Desktops Becoming a Less Viable Business

Once at the epicenter of PC makers' profits, desktops are losing their luster as a viable market as companies are hit by thinner profit margins and more emphasis is placed on mobility, analysts said.

Users are increasingly adopting laptops as prices fall, and desktops are being bumped to a niche audience including task workers and gamers. The increased laptop adoption has dropped the average selling price of low-end desktops, which has led to low margins for vendors, especially in the U.S.

On Thursday, Dell reported that its desktop revenue fell 5 percent year-over-year despite a 9 percent increase in shipments in the first quarter of 2009.

"It's important to point out that our notebook growth rate was high and indicative of the trend toward mobility products over the desktop," said David Frink, a Dell spokesman.

Dell's business model was built around desktops in the client and corporate space until a few years ago, and its failure to quickly turn to laptops put its business in trouble, said Roger Kay, president of Endpoint Technologies Associates. The shift to mobile products across the major product lines has put the company back on track, Kay said.

"The trend of switching over to notebooks will continue to rise. I don't think they're going to stop anytime soon," Kay said.

Dell's laptop shipments grew 43 percent during the quarter, with revenue growing 22 percent year-over-year to US$4.9 billion.

Dell's drop in desktop revenue reflects a growing problem with the desktop market in general, said Charles King, president of Pund-IT. "Desktops have traditionally been a market where profit margins are extremely thin to begin with."

Notebook sales overtook desktop sales for most vendors, which are becoming wary about their desktop businesses because of competition and low margins, King said.

"It is a warning flag, not just for Dell. Almost all the PC vendors are going to see ... problems with their desktop sales over time," King said.

While demand for desktops in the U.S. has slowed down, the demand for desktops has shown more life internationally. The world's top PC vendor, Hewlett-Packard, did not record year-over-year growth in desktop shipments in the U.S. in the fourth quarter of 2007, shipping just 2.15 million units, according to IDC. But HP shipped 6.86 million desktops worldwide, a 10.7 percent increase over last year's fourth quarter.

While desktop and laptop prices are close to par in the U.S., low-end desktops are more affordable than laptops in developing countries, which makes them appealing as a first machine for users, Kay said. The trend is changing, with laptops like the XO from One Laptop Per Child and Asus' Eee PC aimed at first-time users.

"When you look at how aggressive vendors have been in pricing those products -- increasingly aggressive I think -- and relying more and more on low-end sales as opposed to high-end gaming and business PCs ... a company can have actual increases in sales but declines in revenue," King said.

Desktops are highly configurable compared to laptops -- which are highly integrated -- so gaming-system builders and niche white-box vendors may flourish on building desktops, Kay said. Theoretically, everything else in desktops could go mobile.

"If the price is the same between notebook and desktops, [users] will go mobile," Kay said.

Newer Technology ESATA Extender Cable

One of the major changes in hard-drive technology in recent years is that most computers now use Serial ATA (SATA) connections, as opposed to the older ATA/IDE connections (also known as PATA, for parallel ATA). All other factors being equal, SATA connections are designed to offer faster data throughput; thinner, more-manageable cables; and better reliability.

While all current Macs except the Mac mini use SATA connections for internal hard drives--the Mac Pro actually has four internal SATA drive bays--Macs lag behind some Windows PCs when it comes to eSATA, a form of SATA used for connecting hard drives in external enclosures. It's an alternative to FireWire and USB 2.0, and one that is, in theory, faster than even FireWire 800; it should offer performance comparable to that of an internal SATA drive. If you've done any shopping for external hard drives lately, you've likely noticed that many inexpensive external hard drives and hard-drive enclosures offer the combination of USB2.0 and eSATA--no FireWire.

(It's worth noting that there are two main drawbacks to eSATA compared to FireWire and USB 2.0. First, the current implementation of eSATA doesn't supply power to external hard drives; you need a separate power adapter. Second, while the SATA interface supports hot-swapping, software and hardware limitations in the host computer mean that few computers currently allow hot-swapping of SATA--and, thus, eSATA--drives. This means that eSATA drives must be connected before your computer starts up, and you must shut down your computer before disconnecting such drives. Still, while I'm partial to FireWire for many uses, especially if I'll be disconnecting and connecting an external drive regularly, eSATA offers great performance at a reasonable price--and yet another option for expanding your storage.)

So how do you add eSATA ports to your Mac? If you've got a Mac Pro, you could buy an eSATA PCI Express card; these cards range in price from US$40 to nearly $200. But it turns out the Mac Pro has six SATA connectors right on the motherboard (in other words, inside the case). Four of those are used for the computer's four internal SATA drive bays, but two are just sitting there, unused.

Taking advantage of these two unused SATA connectors, at a relatively inexpensive price, is the purpose of Newer Technology's $25 eSATA Extender Cable, a nifty accessory that provides two eSATA ports via one of the Mac Pro's PCI Express slot openings. But the Extender isn't a PCI Express card; it just replaces one of the PCI Express card retaining covers--the metal pieces that cover the holes on the back of your Mac Pro left by unused PCI Express slots--with a similar plate that offers two eSATA ports. You connect the two included SATA cables to the unused SATA connectors on the Mac Pro's motherboard and then route the cables to the back of the mounting plate. It's a bit of a hack, but it's a clever one.

Once you've installed the eSATA Extender Cable, the two eSATA ports it provides work well. Using a quad-interface (eSATA, FireWire 800, FireWire 400, USB 2.0) OWC Mercury Elite hard drive, I copied a 1.2GB folder of files from one of my Mac Pro's internal hard drives to the external drive using each interface; I also copied that same folder from one internal hard drive to another. The eSATA connection outperformed FireWire and USB 2.0; for example, it took 1:09 to copy the folder via FireWire 400 but only 0:32 to copy it via eSATA. And the eSATA connection was just as fast as copying the folder between two internal drives.

The downside to the Extender Cable itself is the installation process. You see, Apple didn't mean for the Average Joe to be plugging things into the two unused eSATA connectors on the Mac Pro's motherboard; the connectors are hidden behind many other components. So installing the Extender Cable involves removing a good number of parts, including several Things You Normally Wouldn't Touch. For example, on my 2006 Mac Pro, I had to remove the two memory riser cards, the memory bay itself, all four internal hard-drive brackets, the video card, the processor cover, and the front fan assembly. Whew!

Thankfully, Newer Technology provides a pretty good installation manual that includes clear instructions and lots of images. (Note that although the product's Web page claims the installation guide is "full color," the guide included with our unit was grayscale. There's a full-color PDF version of the manual; unfortunately, it's missing several pages.) Overall, it took me only about 20 minutes to install the Extender Cable. Still, I don't recommend the procedure to those who aren't comfortable taking (expensive) things apart and putting them back together again. And keep in mind that if your Mac Pro is still under warranty and you break anything while installing the Extender Cable, there's a very good chance Apple will refuse to cover the repair.

I suspect that Apple will eventually add eSATA ports to, or make them available as an option for, new versions of the Mac Pro. But for those of us who already have a Mac Pro and would like to have a couple eSATA ports for connecting external drives, the eSATA Extender Cable gives you the option. And it's tough to argue with the price. As someone who's comfortable with the insides of a computer, it's the route I'd take right now. If the installation process was easier, I'd be more comfortable recommending it to everyone.

IPod Case Roundup: Nano Mishmash

As much as I'd like to treat readers to another "theme weeks" for iPod cases, I'm running a bit short on cases of any particular style. So this week please enjoy a delectable multi-case assortment. The four cases we look at share at least one common element: they're all designed for the third-generation iPod nano. But within this diverse hodgepodge, we've got something for everyone: a couple silicone skins, a leather slipcase, and a neoprene sleeve.

Incase Protective Cover for iPod nano

Silicone skins are already about the simplest kind of case you can get for your iPod; Incase's US$25 Protective Cover for iPod nano is simple even by those regards. This piece of molded silicone wraps around your case, covering the back and outside edges. The large front opening leaves pretty much the entire face of the iPod nano visible and an opening along the bottom edge gives you access to the hold switch, dock-connector port, and headphone jack.

Although the open front means you have unrestricted access to all of the iPod's controls, from a protective standpoint, it isn't going to do much to keep your iPod safe and secure. The raised edge of silicone might provide a little shock protection if you drop your iPod on the floor, but if you're worried about sticking your iPod into your pocket or purse along with keys, change, etc., then the Protective Cover probably isn't going to allay those fears.

The silicone itself is fairly thick and durable and the back features a wavy pattern that makes it easy to grip, but that's about all that this case has going for it. The price tag is also pretty steep for a skin that leaves this much real estate unprotected; if you're in the market for a silicone case, you're probably best off looking elsewhere.

Uniea U-Suit for iPod nano

Uniea bills its U-Suit for iPod nano as a "leather hard case" since it features a leather exterior with a reinforced ABS plastic interior. In form, it's basically a sleeve; you slip the nano in at the top, which is open, and the case covers the back, the edge around the screen, and the face on either side of the Click Wheel. The controls and screen are left exposed, though recessed, but Uniea also includes a thin adhesive film to protect the screen.

