Steve Jobs' Los Altos childhood home eyed for historic preservation

 

A years-long effort to add the childhood home of Apple co-founder Steve Jobs to a list of protected historical sites in Los Altos is poised to move forward Monday.

That's when the seven-member Los Altos Historical Commission is scheduled to discuss a "historic property evaluation" of the single-story, California ranch style house at 2066 Crist Drive.
The property is historically significant because it's where Jobs and Apple co-founder Steve Wozniak built the first 50 Apple 1 computers in 1976, according to the evaluation by Commissioner Sapna Marfatia. The computers were then sold to Paul Terrell's Byte Shop in Mountain View for $500 each.
"Steve Jobs is considered a genius who blended technology and creativity to invent and market a product which dramatically changed six industries -- personal computers, animated movies, music, phones, tablet computing and digital publishing," Marfatia wrote in the evaluation. "His influence is expected to be felt by multiple generations forthcoming."
The first partnership for "Apple Computer Co." was established on April 1, 1976; nine months later, the company was formally established and its operations relocated to Cupertino, according to the evaluation.
Jobs first moved into the house with his adoptive parents, Paul and Clara, in 1968. He attended a local middle school and Homestead High in Cupertino, where he met Wozniak, according to the evaluation.
The historical commission has spent the better part of the past two years reviewing the Crist Drive property for potential designation as a historic resource. The home would have to be preserved as it currently stands if added to the city's historic resources inventory.
A public hearing would be scheduled if the commission decides to add the property to the inventory. The city council wouldn't have any say over the matter unless the decision is appealed.

Apple's new iPhone 5s offers modest changes

 

The iPhone 5S may be the "most forward thinking" smartphone ever, as Apple (AAPL) likes to call it. But you'll be forgiven if you can't tell the difference between it and its predecessor at first glance -- or even after playing around with it for a while.

That's because the changes Apple made between last year's iPhone 5 and the new phone are either subtle or under the hood. If you were hoping for something radically different from Apple, this isn't it. And if you were hoping that the company was going to address some of the long-standing complaints about the iPhone, such as its relatively small screen size or its insufficient battery life, you'll have to wait until next year -- or beyond.
That said, the iPhone 5S remains among the best smartphones on the market. But its most significant new features will take time to realize their full potential.
Take, for example, the new phone's fingerprint sensor, its hallmark new feature that is built into its home button. Once you train the sensor, which Apple calls Touch ID, to recognize your fingerprint, you can use it in place of a passcode to secure your phone.
It takes a couple of minutes to teach Touch ID to recognize a particular fingerprint. You can configure it to recognize up to 10.
In my tests, the sensor worked fairly well. Although it seemed to recognize my thumbprint only about half the time at first, it improved over time. But even when it failed, it wasn't too annoying -- the sensor takes only a second or two to read your print, so it doesn't take very long to retry, and I found it usually got it right the second time around.
The bigger problem with the Touch ID is that unlocking your phone is one of only two functions it has right now. The other is that you can also use it instead of a password to authorize your purchases in Apple's books, music and app stores.
It's not hard to imagine that Touch ID might be used in the future to verify purchases in stores other than Apple's or to log into your financial or social media accounts. But right now, that is just a potential a use of the Touch ID.
Another big change with the iPhone 5S is an internal one: Apple has replaced the 32-bit A6 processor that's in the iPhone 5 with a speedier 64-bit chip it dubs the A7.
At least in benchmark tests, the A7 is plenty fast. It blew away not only my iPhone 5, but also Motorola's brand new Moto X.
But in real-world usage, its speed wasn't readily apparent. The new iPhone didn't launch apps or load Web pages significantly faster

Diana Nguyn holds her new iPhone 5S during the opening day of new iPhone sales in Richmond, Va., Friday, Sept. 20, 2013. (AP Photo/Steve Helber) (Steve Helber)

than last year's model. In fact, the only time I really noticed a difference in speed was when I exported a movie I edited in iMovie to my camera roll, but that's not something that most people are going to do every day. However, it's likely that developers will take advantage of the faster chip with new, more sophisticated apps.The iPhone 5S also has several cool new camera features, among them a slow-motion video mode and a burst shooting mode. The burst mode in particular is great, because it will keep shooting 10 pictures a second until you stop pressing the button or you hit 999 shots. I wish Apple had added more features to the burst mode -- such as the ability users have on Samsung's phones to combine photos to create one with the best facial expressions -- but the much greater number of burst shots you can make with the iPhone and the sheer speed of the burst mode are both pretty impressive.
The camera comes with a bigger sensor that is supposed to be better able to shoot in dark environments. I found the difference to be minor. Apple has also included with the iPhone 5S a new two-tone flash that's supposed to more naturally illuminate subjects. I found it worked moderately well; skin tones were a little truer to life than in flash pictures taken on the iPhone 5.
Like last year's model, the iPhone 5S looks sleek and feels solid. It retains the same four-inch screen that Apple introduced with last year's iPhone 5.
The new phone ships with iOS 7, Apple's revamped operating system, which offers a much cleaner, refreshed look and delivers some long-awaited features.
Overall, the iPhone 5S offers modest changes, although some may become more important in the future. If you have an iPhone 4S or earlier, it represents a great upgrade. If you already have an iPhone 5, though, I'd wait for the iPhone 6.

Contact Troy Wolverton at 408-840-4285 or twolverton@mercurynews.com. Follow him at www.mercurynews.com/troy-wolverton or Twitter.com/troywolv.

Troy's
RATING

8.0

(Out of 10)

What: Apple iPhone 5S
Likes: Bright, vivid screen; new Touch ID sensor quickly reads fingerprints to unlock device; new camera has superfast burst mode; slow-motion video mode and a two-tone flash that offers more true-to-life colors in flash photos; new processor
Dislikes: Battery life remains the same as last year's model; several new features, including the new processor, offer more theoretical than practical benefits; screen is small compared to Android rivals; Apple charges a pricey premium for extra storage space.
Specs: 64-bit, dual-core processor; 1.2 megapixel front and 8 megapixel rear cameras; four-inch, 1136 x 640 display.
Price: With a two-year contract, $200 for 16GB model, $300 for 32GB model, $400 for 64GB model

Zuckerberg says U.S. 'blew it' on NSA spying

SAN FRANCISCO -- Facebook CEO Mark Zuckerberg lashed out at the U.S. government Wednesday, saying that authorities have hurt Silicon Valley companies by doing a poor job of explaining the online spying efforts of U.S. intelligence agencies.

"Frankly I think the government blew it," Zuckerberg complained during an onstage interview at the tech industry conference known as Disrupt, a weeklong event where Yahoo (YHOO) CEO Marissa Mayer and other prominent tech executives also spoke out publicly and expressed frustration in person, for the first time, since a series of news leaks revealed the government's controversial surveillance programs.
"It's our government's job to protect all of us and also protect our freedoms and protect the economy, and companies," Zuckerberg told interviewer Michael Arrington, "and I think they did a bad job of balancing those things."
He went on to say: "They blew it on communicating the balance of what they were going for."
Facebook and other Internet companies have been under intense pressure in recent months after a series of news reports that suggest U.S. intelligence agencies have gained access to the online activities and communications involving users of Facebook and other popular services. Some of those reports have suggested that unnamed companies have cooperated with the U.S. efforts, although the details are unclear.
Analysts say those reports could hurt the companies financially, especially overseas, if consumers and business customers believe their sensitive information isn't safe from government prying.
Along with Google (GOOG), Yahoo and other tech giants, Facebook has insisted it doesn't give the government free rein to tap into its servers. But the companies also say they comply with legal requests to turn over user information. And they have chafed at national security rules that prohibit them from discussing the details of their actions.
Mayer, who was interviewed on stage shortly before Zuckerberg, said Wednesday that she was proud of her company for waging an early, unsuccessful court battle against government requests for Internet user data, a fight that predated her time at Yahoo.
But she said of those battles, "When you lose and you don't comply, it's treason."

