Tuesday, March 29, 2011

EBay to buy GSI Commerce for $2.4 billion

Online marketplace operator EBay said Monday that it will pay $2.4 billion for GSI Commerce, which operates websites for retailers like Toys R Us and Bath & Body Works.

EBay Inc., which runs its namesake site where users buy and sell items through auctions and fixed-price "Buy it Now" formats as well as online payments service PayPal, hopes the acquisition will bolster its ability to connect buyers and sellers around the world. It could also help it become more of a threat to Amazon.com Inc.

GSI runs websites, packs and ships products and offers interactive marketing services to a variety of retailers. It has long-term contracts with 180 retailers, including Radio Shack, Ace Hardware and American Eagle Outfitters.

Shares of GSI, which is based in King of Prussia, Pa., surged 51 percent, or $9.82, to $29.20.

EBay has been working on improving its eBay.com website by doing things such as revamping its home page, cutting upfront listing fees it charges sellers and bolstering its search engine. In an interview, eBay CEO John Donahoe said the GSI deal fits in with his company's efforts to help retailers grow.

"Commerce is at an inflection point where the lines between online and offline commerce are blurring," he said. "We see retailers of all sizes, merchants of all sizes, looking for partners that can help them grow their businesses."

Lots of businesses need help doing things like generating demand for products, running their websites, delivering goods to customers, and growing their mobile sales, Donahoe said. GSI does this for large companies, and eBay and PayPal do this for small- and medium-sized companies, he said, which makes the acquisition a natural fit.

The purchase might also help eBay compete with Seattle-based Amazon, which, in addition to selling many items directly, allows merchants to sell their products through its site and offers product fulfillment services, too.

EBay is already involved with GSI through PayPal, which was integrated with GSI customers' sites last year, Donahoe said. He hopes that the purchase will also result in some of the companies GSI works with selling their goods on eBay.com.

Forrester Research analyst Brian Walker said the acquisition is a good move for eBay since it adds diversity to its business and gives the company access to larger merchants and merchant services that have traditionally shied away from selling on its site.

"It makes them a solution for large, regular-price retailers and consumer brands who would not see eBay or PayPal as solutions," he said.

The price seems high, he said, but it reflects the growing importance of the Web and mobile commerce.

San Jose-based eBay said it will pay $29.25 per share, a 51 percent premium to GSI's closing stock price on Friday. The $2.4 billion total is the second-largest amount eBay has paid for another company thus far — in 2005 eBay paid at least $2.6 billion for Internet calling and messaging service Skype, which it has since sold.

As part of the acquisition, eBay plans to sell GSI's licensed sports merchandise business and 70 percent of shopping sites RueLaLa.com and ShopRunner.com.

EBay hopes to complete the deal in the third quarter. It says its 2011 net income per share will be 30 cents to 34 cents lower than its earlier outlook. In January, it had forecast earnings of $1.56 to $1.61 per share. Its adjusted earnings won't be affected. The company had forecast adjusted earnings of $1.90 to $1.95 per share in January.

Monday, March 28, 2011

Nintendo ready to take 3-D gaming to mass market

With the Nintendo 3DS, the Japanese video game company is betting that it can once again nudge mass entertainment in a new direction, just as it did nearly five years ago when it launched the Wii with its innovative motion-based controller.

This time, though, the competition from other devices is tougher.

The handheld 3DS, which goes on sale in the U.S. on Sunday for $250, lets users play 3-D games without wearing special glasses. It also takes 3-D photos. This summer, the 3DS will play 3-D movies streamed from Netflix on its 3.5-inch screen.

Reggie Fils-Aime, the president of Nintendo's U.S. arm, calls it "the first mass-market 3-D device."

Nintendo's handheld gaming systems have been wildly popular since the days of the Game Boy, but in recent years people have grown accustomed (and sometimes addicted) to playing games on their smartphones. "Angry Birds," for example, is played by 40 million people a month.

And both AT&T Inc. and Sprint Nextel Corp. have announced they'll be selling smartphones with 3-D screens soon.

Fils-Aime acknowledges that consumers have a wide range of entertainment options. Nintendo, he says, must provide better entertainment experiences so that people keep flocking to its games and devices.

