News From Yellow Business Pages » InfoWorld RSS Feed

InfoWorld RSS Feed (10 unread)

Update: Yahoo-Google partnership reportedly under DOJ scrutiny

Posted: July 2nd, 2008, 10:49am EDT

The U.S. Department of Justice (DOJ) has opened a formal antitrust investigation into the advertising partnership between Yahoo and Google, the Washington Post reported Wednesday.
On June 12, Yahoo said it would run advertisements supplied by Google alongside search query results, a four-year deal estimated to bring Yahoo up to $800 million in revenue a year.
"We are continuing to have cooperative discussions with the Department of Justice about this arrangement," Google said in a statement. "We are confident that the arrangement is beneficial to competition, but we are not going to discuss the details of the process."
Yahoo did not have a comment.
The deal with Google, which already dominates text-based search advertising, was widely characterized as a move by Yahoo to deflect Microsoft's acquisition attempts.
[ For the complete saga of Microsoft's unsuccessful bid to take over Yahoo, check out InfoWorld's special report ]
In April, Yahoo, and Google informed the DOJ of a planned two-week test of the advertising program, which was limited to U.S. traffic on yahoo.com and comprised no more than 3 percent of total search queries.
After reaching a larger agreement last month, the two companies said they would delay implementing the program for three and a half months pending a voluntary review by the DOJ, the Post reported. But the newspaper characterized the DOJ as now undertaking a formal investigation of the deal.
Update: Report says Microsoft readying new try for Yahoo

Posted: July 2nd, 2008, 9:09am EDT

is Microsoft is seeking partners including Time Warner and News Corp. in a new bid to acquire Yahoo's search business, the Wall Street Journal reported Wednesday.
Microsoft wants to acquire Yahoo search, with the partner, likely a media company, taking the rest of Yahoo's business. CEO Steve Ballmer called Yahoo Chairman Roy Bostock and arranged a meeting set for Monday, but that meeting was cancelled, the Journal reported, citing people familiar with the situation.
Microsoft officials contacted in London had no comment Wednesday morning.
In January, Microsoft made an unsolicited bid to buy all of Yahoo, an offer the latter refused. Although Microsoft later raised its offer price, Yahoo continued to decline, and in early May, Microsoft ended the negotiations.
[ For the complete saga of Microsoft's attempt to take over Yahoo, check out InfoWorld's special report ]
On Monday, his final day as Microsoft's chairman, Bill Gates stated that he thought any deal between his company and Yahoo was unlikely.
However, the matter has refused to go away with Microsoft indicating it would still be interested in buying part of Yahoo, namely its search business. At the same time, Yahoo investor Carl Icahn has pushed for a deal with Microsoft. He has stated publicly on several occasions that the company's board failed to serve shareholder interests by refusing to sell, and is maneuvering to replace the board at an upcoming investor meeting in August.
On Tuesday, Yahoo gave shareholders with a 32-page presentation that sought to shore up support for the board ahead of that meeting, and defended its decisions in the face of Microsoft and Icahn criticism.
Jeremy Kirk in London contributed to this report.
Microsoft to sell Office 'value pack' for $70 per year

