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Thursday, January 6, 2011

SEC rule likely to trigger Facebook IPO in 2012 (AP) : Technet

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SEC rule likely to trigger Facebook IPO in 2012 (AP) : Technet

SEC rule likely to trigger Facebook IPO in 2012 (AP)

Posted: 06 Jan 2011 07:00 PM PST

By MICHAEL LIEDTKE, AP Technology Writer Michael Liedtke, Ap Technology Writer – 2 hrs 5 mins ago

SAN FRANCISCO – With so many investors becoming fans of the company, Facebook will be legally required to begin sharing more information about its finances and strategy by April 2012, according to documents distributed to prospective shareholders.

Some of the numbers that began trickling out Thursday were eye-popping — most notably a net profit margin of nearly 30 percent, much higher than most people had previously speculated.

The owner of the world's largest Internet social network, privately held since it started in a Harvard University dorm room seven years ago, will be forced to open its books because it expects to have more than 500 shareholders at some point this year, according to a person who has reviewed the documents handed out Thursday. The person asked not to be identified because the documents are only being given to an elite group selected to buy a stake in Facebook through a fund packaged by the company's newest investor, Goldman Sachs Group Inc.

Surpassing 500 shareholders will catapult Facebook over a hurdle likely to lead to the company's long-awaited initial public offering of stock next year.

After a company with at least $10 million in assets has more than 500 shareholders, the Securities and Exchange Commission requires it to disclose its financial results and other details on a quarterly basis in an effort to ensure investors are adequately informed. The reporting requirement kicks in 120 days after the fiscal year in which a company exceeds the shareholder threshold for the first time.

Facebook's fiscal year ends Dec. 31, meaning it would have until late April 2012 to comply.

The company, now based in Palo Alto, could still retain a private ownership structure, but an IPO is the more probable scenario given Facebook will have to make many of the same disclosures of a publicly traded company anyway.

But Facebook founder Mark Zuckerberg, 26, has been in no hurry to take the company public, partly because he hoped to preserve a free-wheeling culture. Some analysts also think Zuckerberg, named Time magazine's person of the year for 2010, wanted to avoid the public limelight so he would have more time to mature as a leader.

To help keep the company private, Facebook sought and received an SEC exemption in 2008 that assured employees who received a class of stock wouldn't be counted toward the 500-shareholder barrier. The stock awarded those employees won't be issued until an IPO or sale of the company occurs, another factor that will pressure Zuckerberg to drop his resistance to an IPO. Zuckerberg owns about a 25 percent stake in Facebook.

Facebook spokesman Jonathan Thaw declined to comment Thursday.

Crossing the 500-shareholder barrier prompted Google to pursue its IPO in 2004 before the Internet search leader had turned six years old.

If Facebook follows a similar timeline as Google did, its IPO would probably occur during the summer of 2012.

Some of Facebook's financial information is being shared for the first time as part of the exclusive stock offering that Goldman Sachs put together in an effort to raise $1.5 billion. The minimum investment in the fund is $2 million, although some exceptions are being made for Goldman's own partners.

Some of the numbers emerging in the limited stock offering help explain why Goldman Sachs itself decided to ante up $450 million for a less than 1 percent stake in Facebook earlier this week. The investment valued Facebook at $50 billion, more than twice the current market value of Internet pioneer Yahoo Inc.

Through the first nine months of last year, Facebook earned $355 million on revenue of $1.2 billion, according to the person who reviewed the offering document. That 30 percent profit margin is in the same range as that enjoyed by Google, which posted net income of nearly $6 billion on revenue of $29.9 billion through the first nine months of 2010. Facebook produced a similar profit margin in 2009, too, with net income of $220 million on revenue of $777 million, according to the person who had seen the Goldman Sachs documents.

Like Google, Facebook is making most of its money so far by selling advertising. Facebook has emerged as a marketing magnet because it now has more than 500 million users worldwide, and the company knows a lot about them because its audience shares so much information about their interests on the website. More than 30 billion links, notes, photos and other types of content get posted on Facebook each month.

As impressive as Facebook's growth has been, just how much the business is worth remains a hotly debated topic.

The $50 billion market value implied in Goldman Sachs' investment is 25 times higher than the $2 billion in revenue that analysts believe the company had last year. Google, the Internet's biggest moneymaker so far, ended Thursday with a market value of $196 billion, about seven times its annual revenue.

Microsoft's answer to the iPad is still in pieces (AP)

Posted: 06 Jan 2011 07:13 PM PST

By JESSICA MINTZ, AP Technology Writer Jessica Mintz, Ap Technology Writer – 1 hr 51 mins ago

SEATTLE – Instead of unveiling an elegant response to the iPad, Microsoft came to the tech industry's premier gadget show with a collection of exposed computer guts.

Microsoft's biggest news was that the next version of Windows would run on the style of cell phone chips that power the iPad and other tablets today. It proved it with a series of demonstrations on half-built computers; on the monitors hooked up to those machines, the software was indistinguishable from the current Windows 7.

Microsoft's missing tablet served as a reminder that the world's largest software maker remains years from a serious entry into this new category of devices. It also raised more doubts about whether Microsoft Corp. will ever be able to grab a meaningful piece of this fast-growing segment. If it can't, Microsoft Corp.'s dominance of personal computers may become increasingly irrelevant as people embrace ever-sleeker portable devices.

CEO Steve Ballmer mostly lingered on what went right last year when he gave the company's customary keynote on the eve of the International Consumer Electronics Show on Wednesday. He had his share to boast about. Xbox 360 and the Kinect motion-sensing controller that's racked up more than $1 billion in sales in just two months, a ground-up overhaul of the Windows smart-phone software and rapid adoption of Windows 7 on PCs are all legitimate successes.

Still, it's hard for anyone to applaud Microsoft without noting the threats posed by the growing popularity of Apple Inc.'s iPad. It's also hard to see Windows as a tablet contender amid an onslaught of new tablets running Google Inc.'s Android software, which has already helped turn mobile phones into mini-computers.

Those concerns have been weighing on Microsoft stock, which has hovered around the $20 to $30 range for the past decade. Apple, on the other hand, has seen its share price more than triple since the first iPhone was announced in early 2007. Last year, Apple's market capitalization surpassed Microsoft's, making Apple the second-largest U.S. public company after Exxon Mobil Corp.

Microsoft has not been absent from the tablet discussion — Windows tablets have been around for years, but the devices never caught on with the mainstream. At last year's gadget show, Ballmer demonstrated a sleek "slate" from Hewlett-Packard Co. that runs Windows 7, and today there are several iPad-esque tablets that use Microsoft's operating system.