AdYahoo CEO Marissa Mayer speaks at the annual Tech Crunch Disrupt conference in San Francisco on Sept. 12, 2013. ( Dai Sugano )d caption

Mayer also indicated sympathy for the government's efforts to defend against terrorism -- saying she agreed with earlier comments by PayPal co-founder Max Levchin, who said onstage this week that government cryptographers and other intelligence workers should not be reviled and deserve respect for trying to keep the country safe.
Arrington had warned tech executives that he planned to ask them about government spying efforts during this year's Disrupt conference, which is organized by the blog TechCrunch. His onstage interviews during the conference are always closely watched industry events.
Zuckerberg, who was clearly prepared for the question,

noted that Facebook joined Google, Yahoo and Microsoft in filing lawsuits this week that seek permission to disclose the number and nature of the user data requests they receive from U.S. intelligence agencies.The Facebook CEO said the numbers would show that the social network has only provided information about a tiny number of the social network's 1.1 billion users worldwide. But he complained that the government has not explained its efforts clearly.
It didn't help the interests of U.S. companies in overseas markets, Zuckerberg added, when the government said, "Don't worry, we're not spying on Americans." He added sarcastically, "Oh wonderful. That's really helpful" for companies that do business around the world. "I think that was really bad."
Most of Zuckerberg's remarks, however, focused on Facebook's progress over the past year. His appearance was a triumphant milestone of sorts for the 29-year-old CEO, who chose the same conference last year to break a lengthy public silence after the social network's lackluster stock market debut.
At the time of his 2012 appearance, Facebook's stock was floundering at nearly half the company's initial public offering price of $38, as critics questioned whether Facebook could adapt to the mobile Internet trend. Zuckerberg was forced to concede then that Facebook's stock performance had been "disappointing," but he vowed the company's nascent mobile business "will make a lot of money."
In the year since, Zuckerberg has followed through on that prediction, while presiding over a resurgence in Facebook's stock. After developing new kinds of advertisements to show within each user's stream of posts and updates from friends, the company is expected to see more than $2.5 billion in mobile ad sales for 2013, according to research firm eMarketer.
Facebook's stock hit an all-time high of $45.09 on Monday, before closing at $45.04.
Zuckerberg acknowledged Wednesday that he worried about the company's initial public offering last year, especially after the stock price plunged. He said he feared that talented employees would become demoralized and leave the company.
They didn't, he said, adding that the experience "has made our company a lot stronger."
Facebook's success has also enabled Zuckerberg to increasingly flex his wealth and clout on public issues: He's launched a political advocacy group to campaign for new immigration laws and announced a campaign with mobile tech firms to expand Internet access in undeveloped countries. He reportedly is scheduled to meet next week with congressional Republican leaders in Washington, D.C.

Christmas in summer? Gadget makers reveal lineups

 

It's still officially summer, yet major electronic companies have already announced a slew of holiday gift ideas: iPhones of different colors, video game players and a new category of wristwatches designed to mimic the functionality of smartphones.

Much of the early attention has been on smartwatches. Although the devices have been around for years, consumer interest has been low. Samsung Electronics Co. is hoping to change that with its $300 Galaxy Gear. When it's linked wirelessly with newer Samsung phones and tablets, the Gear lets you set alarm clocks, check email and Facebook updates, and make phone calls on your wrist, secret agent-style.

The watch will be available in a few weeks in six colors. The Gear's unveiling came as Qualcomm Inc. said it will start selling its Toq smartwatch before the end of the year. Sony Corp., meanwhile, has an updated SmartWatch 2 device coming. And Apple Inc. (AAPL) is widely believed to be working on an iWatch.
What's behind the sudden rise of the smartwatch? Consumer electronics companies are trying to create a new type of device for people to spend money on now that many of them already own smartphones and tablet computers. That doesn't mean companies have given up on phones and tablets, or other gadgets.
Here's a look at what's in store as manufacturers and retailers try to get a jump on the holiday shopping season.
PHONES:
The iOS software that runs iPhones is showing signs of aging, so Apple is refreshing its look and functionality. Recent phones can get the iOS 7 update for free, starting next Wednesday. The software also comes with the new iPhones going on sale on Sept. 20.
Apple is departing from its practice of keeping choices simple. In the past, Apple released one iPhone a year, in black or white. This time, the company has a regular model, the iPhone 5S (selling for $199 with a two-year service agreement) and a less expensive model, the iPhone 5C (which goes for $99). The 5S comes in three colors and the 5C in five.
Samsung, meanwhile, announced the Galaxy Note 3, the latest phone in a line that comes with a stylus for handwriting on its large, 5.7-inch (measured on the diagonal) touch screen. Sony will have the Xperia Z1, notable for its high-resolution, 20.7-megapixel camera and the ability to attach better lenses. Both devices use Google's (GOOG) Android operating system.
Even more devices are expected around this fall's release of a new version of Android, which goes by the name Kit Kat.
TABLETS:
Tablets with screens that measure about 7 inches diagonally are becoming popular because they're cheaper than full-sized tablets and are easier to carry around. Amazon.com Inc. and Google Inc. paved the way with their Kindle Fire and Nexus 7 devices. Apple followed with the iPad Mini last fall.
Google updated its Nexus 7 in July, offering the basic model for $229. Amazon and Apple will likely update their devices, too. Meanwhile, several companies are expected to release smaller tablets running Microsoft Corp.'s Windows 8.1 operating system when the software update comes out on Oct. 17. The current Windows 8 system wasn't designed for smaller touch screens.
Want big? Google, Amazon and Apple are also due to update their full-size models. Lenovo, Dell and other computer makers have also unveiled Windows tablets that can convert into traditional laptops.
Meanwhile, a company that specializes in e-book readers, Kobo, plans tablets of both sizes. Many of the tablets currently available emphasize the ability to play video and music. Kobo's new Arc HD tablets can do that, too, but the company hopes to address the needs of readers with a mode designed to minimize battery use while reading. The 7-inch version starts at $200, and the 10-inch model goes for $400. They will be out Oct. 16.
GAME MACHINES
Many people have shifted to smartphones and tablets to play games, but hard-core gamers still like standalone video game consoles. Although Nintendo Co. released its Wii U console last year to lackluster sales, Microsoft and Sony are hoping to do better with their game machines this fall.
Microsoft's Xbox One wants to be the all-in-one device that lets you watch television, play movies, listen to music and browse the Internet --as well as play video games. It will start selling on Nov. 22 and cost $499. A Kinect motion-control system will be included.
Sony's PlayStation 4 is coming out Nov. 15 for $399. It's touted as a supercharged PC, which should make it easier for developers to create games for it. But that also means the new machine won't be able to play older games, other than by streaming them over the Internet. The machine's other new features revolve around social networking and remote access.
AND THE REST ...
Although much of the attention is on phones and tablets, people are still buying traditional desktop and laptop computers.
Expect to see new PCs out with the release of Windows 8.1 in October. The update is designed to address some of the frustrations people have had with last year's Windows 8. Among other things, the new version will make it easier to bypass Windows' tile-based interface and use a desktop mode that's more familiar to long-time Windows users.
Apple is also coming out with a Mac Pro computer for high-end, professional users. It's notable in that it will be assembled in the United States, rather than in Asia. Apple also may refresh its popular line of MacBook Pro laptops. A new MacBook Air came out in June, sporting longer battery life.
Avid readers will have at least two major e-book readers to choose from: an updated Kindle Paperwhite device from Amazon (starts at $119) and the Aura from Kobo ($150). Both start selling this month. Many people prefer tablets because they do more, but those who only want to read digital books, e-readers are a good choice.
People will also have choices when it comes to standalone devices for watching TVs and movies.
Last month, TiVo Inc. released a digital video recorder that lets people watch recorded shows outside their homes starting this fall, using an app for iPhones and iPads.
Apple, Roku Inc. and other companies have devices for streaming video from Netflix (NFLX) and other services on big-screen TVs. An updated Apple TV is possible this fall.
If you need a new TV, Sony and other companies are continuing to promote so-called 4K sets -- those with ultra-high resolution, far more than current high-definition sets. The 4K sets are coming down in price -- to just a few thousand dollars!
It's your choice: Spend $3,500 on a Sony 55-inch 4K TV. Or buy an iPhone 5C, an iPhone 5S, a Kindle e-reader, a 10-inch Kobo tablet, both new game consoles and six Gear smartwatches, one in each color.

China's response to Apple's new iPhones: A giant, collective yawn

 

BEIJING -- The iPhone's magic as China's must-have smartphone is eroding.

