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Chinese smartphone firm Xiaomi to set up production in India Chinese smartphone maker Xiaomi Inc said on Thursday it would invest further and begin local production within 12 to 18 months in India, one of the world's fastest-growing markets and currently dominated by Samsung Electronics and local firms like Micromax. The five-year-old Chinese company, whose name means "little rice," entered the Indian market in July last year and its low-priced but feature-rich smartphones have proved a big hit, with sales of over a million phones within five months."We want to invest deeply in this market, we want to have a significant amount of research and development done here -- not only for India but the rest of the world," Hugo Barra, Xiaomi's vice president of international operations, said. Xiaomi, already the fifth-largest phone company in the Indian market, is evaluating various locations to set up a manufacturing unit and is in talks with local partners and state governments, Barra said, adding that the process is likely to take at least a year.Barra's comments highlight how important the India market is regarded by Xiaomi, valued at $45 billion after a December funding round, said Neil Shah, a Mumbai-based research director for devices at Counterpoint Research.Barra did not say how much Xiaomi might be prepared to invest in India, its largest market outside China, but the company is looking to put money into start-ups and rolling out service centers. "The fundamental point is we want to build deeply rooted Indian products because this is a hugely important market for us and there is nothing more powerful than being a local business," he said, adding that India could also serve as an export hub."We are looking at (serving) the domestic market to start with but as we expand into other markets, particularly other markets in south Asia, it could make sense to export," he said. In December Swedish telecoms equipment firm Ericsson obtained a court order temporarily halting Xiaomi's shipments to India, claiming the Chinese company had not been paying royalties on its patents. The matter is pending in an Indian court. However, speaking at the launch of its latest smartphone in India, Barra said it was "business as usual" for Xiaomi, which sold upwards of 60,000 phones a week last year.The company, which sells its phones primarily through flash sales on online retailer Flipkart.com, also said it will open 100 stores in India this year to help consumers "experience" the company's devices, but will not sell them at these stores."They will have to go with physical distribution if they want to go beyond the urban consumers who are just buying online and the setting up of a local manufacturing facility would be a step in that direction," Shah said.

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Obama administration to comply with immigration injunction The Obama administration on Tuesday said it will comply with a injunction temporarily blocking its plan to shield millions of people who are in the United States illegally, suspending applications for deferred action while the legal process plays out.In a statement, the U.S. Department of Homeland Security said it would not take requests for deferred action for people whose children are U.S. citizens or legal permanent residents. It also said it will not accept requests for deferred action for people brought illegally to the United States as children under an expansion that had been planned to start on Wednesday.

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Exclusive: Microsoft's digital assistant to head to Android, Apple devices Microsoft is working on an advanced version of its competitor to Apple's Siri, using research from an artificial intelligence project called "Einstein."    Microsoft has been running its "personal assistant" Cortana on its Windows phones for a year, and will put the new version on the desktop with the arrival of Windows 10 this autumn. Later, Cortana will be available as a standalone app, usable on phones and tablets powered by Apple Inc's (AAPL.O) iOS and Google Inc's (GOOG.O) Android, people familiar with the project said.    "This kind of technology, which can read and understand email, will play a central role in the next roll out of Cortana, which we are working on now for the fall time frame," said Eric Horvitz, managing director of Microsoft Research and a part of the Einstein project, in an interview at the company's Redmond, Washington, headquarters. Horvitz and Microsoft declined comment on any plan to take Cortana beyond Windows.     The plan to put Cortana on machines running software from rivals such as Apple and Google, as well as the Einstein project, have not been reported. Cortana is the name of an artificial intelligence character in the video game series "Halo."    They represent a new front in CEO Satya Nadella's battle to sell Microsoft software on any device or platform, rather than trying to force customers to use Windows. Success on rivals' platforms could create new markets and greater relevance for the company best known for its decades-old operating system.    The concept of 'artificial intelligence' is broad, and mobile phones and computers already show dexterity with spoken language and sifting through emails for data, for instance.    Still, Microsoft believes its work on speech recognition, search and machine learning will let it transform its digital assistant into the first intelligent 'agent' which anticipates users needs. By comparison, Siri is advertised mostly as responding to requests. Google's mobile app, which doesn’t have a name like Siri or Cortana, already offers some limited predictive information 'cards' based on what it thinks the user wants to know.    Microsoft has tried to create digital assistants before, without success. Microsoft Bob, released in 1995, was supposed to make using a computer easy, but ended up being the butt of jokes. The Office Assistant nicknamed 'Clippy' suffered a similar fate a few years later.    "We're defining the competitive landscape... of who can provide the most supportive services that make life easier, keep track of things, that complement human memory in a way that helps us get things done," said Horvitz.     Outside his door stands "The Assistant", a monitor showing a woman's face that can converse with visitors, has access to Horvitz's calendar and can book meetings.     On his desktop, Horvitz runs 'Lifebrowser', a program that stores everything from appointments to photos and uses machine learning to identify the important moments. A keyword search for his university professor instantly brings up photos and video from the last time they met.    Cortana could tell a mobile phone user when to leave for the airport, days after it read an email and realized the user was planning a flight. It would automatically check flight status, determine where the phone is located using GPS, and checking traffic conditions.    None of the individual steps are a breakthrough, but creating an artificial intelligence that can stitch together the processes marks a breakthrough in usefulness, Microsoft says.    Rivals are on the same track. Google's latest mobile app uses the predictive power generated from billions of searches to work out what a user is doing, what they are interested in, and sending relevant information, such as when a favorite sports team is playing next.    Apple is also pushing Siri, which uses Microsoft's Bing search engine in the background, into new areas with its CarPlay and HomeKit platforms, as well as the recently unveiled Apple Watch.     The key to Cortana's success will be knowing where a user is, what time it is, and what they are trying to do. Albert Einstein's work on the relationship between space and time gave rise to Microsoft's secret project name, said Horvitz.    "Einstein was brilliant about space and time," he said. "It’s using brilliance about space and time generally in our agents."

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Apple pies and iPads sweeten China's dreaded TV expose From cut-price apple pies to free iPads, companies in China are transforming Sunday's dreaded consumer rights day into a shopping frenzy, to blunt the impact of being named and shamed in state broadcaster CCTV's annual expose.McDonald's Corp is discounting pies three years after food safety lapses made it a one-time target of the broadcaster's "3.15" show, while e-commerce giant JD.com Inc is giving away tablet computers over four days of "crazy sales" ending Sunday."Companies are being preemptive, making consumer day a positive story," said James Feldkamp, chief executive officer of consumer watchdog MingJian. "If you're going to be a target, at least you're already doing something to balance it out."The investigative news show, broadcast every World Consumer Rights Day, is in tune with a government drive to boost consumer protection laws and toughen punishments for misleading shoppers. Violations of consumer trust can go viral online in China, especially in sensitive sectors such as food, cars and make-up.The 3.15 show drew a rare apology from Apple Inc in 2013 after criticizing the iPad maker's customer service, and leveled a similar charge at camera manufacturer Nikon Corp last year. Similar broadcasts have dragged down China sales at McDonald's and KFC parent Yum Brands Inc.Such is the show's impact that in recent years firms have increasingly prepared for shocks by buttering up consumers.APPLE "PI" DAYAhead of this year's March 15, former target Wal-Mart Stores Inc has deals on electronics and cosmetics on its online supermarket Yihaodian, and a "say no to fakes" campaign echoing government calls to outlaw counterfeit goods. Dealers of fellow victim Volkswagen AG (VOWG_p.DE) also have 3.15 discounts.Not all campaigns are explicitly linked to the day. Online retail giant Suning Commerce Group is giving away 30 million cartons of milk, yoghurt and other dairy products for as little as 20 cents each over five days ending on Saturday.At McDonald's, the apple pie price cut over Saturday and Sunday is touted as a "3.14" event - a play on the mathematical number "pi". The fast food chain, which gave away 1 million free breakfast McMuffins in China around the same time two years ago, said its pie promotion was in no way linked to 3.15.JD.com and Volkswagen declined to comment. Suning did not respond to emails seeking comment.COMPANIES ON EDGEThe 3.15 show, similar to CBS network's "60 Minutes" in the United States, may have lost some of its appeal as younger viewers turn to foreign dramas online. Some have even turned to social media to defend targeted firms.But that does not stop it being feared. People close to CCTV as well as "firefighters" helping firms respond to being targeted said some companies were given advance warning, while others had to scramble to respond after seeing their firm named for the first time on the late-night show."Speaking for Wal-Mart, we will watch the show. I am certain every company who services customers will do so," said Raymond Bracy, head of corporate affairs at Walmart China.The plethora of cut-price offers, however, may dampen the impact on targeted firms among consumers busy snapping up deals."It's a carnival for shopping online and I've bought a few things," said Zhang Dasu, a 22-year-old from Shanghai. "I may be too tired to stay up to midnight to watch the show, though."

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Ericsson cuts 2,200 Swedish staff as part of savings program Ericsson will cut 2,200 jobs in Sweden, mainly in research and development (R&D) and supply, as part of its latest cost-cutting program, the Swedish telecom equipment maker said on Wednesday.Ericsson said in November it aimed to cut annual costs by around 9 billion Swedish crowns ($1.05 billion), with full effect in 2017. The program will entail restructuring charges of around 3-4 billion crowns between 2015 and 2017.Chief Financial Officer Jan Frykhammar said past increases in R&D spending had partly aimed at reducing the number of hardware platforms and versions of software, while Ericsson had also worked on structurally improving R&D efficiency."Therefore, while we continue to have a very high pace of investments in R&D, there are now possibilities to realize efficiency gains or cost reductions," Frykhammar said. He declined to say how many of the planned job cuts would be in R&D.Ericsson spent 36.3 billion Swedish crowns ($4.2 billion) on R&D in 2014, or 15.9 percent of its revenue, up from 32.2 billion the previous year.At the end of 2014, Ericsson employed 118,000, including 17,580 in Sweden and around 25,700 in R&D globally. Only India had more Ericsson employees than Sweden, at close to 20,000.