But those gadgets have none of the iPad's cachet, and Microsoft has done little to market them. And it's the upcoming Honeycomb version of Android, Google's first to be designed specifically for tablets, that is seen as the best shot to challenge Apple.

Many analysts and design experts say Windows 7 is doomed to fail as a tablet system because it was created with the keyboard and mouse in mind. At best, said technology industry analyst Rob Enderle, Windows 7 tablets are a stopgap measure while Microsoft pushes ahead on what will likely be called Windows 8.

Microsoft declined to make Ballmer available for an interview Thursday. Given the rudimentary proof-of-concept work Microsoft demonstrated Wednesday, and the difficulty of the task of building a multi-platform operating system, analysts don't expect a new Windows to arrive for at least another two years. Microsoft moved late in part because it didn't take tablets seriously.

"Remember, we just had the netbook scare," Enderle said in an interview. Netbooks, a class of cheap, under-powered laptops that at first ran versions of the free, open-source Linux operating system, were heralded as the end to Windows' domination. But Windows soon edged out Linux on netbooks; shortly thereafter, consumers realized the devices weren't good for such tasks as watching online video. The phase passed so quickly that when the industry moved on to tablets, Microsoft expected to see the same progression, Enderle said.

The factor Microsoft apparently failed to take into consideration was Apple, which scoffed at netbooks but took the tablet very seriously. When the iPad launched, Apple's design and marketing savvy tipped tablets into the mainstream.

"Now, they recognize that they've got a problem," Enderle said.

In the near term, worrying about Microsoft crumbling at Apple's feet seems overblown despite its stagnant stock. After all, the software maker has for years handily fended off challenges to its cash cows, Windows and Office, from the likes of Google and Apple.

The company, with more than $40 billion in cash on its balance sheet, can afford to slog from behind in areas such as search and smart phones. Its earnings rose 29 percent and revenue grew 7 percent in its last fiscal year that ended in June, while most other companies were foundering in the global recession.

Microsoft's dividends are generous and steady. Ballmer frequently draws criticism from the media but wins high praise from analysts and large shareholders for delivering quarter after quarter of strong results that just about any other CEO would envy.

But some analysts fear that missing the tablet boat might make a lethal crack in Microsoft's complete dominance in the PC market.

Wells Fargo Securities analyst Jason Maynard said he worries that even though Microsoft still generates the bulk of its wealth from corporate spending on technology, consumers are starting to have more sway in deciding the kinds of devices that make it into the workplace.

This trend, Maynard said, could become the "Trojan horse" that Apple needs to increase Mac sales to businesses, or that Google needs to chip away at Microsoft's hold on e-mail and desktop software.

When Microsoft changes direction, it must weigh the affect its moves will have on more than a billion Windows PC users. Roger Kay, founder of the research group Endpoint Technologies Associates, said this hobbled Microsoft's tablet planning. It can't afford to repeat the pattern when the next hot device trend lands.

"It's clear Microsoft has to become more nimble," Kay said. "It may be able to recover from this tablet debacle, but this won't do for business as usual."

___

AP Technology Writer Joelle Tessler in Washington contributed to this report.

Apple launches app store for Mac computer software (AP)

Posted: 06 Jan 2011 11:36 AM PST

By JESSICA MINTZ, AP Technology Writer Jessica Mintz, Ap Technology Writer – Thu Jan 6, 2:36 pm ET

SEATTLE – Apple Inc. is expanding the "app store" idea that caught fire on the iPhone and iPad to its line of Mac computers.

Mac users who have the latest version of Apple's computer operating system, called Snow Leopard, will be prompted to update their software starting Thursday. When the upgrade is complete, an icon for the new Mac app store will appear in the dock.

After launching the store software, people can browse through more than 1,000 programs for Macs. Some are free, and some will cost money; people can log in and buy software using their existing iTunes account information. As with the existing app stores for Apple's other gadgets, people can see lists of the most popular programs and rate software they purchase.

Also similar to the existing system, software developers will name their own prices. Apple will vet all of the applications before they're accepted for sale in the store.

The iPad and iPhone have been successful in part because of the tens of thousands of games and other programs available as free or paid downloads in Apple's app stores. Apple may be looking to the Mac app store to boost interest in its computers, which make up a tiny but growing percentage of the personal computer market.

The arrival of the app store for mobile gadgets "dramatically changed how software is discovered and purchased," said Phil Schiller, Apple's top product marketing executive, in an interview. "It will have a big impact in the desktop world as well."

Among the programs for sale on Thursday are Apple's own iLife programs for organizing photos, editing video and other tasks, which will be sold separately for $14.99 each, and iWork programs for creating documents, spreadsheets and presentations, for $19.99 each.

The Mac app store is available in 90 countries starting Thursday. People who use older versions of the Mac operating system will not be able to access the app store.

CES: Photo frame turns 2D snapshots into 3D, no glasses required (Ben Patterson)

Posted: 06 Jan 2011 06:45 PM PST

By Ben Patterson ben Patterson – 2 hrs 19 mins ago

ViewSonic's latest photo frame has a clever trick up its sleeves: it converts standard 2D photos into 3D, then displays them on an eight-inch autostereoscopic display—meaning you won't need glasses to see the 3D effect. Neat? Sure. Great 3D quality? Read on.

On sale now for about $200, the ViewSonic 3DPF8 (not much of a name, I know) looks pretty much like your standard digital photo frame, complete with an SD/MMC memory card slot, a slideshow mode, and touch-sensitive controls on the front bezel.

Just plug your digital photos into the ViewSonic's memory card slot and the frame will interpolate the 2D image into 3D, which it then displays on its bright eight-inch 3D display (which, as I understand it, words its glasses-free magic with the help of parallax barrier technology).

OK, but does Viewsonic's 3D frame really do the trick? Well … sort of.

You do get a definite sense of depth from the image, with the photo appearing to stretch behind the frame. And if you're viewing the photo from precisely the right angle, you will get the uncanny sense that you're seeing an actual 3D image—although "sense" is the key word here.

After looking a little too hard, though, the double images in ViewSonic frame made me feel a little dizzy, mainly because it felt like my eyes were crossing. Not helping matters is the display's relatively low 800-by-600 resolution, meaning your treasured memories won't be getting the razor-sharp look they deserve.

So yes … the ViewSonic 3DPF8 makes for an interesting novelty, but I wouldn't rush out and drop $200 in the hopes that you'll get "Avatar"-level 3D out of your family scrapbook with the Viewsonic's help. You won't.

Still, that's not to say that there isn't any truly promising glasses-free 3D going on at CES this year. Toshiba, for one, is showing off a full-size no-glasses 3D display, and I'm hoping to get eyes-on with it Friday. Stay tuned for a full report.

