New app rescues people from bad dates

NEW YORK | Tue Jul 10, 2012 5:16pm EDT

NEW YORK (Reuters) - Most people have been there, trapped on an awkward date that is going nowhere. But relief could be on the way with a new app that provides an incoming rescue call.

The Bad Date Rescue app, which was launched by the dating website eHarmony.com this week, lets users arrange for a call to appear on their iPhone to graciously allow them to bow out if a date isn't going well.

"There are all sorts of reasons for why people would want to get out of a date," said Arvind Mishra, director of product management at eHarmony. "We can all sympathize because we have all been on bad dates in our lifetime."

The free app includes several ways to set up a rescue. Users can pick a number from their address book for the call, for example from their mother or a friend. It the person's picture is stored on the app it will appear on the screen when the call comes through.

Scripts are available giving the reason for the call, such as a neighbor calling about a leaky pipe; a mother informing that a sister just had a baby; or a boss saying he needs help immediately.

"It graciously allows you to play along and to get out of that situation," Mishra explained.

The free app can be pre-set before the date to call at a specific time and there is a quick rescue that can be triggered on the spot to ring in a few seconds or minutes.

"There are all sorts of reasons for why people want to get out of a date. We are helping them do it in a way that is fun and light and not abrupt," he added.

(Reporting by Patricia Reaney; Editing by Christine Kearney and Leslie Gevirtz)

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CEO vows to turn RIM into "lean, mean machine"

1 of 14. Research In Motion Limited (RIM) President and CEO Thorsten Heins speaks during the annual general meeting of shareholders in Waterloo July 10, 2012. Research In Motion Ltd's slate of directors was re-elected at the BlackBerry maker's annual general meeting on Tuesday, Chairwoman Barbara Stymiest said.

Credit: Reuters/Mike Cassese

By Alastair Sharp

WATERLOO, Ontario | Tue Jul 10, 2012 8:10pm EDT

WATERLOO, Ontario (Reuters) - Research In Motion Ltd's new CEO vowed on Tuesday to turn around the embattled company with the new generation of BlackBerry devices coming next year, saying he would transform RIM into a "lean, mean, hunting machine."

But Thorsten Heins, presiding over his first annual meeting since taking the helm, offered little to disgruntled shareholders beyond his faith in the power of the BlackBerry 10 line to reverse RIM's fortunes. Its battered stock fell another 5 percent after he spoke.

"There was no mention of a sale of the company, no mention of a breakup of the company, and again, our big, big concern is if the BB10s are a dud," said Vic Alboini, chief executive of Jaguar Financial and a long-time RIM critic. "Where are we then?"

After a year that wiped out nearly 80 percent of RIM's value, Heins acknowledged the frustration of shareholders with his decision to delay the launch of the new phones until after the crucial holiday shopping season.

"I am not satisfied with the performance of the company over the past year," Heins told the mostly subdued audience. "Many of you are frustrated with the time it has taken us to make our way through the transition."

But Heins, who joined RIM from electronics giant Siemens AG four year ago and took over as CEO in January, expressed confidence that RIM was heading in the right direction.

"I have assembled a leadership team for RIM that's truly capable of taking us into future," he told shareholders.

RIM virtually invented mobile email with its first BlackBerry devices more than a decade ago, but its market share has evaporated as consumers flock to Apple Inc's iPhone and devices based on Google Inc's Android system.

RIM last month posted its first operating loss in eight years, and it was much deeper than expected. The company also said it was cutting 5,000 jobs, almost a third of its workforce, as it struggles win back its reputation as an industry innovator.

At the same time the company pushed back the launch of the BlackBerry 10 devices to next year from the final quarter of this year. Heins said the delay reflected RIM's determination to make sure that the devices were ready for the big time.

"We're working day and night to bring it out and prove the point that it is what we say it is," he told reporters after the meeting.

RIM plans to prune down its extensive array of BlackBerry models to focus on high-end and mid-range devices that will come with either touchscreen or physical keyboards, Heins said.

But things will probably get worse before they get better. Heins conceded that RIM would likely suffer lower average selling prices and declining service revenue this year as it pushes to sell existing BlackBerry devices.

TAME AUDIENCE

Despite the deep problems, investors who attended the meeting in a university lecture hall in RIM's hometown of Waterloo, Ontario, avoided many of the tougher questions that analysts have thrown at the BlackBerry maker.

One shareholder blasted earlier versions of the board which he said had failed to keep management accountable, while another poked around the details of the CEO's compensation package.

Throughout the session Heins was adamant that RIM's best path forward was the BlackBerry 10, even if the strategic review now underway concludes that a sale of the company makes the most sense. RIM has said it is examining all options, including partnerships, joint ventures or a break-up of the company.

RIM might be able to provide more about on the outcome of the strategic review in a few months, Heins told a handful of reporters after the meeting.

"There is a lot of action going on, looking at very different options for what the company could do," he said. "When it's time to go public with it, we'll go public with it."

KEEPING FAITH

The stock, which slipped 5 percent to $7.29 on Nasdaq, once traded as high as $148.13, and several small investors told Reuters they were confident RIM could regain at least some of its past glory in the next two or three years.

"They're in survival mode, but if they survive their business will go right back to, in my view, the levels above $60," said Ted Cross, a retired 76-year-old who bought his shares in the high $20 range. "I'm confident the company will survive and thrive."

One of the few dissenting voices in the hall came from Jaguar Financial's Alboini, who says he speaks for an informal alliance of disgruntled RIM investors. He asked what steps RIM was taking to attract more new board members with technology and financial industry experience.

Chairwoman Barbara Stymiest said the company aimed to add several new members to the board this year and hired an external firm to assess candidates. She pointed out that four of the board's 10 members have joined in the last year.

Despite RIM's recent performance, the company's slate of directors was elected at the meeting with token opposition, although preliminary results showed some shareholders withheld their votes, including 19 percent for former co-CEO Mike Lazaridis.

John Richardson had 30 percent of votes withheld, following the recommendation of proxy advisory firm Glass Lewis. It said Richardson, as lead director, had failed to properly oversee the provision of stock options to RIM employees, which were erroneously back-dated over an eight-year period.

(Reporting by Alastair Sharp; Writing by Frank McGurty and Euan Rocha; Editing by Peter Galloway and Janet Guttsman)

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Analysis: Tech Inc's invincible aura fades

By Jim Finkle

Wed Jul 11, 2012 12:48am EDT

n">(Reuters) - Hopes are evaporating that leading technology companies will offer a safe harbor this year from the economic storms swirling across Europe, Asia and the United States.

Investors should brace for some of the biggest names in U.S. software and hardware -- from Microsoft Corp and IBM to Intel Corp -- to disappoint when Big Tech begins reporting quarterly earnings next week, analysts said.

The trio's shares are all in the red for July, in the wake of earnings warnings over the past week from smaller peers, including Advanced Micro Devices Inc, Applied Materials Inc and Informatica Corp.

Corporate IT budgets have historically proved more resilient to worsening macroeconomic conditions than other kinds of spending, because businesses invest on the assumption that technology boosts productivity and helps save them costs over the long term.

But investors may have misjudged the depth of the European crisis, and with once-reliable-as-clockwork Chinese growth waning, demand in other emerging markets has not picked up enough of the slack.

The profit warnings could signal a broader pullback in orders, which means that Wall Street's earnings projections now appear over-optimistic to some outside experts.

"I don't think the companies or the market anticipated the kind of slowdown like the one we are going to see in the second half," said Fred Hickey, editor of the High-Tech Strategist Newsletter for investors. "Companies haven't had a chance to adjust estimates yet and they will. That's coming," said Hickey, who has been following the tech industry since the 1980s.

ASIA BEATEN DOWN, TOO

The sense of impending gloom is not confined to the United States.

Samsung Electronics, Asia's top-earning tech company and the world's leading maker of smartphones, TVs and memory chips, has predicted record quarterly profit of $5.9 billion for April-June -- but its stock has slumped more than a fifth since May on concerns about the broader outlook for chip demand and the impact of the euro zone crisis on sales of its TVs and home appliances.

Since mid-June, analysts have cut by more than a quarter their earnings forecasts for LG Electronics, South Korea's other tech heavyweight, according to Thomson Reuters Starmine SmartEstimates, which accords higher weight to the timeliest forecasts from historically more accurate analysts.

Shares of China's Lenovo, the world's No.2 PC maker behind Hewlett Packard, have retreated to 5-month lows with brokers downgrading their outlooks for the company as global economic weakness damps demand for personal computers.

In Japan, a fast fading powerhouse in consumer electronics and technological innovation, shares in Sony Corp and Panasonic Corp are mired near more than three-decade lows as investors fret over their ability to regain profitability in today's hostile macro environment and against tough competition from nimbler rivals in South Korea and Taiwan.

SHINY APPLE

The one bright spot is Apple Inc, which still has many fans on Wall Street. The iPhone and iPad maker is one of the few major tech stocks to have gained in July, up 4 percent.

Apple has beaten analysts' earnings forecasts in seven of the past eight quarters by at least 12 percent. Last quarter, it reported earnings 22.5 percent above Wall Street estimates. Its performance has propped up the entire sector and analysts expect a new iPhone this year to keep that up.

