News written by James Delahunty (July, 2009)

Sony Ericsson has posted a quarterly loss of €213 million ($300 million) for Q2 2009, it's fourth consecutive quarterly loss as the global recession continues to pound the mobile handset market. Units shipped in the quarter were 13.8 million, a decrease of 43% year-on-year and a sequential decrease of 5 percent. Sales for the quarter were €1.68 billion, a year-on-year decrease of 40 percent, from €2.8 billion in Q2 2008.

"As expected, the second quarter was challenging and we still believe the remainder of the year will be difficult for Sony Ericsson. Our focus remains on bringing the company back to profitability and growth as quickly as possible, and our performance is starting to improve due to our cost reduction activities. The new product portfolio that integrates communications, entertainment and social media applications should contribute to healthier topline development when shipments start later this year," said Dick Komiyama, President, Sony Ericsson.

He continued: "We remain confident that the actions we are taking will further improve our financial situation and strengthen Sony Ericsson's competitiveness." EQ Bank analyst Jari Honko commented that the report shows Sony Ericsson, a joint-venture of LM Ericsson and Sony Corp., is in deep trouble. "My future outlook for the company is pretty dark," he said. "I haven't seen any magical trick that could improve Sony Ericsson's position."

According to the midyear report issued by the Digital Entertainment Group (DEG), sales of Blu-ray titles rose considerably so far in 2009, helping to reduce overall losses to the industry as prerecorded entertainment sales dropped 3.9% over last year. Sales of Blu-ray titles were up 91 percent, totaling $407 million. Additionally, rentals of Blu-ray titles also rose, with revenue from rentals up 62 percent.

Adams Media Research had published data showing Blu-ray sales doubled in the first quarter of the year. The format is benefiting from continued HDTV penetration to U.S. households, which is up 13 percent since the end of 2008. Blu-ray player sales rose 25 percent as hardware prices dropped off. Over 2 million Blu-ray stand-alone players are now in U.S. households, and the number shoots up to 11 million when you include the PlayStation 3 (PS3) console.

More than 1600 Blu-ray titles are now available, and over 40 million discs have been sold in the United States. The good results are a boost to the Blu-ray format, and are contradictory to a recent Harris Poll report which would suggest most consumers are not interested in the new format at all.

HTC is offering a fix for a Bluetooth security vulnerability for several of its handsets. The fix was issued for the HTC Touch models. Although HTC did not specify exactly what problem it was fixing, the fix coincides with security researcher Alberto Moreno Tablado's discovery which he made public when HTC did not issue a fix after he alerted the company in February.

"Microsoft states this is a 3rd party driver developed by HTC and installed on HTC devices running Windows Mobile, so the vulnerability only affects to this vendor specifically," Tablado wrote. "A remote attacker (who previously owned authentication and authorization rights) can use tools like ObexFTP or gnomevfs-ls from a Linux box to traverse to parent directories out of the default Bluetooth shared folder by using ../ or .. marks."

Authentication or Authorization rights could be gotten by pairing the HTC handset with a Bluetooth device, or more complication solutions would include spoofing the MAC address or include sniffing the Bluetooth pairing. Once obtained, an attacker can navigate can access or modify any file stored on the device without the user being aware of the attack.

In an effort to find a new source of revenue, LG Display has announced that it now aims to produce 32-inch Organic Light-Emitting Diode (OLED) televisions in 2012. OLED technology has enormous benefits in the form of picture quality, and due to the absence of a backlight, uses less energy than LCD and Plasma. Longevity of a OLED panel falls behind competing technology however, and many of the world's largest consumer electronics companies are searching for a solution.

In it's push to bring an OLED television to the market as soon as possible, LG Display will expand its research and development sector, taking on 1,700 new jobs this year, according to chief executive officer Kwon Young-soo. "We plan to produce 30-inch OLED panels for TVs in 2012," he said.

He continued: "The commercial success of OLEDs hinges on how it shows its superiority compared to existing liquid crystal display (LCD) technologies. We will focus on TV panels rather than cell phone panels because the larger the display, the more efficient the OLED technology."

