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Thursday, April 23, 2015

Comcast to ditch $45.2B takeover of Time Warner Cable, report says

After meeting with regulators, Comcast looks to be giving up on its plan to acquire the cable giant, according to Bloomberg.

Comcast may be giving up on its $45.2 billion bid to buy fellow cable provider Time Warner Cable after meetings with regulators indicated they may oppose the deal, according to a report from Bloomberg.

The news service said that the announcement could come as early as Friday.

Regulators have been concerned that the joining of the two largest cable operators in the US, creating a pay television behemoth with approximately 30 million subscribers, would influence the distribution of video content and could hinder competition from Internet companies like Netflix that stream video over broadband networks.

Comcast declined to comment on the report.

The news comes a day after Comcast officials met with regulators at the Department of Justice to begin the process of discussing potential concessions in the deal. On Wednesday, Federal Communications Commission staff also met with the commissioners to brief them on their recommendation for the merger.

The Justice Department and the FCC work closely in reviewing mergers in the communications sector. The DOJ looks at whether mergers violate antitrust laws or concerns, while the FCC considers whether mergers would be in the public interest.

Rumors have circulated in the last few weeks that the Justice Department staff had concerns about the deal and were considering suing Comcast to stop the merger. And on Wednesday, FCC staff expressed their own concerns about the deal and suggested commissioners consider sending it for a review by an administrative law judge, a source familiar with the situation confirmed.

Such a recommendation by the FCC staff suggests that those reviewing the merger did not feel the deal would be in the public interest, even with conditions imposed by the agency, which would trigger the judge's review.

Even though Comcast and Time Warner Cable would still have an opportunity to argue why they believe the merger is in the public interest, it's likely they felt too much opposition to the deal. Still, the recommendation from the FCC staff is not an official decision by the commission. Staffers analyze transactions, but it is ultimately up to the five FCC commissioners to vote on whether to approve a deal.

Comcast has argued previously that its deal with Time Warner Cable is in the public interest. And it has denied anything anticompetitive about the deal since Time Warner Cable and Comcast do not compete directly for broadband or television customers in any markets.

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YouTube turns 10: The video site that went viral

YouTube is the Web's de facto home for video. But 10 years ago, online video was anybody's game. As it celebrates a decade offering us everything from new celebrities to cat videos, YouTube has become a premier destination for content. Here's how it got there.

Ten years ago today, a startup called YouTube uploaded its first video.

Co-founder Jawed Karim, in a private test of the fledgling service's capabilities, posted a short video of himself at the San Diego Zoo. The 18-second clip shows Karim unenthusiastically noting how elephants have "really really really long, um, trunks. And that's cool. And that's pretty much all there is to say."

Actually, there's a lot to say. From that modest beginning, a mammoth has evolved.

It's difficult to overstate just how big YouTube is: By the time you finish watching Karim's "Me at the zoo," other YouTube viewers around the globe will have collectively watched more than seven years worth of video. In the time it takes to watch that test video two more times, about 12 days of footage will have been uploaded to Google's video site.

Today, YouTube attracts more than 1 billion unique visitors a month -- or one out of every seven people on the planet. And that audience is helping create online stars. Today's fastest-rising celebrities aren't coming out of Hollywood. They're teens hamming it up or breaking it down in front of the computer to create a new kind of entertainment.

That dominance wasn't a foregone conclusion. In 2006, Google paid $1.65 billion for YouTube, which was founded by Karim along with entrepreneurs Chad Hurley and Steve Chen. The sheer might of its parent, though, didn't guarantee success. (How frequently do you check your Google+ social network, for example?) Several factors early in YouTube's existence played out in its favor and set it on the path to becoming the biggest media platform on the planet.

"No one organization has done more for creatives in the whole history of humanity than Google or YouTube," said Will Keenan, who heads the US digital division of television production giant Endemol.

Utilitarian start

YouTube's main attraction at first wasn't the videos you could watch but the files you could store online. The founders wanted to create an easy way to share videos, not necessarily a place to sit back and let others watch them. At a time when video files were large and online storage capabilities for them were scarce, YouTube's appeal was in its role as an early version of now popular cloud-based service Dropbox.