Posted: July 2nd, 2008, 9:06am EDT

Microsoft has chosen the name "Equipt" for a forthcoming package of products that includes its Office suite, Internet security software and other services, and will sell it for an annual subscription fee of $69.99.
Equipt, which was formerly known by its code name, Albany, includes Office Home and Student 2007, Windows Live OneCare, Office Live Workspaces, Windows Live Mail, Live Messenger and Live Photo. Microsoft plans to begin selling it in the U.S. on July 15 through Circuit City, with other outlets to follow. It will be offered in other countries at about the same time, though pricing elsewhere was not announced.
The name comes from the idea that the package will help customers "equip their PC with a core set of services," said Bryson Gordon, a group product manager for Microsoft Office. "It resonated well with customers in testing."
Indeed, the name is more succinct than Microsoft has used for some other Office products, including unwieldy names like Microsoft Office Professional Plus 2007 and Microsoft Office Outlook with Business Contact Manager.
Rumors began circulating in March that Microsoft was devising a new way of packaging Office to help it better compete with Google Docs and other free or low-cost productivity suites. The company sent out invitations to a select few, asking them to test a mysterious new project code-named Albany.
The company asked people to sign nondisclosure agreements just to sign up for the test. In April, Microsoft confirmed the products that would be available in the package.
Gordon played down the effort to compete with Google Docs and other free office suites, such as IBM Symphony. He said Equipt is aimed at people who are interested in purchasing a PC security suite -- such as Windows Live OneCare -- and might forgo buying Office as well in favor of using an older copy they might already have, or that they might pirate. "We're lowering the barrier to entry" for those customers, he said.
Because Equipt is such a "complicated value proposition" to understand, Microsoft is selling it first through Circuit City because the store's staff has been trained to explain it to customers, and because it has successfully handled other Microsoft product campaigns, Gordon said.
Microsoft determined the $69.99 subscription rate by taking into account the pricing for Windows Live OneCare, which costs $49.99 a year, and the pricing for Office Home and Student 2007, which has a one-time license fee of $149.99, Gordon said. It also took input on pricing from the beta testers, he said.
Customers can load Equipt on up to three PCs for the yearly subscription fee.
Hands on with the Cloudbook Max netbook

Posted: July 2nd, 2008, 8:03am EDT

Taiwan's First International Computer (FIC) showed off several new low-cost laptops, or netbooks , at Computex last month, and many of them will hit U.S. stores through affiliate Everex Systems.
I had a chance to try out the upcoming version of the Cloudbook with an 8.9-inch screen at FIC's offices in Taipei. One build, the Cloudbook Max , is able to connect to WiMax wireless networks and will be out in the U.S. in September.
The 8.9-inch screen netbooks will also be sold in other parts of the world, but may not carry the Everex name.
The device they had ready for me to try held a 1.6GHz Intel Atom microprocessor, 512MB of DRAM, and a 40GB HDD (hard disk drive). It was running Windows XP.
One nice thing was the keypad, which is important because none of the netbooks use a standard size keypad. On netbooks with a 10-inch screen size, some of the keypads are 80 percent to 90 percent the size of a mainstream laptop keypad, but on smaller devices such as 8.9-inch ones, they're much smaller.
Some companies have even designed unique keypads that are flat with little space between keys. That may make the device look nicer, which I'm told is the reason for such a design, but without space between the keys, it's easy to hit the wrong letters. Maybe it takes some time getting used to typing on a smaller keypad, but for anyone buying a device like this, the secondary application -- after surfing the Internet -- will likely be typing: e-mail, homework, work, journal or blog entries, etc. Comfortable typing is important.
These mini-laptops, or netbooks, are designed to be portable and offer easy access to the Web. That's why they weigh around 1 kilogram each and are about half to two-thirds the size of a mainstream laptop computer, with batteries that can last up to 8 hours.
They aren't really supposed to have the same functionality as a mainstream laptop and FIC's 8.9-inch laptop didn't. Battery-life, performance on simple software tasks, screen size and the size of the keypad were my biggest concerns.
It took about 35 seconds to boot Windows XP on the FIC device, and launching programs took about the same time as other devices I've had a look at, including Asustek Computer's Eee PC and Micro-Star International's Wind . Since most of the components are the same, similar performance isn't surprising.
One part of the FIC device that did set it apart was an express card slot for 3G (third-generation) or WiMax cards and options for built-in WiMax, 3G, and Bluetooth technology. Wi-Fi connectivity with 802.11 b/g is standard on the devices.
The mousepad worked well, and was easy to navigate on despite its small size.
The picture quality on the screen of the device was also nice. The company used WSVGA (wide super video graphics array) LCD screens with LED (light-emitting diodes) backlights with 1,024x600 resolution. Pictures on the screen looked crisp, as did a picture slideshow.
FIC has developed two main configurations of the model with an 8.9-inch screen. The CE2A1, with a 1.2GHz Via C7-M microprocessor, 1GB of DRAM, and an HDD with 60GB of storage and the CW0A1, which is similar but comes with a 1.6GHz Intel Atom microprocessor.
Solid State Drives (SSDs) are optional on the devices.
They come with either 4-cell or 6-cell lithium-ion batteries. The 6-cell batteries can run for seven to eight hours before needing a recharge.
They will be available in Taiwan and Japan by the end of August, the FIC representative said. In Taiwan, an 8.9-inch FIC netbook with an Atom microprocessor will cost around NT$15,000 (US$493), while one with a Via processor will sell for around NT$14,000.
AMD gains ground on Intel in chip wars

