Business Tech

If the iPhone didn't finish off Windows Mobile in the smartphone market, the Motorola Droid may.

Windows Mobile is losing the last vestiges of its mojo--if it really had any to begin with--as the Droid and other phones based on the Android 2.0 operating system push the buzz meter needle into the red zone. Many in the media--which can play a big role in steering users to one technology platform or another--sense that Windows Mobile has now been relegated resolutely to has-been status.

Let's do a quick canvas of what some in the press are saying now that we're at the start of the Droid era. A post on SFGate.com (the Web site of the San Francisco Chronicle) is, like other commentary out there, clearly dismissive of Windows Mobile. "Curiously, Microsoft is nowhere to be seen in this battle royal," the author states, referring to the iPhone and Android.

And there's this more damning comment from a blog at SeattlePI.com. "Rarely mentioned, however, is another player in the mobile OS market--Microsoft. Why not? Because not many people in the smartphone world seem to really give a hoot about Windows Mobile anymore."

The litany of like articles is long. This post on PC World asks: "Has Microsoft Placed Its Last Mobile Bet?" The article cites research from Canalys showing Windows Mobile slipping from 13.9 percent of the worldwide smartphone market in 2002 to 9 percent in the second quarter of 2009.

The numbers are even less favorable in an accounting by ad service Admob, which compiles data on which operating systems are in use on mobile devices that access online ads. In August, according to AdMob, Windows Mobile had only a 4 percent share of the mobile OS market worldwide, down from 7 percent in February.

But getting back to my original premise of no mobile mojo for Windows. The fact is that consumers don't care about Windows on smartphones. In other words, while Windows seems to be a prerequisite for many consumers when buying a PC, it just doesn't come into play in a big way in a smartphone purchase.

This will have ramifications beyond Microsoft of course. Companies like Toshiba (and its attractive TG01 smartphone) will probably not be as successful on Windows Mobile as they would (will) be on Android 2.0. Or, at the very least, will not get the necessary buzz.

Then there's the Intel factor. Intel also wants to be a player, eventually, in the smartphone space. If it is indeed able to beat back Texas Instruments (whose chip is used in the Droid), Samsung (iPhone), Qualcomm (BlackBerry), and Marvell, it probably won't do it by sticking to the tried-and-true "WinTel" combination that's been so outrageously successful in the PC space.

And Intel is chasing a fast-moving target. TI, and all the other ARM-based chip suppliers cited above, are slated to bring out dual-core designs that can hit speeds as high as 2GHz (think next-generation tablets and media pads). In other words, they'll also be able claim the coveted speed mantle on phones, such as the Droid, where Windows Mobile is no where in sight.

So the Droid may not be the iPhone killer but rather the Windows Mobile slayer. Microsoft, of course, will always have the unassailable PC franchise. But, wait, isn't Android coming to Netbooks next year? Maybe the real battle royal for Microsoft is yet to come.

Though the Motorola Droid and Apple iPhone have different chassis, their high-octane engines are similar.

The internal similarities begin with performance: both devices are fast. The iPhone 3GS is already distinguished for its speed. And the Droid is quickly garnering similar accolades.

"The Droid makes a big leap in internal performance. Compared with its rather sluggish Android predecessors," CNET Reviews said, citing the speed at which the Droid opens applications and menus and scrolls through lists and switches display screens.

"We're really pumped to see all the industry excitement it's created," said Jeff Dougan, the OMAP 3 product marketing manager at Texas Instruments, which supplies the OMAP 3430 processor that powers the Droid. "This is the first handset that truly realizes the full potential of Android," he said, referring to Google's Android 2.0 operating system that runs on the Droid phone.

The TI processor, like the one in the iPhone, is based on an a new architecture called Cortex-A8 from U.K.-based chip design house ARM, whose wide variety of chips populate most of the world's cell phones. Dougan says most smartphones currently on the market use an older, lower-performance ARM architecture than the Cortex-A8--with the exception of the Palm Pre, which opted for the newer TI chip. The Cortex-A8 provides a "two to three times performance boost" over older architectures, according to Dougan.