All of the iPod's controls remain easily accessible when it's in the sleeve; the open bottom lets you get at the hold switch, dock-connector port, and headphone jack. I found the edges on either side of the Click Wheel a little annoying when scrolling (my thumb kept hitting them), but it didn't seem to adversely affect the nano's operation. The leather exterior is pleasant to the touch and the case is robust enough to keep the nano pretty well-protected; the interior features a soft lining that won't scratch the iPod.

The one major downside to the U-Suit is that the case is rather on the bulky side. The third-generation nano is the thinnest that Apple has ever made and although the reinforced leather doesn't make it particularly heavy, it does substantially increase the iPod's profile. If it's svelte lines you're after, the U-Suit probably won't meet your needs, but if you're in the market for a decent leather sleeve, it ought to be fine.

Bone Collection Nano3 Cube

Don't be deceived by the name: the $18 Nano3 Cube from Bone is not a cube. Rather, the front features a distinctive chessboard pattern. The case's design leaves the screen exposed, though Bone also includes a thin adhesive film that you can affix; the Click Wheel is covered by the case and even features raised markings over each of the wheel's buttons. The back of the case has raised bumps that make it easy to grip and also has a small hole for hosting a lanyard (not included). The bottom edge of the case leaves an opening for getting at all of the ports and controls there: the hold switch, dock-connector port, and headphone jack.

Overall, the case itself is thin, not adding a lot of bulk or weight to the nano. It's enough to keep the nano pretty well protected too, though I would have preferred a hard plastic screen protector over the adhesive film. Otherwise, however, the Nano3 Cube is a solid silicone skin at a pretty reasonable price.

Incase Neoprene Sleeve for iPod nano

Our second entry from case vendor Incase is the company's $25 Neoprene Sleeve for the iPod nano. The case is made mainly of neoprene, though the front and back feature heavier plastic panels stitched to the stretchy sleeve material. An opening lets you access the Click Wheel, but Incase thoughtfully protects the screen with a flexible plastic window. The back of the case has a fixed belt clip, oriented upside down from the nano.

To insert the nano into the case, you insert it from bottom, then fasten a Velcro strip to keep the nano from slipping out. The fastener covers the dock-connector port, but lets you get at the hold switch and headphone jack. You can, however, sync or charge the nano without taking it out of the case by simply unfastening the Velcro.

I like the addition of the sturdy belt clip, but it does add a decent amount of bulk to the case, as does the external stitching on the neoprene around the case's edges. However, the sleeve does a good job of both protecting the nano and leaving its controls accessible. For those in search of a sporty, resilient case, the Neoprene Sleeve is a very respectable option.

A Year After ITunes Plus, Competition Heats up

A year ago, if you wanted to purchase and download music without digital rights management--aka DRM, the protection scheme that controls what you can do with your digital media--your choices were few and far between. Some small outfits, such as eMusic, sold DRM-free music, though not usually from the major labels. And while other services, such as Yahoo Music, had toyed with DRM-free releases, it was only for limited promotions. But the vast majority of digital music available online, from vendors like Apple, Microsoft, and Napster, used some form of DRM to protect its content.

Then, in February 2007, Apple CEO Steve Jobs wrote a lengthy and seemingly unprovoked essay on the subject of DRM, entitled "Thoughts on Music." In the piece, Jobs said that Apple would adopt an entirely DRM-free catalog "in a heartbeat," presuming the four major record labels--Universal, Warner Music, Sony BMG, and EMI--would let Apple do so.

Jobs argued that DRM had never been effective at combatting piracy, given the fact that all music sold on CDs was essentially unprotected, and even those digital schemes that did exist had loopholes: Apple itself had for years allowed its iTunes customers to strip the DRM from their purchased music by burning files to CD and then re-importing them.

The world Jobs laid out, where all music sold by online stores would be completely interoperable and DRM-free, seemed to many to be a future seen through rose-colored glasses. Six weeks later, however, it went from fiction to fact when Apple announced a deal with EMI to distribute DRM-free tracks on the iTunes Store.

The initiative, dubbed iTunes Plus, would see EMI's entire catalog made available on the iTunes Store without DRM, in a higher-quality audio format for a premium of 30 cents more than the usual 99-cent track price. The ever-ambitious Jobs predicted that by the end of 2007, half of iTunes' catalog would be available without DRM, a move that would necessitate deals with the other major record labels.

Apple never reached that milestone, however. So what happened?

Share and share alike

In order for Apple to pass that vaunted halfway point, it would have needed to get one of the other big music companies on the DRM-free train. The labels, however, had long been uncomfortable with the amount of power Apple wielded, such as insisting on the flat 99-cent price per song. And with Apple as the runaway leader in the digital download market--and increasingly in the music market as a whole--the labels had little in the way to use as leverage.

"Steve Jobs was getting pushback from the labels," says Phil Leigh, president of Inside Digital Media, which analyzes the digital-media industry. "The labels really have had a rocky relationship with Apple, particularly because they are concerned that Apple has too much power."

In late 2006, Universal had maneuvered a deal with Microsoft to take a cut of sales on its Zune music player, with the rationale that the devices would likely be full of pirated content. Getting a slice of iPod sales would have been the holy grail for the labels, but that was a term that Apple was never going to agree to. So when Universal's contract expired in July of last year, the music company announced that it would not renew its long-term blanket deal, and would instead market its music "at will."

Meanwhile, competing music stores had been engaged in an uphill battle against iTunes. Much of that success can be attributed to iTunes's close ties to the iPod, which remains to date the most popular digital music player on the market; as of December 2007, it held a 67 percent market share. Of course, iPod owners have never been limited to getting their music from the iTunes Store--CD ripping has always been possible--but all of iTunes' rivals used DRM schemes that were incompatible with Apple's portable player.

The labels saw an opportunity with DRM-free music, which they thought would allow them to tip the balance of power back into their favor by freeing them from Apple's stranglehold on the digital download market. Since DRM-free music can be played on the iPod without any sort of technological tomfoolery, providing those tracks to other providers would open up Apple to competition--and the record labels were in a position to make that happen. In August 2007, Wal-Mart and Real Networks announced support for DRM-free music, both prominently featuring DRM-free tracks from Universal Music Group.

"The reality is there are some out there who would like to see more competition for Apple, and DRM-free is one potential lever to create that," says Russ Crupnick, vice president and senior industry analyst for the market-research firm NPD Group. "The record labels feel that DRM-free is in their interest."

Inside Digital Media's Leigh agrees, saying that while Jobs "correctly inferred that the labels were going to have to shift to a DRM-free format, he miscalculated that they would shift towards his competitors."

Amazon MP3 offers DRM-free tracks from all the major labels.

The cannonball into the pool of the digital music download market came in September 2007 when retail giant Amazon launched its own long-awaited music download service, featuring an entire DRM-free music catalog from both EMI and Universal Music Group, as well as a number of smaller independent labels. By leveraging its enormous existing customer database, distributing a free program that tied into Apple's iTunes music software, and undercutting the pricing on iTunes's DRM-free offerings, Amazon positioned itself as the first major competitor to iTunes.

Apple responded the next month by dropping the 30-cent premium on its DRM-free tracks--they would cost 99 cents just like protected songs--and announcing that it had struck deals with independent labels to bring an additional two million tracks of DRM-free music to iTunes. That brought iTunes' total of DRM-free tracks close to half of its 6 million song catalog. (It's impossible to know for sure since Apple has not released exact numbers and declined to offer more detail.)

Meanwhile, iTunes rivals have picked up momentum on the DRM-free front. Earlier this year, Amazon picked up the other two big record companies, Sony BMG and Warner Music Group, making it the first digital music site to boast DRM-free tracks from all the major labels and boosting its total catalog to 5.2 million songs. Just this past week, former music-sharing site Napster reinvented itself by launching an all DRM-free service and claiming the crown of largest MP3 catalog around with over six million songs. And in April 2008, Sony, Universal, and Warner also announced deals to distribute DRM-free tracks on News Corp.'s popular social-networking site, MySpace.

But for all that they appear to have embraced DRM-free music, Sony, Universal, and Warner continue to withhold the unencumbered tracks from Apple, choosing instead to back iTunes's rivals. It would seem that Steve Jobs's proposed future of DRM-free music has quickly become a reality--if not in quite the way he envisioned.

Does DRM matter?

But for all of the noise about Digital Rights Management, the broad availability of DRM-free music has done little to change the overall digital downloads market; people clamoring for it appear to be a vocal minority. Despite iTunes' meager selection of DRM-free music compared to Amazon and Napster, customers are still buying tracks from iTunes in droves. According to NPD's Crupnick, Apple continues to hold around three-quarters of the digital download market, with Amazon in second place, trailing at "a huge gap." Apple's even risen to become the top seller of music in the U.S., beating out brick-and-mortar stores Wal-Mart and Best Buy.