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Google in talks to buy Indian startup InMobi: source Google Inc (GOOGL.O) is in talks to buy Bangalore-based mobile advertising venture InMobi, a source with direct knowledge of the matter said, which could pave the way for what could be the U.S. company's first deal in India's busy start-up space, InMobi helps companies target the users of phones and mobile devices in their advertising. It was launched in 2007 and says it has more than 1 billion users across 200 countries. It counts Japan's SoftBank (9984.T), an early backer of China's Alibaba (BABA.N), and venture capital firm Sherpalo among investors.The source, who asked not to be named because Google and InMobi have not made the negotiations public, said talks were at an early stage. The source said Google had not yet detailed its terms and conditions for the deal.Both InMobi and Google declined to comment.The source said the two sides were negotiating over issues that included how many unique users InMobi has, a key to its value."They are ironing out issues on what InMobi's parameters are, and whether it matches Google's," the source said, adding that InMobi would likely be valued at around $1 billion.Google Capital, the group's investment arm, has set up shop in India's Silicon Valley, but the parent company has yet to invest directly in the country's Internet and e-commerce sector."Advertising is a big revenue generator for Google. As people move from browser or desktop searches, mobile advertising is becoming more important," Neil Shah, an analyst at Counterpoint Technology Market Research, said.Google has bought mobile advertising company AdMob for $750 million, getting a green light in 2010 after months of negotiations with the U.S. Federal Trade Commission.In February, InMobi said 43 percent of its users were in North America and Western Europe, while the Asia Pacific region made up 38 percent.In India, the vast majority of Indian Internet users access the web through their phones. There were more than 240 million mobile Internet users in India at the end of 2014, according to Shah at Counterpoint Research.

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Google CFO retiring, leaves spreadsheets for backpack Google Inc's finance chief said on Tuesday that he plans to retire, the latest in a series of changes in the company's upper ranks but a move that some analysts said was unlikely to cause major disruptions.Patrick Pichette is leaving Google to go backpacking, the 52-year-old French Canadian announced in a lengthy post on his personal Google+ Web page on Tuesday. Google, which dominates the online advertising business, expects to find a replacement for Pichette within six months, the company said in a regulatory filing with the U.S. Securities and Exchange Commission. Pichette's retirement date has not been set and Google said Pichette intends to help find a successor.Shares of Google closed down 2.4 percent at $555.01 and were unchanged after hours. Pichette's decision to retire, which he said caps about 30 years of "nearly nonstop work," came as a surprise to investors, although Wall Street took the news in stride. Pichette's decision to travel after seven years at Google, appears reasonable, said Hudson Square Research analyst Daniel Ernst. While Google is a massive company which analysts expect to generate roughly $76 billion in revenue this year, the business is relatively straightforward, said Ernst. "Any experienced CFO could slot in there and see how it all works," he said. A former telecom industry executive who joined Google in 2008, Pichette is credited by some on Wall Street for maintaining spending discipline even as Google has embarked on ambitious "moon shot" projects including self-driving cars, satellites and healthcare. For Google, Pichette's exit marks the latest change in its upper ranks. Last year, Google Chief Business Officer Nikesh Arora left unexpectedly to become vice chairman of Japan's SoftBank Corp. Vic Gundotra, the head of Google's social networking services, left in April 2014.Google Chief Executive Officer Larry Page in October turned over day-to-day management of major products and services to Senior Vice President Sundar Pichai, freeing him up to focus on bigger-picture issues. Pichette said in his blog post that he decided to retire after a recent trip climbing Africa's Mount Kilimanjaro when his wife suggested they continue traveling. "I could not find a good argument to tell Tamar we should wait any longer for us to grab our backpacks and hit the road," Pichette wrote, referring to his wife. In a separate post on Google+, CEO Page wished Pichette well, describing his "unconventional" farewell note as "well worth reading."

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CIA sought to hack Apple iPhones from earliest days: The Intercept CIA researchers have worked for nearly a decade to break the security protecting Apple (AAPL.O) phones and tablets, investigative news site The Intercept reported on Tuesday, citing documents obtained from NSA whistleblower Edward Snowden.The report cites top-secret U.S. documents that suggest U.S. government researchers had created a version of XCode, Apple's software application development tool, to create surveillance backdoors into programs distributed on Apple's App Store.The Intercept has in the past published a number of reports from documents released by whistleblower Snowden. The site's editors include Glenn Greenwald, who won a Pulitzer Prize for his work in reporting on Snowden's revelations, and by Oscar-winning documentary maker Laura Poitras.It said the latest documents, which covered a period from 2006 to 2013, stop short of proving whether U.S. intelligence researchers had succeeded in breaking Apple's encryption coding, which secures user data and communications.Efforts to break into Apple products by government security researchers started as early as 2006, a year before Apple introduced its first iPhone and continued through the launch of the iPad in 2010 and beyond, The Intercept said.Breaching Apple security was part of a top-secret program by the U.S. government, aided by British intelligence researchers, to hack "secure communications products, both foreign and domestic" including Google Android phones, it said.Silicon Valley technology companies have in recent months sought to restore trust among consumers around the world that their products have not become tools for widespread government surveillance of citizens.Last September, Apple strengthened encryption methods for data stored on iPhones, saying the changes meant the company no longer had any way to extract customer data on the devices, even if a government ordered it to with a search warrant. Silicon Valley rival Google Inc (GOOGL.O) said shortly afterward that it also planned to increase the use of stronger encryption tools. Both companies said the moves were aimed at protecting the privacy of users of their products and that this was partly a response to widescale U.S. government spying on Internet users revealed by Snowden in 2013.An Apple spokesman pointed to public statements by Chief Executive Tim Cook on privacy, but declined to comment further."I want to be absolutely clear that we have never worked with any government agency from any country to create a backdoor in any of our products or services," Cook wrote in a statement on privacy and security published last year. "We have also never allowed access to our servers. And we never will."Leaders including U.S. President Barack Obama and British Prime Minister David Cameron have expressed concern that turning such privacy-enhancing tools into mass market features could prevent governments from tracking militants planning attacks. The CIA did not immediately reply to a request for comment.

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Apple asks U.S. appeals court to disqualify antitrust monitor A U.S. appeals court on Tuesday weighed Apple Inc's latest bid to disqualify a court-appointed antitrust monitor whose activities one judge sharply questioned.Members of the three-judge 2nd U.S. Circuit Court of Appeals in New York heard arguments focused on the actions of Michael Bromwich, who was appointed as monitor after Apple was found liable for conspiring with publishers to raise e-book prices.Circuit Judge Dennis Jacobs focused on Bromwich's push to have the iPad maker's leadership speak with him without lawyers present, saying it implied "things may not go well" unless executives met without counsel present."I think you could see how that could generate substantial anxiety in the company," he said.Apple previously also objected to Bromwich's fees, initially $1,100 an hour before being reduced to an undisclosed amount. The initial sum would leave the public "flabbergasted," said Jacobs, who ordered details on the current rates to be filed by Thursday.Bromwich, who was not represented at the arguments, did not respond to a request for comment.The arguments marked the second time since December that Apple appeared before the appeals court in the case.Another three-judge panel, which included two of Tuesday's judges, seemed sympathetic in December to Apple's bid to reverse a 2013 ruling finding it liable for antitrust violations.If Apple wins that appeal, it could jeopardize a related $450 million settlement among Apple, 33 attorneys general, and lawyers for a class of consumers.Bromwich, a lawyer who runs a consulting group, was installed in October 2013 by U.S. District Judge Denise Cote three months after she concluded Apple played a "central role" in a conspiracy with publishers to raise e-book prices.The publishers include Lagardere SCA's Hachette Book Group Inc, News Corp's HarperCollins Publishers LLC, Penguin Group Inc, CBS Corp's Simon & Schuster Inc and Verlagsgruppe Georg von Holtzbrinck GmbH's Macmillan. Since Bromwich's appointment, Apple has repeatedly tried to have him ousted, saying he was aggressively seeking interviews with executives and engaging in private discussions with the Justice Department."This really is a roving commission," Theodore Boutrous, Apple's lawyer, argued Tuesday.Finnuala Tessier, a Justice Department attorney, countered that Bromwich never met with Apple executives privately without lawyers present. She also said private discussions with the Justice Department were necessary and expected."Monitorships would be unworkable otherwise," she said.The case is U.S. v. Apple Inc, 2nd U.S. Circuit Court of Appeals, No. 14-60.

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Telecom Italia says in talks with Netflix over content deal Italy's biggest phone company, Telecom Italia said on Tuesday it was in talks with Netflix over a possible content deal with the U.S. online movie streaming company."We are in talks also with Netflix," Telecom Italia Chief Executive Marco Patuano told a parliamentary hearing. "In some European countries (Netflix) has chosen to make deals with telecoms operators," he added, recalling that Netflix services are available on the TV platform of Belgium's national telecoms company Belgacom. Like other telecoms companies Telecom Italia is moving into the content market to find new sources of income as sales from its traditional voice services decline as competition from online firms increases.Telecom Italia has already signed a non-exclusive content deal with Britain's Sky and is also in talks with Mediaset, the TV company controlled by former Italian prime minister Silvio Berlusconi. Patuano said on Tuesday the whole Sky content will be made available to its clients in the coming months.

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Expedia takes Decolar.com stake as it deepens Latin America ties Expedia Inc said on Tuesday it will take a minority stake in Latin American online travel company Decolar.com Inc, expanding its exposure in the region.Expedia has invested $270 million for a stake of under 20 percent of Decolar and has broadened the hotel listings the companies have shared since 2002, Expedia's Chief Financial Officer Mark Okerstrom told investors at a Piper Jaffray & Co conference.The deal marks the latest expansion of Expedia, the world's second-largest online travel company by bookings after the Priceline Group Inc. Driving industry consolidation, Expedia in January purchased Travelocity for $280 million and in February announced plans to acquire Orbitz Worldwide Inc for more than $1.3 billion."Our strategy is very clearly to own and empower the best travel brands that exist in the world," Okerstrom said. Expedia is excited "to develop (its) relationship over time" with Decolar, he added.Shares of Expedia were down about 0.9 percent in afternoon trading. S&P Capital IQ analyst Tuna Amobi said the deal appears structured in such a way that Expedia could potentially increase its investment in Decolar to a controlling stake."It's a playbook that we've seen before," Amobi said in an email.Expedia announced a marketing agreement with Travelocity in 2013 prior to its acquisition of that travel agency.While Expedia's Chinese brand eLong is facing heated competition, Okerstrom said its new investment in Latin America was very different.Decolar "is really the number one player. They have been around for a long time and have built a very solid position in Brazil and in Argentina," he said during the conference. "It's very different from China. You certainly don't have the big Internet giants in playing with their pawns."Amobi said an emerging middle class in Latin America presents an opportunity for the online travel industry.Expedia hopes to grow its business abroad to the point that the U.S. market drops to between 30 percent and 40 percent of Expedia's business, down from about 50 percent currently, Okerstrom said.

