Palm and BlackBerry maker will sign a licensing agreement

Palm, maker of the Treo smartphone, and its rival Research In Motion, the maker of the wireless BlackBerry device, are expected to announce a licensing agreement that could alter competition in the market for phones that offer e-mail and other functions, one of the fastest-growing segments of the cellphone industry.

The New York Times reports (17 October) that, as part of a broad strategy to become a software company as well as a device maker, Research In Motion, or RIM., will allow Treos to use its e-mail and communications technology, called BlackBerry Connect.

The deal is significant because it gives Palm, a 10-year-old Silicon Valley company, a greater opportunity to sell Treos to corporations that have spent substantial sums outfitting their workers with BlackBerrys, which are still big sellers among business users, reports the NYT.

The newspaper says that the Treo has gained momentum in the corporate market because thousands of business software programs can run on its devices. Over the last several months, some cellphone makers, like Nokia and Sony Ericsson, have also licensed BlackBerry Connect, but they have only recently started promoting that service.

For RIM., says the NYT.,the deal with Palm takes the company further down the strategic path it announced more than two years ago, after it became clear that the company needed to reinvent itself if it wanted to maintain its growth rate.

While RIM continues to sign up new subscribers - in its last quarter it added 620,000 accounts, for a total of 3.65 million, its growth is starting to slow.

In 2004, the makers of smartphones - cellphones with advanced e-mail, calendar and other computing functions - sold about 3.2 million units.

The newspaper says that this year, that figure is expected to nearly double, to 6 million, and to reach 11 million units in 2009, according to Jupiter Media, a research group.

Japanese-Swedish mobile phone maker Sony Ericsson on Monday unveiled a new third generation technology mobile phone handset which includes a digital music player and a camera.

Reuters reports in The New York Times (17 October) that the joint venture between Japan's Sony and Sweden's Ericsson is the world's fifth-largest handset maker. It focuses on more expensive models and has about a 6.2 percent share of the market.

The new 3G Walkman phone, which has a 2-megapixel camera and allows users to download and browse video games and graphics, will be available at the end of the year.

The Reuters/NYT report says that the latest model is the fourth Sony Ericsson Walkman phone. Sony Ericsson's W800 Walkman phone was the first phone to use Sony's revived Walkman brand, first launched in 1979.

The joint venture has been unable to meet demand in Europe for some of its latest models, such as the Walkman phone, because of popular demand, analysts said last month.

Talks between Samsung Electronics and Apple Computer on a possible joint investment in flash chip production have been dropped, a Samsung spokesman said on Monday.

Reuters reports in The New York Times (17 October) that the Korea Economic Daily reported on Saturday Apple had pulled out of the joint US$3.8 billion investment plan due to deepening anti-Samsung sentiment among some South Korean politicians and civic groups. The paper quoted an unnamed senior Samsung official in the report.

Samsung is the world's largest maker of NAND flash memory, used in hot-selling MP3 music players, digital cameras and high-end mobile phones.

Analysts said Apple had booked as much as 40 percent of the NAND output of Samsung for the second half of 2005 to support production of its flash memory-based iPods digital music players, Reuters reports.

In the US., a man described as one of the nation's leading senders of spam says an FBI raid on his home office has halted his e-mail operation.

The Associated Press reports in The New York Times (16 October) that warrants unsealed last week show that a September raid on Alan M. Ralsky's home in a Detroit suburb included the seizure of financial records, computers and disks.

Ralsky, 60, has said that he has 150 million or more e-mail addresses, and he has been a target of anti-spam efforts for years.

According to AP., Verizon Communications sued him in 2001, saying he shut down its networks with millions of e-mail solicitations. He settled, promising not to send spam on its networks.

A federal law that took effect last year bans use of misleading subject lines and the sending of commercial e-mail messages that appear to be from friends. It also bans use of multiple e-mail addresses or domain names to hide senders' identities.

The market for internet companies to go public is back, the managing director of Goldman Sachs'high-tech group said on Sunday, but only with provisos and with private equity firms increasingly calling the shots.

Reuters reports in The New York Times (16 October) that Lawrence Calcano told a technology conference in Athens that US internet companies with strong online advertising business models were succeeding, but that the climate did not mean a return to the hype of the internet bubble of 2000.

The Reuters/NYT report says that top internet companies are trading at around 40 times future price-to-earnings ratios, compared with as much as 300 times for companies like Yahoo at their peak.

Calcano said today's more sober market was a healthy one, with great potential for new internet companies with clear online advertising plans. Only around 5 percent of advertising budgets are currently spent on internet ads, he said, compared with 20 percent of consumers' time spent online.

The US's television industry will have to make the switch from analogue to digital by 7 April 2009, paving the way for a spectrum auction that would have to raise at least US$5billion, if draft legislation in the US comes into force.

