Sex Is latest cellphone feature

The cellphone, which already plays music, sends and receives e-mail and takes pictures, is adding a steamier offering: pornography.

The New York Times reports (17 September) that, with the advent of advanced cellular networks that deliver full-motion video from the internet - and the latest wave of phones featuring larger screens with bright color - the pornography industry is eyeing the cellphone, like the videocassette recorder before it, as a lucrative new vehicle for distribution.

In recent months that prospect has produced a cadre of entrepreneurs in the United States hoping to follow the lead of counterparts in Europe, where consumers already spend tens of millions of dollars a year on phone-based pornography, according to the NYT.

The newspaper says that the major American cellular carriers have so far been adamant in their refusal to sell pornography from the same content menus on which they sell ring tones and video games. But there are signs that they may soften their stance.

The cellular industry's major trade group is drafting ratings for mobile content - akin to those for movies or video games - signaling that phones, too, will be a subject of viewer discretion.

For now, says the NYT., the web-based video available on many cellphones is crude. Images take time to load and appear grainy, and video feeds are often interrupted by inconsistent wireless signals.

But, reports the newspaper, Roger Entner, a wireless industry analyst for Ovum, a market research firm, said that as use of the internet on phones becomes easier, and as content ratings emerge, it was inevitable that phone-based pornography would become a fixture.

The newspaper says that for the carriers, it is a tricky proposition. Offering pornography would stir a tempest over indecency and possible pressure from regulators or the US Congress. But conceding the field to third parties would leave millions of dollars on the table.

At present, sales of pornography over mobile phones in the US amount to virtually nothing. But cellphone commerce is on the rise, with sales of ring tones alone expected to reach US$453 million this year, according to the Yankee Group, a research firm. The company estimates that by 2009, sales of pornography for phones will hit US$196 million, still meager compared with a projected US$1.2 billion for ring tones, the NYT reports.

Nintendo, maker of the GameCube video console, has surprised the industry with its answer to the increasingly high-tech consoles of its rivals: a simple, one-handed controller that players can also swing like a sword or a golf club.

The New York Times reports (17 September) that Nintendo's controller was the star of the Tokyo Game Show, a three-day event that opened on Friday, where Nintendo and its rivals, Sony and Microsoft, were trying to drum up interest in their new consoles. The three are vying for dominance as they scramble to roll out a new generation of game consoles.

While most controllers require two hands and are studded with buttons and joysticks, the new controller has fewer features, giving it the appearance of a TV remote control.

The report says that the controller is intended for use with Nintendo's Revolution game console, the successor to GameCube. Revolution is scheduled for release sometime next year. It will go head to head with Microsoft's Xbox 360, to appear in November, and Sony's PlayStation 3, set for next spring.

According to the newspaper, it was clear Friday that the three companies are taking very different tacks to attract consumers.

Nintendo hopes the simplicity of its new controller and games will make them more accessible, especially to first-time players. Sony, on the other hand, wants to make its PlayStation 3 the most technologically advanced console. Microsoft will probably use its internet expertise to appeal to those who enjoy playing against opponents online.

The NYT reports that at a news conference to show the controller, Nintendo's president, Satoru Iwata, said his company wanted to make a device that was simple enough for anyone to use.

Intel, the world's largest computer chip maker, is preparing to begin construction on a major new chip production plant in Israel, an analyst said on Friday, citing industry sources, according to a report by Reuters in The New York Times (16 September).

The Reuters report says that Moors & Cabot analyst Shekhar Pramanick said in a research note to investors that he had learned from equipment suppliers to Intel and from observers on the scene in Israel that clearing work had begun at the proposed plant site.

However, Intel spokesman Chuck Mulloy said his company had not announced any new projects in Israel and denied that construction was underway on a new plant.

Reuters reports that Pramanick said his sources said preparatory work may have begun at a new, yet to be announced, Intel fabrication plant in the southern Israeli town of Kiryat Gat, which is likely to be called Fab 28.

The facility would be geared to produce chips used in the latest 300 millimeter wafers and could cost in excess of US$2 billion, roughly one-quarter to one-third of which would be drawn from Israeli government subsidies, he said.

Reuters says that in July, Israeli Prime Minister Ariel Sharon said Intel had informed him that the US electronic chip giant planned to build another plant in Israel with an investment of up to US$4 billion.