"People were already videotaping at that time, but they had no way to store that content," recalled Zefr cofounder Rich Raddon, whose company helps studios manage their copyrighted material on YouTube. "It was more of an archivist point of view."

Here, Google's resources were key.

"They were really able to benefit from Google's scale," said Laszlo Bock, Google's head of human resources. Bock started at Google in 2006, the same year the search engine bought YouTube. For Google, the challenge was finding a balance between getting involved enough to be helpful but not a hindrance.

One of Google's perks was its arsenal of technology. The infrastructure needed to sustain heavy usage was daunting for a startup but not for one of the Internet's biggest companies.

"It was necessary that the platform got bought early by Google because the sheer costs to store and code and stream all that video were massive," said Raddon. Google's data centers around the world distributed content to make it quick to access so viewers didn't have to wait for videos to load. "When you hit play, there isn't that much buffering because that content had been spread out, localized throughout the world."

The un-TV

YouTube was one of many sites striving to be the the Web's home for free video. One way it set itself apart was by letting its users figure out what the site should be, rather than prescribing that YouTube should feel like "real" television.

"A bunch of services out there, they really thought they were going to be TV," said Jim Louderback, who ran multichannel network Revision3 and is now an editorial director of the VidCon conference on online video. "YouTube looked at themselves and said, 'What's going to make it easy for people to share video? We're going to let it be what it is."'

That democratic approach extended to elements reminiscent of social networks. Unlike the inherent distance that rests between TV and its audience, performers and viewers on YouTube could form interactive online communities. YouTube's most successful "creators" quickly learned that being accessible and authentic on the platform was crucial for building a fan following.

In fact, some of YouTube's most memorable videos are of a tearful teen defending Britney Spears and a gangly graduate student singing a song called "Chocolate Rain" in a Barry White-like voice.

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Samsung teases upcoming round Gear smartwatch

The company gives developers access to the software for its seventh wearable but hasn't unveiled the device yet.

Samsung's got another smartwatch up its sleeve.

The South Korean mobile giant on Thursday posted a graphic and press release on its website saying developers can access its software development kit to build apps for an upcoming, not-yet-announced Gear wearable. The company simply said the device -- its seventh in the past two years -- would be another "wrist watch type." Gear is the name for Samsung's line of wearables that includes its Gear S curved smartwatch, its Gear Circle wireless headphones and its Gear VR virtual-reality headset.

The graphic showed what appeared to be a round smartwatch screen, which would be a first for Samsung. The company's previous smartwatches have sported rectangular and curved screens, but none has been circular like Motorola's Android Wear smartwatch. The Moto 360 received a lot of attention and accolades before its launch, but the device had issues -- including that the software was designed for a rectangular screen and left a black "flat tire" appearance on the edges of the screen. Other companies, including LG and Huawei, also have released round smartwatches over the past year.

Samsung said to stay tuned for more information about its next smartwatch. "We will unveil details on the timing of the product announcement when we are ready," the company told CNET.

Samsung has released more smartwatches than its rivals in an effort to define and control the market. That's particularly important as Apple prepares to launch its first smartwatch on Friday. Samsung was the market share leader for smartwatches last year, but Strategy Analytics and other tech research firms expect Apple's sales to surpass Samsung's in 2015. It is key for both companies to expand beyond smartphones and tablets, two markets that are experiencing slower growth.

Samsung was expected to introduce a new round smartwatch alongside the Galaxy S6 and Galaxy S6 Edge at the Mobile World Congress trade show in March. Instead, the company focused on its new smartphones and its virtual-reality headsets. It's likely the company was waiting to see what Apple would introduce with its smartwatch before proceeding with its newest device.

What changes smartwatches from "nice-to-have" to "must-have" devices is what users can actually do with them. The real trick is convincing app developers to invest in creating programs for smartwatches that will show off what you can actually do with it. Apple's iPad tablet and iPhone became popular with the help of third-party software developers, who collectively have created more than a million apps for those mobile devices.

