem to always find new unlocking methods within weeks). And it restricts the number of iPhones people can buy at any one time.

Mr. Sacconaghi said it is possible that the gray market dealers, however, have overestimated demand and have a big inventory backlog themselves.

What is more, both Mr. Munster and Mr. Sacconaghi are convinced that Apple actually makes money on the iPhone without taking into account the payments from the carriers. Mr. Munster estimates that gross profit on each iPhone is about $50. That doesn’t take into account costs like development and marketing, but it’s still amazing given the product is so new in its life cycle. (The cost of making a product tends to go down faster than its selling price.) If true, Apple’s effective profits from the iPhone, taking into account the payments from carriers, are huge even if diluted because a quarter of the phones are being unlocked.

Moreover, Apple has several ways to reduce the percentage of phones that are being unlocked. The most significant plan is simply to expand the number of countries in which it sells the phones, giving buyers in Asia and Latin America a legitimate alternative to gray market dealers. If Apple still found all this to be a significant problem, it could certainly require customers to sign up for a service plan before they left the store. And it wouldn’t be a surprise if the next generation of iPhone, which Mr. Munster expects over the summer, has even tougher ways of keeping the phones locked.

The world's biggest music companies, including Warner Music Group Corp and Sony BMG, denied that they have agreed to license songs for a free download service that was launched by Qtrax on Monday.

Qtrax told Reuters and other media outlets last week that it had deals with the major labels representing about 75 percent of all music sales, to let users download songs for free in a new service to be supported by advertising revenue.

But by Monday, Sony BMG Music Entertainment and Warner had publicly denied that they had agreed to back the new Qtrax service.

A source close to Universal Music, the largest of the group, said it also had not signed a deal for the new Qtrax service and is still in discussions.

And a source close to EMI Group said that while its song publishing unit has an agreement with Qtrax, its recorded music arm, EMI Music, does not.

"Sony BMG can confirm it has not signed a deal with Qtrax for the ad-supported service," said a spokesman for Sony BMG, a joint venture between Sony Corp and Bertelsmann AG.

EMI Music, Sony BMG and Warner all previously had agreements with Qtrax, which was testing a paid music download service. Sources say those agreements expired in the last year and did not cover the new free, ad-supported model now being promoted by Qtrax.

  The Federal Communications Commission will begin auctioning off a large swath of wireless spectrum today that might hold the promise of delivering a robust wireless broadband alternative to cable and DSL.

The auction of the 700 megahertz spectrum includes enough capacity to help create a nationwide broadband network that can deliver faster speeds than current cellular data networks. The characteristics of the spectrum - which has broad reach and the ability to easily pass through walls - combined with the fact that it is the last section of airwaves expected to go on sale for some time, makes this auction a prime opportunity for wireless operators and, ultimately, consumers, said Kevin. Martin, chairman of the FCC.

It's "probably the most important auction we've had to date and the most important one we're going to have in the foreseeable future," Martin told the Associated Press.

But some critics fear the auction could end up being dominated by a few large companies like Verizon and AT&T, potentially stifling competition and innovation.

"Placing the promise of the mobile Internet exclusively under the gatekeeper control of these companies is a chilling prospect," said Ben Scott, policy director of Free Press, a media lobby. "We need policies that open the closed networks of today and guarantee an open wireless Internet for future generations."

Free Press has pushed a petition that would force the FCC to require all wireless carriers to open their networks to outside applications and devices. The organization hopes to ensure that consumers maintain access to choice and innovations.

The FCC hopes to gain about $10 billion from the sale of the spectrum, which is being freed by the conversion of television signals from analog to digital next year. There are 214 bidders who for 1,099 licenses that are spread over five blocks. Most of the attention has been on the C-block, the largest piece. Google pledged to pay at least the reserve amount of $4.6 billion for the C-block, which is broken into 12 regional licenses.

Last year, Google successfully lobbied the FCC to add open requirements for the C-block that would require the owner to keep the network open to any application or device.