Last year, eager buyers in Beijing waited overnight in freezing weather to buy the iPhone 4S. Pressure to get it -- and the profit to be made by reselling scarce phones -- prompted some to pelt the store with eggs when Apple (AAPL), worried about the size of the crowd, postponed opening.
Just 18 months later, many Chinese gadget lovers responded with a shrug this week when Apple unveiled two new versions of the iPhone 5. Today's market is glutted with alternatives from Samsung to bargain-priced local brands.
"There was no big change, no surprise at all," said Gu Lanjun, a 29-year-old employee at a Shanghai bank. Having bought the three most recent iPhone models as soon as they were released, she said, "I won't update this time."
That lackluster reception suggests Apple faces a struggle in defending its shrinking share of China's crowded, increasingly competitive smartphone market and its premium prices.
That matters, because China is a key part of Apple's growth plans. CEO Tim Cook told the official Xinhua News Agency in January he expects this country to pass the United States as its biggest market.
"Apple's market position in China has stagnated," said telecommunications analyst Jan Dawson of the research firm Ovum, in an email.
One problem, he said, might be that Apple's high price limits it to targeting the top market tier, and customers in that segment who want an iPhone already have one.
The two models unveiled this week "will largely be sold to existing subscribers and won't win many converts," Dawson said.
Earlier iPhones became status symbols in China even before they were formally sold here. Buyers paid hundreds of dollars for handsets brought in from Hong Kong and modified to work on China's phone network. Companies treated them as luxury goods, buying hundreds at a time to give to important customers as Chinese New Year's gifts.
Now, Apple faces increasing competition. Samsung has made inroads into its premium market segment. For the mass market in a country with an average annual income of only about $4,000 per person, less than one-tenth the U.S. level, newcomers such as China's Xiaomi offer smartphones that run Google's (GOOG) Android system for as little as 799 yuan ($125).
The rapid growth of the lower segments where Cupertino-based Apple doesn't compete has helped to shrink its share of the overall market even as its sales grow.
Apple's share of China's smartphone market fell by nearly half, from 9.1 percent to 4.8 percent, over the past year, according to research firm Canalys.
Apple appeared to be trying to capture some of that lower-tier market with this week's announcement of the lower-priced 5C. But the company's website said it will start at 4,488 yuan ($712) in China, well above analysts' expectations of as little as 2,500 yuan ($400).
"People were expecting a much cheaper version to expand the market to the mid-tier segment. But that didn't happen," said analyst C.K. Lu of Gartner. "We don't see much is going on in the China market with this new product launch."
Investors gave Apple's two new iPhones a similarly lukewarm reception.
Shares fell 6 percent in U.S. trading on Wednesday following the announcement. Apple stock has fallen nearly 30 percent since peaking at $705.07 when the last iPhone came out.
Apple also disappointed observers by failing to announce an agreement with China Mobile, the world's largest phone company by number of subscribers, though Apple had promised no deal.
After this week's announcement that Japan's biggest mobile carrier, NTT DoCoMo, would support the new iPhone lineup, China Mobile is the last major holdout. A tie-up would require Apple to create an iPhone that runs on China's homegrown mobile standard but would give it a partner with 750 million subscribers.
The latest iPhone release also marks an upgrading of Apple's marketing in China. For the first time, the new model will be released in China at the same time as it debuts on Sept. 20 in the United States and other major markets such as Britain, Japan and France. In more than 100 other countries, it will not go on sale until December.
But advance orders for the iPhone 5S and 5C have been "much lower" than for previous models, according to Zhang Xue, a saleswoman for China Telecom, one of two Chinese carriers that support the iPhone.
"Customers are much calmer when they face the new iPhone lineup," Zhang said.
Apple still has plenty of fervent admirers in China, but some complained the latest iPhones offer too few technical advances.
Liu Guanlin, a junior at the Beijing Contemporary Music Academy, said he traded up from Samsung Galaxy to an iPhone because Apple's operating system seemed more stable. But he said the 5C didn't look like it would be worth the money.
"I have lots of Apple products, yet my complaint about the iPhone is it lacks innovation," said Liu. "I can't see major breakthroughs in the latest models, which is disappointing."
Others complained Apple failed to live up to its stylish design standards.
"The covers look garish. It will take people back to 10 years ago," said Gu, the Shanghai bank employee. "I would rather wait for the iPhone 6 and if there still is not much change, I will think about switching to another brand."

Apple renews focus on China with iPhone 5c launch

Whether the "c" in iPhone 5c stands for color or China, the launch of a plastic cellphone marks one of the biggest strategic shifts for Apple (AAPL) since the company began the smartphone revolution six years ago.

Though the announcements made Tuesday at Apple's headquarters were relatively modest in scale, the tech giant seemed to be signaling that it was intent on recapturing lost momentum in China. Although a rumored deal with that nation's largest carrier was not announced at the event, analysts are expecting it to be confirmed soon, possibly at a separate media event being held in Beijing on Wednesday.
Still, investors and analysts expressed surprise that Apple's China efforts weren't more aggressive, saying the iPhone 5c was priced much higher than expected. As much as Apple may be deviating from its classic playbook, it remains unclear how much these efforts will help the company gain ground in emerging markets and with first-time smartphone buyers.
"I think we were all expecting a lower price point on the 5c, that it was going to be more about expanding Apple's market share in emerging markets," said Charles Golvin, a Forrester analyst. "And Apple didn't go down that road. They're still maintaining their position that Apple is a premium brand, people need to pay extra to get that experience."
The 90-minute event took place at Apple's Cupertino headquarters, a much smaller venue than the cavernous Yerba Buena Center in San Francisco, where last year's iPhone 5 debut was held.
Despite lower expectations for the event, shareholders signaled their disappointment by driving Apple's stock down $26.93, or 5.44 percent, to $467.71.
Observers were watching Tuesday's event for clear signs that Apple was making moves to be more competitive in China, the world's largest smartphone market.
China is Apple's third-largest market. But after seeing some encouraging signs there, Apple reported that its "greater China" revenue (which includes Hong Kong and Taiwan) fell 14 percent in its most recent quarter from the same period a year earlier. It was down a whopping 43 percent from the previous quarter.
Rumors before the announcements held that the iPhone 5c was the solution: a cheaper smartphone with a plastic casing that would be less expensive in overseas markets where carriers don't tend to subsidize the cost of smartphones.
Many of the whispers about the iPhone 5c proved accurate. It will come in five colors with plastic cases reinforced inside by a steel frame. In a video at the event, Apple design guru Jonathan Ive called the phone "unapologetically plastic." Still, analysts noted that the phone does not look or feel cheap.
And indeed, it isn't. When the iPhone 5c becomes available for pre-ordering Friday, consumers will be able to buy it for as little as $99 with a two-year contract. With no contract, the iPhone 5c starts at $549.
Another unusual aspect of Tuesday's event was the decision to unveil two new iPhones.
The iPhone 5s unveiled Tuesday will start at $199 with a contract and $649 with no contract. The iPhone 4s will become the low-cost option, offered free by many U.S. carriers with a contract and starting at $450 without a contract.
Apple will no longer sell the iPhone 4 or iPhone 5.
"Apple is never going to be the cheap option," said Carl Howe, vice president of research at Yankee Group. "In this case, they've certainly given themselves some room to lower the prices."
Of course, if Apple seals a deal with China Mobile, investors and analyst can be expected to cheer. China Mobile is seven times as large as Verizon Wireless with 740 million customers, and any partnership could supercharge Apple's slowing growth.
Absent a radically cheaper phone, Apple is making other gestures toward the China market. For the first time, the new iPhones will begin selling in China the same time as in the U.S. The new phones will run on a wider range of networks, something important to international markets. And the new gold-colored iPhone 5s is expected to be a popular choice in China.
The new flagship iPhone 5s comes with a faster processor, a better camera and a fingerprint sensor that will enable users to unlock their phones and make iTunes and App Store purchases with the press of a finger.
The 5s and 5c will begin selling Sept. 20, although the 5c can be pre-ordered starting Friday.
Apple continues to lead the U.S. smartphone market but has lost share overseas to smartphones running Google's (GOOG) Android operating system. Even with the new features announced Tuesday, analysts were quick to point out that some existing Android devices are way ahead of the iPhone 5s.
Samsung's Galaxy S4, for instance, has eye-tracking capabilities, gesture control, a 5-inch full HD screen and a 13-megapixel rear-facing camera.
Apple Chief Executive Tim Cook addressed those concerns at Tuesday's event, saying the company thinks carefully about "what experience people should have."
"We don't just pack in feature after feature," he said.
Apple did make a major concession to its users, announcing that it would give its top mobile productivity apps free to those who buy new devices running its iOS operating system.
The Pages, Numbers, Keynote, iPhoto and iMovie apps will be available to customers who buy the latest versions of Apple's mobile devices. Currently Pages, Numbers and Keynote are available for download for $9.99, and iPhoto and iMovie cost $4.99.
Apple's move comes in response to Google, which offers its suite of productivity apps at no cost on the Web and on smartphones through the Google Drive app, and Microsoft, known for its popular business-friendly software.
The company also confirmed that the radically redesigned iOS 7 will be available for download Sept. 18. The new mobile operating system was unveiled over the summer at Apple's developers conference.
The new software, iOS 7, represents the most dramatic change Apple has made to its mobile platform since it launched alongside the original iPhone in 2007. Several analysts noted that downloading iOS 7 will make current users feel as if they just upgraded to a whole new phone, leading some to wonder whether it could cause some consumers to delay buying a new phone.
"The iOS 7 upgrade is going to be a big deal. In a way, it's going to actually deter some of the hardware upgrades," said Bob O'Donnell, a vice president at research firm IDC.
Other analysts said they've learned not to count Apple out, especially when it comes to smartphones. Each new version, no matter how praised or criticized, has set records for sales.
With two models launching in far more markets than in past years, historical comparisons will be difficult. But analysts will be watching closely Sept. 20 to see whether the new models generate the expected enthusiasm among newbies and hard-core loyalists.
"I've learned my lesson about being skeptical," Forrester analyst Golvin said. "And I'm going to say I think that they're going to sell pretty darn well."