Samsung worked with developers on apps before its wearables launched in the past, but this is the first time it has opened up its SDK to a broader group before even announcing the device. The company has long partnered with Google for its smartphone and tablet operating system, but it has shifted its wearables to its own homegrown software, Tizen.

While Samsung has made a push to get developers interested in Tizen, including by hosting developer conferences and helping fund development, interest in the software has remained low. Some developers, such as Citi and JetBlue, have opted to make Apple Watch apps first before venturing into Tizen or Android Wear.

"The majority of our users are Apple users," said Maryssa Miller, director of digital commerce at JetBlue. And "Apple has been the leader on the customer experience side of things."

The Apple Watch App Store went live Thursday with more than 3,000 apps, and app store analytics company appFigures believes the Apple Watch store will grow to about 100,000 apps within the next year.

"The launch of the Watch App Store will create a rush for developers that's very similar to the original [iPhone] gold rush of 2008," appFigures CEO Ariel Michaeli said in a blog post. Apple in January said App Store developers had earned $25 billion from the sale of apps and games since the store launched.

Samsung said there are about 3,000 app currently available for its Gear devices.

"We aim to enrich the smart wearable experiences through broader collaboration with app partners and developers," the company told CNET.

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Wi-Fi client vulnerability could expose Android, Linux, BSD, other systems to attacks

A serious flaw in a component that's used to authenticate clients on Wi-Fi networks could expose Android, Linux, BSD, and possibly Windows and Mac OS X systems to attacks.

The vulnerability is in wpa_supplicant, an open-source software implementation of the IEEE 802.11i specifications for wireless clients.

The component is cross-platform and is used to control WPA and WPA2 wireless connections on Android, Linux and BSD systems. It can also be used by some third-party wireless software on Mac OS X and Windows, but these operating systems have their own built-in supplicant implementations that are used by default.

The vulnerability stems from how wpa_supplicant parses SSID (Service Set Identifier) information from wireless network frames when the CONFIG_P2P option is enabled. If exploited, the flaw can allow attackers to crash the client (denial of service), read contents from the process's memory or inject arbitrary data into its memory, which could result in arbitrary code execution.

All versions of wpa_supplicant from 1.0 to 2.4 are vulnerable. A patch was released Wednesday and operating systems are expected to update their packages.

"The vulnerability is easiest to exploit while the device has started an active P2P operation (e.g., has ongoing P2P_FIND or P2P_LISTEN control interface command in progress)," said Jouni Malinen, maintainer of wpa_supplicant, in an advisory posted on the OSS security mailing list. "However, it may be possible, though significantly more difficult, to trigger this even without any active P2P operation in progress."

The vulnerability was discovered by the hardware research group at Alibaba and was reported to the wpa_supplicant development team by the Google security team.

Users should install the security updates for wpa_supplicant when they become available for their operating systems. A mitigation in the meantime is to disable P2P for each wireless interface in the wpa_supplicant configuration file by following instructions in the advisory.

Unfortunately, wpa_supplicant is also used on embedded devices, for which patches are not as frequently released or easy to install.

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Apple Software Bug Lets Hackers Crash iPhones, Researchers Say

Apple Inc.’s iOS operating system contains a bug that lets attackers crash iPhones and iPads within range of a wireless hotspot, security company Skycure Ltd. said.

The devices’ applications and even the entire base software shut down when served with manipulated SSL encryption certificates, Skycure Chief Executive Officer Adi Sharabani said in a phone interview. If hackers manage to force devices within range onto their own wireless network, they can effectively create a “no iOS zone,” according to Tel Aviv, Israel-based Skycure.

“When their programs crash, people tend to put this off as a quality issue,” Sharabani said. “But it can be a serious vulnerability.”

With Apple keeping tight control over its operating system’s code and the applications that may run on it, attackers targeting mobile devices have concentrated on Google Inc.’s Android platform, which gives them more leeway for manipulation. The SSL bug shows that attackers occasionally get the opportunity to damage Apple customers as well.

An Apple representative in London declined to comment. Skycure said it isn’t aware of anyone having exploited the security loophole.

The latest iOS version, the 8.3 released this month, fixed some of the vulnerabilities, while others could still be reproduced, Sharabani said. He declined to provide details so as to not give hackers instructions.

