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SAN FRANCISCO - Apple Inc. is mulling a plan to upend its iTunes business by giving people unlimited free access to the music library if they’re willing to pay more for the iPod and iPhone devices they use for playing and storing the digital media, according to a report published Wednesday.

Some analysts threw cold water on the plan outlined in the Financial Times, however, saying Cupertino-based Apple would risk creating an “accounting nightmare” and alienating some artists if it started giving away songs on its iTunes online store.

Rumors have buzzed through the industry for a couple years that Apple might open iTunes for free downloads. Meanwhile, Apple’s rivals are experimenting with new ways to distribute music online — including giving it away.

The newspaper cited unnamed music industry sources in reporting that Apple is negotiating with record labels over a deal to offer a monthly music subscription for the iPhone, as well as an unlimited music bundle for both the iPod and iPhone.

The cheapest iPods — the Shuffle model — currently start at $49, and the cheapest iPhones start at $399.

The Financial Times didn’t say how much the prices of those devices would jump if the proposal were to go through. But it said the sticking point in the discussions how much Apple will pay the labels for access to their music libraries, with Apple currently offering to pay just $20 per device.

Apple did not respond to requests for comment.

Some analysts said the iTunes store is too valuable to Apple for it to give away the music in it.

“I think it’s a little far-fetched at this stage,” said Tim Bajarin, president of technology consulting firm Creative Strategies in Campbell, Calif. “The studios still want to be compensated. And the artists, especially the independent artists, still want to be compensated. I’m skeptical that carte blanche, free access to any music may be in the works.”

Only about 10 percent of Apple’s revenues come through iTunes — about $2.5 billion in 2007. But the store has been a critical tool for driving the more-lucrative iPod sales and helping musicians get paid for their work.

Apple sold $8.3 billion in iPods last year, an 8 percent increase over the year before.

The success of iTunes has helped Apple become one of the world’s biggest music retailers — it’s currently the No. 2 music retailer in the U.S. behind Wal-Mart Stores Inc.

But it’s also exposed Apple to criticism over how the company protects its content and prompted Apple to campaign for new ways to distribute music legally online.

The criticisms center on the inability to play songs bought on iTunes on rival products to the iPod, such as Microsoft Corp.’s Zune player.

To free up online music, Apple CEO Steve Jobs says the major record labels should strip protections known as Digital Rights Management, or DRM, technology, which prevents unauthorized copying, from their songs sold online. Apple, meanwhile, has refused to abandon its own copying protections.

Some of Apple’s rivals are already trying out new approaches.

Nokia Corp., the world’s largest mobile phone maker, announced a deal with Universal Music Group in December that gives buyers of certain Nokia phones unlimited free downloads of songs from the Universal catalog.

Seattle-based RealNetworks Inc. and Redmond, Wash.-based Microsoft both offer music subscriptions that cost $14.99 per month that the companies believe will appeal to customers who are more interested in discovering new music than owning old favorites.

Neil Smith, a vice president of marketing for Rhapsody, said its subscribers delve deeper into back catalogs and check out more independent artists than typical in-person music store shoppers. Subscribers also buy more MP3s than non-subscribers.

“We believe that this kind of approach, where unlimited content can flow seamlessly across different devices and media, is the best thing for the consumer and the industry,” said Microsoft spokesman Jason Reindorp. “It brings the focus back to where it should be — the music.”

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AP Technology Writer Jessica Mintz in Seattle contributed to this report.

A recent report from Digitimes suggests that Delli is working with Foxconn Group to develop Windows Mobile-based handheld devices. Neither Dell nor Foxconn responded to requests for comment.

The development of smartphones, however, seems like a logical step for Dell to expand its presence in the mobile market, said Neil Mawston, director of wireless device strategies at analysis firm Strategy Analytics.

However, Dell will need an Apple iPhone killer to really make a dent in the market, analysts said.