LG Display is to invest $2.59 billion in the production of another eight generation LCD production line to be in operation in the second half of 2010. The company announced a return to profit in the second quarter, attributed to rising costs of LCD panels and stronger demand.

Mozilla Corp. has released Firefox v3.5.1 to address a security flaw that it has described as "critical". The vulnerability lies with the software's Just-In-Time (JIT) compiler used with Javascript and it could be exploited by an attacker to run arbitrary code on a victims computer, such as malware or something similar.

Changes in Firefox 3.5.1

• Several security issues.
• Several stability issues.
• An issue that was making Firefox take a long time to load on some Windows systems.

Microsoft has responded to the sales figures published by the NPD Group by revealing that paid downloads have increased on the Xbox Live service by 73 per cent year-over-year for H1 2009. The Xbox 360 console is the only home console to see growth so far in 2009, with Nintendo's DS handheld portable also experiencing a sales increase over last year.

In June 2009, Microsoft managed to sell 241,000 units of the Xbox 360 console, roughly a 20 percent increase over June 2008. Additionally, Microsoft went on to point out that third-party software sales for its platform totaled $168 million in June, a higher figure than enjoyed by Sony or Nintendo.

The Redmond-based software giant is also boasting a 20 million-strong active user base for the Xbox Live service. Sony has recently announced good news for its own services however. Sony's Peter Edward revealed at a developer conference that seven million people have signed up for PlayStation Home, with three million of them coming from Europe.

Google Inc. is becoming more confident that its YouTube video-sharing service acquired for $1.65 billion in 2006 will become profitable soon. Since acquiring the site, which is used to share and view videos for free, Google has lost money due to high maintenance costs as the number of users continues to rise. Analysts have been cautious about YouTube exactly because of these high costs.

"YouTube is now on a trajectory that we're very pleased with," Google Chief Executive Eric Schmidt said during an earnings call on Thursday. He revealed that Google is working with advertising agencies to help them to create ads suited for YouTube easily. At the Sun Valley technology and media conference last month, Schmidt also said that new advertising formats (such as pre-play ads) will draw in more revenue.

Additionally, in the past year, the number of video viewing monetized videos (videos supported by advertising) has increased three-fold. "We're now monetizing billions of views of partner videos every month," Google's head of product management and marketing, Jonathan Rosenberg said.

Sales of videogame hardware and software have been dropping each month (compared to the same months of 2008) largely due to a stellar sales performance all around early last year. Still, with analysts predicting a 20 percent drop in sales of (non-PC) gaming hardware, software and accessories in June, a reported 31 percent decline compared to June 2008 surprised the industry. June 2009 was the worst monthly performance for the industry since September 2000.

Sales of gaming hardware dropped 38 percent to $382 million, compared to $617.25 million in June 2008, according to figures from NPD. The Nintendo DS platform led the month with a still-strong 766,500 units, following by the Wii console at 361,700 units. Microsoft's Xbox 360 console moved 240,600 units while the Sony PlayStation 3 (PS3) sold 164,700 units, a difference of just 12,000 units compared to the PlayStation 2's 152,700 tally. The PSP handheld moved 163,500 units.

Nokia, the world's largest mobile-handset marker, posted a second-quarter earnings drop of 66 percent compared with the same period of the previous year. Net profit fell from €1.1 billion last year to €380 million, while total sales were at euro;9.91 billion, a drop of around 25 percent. The slump in profits was generally expected by analysts but the more disappointing news of the day was Nokia's adjustment of its target market share this year.

While previously expected to gain ground in the market, Nokia now expects its share of the mobile market to stay unchanged from 2008. The news sent share prices down 11 percent to €9.86. It's Nokia Siemens Networks joint-venture also had its outlook downgraded with the company now expecting a moderate loss of market share having previously aimed to maintain its current share.