Biz Break: Apple shares sink while Facebook hits all-time high

Today: Apple (AAPL) drops 5 percent as investors disappointed by lack of a truly low-cost smartphone, while Facebook completes its comeback and hits $45 for first time since its 2012 IPO. Also, Fremont's Synnex skyrockets after IBM deal and Pandora names a new CEO.

The lead: Apple plunges as Facebook surpasses milestone

It was a tale of two stock prices Wednesday, as Facebook completed a months-long comeback from the depths to reach a new all-time high, while Apple, the company that once could seemingly do no wrong, tumbled

another 5.4 percent a day after its new iPhone models failed to impress. Combined with Tuesday's decline of more than 2 percent, Apple has lost nearly $35 billion in market value in the past two days. It took a year and a half, but Facebook finally topped its all-time high share price, first set on the day of its much-ballyhooed IPO. Shares peaked at $45.09 Wednesday, before closing at an all-time-best $45.05, up 3.33 percent on the day.
The Menlo Park social media giant previously hit $45 a share during midday trading on May 18, 2012. The largest tech IPO in history then went bust, with shares going on a rapid slide, bottoming out below $18 a share last fall. But shares have rallied 70 percent since Facebook's earnings report in July, in which it surprised analysts by reporting huge gains in mobile ad sales. Mobile accounted for 41 percent of Facebook's total ad sales last quarter, compared to zero a year before.
"There's growing recognition that, 'Hey, this is not just a fad -- it's not going away, it's becoming ingrained in people's lives,'" Martin Pyykkonen, an analyst at Wedge Partners, told Bloomberg News. "Their ads are becoming more effective. Advertisers are finding that's a very attractive place to target."
Now the Facebook bandwagon is growing crowded, as increasingly optimistic investors are being joined by Wall Street experts; according to the Los Angeles Times, 30 of 32 analysts who cover the company now give it a "buy" rating.
Apple, meanwhile, continued to make

A woman looks at her mobile phone as she walks past an Apple iPhone 5 poster outside a store in Beijing on September 12, 2013.Add caption

 

analysts shake their heads. In unveiling two new iPhone models at a media event in Cupertino on Tuesday, the tech giant delivered neither the new "wow" gadget experts had hoped for nor the low-cost smartphone that experts had expected to help it compete in developing markets. At a puzzling media event in Beijing on Wednesday, Apple announced it had received a license that would allow its iPhones to work on China Mobile's network, but there was no mention of a much-rumored partnership with the world's biggest mobile carrier. That was hardly the only disappointing news for Chinese consumers. The new iPhone 5C -- touted as a low-cost smartphone in the U.S. -- will start at more than $700 in China, due to the lack of carriers' subsidies. That's more than the average monthly income in urban China, Reuters reports, and will make it next to impossible for Apple to compete with mass-market Android phones, which can sell for as low as $100.
"It's not cheap enough," Tucker Grinnan, an analyst with HSBC Holdings, told Bloomberg News. "We are disappointed with the price point. It is a high-end phone in China."
In the U.S., at least four analysts downgraded their rating of Apple on Wednesday morning. Others were vocal in their disappointment: "We worry that Apple's inability/unwillingness to come out with a low-priced offering for emerging markets nearly ensures that the company will continue to be an overall share loser in the smartphone market until it chooses to address the low end," said Toni Sacconaghi of BernsteinResearch, according to the Los Angeles Times.
Mark Luschini, chief investment strategist at Janney Montgomery Scott, told Reuters: "This was less than expected from a company that has a reputation for surprising with a killer product or strategy."
Credit Suisse analyst Kulbinder Garcha expects Apple's smartphone market share to fall to 13.1 percent next year, down from 18.1 percent in 2012, according to Reuters. The premium smartphone market "is not forecast to see meaningful growth long term," he said. "This decision, at the margin, is good for profitability but not growth."
Whether Apple is out of new ideas and content to spin its wheels, or if it is simply the victim of its own track record of innovation and high expectations, it's looking likely that Apple's recent stock funk is far from over. Apple has plummeted from its all-time high of $705.07 last October, falling as far as $385.10 earlier this year. Until it presents a clear vision or a new must-have gadget (like it did in the past decade with the iPhone, iPod and iPad), expect its doldrums to continue.
Apple shares fell $26.81 on Wednesday, down 5.42 percent, to close at $467.83.

SV150 market roundup: Synnex shares skyrocket, Pandora names new CEO

The Dow Jones industrial average and Standard & Poor's 500 gained slightly Wednesday, but Apple's drop hurt tech stocks. The tech-heavy Nasdaq dipped 0.11 percent, and the SV150 index of Silicon Valley's biggest companies dropped by 0.84 percent.

The big mover in Silicon Valley was Fremont-based Synnex, which Tuesday acquired IBM's customer-care outsourcing unit for $505 million. Synnex shares surged more than 20 percent Wednesday, or $9.62, closing at $57.59. The purchase is expected to add about $120 million to Synnex earnings in its first year, according to a statement from the company.
Also, Mountain View Internet giant Google (GOOG) and Santa Clara chipmaker Intel (INTC) announced a partnership Wednesday for new Chromebooks, which will run Intel's powerful new Haswell processor. The new laptops will be built by Palo Alto-based Hewlett-Packard (HPQ), Acer, Toshiba and Asus and should hit store shelves by the Christmas shopping season. Google shares rose 0.85 percent, while Intel slipped 0.67 percent. HP was unchanged.
Pandora, the Oakland-based Internet radio service, named Brian McAndrews its president and CEO on Wednesday. McAndrews, a former vice president at Microsoft and partner at Madrona Venture Group who has extensive experience in digital advertising, succeeds Joe Kennedy, who announced his retirement in March.
"We had very specific criteria for our new CEO, and we were very strategic about finding the right person -- Brian is that person," Tim Westergren, Pandora's founder and chief strategy officer, said in a statement. "No one better understands the intersection of technology and advertising."
"It is a great privilege to be asked to lead Pandora at this important moment in the company's history," McAndrews said in a statement. "I look forward to joining this great team to build on Pandora's success for years to come."
Pandora is the seventh SV150 company to get a new CEO this quarter, joining Twitter, Polycom, Juniper, IDT, Solta Medical and Applied Materials.
Investors seemed to welcome McAndews' addition; Pandora shares rose 5 percent during trading Wednesday, closing up $1.03 to $21.38, and were rallying even more after hours. As of 3:30 p.m. PDT, Pandora was up another $1.63, or $7.62 percent.
Up: Google, Oracle (ORCL), Cisco (CSCO), eBay (EBAY), Gilead, VMware, Yahoo (YHOO), Juniper, Facebook, LinkedIn
Down: Apple, Intel, VMware, Yahoo, Zynga, Tesla
The SV150 index of Silicon Valley's largest tech companies: Down 11.19, or 0.84 percent, to 1,322.79
The tech-heavy Nasdaq composite index: Down 4.01 , or 0.11 percent, to 3,725.01.
The blue chip Dow Jones industrial average: Up 135.54 or 0.89 percent, to 15,326.60.
And the widely watched Standard & Poor's 500 index: Up 5.14, or 0.31 percent, to 1,689.13.