So far, they are. While demand for the handheld DS has slowed over the past year, video game analyst Jesse Divnich of Electronic Entertainment Design and Research said that's only because people have been holding out for the 3DS. As of Dec. 31, Nintendo had sold about 145 million units of the DS in all its iterations worldwide. Divnich thinks demand for the 3DS will be more brisk during its first year on sale than for previous iterations, such as the DSi, which went on sale in 2008.

The Wii, which hit store shelves in 2006 for $250 (it is now $200), was often sold out or in short supply as recently as last February. It's not clear yet whether this will be the case with 3DS, but retailers say demand has been strong based on the number of pre-orders they received. Tony Bartel, the president of GameStop Corp., the world's largest video game store chain, said the company is "working every day with Nintendo" to ensure that they can meet demand.

Wedbush Morgan analyst Michael Pachter said Nintendo will sell "as many as they can make" over the next 12 months. While the earthquake and tsunami that devastated Japan will likely affect supplies, he called an estimate of 16 million units "very fair."

The 3DS isn't Nintendo's first foray into 3-D gaming. In 1995, it launched the Virtual Boy, which required bulky headgear and displayed all images in red. It bombed and Nintendo soon discontinued it. But it didn't give up on 3-D.

The technology used to create 3-D images on the 3DS is not new. Called a "parallax barrier" LCD screen, it works as if two sets of thin blinds were laid over the screen, so that your eyes each see a different version of the image. Your brain then puts them together, creating the 3-D effect. Because it only works if the viewer is at a certain place in relation to the screen, this technology is better suited to hand-held devices than TV sets.

As entertainment technology, 3-D doesn't have a long track record of appeal to the mass market. It's been possible to play computer games in 3-D for years, with the help of glasses, but they have never caught on. People are willing to pay extra to see 3-D movies, but they haven't helped overall box office receipts.

Veteran game designer Hideki Konno, who helped develop the 3DS, said being able to see games in 3-D makes it easier to comprehend distances while playing.

"You will find it easier to grasp the width, height and the depth of the gaming world," he said in an email message translated from the Japanese.

Ji Soo Yim, 20, is a fan of Nintendo but she said she might wait to buy the 3DS. She tried it out recently at the Nintendo World store in New York City while visiting on spring break from Grinnell, Iowa.

"It was supposed to be 3-D, but it looks like it's going to be a headache," she said.

Nintendo notes that the 3-D effect is adjustable (and can be turned off completely, too), which could help those prone to headaches from 3-D. Nintendo hopes that, along with the lack of glasses, will make the 3DS appealing to a broad range of people.

It also helps that people are familiar with 3-D technology from movies. Ross Rubin, an analyst for market research firm NPD Group, thinks consumers will eventually adopt 3-D TVs in their homes just as they bought high-definition screens. The 3DS is one sign that the use of 3-D is spreading through the electronics industry, he said, though he noted that 3-D TV sales haven't been as strong as some manufacturers have expected.

Saturday, March 26, 2011

Kodak patent complaint against Apple, RIM revived

A federal agency said Friday that it will review Eastman Kodak Co.'s high-stakes patent-infringement claim against technology giants Apple Inc. and Research in Motion Ltd.

The U.S. International Trade Commission in Washington, D.C., agreed to examine a judge's finding in January that Apple's iPhone and RIM's BlackBerry don't violate an image-preview patent the photography pioneer obtained in 2001.

The decision revives Kodak's hopes of negotiating royalties worth $1 billion or more. The agency's six commissioners will decide by May 23 whether to alter the initial determination by its chief administrative judge, Paul Luckern, or let it stand.

Kodak spokesman Gerard Meuchner said "we are pleased with the decision and we look forward to the next step in the process."

The company has amassed more than 1,000 digital-imaging patents, and almost all digital cameras rely on that technology. Mining its rich array of inventions has become an indispensable tool in a long and painful turnaround.

That campaign was stalled by the recession, which began just after Kodak completed a three-year, $3.4 billion digital overhaul in 2007. Its payroll has plunged to 18,800 people, from 70,000 in 2002.

Kodak's shares jumped 27 cents, or 8.6 percent, to close at $3.40 Friday, then shot up 72 more cents to $4.12 in after-hours trading. They are trading in a 52-week range of $2.90 to $9.08.

Messages seeking comment from RIM were not immediately returned. An Apple spokeswoman said the company had no comment.

After failed negotiations, Kodak filed a complaint against Cupertino, Calif.-based Apple and Waterloo, Ontario-based RIM in January 2010 with the commission that oversees U.S. trade disputes. It also filed two lawsuits against Apple in federal court in Rochester, but it has not specified the damages it is seeking.

