Monday, November 30, 2009

GPS cell phone apps challenge standalone devices

The growth of cell phones with global-positioning technology is making life uncertain for the makers of personal navigational devices that help drivers figure out where they are and where to go.

Manufacturers of standalone GPS products will have to move quickly and smartly to transform their dumb map readers into intelligent devices that can provide a host of services such as traffic avoidance.

Otherwise, they risk obsolescence in a future in which customers view navigation as simply one more application for their phones. Some of the newer apps already closely match what basic, dashboard-mounted gadgets can do.

"You have to redefine the category somewhat, like what Apple did with the iPod Touch," said Ross Rubin, technology analyst for research firm The NPD Group. "That turned it from something that was just a media player into something that accessed the Web."

Garmin, TomTom and other makers of satellite navigational devices could take a lesson from camera makers, which have convinced consumers that they still need standalone devices because there is a significant drop in quality with cameras built into cell phones.

Those GPS manufacturers now must make a similar argument for their devices or add enough extra services to give shoppers a reason to buy.

But there are unique challenges for gadgets primarily used while driving.

"The driver's attention should be on the road, not checking his or her Facebook," Rubin said.

Manufacturers already have begun broadening their GPS products, adding wireless technology to some of their top-end devices to provide up-to-the-minute traffic data, nearby gas prices and weather information. Research firm Berg Insight estimates that more than 80 percent of navigational devices will have wireless capability by 2015.

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Other products, particularly pricey units built into a vehicle's dashboard, are coming with the ability to play digital audio files or act as an Internet hub for the driver and passengers.

These features could give manufacturers new revenue streams, as they'd be able to justify monthly subscription fees, which they don't currently charge for basic mapping and directions.

Satellite navigation devices have changed in recent years from being $1,000-and-up toys mostly for the affluent technorati to tools costing less than $200 and used by truckers, rental car customers and errand-running parents.

Although the economic slowdown has hampered sales somewhat, those devices are still popular. Research firm In-Stat estimates that worldwide unit sales will rise 19 percent this year from 2008 and grow 13 percent next year. The NPD Group says U.S. sales are up 4 percent to 4.7 million through September from the same nine months in 2008.

But cell phones are now offering similar GPS-based navigational features — for free on devices with software from one of the Internet's top brands.

Google Inc. recently introduced a free application that calls out turn-by-turn directions, just like the standalone devices do, letting motorists concentrate on driving without having to constantly look at the phone for written directions. The app was launched on the Droid phone for Verizon Wireless a few weeks ago and expanded this past week to include myTouch 3G and the G1 for T-Mobile.

The three main wireless providers, AT&T Inc., Verizon Wireless and Sprint Nextel Corp., also sell their own turn-by-turn mapping applications for $9.99 per month — or include the apps in an unlimited data plan.

Besides helping wireless carriers poach potentially thousands of customers, cell phones will likely also accelerate the decline in prices for navigational device — already down 25 percent from last year to an average of $175, according to NPD.

Normally, that means the standalone devices pay for themselves in about a year and a half, as consumers avoid monthly fees for the basic features.

Google's freebie changes the dynamics.

Investors are certainly spooked, greeting Google's Oct. 28 announcement by hammering shares of Garmin Ltd. and TomTom NV. Garmin shares have fallen 22 percent from a high of $39.58 a little more than a month ago. TomTom shares are about half their 52-week high of $13.65.

Company officials acknowledge the increased competition but say their devices still enjoy distinct advantages over cell phones: They have easier-to-use controls and screens that are bigger and can include more information. Maps also are built into the machines and won't suddenly disappear when the wireless network goes hazy.

Standalone devices "will still be an important way for consumers to get directions," said Ted Gartner, a spokesman for Garmin, which is based in the Cayman Islands but has its headquarters in Olathe, Kan. "We're not going anywhere."

But Frank Dickson, vice president of research at In-Stat, said customers who have never used a personal navigation device or don't travel often into unfamiliar areas might not care about the quality difference. They'd be more apt to demand additional functions and value to offset the higher upfront cost of a dedicated device.

At the same time, device makers are trying to make inroads in the cellular market. Both Garmin and TomTom, based in the Netherlands, sell $99 applications for smart phones.

"We consider ourselves to be very portable and we look forward to the growth of navigation across the board," said Tom Murray, vice president of market development for TomTom's U.S. division.

Garmin went one step further this fall, introducing the nuvifone, a cell phone with many of the features of the company's line of devices. Sold though AT&T, the nuvifone has been disappointing, but Garmin says it will release newer versions, including one next year for phones running Android, the Google-made operating system on which Google's own mapping application can run.

In-Stat's Dickson warns that entering the cell phone market may be a mistake because navigational device makers should emphasize their expertise in mapping software and location-based services.

"I can't help but think they're going to get a butt-kicking," Dickson said. "Let's focus on being the best navigation device maker that we can be and if we can integrate some of those other functions, like instant messaging or voice connectivity, then we can do that."