Many analysts believe Google is not prepared to win the spectrum auction but is staying in to follow up on its commitment to openness and force a big player like Verizon to meet the reserve. If the reserve for any of the blocks is not met, the FCC can reprice that block or tinker with the requirements attached.

"Our view is that Google is participating in the bidding not to win the auction but to ensure that a wireless data network is built and that Google and others have unfettered access to it," Romeo Reyes, an analyst with Jefferies & Co. wrote in a recent report.

Auction participants are prohibited from making public statements after filing their intent to participate. The spectrum auction will be conducted electronically over the coming weeks and will extend possibly into March.

Verizon and AT&T are expected to compete directly with Google for the C-block. Other potential bidders include cable provider Cox, satellite TV carrier EchoStar and regional wireless provider Alltel.

Carlyn Taylor, a senior managing director with consultancy FTI and national leader of its communications and media practice, said she expects big players like Verizon and AT&T to scoop up most of the spectrum licenses, potentially as a defensive maneuver against competitors. But she said there is still an outside chance that Google could win the spectrum and team with a company like WiMax provider Clearwire to build a national network.

"The question is whether Google wants to become its own wireless provider," Taylor said. "It would be very interesting to have a new provider like Google."

AT&T Inc. said Wednesday it will make its 10,000 Wi-Fi hotspots free to nearly all of its broadband Internet customers starting early next week.

Only subscribers to AT&T's premium broadband services previously had free access to its hotspots, leaving out the majority of high-speed users, who have the 1.5-Mbps service.

Now, more than 10 million broadband customers, most of AT&T's high-speed Internet subscribers, will be able to use the hotspots free of charge.

"It's a differentiator for us when people are choosing between competitors," said AT&T spokesman Fletcher Cook.

Most Wi-Fi hotspots — in restaurants, airports and other public places — charge daily or monthly fees for access.

AT&T wireless customers who use Apple Inc.'s iPhone currently must get a Wi-Fi package to use their iPhone at AT&T hotspots, but they now can use their iPhones at hotspots for free if they are AT&T broadband Internet subscribers.

San Antonio-based AT&T also said Wednesday that it will introduce a faster broadband service that can send data at up to 10 Mbps. The service, at $55 per month, will be available only to customers of its Internet Protocol-based television service, U-verse.

Demand for such high speeds still comes from a relatively small segment of the overall broadband market, in part because actual Internet speeds depend on a host of variables ranging from an individual Web site's server to the flow of data on various networks.

Faster broadband services are most favored by customers who download movies and music or share a lot of photos over the Internet, all of which require heavy amounts of data to move across the network.

Hollywood laid much of the blame for illegal movie downloading on college students. Now, it says its math was wrong.

In a 2005 study it commissioned, the Motion Picture Association of America claimed that 44 percent of the industry's domestic losses came from illegal downloading of movies by college students, who often have access to high-bandwidth networks on campus.

The MPAA has used the study to pressure colleges to take tougher steps to prevent illegal file-sharing and to back legislation currently before the House of Representatives that would force them to do so.

But now the MPAA, which represents the U.S. motion picture industry, has told education groups a "human error" in that survey caused it to get the number wrong. It now blames college students for about 15 percent of revenue loss.

The MPAA says that's still significant, and justifies a major effort by colleges and universities to crack down on illegal file-sharing. But Mark Luker, vice president of campus IT group Educause, says it doesn't account for the fact that more than 80 percent of college students live off campus and aren't necessarily using college networks. He says 3 percent is a more reasonable estimate for the percentage of revenue that might be at stake on campus networks.

"The 44 percent figure was used to show that if college campuses could somehow solve this problem on this campus, then it would make a tremendous difference in the business of the motion picture industry," Luker said. The new figures prove "any solution on campus will have only a small impact on the industry itself."

The original report, by research firm LEK, claims the U.S. motion picture industry lost $6.1 billion to piracy worldwide, with most of the losses overseas. It identified the typical movie pirate as a male aged 16-24. MPAA said in a statement that no errors had been found in the study besides the percentage of revenue losses that could be attributed to college students, but that it would hire a third party to validate the numbers.