"There's been no real substantive change in market share for iTunes and for the iPod," says Crupnick. "If you're in that environment, DRM-free doesn't impact you."

Phil Leigh agrees: "The amount that it hurts Apple is almost unnoticeable. Most people that have MP3 players have iPods. And the vast majority of iPod owners are unaware or [disinclined] to use other services."

And the number of those services on the market is narrowing, too. In the past year, several download sites backed by prominent companies have closed their doors, including Sony's Connect store and Yahoo Music.

Music services shutting down may let DRM finally shows its teeth. If a brick-and-mortar music retailer goes out of business, all of the CDs you bought there continue to work just fine. But the matter is not so straightforward in the online music world. While many of the closing services operated on a subscription basis that offered unlimited music as long as you paid a regular fee, some also let users download songs to their computer for an additional fee. What happens to those tracks when the service closes?

Phil Leigh thinks issues like this could prompt more awareness of DRM in the future, as digital media becomes even more a part of our lives. "When people buy new computers and try to move their libraries, it's not straightforward. There's going to be some foul-ups, disillusioned consumers."

Microsoft is one company that's recently had to deal with just this sort of problem. The company's MSN Music venture stopped selling music in 2006, but only recently announced its intention to shut down the servers that let users continue to play purchased music at the end of this summer. Past that point, those users will only be able to play their music as long as they keep using the same computer and operating system. But if they upgrade either hardware or software, they're out of luck.

For all of that, though, most users haven't yet found themselves on the business end of DRM. "It's not an issue for the average consumer," says Crupnick. "The average consumer is an Apple consumer and they don't run into DRM issues except for very rarely." It seems that as far as most people are concerned DRM is not a major factor when buying media online. At least, not yet.

The future

In the long run, music isn't the only form of media DRM is concerned with either. In the five years since its inception, the iTunes Store has steadily expanded, adding audiobooks, podcasts, TV shows, movies, and even games for the iPod. In June 2008, Apple will also launch its AppStore, which will let iPhone and iPod touch users download software directly to their devices. And nearly all of this media is or will be protected by DRM too.

As the former CEO of Pixar and now a board member at Disney, Steve Jobs clearly has a vested interest in video. When asked about the topic at Apple's joint press conference with EMI first announcing the DRM-free initiative, Jobs said that video was different from music: you can't go out and buy DRM-free video, even on a physical medium like a DVD. To some that might seem like a rationalization, but if nothing else it's an indication that the movie and television industry are eager to avoid the mistakes of their cousins, the record labels.

"You'll continue to see DRM on video," says Russ Crupnick."The video people look at the way music is acquired and go 'we don't want to wind up like that.' It's killing the business."

Inside Digital Media's Phil Leigh concurs: "The natural instincts of the people that control the studios is to try and control [the media] as much as possible."

Leigh foresees a two-prong model for video, where companies will offer their content in both ad-supported and for-pay formats. But he thinks consumers will be more forgiving of DRM on video, too, because it's consumed differently. "The problem with music is you want to move it one from device to the next; with movies you just want to watch it once."

But both Crupnick and Leigh agree that the march toward DRM-free music will continue. "In the long term, the reality is we are going to a situation where we're going to be DRM-free for individual downloads," says Crupnick. Leigh points out that the record industry's sales have been in decline over the last several years, and says that he would be unsurprised to see them drop even more.

"It puts more pressure on the labels than on Apple." The relationship between Apple and the labels will change over time, Leigh says. "The question is: who has more time?"

Sorting Through the Mac OS X 10.5.3 Update

Eight months into the Leopard era, Apple unleashed the third update to Leopard, with Wednesday's release of OS X 10.5.3. By way of comparison, the 10.3.3 and 10.4.3 updates both came within five months of the release dates for Panther and Tiger, respectively.

As with most of Apple's recent OS X updates, the 10.5.3 version just screams for a broadband connection, weighing in at more than 400MB, depending on which Mac you have and which version your machine deems you to require. So what do you get in exchange for your download time investment? Apple details many--but not all--of the changes in this Knowledge Base document. I won't bother repeating everything listed there, but here are a few of the more important highlights:

Spotlight searching on mounted AFP volumes has been improved.

Wireless connectivity has been improved, both for AirPort in general and when using Time Capsule.

A number of Automator bugs have been fixed, which is great news for many people, myself included. One in particular--a bug wherein a Finder plug-in wouldn't work if the first step was "Get Selected Finder Items"--had affected a number of plug-ins that I use regularly. These now all work in 10.5.3.

Some bugs with Spaces have been fixed, including one where switching to another application via the Dock takes you to another Space, even if that program had an active window in the current space.

A number of Time Machine bugs have been fixed, and Time Machine backups can now be run when your Mac is running on its battery. Previously, you had to connect to a power supply before Time Machine would run.

There are fixes in other programs as well, covering programs such as iCal, iChat, Parental Controls, Voice Over, and the Finder, all of which are detailed in the linked Knowledge Base document.

But what else has changed in OS X 10.5 that Apple hasn't told us about? I've been digging through the new release, looking for any areas that have received updates beyond what's been disclosed. The only substantive visible change I found is in iCal, where there's a new setting in the General section of the calendar app's preferences for controlling how scrolling works in Week View mode. You can now choose between scrolling by weeks (the way OS X 10.5.2 worked) or by days.

It would've been nice if Apple gave us a hidden key override to toggle the settings in real time while scrolling (i.e. holding Option would scroll by weeks if you had the pref set to days), but if the update offers that, I can't find it.

Beyond that visible change, there are many behind-the-scenes changes in 10.5.3, including both major and minor alterations. Here's what I've discovered--and this is by no means a comprehensive list, so feel free to add your own observations as you use this latest update.

Something that's not mentioned at all in Apple's note, but is clearly quite important, are the revised graphics drivers for ATI and Nvidia graphics cards. The 10.5.3 update supposedly delivers improved graphics performance--something that was hinted at in this week's news on Delicious Library 2.0, which shipped with a warning that those not running 10.5.3 will experience graphics slowdowns. Digging through the installer file, I can see that there are updated extensions for a large number of ATI and Nvidia cards (including on-board video in the mini and MacBooks) in the 10.5.3 update.

Other system extensions have also received updates--everything from AirPort to the keyboard backlight to fan management to power management to RAID to storage management. The Multitouch gesture capabilities get an update, as do USB, FireWire, and Bluetooth. Networking technologies are updated, as are file systems such as NTFS, SMB, UDF, and WebDav.

There are a ton of modified files in the CoreServices folder, where many critical features of OS X reside. Changes here include the Dock, the Finder, file synchronization, the installer, various menu extras, and the process that manages Time Machine, among others.

A number of Dashboard Widgets have been updated. Dictionary, Stocks, Weather, and iCal widgets all have new code (though I'm not sure if they have any new functionality), and Unit Converter and Web Clip contain changes only to non-English files.

There are quite a few updates to Macromedia's Shockwave plug-in, but unfortunately, it's still a PowerPC plug-in that's not compatible with Intel Macs (unless you run your browser in Rosetta mode).

iSync added support for some new phones from Samsung.

A number of other applications received updates of some kind, but the changes were either minor (noted in parentheses below), or I can't find any detail on what's changed. Items on this list include DVD Player, Dictionary (something to do with Wikipedia support), Exposè, Photo Booth, Preview (related to PDFs and images), Safari (some language changes on preference panels; help files), Activity Monitor (changes in some phrases), Bluetooth File Exchange, ColorSync Utility (changes in filters and profiles), Directory, Disk Utility (changes in many plug-ins, including those that handle disk first aid, info windows, partitioning, and RAID), Keychain Access, Migration Assistant (lots of changes and a new version number, 1.2.1), RAID Utility (changes in the main window and menu), Remote Install OS X, and X11.

Whew. That's a heck of a lot of stuff to update, and it's nowhere near complete--these are only the things that seemed worthy of highlighting, out of more than 35,000 changed files in this update.

As an aside, if you're curious as to how you can see what's been installed by the 10.5.3 update yourself, the key is reading the "bom" file that's created when you run the installer. You'll have to use Terminal to read the file, but here's how you can dump its contents to a text file in one command. Open Terminal and type the following, then press Return:

You can then open the 1053changes.txt file (which will be on your Desktop) in any text editor, and see each and every file that was modified by the installer. Keep in mind that just because a given file was changed, that doesn't mean you'll see new features in that program--the changes could have been behind-the-scene bug fixes, or minor changes in language that only appear on certain screens. Still, scanning this file gives you a good sense of the breadth of this update.

In my limited time with 10.5.3, I haven't found any new bugs that this update has introduced. That doesn't mean Apple has fixed all the bugs in Leopard, of course--I'm still waiting for the ability to view more than three columns in Spotlight's search results, as but one example. But Apple's focus on continual improvements in OS X 10.5 is good news for all of us consumers.