The Competition

Dell competitors Apple, Hewlett-Packard and Toshiba are already present in mobile computing with smartphones and PDAs (personal digital assistants), and the market is just too big for Dell to ignore, Mawston said.

The company already makes cellular laptops, and the move to smartphones isn't a big leap, Mawston said. Apple is ahead with the iPhone, and to attract consumers, Dell will need to make a splash with an attractive handset featuring the right operating system and content. A rumored announcement in support of Google's Android mobile platform never materialized at last month's Mobile World Congress in Barcelona. Dell may adopt the Microsoft Windows Mobile OS for its smartphone, which will be a good win for Microsoft, Mawston said.

Dell last year tapped former Motorola executive Ron Garriques to be the new president of Dell's global consumer division, which could suggest that Dell is working on some form of a smartphone, Mawston said. Last year, Dell CEO Michael Dell said Garriques was chosen for the job partly because he had led Motorola's PCS (personal communications services) division for Europe, the Middle East and Africa, as well as Motorola's US$28 billion handset division.

Background

The smartphone will be an effective replacement for Dell's previous Axim personal digital assistants that it killed last year, citing a declining market for pen-based PDAs. Dell's Axim product portfolio was weak, with not many devices on offer, Mawston said. The company needs a replacement for Axim, and the new smartphone could fill that void.

A new smartphone will also create a new revenue stream for Dell, and the company's move away from a direct sales model could help in sales, Mawston said.

The Possibilities

Now that Dell is selling its products through stores, it is gaining traction through relationships with retailers and carriers to distribute the smartphones, said Andrew Brown, director for wireless enterprise strategies at Strategy Analytics. Dell has a relationship with Vodafone in Europe and Verizon Wireless in the U.S. to bring third-generation wireless broadband connectivity to Dell notebooks.

However, Dell faces challenges if it decides to enter the smartphone market. Dell will need good design and technology to contend with the popular iPhone, which is setting the benchmark on smartphone design, Mawston said.

The company will also need a stronger distribution network, Brown said. Dell is a well-established brand name in the U.S. but not in Europe, where it could encounter some bumps in trying to sell a smartphone. The distribution tie-ups with companies like Tesco and Carrefour, which are established grocery retailers, could help in the sales of prepaid phones, not high-end smartphones. The company will need to tie up with established retailers like Dixon's or Carphone Warehouse to be competitive, Brown said.

San Francisco - A planned upgrade to the Eclipse software development platform, called Eclipse 4.0, is expected to feature Web enablement and less complexity.

Due in two years, Eclipse 4.0, or e4, was the subject of a presentation at the EclipseCon 2008 conference in Santa Clara, Calif. on Wednesday. It also was discussed by Mike Milinkovich, executive director of Eclipse, in an interview on Tuesday. He said e4 is not even started as a project yet. “It is theoretical at this point,” said Milinkovich.

But plans are proceeding.

“I think it's really important for the Eclipse code base to move out to the Web to get involved in that space because the world's changing,” said Mike Wilson, an Eclipse Project Management Committee member representing Platform and Incubator projects, in Wednesday's presentation.

Other improvements suggested include making it easier to write and deploy new plug-ins and extending the development of Eclipse plug-ins to other languages besides Java. “If you're not a Java programmer, you can't build plug-ins right now,” said Wilson.

More pervasive use of scripting is eyed for platform; JavaScript and ActionScript tooling are desired for e4.

Building a better desktop, making it easier to modify Eclipse, and fixing pain points also will be focuses. While the presentation showed intended directions for e4, Wilson stressed that Eclipse is open to suggestions on where the platform goes and would like to start talking to the community at large.

Ideas from the Eclipse Rich Ajax Platform, for building AJAX-enabled (Asynchronous JavaScript and XML) applications, also will be featured in e4. The Eclipse application model planned for e4 is set to feature a well-defined and documented set of services and a REST-ful (Representational State Transfer) architecture.

