Sony profit plunges 50 pct from year ago (AP)

TOKYO - Sony Corp. said Tuesday its April-June profit plunged to 34.98 billion yen ($326.9 million) -- about half that recorded a year ago -- as a strong yen, the absence of "Spider-Man 3" revenue and faltering results at its cell phone operations battered earnings.

The Japanese electronics and entertainment company, which makes the Walkman player and the PlayStation 3 game machine, had recorded 66.46 billion yen in profit for the fiscal first quarter the previous year.

Price competition in its core electronics sector also led to Sony's worse-than-expected quarterly performance. Analysts surveyed by Thomson Financial had forecast a 52 billion yen ($486 million) profit.

Sony also lowered its full year profit forecast Tuesday to 240 billion yen ($2.24 billion) from an earlier 290 billion yen ($2.71 billion), blaming expected poor results at its Sony Ericsson mobile joint venture and a pessimistic outlook in electronics.

The results for the latest quarter were also hurt by the absence of a blockbuster like "Spider-Man 3," which lifted the performance of Sony's movie division in the same period a year earlier, according to the company.

In a bit of bright news, the Tokyo-based manufacturer marked a continued recovery in its long struggling video game section, which was profitable in the latest quarter in contrast to losses the previous year.

Sony sold 1.56 million PlayStation 3 machines in April-June, more than double the 700,000 machines sold the same period a year ago. It kept unchanged its forecast for selling 10 million PS3 consoles the fiscal year through March 2009.

The PS3 has been struggling against the hit Wii from rival Nintendo Co. Sony said it has now sold a cumulative 14.4 million PS3 machines worldwide since it went on sale late 2006. Nintendo reports earnings Wednesday.

Sony's quarterly sales were just about unchanged at 1.979 trillion yen ($18.5 billion) compared with 1.977 trillion yen a year ago.

If currency rates had remained the same, sales would have jumped 8 percent on year, but the yen rose against the dollar by nearly 16 percent from the previous year, Sony said.

In its electronics business, the unfavorable exchange rate erased 14.3 billion yen ($133.6 million) from Sony's operating profit for the fiscal first quarter.

Sony raised its sales forecast for the year ending March 2009, to 9.2 trillion yen ($85.98 billion), up from an earlier 9 trillion yen ($84,1 billion), citing in part a more favorable exchange rate. Sony had assumed the dollar would trade at 100 yen but now expects it to hold at 105 yen.

Price competition, unpopular products and higher research investments hammered results at Sony Ericsson, Sony's joint venture with Ericsson of Sweden, for the quarter ended June 30.

In other equity-related income, Sony's music business Sony BMG deteriorated into losses from a year earlier, reflecting an overall decline in the worldwide market and restructuring costs.

Best-sellers during the quarter included Usher's "Here I Stand" and Neil Diamond's "Home Before Dark," Sony said.

Sony shares fell 3.2 percent to 4,210 yen ($39). Trading ended in Tokyo before Sony's earnings were announced.

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Mobile computing now an open source driver (InfoWorld)

San Francisco - Mobile computing has become a dominant focus in the open source arena, a theme on prominent display at a major open source technology convention last week.

The OReilly Open Source Convention (OSCON) in Portland, Ore., highlighted mobile efforts along with Linux, Web computing, and languages. Mention of various mobile efforts abounded, including LiMo (Linux Mobile), Intels Moblin, and the Google-backed Android platform.

"Weve seen some amazing things happening in the Linux development process thats really going to impact the mobile world," said Jim Zemlin, executive director of the Linux Foundation, in a presentation at the Open Mobile Exchange portion of the conference. Zemlin explained that datacenter innovations pertaining to power consumption in Linux can be applied to the mobile world, translating to longer battery life. Real-time technology also is pertinent, he said.

Intels Dirk Hohndel, chief Linux and open source technologist, touted the Moblin platform championed by the company as well as Intels open source push. "Open source is something that we believe really helps change the game," Hohndel said.

The Android platform also attracted attention, although not all of it positive. "I like the idea of Android. Ive been really disappointed in the progress of the project," Tim Bray, director of Web technologies at Sun, said in an interview on the OSCON show floor. There has not been any Android hardware out and not much has been offered as far as new releases, Bray noted. Also, the project has lacked transparency, he said.

Google released a statement affirming its Android plans. "We remain on schedule to deliver the first Android-based handset in the second half of 2008 and were very excited to see the momentum continuing to build behind the Android platform among carriers, handset manufacturers, developers and consumers," the company said.

A Java developer conducted an evening "birds of a feather" session at OSCON to familiarize attendees with Android. "I think [Android] will be successful," said Sean Sullivan, an independent developer, in an interview. "I think [there are] going to be many mobile phone platforms. Its not going to converge quickly." He is building an Android application to help people in Portland use the local bus system.??

Bray expressed disappointment with the overall mobile market.

"The only mobile platform thats widely used to access the Net is the iPhone and it???s a totally controlled ecosystem where youre only allowed to write the programs Apple says youre allowed to write," Bray said.

The iPhone attracted attention at the conference. An audience member during a morning keynote presentation event asked why the open source world has not done anything as "insanely great" as iPhone.

Bray held out hope that Suns JavaFX Mobile platform now in development could serve as an open source, encumbrance-free, mobile platform for the industry to adopt. Openmoko technology also could succeed, according to Bray.

Aside from mobile computing, OSCON also featured calls by Mark Shuttleworth, founder of Ubuntu Linux, for a Linux desktop to exceed what Apple has accomplished and development of free software business models. He advocated a services-based model.

Sun, meanwhile, used OSCON to release Sun Web Stack, a software stack that lets users choose which OS they want to include with their Web deployments. Microsoft also courted open source at the conference, making contributions to the Ruby and PHP communities and partnering up with the Apache Software Foundation, becoming a platinum-level sponsor.

"This sponsorship will enable the ASF to pay administrators and other support staff so that ASF developers can focus on writing great software," said Microsofts Sam Ramji, director of platform strategy, in a blog entry.

Meanwhile, Open Web Foundation, an industry effort to develop and protect non-proprietary specifications for Web technologies, was unveiled at OSCON.

"The Open Web Foundation differs from most formal standards bodies as it is based around individual membership (like the Apache Software Foundation) and is designed to have a lightweight process, which makes it easier for a community of individuals and/or companies to come together and start work on an open specification," said David Recordon, an organizer of the foundation and open platforms tech lead for Six Apart, which makes blogging tools.

"Like the Apache Software Foundation, the incubation process will also focus on building a diverse community of contributors to each specification as well as ensuring the existence of multiple interoperable implementations like the IETF does," Recordon wrote in an e-mail.

OSCON attendee Jon Rockway, an author of the Catalyst Web framework for Perl, was disappointed with what he perceived to be the overly commercial bent of the event.

"One thing I dont like about OSCON is it feels a little bit too commercial for me," Rockway said. "Companies come and they want to pitch open source as a magic solution to any problem and really, Im more of a coder than a business person."

Nonetheless, Rockway said he enjoyed seeing colleagues face to face at OSCON.

"I always come to these to meet up with friends," Rockway said.

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Sony Q1 profit down on mobiles, Matsushita up (Reuters)

TOKYO (Reuters) - Sony Corp (6758.T) posted a bigger-than-expected 47 percent fall in quarterly profit and cut its outlook, hurt by its struggling mobile phone joint venture with Swedens Ericsson (ERICb.ST), while rival Matsushita (6752.T) nearly doubled its profit on rising flat TV sales.

Sony lowered its group net profit forecast for the year to March by 17 percent, citing the slump at Sony Ericsson and weakening prospects for its electronics division as rivals try to undercut its Cyber-shot digital cameras and Vaio PCs on price.

"On digital cameras and camcorders, growth in developed markets such as Europe and the United States slowed and competition intensified, resulting in smaller profits," Sony Senior Vice President Naofumi Hara told a news conference.

Matsushita Electric Industrial Co Ltd, the maker of Panasonic products, in contrast, kept its outlook above market expectations as it cashes in on strong demand for its Viera flat TVs.

Asked about media reports that Sony is in talks to buy the 50 percent it does not own in Sony BMG Music Entertainment from Germanys Bertelsmann (BERT.UL), Sony Chief Financial Officer Nobuyuki Oneda said nothing concrete has been decided, indicating the two are negotiating on Sony BMG stakes.

The Financial Times reported in June that Bertelsmann is seeking 1.2 billion to 1.5 billion to pull out of Sony BMG, while the Nikkei business said on Tuesday the sale price for the 50 percent stake is expected to be in excess of 100 billion yen (931 million).

SEVERE STATE

The U.S. economic slowdown, higher raw materials prices and a firmer yen have been slicing into the profitability of Japanese exporters. But analysts said Sony is being hit particularly hard.

"Overall, Sonys earnings gave me the impression that the company is in a severe state," Daiwa Institute Research analyst Kazuharu Miura said. "The electronics division seems to be in a particularly tough situation, hit by sharp price falls."