Google Highlights OpenSocial, Gears at I/O Event

Google has upgraded its OpenSocial platform with a new REST (representational state transfer) API for applications that need to tap back-end servers for data and functionality.

This capability had been eagerly awaited by developers creating OpenSocial applications, particularly because having the REST API (application programming interface) is considered key for mobile applications.

Version 0.8 of OpenSocial also enhances the platform's JavaScript API, Google announced Wednesday at its I/O developer conference.

"This represents the next evolution of the OpenSocial API, which was scoped, specified and built via an open process run by the community," wrote Google product manager Dan Peterson in the OpenSocial blog.

OpenSocial is a project that provides a set of basic APIs so developers don't have to fully re-write an application to have it run on each social-networking site. The JavaScript API modifications are detailed in version 0.8's release notes.

In a related I/O announcement, Google said that MySpace is adopting its Gears technology for storing data from Web applications locally in a browser for offline access.

Specifically, MySpace will use Gears in the e-mail service it provides to its social-networking site members. To date, this is the largest implementation of Gears outside of Google and the first time MySpace has made available functionality for its users to search and sort mail.

According to MySpace, its members send an average of 170 million mail messages every day using the site's mail system. Through its local storage capability, Gears will allow them to search and sort their mail rather than having to manually scroll through their messages.

In addition, Google announced that popular blog-publishing service WordPress is also using Gears to let its users manage their blogs offline, and that Gears now also supports Apple's Safari browser and version 3 of the Firefox browser.

Also at I/O on Wednesday, the company released an API and a browser plug-in for its Google Earth mapping application. "[Developers] can now use the Earth as their canvas and apply their creative vision to a geographically rich, 3D environment, leveraging the same technologies we use in the desktop Google Earth client. For consumers, this means that they will soon see Google Earth in many more places around the Web -- perhaps even their favorite Web site," Google said in a statement.

Mozilla Shooting for Record Books With Firefox 3 Release

Mozilla is aiming to create what may be the geekiest world record ever with its upcoming Firefox 3 browser release.

The company on Wednesday started a campaign asking users to pledge to download the next full release of its browser on the day it is available so the release can set a Guinness World Record for the largest number of software downloads in 24 hours.

Mozilla has not yet unveiled exactly when Firefox 3 will be available, but expects it could be as soon as mid-June. A test release of Firefox 3 is currently available online.

The company is deeming the day of its release "Download Day" and is asking fans to not only pledge to download Firefox 3, but to host parties to encourage friends to download with them, and place "Download Day" buttons on their Web sites as reminders of the big day.

Currently there is no world record for software downloads; Mozilla is trying to create one with Firefox 3 and its Download Day festivities.

According to the campaign's Web site, once Download Day is over, Mozilla plans to provide the Guinness Book of World Records a signed statement of authentication from its judges showing that it followed rules for breaking records; the company also will confirm download numbers. Mozilla also plans to send video footage and photographs of Mozilla users hosting download parties as well as download logs for a sample size of Firefox 3 downloads to prove it has set a world record.

While the fanfare may seem a bit geeky, Firefox -- released in November 2004 -- has inspired a significant and rather fervent fan base. This is in part because it was the first browser in years to give Microsoft's Internet Explorer viable competition. The browser even has its own fan page (sign-in required) on the Facebook social-networking site, with 79,174 fans signed up and counting.

According to Mozilla, there are more than 175 million users of Firefox, which is available in more than 45 languages and used in more than 230 countries.

More information about how users can participate in Download Day is available on the campaign's Web site.

Leech 1.1.2

For some people, downloading files is something that happens only occasionally--for example, when a new version of a program they use is available. But for others, file downloading is a frequent task. I'm definitely in the latter group; for my Mac Gems work alone, I download 10 to 20 software titles each day.

Safari, Firefox, and other Web browsers handle downloads adequately, but if you're a frequent downloader, a dedicated download manager can be quite handy. The latest such tool is Many Tricks' Leech 1.1.2 (€9.95 [US$19.69]; cross-upgrade from any other download-managing utility, €6.95), and in the time I've been testing it, it's improved my workflow noticeably.

Leech provides several options for initiating a download. One is to drag or paste a download's URL into the Leech window; the file will begin downloading immediately. (When you paste a URL or link, using the Command+V keyboard shortcut or Leech's Edit: Paste menu command, you won't actually see the URL in a text field; Leech will just start downloading from the pasted URL.) You can also drag a URL onto Leech's icon in the Dock or switch to Leech and enter a URL manually using the File: Open URLs command. (All these methods also work with multiple URLs. For example, you can copy several URLs at once and then paste them into Leech's window.) You don't even have to use raw URLs; you can even use text with embedded links. So, for example, you can drag or paste a paragraph of text from a Web site into Leech; Leech will extract all the download URLs from that paragraph.

But the easiest approach--though it comes with a caveat, noted below--is to let Leech integrate with your browser. When you first launch Leech, it will ask you if you want to install the necessary support files. If you agree, Leech can take over all download links in Safari, Camino, OmniWeb, and Firefox; it essentially displaces each browser's own Downloads window. All you have to do is activate Leech from within your browser; for example, in Safari, you just choose Safari: Download via Leech. Once you do this, clicking on a download link in your browser sends the URL directly to Leech, where it then downloads.

The caveat I mentioned about this direct browser integration is that it requires you to install an Input Manager module; specifically, the SIMBL Input Manager manager. Input Managers like SIMBL use unsupported methods to add functionality to programs, so it's possible they can cause problems, especially when new versions of affected programs, or the OS itself, are released. I use the occasional Input Manager hack on my own Macs without problems, but if you start experiencing issues with your Mac, especially after upgrading OS X or your Web browser, Input Managers are a good place to start troubleshooting. And I give Many Tricks much credit for being up front about Leech's use of an Input Manager: before installing it, Leech provides you with detailed information about the risks. (Note that integration with Firefox requires that you also install the FlashGot extension and then choose Leech as your download manager in FlashGot's preferences.)

However you choose to use Leech, you monitor your downloads using its main window, which looks very much like Safari's Downloads window, complete with progress bars showing you how much of each file has been downloaded.

Of course, if all Leech did was to take over downloads from your browser, it wouldn't be very compelling. What makes Leech so useful is that it gives you many options for customizing how downloads are handled.

At the most basic level, Leech lets you pause and resume downloads for individual files or for all downloads; paused downloads remain queued even if you quit Leech or shut down your Mac, so you can resume at some other time. (Note that some servers don't support resumed downloads; downloads from such servers will start over when you resume.) Leech also lets you choose how many downloads can occur simultaneously; how and when downloads are cleared from the Leech window; and what kind of notifications you get when each download finishes (Leech includes Growl support). But it's also got a number of unique features that make it especially useful for heavy downloaders:

You can set up multiple download locations and then quickly switch between them. For example, during the normal course of my work day, most of the stuff I download ends up in work-related folders. But once a day I get an email from VersionTracker listing all the new programs added to VersionTracker that day; I go through this email and download new programs I want to try and updates to programs I've already installed. With Leech, I can easily choose to download such files to a folder dedicated to software downloads. (Such a change applies to future downloads; currently-downloading files will be saved to the location that had been chosen at the time they started downloading.) You can also choose to download a specific file to a different location by holding down the Shift key as you drag the download URL into Leech.

You can configure rules for handling downloads of specific types or from specific domains--or both. For example, you can set up a rule so that any disk image downloaded from Apple's servers is saved to a folder called "Apple Updates." To do so, you choose File: Define Rule; enter apple.com and appldnld.apple.com.edgesuite.net in the Host box and dmg in the Extensions box; and then choose the desired folder--Apple Updates, in this example--from the Download To pop-up menu. (I included appldnld.apple.com.edgesuite.net in the Hosts box because some Apple updates actually come from that domain; note that you need to omit the . from any file extension.) If a rule contains a file-extension condition, you can optionally have Leech open matching files with a particular program. You can create as many rules as you need, and you can preview your rules in Leech's File menu.

Leech offers a number of post-download options. Right-click on a completed download in Leech and you're presented with a number of choices, including revealing or opening the file, copying the URL of the original download, or copying the path to the file on your Mac's hard drive.

If you're not online, you can choose to download files later. For example, if you're browsing email on a plane, or surfing pre-loaded or archived Web pages away from a network, Leech can queue downloads; you can then start the queue the next time you've got a 'net connection.

Leech's downloads window also serves as a history listing, storing as many past downloads as you choose--up to the 500 most-recent, or, instead of a set number, the complete list of every file you've downloaded using Leech. What makes this feature useful is that you can sort the download history chronologically or by name or progress, and you can quickly search for any past download using the Filter field at the top of the window. Leech's History menu also displays completed downloads and offers many of the same options you get by right-clicking on an item in the queue; the menu also adds an option to download a file again.