Apple is likely to report earnings of more than 1 percent above the Street's average forecast, according to StarMine SmartEstimates. In contrast, Microsoft, which is preparing to launch the Windows 8 operating system and its first tablet computers, may report earnings 0.7 percent below the average.

"Guidance could turn out to be very conservative given momentum with new Macs, a potential iPad mini and ongoing success with the new iPad," Barclays analyst Ben Reitzes said in a research note. Apple said the latest iPad will hit Chinese store shelves on July 20.

Apple aside, market watchers expect the economic malaise will broadly hit technology companies in the second half of the year, even at firms that managed to squeak by in the second quarter and avoid issuing preliminary earnings warnings.

Over the past three months, analysts have largely held on to their second-quarter earnings forecasts for technology and telecommunications companies, while cutting estimates in other sectors. Now many may have to make up for that oversight.

An IDC survey of chief information officers (CIOs) at about 250 U.S. companies conducted two weeks ago found, on average, that they expected their budgets to decrease for the first time since early 2009.

"There is this sense among CIOs that things have slowed down and they are going to have to think about ways of cutting back," said IDC analyst Stephen Minton.

Analysts currently forecast companies in the S&P 500 Index will report profit growth of 5.8 percent in the second quarter, with technology earnings growing at 7.9 percent, according to Thomson Reuters data.

They are more optimistic about prospects for the second half and that's where some expect cuts to come.

Analysts forecast third-quarter earnings growth of 12.9 percent for the S&P 500's technology index and fourth-quarter growth of 14.9 percent.

SHIFTING SENTIMENT

Companies at risk in the second half include services giant IBM, No. 1 chipmaker Intel, as well as software makers including Microsoft and VMware Inc, analysts said.

It's not a surprise to some that sentiment has shifted so quickly.

Historically when businesses have frozen or cut technology budgets, they have sometimes done so suddenly, taking tech companies and Wall Street by surprise. That process appears to have begun.

"Sentiment is turning into reality," said Cliff Waldman, senior economist with the Manufacturers Alliance for Productivity and Innovation. "Negative sentiment is truly starting to affect investment spending."

When it issued its warning last week, Informatica said business conditions "dramatically" worsened in June with customers scrutinizing deals more closely.. Applied Materials warned on Tuesday that it expected weak demand from chipmakers to put a damper on sales through at least the third quarter.

"Demand is weaker than expected in Europe and China, and this makes chipmakers delay or cancel equipment orders," said James Song, analyst at KDB Daewoo Securities in Seoul. "They are slowing investment in capacity expansion or technology migration."

Mark Luschini, chief investment strategist at Janney Montgomery Scott, which manages about $54 billion, blames the tech turmoil on Europe, a strengthening U.S. dollar, which reduces the revenue contribution from overseas sales, and concerns about a U.S. tax increase.

"If there is no improvement on domestic data points, or news from Europe that the saga has ended, why should there be a change?" Luschini said.

(Additional reporting by Poornima Gupta, Editing by Edwin Chan, Tiffany Wu and Ian Geoghegan)

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Judge who shelved Apple trial says patent system out of sync

Federal Judge Richard Posner poses in his Chambers in Chicago July 2, 2012. The U.S. judge who tossed out one of the biggest court cases in Apple Inc's smartphone technology battle thinks policymakers should examine whether patents should cover software at all. Picture taken July 2, 2012.

Credit: Reuters/John Gress

By Dan Levine

CHICAGO | Thu Jul 5, 2012 8:42am EDT

CHICAGO (Reuters) - The U.S. judge who tossed out one of the biggest court cases in Apple Inc's (AAPL.O) smartphone technology battle is questioning whether patents should cover software or most other industries at all.

Richard Posner, a prolific jurist who sits on the 7th U.S. Circuit Court of Appeals in Chicago, told Reuters this week that the technology industry's high profits and volatility made patent litigation attractive for companies looking to wound competitors.

"It's a constant struggle for survival," he said in his courthouse chambers, which have a sparkling view of Monroe Harbor on Lake Michigan. "As in any jungle, the animals will use all the means at their disposal, all their teeth and claws that are permitted by the ecosystem."

Posner, 73, was appointed as a federal appeals court judge by President Ronald Reagan in 1981 and has written dozens of books, including one about economics and intellectual property law.

Posner, who teaches at the University of Chicago, effectively ended Apple's lawsuit against Google Inc's (GOOG.O) Motorola Mobility unit last month. He canceled a closely anticipated trial between the two and rejected the iPhone maker's request for an injunction barring the sale of Motorola products using Apple's patented technology.

Apple is in a pitched battle with its competitors over patents, as technology companies joust globally for consumers in the fast-growing markets for smartphones and tablet computers.

Posner said some industries, like pharmaceuticals, had a better claim to intellectual property protection because of the enormous investment it takes to create a successful drug.

Advances in software and other industries cost much less, he said, and the companies benefit tremendously from being first in the market with gadgets - a benefit they would still get if there were no software patents.

"It's not clear that we really need patents in most industries," he said.

Also, devices like smartphones have thousands of component features, and they all receive legal protection.

"You just have this proliferation of patents," Posner said. "It's a problem."

GENERATION SMARTPHONE

The Apple/Motorola case did not land in front of Posner by accident. He volunteered to oversee it.

Federal appellate judges occasionally offer to preside over district court cases. Posner had alerted the district judges of his interest in patents, so after part of the smartphone battle landed in Wisconsin federal court, the judge there transferred the case to him.

When Posner began working on the smartphone case, he told the litigants he was "really neutral" because he used a court-issued BlackBerry made by Research In Motion Ltd (RIM.TO). He soon accepted an upgrade to an iPhone, but only uses it to check email and call his wife, he said.

"I'm not actually that interested in becoming part of the smartphone generation," he said.

Posner's corner office is filled with the requisite library of law tomes, and a row of books he wrote sits alongside his family photographs. He also has a signed photograph from the late Supreme Court Justice William J. Brennan Jr., for whom he clerked in the early 1960s.

Judges rarely speak openly to the press, but Posner is outspoken on a range of topics. Last week in online magazine Slate, he penned a withering critique of U.S. Supreme Court Justice Antonin Scalia's recent dissent in the Arizona immigration case.

"It wouldn't surprise me if Justice Scalia's opinion were quoted in campaign ads," Posner wrote.

MOTOROLA V. APPLE

Motorola sued Apple in October 2010, a move that was widely seen as a pre-emptive strike. Apple filed its own claims against Motorola the same month.

In canceling the trial, Posner said an injunction barring the sale of Motorola phones would harm consumers. He also rejected the idea of trying to ban an entire phone based on patents that cover individual features like the smooth operation of streaming video.

Apple's patent, Posner wrote in his June 22 order, "is not a claim to a monopoly of streaming video!"

Not all judges in the patent wars share Posner's skepticism of injunctions. U.S. District Judge Lucy Koh in San Jose, California, granted Apple two critical pretrial injunctions against Samsung Electronics Co Ltd (005930.KS) last week: one against the Galaxy Tab 10.1, and the other against the Galaxy Nexus phone.

In Friday's 101-page ruling barring the Galaxy Nexus, Koh cited the harms to Apple due to competition from phones that infringe its patent on the Siri search feature. Samsung is appealing both injunctions.

Posner said he had not read Koh's orders.

In his own ruling, Posner also barred Motorola from seeking an injunction against the iPhone because the company had pledged to license its patent on fair and reasonable terms to other companies - in exchange for having the technology adopted as an industry standard.

Posner's idea of examining whether industries like software should receive patent protection is a mainstream one, especially in the computer industry, said John Allison, a professor at University of Texas at Austin who studies intellectual property rights.

However, recent patent law reforms passed by the U.S. Congress did not directly address the issue, and Allison said classifying industries for the purposes of intellectual property protection - as Posner suggests - was "completely impractical" because talented lawyers could game the system.

When it comes to the smartphone litigation wars, Posner said tech companies should not be blamed for jumping into court since they are merely taking the opportunities that the legal system offers.

Given the large cash reserves in Silicon Valley, high legal fees are not a deterrent. Apple, for instance, had $110 billion in cash and securities as of March 31.

"It's a small expense for them," Posner said.

Posner said he had been looking forward to presiding over a trial between Motorola and Apple, but had no other choice than to toss the case.

"I didn't think I could have a trial just for fun," he said.

(Editing by Martha Graybow and Lisa Von Ahn)

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Russia-focused online games developer eyes new markets

By Tova Cohen

HERZLIYA, Israel | Wed Jul 11, 2012 5:18am EDT

HERZLIYA, Israel (Reuters) - Israel-based online games developer Plarium, whose multi-player game Total Domination has attracted 20 million users in just a year, expects revenue to double annually in coming years as it launches new games and enters new markets such as the United States.

"We are growing very fast," Plarium CEO Avi Shalel told Reuters. "Since the beginning we have doubled revenue every year and we expect this pace to continue."

The private company, which has so far focused largely on Russia and eastern Europe, does not disclose financial data but Shalel said revenue had reached tens of millions of dollars a year and the company is profitable.

Plarium has six new games in the pipeline, including two that will be launched in coming weeks, and is entering new platforms such as Facebook (FB.O) and mobile devices, as well as starting its own standalone website.

Plarium, which was founded three years ago and employs 250 staff, has over 70 million users, mostly in Russia and eastern Europe, including 3 million active daily users.