Has Apple lost its mojo?

 

Could Apple drop a "one-more-thing" bombshell one more time?

The late Steve Jobs used to whip his product-launch crowds into a frenzy with that famous keynote postscript -- "Oh, there is one more thing" -- just before blowing them away with the latest gadget. But on the eve of Tuesday's big product announcement, many Apple watchers are wondering if Cupertino's dream-catcher has lost its knack for innovating technology that time after time would take the world's breath away.
"The wow-factor is wearing off at Apple," said analyst Laurence Balter with Oracle Investment Research. "Innovation has been put on the back burner while the company focuses on market-share penetration. But unless they pull one incredible rabbit out of the hat next week, the pressure is going to be even more intense on Apple to somehow surprise us all again."
While the rumor mill expects Apple to unveil an iPhone 5 successor along with a lower-cost iPhone that will come in multiple colors, Balter scoffs at the offering: "It's almost become like the fall catalog from JCPenney. 'Ooo, look at the new colors for the new season.' But it sure doesn't scream 'innovation.'"
No one is suggesting Apple's days are numbered. It remains the world's most valuable company in terms of market capitalization, even as the growth of sales of its signature iPhone slows and its stock price is stuck far below its highs. Its crack team of creatives, led by the legendary Jony Ive, is presumably hard at work on the next major product. And a second announcement expected next week from the company will reportedly showcase a blockbuster iPhone deal with China Mobile. The behemoth carrier's 710 million customers would lend Apple a staggering heft in the world's largest smartphone market, a place where Apple hopes to step up its game.
As Apple continues to serve up new versions of a product arguably long in the tooth, at least in Internet years, analyst John Jackson with IDC admits there is some "iteration fatigue" among consumers. Still, Jackson insists next week's product launch doesn't need to be of biblical proportion to please fanboys everywhere.
"I don't think Apple has to do much," he said. "And they certainly don't have to create something entirely new right now to get a wow from people, as long as it's slick and sophisticated. I think there's a huge appetite out there for something, anything, new from Apple, even if it's a variation on a current theme."
The spotlight is turned up high on CEO Tim Cook, now more than two years at Apple's helm, where he's had to not only try to fill Jobs' shoes, but do damage control for product snafus like "Mapgate" and fix an important hire that went south when Apple Store chief John Browett was shown the door last October after only six months. Whether it's boosting the bottom line after two quarters of disappointing earnings or finally delivering on what he's hinted at several times as a product pipeline extraordinaire, Cook's under the gun. And overshadowing it all is the not-so-distant memory of Apple under Steve Jobs.
"This is a transcendent moment," business strategist Pam Murtaugh wrote recently on Huffington Post. "Apple became Apple when Jobs brought 'post-computer products' to the world. While Jobs thought the iPod was 'a thousand songs in your pocket,' its magic came from giving people a thousand feelings in their pocket. The iPod was a bank of feelings."
It's hard to imagine that sort of emotional geyser unleashed by simply a new colored iPhone or, as is expected later this year or early 2014, a new version of the iPad. And while Apple busies itself with its product pipeline, which eight long months ago Cook described as being "chock full" of "incredible stuff," the clock is ticking.
Literally. Samsung's release this past week of its new workout-tracking, photo-snapping smartwatch, the Galaxy Gear, puts one of Apple's fiercest rivals a few steps in the lead, at least on this one path of innovation, while the Cupertino brain trust reportedly works on a smartwatch of its own.
But before anyone starts ringing the funeral chimes, said analyst Joel Achramowicz with Merriman Capital, Apple could still make history with a piece of wearable technology that blows Galaxy Gear right off your wrist. Achramowicz finds it intriguing that Apple, simply by its silence, "appears to be falling behind. Maybe it's good that Cook has been so quiet for so long, because Apple could very well come out with a version of a smartwatch that nobody has even thought about yet, and then it's 'Bingo!'"
Think iPod, he said, or iPhone. In both cases, it was as if Apple were lying in wait while its competitors stumbled about releasing their own not-insanely-great portable music-players and mobile phones until -- Bingo! -- Apple finally weighed in. If Achramowicz's instincts are spot on, Cook and his crew may be sitting on an egg of innovation that, once hatched, will blow everyone away. Or maybe not.
"It's hard to believe Apple would come out with, say, a smartwatch that's not really exciting," Achramowicz said. "But either way, this is it for Tim. He's got really smart people in the organization, but you've got to take risks or you don't get anywhere. Now's the time for him to come up with something really surprising, like Jobs always did, and to create his own legacy."

Samsung smartwatch is sign of changing times

 

Like many people these days I don't typically wear a watch because if I want to know the time, I can glance at my smartphone. But I made an exception last week because I was on an overseas trip and needed to know the time on two continents. So I spent $18 for a Casio dual time zone watch that tells me the time here in Europe and at home.

But Samsung wants me to jettison that watch for one they announced last week at the giant IFA tech show here in Berlin.
The watch, named Galaxy Gear, consists of a large metal and glass screen with a large plastic band that comes in a variety of colors, including jet black, "oatmeal beige" and my favorite, "wild orange." It's not a stand-alone device, but a

companion to Samsung's Galaxy Note 3 smartphone that they also announced at IFA. At launch, the watch will work only with that phone. It's set to go on sale Sept. 25 for $299.With the phone in your pocket or purse and the watch on your wrist, you can take pictures and video, check your email and text messages and talk on the phone. You can also use the watch as a pedometer and -- imagine this -- check the time. Samsung is working with app developers to expand the capability of the product.
I got to spend a few minutes trying the Galaxy Gear, which isn't enough time to pass judgment on all its features. For example, I didn't get to see how the 1.63-inch backlit Super AMOLED display works in bright sunlight. What I can say is that it's reasonably stylish for a watch with a plastic band and that the sound quality of its speaker is better than I expected, but not quite as good as talking directly on most smartphones. The interface, which involves gestures similar to what Android and iPhone users are used to, takes some time to learn, but people will figure it out.
My biggest complaint about this and all the other smartwatches I've seen so far is that the battery lasts for only about a day between charges. You can't plug a charging cable directly into the watch, but it does come with a small docking adapter that -- like most smartphones -- connects to a regular Micro USB cable. Still, having to charge the phone daily and carry the adapter when you travel is one more thing to deal with every day. Casio claims that the $18 watch I'm wearing has a 10-year battery life.
My other issue is more of a question. Will Samsung's Galaxy Gear or any other smartwatch solve a big enough problem to be worth whatever it winds up costing? Of course early adapters and techies will buy it, but will it resonate with people who may not feel all that bothered by having to take their phone out of their pocket or purse to make a call, send a text or take a picture? I can see how it might be handy when driving, if the phone's voice recognition software performs as advertised and you don't have to touch the phone to make or answer a call.
If wearable computing like this watch follows in the footsteps of smartphones and tablets, the real value will come not from the hardware, but from the apps it supports. There is already a pedometer app and the usual compliment of phone and contact apps, but it remains to be seen how many third party apps are written for this and other wearable platforms.
There have been consistent rumors that Apple (AAPL) is also working on a smartwatch, but no details have been disclosed regarding what it might be or when it might be announced. If Apple is to introduce a game-changer, it has to be something different from what Samsung is offering. I'm expecting that it will work with Siri to allow voice commands, but I'm also hoping for better battery life. I'd also like to see it include a TV remote control and perhaps controls for home automation and security systems. A big question is whether Apple will follow Samsung's lead and make its smartwatch a companion to the iPhone or come up with a stand-alone device.
Of course, a smart wristwatch is only one type of wearable computing. Google (GOOG) Glass, with its small computer screen suspended from what resembles an eyeglass frame, is another way to put the Internet, quite literally, in your face. Over time we can expect a wide range of devices, including sensors that keep track of our vital signs as well as technology built into our clothing. Nike already has shoes with built-in sensors that send time and distance information to a smartphone.
The personal computer as we know it may be on the decline, but truly personal computers -- ones that we wear and may someday even embed into our bodies -- may be the wave of the future.

Sony Eyes Sensors in Wearable Computers to Gesture TVs

Sony Corp. (6758) is considering applying its image sensors to wearable computers and hand-gesture TVs as it expects smartphone revenue to peak around 2015.

