Behind Apple's products is longtime designer Ive

Steve Jobs has been Apple's most recognizable personality, but much of its cachet comes from its clean, inviting designs. For that, Apple can credit its head designer, Jonathan Ive.

Ive, a self-effacing 44-year-old Brit, helped Jobs bring Apple back from the brink of financial ruin with the whimsical iMac computer, whose original models came in bright colors at a time when bland shades dominated the PC world. He later helped transform Apple into a consumer electronics powerhouse and the envy of Silicon Valley with the iPod, the iPhone and, most recently, the iPad.

In the wake of Jobs' resignation as CEO, Apple must show that it can keep churning out head-turning products even without its charismatic leader. Apple's chief operating officer, Tim Cook, is now CEO, taking on the role of Apple's public face.

But in many ways the real pressure will fall on Ive to make sure Apple continues its string of gadget successes.

Ive, known to his friends as "Jony," has led Apple's design team since the mid-'90s. Working closely with Jobs, Ive has built a strong legacy at Apple, ushering in products that are sleek and stylish, with rounded corners, few buttons, brushed aluminum surfaces and plenty of slick glass.

Apple's pride in this work is evident even in the packaging: Open up any iPhone box, for example, and see Apple proudly proclaim, "Designed by Apple in California." Six of Ive's works, including the original iPod, are even part of the collection at the Museum of Modern Art in New York.

People who have worked with Ive describe him as humble and sweet, quiet and shy, but also confident, hard-working and brilliant. Paola Antonelli, senior curator of architecture and design for MoMA, said she knows "hardly anybody that is so universally loved and admired" as Ive.

"Products have to be designed better now for people to buy them because of Jony Ive and Steve Jobs and Apple," Antonelli said. "All of a sudden people have gotten used to elegance and beauty, and there's no going back."

Design, as well as software that makes the gadgets easy to use, is a crucial part of setting Apple products apart from those of its rivals. Apple didn't make the first music player or smartphone, but it blew past rivals by making ones that looked cool and worked well.

Ive started out far from Apple Inc.'s Cupertino headquarters. He grew up outside London and studied design at Newcastle Polytechnic (now Northumbria University) in Newcastle, England. After finishing school, he co-founded a London-based design company called Tangerine. There, he designed a range of products including combs and power tools. It was through Tangerine that he first got to work with Apple.

In 1992, while Jobs was still in the midst of a 12-year exile from Apple, the company's design chief at the time, Robert Brunner, hired Ive as a senior designer. Thomas Meyerhoffer, who worked under Ive at Apple in the '90s, believes Ive came because he understood Apple was different from other computer companies.

"He came to Apple to take that even further," Meyerhoffer said.

And Ive did, but not right away. Ive quickly became a leader, working as the creative studio manager and helping to build Apple's design team during a period in which the company struggled to innovate.

Apple declined requests for an interview with Ive. But during a 1999 interview with The Associated Press, Ive said that for years, designers would produce foam models of computers only to be sent back to their drawing boards because of managers' fixations with focus groups and marketing figures.

"We lost our identity and looked to competition for leadership," Ive said at the time.

Brunner left in 1996 and suggested that Ive take over the post, even though Ive was only 29. When Jobs returned from his exile and became interim CEO in 1997, he named Ive as senior vice president of industrial design.

With Jobs again at the helm and Ive as his style guru, Apple refocused around design and produced a hit that got the company back on track. Apple shook up the personal computer industry in 1998 with the candy-colored all-in-one iMac desktop, the original models shaped like a futuristic TV.

Unlike previous product attempts, the iMac concept was immediately embraced by the top decision makers at Apple, and the design went through very few revisions.

"We knew we had it when we saw it, and with Jobs' support we were able to make it happen," Ive said in 1999.

At a time when most computers were boxy and largely black, beige or gray, the iMac was bulbous and flashy. People snapped up 150,000 of them in the first weekend following its release. Apple sold 800,000 iMacs by the end of the year.

The iMac changed the way consumers thought about personal computers and about Apple itself. It gave Apple a vital boost that helped it usher in a new era of consumer electronics that were quirky, fun and colorful. The marketing team even teased consumers by encouraging them at one point to collect all five — strawberry, blueberry, grape, tangerine and lime.

With Ive in charge of design, Apple then bought out the first iPod in 2001, the iPhone in 2007 and the iPad in 2010. In recent years, the company has largely dropped the bright color palette (though you can still find it on some iPods) in favor of black, white and silver hues. Yet they retained simplicity that made them approachable to everyone — from the tech geek to Grandma — as well as the curves, shiny surfaces and expensive appearance.

As a result, Apple's products are more popular than ever, allowing the company to surpass rival Microsoft Corp. last year as the most valuable technology company in the world.

"He wasn't responsible for them, but they definitely couldn't have done them without him," said Leander Kahney, who has written about Apple in several books and on his "Cult of Mac" blog.

Ive and Jobs have worked hand in hand and, in many respects, have contributed to each other's success. Ive has always been in contact with Jobs and speaks the same language as him, Antonelli said, and they clearly have chemistry.

Don Norman, who worked at Apple in the '90s as vice president of the company's advanced technology group, said that while Ive had good design ideas "sitting on the shelves," he needed Jobs to get those designs off the shelves.

"Jony has always been Jony — brilliant," Norman said. "What he needed was a Steve Jobs to say, 'Make this happen.'"

Now, the test will be whether Cook can continue to keep that focus at Apple and encourage Ive to continue creating hits.

In a sense, the challenge won't be as difficult as it had been in the 1990s. Now that Apple has developed a style, it can build on it rather than try to reimagine it with each new product.

And that, Norman says, is now in Apple's DNA.

Jobs' new job at Apple could be 'chief visionary'

The end of Steve Jobs' reign as Apple Inc. CEO doesn't mean he is bowing out as the maestro of personal technology.

True to its tight-lipped style, Apple isn't spelling out how actively involved Jobs will be as the company's new chairman while he tends to his own fragile health after surviving pancreatic cancer and a liver transplant during the past seven years.

But longtime Apple watchers have no doubt that Jobs will weigh in on all key decisions and help sculpt the company's future product lineup.

"I know enough about Steve Jobs to know that as long as he has a breath in him, he will be giving direction at Apple," said Tim Bajarin, president of Creative Strategies and the dean of Apple analysts. "He is going to remain Apple's chief visionary."

In his Wednesday resignation letter as CEO, Jobs, 56, wrote that he planned to be "watching and contributing" to Apple's success as chairman, a position that had long been vacant.

In a sign of his commitment, Jobs put in a full day at Apple's Cupertino headquarters during his last full day as CEO, even though he was technically still on medical leave, said Yankee Group analyst Carl Howe.

Bajarin and other people in close contact with Apple said Jobs remained intimately involved there even as he spent 14 of the past 32 months on medical leaves of absence. During that stretch, Apple kept pumping out smash hits and became more successful than ever, with its market value swelling from $80 billion to nearly $350 billion today.

Even so, the mere specter of Apple operating without Jobs conjures unwelcome memories. After co-founding Apple in 1976 and establishing it as a technology trailblazer, Jobs was forced out in 1985. When he finally returned in 1997, the company was in danger in going bankrupt and even needed financial help from longtime nemesis Microsoft Corp. to survive.

