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Microsoft's Entertainment division, which includes the Xbox 360, Zune and PC software has shown a strong profit for the Q1 2010, along with larger revenue.

The company saw a rise in revenue to $1.67 billion from $1.63 billion year-on-year, and showed a profit of $165 million USD. Overall, the company had a record month, bringing in $14.5 billion in revenue and $4.01 billion in net profit.

Microsoft sold 1.5 million consoles during the quarter, which was down from 1.7 million for the same quarter in 2009, and 8.8 million consoles in the last nine months, which was down from 10 million in the comparable period a year before.

Despite the drop in sales, manufacturing costs for the 360 fell 22 percent, helping to lead to the strong profit. Sales and marketing expenses fell 6 percent as well, or $60 million. On the other end, R&D costs increased by $31 million, and Xbox Live operating costs increased as well.

Mainly, the growth was attributed to the strong launch of Windows 7, as well as strong growth in Xbox Live revenue.

Google has denied today that it will be bringing its free Navigation GPS system to the iPhone, squashing rumors that had started earlier in the week.

The rumors had started when a Google executive was quoted as saying the search giant was planning to bring the GPS to unspecified mobile platforms in the future.

"We did not say we would bring it to iPhone, we said to date we've had it on Android and that in the future it may come to other platforms but did not confirm this will be coming to iPhone at all," says Google, via PCWorld.

Maps Navigation, which is completely free and available for Android 1.6-2.1 users, offers 3D maps, turn-by-turn voice navigation, rerouting, real-time traffic, weather and more.

The software also pre-caches the entire route, so if you lose your data connection for a few minutes you can still see your progress towards the destination.

The war of words between Adobe and Apple over the latter company's apparent campaign to dethrone Flash as a standard web development technology continues to escalate.

Besides declining to work with Adobe to bring Flash to the iPhone OS, Apple has recently changed the Terms of Service for the iPhone SDK to disallow development with unauthorized tools like Adobe's new Creative Studio 5.

Earlier this week Adobe's Mike Chambers indicated that due to the new restrictions in the iPhone SDK TOS, Adobe won't contine development of tools to create iPhone apps in Flash CS5. Chambers wrote that Apple wants to "make it difficult for developers to target other platforms."

Apple spokeswoman Trudy Muller shot back in a statement pointing out that the iPhone OS supports common open standards like HTML5, CSS, Javascript and H.264, calling Flash "closed and proprietary."

But does support for open standards actually make the iPhone OS itself open? After all, Flash also supports H.264, but as Muller correctly points out that doesn't stop it from being closed.

T-Mobile USA has announced that it will become the exclusive carrier of GPS maker Garmin's first ever smartphone, the Android-based Garminfone.

The phone has a 3.5-inch screen, 3MP camera with autofocus, and because of the GPS, the pictures can be geo-tagged. The GPS, as standard, works over 3G and Wi-Fi.

While those specs are not impressive, the Garminfone is notable because of its GPS system, which has on-board US maps, text-to-speech, full driving/walking/public transportation directions, real-time traffic, weather, local events, movie listings and even gas prices.

The next best feature is "Garmin Voice Studio" which lets users "record and customize voice directions which can also be shared with family and friends."

Because it is more a GPS with phone capabilities than anything else, the device will come with a charging window and a dashboard mount for the car.

Blizzard has announced today that they have removed 320,000 "cheaters" from Battle.net, shutting down the accounts of those playing Warcraft III and Diablo II and using hacks.

A first time ban gets your account suspended for 30 days, and a second time offender will be banned for good.

"We would like all players to remember that abuse of unintended mechanics and/or use of third party programs is a violation of the agreement made when signing on to Battle.net, and can subject your account to disciplinary action up to and including a permanent ban of its access to the service," says the Blizzard forum post. "These types of activities can severely impact the stability of our servers, and we'll continue to aggressively monitor Battle.net in order to protect the service and its players from the harmful effects of cheating."

The account closures are final, and the company says most of those banned were first reported by legitimate users who emailed the company claiming those users were cheating.

The company says if you know of any other cheaters or sites responsible for distributing hacks, email them at hacks@blizzard.com.

YouTube has opened their video rental store today, offering up movies and TV episodes for .99 to $3.99.

The rentals last for 48 hours and to buy them all you need is a Google Checkout account.

There aren't any big names movies so far, with most of the current catalog being independent, Bollywood, Manga and documentaries.

In February, YouTube expanded the store from just Sundance films, but the catalog is still small.

You can check the Store here: http://www.youtube.com/store

Nokia reported today that their smartphone business saw strong growth, shipping 21.5 million units in the Q1 2010, a 57 percent jump year-on-year.

That number is expected to give Nokia a 41 percent share of the global smartphone market.

Overall mobile phone shipments grew 16 percent to 107.8 million which helped Nokia boost its quarterly profit 60 percent year-on-year.

Apple, on the other hand, saw 131 percent growth in the quarter, thanks to strong sales in China of the iPhone.

Nokia says the entire smartphone industry will continue to grow 10 percent in 2010, but the company says its share of the market will remain flat. Says CEO Olli-Pekka Kallasvuo: Nokia faces "tough competition with respect to the high end of our mobile device portfolio."

The smartphone maker's new operating system, Symbian^3, has been delayed until the summer.

DaringFireball's John Gruber, known for his top connections inside Apple, says that the prototype "iPhone HD" revealed by Gizmodo earlier this week is very close to the final product, and may even be the final design.

The barcode on the back shows the label N90_DVT_GE4X_0493, with n90 known internally as the codename for the upcoming iPhone, and DVT standing for Design Verification Test, a unit only made "very late" into the development of a new product.