In December 2009, the commission ruled that cell phones made by Samsung Electronics Co. and LG Electronics Inc. infringed the same Kodak patent, and Kodak received a one-time $550 million royalty payment from Samsung and a $414 million deal was reached with LG Electronics.

The 131-year-old camera maker has said it expects to continue to generate an average of between $250 million and $350 million annually through 2013 from licensing its digital technology. Over the last three years, it outpaced that figure, booking $1.9 billion in revenue.

Kodak has banked on replacing hefty profits it once made on film, with promising new lines of home inkjet printers and high-speed inkjet presses. It expects to generate its first profits from consumer printers this year and its commercial line is targeted to turn profitable in 2012.

Separately, ITC judge E. James Gildea issued an initial ruling in a dispute between Apple and Nokia Corp. on Friday, saying Apple did not infringe on five of Nokia's patents.

Nokia, the world's largest maker of cell phones, filed a complaint with the ITC in Dec. 2009, alleging Apple's iPods, iPhone and computers violate Nokia's intellectual property rights. At issue were key features found in Apple products, including aspects of user interface, cameras, antenna and power management technologies, Nokia said at the time. The company claimed that the technologies in question help cut manufacturing costs, reduce gadget size and prolong battery life.

The cell phone maker began its patent fight with Apple in October 2009, filing its first patent infringement claim against Apple in Delaware. Apple filed a countersuit, claiming Nokia was infringing on a variety of its patents.

Apple countersued Nokia in the U.S., and also filed a counter-complaint with the ITC.

Nokia has also filed patent lawsuits last year against Apple in Britain, Germany and the Netherlands.

Apple had no comment on Gildea's ruling. A spokeswoman for Nokia did not immediately respond to requests for comment.

Friday, March 25, 2011

Oracle fiscal 3Q net income up 78 pct

Database software maker Oracle Corp. said Thursday its net income rose 78 percent in the fiscal third quarter, helped by a rise in new software license sales and the benefit of three full months of revenue from Sun Microsystems, a company it acquired last year.

Oracle also issued earnings guidance for the current quarter that is higher than Wall Street expected. Shares climbed in extended trading.

The strong performance by Oracle is further testament to the recovery in business spending on technology. It is also a sign that the acquisition of Sun Microsystems, which turned Oracle into more of a one-stop shop by adding server computers to its software and consulting services lineup, is humming right along.

Oracle, which makes database software that underpins everyday transactions, from bank withdrawals to airline reservations, said new software license sales, a key figure for measuring Oracle's growth, increased almost 30 percent to $2.2 billion, above its own forecast for a 10 percent to 20 percent improvement.

Hardware systems revenue more than tripled to $1.7 billion from $458 million in the year-ago quarter. Oracle's $7.3 billion acquisition of Sun Microsystems, a server computer company, closed last January, so last year's quarter only included one month of revenue from Sun. This year's quarter included three months of Sun revenue.

It "was just a great quarter," said Mark Hurd, a president at Oracle.

Hurd, the former Hewlett-Packard Co. CEO who joined Oracle after his ouster last year in a sexual harassment scandal, took the place of Oracle's bombastic chief Larry Ellison, who could not join a conference call because he is serving jury duty.

Net income for the quarter that ended on Feb. 28 increased to $2.1 billion, or 41 cents per share, from $1.2 billion, or 23 cents per share a year earlier.

Excluding certain items, Oracle earned 54 cents per share, more than Wall Street was expecting. Analysts surveyed by FactSet forecast earnings of 50 cents per share.

Selling more Sun hardware and less third-party hardware helped Oracle improve profits in the quarter, as did improvements to the hardware supply chain, the company said.

Revenue jumped 37 percent to $8.8 billion from $6.4 billion, more than the $8.7 billion analysts predicted. The company said revenue increased more than 30 percent in every region worldwide.

Oracle said it expects fourth-quarter revenue to grow 10 percent to 14 percent, which comes out to $10.5 billion to $10.8 billion. Analysts currently predict $10.5 billion.

The company forecast earnings of 69 cents to 73 cents. Analysts forecast fourth-quarter earnings of 66 cents per share.

Oracle said it expects new software license revenue to grow 9 percent to 19 percent.