You can set Leech to automatically shut down your Mac when all downloads have completed. If you're downloading a huge file late at night, just right-click anywhere in Leech's file list and choose Shut Down When Done; you can go to sleep knowing that your Mac will turn off by itself. (Of course, as with any shut-down command, make sure you don't have any unsaved changes in other programs, which can prevent a shutdown from occurring.) Unfortunately, there's no Sleep When Done option.

Leech's Dock icon lets you track your downloads at a glance by showing the number of items in the queue and the overall progress of pending downloads.

There are also a few other interesting features, such as private downloading, which obfuscates file names in the download window, and keychain support, so you can re-download a file from a password-protected server without having to enter the password again.

One issue I found while testing Leech is that it doesn't appear to support HTTP-redirect URLs. For example, all download URLs on VersionTracker are HTTP links such as http://tc.versiontracker.com/product/redir/lid/1369259/ScriptLight%20Install.dmg.zipScriptLight that redirect to the actual download URLs on software vendors' servers (in this example, http://www.hamsoftengineering.com/assets/ScriptLight%20Install.dmg.zip). When Leech is integrated with your Web browser, such URLs present no problems, as your browser handles the redirect and passes the actual download URL to Leech. But if you try to paste such a URL into Leech, or drag it into Leech, nothing will happen, because Leech doesn't see it as a valid download URL. That said, if you take advantage of Leech's browser integration, which I suspect most people will, this issue won't affect you.

Leech isn't for everyone; if you don't download files frequently, you won't be able to appreciate its attributes. But for heavy downloaders, it's the "Downloads window" I wish Safari and other browser had.

Leech 1.1.2 requires Mac OS X 10.5 or later.

First Look: Dreamweaver CS4 Beta

The public beta of Dreamweaver released by Adobe Tuesday delivers significant changes to the 10-year old Web design and development tool. Not only does Dreamweaver CS4 offer a complete overhaul of the user interface, it adds many new features aimed at the "professional" Web developer. In addition, the beta expands on the powerful (and easy-to-use) Spry toolset introduced in last year's Dreamweaver CS3 release.

Integration with the Creative Suite

The most obvious change to the program is Dreamweaver CS4's new user interface. The old Macromedia look-and-feel has finally been replaced with an interface that matches the other applications in Adobe's Creative Suite. (Dreamweaver was among the Macromedia products absorbed by Adobe when it bought its one-time rival three years ago.)

While this change will take a while for long-time Dreamweaver users to get used to, the new interface significantly improves the usability of the program. Panels and windows mesh together well, are easier to organize, move and hide, and the new interface provides the flexibility to create a working environment that's comfortable whether you're working on a 17-inch monitor or a 30-inch Cinema Display.

In addition, the program has taken its first step toward supporting a feature that's been in the other Creative Suite programs for years--SmartObjects. Dreamweaver CS4 now offers support for PhotoShop SmartObjects--you can drag a PSD file into a Web page within Dreamweaver, optimize the image for the Web, and even resize it. If you later update the original PSD file, a red arrow will appear on the image inside Dreamweaver indicating that the source file has changed. You can then click an "update from original" button in the Property inspector, and a new version of the image is created.

A professional Web developer tool

Dreamweaver has always been a powerful tool that has attracted both Web novices and Web veterans. This latest version offers a slew of new features aimed directly at those that feel at home working in raw HTML, CSS and JavaScript as much as they do working with Dreamweaver's visual, dialog-driven tools. In fact, many of the new features promote a workflow that involves working in code view alongside the visual design view.

The new related files bar, which appears between the document toolbar and the document itself, lists all CSS and JavaScript files linked to the page. (If you're using a server-side programming language like PHP, you'll see included server-side files listed as well.) By clicking one of the related files in this bar, you immediately jump to the code in that file. In this way, you can open a single Web page and immediately have access to other files the page references: quickly jump to the page's CSS file, make some changes and jump back to the Web page file to see the changes.

The related files bar really shines when combined with another new addition: vertical split view. Now you can see side-by-side, a page's raw HTML code and its visual design. Make a change in the visual view and see the code immediately updated or vice-versa. When viewing a page that has related files (for example, an attached external style sheet), you can see the visual design of the page on one side, and a related file in the other. This lets you edit the CSS code and see the changes take place visually on the Web page.

A new "code navigator" (which is really more like a "CSS navigator") lets you view a list of CSS styles that affect the current selection: you can view all of the properties set for that style and even jump directly to the CSS code for that style. While earlier versions of Dreamweaver provide similar tools through the CSS Styles Panel, this streamlined method makes for a more efficient workflow.

Dreamweaver CS4 offers many new features for HTML, CSS and JavaScript code warriors, including the related files bar, a new vertical split view, and live view to see the page as it actually looks (and works) in a Web browser. In addition, you can view the "live" code (which Dreamweaver displays with a yellow background) to see any HTML produced by JavaScript or server-side programming.If you have ever been dismayed that Dreamweaver doesn't provide a real WYSIWYG view of your Web pages, you'll be happy with the new Live View option. The Dreamweaver CS4 beta embeds the WebKit rendering image (the same as used in Safari), so by clicking a live view button you can actually see the page as it's rendered in a Web browser: you can even interact with the page and view JavaScript effects like rollovers, drop-down menus and tooltip pop-ups without having to switch from Dreamweaver to a Web browser.

The complementary Live Code view shows the HTML--a useful addition for pages that use JavaScript to manipulate the appearance and content of a page, or for dynamic server-side pages that require additional information from a database to display correctly.

Within live view, you can "pause" any JavaScript effects--for example freeze a drop-down navigation menu--then use the code navigator to quickly identify the CSS styles that affect the menu.

More than just code

But not all of the new features in the beta are aimed at those Web professionals who know how to code with one hand tied behind their backs. Several features will be a boon to less-experienced Web designers as well.

The revamped Property inspector reduces the risk of making errors when adding HTML and CSS for text. In earlier versions of Dreamweaver, you would sometimes add HTML to the page and sometimes create CSS styles, depending on which buttons you clicked in the Property inspector. This frequently led to a messy mix of strangely named styles, like Style1, Style2, and so on. Now the two functions--adding HTML and creating styles--are separated into two different views of the Property inspector.

The Dreamweaver CS4 beta also expands on the JavaScript-based Spry Tools introduced in Dreamweaver CS3. Dreamweaver's Spry features make it easy for non-programmers to add sophisticated JavaScript-based user interface elements like drop-down navigation bars, tabbed interfaces, and user-friendly form validation. The new Spry tooltip commands lets you add pop-up information bubbles to links.

Dreamweaver CS4 also includes three new form validation widgets. The password validation widget lets you enforce rules for passwords (such as "this password must be 10 characters long and contain at least 2 numbers"). The password confirm widget forces a user to confirm the password he already entered. The radio group validation widget lets you make sure that a radio button is checked before a form is submitted.

Finally, a new HTML dataset tool lets you treat a regular HTML file like a small database system. For example, you can create a HTML table full of rows and columns of data, and use Dreamweaver to import that table into another Web page (using JavaScript and Spry). There you can present that data in a variety of different ways such as a "Master/Detail" page that lets a user view a master summary of rows from the table, click an item in the list and instantly see all of the details for that table row.

See for yourself

The Dreamweaver CS4 beta is available now from Adobe Labs. It requires either a PowerPC G5- or Intel-based Mac and OS X 10.4.11 or 10.5. The beta expires after two days unless you have an Adobe CS3 serial number. With that serial number, the beta will remain unlocked until the next version of the beta becomes available.

[David Sawyer McFarland is the author of Dreamweaver CS3: The Missing Manual (O'Reilly, 2007).]

FTC Halts Pretexting Operation Connected to Hewlett-Packard

A U.S. judge ordered a Florida business connected to the 2006 Hewlett-Packard spying scandal to halt the sale of personal telephone records and ordered defendants in the case to pay more than US$605,000 after a complaint by the U.S. Federal Trade Commission.

Judge Anne Conway of the U.S. District Court for the Middle District of Florida, Orlando Division, ordered Action Research Group and people connected with the company to stop obtaining consumers' telephone records without their consent, the FTC announced Wednesday.

A contractor hired by HP through Action Research Group was at the heart of a scandal revealed in late 2006 in which HP officials authorized private investigators to trace the source of boardroom leaks to the media by obtaining the call records of board members and journalists. The contractor and other investigators allegedly used false pretenses to trick phone companies into providing those records, a practice called pretexting.

In February 2007, the FTC filed a lawsuit against Action Research Group, owners Joseph and Matthew DePantes, and contractors Eye in the Sky Investigations, its owner Cassandra Selvage, and Bryan Wagner. In January 2007, Wagner pleaded guilty to federal charges of conspiracy and aggravated identity theft for his part in the HP pretexting scandal.

In March 2007, a California judge dismissed charges against Action Research Group's Matthew DePantes, former HP chairwoman Patricia Dunn and two other men connected to the HP case.

