Technology Word

NEW YORK (AP) - Apple Inc. said Monday it sold 1 million iPhones in the first three days its newest model was on the market.
“IPhone 3G had a stunning opening weekend,” said Steve Jobs, Apple’s chief executive, in a statement.
However, Jobs did not address widespread software problems that plagued the launch.
On Friday, Apple’s servers buckled as buyers tried to activate new iPhones in stores, while owners of older iPhones and the iPod Touch were updating and reactivating their devices.
In stores, employees who couldn’t get the new iPhones working sent shoppers home to try again on their own later. At the same time, owners of the older phones were left with unusable units.
Reports of activation snags subsided over the weekend, as Apple’s systems apparently recovered, and buyers were able to activate their phones through their home computers. As of Monday, the issues appeared to have been resolved, said analyst Charles Golvin of Forrester Research.
Apple did not respond to calls or e-mails requesting more information about the activation glitches.
Apple had sold about 6 million units of the first-model iPhone since it launched in the U.S. a year ago. The company has set a goal of selling 10 million iPhones by the end of 2008.
Shares of Apple rose $1.30 to close at $173.88.

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NEW YORK - Apple Inc. said Monday it has sold 1 million iPhones in the three days following the release of the latest model on Friday.

“iPhone 3G had a stunning opening weekend,” said Steve Jobs, Apple’s chief executive, in a statement Monday.

But the launch was plagued by software problems. All the new iPhones had to connect to Apple’s servers for activation, which quickly overloaded them. Lines of customers built in stores as employees were unable to get the phones working.

Additionally, new software was released for the old iPhone, which required reactivation of those phones. Many owners of the older phone were left with unusable units.

The iPhone 3G was launched simultaneously in 21 countries, including the U.S.

Apple had sold about 6 million units of the first-model iPhone since it launched in the U.S. a year ago. The company has set a goal of selling 10 million iPhones by the end of 2008.

Shares of Apple rose $5.32, or 3.1 percent, to $177.90 in morning trading.

Click for related contentiPhone goes on sale, problems ariseThe ‘iPocalypse’ is at handiPhone envy at the 24-hour Apple storeBring on iPhone 2.0 software iPhone games we can’t wait to play

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NEW YORK - Apple Inc said on Monday it has sold 1 million new iPhones in its initial weekend, on par with estimates set by analysts, sending its stock rising more than 2 percent.

The original iPhone, introduced in late June 2007 in the United States only, sold about 270,000 units in its first two days. Sales topped 1 million by early September. The new device sells in 21 countries.

Apple executives were pleased with the early results.

“IPhone 3G had a stunning opening weekend,” Apple Chief Executive Steve Jobs said in a statement. “It took 74 days to sell the first 1 million original iPhones, so the new iPhone 3G is clearly off to a great start around the world.”

Steven Hodges, President for the Northeast region for AT&T Inc, Apple’s only U.S. carrier partner, would not disclose how many iPhones it sold but said it would be AT&T’s key device for the holiday shopping season this year.

“It’s definitely in the center of demand,” he said at the operator’s holiday phone showcase in New York.

Still, iPhone sales pale compared with those of established mobile phone makers, such as Nokia Oyj, which sells almost 10 million phones a week, or Samsung Electronics Co Ltd and LG Electronics Inc, which each ship more than 100 million a year.

While those phone makers often unveil dozens of models a year, Apple has only one, and its sales spark a retail frenzy as consumers around the world line up to grab one.

Apple’s addition of support for corporate e-mail pits it more directly against Research In Motion, the maker of the wildly popular Blackberry e-mail devices. While big firms are not moving en masse from Blackberry so far, many are at least looking at the iPhone as an alternative, according to Damian Goldstein, an AT&T enterprise specialist.

“They’re more open to it,” he said, adding that most companies are at least getting a few iPhones to test.

The iPhone 3G still has the popular touch screen, but also offers a faster wireless network and the ability to download third-party applications such as games.

Perhaps more important, the new iPhone sells for about $200 in the United States, about one-half the price of its predecessor.

“We don’t yet know the breakdown of how many phones were sold to new customers and how many existing iPhone customers upgraded, but regardless, sales during the first weekend were very impressive,” said Jeff Kagan, an independent telecommunications analyst, in a note.

Analysts said iPhone sales may dent sales and profit margins at Samsung and LG this year.

Activation problems marred its U.S. launch on Friday, with many buyers leaving stores frustrated that they could not use the hotly anticipated gadget after waiting in line for hours.

AT&T Inc, the sole U.S. carrier for the iPhone, blamed problems synchronizing the phone with Apple’s iTunes online music and software store, saying it was probably caused by too many people trying to access iTunes at the same time.

Analysts expect Apple to exceed its original target of 10 million iPhones by the end of 2008.

“The iPhone 3G launch was clearly not as smooth as last year’s launch. However, demand was clearly strong across the U.S. …,” said Morgan Keegan analyst Tavis McCourt in a note to investors.

Apple shares closed up $1.30, or less than 1 percent, at $173.88 after earlier hitting a session high of $179.30.