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Bitcoin Exchange itBit says it won part of bitcoin auction Bitcoin exchange itBit on Tuesday said it had won part of the U.S. government's third auction of bitcoins seized from Ross Ulbricht, who was convicted last month of operating black market website Silk Road.The company said it won 3,000 of the 50,000 bit

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Oklahoma House panel OKs bill to punish licensing of gay marriage An Oklahoma bill to punish any local or state employee who issues marriage licenses to same-sex couples will be heading to a vote in the state House of Representatives after a committee approved the legislation this week.The bill is one of several in the Republican-dominated statehouse to impose restrictions on same-sex marriages that have been proposed after a U.S. federal judge last year ruled the state's ban on same-sex marriage was unconstitutional. The bill called the "Preservation of Sovereignty and Marriage Act" prohibits taxpayer funds, including government salaries, to be used for any activity that supports same-sex marriage. It also says that those who issue marriage licenses to same-sex couples can be subject to removal from office.The bill's author, Representative Sally Kern, a Republican, said the measure is a response to U.S. courts overstepping their authority by forcing Oklahoma to recognize gay marriage. Groups for lesbians, gays, bisexuals and transsexuals (LGBT) have said they would challenge discriminatory legislation in the courts. It remains unclear if the bill will be approved by both houses of the state's legislature.Representative Emily Virgin, a Democrat who voted against the measure in committee on Tuesday, said: "No other state in the union has seen more anti-LGBT legislation introduced during this legislative session. The battleground is right here in Oklahoma."

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Eighty percent of global merchants fall short on card data security compliance: report Four out of five global retailers and other merchants failed interim tests to determine whether they are in compliance with payment card data security standards, putting them at increased risk of cyberattacks, according to a new report by Verizon Communications Inc.Businesses must be vigilant in maintaining security to remain compliant with the Payment Card Industry Data Security Standard (PCI DSS), required by payment card issuers. Most of the companies have a tendency to run upgrades of security software and hardware only when they approach an annual compliance check, according to Verizon.The report, which gathered data in 30 countries by assessing more than 5,000 merchants including retailers, financial institutions and hospitality firms among others, found only 20 percent of those tested to be fully compliant less than a year after installing security safeguards. From 2013-2014, overall compliance went up by 18 percentage points for 11 out of the 12 payment data security standards.The report acknowledged the standards are only a baseline, an industry-wide minimal acceptable standard. The volume and scale of breaches in the past 12 months have shown that this is not stopping attackers, Verizon said.However, out of all the data breaches in the past 10 years that Verizon studied, not a single company was found to be compliant at the time of the breach.Credit and debit cards account for two-thirds of purchases by value in the United States. A further $2.17 trillion is spent via electronic methods, such as PayPal and mobile payments — many of which are ultimately backed by card transactions, the report said.

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Alibaba taps Jeff Zhang to oversee consolidated retail division Alibaba Group Holding Ltd appointed Jeff Zhang to oversee its main services on Monday, bringing Taobao, Tmall and Juhuasuan into a newly created "China Retail Marketplaces" division.The appointment marks one of the highest-profile personnel shuffles since China's largest e-commerce company went public in September. Together with the creation of the new division, the move will streamline operations and enhance efficiency.The company, which now handles more ecommerce than Amazon.com and eBay Inc combined, has been struggling to sustain the rip-roaring pace of growth it enjoyed in past years as it gains scale. It's unclear how Zhang's appointment affected Yilei Wang, who was President of the Amazon.com-like Tmall retail website.On Monday, Chinese news website sina.com reported that Wang had been dismissed from his post, though the company declined to comment on his current situation.Shares in the company ended 2.2 percent lower at $82.53 on the New York stock exchange.Alibaba's eBay-like Taobao remains its largest retail service, often referred to as a consumer-to-consumer website because of its focus on transactions between individual or smaller buyers and sellers.Tmall was envisioned as more of a platform for brands to sell to consumers, and is growing faster than Taobao. Juhuasuan is Alibaba's discount-retail service.Revenue growth, at its lowest level since at least 2013, and margins slipped in the quarter ending in December as sales through mobile devices, typically smaller-ticket items, accounted for a bigger slice of total sales than in the previous quarter.Growth at Tmall, however, is far outpacing Taobao. Tmall's gross merchandise value rose 60 percent for the three months ending in December, while Taobao's climbed a more modest 49 percent.

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Bain to buy Blue Coat for about $2.4 billion Bain Capital LLC will acquire Blue Coat Systems Inc from fellow private equity firm Thoma Bravo LLC in a deal that the network security company said on Tuesday would value it at about $2.4 billion, including debt.The deal comes amid strong demand for cybersecurity technology following a spate of high-profile breaches that have crippled businesses and rattled conglomerates such as Sony Corp and Target Corp. "This is a land-grab market opportunity, and private equity as well as larger tech players, have a strong appetite for vendors that play in this $15 to $20 billion market opportunity," said FBR Capital Markets analyst Daniel Ives.Reuters first reported on the deal earlier on Tuesday. Blue Coat, which San Francisco-based Thoma Bravo took private in February 2012 for $1.3 billion, operates in an area where businesses and governments are increasing their spending to counter and contain cybersecurity threats.Its products are used to speed up data flow over the Internet and block inappropriate websites and cyber attacks."The world's most trusted brands use Blue Coat, and the acquisition by Bain Capital sets us on the trajectory to further grow our portfolio, better serve our customers and help us prepare to return to the public markets," Blue Coat Chief Executive Officer Gregory Clark said in a statement.Since going private, Blue Coat has increased its scale through a number of acquisitions. These have included anti-malware company Norman Shark; Solera Networks, which uses data mining to detect potential security threats; and Netronome's SSL technology, which helps inspect Internet traffic.Goldman Sachs Group Inc and Wilson Sonsini Goodrich & Rosati are advising Blue Coat. Jefferies LLC is advising Bain and providing debt financing for the deal. Ropes & Gray LLP is legal counsel, and PwC LLP is accounting adviser to the private equity firm.

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Alibaba enlists startups to provide UK trade financing Alibaba Group Holding Ltd has enlisted two UK startups to provide financing for small British businesses looking to buy from Chinese suppliers, aiming to help cash-strapped firms access the world's largest economy.The partnerships with iwoca Ltd and ezbob announced by Alibaba on Wednesday are a first for the Chinese company in Europe, and are intended to provide short-term working capital to businesses that otherwise would have trouble securing funds from banks.Its British arrangement is similar to its recently announced tie-up with LendingClub Corp in the United States.British firms looking to source cheap components or goods from Chinese suppliers apply for credit online; the startups review their business track records, tax returns and other data; then provide a swift decision."We want to make financing as easy as possible for the millions of British companies that do business through Alibaba.com," said Wei Duan, Alibaba.com's European marketing and business development director.Unlike LendingClub, a peer-to-peer loans matching service, ezbob and iwoca would provide the financing themselves. They already lend to Amazon.com and eBay merchants.Ezbob gets its name from the British colloquialism for a shilling and is the trading name for Orange Money Ltd. The 4-year-old company is backed by the British government's Angel CoFund and its loans are guaranteed by the European Union.Iwoca, or "instant working capital," has secured financing from investors including Global Founders Capital and Redline Capital.Both will be providing micro-loans of 50,000 pounds ($75,315) and up to qualified firms, at anticipated interest rates of 0.75 percent to 2 percent monthly. Iwoca Chief Executive Officer Christoph Rieche said in a statement he expects to finance some 100 million pounds of deals over the next 12 months. Funds are channeled directly to Chinese suppliers.Britain is one of Alibaba's major markets, primarily for business-to-business goods sourcing on Alibaba.com. The Chinese company derives the lion's share of its revenue from retail platforms Taobao and Tmall, but it got its start supporting small businesses with Alibaba.com, which Jack Ma co-founded out of his Hangzhou apartment in 1999.The service is used by businesses on the lookout for cheap products and services from China, anything from manufacturing to components in bulk. Its executives have said they are looking for similar providers to extend financing beyond the United States, to major markets such as Australia, Germany and Canada.($1 = 0.6639 pounds)

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Qualcomm to buy back up to $15 bln of shares, raise dividend Chipmaker Qualcomm Inc said it would buy back up to $15 billion of shares and raise its quarterly dividend.Shares of the company, which said it would buy back up to $10 billion of shares in the next 12 months, rose 2.6 percent to $74.60 in extended trading on Monday. Qualcomm also raised its quarterly dividend to 48 cents per share from 42 cents, effective March 25.The company said it would finance its capital return program mainly through borrowings from the public debt markets this year. The new buyback plan replaces the previous program, which had $2.1 billion authorization remaining, Qualcomm said. The company had raised the size of its share buyback plan in March last year to $7.8 billion from $2.8 billion.Qualcomm said on Monday it would continue to return at least 75 percent of its free cash flow to shareholders annually. The chipmaker distributed $7.1 billion, or 93 percent of its free cash flow, to shareholders in the year ended September 2014.