— Ben Patterson is a technology writer for Yahoo! News.

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CES: Verizon shows off 4G LTE smartphones, tablets—but no iPhone, yet (Ben Patterson)

Posted: 06 Jan 2011 03:10 PM PST

By Ben Patterson ben Patterson – Thu Jan 6, 6:10 pm ET

Well, so much for Verizon Wireless unveiling a 4G-ready iPhone at CES.

I just came from Verizon's lavish CES press conference, and make no mistake — we saw some impressive hardware tailored for the carrier's new LTE network, including a pair of tablets (Motorola's just-announced Xoom, and a 4G version of the existing Samsung Galaxy Tab), some eye-popping new smartphones, and even a laptop or two.

But those who were hoping that Verizon would take the wraps off a 4G-enabled iPhone — or heck, any iPhone at all — came away disappointed.

Don't get me wrong. All signs point toward Apple announcing a new iPhone for Verizon, with recent chatter having it that the unveiling may come some time before Valentine's Day. But while a few had hoped that Verizon might make the dramatic iPhone reveal here at CES, well … no dice.

Still, we did get some interesting news out of Verizon's presser Thursday. We learned that a 4G version of the seven-inch Samsung Galaxy Tab is on tap for the first half of this year.

The Tab will be one of two 4G tablets on Verizon's network — the other being the 10-inch Xoom, which Motorola unveiled Wednesday night.

Also announced: the widely expected HTC Thunderbolt, an Android 2.2 smartphone with a 4.3-inch WVGA display, a 1GHz Snapdragon processor, dual cameras (including an 8MP lens in back), video chat courtesy of Skype, wireless hotspot capabilities for up to eight devices, and a kickstand.

Meanwhile, Samsung will have one of its Galaxy-style Android phones set for 4G, with the still-unnamed device slated to arrive with Android 2.2 and a 1GHz processor under the hood, a 4.3-inch Super AMOLED "Plus" display (the "Plus" refers to enhanced pixel density, while the "Super" means better visibility outdoors), and dual cameras (8MP in back, 1.3MB in front), along with the ability to act as a wireless hotspot (same as the Thunderbolt).

The previously announced Motorola Droid Bionic is also Verizon LTE-bound, as is the new LG Revolution, a 4.3-inch Android 2.2 handset with dual cameras (including a 5MP lens in back, and a front-facing camera for video chat) and wireless hotspot capabilities.

Novatel Wireless and Samsung will both have portable 4G hotspots on deck, while a pair of 4G-ready laptops will be on the way: an HP Pavillion, and a Compaq netbook.

The 10 new 4G devices should launch in the first half of the year, but Verizon didn't offer any pricing details Thursday.

Much of the Verizon presentation was devoted to crowing about the carrier's new LTE network, which is live in 38 markets now and is expected to cover most of the country by 2013.

The speedy network delivers peak download speeds of up to 12Mbps, Verizon execs bragged — but what about those pesky monthly data caps?

Well, Verizon reps wouldn't commit to anything new or exciting on that front — as in, say, ditching monthly caps altogether — but at least they said they'll "continue to look at" other possibilities.

— Ben Patterson is a technology writer for Yahoo! News.

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Samsung seeks 15 percent TV sales jump in smart TV push (Reuters)

Posted: 06 Jan 2011 08:32 PM PST

By Miyoung Kim Miyoung Kim – 33 mins ago

LAS VEGAS (Reuters) – Samsung Electronics Co, aiming for a 15 percent jump in TV sales in 2011, signaled an aggressive push into "smart" and 3D TVs this year in unveiling a procession of content and technology tie-ups with the likes of Comcast and Adobe.

The world's largest television maker is targeting 15 percent growth in 2011 sales of flat-screen TVs to 45 million units, and hopes to more than double shipments of pricier LED sets.

It aims to quadruple sales of 3D TV sets to around 8-9 million units this year, while aggressively promoting Internet-enabled TVs to goose up margins as severe price competition keeps profits razor-thin.

Shaken by their failure to inspire consumers in a recession with a new generation of TVs, major producers from Samsung, LG Electronics Inc to Sony all showed improved versions of 3D and "smart" TVs at the Consumer Electronics Show, hoping to grab a bigger slice of an emerging market where no single player dominates.

The fight over the connected living room, which enables viewers to hook up TVs to Web shows and software stored in the cloud and on personal computers, is not short of aspirants with technology heavyweights from Google Inc and Microsoft Corp to Apple Inc all joining the fray.

At the show on Thursday, Samsung TV division chief Boo-keun Yoon was joined onstage by a coterie of media CEOs, in a strong signal of its commitment to hawk an expanding line-up of Internet-enabled TVs, announcing content partnerships with Comcast and Dreamworks Animation.

Dreamworks CEO Jeffrey Katzenberg told the audience his studio's animated 3D movies, such as "Shrek," will be available out of the box on Samsung TVs, while Comcast CEO Brian Roberts touted his Xfinity on-demand online video service.

Time Warner Cable CEO Glenn Britt demonstrated how his customers, through an application on Samsung's TV apps store, would be able to access the service from Samsung's smart TVs and Galaxy tablet.

And Adobe CEO Shantanu Narayen announced that his Adobe AIR and Flash Player 10.1 would be would be made available also, letting developers craft apps for the in-built apps store.

Samsung this year aims to sell 12 million Internet-enabled TVs, which sport access to its TV Appstore, video-streaming site Hulu and social networking sites such as Twitter. The 12 million figure would make up 27 percent of its total TV shipments this year.

"Smart TV is not a simple Internet-enabled device or a computer with a large screen and no keyboard," said Kim Hyun-suk, senior vice president at Samsung's TV division.

"It allows consumers to lean back and have access to all kinds of applications and content, and connect with other devices in the home."

SMART VS DUMB TVS

Samsung booked the biggest showing area among CES participants this year in Las Vegas to showcase a plethora of products from smartphones and tablets to TVs and cameras. It dedicated a large portion to Smart and 3D TVs in particular, betting the global Smart TV market would grow to 30 million units this year.

DisplaySearch estimates that 21 percent of all TVs shipped in 2010 have Internet connectivity, and the segment is expected to grow at double-digit rates over the next four years, swelling to 122 million units by 2014.

On 3D, Samsung attributed its slow takeoff last year to a combination of high prices, a lack of available content, and the discomfort of having to watch TV with heavy glasses.

"Most of those issues will be resolved to a large extent and the market will really take off," Yoon said. "3D premium has fallen to an affordable level, content keeps growing and glasses have also become much lighter."