Von Ahn and Andre Grenon)

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After seeing Cisco Systems Inc.’s market value plunge $50 billion over the past six months, investors were relieved that the networking equipment maker managed to weather U.S. economic turbulence better than expected in its fiscal third quarter.
The company reported third-quarter profit Tuesday that beat analyst forecasts by 2 cents per share, and it offered fourth-quarter sales guidance in line with Wall Street’s projections.
Cisco shares rose 29 cents in after-hours trading after the results were reported. The stock had gained 5 cents to close at $26.33 during the regular trading session, giving Cisco a market value of about $157 billion.
But Cisco still has a long way to go to get its stock price back to last fall’s levels.
The stock is still down more than 20 percent from its 52-week high of $34.24 on Nov. 6, when the company had a market value of about $207 billion.
Analysts said Cisco continues to feel the effect of the general downturn in technology stocks since then, which was triggered in part by Cisco’s troubling assessment in November about the health of U.S. technology spending.
Kenneth Muth, a senior research analyst with Robert W. Baird & Co., said Cisco’s fourth-quarter outlook of 9 percent to 10 percent sales growth likely won’t be enough to convince investors to jump back into Cisco’s stock.
“You need 100 percent of the equation for the stock to move up - you need a good quarter and good guidance,” Muth said. “And the guidance was really unchanged. And given how the stock has moved, I don’t think that’s enough for the stock to move higher from here.”
San Jose-based Cisco is particularly vulnerable to economic downturns because its routers and switches - which direct traffic over the Internet - each can cost hundreds of thousands of dollars and even millions of dollars. That makes them the kind of big expense that companies try to cut when times get tough.
But a big advantage for Cisco is its worldwide sales base and strong growth in emerging markets where Internet infrastructure is being deployed rapidly, a factor that has helped Cisco as the U.S. economy has faltered.
Cisco’s profit was $1.77 billion, or 29 cents per share, during the three months ended April 26. That represents a drop of 5.4 percent from the $1.87 billion, or 30 cents per share, that Cisco earned during the year-ago period.
Stripping out one-time charges, Cisco earned 38 cents per share, which is 2 cents per share above the average estimate of analysts polled by Thomson Financial.
Sales came in at $9.79 billion, a 10.4 percent jump over the year-ago period. Analysts were expecting sales of $9.75 billion.
Wall Street wasn’t expecting fireworks from Cisco in the third quarter because the technology bellwether lowered its sales-growth target in February. Cisco blamed weakness in the U.S. economy, which was causing big customers to delay or scuttle big purchases.
“Considering the relatively mixed economic environment we’re in, I think it was a really good quarter from a balance perspective and an execution perspective - we did what we said we were going to do,” Jonathan Chadwick, Cisco’s corporate controller, said in an interview.
On a conference call with analysts, Cisco’s chief executive, John Chambers, said he expects companies in the U.S. to remain cautious about spending until at least the end of 2008.
On the Net:
Cisco Systems Inc.: http://www.cisco.com

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SAN FRANCISCO - Cisco Systems Inc.’s profit fell 5 percent in its fiscal third quarter but beat Wall Street’s expectations, a sign the turbulent U.S. economy didn’t rattle the world’s largest networking equipment maker as hard as expected.

The San Jose-based company reported Tuesday it earned $1.77 billion (euro1.14 billion), or 29 cents per share, during the three months ended April 26. That represents a drop of 5.4 percent from the $1.87 billion, or 30 cents per share, that Cisco earned during the same period a year ago.

Stripping out 9 cents per share in one-time charges for acquisition and employee stock-based compensation, Cisco earned 38 cents per share. That’s 2 cents per share above the average estimate on the same basis from analysts polled by Thomson Financial.

Sales were also higher than analysts’ subdued forecasts, coming in at $9.79 billion (euro6.3 billion) in the third quarter, a 10.4 percent jump over the year-ago period, when Cisco’s sales were $8.87 billion. Analysts were expecting sales of $9.75 billion (euro6.28 billion) in the third quarter this year.

Wall Street wasn’t expecting fireworks from Cisco in the third quarter because the technology bellwether lowered its sales-growth target in February. Cisco blamed weakness in the U.S. economy, which was causing big customers to delay or scuttle big purchases involving Internet infrastructure.

Investors were merely hoping the company, which makes routers and switches that direct Internet traffic, would manage a slowdown in technology spending in the U.S. and at least report in line with expectations.

“Considering the relatively mixed economic environment we’re in, I think it was a really good quarter from a balance perspective and an execution perspective we did what we said we were going to do,” Jonathan Chadwick, Cisco’s corporate controller, said in an interview.

The company’s worldwide base helped it overcome sluggishness in the U.S. in the third quarter.

Cisco’s overall sales of routers were up 14 percent over last year to $2 billion (euro1.29 billion), and sales of switches were up 3 percent to $3.2 billion (euro2.06 billion). Sales of so-called advanced technologies like wireless home routers and set-top boxes were up 17 percent to $2.4 billion (euro1.55 billion).

Meanwhile, sales to large corporations in the U.S. continued to grow more slowly than they have in the past, rising in the mid-single digits in the third quarter, a sign that technology spending among some of Cisco’s biggest customers remains tight.

The slowdown appears to have spread to Internet service providers as well. Orders from service providers in the U.S. were down 3 percent over last year, a surprising sign after a lengthy period of robust growth.

Chadwick said some Internet providers have cut their short-term spending on infrastructure, but added that Cisco expects the business to pick up again soon because service providers need to keep upgrading their networks.

Cisco also offered fourth-quarter guidance of 9 percent to 10 percent sales growth that matched analyst expectations. On a conference call with analysts, Cisco’s chief executive, John Chambers, said he expects companies in the U.S. to remain cautious about spending until at least the end of 2008.