The ongoing prosperity during Jobs' recent illnesses is a testament to the management team he assembled and schooled, and to his own ability to remain engaged and inspired even as he convalesces.

The Steve Jobs way is so deeply ingrained in Apple's DNA that analysts are convinced that new CEO Tim Cook and his key subordinates no longer need to hear from Jobs every day to know what he wants.

In a Thursday letter to Apple employees, Cook stressed he won't mess with the formula that worked so well during Jobs' 14-year tenure as CEO.

"I want you to be confident that Apple is not going to change," Cook wrote. "I cherish and celebrate Apple's unique principles and values. Steve built a company and culture that is unlike any other in the world and we are going to stay true to that."

Cook also noted that he is "looking forward to Steve's ongoing guidance and inspiration."

Cook, who has run Apple during all three of Jobs' medical absences since 2004, will have ample help beyond his former boss. The other key players include marketing guru Phil Schiller, design chief Jonathan Ive, software mastermind Scott Forstall and the head of finance, Peter Oppenheimer.

"If you were trying to describe this group of people, it would be the dream team of executive management," said Howe said.

Nearly all the key Apple executives have been at the company for years, many of them joining the company around the time of Jobs' 1997 return.

The biggest area of concern is Ron Johnson, the man in charge of the Apple stores that have become the main showcase for the company's sleek devices. Johnson is leaving Apple in November to become J.C. Penney Co.'s CEO, but Howe thinks Apple won't have much problem finding another savvy merchant to replace him.

Jobs has done such a masterful job plotting Apple's progression from the iPod to the iPhone to the iPad that the next few years of new products are probably already in the pipeline. With an operating system already in place for use on a multitude of devices, it's likely that Jobs already has laid the groundwork to place Apple's technology on other gadgets with screens, including in-car navigation systems and televisions, Bajarin said.

Investors appear to be betting that Apple won't miss a beat. Apple's stock dipped $2.46, or less than 1 percent, Thursday to close at $373.72.

Things could get rocky if it becomes clear Jobs' health is getting worse. He has looked frail in his recent public appearances.

Jobs resignation letter indicated he isn't feeling well enough to be a full-time CEO. But analysts think that could just mean he has figured out he needs to focus more on his health and spend just part of his time as Apple's chief visionary.

The resignation may even turn out to be a positive for Apple because it will end the perpetual guessing game about who is going to succeed Jobs as CEO and give Cook even more of a chance to prove his management chops, said Sterne Agee analyst Shaw Wu.

Jobs' decision to step aside "is very brave," Wu said. "Some guys hold on to the last minute, but he had the foresight, the maturity level to do this. It's a huge step."

Apple's hot streak probably made the choice easier, Bajarin said. "If there ever was a time where Steve Jobs was going to make his own health his top job, this is it."

It could well be that Jobs will relish the opportunity to focus more on big-picture ideas and less on the more mundane tasks of running a company that can now be left to Cook and others, said Jay Elliot, a former Apple vice president who worked closely with Jobs in the 1980s.

"Steve is incredibly passionate about the product, his whole life is driven by the product," said Elliot, who wrote a book "The Steve Jobs Way — iLeadership For a New Generation." ''I view him as an artist making sure the final painting is a masterpiece."

Jobs at Apple: Master inventor, master marketer

Steve Jobs started Apple Computer with a high school friend in a Silicon Valley garage in 1976, was forced out a decade later, then returned to rescue the company. During his second stint, Apple grew into the most valuable technology company in the world.

Jobs invented and masterfully marketed ever-sleeker gadgets that transformed everyday technology, from the personal computer to the iPod and iPhone. Cultivating Apple's countercultural sensibility and a minimalist design ethic, he rolled out one sensational product after another, even in the face of the late-2000s recession and his own failing health.

Jobs helped change computers from a geeky hobbyist's obsession to a necessity of modern life at work and home, and in the process he upended not just personal technology but the cellphone and music industries.

Perhaps most influentially, he launched the iPod in 2001, which offered "1,000 songs in your pocket." Over the next 10 years, its white earphones and thumb-dial control seemed to become as ubiquitous as the wristwatch.

In 2007 came the touch-screen iPhone, and later its miniature "apps," which made the phone a device not just for making calls but for managing money, storing photos, playing games and browsing the Web.

And in 2010, Jobs introduced the iPad, a tablet-sized, all-touch computer that took off even though market analysts said no one really needed one.

Earlier this month, Apple briefly surpassed Exxon Mobil as the most valuable company in America, with Apple stock on the open market worth more than other company's.

Under Jobs, the company cloaked itself in secrecy to build frenzied anticipation for each of its new products. Jobs himself had a wizardly sense of what his customers wanted, and where demand didn't exist, he leveraged a cult-like following to create it.

When he spoke at Apple presentations, almost always in faded blue jeans, sneakers and a black mock turtleneck, legions of Apple acolytes listened to every word. He often boasted about Apple successes, then coyly added a coda — "One more thing" — before introducing its latest ambitious idea.

In recent years, Apple investors also watched these appearances for clues to his health.

In 2004, Jobs revealed that he had been diagnosed with — and "cured" of — a rare form of operable pancreatic cancer called an islet cell neuroendocrine tumor. In early 2009, it became clear he was again ill.

Jobs took a half-year medical leave of absence starting in January 2009, during which he had a liver transplant. Last January, he announced another medical leave, his third, with no set duration. He returned to the spotlight briefly in March to personally unveil a second-generation iPad.

Jobs grew up in California and after finishing high school enrolled in Reed College in Portland, Ore., but dropped out after a semester.

"All of my working-class parents' savings were being spent on my college tuition. After six months, I couldn't see the value in it," he said at a Stanford University commencement address in 2005. "I had no idea what I wanted to do with my life and no idea how college was going to help me figure it out."

When he returned to California in 1974, Jobs worked for video game maker Atari and attended meetings of a local computer club with Steve Wozniak, a high school friend who was a few years older.

Wozniak's homemade computer drew attention from other enthusiasts, but Jobs saw its potential far beyond the geeky hobbyists of the time. The pair started Apple in Jobs' parents' garage two years later. Their first creation was the Apple I — essentially, the guts of a computer without a case, keyboard or monitor.

The Apple II, which hit the market in 1977, was their first machine for the masses. It became so popular that Jobs was worth $100 million by age 25. Time magazine put him on its cover for the first time in 1982.

Three years earlier, during a visit to the Xerox Palo Alto Research Center, Jobs again spotted mass potential in a niche invention: a computer that allowed people to access files and control programs with the click of a mouse, not typed commands. He returned to Apple and ordered the team to copy what he had seen.

It foreshadowed a propensity to take other people's concepts, improve on them and spin them into wildly successful products. Under Jobs, Apple didn't invent computers, digital music players or smartphones — it reinvented them for people who didn't want to learn computer programming or negotiate the technical hassles of keeping their gadgets working.

"We have always been shameless about stealing great ideas," Jobs said in an interview for the PBS series "Triumph of the Nerds."

The engineers responded with two computers. The pricier one, called Lisa, launched to a cool reception in 1983. A less-expensive model called the Macintosh exploded onto the scene in 1984.

The Mac was heralded by an epic Super Bowl commercial that referenced George Orwell's "1984" and captured Apple's iconoclastic style. In the ad, expressionless drones marched through dark halls to an auditorium where a Big Brother-like figure lectures on a big screen. A woman in a bright track uniform burst into the hall and launched a hammer into the screen, which exploded, stunning the drones, as a narrator announced the arrival of the Mac.