Reboot Cycles

Skycure, founded in 2012 by Sharabani and Chief Technology Officer Yair Amit, specializes in software that protects mobile devices from attacks via the airwaves. The company, which received $8 million last month from investors including Shasta Ventures, discovered in 2013 how hackers can force mobile users onto malicious wireless networks by using privileges normally reserved for mobile carriers.

Skycure researchers found the iOS bug while experimenting with various ways to connect devices to a network. When they brought in a new router and changed the wireless configuration, programs on devices running Apple software began crashing.

Hackers controlling the network that the device is on can also control the certificates that are normally being used to securely transfer data, and use them for a so-called “denial of service” attack. Since SSL encryption is used by iOS and almost all applications available in the app store, the vulnerability concerns a wide range of users.

In the worst case, the devices can be forced into reboot cycles that can only be broken if the customer moves out of range of the malicious network, Sharabani said. Users should make sure to upgrade their operating system soon, and be wary of using public local wireless networks, Skycure said.

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Apple Inc. (AAPL) Q2 Earnings Preview: What To Expect

Stifel says its supplier checks suggest that the iPhone sales have been "more robust than previously anticipated.

Apple Inc. (NASDAQ:AAPL) is scheduled to release its fiscal second-quarter results at 5:00 PM ET on Monday, April 27. Investor sentiment has been mixed going into earnings. While research firms like Canaccord Genuity, UBS AG (NYSE:UBS) and Canton Fitzgerald have been bullish on the stock, Societe Generale downgraded Apple Inc. (NASDAQ:AAPL) earlier this month. But Stifel analysts Aaron Rakers and Sanjiv Wadhwani said in a research note Wednesday that the iPhone maker is going to crush the consensus estimates.

Stifel raises iPhone sales estimate

Stifel has increased its iPhone sales estimate for the fiscal second-quarter from 53.6 million to 59.6 million units, way above the Wall Street estimate of 54.9 million units. Rakers and Wadhwani expect the average selling price for iPhones to stand at $670. Their revised estimate reflects the strong momentum in China, driven by 4G adoption.

Stifel has increased its Q2 revenue estimate from $54.4 billion to $58.4 billion. The research firm also revised its EPS estimate upward from $2.06 to $2.26. By comparison, the Wall Street consensus calls for $55.75 billion in sales and $2.14 per share in earnings. For full-year 2015, Stifel forecasts $231.2 billion in revenue and $8.81 a share in earnings. Stifel has a Buy rating on Apple Inc. (NASDAQ:AAPL stock with a price objective of $150.

The research firm said its supplier checks indicate that the iPhone sales have been “more robust than previously anticipated.” The iPhone 6 and 6 Plus sold briskly in China. In the first quarter of 2015, Apple Inc. (NASDAQ:AAPL) reported 97% YoY rise in iPhone shipments for BRIC countries. Rakers and Wadhwani said they would also be interesting in sales Brazil and India.

Currency headwinds may affect Apple’s (AAPL) margins

The Cupertino company has guided gross margins of 38.5% to 39.5%. But it is likely to face forex impact of up to 100 basis points as the dollar continues to strengthen against other currencies. The recently released Apple Watch will not be included in March quarter results. But investors will be looking for management commentary on the initial demand for the Watch.

Stifel said it expected Apple Inc. (NASDAQ:AAPL) to ship 3.3 million units of Apple Watch in the first quarter of its release (Q3, 2015) with an average selling price of $475. Apple Watch sales are expected to top 19.6 million units in the first 12 months.

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Acer unveils smartphone with huge battery and new line of wearables

After it got done announcing a small army of inexpensive Windows convertibles and laptops today, Acer turned its focus to smartphones. The company unveiled a brand new Android phablet, the Liquid X2, and it contains one of the largest batteries we've yet seen in a phone. Rated at 4000 mAh, the Liquid X2's battery is larger than the Droid Turbo's. It's bigger than the Note 4's battery, as well. Even when it's powering a 5.5-inch display (Acer hasn't specified the resolution), the enormous capacity of this battery should allow you to skip the charger and keep running through another day or two of use. Lenovo recently announced its own smartphone with a 4000 mAh battery for the Russian market, and we don't yet know whether the Liquid X2 is US bound.