Net profit at Sony came to 35 billion yen in April-June, down from 66.5 billion yen a year earlier and below the average estimate of 52.5 billion yen from three analysts polled by Reuters Estimates. Sales rose 0.1 percent to 1.98 trillion yen.

Bucking the trend, Matsushita reported a 86 percent rise in quarterly net profit to a record 73 billion yen.

Matsushita reiterated its forecast for net profit to rise 10 percent to 310 billion yen in the year to March, against the market consensus of 300 billion yen. Sony cut its forecast by 50 billion yen to 240 billion yen, well below the consensus estimate of 278.5 billion yen.

Nobuo Kurahashi, an analyst at Mizuho Investors Securities, said investors have been bracing for a set of weak numbers after Sony Ericsson reported its earnings earlier this month, but may still sell Sonys stock.

"The profit warning will likely have a negative impact on Sony shares tomorrow," Kurahashi said.

NEW EARNINGS DRAG

The electronics and entertainment conglomerate, fresh from its victory over Toshiba Corp (6502.T) in the high-definition DVD format battle, is aiming to turn around its TV and video game operations, which have been Sonys two major earnings drags.

The company currently trails Samsung Electronics Co Ltd (005930.KS) in liquid crystal display (LCD) TVs and lags Nintendo Co Ltd (7974.OS) in video game consoles.

Sonys Oneda said TV demand in China has been slower than expected ahead of the Beijing Olympics due partly to the Sichuan province earthquake in May.

The maker of Bravia flat TVs, however, managed to improve profitability on LCD TVs in the latest quarter and turned its game division profitable on lower manufacturing costs for the PlayStation 3 and higher sales of PS3 games.

Its pictures division slipped to a loss due to the lack of a hit movie like Spider-Man 3 in the same quarter last year. Sony Ericsson was another big negative, posting a quarterly operating loss as demand for its more expensive phones sagged.

"Games have recovered well. Thats positive. But movies arent good. Then Sony Ericsson is really a drag," said Hiroaki Osakabe, a fund manager at Chibagin Asset Management.

Prior to the announcement, shares in Sony closed down 3.2 percent at 4,210 yen, while Matsushita slipped 0.2 percent to 2,180 yen. The Tokyo stock markets electrical machinery index (.IELEC.T) dropped 2.1 percent.

(Editing by Malcolm Whittaker, Paul Bolding)

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Sprint Loses 'Early Termination' Case, Must Pay $73 Million (TechWeb)

A California judge ruled Tuesday that Sprint Nextel would have to pay $73 million in a class-action lawsuit regarding early termination fees.

The ruling is tentative, as Sprint will have about two weeks to come up with a response before a final decision is made in Alameda County, Calif., Superior Court.

"Now that the ruling is in, the outcome is clear," said Scott Bursor, an attorney representing the plaintiffs, to reporters. "We won this trial. And Sprint lost. Convincingly."

Representatives from Sprint said they are reviewing the ruling, which said former customer will receive about $73 million in refunds.

Customers are becoming increasingly frustrated with early termination fees, and are turning to the courts. AT&T is currently facing litigation regarding its cancellation fees, and Verizon Wireless recently settled its cases for $21 million earlier this month. T-Mobile has also been involved in lawsuits regarding this issue.

But the wireless carriers contend that these fees are necessary to recoup the cost of subsidizing handsets. Still, all four major mobile wireless companies have changed, or are in the process of changing their early termination fee policies.

The issue has caught the attention of the FCCs Commission Chairman Kevin Martin.

"Too often consumers are surprised that the amount they owe on their first bill is not what they expected, only to then learn that their trial period already ended and cancellation will result in paying the early termination fee," Martin said in a meeting last month.

The FCC is mulling a plan to create a nationwide policy regarding cell phone cancellation fees.

"While Im respectful of state regulators, I have been skeptical that lawsuits are a good way of ensuring protection for all consumers," Martin said.

See original article on InformationWeek.com

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Business of Life: Night lights, too bright (AP)

NEW YORK - Twinkle, twinkle, little Internet router. And cell phone. And digital video recorder. And cable modem. And game console. And power strip. And TV -- even though it's turned off.

Turn off the lamps in a living room or bedroom today, and chances are good the room will still be aglow with the tiny diode lights of a half-dozen gadgets.

They can be useful indicators of what state a gadget it is in, or where it is, but they also bug people who'd rather not have lights shining in their faces when they're trying to sleep or watch movies.

To sleep in a dorm room full of electronics at Cornell University, Rafael Garcia has covered some lights with black tape. He turns his laptop upside-down and places a mouse pad and a picture of his girlfriend on his desktop computer to block its lights. His electric toothbrush has to come out of its charger, or it will blink through the night.

Unplugging the gadgets stops them from disturbing the darkness, but an unplugged laptop or toothbrush also doesn't charge. Other devices, such as computers, take time to shut down and start up.

"It's gotten way, way, worse, especially in the last year or two," said Shawn Therrien, a Los Angeles computer programmer. "Every single thing we buy has little neon-blue flashing lights on it. ... Turn the light off and they shine like beacons."

Therrien's bedside nemesis is an alarm clock that doubles as an iPod docking station.

"It lights up like the Fortress of Solitude," he said, likening it to Superman's headquarters of glowing crystals. He tamed it with 12 strips of black tape.

Tom Hespos, a partner in an advertising firm in New York, counted six glowing devices in his bedroom. One is an alarm clock with a blue backlight so strong he has to put a pillow between it and him.

And don't get him started on his Internet router, which has blinking blue light-emitting diodes.

"Whoever sees that glow through my window must think I'm keeping aliens in my spare room," he said.

Blue LEDs have become particularly popular for electronics, and that's part of the problem. In dim light, our eyes are more sensitive to colors at the blue end of the spectrum, so blue LEDs look brighter, said Mariana Figueiro of the Rensselaer Polytechnic Institute's Lighting Research Center in Troy, N.Y.

When blue LEDs became available in 1993, following red, green and yellow, they first showed up only in high-end equipment.

Andy Logan, principal designer at Frog Design in San Francisco, tries to steer manufacturers toward more subtle light designs rather than having the diodes shine like flashlights.

But he doesn't recommend designing products so that people can turn off the lights without turning the entire gadget off. The lights often indicate when a device shouldn't be unplugged, such as when a hard drive is writing data.

Outside the bedroom or dorm room, more blue LEDs might actually be a good thing -- researchers are exploring whether they can be used to keep people alert and awake.

Scientists have discovered that a light-sensitive layer of the eye, separate from the part that allows us to see, sends signals to the body that affect rhythms of wakefulness and sleep.

That layer is also more sensitive to blue light than to any other color, said George Brainard, director of the light research program at Thomas Jefferson University in Philadelphia.

He has funding from the NASA-affiliated National Space Biomedical Research Institute to study whether blue-light treatment can help keep astronauts more alert. Figueiro is helping the Navy figure out whether blue light can help submariners adjust to their watch schedules.

For now, researchers don't believe the low levels of blue light emitted by gadgets is enough to change our sleep patterns.

"Some people are very, very sensitive," Brainard said, "so I'd hate to say never."

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Judge ruling on Sprint fees is blow to industry (AP)

SAN FRANCISCO - The fees that cell phone carriers charge customers who break service contracts took a big hit in a California courtroom when a judge said such charges by Sprint Nextel Corp. likely violate state law.

The judge, in a tentative ruling issued late Monday, said Sprint will have to pay $18.3 million to customers who sued over the fees and credit $54.8 million to those who were charged but did not pay the fees.

The same judge is considering other lawsuits against telecommunications companies over their so-called early termination fees, which can range from $150 to $225. This month Verizon Wireless agreed to pay $21 million to settle an identical lawsuit just as trial was starting.

Alameda County Superior Court Judge Bonnie Sabraw rejected Sprint's argument that a state court had no business deciding an issue the company said should be left for federal authorities. And while her ruling isn't legally binding outside the state, it cut to the heart of an ongoing debate in other state courthouses and in Washington, D.C., over the fairness of the fees.

The Federal Communications Commission is enduring intense lobbying over how best to handle the fees. Telecommunications companies have asked the FCC to regulate the fees and shield wireless companies from class action lawsuits in state courts, such as the one Sprint is poised to lose.

At a public hearing last month, FCC Chairman Kevin Martin sketched out a plan in which the cancellation fees would be reduced over the life of the contract. Three companies -- T-Mobile, AT&T and Verizon Wireless -- already do that and Sprint said it would begin prorating its fees next year.

Martin said he hoped the commission would make a decision in August.

FCC spokesman Robert Kenny declined to comment on the court decision specifically, but did say it wouldn't affect the agency's plans to address the issue.

Chris Murray, senior legal counsel for Consumers Union, said he hoped the California court decision would "drive a stake through the heart" of the industry's hopes for removing state courts and state regulators from having oversight over the fees.