Max Baron, an analyst at Microprocessor Report, says the chips in the Droid and the iPhone (see not below) are so alike that differences are more dependent on the operating systems the two chips use and how successfully each phone maker optimizes the OS. "With chips that have near-similar specs, the optimum OS and the look-and-feel of the user interface may make or break the product," Baron said.

"The caveat, however, is that even small differences in chips will surface and become important differentiators as soon as the market forces you to increase the screen size or add more pixels per screen, or execute more power-consuming applications," he added.

The raw MHz ratings on the chips are slightly different. The processor in the iPhone 3GS--which is believed to be based on the Samsung S5PC100 processor--runs at 600MHz, according to most accounts. The Motorola Droid's TI chip is rated at 550MHz though theoretically it can be run as fast as 600MHz, according to TI's Dougan.

Both phones also use PowerVR graphics from Imagination Technologies--a company that both Apple and Intel have invested in, testifying to how hot its ultramobile graphics technology is. The PowerVR SGX is renowned for its ability to process several million triangles-per-second--a key indicator of graphics chip performance--blowing away other phones and the previous version of the iPhone.

Other internal specifications are similar between the two phones, including memory capacity (either 16GB or 32GB) and communications chips that offer 3G, Wi-Fi, and Bluetooth connections.

So, internally the Droid is every bit the iPhone's equal. And future versions of TI OMAP 3 chips that may appear in upcoming Droids will be backed by formidable ecosystems, according to Baron. "Investments in application software may lean more toward the TI components," said Baron, given TI's strong support of the entire chip ecosystem, including auxiliary chips and software development tools.

Note:: Apple's and Samsung's reluctance to release information about the processor used in the iPhone 3GS has made it difficult to determine if the chip is based on the Samsung S5PC100, according to the Microprocessor Report's Baron. Many iPhone 3GS reviews and teardowns, however, state explicitly that the iPhone's processor is essentially the Samsung S5PC100 processor.

Verizon Wireless customers will soon be able to get their hands on the much-anticipated Google Android phone called the Droid.

Verizon and Motorola officially unveiled the device, which, like most smartphones of its class, will cost $199 with a two-year contract. And it will be available to consumers starting November 6.

The device offers voice-activated search that allows users to speak a query, and the Google-powered search engine delivers Web results or device-native results such as stored contacts, music, and photos. The voice search also works with the new turn-by-turn directions for Google Maps. It allows users to view geographic information, such as My Maps, Wikipedia entries, and transit lines on the map.

•  Can the Droid save Motorola?
•  MLB uses World Series to warm up Android app
•  Is the Motorola Droid ugly?
•  Google Android resource guide

More headlines

Microsoft puts its 'signature' on PCs

In its online and retail stores, Microsoft is selling computers loaded with all of its online software, including its Windows Live, Zune, and Security Essentials products.
•  Students find problems with Windows 7 upgrade
•  Windows 7 is an all-ages show
•  Results of the Windows 7 upgrade poll

Yahoo, Microsoft need more time to ink pact

Yahoo says in a regulatory filing that the companies have agreed to extend the deadline by which they will have a definitive agreement.

Former AMD chief linked to Galleon case

Hector Ruiz, the former CEO and chairman of Advanced Micro Devices, has been linked to the insider-trading case.
•  Contradictions stalk former AMD chief

Cisco to buy cloud security firm for $183 million

Cisco Systems plans to buy a Web-based security software company called ScanSafe, marking the third announced acquisition this month.
•  Cisco revs its acquisition engine

Facebook spells out updated privacy policy

After continued scrutiny from privacy advocates, Facebook has explained the difference between deleting and deactivating accounts.
•  Facebook woos developers with a road map
•  Pandora now shares with Facebook, Twitter
•  Facebook's 'share' buttons: Now with numbers
•  Bank Trojan botnet targets Facebook users
•  Fake Facebook e-mail contains Trojan