"When people buy a TV, they look for a product they can use for the next six to seven years. With all those issues addressed, consumers are now very likely to buy 3D sets."

In addition to a lack of 3D content, however, one of the biggest obstacles for the new technology is different formats.

Samsung, which controlled more than 50 percent of the global 3D TV market last year, is pushing for active-shutter glass technology, which requires special glasses with batteries, chips and switches to synchronize 3D signals from TV sets.

Some producers, led by Japan's Toshiba, are introducing glasses-free 3D sets, while LG Electronics is placing a bet on a new display called film patterned retarder (FPR) that makes glasses much lighter, as 3D signals are embedded into TVs.

Affiliate LG Display, which makes the rival 3D panel technology, hopes it gains traction by tapping major customers of LG Electronics, Sony, Vizio and Philips Electronics, raising the stakes in a head-on competition with Samsung.

Samsung argues moves by some TV manufacturers to introduce glasses-free sets could deter consumers from switching to 3D sets by stoking expectations that such technology may come soon.

Glasses-free TVs "will deter 3D market growth but what people are missing here is that it's unrealistic to make 3D glasses-free in large screens and full high-definition at the same time. You have to sacrifice one of them," Samsung's Yoon said.

"Such technology will be limited to small screen sets for single viewer and it's not ready yet for a larger living room-type model."

(Editing by Edwin Chan and Lincoln Feast)

Verizon CEO ponders shift to use-based mobile plan (Reuters)

Posted: 06 Jan 2011 08:08 PM PST

By Sinead Carew Sinead Carew – 56 mins ago

LAS VEGAS (Reuters) – Verizon Wireless is experiencing a boost in higher-margin wireless data subscribers thanks to a $10 limited data service it is offering, potentially encouraging the top U.S. operator to make such an offer more permanent.

While rival AT&T Inc had eliminated unlimited data services and been selling useage-based data pricing plans to smartphone customers for months, Verizon Wireless has yet to follow suit.

While tiered pricing with limited data use means heavy data users have to pay more, lower-level plans are seen encouraging people who have never used data services to try it out.

Late last year, Verizon Wireless took a tentative step in that direction with a $10 plan for data downloads limited to 150 megabytes in a temporary promotion, which lasts until the end of January.

Chief Executive Daniel Mead said the offer had helped smartphone and data service adoption, especially among customers who subscribe to mobile family plans.

"We've been very encouraged by that. We think it's helped us in terms of getting more members of a family using data," Mead told Reuters at the Consumer Electronics Show.

The executive said the promotion would end in January but said the company is evaluating if its success could lead to a more permanent plan.

"We're considering every option," he said.

Smartphones and data services have become key to growth in a U.S. market where most consumers already own cellphones but a smaller number pay for services such as mobile Web surfing.

At CES, Verizon showed off 10 new devices it plans to sell in the first half of this year for a high-speed network it is building based on Long Term Evolution (LTE) technology. It said the network offers a speeds ten times or more faster than its older service.

Mead, who took the top job at the venture of Verizon Communications and Vodafone Group Plc late last year, said the new LTE service and devices would help spur increased consumer demand in data.

"We're coming into an important phase of growth. I think we're going to see customer growth. We're going to see customer engagement in different ways," Mead said.

He said the services will also keep Verizon ahead of its rivals, allowing it to hold onto its market lead.

"It's going to be a phenomenally competitive offering." he said. "I think you're going to see the other carriers are going to have a lot of work to do chasing us."

(Editing by Lincoln Feast)

LG eyes 2-3 times rise in smartphones, focus on high-end (Reuters)

Posted: 06 Jan 2011 08:00 PM PST

By Miyoung Kim Miyoung Kim – 1 hr 4 mins ago

LAS VEGAS (Reuters) – South Korea's LG Electronics Inc aims to more than double smartphone shipments this year and will focus on expanding premium products to catch up with bigger rivals, an executive said on Thursday.

LG is the world's No.3 handset maker but the business is struggling with record losses and has lost out to Apple due to weak lineups and a rise in development and marketing costs to prop up faltering sales of low-priced phones.

"It'll be difficult to make a quick turnaround due to legacy products and higher marketing spending," Ma Chang-min, vice president and head of marketing for LG's mobile communications, told Reuters in an interview at the Consumer Electronics Show in Las Vegas.

"But we are now better prepared for competition as our products such as Optimus One have gained some traction in the market and our focus in 2011 will be expanding premium product offerings."

Ma said LG sold around 7 million smartphones last year and aimed to increase the volume by two to three times this year.

LG has made progress in its smartphone business over the past six months, selling nearly 3 million units of Optimus One since its October launch. The Android phone is LG's best-selling smartphone so far.

But the firm is not out of the woods yet due to a lack of premium models and higher spending for marketing and recruiting to boost high-end products attractive enough to challenge Apple's iPhone and Samsung's Galaxy S.

Due to its focus on low-end models, LG is the world's fifth-largest handset maker by revenue, although it is ranked third in terms of unit shipment, according to CLSA analysts.

It recently introduced premium models such as Optimus 2X, which uses Nvidia's Tegra 2 dual core microprocessor, and Optimus Black.

Optimus 2X is the world's first smartphone with a dual core chip processor, which boasts low power consumption, enables faster and smoother Web browsing and improves speed of multi-tasking between applications, compared with a single-core processor.

The 4-inch screen phone also has a 8 megapixel rear camera and a 1.3-megapixel front-facing camera for video conferencing.

"Our strategy for 2011 will be improving such premium offerings as Optimus 2X and Black and grow our smartphone portion in our portfolio to be in line with the market growth, which is estimated at around 30 percent this year," Ma said.

Smartphones currently account for around 10 percent of LG's handset shipments.

LG is considering using dual core chips for its next smartphone lineups to differentiate its offerings, Ma said.

Research firm IDC estimates global mobile phone market growth to slow to 6.4 percent this year to 1.4 billion units from last year's nearly 15 percent expansion. It sees smartphone shipments rising by 31.5 percent to 380.7 million units this year, accounting for 27 percent of the handset market.

(Reporting by Miyoung Kim; Editing by Dhara Ranasinghe)

Sony aims for No. 2 spot in tablet devices (Reuters)

Posted: 06 Jan 2011 07:24 PM PST

By Isabel Reynolds Isabel Reynolds – 1 hr 41 mins ago

LAS VEGAS (Reuters) – Sony Corp aims to slide in behind Apple Inc as the world's second-largest maker of tablet devices by 2012, a senior executive said on Thursday, adding that a PlayStation phone was also a potential opportunity.