The Redwood Shores, Calif.-based company also said Thursday that employees in Japan are safe after the earthquake and tsunami, and that its Tokyo building was not damaged. Safra Catz, an Oracle president, said during a conference call that she does not expect problems with the supply chain as a result of the recent disasters.

Shares of Oracle bounced up $1.09, or 3.4 percent, to $33.20 in after-hours trading following the release of the earnings report. Earlier, the stock added 73 cents, or 2.3 percent, to close the regular session at $32.14.

Wednesday, March 23, 2011

RIM PlayBook ready to contest crowded tablet market

It's official: with the launch of Research In Motion's (RIM.TO) (RIMM.O) PlayBook tablet now just a month away, the BlackBerry maker's battle against Apple and Google is at the cusp of a fierce new phase.

RIM said on Tuesday its tablet will finally hit store shelves April 19, seven months after the device was announced.
The North American rollout will come almost a month after Apple's (AAPL.O) iPad 2 goes on sale outside of the United States, where it sold up to 1 million units in its first weekend alone.

On Tuesday, Apple confirmed it would start selling the iPad 2 in 25 more countries from Friday. That eased concerns that the crisis in Japan might curtail the supply of crucial components for electronic devices. Shares in both Apple and RIM closed higher.

As it enters the tablet market, RIM has little room for error and a small window to impress. It was once the undisputed king of mobile communications, but slicker Google (GOOG.O) Android and Apple products have become must-haves for young consumers while also threatening RIM's corporate bastion.

"The big question is the Playbook's appeal to those not already part of the BlackBerry world," said CCS Insight's Geoff Blaber.

While investors await the consumer's verdict, the Canadian company has one more set of quarterly results to unveil without the PlayBook.

The report, due Thursday, is likely to show RIM's global growth story on track. As with recent quarters, the catalysts are sure to be higher overseas sales of cheaper handsets and U.S. discounts. Turmoil at Nokia, the leader in the low-end of the market, probably didn't hurt matters either.

The PlayBook will likely contribute only marginally to sales and earnings this year. Even so, it represents a nascent opportunity for RIM in a booming tablet marketplace.

RIM is hoping the PlayBook's natural affinity with its corporate-friendly smartphones gives sales an early boost and offsets a move by more companies to allow workers to use their own non-BlackBerry smartphones to access work-related email and data.

Unlike the almost 10-inch iPad, the 7-inch PlayBook boasts support for Flash, but the RIM tablet will not ship with its own cellular connection until mid-year.

The first version of the PlayBook pairs with a BlackBerry smartphone for features such as corporate email and to any smartphone for connectivity when not near a WiFi connection.


RIM's tablet will sell in 20,000 retail and wireless carrier outlets including Best Buy (BBY.N) for as little as $499, matching the pricing for the iPad.

Apple sold nearly 15 million iPads in nine months of 2010, two or three times as many as analysts had forecast. It is expected to sell 30 million or more this year.

Still, worries remain about the supply of key components. Several key components in the new version of the tablet come from Japan, including the battery and the flash memory used to store music and video on the device, according to research firm IHS iSuppli.

Expectations for the PlayBook are lower, with between 1 million and 4 million sales seen this year.

Scotia Capital analyst Gus Papageorgiou, who expects sales at the high end of that range, said the expansive distribution network could boost PlayBook 2011 sales to more than 7.3 million in North America alone.

While RIM is seen as less exposed to Japanese supplies, its conference call following the numbers could also provide further insight from mobile industry executives on supply chain disruptions due to the earthquake.

RIM likely shipped almost 14.9 million devices in the quarter, which included Christmas and Valentine's Day, according to 12 analysts surveyed by Reuters. They shipped 14.2 million in the previous quarter.

Analysts on average expect RIM to earn $1.76 a share on revenue of $5.64 billion, both some 38 percent higher than a year earlier, according to Thomson Reuters I/B/E/S. RIM's own forecast is for sales of between $5.5 billion and $5.7 billion and earnings of between $1.74 and $1.80 a share.

In its last reported quarter RIM got 44 percent of its revenue from outside North America and Britain. That portion is expected to grow as RIM extends deeper into emerging markets.


A shift in mix toward cheaper phones will hit average selling prices and mean RIM must ship even more phones to boost revenue, but will likely not hit gross margins, which at 43 percent are among the highest in the mobile industry.

Meanwhile, a November discount on its Torch model, launched in August with an improved browser, may have offset RIM's U.S. market share losses since Verizon started selling the iPhone.

