Digital Daily » digital

Apple to Psystar: And Don't Get Any Bright Ideas About a Black Friday Sale, Either

John Paczkowski — Wed, 25 Nov 2009 11:00:29 +0000

Having diligently hewn Psytar’s legal coffin over the past year and a half, Apple has now taken up its hammer and set about nailing the Mac clone maker into it. This week, the company called for a permanent injunction against Psystar’s operations.

“Psystar…has built its business on infringing Apple’s copyrights and trademarks, free-riding on Apple’s research and development efforts, and trading on Apple’s hard-earned reputation for high quality, innovative and easy-to-use computers,” Apple said in its motion.

“Psystar’s appropriation of Apple’s intellectual property and goodwill has been systematic and brazen, from the name of Psystar’s ‘OpenMac’ computers to its deliberate pirating of Apple’s Mac OS X,” the company added.

“Psystar even seeks to profit from Apple’s efforts to protect its rights, extolling this litigation as Psystar’s ‘opportunity to gain market share,’ in a pitch to venture capitalists….Unless Psystar is permanently enjoined, it will not stop its unlawful conduct–conduct that is causing irreparable harm to Apple’s business, brand and goodwill.”

Catch that? Psystar was pitching VCs on its plan to use Apple’s IP to “compete directly against Apple.” Shameless. Little wonder Cupertino is so intent on burying the would-be rival.

And make no mistake, Apple legal is going to grind Psystar into fine silicon dust. In addition to the injunction, Apple is requesting compensation for legal costs and statutory damages owed under the Copyright Act and the Digital Millennium Copyright Act. And according to Apple’s expert witness, statutory damages for the former should run “between $1500 and $300,000″ and for the latter “between $449,500 and $4,495,000.”

Suffice it to say, that’s quite a bit more than the current value of Psystar’s assets which, according to its bankruptcy filing, are no more than $50,000.

Crikey! Eh? Microsoft-Yahoo Deal Cleared in Australia and Canada.

John Paczkowski — Tue, 24 Nov 2009 22:28:41 +0000

They’re grinning like a shot fox up at Microsoft today now that the company’s advertising partnership with Yahoo has been cleared by antitrust regulators in Australia and Canada.

“Microsoft and Yahoo!’s share of online paid search advertising queries in Australia was limited,” the Australian Competition & Consumer Commission said in its notice of approval. “In combining search engine platforms, Microsoft and Yahoo! may have been able to achieve the necessary scale to provide effective and sustainable competition to Google, which had a very large share of online paid search advertising queries.”

Great news for the two companies, whose plan to consolidate two of the search market’s three largest players is currently under review by antitrust regulators at the U.S. Justice Department. Should it be approved, Microsoft (MSFT) and Yahoo (YHOO) will together control nearly 30 percent of the U.S. search market, giving them a better chance to compete with Google (GOOG), which holds a roughly 65 percent market share.

“We continue to believe that this deal will create a true, competitive alternative in the marketplace that will benefit consumers, advertisers and publishers,” the companies said in a joint statement. “We remain hopeful that the agreement will close in early 2010.”

Does This Mean We Can Expect a Live Nation "iTunes Convenience Fee"?

John Paczkowski — Tue, 24 Nov 2009 20:10:08 +0000

This year, Live Nation, the world’s largest concert promoter, will put on some 22,000 live shows–each one attended by carping about the asinine “convenience” and “courtesy” charges the company likes to tack on to ticket purchases. Funny, isn’t it, how quickly a $28 show can become a $50 one?

But much as concertgoers might loathe the idea of giving Live Nation (LYV) even more of their money, they may soon do so. Because beginning today, the company is offering exclusive audio and video recordings of some of its events through Apple (AAPL) iTunes. Prices start at $7.99, which seems astonishingly reasonable for live recordings of this quality. More so when you factor in Live Nation’s involvement.

Not an original idea, by any means; Metallica, Primus, The Pixies, Phish and others have been peddling soundboard recordings of their shows through their official sites for years now. But this is the first time, I think, that we’re seeing the live side of the music business really leverage iTunes and its massive installed base.

And, let’s face it, this is a great idea, indeed. I saw two live shows in the past few months and happily paid $10 and $14 for soundboard recordings of each. But I had to spend some time seeking them out, creating a new customer profile, etc. It would have been much nicer to just fire up iTunes and buy them both with one click.

2009 PC Sales Not So Lousy After All

John Paczkowski — Tue, 24 Nov 2009 19:00:45 +0000

[ See post to watch video ]

Brocade Not Interested in HP, Oracle Bromance

John Paczkowski — Tue, 24 Nov 2009 17:46:23 +0000

Will Brocade be tech’s next big buyout?