Scott Bursor, a lawyer for the victorious Sprint customers, added that the "ruling sounds the death knell" for the industry's efforts before the FCC.

Sprint will get a chance to change Sabraw's mind at another court hearing. But it's unlikely the judge will alter her detailed, 37-page tentative ruling, which she issued after presiding over a two-week trial in June.

Customers of six telecommunications companies sued their carriers in 2006 in Alameda County Superior Court alleging that the fees violate California's unfair business practices law.

Wireless carriers say early termination fees are necessary so the companies can recover the cost of mobile phones, which they subsidize when customers sign long-term service contracts.

But the judge in her ruling said the contracts were "implemented primarily as a means to discourage customers from leaving" and that the company gave little regard to the cost of broken contracts.

"There was no evidence at trial that Nextel did a damage analysis that considered the lost revenue from contracts, the avoidable costs, or Nextel's expected lost profits from contract terminations," the judge wrote.

"We"re disappointed," said Sprint spokesman Matthew Sullivan, "but this is a tentative decision and we are focusing now on our response to the court."

___

Associated Press Writer John Dunbar in Washington contributed to this report.

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Prenatal cell phone exposure tied to behavior (Reuters)

NEW YORK (Reuters Health) - Children whose mothers used cell phones frequently during pregnancy and who are themselves cell phone users are more likely to have behavior problems, new research shows.

The finding "certainly shouldnt be over interpreted, but nevertheless points in a direction where further research is needed," Dr. Leeka Kheifets of the UCLA School of Public Health, who helped conduct the study, told Reuters Health. "Its a wonderful technology and people are certainly going to be using it more and more," she added. "We need to be looking into what are the potential health effects and what are ways to reduce risks should there be any."

Kheifets and her team looked at a group of 13,159 children whose mothers had been recruited to participate in the Danish National Birth Cohort study early in their pregnancies. When the children reached age 7, mothers were asked to complete a questionnaire about their childrens behavior and health, as well as the mothers own cell phone use in pregnancy and the childs use of cell phones.

After the researchers adjusted for factors that could influence the results, such as a mothers psychiatric problems and socioeconomic factors, children with both prenatal and postnatal cell phone exposure were 80 percent more likely to have abnormal or borderline scores on tests evaluating emotional problems, conduct problems, hyperactivity, or problems with peers.

Risks were higher for children exposed prenatally only, compared with those exposed only postnatally, but were lower than for children exposed at both time points.

Kheifets and her colleagues note that a fetuss exposure to radiofrequency fields by a mothers cell phone use is likely very small. However, they add, research has shown that children using cell phones are exposed to more radiofrequency energy than adults, because their ears and brains are smaller.

Because cell phone use was so infrequent among children in the study - 30 percent of kids were using a cell phone, but just 1 percent used a cell phone for more than an hour a week - radiofrequency exposure seems unlikely to have caused any behavior problems, they say.

"Another possible explanation for the observed association might be the lack of attention given to a child by mothers who are frequent users of cell phones," the researchers suggest. They note that mothers who used cell phones frequently were of lower socio-occupational status, more likely to have mental health and psychiatric problems, and more likely to have smoked while they were pregnant.

No matter what the factors behind the association are - if there indeed is a real relationship between cell phone use and behavior problems--one simple way to reduce exposure to cell phones would be to use hands-free technology, Kheifets said in an interview.

Editorialists writing in the journal raise the question of whether the publication of these findings may scare people for no reason.

Kheifets and her team believe that while their findings are preliminary, they should be reported. "We felt that the public is quite capable of dealing with proper information," the researcher said. "One shouldnt really try to be paternalistic about it."

SOURCE: Epidemiology, July 2008.

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LG to Use Dolby Mobile Audio System in Cell Phones (PC World)

LG Electronics plans to start adding Dolby Mobile to high-end phones later this year, it said Wednesday.

The two companies have reached a deal that will make South Koreas LG the first cell phone maker to incorporate the Mobile version of Dolbys system into its handsets. Dolby Mobile is an audio processing system tuned to match the processing and audio capabilities of cell phones.

As cell phones have gotten more complex in recent years, a lot of effort has been spent improving the screens but relatively little work has been done on the audio systems. While most phones today feature an MP3 music player its been more or less an after thought in many handsets, but with more and more people using the function a richer, deeper, better sound could become a key selling point.

LG is currently the fourth largest cell phone maker in the world with an 8.2 percent share of the market in the first three months of this year. It shipped 24.4 million [m] handsets during the quarter on strength from emerging markets and its domestic market in South Korea. But shipments slipped in Europe.

The first LG phones with Dolby Mobile are due out in the fourth quarter of the year. The company plans to build the technology into high-end multimedia handsets.

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Uno goes on sale for iPods

Gameloft has released a new portable version of Uno, (iTunes link), now designed for iPods. Players in the card game attempt to whittle down their hands, while simultaneously sabotaging their opponents' hands with special "action" cards. Competition can include either AI players or live ones taking turns on the same iPod.

Nine different rules settings can be used including "7-0" and "Jump-In," and special achievements are awarded for people who complete achievements in the Career Mode. Uno costs $5 and requires an iPod Classic, a third-generation Nano, or an older fifth-generation iPod. The release marks the first new clickwheel iPod game since Apple debuted the App Store for iPhones and iPod touches.

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99p rentals at iTunes UK

The UK storefront for iTunes has joined those in Canada and the US in offering discount movie rentals, Apple has announced. The site now advertises a "99p Film of the Week" program, letting people rent a single movie at a sharp discount over the normal cost of �2.49. The chosen debut movie is John Frankenheimer's Ronin, a 1998 thriller about the life of spies in a world without good, evil or the Soviet Union.

The new pricing is of course proportionately higher than equivalent 99 cent options, which if converted from US dollars would equal only 50p. MacNN cannot confirm if an HD version is available to view from an Apple TV.

[via Macworld]

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MagicPad demos rough iPhone copy/paste functions

A new application demonstrates early copy and paste functions on the iPhone, its creator claims. Proximi has developed an application called MagicPad, a rich text editor similar in function to TextEdit. Unlike the built-in Notes application, users can type up documents using six fonts, five sizes and eight colors; in case text needs to be repeated, a button above the keyboard lets users select part of a document using a loop, and then copy, cut or paste. Other options include bold, italic, underline and strikethrough formatting.

As opposed to Apple's rumored update plans however, these editing functions work only within MagicPad, meaning that text cannot for instance be copied into a Safari form. The only way text can be exported is via e-mail. MagicPad is not yet available through the App Store, but is said to be waiting for approval.

First Look - MagicPad from Apple iPhone Apps on Vimeo.

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Palringo multi-platform IM client arrives on iPhone

Palringo says that it has brought its self-named instant messaging client (iTunes link) to the iPhone. In contrast to apps such as AIM, Palringo is able to interact with several different IM platforms, including not just AIM but iChat, Yahoo, ICQ and Google Talk, as well as less common options such as Jabber and Gadu Gadu. Contacts from all networks are presented in a single list.

Users can additionally send picture messages through the client, and the company says it intends to eventually allow sending voice messages, at a size of 1MB for every 15 minutes. Palringo is a free download from the App Store.

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Rogers: iPhone "slammed brakes" on rivals

Sales of other phones on Rogers Wireless' network virtually ground to a halt the day of the iPhone 3G announcement in late April, company president Nadir Mohammed said today during a call discussing the company's latest quarterly results. Although the cellular business helped drive Rogers' year-over-year quarterly revenue increase of 11 percent to $2.8 billion without the iPhone on sale, the company executive notes that demand for other devices "slammed on the brakes" the same day as Rogers announced it would launch the Apple device during the summer.

Demand for devices remained cool roughly up until the launch of the iPhone itself, according to the report. Nokia and Rogers significantly halved the N95 8GB's price to $200 on contract less than a week after the iPhone 3G release in a bid to stimulate sales versus the iPhone, which has most of the same hardware features at the same price.

Mohammed also reveals that Rogers was completely taken by surprise with the opportunity to launch the device, regardless of whether it used Apple's original model of sharing monthly revenue or the new device subsidy approach. "We didn't anticipate that we would launch that device under any model this year," he says.

The company nonetheless believes Apple's current approach is "highly, highly attractive" to Rogers. Although the up-front discount on the device is the largest the company has ever had, the higher average revenue per user is expected to more than offset the initial price of the phone as nearly all customers are likely to sign up for a data plan and potentially extra features. Mohammed declines to specifically identify its user behavior, however, and notes that most phones of the class have a "honeymoon period" of between 90 to 120 days where service usage is extremely heavy.

Rogers has committed to buying at least $150 million in iPhones and will spend more as necessary.

The Canadian provider further adds that non-disclosure agreements prevent it from discussing the ratio of customers upgrading versus new additions, but says that it would be "premature" to provide any kind of definite answer. AT&T in the US has said that a significant minority of new iPhone 3G subscribers are conversions from competing networks.