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Kleiner ex-partner Pao testifies in Silicon Valley bias case A former partner at Kleiner Perkins Caufield & Byers accusing the venture-capital firm of gender discrimination testified on Monday that she urged firm leaders to improve human relations policies after learning that three administrative assistants had allegedly complained about harassment. Ellen Pao said those rumors led her to tell senior partners in 2007 about a brief affair she had with a colleague, who then began keeping her out of important meetings after she broke off their personal relationship. Pao said she told Kleiner leaders, including senior partners Ray Lane and John Doerr, that the firm's HR policies were too "loosey-goosey." However, those policies were not improved after her complaints, she said. Pao's lawsuit against the firm that backed Google, Amazon and dozens more iconic technology companies helped spark a broad and ongoing discussion about gender in Silicon Valley. Questioning Pao provides the best opportunity for each side to clinch their arguments, employment lawyers following the trial say. To win, Pao must seem capable, but not defensive, employment lawyers say, while Kleiner's lawyers will try to show she lacked the qualifications to advance without questioning her so harshly they lose the jury's sympathy.So far, Kleiner's case has tried to tread a fine line between acknowledging that Pao excelled in some areas, such as critical thinking, and arguing that she fell short on the leadership and interpersonal skills needed to advance at the firm.By 2012, Pao had raised concerns about a wider pattern of gender discrimination at Kleiner. She sued the firm that year.In court on Monday, Pao responded to questions from her attorney in an even tone, with the occasional smile. She said Lane encouraged her to have lunch with Ajit Nazre so they could try to continue working together despite the affair.At that lunch, Pao said Nazre told her he still loved her. "I got out as fast as I could, and he followed me to the car," she said.Still, Pao said she urged Doerr not to fire Nazre.Pao said she aired other critiques of Kleiner in 2007, including that the firm often treated tech entrepreneurs disrespectfully, arriving late to meetings and dismissively suggesting that their companies be broken up.Pao offered her colleagues advice in a memo: "Don't be an asshole."

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Swiss makers quietly gear up with smartwatches of their own To observers of the secretive Swiss watch industry, its quiet, seemingly passive response to Apple Inc's plan to attack their centuries-old business could be mistaken for submission before an overwhelming adversary.But luxury and fashion groups Richemont, LVMH, Swatch Group and Guess Inc have been busy in the past year tinkering with smartwatches of their own, while aiming to preserve their products' more timeless appeal.When Apple Watch was first announced last September, some experts dismissed such devices as appealing to a different class of customer - those who prize technology over prestige.Now analysts and industry executives are starting to think that maybe the Apple Watch juggernaut will stoke sales of luxury timepieces among younger consumers used to telling the time with their phones, rather than on their wrists. "Apple has the potential to make the watch cool again," said CCS Insight mobile analyst Ben Wood, a confessed wearable gadget freak. "I think the Swiss watch industry are going to be absolutely delighted." Swatch - which has dabbled with smartwatch experiments for more than a decade and already makes components for fitness band wearable devices, has told Swiss newspapers it is gearing up to offer smartwatches of its own in the next few months. "Apple is not the only company which is about to toss a smartwatch on the market," Nick Hayek, chief executive of Swatch, the world's largest watchmaking group, told SonntagsBlick in January. "This is not a threat but a huge opportunity for us and the Swiss watch industry."On Monday, Apple revealed that its line-up of watches will go on sale in April. The entry-level Apple Watch Sport will start at $349, the standard version at $549 and the high-end "Edition" watch at $10,000.    The upcoming Swatch Smartwatch will include a chip that allows users to make contactless payments with a swipe of the wrist. It will use long-lasting batteries and work with both Apple and Google-based phones, according to news reports.While the Apple Watch has drawn rave reviews for many of its features, its limited battery life of no more than 18 hours before re-charging is considered a big drawback. LUXURY OF TIMEThe threat of the smartwatch may also be limited due to its short shelf life as a hi-tech, frequently upgraded product. An iPhone tends to lose half its value within the first year after it is introduced, while Rolex's flagship Submariner model has risen in value, analysts at Berenberg Bank noted in a recent report.Montblanc, owned by Richemont, announced in January the launch of the TimeWalker Urban Speed e-strap watch, which combines a traditional mechanical watch with an interchangeable strap containing a Bluetooth connected device. That offers "the best of both worlds", according to Berenberg's luxury goods analyst, Bassel Choughari. He said this is less risky than the strategy of LVMH's Tag Heuer, which has partnered with an as-yet-undisclosed U.S. tech company to produce a watch outside Switzerland. "It creates a bit of a grey area between Swiss-made and probably made-in-China products, so that could be a bit difficult to manage over time," Choughari said of the danger to brands. Guess Inc has also announced plans to launch a smartwatch line called Guess Connect later this year. The new models, which come in sporty and jewel-encrusted versions, will link wirelessly to a user’s nearby Apple or Google Android smartphone. Guess says these will be compatible with thousands of existing mobile phone apps and can be controlled from the watch using voice activated commands. Fossil Group, another U.S.-based fashion group, has toyed with smartwatches since 2003. A year ago, it said it would produce a smartwatch based on Google’s Android Wear software, and in September, it said it had partnered with chipmaker Intel Corp.It too early to know whether the Apple Watch, whose price tags run as high as $17,000 for its yellow or rose gold models, will steal share from the Swiss industry, which sells about 30 million watches a year.The threat that Apple will cannibalize existing watch demand is most acute for Swatch, analysts say, because it has the highest proportion of products selling for a few hundred dollars, instead of several thousands as high-end names do. If Apple sells 20 million watches in the first year, as some analysts estimate, and all of those purchases divert buyers from other watch brands, Swatch could suffer a 6 percent hit to annual revenue, according to a calculation by Barclays analysts.Watch connoisseur Steve Baktidy says he is interested in the Apple Watch but only as a tech gadget to play with. But he also welcomed efforts by luxury makers to introduce more tech features of their own. "Absolutely I'll buy one (from Apple) but it's not going to replace my everyday watch," said Baktidy, owner of two auto body repair shops in New York and two dozen watches by luxury brands including Patek Philippe, Audemars Piguet, Breitling and Omega.

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Cyber attack hits Madison, Wisconsin, after police shooting of teen Cyber attackers are targeting city and county computer systems in Madison, Wisconsin, in retaliation for the shooting death of a 19-year-old unarmed black man by police in the Wisconsin capital, city officials said on Tuesday.The cyber attack was hitting the police department as well as other city and county websites with varying levels of intensity, blocking legitimate Internet traffic to and from the governmental agencies, officials said.Local, state and federal law enforcement agencies, including the FBI, were working to trace and apprehend the culprits, said Paul Kronberger, Madison's chief information officer."They're preventing us from utilizing the Internet. That's a huge thing," Kronberger said. "There is not a lot we can do about it. The people who do this kind of attack are very skilled."The attack, which began Monday afternoon, was thought to be initiated by Anonymous, an international network of activist computer hackers, in response to the fatal shooting of Tony Robinson by a white Madison police officer on Friday.Robinson's death has sparked outrage and protests reminiscent of those seen in Ferguson, Missouri, and other U.S. cities after the August police shooting of Michael Brown, 18, an unarmed African-American, by a white Ferguson police officer."We do know that Anonymous has claimed responsibility for this and there are people actively working to prevent it from damaging our ability to take care of business here," Madison police spokesman Joel DeSpain said.The attack was discovered around 4:30 p.m. Monday when police officers found "intermittent connectivity issues" that escalated to complete outages with their computer systems, DeSpain said. Robinson was shot Friday evening after Officer Matt Kenny responded to calls about a man dodging cars in traffic who had allegedly battered another person, according to police officials.Kenny is on paid administrative leave while the Wisconsin Department of Justice investigates the shooting.Police shootings and police tactics were the subject of scrutiny in Washington as more than a dozen protesters critical of police attended a District of Columbia Council meeting on Tuesday.The protesters were critical of what they called racially biased policing, including "jump outs," or the stopping of citizens by plainclothes officers in unmarked cars, which they said are disproportionately used in black neighborhoods in the U.S. capital.Police Chief Cathy Lanier said "jump outs" were not official policy.

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Mini army drones developed A Polish firm who develop new technologies for the military has devised a system of miniature drones capable of operating from vehicles for surveillance and even directly supporting infantry units.WB electronics, which already manufactures surveillance and target acquisition systems for the Polish army, teamed up with another firm, Optimum, to develop drones with camera systems capable of attacking small targets with explosive charges.The system, called 'Bee', can be configured to fit a number of the small-sized drones on to a military vehicle, such as the Rosomak (Polish for 'Wolverine') armored personnel carrier (APC).The range of the drones controlled from a tablet-sized interface is around two kilometers with a flight time of 30 minutes.One design, which WB Electronics say is unique to their system, is a camera head capable of thermal vision and laser target designation at just 300 grams (10.5 ounces) in weight."There is no other head this small in the world with two in-built cameras and which is also electromechanically stabilized by a gyroscope in two dimensions. This is an absolutely unique solution," WB Electronics Director For Research and New Technologies, Wojciech Komorniczak, said.The system is designed to offer support to infantry operating in an urban and densely built-up environment, and has an independent communications system."This is about a communications system which will operate very well in battle conditions despite dense urban development. Battle conditions are, for instance, when there is no mobile phone connection and the generally available wireless network is gone, so we have to supply such a network by ourselves," Komorniczak said.Other drones in the system are designed to attack targets from the air by flying close to them and exploding. Another solution in the prototype phase is the 'Warmate' drone that is meant to act like a guided missile providing a real-time video feed of its target."The innovative feature of our solution is that this drone can first identify the target and make sure that it is in fact the enemy our opponent, so that we don't strike innocent people," Komorniczak said.The 'Warmate' drone is planned to be incorporated in the 'Bee' system in the future and is a cheaper and more versatile alternative to commonly used missile systems, the company says. Its full weight is planned to be several kilograms and when stowed away in a special container is meant to be easy to carry.The company tests their drones in various conditions, ranging from Arctic to desert and jungle, as well as in high altitudes. The system is part of a tender by the Polish armed forces for a direct support attack system for the its infantry.