Separately, Sony CEO Howard Stringer denied he was a candidate for the chairmanship of the BBC, after a media report said last month he had been approached about the post.

Sony, considered a laggard in some areas of high-end consumer electronics, surprised some by not unveiling a tablet rival to Apple's iPad at the Consumer Electronics Show in Las Vegas.

Competitors including Samsung -- whose Galaxy Tab is out and being called by some analysts a potential iPad killer -- and Research in Motion -- which is getting positive early reviews for its PlayBook demonstrated here on Wednesday -- are pushing ahead.

But computer division head Kunimasa Suzuki said the company had ambitions to catch up quickly.

"For sure iPad is the king of tablets. But what is the second, what is the third? Who is taking the second position? That is our focus," Suzuki said. "We would like to really take the number two position in a year."

Stringer said the company was biding its time and considering whether the tablet offering should have 3D capability. "If I want to differentiate it from others, do I release it tomorrow, or do I wait till I differentiate it?"

DIFFICULT TARGET

After Sony disappointed some investors by not unveiling a new tablet, an analyst said it would be difficult for the electronics maker to achieve its goal of becoming the world's No.2 in tablet devices by 2012.

"Many electronics makers have already unveiled tablet devices since last year, and it would be extremely difficult to come up with products that are different from the others and to steal market share from the far-and-away front-runner, Apple," said T.I.W. senior analyst Takao Hattori.

"To attract consumers, Sony would have to come up with features that are totally unexpected," Hattori said.

Sony's Suzuki said he saw casual and social gaming as an area of interest for Sony, adding that a rumored PlayStation phone was "one potential opportunity," but declined to comment further.

A series of media reports have focused on 68-year-old Stringer's career prospects, with one saying part of his responsibilities would be hived off to another executive as Sony seeks to groom a successor. Last month, Britain's Daily Telegraph said he had been approached to become chairman of the BBC.

"I am not a candidate," Stringer told reporters at the CES on Thursday. "I'm not worried about the future. I am still very excited about what we're doing here. For me, this is the culmination of a dream that started five years ago."

Analysts said Stringer, who took the helm at Sony five years ago, deserves credit for pushing through necessary job and cost cuts and for trying to pull the sprawling conglomerate's diverse units together to leverage its unique combination of content and technology.

But the company has fallen behind Apple in innovations that seize the public imagination and lost ground to South Korean rivals in the flat-panel television market.

Stringer, who is expected to stand down in 2013, joked that a lifetime award for technology he was set to receive later on Thursday inspired somber thoughts.

"That does suggest, I agree, it's over," he said. "Actually, I already have a lifetime achievement award in media from the Emmys too. That was ten years ago, so it doesn't mean it's over."

Sony's shares slid 0.3 percent to 3,000 yen in morning Tokyo trade, while the benchmark Nikkei 225 average shed 0.2 percent.

For other stories from the CES, see

(Additional reporting by Edwin Chan in Las Vegas and Mariko Katsumura in Tokyo; Editing by Gunna Dickson and Edmund Klamann)

Verizon reveals first 4G wireless tablets, phones (AP)

Posted: 06 Jan 2011 06:37 PM PST

By PETER SVENSSON, AP Technology Writer Peter Svensson, Ap Technology Writer – 2 hrs 28 mins ago

LAS VEGAS – This year, the big national wireless carriers will be racing to stake their claims in the new frontier of service: ultra-fast data access — for smart phones and laptops as well as for gadgets like tablets.

The companies are boosting their wireless data speeds and revving up the marketing hype. They're moving away from talking about call quality and coverage, and focusing on data speeds: megabits in place of minutes. For consumers, there are benefits in the form of faster service and cooler gadgets. Yet some of the marketing campaigns seem designed to confuse consumers about the gadgets' speed.

At the International Consumer Electronics Show in Las Vegas this week, Verizon Wireless revealed the 10 gadgets with built-in access to its new high-speed wireless data network, including smart phones, tablet and laptops. Some are to launch as early as March.

Along with Sprint Nextel Corp.'s subsidiary Clearwire Corp., Verizon is at the forefront of the move to a new network technology, designed to relay data rather than calls. Verizon's fourth-generation, or "4G" network, went live for laptop modems in last month.

The new wireless network is the nation's fastest. Verizon is hoping to cash in on that advantage by selling tablets and smart phones that devour data.

One of the devices, Motorola Mobility Inc.'s Xoom tablet, will come with a 10.1-inch screen and two cameras: one for video chatting, the other for high-definition videos. The Xoom will begin selling by March. Initially, it will work with Verizon's 3G network but will be upgradeable to work on the speedier 4G network.

Motorola's Droid Bionic smart phone will also have two cameras, to help with videoconferencing, a data-hungry task. It will be one of the first phones with a so-called "dual-core processor" that will roughly double its computing capacity. That should help with video processing.

LG Electronics Inc., Samsung Electronics Co. and HTC Corp. are bringing out similar phones for the network. Hewlett-Packard Co. is adding 4G capability to a laptop and a netbook.

There will also be two "mobile hotspot" devices for the network: small battery-powered bricks that act as Wi-Fi access points, connecting Wi-Fi-equipped computers to the 4G network.

Verizon didn't reveal what the new devices or wireless plans will cost.

Verizon's size — by number of subscribers, it's the largest U.S. wireless carrier — and the quality of its network are helping it gain traction with manufacturers.

"By deciding to go early and go first to (4G), we sent a signal to the entire consumer electronics market that this technology would develop very quickly," said Lowell McAdam, Verizon's president and chief operating officer, in a keynote address at the trade show Thursday.

There's speculation that Verizon will get to sell a version of Apple Inc.'s iPhone this year. That would break AT&T Inc.'s exclusive hold on the most popular smart phone. But there was no talk of an iPhone from Verizon at Thursday's events.

With or without the iPhone, Verizon's new network is pressuring its competitors to step up their offerings. AT&T Inc. on Wednesday said it's on track to launch its own 4G network this summer. Also, it said it will start calling its current 3G network "4G," since it's been upgraded to be capable of nearly 4G speeds.

T-Mobile USA said Thursday that it will upgrade its 3G network to double the possible download speeds in two-thirds of its coverage area. It started calling the network "4G" in ads last fall. It, too, revealed two tablets for its network, to launch later this year.

Sprint and Clearwire have chosen a slightly different route to 4G. They've picked a 4G technology called WiMax that was ready before Long Term Evolution, or LTE, which Verizon is using.

Now, however, WiMax looks set to be a niche technology, while the rest of the industry adopts LTE. That will hamper Sprint's efforts to get competitive devices for the network. Still, it was able to launch its first 4G phone last summer, ahead of the competition. On Wednesday, it announced it would be the first to carry a 4G tablet computer from Research In Motion Ltd., the maker of the BlackBerry, some time this summer.