It started out by developing applications such as a social poker platform for Russia and eastern Europe, initially focusing on the social network VKontakte and then expanding to other sites such as Mail.Ru (MAILRq.L).

"There was no Farmville, no poker, there was a tremendous need for it but no one was developing it," Shalel said.

Plarium has become the leading developer of online games in Russia and eastern Europe in terms of revenue, though Social Quantum, which focuses on casual games, or non-hardcore games played once in a while, has more users.

GOING GLOBAL

"We realized that if we want to go global we must be able to develop original content. We decided to start developing for the hardcore and midcore game audiences with the aim of going international," the 26-year-old CEO said.

Plarium's first original online game Total Domination was launched a year ago and has 20 million users, while its second, Pirates, is approaching 10 million after six months. They are known as "massively multiplayer online" (MMO) games, capable of supporting thousands of players simultaneously.

Plarium has five animation studios - one in Israel, one in Russia and three in Ukraine - and is seeking to open one in the United States.

While users can play the games for free, they must pay for special content and benefits. Plarium is also experimenting with carrying advertising in eastern Europe.

"We don't see it being a main business model in the near future. We want to make sure we don't spoil the user experience with advertisements," Shalel said.

Plarium has two main competitors, Kixeye and Kabam, in the hardcore gaming market. Shalel believes Zynga (ZNGA.O), the world's largest social game publisher whose games include Farmville, will eventually enter the hardcore market.

"They will need ... to enter new genres and hardcore games will be on their radar. By that time we hope to establish ourselves as the dominant player," he said

Born in Georgia, then part of the Soviet Union, Shalel is a native Russian speaker who moved to Israel as a teenager. After attending university in the United States he founded Plarium with six partners, who used their own money to start the company and did not have to seek out venture capital.

"We are building the company to go public," Shalel said. "We are not looking for an early exit or to sell the company."

(Editing by David Holmes)

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Oracle continues to add social media muscle with Involver deal

The company logo is shown at the headquarters of Oracle Corporation in Redwood City, California February 2, 2010. Picture taken February 2, 2010.

Credit: Reuters/Robert Galbraith

By Gerry Shih

SAN FRANCISCO | Tue Jul 10, 2012 7:54pm EDT

SAN FRANCISCO (Reuters) - Oracle Corp said Tuesday it had acquired social marketing firm Involver, notching the third deal in as many months in a red-hot area for enterprise software makers.

Terms of the deal were not disclosed.

San Francisco-based Involver, founded in 2007, provides tools for developers to create advertising campaigns on social media networks such as Facebook.

"Companies are looking to harness the full potential of social media to increase brand loyalty, connect with potential customers and anticipate buyers' needs," Oracle said in a statement.

Oracle, the world's No. 3 enterprise software provider, has aggressively fleshed out its social media capabilities in recent months, beginning in May with a deal for Vitrue, a social media engagement service. The following month, Oracle acquired Collective Intellect, a social media analytics company.

Even though Facebook's troubled IPO in May cast some doubt over consumer social media, deals in the enterprise sector have continued at a scorching pace.

Salesforce.com Inc snapped up social media advertising firm Buddy Media in a $689 million tie-up in June, while Microsoft Corp acquired workplace collaboration software maker Yammer for $1.2 billion in July. (Reporting by Gerry Shih)

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European ruling on Google privacy policy set for September

PARIS | Tue Jul 10, 2012 11:30am EDT

PARIS (Reuters) - France's data protection watchdog said it will likely wrap up the inquiry of Google's new privacy policy, which it is conducting on behalf of European regulators, in September.

France's Commission Nationale de l'Informatique (CNIL) had expected to decide in June whether Google's new approach to privacy that took effect in March conforms with European law, but the process has been slowed as the company provided more information to the regulator.

"We just received answers to questions we put to the company in May, and we are studying them closely," said Isabelle Falque-Pierrotin, the director of the CNIL, at a press conference on Tuesday.

The CNIL will then draw its conclusions and present them to the wider group of data protection regulators of the 27 European Union member states, known as the G29.

Under its new approach, Google consolidated 60 privacy policies into one and completed its ability to pool the data collected on users across its services, including YouTube, Gmail and its social network Google+

The Mountain View, California-based search giant says this allows it to better tailor search results and improve services for consumers. Users are not allowed to opt out.

The CNIL review could lead to financial penalties of up to 300,000 euros or administrative sanctions for the U.S. search giant, but it is not clear whether they would be imposed collectively or if individual states would seek their own fines.

The Wall Street Journal reported late on Monday that Google is close to paying $22.5 million to settle charges that it bypassed the privacy settings of customers using Apple's Safari browser.

The fine would be the largest penalty ever levied on a single company by the U.S. Federal Trade Commission, the Journal said citing officials briefed on the settlement terms.

(Reporting by Gwenaelle Barzic; Writing by Leila Abboud; Editing by Jon Loades-Carter)

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Sandvine posts wider-than-expected loss

n">(Reuters) - Canadian network equipment maker Sandvine Corp posted a wider-than-expected quarterly loss as revenue fell 24 percent.

Second-quarter net loss was $4.2 million, or 3 cents per share, compared with a net income of $1.7 million, or 1.2 cents per share, a year earlier.

Revenue fell to $18.6 million from $24.5 million.

Analysts had expected a loss of 2 cents per share on revenue of $18.8 million, according to Thomson Reuters I/B/E/S.

Sandvine last month warned of smaller-than-expected revenue for the second quarter due to delays in closing several projects with Spanish telecom company Telefonica SA.

Separately, Sandvine said on Friday it received over $2 million worth orders from one of the top 10 telecom providers in the United States.

Shares of the Waterloo, Ontario-based company closed at C$1.34 on the Toronto Stock Exchange on Thursday.

(Reporting by Megha Mandavia in Bangalore; Editing by Sriraj Kalluvila)

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Google to pay $22.5 million to settle privacy charges: source

People visit Google's stand at the National Retail Federation Annual Convention and Expo in New York January 16, 2012.

Credit: Reuters/ Kena Betancur

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Canadian Solar CEO: could build 700-MW factory in China

By Braden Reddall

SAN FRANCISCO | Tue Jul 10, 2012 8:54pm EDT

SAN FRANCISCO (Reuters) - Canadian Solar Inc (CSIQ.O) is expected to decide within months whether to build a factory that could produce 700 megawatts per year of new, more efficient solar cells, the firm's head said on Tuesday, with any facility likely to be in China.

Chief Executive Shawn Qu said at a conference in San Francisco that there was a good chance the company, which already carries out most of its production in China, would take the step despite oversupply in the solar equipment market. He declined to comment on the potential cost.

Solar equipment manufacturers have struggled to reduce production costs as prices for panels that convert sunlight into electricity have plummeted by more than half in the past year on a supply glut.

That has forced several companies in China, Europe and the United States to shutter operations, and many more are expected to merge or shut down as the fledgling industry undergoes a shakeout.

The factory touted by Canadian Solar would produce cells which the Ontario-based firm says can achieve efficiency of 19.5 percent, compared with about 17 percent for many rivals. Solar cell efficiency refers to the ratio of electrical output to the amount of sunlight.

Mark Kingsley, chief commercial officer of China-based competitor Trina Solar Ltd (TSL.N), said he expected to see solar companies start competing more on efficiency and less on price, as costs have come down far enough for most buyers.

Trina earlier on Tuesday said it had expanded into Canada by striking a deal with module maker Silfab Ontario, a unit of Italy's Silfab SpA, as it finds a way around recently set U.S. tariffs on Chinese modules.

(Reporting by Braden Reddall in San Francisco; Editing by Carol Bishopric and Joseph Radford)

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After Farmville success, Zynga not ready to plunge into mobile

The corporate logo of Zynga Inc, the social network game development company, is shown at its headquarters in San Francisco, California April 26, 2012.

Credit: Reuters/Robert Galbraith

By Gerry Shih

SAN FRANCISCO | Tue Jul 10, 2012 8:10pm EDT

SAN FRANCISCO (Reuters) - Zynga Inc CEO Mark Pincus said Tuesday he remains wary of investing as heavily in mobile games as he has in proven Web-based titles like FarmVille despite an industrywide push toward catering to mobile devices.

Game industry observers in recent months have stressed that developers must adapt as Internet users worldwide shift toward spending time on smartphones and tablets rather than desktop computers.

Concerns that Zynga continues to rely too heavily on its Web titles built on top of Facebook's platform have weighed on the stock, which has fallen roughly 50 percent from its $10 IPO price in December.

Speaking at an industry conference in San Francisco, Pincus said it was "obvious" that game companies should be investing heavily in mobile games — Zynga itself splashed $183 million to acquire New York-based game studio OMGPOP in March — but added the company's emphasis remained on Web games, given uncertainties about how the mobile platform will mature.

"We invest north of $10 million in a potential franchise game like the Ville," Pincus said. "We can't make that investment yet confidently in mobile. And I'm confident in the next couple of years we'll get to the point where we can. But it's not there yet and I think it's a little chicken or egg."

Pincus said he was held back by some unresolved questions over the still-maturing mobile platform, such as whether the Adobe Air and HTML5 technologies will become accepted standards.

"We've made a huge investment in mobile, organically building up teams and products and with one large acquisition," Pincus said. "We're at the point where it's obvious that we all should be investing heavily. But I don't think we have that all-in confident moment. The flywheel isn't there in an obvious way."