There were early stumbles at Apple. Jobs clashed with colleagues and even the CEO he had hired away from Pepsi, John Sculley. And after an initial spike, Mac sales slowed, in part because few programs had been written for the new graphical user interface.

Meanwhile, Microsoft copied the Mac approach and introduced Windows, outmaneuvering Apple by licensing its software to slews of computer makers.

With Apple's stock price sinking, conflicts between Jobs and Sculley mounted. Sculley won over the board in 1985 and pushed Jobs out of his day-to-day role leading the Macintosh team. Jobs resigned his post as chairman of the board and left Apple within months.

"What had been the focus of my entire adult life was gone, and it was devastating," Jobs said in his Stanford speech. "I didn't see it then, but it turned out that getting fired from Apple was the best thing that could have ever happened to me. The heaviness of being successful was replaced by the lightness of being a beginner again, less sure about everything. It freed me to enter one of the most creative periods of my life."

He got into two other companies: Next, a computer maker, and Pixar, a computer-animation studio that he bought from George Lucas for $10 million.

Pixar, ultimately the more successful venture, seemed at first a bottomless money pit. Then came "Toy Story," the first computer-animated full-length feature. Jobs used its success to negotiate a sweeter deal with Disney for Pixar's next two films. In 2006, Jobs sold Pixar to The Walt Disney Co. for $7.4 billion in stock, making him Disney's largest individual shareholder and securing a seat on the board.

With Next, Jobs was said to be obsessive about the tiniest details of the cube-shaped computer, insisting on design perfection even for the machine's guts. He never managed to spark much demand for the machine, which cost a pricey $6,500 to $10,000.

Ultimately, he shifted the focus to software — a move that paid off later when Apple bought Next for its operating system technology, the basis for the software still used in Mac computers.

By 1996, when Apple bought Next, Apple was in dire financial straits. It had lost more than $800 million in a year, dragged its heels in licensing Mac software for other computers and surrendered most of its market share to PCs that ran Windows.

Larry Ellison, Jobs' close friend and fellow Silicon Valley billionaire and the leader of Oracle Corp., publicly contemplated buying Apple in early 1997 and ousting its leadership. The idea fizzled, but Jobs stepped in as interim chief later that year.

He slashed unprofitable projects, narrowed the company's focus and presided over a new marketing push to set the Mac apart from Windows, starting with a campaign encouraging computer users to "Think different."

Apple's first new product under his direction, the brightly colored, plastic iMac, launched in 1998 and sold about 2 million in its first year.

Jobs later dropped the "interim" from his title. He changed his style, too, said Tim Bajarin, who met Jobs several times while covering the company for Creative Strategies.

"In the early days, he was in charge of every detail. The only way you could say it is, he was kind of a control freak," he said. In his second stint, "he clearly was much more mellow and more mature."

In the decade that followed, Jobs returned Apple to profitability while pushing out an impressive roster of new products.

Apple's popularity exploded in the 2000s. The iPod, smaller and sleeker with each generation, introduced many lifelong Windows users to their first Apple gadget.

ITunes gave people a convenient way to buy music legally online, song by song. For the music industry, it was a mixed blessing. The industry got a way to reach Internet-savvy people who, in the age of Napster, were growing accustomed to downloading music free. But online sales also hastened the demise of CDs and established Apple as a gatekeeper, resulting in battles between Jobs and music executives over pricing and other issues.

Jobs' command over gadget lovers and pop culture swelled to the point that, on the eve of the iPhone's launch in 2007, faithful followers slept on sidewalks outside posh Apple stores for the chance to buy one. Three years later, at the iPad's debut, the lines snaked around blocks and out through parking lots, even though people had the option to order one in advance.

Jobs' personal ethos — he is a natural food lover who embraced Buddhism and New Age philosophy — was closely linked to the public persona he shaped for Apple.

Apple itself became a statement against the commoditization of technology — a cynical view, to be sure, from a company whose computers can cost three or more times as much as those of its rivals.

Facebook Changes Privacy, Sharing and Photo Tagging Features

The Facebook changes are designed to make sharing individual items, photos or posts on Facebook more granular. People can now choose on each post who exactly they want to share with right on the post. They can choose with dropdown list from choices of: a public post to the web, just Facebook friends, or a select group of friends. The list will later expand to include smaller friend groups that people have created, or Facebook Groups.

Previously controls on Facebook sharing had to be done from Facebook's intricate main privacy settings. The changes sound very similar to how Google+ works. Facebook, however, says they aren't a response to Google+. "We’ve been working on building these updates over the last few months and, as we said a few weeks ago, this is launch season and we’re ready to get it out of the door," a Facebook spokesperson said.

The Facebook changes do not affect how Facebook's overall friends lists work, however. The friends lists and how they're set up on Google+ were one of the main distinguishing features from Facebook. That hasn't changed, but these changes from Facebook answer one issue people have had with Facebook: you don't know who you're sharing posts with.

Another big change Facebook made is to photo sharing. Now when people are tagged in photos, they can approve whether they are tagged before it is applied. This prevents people from being able to tag you in embarrassing photos and sharing those photos with all of your friends. As a result, this could make people more willing to adjust their Facebook settings to automatically share photos that they're tagged in with friends.

One other big change: now you can change who can see a post after you post it. Previously you couldn't change who could see a post. Now you can go back and adjust any gaffes you make with inadvertent posts.

Skype buying group message system GroupMe

Skype is expanding even before it gets absorbed by Microsoft Corp.

The online communications service said Monday that it plans to buy GroupMe, which provides group text messaging.

Skype lets users make calls, conduct video chats and send instant messages over the Web. Its basic services are free, while users pay for services such as calling regular phones from a computer.

The acquisition brings Skype into the quickly growing field of mobile group messaging, which has been rolled out on a variety of smartphone apps including one recently launched by Facebook. Skype already offers a number of group communication options, including Web-based conference calls and group video chats.

New York-based GroupMe was founded last year at a gathering called the TechCrunch Disrupt Hackathon. In addition to group texts, it offers conference calls, photo sharing and location sharing. Its services are free, though users have to pay for text messages they get or send.

Skype, a privately held company, did not say how much it will pay for GroupMe. Skype is based in Luxembourg and was founded in 2003.

Skype is itself being bought by Microsoft for $8.5 billion. The deal was announced in May and the companies hope to close by the end of this year.

With HP tablet dead, who can challenge Apple?

The sudden demise of Hewlett-Packard Co's WebOS TouchPad after just seven weeks on shelves was a reminder of how tech giants have failed so far to take a bite out of Apple Inc's iPad.

The TouchPad joins Dell Streak 5 in the tablet graveyard and weak sales for many offerings suggest others are bound to follow.

"The non-iPad tablets just won't sell at retail. That's the clear message from events over the past few days," said Mark Gerber, an analyst at Boston research and investment firm Detwiler Fenton.

Other tablets that have failed to click with consumers include Asustek Computer Eee Pad Transformer and the Xoom from Motorola Mobility, which Google Inc plans to buy.

Research in Motion's PlayBook received scathing reviews and sales have been slack, but it will probably survive since it is key to RIM's strategy.