Presenters also stressed that the Eclipse SDK 4.0 should be able to run existing Eclipse 3.x plug-ins and provide an upgrade path to 4.0. But an audience member expressed concerns about backward compatibility.

“Do you think it's going to be the case that most existing plug-ins [will] be broken a bit or only a few plug-ins will be broken? What's that look like,” the audience member asked.

“If you've got an API-clean plug-in, it should work,” meaning plug-ins using the Eclipse API, Wilson responded.

In another Eclipse-related development, Milinkovich said the Eclipse Ganymede release train, which offers synchronized releases of 24 Eclipse projects, is due on June 25. Last year's release train was called Europa while the 2006 release was known as Callisto.

San Francisco - Dell is primed to enter the mobile-phone arena with a smartphone, but it will need an Apple iPhone killer to really make a dent in the market, analysts said.

A recent report from Digitimes suggested that Dell was working with Foxconn Group to develop Windows Mobile-based handheld devices. Neither Dell nor Foxconn responded to requests for comment.

The development of smartphones, however, seems like a logical step for Dell to expand its presence in the mobile market, said Neil Mawston, director of wireless device strategies at analysis firm Strategy Analytics.

Dell competitors Apple, Hewlett-Packard, and Toshiba are already present in mobile computing with smartphones and PDAs, and the market is just too big for Dell to ignore, Mawston said.

The company already makes cellular laptops, and the move to smartphones isn't a big leap, Mawston said. Apple is ahead with the iPhone, and to attract consumers, Dell will need to make a splash with an attractive handset featuring the right operating system and content. A rumored announcement in support of

SAN FRANCISCO - Recognizing not all banking customers want a safe deposit box, Wells Fargo & Co. plans to sell online vaults as a secure and convenient alternative for storing vital records.

When the service rolls out this summer, Wells Fargo believes it will be the first major U.S. bank to offer an Internet alternative to the safe deposit boxes that have been an industry staple for decades.

Because it can’t store jewelry, cash and many other precious assets, Wells Fargo’s online version isn’t likely to replace the traditional safe deposit box. It’s more likely to replace shoe boxes and home filing cabinets, said Jim Smith, who oversees the bank’s Internet products.

Called “vSafe,” the service is perfect for storing digital versions of birth certificates, wills, driver’s licenses, passports, family photos and other important documents, Smith said.

Customers will be able to retrieve the documents from any computing device with an Internet connection — a major advantage for frequent travelers.

Always on the lookout for new sources of service fees, Wells Fargo will charge nearly $180 per year for its biggest online safe. The planned monthly fees will be: $4.95 for 1 gigabyte of storage: $9.95 for three gigabytes; and $14.95 for six gigabytes.

Those costs could discourage many customers from using Wells Fargo’s online vault, given that several major technology companies, including household names like Google Inc. and Microsoft Corp., already offer some Internet storage space for free.

Wells Fargo hopes its 156-year history of helping protect customer assets will give it a marketing advantage among people who have been reluctant to entrust Web sites to store important information online.

All documents put in vSafe will be encrypted, using the same measures that the bank deploys to protect other Internet accounts.

San Francisco - Microsoft's much-anticipated revelations about collaborations with the Eclipse Foundation Wednesday did not include joining the open-source tools foundation. But the two organizations are working together to enable use of Eclipse technology to build Java applications for Windows Vista.

Also, Microsoft and Eclipse are collaborating on identity management via linking Eclipse's Higgins Project with Microsoft's CardSpace technology. Microsoft's efforts were detailed by Sam Ramji, Microsoft director of platform technology strategy, at the EclipseCon 2008 conference in Santa Clara, Calif.

Ramji guided the audience through a list of efforts Microsoft has made in the open-source world, such as accommodations for PHP (Hypertext Preprocessor), JBoss, and Novell's Xen hypervisor. Ramji also said Microsoft itself has 200 projects hosted on its CodePlex open-source hosting site.