Pincus's hesitation in the mobile market stands in contrast to Zynga's all-out approach to its Web hits, which feature sophisticated social mechanics that are constantly analyzed and refined by dozens of Zynga engineers even years after they are first released.

Titles like CityVille and FarmVille, built off Facebook's platform, have helped Zynga squeeze $1.1 billion in revenue in 2011 out of an average 223 million monthly active players in 2011.

In a move to wean itself off of Facebook, Zynga announced in June that it would open its platform to encourage independent developers to build games on top of Zynga's own network.

Zynga also unveiled a new slate of games. For its latest offerings, Zynga has poured 100 developers who have worked "well over a year and a half" to ship its new titles "The Ville," a Sims-like social game, and "ChefVille," a kitchen management game, Pincus said.

But any efforts to roll out these games across multiple platforms will prove difficult, if the past were any indication, Pincus acknowledged.

"We were too ambitious at first with FarmVille," Pincus said. "We spent a huge amount of engineering to build a totally synchronous game experience."

(Reporting By Gerry Shih,; additional reporting by Malathi Nayak; editing by M.D. Golan)

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Megaupload tycoon offers to go to U.S. to answer piracy charges

Megaupload founder Kim Dotcom talks to members of the media as he leaves the High Court in Auckland February 29, 2012.

Credit: Reuters/Simon Watts

WELLINGTON | Tue Jul 10, 2012 11:15pm EDT

WELLINGTON (Reuters) - Kim Dotcom, the Internet tycoon at the centre of a U.S. investigation into online piracy and fraud, said on Wednesday he was willing to go to the United States to clear his name, offering to forego a pending extradition hearing in New Zealand.

Dotcom, the founder of the Megaupload file-sharing site, challenged the U.S. Federal Bureau of Investigation to a fair trial, and said he was willing to face them in court in the United States if they agreed to certain conditions.

"Hey DOJ (Department of Justice), we will go to the US. No need for extradition," Dotcom, the 38-year-old German national, who also goes by Kim Schmitz, posted on Twitter.

"We want bail, funds unfrozen for lawyers & living expenses," he added, referring to himself and three others facing the U.S. charges.

In its highest-profile investigation into online piracy, the FBI alleges that Dotcom led a group that has netted $175 million since 2005 by copying and distributing music, movies and other copyrighted content without authorization.

His lawyers say the company simply offered online storage.

Dotcom's offer comes a day after a New Zealand court delayed a hearing into the U.S. extradition request until March next year because of ongoing legal hearings related to the search and seizure of evidence by the United States.

The New Zealand High Court in June ruled that search warrants used by police to search the flamboyant Dotcom's mansion to collect the evidence were illegal. The court also ruled that the FBI's copying of evidence and sending it to the United States was also unlawful.

Acting on a request from the FBI, New Zealand armed police, backed by helicopters, swept into Dotcom's rented estate outside Auckland in January, confiscating computers and hard drives.

Dotcom and the three others were arrested, and Dotcom was kept in custody for a month before being granted bail.

New Zealand courts have progressively eased restrictions on him, allowing him back into his mansion, giving him access to hundreds of thousands of dollars for living and legal expenses, and removing some travel and meeting restrictions.

Dotcom told a local paper that U.S. authorities already know they cannot win the case against him, but his legal bills are mounting up into "millions of dollars", which he cannot pay because of a freeze on much of his fortune and assets.

"I have accumulated millions of dollars in legal bills and I haven't been able to pay a single cent," he told the New Zealand Herald on Wednesday.

"They just want to hang me out to dry and wait until there is no support left."

He is increasingly using Twitter to keep his followers abreast of every twist and turn in his complicated case, while also posting photos of family birthdays and praising his legal team.

(Reporting by Naomi Tajitsu; Editing by Chris Gallagher)

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Details on 'Angry Birds' for consoles surface

Video game creator Rovio has revealed fresh details on the arrival of its hit franchise Angry Birds to consoles.

IGN reports the game, titled Angry Birds Trilogy, will launch as a retail game on the PlayStation 3, Xbox 360 and Nintendo 3DS this holiday.

The trilogy will bundle high-definition versions of Angry Birds, Angry Birds Seasons and Angry Birds Rio.

It also supports Microsoft's Kinect motion sensor, the PlayStation Move motion controller and 3DS StreetPass.

The big question remaining is, how much will this retail version cost players? HD versions of all three games available on Apple's iPad cost a combined $6, according to recent listings on Apple's App Store.

Angry Birds is no stranger to home consoles. A version was released for the PlayStation 3 in early 2011.

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Report: Activision launching Walking Dead game

Video game publishers can't seem to get enough of the zombie thriller The Walking Dead.

IGN reports Activision will launch a first-person action game in 2013 based on The Walking Dead TV series on AMC. It will be available for PC, PlayStation 3 and Xbox 360.

The game will be developed by studio Terminal Reality, known most recently for Def Jam Rapstar and Ghostbusters: The Video Game.

An official website for The Walking Dead video game from Activision has also gone live with an initial video teaser.

According to the report, the game will follow Daryl Dixon and his brother Merle as they try to avoid hordes of zombies en route to a safe haven in Atlanta. Players can choose take on zombies directly or use stealth to avoid being spotted.

Players will also have to manage resources such as food, supplies and ammunition as they battle to survive, says the report.

The Activision project is not affiliated with the adventure series The Walking Dead from studio Telltale Games. That game, based on the Robert Kirkman comic franchise, follows Lee Everett as he protects an orphaned 6-year-old girl from waves of zombies.

REVIEW:  The Walking Dead is frightfully fun

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Video: 'Black Ops II' villain back story

Treyarch is shedding a little more light on the villain in its upcoming release Call of Duty: Black Ops II, due Nov. 13 for PlayStation 3, Xbox 360 and PCs.

This new video, also available on YouTube and the official Call of Duty site, sets up Raul Menendez as "the Messiah of the 99%" to the populace, but has global terrorism on his mind.

The teaser video notes the contributions of writer David S. Goyer (co-writer of The Dark Knight Rises) and Trent Reznor (Academy Award-winning music composer for The Social Network) on the game.

Treyarch's Dave Anthony, who directed and co-wrote the story, told Game Hunters recently that Black Ops II "is like an eight-hour movie, and we're doing story branching, so the game can have multiple outcomes as you are coming through it. So Trent not only had to somehow assimilate this eight-hour story but he also had to take in all the multiple character arcs that could happen depending on how you play it."

The game continues the story of Special Forces operative Alex Mason, who helped thwart Russian attack plans in the Sixties in 2010's Black Ops. The sequel picks up after the events of Black Ops, but at the same time takes the story into the future, the year 2025, where Mason's son, David Mason, is a Special Forces operatives assigned to protect the President.

Menendez is manipulating a cold war between the U.S. and China and the countries' reliance on rare earth metals. (Technology consultant Peter Singer talked about the reality of such a thing in a recent interview.)

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Ouya to launch new video game console

Update: Ouya's Kickstarter project reached its funding goal in less than eight hours, topping $1 million just after 5:15 p.m. ET. The speed of success recalled that of Double Fine's Kickstarter project from February.

A high-tech dream team is backing the new Ouya video game console, which started its fund-raising campaign today on Kickstarter.com.

About the size of a Rubik's cube, the Ouya set-top box is smaller than traditional systems, but the controller is comparable in size to current models. Features include buttons, two joysticks, a directional pad and a touch pad.

The company is looking to raise $950,000 on Kickstarter.com to fund fine-tuning and manufacturing of the system. (Here's our full story on Ouya.)

Award-winning industrial designer Yves Béhar, the founder of Fuseproject and chief creative officer at Jawbone where he designed the wireless Jambox speaker, is fashioning the console and controller. "He is the best designer outside of Apple," says Ouya CEO Julie Uhrman. "He really understands how to build something that is beautiful with high performance that is really affordable and attainable for everybody."

Other big names on board include Minecraft developer Markus "Notch" Persson, who plans to deliver an updated version of his hit game for the console. Indie game designer Adam Saltzman (Canabalt) is another supporter, as are former Microsoft Xbox executive Ed Fries, Peter Pham of incubator firm Science and longtime video game executive Brian Fargo, founder of InXile Entertainment and previously at Interplay, who is also an investor.

Other investors include Jawbone founder Hosain Rahman, Digg founder Jay Adelson, Flixster founder Joe Greenstein, Amol Sarva, founder of cloud software company Peek and Eric Hautemont, co-founder of board game publisher Days of Wonder.

"When I was telling people, 'I have this idea for an open console based on Android and all the games will be free to play so you don't have to spend $60 and get upset and the gamers could get into it for less than $100 bucks. What do you think about this?' the most common response was 'Yeah, wow. I'm surprised no one has done this already'," Uhrman says.

Game developers that Ouya has informed about the project include ThatGameCompany's Jenova Chen, who said, "I'm excited for Ouya! I am a firm believer that there is always room to challenge the status quo" in a testimonial quote on the Kickstarter page.

Development software is included on each console so that it is easy to create games on the open source Android system. "At the end of the day, we view this as the people's console," Uhrman says. "This is affordable for gamers at the less than $100 price point where all these games are free to play and for developers it is open so whatever they conceive they can finally get onto the television. ... What Kickstarter will allow us to do is get feedback and support early from gamers and developers and have them on board to support this."

