HP exec paints bleak picture of Microsoft, Intel future

The future of computing won't favor Microsoft and Intel. That's the opinion of an HP executive speaking at a conference in Barcelona.

'Other than Microsoft, there's no one else who charges for an operating system,' said Sridhar Solur, HP's director of Next Gen Computing and Cloud Services.

(Credit: Hewlett-Packard)

A Hewlett-Packard executive didn't pull punches when talking about a personal computing future that has less and less to do with Microsoft and Intel.

Sridhar Solur, director of Next Gen Computing and Cloud Services at HP, was speaking during a session Thursday (that was streamed live) at HP's Discover conference in Barcelona.

The session was titled "Internet of Things and wearables. Driving the next phase of growth in computing." According to Solur:

In 2012 there were 300 million-plus PCs that were shipped. The big players were Intel and Microsoft. Think about the business models of those companies [in] 2012. The year now is 2014. The total number of mobile devices shipped is 3 billion. That's a magnitude higher.

[And] look at the major players. You have ARM. Look at the business model difference between Intel and ARM. Look at the operating systems. In today's world, other than Microsoft there's no one else who charges for an operating system. It's vastly different.

The next wave of computing [will be in] 2016. You're talking about 30 billion connected devices. Look at who are the players. This is a total greenfield opportunity.

Both Microsoft and Intel are racing to address the brave new world of mobile computing.

But those two companies are pitted against an army of ARM ecosystem companies that include Qualcomm, Nvidia, Samsung, Google, and Apple.Microsoft is rumored to be considering free versions of Windows Phone and RT, and Intel is now focused intently on mobile chips like its Quark, Bay Trail, and Merrifield processors.

And as Solur pointed out, the Internet of Things and wearables could tilt the future in favor of the ARM ecosystem.

Japan designer praises iPhone 5S beauty -- inside and out

A Nikkei article compares the quality and refinement of the iPhone 5S design to Toyota's system of Kaizen.

Small refinements in the iPhone 5S point to Apple's painstaking attention to detail, according to a Japanese design expert.

(Credit: Apple)

A University of Tokyo professor and industrial designer had high praise for the iPhone 5S' quality and attention to detail.

Shunji Yamanaka, founder and president of Leading Edge Design and associate professor at University of Tokyo, said the iPhone 5S has been improved over the iPhone 5 and in small -- and in most cases imperceptible -- ways that point to Apple's meticulous approach to design.

He was cited as part of an article Nikkei published Thursday (subscription required), titled "iPhone 5S' beauty is in the details."

That practice espouses continuous improvements in quality and was inspired, in part, by W. Edwards Deming, an American statistician who visited Japan in the early 1950s and conducted training in process control and quality.The design improvements for the 5S can be compared to the kaizen system of manufacturing improvement, often associated with Toyota, according to the article.

Some of the salient iPhone 5S improvements that were demonstrated in the Nikkei article include: 

• Button tolerances improved: The gaps around the buttons on iPhone 5 have been "almost eliminated" on the iPhone 5S. The article focuses, for example, on the on-off button at the top of the iPhone as one example. 
• Speaker grill: Fine, intricate improvements to the design of the speaker grill. 
• Circuit board: The size of the 5S' main circuit board has been reduced compared with the 5's. By making the effort to shrink the circuit board up to 10 percent, Apple has freed up space for the battery. 
• Coils: Even something inside the iPhone as small as the coils has been improved -- the arrangement of the coils -- showing that Apple wants the iPhone 5S to "look beautiful even inside the phone." 
• Anodized aluminum edges: The way the aluminum edges that rim the iPhone 5S have been machined has changed, resulting in almost-imperceptible but significant improvements. 
• Apple logo: The Apple logo mark has been refined in ways, again, that are real but won't be noticed by most people. 

This attention to detail and quality is likely one of the reasons the iPhone and iPad have been such big hits in Japan -- and also highlights a shift back to the US in quality control for high-profile products like the iPhone.

European banking officials: Bitcoin may not be your friend

The European Banking Authority issued a stern warning on the value of buying and trading Bitcoin.

In a statement on Friday, the EBA said that as Bitcoin's popularity rises, it comes with "a series of risks deriving from buying, holding, or trading virtual currencies." The issue, the EBA said, is that virtual currencies like Bitcoin are not regulated by the government, putting any investments into them at risk.

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Bitcoin has become a hotbed of controversy over the last few years. Earlier this year, it came under fire after the FBI took down the illegal online marketplace Silk Road, which relied in part on Bitcoins to conceal the identities of buyers and sellers and trade currency. More recently, however, Bitcoin has been lauded by some lawmakers in the US as a perfectly viable currency.

Still, without regulation, the EBA said, risks remain.