Posted: July 2nd, 2008, 7:42am EDT

Chip maker Advanced Micro Devices (AMD) gained some ground on rival Intel in the lucrative microprocessor market during the first quarter, market research iSuppli said late Tuesday.
AMD's share of global microprocessor market revenue in the first quarter rose by 2.2 percentage points compared to the same time last year to 13 percent, iSuppli said. Meanwhile, Intel's microprocessor sales dropped by 0.7 percentage points to a 79.7 percent share of the market.
The figures show that AMD is growing its market share at the expense of Intel, iSuppli said.
"AMD's PC microprocessor product portfolio has become much stronger during the last year, particularly on the desktop side," said Matthew Wilkins, principal analyst and iSuppli, in a report.
The market research company also noted that microprocessor prices appear to have stabilized, a sign that price wars between AMD and Intel have abated.
A portion of AMD's first quarter market share increase came from smaller microprocessor suppliers, iSuppli said. The report results included all kinds of microprocessors, not just the x86 processors AMD and Intel make for computers.
In fact, Intel and AMD accounted for 92.7 percent of total microprocessor revenue in the first quarter, up 1.4 percentage points from the same time last year, iSuppli reported.
Trojan lurks, waiting to steal admin passwords

Posted: July 2nd, 2008, 7:23am EDT

Writers of a password-stealing Trojan horse program have found that a little patience can lead to a lot of infections.
They have managed to infect hundreds of thousands of computers -- including more than 14,000 within one unnamed global hotel chain -- by waiting for system administrators to log onto infected PCs and then using a Microsoft administration tool to spread their malicious software throughout the network.
The criminals behind the Coreflood Trojan are using the software to steal banking and brokerage account usernames and passwords. They've amassed a 50GB database of this information from the machines they've infected, according to Joe Stewart, director of malware research with security vendor SecureWorks.
"They've been able to spread throughout entire enterprises," he said. "That's something you rarely see these days."
Since Microsoft shipped its Windows XP Service Pack 2 software with its locked-down security features, hackers have had a hard time finding ways to spread malicious software throughout corporate networks. Widespread worm or virus outbreaks soon dropped off after the software's August 2004 release.
But the Coreflood hackers have been successful, thanks in part to a Microsoft program called PsExec , which was written to help system administrators run legitimate software on computers across their networks.
For a widespread infection, attackers must first compromise a system on the network by tricking the user into downloading their program. Then, when a system administrator logs onto that desktop machine -- to perform routine maintenance, for example -- the malicious software tries to run PsExec and install malware on all other systems on the network.
Often the technique succeeds.
Over the past 16 months, Coreflood's authors have infected more than 378,000 computers. SecureWorks has counted thousands of infections in university networks and has found financial companies, hospitals, law firms, and even a U.S. state police agency that have had hundreds of infections. "It's kind of insane how often they are getting on hundreds or thousands of computers at a single company," Stewart said. "They've probably stolen far more accounts than they can use."
The SANS Internet Storm Center reported one of the infections, which affected 600 machines on a 3,000 PC network, on June 25.
Malicious programs have used PsExec for more than five years, said the software's creator, Mark Russinovich, a Microsoft technical fellow. However, this is the first time he had heard of it being used in this fashion. "PsExec doesn't expose anything that a malware author can't code themselves or even accomplish with alternate mechanisms," he said in an e-mail interview. "Once you have credentials that give you local admin rights via remote access, you own that system."
Coreflood, which is also known as the AFcore Trojan, has been around for about six years. It has been used in the past for such things as launching denial-of-service attacks, but not to steal passwords, Stewart said.
Can Google Apps move up market?