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Fidelity tech fund trounces all rivals without holding Apple The best performing technology fund since the peak of the dot com boom did it all without owning Apple Inc (AAPL.O), whose soaring stock price has pushed the Nasdaq near a new record high. The $941 million Fidelity Select IT Services fund (FBSOX.O) has returned an average of 10.9 percent a year since March 10, 2000, when the Nasdaq Composite hit its record high, according to Lipper data. That's more than double any other technology fund tracked by Lipper, and trounces the 0.1 percent a year generated over the same period by the PowerShares QQQ ETF (QQQ.O), the most popular exchange traded fund tracking the Nasdaq."This is a fund that doesn't have Google, doesn't have Microsoft. This is a wholly different subset of technology than most investors are familiar with," said Todd Rosenbluth, director of mutual fund research at SP Capital IQ. The fund invests at least 80 percent of its assets in firms that provide day-to-day services such as payment processing and web hosting, rather than looking for those with zooming growth, said Kyle Weaver, 38, who has been lead portfolio manager of the fund since 2009. The fund has largely kept the same investment approach since its inception, he said. "We're looking for companies that have a high degree of recurring revenue that aren't very glamorous and operate in the background of our lives instead of front and center," he said.Instead of Apple and other big household names of the Nasdaq, Weaver owns large positions in companies that few lay investors have heard of, such as Vantiv Inc (VNTV.N), a payments processing company, and data analytics company Cognizant Technology Solutions Corp (CTSH.O).Still, the size of the bets the fund takes on companies may give investors pause, Rosenbluth said."This is a very concentrated fund and while it has companies like IBM that people have heard of, it has a mixture of small and mid cap companies that will fly below the radar for most investors," he said. The fund charges 83 cents per $100 invested, a level that Morningstar considers below average. BETTING ON PAYMENTS Its top holdings are Visa Inc (V.N) and Mastercard (MA.N), both of which are up more than 220 percent over the last five years. Together, the companies make up about 26 percent of the fund's assets. Neither is the top holding in any other technology fund, according to Morningstar data. These "names we know but don't always associate with technology" have "been on a tear over the past three years," said Jeff Tjornehoj, head of Americas Research at Lipper. Outside of its bets on Visa and Mastercard, the fund has profited more from its positions in medium and small-sized companies than from the large companies it holds. International Business Machines (IBM.N), for instance, is up just 27 percent since the fund purchased it in early 2010, compared with a 130 percent rally in the broad Nasdaq Composite over the same time. Weaver splits his portfolio roughly evenly between large and small companies. He recently added to positions in Vantiv Inc (VNTV.N), a $7 billion market cap payment processing company, as well as Alliance Data Systems Corp (ADS.N), a $17 billion market cap company that operates customer loyalty programs and branded credit cards. These companies that operate in the background tend to have more profitable niches and trade at less expensive valuations than average, said Weaver. Vantiv, for instance, trades at a forward price-to-earnings ratio of 15.6, below the 20.7 multiple for the Nasdaq as a whole, while Alliance Data Systems trades at a forward P/E ratio of 16.3. Vantiv's shares are up 16 percent over the last 12 months, while shares of Alliance Data Systems have slipped 1.3 percent. "Apple is the biggest stock in the Nasdaq and everyone knows why," Weaver said. "But I bet very few people know if ADP (ADP.O) or Paychex (PAYX.O) cut their last paycheck."

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U.S. delays Obama's immigration steps after judge's rebuke President Barack Obama's administration on Tuesday delayed implementing his unilateral steps to shield millions of illegal immigrants from deportation after a judge blocked the actions at the urging of 26 states accusing Obama of exceeding his powers.In a setback to the president, U.S. District Judge Andrew Hanen in Brownsville, a city along the Texas border with Mexico, issued a temporary court order on Monday stopping Obama's executive actions that bypassed a gridlocked Congress.Hanen's action left in disarray U.S. policy toward the roughly 11 million people in the country illegally.  Obama said he disagreed with the ruling and expected his administration to prevail once the issue made its way through the courts."The law is on our side and history is on our side," Obama told reporters in the Oval Office. The president said the administration will comply with the judge's order and delay accepting applications from some of the illegal immigrants for deportation relief and work permits that had been set to begin on Wednesday."We will be prepared to implement this fully as soon as the legal issues get resolved," Obama said. He urged Congress to pass legislation to reform the U.S. immigration system more broadly.Obama said the Justice Department will appeal Hanen's preliminary injunction to the majority conservative 5th U.S. Circuit Court of Appeals in New Orleans. Hanen has previously issued other opinions critical of the Obama administration’s enforcement of immigration laws.Hanen's preliminary injunction is not a ruling on the merits of the lawsuit filed by 26 states, led by Republican bastions such as Texas. The judge issued his opinion amid a fight in the Republican-led U.S. Congress over legislation passed by the House of Representatives to allow funding for the Department of Homeland Security only if Obama's immigration actions were nullified. The department is charged with securing U.S. borders, airports and coastal waters.Neither Republicans nor Democrats showed signs of backing down, especially with the court order being a preliminary one.The judge hemmed in Obama's exertion of executive power on Nov. 20 that has drawn the ire of Republican elected officials who say he exceeded his constitutional authority."President Obama abdicated his responsibility to uphold the United States Constitution when he attempted to circumvent the laws passed by Congress via executive fiat, and Judge Hanen’s decision rightly stops the president’s overreach in its tracks," said Republican Texas Governor Greg Abbott.DEPORTATION RELIEFObama's executive orders would let up to 4.7 million illegal immigrants stay without threat of deportation. It was aimed mainly at helping 4.4 million people whose children are U.S. citizens or legal permanent residents.About 270,000 people would be able to stay under the expansion of a 2012 program that offered deportation relief to people brought illegally to the United States as children, allowing them work. That expansion had been set to begin on Wednesday.Immigration lawyers said many applicants for deportation relief under Obama’s order had already filed paperwork and the required $465 fee ahead of the beginning of the first stage of the executive action. They now must decide whether to withdraw their applications and be refunded, or continue in hopes the injunction is overturned.Obama's administration billed his moves as the biggest immigration policy shift since 1986 changes passed under President Ronald Reagan. Immigration policy is certain to become an important topic in the 2016 presidential campaign.Most of the illegal immigrants in the United States come from Mexico and other Latin American countries. Guatamala, Honduras, El Salvador and Mexico said they were disappointed with the Texas judge's order.Mexico’s Foreign Ministry said Obama's moves provided "a just migration solution for millions of families and could reinforce the significant contributions of Mexican migrants to the American economy and society."The judge wrote that the administration had not complied with procedures needed for putting into effect Obama's immigration moves, which he made after House Republicans blocked bipartisan immigration legislation passed by the Senate in 2013.In his opinion, Hanen wrote that "the states have clearly proven a likelihood of success on the merits" of the case. Hanen wrote it was "disingenuous" for the administration to maintain Obama's actions merely "supplements and amends" current policy."It represents a massive change in immigration practice, and will have a significant effect on, not only illegally present immigrants, but also the nation's entire immigration scheme and the states who must bear the lion's share of its consequences," Hanen wrote.Republicans argue that Obama often has overstepped his presidential authority in areas also including U.S.-Cuba policy and changes in his signature healthcare law.In aiming to thwart Obama's moves on immigration, they risk further alienating Hispanic voters and being accused of interfering with counterterrorism efforts by holding up money for homeland security. Republicans say there will be no interruption in the homeland security agency's critical protective missions.

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Kleiner questions whether ex-partner Pao raised HR concerns Kleiner Perkins Caufield & Byers tried to undercut a former partner's claims that she flagged "loosey-goosey" personnel policies at the venture firm but was ignored, as its lawyer cross-examined her for a second day.Ellen Pao had previously testified that she told senior Kleiner partners that the firm's human resources policies were too lax as early as 2007, but nothing was done to address her concerns. Pao, who left the firm in 2012, is suing the firm for gender discrimination and retaliation in a move that helped spark a broad and ongoing conversation about gender issues in Silicon Valley.In San Francisco Superior Court on Wednesday, Kleiner attorney Lynne Hermle displayed several emails written by Pao to senior partners, including senior partner John Doerr, about a brief affair she had with a colleague. Pao has claimed she faced retaliation for breaking off the affair, first from the colleague and eventually from other senior Kleiner executives."I'm sorry to have brought stress into your life with the issues I raised," Pao wrote in the email.Hermle asked if Pao had mentioned anything about HR policies in her correspondence. "No," Pao answered.Into the third week of this case, Kleiner's cross examination of Pao marks the first time that she has been on the defensive about her 7-year tenure at the firm, best known for backing Amazon, Google, and other iconic technology companies.The first witness in the case, former Kleiner partner Trae Vassallo, was called by Pao's attorneys to testify about unwanted advances Vassallo suffered from the same male colleague Pao had the affair with. Vassallo also described additional slights at the hands of male senior partners. During cross examination on Wednesday, however, Hermle questioned Pao about tension in her own relationship with Vassallo. At one point, Pao acknowledged she heard she made Vassallo cry in the office after accusing her of being untrustworthy.The case is Pao v. Kleiner Perkins Caufield & Byers LLC, CGC-12-520719, in California Superior Court, in the County of San Francisco.

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Google says CFO Patrick Pichette to retire Google Inc said on Tuesday that Chief Financial Officer Patrick Pichette has announced his intention to retire, marking the latest change to the Internet company's upper ranks. Google expects to find a replacement for Pichette within six months, the company said in a regulatory filing with the U.S. Securities and Exchange Commission. The effective date of Pichette's retirement has not been determined but Google said Pichette intends to assist in the search for a new CFO.The world's No. 1 Internet search company has gone through a string of changes to the senior management. Google has a market valuation of roughly $380 billion and analysts expect the company to generate $76 billion in revenue this year. Shares of Google, which finished Tuesday's regular trading session down 2.4 percent at $555.01, were down 15 cents in after-hours trading. A former telecom industry executive, Pichette joined Google in 2008. Last year, Google Chief Business Officer Nikesh Arora departed unexpectedly to become Vice Chairman of Japan's SoftBank Corp and was replaced by longtime Google executive Omid Kordestani. Vic Gundotra, the head of Google's social networking services, left in April 2014.

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PayPal sets up Israeli security center, buys CyActive Online payments company PayPal, a unit of eBay (EBAY.O), is establishing a cyber security center in Israel and has bought local start-up CyActive to help launch the development.PayPal, which is slated to split from eBay later this year, did not disclose financial details but Israeli media have said the acquisition was worth $60 million."Located in one of the world's top cybersecurity hubs, this new security center will allow us to tap into the country's cutting-edge technology and top cybersecurity talent," PayPal chief technology officer James Barrese wrote in a blog on the company's website.CyActive, which can predict how malicious software will develop and offer companies detection and prevention, had received a strategic investment from the venture capital unit ofGermany company Siemens (SIEGn.DE) in September. Financial details were not disclosed.Siemens joined Jerusalem Venture Partners (JVP), an Israeliventure capital firm, in investing in CyActive. JVP was the mainshareholder in another cyber security company, CyberArk Software(CYBR.O), which went public on Nasdaq in September.Israel's dedication to developing its defense capabilities has been extended to cyberspace in recent years, spawning an industry which has attracted a near four-fold increase in venture capital investment since 2010.Besides jumpstarting the security center, Barrese said the acquisition of CyActive will add "future-proof technology" to PayPal's security platform.This is PayPal's second acquisition in Israel, afterit bought FraudSciences, which monitors financial fraud, in 2008for $169 million. PayPal has a fraud and risk detection center in Tel Aviv.