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Luminair allows iPhone to control DMX stage lighting

SyntheFX has released a handy iPhone app for A/V and theater professionals. Luminair 1.0 allows remote control of intelligent DMX512-A lighting systems via the iPhone. DMX is a widely-used standard for digital control of stage lighting, special effects and fog machines. Luminair uses Artistic Licence's Art-Net protocol through a Wi-Fi connection to interface with DMX devices. The app includes an on-screen "mixer," channel layout interface and data analyzer.

Synthe FX says Luminair allows "users to be unchained from the mixer desk or patch-panel in a way like never before." The touch-board layout allows users to quickly set up channels for each fixture.

The lighting mixer uses the iPhone's multi-touch interface to control with "accurate precision," and a "color changer channel" allows real-time color manipulation. Luminair's included data analyzer allows users to examine incoming DMX data packets for each channel in realtime. Users can save and restore individual fixture settings or entire projects using the built-in file manager.

Luminair 1.0 is available at the iTunes AppStore for the "introductory price" of $99, and works with any iPhone or iPod Touch running iPhone 2.0 software. A Wi-FI connection is required.

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ILuv intros full line of Silicone, Acrylic iPhone 3G

Audio accessory maker iLuv has announced a full line of form-fitting cases for the iPhone 3G, including a unique two-toned silicone model. There are four models available: a basic silicone case in black or white, the two-toned silicone model, and hard cases in acrylic or clear plastic. All of the cases allow full access to the iPhone's controls and ship with a glare-free screen protector film. Users can charge or sync thier iPhones without removing the case.

The two-toned cases come in the same overall color, but iLuv chose to use a darker shade for the larger surfaces, with a lighter shade for the trim. Two-Toned Silicone Cases are available in black, white, pink and blue.

The cases range in price from $13 for the basic silicone model, to $25 for the Two-Toned Silicone, Acrylic Protective Case and Clear Crystal Hard Case models. The cases are available now online and at a variety of retailers worldwide.

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Poker game for iPhone, play against thousands

Real Dice has announced Multiplayer Championship Poker for the iPhone and iPod touch. The Texas Hold'em game features live multiplayer games, with options such as ring games, sit-n-go tournaments and multi-table events. The game is not indigenous to the iPhone, and players from other platforms with the game can play against one another; a user on an iPhone can play against a Blackberry, Facebook or Windows user. In addition, over 200 artificially intelligent players are built into the game. Multiplayer Championship Poker is available on the iTunes App Store for $10.

The game was brought to the iPhone platform with the idea of expanding access to the multiplayer virtual poker world. �The expansion of Multiplayer Championship Poker to the iTunes Store now allows iPhone and iPod touch customers to pull up a virtual chair and play Texas Hold�em with the 300,000 users who are already online on a variety of other devices,� said Russ McMahon, Director of Mobile Development at Real Dice.

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CellSpin brings mobile blogging to the iPhone

CellSpin Soft has adapted its CellSpin mobile blogging software for the iPhone and iPod touch, providing a GUI-based blogging tool for audio, photo and text capture. Users can link and upload to blogging, social networking and photo sharing sites over a secure connection, allowing fully mobile blogging and podcasting. The software also allows users to post to Ebay. It works with Blogger, MySpace, Facebook, Twitter, Google Blogger, Flicker and more. The application is free and available at the iTunes App Store under Social Networking. CellSpin works on both the original iPhone and iPhone 3G, as well as the iPod touch.

CellSpin is described by its co-founder, Vince Laviano, as "the Swiss Army knife of mobile blogging." It allows iPhone users to blog utilizing voice, photos and text; it works with MoBlog on both Facebook and MySpace and features one-click blogging from the iPhone interface.

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BetterPower long-life battery iPhone speaker/charger

China-based OEM manufacturer Better-Power Electric has developed a unique combination speaker and charger for the iPod and iPhone using a 4800mA, 3.7V Lithium-Ion Battery. The company says the device can charge an iPhone in 50-80 minutes and also works with various iPods and other mobile devices via USB. The speaker can play music for more than 12 hours, and iPhone owners can reportedly use it as a speakerphone.

Betterpower says the speaker produces "high quality stereo sound," and comes equipped with a USB-MINI socket that, with the proper software, could allow syncing between a mobile device and a computer. The speaker also works as a mobile power supply for the iPhone, allowing longer use than the conventional battery.

SInce Better-Power is an OEM manufacturer, there's no word when device will be sold directly to consumers in the U-S or Europe or at what price point.

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Motorola to reorganize home and networks unit (Reuters)

PHILADELPHIA (Reuters) - Motorola Inc (MOT.N) will create three businesses within its home and networks mobility business to focus on the sectors growth potential, the cell phone maker said.

The home and networks mobility business, led by Dan Moloney, will now comprise three businesses: broadband home solutions, broadband access solutions and cellular networks, the company said.

The unit, which had revenue of 2.4 billion in the first quarter, supplies equipment to telephone companies and cable television companies for voice, data and video services.

The unit previously had been organized as a mixture of businesses, making cable set-top boxes, modems, cable infrastructure and network gear to carry voice and data signals, the Wall Street Journal newspaper said.

"This organizational change will ensure that home and networks mobility remains agile, focused and ideally aligned to realize its growth potential," Motorola said in a statement obtained by Reuters.

Motorola said it was "evolving the structure of its home and networks mobility business to capitalize on the opportunities created by changes in the global marketplace."

In March, Motorola said it would split into two publicly traded entities in 2009, separating its mobile phone unit from the rest of the business, which makes television set-top boxes and network equipment.

(Reporting by Jessica Hall; Editing by Clarence Fernandez)

(For more M&A news and our DealZone blog, go to http://www.reuters.com/investing/news/mergers)

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New Cell Phones Help Keep You Healthy (PC World)

Cell phones have always been about helping you keep in touch. Now theyre helping you stay healthy.

Eager to discover the next new trend in cell phone technology, Japanese mobile carriers are developing and rolling out services that tie a users desire to keep fit with their cell phone and network-linked services.

First off the starting block has been KDDIs Au unit, which launched a service earlier this year called Smart Sports.

Most of its new handsets incorporate the service to some degree but three recently-launched models are fully equipped to take advantage of the technology. Inside the phones, a motion sensor and GPS (Global Positioning System) work together so that when youre running, the number of steps taken, distance, and calories burned are measured and recorded-- and the phone does this even if the phones dedicated "Run&Walk" application isnt launched.

When youre done work-out information can be sent to a server and later your run can be mapped and analyzed through a PC.

And because the beat of music can help you during your daily exercise, the service links in with Aus "Lismo" music download service and can send selected tunes to a pair of wireless headphones. Using the "Beat Run" playback mode, it will also match musical tracks and the pace of the exercise.

The Smart Sports Web site indicates 7,200 users worked out with the service on Sunday and that in total this month 54,000 users have racked up more than 1 million [m] kilometers of running and walking between them and burned a collective 38 million [m] kilocalories.

Rival carrier NTT DoCoMo is also developing health-related applications.

Its system has weighing scales or blood-pressure monitors sending data to a users cell phone via Bluetooth. DoCoMo is hoping to get organizations like health clubs and hospitals to participate so that automatic monitoring of basic wellness data can be easily done-- with the users consent of course.

The system isnt commercialized yet but NTT DoCoMo hopes to have it available some time in the next year.

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Verizon's Income Grows on Mobile and Data Services (PC World)

Verizon reported net income of US$4.5 billion for the second quarter of 2008, up 9.6 percent from a year ago, due largely to growth in mobile and data services, the company said.

Verizon Wireless added 1.5 million customers in the quarter, bringing its total customer numbers to 68.7 million. Mobile revenue was up 11.8 percent and mobile data revenue up 45.3 percent, Verizon said Monday.

In addition, Verizon added 176,000 new customers to its Fios fiber-based television service and 187,000 new Fios Internet customers. Verizon now has about 1.4 million Fios TV customers and 2 million Fios Internet customers, company officials said.

Verizons revenue for the quarter was $24.1 billion, up 3.7 percent from $23.3 billion during the second quarter of 2007. Adjusted earnings per share for the quarter, which ended June 30, were $0.67, beating the $0.65 per share expected by analysts polled by Thomson Financial.

The telecom giant sees minimal effects of the slumping U.S. economy and the launch this month of a new version of Apples iPhone, which exclusively uses the mobile network of Verizons rival AT&T in the U.S.

Verizon executives "feel very comfortable with our business plan, despite some of the concerns that others have expressed about the economy," said Dennis Strigl, Verizons president and chief operating officer. "Although we may see some softening in some of our volumes, we do not expect any significant economic impact on our results for the second half of the year."

Asked during a conference call about the new iPhone 3G, Strigl called it a "minimal, short-term impact" on Verizon Wireless. The new iPhone was launched after the second quarter ended.

Verizon Wireless revenue was $12.1 billion for the quarter. The company reported a turnover, or churn, rate of 1.12 percent, a record low for the company. The average monthly revenue per customer was $51.53, up 0.9 percent from last year, and up for the ninth consecutive quarter.