Posted: July 2nd, 2008, 6:00am EDT

Although Google always seems to be up to something, the past few months have seen a flurry of activity in a space long associated with IT: Google has driven its cloud computing applications -- Google Apps -- into businesses.
Now Google wants to move up market and become an enterprise player. For example, it has announced enterprise editions of its Google Apps, and has 600 employees across sales, support, engineering, marketing and product management dedicated to enterprise products at Google.
But the road to the enterprise is fraught with pitfalls. Big companies are infamous for long software sales cycles and averse to newfangled technology such as cloud computing. Requirements run the gamut, from security to compliance, manageability to support. And, of course, Google is on a collision course with Microsoft in the cloud.
The one sure bet: Despite Google's recent rush to bring new products and functionality up market, "Google Apps has a long way to go," says Phil Shih, analyst with Tier 1 Research. "I don?t see them being anywhere near enterprise-ready."
[ Learn more about the new breed of utility computing and platform-as-a-service offerings. ]
Google Apps is a bunch of free software with very limited functionality hosted at Google's datacenters and accessible over the Internet. The suite includes Gmail, which receives revenue from advertising; Google Calendar, which lets users share a calendar; Google Talk, for free text and voice calling; and Google Docs, for document creation and collaboration.
Many consider Web-based Google Apps to be a challenge to Microsoft Office on the desktop, although market comparisons today are hardly fair. Google claims more than 500,000 companies have signed up for Google Apps, but Gartner analyst Tom Austin figures only a handful of employees at each company uses the tools. Given Microsoft Office's 500 million users, he says, "it's a raindrop."
"In a two-year planning horizon, I don't think anybody is going to confuse Google Apps with Microsoft Office," Austin says. "Google is trying to outflank Microsoft Office, not undercut it." Basically, Google's plan is to exploit Microsoft's weaknesses in the cloud by offering simple, collaborative Web applications (and related files) that are used alongside feature-rich, somewhat restricted Microsoft Office applications (and related files) on the individual desktop.
Google enters the business world
Four years ago, Google began riding the cloud computing wave into the backwaters of businesses by offering a piece of its heralded search-engine technology for corporate Web sites. The success of that product showed Google that it could make a splash in businesses, and thus Google rapidly expanded a business line of plain-Jane software services.?
Google Apps has held a kind of grassroots appeal for workers fed up with their IT department's sluggish responses to their requests. These workers wanted to tap free collaboration applications over the Internet, while skirting draconian IT policies. Indeed, employees across the board have been taking control of IT.
Thus, Google has enjoyed a surge, mostly within small and midsized companies. As Google Apps took hold inside cubicles, CTOs had to find ways to support the software or else ban it. Gartner's Austin says last year he fielded a rising tide of telephone calls from clients wanting to know more about Google Apps. According to TechCrunch, Google Apps earned about $400 million in 2007.
Google, too, saw the signs and ramped up efforts to make Google Apps more business-friendly. In summer 2007, Google bought Postini for $625 million -- the company's third-largest acquisition. Postini brings policy, security, and compliance rules to e-mail and the Web, a critical feature for large companies looking to leverage cloud-based computing applications. "We've taken a lot of [Postini's] functionality and integrated it with Google Apps over the last six months," says Rajen Sheth, senior product manager for Google Apps.
Earlier this year, Google's pitch hit a crescendo. It came out with a host of new products: Google Web Security for Enterprise, which uses Postini technology, and Google Sites for people to create a "team" Web site. Most notably, in late February, Google announced Google Apps Team Edition, which aims to give administrators visibility into Google Apps usage at their companies, as well as the ability to exert some control -- a sure sign that Google wanted to court big companies.
Microsoft chills out the cloud noise