"I do not expect RIM to be shutting down PlayBook sales any time soon or abandoning that platform, because RIM views it as its future," said Colin Gillis, an analyst at BGC Financial in New York.

Apple's rivals have not fared any better in designing software for tablets.

Apple's iOS tablet software accounted for 61.3 percent of the tablet market in the second quarter, more than double the 30.1 percent share held by Google's Android, its nearest competitor. Microsoft held a paltry 4.6 percent share and RIM 3.3 percent, according to Strategy Analytics.

COMPETITION COMING

But the landscape could soon change. Google's move this week to buy Motorola Mobility, a hardware manufacturer, has also potentially raised the stakes against Apple as it will give the Internet leader devices to showcase its software -- just as Apple does.

All eyes are now on Google's "Ice Cream Sandwich" system, which will unite the Android software used in tablets and smartphones. That is expected to encourage developers to flock to the platform and create better apps.

Microsoft could also pose a threat when it releases its tablet software, code-named Windows 8, but this probably won't be until the fall of 2012.

"The ecosystem built around Microsoft is the largest computing ecosystem out there, so this makes it the company most likely to get significant traction in the tablet marketplace," said BGC's Gillis.

Microsoft has said the software will run on a range of devices from traditional PCs to laptops and tablets, and incorporate mouse and keyboard commands.

Amazon.com, the maker of the popular Kindle e-reader, is also expected to announce plans to release a tablet this fall, providing a challenge to Apple.

The Amazon offering could be a "game-changer," Colin Sebastian, an analyst at Robert Baird & Co, said in a recent note. The tablet will likely feature Android's Honeycomb OS system, a 7-inch screen and be priced under $300, he said.

Sebastian forecast sales of up to 3 million units in the first year and said they would eventually outsell other Android-enabled tablets from Motorola and Acer, and could potentially surpass Samsung's Galaxy Tab.

Amazon's as-yet unnamed tablet poses a significant threat to Apple because of the Kindle's popularity and the movie and music services the company sells. Analysts also expect Amazon to subsidize the tablet's price, which could also boost sales.

"Amazon is widely viewed as a wild card. It has the potential to be disruptive," said NPD analyst Ross Rubin.

The crowded market has not discouraged Sony Corp either. The consumer electronics giant is going full steam ahead with plans to release its first two tablets in the fall.

"We're going to see many competitors come and go," a Sony spokeswoman said.

"We're going to bring the best of all of the assets at our disposal to bear: hardware, content and network services."

Google-Motorola deal highlights patent arms race

When an Internet company plunks down $12.5 billion to buy a struggling cellphone company for its collection of patents, it's another sign that, for the high-tech industry, patents have become a mallet wielded by corporations to pummel their competitors.

Google Inc. announced the deal to buy Motorola Mobility Holdings Inc. on Monday, specifically for its trove of 17,000 patents. Google needs them to shield companies like HTC Corp. and Samsung Electronics Co. —who make phones based on Google's Android software— from lawsuits filed by Microsoft Corp. and Apple Inc.

"Google is not acquiring Motorola for the sake of its technology or its research," said James Bessen, a lecturer at Boston University and co-author of a book on the patent system. "Patents have become legal weapons — they're not representing ideas anymore."

The trend, decades in the making, raises questions that pending patent legislation in Washington only begins to answer.

Google's multi-billion bid to get its hands on Motorola's output of legal paperwork is the culmination of a "bubble" in the value of patents relating to smartphones that started last year, as Microsoft and Apple mounted their legal attack. Industry watchers say that bubble may deflate now that Google is set to gain the protection of Motorola's patents in a deal that's set to close late this year or early next.

But an underlying problem will keep growing: patent filings and lawsuits that distract companies and sap resources that are better spent on other things.

Engineers spend their time writing patents rather than inventing things, or reworking products just to avoid patent infringement. Customers put off purchases because of pending lawsuits, and independent software developers close up shop because they can't afford licensing fees.

"If you have to pay $12.5 billion dollars to play, you can sense why maybe an individual who has a great idea would feel discouraged," said Julie Samuels, a patent lawyer with the Electronic Frontier Foundation, a technology-oriented civil liberties group. "It affects the whole economy."

It wasn't always this way. The U.S. software industry got its start with nary a patent filed, and on the hardware side, patent suits were rare until the mid-1980s. That was when calculator and chip maker Texas Instruments Inc., on the brink of extinction, decided to see if it could make some money from its patent portfolio. It started filing patent lawsuits and demanding money from companies with infringing products. It saved the company.

IBM Corp. latched on to TI's lead in patent licensing in the mid-90s, when it was down on its luck. That coincided with courts broadening the types of patents allowed. Patents on software and "business methods," with vague, broad claims, were now accepted.

Since then, an arms race has slowly escalated in the industry. Companies found that the best defense against a patent suit from a rival was to have a patent portfolio to wield as a deterrent: "Sue me and I'll sue you back," is the message Google is sending by buying Motorola.

Motorola is already suing Apple over several patents, including one that purports to cover the act of sending address data between two phones. Another patent at issue covers the idea of concealing a phone's antenna in its outer case, which Apple arguably does with the iPhone 4.

It's a situation reminiscent of the nuclear standoff between the U.S. and the Soviet Union. But just as the threat of nuclear weapons didn't stop third-world guerillas during the Cold War or deter terrorists today, the patent arsenals are useless against "patent trolls" — companies that own patents but don't do actual research or development. Since they don't make anything themselves, they can't be the targets of patent suits, says Colleen Chien, assistant professor at the University of California, Berkeley.

"Mountains of patents have proven useless against the patent system's 'stateless actors,' non-practicing entities who are invulnerable to patent counterclaims," Chien writes.

In one example, a company with a 1980s patent on a kiosk that made music audiotapes on the spot for customers in stores tried to levy license fees from tens of thousands of technology companies, claiming that the patent covered any downloading of media from the Internet. Microsoft was among the companies that settled.

Bessen puts the cost of dealing with "patent trolls" at half a trillion dollars in the last two decades. Yet patent trolls account for only one in six patent suits, by his estimate, so the patent system's burden on the economy is much higher.

Just as we worry about old Soviet nuclear weapons falling into the wrong hands, Chien says that the patent hoards accumulated by corporations as "defensive" measures are starting to end up with "non-practicing entities" who use them for lawsuits.

For example, memory chip-maker Micron Technology Inc. in 2009 sold 4,500 patents to a patent lawyer in 2009. Chien points out that the patents are worth more to "non-practicing entities," because they can sue without fear of retaliatory patent suits.

During the Cold War, there were arms limitation talks. Similarly, many of the big technology corporations want the patent bombs taken away, or at least limited. Google's lawyers are critical of the patent system, and it's clear the company would rather not have to strike deals like the one to buy Motorola. Cisco Systems Inc., the world's largest maker of networking gear, wants patent infringement damages to be based on the value of the component in question rather than the entire product.

Tech companies can expect little help from Washington. After a decade of wrangling, Congress is set to approve a patent reform bill when the Senate reunites in December. It will be the largest legislative change to the patent system since 1952. Even so, experts say its effect on the high-tech industry will be marginal. It had sought more sweeping changes, but resistance from the pharmaceutical industry, which is much better served by the current system, has kept out the more radical proposals.

The legislation will make it marginally harder to get and hold onto patents, Chien said, but that's unlikely to cut down on the number of spurious patents, she believes.