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Launch Pad: Are you ready for some football?

College football is back. Well, in video game form, anyway.

We're still roughly a month away from real-world college football to kick off, but video game players will virtually jump onto the gridiron starting Tuesday.

Here's a peek at this week's video game releases.

Retail games launching July 10

NCAA Football 13
Publisher: Electronic Arts
Platform(s): PlayStation 3, Xbox 360
Details: The big addition this season is the Heisman Challenge. Players choose between one of several Heisman Trophy winners and attempt to replicate his classic season. Otherwise, expect the core game to remain similar to previous releases, such as Dynasty mode to guide a program to a national title and Road to Glory, an option in which players create and mold their own potential superstars.

The Sims: Diesel Stuff
Publisher: Electronic Arts
Platform(s): PC, Mac
Details: The latest expansion for EA's simulation lets players decorate their characters and digital homes with gear from Diesel. Seems like you really need to love Diesel products to embrace this pack. What next, The Gap?

Digital downloads

Quantum Conundrum
Publisher: Square Enix
Platform(s): PS3, Xbox 360
Release Date: July 10 (PS3) and July 11 (Xbox)
Details: The puzzle game from the co-creator of Portal makes its console debut. A young boy must rescue his inventor uncle from his home using a device that alters dimensions.

Frogger: Hyper Arcade Edition
Publisher: Konami
Platform(s): PS3
Release Date: July 10
Details: Already available for the Xbox 360, this reimagined version of the classic arcade title Frogger arrives on Sony's console. Players can enjoy the game in its classic form or participate in other game modes, as well as offline multiplayer using customized environments.

The Legend of Zelda
Publisher: Nintendo
Platform(s): Nintendo 3DS
Release Date: Available now
Details: This is the game that started it all. The classic Nintendo Entertainment System title becomes available in downloadable format, as players rescue Princess Zelda from Ganon.

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Paul McCartney working with 'Halo' studio

The studio that brought video game players Master Chief has recruited a former Beatle.

Paul McCartney used his verified Twitter account to confirm he's pairing up with Bungie, the studio behind Xbox hit Halo, on some new tunes.

"I'm really excited to be working on writing music with @bungie, the studio that made Halo," says McCartney's tweet, which also includes a picture of the ex-Beatle collaborating with Halo composer Martin O'Donnell.

Although neither Bungie nor McCartney could confirm, the music might be tied to the studio's upcoming project with Activision, reportedly code-named Destiny.

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Trent Reznor writes 'Black Ops II' theme

The next soundtrack project for Trent Reznor, who most recently scored The Girl with the Dragon Tattoo with Atticus Ross, is not for a film, but for the video game Call of Duty: Black Ops II.

Reznor has composed the game's theme song, an "aggressively sounding" piece of guitar, bass and drums-based rock. Well-known video game composer and Video Games Live co-producer Jack Wall (Mass Effect 2) composed the rest of the music for the game.

A lifelong video gamer, Reznor is no stranger to collaborating with game developers having worked on Quake and Doom 3 with id Software. His teaming with the game's development studio Treyarch is a suitable one as the Nine Inch Nails front man is a fan of the Call of Duty franchise and 2010's Black Ops. "I have always looked to that franchise as the cutting edge of what seemingly unlimited budgets and full-on not cutting any corners can do in the current day and age," he says.

When Treyarch studio head Mark Lamia began talking with Activision's music affairs team, "we were trying to think what is the kind of artist that could represent something a little bit dark, sometimes conflicted, bold original and engaging," says Black Ops II director and writer Dave Anthony. "Honestly, Trent's name stuck out. He was perfect for it."

Reznor recently talked with Game Hunters about Black Ops II, video games and his upcoming music projects.

How'd you get connected with Treyarch on 'Black Ops II'?
I'm not exactly sure. I started dipping my toe into film scoring. That led me to film-scoring agents and whatnot, and a variety of projects start to get thrown at you to check your level of interest. And quite a while ago I had heard, 'Would you be interested in a big franchise video game?' Being an avid gamer my whole life, I said, 'Yeah, I would be interested in that.'

Coming off of doing two films in a row, I wasn't looking to really dive into a super big project, so the idea of scoring the theme song for this came up and it sounded interesting to me so I pursued it.

How is doing music for a game similar or different from composing film soundtracks?
Here's a similarity. When David Fincher called me up a few years ago and said, 'Hey, I'd like you to score this film The Social Network.' I said, 'I'm flattered but I really don't have any real experience scoring films and I'd rather not screw it up on a high-profile project. And I like you and I don't want to compromise our friendship.'

He talked me into it, which I'm glad he did. My strategy going into that was the one I used since then on The Girl with the Dragon Tattoo and certainly on Call of Duty, which was really to sit and listen and realize that my role in this is a supporting role. He had lived with project, and I'm talking about The Social Network right now, and thought about it a lot more than I have. Let me try to find out exactly what it is he is wanting and why he reached out to me. I found that strategy, although it may seem obvious, really worked.

In Nine Inch Nails, I've been the guy calling the shots since inception. I'd gotten used to that. I was interesting to be in a situation where I was working under somebody I respect and playing a supporting role. When I sat down with the Treyarch guys, I wanted right off the bat to say, 'Guys, first of all, I am working for you on this thing. What are the moods you are looking for, because the role of this piece is greeting the gamer into the game. Let's really talk about themes and as I start throwing iterations at you, please feel free to say, That's not right.'

How did you arrive at a sound?
When I sat down with these guys. I kind of wanted to extract 'If you are looking for a big orchestral, Hollywood-y feeling, traditional-type patriotic score, I can do something like that, but I'm not excited about doing it,and it's not my strength. There's a lot of other people who can do that better than I can.

I was intrigued by the idea that they were willing to get out of the zone with something a little bit different. What I did was present them with the concept of 'Let's have it arranged semi-orchestrally, but let's have the voice be an instrument. Let's veer it more toward guitar, bass, drum rock band aggression. And I don't mean in a corny rock-and-roll way, but let's have a more modern foundation in terms of how it sounds. But let's have the way the voices are arranged mimic an orchestral range.' If that makes sense. The first thing I sent back to them was what really wound up being the foundation of the core of the end result.

What I learned in listening to the full story and the amount of effort that has gone into the back story and the characters and the full preparation (is) there is a lot of reservation and angst and sense of loss and regret and anger bubbling under the surface. So it didn't make sense to have a gung ho, patriotic feeling theme song. It has to feel weighty. There is a lot of remorse and apprehension here. So choosing to arrange it a bit more with guitars and drums and aggressively sounding, that struck a tone with them.

If it was set purely in World War II, for example, I wouldn't have chosen the instruments that I did. The fact that it is set slightly in the future made me feel like maybe it is OK to get away from an orchestra. So we did it the way we did.

Have you completed work on that?
The phone hasn't rang for a few weeks. I'm on call, but we'll see how it goes. I'm assuming that is a good sign but maybe I'm being naive here.

How big of a 'Call of Duty' fan are you?
I think I have played them all with the exception of one or two that may have come out when I was on long touring jaunts. But for the most part, I have played them all.

What do you enjoy about the games?
I've watched with a kind of wary eye how gaming has progressed. I was there at the beginning with Pong in the arcade, and a lot of my great childhood memories were around a Tempest machine. I really looked at gaming as a real art form that is able to take a machine and turn it into something that is a challenging, human interaction puzzle game strategy. I have been wildly enthused about gaming since I was younger, and a career path I chose not to go down but did really consider was getting into programming and game design. When I first played Wolfenstein 3D, it blew my mind. It had a big impact on me.

And when I say 'wary,' I have seen big companies and publishers get involved, and I have seen a similar to Hollywood hierarchy set up where, often, innovation gets bulldozed by franchises and familiarity and let's milk sequels out. What I have appreciated about the Call of Duty games is the scale of production. It's not an indie game. It's not trying to be an indie game. But I've genuinely been pretty consistently blown away by, wow, what an effort has gone into this. I get what they are going for. ... As a player, I've generally focused on multiplayer.

What game systems do you have, and what other recent games have you enjoyed?
Pretty much all systems are here in the house, in some room of the house, the studio or otherwise. I've spent some time with Diablo III. I'm pretty blown away by the scale of Skyrim. I thought Heavy Rain was engrossing. I just bought a piece of obscure musical gear from that company (Quantic Dream) over there. My wife and I spent quite a few evenings kind of scared making our way through that game. That achieved its mark and really felt like an accomplishment in terms of expanding what games can be.

It's interesting to see gaming go from one guy in the Robotron era to when I worked on Quake with the 'Mom-and-Pop shop' of id Software fresh off the success of Doom, but it still was a core of a handful of guys that could work autonomously and churn out interesting cool stuff. And jumping back to id a few years later when it's Doom 3 and now that handful of guys has a zero at the end of how many there are and the scale of, wow, there's a hell of a lot more resources need to go into the game.

And then tuning out of that world for a while and popping in at Treyarch and the scale of it and, most impressively, the coordination of it all. I was in there a month ago or so, and there's everybody in their cubicles working on minutiae that fits into this whole in some way. And I start thinking, 'Man, this is coming out in a few months. Somebody has planned out that all these pieces fit together.' I know how hard it is to get three other guys and the lights to come on for a tour. It is mind-blowing to see that coordination and effort and the handshaking part. It's very impressive.