Investors were apparently relieved the damage from weakness in the U.S. wasn’t worse and bid up Cisco’s shares.

via MSN

WASHINGTON (AP) - The NASA inspector general says the space agency is breaking the law by allowing conflicts of interest on a board overseeing the building of a new spaceship to return astronauts to the moon.
The board is set up to review NASA’s new Orion capsule. The panel is loaded with employees of the contractors it is supposed to scrutinize, the inspector general report says.
The report says the board chairman and five other members work for contractors hired by NASA for the multi-billion-dollar space shuttle replacement program. Four of the six are also stockholders in firms making money off the NASA project, the report says.

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WASHINGTON - A board set up to review construction of the spaceship to return astronauts to the moon is loaded with employees of the very contractors they are supposed to scrutinize, breaking federal law, a government watchdog says.

The board chairman, former Skylab astronaut Ed Gibson, and five other members work for companies hired by NASA on the multi-billion-dollar space shuttle replacement program.

The NASA inspector general, the agency’s in-house watchdog, calls that a conflict of interest and recommends suspending the six board members.

NASA contends that in the specialized field of aerospace, most of the experts either work for NASA or its contractors. The agency regularly has to deal with this on review boards, said NASA spokesman David Steitz.

The board was set up to oversee NASA’s new Orion crew capsule project, but not the moon rocket that sits under the capsule. Plans call for astronauts to return to the moon by 2020 and the Orion would take them there.

The board consists of 19 members charged with providing “independent” assessments of the project designed by NASA but built by private firms. However, nearly one-third of them work for those firms. Four of the six contractor employees were also stockholders in companies making money off the NASA project.

The conflicts include two powerful space and defense contractors: Science Applications International Corp. (SAIC) of San Diego and Lockheed Martin Corp. of Bethesda, Md.

Gibson and former NASA flight director Neil Hutchinson are vice presidents and stockholders of SAIC, which has a $51.4 million contract for Orion test facilities. Another board member is an SAIC employee. A former top NASA official, Jack Garman, works for and owns stock in Lockheed Martin, the prime builder of Orion with a $4.3 billion contract. Two other board members work for contractors MEI Technologies of Houston and Gray Research Inc. of Huntsville, Ala.

In a response from NASA in the report, Scott Pace, an associate administrator, said there is no need to suspend or replace the board members in conflict. Pace said the standards for the board’s independence are being rewritten. The inspector general’s office called that response “nonresponsive.”

An expert on government ethics said the conflict was “a flagrant abuse and Congress should investigate.”

“Not only is NASA ready to challenge the laws of physics, it appears more than willing to challenge the laws of Congress,” said New York University professor Paul Light.

House Science Committee Chairman Bart Gordon, D-Tenn., said he believes “NASA will take whatever steps are required to eliminate any conflicts of interest.”

This is not just bureaucratic nitpicking, Light said. Independent oversight is crucial and that means separate from the contractors NASA uses so often, he said. He pointed out that NASA lost a $125 million Mars probe in 1999 because a contractor, Lockheed Martin, used English measurements while NASA had been using metric measurements for years.

In a NASA self-assessment of any potential conflict of interest, Gibson wrote that there is no conflict between him and SAIC where he is an officer. He said SAIC provides only technical services and that he created a “firewall” between him and SAIC’s work on Orion; he said he is barred from discussing Orion work with company employees. SAIC did not have any comment.

However, the inspector general auditors wrote that these assurances were not “adequate to remedy his independence impairment.”

This is the second major conflict of interest problem NASA has had with a board recent months. Last December, NASA announced it was delaying by two years its planned half-billion-dollar 2011 unmanned probe to Mars. because of an unspecified conflict of interest in the board formed to pick a contractor.

___

On the Net:

NASA Inspector General’s report:

http://oig.nasa.gov/audits/reports/FY08/IG-08-018.pdf

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Motorola Inc. on Monday dismissed as an “unnecessary distraction” billionaire investor Carl Icahn’s legal efforts to force it to turn over documents about its executives and its cell phone business.
Icahn plans to use the material in his battle to win four seats on the Schaumburg-based company’s board. Motorola prevailed in a similar proxy battle with Icahn a year ago.
“Over the past 12 months the statements and predictions of Motorola’s management and the board about mobile devices business have too often proven to be wrong,” Icahn said in a statement.
Icahn sued the company for the documents Monday afternoon in the Court of Chancery of the State of Delaware.
“We demanded these materials for the purposes of enabling us to investigate whether and to what extent the board of directors of Motorola failed in their duties as directors in supervising management and setting policy and direction of Motorola,” he said.
Motorola said it rejected Icahn’s “demand for extensive access to its books and records” earlier this month on the belief that he does not have a credible basis to request such an inspection.
“Motorola had offered Mr. Icahn access to information concerning Motorola pursuant to a customary confidentiality agreement, but Mr. Icahn chose not to avail himself of that opportunity and instead seeks to create further unnecessary distraction,” the company said in a statement.
The investor has nominated former Viacom Inc. CEO Frank Biondi, WR Hambrecht & Co. founder and CEO William Hambrecht, Massachusetts Institute of Technology professor and semiconductor materials processing expert Lionel Kimerling and Icahn Enterprises CEO Keith Meister for Motorola’s board.
Icahn said in a story posted late Monday on The Wall Street Journal’s Web site that Motorola offered to seat two of his nominees on the board, but excluded Meister from the proposal.
Icahn called Motorola’s rejection of Meister “intolerable and reprehensible” and said he turned down the offer, the Journal reported.
Icahn did not immediately return a call from The Associated Press.
Motorola spokeswoman Jennifer Erickson said the company was not commenting on its discussions with Icahn.
In his lawsuit, among other materials, Icahn is seeking board documents related to a potential spin-off of the cell phone unit, the service and selection of Motorola’s senior officers and materials related to the use of company aircraft by senior management, board members and their families.
Icahn, who has been steadily increasing his Motorola position, disclosed in a filing this month that he now owns 142,362,000 million shares, or 6.3 percent - up from 5 percent a month ago.
Icahn said in a letter to Motorola stockholders that the company “assured us during last year’s proxy contest that they had a plan to right the ship.”
Instead, he said, the results in the cell-phone division “are a stockholders’ nightmare.” He favors spinning off the division to stockholders as a wholly separate company with a new CEO. The company has indicated it is considering selling or spinning off the unit.
In January, Motorola told investors its net profit had fallen 84 percent in the final quarter of the year and mobile phone sales were down 38 percent. The company revealed its already diminished market share continued to fall as Nokia and other competitors carved into its sales.
Former Motorola Inc. Chief Executive Ed Zander stepped down at the end of last year under pressure from investors after a disastrous stretch that pushed Motorola into third place in the global cell-phone market and caused it to lose $49 million for the year.
Zander was succeeded Jan. 1 by Greg Brown, who the company announced in February has assumed day-to-day responsibilities of the phone business.
Motorola shares rose 45 cents, or 4.8 percent, to close at $9.69.
On the Net:
Motorola: www.motorola.com

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(Updated with comments from Icahn, similar court cases, background starting in ninth paragraph.)

By Roger Cheng

Of DOW JONES NEWSWIRES

NEW YORK -(Dow Jones)- In his latest gambit to gain influence at struggling Motorola Inc. (MOT), activist investor Carl Icahn on Monday sued the company in hopes of forcing it to release documents related to its mobile devices unit.

Icahn is again waging a proxy fight with the Schaumburg, Ill., company, and has put up four candidates to replace directors on Motorola’s board. He attempted - and failed - to do so a year ago when cracks began forming in the company’s once mighty handset business. With shares down more than 50% in just the last six months, Icahn is pressing his case.

Motorola shares recently traded at $9.64, up 4.3%, as they rebound from their 52-week low of $8.98 set Thursday.

The lawsuit, filed in Delaware, follows what Icahn said were failed attempts to get the materials he sought. He contended those items would help him ” ascertain what the board could have done” to assure shareholders that the company’s comments weren’t incorrect and wouldn’t give shareholders “an inaccurate perspective on the prospects for the mobile devices business.”

Motorola, however, refused the request and called the move a distraction.

“Motorola rejected Mr. Icahn’s demand for extensive access to its books and records, as the company’s does not believe that Mr. Icahn’s demand sets out a proper purpose to support a right of inspection under Delaware Law.,” spokeswoman Jennifer Erickson said in an e-mailed statement.

Motorola had offered Icahn access to information in exchange for a typical confidentiality agreement, but he didn’t take the company up on the offer, Erickson said.

Icahn “instead seeks to create further unnecessary distraction,” Erickson said.

Similar cases, in which investors have sought inside corporate information, don’t bode well for Icahn. One such case had Polygon Global Opportunities Master Fund suing West Corp. (WSTC) to inspect its books. The Delaware court denied the request. In a number of cases, the courts have denied the requests because of a lack of a specific objective.

Icahn on Feb. 1 named four board nominees who will try to push the troubled company to quickly spin off or sell its flagship handset division. That announcement came a day after Motorola said it was considering spinning off or selling the segment.

Icahn has long argued that Motorola’s stock is severely undervalued and that splitting off the cellphone division would improve shareholder returns. He believes it would unlock $20 billion in value. The unit accounted for just more than half of the company’s 2007 sales of $36.62 billion but has experienced plummeting sales in recent months as Motorola failed to come up with a replacement for its popular Razr phone.

Icahn, meanwhile, said on CNBC Monday that he believes the stock is “very undervalued” and there was a good chance he would buy more.

“The value of (Motorola) stock gives no value to the handset business,” he said. “It’s losing a lot of money, but it’s losing a lot of money because there is no management. We think there is value there. You have a great brand name ( and) a great deal of money spent in research.”

Icahn wrote in a letter to shareholders asking for support for his board slate that “2008 was supposed to be a successful and profitable year in Mobile Devices with the potential to achieve 10% operating margins in the near future” He added: “Instead, the results are a stockholders’ nightmare.”

The latest chapter in Icahn’s battle to change Motorola comes as the company sees a stream of managerial departures amid problems in its handset division. Since Greg Brown took over as chief executive in January, the company has replaced its head of finance, human resources and technology, among other senior executives.

Two weeks ago, Icahn said he was supporting a shareholder “say-on-pay” proposal and another proposal designed to prod the company to recoup any ” unearned” bonuses received by executives. Motorola has said it opposes the shareholder proposals, which previously were disclosed by the company.

-By Roger Cheng, Dow Jones Newswires; 201-938-2020; roger.cheng@dowjones.com

(Mike Barris and Rebecca Townsend contributed to this report.)