The Finnish giant managed to ship 103 million mobile devices during the quarter, which represents a 15 percent drop. The global recession has had a huge impact on the market, and the average selling price of a Nokia handset fell from €74 to €62. "The mobile industry is undergoing its biggest change in its 20-year history," Nokia CEO Olli-Pekka Kallasvuo said in a conference call.

Security researcher Alberto Moreno Tablado has reported a security flaw with the File Transfer Profile service that's built in to the Bluetooth stack implemented by HTC. Despite contacting HTC about this problem in February, no fix has been issued, prompting Tablado to go public. The security vulnerability could allow an attacker to view and edit sensitive files stored on a device.

"Microsoft states this is a 3rd party driver developed by HTC and installed on HTC devices running Windows Mobile, so the vulnerability only affects to this vendor specifically," Tablado says. "A remote attacker (who previously owned authentication and authorization rights) can use tools like ObexFTP or gnomevfs-ls from a Linux box to traverse to parent directories out of the default Bluetooth shared folder by using ../ or .. marks."

Authentication or Authorization rights could be gotten by pairing the HTC handset with a Bluetooth device, or more complication solutions would include spoofing the MAC address or include sniffing the Bluetooth pairing. Once obtained, an attacker can navigate can access or modify any file stored on the device without the user being aware of the attack.

According to Dorian Bloch of GfK Chart-Track, the market for digital game downloads for PC in 2009 will reach over $1 billion. Bloch estimates that the market will grow to $1 billion from an estimated $600 million last year, driven by digital download services such as Steam, Direct2Drive and Metaboli.

The company has come under some pressure from the industry by publishers who wish to have their sales in the market included in its stats and Bloch has described the emerging market as a "huge business". GfK Chart Track's figures are most sought after in the UK.

"Sega has been asking us, 'when can we include our Football Manager sales in our charts?' We'd like to include them, but I can't just include one publisher's sales, I need a balanced approach for doing that," Bloch told a Developer Conference in Brighton.

He added: "The key thing for me in this is that these publishers support me in what I do and they want their sales included in the charts."

Microsoft's chairman Bill Gates revealed in an interview with CNET that the project Natal technology coming to the Xbox 360 platform is also in development for non-gaming uses with Windows. He said the project evolved from Microsoft research, and is now being commercialized by Windows and Xbox units.

"Both the Xbox guys and the Windows guys latched onto that and now, even since they latched onto it, the idea of how it can be used in the office is getting much more concrete and is pretty exciting," he said. Gates was the first to hint that Microsoft was working on the technology in the 2007 All Things Digital conference where he appeared with Apple CEO Steve Jobs.

Back then, after Gates talked about a gaming machine that you could interact with by swinging a tennis racket or a bat, the hosts referred to the Nintendo Wii console. Gates corrected the hosts however, saying, "You can't sit there with your friends and do those natural things, that's a 3D positional device. This is video recognition. This is a camera seeing what's going on."

Amazon.com Inc. is being sued by Seattle resident Matthew Geise over an alleged design flaw affecting the Kindle 2 and Kindle DX. The suit alleges the problem is really sourced with the separately-sold protector cover. It claims the covers designed and sold by Amazon for the Kindle 2 and Kindle DX put pressure on the hinge and cause the screen to crack. The suit is seeking class-action status.

"Mr. Geise understood that the Kindle Cover he purchased for the Kindle was, in fact, compatible with the Kindle and would not damage the Kindle as a result of ordinary use. Amazon never disclosed to Plaintiff that using the Kindle Cover with the Kindle would damage the Kindle," according to the complaint.

The complain cites an array of consumer complaint postings on the Internet about the same problem. "Because of the relatively small size of the typical damages, and the modest resources of most consumers, it is unlikely that most Class Members could afford to seek recovery against Amazon on their own. A class action is therefore the only viable, economical and rational means for members of the Class to recover from Amazon for the damages it has caused," the complaint reads.

Apple Inc. has updated it's iTunes software to block use with the Palm Pre device. The recently-released device was compatible with the iTunes software, letting users organize media with the software just as they would with an iPod. An Apple spokesman commented that this update, "disables devices falsely pretending to be iPods, including the Palm Pre." Palm responded by reminding Apple who the real target of this change is.