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Investors put $116 million in bitcoin startup 21 Inc: WSJ Silicon valley startup 21 Inc has raised $116 million in venture funding to help broaden the uses of bitcoin technology, the Wall Street Journal reported. 21 Inc's lead investors include venture capital firms such as Andreessen Horowitz and RRE Ventures, with chipmaker Qualcomm Inc owning a strategic stake through its venture-capital unit, according to the Journal. San Francisco-based 21 Inc has not disclosed an independent valuation or how it plans to use the funds, the Journal said on Tuesday. Chief Executive Officer and co-founder Matthew Pauker indicated "several interesting developments over the next weeks and months" that will deal with products designed "to drive mainstream adoption of bitcoin", the Journal reported.

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Alibaba says March 18 lockup expiry will free up 437 million shares Alibaba Group Holding Ltd's 180-day post-IPO lockup expires March 18, allowing about 437 million shares or roughly 18 percent of the company to be sold publicly.The Chinese company said on Tuesday that of that total, about 100 million shares will remain subject to trading restrictions that apply to employees, until after the company announces quarterly results in May.

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Dropbox says Android security flaw fixed Dropbox, the popular online file storing system, said on Tuesday it has fixed a security flaw that could have allowed hackers to capture data stored in its service on Android devices via compromised third-party apps. Dropbox, which has more than 300 million users, said it fixed the vulnerability a few months ago in the software it provides to third parties making apps that work with Dropbox. It warned all Android developers on Tuesday to update the latest version of the software. "There are no reports or evidence to indicate the vulnerability was ever used to access user data," Dropbox said in a blog on its website. Researchers at International Business Machines Corp initially discovered the flaw, and informed Dropbox, according to both companies.

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Fast-changing security threats overwhelm IT managers: survey Security professionals are unable to keep pace with cybersecurity threats against companies as external and internal threats mushroom from both known and emerging technologies, a survey published on Wednesday showed.The study of just over 1,000 security professionals in the United States, Britain and Canada paints a picture of mounting pressures on organizations due to a shortage of necessary specialist skills, tight budgets and poor employee education.Emerging threats have changed dramatically from a year ago, as concern over managing security for social media and big data projects have declined sharply only to be replaced by new risks.Forty-seven percent of security professionals now say the pressure to move their organizations to cloud-based Internet services from in-house computer systems has become their firm's biggest emerging threat, up from 25 percent a year ago. "Few white-collar professionals face as much mounting pressure as the information security trade," said a report analyzing the survey findings from Trustwave, a supplier of managed security services based in Chicago.The study found 54 percent of respondents believed security staffing levels inside their organizations needed to double in size and another 24 percent said they needed to quadruple, in order to cope with the range of cybersecurity issues they face. Businesses face determined, well-funded attackers as their organizations create growing mountains of data that must be defended not only from outside attacks, but inside ones that are smuggled into work by unaware employees who increasingly use their own mobile phones instead of company-controlled devices.Despite this, one of the strongest complaints voiced in the survey was the pressure to prematurely release new tech projects or applications, despite security concerns. Seventy-seven percent said they were pressured to launch projects too soon.Nonetheless, a surprising 70 percent of respondents said they consider their own organizations safe from cyber attacks and data compromises. This result suggests a false sense of security in light of a separate recent study from the Ponemon Institute that found 43 percent of companies had suffered a data breach in the past year. This disconnect was most pronounced in Britain, where 80 percent of those surveyed said their organizations were safe.The poll was conducted in December and January by a third-party firm on behalf of Trustwave and drew on responses from more than 600 U.S. security professionals and another 200 each in Canada and Britain.

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Twitter opens Hong Kong office, gains China foothold Twitter Inc has opened a Hong Kong office, its first in the Greater China region, the company whose microblogging services are blocked on the mainland said on Tuesday.The office, to be headed by Twitter executive Peter Greenberger, will allow the San Francisco-based company to tap China for advertising revenue, the company said, even if Internet users on the mainland cannot see those ads.Twitter collected $479 million in fourth-quarter revenue from advertisers who paid to inject their ads, known as "promoted tweets", into Twitter users' timelines. The company has 288 million users worldwide.China's censors have blocked Twitter's microblog since 2009 along with U.S. social media platform Facebook Inc and Google Inc's YouTube. Beijing officials say this censorship is necessary to maintain social order. Twitter was credited with helping fuel the popular uprisings in the Middle East and has maintained a stridently pro-free speech stance to the extent that it has attracted international criticism for failing to police sexist and racist abuse.Despite the ban, Chinese companies including Huawei Technologies Co Ltd [HWT.UL] and the state-owned Xinhua news agency use Twitter's microblogging service to reach a global audience.Last year, the company downplayed suggestions it would seek to enter China, citing political hurdles.

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NSA sued by Wikimedia, rights groups over mass surveillance The U.S. National Security Agency was sued on Tuesday by Wikimedia and other groups challenging one of its mass surveillance programs that they said violates Americans' privacy and makes individuals worldwide less likely to share sensitive information.The lawsuit filed in federal court in Maryland, where the spy agency is based, said the NSA is violating U.S. constitutional protections and the law by tapping into high-capacity cables, switches and routers that move Internet traffic through the United States.The case is a new potential legal front for privacy advocates who have challenged U.S. spying programs several times since 2013, when documents leaked by former NSA contractor Edward Snowden revealed the long reach of government surveillance.Other lawsuits have challenged the bulk collection of telephone metadata and are pending in U.S. appeals courts.The litigation announced on Tuesday takes on what is often called "upstream" collection because it happens along the so-called backbone of the Internet and away from individual users. Bulk collection there violates the constitution's First Amendment, which protects freedom of speech and association, and the Fourth Amendment, which protects against unreasonable search and seizure, the lawsuit said.The plaintiffs include the Wikimedia Foundation, which runs the online encyclopedia Wikipedia, the conservative Rutherford Institute, Amnesty International USA and the National Association of Criminal Defense Lawyers, among other groups.The groups said in the lawsuit that upstream surveillance "reduces the likelihood" that clients, journalists, foreign government officials, victims of human rights abuses and other individuals will share sensitive information with them.Legal standing, which requires the organizations to show individual, particular harm, is the most significant obstacle for them, said Stephen Vladeck, a professor at American University Washington College of Law. While it might stand to reason that the plaintiffs' communications are being intercepted, they can only use legally public information, which the government has acknowledged or declassified, to show harm, Vladeck said. It is "not beyond the pale" that the government could make more information public while the lawsuit is pending, he said. For now, the lawsuit is a “longshot” according to Vladeck.An Obama administration official said: "We've been very clear about what constitutes a valid target of electronic surveillance. The act of innocuously updating or reading an online article does not fall into that category."The U.S. Department of Justice, which was named as a defendant along with the NSA, said it was reviewing the lawsuit. The NSA did not immediately respond to requests for comment."By tapping the backbone of the Internet, the NSA is straining the backbone of democracy," Lila Tretikov, executive director of the Wikimedia Foundation, said in a statement. STATE SECRETSAnother potential roadblock for the groups is that the government could try to assert what is known as the state secrets privilege, saying that continuing with the lawsuit would expose classified information, said Carrie Cordero, director of national security studies at Georgetown University Law Center.Tretikov and Wikipedia founder Jimmy Wales wrote in the New York Times' opinion pages that they were concerned about where data on their users ends up after it is collected in bulk by the NSA. Citing close intelligence ties between the United States and Egypt, they said a user in Egypt would have reason to fear reprisal if she edited a page about the country's political opposition.The U.S. Supreme Court in 2013 rejected another challenge to NSA surveillance of email and other communications, ruling that a similar coalition of plaintiffs did not prove they had been spied upon or would be.The ruling, however, was made just three months before the first of Snowden's revelations. Documents made public by Snowden support the right to sue, said Patrick Toomey, one of the American Civil Liberties Union lawyers working on the lawsuit.Toomey said that with upstream collection, the NSA systematically taps into Internet message traffic between U.S. and overseas users as it moves in and out of the United States over fiber-optic cables.The NSA then systematically sweeps through the vast amount of content for anything relating to specific individuals or groups considered by U.S. agencies to be intelligence targets, according to the documents leaked by Snowden.Consequently, Toomey said, anyone inside the United States who sends or receives messages via the Internet to or from someone outside the country is likely to have had messages examined in some way by NSA. The case is Wikimedia Foundation, et al, v. National Security Agency, et al, U.S. District Court for the District of Maryland, No. 15-662

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Fuhu's nabi tablet to offer content from Disney, Discovery Fuhu Inc, which makes kid-friendly computer tablets, said it signed deals with Walt Disney Co and Discovery Communications Inc to add their content to monthly subscription offers on its nabi tablets.The deal with Disney allows Fuhu to curate on nabi Pass a collection of videos from Disney Channel, Disney Junior and Disney XD, and select Disney apps and ebooks.These would include Disney's popular video content such as "Mickey Mouse Clubhouse", "Girl Meets World", among other kids video content and ebooks for characters such as Disney princesses.Discovery Communications will provide its content from the Discovery Family Channel brand, Fuhu said.The company launched in December its monthly subscription service, nabi Pass, for children aged 3 to 14 with content from Walt Disney Records, DreamWorks Animation and National Geographic Kids.