The Register reports (17 October) that, according to Reuters, the Senate Commerce Committee is set to consider the bill on Wednesday this week, meaning they could include the money they expect it to raise in the next budget planning session.

The draft calls for the auction to begin 28 January, 2008, and requires that it raise no less than US$4.81billion for the US Treasury. According to government estimates, the auction could raise up to US$10 billion.

The register says that the money raised could be put towards a fund to help TV owners buy the kit they need to upgrade their TV boxes to receive digital signals. The US government says that around 21 million households in the US still rely on broadcast TV only.

Currently, TV stations will be required to make the switch by 31 December, 2006, or when 85 per cent of the TV audience can see the new digital signals, whichever comes later, reports The Register.

The Linux Association of Germany has failed in its efforts to keep the Microsoft logo off TV stories about the recent elections in the country.

The Register reports (17 October) that a Hamburg District Court on Friday lifted a temporary restraining order, which the Linux Association of Germany obtained against public broadcaster ARD/NDR shortly before the recent German general election.

A couple of weeks ago the Linux Association of Germany had objected to German public broadcaster ARD/NDR displaying a Microsoft logo on reports on the evening of the elections to Germany's lower chamber of parliament in September.

The publication says that the Linux Association considered this as "illegal advertising" and decided to go to court claiming ARD/NDR neglected rules laid down by the German Broadcasting State Treaty.

However, ARD/NDR immediately fired back and a temporary restraining order was issued against the Linux Association without a hearing.

The Register says that ARD/NDR argued that as German polling agency Infratest Dimap uses Microsoft databases and graphics software for its forecasts, there was little problem in displaying the logo.

In the UK., Easynet - the telco that's invested heavily in providing broadband services to rival BT - has confirmed that it has been approached regarding a possible buyout.

The Register reports (17 October) that the admission follows reports that satellite operator BSkyB is lining up a bid for local loop unbundling (LLU) operator Easynet as part of a cunning plan to go head-to-head with BT and NTL/Telewest.

In a statement issued today the company said: "The Board of Easynet notes the recent press speculation and movement in its share price. The Board can confirm that it has received an approach that may or may not lead to a formal offer being made for the Company, reports The Register.

The publication says that, although Easynet - which also operates the UK Online ISP - would not confirm that it's holding talks with BSkyB, there seems little doubt that the satellite broadcaster has made an approach.

A big campaign for a new venture from Time Warner demonstrates again the growing importance of computer gaming for Madison Avenue, reports The New York Times (17 October).

The newspaper says that the campaign, which formally begins today after some teaser elements ran this past summer, introduces the venture, called GameTap, which offers computer users with broadband connections an opportunity to play hundreds of games on demand. The games, from A (Adventure) to Z (Zork II: The Wizard of Frobozz), are licensed from video game producers including Activision, Atari, Midway, Namco, Sega and UbiSoft.

According to the NYT.,the budget for the campaign, carrying the theme "Expand your playground," is estimated at more than US$50 million through the end of next year.

The NYT reports that GameTap, being sold by the Turner Broadcasting System division of Time Warner, is available to subscribers who download and install software from a web site (gametap.com). The site also features free original content like video clips and e-mail cards. Turner Broadcasting is offering a two-week free trial of GameTap, after which most subscribers will pay US$14.95 a month.

The report says that the campaign for GameTap, which will appear in traditional media like television and new media like internet radio, is indicative of the growing allure of gaming to advertisers, agencies and media companies. They are eager to capitalise on the increasing amount of time that consumers are devoting to what is known as casual gaming, playing short games that fill time or sharpen skills. They are also eager to tap into the tens of billions of dollars being spent on games, game consoles, broadband connections and other game-related equipment and services.

According to the newspaper, the goal is for GameTap to attract 1.5 million to 2 million subscribers in two to three years, said Dan Riess, who leads new product development for Turner Broadcasting and also heads marketing for GameTap.

In the US., a biometrics payment company has stepped in to buy the assets of CardSystems Solutions, the same day an offer was withdrawn for CardSystems, the credit card processor at the centre of this year's biggest data compromise.

The New York Times reports (17 October) that the biometrics payment company, Pay By Touch, which hopes that consumers will swipe fingers at retail stores instead of cards, said on Saturday that it was buying substantially all of CardSystems' assets to gain access to its 120,000 merchants.

CyberSource, an online payment company, said it had ended negotiations with CardSystems because the two companies were unable to reach an agreement. Details about the breakup were not disclosed, nor were terms of the new deal.

The newspaper reports that a Visa USA spokeswoman said an extension it granted to CardSystems after the CyberSource deal was announced would remain in effect. That would allow CardSystems to continue processing cardholder transactions until January, even though Visa announced last July that it would bar the processor from its network at the end of this month.

Visa's chief competitor, MasterCard International, said it was allowing CardSystems to process transactions provided that it improved its security practices and policies to comply with MasterCard rules. It did so in late August.