The company plans to seek growth in developing the chips, already used in smartphones and digital cameras, for products such as self-driving cars and medical equipment, Yasuhiro Ueda, senior vice president for Sony’s image sensor unit, said in an interview.

Sony has garnered almost a third of the $7.6 billion market for the low-power chips, known as complementary metal-oxide semiconductors, that quickly capture crisp snapshots in high-end smartphones, a market that is nearing saturation. The company sells CMOS to others, with versions in Apple Inc. (AAPL)’s iPhones 5 and 4S and Samsung Electronics Co. (005930)’s flagship Galaxy S4, according to SMBC Nikko Securities.
“We have a high sense of crisis after seeing the high-end smartphone market start to saturate this year,” Ueda said yesterday at Sony’s technology center in Atsugi, near Tokyo. “Our plan is to draw a growth strategy in an area where we see shipment potential of 10 billion units a year.”
Sony’s Exmor image sensor works as an eye for electronic products, capturing light to convert into electronic signals for processing. The latest chip uses less power and faster processing to catch vivid images under low light.

Surging Shipments

Chief Executive Officer Kazuo Hirai has said the company plans to leverage the technology to expand in medical equipment business. The chips can be offered for endoscopes used to look inside body cavities and medical testing devices, Ueda said.
Worldwide CMOS shipments rose 25 percent to 2.5 billion units last year and may show a similar increase this year, according to an estimate by Techno Systems Research Co. That may slow down to about 11 percent in 2015, according to the Tokyo-based researcher.
Sony’s revenue from the chips probably rose to $2.45 billion in 2012 from $1.89 billion a year earlier, garnering 32 percent of the global market’s sales, according to estimates made by Techno Systems. Omnivision Technologies Inc. (OVTI) is ranked second with 14.4 percent, followed by Samsung at 12.9 percent.

‘Robust Orders’

“Sony’s CMOS business, which has seen robust orders from smartphone makers may be reaching a turning point as demand shifts toward middle- to low-end handsets,” said Ryosuke Katsura, an analyst at UBS AG in Tokyo. “There will be a higher risk going forward for the business” unless it finds a new growth driver, the analyst said.
Sony rose 0.9 percent to 2,059 yen as of the close of trade in Tokyo. The stock has more than doubled this year, compared with a 34 percent gain in the Topix index.
Global smartphone revenue will rise 22 percent in 2013, or nearly half the pace of an expected 41 percent gain in shipments, amid falling prices, according to UBS.
Sony unveiled its Xperia Z1 smartphone today at the IFA consumer electronics show in Berlin. The phone will be available this month, equipped with a 20.7 megapixel camera and a free download of the movie “Elysium.”
Sony’s device division generated operating profit of 10.9 billion yen ($110 million) in the June quarter with most of the earnings generated by sales of the chips, Deutsche Bank AG estimates. The division was the biggest source of profit after its insurance business.
Ueda declined to elaborate on revenue and profit from its image sensors.

Apple, Samsung

Sony started developing image sensors in 1970 as it tried to compete with Eastman Kodak Co. in photographic devices. The Tokyo-based company’s first such chip was used in a camcorder before the growth driver shifted to digital still cameras and smartphones, Ueda said.
Future growth may come from devices such as Google Inc.’s Glass, a set of Web-enabled eyewear, according to Ueda. Apple and Samsung’s planned watch devices may lift sales of wearable gadgets to 70 million units in 2017 from 15 million this year, according to Juniper Research.
“Image sensors will be crucial device for wearable computers,” Ueda said. Sony is “very keen to expand our business in this area.”
Sony’s SmartWatch 2 will hit stores worldwide later this month, and will be able to be used as a second screen for the Xperia smartphone, the company announced today in Berlin.

Autonomous Vehicles

Samsung may unveil a wristwatch-like device named the Galaxy Gear that can make phone calls and surf the Web and handle e-mails, people familiar with the matter said last month. Cupertino, California-based Apple has a team of designers working on a watch-like device, two people familiar with the matter said in February.
Nissan Motor Co. (7201) plans to deliver fully autonomous vehicles to the market by 2020, Andy Palmer, the automaker’s executive vice president, said last month. Technology underpinning autonomous cars, including adaptive cruise control and electronic steering is already available, and added sensors and road-monitoring capabilities are being refined, Palmer said.
Self-driving cars are currently legal in three U.S. states and may offer a revenue opportunity of more than $200 billion, according to a June report by Piper Jaffray & Co.
“If you want to make self-driving cars, you need several sensors in the car,” Ueda said. “Hand-gesture TV sets may see a booming demand, while house-clean robots can probably do a better job if image sensor was added.”

Sony Bets on Xperia Z1 to Pass LG in Smartphone Race

Sony Corp. (6758) is betting its Xperia Z1 handset will propel it to No. 3 in the smartphone market, leaping from seventh place by vaulting past competitors such as LG Electronics Inc. (066570) and Lenovo Group Ltd. (992)
 
The Xperia Z1, which comes with a 20.7 megapixel camera and will be in stores this month, will help it gain ground in the U.S. and China to become the biggest rival to Apple Inc. (AAPL)’s iPhone and Samsung Electronics Co.’s Galaxy devices, said Dennis van Schie, Sony Mobile Communications sales chief. The company also announced a zoom lens-style camera for smartphones.
“Our ambition is to become a top three player,” van Schie said in an interview at the IFA consumer electronics show in Berlin yesterday. “We are, right now, enjoying fantastic momentum in the markets where we play. We are breaking into the U.S.; we are building momentum in China.”
Sony has its sights set on a market dominated by Samsung, which controlled a third of smartphone sales globally in the second quarter, according to research from Gartner Inc. The Tokyo-based company doesn’t rank in the top five, according to data compiled by Bloomberg. Apple, which is unveiling its new iPhone next week, has 14 percent of sales. LG, Lenovo and China’s ZTE Corp. (000063) round out the leaders list.
“Sony has done a good job to differentiate itself from others,” said Junya Ayada, an analyst at Daiwa Securities Group Inc. in Tokyo. “If Samsung does not introduce new smartphone in the second half of this year, I think Sony can continue to enjoy its momentum toward the end of this year and expand its global share.”

Shares Gain

Shares of Sony rose 0.8 percent to 2,076 yen at the close of trade in Tokyo. The stock has more than doubled this year compared with a 35 percent gain in the Topix index.
Sony is gaining in Europe with cheaper handsets, according to Kantar Worldpanel ComTech. Still, the Xperia Z1, which uses Google Inc.’s Android operating system, points to Sony’s aspirations to the more profitable premium market dominated by Apple and Samsung. The maker of Bravia televisions and PlayStation game consoles is playing to its strengths with image sensors in its smartphones, and it often notes water-resistant features to draw customers willing to spend more.
The company unveiled its first lens-style camera featuring optical zoom and an image processor. The device can take pictures on its own and also attach to smartphones, including Sony products and Apple iPhones, the company said.

‘Turning Around’

“While many of our competitors are struggling for their survival, we are turning around, we are delivering according to plan,” van Schie said. “For us, the growth mode is there, also in the high-end segment.”
Sony’s larger competitors are also unveiling new devices to stay ahead. Apple sent out invitations this week to a Sept. 10 event at its Cupertino, California headquarters to debut more models of its top-selling product, the iPhone, a person familiar with the plans has said.
Samsung hosted an event yesterday at the Berlin show featuring a live orchestra to introduce the Galaxy Note 3, a smartphone-tablet combination with a 5.7-inch screen and exterior of patent leather-like plastic. Unlike Apple and Sony, the Note uses a stylus pen for many functions and retooled Android software to ease multitasking.
Microsoft Corp. this week agreed to spend 5.44 billion euros ($7.2 billion) to buy Nokia Oyj (NOK1V)’s handset unit so it can gain ground on Apple and Android devices after lagging behind its rivals in smartphones and tablet computers.
Sony’s device division generated operating profit of 10.9 billion yen ($110 million) in the June quarter with most of the earnings generated by sales of chips, Deutsche Bank AG estimates. The division was the biggest source of profit after its insurance business.
“The Xperia Z1 is truly a watershed moment in Sony’s history,” Chief Executive Officer Kazuo Hirai said at the press conference introducing the new smartphone.