(END) Dow Jones Newswires 03-24-08 1534ET Copyright (c) 2008 Dow Jones & Company, Inc.
via CNN

Mobile phone maker Sony Ericsson on Wednesday warned that falling growth in the market for mid- and high-range handsets would have a negative impact on its sales and profits in the first quarter.
The joint venture between Sweden’s LM Ericsson and Japan’s Sony Corp. said shortages in certain components for mid-priced phones also were expected to affect sales growth in the period.
The company is due to release its earnings for the first quarter on April 23, and said it expects to report around 22 million shipped phones - leading to lower net sales compared with the same quarter a year earlier.
Pretax profit was expected to be between 150 million euros and 200 million euros ($235 million and $315 million), down from 362 million euros in the quarter a year ago because of higher research and development costs.
The company added, however, that it still expects its gross margin for the three-month period to stay relatively stable compared with the same period in 2007.
Sony Ericsson President Dick Komiyama said “the market is proving to be challenging. This has been more pronounced in the mid- to high-end replacement sector of the market in Europe, where Sony Ericsson has stronger than average market share.”
He added that for the last year, his company has focused on expanding its portfolio and its presence in new markets in a move to reduce its reliance on the European high-end sector for growth.
“This strategy will continue, and our objective remains to become a top three player globally by 2011,” he said.
Komiyama said his company expects to start seeing the positive effects of recent mobile phone and platform launches in the second half of 2008.

via AOL

(Adds detail, background, analyst comment.)

By Adam Ewing

Of DOW JONES NEWSWIRES

STOCKHOLM -(Dow Jones)- Sony Ericsson Wednesday said slowing market growth of mid-to-high end phones will negatively impact sales and net income before tax for the first quarter of 2008.

Sony Ericsson, a joint venture between Japan’s Sony Corp(SNE) and Sweden’s Telefon AB LM Ericsson Co. (ERIC) said certain component shortages for popular mid-priced phones had contributed to modest unit sales growth in the first quarter.

“As discussed during our fourth quarter 2007 Media and Analyst Call, the market is proving to be challenging,” said Dick Komiyama, President of Sony Ericsson. “This has been more pronounced in the mid-to-high end replacement sector of the market in Europe, where Sony Ericsson has stronger than average market share.”

Koyama said Sony Ericsson will continue to try to reduce its dependence for growth on the European high-end sector and would continue with its plan to develop its presence in new markets.

“This strategy will continue, and our objective remains to become a top three player globally by 2011,” Komiyama said.

Mobile device unit sales are seen falling on slowing consumer spending in developed countries.

In a sign of this slowing demand, mobile chip manufacturer Texas Instruments Inc. (TXN) last week trimmed its financial forecasts amid weakening demand for the high-end and third-generation, or 3G, handsets for which it makes chips. The company noted that one large customer had made a “significant downward revision in wireless customer demand.” Though it didn’t name the customer, shares in Nokia Corp. (NOK), the world’s largest mobile device maker with some 40% of the market, fell in the wake of the comments.

Sony Ericsson is the fourth largest phone maker globally with 8.8% of the market in the fourth quarter, according to research firm Gartner, behind second placed Motorola Inc. (MOT) of the U.S. and third placed South Korean Samgsung ( 6758.TO). Sony Ericsson makes a large proportion of its sales from higher end devices.

London-based Nomura analyst Richard Nomura said last week Sony Ericsson was the most likely to be affected by slowing consumer demand due to its relatively large exposure to this high-end segment.

Sony Ericsson said Wednesday it now plans to ship some 22 million phones during the first quarter of 2008 with an estimated ASP, or average selling price, of EUR120.

This is expected to generate net sales lower than the first quarter of 2007, and net income before taxes is estimated to fall in a range of between EUR150 million to EUR200 million compared with the EUR362 million reported in the same quarter last year, due to increased research and development expenses as a percentage of sales, the company said.

Sony Ericsson said increased R&D investments are in line with its strategy to meet future growth ambitions. Its gross margin is expected to remain relatively stable for the first quarter of 2008 compared with the first quarter of 2007.

Ericsson shares are expected to open “substantially lower” from its SEK11.48 closing, while the impact on Nokia, which closed at EUR20.45 aren’t as clear, says a Swedbank analyst.

Company Web site: http://www.sonyericsson.com

-By Adam Ewing, Dow Jones Newswires; +46 8 545 130 95; adam.ewing@dowjones.com

(END) Dow Jones Newswires 03-19-08 0359ET Copyright (c) 2008 Dow Jones & Company, Inc.
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(refiling, changing to ‘late morning’ in first par)
COPENHAGEN, Mar. 19, 2008 (Thomson Financial delivered by Newstex) — Shares were lower late morning, shedding initial gains, with investor sentiment negatively affected by a profit warning from Sony (NYSE:SNE) Ericsson. (NASDAQ:ERICY)
At 11.09 am, the OMX Stockholm index was down 1.11 pct at 298.22, and the OMX Stockholm 30 index shed 1.09 pct to 904.60.
Turnover was 7.57 bln skr.
Ericsson B fell 8.29 pct to 10.51, after jointly owned handset division Sony Ericsson warned that it now expects first quarter pretax profits of 150-200 mln eur and lower sales quarter on quarter.
Analysts had been expecting a pretax profit of 362 mln eur, according to a survey by SME Direkt.
‘This is the first very clear indication that demand in the end market is weakening and that is clearly negative for the sector,’ Thomas Langer, analyst at WestLB said.
Carnegie’s Ericsson analyst Martin Nilsson said: ‘Sony Ericsson accounts for one third of Ericsson’s operating profit, so it’s quite a big hit.’
Trelleborg AB shed 0.23 pct to 108.25. The industrial group said it has acquired US company MacDermid Offset Printing Blankets for 400 mln skr.
Among other heavily traded shares, TeliaSonera AB (PINKSHEETS:TLSNF) was down 0.22 pct at 46.10, Boliden AB (TSX:BLS) fell 2.06 pct to 59.50 and Atlas Copco AB added 0.78 pct to 96.50.
Copyright Thomson Financial News Limited 2008. All rights reserved.
The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.