"We take this error very seriously and have taken strong and immediate action to both investigate the root cause of this problem as well as substantiate the accuracy of the latest report," the group said in a statement.

Terry Hartle, vice president of the American Council on Education, which represents higher education in Washington, said the mistakes showed the entertainment industry has unfairly targeted college campuses.

"Illegal peer-to-peer file-sharing is a society-wide problem. Some of it occurs at college s and universities but it is a small portion of the total," he said, adding colleges will continue to take the problem seriously, but more regulation isn't necessary.

Apple Inc. is in the latter development stages of what could possibly be its most significant 'dot release' of Mac OS X ever.

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Due out next month as Mac OS X 10.5.2, the update will deliver to users of the company's Leopard operating system nearly 100 code corrections and enhancements, people familiar with the software say.

Among them are twenty new fixes that turned up as part of Mac OS X 10.5.2 build 9C16, which was released privately to developers during last week's Macworld Expo. Some of the more prominent fixes in that build target problems with resuming Time Machine backups and previewing PDF, image and mail attachments.

Since seeding the first pre-release copies of the Leopard update in mid-December, Apple has asked that its developer community test the release quite broadly. The latest build arrived without exception, maintaining a list of thirty seven core focus areas that swapped out an emphasis on 802.11 wireless testing for that of Active Directory.

Mac OS X 10.5.2, which in its current incarnation includes just two known issues, will also deliver support for Apple's just-announced Time Capsule backup appliance and include a revised version of the company's "Stacks" desktop feature.

Apple is also simultaneously testing a similar update for users of Leopard Server, which currently carries a list of nineteen core focus areas and includes over 30 specific code corrections.

Delta -- or bare bones -- versions of both Mac OS X 10.5.2 client and server are some of the heftiest yet out of Apple for a "dot release," weighing in at 450.8MB and 454.5MB, respectively.

Yahoo Inc. plans to cut hundreds of jobs as part of an effort to refocus the Web portal's faltering business, a source familiar with the matter said Monday.

The layoffs would mark the most aggressive step yet by Jerry Yang, Yahoo's chief executive, to revive the company's fortunes since he took the reins last year. He's been under intense pressure from Wall Street investors to jettison underperforming units, in an effort to jack up Yahoo's profits and its moribund shares.

The job cuts are expected to number around 500, out of 14,000 employees globally, although their precise locations have yet to be finalized. They could be announced during the company's fourth-quarter earnings report on Jan. 29 along with some more information about the company's continuing reorganization.

Yahoo declined to comment directly about the pending layoffs, and instead issued a statement saying, "Yahoo has embarked on a multiyear transformation that includes making tough decisions about the business to help the company grow" and that the company "plans to invest in some areas, reduce emphasis in others and eliminate some areas of the business that don't support the company's priorities."

Yahoo is facing slowing growth under the onslaught of Internet colossus Google Inc. Even Yahoo's executives concede that the company had become too bureaucratic and failed to keep innovating fast enough against myriad upstarts, including social networking giants Facebook and MySpace, which have captured tens of millions of the Internet's eyeballs.

Since Yang took charge last year, Yahoo has been in transition to address the shortcomings. The management ranks have gone through a major reshuffle as Yang tried to flatten the decision making at the company and bring in new blood.

At the beginning of his tenure, he implemented a 100-day review in which he said there would be no sacred cows. But the deadline came and went with few visible changes other than the management shakeup and the elimination of a few unpopular features on the site, including social networking service Yahoo 360 and online auctions.

Yahoo's shares have suffered as its financial fortunes sagged. Over the past two years, the stock has dropped 40 percent during that period to $20.78, their lowest point in more than four years, making it a perpetual target of takeover rumors, usually involving Microsoft Corp.

Still, Yahoo remains a highly popular Web site with nearly 500 million users globally. The company continues to be profitable, albeit not enough to please investors.

Company executives are banking their turnaround on making Yahoo the starting point for most Internet users; establishing it as key player in the online advertising world that brokers ads not only for its own site, but for other sites too; and opening the Yahoo Web site to outside developers. The idea is to invest in Yahoo's search engine, e-mail, finance, photos and recent acquisitions in online advertising, Right Media and BlueLithium.