Friday, November 20, 2009

Google Chrome Operating system will start pc less than 7 second

New Google Inc software will start up a computer as fast as a television can be turned on, the search company said on Thursday as it showed off its Chrome operating system designed for PCs that do their work on the Web.

Google gave the first public look at its Chrome OS four months after declaring its intention of developing the PC's main software, a move that pits it directly against Microsoft Corp and Apple Inc.

True to Google's Internet-pedigree, the Chrome OS resembles a Web browser more than it does a traditional computer operating system like Microsoft Windows, matching Google's ambition to drive people to the Web -- where they can see Google ads.

Google said the software will initially be available by the holiday season of 2010 on low-cost netbooks that meet Google's hardware specifications, such as using only memory chips to store data instead of slower hard drives, the current standard.

Netbooks running Chrome OS will only be able to run Web applications and the user's data will automatically be stored on the Web in the so-called cloud of Internet servers, Google executives said at an event at the company's Mountain View, California headquarters on Thursday.

"It's basically a Web browsing machine," said Altimeter Group analyst Charlene Li, referring to the netbooks powered by Chrome OS.

Such a machine is made for a world of near-constant, extremely fast Web connection, without the type of software that made Microsoft famous, since most of the work would be done by big machines on the Web which take directions and send information to relatively uncomplicated devices like a Chrome PC.

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Sundar Pichai, vice-president of product management for Google's Chrome OS, said that computers running Chrome OS will be able to start in less than seven seconds.

"From the time you press boot you want it to be like a TV: You turn it on and you should be on the Web using your applications," Pichai said.


Google said it is giving away the software for free, similar to its Android smartphone software, with the idea that improving the Web experience will ultimately benefit its Internet search advertising business, which generated roughly $22 billion in revenue in 2008.

"They're doing it to get further and further entrenched in whatever people are doing to go online, whether that's a browser, an operating system or in applications," said Todd Greenwald, an analyst with Signal Hill Group.

"If Chrome is the OS then the attach (access) rate on Google searches will be a lot higher," he said.

But analysts noted that the differences between conventional PCs and Chrome OS netbooks might give some consumers pause.

"If they view it from the conventional perspective, then it falls short," Gartner analyst Ray Valdes said of Chrome OS, citing its lack of compatibility with traditional software and its limited offline capabilities.

Google officials said Chrome OS netbooks will be able to provide some functions when offline, but that the product was primarily designed to be connected to the Internet.

But Valdes said if Google can deliver on the products' promises, such as fast performance, then consumers may view Chrome OS netbooks as distinct class of products with attractive benefits.

"I think that it's initially going to appeal to small subset of the general consumer population," said Valdes. "The question is can they build on that and expand that over time."

Google made the computer code for the Chrome OS available to outside developers on Thursday, allowing developers to tinker with the software and potentially design new applications to run alongside it.

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With Chrome, Google is seeking to challenge the dominance of Microsoft Corp's Windows, which runs on nine out of 10 personal computers.

The Chrome OS also challenges makers of traditional, desktop software, including Microsoft and its lucrative Office suite of productivity software, since Chrome OS only runs Web applications.

Google's Pichai, noted during a demonstration on Thursday, that Chrome OS-based PCs would be interoperable with Web-based versions of software, such as Microsoft's online version of its Excel spreadsheet.

Google said all data in Chrome will automatically be housed in the so-called cloud, or on external servers, but also cached on the computer's internal hardware to boost performance.

If a person loses their netbook, Google Engineering Director Matt Papakipos explained, they can buy a new one, log in and within seconds have a machine with access to all the same data as their previous device.

"What really makes this a cloud device is that all the user data is synced back to the cloud in real time," said Papakipos.

Shares of Mountain View, California-based Google fell $3.66 to $572.99 in afternoon trading on the Nasdaq.

Tuesday, November 17, 2009

Microsoft co-founder Allen treated for lymphoma

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Microsoft Corp. co-founder and billionaire investor Paul Allen has been diagnosed with non-Hodgkin's lymphoma and is undergoing chemotherapy.

In a memo sent to employees, Jody Allen, Paul Allen's sister and the CEO of his investment firm Vulcan Inc., said the 56-year-old received the diagnosis early this month. According to the memo, Paul Allen has diffuse large B-cell lymphoma, a relatively common form of lymphoma.

Allen battled another form of immune system cancer, Hodgkin's lymphoma, more than 20 years ago and survived. The CEO wrote that Allen "is optimistic he can beat this, too."

"Paul is feeling OK and remains upbeat," she added. "He continues to work and he has no plans to change his role at Vulcan."

Allen founded Microsoft with Bill Gates, a high school friend and fellow computer enthusiast, in 1975. He served as the company's executive vice president of research and new product development until 1983, when he left to focus on his health.

Allen remained a major shareholder and member of the board, and went on to invest broadly in technology, real estate, sports and the arts.

He formed Vulcan in the mid-1980s to invest in media and communications companies, including America Online, DreamWorks Animation and cable operator Charter Communications Inc. He also co-founded a Silicon Valley research lab that he then shuttered after investing more than $100 million.