The reaction from Redmond was swift. Less than a week after the Google Apps Team Edition announcement, Microsoft announced the public availability of Microsoft Office Live Workspace beta. Microsoft describes this as a Web-based extension of Microsoft Office that lets people access their documents online and share their work with others.
Unlike Google Apps that actually run in the cloud, Microsoft Office Live Workspace requires Microsoft Office applications to run on a person's computer in order to create documents and make changes to them in the online workspaces. Randall Kennedy, an InfoWorld Test Center contributor and long-time Windows performance expert, panned Microsoft Office Live Workspaces in a December review, citing its lackluster document-sharing features and its tardiness to the cloud computing party.
In addition to the Microsoft Office Live Workspace announcement, Microsoft revealed plans to release Microsoft SharePoint Online and Exchange Online in the coming months as a paid subscription service. Basically, companies can choose to have Microsoft host SharePoint and Exchange instead of hosting it themselves on their own servers. Much like Google Apps' online collaboration draw, Microsoft's new services will let business users access e-mail, calendars, contacts, shared workspaces, and video conferencing over the Web.
The Microsoft announcement was a tactical move. "Microsoft is telling companies that they're coming to market, so wait before making decisions about cloud-computing services," Austin says. "This is a great market freezer."
Microsoft believes the hosted services model will eventually play a major role at large corporations. "In five years, we think closer to 50 percent of Microsoft Office users will be using Microsoft [online] services, likely in conjunction with Microsoft software," says Alex Payne, director of product management in the Microsoft Office group. The difference: Microsoft is looking to add online capabilities to Office, not move Office online. Google wants to cut into Office with online services of its own.
InfoWorld?s Kennedy predicted Microsoft's embrace of cloud computing nearly two years ago. That's when Microsoft acquired application virtualization platform product SoftGrid. Kennedy says the renamed Microsoft Application Virtualization will stream Microsoft Office and other bulky client-server software to users over the Internet. That eliminates the current choice that Google's strategy seems to want to force between installed Office versus Web-delivered Google Apps.
Earlier this year, Kennedy made another bold prediction: A streaming Microsoft Office will clobber Google Apps in the cloud. He cites Microsoft Office's key strengths, such as full-fledged functionality and offline operation, as eventually winning the day.
The long road to the enterprise
Google claims its efforts to crack large enterprises, including forging a partnership with Salesforce.com in April, are paying off. "We are working with three to four dozen large-size enterprises in various stages of deployment right now of Google Apps," Google's Sheth says. "Some of them, such as Genentech, have announced they'll be doing larger deployments."
In a single week in June, Gartner analyst Austin had three inquiries from companies -- "each with tens of thousands or more users," he says -- asking about using Google Apps in the next year or two. The timing is somewhat surprising since most large companies upgrade e-mail and collaboration applications on a minimum 10-year cycle. "That argues against any quick success for Google," Austin says.
The three companies were not seeking full deployments, either. "They wanted to know about segmented strategies for a certain class of employee, such as a highly mobile person who doesn't really need a laptop but has to access e-mail and corporate information," Austin says. "They asked, 'What about cloud computing? What about Google?'"
And herein lies the rub. Although Google Apps may carve out niches, it's unlikely that basic applications in the cloud will play a major role in the way giants of industry conduct business. Imagine sensitive business documents being shared in the cloud without comprehensive enterprise controls.
Not only is Google Apps not ready, says Tier 1's Shih, companies aren't either. "The general trend toward more applications, more collaboration being done online in the work environment, is pretty irreversible," he says. "But enterprises making the leap from the desktop to the cloud is still a bit of a stretch right now."
Oracle reveals BEA roadmap