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Kate Brown sworn in as Oregon governor, replacing embattled Democrat Liberal Democrat Kate Brown was sworn in as Oregon governor on Wednesday, pledging to restore trust in government after an influence-peddling scandal led to the resignation of her predecessor. Brown replaced fellow Democrat John Kitzhaber, who stepped down as his administration faced federal and state corruption investigations because of allegations that his fiancée, Cylvia Hayes, used her role in his office for financial gain.Brown, 54, who had been secretary of state, took the oath of office during a ceremony in the state House of Representatives in Salem, Oregon's capital, making her the nation's first openly bisexual governor. Kitzhaber, who had been elected in November to an unprecedented fourth term, has denied wrongdoing but agreed last week to resign following pressure from prominent Democrats who were once his strong allies."Oregon has been in the national news for all the wrong reasons. That changes, starting today," said Brown, known for her efforts to expand voting and promote campaign finance transparency. "It's time for us to get back to work. It's time to move Oregon forward."Brown's ascent to the governorship could give her an edge in a 2016 election triggered by Kitzhaber's resignation. Oregon media had reported she had already been mulling a run for governor.In public remarks after the swearing-in ceremony, Brown called for reforms to "restore the public's trust" and for more jobs and access to good education and healthcare, but offered little in the way of specifics. She also vowed that neither she nor any family members would accept outside compensation related to state business.Kitzhaber did not attend the ceremony and made no public statements afterward. Before stepping down, he commuted the sentence of a man convicted of attempted murder, Brown's office said. UNEASE AMONG REPUBLICANSRepublicans have expressed concern that Brown might try to lead Democrats further left."She doesn't come in with a strong mandate," University of Oregon political scientist Joseph Lowndes said. "In terms of getting things done, the landscape has changed in Salem and it may be that Democratic leaders in the Senate and House have more authority given there is a vacuum in leadership."Brown, whose role as secretary of state was focused mostly on behind-the-scenes workings of governance such as voting, was appointed to the state House in 1991. In 2004, she became the first woman to serve as state Senate majority leader. She has touted her work in passing civil rights and domestic partnership laws, and she backed a bill to let Oregonians register to vote when they get a driver's license. She also has worked to create an online campaign donation database. Critics accused her of playing politics when she delayed a 2012 election for labor commissioner, a move perceived by some as helping a fellow Democrat.

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Former Google exec Lee confirmed to lead U.S. patent office The U.S. Senate on Monday confirmed former Google Inc executive Michelle Lee to head the U.S. Patent and Trademark Office, a position that has been vacant for more than two years.President Barack Obama's choice was approved by an unrecorded voice vote in the full Senate, just over a week after the Senate Judiciary Committee gave the nod to her nomination. The Alexandria, Virginia-based federal agency has more than 12,000 employees whose main role is to determine which inventions deserve a patent. The agency had gone without a confirmed leader since David Kappos, a former IBM Corp executive, left in February 2013. Lee, a former deputy general counsel and head of patents and patent strategy at Google, had been the acting director of the office. She started with the agency in 2012 as the first director of the patent office's Silicon Valley outpost. The agency has been a focus of Congressional efforts at patent reform aimed at curbing patent litigation in federal court. The patent office has been criticized for approving what some say are weak software related-patents that have formed the bulk of the litigation. Robert Stoll, a 29-year veteran of the agency and its commissioner of patents from 2009 to 2011, said Lee's main task will be to improve the quality of patents granted by the agency."Assuring better quality patents will help blunt the patent troll problem," said Stoll, now a partner at the law firm of Drinker Biddle & Reath in Washington, D.C., using a term some use for companies that profit from patent lawsuits instead of making products. Another complaint has been the agency's long backlog in examining patents. In December 2011, the unexamined backlog was almost 722,000 patents. It currently stands at 602,265, according to the agency's website.The Senate on Monday also approved Daniel Marti to be the White House's intellectual property enforcement coordinator, otherwise known as the "IP Czar."

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Google change allows company statements to top news searches A little-noticed change in the way Google selects search results has allowed company statements to top the list of news links shown when users search for information on businesses.The measure may cost news publishers web traffic and risks misleading users, analysts said.A Google spokeswoman said that in September the search giant widened the number of sources from which it drew the entries that appear in the "in the news" section of its search results page.Previously, only links to stories on approved news sites such as those of newspapers and TV stations appeared in this section of the main search page."The goal of search is to get users the right answer at any one time as quickly as possible -- that may mean returning an article from an established publisher or from a smaller niche publisher or indeed it might be a press release," the Google spokeswoman said.She added Google, which did not announce the September change, does not get paid for including press releases on the lists.Recent examples of companies whose announcements topped the "in the news" section include Franco-Dutch SIM card maker Gemalto. Last month, Gemalto confirmed reports it had likely been the victim of hacking by U.S. and British spies. The story garnered wide media attention but when users did a Google search for the word "Gemalto", the first "in the news" listing was a Gemalto statement, which played down the impact of the hacking.Earlier this week, on the day Apple launched its new watch, a link to a promotional site for the product topped the "in the news" selection.Gemalto and Apple were not available for comment.Josh Schwartz, chief data scientist at Chartbeat, which tracks web traffic for news publishers and others, said it was likely that companies could use search engine optimization techniques to lift their rankings in the news listings. He said the new system could confuse readers, directing them towards public relations material and away from news reports. That also poses a risk to news organizations that rely on Google and other search engines to direct readers to their websites."The 'in the news' modules are potentially an extremely powerful driver of traffic," Schwartz said. "It could cost news sites traffic."

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Sharp executive says display unit to remain independent Sharp Corp is not considering merging its troubled display business with rival Japan Display Inc, an executive said on Tuesday, adding that the unit had a technological advantage over its competitors."Looking at our overall display business including our medium and large-sized screen operations, we believe we should be on our own," Norikazu Hohshi, the head of Sharp's device business, which includes displays, told reporters at a briefing.He was responding to speculation that loss-making Sharp could merge its display business with Japan Display.Sharp is due to post its third annual net loss in four years, hurt by aggressive competition from its rival and weaker-than-expected smartphone demand in China.Sharp is compiling a new business plan, and sources familiar with the matter said Chief Executive Kozo Takahashi met with officials from its main lenders Mizuho Bank and Bank of Tokyo-Mitsubishi UFJ last Thursday, although he did not request specific amounts or make promises about restructuring.Hohshi acknowledged Sharp may need help, but said nothing had been decided. "It is true that our capital is thin. We will need more support in this area in the future, but that is currently under consideration," he said.The banks agreed in September 2012 to rescue Sharp with loans and credit lines worth 360 billion yen, or $3 billion at today's exchange rates, in exchange for promises to return to the black by this year. Sharp then exited the European TV market and closed solar-panel businesses in Europe and the United States.(This story has been corrected to remove extra word "was" in the first paragraph; also to specify in second paragraph that device business includes displays)

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Four Hewlett-Packard patents invalidated in ServiceNow case A federal judge in California on Tuesday invalidated four Hewlett-Packard Co patents for being too abstract, marking a setback in the company's patent infringement lawsuit against competitor ServiceNow Inc. Hewlett-Packard last year accused its competitor, a Santa Clara, California-based software company, of infringing eight patents on software for managing computer networks. But the federal court in San Jose, California said four of them were too abstract to deserve legal protection. The ruling involves one of the biggest companies to have its patents struck down in the wake of a highly influential 2014 U.S. Supreme Court decision, Alice v. CLS Bank, which experts say has placed thousands of software-related patents in peril. That ruling stated that when an idea is too abstract, or basic, to deserve a patent, it does not become eligible for a patent if run on a computer.Since that high court decision last June, more than 20 lower-court rulings have used the ruling to invalidate software patents, according to a Reuters tally. By contrast, only a handful have upheld the soundness of the patents involved. In her ruling on Tuesday, U.S. District Judge Beth Freeman said she was invalidating the patents because even if Hewlett-Packard may have been first with an innovative idea, "this does not entitle HP to a patent."Hewlett-Packard said the company will press forward with its lawsuit on the four patents Freeman's ruling left intact.“We are disappointed in the court’s ruling, and are considering next steps as this is a rapidly evolving area of the law," the company said in a statement.ServiceNow declined to comment on the decision.Palo Alto, California-based Hewlett Packard closed down 0.85 percent at $32.67 in trading on the New York Stock Exchange.The case is Hewlett-Packard Co v. ServiceNow, Inc, in the U.S. District Court for the Northern District of California, No. 14-cv-570.

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HBO standalone service coming to Apple devices in April HBO's standalone streaming service will launch on Apple Inc devices next month in time for the season premiere of hit series "Game of Thrones," the network said on Monday, a move to reach millions of viewers who do not subscribe to pay television packages.The new HBO Now service will cost $14.99 a month. It will include the network's past, present and future series plus its lineup of Hollywood movies, HBO Chairman and Chief Executive Officer Richard Plepler said at an Apple event in San Francisco. It is the first time the premium network will be available to people with Internet access who shun traditional TV bundles with dozens of channels. Other media companies including CBS Corp and Dish Network Corp also are taking steps to reach those audiences."This is a transformative moment for HBO," Plepler said after an introduction by Apple CEO Tim Cook.The move by Time Warner Inc's HBO could threaten the video businesses of cable and satellite companies, which are fighting to keep customers from dropping their TV packages. It also amps up competition with streaming services such as Netflix Inc. HBO's library of hits includes "The Sopranos" and "Sex and the City."Starting in early April, HBO Now will be available through the Apple TV box and on iPhones, iPads and the iPod touch. The fifth season of "Game of Thrones" premieres April 12. Apple will be the exclusive digital provider of HBO Now for three months. The network also is aiming to convince traditional TV distributors to offer the service as early as April.Plepler, in an interview, said HBO Now offers pay TV distributors the chance to package it with broadband-only or smaller TV bundles and improve retention. The distributors also would get a share of the monthly revenue. "That's an enhancement and a turbocharge to their own business," he said.Verizon Communications Inc, AT&T Inc and Dish had no comment. Other distributors could not immediately be reached.HBO Now is separate from the HBO Go streaming service for customers who subscribe through TV packages.Apple also said it was cutting the Apple TV's price to $69 from $99.Time Warner shares rose 1.3 percent to $85.20 on the New York Stock Exchange. Shares of Netflix fell 1.9 percent to $445.63, while Apple shares climbed 0.4 percent to $127.14. Both trade on Nasdaq.