And paradoxically, the bills could expand the glut of patents that's plaguing the industry, since one of its goals is to reduce the three-year backlog of patents pending at the Patent Office.

"It's going to take a long time for Congress to tackle patents again, and that's really a problem because this troll problem is going to continue to fester," Samuels said. "We all feel the effects."

Google Buys Motorola Mobility & Xoom Tablet

It may be the boldest move yet by a company known for being audacious: Google is spending $12.5 billion to buy Motorola Mobility. But the big prize isn't Motorola's lineup of cellphones, computer tablets and cable set-top boxes.

It's Motorola's more than 17,000 patents — a crucial weapon in an intellectual arms race with Apple, Microsoft and Oracle to gain more control over the increasingly lucrative market for smartphones, tablets and other mobile devices.

If approved by federal regulators, the deal announced Monday could also trigger more multibillion-dollar buyouts. Nokia Corp., another cellphone manufacturer, and Research In Motion Ltd., which makes the BlackBerry, loom as prime targets.

The patents would help Google defend Android, its operating system for mobile devices, against a litany of lawsuits alleging that Google and its partners pilfered the innovations of other companies.

In addition to the existing trove of patents that attracted Google's interest, Motorola, which introduced its first cellphone nearly 30 years ago, has 7,500 others awaiting approval.

Phone makers and software companies are engaged in all-out combat over patents for mobile devices. The tussle has been egged on by the U.S. patent system, which makes it possible to patent any number of phone features.

Patents can cover the smallest detail, such as the way icons are positioned on a smartphone's screen. Companies can own intellectual-property rights to the finger swipes that allow you to switch between applications or scroll through displayed text.

Apple, for example, has patented the way an application expands to fill the screen when its icon is tapped. The maker of the iPhone sued Taiwan's HTC Corp. because it makes Android phones that employ a similar visual gimmick.

The iPhone's success triggered the patent showdown. Apple's handset revolutionized the way people interact with phones and led to copycat attempts, most of which relied on the free Android software that Google introduced in 2008.

Android revolves around open-source coding that can be tweaked to suit the needs of different vendors. That flexibility and Android's growing popularity have fueled the legal attacks. About 550,000 devices running the software are activated each day.

Many upstart manufacturers, like HTC, had only small patent portfolios of their own, leaving them vulnerable to Apple Inc. and Microsoft Corp.

Getting Motorola's patents would allow Google to offer legal cover for HTC and dozens of other device makers, including Samsung Electronics Co., that depend on Android.

The deal is by far the largest Google has pursued in its 13-year history. Motorola Mobility's price tag exceeds the combined $9.1 billion that the company has paid for 136 previous acquisitions since going public in 2004, according to filings with the Securities and Exchange Commission.

Buying Motorola also would push Google into phone and computer tablet manufacturing, competing with other device makers who rely on Android. The largest makers of Android devices are all supporting a deal that Google CEO Larry Page said was too tempting to resist.

"With mobility increasingly taking center stage in the computing revolution, the combination with Motorola is an extremely important step in Google's continuing evolution," Page told analysts in a conference call Monday.

Google pounced on Motorola less than two months after a group including Apple and Microsoft paid $4.5 billion for 6,000 patents owned by Nortel, a bankrupt Canadian maker of telecommunications equipment.

Leaving no doubt about the mounting antagonism among the companies, Google's top lawyer lambasted Apple and Microsoft for their legal maneuvering earlier this month in a blog post titled "When patents attack Android."

"We believe this acquisition was solely driven by the ongoing patent war," Sanford Bernstein analyst Pierre Ferragu wrote in a research note, referring to the Google deal.

Apple and Google were once so close that Google's former CEO, Eric Schmidt, sat on Apple's board. But Google has since rolled out Android and provided hardware makers a way to counter the iPhone and iPad. Schmidt resigned from Apple's board two years ago.

Microsoft, for years one of Google's most bitter rivals, is desperately trying to make inroads in the mobile device market. John McCarthy, an analyst with Forrester Research, says Microsoft may try to counter Google by pursuing a long-rumored takeover of its partner, Nokia.

Investors were betting on that possibility Monday. Nokia stock rose 93 cents, or more than 17 percent, to $6.29. Research In Motion stock climbed $2.55, or more than 10 percent, to $27.11.

Oracle Corp. is seeking billions of dollars from Google in a federal lawsuit alleging that Android owes licensing fees for using the Java programming language that Oracle acquired from Sun Microsystems.

Buying patent protection offered by Motorola Mobility will be expensive. Although Google has $39 billion in cash and can easily afford it, the price translates to $40 per share, 63 percent above Motorola's stock price before the deal was announced.

Motorola Mobility Holdings Inc.'s stock soared 56 percent, or $13.65, to $38.12. Google Inc. lost about 1 percent and closed at $557.23.

The deal will test Page's ability to avoid a clash of cultures while he is still learning the nuances of the CEO job, which he took only four and a half months ago. With 19,000 workers, Motorola Mobility's payroll isn't that much smaller than Google's 28,800.

It's a coup for Motorola Mobility CEO Sanjay Jha and the company's largest shareholder, billionaire investor Carl Icahn, who had been pressuring Jha to cash in on the patent portfolio. With an 11.4 percent stake in Motorola Mobility, Icahn is in line to be paid more than $1.3 billion.

Motorola Mobility, based in Libertyville, Ill., has been struggling to come up with a product that has mass-market appeal since it introduced the Razr cellphone in 2005.

The company had some success with the Droid, one of the first phones to run on Android, but it now ranks a distant eighth in the smartphone market, with 4.4 million units shipped in the second quarter, according to research firm Canaccord Genuity. By comparison, the market-leading iPhone shipped about 20 million.

An attempt to counter the iPad hasn't paid off for Motorola Mobility, either. In an effort to drum up more demand, the company recently cut the price on the Wi-Fi-only version of its tablet, the Xoom, to $499 from $599.

The troubles saddled Motorola Mobility with a $56 million loss in its latest quarter, sinking the company's stock price to one of its lowest points since its January spinoff from the old Motorola Inc. The remaining part of that company now runs as Motorola Solutions Inc. In contrast, Google earned $2.5 billion in its most recent quarter ending in June.

Cellphones blocked in SF to hinder transit protest

Transit officials said Friday that they blocked cellphone reception in San Francisco train stations for three hours to disrupt planned demonstrations over a police shooting.

Officials with the Bay Area Rapid Transit system, better known as BART, said they turned off electricity to cellular towers in four stations from 4 p.m. to 7 p.m. Thursday. The move was made after BART learned that protesters planned to use mobile devices to coordinate a demonstration on train platforms.

"A civil disturbance during commute times at busy downtown San Francisco stations could lead to platform overcrowding and unsafe conditions for BART customers, employees and demonstrators," BART officials said in a prepared statement.

The statement noted that it's illegal to demonstrate on the platform or aboard the trains. BART said it has set aside special areas for demonstrations.

The American Civil Liberties Union questioned the tactic.

"Shutting down access to mobile phones is the wrong response to political protests," the ACLU's Rebecca Farmer said in a blog post.

The Electronic Frontier Foundation said on its website that "BART officials are showing themselves to be of a mind with the former president of Egypt, Hosni Mubarak." Mubarak's regime cut Internet and cellphone services in the country for days early this year while trying to squelch protests demanding an end to his authoritarian rule.