Posted: July 1st, 2008, 5:20pm EDT

Oracle presented on Tuesday a comprehensive roadmap for its recently acquired BEA Systems middleware technologies, making BEA's application server Oracle's strategic Java container and pledging continued support for BEA customers.
In a 105-minute Web conference, Oracle President Charles Phillips and, primarily, Oracle Fusion Middleware Senior Vice President Thomas Kurian covered product plans in the SOA, development tools, identity management and other middleware spaces. Oracle closed its $8.5 billion merger with BEA in late-April.
BEA customers will have investment protection, Phillips said. "There will be no forced product migration at all," he said.
Phillips cited SOA synergies and said Oracle, with BEA in tow, becomes number one in the middleware market.
"We want to provide a complete platform for developing [and] deploying SOA-based applications," Phillips said. The acquisition of BEA made sense because BEA is a pioneer in middleware and a company that "really got SOA," he said.
Oracle's plan categorizes BEA products into three areas:?
* Strategic products, which will be adopted immediately with limited re-design into the Oracle Fusion Middleware platform.
* Continue and converge products, which are BEA products being incrementally re-designed to integrate with Fusion Middleware. These products will continue to be developed and maintained for at least nine years.
* Maintenance products, which BEA had put on an end-of-life status and will get continued maintenance for five years. One example is BEA's Beehive applications framework.
Perhaps the biggest -- but most expected -- revelation was in the application server arena. The BEA Weblogic Server Java application server "becomes Oracle's strategic J2EE container," Kurian said. It has been integrated with Oracle technologies like Oracle TopLink for Java persistence and Oracle Coherence grid capabilities.
Application server modernization plans call for modularization based on the OSGi standard. However, "Oracle's own application server continues development going forward," said Kurian.
SOA plans call for integrating the Oracle ESB (enterprise service bus) with BEA Aqualogic Service Bus. This provides a best-of-breed offering for customers, said Kurian. Also, the former BEA Aqualogic Enterprise Repository becomes Oracle's SOA governance repository; with it, SOA artifacts can captured shared and change-managed across the lifecycle, Kurian said.
Oracle Service Registry will serve as a UDDI-compliant registry to publish and register services.
The Oracle Data Integration product continues as Oracle's entry in data integration and Oracle BPEL Process Manager provides SOA service orchestration. For event processing, BEA's Weblogic Event Server will be merged with Oracle Complex Event Processor.
"We're going to combine these two products into a unified event processing engine," said Kurian.
BEA Weblogic Integration will pick up Oracle SOA technologies like adapters from BPEL Process Manager.
Oracle also plans to strengthen BEA's Tuxedo transaction processing software. Tuxedo is geared for C, C++, and Cobol applications as well as customers looking to migrate off of mainframes. Additionally, the company views the JRockit Java Virtual Machine acquired from BEA and the BEA Liquid VM virtual machine, featuring hypervisor technology, as critical going forward, Kurian said.
In business process management, the Oracle BPA (Business Process Analysis) designer will be converged with BEA Aqualogic BPM Designer on a common BPM and BPEL-compliant metadata model to move information between these two tools.
In development tools, Oracle is focused on offering a single integrated development environment and a single metadata model. Oracle JDeveloper continues as Oracle's integrated toolset and Oracle ADF (Application Development Framework) stays the company's model view controller framework.
Also, Oracle Eclipse-based software assets and components from the BEA Workshop software development platform will be integrated into a single product called Oracle Eclipse Pack.
Portal plans call for converging BEA Weblogic Portal with Oracle's WebCenter framework. For identity management, Oracle Aqualogic Enterprise Security becomes Oracle Entitlements Server. With it, authorization policies can be centralized for enterprise applications and Web services.
Oracle also is integrating BEA telecommunications products, such as BEA WebLogic SIP Server, with Oracle technologies.
An Oracle reseller was pleased with Oracle's efforts, saying users still have choice. "The end users will be able to pick and choose the product that best fits their environment," said Sastry Tauravai, CTO at Bluenog. Oracle was able to formulate its plans for BEA products in a short time, he said.
Oracle's developer resource, the Oracle Technology Network, will merge with BEA Dev2Dev and BEA Arch2Arch programs for developers and architects. Oracle plans to hold 70 customer-oriented events in various locations beginning July 15 as well as having a focus on BEA at the Oracle OpenWorld conference in San Francisco beginning September 21.
Oracle's list of Fusion Middleware products can be found on this Web page.
Intel calls out mobile chip competitors