Intel will pump US$345 million into two US fabs in a bid to boost production capacity, the chip giant said yesterday, according to a 16 September report in The New York Times.

The Register says that the two fabs targeted for investment, Fab 17 in Hudson, Massachusetts and Fab 23 in Colorado Springs, Colorado, both work with 200mm wafers.

According to the publication, as such, they're used primarily to punch out chipsets, communications parts and Flash memory components. While Fab 17 will get US$155 million to increase overall production capacity, Fab 23's cut, $190 million, will be used to kit out a second clean room which will be used to finish off processors made on 300mm wafers at other Intel facilities.

The Register says that aarlier this month, Intel admitted it had "sold out" of notebook chipsets. In August, it said it was shifting output away from entry-level desktop chipsets in order to focus available capacity on higher-end, higher-margin chipsets, causing some observers to claim Intel plans to quit the low-end chipset business - a move the manufacturer later denied.

IBM, the world's biggest computer company, said it began shipping the latest version of its mainframe computer today, helping drive up revenue as customers switch to the new device, Reuters reports in The New York Times (16 September).

The Reuters report says that System z9, the ninth generation of IBM's modern z-series mainframe, has more than twice the capabilities of its predecessor, IBM said in a statement on Friday. The refrigerator-sized computers, used by some of the world's largest companies and governments, promise added security for medical and financial information and other sensitive data.

The computer can handle 1 billion transactions per day. Fully configured versions have 54 chips and 18 billion transistors. Prices start at around US$1 million apiece.

The Reuters/NYT report says that IBM said in July the upgrade would help it fuel growth in mainframes, which were seen as dinosaurs in the personal computer era. Mainframes instead have staged a comeback as a more manageable way to consolidate smaller computers.

Mainframes account for a fraction of IBM's roughly US$90 billion annual revenue but act as a catalyst for IBM's software, storage and outsourcing services, which make up about about half of revenue, says Reuters.

The internet's key oversight agency approved a domain name for the Catalan language Thursday while deferring final action on creating a red-light district on the internet through a ''.xxx'' suffix.

The Associated Press reports (16 September) that creating the ''.cat'' suffix for individuals, organisations and companies that promote the Catalan language and culture was relatively uncontroversial. Though the language is spoken largely in certain regions of Spain, backers say a domain name could unify Catalan speakers who live in France, Italy, Andorra and elsewhere. The name could begin appearing in use next year.

As for ''.xxx,'' the Internet Corporation for Assigned Names and Numbers deferred final approval for the second time in as many months.

AP says in the NYT report that the board decided to seek changes to a proposed contract with ICM Registry, the Jupiter, that would run the domain name for voluntary use by the adult entertainment industry. No details were immediately available on the changes sought.

The report says that the ''.xxx'' domain has met with opposition from conservative groups and some pornography web sites, and ICANN postponed a final decision last month after the US government stepped in just days before a scheduled meeting to underscore objections it had received. ICANN had given a preliminary OK in June.

ICM argues the domain would help the US$12 billion online porn industry clean up its act. Those using the domain would have to abide by yet-to-be-written rules designed to bar such trickery as spamming and malicious scripts. ICM would charge US$60 per name.

ICANN was selected by the US government in 1998 to oversee internet addressing policies, although the Commerce Department retains veto power over decisions. More than 260 domain name suffixes exist, mostly country codes such as ''.fr'' for France. Recent additions include ''.eu'' for the European Union and ''.mobi'' for mobile services.

The AP report says that although ICANN was to consider the ''.asia'' domain during Thursday's teleconference board meeting, it took no action on establishing a unified domain for the Asia-Pacific community.

The price gap between cable broadband service and phone carriers' digital subscriber lines widened to an all-time high in August, according to a survey by SG Cowen.

The Associated Press reports in The New York Times (16 September) that in the US cable-modem service was, on average, 75.8 percent more expensive than DSL during the month, up from a 53.3 percent gap in July. While phone carriers cut prices -- the average DSL price decreased by 9.2 percent -- cable companies raised them.

Leading the price decline was Verizon Communications which rolled out a slower service that cost just US$14.95 a month, with a free month of service with a one-year commitment, says the AP report.