Can you update us on the How To Destroy Angels album (the band includes Reznor's wife Mariqueen Maandiq and Tattoo and Social Network soundtrack co-composer Atticus Ross)?
We have a finished album. It's been finished for a little while. We're doing a little bit of tweaks on it. The record will be out soon. We are doing a different type of distribution this time so it's taking a little bit longer to coordinate stuff. There's a lot of music about to be unleashed, videos, etcetera. I'm working on some new Nine Inch Nails stuff.

Did you say also working on new Nine Inch Nails music? That's good to hear.
Dot dot dot. Hopefully, it will be good to hear. Right now, it's in its gestation period.

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U.S. online job demand rises in June

NEW YORK | Fri Jul 6, 2012 12:11am EDT

NEW YORK (Reuters) - A monthly gauge of online labor demand in the United States rose in June, led by jobs available in the transportation and warehousing sector, while retail positions regained momentum, the operator of a job search website said on Friday.

Monster Worldwide Inc, an online careers and recruiting firm, said its employment index rose 4.1 percent to 153 points from 147 in May. The index was up 4.8 percent from 146 a year ago.

The index saw annual growth in 14 of the 20 industries and 19 of the 23 occupations monitored last month.

The transportation and warehousing industry was up more than 22 percent from a year ago, while the retail sector re-entered the top five growth industries and was up over 9 percent on the year.

The report was another look at the jobs market ahead of the government's non-farm payrolls report later on Friday, which is expected to show hiring rose last month, but still remained tepid at 90,000 new jobs.

The Monster Employment index is a monthly analysis based on a selection of corporate career sites and job boards. The margin of error is about plus or minus 1 percent.

(Reporting by Leah Schnurr; editing by Andre Grenon)

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Samsung's Galaxy powers record $5.9 billion profit; euro a worry

1 of 2. A man tries Samsung Electronics' new Galaxy S III smartphone that is on display at a store in Seoul in this June 26, 2012 file photo.

Credit: Reuters/Lee Jae-Won/Files

By Miyoung Kim

SEOUL | Fri Jul 6, 2012 7:37am EDT

SEOUL (Reuters) - Soaring sales of the Galaxy smartphone drove record quarterly profit of $5.9 billion at Samsung Electronics, though the South Korean tech giant is sweating over how Europe's debt crisis is denting demand in its biggest market for televisions and home appliances.

The flagship Galaxy smartphones are likely to have stretched their lead over rivals Apple and Nokia - despite a parts shortage that meant it struggled to keep up with stronger-than-expected demand for its latest S III model.

While strong handset sales grab the headlines, more than doubling profit growth, other businesses such as chips and consumer electronics are battling weak prices and demand and a limp euro, which eats away at repatriated profits. In a sign that the euro zone crisis is exercising minds in boardrooms around the globe, Samsung executives said this week the group was operating to a contingency plan.

"Europe is our biggest consumer electronics market and we may have to initiate cost cuts and product price increases should the euro fall further from the current level," said one executive who didn't want to be named as the plan is internal.

"Our smartphones are flying off the shelves, with some outlets reporting 40-60 percent sales growth, but that's distorting the overall trading outlook which is more challenging due to the weak global economy and a weak euro."

The euro has fallen around 5 percent against the Korean won since April, and about 8 percent in the past year, to 2-year lows.

PRICE PRESSURE

In its April-June earnings guidance on Friday, Samsung, valued at $170 billion and the world's leading maker of TVs, smartphones and DRAM memory chips, estimated operating profit jumped 79 percent to 6.7 trillion won from a year ago - in line with an average forecast in a Reuters survey of 23 analysts.

That would be 14.5 percent higher than the previous record quarterly profit in January-March. Samsung estimated its second-quarter revenue at 47 trillion won ($41.4 billion), just below a 50 trillion won forecast.

"Revenue is below our forecast, which suggests price pressure was more severe than had been expected in products such as televisions and home appliances," said Nho Geun-chang, analyst at HMC Investment Securities in Seoul.

"Earnings will be stronger in the current quarter as sales of the high-end Galaxy S III will increase dramatically and drive the telecom division's earnings to above 5 trillion won," he said, predicting shipments of the S III would hit 19 million this quarter.

Samsung is due to release its full second-quarter results - the first since its components chief Kwon Oh-hyun took over as CEO - towards the end of this month.

Samsung and local rival LG Electronics are among the few global TV makers making money and gaining market share from stumbling Japanese rivals Sony, Panasonic and Sharp.

But, spooked particularly by a weak chip market, Samsung shares have dropped 15 percent in the past two months, while the broader Korean market has fallen just over 5 percent, and Apple has gained almost 3 percent. The stock lost another 2 percent on Friday, closing at 1.16 million won ($1,000) in a market down 0.9 percent.

"Samsung's profits have yet to peak, and with smartphone sales and recovering chip prices to propel earnings even higher in the second-half, the bar's been raised so high that even in-line earnings disappoint some optimists," said Lee Jin-woo, an analyst at Mirae Asset Securities.

Smaller Taiwanese rival HTC, which once boasted the biggest share of the U.S. smartphone market, on Friday reported that its quarterly net profit more than halved as European sales disappointed and U.S. sales were delayed by customs inspections.

MOBILE DRIVER

Profit from Samsung's mobile division is likely to have more than doubled to around 4.4 trillion won from a year ago, with sales of around 50 million smartphones - at a rate of 380 every minute.

Current quarter mobile profits are expected to forge further ahead as the latest Galaxy model enjoys a boom before the next iPhone launch. Samsung's overall third-quarter operating profit is likely to be between 7.3 trillion won and 9.1 trillion won, an increase of as much as 36 percent from the second quarter, according to a Reuters survey of 14 analysts. The mobile business brings in more than 70 percent of Samsung's earnings.

While the next iPhone, expected later this year, will likely slow Samsung's handset earnings growth, it will boost the Korean firm's semiconductor earnings as Samsung is the sole producer of processing chips used to power the iPhone and iPad, and also supplies Apple with mobile memory chips, NAND flash and display screens.

"Earnings will grow further as the semiconductor division will also stage a solid recovery on the back of improving DRAM and NAND demand," said Jeff Kang, an analyst at Daishin Securities, adding the division could increase earnings by 1 trillion won this quarter.

($1 = 1135.0750 Korean won)

(Additional reporting by Hyunjoo Jin and Joonhee Yu; Editing by Ian Geoghegan)

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Media, tech deals may make comeback at Sun Valley

By Liana B. Baker and Lisa Richwine

Fri Jul 6, 2012 12:12pm EDT

n">(Reuters) - A fresh sense of dealmaking excitement should permeate Idaho's mountain air next week when media and technology moguls descend on remote Sun Valley for their annual conference, which in recent years has been as sleepy as the town for which it is named.

The latest moves made by News Corp, Vivendi and Liberty Media signal a shifting landscape of opportunities for snatching up assets as media companies navigate new entertainment platforms, a soft economy, turmoil in Europe, and the upcoming U.S. presidential election.

The 30-year-old conference, hosted by boutique investment firm Allen & Co has consistently attracted heavy hitters and spawned blockbuster deals including Disney's $19 billion acquisition of Cap Cities/ABC in 1995. However, with the exception of Comcast Corp's 2009 purchase of NBC Universal, few major tie-ups have come out of Sun Valley in recent years.

That may change at this year's event, which runs from July 10 to July 14 at the Sun Valley Resort. Developments in just the past few weeks have industry watchers predicting media companies will peel away more assets while they jockey to grab consumers' attention as entertainment options swell.

Most notably, News Corp's board approved a plan to split the $60 billion conglomerate into two publicly traded companies, one focusing on entertainment and the other on publishing, with the Murdoch family controlling both. News Corp Chief Executive Rupert Murdoch and his children - James, Lachlan and Elisabeth - are expected at Sun Valley amid speculation over their roles in the new companies.

"I think it'll be more provocative this year. There will be more discussion about whether these bigger conglomerates start breaking up. It'll be the topic du jour considering what happened with News Corp," said Todd Davison, Morgan Stanley's co-head of media investment banking for North America.

Between whitewater rafting and hikes in the scenic Pioneer mountains, executives attending the so-called "summer camp for moguls" have the chance for high-level talks about possible sales or collaborations.

Close attention will be paid to who lunches together, chats over cocktails, or huddles with the venture capitalists and private equity chiefs expected to attend, including Marc Andreessen of Andreessen Horowitz LLC and Henry Kravis of Kohlberg Kravis Roberts & Co.

Other media titans whose private jets are expected to clog the small airport's runway include Disney Chief Executive Bob Iger, talk show queen turned network executive Oprah Winfrey, and Time Warner CEO Jeff Bewkes, according to a list of attendees obtained by Reuters.

On the tech side, guests include Facebook founder Mark Zuckerberg, Amazon.com Chief Jeff Bezos, Google Inc's Sergey Brin, Eric Schmidt and Larry Page, and Netflix CEO Reed Hastings.

Facebook, one of the most closely watched and highly anticipated companies to go public, fell flat with its IPO in May after technical glitches on the Nasdaq and questions about its ability to increase advertising revenue. The fallout from Facebook's public debut and how that will affect other tech companies' plans of going public will certainly be a topic of conversation among the moguls.