Yahoo's predicament is reminiscent of its troubles in 2001, when the company was caught in the dot-com bust and was forced into a series of layoffs. At that time, Terry Semel, a Hollywood studio chief, and Yang's predecessor, was called in to fix the Web portal, which faced many of the same criticisms as it does today.

AT&T Inc. on Monday unveiled business plans for Apple Inc.'s iPhone, the first time that the mobile carrier has courted corporate customers of the smart phone. But the lowest-cost data plan is still two-and-a-half times higher than a comparable consumer plan.

The news comes on the heels of reports -- still unconfirmed -- that IBM Corp. will soon add support for the iPhone to its Lotus Notes enterprise messaging system.

AT&T's new iPhone plans for businesses, which it spelled out on its Web site, come with a minimum two-year service agreement. Unlike its consumer iPhone plans, however, which combine voice and data into one fee, AT&T's business billing splits the two.

Enterprise data plans, for example, start at US$45 monthly for 200 text messages, $55 a month for 1,500 text messages and $65 for unlimited texting. All three plans bundle unlimited domestic data access via AT&T's EDGE network. Consumers' bills, in comparison, break out the 200-message data part of the lowest priced plan as just $20.

Businesses must also sign up for a new voice plan, or have an existing one in place, for each iPhone. Those voice plans are sold at standard corporate rates that range from $39.99 for 450 monthly minutes to $199.99 for 6,000 minutes monthly in plans sans minute sharing among users.

AT&T is also offering a $25 monthly credit to new iPhone accounts activated by March 31; the credit will be applied to bills through the end of 2008.

Last week, reports circulated that IBM would port Lotus Notes to the iPhone, but as of midday Monday, IBM had not made the speculation official with an announcement from its Lotusphere trade show now in progress in Orlando, Florida. On Tuesday, however, IBM is hosting a press conference where it will, according to e-mail from a spokesman on Monday, discuss "new functionality for Lotus Notes/Domino, including new Web 2.0 functionality."

AT&T is the exclusive carrier for the iPhone in the U.S.

Most people expect some flip-flopping in an election year, but not usually from their software vendor.

Nonetheless, Microsoft on Monday changed its mind again, saying it will allow users to run Vista Home Basic and Vista Home Premium as guest operating systems on a virtual machine. The news is especially welcome for Mac users who want to run the latest Windows version without having to pay an arm and a leg. Until now, Mac users and others wanting to run Vista virtually have had to fork over for the most expensive Business and Ultimate versions.

Microsoft had briefed reporters in June that it was going to expand Vista's virtualization options, but then for reasons that were never made clear, it reversed itself and never announced such a move.

The reasoning behind the limitation never made that much sense to me. Microsoft's argument was that running Vista in a virtual machine represented some security risks. The company said it was not the case that the Ultimate or Business versions had less of a security risk than the Home editions, but rather that by limiting virtualization to the pricier versions, ideally only more technically sophisticated people would make the move.

In any case, Monday's move will certainly be welcomed by enthusiasts, Mac users, and virtualization software vendors such as Parallels.

Microsoft group product manager Patrick O'Rourke said in a telephone interview Monday: "Now is the right time, we believe, to make it easier for technical enthusiasts...to experience and see if virtualization is right for them."

As for the flip-flop in June, O'Rourke wouldn't go into the specific thinking behind either the planned move or its reversal. "There was some internal discussion still occurring at the time," he said.

The Vista change was just one of several announcements made by Microsoft on Monday. The company also said it is buying Calista Technologies, a San Jose, Calif.-based company that has technology to improve the performance of remote desktops. The company has a patented approach for creating a virtualized graphics processor, which can help with 3D and other image-rendering tasks when doing so-called "presentation virtualization." Microsoft also expanded its alliance with thin-client specialist Citrix Systems.