By contrast, says AP, cable broadband service got 4.1 percent more expensive, on average. Comcast raised prices an average of 7.9 percent, while Time Warner Cable raised by 5.8 percent, according to the survey.

During the first and second quarters of 2005, cable companies captured 47.8 percent and 46.3 percent of net new broadband subscribers, respectively, down from 50.3 percent in 2004 and 60.8 percent in 2003. Analysts SG Cowen estimate that cable companies will capture about 47.3 percent of net new broadband subscribers in 2005, reports AP.

A technology arms race is under way in the hotel industry, according to a report in The New York Times (18 September).

The newspaper reports that standard televisions are being replaced by flat-panel, high-definition displays that produce a better picture and allow a bulky piece of furniture to be removed from often-crowded guest rooms. Internet connections are becoming standard, whether through high-speed hard-wired connections or wireless systems that allow users to stay connected wherever they are in the building.

And, according to the NYT, some hotels are even installing docking stations for iPod music players to recharge the batteries and to play music over speakers rather than headphones. Satellite radios are also making their way into hotels seeking to convey a hip, high-tech image. And many hotel operators are looking at internet-based telephones to replace the standard versions that cellphone users increasingly ignore.

The NYT says that as new technologies and gadgets proliferate, hotel managers have to decide which ones provide real value to guests and which ones may not be as important to them.

Big operators like Marriott and the W Hotels unit of Starwood Hotels and Resorts Worldwide are pushing to stay ahead of the technology curve, says the NYT.,and on Wednesday, Marriott is scheduled to display its hotel room of the future in an exhibit in front of the Marriott Marquis in Times Square. The room will include a high-definition, flat-panel television and a connectivity panel nearby, enabling computers and other devices to be plugged into the screen and sound system. The system is intended to adapt to new devices as they become popular.

The newspaper reports that hotels have long used technology features to distinguish themselves from competitors, said John A. Fox, a senior vice president at PKF Consulting, which specialises in the hospitality industry.

Kevin Mallory, who brokers hotel transactions as a senior managing director of CB Richard Ellis, says he looks at hotel rooms from a consumer's point of view and travels with electronic gear and expects high-speed internet access to stay connected with his business.

And, the newspaper reports that wired takes on a whole new meaning in the US$5,000-a-night penthouse at the W in Times Square. A paperback-sized plasma-screen control panel can be used to manage a 32-inch plasma television, other electronic devices and the lights. It even controls the window shades and blackout curtains.

Microsoft and Time Warner have explored a variety of possible combinations of the MSN internet portal with the America Online operation of Time Warner, including a merger of the two into a new company that would be jointly owned, according to several people involved in the talks.

The New York Times reports (16 September) that the discussions were initiated by Microsoft, which has Google, its new archrival, clearly in its sights. Microsoft is trying to focus its internet operations on its developing web search product rather than its web portal and Internet access business, which it no longer sees as strategically important.

Microsoft offered to sell its MSN internet portal and dial-up subscriber business both to America Online and to Yahoo, according to several people with knowledge of the talks. While Yahoo considered and quickly rejected the proposal, Time Warner, the parent of America Online, expressed interest, repoprts the NYT.

According to the NYT., top executives at the companies discussed a variety of potential transactions as recently as three weeks ago. Those talks, however, are in suspension as Microsoft considers its strategic position, people involved in the discussions said.

The newspaper says that the most elaborate proposal being discussed would involve combining America Online with the MSN internet portal and dial-up internet business, creating the world's largest internet company. The venture's web search would be provided by Microsoft. That combination would be a significant blow to Google, which provides the web search on AOL's services. This year, 11 percent of Google revenue came from advertising it placed on AOL sites.

A combination of AOL and MSN would have 18 percent of the search market in the United States, according to Nielsen NetRatings, making it third after Google, with 46 percent, and Yahoo, with 23 percent.

According to the newspaper, Microsoft sees in Google the potential to offer a variety of internet services, using Google's vast network of servers, making it less necessary for people to buy Microsoft software or even computers with the Microsoft Windows operating system. Moreover, Google could offer free desktop software as well, supported by its network of advertisers.