BART officials were confident the cellphone disruptions were legal. The demonstration planned Thursday failed to develop.

"We had a commute that was safe and without disruption," said BART spokesman Jim Allison.

The demonstrators were protesting the July 3 shooting of Charles Blair Hill by BART police who claimed Hill came at them with a knife.

A July 11 demonstration disrupted service during the rush-hour commute, prompting the closing of BART's Civic Center station. Several arrests were made.

Stick-on patch proposed for patient monitoring

One day monitoring a patient's vital signs like temperature and heart rate could be a simple as sticking on a tiny, wireless patch, sort of like a temporary tattoo.

Eliminating the bulky wiring and electrodes used in current monitors would make the devices more comfortable for patients, says an international team of researchers who report their findings in Friday's edition of the journal Science.

"What we are trying to do here is to really reshape and redefine electronics ... to look a lot more like the human body, in this case the surface layers of the skin," said John A. Rogers of the University of Illinois. "The goal is really to blur the distinction between electronics and biological tissue."

The researchers embedded electronic sensors in a film thinner than the diameter of a human hair, which was placed on a polyester backing like those used for the temporary tattoos popular with kids. The result was a sensor that was flexible enough to move with the skin and would adhere without adhesives.

The researchers said the devices had remained in place for up to 24 hours. Rogers said in an briefing that, while normal shedding of skin cells would eventually cause the monitors to come off, he thought they could remain in place as long as two weeks.

In addition to monitoring patients in hospitals, other uses for the devices could include monitoring brain waves, muscle movement, sensing the larynx for speech, emitting heat to help heal wounds and perhaps even being made touch sensitive and placed on artificial limbs, Rogers said.

The device will help fill the need for equipment that is more convenient and less stressful for patients, permitting easier and more reliable monitoring, said Zhenqiang Ma, an engineering professor at the University of Wisconsin, who was not part of the research team. The electronic skin can simply be stuck on or peeled off like an adhesive bandage, he noted in a commentary on the report.

Rogers is a founder of the company MC10, based in Cambridge, Mass., which is working to develop commercial uses of the devices, but he declined to speculate on how soon the electronic skin would be ready for market or what it would cost.

The monitor looks rather like a bandage and contains an antenna that could be used to transmit data, though a radio to do that transmitting has not yet been tested, Rogers said.

The current design has a small coil and could be powered by induction — by placing it near an electrical coil — Rogers said. That would permit intermittent use, he said, and for longer-term monitoring a tiny battery or storage capacitor could be used.

The monitor doesn't use an adhesive, relying on a weak force called the van der Waals force that causes molecules and surfaces to stick together without interfering with motion. The ability of geckos to climb smooth surfaces has been attributed to the van der Waals force. For longer-term use the electronic skin could be coated with an adhesive.

Rogers and co-lead author Dae-Hyuong Kim, have been working on the technology for several years. They earlier worked together to develop flexible electronics for hemispherical camera sensors and other devices that have complex shapes.

Funding for the research came from the Air Force Research Laboratory, the National Science Foundation, the U.S. Department of Energy, the Beckman Institute for Advanced Science and Technology at the University of Illinois, and a Defense Department National Security Science and Engineering Faculty Fellowship.

Can a smartphone camera do it all

If you're anything like me, your cellphone and its built-in camera is always on you, while your digital camera gathers dust at home.

This wasn't always the case. Just a few years ago, phone cameras with a lowly 1.3 megapixels were the norm, and photos came out pixelated and poorly lit. No way would you have thought of ditching your regular camera for one of those.

But as smartphone makers have increasingly realized the potential of the built-in camera, there's been a deluge of phones with cameras that can match — and sometimes outperform — low-end dedicated devices in a snap.

A new entrant to the market should inspire some more competition in the phone camera sphere: The myTouch 4G Slide smartphone, made by HTC and available through T-Mobile.

It has an 8-megapixel camera and plenty of the settings you'd find on a normal digital camera. The device takes crisp, bright photos and is simple to use. With it in hand, you'll be missing some pocket camera features, but mostly you'll be apologizing to your increasingly dusty digital friend.

The phone runs Google's Android operating software and costs $200 with a two-year service contract.

Although you can easily find a cheap digital camera that can take higher-resolution photos than the myTouch, the phone has a lens that gathers more light, which makes for better shots in dim lighting. Indeed, I generally found the phone's built-in flash too blinding and got better results by simply using the camera's night setting.

It's also very quick to take photos. On many cellphone cameras, there's a lot of shutter lag, which refers to the irritating gap between when you press the shutter button and when the camera actually takes a photo. T-Mobile touts the myTouch's camera as having "zero" shutter lag. The camera records continuously when the camera application is open and grabs the frame that corresponds with when you pressed the button.

Indeed, it was better than nearly all cellphone cameras I've tried, and it's on par with Apple's iPhone and the Pre, developed by Palm and now sold by Palm owner Hewlett-Packard Co. But there did seem to be bit of a gap, especially when taking action shots.

The myTouch's biggest issue, sadly, is the same one you encounter on virtually all cellphone cameras. There's no optical zoom, which is where the camera lens moves closer to subjects. To conserve space and cut down on moving parts, cellphones generally include optical zoom's dumb cousin, digital zoom. That's a software trick that simply magnifies what the camera sees, without making images as sharp as they are with optical zoom.

Unfortunately, this makes it difficult to take detailed shots of far-away objects. Using the myTouch on a canoe trip, ducks and a blue heron snapped at a distance looked like pitifully tiny parts of a larger scene. Cropping the photos and zooming in on my feathered subjects made them look pixelated.

That said, the myTouch's camera is quite good for close-up shots. I took plenty of sharp, bright shots of my friends with the phone. And when using the camera's macro, or close-up, setting, I was able to capture some great photos of textured objects such as a woven bicycle basket and brightly colored ones including flowers in a planter.

As is the case with standalone digital cameras, the myTouch's camera includes facial recognition and smile-and-blink detection, as well as preset "scenes" for doing such things as taking portraits or action shots.

One cool feature is a mode for HDR, or high-dynamic range. The iPhone has one, too. It shoots several images with slightly different exposure settings and combines them into one image with richer colors. I got some cool shots with this setting in particular.

And if you're into videos, it will record high-resolution clips, too.

Mostly, I found myself switching back and forth between the auto and manual modes. It was nice to let the camera decide which settings it thought were best, but I also liked to play with the exposure, contrast and various color filters.

I found the camera performed best in moderate and bright light — a well-lit office or outside on a sunny day. On some of my canoe trip photos, colors looked somewhat washed out in very bright sunlight. Perhaps that could be fixed by tweaking the settings.

The phone includes an 8-gigabyte microSD memory card, which provides plenty of space for shots. There's also 4 GB of memory on the phone.

In places where I had access to T-Mobile's new high-speed 4G network, I could quickly upload photos to Flickr and Facebook, something I couldn't do easily from a point-and-shoot camera.

Of course, the myTouch is also a phone. In general, it performs its phone-related tasks well. It runs version 2.2 of Android, rather than the latest version for smartphones, so it doesn't get some of the latest features and speedier performance. But with its fast dual-core processor, the device only hiccupped a couple times while I was using it. Its touch screen, which measures 3.8 inches diagonally, is plenty spacious as a camera viewfinder and a display for webpages, emails and games.