Verizon reported broadband and video revenue from the consumer market at $1 billion for the quarter, up 52.9 percent from a year ago. Verizon began rolling out its Fios service in late 2004. Verizon posted a net increase of 54,000 broadband connections for the quarter, with the numbers reflecting a decrease of 133,000 DSL (Digital Subscriber Line) customers.

During the quarter, Verizon gained approval to offer Fios in New York City, and the company launched its marketing efforts there on Monday.

Total wireline revenue was down 1.8 percent to $12.1 billion, with losses coming from traditional telephone service.

Independent telecom analyst Jeff Kagan said Verizon posted "strong results" for the quarter, but the affect of the U.S. economy on the company bears watching. Verizons combination of mobile, Internet and TV services gives the company a strong offering, he said.

"Verizon is a very different company from the phone company we followed 10 years ago," he said. "Verizon is in the middle of a major transition. Moving out a few years it will be an entirely different company. Verizon has shown continued strength in wireless and their Fios business."

Verizon will have to pay attention to the cost of its services in coming months, Kagan added in an e-mail. "One worry is about how the soft economy will affect Verizon," he said. "Many of these services are easy to avoid if they cost more."

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D-Link 'Green' Routers Save Energy (PC Magazine)

As part of D-Links green initiative, the company has become the first to come out with "green" Wi-Fi routers for the home network. More particularly, D-LINK has incorporated "green" features into some of the brands Xtreme N WiFi routers.

The current routers integrated with "green" features available for shipping are the D-Link Xtreme N Gigabit Router, D-Link Xtreme N Duo Media Router, and the D-Link Xtreme N Gaming Router.

The three routers mentioned use the previously announced D-LINK Green Ethernet technology which detects both cable length and link status and then adjusts the power accordingly. Other than that, they also incorporate a functionality called Wi-Fi Scheduler which provides users with an automatic shut-down option. Users can adjust the start and end times of the WiFi router within a single day. According to D-LINK, compared to a conventional D-LINK router, N Gigabit Router saves up to 32 percent, the N Gaming Router saves up to 31 percent, while the N Duo Media Router saves up to 41 percent in energy consumption.

ORIGINALLY PUBLISHED ON GOODCLEANTECH.

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China Has More Internet Users Than U.S. (TechWeb)

More people connect to the Internet in China than in any other country in the world, a Chinese consulting and research firm announced.

BDA reported Thursday that China surpassed the United States to rank first among nations for its number of Internet users. The firm said that the China Internet Network Information Center counted 210 million Internet users in China at the end of 2007.

Nielsen/NetRatings counted 216 million U.S. users at the end of 2007. Assuming the markets have continued to grow at the same rates as last year, BDAs principal new media analyst, Bin Liu, concludes that China now has more Internet users than the United States.

The numbers represent market opportunities, but the quality of content, advertising, and e-commerce is better in the United States, according to BDA, which predicts that e-commerce will boom in China as businesses and retailers take advantage of the countrys large and growing population of Internet users.

BDA chairman Duncan Clark said China also boasts the worlds largest mobile communications user base, with about 560 million subscribers.

"Now it adds Internet users to its gold medal collection," he said. "While the volume of communications users will continue to boom, the focus now in China will increasingly shift to deriving greater value from these consumers."

Clark thinks China will become like a "new California," which will help create innovative applications and shape consumer trends worldwide.

Clark said that a strong economy, investments in broadband infrastructure, and consumer demand for online games, instant messaging, online music and video, and other applications have driven increased Internet use in China.

See original article on InformationWeek.com

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Mobile Map Usage Growing Rapidly (TechWeb)

Users around the globe are increasingly turning to their mobile phones to get directions, according to new data from ComScore.

The report found that 8% of U.S. wireless subscribers and 3% of European mobile subscribers accessed maps from their mobile handsets between March and May 2008. This represents a growth rate of 82% and 49%, respectively, compared with the same period last year.

"The mobile phone as a personal navigation device makes tremendous sense," said Mark Donovan, senior analyst at ComScore, in a statement. "With the influx of devices, such as the iPhone with GPS, entering the market, Nokias purchase of Navteq, and the growing popularity of downloadable navigation applications, you dont need a map to see where this sector is going."

The study found that Apples iPhone was the leading device for U.S. customers to access maps. This can be attributed to the integrated Google Maps, and this is expected to continue now that the iPhone 3G has built-in GPS.

Meanwhile, European users preferred Nokias N95 and N70. The report said the vast majority of mobile map users are seeking driving directions, even in Europe, where public transportation options are more popular.

According to the report, the majority of users -- 73% in the United States and 57% in Europe -- accessed mobile maps via the handsets browser. Less than a third of customers in these markets used a downloaded application.

As more cell phones sport built-in GPS chips, wireless operators and handset manufacturers are increasingly offering data-heavy navigation services. To counter this increase in competition, Garmin will enter the mobile phone market later this year with the Nuvifone.

See original article on InformationWeek.com

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AT&T, Rural Carriers Oppose Sprint-Clearwire WiMax Partnership (TechWeb)

The proposed partnership of Sprint Nextel and Clearwire to deploy a nationwide WiMax network is being opposed by AT&T and the Rural Cellular Association, both of which have asked the FCC to examine the deal.

Citing the FCCs earlier scrutiny of mergers and competitive combinations for mobile wireless partnerships, AT&T last week asked the FCC to be consistent in examining and approving partnerships. AT&T cited its acquisition of Dobson Communications, in which the FCC intensely reviewed the acquisition, as an example.

AT AT&T said the Sprint-Clearwire combination would be subjected to closer examination if the discounted airwaves were taken into account.

"While AT&T does not fundamentally oppose the underlying transactions," AT&T stated, "the regulatory process must be consistent for all entrants, including New Clearwire, and regulatory parity therefore requires an examination of the reformed companys spectrum aggregation."

In a separate petition, the RCA, which represents wireless providers in rural areas, has raised objections to the proposed partnership, asking the FCC to examine "carrier-to-carrier network interoperability, including automatic roaming for voice and data, notably for wireless broadband services."

In a statement, the RCA said, "Competition is promoted through interoperability because it allows small and regional wireless carriers to offer the public a service that is not interrupted by unsuccessful inter-carrier handoffs, and because consumers can make full use of their wireless devices regardless of which carrier is their serving carrier whenever the networks are technically compatible."

However, the proposed Sprint Nextel-Clearwire partnership has picked up important support in recent weeks from several educational and religious organizations, including the Wireless Communications Association International and the Catholic Television Network.

Through a spokesman, Sprint Nextel hailed its proposed partnership with Clearwire, maintaining that it will create the countrys "first nationwide true broadband mobile network that will increase competition in a consolidating industry." The company also said the partnerships WiMax technology can bring broadband to consumers who are beyond the reach of existing broadband networks.

See original article on InformationWeek.com

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Verizon profit rises, but wireline disappoints (Reuters)

NEW YORK (Reuters) - Verizon Communications Inc (VZ.N) posted a higher quarterly profit on strong wireless sales, but its shares fell on worries about its declining landlines and weaker-than-expected growth in its FiOS Internet and video service.

FiOS, delivered over a high-speed, all-fiber network, is a key part of Verizons strategy to bolster its landline business and compete with cable companies all-in-one phone, video and Internet offerings.

Second-quarter profit rose to 1.88 billion, or 66 cents a share, from 1.68 billion, or 58 cents a share, a year earlier. Excluding items such as merger integration costs, earnings per share were 67 cents, beating the average analyst forecast for 64 cents a share, according to Reuters Estimates.

Revenue rose 3.7 percent to 24.12 billion, in line with analysts forecasts.

But residential switched access lines fell 11.4 percent in the second quarter from a year earlier, while total lines fell 8.5 percent, Verizon said on Monday.

Analysts said the results showed the companys massive investment in FiOS was failing to stem a loss in traditional phone subscribers amid a weak economy.

"Its no surprise Verizon is losing access lines, but the rate at which theyre losing them is enough to make you blanch," said Bernstein analyst Craig Moffett, adding the rate of access line losses was the "worst in history."

Verizon shares fell 2 percent to 33.77 by mid-afternoon.

Verizon said it added 176,000 new FiOS television customers in the quarter, bringing the total to nearly 1.4 million. It added 187,000 FiOS Internet customers, to a total of 2 million.

Both UBS analyst John Hodulik and Goldman Sachs Jason Armstrong had expected a gain of 230,000 FiOS TV customers.

Verizon Chief Operating Officer Denny Strigl said FiOS growth slowed after a promotion giving free flat-screen TVs to new customers ended, but as a result, the costs of acquiring subscribers also fell.

Some analysts said FiOS could gain momentum as it expands into new areas later this year. On Monday, it launched FiOS TV in New York City, where it will compete with cable service providers such as Time Warner Cable Inc (TWC.N) and Cablevision Systems Corp (CVC.N).