Time Warner, meanwhile, has been trying to figure out if AOL fits into its amalgamation of companies, especially because AOL's core dial-up internet access business, while profitable, is shrinking as customers shift to high-speed service provided by telephone and cable companies, says the report in the NYT.

The newspaper says that AOL has been trying to build a free, advertiser-supported portal business. Combining that effort with Microsoft's large MSN portal, along with Microsoft's popular Hotmail e-mail service, could accelerate AOL's progress toward its goals.

The merged company would leap past Yahoo as the biggest internet portal and have a more credible case to make to advertisers. Another advantage of a deal is that MSN is strong in many countries while AOL has focused mainly on the United States and a few European countries, the newspaper reports.

Reported ID theft losses represent only the tip of an iceburg, dwarfed by fraudulent losses run up by crooks assuming completely fictitious identities, according to analysts Gartner.

The Register reports (16 September) that Gartner reckons ID theft will claim US$10 million in 2005 resulting in losses of around US$15 billion from 50 million accounts. By comparison "victimless" fraud - bad debt run up in the name of non-entities - will hit US$50bn this year.

According to the publication, Avivah Litan, research director at Gartner, explained that because US banks are so keen to recruit new customers they will open up accounts on the basis of identification from only a pay-as-you-go mobile phone bill (a type of account that is even easier to open) without checks on the validity of supplied social security numbers.

Once a bank account is open crooks will pay bills religiously, eventually earning enough trust to obtain credit cards with higher and higher limits. After around 18 months fraudsters will obtain cash advances on these cards and disappear, a process know as busting out. Losses of around US$50K are typical, according to Litan, reports The Register.

The Register says that Gartner reports that banks will pursue these funds and call in collection agencies but in the end the majority will write-off the debt without understanding the root cause of the fraudulent loss.

Gartner said that banks in Britain were far better at sharing information and working with each other to minimise exposure to this kind of fraud. The incentive to sign up new customers is great in Europe but in the US it's even more pronounced because banks send out 1,937 pieces of marketing information for every new sign-up.

T-Mobile UK has admitted that many of its customers cannot access external email even when they buy supposedly email-enabled phones from the service provider.

The Register reports (16 September) that, unlike most other mobile operators in the UK, T-Mobile operates a "walled garden" that means customers cannot freely access external email accounts with its service. With the latest smartphones on the market, tens of thousands of UK citizens have been upgrading so they can access their normal email accounts while on the move.

The publication says,however, that T-Mobile will only allow external email to be accessed through its MDA line of Windows-based PDAs, or its Blackberry devices, which involve an additional fee to Blackberry's owners RIM.

T-Mobile customers who choose many of the other email-capable phones on the market are not told by the company they will not be able to access email, however. Instead, they are repeatedly advised to contact either the phone manufacturer or their ISP to recover settings that will enable them to gain access to their email, according to The Register.

The Register says that when those companies advise customers that it is an issue with T-Mobile and not themselves, they return to T-Mobile customer services - only to receive the same advice from the service provider.

According to the publication, in a recorded conversation we held with one T-Mobile representative, it's reporter was told five times that it was an issue with the phone manufacturer, or The Register's ISP.

Faced with a chronic shortage of science and math teachers, American education officials have long blamed the country's lucrative high technology industry for luring potential teachers to higher-paying positions in business, according to Thew New York Times in a 17 September report.

The newspaper says, however, that IBM has just announced a new program intended to begin to reverse the cycle by paying to train some of its veteran employees for second careers as teachers. IBM officials said they hoped other companies would follow suit.

The program, "Transition to Teaching," was announced yesterday at Public School 19 in Manhattan by Stanley Litow, a former deputy chancellor of the New York City schools who is now president of the IBM International Foundation.

The NYT reports that Mr. Litow said that the program would be geared to IBM employees in their early 50's who are preparing to retire, but he said that it would be open to all employees with at least 10 years of experience and some prior community service work.

IBM employees accepted into the program will continue to work for the company while completing coursework required to become a certified teacher and will be granted a paid leave of absence to complete three months of student teaching.

The newspaper says that IBM will pay up to US$15,000 per employee for tuition and stipends. To be eligible, employees must have worked for IBM for at least 10 years, have a bachelor's degree in science or math or a higher degree in a related field and experience as a teacher, a tutor or a volunteer in a school or other children's program.