Microsoft traditionally has been viewed as the anti-open-source company, but Ramji spared no detail looking to refute this notion, listing a myriad of projects undertaken over the years. “Today, we're architecting our participation in the open-source world,” said Ramji, who directs the open-source lab at Microsoft.

The Java enablement effort for Vista involves collaboration on an SWT (Standard Widget Toolkit) to work with Microsoft's WPF (Windows Presentation Foundation) technology for graphical presentation. This will enable Java to be used an authoring language to write WPF-enabled applications, Ramji said.

SWT is the graphics library used by Eclipse for portability across platforms, said Mike Milinkovich, Eclipse executive director. Eclipse is in the process of porting SWT to WPF. “Having [Microsoft's] participation is going to make it mean that we're going to be able to do a better job more quickly,” Milinkovich said. Eclipse's port means Eclipse's development platform can run as a first-class platform on Vista. “One of the things you'll be able to do is write an application in Java on Vista, and it will look as good as any application written in C#,” said Milinkovich.

The Higgins Project, meanwhile, is a framework to integrate identity, profile, and social relationship information across different sites, applications, and devices. Interoperability between Microsoft's CardSpace and Higgins will provide for reliable, interoperable identity management, Ramji said.??

Other possible collaborations also were cited. Ramji said he and Milinkovich have talked about Microsoft building a C# IDE at Eclipse. “That's a conversation Mike and I will keep [having],” he said. “Watch this space.”

Microsoft also is pondering accepting Java as a first-class citizen on the Windows platform, Ramji acknowledged. “I think there's enough interest to start taking a look at that,” he said.

The Wiseman project, offering a Java implementation of the WS-Management stack for Web services, also was mentioned by Ramji. He did not commit, however, to Microsoft having official Eclipse “committers” who work on Eclipse projects.

An analyst was skeptical of Microsoft's efforts. “We need some more fine print to make sure there's not any weird clauses like that 'not for commercial use' stuff in the Microsoft interop memo,” from a few weeks ago, said analyst Michael Cote of RedMonk.

An attendee at EclipseCon was encouraged by Microsoft but still had questions about the company's intentions.

“I believe Microsoft can't ignore the open-source movement,” said the attendee, Samuel Edge, president and CEO of Neoharbor, which offers electronic publishing services.

He raised the issue about what impact Microsoft's patents could have on the company's intentions.

“Microsoft's patent portfolio is quite large and what's going to be their primary interest? Protecting that or help facilitate open source,” Edge said. “It's one of my biggest concerns.”

Microsoft is in the third year of a 10-year effort to bolster its stance in the open-source realm. By 2015, Microsoft expects to be considered a responsible member of the open-source development community, said Ramji.

Microsoft also is working with the Apache Software Foundation on interoperability with Windows Server, said Ramji.

Ramji jokingly began his presentation by announcing a fictitious project named “Supernova,” which would have Eclipse and Visual Studio merging and Microsoft acquiring copyrights and trademarks from the Eclipse Foundation.

He had mentioned he would be presenting at EclipseCon during a panel session at the MIX08 conference in Las Vegas two weeks ago.

The Federal Communications Commission netted $19.592 billion from its auction of wireless spectrums, including its “crown jewel,” the 700-MHz spectrum being abandoned by broadcast television.

The auction for that spectrum, Auction 73, ended Tuesday afternoon, the FCC reported. “There were no bids, withdrawals or proactive activity rule waivers placed in Round 261. Therefore, Auction 73 has closed under the simultaneous stopping rule,” a posting on the agency's Web site said. The take for Auction 73 was $4.75 billion.

“The $19.6 billion generated by the auction nearly doubled congressional estimates of $10.2 billion,” FCC Chairman Kevin Martin said. “All other 68 auctions conducted by the FCC in the past 15 years collectively generated a total of only $19.1 billion in receipts. Even with open-platform and aggressive build-out obligations, each of these blocks sold for more than AWS-1 (Advanced Wireless Service) blocks with comparable bandwidth and license areas.”