Microsoft is also cutting the price of a new product for large businesses that want to run Vista on a server and use either a PC or thin client to act as a terminal to display the information. O'Rourke said that businesses that are part of its Software Assurance program will be able to use the technology by paying a license fee. For Windows PCs, the charge is $23 per machine a year, while thin clients will require a fee of about $110 annually.

That represents a price cut of about 25 percent to 50 percent compared with Microsoft's original plans.

Time Warner Inc pay TV channel HBO will launch a service on Tuesday to let subscribers download movies and television shows over the Web, joining a crowded market for video on the Internet.

The service, HBO on Broadband, will make its debut with a much larger library than its cable-based on-demand service in a stab at satisfying increasingly mobile and choosy viewers.

It will roll out to Time Warner Cable high-speed Internet customers in Green Bay and Milwaukee, Wisconsin, as a free add-on to HBO and HBO on Demand, HBO spokesman Jeff Cusson said.

The company has no timeline for when it will be available to all U.S. subscribers, Cusson said.

HBO is entering movie downloads as older services that sell movies on the Web are reassessing their business models.

Apple Inc this month added online movie rental to its iTunes store to bolster movie sales, while Wal-Mart Stores Inc, which launched a movie download site in 2007 to great fanfare, quietly shut it last month for lack of sales.

But DVD rental company Netflix Inc offers customers unlimited viewing of movies online as part of its subscriptions, in a move to keep customers loyal.

HBO has positioned its site as a way to keep subscribers who watch more content online, just as it gave more flexibility to time-shifting viewers with the creation in 2000 of HBO on Demand.

Cusson said the roll-out of HBO on Demand reduced the cancellation rate among certain subscribers. "They found more satisfaction with their service so they kept it longer," he said. "As more viewing occurs on the broadband platform we want to make sure we provide that option to the HBO subscription."

Targeted at younger subscribers and travelers who watch TV shows and movies on laptops, HBO on Broadband will offer 600 titles each month, with 400 of those available at any time, as well as a live stream of the main HBO channel.

HBO on Broadband will also suggest titles based on viewing habits. Programming will be available for at least a month, but will be erased from users' libraries at its expiration date.

The application can be programmed for up to five users and downloaded to five devices that use Microsoft XP or newer operating systems. An Apple version is in the works.

Each month, an HBO original series such as "Entourage," "The Sopranos" or "Sex In the City" will be available in its entirety.

Taiwanese smartphone maker HTC sold 2 million of the Microsoft-based mobile phones it developed to compete with the iPhone last year, the 'Touch' family of handsets.

At last week's Macworld Expo in San Francisco Apple CEO Steve Jobs said his company had sold 4 million iPhones since launch.

The HTC Touch uses Microsoft Windows Mobile 6 software and has a touch screen that takes up most of its face, similar to the iPhone. The Touch was launched in June of last year, just weeks ahead of the iPhone.

The company sold 11.8 million handsets overall last year, an roughly 12 percent increase over 2006, executives said.

Strong sales of the handset helped HTC's revenue grow nearly 12 percent last year as well, and the company already sees good prospects for the first quarter of this year.

"The first quarter looks good, it will be a lot better than our first quarter last year," said Peter Chou, president and CEO of HTC, at a year-end party Friday evening. Companies in Taiwan and throughout China typically host parties around this time of year as the Lunar New Year is approaching.

Some of the global economic issues that have hurt stock markets, including subprime mortgages and fears of recession in the U.S. have no impacted HTC so far in the first quarter.

"We've seen no impact from global economic turmoil. We feel pretty good about this quarter," said Chou.

Sanyo Electric Co. said Monday it will sell its troubled mobile phone operations to Kyocera Corp.

The two electronics companies have said the value of the business to be transferred is about 40 billion yen ($374 million). Including debt the deal — set for completion April 1 — is worth about 50 billion yen ($467 million), although the companies have yet to agree on a final transaction price.

Sanyo started making mobile phones in 1994 and has supplied several key mobile phone carriers for both in and outside the country.

But the company faced "intensified competition from rival companies," Sanyo said in a statement. "In order to meet the best interest of the business and its stockholders, Sanyo has ... concluded that a transfer of the business to Kyocera would be the ideal solution."