WIRELESS STRONG

Despite the disappointment over FiOS, Verizons wireless growth was solid and its wireless profit margin of 45.6 percent was ahead of expectations. Stifel Nicolaus analyst Chris King and Bank of America analyst David Barden both had expected a wireless margin of 44.9 percent.

King said Verizons territory, which includes New York and New Jersey, has helped it weather the economic downturn more easily than industry leader AT&T Inc (T.N), which serves areas such as Florida, hit hard by the housing crisis.

"You are clearly seeing some geographic differences in the areas they operate in with regards to economic pressures," King said, even as he noted that Verizons FiOS growth was weaker than he had expected.

Verizon Wireless, owned by Verizon and Vodafone Group Plc (VOD.L), said last week it added 1.5 million subscribers in the quarter, taking its total subscriber base to 68.7 million.

Verizon plans to buy rural wireless provider Alltel, a move that would replace AT&T as the top U.S. wireless provider. It reaffirmed plans to close the deal by the end of the year.

Strigl said the weaker U.S. economy is not hurting Verizons business so far. Sales to clients in the financial sector could soften, but the impact would be small.

"Although we may see some softening in some of our volumes, we do not expect any significant economic impact on our financial results in the second half of the year," he said, adding the company would be "comfortable" considering a dividend increase in the fall.

Verizon also said it was positive it could resolve a dispute with union workers over a labor contract that is set to expire on August 2, thereby avoiding a strike.

A strike would be a blow as the company is ramping up its expansion of FiOS and beginning its New York City roll-out

.

"I know that our employees know FiOS is creating new jobs and, also, plenty of work for our existing employees," Strigl said.

Verizon said it would offer 100 high-definition channels in New York City, although its main "triple-play" offer of video, Internet and phone would be a 95-a-month plan which comes with 54 HD channels and Internet download speeds of 20 megabits per second and upload speeds of 5 megabits per second.

(Editing by Gerald E. McCormick and Andre Grenon)

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Samsung, GyPSii Sign Social Networking Deal (TechWeb)

In a move that will help Samsung increase its presence in location-based services and mobile social networking, the company announced a multiyear deal with GyPSii.

The Amsterdam-based GyPSii has developed a mobile networking platform that utilizes location data. Under the terms of the deal, GyPSii will be provide technology, products, worldwide data center infrastructure, and branding rights to Samsung in a nonexclusive agreement.

The mobile networking service enables users to share geo-tagged content with friends, potentially receive location-based advertising, and interact with other social networks like Facebook. To kick off the deal, a GyPSii application will come pre-loaded on Samsungs upcoming touch-screen smartphone, the Omnia.

"Social networking and location-based services on the mobile phone are now mainstream, so we looked to emerging innovators in the industry to support and deliver these value-added services," said W.S. Lee, Samsungs VP of research and development, in a statement.

GyPSii is currently supported by Symbian, Windows Mobile, and BlackBerry handsets, and it can be accessed through a mobile browser on the iPhone. The company also signed a similar deal last month with Garmin, and applications could potentially show up on the upcoming Nuvifone.

"This distribution and partnership agreement brings GyPSii to millions of new users, enabling us to penetrate new markets, expand our global footprint, and leverage the strength of the Samsung brand to drive marketing, distribution, and new revenue streams," said GyPSii CEO Dan Harple, in a statement.

The agreement comes as many companies are betting that mobile social networking will be a hit with consumers. Nokia recently acquired Plazes to beef up its social networking capabilities, and Facebook and MySpace applications are routinely in the most-downloaded list for Apples App Store.

See original article on InformationWeek.com

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Verizon Profit Beats, But Q2 Sales Miss As FiOS Disappoints (Investor's Business Daily)

Verizon Communications second-quarter profit topped views, but sales missed estimates as shrinking demand for wireline service and disappointing sales of high-speed Internet and digital TV overshadowed solid wireless growth.

Adjusted for one-time items, the telecom giant earned 67 cents per share for the quarter that ended June 30, up 15.5% from a year earlier and 2 cents over the average estimate of analysts polled by Thomson Reuters. Sales rose 3.7% to $24.12billion, just shy of analysts forecast $24.17 billion.

Verizons (NYSE:VZ - News) broadband business slowed sharply while its fledgling TV business, called FiOS, signed up fewer customers than analysts had forecast.

Verizon downplayed the impact of a weaker U.S. economy on its wireline results in a conference call with analysts. But management cited tough competition from cable TV operators in the consumer and small business markets.

"Its very stiff competition that were receiving from cable," said Denny Strigl, Verizons chief operating officer, on the call.

"Despite some challenges, we delivered double-digit earnings growth in the quarter," Strigl added. "Although we may see some softening in (call) volumes, we do not expect any significant economic impact on our results in the second half of the year."

Verizons shares slipped more than 2% Monday to close at 33.60. The stock has fallen 22% this year.

Rival AT&T (NYSE:T - News), the nations biggest phone company, says the slowing economy has hurt its consumer business, though analysts say its service region is more exposed to the housing downturn than Verizons.

"There are concerns about the economy getting worse," said Todd Rosenbluth, an analyst at Standard & Poors. "Even though Verizon says theyre not seeing pressure, people think that they might going forward."

Verizon Wireless, partly owned by U.K.-based Vodafone (NYSE:VOD - News), added 1.5 million customers, beating the consensus estimate of 1.33 million additions. Revenue climbed 11.8% to $12.1 billion.

Sales of wireless data products, such as text messaging and music downloads, jumped 45% to $2.56billion.

"Wireless continues to sparkle," said Craig Moffett, an analyst at Bernstein Research.

Verizon Wireless aims to overtake AT&T as the biggest U.S. wireless firm. In June, Verizon agreed to buy Alltel, the fifth-biggest wireless firm, for $28.1 billion in cash and debt.

Second-quarter revenue from Verizons wireline business fell 1.8% to $12.1 billion as the company lost consumer lines at a faster pace. Verizon had 22.45 million residential lines as of June 30, down 11.4% from a year earlier and down 3.3% from the previous quarter.

Verizon added 54,000 high-speed Internet customers in the quarter, down from 281,000 a year ago and 263,000 in the first quarter.

"Theyre facing challenges in consumer wireline," said Rosenbluth. "Broadband, which has been a growth driver for all telecom (companies), has slowed. But wireless remains in sound shape and the corporate side is holding its own."

Verizon has upgraded its network with fiber-optic lines to deliver pay-TV and faster Internet services. The company has said itll spend $23 billion on the FiOS network through 2010.

For the second quarter, Verizon added 176,000 FiOS TV customers. Thats up 5% from the 167,000 customers it signed up in the same quarter last year, but down from the 263,000 it added in the first quarter and below analysts forecasts.

Bernstein Research had estimated Verizon would add 283,000 FiOS TV customers in the quarter; Bank of America forecast 260,000, and Goldman Sachs said 230,000.

"It is remarkable to see FiOS growth already slowing," Moffett said. Verizon ended a promotion in the quarter that gave new FiOS customers who signed two-year contracts a 19-inch, high-definition TV.

The firm opened a new front in its battle against cable on Monday, launching its fiber-optic TV service in New York, where Time Warner Cable (NYSE:TWC - News) and Cablevision (NYSE:CVC - News) operate. Until now, the biggest city getting FiOS TV had been Virginia Beach, Va. -- population 435,619.

FiOS TV will only be available to 10% to 15% of New York homes at launch. Verizon has said it plans to make FiOS available to the entire city by 2014.

Rosenbluth says Verizon needs to ramp up FiOS TV in other big east coast cities to stem the loss of home lines to cable TV firms.

Verizon says the FiOS project will turn EBITDA-positive (earnings before interest, taxes, depreciation and amortization) in 2008.

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China Telecom to Pay US$6.41 Billion for CDMA Business (PC World)

China Telecom finalized a deal on Monday to buy China Unicoms CDMA business, another big step towards consolidation among Chinese telecom companies.

China Telecom is paying 43.8 billion yuan (US$6.41 billion) for the CDMA (Code Division Multiple Access) network, which had 43.17 million subscribers as of June 30. It will also take on 29.3 percent of China Unicoms total employees, the two companies said in a statement.

China Unicom is merging with China Netcom, and plans to use the proceeds from the sale to expand its GSM (Global System for Mobile communications), which had 127.6 million subscribers at the end of June. Unicom said it will also begin preparations to offer 3G services, but gave no timetable as to when those services would begin.

The latest round of consolidation was announced in late May, and will create three major carriers, China Netcom, China Mobile and China Telecom. Each of the companies will offer fixed-line, mobile and other services. As such, China Unicom-- which was originally created as the state-run competitor to former monopoly service provider China Telecom-- will be folded into China Netcom, while China Mobile is acquiring China Tietong for its fixed-line network and China Telecom is taking on China Unicoms CDMA network.