Evidently not. During a post-earnings conference call Monday, Brocade (BRCD) CEO Michael Klayko said the company has not “quietly put itself up for sale” as people familiar with the matter told The Wall Street Journal back in October.

“That is just false,” Klayko said of the rumors, which claimed Hewlett-Packard (HPQ) and Oracle (ORCL) as possible suitors.

Guess those reports that Brocade had hired Frank Quattrone’s merchant banking boutique Qatalyst to shop it around were a bit off …

Nokia R&D Workers Researching and Developing New Job Leads, Redux

John Paczkowski — Tue, 24 Nov 2009 16:12:04 +0000

Nokia is taking the ax to its research and development group. Again. This morning the company said it would cut around 220 R&D jobs in Japan. This, just four days after announcing plans to eliminate 330 jobs in Finland and Denmark.

The stated reason for the reductions: An effort to better align the company’s operations with its focused portfolio of future products. Seems Nokia (NOK), which typically spews out 50 or so new phones a year, many of them unremarkable, plans to concentrate on a smaller number of more “iconic” devices going forward.

In other words, Nokia is going to work a little harder to catch up with Apple (AAPL), which has really shown up the company these past few years. As Bengt Nordstrom, chief executive of telecom consultant Northstream, told Reuters earlier this year: “As much as iPhone and App Store is a success for Apple, it’s a humiliating defeat for the rest of the mobile industry. Twenty years of efforts from operators and vendors to create mobile applications that customers like is overtaken in a heartbeat by someone that never done it before.”

Latest PC Shipment Forecast Considerably Less Hysterical Than Predecessors

John Paczkowski — Tue, 24 Nov 2009 12:30:21 +0000

So that 11.9 percent decline in PC shipments that was supposed to occur this year? Not gonna happen, says Gartner. Neither is the 9.2 percent decline the research outfit projected back in March. Same for the 6.6 percent decline it forecast in May, the six percent decline predicted in June and the two percent decline it foresaw in September.

Nope. Turns out that 2009 PC shipments, which were once thought to be headed for certain disaster, aren’t going to decline at all. They’re going to grow.

By 2.8 percent.

Seems that rising consumer demand for netbooks is boosting unit sales to better-than-expected levels. That said, the market value of those sales is still projected to decline.

“Blame this year’s drop in market value on the unprecedented declines in PC average selling prices (ASPs) we’ve seen this year,” said Gartner (IT) research director George Shiffler. “The rapid decline in PC ASPs reflects a marked shift towards lower price points as customers have looked for ‘good enough’ PCs at the cheapest price, and vendors have tried to spur market growth by catering to ever-lower price points. We expect PC ASP declines to slow as the market recovers, but given the market’s competitive dynamic, we don’t see PC ASPs rising any time soon. As a result, growth in the market value of shipments will significantly lag shipment growth next year and beyond.”

One last point worth noting here. Despite Microsoft’s (MSFT) claims that sales of Windows 7 have been “fantastic,” Gartner says the operating system isn’t likely to have much impact on holiday PC sales. “We just don’t see consumers buying new PCs solely because of Windows 7,” said Shiffler. “We are expecting a modest bump in fourth-quarter consumer demand as vendors promote new Windows 7-based PCs, but the attraction will be the new PCs, not Windows 7.”

According to Shiffler, “The more critical question is, ‘When will businesses make their move to Windows 7, and what will they do about replacements in the interim?’ We don’t see businesses mainstreaming Windows 7 much before the end of 2010. We think many businesses will try to shift replacements to the back end of next year so as to sync their adoption of Windows 7 with their PC refresh. That will put a damper on early 2010 shipments.”

HP Earnings in Line With Guidance

John Paczkowski — Mon, 23 Nov 2009 21:41:50 +0000

After market close Monday, Hewlett-Packard (HPQ) reported fourth-quarter earnings that were in line with the forecast the company gave earlier this month when it acquired networking equipment maker 3Com. Excluding items, HP earned $1.14 a share on revenue of $30.8 billion, down eight percent from $33.6 billion a year earlier. Analysts had expected earnings of $1.13 a share, on $30.4 billion in revenue.

“HP’s solid performance in Services drove record profit, and the accelerated pace in signings creates strong momentum going into 2010,” said CEO Mark Hurd. “Our operational execution and improving cost structure generated strong quarterly and year-end results. We expect to outperform the market due to our significant scale, broad portfolio and market-leading position.”