The most distinctive feature of 4G technologies like LTE and WiMax is that they're designed to carry data rather than phone calls. That makes them more efficient at serving today's smart phones, tablets and other gadgets that need data access on the go. It also makes the networks cheaper to build out and manage.

They're faster than today's 3G networks, though not by much, which makes T-Mobile and AT&T feel justified in calling their upgraded 3G networks "4G." After all, they say, speed is what really matters to users.

Aside from the bump in speed, the main reason the LTE buildouts of Verizon Wireless and AT&T significant is that they add fresh spectrum to the nation's wireless networks. That means more capacity for the growing number of mobile gadgets.

Also, both companies are using spectrum that was previously used for UHF TV channels, a prime piece of the airwaves. It can cover wide areas easily and penetrate deep into buildings. (Clearwire's WiMax network uses a frequency that has shorter range and more difficulty penetrating buildings.)

Future upgrades can further boost the speed of wireless networks. But at some point, they will run out of room for improvement. There's a theoretical limit for how much information a certain slice of the airwaves can carry. When that happens, there will still be two ways to add capacity to wireless broadband.

The government can assign more spectrum, perhaps by taking it from TV stations. But spectrum, too, will run out. The carriers can add more cell towers, but that's expensive and difficult. They can't put cell towers everywhere they'd like.

Given these limiting factors, wireless broadband isn't likely to ever replace wireline connections for home broadband, except possibly in rural areas where it's expensive to draw cables for high-speed connections to homes.

The U.S. is at the forefront in the international race to LTE. Verizon's buildout is the world's largest. The U.S. was faster than most other countries in taking back airwaves from TV stations and selling it off for wireless broadband.

Another reason Verizon has been aggressive about LTE is that its 3G network uses a technology that isn't upgradable to higher speeds as AT&T's and T-Mobile's are. That's left it with a burning need for the next network technology.

Verizon Wireless is a joint venture of Verizon Communications Inc. and Vodafone Group PLC of Britain. Motorola Mobility Inc. was formed this week as Motorola Inc. split into two parts. The Mobility consists of the cell phone business.

Darth Vader Demands You Pre-Order the Star Wars Saga on Blu-Ray (PC World)

Posted: 06 Jan 2011 04:35 PM PST

Chris Brandrick Chris Brandrick – Thu Jan 6, 7:35 pm ET

Earlier this week we brought you word that Darth Vader would be descending on Las Vegas during CES to deliver some "most impressive" Star Wars news.

As promised, Vader invaded Vegas on time, complete with a legion of his Imperial stormtroopers. The Dark Lord then went on to reveal to the show attendees that, for the first time ever, all six of the Star Wars movies would be available to buy in a complete Blu-ray set.

The news is hardly the "most impressive" announcement we were hoping for, but it's welcome all the same.

Fans can pre-order the Blu-ray collection now, ahead of its launch in September of this year. The Complete Saga will be available in three different sets: The first is a $139.99 nine-disc set, which includes all six films and a crazy amount of extras. The second offers the prequel trilogy (I-III), and the third is the original trilogy (IV-VI)--with both priced at $69.99.

A word of advice--wait for the sales if you plan to pick up the prequel trilogy. Even those of you who are die-hard Star Wars, just remember this--you will be paying to willingly see Jar-Jar Binks on your HDTV.

The best and most complete Star Wars collection is finally coming to homes - until it inevitably gets a 3D re-release in a few years time that is.

If The Force is indeed with you, you can pre-order now from Amazon.

[Photos: Twentieth Century Fox Home Entertainment]

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Startup Turns Artificial Intelligence into Serendipity Engine for Mobile (Mashable)

Posted: 06 Jan 2011 02:17 PM PST

Jennifer Van Grove Jennifer Van Grove – Thu Jan 6, 5:17 pm ET

This post is made possible by Microsoft BizSpark as a new part of the Spark of Genius series that focuses on a new and innovative startup each day. Every Thursday, the program focuses on startups within the BizSpark program and what they're doing to grow.

If the name Clever Sense doesn't ring a bell, that's likely because the nearly three year-old Mountain View-based startup has been operating under the radar for much of its existence, bootstrapped by co-founder Babak Pahlavan.

The company is applying artificial intelligence to location-based services and is readying a big release of its first product, Seymour, for iPhone and Android. It is expected toward the end of the first quarter. Clever Sense has also raised roughly $1.5 million in financing, is aggressively going after more funds, has four Ph.Ds on staff and has scored a renowned advisor in Stanford Professor Jeff Ullman, who was the Ph.D advisor to Google co-founder Sergey Brin. As such, Clever Sense is a name that you will know soon enough.

So, what is it and what does it do? "Clever Sense is an artificial intelligence-based, context-aware platform for location-based services. It's the culmination of artificial intelligence, machine learning and data learning," explains Pahlavan. "It's a next generation Siri."

In layman's terms, Clever Sense has crafted technology to personalize your mobile experience. The technology will be used in company-built and third-party mobile applications that aim to harness data from your social graph and location in conjunction with place and time information to create serendipitous experiences in mobile.

Seymour, Your Personal Concierge

Seymour provides a first, appetite-wetting taste of how Clever Sense's technology can be applied to real world, practical problems. Seymour recommends places based on where you are, who you're with and what you want in the moment.

It resembles Siri, but goes further to discover what is good or bad about a place through sentiment analysis of Yelp and Citysearch reviews, and saves personal "Taste Cards" for you, based on your mood and preferences.

Ask Seymour for places that serve lunch or dinner and use descriptive words and phrase like "vegan," "cheap" or "group-friendly" to narrow your query and the app will work to match your interests to nearby places. You can even further specify that you're looking for something similar to place you know you like, say, Peet's Coffee or The Cheesecake Factory.

Seymour is designed to process natural language commands, as opposed to queries, so you can ask it something nearly identical to what you'd ask a friend. It's meant to be conversational and friendly. Pahlavan describes the overall experience as "searchless, search."

Once Seymour recommends top places, you can teach it to better recognize your tastes by giving suggested places thumbs up or thumbs down reviews. Suggestions are revised as you rate places. Eventually, Seymour will learn from your Facebook Places and Foursquare checkins too.

The beta mobile application was recently released for Windows Phone 7. Pahlavan stresses that the application was released merely to solicit feedback, but he's been impressed with the response so far. The startup also has its eye on hotter mobile platforms: iOS and Android. More sophisticated versions of Seymour are currently in the works for each platform.