"In particular, consumers should be aware that exchange platforms tend to be unregulated and are not banks that hold their virtual currency as a deposit," the organization said on Friday. "Currently, no specific regulatory protections exist in the EU that would protect consumers from financial losses if a platform that exchanges or holds virtual currencies fails or goes out of business."

The EBA stopped short of saying that consumers should not invest in virtual currencies like Bitcoin, but said that they should "not use 'real' money that they cannot afford to lose."

The EBA's warning comes just a week after China said that it will not allow for the exchange of Bitcoins through its banks, but would allow its citizens to exchange Bitcoins freely in the country.

Adobe stock hits all-time high on subscription shift

Shifting from the Creative Suite license business to Creative Cloud subscriptions made plenty of customers angry, but it made plenty of investors happy

There now are 1.439 million Adobe Creative Cloud subscribers.

(Credit: Adobe Systems)

Adobe Systems' transition to software subscriptions will be essentially complete by this time next year -- and investors are happy about it.

The company's stock rose $5.36, or 10 percent, to $59.35 in trading early Friday after the company reported financial results for its fourth fiscal quarter on Thursday.

"The company continued to beat its goals and consensus' expectations for net subscriber additions and annualized recurring revenue (ARR), the metrics that investors are using to measure the progress of the transition from a perpetual license to subscription revenue model," FBR analyst Samad Samana said in a research note Friday.

Adobe said 1.44 million people now are getting Photoshop, Illustrator, and the company's other creative design software under the Creative Cloud subscription program. That beat the company's year-end goal for the program, 1.25 million. Adobe also said it expects to have 3 million subscribers a year from now and to surpass another official goal, 4 million subscribers by two years from now.

Plenty of customers are angry about subscriptions in particular the idea that their software will stop working if they stop paying their $50 per month for the full Creative Cloud subscription. That's not a problem for people who buy perpetual licenses to software, the sales method that Adobe is phasing out.

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But customers are making the shift, either because they like the frequent modest updates to the software, pricing that can be cheaper for heavy users who upgrade frequently, the lack of a major up-front payment -- or the fact that Adobe has stopped updating its older Creative Suite 6 product. Despite complaints, Adobe said it's not turning back from the subscription plan.

The transition to subscriptions and away from selling Creative Suite software through traditional perpetual licenses is going faster than Adobe expected. "We now expect fiscal year 2014 will be the last year of any meaningful Creative perpetual revenue," Chief Financial Officer Mark Garrett said on the company's conference call Thursday.

The company reported net income of $65.3 million, or 13 cents per share, on revenue of $1.04 billion for the three-month period ended November 29. For its first quarter of fiscal 2014, it projects revenue between $950 million and $1 billion.

The quicker transition to subscriptions has a shorter-term downside: because customers pay smaller fees steadily over a long period of time instead of a large sum at the beginning of a purchase, revenues drop when the subscriptions begin. That's true of Adobe, and it's complicated by the fact that it offered promotions to encourage people to make the change.

For example, earlier Creative Suite customers can spend $30 a month instead of $50 for their first year for the full CC subscription to all Adobe's software, and the company also has a limited-term $10-per-month Photoshop Photography Program option that gives access to Photoshop, Lightroom, cloud storage, and access to the Behance professional network.

But as promotions expire, Adobe expects the figure to increase. For its creative software, the annually recurring revenue (ARR) increased $219 million from the third quarter to the fourth quarter to reach $768 million. Adding the company's digital publishing offerings brings Adobe's total digital digital media ARR to $1.85 billion.

The company raised its compound annual growth rate forecast for digital media from 15 percent to 20 percent for fiscal 2014 to 2016.

"2013 was an outstanding year," Adobe Chief Executive Shantanu Narayen said in a statement.

So, although the subscription opponents dislike Adobe's change, they'd better not expect Adobe to change its behavior

iPad Mini availability at Verizon, AT&T improves, supply eases

Supply of the iPad Mini Retina appears to be easing significantly, as cellular models become more readily available at Verizon and AT&T

The iPad Mini Retina is now trickling into carrier stores and availability at Apple's online store is now 1-3 days.

(Credit: Sarah Tew / CBS Interactive)

The iPad Mini with Retina display is finally trickling into Verizon and AT&T stores, while order lead times are dwindling to days, as supply eases overall.

AT&T is now showing select cellular models available at some stores across the country for the first time.

And Verizon is now showing a shipping date of Saturday. A small number of stores also are starting to receive select cellular models for the first time.

Apple's online store is also showing 1-3 days available-to-ship. A week ago this was 5-7 days.This is in contrast to last Friday when the Mini Retina was listed as back-ordered for at least three weeks at AT&T and 10 days at Verizon (which had been continuously pushing out its back-order dates).