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SAN FRANCISCO (AP) - Apple Inc. is negotiating with record labels over a deal to give iPhone and iPod customers free access to the entire iTunes music library if they pay extra for the devices.
The Financial Times is reporting that the sticking point in the talks is how much Cupertino-based Apple will pay the record labels for the access. The newspaper cites unnamed music industry sources for Wednesday’s report.
Apple declined to comment.
The newspaper reports that Apple is looking at offering the unlimited music bundle with for the iPod and iPhone, and also a monthly music subscription service only for the iPhone.

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LONDON, Mar. 19, 2008 (Thomson Financial delivered by Newstex) — Apple Inc is in talks with music companies to offer customers free access to its iTunes music library if they pay a premium for its iPod and iPhone devices, the Financial Times website reports, citing unnamed sources.
The model under discussion is similar to the ‘comes with music’ model agreed between Nokia (NYSE:NOK) and Universal Music last year, it added.
Executives familiar with negotiations said the talks hinge on a dispute over the price Apple is willing to pay for access to the music companies’ archives, said the report.
Apple declined to comment on the plan, it added.
While Nokia is believed to be offering 80 usd per handset to its music industry partners, Apple has so far offered only 20 usd per device, said the report, citing two executives.
tf.TFN-Europe_newsdesk@thomson.com
slj/ms1
Copyright Thomson Financial News Limited 2008. All rights reserved.
The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.

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BERKELEY, Calif. (AP) - A new partnership among two personal computing giants and two major research universities aims to bring advances in processing technology to consumers faster.
Under an agreement announced Tuesday, Intel Corp. and Microsoft Corp. are joining the University of California, Berkeley, and the University of Illinois at Urbana-Champaign to push developments in parallel computing.
Parallel computing speeds computers enabling them to perform tasks at the same time on multiple chips.
The companies are expected to invest about $20 million in research centers at both universities over the next five years.
Technologies the centers may pursue include face recognition and voice recognition.

via AOL

URBANA, Ill. - A new partnership between two massive computer companies and the University of Illinois will help consumer products use the same technology that drives high-speed supercomputers.

Under an agreement announced Tuesday, the U of I will become home to one of two new research centers funded by Microsoft Corp. and Intel Inc.

The $18 million Universal Parallel Computing Research Center will involve 22 faculty members from the school’s computer science and computer engineering departments.

The center will focus on the mass-market use of so-called parallel computing, the process of having tasks performed at the same time on multiple processors.

via MSN

NEW YORK (AP) - AOL said Thursday it will pay $850 million to acquire the online hangout Bebo, giving the struggling Internet company a foothold in an expanding business.
Bebo is one of the largest social networks in Britain, is ranked No. 1 in Ireland and New Zealand and has a global membership of more than 40 million, according to AOL. In the United States, however, it ranks third behind MySpace and Facebook.
Ron Grant, AOL’s president and chief operating officer, said the deal should help AOL expand internationally and Bebo grow in the United States. The all-cash deal, expected to close in a month, also should give AOL an engaged audience from which it can generate additional advertising revenue.
AOL has been looking for ways to boost its advertising revenue to offset steep declines in dial-up Internet subscriptions. After several quarters of strong growth, AOL’s advertising expansion has been slowing, putting pressure on the company’s parent, Time Warner Inc., to sell off the Internet unit.
The deal is an acknowledgment that AOL still needs to seek additional outlets for expanding its audience and its advertising opportunities. But it also underscores the growing value of social networks such as Bebo to media companies as potential gold mines for online advertising dollars.
News Corp. bought MySpace for $580 million in 2005, but has estimated the network is now worth more than $15 billion. News Corp. also owns the Fox television and movie studios in addition to its newspaper and Internet holdings.
Facebook Inc., which owns the Internet’s second-largest social network behind MySpace, now arguably has a $15 billion market value, based on Microsoft’s purchase late last year of a 1.6 percent stake for $240 million.
“Bebo is the perfect complement to AOL’s personal communications network and puts us in a leading position in social media,” said Randy Falco, chairman and chief executive of AOL.
AOL said current Bebo president Joanna Shields will continue to run the company, reporting to AOL President and Chief Operating Officer Ron Grant.
The acquisition is part of AOL’s shift from a subscription-driven business to a public Web site that generates income from building traffic and selling advertising, similar to rivals Yahoo Inc. and Microsoft Corp.’s MSN. AOL, which has launched 17 international Web sites over the last year and expects to expand to 30 countries outside the U.S. by the end of 2008, said Bebo plans to launch in five countries this year, and will be “featured prominently” in AOL’s international expansion efforts after the deal is closed.
Bebo has about 100 employees operating in offices in the U.K., San Francisco and Austin, Texas.
AOL was advised by Banc of America Securities LLC and Deutsche Bank Securities Inc. Bebo was advised by Allen & Co.

via AOL

NEW YORK (Fortune) — AOL will pay $850 million to acquire global social networking site Bebo.com in an all-cash deal announced Thursday.