So will the fate of Yahoo, an Internet icon that is struggling to regain its leadership status after being usurped by Google, Facebook, Apple, and others. Yahoo's interim CEO Ross Levinsohn is currently on the guest list, but he may not make the event due to the annual meeting of Yahoo shareholders next week while former Yahoo CEOs Jerry Yang and Terry Semel are also expected to attend the conference.

Apple CEO Tim Cook appears on the guest list, but the iPhone maker has not confirmed whether he will attend. His predecessor, the late Steve Jobs, shunned the event, though his widow, Laurene Powell Jobs, is listed among this year's guests.

Even if Cook does not attend, the next version of Apple TV will be on the minds of media executives.

"I'm sure there will be lots of speculation with the full version of Apple TV. If and when that happens, that will have a major impact on how Internet video is consumed in the living room," said Ken Allen, director in Blackstone's technology advisory practice.

OTHER DEALS

Vivendi, the French media conglomerate, could be looking to unload some assets now that longtime CEO Jean-Bernard Levy has stepped down.

One Vivendi asset widely considered to be ripe for disposal is its 60 percent, or $8 billion stake, in U.S. video game publisher Activision Blizzard, whose CEO Bobby Kotick, a Sun Valley conference regular, is registered for this year's edition as well.

The company could also spin off Moroccan telecom company Maroc Telecom or mull a Murdoch-style split of its business into a telecom and media arm, analysts and bankers have said.

Lucian Grainge, the head of Universal Music Group, another Vivendi asset, will also be in attendance as his company continues its battle for regulatory approval of EMI Group.

John Malone, the CEO of Liberty Media is expected, as his media holding company tries to seize control of Sirius XM Radio, the satellite radio provider it floated a $530 million loan to in 2009 to help it avoid bankruptcy.

THEMES

Television and film producers also may be looking for new avenues to sell their content as online players try to bolster their offerings.

"The content companies are in the best position. They just need to continue to figure out the best way to monetize their content through new mediums," said Jonathan Boyar, managing director of Boyar Value Fund, which owns shares of Cablevision Systems, CBS Corp, Time Warner and Comcast.

The November presidential election is "another source of uncertainty in terms of what sort of regulation we'll have, what the tax outlook will look like, what the healthcare will look like," said Blackstone's Allen.

(Reporting By Liana B. Baker in New York and Lisa Richwine in Los Angeles; Editing by Peter Lauria and Alden Bentley)

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Microsoft stumbles into crucial financial year

Joe Belfiore, corporate vice president of Microsoft, introduces the Windows Phone 8 mobile operating system in San Francisco, California, June 20, 2012.

Credit: Reuters/Noah Berger

By Bill Rigby

SEATTLE | Fri Jul 6, 2012 1:11am EDT

SEATTLE (Reuters) - An ugly first week for Microsoft Corp's new financial year, probably its most important to date, has done little to inspire confidence that the software giant can jumpstart a stubbornly stagnant share price.

The world's largest software company, whose stock remains mired around $30, had prepared a multi-pronged assault to try and break into the crucial mobile computing space this year and take Apple Inc and Google Inc down a peg.

But on Monday, it announced a $6.2 billion writedown of a 2007 Internet-advertising acquisition - a reminder that Microsoft has a patchy track record when it ventures outside of its Windows and Office comfort zone.

Days later, Vanity Fair blamed Steve Ballmer's "astonishingly foolish" leadership for a "lost decade", in one of the most scathing articles ever written about the CEO.

It was not the news agenda Microsoft had in mind as it prepared to unveil fourth-quarter results on July 19. The writeoff is expected to hand the company its first quarterly loss - on paper - since going public in 1986.

"This kind of massive write-off is a stark reminder that Microsoft's capital allocation policies in the past have not been ideal at times," said Highmark Capital fund manager Todd Lowenstein.

Microsoft is placing several major bets over the next 12 months: its new Windows 8 operating system; its first tablets; a new version of Office; and revamped phone software.

Wall Street thinks Microsoft still stands a chance of reclaiming its former glory and investors, including Lowenstein, cite a promising pipeline for 2013. But they will want hard reasons to pay more than $30 for a stock that hasn't traded above that for any extended period of time since 2000.

"The jury is still out, but I see the potential for a renaissance here with a new platform," said Rick Sherlund, an analyst at Nomura Securities International, who has followed the company for three decades. "This is not a winner takes all, Apple kills Microsoft, death-spiral situation. There's room for a lot of innovation that allows Microsoft to grow again."

BIG CHARGE

Microsoft got off on the wrong foot with the announcement that it was writing off $6.2 billion in goodwill, chiefly for its 2007 acquisition of digital advertising firm aQuantive.

That purchase was supposed to accelerate Microsoft's entry into an online ad market dominated by Google, but it never took hold and its money-losing Bing search engine has barely dented Google's market share in the three years since launch.

The write-off was a painful admission that Microsoft has failed to make a profitable business from online ads despite growing traffic. A sale of the online unit, perhaps to Facebook Inc, would make sense now, some on Wall Street suggest.

The huge charge was not a shock to investors - Microsoft shares rose slightly in the next trading session - but it underscored how the company misjudged the Internet's commercial possibilities and lost its way in mobile computing.

Ballmer has become a lightning rod for this failure of innovation. Vanity Fair quotes one former manager saying Microsoft had turned itself into "technology's answer to Sears".

Ballmer has had critics since taking the top job in January 2000. But the widely cited thumbs-down still resonates.

"I would question how much longer he (Ballmer) will be there. That's something Wall Street is always speculating about," said a Wall Street analyst who asked not to be named. "You need someone who can manage creative talent better than Steve's done."

Some point out that Microsoft's $6.2 billion charge for an ill-conceived Internet-centric acquisition is actually better than they deserve. Ballmer offered to pay $47.5 billion for fading Internet giant Yahoo Inc in 2008. That company's market value is now less than half that.

WINDOWS 8

The central gambit for 2013 is that its touch-friendly Windows 8 software - due out around October - will fire consumers' imaginations and take root among Microsoft's core business audience.

For the first time, it will make "Surface" devices of its own to run Windows 8: a tablet based on power-efficient ARM Holdings chips to challenge Apple's iPad and an Intel Corp processor to attack the lightweight laptop market.

Analysts are skeptical Microsoft can produce a device cheaply enough to seriously threaten the iPad, but recognize that Microsoft is challenging PC makers such as Acer and Samsung to come up with better machines.

Microsoft has generated interest, but not exactly excitement about the new system, which is sure to confuse many longtime Windows users [ID:nL1E8HD00C].

But even if Windows 8 is not an instant hit, Microsoft's long-term agreements with corporations, which are paying for the latest version of Windows even if they don't use it, mean that the core Windows business will not crumble.

"Windows is not only not going to disappear, but rather become the No. 2 tablet operating system and No. 1 operating system for" tablet-notebook devices, said Mark Moerdler, a technology analyst at Bernstein Research. "In contrast to the bear case, that Windows revenue will go off a cliff."

In phone software, Microsoft has no such cushion. Despite a tie-up with handset maker Nokia, the company still has only 4 percent of the U.S. smartphone market, according to the latest figures from tech research firm Comscore.

Microsoft announced a new version of its phone software two weeks ago, called Windows Phone 8, but there are concerns that financially-squeezed Nokia may not last until its release in autumn without help. Its shares have fallen 80 percent since former Microsoft executive Stephen Elop became CEO in 2010.

"If Nokia goes away, then Windows Phone is done," said Michael Yoshikami, CEO of fund manager Destination Wealth Management, who does not own Microsoft shares. "Microsoft is either going to own or have a share of Nokia."

EARNINGS WIPE OUT

Microsoft's $6.2 billion aQuantive charge is expected to wipe out any profit for Microsoft's fourth fiscal quarter. Wall Street analysts are now predicting a quarterly net loss of $366 million when the company reports earnings on July 19, rather than its previous estimate of $5.25 billion net profit.

But the one-time charge will not affect fiscal 2013. Analysts are calling for a sales increase of about 10 percent for fiscal 2013, and profit growth of about 13 percent if the charge is discounted.

Bernstein's Moerdler thinks the share price is based on "an unrealistically bad scenario of no-to-negative perpetual growth, billions of dollars of annual cash drain from search and mobile into perpetuity, and tens of billions of dollars of additional value destruction through ill-fated acquisitions and investments."

But that is exactly what some fear. Destination Wealth Management's Yoshikami paints a worst-case scenario.

"Nokia collapses, they don't step in. They have no other significant manufacturer willing to take a chance on Windows 8, they decide they are going to take a chance on Surface tablet and that comes out at $800. Then their stock is at $28 forever."

(Reporting By Bill Rigby; Editing by Bernard Orr)

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Berenberg cuts Cognizant, VMware to hold

n">(Reuters) - Sales at global IT companies are likely to come under pressure, hurt by slowing spending and weakening European demand, Berenberg said, downgrading Cognizant Technology Solutions Corp and VMware Inc.

Europe is contracting, growth in the United States has slowed and the Japanese recovery seems to have stalled, analysts led by Daud Khan wrote in a note to clients.

"While we do not expect a blood bath (in the sector) in Q2, the prospects for guidance downgrades for the full year are likely," said the analysts, cutting their rating on both stocks by a notch to "hold."