Verizon a Likely Winner

The television spectrum is valuable because it can travel over long distances and penetrate walls and structures. That makes it very valuable to wireless providers. Google succeeded in pushing the FCC to adopt open-access rules for the spectrum if the bidding cleared the $4.6 billion level.

Most analysts believe Google and Verizon were competing for the spectrum, but the FCC will not announce the names of the winners for several weeks yet. Observers believe Google only bid to the point where open-access rules would apply and that Verizon and AT&T have likely acquired licenses to the spectrum.

“When it finally came time to go into the auction, I think they (Google) were pretty firm about wanting to enforce the open-access conditions as much as it could be enforced, but also being firm on not really being interested in becoming a network operator,” said Rebecca Arbogast, a principal telecommunications analyst with Stifel Nicolaus. “I think they were a willing loser.”

Open Access

Verizon originally fought the open-access rules but later announced it would launch its own open-access network, in addition to its closed network. If Verizon is the winner — and the winning bid was more that the $4.6 billion Google said it would bid — it will likely use the spectrum on its open network.

Martin trumpeted the fact that open-access rules will apply to that spectrum. “With the open-platform requirements on one-third of the spectrum, consumers will be able to use the wireless device of their choice on those networks and download whatever software or applications they want on it,” he said. “The open platform will help foster innovation on the edge of the network, while creating more choices and greater freedom for consumers to use the wireless devices and applications of their choice.”

The final tally from the auction was $19,592,420,000. While that figure was double the amount the FCC had projected for this auction, it was not a total success. Still unresolved is the question of a public-safety network.

Public-Safety Spectrum Unsold

The FCC rules called for public-private cooperation on the so-called D block. This spectrum was to be used for private-sector wireless purposes and for communication between public-safety agencies.

The only serious proposal for D block was from Frontline Wireless, an organization headed by former FCC Commissioner Reed Hundt, but that effort faltered last year and the organization disbanded. The D block is likely to be reauctioned at a later date.

Rep. Ed Markey (D-Mass.) called on the FCC to set new auction rules that will deliver a national public-safety network. “I believe that any new auction for the D block should be consistent with an overarching policy goal of advancing public-safety objectives and ultimately achieving a state-of-the-art, broadband infrastructure for first responders,” he said.

AMSTERDAM, Netherlands - A robot with a cowardly streak took top honors at a conference on human-robot interaction in Amsterdam with antic displays intended to mimic human phobia.

Attendees at a competition this month of seven teams from technical universities around the world voted the “Phobot,” designed by a team of students from the University of Amsterdam, their favorite.

When first exposed to a fear-inspiring object — in this case, a menacing larger robot — the Phobot retreats and then spins in circles. It overcomes its “fear” by getting comfortable with small robots and working its way up to large ones — mimicking the psychological principle of “graded exposure.”

“This robot is there as a sort of buddy to help a child having any kind of actual fear, doing it step by step,” said team member Ork de Rooij. “The child would say, ‘Hey, not only am I scared, but this robot is also scared, so maybe we can help each other.’”

All contestants used the same set of Lego robotics — with light, sound, touch and ultrasound sensors — plus National Instruments software.

The jury’s prize — and second place in the popular vote — went to “Pot Bot,” a device that monitors potted plants and determines whether they need water or sunlight. Its sensors find the strongest available light source, and it then signals people with that information using two handlike front panels.

“The robot acts as a mediator to make communication between humans and nature more fluid,” said Sonya Kwak, who led a joint team from Carnegie Mellon University and the Korea Advanced Institute of Science and Technology created Pot Bot.

Pot Bot also uses Lego strips hanging at its sides like wind chimes to signal wind conditions. And it can spread the strips like wings in a display of gratitude when the plant receives water.

“The robot itself was not so sophisticated, but it had an artistic quality to it, and it was very different, very original,” said organizer Christoph Bartneck of the International Conference on Human-Robot Interaction, explaining the jury decision.