In a day full of talking, checking and sending messages and taking photos, the phone's battery held up nicely. It's rated for up to 10 hours of talk time.

Probably the most glaring mistake overall is its slide-out keyboard, which was difficult to type on because the keys are not elevated enough. The phone doesn't even really need a physical keyboard anyway, as it includes Swype's excellent touch-screen keyboard software, which lets you slide your finger from letter to letter to type.

Here's an idea: Perhaps the next version of the myTouch could swap the keyboard hardware for a lens with optical zoom. That would make the phone's great camera even better and tempt me to leave my trusty digital camera behind for good.

Apple briefly passes Exxon as most valuable US company

Apple briefly surpassed Exxon Mobil on Tuesday as the nation's most valuable company.

The iPhone and iPad maker had the lead for much of the afternoon before its stock closed just behind Exxon's. The two companies are so close that Apple is likely to keep the top spot soon.

Apple Inc.'s stock gained 5.9 percent to $374.01 on Tuesday, bringing its market capitalization to about $347 billion.

Exxon Mobil Corp.'s stock, meanwhile, closed up 2.1 percent at $71.64. That gives the oil company a market cap of $348 billion. Its stock was down earlier in the day, allowing Apple to take the lead.

Other big-name corporations, such as Wal-Mart Stores Inc. and General Electric Co., don't even come close. Apple overtook Microsoft Corp., the previous No. 2, just last year.

Does this mean people need iPads more than oil?

"Exxon obviously sells a product that people need. Apple sells a product that people want," said Brian Marshall, an analyst with Gleacher & Co. who follows Apple.

Exxon, which set a record in 2008 for the highest quarterly earnings by any company, has limited growth prospects, which are driven by oil prices and discovering new oil. It's growing, but not as quickly as Apple, which is charging ahead at the pace of a startup, Marshall says, even though the company is 35 years old.

Apple, which is based in Cupertino, California, has been on a roll with the soaring popularity of its iPad tablet computer and strong sales of the iPhone. Its growth is limited only by innovation. Investors expect it to grow as long as it keeps making products that people want. So investors are betting on Apple's stock even though it currently makes less money than Exxon.

In its latest quarterly report, Apple said stronger iPhone and iPad sales helped more than double its net income to $7.31 billion and grow revenue by 82 percent to $28.6 billion.

Exxon Mobil, meanwhile, posted a 41 percent increase in its second-quarter earnings to $10.68 billion, the largest since it set a record of $14.8 billion in the third quarter of 2008. Its revenue grew 36 percent to $125.5 billion.

International companies that vie for the most valuable spot in the world include PetroChina Co., the publicly traded unit of China's biggest oil and gas company, and Petrobras, Brazil's state-controlled energy company.

In the U.S., Exxon and General Electric had been trading off the No. 1 and No. 2 spots until Microsoft surpassed them both in early 1999, at the height of the dot-com boom. By 2000, though, GE was No. 1 once again. According to data from FactSet, the three were close over the next five years, though Apple was ascending quickly.

Exxon Mobil, which is based in Irving, Texas, took the top spot in 2005 and, for now, remained there on Tuesday.

Marshall believes Apple may pass yet another milestone next year, when it's likely to surpass Hewlett-Packard Co. as the world's largest technology company by revenue. In the quarter that ended in April, HP reported $31.6 billion in revenue, compared with Apple's $28.6 billion in the just-ended period. HP reports results for the May-July period next week.

Kids and hackers:DefCon adds kids track

Fewer things seem out of place at the rough-hewn DefCon hacker convention than a swarm of kids.

For 18 years, hackers — and the computer security experts who track them — have gathered at DefCon, one of the largest and longest-running conferences of its kind, to share information about breaching and securing computers and other devices.

This year's DefCon featured what some hardcore attendees might consider to be a startling sight: children. For the first time, DefCon included discussions and tutorials for budding hackers, ages 8 to 16. Some 60 kids showed up.

Over two days, they met prominent hackers, Homeland Security officials and NSA security experts. They also listened to talks on the history of hacking and lectures on cryptography. Some of the convention's hotly contested competitions were geared toward children, as well. One contest covered lock-picking techniques to be used in the event they forget their locker combination. The kids were encouraged to find security vulnerabilities in popular technologies, from video games to computer hardware.

Children were required to have a parent with them. Many parents who brought their kids are longtime DefCon attendees who said they were excited about the bonding opportunity.

Rey Ayers, 42, an information security specialist for a utility company in the San Francisco Bay area, has attended DefCon for the past four years. He brought his son, Xavier, 14, who has been tinkering with computers for years and already has two information technology certifications.

Ayers said it was important to introduce his son to the hacker community, adding that they've talked extensively about the difference between ethical and unethical hacking.

"I see it in him — he feels like he belongs to a clan, to a group. I'm really proud," Rey Ayers said in an interview. "I can see he has the excitement in his eyes."

Xavier, his backpack decked out in new pins with hacker logos, said he's trying to follow in his dad's footsteps. The conference has given them new ideas to explore. The two look forward to finding vulnerabilities in wireless networks together when they get home to Vallejo, California. Xavier, who hacks mostly with his dad, said he hoped to meet some kids his age at the conference who might become his hacking pen pals.

"I feel like a community here — it's like I'm not the only kid," Xavier said.

The emergence of the DefCon kids' conference comes as hackers are making headlines around the world. Though the general public often associates hacking with criminality, the engineering culture of the technology mainstream has always embraced people who explore the boundaries of what can be done with computers and other gadgets. Steve Jobs and Stephen Wozniak, the co-founders of Apple Inc., have said they considered themselves "hackers" when they created the first Apple computers in the mid-1970s.

Recent hacker attacks, however, play into stereotypical definitions of hackers. On Saturday, for instance, the hacker group Anonymous broke into 70 U.S. law enforcement websites, illustrating the growing threat from criminal hackers.

DefCon and its more-polished relative, the Black Hat technical security convention, drew thousands of people here in Las Vegas. They came for the revelry and intense discussion of new vulnerabilities in devices ranging from mobile phones to insulin pumps and critical infrastructure.

Black Hat, which is an industry sponsored event and costs up to $2,500 to enter, had more than 6,000 attendees. Vendors and executives in suits were there to schmooze and strike deals until Black Hat ended on Thursday.

DefCon, which ended Sunday, costs $150 to enter. Organizers stopped counting the number of attendees after they sold 10,000 badges on the first day. Most attendees wore t-shirts and shorts. One popular annual pastime at DefCon involves trying to identify undercover federal agents. DefCon ended Sunday.

This year many attendees rallied around a hacker named "Barkode" who has a blood disease and needs an urgent bone marrow transplant. Volunteers running a blood drive on site offered free mohawks to all donors. Conference organizers said the drive was so successful that extra supplies were needed to handle the donations.

Wolfe and Behr Crouse of Conroe, Texas proudly sported mohawks. Wolfe, 11 and Behr, 8 outlined the family hacking hierarchy.

"He's the hacker, I'm the lockpicker. I get him in the building," Behr said.

So how long has he been a lockpicker? Less than a day, his mother laughed. He got the bug after picking locks with some success at DefCon.

The boys' parents, Rick and Kirsten, are both techies. They came to DefCon to introduce their boys to the culture. Rick has attended for the past three years. He said he wanted Wolfe and Behr to see the constructive applications of hacking.