Turmoil at global rival Nokia (NOK1V.HE), which has sidelined its own software platforms to ink a deal with Microsoft, could bolster RIM in big growth markets as it sells increasing numbers of its lower-end smartphones, such as the Curve 8520, in Latin America, South East Asia and elsewhere.

Analysts expect RIM's earnings to drop to $1.65 a share in the current quarter on revenue of $5.65 billion. (Additional reporting by Euan Rocha in Toronto and Arup Roychoudhury in Bangalore; editing by Frank McGurty, Bernard Orr)

Thursday, March 17, 2011

HTC Thunderbolt will make use of Verizon's 4G network

Verizon (VZ) announced this week that HTC’s (2498.TW) upcoming Thunderbolt smart phone, which is capable of using Verizon’s growing 4G LTE network, will be hitting store shelves starting March 17. In other words, it’ll be just two days before the company rolls out the first phone on its reportedly superfast data network.

We’ve been hearing about the benefits of Verizon’s LTE network for a while, but back at CES 2011 earlier this year in Las Vegas, we saw that a lot of other companies are seemingly getting on board. These include device makers like HTC and LG, as well as software creators, as well. Electronic Arts (ERTS), the publisher of games in the Rock Band franchise, demonstrated the capabilities of gaming over LTE during the conference (using the Thunderbolt, in fact), and Verizon had tablets playing games alongside players on PCs and PlayStation 3s using the network. It really does seem quite powerful, and Verizon pegs it as being 10 to 20 times faster than current standard 3G service.

Most of the big mobile carriers are touting some kind of 4G network growth right now, in fact, although Verizon’s is, by most non-carrier accounts, the best. Verizon is extending the coverage quickly and hopes to have 176 markets included in the service by the end of the year. Meanwhile, AT&T (T) is pushing two 4G-labeled devices, and T-Mobile (DTEGY.PK) has 4G of its own. But before you go running out to take advantage of a new Android device’s amazing 4G data capabilities, you might want to do a little research -- all 4G is not created equal.

A story from PC World has some really interesting things to say about how each carrier handles 4G -- some of them, in a word, don’t. For example, AT&T’s “4G” network has actually been shown by PC World to be slower than its 3G coverage. The advertising campaigns it’s pushing for 4G are basically false, but the company can get away with it because the definition of what constitutes 4G is pretty lax. Just because a carrier claims to be selling you 4G (and that’s not just limited to AT&T) doesn’t mean what you’re getting is an improvement.

According to PC World, cellular companies put some pressure on the International Telecommunications Union, which eventually changed its definition of 4G from several specific, high-powered technologies that the carriers didn’t actually have yet, to just about anything that’s considered faster than 3G. That makes the actual qualifications for 4G a little hazy, and subject to device and location.

For example, AT&T’s 4G might not run as well as its 3G, but it’s not necessarily a function of the technology -- it could be the coverage, or the network being overtaxed, or a result of several other factors. MetroPCS (PCS) has a 4G phone, the Samsung (005930.KS) Craft, that’s reportedly slower than its 3G counterparts, but the issue is the device’s processor rather than its data connection. T-Mobile’s two 4G phones use technology the company has actually said is not 4G.

The differences between 3G and 4G definitely exist, but it isn’t necessarily the smart phone super-technology tech companies sometimes make it out to be. That’s not to say that it isn’t a step forward in many cases, but the creation of the networks is taking time. Even AT&T’s service, which is lagging now, is being worked on and improved alongside its somewhat notorious 3G network.

But the fact of the matter right now is that “4G,” whatever that might entail, isn’t definite. As new devices hit shelves, it’s a worthwhile endeavor for Android customers to do their homework and vet new smart phones to find the ones that really are as powerful and speedy as carriers claim them to be.

Friday, March 04, 2011

Jobs breaks from medical leave to unveil iPad 2

Apple is back with a refined second-generation tablet computer that squeezes more power into a thinner shell while keeping prices in check. It's a three-pronged push that should handily hold off competitors for another year.

Underscoring the tablet's importance to Apple, CEO Steve Jobs briefly emerged from a medical leave Wednesday and made a surprising appearance to unveil the iPad 2 himself.

With the original iPad, Apple proved there is great demand for a tablet that's less than a laptop and more than a smart phone, yet performs many of the same tasks. Dozens of copycat touch-screen devices are in the works, but so far none has broken into the mainstream consciousness the way the iPad has.