Sony Ericsson said slowing growth in mobile-phone sales will hurt its sales and income for the current quarter. The joint venture between Sony and Ericsson cited component shortages and a sales slowdown in the world's more mature markets, which some analysts warn are on the verge of saturation.

“This has been more pronounced in the mid- to high-end replacement sector of the market in Europe, where Sony Ericsson has stronger than average market share,” said Sony Ericsson President Dick Komiyama.

Slowing Growth Ahead

IDC Senior Research Analyst Ryan Reith said it would be unreasonable to expect the global handset market to maintain the high growth levels it has seen over the past three years. “We expect growth to be in the single digits throughout 2008 and most likely for years to follow,” Reith said.

Other industry analysts agree that handset sales growth will be more moderate this year than in the past.

“We expect the growth in sales of mobile devices to end users will decelerate in 2008 and fall to about 10 percent growth as mature markets become more saturated,” Garter Research Director Carolina Milanesi said earlier this month. “The mature Western Europe and North America markets are driven by operator contract terms and replacement cycles and will account for just 30 percent of the global mobile-devices market in 2008.”

Handset makers had been counting on 3G phone sales to help lift sales in mature markets. But mobile chipmaker Texas Instruments recently scaled back its first-quarter growth estimates because of a decline in demand for the latest 3G handsets.

Targeting New Markets

Up till now Sony Ericsson has enjoyed the most success from sales of its higher-priced Cyber-shot and Walkman models. But as Milanesi pointed out, handset growth over the past several quarters has been driven primarily by sales in emerging markets such as China and India.

Komiyama said Sony Ericsson sought in 2007 to lessen its historic reliance on the European high-end sector by trying to develop new markets. “This strategy will continue, and our objective remains to become a top three player globally by 2011,” he said.

Sony Ericsson's task going forward is to fine-tune its product mix to place more emphasis on the lower-priced models that popular in emerging markets. To this end, the company recently announced 15 new handsets and said it aims to achieve an average selling price of $187.60 for its product line, down from $209.50 in the year-earlier period.

“We expect to start seeing a positive effect from these announcements during the second half of 2008,” Komiyama said.

However, the company's reduced ASP target — coupled with a rise in R&D expenses — will negatively impact Sony Ericsson's bottom line. The handset maker said its first-quarter net income before taxes will range between $234.5 million and $312.7 million. The company earned $566 million in the year-earlier period.

Moreover, mobile network equipment maker Ericsson said slowing sales growth at its joint venture with Sony Ericsson will negatively affect its own bottom line by $33.3 million to $49.9 million in the current quarter. Ericsson reportedly derives about 25 percent of its operating profit from the company's handset joint venture with Sony.

BRUSSELS, Belgium - More than 50,000 European homes and offices added a high-speed broadband Internet connection every day last year, according to the European Commission.

Increasing competition has cut prices as Internet speeds increase, while mobile third-generation Internet services doubled last year to include 88 million users, some 20 percent of the EU’s population, the commission said Wednesday.

Denmark, Finland and the Netherlands now top the world in their proportion of residents with broadband service, although the European Union as a whole lags behind other regions with a “broadband penetration rate” of 20 percent.

More than half of broadband connections have speeds of 2 megabytes to 10 megabytes per second although a “significant” number of connections transmit data at 10 megabytes per second.

Some 19 million broadband lines were added across Europe last year, generating revenues of $98 billion for telecommunications companies.

But the EU criticized former state monopolies for keeping a tight grip on the telecommunications market, saying they hold nearly half of broadband lines across the EU. It said newer rivals still have limited access to lines that would allow them to provide more connections to customers.

The European Commission also repeated a warning that mobile phone operators are charging customers too much for data roaming, Internet service and text messaging when they go abroad. Prices fell 14 percent when the EU imposed a cap on voice call roaming prices.

The telecommunications sector in the European Union was worth nearly $473 billion last year, up 1.9 percent from 2006.

A large chunk of that revenue — $216 billion — came from mobile phones.