The Telecommunications Act of 1996 provides that a customer's phone records may only be disclosed "upon affirmative written request by the customer," according to the FTC complaint. Since at least 2005, Action Research Group has sold confidential phone records obtained using "false pretenses, fraudulent statements, fraudulent or stolen documents or other misrepresentations, including posing as an account holder or as an employee" of a phone company, the FTC said.

"The invasion of privacy and security from the unauthorized access to and sale of confidential customer phone records causes or is likely to cause substantial harm to consumers and the public, including, but not limited to, loss of privacy and endangering the health and safety of consumers," the FTC said in its complaint.

The DePantes and Action Research Group agreed to settle the FTC charges, the FTC said. Defendants Eye in the Sky, Selvage and Wagner received default judgments from the court. Attorneys for Action Research Group did not immediately respond to a request for comment.

The settlement and default judgments permanently prohibit the defendants from obtaining, marketing or selling customer phone records or consumers' personal information derived from those records. They also bar the defendants from pretexting or using others to pretext to obtain consumers' information.

The settlement order entered a judgment in the amount of $67,000 against the DePantes and Action Research Group, the estimated amount of ill-gotten gains the defendants earned from their pretexting schemes, the FTC said. That judgment was reduced to $3,000 based on their ability to pay.

In the default judgments, the court ordered Wagner to give up $428,085 in ill-gotten gains and Eye in the Sky and Selvage to give up $110,762.

Since 2006 the FTC has charged 16 people and their businesses with violating federal law by pretexting to obtain phone records. All of the defendants have been barred from pretexting and have been ordered to give up the money they made.

Cheer Up: Mobile Ad Invasion Stalls

PARIS (Reuters) - Advertising on mobile phones has enormous potential to become a significant platform for marketers, but any breakthrough is years away and major operators must work together to succeed, executives said.

Mobile operators increasingly see advertising as a powerful offering, given falling traditional voice revenue, as it allows brands to target consumers based on their location and at times of the day when they are otherwise hard to reach.

Executives from advertising and telecoms groups told the Reuters Technology, Media and Telecoms summit mobile advertising was inevitable and would become hard to resist.

But it was still at the experimental stage, and many brands and mobile operators were wary of alienating customers.

"It will be slow, it will take time but it will be there," Maurice Levy, chairman and chief executive of advertising group Publicis, told the summit in Paris.

"Why? Because it will be in the interest of the phone companies, consumers and advertisers. So it will be very difficult to resist."

Forecasts suggest the mobile ad market will generate revenue of $1 billion to $24 billion within the next 4 years.

Many operators are experimenting with plans and one service, Blyk, has signed 100,000 clients in the UK with its offer of some free calls and text messages in return for accepting ads.

"If you look at the long horizon, I think that advertising on mobile phones is going to be very, very significant, simply because there are going to be 5 billion mobile phones and they are always with you," Hamid Akhavan, the head of Germany's T-Mobile, said.

Stumbling Blocks

"There are people on this earth who in their life will never have a TV or a laptop but they will have a mobile phone. (So) thinking logically, there is no reason why mobile phones should not be the most powerful tool for advertisers."

All participants agreed there were many stumbling blocks.

Virgin Mobile USA told the Reuters summit in New York that it would use AOL's mobile advertising system exclusively to deliver banner ads to its customers who surf the Web on their phones. But they intended to approach the offering carefully.

"A cell phone is an intimate device," Chief Executive Dan Schulman said. "We pay a service provider to have that service and we don't want to be spammed, quite frankly."

French mobile operator SFR said there would be a market for mobile advertising and it had established a team to work on a business model, but said its customers would have to opt in.

"People will have to agree to take this service," Chief Executive Frank Esser said.

T-Mobile's Akhavan saw mobile advertising being held back by the large number of different phones and their capabilities, meaning the inventory space for advertising was very fragmented.

"By the time you say how many countries you cover and what your share of the market is, how many people have that kind of phone and how many of them are interested in Nike, you end up with an inventory of 6,000," he said.

"And are you going to go to Nike and waste their time over 6,000 potential customers?"

A cooperative model was likely the only way to succeed.

"So in Europe for instance all the big names have to work together, look at the inventory and try and figure out a way for us to share it in a very cooperative way and together go and pitch. That's the only way it is going to work," he said.

Akhavan said operators were starting to discuss this but that it was not a top priority.

Demand Remains for Smaller LCDs

Analysis: Combo units and midsize monitors still draw buyers' interest, even as LCD-makers push big-screen TVs.

TOKYO (Reuters) - Predicting what fickle consumers will buy has never been an exact science.

Liquid crystal display (LCD) makers had predicted shoppers would snap up the biggest flat TVs as prices came down, but are finding that it's the smaller models that are moving faster off the shelves.

Shrinking Interest

TV screens sized 32 inches or smaller and TV-viewing PC monitors are a cheaper way to replace bulky cathode-ray sets for many consumers in emerging markets, such as China, India and Russia, in time for the Beijing Olympic games.

A U.S. economic slowdown has curbed demand for larger, more expensive sets.

Makers had previously forecast premium 40-inch sets would be the main money-spinners and spent heavily in a race to build larger factories suited for bigger panels.

Now, makers with strength in small screens, such as Taiwan's AU Optronics Corp, and those with a focus in the Chinese market such as LG Display Co Ltd are in favor.

"As of now, 32-inch is almost one third of the market," Champ Shin, vice president in charge of TV screen sales at LG Display, told the Reuters Global Technology, Media and Telecoms Summit.

"Up to now most LCD makers had focused on large screens only. But the growth rate of larger screens seems to be a bit slow. And there's big demand for ... TVs using monitor panels or smaller TV panels."

LG Display is switching some of its TV panel capacity to computer screen production, building a new line for smaller panels and strengthening ties with Chinese TV makers.

The lead by small-size TVs will likely continue for the next few quarters as the U.S. economy stutters and the Chinese TV market takes off ahead of the Olympics.

32-inch TVs are the most popular model for those replacing conventional cathode-ray tubes, whose market size was around 100 million units in 2007, according to Lehman Brothers.

Dual Duty

High-definition monitors adopting the wider TV screen format are increasingly sold for TV viewing, as new technology such as broadband TV has blurred the line between monitors and TVs.

So-called moniTV sales could more than double in 2009 to top 50 million units, AU CEO H.B. Chen said at the Reuters Summit.

"All these monitors can still provide very good TV performance. MoniTVs are a new segment to grow," Chen said.

The entry-level 15-inch models are for students or emerging market consumers, while 19-inch is becoming a mainstream in the moniTV market, said Paul Peng, AU executive vice president.

But the popularity of the small-size TVs won't last long as TV makers are aggressively cutting prices, which soon will spur up demand for larger sets.

In North America, Samsung Electronics Co Ltd, Sony Corp, and Vizio are conducting a fierce price battle for market share in the slowing market.

After all, moniTVs are not the flagship product.

"Do you want to have that in your living room? I don't think so. Large-size TVs will still be king in the future," said Nigel Lee, a fund manager at Taiwan's National Investment Trust.

A looming panel oversupply in 2009 will only help make bigger TVs affordable sooner than expected.

After an industry-wide spending curb last year, new capacity from top makers such as Samsung and LG Display is set to hit the market early next year.

Analysts expect prices of 40-inch grade TVs to fall below $1,000 by the 2008 fourth quarter, boosting demand. Sony has lowered prices of its key LCD TV models by 30 percent in the second quarter, they say.

"40- and 42-inch TVs, along with the 32-inch model, will become the mainstream in the global market by 2010," said Jeff Kim, analyst at Hyundai Securities.

Nudge to Digital

The phase-out of analog broadcasting in the United States in early 2009 is also expected to speed up TV replacement demand.

"In the U.S., the sweet spot is quickly moving to 40 inches," Mike Splinter, CEO of Applied Materials Inc, told the Reuters Summit in New York.

"(TV size) is going to continue to move up for the next few generations. I don't know where the limit is."

Research firm iSuppli forecasts worldwide LCD TV sales volume to top 100 million this year and reach 194 million in 2012. LCD TV shipments were at 78.5 million units in 2007.

Does the US Need a New Broadband Policy?

Ken Hubbard worries that broadband speeds in the U.S. aren't adequate for the next wave of Web content.

Hubbard, president of networking startup InteliCloud Technology, said he's generally not a fan of large government programs, but it may be time for the U.S. Congress to look at ways to encourage roll out of faster broadband services.

Internet users are demanding more video and high-bandwidth applications, and high-definition video is on the way, said Hubbard, whose company is set to release a network appliance it dubs "network in a box." "The infrastructure is not strong enough to support the growth that needs to happen," he said. "[Broadband] has got to become ubiquitous."

Hubbard's concerns have been echoed by several groups in recent months. Groups calling for a wide-ranging U.S. broadband policy say the nation is falling behind others in key broadband statistics. One problem, however, is that the debate over broadband policy spills over into many issues, including concerns about a lack of competition and net neutrality.