The availability of the Mini Retina cellular models contrasts with the iPad Air sales launch. When Apple started selling the iPad Air on November 1, it was available at Verizon, AT&T, and other carriers on the same day.

The fact the Mini Retina is now more readily available at Verizon and AT&T may be an indication that Apple is finally easing its grip on supply. The new Mini launched quietly about a month ago, on November 12.

Before the launch, Apple CEO Tim Cook had expressed caution about supply of the Mini Retina during Apple's fourth-quarter earnings conference call -- as have analysts.

"Even though they were able to ramp up more quickly than anticipated in November and December, it still takes awhile to get those products out," Rhoda Alexander, director of Tabletand Monitor Research at IHS iSuppli, told CNET last week.

The new iPad Mini sports a 2,048x1,536-resolution display that boasts 326 pixels per inch -- one of the highest of any tablet to date. Analysts believe the display has been a challenge to make in the large volumes that Apple demands.

NSA agents are posing as Santa Claus, sings ACLU

In a Christmas YouTube video, there to make you laugh and quake, the ACLU gives a traditional Christmas song new lyrics and meaning

One woman fights back against a snooping NSAnta.

(Credit: ACLU/YouTube screenshot by Chris Matyszczyk/CNET)

It's been a year in which the alleged needs of security have made many people feel more insecure.

So now as we all prepare to gather round with our families, the American Civil Liberties Union would like to remind us that Santa Claus does exist, but he might be an NSA agent.

In a YouTube video made, I imagine, to make you titter and quiver, we hear a famous song that's been infiltrated.

"Santa Claus Is Coming To Town" has become "The NSA Is Coming To Town."

As you're listening to these words of foreboding, we see that NSA agents are dressing up as secret Santas so that they can follow your every move.Some might be moved by lines such as "You're making a list, they're checking it twice" and "they see while you are sleeping, they hear while you're awake."

We see the NSAntas marauding around, photographing people's cell phones with their own cell phones, and generally being intrusive to the point of insanity.

Your insanity, that is.

Some people fight back. Some are merely bemused by this overactivity, while they're trying to focus on what's important at Christmas: buying things.

"Help us end the NSA's unlawful spying programs," is the message at the end of this cheery piece.

How might you do that? Kidnap the secret Santas' reindeer?

Sprint is preparing bid for T-Mobile, WSJ says

The deal would combine the No. 3 and No. 4 carriers in the nation, and could be worth more than $20 billion.

The Sprint innovation center in Burlingame, Calif.

(Credit: Lynn La/CNET)

Sprint may try its luck in a potential merger with T-Mobile next year, according to The Wall Street Journal.

The Journal, citing unnamed sources, said Sprint is working on a possible bid for T-Mobile for the first half of next year. The deal could be worth more than $20 billion.

A deal would significantly reshape the wireless landscape. Sprint, the third largest carrier in the US, would combine with T-Mobile, which is the fourth and smallest national carrier. The idea is that the combined company would be better-suited to compete against Verizon Wireless and AT&T, which are both far larger than its two smaller competitors.

But a deal will also test the mettle of regulators, who have in the past said they preferred four competitors in the wireless market. AT&T was forced to scrap its planned takeover of T-Mobile in 2011 after regulators signaled they would not approve the deal. It ended up being a costly move with AT&T paying $3 billion to T-Mobile parent Deutsche Telekom and providing $1 billion worth of spectrum -- which T-Mobile has used to build its LTE network.

The Journal does note that Sprint hasn't yet decided on whether it would move ahead with the bid.

Beyond the regulatory hurdles, Sprint and T-Mobile operate on different wireless technologies, although they are slowly converging with the move to LTE. T-Mobile's 3G technology is based on GSM, while Sprint's is based on CDMA. Sprint, however, is upgrading its network to handle different flavors of technology and spectrum.

T-Mobile CEO John Legere.

(Credit: Lori Grunin/CNET)

Both companies have had a busy year. Over the last few months, Sprint closed its acquisition of Clearwire, shut down its Nextel network, best known for its walkie-talkie feature, and all while wrapping up its own takeover by Japanese carrier SoftBank. More recently, it unveiled Sprint Spark, its super-fast LTE service.

T-Mobile, meanwhile, has been solidly on the road to recovery with its Uncarrier campaign, which shed contracts, introduced an early upgrade program, did away with international data roaming charges, and provided free data to tablet customers. In doing so, the carrier has seen growth as customers flocked back to the carrier -- a reversal from recent years.

T-Mobile CEO John Legere told CNET in July that he was open to deals with companies such as Sprint and Dish Network, and has indeed had experience running a business and selling it off, having successfully done so with Global Crossing.

A Sprint representative declined to comment. CNET contacted T-Mobile for comment, and we'll update the story when they respond