Twitter investor: 'We didn't need the money'

Although the company hasn't put a long-term revenue strategy in place, one of its backers says Twitter didn't raise $100 million last month out of a need for cash.
•  Why Hollywood needs to hear more about Twitter
•  Twitter users warned about new phishing attack
•  Kaspersky tool detects malware in Twitter links

Analyst: Chip recovery under way

Revenue from chip sales is expected to rise in the fourth quarter. Still, iSuppli adds a good dose of caution to its report.
•  Netbooks boost graphics chip shipments

Google Voice now (kinda) works with your number

Google is giving users of its Voice service a way to forward missed cell phone calls to its free voice mail service while retaining their usual cell phone number.
•  Hands-on: Google Voice's new voice mail service

White House Web site makes open-source move

The open-source Drupal package now is used to power WhiteHouse.gov. But please don't conflate open source and open governance.

Bill Gates casts self as 'impatient optimist'

In a speech on global health, Bill and Melinda Gates tout some successes but also call for more action to nearly halve the number of childhood deaths worldwide within 15 years.

Also of note

•  Apple delivers Apple TV 3.0 software
•  Yahoo planning Santa Clara campus
•  Microsoft pulls plug on 'Family Guy' special

Apple media events are usually notable for what was unveiled, but Wednesday's was more about who was there to do the unveiling.

While there were no tablet computers or an updated version of the Apple TV, and not even the long-rumored Beatles-iTunes deal, Apple's CEO Steve Jobs surprised everyone by anchoring the keynote, making it his first public appearance since October 2008.

Though technically he returned to work two months ago, it was as the host of Wednesday's Apple music event that Jobs publicly retook the reins of the company he founded. Jobs was the first person to emerge on stage to open the now-annual September iPod introduction. Appearing notably thin, he received a prolonged standing ovation from the audience, much of it composed of members of the media, but also a range of guests including app developers, entertainers, and music industry types.

"I'm very happy to be here today with you all," he said. "As you may know, I had a liver transplant. So I have the liver of a mid-20s person who died in a car crash, and was generous enough to donate their organs. And I wouldn't be here without such generosity."

Apple announced the release of OS 3.1, which will be a free update to both iPhone and iPod Touch owners, as well as a new version of iTunes, which offers iPhone and iPod Touch users a way to better organize applications they have added to the device.
• iTunes 9 refines still-clunky buying experience
• New iTunes LP format is live
• iPhone 3.1 brings Genius changes, ringtones
• iPhone 3.1 firmware reversing iPhone jailbreaks
• Facebook, Twitter integration comes to iTunes

With the popular Flip Video camera squarely in its sights, Apple introduced an updated version of the iPod Nano that sports a built-in video camera and microphone located on the lower left-hand side. It also features a slightly larger 2.2-inch display, up from 2 inches. Like the Flip, the Nano is supposed to have easy video uploading right to YouTube.
• Full coverage: Apple iPod

More headlines

The Cliq: Motorola's first Android phone

For all the features it packs, the Cliq isn't so different from other smartphones. Will its Motoblur service click with the social network set?
• Minute by minute with Motorola
• iPhone users aren't the only ones to get cool apps

Palm thinks small with new Pixi smartphone

Hoping to capitalize on the popularity of its Pre smartphone, Palm unveils a smaller, cheaper smartphone called Pixi.
• Sprint offers unlimited calling to any cell phone
• D'oh! Sprint pulls $99 Palm Pre promo after error

Google planning micropayments for newspapers

Is it an olive branch for the beleaguered (and Google-bashing) publishing industry, a move to encroach upon Facebook's turf in the micropayment wars, or a bit of both?
• Recurring problems with Google Checkout

Google offers rivals a place in e-books program

The search giant offers competitors an ability to resell e-books that Google alone could get rights to. But Amazon spurns the offer.