With 40 million members, Bebo falls a distant third to Facebook and MySpace (NWS, Fortune 500) in the United States, but it vies for the top spot in terms of audience in the United Kingdom and has a fast-growing global audience.

“Bebo is the perfect complement to AOL’s personal communications network and puts us in a leading position in social media,” said AOL chief executive Randy Falco.

AOL hopes to leverage its advertising sales business across Bebo’s network. Time Warner (TWX, Fortune 500) owns AOL and Fortune.

Bebo will be the cornerstone to AOL’s social media strategy. When integrated with instant messaging services ICQ and AIM, it is expected to reach 80 million members.

Started in 2005 by San Francisco programmers Michael and Xochi Birch, the company has approximately 100 employees.

Bebo’s site looks a lot like MySpace with a cleaner interface. It has been a pioneer in combining professionally produced entertainment and user-generated content with programs like KateModern.

The show’s title character, Kate Modern (whose name is a play on the famous British museum, the Tate Modern), is a waifish art student trying to make it in London. She and her friends record and post short video diaries and chat with viewers. Her popularity is one reason why Bebo’s 40 million members spend an average 33 minutes on the site.

Bebo also has partnership with media companies like CBS (CBS, Fortune 500) and MTV (VIA).

The deal comes just one week after AOL launched Open AIM 2.0, which allows developers greater freedom to develop for the AIM network and integrate AIM into its sites and applications.

Bebo has a number of pre-existing deals with AOL competitors. In September the site announced a partnership with Yahoo (YHOO, Fortune 500) to sell the site’s display ads in Britain and Ireland and to integrate Yahoo! Answers with Bebo’s site. That followed a Microsoft (MSFT, Fortune 500) partnership that let members IM with anyone - Bebo friend or not - on Windows Live Messenger. Shields declined to comment on what will happen to those deals. First Published: March 13, 2008: 9:16 AM EDT

Digg Facebook Bebo’s British invasion
via CNN

NEW YORK - Time Warner Inc’s AOL Internet division said on Thursday it will buy social network Bebo for $850 million in cash, bolstering its consumer Internet offerings even as the media conglomerate mulls splitting off the business.

Bebo, which claims a global membership of about 40 million users, is the top social network in Britain, Ireland and New Zealand, it said. It is No. 3 in the United States behind News Corp’s MySpace and Facebook.

“AOL, at its core, is a way for people to connect,” AOL President Ron Grant said in a phone interview. “We need to get back to our roots.”

The two companies had spent the last six months hashing out the deal, executives said in an interview with Reuters. Grant said Bebo’s heavy focus on media and international interest attracted AOL to Bebo.

The purchase comes amid a wholesale transformation of AOL from a dial-up Internet provider to an online advertising powerhouse.

It has spent nearly $1 billion to create one of the biggest third party display ad units, Platform-A. AOL aims to gird against the prospect of bigger rivals as Microsoft Corp pursues a deal to buy Yahoo Inc and following the closing of Google Inc’s purchase of DoubleClick.

AOL said Bebo will help round out its personal communications offerings, now comprised of AOL Instant Messenger and ICQ, two wildly popular services that let users send quick text, video and audio correspondence.

Despite its global popularity AOL has not had much success turning that into a business.

AOL said its advertising system is well positioned to turn social networks into a thriving business despite difficulties its rivals face. Google, which is the search advertising provider for MySpace, expressed difficulties in “monetizing” MySpace’s traffic.

Bebo President Joanna Shields will continue to run Bebo and will report to Grant after the transaction closes.

Banc of America Securities LLC and Deutsche Bank Securities Inc. advised AOL. Allen & Co advised Bebo.

via MSN

NEW YORK (AP) - U.S. video game sales - including hardware and software - jumped 34 percent in February to hit $1.33 billion, even with two top-selling consoles in short supply, according to data from market researcher NPD Group.
Nintendo’s Wii and Microsoft Corp.’s Xbox 360 have been in such high demand stores are having a hard time keeping them in stock. Microsoft spokesman David Dennis said the company moved up shipments during the holidays and hasn’t been able to catch up since.
He added “we should be in good shape” by the time “Grand Theft Auto IV,” the highly anticipated latest installment of the Rockstar Games franchise, hits store shelves April 29.
The game, which will be available on the Xbox 360 and Sony Corp.’s PlayStation 3, is expected to boost sales of both consoles. Pre-orders have been better than expected, according to its publisher, Take-Two Interactive Software Inc.
Michael Pachter, an analyst with Wedbush Morgan, expects the game to sell about 9 million units during the company’s fiscal year, which ends in October. Roughly 6 million of this, he added, will be to Xbox 360 owners.
February is normally a slow month for video game publishers coming off holiday highs, and consumers have also been cutting back spending amid economic worries. Still, with “several marquee titles still to come in the front half of the year, the industry is poised to achieve another year of record-breaking sales despite difficult economic conditions,” said NPD analyst Anita Frazier in an e-mail.
The sales figures surpassed what many analysts were expecting. Game hardware sales rose 19 percent during the month to $480 million, NPD said late Thursday. Of this, the portable Nintendo DS was the best-seller with 587,600 units, followed by the Wii at 432,000. The Xbox 360 sold 254,600 units even amid supply constraints.
“It appears that Wii and DS shortages abated in February, likely in anticipation of strong March software launches,” Pachter wrote in a note to investors.
Going strong since its launch in 2000, Sony’s PlayStation 2 continued to outpace its successor. The PS2 sold 351,800 units compared with 280,800 for the PS3.
February’s software sales grew 47 percent to hit $668.7 million, with Activision Inc.’s first-person shooter “Call of Duty 4: Modern Warfare” at No. 1 with 296,200 units sold for the Xbox 360. Capcom USA’s “Devil May Cry 4″ and Nintendo’s “Wii Play,” which comes with a remote and includes games like pingpong and fishing, also did well.