"The technology itself isn't good or evil — it's what you do with it," Rick Crouse said.

Kirsten Crouse added that they wanted to show examples of math and science in action to convey the importance of doing well in school.

"It's an amazing opportunity for the kids to see what the options are out there," she said.

Hackers are out to stymie your smartphone

Last week, security researchers uncovered yet another strain of malicious software aimed at smartphones that run Google's popular Android operating system. The application not only logs details about incoming and outgoing phone calls, it also records those calls.

That came a month after researchers discovered a security hole in Apple Inc.'s iPhones, which prompted the German government to warn Apple about the urgency of the threat.

Security experts say attacks on smartphones are growing fast — and attackers are becoming smarter about developing new techniques.

"We're in the experimental stage of mobile malware where the bad guys are starting to develop their business models," said Kevin Mahaffey, co-founder of Lookout Inc., a San Francisco-based maker of mobile security software.

Wrong-doers have infected PCs with malicious software, or malware, for decades. Now, they are fast moving to smartphones as the devices become a vital part of everyday life.

Some 38 percent of American adults now own an iPhone, BlackBerry or other mobile phone that runs the Android, Windows or WebOS operating systems, according to data from Nielsen. That's up from just 6 percent who owned a smartphone in 2007 when the iPhone was released and catalyzed the industry. The smartphone's usefulness, allowing people to organize their digital lives with one device, is also its allure to criminals.

All at once, smartphones have become wallets, email lockboxes, photo albums and Rolodexes. And because owners are directly billed for services bought with smartphones, they open up new angles for financial attacks. The worst programs cause a phone to rack up unwanted service charges, record calls, intercept text messages and even dump emails, photos and other private content directly onto criminals' servers.

Evidence of this hacker invasion is starting to emerge.

— Lookout says it now detects thousands of attempted infections each day on mobile phones running its security software. In January, there were just a few hundred detections a day. The number of detections is nearly doubling every few months. As many as 1 million people were hit by mobile malware in the first half of 2011.

— Google Inc. has removed about 100 malicious applications from its Android Market app store. One particularly harmful app was downloaded more than 260,000 times before it was removed. Android is the world's most popular smartphone operating software with more than 135 million users worldwide.

— Symantec Corp., the world's biggest security software maker, is also seeing a jump. Last year, the company identified just five examples of malware unique to Android. So far this year, it's seen 19. Of course, that number pales compared with the hundreds of thousands of new strains targeting PCs every year, but experts say it's only a matter of time before criminals catch up.

"Bad guys go where the money is," said Charlie Miller, principal research consultant with the Accuvant Inc. security firm, and a prominent hacker of mobile devices. "As more and more people use phones and keep data on phones, and PCs aren't as relevant, the bad guys are going to follow that. The bad guys are smart. They know when it makes sense to switch."

When it comes to security, smartphones share a problem with PCs: Infections are typically the responsibility of the user to fix, if the problem is discovered at all.

The emergence in early July of a previously unknown security hole in Apple Inc.'s iPhones and iPads cast a spotlight on mobile security. Users downloaded a program that allowed them to run unauthorized programs on their devices. But the program could also be used to help criminals co-opt iPhones. Apple has since issued a fix.

It was the second time this year that the iPhone's security was called into question. In April the company changed its handling of location data after a privacy outcry that landed an executive in front of Congress. Researchers had discovered that iPhones stored the data for a year or more in unencrypted form, making them vulnerable to hacking. Apple CEO Steve Jobs emerged from medical leave to personally address the issue.

The iPhone gets outsize attention because it basically invented the consumer smartphone industry when it was introduced in 2007. But Apple doesn't license its software to other phone manufacturers. Google gives Android to phone makers for free. So, Android phones are growing faster. As a result, Google's Android Market is a crucial pathway for hacking attacks. The app store is a lightly curated online bazaar for applications that, unlike Apple's App Store, doesn't require that developers submit their programs for pre-approval.

Lookout says it has seen more unique strains of Android malware in the past month than it did in all of last year. One strain seen earlier this year, called DroidDream, was downloaded more than 260,000 times before Google removed it, though additional variants keep appearing.

Lookout says about 100 apps have been removed from the Android Market so far, a figure Google didn't dispute.

Malicious applications often masquerade as legitimate ones, such as games, calculators or pornographic photos and videos. They can appear in advertising links inside other applications. Their moneymaking schemes include new approaches that are impossible on PCs.

One recent malicious app secretly subscribed victims up to a service that sends quizzes via text message. The pay service was charged to the victims' phone bills, which is presumably how the criminals got paid. They may have created the service or been hired by the creator to sign people up. Since malware can intercept text messages, it's likely the victims never saw the messages — just the charges.

A different piece of malware logs a person's incoming text messages and replies to them with spam and malicious links. Most mobile malware, however, keep their intentions hidden. Some apps set up a connection between the phone and a server under a criminal's control, which is used to send instructions.

Google points out that Android security features are designed to limit the interaction between applications and a user's data, and developers can be blocked. Users also are guilty of blithely click through warnings about what personal information an application will access.

Malicious programs for the iPhone have been rare. In large part, that's because Apple requires that it examine each application before it goes online. Still, the recent security incidents underline the threat even to the most seemingly secure devices.

A pair of computer worms targeting the iPhone appeared in 2009. Both affected only iPhones that were modified, or "jailbroken," to run unauthorized programs.

And Apple has dealt with legitimate applications that overreached and collected more personal data than they should have, which led to the Cupertino, Calif.-based company demanding changes.

"Apple takes security very seriously," spokeswoman Natalie Kerris said in July. "We have a very thorough approval process and review every app. We also check the identities of every developer and if we ever find anything malicious, the developer will be removed from the iPhone Developer Program and their apps can be removed from the App Store."

A criminal doesn't even need to tailor his attacks to a mobile phone. Standard email-based "phishing" attacks — tricking people into visiting sites that look legitimate — work well on mobile users. In fact, mobile users can be more susceptible to phishing attacks than PC users.

The small screens make it hard to see the full Internet address of a site you're visiting, and websites and mobile applications working in tandem train users to perform the risky behavior of entering passwords after following links, new research from the University of California at Berkeley has found.

The study found that the links within applications could be convincingly imitated, according to the authors, Adrienne Porter Felt, a Ph.D. student, and David Wagner, a computer science professor.

They found that "attackers can spoof legitimate applications with high accuracy, suggesting that the risk of phishing attacks on mobile platforms is greater than has previously been appreciated."

A separate study released earlier this year by Trusteer, a Boston-based software and services firm focused on banking security, found that mobile users who visit phishing sites are three times more likely to submit their usernames and passwords than desktop PC users.

Mobile users are "always on" and respond to emails faster, in the first few hours before phishing sites are taken down, and email formats make it hard to tell who's sending a message, Trusteer found.

Still, mobile users have an inherent advantage over PC users: Mobile software is being written with the benefit of decades of perspective on the flaws that have made PCs insecure. But smartphone demand is exploding, with market research firm IDC predicting that some 472 million smartphones will be shipped this year, compared with 362 million PCs. As a result, the design deterrents aren't likely to be enough to keep crooks away from the trough.

"It's going to be a problem," Miller said. "Everywhere people have gone, bad guys have followed."