Gruber adds that the company has told him there will likely be only minor changes to the final design, so the phone lost in a bar last week is likely the iPhone 4G/HD as we know it.

New to the "iPhone HD," are a front-facing camera for video conferencing, a better standard camera (including larger lens and flash), a Micro-SIM slot (just like the iPad), 960x640 resolution, a second mic, metallic exterior (not plastic) and split side buttons for volume.

Engadget has leaked four new Dell smartphones, Lightning, Thunder, Smoke and Flash, four high-end phones that will use Android or Windows Phone 7 as their operating systems.

First off is the Lightning:


The phones uses Windows Phone 7, has a large 4.1-inch OLED screen, a 1GHz Snapdragon processor, a full QWERTY keypad, 512MB RAM, 1GB ROM, 8GB of internal storage for music, movies, etc, a 5MP camera with LED flash, and Adobe Flash, DivX and Microsoft Silverlight support.

The phone will be available before Christmas for GSM carriers AT&T and T-Mobile.

If multiple reports are correct, it appears that Apple is considering acquiring ARM Holdings for $8 billion USD.

ARM is the company behind the processors in most of the world's current smartphones, including the iPhone.

The latest rumor comes via the London Evening Standard, which says Apple is looking to purchase ARM for 5.2 billion pounds, the equivalent of about $8 billion USD.

Although this is still speculation, Apple has over $25 billion in cash reserves and no debt, meaning the deal could be completed easily.

The move would have two positives for Apple. They would bring chip technology in-house, allowing for more "Apple-ized" processors, and secondly, Apple could potentially block ARM processors from being used in rival smartphones, such as those made by HTC with the Android OS.

The second "positive" may never come to fruition, given the notoriously strict nature of European anti-trust regulators, but it still a possibility.

Hulu, one of the most popular video streaming sites in America has announced it will begin testing a $10 per month premium subscription starting on May 24th.

The service, called Hulu Plus, will allow users to watch additional episodes than those that are currently made available to free users. Free users can, for the most part, watch the last five episodes of a current season of a show.

News Corp., NBCU and Disney, the three media giants behind the streaming site say Hulu has been profitable for two quarters now, with over $100 million in revenue coming from advertisers. Of course $100 million is a drop in the bucket compared to profits from "traditional media" outlets.

On top of the subscription model, Hulu is expected to eventually add as many commercial breaks as current TV has, 9 minutes for every 21 minutes of programming.

Despite being the second most popular streaming video site behind YouTube, Nielsen Online reports that unique viewership has almost flatlined, still growing but barely.

Sony has announced they will be bringing Major League Baseball to the PS3, in one of the biggest streaming deals announced in the history of the console.

Peter Dille, senior vice president of Sony Computer Entertainment America, agrees: "This is one of the biggest deals we're bringing to the PS3, and it won't be the last one, there's lots of conversations going on."

The games will be broadcast in 720p HD through MLB.TV, which costs $25 a month or $120 a year for a subscription.

The PS3 will get a custom MLB.TV interface which allows users to scroll through live games or archived games. You can also pause, rewind and jump forward during games, just as if it had been recorded with a DVR.

Notably, due to "blackout rules," users cannot watch their own local market teams.

"We're excited about bringing MLB onto the console ... this is something you can't find on any other console," Dille continues, via Reuters.

iPhone Dev Team member "planetbeing" has released a video today showing off a huge accomplishment, the Android OS running on a first-gen iPhone.

The hack is currently still in alpha stages, but planetbeing says it should get the ball rolling, and that it will be an "easy port forward to the iPhone 3G." Users with the latest iteration, the iPhone 3GS, will probably not even get to test the second OS for some time, however.

Making the video even more notable is that the device is running both the iPhone OS and Android, working like "Bootcamp" does on Mac computers, allowing for booting of multiple operating systems.

Watch the video, it's pretty incredible.

Out of all of the interesting news that came out of Apple's earnings report yesterday, one of the most interesting pieces was the incredible growth seen in iPhone sales in China.

Overall, Apple sold 8.752 million iPhones in the Q2 2010, beating even the most ambitious analyst projection by 20 percent.

In the earnings conference call (transcripted by CNNMoney, Apple COO TIm Cook talked with Barclay's Ben Reitzes. The conversation went like this:

Reitzes: Did China meet your expectations?

Cook: China has been interesting. If you look at greater China which we define as mainland China, Hong Kong and Taiwan, the iPhone units were up year-over-year over 9 times. We added another 800 points of distribution in China. The revenue, we have never released this number before but I will do this in this particular case, through the first half of the fiscal year that we just completed for the six month period our revenue from greater China was almost $1.3 billion and this is up over 200% year-over-year. So we are well pleased with how the company is positioned to take advantage of the growth in greater China.

T-Mobile's VOD+ movie service has now signed its latest partner, Warner Bros., which will make a plethora of films available to users with Android handsets.

Users can rent and download the movie and then watch it on the PC or on their mobile phones.

Saffron Digital, the video delivery platform behind VOD+ has deals with Nokia, Vodafone, LG, Sony Pictures, Paramount and Fox.

The first seven movies available for rental through the VOD+ service are Driving Aphrodite, Superman 2, Matrix Revolutions, Lethal Weapon, Interview With a Vampire, The Hangover, and Harry Potter and the Half-Blood Prince.

More films are expected over the course of the year.

"We anticipate the Desire being one of our most popular handsets of 2010, and the VOD+ service makes it even greater value for our customers – giving them even more functionality on top of an already impressive features list," says Nicola Shenton, Head of Handset and Device Marketing at T-Mobile, via DT. "As the service is unique to T-Mobile, it will also be a key differentiator for us as we compete with other networks."