Looking ahead to its first quarter, HP sees revenue of $29.6 billion to $29.9 billion and diluted earnings per share of 90 cents to 92 cents.

AOL Now Aol.

John Paczkowski — Mon, 23 Nov 2009 19:00:02 +0000

[ See post to watch video ]

Apple Joins AT&T/Verizon Spat With New iPhone Ads (See Them Here!)

John Paczkowski — Mon, 23 Nov 2009 18:19:50 +0000

Verizon’s merciless razzing of AT&T has finally elicited a reaction from Apple. Presumably peeved at seeing its marquee product banished to the “Island of Misfit Toys” in one of Big Red’s new holiday ads, Apple is launching a pair of new iPhone ads that tout the smartphone and the network on which it runs.

Scheduled to run tonight during programs like “House,” “The Daily Show” and “Dancing With the Stars,” the Apple (AAPL) ads tout the iPhone’s ability to handle data and voice simultaneously, something Verizon’s (VZ) CDMA network does not permit. “Say you’re on a call with a client and he asks, ‘did you see my email?’ You can say, ‘yep got it right here,’ all without ever leaving the call,” the ad explains. “Can your phone and your network do that?”

[ See post to watch video ]

Interesting to see Apple’s commercial messaging for the iPhone, which has to date focused on hardware and software, suddenly extended to include the features of the AT&T (T) network on which it runs. Apple, for its part, tells me the ads were done without any involvement from AT&T, and that may well be the case. But coming as they do after Verizon’s “There’s a Map for That” parody and a handful of other AT&T-bashing ads in which the iPhone is an unwilling participant, it’s hard not to view the new commercials as Apple coming to the defense of its exclusive carrier partner.

PREVIOUSLY:

Broadpoint AmTech Analyst Would Like His Verizon iPhone NOW, Please

John Paczkowski — Mon, 23 Nov 2009 16:31:25 +0000

June 2010. That’s when AT&T’s iPhone exclusivity contract with Apple expires–according to Broadpoint AmTech analyst Brian Marshall, anyway.

In an interview with Bloomberg, Marshall once again said he believes Apple (AAPL) will bring the iPhone to Verizon (VZ) in the second half of 2010 and forfeit AT&T’s (T) sweetheart carrier subsidy as a result. This is, of course, essentially what he said a month ago, although now we appear to have a firmer date.

“While [Apple] started off with exclusive arrangements in 2007 with the original iPhone launch, the company has since migrated towards multiple carriers per region,” Marshall wrote in an October note to investors. “In our view, diverse carrier support is a key element to driving global penetration of the iPhone. Therefore, we believe the chances are high the iPhone will find its way onto the [Verizon] network in 2H10.”

Smartphone Price Cuts Ruining Long-Term Price Potential?

John Paczkowski — Mon, 23 Nov 2009 15:32:50 +0000

As we head into the holidays, smartphone prices are dropping to points that belie their advanced feature sets. While this is great news for consumers, it may well be problematic for smartphone manufacturers.

According to NPD Group’s latest Mobile Phone Track study, price cuts on devices like Apple’s (AAPL) iPhone and RIM’s (RIMM) Blackberry Curve inspired a three percent decline in the average price for all cellphones in the third quarter of 2009. The overall average purchase price for mobile phones in the U.S. for the period: $85. A year ago it was $88.

An interesting trend given the fast-advancing feature sets and presumably high development costs of the new state-of-the-art smartphones we’re carrying around these days. For while these lower prices mean more sales for smartphone manufacturers and more subscribers for their carrier partners in the short term, they may well be undermining the smartphone’s price potential in the long term. It’s hard not to see the $299.99 Palm (PALM) Pixi for $24.99 on Amazon (AMZN) or the $499.99 Droid Eris for $49.99 on Overstock (OSTK) as having some deflationary impact once those retailers are done with them.

“That impact will continue,” NPD analyst Ross Rubin told me. “The iPhone 3G at $99 has created a benchmark that competitors are responding to with handsets such as the Droid Eris and Palm. Even where a handset is competing closer to the $200 mark, carriers and retailers are using buy-one-get-one promotions (that help lock in family plans). And retailers are discounting even value-priced smartphones further to drive store traffic and accessory sales.”

Rubin’s conclusion: “We will soon reach the point where the handset is a minor expense consideration and the required monthly data fees become the limiting factor in smartphone adoption.”