The Road Ahead

A company like Clever Sense, which relies on the sophistication of its technology to stand out, is only as good as the people it employs. The current team is comprised of top engineers, AI and machine learning experts and Ph.D holders. But, once Clever Sense makes its big mobile push onto iPhone and Android, the startup will need to expand its team to support growth.

Finding quality talent will be Clever Sense's greatest challenge, according to Pahlavan. There's an ongoing talent war between Google, Facebook and Apple that makes it difficult for a lesser known startup like Clever Sense to find the best candidates and offer them a competitive-enough compensation package, he says. The startup will need to raise more funds should it wish to compete.

But Pahlavan has confidence in Clever Sense's ability to carve out a new frontier in mobile. "There's no else in mobile doing what we're doing," he says.

And he may be right. You may recall that Siri was acquired by Apple. Should Clever Sense's technology be as good as Pahlavan describes, it too will have a bright future. But first it will have to find an audience.

"This is just the beginning of a long story," Pahlavan says. We hope he's right.

Image courtesy of Flickr, f-l-e-x

Sponsored by Microsoft BizSpark

BizSpark is a startup program that gives you three-year access to the latest Microsoft development tools, as well as connecting you to a nationwide network of investors and incubators. There are no upfront costs, so if your business is privately owned, less than three years old, and generates less than U.S.$1 million in annual revenue, you can sign up today.

Verizon touts 4G at CES 2011 press event (Appolicious)

Posted: 06 Jan 2011 04:14 PM PST

China rare earth curbs could raise prices: report (AFP)

Posted: 06 Jan 2011 08:53 PM PST

– 11 mins ago

BEIJING (AFP) – China plans tougher environmental standards for miners of rare earths which could raise export prices of the elements used to make products such as iPods and wind turbines, state media said Friday.

The Ministry of Environmental Protection has already approved the regulations, which will slash the amount of pollutants that miners of the minerals are allowed to produce, the China Daily said, citing officials.

The report comes as China, which produces more than 95 percent of the world's rare earths, has tightened control over the elements by cutting quotas for overseas shipments and hiking export taxes.

The moves have raised concern overseas that China was abusing its market dominance, but Beijing has insisted the issue is an environmental one.

The new standards -- set to be released in early February -- will cut permissible levels of ammonia nitrogen and also put curbs on radioactive elements and phosphorus, Huang Xiaowei, vice director of the National Engineering Research Centre for Rare Earth Minerals, was quoted as saying.

"The government will allow two or three years for rare earth companies to upgrade their techniques. If they don't meet the standards, the miners will be banned from the industry," Huang said.

The restrictions will likely result in higher production costs and export prices, the report said, citing Niu Jinglu, deputy secretary-general of the Chinese Society of Rare Earths.

The commerce ministry said last month it had slashed rare earth export quotas by about 35 percent for the first six months of this year, but added that did not necessarily mean full-year export quotas would drop that much.

Rare earths are key components in products ranging from flat-screen television panels to hybrid cars and China's curbs on overseas shipments have prompted complaints from foreign high-tech producers.

Japanese industry sources said China temporarily cut off exports last year during a territorial row between Asia's two largest economies.

The United States last month called for Beijing not to use its control over the metals as a "weapon" to serve political interests.

FCC head urges swift action on spectrum crunch (Reuters)

Posted: 06 Jan 2011 06:27 PM PST

By Jasmin Melvin Jasmin Melvin – 2 hrs 38 mins ago

WASHINGTON (Reuters) – A booming wireless market threatens to overload U.S. airwaves if the government fails to act swiftly, the nation's top communications regulator said in remarks prepared for a speech on Friday.

Federal Communications Commission Chairman Julius Genachowski warned that if network congestion continues to grow, "consumer frustration will grow with it."

"We're in the early stages of a mobile revolution that is sparking an explosion in wireless traffic. Without action, demand for spectrum will soon outstrip supply," Genachowski said in remarks prepared for the Consumer Electronics Show in Las Vegas.

Wireless companies have lobbied for help to deal with a looming spectrum crunch as more consumers turn to mobile devices to surf the Web.

The Obama administration in June endorsed making 500 megahertz of spectrum available over the next 10 years to meet the growing demand for wireless services on laptops and smartphones, such as Apple Inc's iPhone.

The FCC, which manages commercial spectrum licenses, and the Commerce Department, which oversees government spectrum, have been working together to locate unused spectrum.

The Commerce Department last month identified 115 megahertz of spectrum that could be reallocated to wireless broadband, and the FCC hopes to repurpose 120 megahertz of spectrum from television stations through voluntary incentive auctions.

In his remarks, Genachowski reiterated the need for incentive auctions, where television broadcasters like CBS Corp would voluntarily give up spectrum in exchange for a portion of the proceeds from the auction of the airwaves.

Under the FCC's proposal, lawmakers would have to give the agency the authority to conduct the auctions and divert some of the revenue from the U.S. Treasury.

Genachowski noted a letter sent by trade groups representing more than 2,000 companies and almost $2 trillion in annual revenue, urging lawmakers to swiftly pass legislation to allow the FCC to move forward with the auctions.

"Incentive auctions would be a big win for our country," Genachowski said, adding that the auctions would help reduce the deficit while freeing up more airwaves for mobile broadband.

Without more efficient use of the nation's spectrum, consumers will be forced to contend with clogged networks, more dropped calls and slower connection speeds on wireless devices.

(Reporting by Jasmin Melvin; Editing by Gary Hill)

Socialtext Lures Yammer Customers with Migration Offer (PC World)

Posted: 06 Jan 2011 06:53 PM PST

Chris Kanaracus Chris Kanaracus – 2 hrs 12 mins ago

Socialtext is trying to grab customers away from enterprise social networking vendor Yammer with a new migration offer, announced Thursday.

Customers running the free version of Yammer with more than 100 users will be able to switch to Socialtext's Signals product for $4 per user per month, a 20 percent drop from the US$5 per user per month price of Yammer Enterprise. Volume discounts are also negotiable.

In addition, Yammer Enterprise customers with more than 100 users can receive a migration service at no charge, as well as Socialtext Signals and Socialtext People at no cost for a year if they buy Socialtext's entire social software platform for two years.

Socialtext offers microblogging, wiki workspaces, spreadsheets, personal home pages, groups and integrations with enterprise applications like Salesforce.com and SharePoint.

Yammer is known for its microblogging function and also provides capabilities for employee profiles, communities and document sharing. It is integrated with SharePoint 2007, Twitter and other applications.

Socialtext contends that its platform has a broader range of functionality and more robust security through the option of a behind-the-firewall appliance deployment model, as well as SaaS (software as a service).