Clock Is Ticking on Smartwatches

 

Only time will tell whether smartwatches, such as the one Samsung introduced yesterday, catch on.
As Neil Mawston at Strategy Analytics told Bloomberg News, "If you see your friend wearing a cool smartwatch on their wrist, you will probably want one, too."
But is the Galaxy Gear cool enough to fork over $299, even if it, uh, might lack a real purpose? For that price, you get a watch with a 1.63-inch screen, 1.9-megapixel camera, 4 gigabytes of internal memory and 512 megabytes of RAM. It links wirelessly to a smartphone to make calls.
For $300 to $350, Qualcomm is also selling a connected wristwatch called Toq. It comes with wireless charging and an always-on screen. The biggest maker of chips for mobile phones is doing this to show off its display technology called Mirasol.
Sony already has its SmartWatch that syncs with Android handsets. The SmartWatch 2 will reach stores this month, and can be used as a second screen for the Xperia Z1 smartphone, Sony said yesterday.
Of course, there's also Apple, which has a team of designers working on a watch-like device, two people familiar with the matter said in February. Apple has sent out invitations to a Sept. 10 event to announce new iPhones, a person familiar with the plans said.
And tech companies aren't the only ones banking on smartwatches amid a market saturation of high-end smartphones. Asian freight airlines, suffering from a traffic slump of six consecutive months, may be able to break their losing streak as device makers rush to deliver their new products from factories in Asia ahead of the Christmas shopping season.
But as always, that will depend on consumers and whether they jump out of bed to buy these smartwatches, or instead, choose to slap the snooze button.

Microsoft Out $18 Billion on Ballmer Nokia Deal: Real M&A

The world’s largest software company lost $18 billion in market value since the purchase of Nokia’s mobile-phone assets was disclosed, erasing all of the gains that followed the announcement last month that Ballmer is retiring, according to data compiled by Bloomberg. The agreement cements the departing chief executive officer’s shift toward the more volatile consumer-device business and leaves little room for his successor to take a different tack, Atlantic Equities LLP said.
Microsoft is chasing growth in a market already dominated by Apple Inc. (AAPL) and Google Inc. (GOOG) with devices that generate lower returns than the company’s business-software division. Nokia CEO Stephen Elop is returning to Microsoft as part of the asset sale, making him Ballmer’s most likely successor and signaling that the company is in smartphones for the long haul, Sanford C. Bernstein & Co. said, even as some shareholders say that strategy is misplaced.
“I can’t say I’m too thrilled about the deal,” Tim Schwartz, a money manager at Bloomfield Hills, Michigan-based Schwartz Investment Counsel Inc., which oversees $1.3 billion and owns Microsoft, said in a phone interview. “The perception is that this is going to be a continuation of the old management and old-school Microsoft mentality.”

Ballmer Exit

Microsoft shares surged 7.3 percent on Aug. 23 after Ballmer, who has been CEO since 2000, said he will retire within 12 months. Some investors were eager for his replacement to be an outsider who might make bold moves to reverse a shrinking market value, such as spinning off consumer-centric units like Xbox and shifting its focus back toward software and services for businesses.
The Nokia purchase instead has fueled speculation that Elop, a former Microsoft executive, is being groomed to take the helm and will continue with Ballmer’s strategy of keeping enterprise and consumer products under one roof. The stock has dropped 6.6 percent since announcing the Nokia deal, sending Microsoft’s market value down to $260 billion yesterday.
Today, Microsoft shares climbed 0.1 percent to $31.23 at 9:50 a.m. New York time.
“There have been a meaningful proportion of investors who had hoped that Microsoft would de-emphasize its consumer businesses and focus on its more profitable, more predictable corporate businesses,” Chris Hickey, a London-based analyst at Atlantic Equities, said in a phone interview. “This acquisition obviously makes that possibility extremely unlikely” and “ties the hands” of the next CEO, he said.

Critical Market

Microsoft said adding Nokia’s handset business will let it make more money from Windows Phones and help the software maker move faster and create better products in a market that is critical to its success. The company sees “significant long-term revenue and profit opportunities” for shareholders, Ballmer said in the press release announcing the deal.
“Phones are the most personal of the personal devices people use today and success in phones is important for success in tablets and PCs,” Brad Smith, Microsoft’s general counsel, said in an interview Sept. 3. “We need to move faster.”
Tony Imperati, a spokesman for Microsoft, declined yesterday to comment further.
The timing of the deal limits activist shareholder ValueAct Holdings LP’s ability to fight the deal, according to Rick Sherlund, a New York-based analyst at Nomura Holdings Inc. ValueAct last week won an agreement that would give it a seat on Microsoft’s board next year and guaranteed regular meetings with “selected Microsoft directors and management.” In return, the investor won’t pursue or participate in a proxy contest.

Response Options

A person with knowledge of the matter has said that ValueAct wants Microsoft to focus on its business software and Internet-based cloud services rather than consumer technology. Representatives for ValueAct didn’t return calls for comment on the Microsoft-Nokia deal.
“Now that ValueAct has entered its standstill agreement, it is not clear what alternatives ValueAct may have to respond to shareholder dissatisfaction with the Nokia deal,” Sherlund wrote in a note Sept. 3.
Much of the dissatisfaction is due to “not the deal itself but what it could mean,” Mark Moerdler, a New York-based analyst at Bernstein, said in a phone interview. “It may not be the end of the investments Microsoft makes in trying to chase after the consumer market, an area that the Street may or may not feel is the best use of Microsoft’s resources.”
More Deals?
Microsoft still needs more applications and services if it wants to fulfill Ballmer’s strategy of integrating its services with its devices, similar to what Apple has done, Jason Maynard, a San Francisco-based analyst at Wells Fargo & Co., wrote in a Sept. 3 report.
BlackBerry Ltd.’s strong presence in the enterprise market could still attract interest from Microsoft, according to people familiar with the matter who asked not to be identified. Shares of the Canadian smartphone maker, which is weighing a sale, have risen 6.2 percent since Microsoft’s Nokia announcement.
Microsoft paid 0.42 times Nokia’s trailing 12-month revenue from devices and services, according to data compiled by padua that include net debt. That revenue multiple would imply an enterprise value of $4.8 billion for Blackberry. The device maker’s equity and net cash are currently valued at $2.8 billion.
The acquisition will put an even bigger spotlight on the struggles in Microsoft’s consumer-devices business, which are likely to continue as it faces off against stronger rivals Apple and Google, Hickey of Atlantic Equities said.

Declining Asset

The deal doesn’t offer much more to Microsoft than it already had as part of its partnership with Nokia, according to Nandan Amladi, a New York-based analyst at Deutsche Bank AG.
“They already had a partnership in place, so people are wondering why they bought an asset with a declining revenue base and pretty challenging margins,” Amladi said in a phone interview.
Microsoft is paying a much higher premium for the Nokia assets than “even optimistic estimates suggested they were worth,” said Todd Lowenstein, a Los Angeles-based fund manager at HighMark Capital Management Inc., which oversees about $19 billion and owns Microsoft shares.
“The deal handcuffs the next CEO somewhat,” Lowenstein said in an e-mail. “This feeds into the perception Microsoft lacks capital discipline, overpays on deals, and chases growth in areas where they aren’t competitive at their core.”

Yahoo unveils new logo; 'modern and fresh,' Marissa Mayer says

 Yahoo (YHOO) has refreshed its logo for the first time since shortly after the Internet company's founding 18 years ago.

The new look unveiled late Wednesday is part of a makeover that Yahoo has been undergoing since the Sunnyvale company hired Google (GOOG) executive Marissa Mayer to become Yahoo's CEO 14 months ago.