Ciena Snags Nortel's Optical Business

John Paczkowski — Mon, 23 Nov 2009 13:30:28 +0000

Ciena is buying Nortel Networks’ optical networking and carrier Ethernet business after besting an offer from Nokia Siemens in a three-day auction. Ciena will pay $769 million for these assets from the now-bankrupt company, noting that they will significantly bolster its Internet infrastructure business. Given the way the market for Ethernet equipment has defied the econalypse, that will likely prove the case.

But the acquisition is not without risks. It poses a massive integration challenge for Ciena (CIEN), the likes of which the company has never dealt with before. As Jefferies & Co. analysts wrote in a research note this morning, “We can’t think of anyone in Ciena’s management team that has ever been involved in–much less integrated–an M&A deal like this.”

Weekend Update 11.21.09–The House of Cards Edition

Drake Martinet — Sat, 21 Nov 2009 20:30:55 +0000

In tough economic times like these, even the biggest businesses get the urge to restructure, reorg and reshuffle.

Kara began Monday with some of the hard facts from the pending AOL-TimeWarner (TWX) split. Stock issued for the post-spinoff AOL places the company’s total implied value at around $3 billion. Also on the list of stuff from 1994 being jettisoned from tech companies is the original instant messenger, ICQ. Kara reported that AOL seeks to shed the brand in an effort to keep the larger ship afloat. Over at Yahoo (YHOO), Kara opened the lid on CEO Carol Bartz’s shifting of top execs. In Silicon Valley’s house of cards, everyone watches out for a shuffle.

Over at Digital Daily, John brought some hard numbers to the stresses being felt by AT&T’s (T) 3G network thanks to a certain fruit-flavored smartphone. It seems that the iPhone is largely responsible for the 2,000 percent increase in data traffic in the San Francisco Bay Area compared with a year ago. (Weekend Update doesn’t claim sole responsibility.) Keeping up with layoff news these days is almost a full-time job. It’s a good thing Paczkowski is on the case. This week, Sony-Ericsson let roughly 2,000 employees go. The firm plans to shutter whole offices in both the United States and abroad. John finished strong with a whole slew of posts about the forthcoming Google (GOOG) Chrome OS, which was released in a developer’s beta this week. Next year, the good kids may be getting their stockings filled with Chrome rather than Apples.

You can never tell what MediaMemo will have up its sleeve in a given week, and this one was no exception. Peter came in early with reports that Wired magazine is another publication betting on a certain tablet. Wired may pave the way for other Condé Nast publication e-editions. From the department of “Hey, it looks like it worked for them,” a couple of music giants will release a Hulu-like service for music videos. No word yet on whether the Internet killed the video star. Peter closed it out this week with the fizzle that will be Oprah’s broadcast career. The talk-show-host-turned-deity will end her broadcast career in 2011, but may not be sorely missed by CBS, according to MediaMemo. Everyone is pretty torn up about Gail leaving though.

Personal Technology went a little off the reservation this week and covered an intriguing specialty gadget with a very specific target audience. The reading aid for the visually impaired is unusual for many reasons, not the least of which is that its branded Intel (INTC) both on the inside and outside. The reader uses a downward-facing camera to read text and translate it directly to speech. Walt was pleased with the device on the whole, though he encountered some bugs and a somewhat steep learning curve that may be a function of the novel nature of the product. Over at Mossberg’s Mailbox, the lead question this week was about data loss. Once the geek shudders stopped, Walt let the reader know that there are many alternatives to Apple’s (AAPL) Time Capsule drives, and the integrated Time Machine option is one useful alternative. At Mossberg Solution, Katie won a fight with a Pixi and brought us the blow-by-blow account. The cheap-and-cheerful version of the Palm (PALM) Pre features a stripped-down price. That savings came at too high a performance cost, said Katie. She praised Palms webOS, but came down on the side of spending a little more to get the Pre.

Stay tuned and check back often. Weekend Update will be back next week as long as we can make it out for the Black Friday sales with all our fingers and toes.

Nokia R&D Workers Researching and Developing New Job Leads

John Paczkowski — Fri, 20 Nov 2009 18:21:53 +0000

Nokia’s workforce is deteriorating nearly as fast as its share of the mobile phone market. This morning, the company–which sacked 1,700 employees in March and another 450 in April–said it will cut 330 more jobs in its research and development group. But not to worry, says Nokia, that’s just two percent of the company’s 17,000-strong R&D staff.

Another sad turn of events for Nokia (NOK), whose dominance of the smartphone market is being steadily eroded by competition from the likes of Apple (AAPL) and Research In Motion (RIMM). In its latest quarter, the company’s smartphone market share declined to 35 percent from 41 percent. This slide is likely to continue unless Nokia is able to inspire a major revival in its smartphone volumes with a worthy iPhone rival.