ACER LIQUID X2 HANDS-ON PHOTOS

The phone includes a 64-bit octa-core processor, according to Acer. And it supports three SIM cards; while that's not a new thing for Acer, it's still rare to see among the company's competitors and should make this phablet ideal for travelers and people who have to clearly separate work from their personal lives and some other, third thing. Acer's also following HTC's lead and putting the same camera on both the front and back of this phone; a 13-megapixel f/1.8 sensor will handle rear camera and selfie duties. And finally, the company showed off a Quick Touch flip case — the same sort of thing you see on Samsung phones — that offers fast access to music controls, the weather, time, and other features without fully flipping the case open.

ACER LIQUID LEAP HANDS-ON PHOTOS

Acer is also releasing a trio of new fitness trackers, and each represents a step up in design compared to the Leap wearable that it produced last year. The Liquid Leap Fit features a 1-inch touchscreen, waterproof design, optical heart rate sensor, and gold-plated sensors that can read galvanic skin response — just like Jawbone's Up3 wristband. Using a combination of all those, the Leap Fit will provide users with a "stress index."

The bands are also interchangeable. Acer's new flagship wearable is called the Liquid Leap Curve and, as the name implies, includes a curved touchscreen plus all the same hardware as the Fit. It basically looks like a Samsung Gear Fit clone, but you can swap the bands out to give it a more unique style. The most basic of the new wearables, the Liquid Leap Active, is essentially a refresh of last year's hardware. All three are compatible with Android, iOS, and Windows. Like the Liquid X2, pricing and availability details here remain an open question.

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Twitter 'Highlights' Helps Android Users Catch Up on Tweets

Do you suffer from FOMO when it comes to Twitter? If so, there's a new solution that could help quell your anxiety over missing something big when you can't check your timeline.

Dubbed Highlights, the new service is a simple summary of "best tweets for you," delivered right to your phone every day via push notification. Unveiled on Thursday, the service is just for English-speaking Android users at this time.

"We want to help you get the most out of Twitter, no matter how much time you spend with it," Twitter's Gordon Luk, wrote in a blog post Thursday. "While your home timeline is a great place to browse through and engage with Tweets, we know it can be challenging to find the time to get through everything."

Twitter said the new service is aimed at helping you quickly catch up on the best tweets that are most relevant to you. You'll see top tweets from people you follow, trending stories, and more.

To create your Highlights, Twitter looks at things like the accounts and conversations that are popular among people you follow, tweets from people you're closely tied to, topics and events that are trending in your area or within your network, and people that are popular or trending among those you follow.

If you opt to receive Highlights, you'll get a notification on your phone twice daily letting you know your summary is ready. When you open the notification, you'll go directly to the Twitter app, where your Highlights will be displayed in a clean, new interface.

You can view an item by swiping from right to left. Then, when you have reached the last Highlight, another swipe will put you right back to your home timeline.

To enable Highlights, head over to your Settings, select your account handle, go to the mobile notifications menu, and check the Highlights box.

"We're refining the experience on Android first and will consider bringing Highlights to other platforms in the future," Luk wrote.

In January, Twitter rolled out a "while you were away" feature that put several older but notable tweets at the top of iOS timelines. It's supposed to arrive on Android and the Web soon.

A recent mobile app update, however, ditched the "Discovery" option and put trending topics in the app's search section.

Highlights, meanwhile, comes after Twitter earlier this week opened up the direct message feature so you can accept messages from anyone, even if you don't follow them. The microblogging service also recently beefed up its violent threats policy to crack down on abusers. For more on that, check out Twitter's New DM Function Pits Brands vs. Harassers.

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Microsoft's Surface sales are on the upswing once again

After a very slow start, Microsoft's Surface finally seems to be hitting its stride. The company made $713 million from Surface sales last quarter, a 44 percent jump over last year, according to its latest earnings report. And yes, it's attributing much of that to the Surface Pro 3, which also saw strong sales during the previous quarter. While any bump is good, it's easy for Microsoft to report revenue growth when it's starting from a low point.