Once the consolidation is complete, Chinas new telecom regulator, the Ministry of Industry and Information Technology, will issue 3G licenses. China Mobile is already publicizing its 3G service, which will use the domestically-developed TD-SCDMA (Time Division Synchronous Code Division Multiple Access) standard, and is providing 3G services to about 18,000 users during the Beijing Olympics, which begin August 8.

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Sony Q1 Profits Halved on Electronics, Cell Phones (PC World)

The effects of tough price competition in the electronics and cell phone businesses hit Sonys profits during the April to June quarter, it said Tuesday.

Net profit fell 47 percent against the same period last year to 35 billion (US$326 million) while sales were virtually unchanged at 2 trillion.

But the unchanged sales figure hides a good deal of movement within several of Sonys key business areas during the quarter. Sales and profitability of its Bravia LCD TVs (liquid crystal display) increased and the game business is finally back in the black after the launch of the PlayStation 3 console, however the Cybershot and Handycam digital camera and Vaio PC businesses, which have been doing well for Sony recently, hit hurdles in the form of increased competition.

Overall electronics sales rose 0.7 percent to 1.4 trillion while operating profits slid 57 percent to 44 billion. Regional sales fell in Japan and advanced in the U.S. and Europe but this was negated by the strong yen, which meant Sony recorded a drop in U.S. sales and unchanged European sales when calculated in the Japanese currency.

The electronics business was also hit by a collapse in income from affiliated cell-phone maker Sony Ericsson. The company contributed 97 percent less profits to Sony during the current quarter than it did last year.

On the positive side, an increase in sales of Bravia TVs led Sonys regional electronics sales growth worldwide except Japan, where the popularity of Blu-ray Disc recorders was notable. Sony hopes to ship 600,000 Blu-ray Disc recorders and 2.5 million Blu-ray Disc players worldwide this year, it said.

Sonys games sector saw 17 percent higher sales and an operating profit of 5 billion on the back of strong PlayStation 3 shipments. During the quarter Sony shipped 1.6 million of the consoles, which is more than double that of the same quarter last year. Additionally PlayStation Portable shipments jumped 75 percent to 3.7 million.

Sonys operating profit in the first quarter was 121 billion.

Looking ahead to the full financial year, Sony raised its sales estimate by 2 percent to 9.2 trillion. At the time of its last forecast it expected the value of the yen to stick around 100 to the U.S. dollar during the current year but it now expects this to be around 105. The currency figure wont, however, lead to increased sales due to a more cautious outlook on electronics.

Profit forecasts were cut to reflect lower results from Sony Ericsson with full-year net income being taken down 17 percent to 240 billion.

Sony Q1 Earnings Table

April to June 2008 April to June 2007 Change

Sales and operating revenue 2.0 trillion 2.0 trillion +0.1 percent

Operating income 73.4 billion 121.3 billion-39.5 percent

Net income 35 billion 66.5 billion-47.4 percent

Source: Sony Corp.

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Sony Q1 profit down on mobile phones, Matsushita up (Reuters)

TOKYO (Reuters) - Sony Corp (6758.T) posted a bigger-than-expected 47 percent fall in quarterly profit and cut its outlook, hurt by its struggling mobile phone joint venture with Swedens Ericsson (ERICb.ST), while rival Matsushita (6752.T) nearly doubled its profit on rising flat TV sales.

Sony lowered its group net profit forecast for the year to March by 17 percent, citing the slump at Sony Ericsson and weakening prospects for its electronics division as rivals try to undercut its Cyber-shot digital cameras and Vaio PCs on price.

Matsushita Electric Industrial Co Ltd, in contrast, kept its annual outlook above market expectations as it cashes in on strong demand for its Panasonic brand plasma TVs ahead of the Beijing Olympic Games.

The U.S. economic slowdown, the yens appreciation and higher fuel and raw materials prices have been slicing into the profitability of most Japanese exporters. But analysts said Sony is being hit particularly hard.

"Overall, Sonys earnings gave me the impression that the company is in a severe state," Daiwa Institute Research analyst Kazuharu Miura. "The electronics division seems to be in a particularly tough situation, hit by sharp price falls."

Net profit at Sony came to 35 billion yen (326 million) in April-June, down from 66.5 billion yen a year earlier and below the average estimate of 52.5 billion yen from three analysts polled by Reuters Estimates.

Sales rose 0.1 percent to 1.98 trillion yen.

Canon, another Japanese high-tech exporter that competes with Sony in digital cameras, said last week its operating profit fell 12 percent in the latest quarter due to a stronger yen and weak copier demand.

Bucking the trend, Matsushita reported a 86 percent rise in quarterly net profit to 73 billion yen.

Matsushita reiterated its forecast for net profit to rise 10 percent to 310 billion yen in the year to March, against the market consensus of 300 billion yen. Sony cut its forecast by 50 billion yen to 240 billion yen, well below the consensus estimate of 278.5 billion yen.

Nobuo Kurahashi, an analyst at Mizuho Investors Securities, said investors have been bracing for a set of weak numbers after Sony Ericsson reported its earnings earlier this month, but may still sell Sonys stock.

"The profit warning will likely have a negative impact on Sony shares tomorrow," Kurahashi said.

ACCOUNTING CHANGE

The electronics and entertainment conglomerate, fresh from its victory over Toshiba Corp (6502.T) in the high-definition DVD format battle, is aiming to turn around its TV and video game operations, which have been Sonys two major earnings drags.

Sony said profitability on liquid crystal display (LCD) TVs improved in the latest quarter and that it had succeeded in getting its game division into the black on lower manufacturing costs for the PlayStation 3 and higher sales of PS3 games.

But its pictures division slipped to a loss due to the lack of a hit movie like Spider-Man 3 in the same quarter last year. Sony Ericsson was another big negative, posting a quarterly operating loss as demand for its more expensive phones sagged.

"Games have recovered well -- thats positive. But movies arent good. Then Sony Ericsson is really a drag," said Hiroaki Osakabe, a fund manager at Chibagin Asset Management.

Sony revised up its operating profit forecast for the year to March to 470 billion yen from 450 billion yen to account for a new accounting method. That is above a consensus of 445.7 billion yen in a poll of 17 analysts by Reuters Estimates.

Under the new accounting procedure, profits and losses from its equity-method companies, or companies in which Sony has stakes of between 20 to 50 percent, are now included in group operating profit.

The new operating estimate is effectively a downward revision as Sony recalculated its previous forecast, unveiled in May, to 520 billion yen from 450 billion yen to reflect the accounting change.

Sony currently trails Samsung in liquid crystal display TVs and lags Nintendo Co Ltd (7974.OS) in video game consoles.

Matsushita kept unchanged its operating profit forecast of 560 billion yen for the year to March, exceeding a consensus estimate of 548.1 billion yen by 19 analysts polled by Reuters.

Matsushita, which makes Viera flat TVs and Lumix digital cameras, is set to change its name to Panasonic Corp on Oct 1.

Prior to the announcement, shares in Sony closed down 3.2 percent at 4,210 yen, while Matsushita slipped 0.2 percent to 2,180 yen. The Tokyo stock markets electrical machinery index (.IELEC.T) dropped 2.1 percent.

(Reporting by Kiyoshi Takenaka; Editing by Louise Heavens)

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Sony profit plunges $327 million from year earlier (AP)

TOKYO - Sony Corp. said Tuesday its April-June profit plunged to $326.9 million (34.98 billion yen) -- about half that recorded a year ago -- as a strong yen, the absence of "Spider-Man 3" revenue and faltering results at its cell phone operations battered earnings.

The Japanese electronics and entertainment company, which makes the Walkman player and the PlayStation 3 game machine, had recorded 66.46 billion yen in profit for the fiscal first quarter the previous year.

Price competition in its core electronics sector also led to Sony's worse-than-expected quarterly performance. Analysts surveyed by Thomson Financial had forecast a 52 billion yen ($486 million) profit.

Sony also lowered its full year profit forecast Tuesday to 240 billion yen ($2.24 billion) from an earlier 290 billion yen ($2.71 billion), blaming expected poor results at its Sony Ericsson mobile joint venture and a pessimistic outlook in electronics.

The results for the latest quarter were also hurt by the absence of a blockbuster like "Spider-Man 3," which lifted the performance of Sony's movie division in the same period a year earlier, according to the company.

In a bit of bright news, the Tokyo-based manufacturer marked a continued recovery in its long struggling video game section, which was profitable in the latest quarter in contrast to losses the previous year.

Sony sold 1.56 million PlayStation 3 machines in April-June, more than double the 700,000 machines sold the same period a year ago. It kept unchanged its forecast for selling 10 million PS3 consoles the fiscal year through March 2009.

The PS3 has been struggling against the hit Wii from rival Nintendo Co. Sony said it has now sold a cumulative 14.4 million PS3 machines worldwide since it went on sale late 2006. Nintendo reports earnings Wednesday.

Sony's quarterly sales were just about unchanged at 1.979 trillion yen ($18.5 billion) compared with 1.977 trillion yen a year ago.