"The competition is essentially going to be picking up the crumbs that Apple decides to leave behind," said Ashok Kumar, an analyst with Rodman & Renshaw.

He said the number of software applications — or "apps" — available for the iPad gives Apple a huge advantage.

"Is the tablet market anything beyond the iPad? So far the answer is no."

Sarah Rotman Epps, a Forrester Research analyst, said iPads should make up at least 20 million of the 24.1 million tablet computers she expects people in the U.S. to buy this year.

Except for Jobs' appearance, little came as a surprise after months of speculation about features and upgrades. The tablet has two cameras built in for taking photos, recording video and video chatting. The battery life will be the same as the original — about 10 hours of usage or a month on standby.

The iPad 2 is faster than its predecessor. Ross Rubin, an analyst for the market researchers NPD Group, said that should make the iPad better for creating music, video and other content, rather than just consuming it.

The iPad 2 is also thinner — 8.8 millimeters, or about a third of an inch, instead of the current 13.4 millimeters. It weighs just a bit less — 1.3 pounds, compared with the original 1.5 pounds.

With a $39 accessory, people can connect the tablet to televisions, so they can watch high-definition videos on the bigger screen.

The next-generation iPads will cost the same as the originals — $499 to $829, depending on storage space and whether they can connect to the Internet over a cellular network. Apple will add a white model to the current black. In the U.S., the iPad 2 will go on sale March 11 and work on AT&T Inc. and Verizon Wireless.

Apple's online store began selling the original models for $100 off, starting at $399. Refurbished versions were even lower, starting at $349.

A reporter who used a white iPad 2 immediately after the announcement found it noticeably thinner, with a more rounded back. YouTube video loaded quickly using AT&T's data service, and "Toy Story 3" played smoothly. Given its size, the iPad 2 appeared impractical for taking lots of photos, but both cameras will help with video chats — the front one to show the caller, and the back one to show what the caller is seeing.

The iPad 2 shared the spotlight with the man who presented it — Jobs, who announced in January that he would take a third leave of absence to focus on his health. In the last decade, Jobs, 56, has survived a rare but curable form of pancreatic cancer and undergone a liver transplant.

Jobs, looking frail in his signature black mock turtleneck and blue jeans, was greeted with a standing ovation.

"We've been working on this product for a while, and I just didn't want to miss today," Jobs told an audience that included bloggers and Apple enthusiasts. "Thank you for having me."

He did not address his health or say if and when he would return.

Tablet computers existed long before the iPad, but it took Apple to build a device that made sense to consumers. Apple simplified the software, designed a sleek, shiny shell and sold 15 million of the iPads in nine months.

The iPad was initially used for checking e-mail, surfing the Web and watching online video. But as the number of apps grew, the tablet made itself at home in offices, shops, restaurants and countless other settings.

Competitors including Dell Inc. and Samsung Electronics Co. have been trying since last year to lure consumers with smaller tablets, without much success. In February, Motorola Mobility Inc.'s Xoom went on sale with a new version of Google Inc.'s Android software that was designed for tablets, not smart phones.

For a moment, the Xoom looks promising, with a comparably sized screen, a faster processor and a few other bells and whistles the original iPad didn't have. But the iPad 2 catches up again with dual cameras and a faster chip inside. It pulls ahead with a slimmer profile and the ever-expanding number of tablet-specific apps.

After its March 11 U.S. launch, the iPad 2 goes on sale March 25 in 26 other markets, including Mexico, New Zealand, Spain and other European countries.

Apple also introduced updates to the software that runs on the iPad, iPhone and iPod Touch. The company said the update, iOS 4.3, will work on iPhone 3GS and iPhone 4 models, except the new version for Verizon Wireless.

Among other things, the new system turns iPhones and iPads with 3G cellular connections into personal Wi-Fi hotspots, so you can share the connection with computers or other devices — if your wireless carrier allows it. Many charge additional fees for this service.

Apple also announced new software designed for the iPad, including a $4.99 version of iMovie for video editing and a $4.99 version of GarageBand, its music recording and editing software. GarageBand includes instruments that can be played by touching the iPad 2's screen, and it can even sense whether you're tapping quietly or banging on the "keys."

The company also said Random House became the last major publisher to agree to sell its titles in Apple's e-books store.