Berenberg also cut its price target on Cognizant to $55 from $83 and on VMware to $90.0 from $112.5. Cognizant shares had closed at $60.22 on the Nasdaq on Thursday, while VMware ended the day at $90.21 on the New York Stock Exchange.

Last month, J.P. Morgan Securities lowered its outlook for growth in IT spending in 2012, amid rising macroeconomic uncertainties in Europe and the United States.

Europe's sovereign debt crisis has shaken investor and consumer confidence, forcing major technology companies such as Cisco Systems Inc and Dell Inc to scale back expectations for IT spending there.

However, Berenberg upgraded engineering software maker Aveva Group Plc and enterprise software company Sage Group Plc to "buy" from "hold," saying potential acquisitions are likely to boost revenue.

Aveva shares were up more than 3 percent at 1,750 pence on the London Stock Exchange by 5.30 a.m. EDT.

(Reporting by Sagarika Jaisinghani in Bangalore; Editing by Sreejiraj Eluvangal)

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Judge approves Netflix privacy settlement

By Jonathan Stempel

Fri Jul 6, 2012 10:14am EDT

n">(Reuters) - A federal judge has granted preliminary approval to Netflix Inc's $9 million settlement of class-action litigation accusing the video rental company of violating consumer privacy laws.

U.S. District Judge Edward Davila in San Jose, California, said the accord reached in February "compares favorably" to recent settlements of other consumer privacy cases, including with Google Inc and Facebook Inc.

The judge also certified a nationwide class of current and former Netflix subscribers estimated in the tens of millions, according to his order issued late Thursday.

Subscribers accused Netflix of violating the federal Video Privacy Protection Act of 1988 by keeping records of DVD and Internet videos they watched for at least two years after they canceled service, and also keeping credit card information.

They said Netflix used the data in marketing and advertising without consent, violating a legal requirement that it purge "personally identifiable information" within one year after it was no longer needed for the purpose for which it was collected.

Most people would feel "extremely uncomfortable" that the Los Gatos, California-based company could keep their viewing histories and credit card data for so long, the complaint said.

The settlement calls for Netflix to "decouple" subscribers' rental histories from other identification data once a year has passed since service was canceled. Money will also be used to educate consumers and regulators on privacy protection.

The case had been brought by former Netflix subscribers and Virginia residents Jeff Milans and Peter Comstock.

Netflix did not admit wrongdoing, and accounted for the settlement in its results for the fourth quarter of 2011.

A hearing to consider final approval is set for December 5.

The video privacy law was passed after Supreme Court nominee Robert Bork's video rental history was leaked in the press during his 1987 confirmation proceedings.

The case is In re: Netflix Privacy Litigation, U.S. District Court, Northern District of California, No. 11-00379.

(Reporting By Jonathan Stempel in New York; editing by John Wallace)

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Get in line: one Apple store per 216 million Chinese

By Melanie Lee

SHANGHAI | Wed Jul 4, 2012 6:52am EDT

SHANGHAI (Reuters) - Apple Inc (AAPL.O) has more retail stores in Pennsylvania than in all of China - where it earns a fifth of its revenue - and a slow pace of expansion may cost the firm more than just sales.

Apple's six stores in Greater China are routinely packed, and customers often wait in long lines for iPhone repairs. Scalpers are known to camp out to be first in line for new products, which they then re-sell for a tidy profit.

The California company is notoriously fastidious when it comes to its flagship stores, and has said it is taking its time in China to ensure it secures the right locations. But its retail expansion has fallen well short of its own goals.

In 2010, Ron Johnson, then-Apple's retail head, forecast the company would have 25 stores in China by this year.

"There's certainly more demand than Apple can serve with their store footprint currently," said Torsten Stocker, a partner at business strategist Monitor Group.

The clamour for Apple products has spawned a bustling grey market where smuggled goods are peddled by unauthorized re-sellers. Copycat Apple stores have popped up in smaller cities that don't have the real thing.

The Apple frenzy will only intensify now that the company has agreed to pay Proview Technology (Shenzhen) $60 million to settle a lawsuit over the iPad trademark, freeing it up to sell its latest tablet computer.

Apple has two retail stores in Beijing, three in Shanghai, and one in Hong Kong. Chinese government officials said last month the company is looking to open two more in the major cities of Chengdu and Shenzhen.

In Pennsylvania, a state with a population of 12.7 million, Apple has eight stores, including three in the city of Pittsburgh alone. The population of China is 1.3 billion.

Apple declined to comment for this story.

HANDS-ON EXPERIENCE

The shortage of retail stores and authorized re-sellers leaves ample room for unlicensed re-sellers to move in. Bad consumer experiences at these unauthorized shops are common and they run the risk of eventually eroding confidence in Apple's products, said David Wolf, chief executive of Beijing-based consultancy Wolf Group Asia.

If Apple doesn't expand its network of stores and authorized re-sellers, it "loses not only near-term sales, it also endangers the sustainability of its success in China," he said.

Apple products can also be bought online in China, but many consumers prefer to buy at the store after testing the product.

Its flagship stores in China are packed with people tinkering with the company's latest gadgets, even on weekdays. Last October, Apple's Chief Financial Officer Peter Oppenheimer said the China branches were the highest trafficked and among the highest revenue stores for the company.

Demand for new Apple products is so high that earlier this year scalpers queued overnight outside a Beijing store for the latest version of the iPhone 4, only to pelt it with eggs after Apple decided against selling the phone at the store because of security concerns.

Apple competes with Samsung Electronics (005930.KS) as well as homegrown Chinese technology firms Huawei 002502.SZ and ZTE Corp 000063.SZ in China's fast-growing smartphone sector.

The pace of retail expansion may not be dictated entirely by Apple. Red tape often hampers foreign firms' expansion plans in China, and that may be holding back growth.

"There are complications around opening stores in China that you don't get in Western countries," said Andrew Milroy, vice president of ICT Research for Asia-Pacific at Frost & Sullivan in Singapore.

(Additional reporting by Lee Chyen Yee in Hong Kong; Editing by Kazunori Takada, Emily Kaiser and Ian Geoghegan)

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HTC profit lags forecasts, faces challenges in third quarter

A shop attendant arranges HTC phones in a mobile phone store in Taipei November 24, 2011.

Credit: Reuters/Pichi Chuang

By Clare Jim

TAIPEI | Fri Jul 6, 2012 6:11am EDT

TAIPEI (Reuters) - Taiwan smartphone maker HTC Corp (2498.TW) saw profit more than halve in the second quarter after European sales disappointed and phones destined for the U.S. market were held up by customs inspections.

The profit fall came on the same day that archrival Samsung Electronics (005930.KS) posted record second-quarter earnings, driven by runaway sales of its Galaxy smartphone [ID:nL3E8I54F4], indicating the size of the challenge facing HTC as it looks to recover market share.

HTC is betting on its new One series of phones to regain market share lost to Samsung and Apple Inc (AAPL.O). HTC, whose sales have grown four-fold since 2010, was battered in the second half last year by the popularity of the iPhone and Galaxy models.

HTC's chief executive, Peter Chou, said in an interview last month that the company will launch other new models in the second half of this year.

But some analysts predict HTC will be upstaged by strong sales of the Galaxy S III and the latest iPhone, which is expected to launch in the fourth quarter.

"In the high-end market, there are Samsung and Apple. In the low-end market, even though HTC wants to gain traction in China, its phones are price uncompetitive," said KGI Securities analyst, Richard Ko.

"HTC's scale and margin are a lot lower compared to Samsung and Apple. It will see much pressure in the short to medium term," Ko said, adding he expected HTC to see limited growth in the second half.

HTC will be further pressured by a sales slowdown faced by the entire industry as the eurozone crisis continues to dampen global consumer sentiment.

"We may not see a traditional high season in the third quarter," said Peter Liao, an analyst at Nomura Securities. "Companies are not seeing strong pull-in and operators are feeling conservative towards giving subsidies."

HTC confirmed a news report on Friday that it has not renewed the contracts of some workers hired during the high season for its production line. The number affected is not more than 1,000, it said.

NUMBERS TELL THE STORY

HTC's unaudited April-June net profit was T$7.4 billion ($247.7 million), the company said, down from T$17.52 billion in the same period a year earlier, but up from T$4.47 billion in the January-March quarter. It did not elaborate.

Earnings had been expected to drop to T$8.25 billion, according to a Thomson Reuters I/B/E/S survey of 21 analysts.

Second-quarter revenue was T$91 billion, improving from T$67.79 billion in the previous quarter.

Last month, HTC cut its second-quarter revenue target by more than 13 percent to T$91 billion and cut its operating margin forecast by 2 percentage points to 9 percent, but kept its gross margin target at 27 percent.

HTC cited the poor economic situation in Europe that was hurting consumer demand, as well as delays to shipments of new phones to the United States due to a requirement for customs inspections after it lost a patent dispute with Apple.

In a separate statement on Friday, HTC said consolidated sales for June were T$30 billion, down 33.4 percent from the same month a year earlier and unchanged from May.

HTC shares closed down 5.15 percent at T$322 before the earnings were released, while the broader market .TWII fell 0.26 percent. The company has a market value of around $11.4 billion.

(Editing by Matt Driskill)

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