Still, the vendors' seemingly closely matched feature sets speaks to the strong competition in the enterprise social networking sector, where other prominent independent players include Socialcast.

There are apparently plenty of customers to go around, as well. Yammer claims that some 90,000 companies and organizations use its software today after just two years in the market.

Pure-play companies like Yammer have been able to thrive because legacy application vendors have done a poor job of building social collaboration tools into their software, said Ray Wang, CEO and principal analyst with Constellation Research. And Socialtext and their rivals "still have a few more years of runway," he said.

For one, social collaboration technology "may be easy to create, but it's not easy to do well," he said. The segment should see a run of consolidation in coming years as platform vendors decide to buy instead of build such tools, he added.

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris's e-mail address is Chris_Kanaracus@idg.com.

Downloads to Recover Your Files and Save Your Bacon (PC World)

Posted: 06 Jan 2011 06:00 PM PST

Jon L. Jacobi Jon L. Jacobi – Thu Jan 6, 9:00 pm ET

Losing important files--whether they're business documents, precious photos, or even favorite videos or songs--is certainly distressing. The data isn't necessarily gone forever, though. Whether you've deleted files accidentally or lost your entire drive to a crash or a disaster, you can try to retrieve the data with help from the following utilities.

(For links to all of these downloads in one convenient place, see our "Downloads to Recover Your Files and Save Your Bacon" collection.)

Recuva (free, donationware), which is stylish and easy to use. It's also available in a portable version. In addition, Recuva offers sector-based recovery.

What is sector-based recovery? When a hard drive crashes, or a PC produces error messages, or you can't boot into the operating system, you need something stronger than a mere undelete utility. If the crashed drive shows up in the Windows Disk Management console, and is still spinning and not making funny noises, you may be able to retrieve your data with one of the sector-based utilities below. It will probably cost you, though: All of these free demos will show you what they can recover, but you'll have to pay to get more than a minimal amount of data back.

Note: Never install a sector-based recovery utility on the hard drive or partition from which you're trying to recover data. You might overwrite the data.

Easeus Data Recovery Wizard ($70; free demo). The demo version will recover a single file for you--no matter the size. Data Recovery Wizard is also arguably the easiest recovery program to use, as it walks you step-by-step through the process.

R-Studio ($80; free demo) has been my go-to recovery application for years because it works with every file system out there, including Linux and Mac. The interface and approach are a bit technical, but R-Studio does the job if the job can be done. The demo comes with its own boot CD in case you need to recover from a machine that can't boot to its OS; I always try to attach the ailing drive to another computer since Windows-based recovery is faster, but it's a nice feature. The demo recovers files of 64KB or smaller.

Active File Recovery Standard ($35; free demo) makes it a tad easier to see what's recovered than R-Studio. Also, it's relatively inexpensive, and the demo recovers files up to 64KB. Companion product Active Partition Recovery ($40; free demo) has also delivered good results. In many cases, by restoring a partition you'll be able to boot to the OS again--and if not, you'll at least be able to use standard file-copy methods to recover your data. For the latter, you'll probably have to boot from a CD; any version of Linux that will run from a CD, such as Slax or Ubuntu, is suitable and free.

Active File Recovery Professional ($45; free demo) combines both file recovery and partition recovery. Hint: Buy Professional unless you need a boot CD, in which case the Enterprise version ($100; free demo), which comes with a Windows 7-based boot CD, is appropriate. Again, the demo can recover files up to 64KB.

Other recovery utilities are out there, including the very pricey EasyRecovery ($200; free 30-day trial) from Ontrack, which I've used effectively as well; its demo can recover a single file. But the programs I've discussed above have worked for me consistently over the years. It doesn't pay to mess around or to try to cheap it out when your drive might be dying even as you recover data--so don't risk it.

That said, in my tests the sector-based recovery in the latest iteration of Recuva worked fine with IDE drives (though not SCSI). If you're sure that hard-drive failure isn't imminent--it can be when you start seeing errors--give Recuva a shot.

AT&T Slashes iPhone 3G Price Ahead of Verizon's Move (NewsFactor)

Posted: 06 Jan 2011 02:25 PM PST

Adam Dickter, newsfactor.com Adam Dickter, newsfactor.com – Thu Jan 6, 5:25 pm ET

Want an iPhone dirt cheap? Just stop at your local AT&T store. Beginning Friday, the carrier will sell Apple's iPhone 3GS at half its current price, or $49, for new and existing customers who sign up for a two-year contract and data plan.

Slower, Less Dazzling

On the plus side, the iPhone 3GS runs the latest Apple mobile-device software, iOS 4, and has access to Apple's App Store and 23,000 AT&T Wi-Fi hot spots. But the 3GS, released in June 2009, has 256 megabytes of memory compared with 512MB in last year's iPhone 4. It also has a lower screen resolution, 480 by 320, compared to 960 by 640 with Retina display on the iPhone 4.

Among other differences, the 3GS also has one three-megapixel camera, compared to a three-megapixel front camera and five-megapixel rear-facing camera on the fourth-generation model. That means no FaceTime video chat on the iPhone 3GS.

The iPhone 4 sells for $199 for the 16GB model or $299 for the 32GB. When it was released last year, Apple started selling the 3GS with 8GB of storage only, for $99.

The $49 price is available at AT&T stores, online and through authorized partners, but as of Thursday afternoon Apple was still listing the device on its web site at $99. Apple didn't respond in time for publication to our inquiry about whether it would drop its price for the 3GS.

AT&T said it wants to make Apple's innovative and fast-selling smartphone more accessible.

"We want to deliver the best, most complete package for our customers -- from price to speed to worldwide access and more," said David Christopher, chief marketing officer for AT&T Mobility. "Combined with our new, lower monthly data plans beginning at just $15 a month, this new price brings even more value to one of the most popular devices in our leading lineup of smartphones."

Hold Those Customers

But it's hard to escape the conclusion that the carrier is trying to lock as many new iPhone adopters as possible into new contracts while it still has exclusive U.S. distribution rights.

"It's a typical move to generate new customers and lock them in before Verizon Wireless comes out with their own updated iPhone device," said Kirk Parsons, a wireless-industry analyst at J.D. Power and Associates. "The 3GS is still a good phone, especially to those price-sensitive customers and younger adults priced out of the market initially."

Neither Verizon nor Apple has confirmed reports that a CDMA-capable iPhone will hit the market this year. Verizon on Thursday launched its first roster of Android-powered phones that will work with its Long Term Evolution network, but there was no news about the iPhone.

"It's probably too soon," said Parsons. "So most likely they will announce something at the CTIA conference in March."
at 9:17 PM

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