In March 2004, President George Bush called for broadband to be universally available across the country by 2007 -- a goal that has not been reached. Bush's broadband policy also focuses on keeping Internet service free of taxes and deregulating broadband providers, initiatives that largely came from Congress or the U.S. Federal Communications Commission.

The call for a stronger broadband policy is far from unanimous. Broadband providers say they're spending billions of dollars a year to expand and improve their networks. And an FCC decision to deregulate telecom-based broadband providers, allowing them to stop sharing parts of their networks with competitors, is only three years old, others say.

Critics of the FCC's deregulation approach say it has eliminated most competition. But deregulation is "really bearing fruit" and should be given more time to work, said Bret Swanson, senior fellow at the conservative think tank, the Progress and Freedom Foundation (PFF).

In many cases, the debate about broadband policy gets wrapped up in related debates about net neutrality and broadband traffic management, Swanson added. While several groups have called for the FCC or Congress to prohibit broadband providers from blocking or slowing some Internet traffic, these net neutrality rules could limit legitimate traffic management techniques, causing network congestion, he said.

Passing net neutrality rules could "halt what is a very positive solution right now," he said. "The way a so-called new broadband policy is talked about seems to not be a step forward."

Some advocates of a new broadband policy also talk about the need for more competition, but because of the cost of building networks, a significant increase in competitors isn't likely, Swanson added. The U.S. may be better served focusing on two large, robust networks with wireless and satellite service filling in the holes, he said.

"You're never going to have dozens or hundreds of broadband providers to your home," he added.

Advocates of a broader national policy say broadband brings huge economic benefits to the U.S. -- a 7 percent increase in broadband adoption would create 2.4 million new jobs and have an annual economic impact of US$134 billion, according to a study released in February by Connected Nation, a nonprofit group focused on improving broadband adoption across the U.S.

Critics of current policies say the U.S. is behind several other countries in broadband adoption, and many rural areas have little or no access to broadband. In addition, U.S. broadband users pay more for broadband and have access to slower speeds than several other nations, they say.

U.S. broadband providers say they are rolling out faster broadband -- Verizon, AT&T and Qwest are all moving forward with fiber-based deployments. But Hubbard, whose company will aim its first product at providers of Internet-based services, doesn't see it happening fast enough to keep up with demand.

"To me, [the broadband] industry has had a shot at it, and they haven't done anything with it," he said.

Critics say Bush's universal broadband goal was largely unsuccessful, with many rural areas still without service or with little competition. The California State Broadband Task Force, in a January report, found that about 4 percent of the state's households, or 1,975 communities, didn't have access to broadband. About 1.4 million [m] California residents, more people than live in 11 other states, don't have broadband service, the report said.

The California report is one of several released in recent months calling for a more comprehensive broadband policy in the U.S. The California task force focused on several things the state could do to encourage broadband rollout, including issuing state bonds to finance broadband expansion, 10 percent or 20 percent tax breaks for providers building networks in rural areas, and lifting the spending cap on a rural telecommunications program already in place.

Educause, a group focused on the benefits of IT on higher education, took a broader approach when it issued its Blueprint for Big Broadband in January. Educause called for a $100 billion investment in broadband in the U.S., with the federal government, state governments and private industry each paying for a third of the costs. The federal government would pay about $8 billion a year for four years under the Educause plan.

The goal is 100M bps to 1G bps of broadband speed available to each U.S. resident and business, said Wendy Wigen, an Educause policy analyst. Educause wants "deployment with a big D, so to speak," she said. "When [government sources] quote 95 percent access ... it is for DSL or cable modem, which we feel is not sufficient for the Internet demand that is just around the corner."

Democratic presidential candidates Barack Obama and Hillary Clinton have both talked about the importance of broadband, Wigen noted.

But Robert Atkinson, president of tech-focused think tank the Information Technology and Innovation Foundation (ITIF), suggested that big government programs aren't likely to gain traction in the U.S. An ITIF report this month compared U.S. broadband policies to several other countries, and found that nations such as Japan and South Korea created mandates for broadband providers that would have little chance of approval in the U.S.

Japan required DSL (Digital Subscriber Line) providers to rent out their lines to competitors at low prices, a policy the U.S. has moved away from. South Korea basically required broadband providers to build out the networks nationwide, Atkinson said. Broadband providers in those countries are "in a different world," he said.

While environmental factors such as weather and population density can have a major effect on broadband adoption, government policies can also help with adoption and rollout, Atkinson said. Instead of major spending projects, which could face major opposition, the recent ITIF report called for the U.S. government to take several smaller steps to encourage broadband rollout.

The U.S. government should adopt more favorable tax policies, allowing broadband network operators to depreciate their investments in next-generation networks faster, the report said. The ITIF recommended that the government make more wireless spectrum available, expand and reform programs aimed at delivering telecom services to rural areas, fund state programs already working to expand broadband deployment, such as the Connected Nation program.

In addition, U.S. residents have to decide what they want: fast broadband or broadband competition, Atkinson said. Part of the problem with the debate about broadband in the U.S. is that many groups have conflicting goals, with many consumer groups pushing for more competition, he said.

More competition is "completely incompatible" with super fast speeds, he added. Building competing broadband networks is an inefficient way to get faster networks, Atkinson said.

"This is not the widget industry," he added. "Competition works well in the widget industry because the fixed costs are fairly low."

U.S. policies should instead focus on rollout and speed, Atkinson added. "The goal should be to get as much broadband to as many people as possible," he said.

Atkinson and Link Hoewing, assistant vice president of Internet and technology issues at Verizon, both see potential in the Connected Nation model, a program started in Kentucky that uses state and private funding to push broadband into areas that don't have it.

Several other states are trying to replicate the Kentucky model that has expanded broadband availability from 60 percent of households in the state to 95 percent of households since January 2004. Verizon and other providers are working with states to map unserved areas and expand coverage, Hoewing said.

In rural areas in other states, "we've got some work to do," he added.

Like the PFF's Swanson, Hoewing pointed to the current broadband policy -- the FCC's deregulation approach. The more government-centric approach in countries like Japan and South Korea wouldn't work in the U.S., he said.

Competition in the U.S. between telecom and cable companies are driving up speeds and driving down costs, he said. Broadband speeds in the U.S. are already competitive with many other counties, he added. "It's pretty evident competition is there," he said.

But for InteliCloud's Hubbard, the U.S. broadband industry is moving too slow, and it's time for the government to take a more proactive approach.

"I think they will get there, but it may be another 10 years to get there," he said. "We need to charge our slow growth into fast growth."

Broadband Policy: The Connected Nation Model

In recent debates over whether the U.S. should have a more comprehensive broadband policy, one group claims significant success: Connected Nation.

Connected Nation, which started as a state program called ConnectKentucky, uses mostly state and some federal and private funding to stimulate broadband roll out. The nonprofit group says it has expanded broadband availability in Kentucky from 60 percent of households to 95 percent of households since January 2004.

The not-so-secret sauce: Connected Nation works with local communities to identify demand for broadband then takes that information to broadband providers.

Other states are now working to replicate the Kentucky program, and a handful of bills in the U.S. Congress focus on giving states more authority to implement similar programs.

Each state will need to create its own broadband plan, and even different communities within a state will have different needs, said Brian Mefford, Connected Nation's CEO. "We're not trying to come up with a one-size-fits-all solution," he said. "It's just common sense to acknowledge that eastern Kentucky is very different in a number of respects from western Montana."

Some other groups have called for federal tax breaks for broadband providers and other incentives, but Connected Nation hasn't focused on those types of government programs. "We've seen a bigger impact when we can work locally to identify pent-up demand," Mefford said. "The greater motivating factor is when a [broadband] company realizes that there's an untapped market."

Broadband providers such as Verizon and AT&T have worked with Connected Nation, and the model has found support from other groups, including the Information Technology and Innovation Foundation (ITIF), a tech-focused think tank.

But Connected Nation has drawn its share of criticism as well. ConnectKentucky had close ties with BellSouth, now part of AT&T, and has lobbied for telecom deregulation and tax breaks for large telecom carriers, said Art Brodsky, communications director for Public Knowledge, a digital rights advocacy group and frequent critic of large carriers.

ConnectKentucky also received funding from AT&T, Brodsky said.

"They're good at telling a story," Brodsky added. "But they're pushing an agenda that benefits carriers."

Mefford acknowledges that ConnectKentucky has worked closely with broadband providers, but the focus was on rolling out service, he said. "We did that for pragmatic reasons, if nothing else," he added.

While ConnectKentucky has relationships with large providers, it has worked with a range of providers, down to the "smallest wireless ISPs," Mefford said. In an effort to map broadband service across the state, ConnectKentucky worked with more than 80 ISPs (Internet service providers), he said. Less than 1 percent of the group's funding came from AT&T, he added.

Brodsky raised several other questions about Connected Nation in a January blog posting.