Facebook Lite is here. Verdict: Better

New slimmed-down social site is faster, easier, stronger, cleaner. Among other things, it pushes those noisy old-school Facebook applications off a cliff.
• Facebook 'status tagging' live
• Facebook open-sources real-time FriendFeed facet

Also of note
• Microsoft issues critical Windows patches
• Comcast to offer 100 Mbps service to businesses
• Phones at Burning Man: Can you hear me now?

Amid markedly lower sales and sluggish demand for its cell phones, Motorola saw a dramatic boost in earnings for the second quarter.

The company on Thursday reported net profit of $26 million, or 1 cent a share, for the quarter ended July 4, compared with $4 million for 2008's second quarter.

The jump in earnings surprised analysts, who had expected a loss of 4 cents a share, and Motorola itself, which had forecast a loss of 3 cents to 5 cents per share.

Quarterly sales fell to $5.5 billion, a drop of 32 percent from $8.1 billion a year ago. Analysts had been eyeing sales of $5.6 billion.

Ih the coming months, Motorola is hoping to make a dent in the smartphone market. "We have agreements in place with carriers and remain on track to bring our new smartphone devices to market for the holiday selling season," Sanjay Jha, co-CEO of Motorola and CEO of Mobile Devices, said in a statement. "We are also excited about our 2010 portfolio and are pleased with the customer feedback."

ZDNet's Larry Dignan noted the company's expectation of good results from tapping Google's Android software, which, Jha said, "will get us back in the game in smartphones."

"We will have two Android devices (for the holidays in the U.S.)," said Jha, adding that deals are already in place with two major carriers with more to follow. "We also have plans for more devices in the first quarter of 2010."

Facing a competitive cell phone market and the lack of exciting new products, the company has been struggling over the past couple of years. Motorola's popular Razr was unveiled in 2004. Since then, the company has failed to come up with a device hot enough to compete effectively with smartphones from companies such as iPhone maker Apple.

During the second quarter, Motorola said it sold 14.8 million mobile phones, up slightly from 14.7 million in the first quarter but down from the 28 million units it sold a year earlier. Second-quarter sales for the mobile device division plummeted 45 percent to $1.8 billion.

To stay afloat, the company has been on a cost-cutting frenzy since last year, which contributed to the quarterly earnings gain.

In December, Motorola said it would trim compensation packages for all employees. Then in January, it announced staff layoffs of 4,000, around 6 percent of its entire workforce.

For the third quarter, Motorola is expecting anywhere from a loss of 1 cent per share to a gain of 1 cent per share. "We will further improve earnings in the second half of the year," said Jha on a conference call to announce the second-quarter results.

Updated at 12:40 p.m. PST with Dell's comments and historical perspective on Apple iMac shortages due to lack of LCD flat panel displays.

LG Display, Sharp, and Chunghwa Picture Tubes agreed to plead guilty to criminal charges for participating in a liquid crystal display price-fixing conspiracy and pay $585 million in fines, the U.S. Department of Justice announced Wednesday.

The three companies worked in concert to set prices on thin-film transistor LCDs, which are used in computer monitors, notebooks, televisions, mobile phones, and various electronics, according to the antitrust unit of the Justice Department.

Apple, Dell, and Motorola were among the companies affected by the price fixing, antitrust regulators said.

"The price-fixing conspiracies affected millions of American consumers who use computers, cell phones, and numerous other household electronics every day," Thomas Barnett, assistant attorney general for the Justice Department's antitrust division, said in a statement.

The three companies, which were charged with violating the Sherman Antitrust Act, allegedly held "crystal" meetings and engaged in communications about setting prices on the TFT-LCD displays. They agreed to charge predetermined prices for the displays, issued price quotes based on those agreements, and exchanged sales information on the display panels, in order to monitor and enforce the agreement, the Justice Department said.

LG Display agreed to pay a $400 million fine, marking the second-highest antitrust fine ever imposed. The company pleaded guilty to setting prices with other unnamed suppliers for the TFT-LCD panels worldwide from September 2001 to June 2006, when the company operated under the name L.G. Philips LCD, a joint venture between LG Electronics and Philips Electronics. LG Display America was known as L.G. Philips LCD America.