The long-anticipated sale of the mobile phone unit comes months after Goldman Sachs and other investors saved Sanyo in a 300 billion yen ($2.8 billion) bailout.

Sanyo's former president was ousted last year after he refused to make major reforms. Sanyo has already sold its small mobile phone retail business and dumped its remaining holdings in Sanyo Electric Credit Co.

Under Monday's agreement, about 2,000 employees in Sanyo's mobile phone operation will be transferred to Kyocera, which will continue to use the Sanyo brand on handsets at home and overseas.

Sanyo's widespread businesses include TVs and other home appliances, but the company has said it has set solar and battery operations as its core business. The company is aiming to book a group net profit this fiscal year through March for the first time in four years.

Kyocera has close ties with telecommunications company KDDI Corp.

Sanyo shares fell 5.04 percent Monday and Kyocera declined 3.6 percent amid a general sell-off in Asian markets. Tokyo's Nikkei 225 index dropped 3.9 percent and Hong Kong's Hang Seng lost 5.5 percent.

The Blu-ray camp has responded to the rather dramatic HD DVD player price cut from last week this weekend: If you purchase certain LCD TV models, Sony and Sharp are throwing in a “free” Blu-ray player.

Price has not been one of the advantages of Blu-ray players so far, but it appears that Sony & Co are beginning to take first shots at Toshiba on this battlefield as well. The ad package in your Sunday newspaper brought two especially interesting flyers – one from Sony and one from Best Buy.

Sony is offering a $400 rebate on the purchase of a LCD TV/Blu-ray player package, which essentially gets you the BDP-S300 for free (we’ll forget the sales tax here). Qualifying TVs are the 46” KDL-46V3000, the 46” KDL-46W3000 and the 52” KDL-52W3000, which carry MSRPs of $2300, $2500 and $3000, respectively. The instant rebate can be used for all of Sony’s current Blu-ray players (excluding the Playstation 3) and is apparently available through all retailers that offer these products.

BestBuy not only advertises this Sony program, but also a similar and time-limited promotion for Sharp TVs and Blu-ray players. Purchasing an Aquos D64-series LCD TV (for prices between $1700 and $3000) allows customers to bag a Sharp BD-HP20U Blu-ray player free of charge. The player usually retails for $500.

Of course, if you own an HDTV and simply want a cheap high-def player, the Toshiba HD DVD units are still the most attractive devices. But you’ll have to be careful what and where you buy: For example, Best Buy offers the entry-level HD-A3 (whose MSRP was dropped to $150 by Toshiba last week) for $300. Most online shops are currently selling this player for about $125.

The Blu-ray promotion includes five free movies; the HD-A3 HD DVD player includes seven or nine free movies, depending on the retailer.

The success of the video game Rock Band is drumming up revenue for the music industry.

Virtual rockers downloaded roughly 2.5 million songs in the eight weeks since the game launched on the Microsoft Xbox 360 and Sony PlayStation 3 systems.

Rock Band, developed by Harmonix, which also created Guitar Hero, comes with 58 playable songs including the Rolling Stones' Gimme Shelter and Metallica's Enter Sandman. But many more tunes can be downloaded over the PlayStation Network and Xbox Live for prices varying from 99 cents to $2.99.

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"Hopefully it helps evolve music to not just a linear art form but a more interactive art form," says Van Toffler of MTV Networks. MTV Games publishes Rock Band, along with Electronic Arts. "You look at a lot of 20-year-olds who are reticent to plop down $20 for a CD, yet they don't mind paying $25 for a DVD or $50 for a video game. … We're seeing the audience really embrace hearing new music for the first time or engaging with classic rock songs in a new way."

New songs are available weekly for Rock Band. And musicians and bands are lobbying to get their songs in the game. "As opposed to us being the aggressor, a lot of the classic bands and the biggest bands in modern music history are approaching us now to be in the game," Toffler says.

More than 1 million copies of the game have been sold, according to the NPD Group.