Posted: July 1st, 2008, 4:21pm EDT

Despite a slow entry into the market, Intel's mobile chips could dominate the space in the long run by offering value and software compatibility that competitors like Arm will find tough to match, according to an Intel official.
By building x86 architecture into mobile devices, Intel wants to build compatibility to standardize software use across PCs and mobile devices, said Pat Gelsinger, Intel's senior vice president, in a press event on Monday to celebrate the company's 40th anniversary.
After riding the wave of success for decades by putting x86 chips in PCs, Intel has put x86 into mobile devices with the Atom processor. The x86 compatibility on mobile phones will boost adoption of the chips for consumers looking to run applications on multiple devices, Gelsinger said.
Despite Intel's hopes, the company will have to compete against Arm, a chip designer that has a dominant presence in the mobile chip space and is now looking to challenge Intel by putting its low-power chips in servers.
"In our first foray into wireless devices, we were doing it with Arm. We said, 'Why are we building somebody else's architecture?' We realized that we can take Intel architecture -- x86 compatible -- to those power levels and cost levels. That's what we've proven with Atom," Gelsinger said.
Arm may be exponentially larger in the mobile space, but the lack of a standard software and hardware ecosystem could pose a problem for the chip designer, Gelsinger said. "You have numerous different Arm architectures, multiple architectural licensees that are compatible across Arm, and you have numerous fragmented different operating systems that run on it. There is no... ecosystem."
Arm didn't immediately respond to a request for comment.
The cost of creating custom chips based on designs is also very expensive, which could create cost challenges for new chip manufacturers to enter the space, Gelsinger said. The move to manufacture chips in the 450-millimeter wafers will help Intel reduce manufacturing costs per chip and result in more efficient use of the resources, including water and energy, which could bring prices of the chips down.
Despite Intel's platform and scale advantages, it enters the mobile chip market where it has a minimal presence. It already suffered a major setback when Apple's CEO Steve Jobs last month said it would use technology from PA Semi, a company it acquired earlier this year, to develop system-on-chips for the iPhone.
Gelsinger said Apple's decision was disappointing, but he hopes the company would add Intel back to its mobile road map.
"People haven't been lining up outside ... asking us to deliver these products. We have to go earn this business. We have to do it with superior products."
Beyond Atom, Intel has new products on the horizon that reduce chip size and consume less power, Gelsinger said. The company is developing a mobile platform code-named Moorestown. The platform includes a system-on-chip code-named Lincroft, which is based on a 45-nanometer Silverthorne core, and puts a graphics, video, and memory controller on a single chip.
"Our strategic attempt ... is to take Intel architecture value proposition into the milliwatt range... something... that we've never done before," Gelsinger said. "We are committed to take it to 10 milliwatts."
No-contract iPhone on the way

Posted: July 1st, 2008, 4:14pm EDT

AT&T Mobility put some asterisks on its iPhone 3G pricing Tuesday but also revealed an interesting option coming in the future: an iPhone without a contract.
In the news release disclosing terms and monthly rates for iPhone 3G service plans, the carrier hinted at the upcoming offer without saying anything about when it will become available. Freedom will come with a price -- $599 for an 8GB device and $699 for a 16GB -- but this will mark the first time consumers in the United States are able to buy an iPhone without being tied down to a two-year contract.
[ For the big picture on the iPhone 3G, see InfoWorld's special report ]
The phone probably would still be locked for use only on AT&T's network, said Jupiter Research analyst Michael Gartenberg. But buyers could choose a pay-as-you-go plan for voice service -- there is no prepaid data plan from AT&T -- or just use the device as a media player and calendar and access the Web via its Wi-Fi radio. Unlike the slimmer iPod Touch, the iPhone has a camera and a small speaker. The numerous third-party applications coming to the iPhone later this month presumably also could be used without a service plan.
However, the no-contract phone is likely to have a narrow appeal, he said.
"That's a pretty hefty premium you're going to pay over an iPod Touch," Gartenberg said.
The iPhone 3G is set to go on sale July 11. On Tuesday, AT&T revealed details of the four plans it will offer for the iPhone 3G. They range from $69.99 per month for 450 anytime minutes and 5,000 night and weekend minutes, to $129.99 per month for unlimited anytime minutes. All the plans include unlimited data but not an SMS (Short Message Service) package. Taxes are extra. There are more details at AT&T's iPhone page.
Also on Tuesday, AT&T said the iPhone 3G's vaunted $199 price would only be available to three kinds of customers:
-- people who bought the iPhone before July 11
-- customers new to AT&T, or ones activating a totally new line
-- existing AT&T customers who are eligible for an upgrade discount
This means current AT&T customers with handsets other than the iPhone will have to pay $399 for an 8GB iPhone 3G or $499 for the 16GB model unless they are due for a phone upgrade discount.
Any AT&T customer upgrading to the iPhone 3G will be charged an upgrade fee of $18 instead of the standard $36 activation fee that newcomers to AT&T will pay. Those who bought a 2G iPhone on or after May 27 will be able to swap it for a 3G model and pay only a restocking fee. However, anyone upgrading from a 2G iPhone to the new model will have to enter into a new two-year contract under a 3G iPhone plan.
Used 2G iPhones can be handed down to family or friends, but their new owners will have to take the handsets to an AT&T store for activation before using them as phones, according to AT&T.
Despite the debuts of alternatives such as the Samsung Instinct from Sprint Nextel, there's still no real competition, Gartenberg said. The iPhone's iPod features and direct connection to iTunes, plus its software overall, make it stand out.
"None of them are quite delivering on the same experience that Apple is, just yet," Gartenberg said.