"Apple's move is a direct blow to their users, who will be deprived of a seamless synchronization experience," Palm spokeswoman Leslie Letts said. She recommended that users stick to the older versions of iTunes or consider other music applications to organize the media.

Jon Rubinstein, a former Apple exec who played a big part in the iPod, became Palm's executive chairman in October 2007. The Pre has touch-screen control features like the iPhone. The recent awarding of a patent to Apple in January covering certain multi-touch functions may affect Palm and other companies eventually.

Following last week's announced agreement between Internet radio services and SoundExchange, Pandora has gotten an almost immediate confidence boost on its future. Even though its founder Tim Westergren has referred to the funding environment for online music start-ups as Toxic, Pandora managed to close a new round of funding headed by Greylock Partners. Reports put the investment figure at around $35 million.

Greylock's investment was led by Partner David Sze, who is apprehensive about online radio. "I've been concerned about the space in general, but as I looked under the covers I realized it's a great business," Sze said. "Pandora's brand is strong and they're getting to scale."

Pandora's success is hinged on royalty rates. The rates announced in 2007 would have made webcasters pay out $0.08 per song through 2014, but would have increased to $0.19 in 2015. Considering Pandora offers a free service, this would have been a very expensive reality for a company that would be paying 70% of its revenue in royalties.

Blockbuster Inc. has struck a deal with Samsung Electronics America Inc. to offer movie rentals through Samsung's next generation of high-definition TVs. The move, aimed at regaining ground on Netflix, will allow users to receive digital rentals piped through the Internet with their TV remote control and a built-in feature in each TV set.

The rentals are expected to be priced between $1.99 and $3.99 and will be viewable for up to 24 hours. Netflix extended its products first to cover video streaming with a free supplement to its DVD-by-mail service launched in early-2007. Since then, Netflix has been at work getting its streaming features onto several consumer electronics products.

Blockbuster's latest move puts it in partnership with the world's largest manufacturer of flat-screen TVs, and moves it into Netflix' space with support added to Samsung's Blu-ray DVD players and home theater systems. There has been some speculation that Amazon may seek to acquire Netflix, which currently has a market value around $2.5 billion.

On its first day of a Windows 7 promotional drive, Microsoft's European online store quickly went offline. Customers were instead greeted with a message claiming the site was, "experiencing a higher level of demand than usual" but that it would be back up and running as soon as possible. The promo gives customers the opportunity to pre-order Windows 7 Home Premium E for £49.99 or Windows 7 Professional E for £99.99.

The software is on sale at the Microsoft Store, as well as several traditional partners including Amazon, Play.com and PC World. The offer will continue until August 9. The company is stressing that users should use the Upgrade Adviser Tool on offer for Windows 7 to avoid similar problems to those experienced with Windows Vista by customers after launch.

The worst issue for most affected consumers was hardware that carried Vista Capable stickers wasn't always compatible with Vista at all. In order to get in on more pre-orders, PC World is offering a free PC healthcheck worth £29.99 to anybody who purchases the software.

Kevin Cogill, a Los Angeles man who pleaded guilty to uploading tracks from Guns N' Roses Chinese Democracy album, is set to participate in an anti-piracy advertisement as part of a deal to avoid jail time. He was also given one year probation and two months' house arrest. The prosecution had demanded a six month sentence originally, valuing the infringement at $371,000.

The calculations were made based on an estimated value of 99c per download, in line with the pricing of the iTunes store. The larger the estimated damages, the longer the sentence was expected to be. According to court documents however, when Cogill agreed to work with the Recording Industry Association of America (RIAA) to create an anti-piracy message, the $371,000 figure was withdrawn.

Cogill admitted to the Federal Bureau of Investigation (FBI) that he uploaded the 14 track album on June 18, 2008. In March this year, the RIAA claimed that damages were as high as $2.2 million, but said it would accept $30,000 if Cogill was prepared to, "participate in a public service announcement designed to educate the public that music piracy is illegal."