People with a Yahoo user name and password will be able to use that ID information to access non-Yahoo Web sites that support the OpenID 2.0 digital identity framework, reducing the amount of different log-in information people need to create, remember and enter online.

Already, almost 10,000 Web sites support OpenID, an open framework available for free to end users and Web site operators alike, according to the OpenID Foundation.

Yahoo's move will triple the number of OpenID accounts to 368 million by adding its 248 million active registered users to the rolls, the company said Thursday.

OpenID addresses one of several issues related to giving people more control of their online activities. Other groups are focusing on data portability, to let people move around the data and content they create online, so that they don't have to enter it manually in, say, every social-networking site they sign up for.

Yet other initiatives, like Google's OpenSocial, aim to create standard interfaces so that developers can create applications that run in multiple social-networking sites, instead of having to rewrite the same application multiple times for every site.

For all of these initiatives, it's critical for major Internet players to get involved, so that the benefits of standard technology and methods developed by groups like OpenID can have a real-world impact.

Unsurprisingly, in Thursday's statement, Scott Kveton, the OpenID Foundation's chairman, hailed Yahoo's support as a crucial validation of the framework that will help spur its adoption by other large Web site operators.

Other major players that have expressed interest and gotten involved in varying degrees with OpenID include Google, Six Apart, AOL, Sun, Novell and Microsoft.

Yahoo's announcement doesn't come as a complete surprise, since signs that it had been working on an OpenID implementation had surfaced. For example, a short message in the domain me.yahoo.com indicating the company would act as an identity provider for OpenID was spotted last week.

Yahoo participated in the development of version 2.0 of the OpenID framework, which the company said provides new security features. Yahoo users who log in to third-party OpenID sites should know that the log-in process doesn't reveal e-mail or instant-message addresses, Yahoo said Thursday.

Yahoo's initial OpenID service will be available in public beta on Jan. 30 and the company is working with several partners, including Plaxo, so that the Yahoo ID will work on their sites that day.

Intel's Classmate PC isn't just for students anymore. HCL Infosystems plans to sell a version of the Classmate PC to consumers and businesses in India who want a rugged, low-cost laptop.

Priced at 13,990 rupees ($356), HCL's MiLeap X laptop uses the same beefy case as the Classmate PC. But HCL -- which signed an agreement with Intel last year to produce the Classmate PC -- insists there is very little in common between the two computers.

"It is a totally different product," said George Paul, executive vice president at HCL Infosystems.

The specifications of the MiLeap X suggest otherwise. Both computers have a 7-inch LCD (liquid crystal display) screen with 800-pixel by 480-pixel resolution, a 900MHz Celeron M processor, Wi-Fi, and 2GB of flash memory for storage instead of a hard drive. They also use the same chip set, Intel's 915GMS.

The main difference between the MiLeap X and the Classmate PC appears to be a minor aesthetic change: The MiLeap X's vinyl cover more closely resembles a business folio than the blue covers typically found on the Classmate PC. The MiLeap X also comes with HCL's logo emblazoned below the display.

Last year, Taiwan's Asustek was the first to crack open the door for wider Classmate PC sales with the introduction of its Eee PC, which uses many of the same components. Intel expected Asustek to announce a version of the Classmate PC for education customers, but the Taiwanese hardware maker instead declared the Eee PC, which uses the same processor and components as the Classmate PC, would be sold to consumers.

Intel has since embraced low-cost laptops as a product segment, despite continued resistance from some executives inside the company. The company's focus on that market will intensify later this year with the release of Silverthorne, a low-cost, energy efficient processor that will appear in a number of low-cost laptops currently under development.

Toshiba Corp. on Monday announced an aggressive campaign to bolster its HD DVD movie disc format against Sony-backed Blu-ray technology, cutting prices on players to as low as $149.99.

The HD DVD camp suffered a serious blow on Jan. 4, when Warner Bros. Entertainment said it would stop publishing movies on HD DVD in May, to focus on Blu-ray and regular DVD.

That leaves only two major studios, Paramount and Universal, still supporting HD DVD, while five support Blu-