Mayer has already

spruced up Yahoo's front page, email and Flickr photo-sharing service, as well as engineered a series of acquisitions aimed at attracting more traffic on mobile devices. The shopping spree has been highlighted by Yahoo's $1.1 billion purchase of Tumblr, an Internet blogging service where the company rolled out its new logo. The redesigned logo retains some of the elements of the old one, including the company's official color, purple. Yahoo's familiar exclamation point, meant to punctuate a yodeling sound that has long been the company's calling card, is still there, too, but with a twist. When visitors come to Yahoo's front page or an app, the exclamation point dances across some of the lettering before settling at the end of the company's name at a slight tilt of 9 degrees.
"We knew we wanted a logo that reflected Yahoo -- whimsical, yet sophisticated," Mayer wrote on her Tumblr account. She hailed the redesigned looks as "modern and fresh, with a nod to our history. Having a human touch, personal. Proud."
Mayer, 38, said she spent most of one weekend this summer figuring out what the new logo should look like with four other Yahoo colleagues: Bob Stohrer, Marc DeBartolomeis, Russ Khaydarov, and an intern,

In an effort to drum up more interest in the changeover, Yahoo spent the past 30 days showing some of the proposed logos that Mayer and her helpers cast aside.
Reaction online was swift and at brutal after the new look was unveiled late Wednesday night.
"Sooooo ugly!!" blasted @JakeTMG on Twitter. "Oh my god!! It looks even worse than their old logo! @Yahoo this is disgusting."
Posters took the new style to task for its "ugly 3-D effect," being "derivative and bland," and being a shoddy final choice after being subjected to the company's "30 days of change" campaign, which showcased a new logo idea every day for the past month.
But there were fans.
Some of those who took to social media called it "clean and elegant," others "skinny and neat."
The revision is the first time that Yahoo has made a significant change to its logo since a few tweaks shortly after co-founders Jerry Yang and David Filo incorporated the company in 1995.
Since Yahoo's logo is so recognizable, it's a good thing they kept the changes relatively sedate, says branding expert Laura Ries, of the Atlanta firm Ries & Ries.
"One of the worst things in the world you can do is have a log around for two decades and then do something totally different. It's quite unsettling for consumers," she said. Keeping the purple and the exclamation point was a good idea, she said.
Mayer's overhaul of Yahoo has attracted a lot of attention, but so far it hasn't provided a significant lift to the company's revenue. Yahoo depends on Internet advertising to make most of its money, an area where the company's growth has been anemic while more marketing dollars flow to rivals such as Google and Facebook.
A new logo is an important part of updating Yahoo, Ries said, but at the end of the day the company has to do a better job of "verbalizing what exactly Yahoo is."

Apple invites media to event next week, new iPhones expected

Apple (AAPL) on Tuesday invited media members to an event next Tuesday that is expected to include the launch of two new models of the iPhone, the company's iconic smartphone.

The media invitation included several differently colored bubbles behind an Apple logo and a single tagline, "This should brighten everyone's day." The event will take place at the company's Cupertino headquarters at 10 a.m.
Apple is expected to announce a lower-priced iPhone model at the event, rumored to be called the iPhone 5C, that will be housed in a plastic case that can be offered in a variety of colors. The production of such a device was confirmed by a human-rights group that secretly infiltrated a Chinese factory working on the assembly and reported on labor-rights violations in July.
Many analysts say Apple must offer a cheaper version of its iconic iPhone to stake out a position in the midrange of the smartphone market as sales of its higher-priced flagship model continue to slow and rivals introduce their own lower-priced gadgets. In the past, Apple has chased that value-seeking consumer by selling its older-model phones for $100 or $200 less than the latest and more expensive model, but it seems to be switching gears: Last week, the tech giant confirmed a new trade-in program that will allow users to surrender older models of the iPhone for discounts on newer models at the Cupertino company's retail stores.
Apple is also expected to introduce a new higher-end model, which many predict will be dubbed the iPhone 5S, similar to the iPhone 4S, which upgraded several components from its predecessor. The most intriguing rumor floating around that model is the possible inclusion of a fingerprint sensor: Apple purchased a company, AuthenTec, last year that specialized in fingerprint sensors, and multiple reports have pointed to the "Home" button on the iPhone 5S doubling as the biometric sensor. Multiple colors are also expected for the higher-end model, including a gold color aimed at the Chinese market.
Apple last introduced a new iPhone on Sept. 12, 2012, with CEO Tim Cook helping to launch the iPhone 5 at the Yerba Buena Center for the Arts in San Francisco. When the new iPhone debuted in the United States and several other countries Sept. 21, Apple stock hit an all-time high of $705.07, but the company has experienced a long Wall Street fall since, dropping as low as $385.10. Apple's share price has rebounded to top $500 recently but closed Friday at $487.22 before rising about 1 percent in morning trading Tuesday following the long weekend. Analysts say the company needs to show a strong hand in its next hardware introduction.
"Investors, along with the rest of the world, are waiting with increasing impatience, for Apple to wow them once again," IDC analyst John Jackson recently told the Mercury News, later adding, "the next event will arguably be the biggest product launch in Apple's history because it will tell us about the future of the company as a true innovator."

Microsoft's Nokia deal aimed at Apple, Google

In a last-ditch effort to catch the mobile-device wave that Apple (AAPL) and Google (GOOG) are riding, Microsoft is making a $7.2 billion bet on Finnish phone company Nokia.

Several analysts said the agreement announced late Monday to buy most of Nokia makes sense for the Redmond, Wash., corporation. Given time and Microsoft's enormous financial reserves, they said, the deal could pose a serious threat to other

gadget makers, especially Apple, which has seen its sales slow and reputation for innovation questioned."The idea that Nokia is going to have reserves that eclipse Apple's would certainly concern me if I were Tim Cook," said tech analyst Rob Enderle, referring to the Cupertino company's CEO.
Microsoft will be diving into a hardware business dominated by Apple and phone makers using Google's Android operating system. Together, they control more than 90 percent of the smartphone market. But Microsoft is a tech titan in its own right, with nearly $80 billion in annual sales, the widely popular Internet communications service Skype, and software that runs millions of personal computers.
Under the deal, which is expected to be completed in the first quarter of next year pending approval by Nokia's shareholders, Microsoft will buy the Finnish company's phone business and license its patents. That should be a good fit for Microsoft, some analysts believe, because Nokia's phones already use Windows. Moreover, they said, it will allow Microsoft to control the production of those phones from beginning to end, emulating how Apple makes its mobile gadgets.
Still, experts said it could take years for Microsoft to significantly boost Nokia's sales. Moreover, some cautioned that the deal could worsen Microsoft's relationship with companies like Hewlett-Packard (HPQ), because it would pit Microsoft's devices against those from HP and other firms that use Microsoft's Windows software in their products.
"Although HP and Dell don't have much presence in mobility today, they both have ambitions in tablets, which is exactly where we expect Microsoft to get much more aggressive in the future," concluded Deutsche Bank's analysts in a note to their clients. "This only serves to cloud the prospects of both HP and Dell in the all-important mobility area."
Al Hilwa, an analyst with research firm IDC, also voiced doubts.
Although "any competitors in this space should be worried" about the Nokia deal, Microsoft "is not particularly scary right now," he said. That's because Web developers can easily make apps that work with tablets and smartphones from Apple and Android-based companies, but have a harder time doing that with Microsoft's software.
In a company statement, Microsoft CEO Steve Ballmer -- who last month stunned the industry by declaring he'll retire within a year -- said the deal "will accelerate Microsoft's share and profit in phones."
Tony Cripps, an analyst at research firm Ovum, sounded enthusiastic.

"It will take mega bucks to take on Apple and Android head-cheerleader Samsung for marketing volume and volume shipments," he concluded in an emailed statement. "What is almost certain is that beyond Apple and Google, Microsoft is the best equipped of today's consumer tech giants to be able to put all the requisite pieces in place to succeed long term."
Wall Street's immediate reaction to the leviathan's deal with Nokia was mixed. Although Nokia's shares soared by more than 31 percent, to close at $5.12, Microsoft's stock price tumbled by $1.52 -- nearly 5 percent -- to $31.88.
Some of that skittishness stems from the dramatic decline Nokia's business has suffered in recent years.
Its share of the global phone market has slid from nearly 35 percent in 2003 to 14.4 percent through the first half of this year, according to research firm Gartner. And in the crucial smartphone segment, Nokia's slice of the business has shriveled from more than 48 percent in 2006 to just 3 percent this year.
Despite its relative lack of experience making gadgets, if Microsoft can succeed producing phones with better quality and lower cost than those from Apple and its Android competitors, the Nokia deal "will look brilliant," said S&P Capital IQ analyst Barbara Coffey.
Tech analyst Jack Gold added that "Apple is probably more susceptible" to losing sales to Microsoft than the Android-based phone makers because the Cupertino company's "market share has been slipping and I think for good reason. There hasn't been a lot of innovation coming out of them in a recent months."
Nonetheless, Gold said he was skeptical the Nokia deal would prove worth the money.
Another doubter is Global Equities Research analyst Trip Chowdhry, who said Microsoft is just too late to the smartphone game to make much of a difference.
"Ninety-five percent of the market is going to remain with Google Android and Apple," he concluded. "Had Microsoft acquired Nokia in 2005, we would have thought that to be groundbreaking, not in 2013, when the smartphone industry is already well defined."