If currency rates had remained the same, sales would have jumped 8 percent on year, but the yen rose against the dollar by nearly 16 percent from the previous year, Sony said.

In its electronics business, the unfavorable exchange rate erased 14.3 billion yen ($133.6 million) from Sony's operating profit for the fiscal first quarter.

Sony raised its sales forecast for the year ending March 2009, to 9.2 trillion yen ($85.98 billion), up from an earlier 9 trillion yen ($84,1 billion), citing in part a more favorable exchange rate. Sony had assumed the dollar would trade at 100 yen but now expects it to hold at 105 yen.

Price competition, unpopular products and higher research investments hammered results at Sony Ericsson, Sony's joint venture with Ericsson of Sweden, for the quarter ended June 30.

In other equity-related income, Sony's music business Sony BMG deteriorated into losses from a year earlier, reflecting an overall decline in the worldwide market and restructuring costs.

Best-sellers during the quarter included Usher's "Here I Stand" and Neil Diamond's "Home Before Dark," Sony said.

Sony shares fell 3.2 percent to 4,210 yen ($39). Trading ended in Tokyo before Sony's earnings were announced.

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Agent 18 adds new iPhone 3G cases

Agent 18 has expanded three of its most popular case lines � EcoShield, ClearShield and FlowerVest � to include versions for the iPhone 3G. Each of these cases offer full access to all of the iPhones connectors, buttons and camera, as well as allow the iPhone to be docked into any universal docking device without the need to remove the case. The EcoShield is a thin case made of a hard scratch resistant plastic derived from recycled plastic bottles. The inside of the case is lined with interior pads to protect the iPhone from any scratches or damage. The case offers a high gloss finish that matches that of the iPhone 3G and is available in five colors: white, pink, green, blue and black.

The ClearShield is an almost invisible case that is constructed of a hard polycarbonate plastic. The case features a rubberized cushioned interior for added shock protection.

The FlowerVest is a lightweight protection option, it is made of a soft silicone and molds to the iPhone for maximum protection. The case helps protect the iPhone from scratches and falls with its bounce back design. The FlowerVest is available in two different designs, brown with blue flowers or pink with pink flowers.

All of Agent 18's cases retail for $30 and are available at Apple Stores or online at Agent 18's website.

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An un-American feel aids expanding US Web firms (AP)

NEW YORK - AOL splashes images of Bollywood celebrities on its new home page for India. MySpace accepts sign-ups from mobile phones in Japan. Google departs from its customarily spartan home page and peppers its Korean site with colorful, animated icons.

As major U.S. Internet companies stake their ground abroad in anticipation of the next billion people coming online -- and the advertising revenue they might generate -- the flags they are planting aren't the Stars and Stripes.

Companies are trying to expand globally without seeming to, designing market-specific services with customized features that reflect differences in connection speeds, payment options and attitudes toward sex or violence.

The stakes are high as the United States faces a weakening economy and a slowing of online ad growth.

And the opportunities are large. People in two populous countries, India and China, are just getting online. The research firm IDC projects worldwide Internet ad spending at nearly $107 billion in 2011, compared with $65 billion this year.

But getting it right will be tough. American companies that merely translate their U.S.-focused sites into other languages risk losing to homegrown businesses that can better respond to cultural nuances.

Google Inc. discovered that in South Korea and China, where it initially held its minimalist approach, only to see local rivals thrive by acknowledging their users' preference for sites rich with entertainment and visual complexity.

"A lot of times, the U.S. companies, because they were successful in the U.S., they tend to repeat their current business models," said Tian X. Hou, a Pali Research analyst who follows China. "Most of the time, that doesn't work."

Cho Ko-un, 29, a graduate student sitting in a cybercafe in Seoul, South Korea, finds Google good for English and academic research, but local portals like Naver and Daum better for Korean-language information. Naver, for instance, has forums for users to answer one another's questions, which proved helpful when Koreans couldn't find a site in their native tongue.

"I feel amazed and surprised when the exact question I am trying to ask ... the proper answer on that is already uploaded," said Kim Seung-ho, a 32-year-old government employee.

Tom Anderson, co-founder of MySpace, said dominance in one market means nothing as the company expands to nearly 30 other countries and regions. He said local incumbents have a key advantage because "it's difficult to get people to change their behavior."

MySpace is nonetheless trying.

In South Korea, MySpace offers an exclusive "minilog" feature for youths to jot down everyday thoughts and feelings. In mobile-heavy Japan, people can sign up for an account directly from a phone; elsewhere, you need a desktop computer. MySpace tweaked its Chinese site to generate new windows with every click, in deference to local user preferences.

The News Corp.-owned company also is exploring low-bandwidth versions -- perhaps with fewer graphics or less audio -- for India and Latin America, where connection speeds tend to be slower.

AOL, meanwhile, has launched about two dozen international sites over the past 18 months. As the one-time Internet access powerhouse transforms itself into an advertising business, executives decided to push into several emerging markets that they knew wouldn't pay off for another few years.

"Our goal is to plant the flag, to be present, said Maneesh Dhir, AOL's India-based international chief. "Then you work to grow that business."

In each market, AOL partners with local content providers.

The Indian portal, for instance, is heavy on Bollywood films, covering their stars as fiercely as American sites follow Lindsay Lohan. Instead of baseball, the Indian portal covers cricket, with schedules, team profiles and an online fantasy game.

AOL, a unit of Time Warner Inc., also customized its popular AIM instant-messaging service for India and other markets with heavy usage of text messaging on cell phones. Messages sent over AIM are automatically converted into phone texts, and vice versa.

And AOL's channel for men is far edgier in Australia than in Asia or the United States, at one point featuring a photo gallery of a New Zealand rugby game with full frontal nudity.

Microsoft Corp. has more than 80 people worldwide tasked with making sure its products and services do not stereotype, offend local sensibilities or prove irrelevant in a particular culture. Microsoft's instant-messaging product, for example, varies icons and emoticons to reflect flowers, animals and characters popular in each market.

Google has had a different challenge.

With a dearth of Arabic Web sites, Google had to find a way to persuade Arabic speakers that the Web is worth exploring. So it developed a system for automatically translating an Arabic user's search terms into English, checking its English index for matches and translating relevant Web sites back into Arabic for Mideast markets.

To take on China and Korea, where it trails rivals, the normally sparse Google site for those countries now displays icons that jump as users move the mouse. In China, Google also took the much-criticized step of filtering its results to avoid revealing search results blocked by the government.

But Baidu is still the Chinese search leader, thanks to its willingness to add music video and other entertainment features.

"I do think local companies have an edge over international companies because local companies start with Chinese services, whereas international companies have to follow their overarching goal and can't easily adapt to Chinese needs," said Zhu Shuang, 27, who works at a Shanghai wireless technology company, mInfo Ltd.

Like other U.S. companies, Google is finding it cannot afford to ignore emerging markets. This year, Google started getting more than half its revenue abroad.

Analyst Greg Sterling of Sterling Market Intelligence said many companies have stepped up international ambitions "to insulate themselves as much as possible" from the weakening U.S. economy.

E-retailer Amazon.com Inc. and auctioneer eBay Inc. were among the pioneers in expanding abroad, gaining dominance elsewhere over the past decade by buying local companies that knew the markets already, said Anette Schaefer, a Europe-based director at the Yankee Group.

Pali's Hou said Microsoft's MSN also has made inroads in China, thanks to its highly local staff in touch with Chinese affinity for entertainment news.

But expansion hasn't always been smooth. Though strong elsewhere, eBay failed to gain traction in Japan and pulled out in 2002. Among its missteps: It insisted on credit cards in a largely cash-based society. EBay is now re-entering Japan by teaming up with auction leader Yahoo Japan Corp., which itself is Yahoo Inc.'s joint venture with a leading Japanese company, Softbank Corp.

Other companies simply translated their sites, and one site that no longer exists displayed products available only in the United States, making the site feel foreign to locals, said Matthias Caesar, German-based board member for the Globalization and Localization Association, whose members provide language and other consulting services.

U.S. companies do have key advantages. They have technical know-how, financial muscle and global reach. MySpace and Facebook, for example, let friends communicate worldwide, even if each logs on from a locally customized home page.

And oddly, a few U.S. companies have found their social networks more popular abroad, including Google's Orkut in Brazil, AOL's Bebo in Britain and Friendster in the Philippines.

But U.S. companies are often hampered by global codes of conduct.

Take nudity. Many Mideast cultures are averse to displaying women's skin, while Europeans are far more tolerant of public nudity than Americans. A U.S. company trying to impose its standards for user-submitted content elsewhere risks complaints of banning too much or too little, yet it wants uniform policies because the Internet crosses borders.

"Creating a national company is like rocket science," said John Strand of Strand Consulting in Denmark. "But creating an international company is like proton physics."

___

Associated Press Writers Joe McDonald in Beijing and Jae-hyun Jeong in Seoul contributed to this report. Didi Tang in Beijing also contributed.

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