Beyond technology, Allen has used his Microsoft earnings to take his interests to an extreme. A longtime sports fan, Allen bought football's Seattle Seahawks and basketball's Portland Trailblazers, and he is part owner of the Seattle Sounders FC, a major league soccer team. Allen has been present at Seahawks games this season, chatting in the locker room with players. He has a band and a recording studio, and built the Experience Music Project, a museum about rock music in Seattle.

Allen has also collected and restored more than 30 vintage airplanes, started a brain science institute and through Vulcan's real estate arm redeveloped a large swath of downtown Seattle known as the South Lake Union neighborhood.

At last count, Allen's net worth totaled about $11.5 billion, making him the 17th richest person in the world according to Forbes' September 2009 tally.

Friday, November 06, 2009

Activision posts 3Q profit, backs 2009 outlook

It's been a rough year for the video game industry, but Activision Blizzard Inc. reported a profit for its third quarter because of a lower costs and a good response for games such as "Guitar Hero 5" and "World of Warcraft."

It also reaffirmed its guidance for the full year, citing a big expected release next week for "Call of Duty: Modern Warfare 2," which could easily be the most lucrative entertainment launch this holiday season.

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If all goes as planned, the hotly anticipated game will give the industry a much-needed boost for the holiday season. But it's not yet clear whether Americans will shell out as much cash for video games as they did last year. The recession, along with fewer hit game launches, has dampened sales this year after the industry hit a record in 2008.

Activision said Thursday its net income grew to $15 million, or a penny per share, in the latest quarter. In the same period of 2008 it lost $108 million, but the results are not completely comparable because Activision Blizzard was formed about 10 days into the year-ago quarter.

Revenue slid slightly to $703 million from $711 million.

On an adjusted basis, Activision earned 4 cents per share in the latest quarter, matching the average estimate of analysts polled by Thomson Reuters.

Its adjusted sales, which include revenue deferred from games' online components, was $755 million, surpassing Wall Street's expectations of $724 million.

The company's shares climbed 25 cents, or 2.3 percent, to $11.12 in after-hours trading.

CEO Bobby Kotick said in an interview that he hasn't seen a change in consumer behavior since the last time Activision reported its earnings, in August. The company boasts it has the industry's strongest slate of holiday releases, including "Modern Warfare 2," "Band Hero" and a new "Tony Hawk" skateboarding game, but Kotick said he sees no clear signs of how shoppers will spend this fall.

"What I am nervous about is consumer behavior," he said.

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Even so, the company expects to end the year on a high note while the industry as a whole is facing a decline. Activision said it expects adjusted earnings of 63 cents per share and $4.5 billion in adjusted revenue for the full year, roughly what Wall Street is predicting. Its outlook for the current quarter is slightly below estimates. Even so, the company expects to bring in $2.22 billion in adjusted revenue.

Earlier Thursday, three industry groups said unit sales across the world's three largest game markets declined 6 percent during the third quarter. The U.S. saw a 9 percent decline, according to the report, published by the NPD Group, GfK Chart-Track Ltd. and Enterbrain Inc.

Because a big chunk of its revenue comes from online subscriptions for "World of Warcraft," a game with a dedicated following of millions, Activision is somewhat more insulated from the ups and downs of the retail economy than its counterparts that rely more on packaged video game sales.

Still, there is some uncertainty to the company's forecast, because Chinese regulators are squabbling over the right to oversee the game, which is operated by Inc. in the country.

The company, which is based in Santa Monica, Calif., was formed in July 2008 when French conglomerate Vivendi SA bought a majority stake in Activision and combined it with its games unit.

Tuesday, November 03, 2009

Best Buy embraces digital delivery of home video

Best Buy Co. is trying to nudge consumers away from its stores' DVD aisles by making it easier for them to rent and buy movies over high-speed Internet connections.

The largest U.S. retailer of consumer electronics is setting up its digital delivery service in partnership with CinemaNow, which has deals with the major movie studios.

The software making it possible to shop CinemaNow's video library will be included on all the Web-connected devices sold in Best Buy's more than 1,000 U.S. stores. That means consumers who buy flat-panel TVs, Blu-ray players, personal computers and mobile phones from Best Buy would be able to get downloads of videos the same day they are released on DVDs.

The alliance marks the latest step away from the DVD format. Consumers are getting more ways of finding home entertainment with just a few clicks instead of traveling to a video rental store or waiting for a disc to be delivered through the mail.

Apple Inc., Inc. and DVD-by-mail pioneer Netflix Inc. all have been winning over consumers with their own digital delivery systems. Blockbuster Inc. also has a deal with CinemaNow that lets people rent movies over the Internet.

Netflix gave an indication of the growing popularity of new video-delivery methods in its earnings report last month. It said that 42 percent of its subscribers streamed at least 15 minutes of video through its Internet-viewing service during the last quarter, up from 22 percent at the same time last year.