One of his points: While Kentuckians may have more access to broadband, many aren't buying it. At the beginning of 2007, less than 33 percent of Kentucky postal addresses subscribed to broadband, ranking the state 46th in broadband penetration across the U.S., according to a report from the Leichtman Research Group.

In June 2007, about 53 percent of all U.S. households subscribed to broadband service, according to Leichtman.

Mefford acknowledged that the U.S. needs to focus more on driving broadband adoption. "We have to be just as intently focused on the demand side as on the supply side," Mefford said. "It's not a 'Field of Dreams' proposition. That demand side of the proposition is practically universally overlooked."

In research Connected Nation has done, many U.S. consumers don't see the value proposition for broadband, Mefford said. For example, in Tennessee, 30 percent of residents who don't subscribe to broadband service have children at home. "You can make a compelling case that, in fact, for their children remain competitive, they do need a computer at home that's broadband-enabled," he said.

In February, Connected Nation released a study saying a 7 percent increase in broadband adoption in the U.S. would have an annual economic impact of US$134 billion, including wages and savings in commuting and health-care costs.

"We don't get any impact just because somebody runs a line or makes a wireless signal available," Mefford said. "There's no economic or social benefit that happens just because that investment is made. The impact occurs when people make the decision to adopt."

ITIF President Robert Atkinson suggested that there may be a government role for promoting broadband with consumers. The U.S. government should support digital literacy efforts, and it should focus more effort on improving e-government, telework and e-learning programs, he said.

Several other countries have taken aggressive steps to drive broadband demand, Atkinson noted. Sweden has given tax breaks to employers that give computers to employees. South Korea has allowed residents to lease computers through the postal service and has given free computers to low-income residents, he said.

"Korea just said, 'We are going to have everyone digitally literate,'" Atkinson said.

But while groups such as the ITIF and Connected Nation have focused on delivering faster broadband to U.S. consumers, many don't want to pay for the extra speed, said independent telecom analyst Jeff Kagan.

"We are seeing all sorts of super-fast Internet connections for higher monthly fees," Kagan said recently. "Faster is better, but if you have to pay extra for a faster connection many customers would prefer a slower connection at a lower cost."

Most consumers don't need more than a 3M-bps (bits per second) connection even as broadband providers are rolling out connections up to 20M bps, Kagan added. "There are times when faster is needed, like when you download a movie or other large file, but the vast majority of use is at a much slower speed and customers don't even realize it," he said. "There is no reason for the average customer to think they need the fastest connection and have to pay for it."

Broadband: How the US Stacks up

Groups calling for a more robust broadband policy in the U.S. say the county has fallen behind in several key statistics.

Many groups have expressed concern that the U.S. continues to fall behind other nations in broadband adoption. The Organisation for Economic Cooperation and Development (OECD) ranked the U.S. 15th among its 30 member nations in broadband adoption per capita as of December.

Some commentators have questioned the OECD numbers, saying the organization's recent reports don't take factors such as population density and even weather into account.

Still, critics of the current U.S. broadband policy have pointed to other problems in addition to adoption: Many rural areas lack access to broadband, and there's little competition among broadband providers even in some suburban and urban areas.

In addition, U.S. broadband users have slower speeds and pay higher prices than consumers in several other countries.

The broadband speeds in the U.S., compared to the other industrialized countries in the OECD, are just as concerning as the lack of adoption, some critics say. The average download speed among consumer broadband services in the U.S. is 8.9M bps (bits per second), according to the OECD, slower than average speeds in 18 other OECD countries.

Japan's average download speed is more than 10 times faster, at 93.7M bps, while France's is 44.2M bps and South Korea's is 43.3M bps. Average download speeds in Sweden, New Zealand, Italy, Portugal, Finland and Australia are above 12M bps, according to the OECD.

In addition, U.S. broadband customers pay more than customers in 17 other OECD nations, according to a report released this month by the Information Technology and Innovation Foundation (ITIF), a tech-focused think tank.

U.S. customers pay US$2.83 per each megabit per second of service, on a monthly basis, for the lowest advertised price in the country; while Japanese customers pay $0.13. Customers in South Korea, Finland, France and Sweden all pay less than $0.43 per megabit per second on a monthly basis, the report says.

Developers: Facebook Redesign Risky but Needed

Facebook's major overhaul of its core member profile pages is a risky but necessary move for the world's second-largest online social network, according to several developers of popular applications for the site.

The move is risky because Facebook will alter the user interface significantly, which can clash against people's natural resistance to change and prompt them to complain.

In addition, for some developers, particularly those new to the platform, the new profile design may limit the visibility of their applications, affecting their ability to build a user base.

"The redesign seems an overall step forward, but it will definitely have speed bumps from an actual implementation standpoint," said Tim O'Shaughnessy, cofounder and CEO of Hungry Machine.

However, with the explosive growth in members and in applications on Facebook, the average member profile interface has become very cluttered, a situation that harms end users and developers alike.

"Facebook is a social [networking] operating system, and the profile is your entry point and your desktop. The utility of that [desktop] interface becomes less and less useful to the end user as it gets more and more cluttered," said Shervin Pishevar, cofounder and CEO of Social Gaming Network (SGN). Thus, taking a bold step to clean up the member profile interface is a logical and natural enhancement for Facebook to make, he said.

Facebook has been talking about its redesign for a while, but this week provided concrete details about its plans, which are aimed at retaining the layout's orderly and clean look, a differentiator from competitors like MySpace.

At the heart of the redesign is the redistribution of profile content into different tabs, so that users can better organize components such as the activity feed, photos, personal information and applications. In addition, the activity feed tab will feature a new authoring control panel for creating and posting content called the Publisher Box. Moreover, the profile will have at the top a new horizontal navigation line with drop-down menus for its core features.

"The three main goals we have for this are: to make the profiles simple and clean; to give users control; and to let them emphasize the most recent and relevant content. This is what we've come up with as the best way to accomplish those goals," said Facebook's Mark Slee, the product manager of the new design.

Of course, any user interface change of this magnitude entails dangers, especially when it will affect about 70 million end users and thousands of application developers. Facebook has experienced backlash from changes in the past, such as the initial versions of its activity feed feature and Beacon advertising program, both of which were criticized for being too intrusive on people's privacy.

"It's a pretty significant redesign, so users will definitely have an adjustment period," O'Shaughnessy said. "People are generally opposed to change, so there'll be a pretty reasonable amount of consternation from users just because it's different."

This is why O'Shaughnessy has been surprised that Facebook is opting to roll out all the changes at once, as opposed to doing it more gradually, since the latter approach might lessen the impact on end users. "It's always a risk to roll out a really big change all at once," he said.

Yet, Slee is confident that the change won't be traumatic for end users, since Facebook has been actively communicating the changes and plans via a Facebook group. Facebook also plans to have a time during which end users will be able to toggle back and forth between the old and new layout, before the change is finalized at some point in June, Slee said.

From the application developer perspective, the redesign will also have significant effects, O'Shaughnessy said. "The applications aren't present nearly as much as they were before," he said, alluding to the fact that the new design groups applications into a separate tab.

Although users will be able to create tabs for individual applications and the new top-level navigation includes a drop-down list of applications, "there's definitely the capability for apps to be less discoverable," O'Shaughnessy said. "For newer developers especially, that'll be really hard."

Not that O'Shaughnessy worries about being affected by this. Hungry Machine began launching its applications in mid-2007, shortly after Facebook opened its platform to external developers, and they have gained very good traction and popularity, and are generating a healthy revenue stream.

However, Facebook argues that the new design will be good for developers, not only because applications can get their own tabs, but because users will be able to add application controls to the Publisher Box. "All applications will be able to tie right into that. We think that's a huge opportunity for developers," Slee said.

Meanwhile, having an entire tab devoted to applications will let developers "build a rich and deep experience that can take advantage of more space than has ever been provided in the profile," Slee said, adding that Facebook is opening a "sandbox" for developers to get acquainted with the profile changes.

Boris Silver, cofounder and CEO of Sport Interactiva, a developer of sport-themed games, also believes that end users are likely to recoil at first and that visibility for applications in general will be diminished, but believes the changes will ultimately be for the better, particularly for companies like his whose applications are firmly established on Facebook. "It'll give room to high quality and useful applications that people value most to rise up," Silver said.

Pishevar holds a similar view, saying that the changes will benefit applications that are genuinely engaging and of high quality, and not those that try to succeed via in-your-face, aggressive self-promotion tactics, something Facebook has been trying to discourage among developers.

"The apps shouldn't be reliant on real estate on a profile page to thrive. There was tremendous benefits early on in the platform from having that real estate, but it also made it probably too easy to get users without actually investing real resources into making quality, highly engaging applications," Pishevar said.

Despite the possible bumps in the road, the developers interviewed agreed that, as far as the actual redesign is concerned, Facebook is hitting the right notes. "I'm pretty high on the design itself. It's smoother, more efficient, more clear," O'Shaughnessy said.