Sharp, meanwhile, agreed to pay a $120 million fine and participated in the conspiracy between April 2001 and December 2006 with other unnamed suppliers. The conspiracy involved setting prices in three separate agreements for TFT-LCD panels sold to Dell, which used them in computer monitors and laptops.

And during the period ranging from the fall of 2005 to mid-2006, similar price-fixing schemes were employed in sales to Motorola, which used the panels in its popular Razr mobile phones.

Sharp's conspiracy also touched Apple from September 2005 to December 2006, in which Apple used the displays for its popular iPod music players.

Chunghwa agreed to pay a $65 million fine, for its participation in the price-fixing scheme from September 2001 through December 2006.

The Justice Department began its investigation in 2006 and notes its investigation is still on-going.

"Dell is aware of the announcement and will review its impact, but we have no comment at this time and probably will not in the near term as it's an ongoing investigation," a Dell representative said Wednesday, in an e-mail response.

Sony, a major LCD panel producer, also declined to comment.

For the LCD industry, problems began in the late 1990s when a surge in demand for notebooks and handheld devices drove up the need for LCD glass. As a result, the TFT-LCD makers built glass plants in Korea and Taiwan during 1998 through 1999.

But as those factories came online and began to pump out LCD glass, a glut took hold. And by the fall of 2000, prices on 15-inch flat panels plummeted to a point that in some cases manufacturers were having to sell their panels at $5 to $10 below cost.

Between October 2000 through August 2001, LCD makers were feeling the pain of an over supply of panels. But after August 2001, prices began to rise.

And apparently, it was no coincidence. Five months prior, Sharp had begun fixing prices on TFT-LCD panels sold to PC giant Dell and in September 2001, LG and Chunghwa also began to engage in price fixing, as well.

Analysts, at the time, predicted LCD shortages, especially in the 15-inch panel, would continue through 2002.

IDC analyst Bob O'Donnell noted at the time that while PCs tend to only go down in price over time, flat panel prices have occasionally risen. Said O'Donnell at the time:

LCD is one of the few (markets) where things have actually gone up in price.

Although Sharp admits to engaging in price fixing with Apple's iPod screens in the 2005 to 2006 period, it remains unclear whether other vendors may have engaged in a similar behavior with Apple back in 2002.

That's when Apple was hit with a component shortage of 15-inch LCD panels for its newly introduced all-in-one flat panel iMacs. As a result, Apple suffered a shortage of iMacs after introducing and touting its sleek iMac.

CNET News' Erica Ogg contributed to this report.

Research In Motion was a big loser in an otherwise positive day for tech stocks after it was the subject of a research note authored by a pessimistic financial analyst.

James Faucette of Pacific Crest Securities rained on RIM's parade with a research note Monday suggesting that October sales of RIM's BlackBerrys have been less-than-impressive, causing the stock to plunge $5.10, or 8.64 percent, to close at $53.91 on the Nasdaq stock exchange. The note also comes a day before Apple is expected to report iPhone sales of around 5 million units during the past quarter.

Motorola was up 8 percent on a report that its Android smartphone is getting closer to reality, and Time Warner was up 9 percent on news of pending layoffs at Yahoo, which could force the struggling search company into a deal with Time Warner's AOL division. Yahoo itself was down slightly, just 0.31 percent.

After the bell, Sun Microsystems warned that its first-quarter profit would be well below expectations, sending its stock down 6.6 percent in after-hours trading.

Most stocks on the CNET Tech Index were positive, with an overall increase of 4.13 percent on the day.

In the broader markets, the Nasdaq rose 58.74 points, or 3.43 percent, to 1,770.03. The Dow Jones Industrials rose 413.21 points, or 4.67 percent, to 9.265.43 while the S&P 500 rose 44.85 points, or 4.77 percent, to 985.40.