via AOL

SAN FRANCISCO - U.S. sales of video game hardware and software hit $1.33 billion in February, up 34 percent from a year earlier, with Sony Corp’s <6758.T> PlayStation 3 topping Microsoft Corp’s Xbox 360 for the second month in a row.

Nintendo Co Ltd’s <7974.OS> Wii was still the best-selling console, moving 432,000 units and topping the 281,000 PlayStation 3s and 255,000 Xbox 360s, according to market research firm NPD.

“With several marquee titles still to come in the front half of the year, the industry is poised to achieve another year of record-breaking sales despite difficult economic conditions,” NPD analyst Anita Frazier said in a statement.

Software sales in February were up 47 percent year-on-year while hardware sales rose 19 percent, NPD said.

Microsoft, which outsold Sony every month up until January, blamed its weak showing on inventory shortages caused by stronger-than-expected demand over the holidays.

“Our manufacturing team guesses five months out. They made their forecast and didn’t have as high a forecast as they should have,” said Microsoft spokesman David Dennis.

“We’re doing everything we can, pulling all the levers” to boost output, he said.

Microsoft said it expects to have a healthy supply of Xbox 360s by April, when Take-Two Interactive Software Inc’s “Grand Theft Auto 4″ hits shelves in what is widely expected to be the biggest game of the year.

But the company, which earlier this week cut Xbox prices in Europe to boost sales, may feel pressure to take a similar move in the United States if it continues to trail the PS3, said Jesse Divnich, an analyst with The simExchange, an online prediction market for game sales.

“Given these past two months and the momentum that the PS3 has gained, Microsoft must react quickly as the PS3’s momentum will only get stronger,” Divnich wrote in a note.

Sony’s PlayStation 2, which uses 8-year-old technology but costs just $130, about one-third of the cheapest PS3, saw surprising strength, selling 352,000 units, 19 percent more than a year ago.

Military shooting game “Call of Duty 4″ from Activision Inc was the top game for a single console, moving 296,000 copies for the Xbox 360, NPD said.

“Devil May Cry 4,” a demonic-themed fighting game from Japan’s Capcom <9697.T>, sold a combined 529,000 copies for the Xbox 360 and PS3.

The top games for Nintendo’s Wii were its “Wii Play,” which came in at number three with 290,000 copies, and Activision’s “Guitar Hero 3,” with 223,000 copies.

“Our momentum has not let up since the holidays and we expect it to continue throughout the year,” Cammie Dunaway, executive vice president of sales and marketing for Nintendo of America, said in a statement.

via MSN

SAN FRANCISCO (AP) - Apple Inc. was sued Wednesday over allegations its iTunes online music store and iPod music players are illegally using a patented method for distributing digital media over the Internet.
Atlanta-based ZapMedia Services Inc. sued Apple in U.S. District Court for the Eastern District of Texas, accusing the Cupertino-based company of violating two ZapMedia patents.
ZapMedia wants royalties on Apple’s sales of iPods and iTunes music, which reached $11 billion last year. The success of iTunes has helped make Apple the No. 2 music retailer in the U.S. behind Wal-Mart Stores Inc., according to market researcher NPD Group.
The patents in question cover a way of sending music and other digital content from servers to multiple media players, a broad description that could also apply to a wide swath of other companies selling digital media and the devices to play it.
ZapMedia applied for the patents in 1999. One was granted in March 2006, the other on Tuesday.
ZapMedia said it met with Apple to discuss licensing, but Apple rebuffed the offer.
“When someone takes our vision and our intellectual property without a license after several attempts, we have no option but to protect it through every means available to us,” Robert Frohwein, ZapMedia’s general counsel, said in a statement.
An Apple spokeswoman said the company doesn’t comment on pending lawsuits.

via AOL

DOW JONES NEWSWIRES

Apple Inc. (AAPL) faces a patent infringement lawsuit filed by privately held ZapMedia Services Inc. related to Apple’s iTunes software and iPod media player.

ZapMedia alleges patents for its system allowing the distribution of media assets to user devices were infringed when Apple unveiled its iPod MP3 player with the integrated iTunes software application in October of 2001 and iTunes store in April 2003.

According to ZapMedia, the lawsuit comes after multiple attempts by the company to resolve concerns of patent infringement with Apple.

In addition, ZapMedia claims it made Apple aware of the patents and their availability for license, and is entitled to a “reasonable royalty” on Apple’s revenue related to the infringement.

An Apple representative said it is company policy not to comment on litigation.

-Nicholas Hatcher; Dow Jones Newswires; 201-938-5400

(END) Dow Jones Newswires 03-12-08 1506ET Copyright (c) 2008 Dow Jones & Company, Inc.
via CNN