Apple sold around $9 billion worth of iPads during the last quarter, for comparison. It's also worth noting that the company's third quarter doesn't include sales of the new Surface 3, which doesn't ship until next month. It'll be interesting to see if that model ends up helping its Pro sibling come next quarter. Before the Surface Pro 3, Microsoft's Surface sales weren't exactly pretty -- at one point it had to write off nearly $900 million in unsold units.

During the company's earnings call today, Microsoft CEO Satya Nadella noted that 64 percent of Surface Pro 3 users also use One Note. That's not surprising, since that device's stylus integrates directly into OneNote. Nadella pointed out that the Surface Pro 3's OneNote penetration is also nine times that of any other touch notebook.

Microsoft's Devices and Consumer group, which the Surface is a part of, saw an overall revenue bump of 8 percent compared to last year. It was also helped by strong Office 365 growth (up 35 percent, reaching 12.4 million subscriptions), Bing advertising gains (21 percent), and a 30 percent bump in Xbox Live usage. Oh yah, and it sold 8.6 million Lumia phones, down from 10.5 million from the holiday quarter. It was a different story for Xbox revenues, which fell 24 percent from last year, mostly due to price drops for the Xbox One.

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Microsoft results show company's shift, but is it enough?

SAN FRANCISCO

Microsoft is changing its business. The question has been whether it's changing fast enough.

The tech giant showed some progress Thursday, reporting better-than-expected quarterly earnings and more growth in its relatively new cloud computing segment. CEO Satya Nadella has been investing in new services and redesigning Microsoft's most popular programs for smartphones and other mobile gadgets.

But a continuing slump in the PC industry has caused Microsoft's stock to tumble in recent months, marking the end of a honeymoon period in which shares rose steadily after Nadella took the reins in February 2014. Microsoft's latest report shows another decline in profit and in revenue from the company's flagship Windows software for personal computers.

Wall Street analysts say 2015 is the year when Nadella needs to show his strategy is making a difference.

"He needs to not just talk the talk, but walk the walk," said FBR Capital Markets analyst Daniel Ives, who's been a fan of Nadella's moves to overhaul a company best known for its personal computer software.

Microsoft's financial results underscore the importance of those efforts. Revenue from cloud computing has grown rapidly, as more businesses are paying to use software housed in Microsoft's data centers. The Redmond, Washington-based company says it's on track to log more than $6 billion in cloud sales this year.

But the numbers show Microsoft still relies heavily on selling traditional software, which contributed the largest part of its $21.73 billion in sales for the quarter. The company saw a 26 percent drop in Windows licensing revenue for consumer PCs and a 19 percent drop in licensing for business PCs. And many analysts believe that trend will continue.

Worldwide demand for PCs are expected to fall in 2015, for the fourth consecutive year, according to International Data Corp. Microsoft blamed weak demand, along with the effects of a strong dollar overseas, when it issued a forecast in January for lower revenue than analysts had expected. That sent Microsoft's stock tumbling more than 10 percent in one day.

After peaking at $50.05 last November, Microsoft Corp. shares have traded below $43 recently. The stock closed Thursday at $43.34 and rose more than 3 percent in late trading after the earnings report.

Microsoft is hoping for a boost later this year, when it releases a redesigned version of Windows with new features for PCs and mobile devices. And Nadella has taken other steps to get Microsoft's software into the hands of consumers who prefer smartphones and tablets.

That includes offering Windows at steep discounts for manufacturers to use in lower-priced tablets and laptops. This may hurt revenue near term, but Bernstein Research analyst Mark Moerdler says it should pay off eventually by getting more people to use Microsoft products like the Bing search engine and Office 365 programs for documents, spreadsheets and mail.

Similarly, Microsoft has released Office apps for Apple and Android smartphones, which are far more popular today than Windows-based phones. While the apps are free for consumers, Microsoft hopes to gain revenue by charging for extra services and versions for business users.

That revenue may come, said Forrester analyst Ted Schadler. But he cautioned, "this kind of structural transition takes a long time."

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