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Samsung Electronics raises production target for new Galaxy phones: Electronic Times South Korea's Samsung Electronics Co Ltd has raised its production target for the new flagship Galaxy smartphones following positive market reception, the Electronic Times newspaper reported on Wednesday. The South Korean paper, citing an unnamed source, said Samsung increased its total production target for the Galaxy S6 and Galaxy S6 edge devices to 8 million units for April from 7 million previously. The company's production target for March remained unchanged at 5 million units, according to the paper. A Samsung spokeswoman said the company did not comment on rumors or speculation. Designed from scratch in an operation dubbed "Project Zero", the Galaxy S6 and its curved-edges variant are critical for Samsung's plans to reverse plunging smartphone revenues that led to its first annual earnings fall in three years in 2014.The new phones have been well-received for the revamped design and various technological improvements, prompting some brokerages to increase shipments forecasts for Samsung smartphones this year. They will start selling in 20 countries on April 10.

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Kevin Spacey revels in his anti-hero president in 'House of Cards' Forget about likeable, upstanding characters doing what is right.Kevin Spacey is convinced that like the ruthless, morally corrupt politician he portrays in Netflix's Emmy Award-winning political drama "House of Cards," the anti-hero is here to stay."The third season explores what happens to these people when they suddenly are in the hot, white spotlight of being president and first lady," Spacey told Reuters. "That's a very interesting dynamic to start to investigate."When the third season of Netflix Inc's online streaming series premiered on Feb. 27, all 13 episodes were immediately available to subscribers, enabling millions of fans to binge-watch the show that follows Spacey as President Francis Underwood and Robin Wright as his ambitious first lady, Claire.Like the first two seasons, which saw the couple destroy anyone who obstructed their path to the White House, the latest episodes find them conniving to consolidate their presidential power base.Underwood embodies the character to whom audiences are both repelled and attracted.Spacey, 55, who has won Oscars for "American Beauty" and "The Usual Suspects," credited the groundbreaking 1980s police drama "Hill Street Blues," as well as HBO's "The Sopranos," with its anxiety-ridden, overweight mob boss and other shows for changing television and introducing anti-hero characters."It seem to me the runway had been very well paved by the time we arrived," he said. "I think it is what audiences are demanding, not what we are. This is what people want.""House of Cards" made history in 2013 when it became the first online series to win three Emmys and established Netflix as a leader in original entertainment.It also provided audiences with a novel way to watch the series by streaming it online, and gave writers and actors alike a longer creative arch to develop characters.Wright, 48, who directed an episode of the current series, likened the format to building a 13-hour film."It's a novel that you, the public, can pick up when you want it, read as many chapters as you want in whatever format, put it down for six months and then return to it," she explained.And Spacey believes the format is here to stay."Creatively, it is the best it can get," he said. "I also think that whether people want to admit it or not, the days of appointed viewing (times) are more behind us than ahead of us."

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Cameroon to renew MTN mobile license, approve 3G Cameroon will renew the operating license of South African mobile communication group MTN and give the group a third generation (3G) license for $125 million, industry sources said on Tuesday.The two leading operators in Cameroon - MTN and its rival Orange, a subsidiary of France's Orange - have been locked in negotiations with the government over the renewal of their licenses and clearance to offer 3G services.Cameroon's Minister of Post and Telecommunications Jean-Pierre Biyiti bi Essam said in a statement the government would hold a signing ceremony with MTN in Yaounde on Wednesday, but did not provide further details. Sources said Cameroon had demanded and got 75 billion CFA Francs ($125 million) each from both operators to renew the licenses.The sources said Orange was also expected to sign a renewal deal soon.Cameroon's third mobile operator Nexttel, owned by Vietnam's Viettel Group, a state-owned mobile network operator wholly owned by the Ministry of Defence, received approval to offer 3G services when it launched last year.The approval of 3G services could boost Internet penetration in Central Africa's biggest economy and spur growth in the online business sector. Just 6 percent of Cameroon's population has internet access, among the lowest in Africa, despite having more than 16 million mobile phone subscribers.

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U.S. judge revokes bail for missing man accused in Facebook fraud A federal judge on Tuesday revoked the bail of an upstate New York man who disappeared from authorities as he faces criminal charges that he tried to defraud Facebook Inc founder Mark Zuckerberg out of half of the social media company.Paul Ceglia, 41, could not be located on Sunday when U.S. marshals were dispatched to check on him at his home. An ankle bracelet that he was supposed to be wearing to monitor his movements was found there.In revoking Ceglia's bail, U.S. District Judge Vernon Broderick in Manhattan said it could be difficult to remove an ankle bracket."It is something it seems like took a fair amount of planning," the judge said at a hearing.Ceglia, a wood pellet salesman from Wellsville, New York, was charged in November 2012 with forging documents to extort Zuckerberg out of a 50 percent stake in Facebook, whose market value on Monday was about $222 billion.The defendant has pleaded not guilty and been scheduled to go on trial on May 4.Ceglia's lawyers, Robert Ross Fogg and Gil Messina, said by phone during the hearing that they had each last heard from their client several days ago.Fogg also said he was unable to find Ceglia by phone, text message or email upon learning of his disappearance."I can't state as to what his state of mind is," Fogg said.Ceglia's criminal fraud case arose from his having allegedly forged a contract and emails underlying a June 2010 civil lawsuit that he had brought against Facebook and Zuckerberg.That lawsuit claimed that Ceglia was entitled to a huge Facebook stake under an April 2003 contract with Zuckerberg, then a Harvard University freshman who had done programing work for Ceglia's StreetFax.com.U.S. District Judge Richard Arcara in Buffalo, New York, dismissed Ceglia's lawsuit in March 2014, saying the contract had been doctored. Ceglia is appealing, and Facebook later sued several lawyers who represented him in that case.The case is U.S. v. Ceglia, U.S. District Court, Southern District of New York, No. 12-cr-00876.

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Alibaba in funding talks with India's Snapdeal: source Alibaba is in talks with Indian online marketplace Snapdeal over a potential cash investment, a source familiar with the negotiations said, in what would be the Chinese e-commerce giant's first direct investment in India.Snapdeal competes in India with bigger rivals Flipkart.com and Amazon.com, and media reports have said it is seeking $1 billion in its latest funding round to fuel growth.In October last year, Snapdeal secured a $627 million investment from Japan's Softbank, itself an early backer of Alibaba.The source, who declined to be named as talks are not public, said on Wednesday that negotiations were "ongoing", confirming Indian media reports. The source said Alibaba was "looking, but there’s still no deal".A second source familiar with the matter confirmed the two sides had spoken in the past and said investor interest was "high", but gave no detail on any current negotiations.Snapdeal declined to comment.Alibaba has been eyeing India for months, but has yet to invest directly in the e-commerce space. Ant Financial, an affiliate of Alibaba controlled by senior Alibaba executives, bought a 25 percent stake in the Indian payment services provider behind Paytm last month.

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Republican Jeb Bush says eager for Netanyahu speech to Congress Republican Jeb Bush, a possible contender in the 2016 presidential contest, said on Wednesday that he is eager to hear a controversial speech by Israeli Prime Minister Benjamin Netanyahu to the U.S. Congress next month.Bush, a former Florida governor, said he was surprised by the White House's reaction to the planned speech, organized by congressional Republicans. President Barack Obama has said he will not meet with the foreign leader to avoid the appearance of interfering in Israel's national elections on March 17.

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Apple debuts $17,000 watch, some waiting for killer app Apple Inc (AAPL.O) launched its long-awaited watch on Monday, including yellow or rose gold models with sapphire faces costing up to $17,000, but some investors questioned whether Chief Executive Tim Cook's first product would be a breakaway hit.Apple's first new device since Cook became CEO will be available for order on April 10 and in stores on April 24, including chic boutiques in Paris, London and Tokyo.In a nod to both fashion and technology, Cook shared the stage with model Christy Turlington Burns, who used it to train for a marathon, and Apple engineers who showed how to send drawings, pictures and even heartbeats with the watch.Apple shares barely budged, however. Investors and analysts agreed that Apple would sell millions to fans but questioned whether it had a "killer app" that would engage a broader audience. Apple in September gave a sneak peek of the watch which included many features shown on Monday."I think there's a niche market for these kind of Apple tech people who love Apple and will buy anything they come out with. But I just don't know if it's going to be the power product that everyone's looking for," said Daniel Morgan, senior portfolio manager at Synovus Trust Company in Atlanta, Georgia, who described Wall Street as "scratching its head".Members of the style establishment, in Paris for shows from the glittering likes of Chanel, Givenchy and Hermes mostly said they saw the watch as a gadget, not this season's must-have accessory.The Edition price tag which is inexpensive compared with a Patek Philippe Nautilus at just over $42,000 on 11main.com, inspired plenty of jibes on social media, including many who questioned whether it would become outdated and compared the price to a car's. "Wonder what kind of gas mileage it gets," asked Twitter user Christopher Caruso.Nevertheless many made clear they wanted it. "My birthday is gonna rock this year... :-) #applewatch," wrote Jay Runquist.The Apple Watch sport will start at $349 for the smaller, 38-mm model. The standard version of the watch will start at $549 and the high-end "Edition" watch will be priced from $10,000, said Cook, who loved the Dick Tracy ability to hold phone calls by watch."I have been wanting to do this since I was five years old," said Cook.The different models reflect different materials. A $17,000 Edition in the smaller, 38-mm size, has a case made from a customized version of 18-karat rose gold, which is especially hard, along with a sapphire display. It comes with a magnetic charging case.A $349 Sport model the same size has an aluminum case, a 'sport band' and a magnetic charging cable, and no case.All the watches share digital faces that can look like traditional time pieces, show the heart beat of a friend, and display photos and interfaces for apps."Apple's been very good at personalizing its products," said Angelo Zino, an analyst at S&P Capital IQ, who said the "intimacy" of the watch was appealing. He saw 10 million in sales this year.In the presentation, Cook described the watch handling many functions currently associated with the iPhone, which tethers wirelessly to the watch and connects it to the Internet. The watch will track exercise and remind wearers of events with a tap on the wrist.Cook also laid out other product successes and launched a new MacBook notebook computer that starts at $1,299 and weighs as little as 2 pounds.Every major car brand had committed to delivering Apple's CarPlay entertainment system, and the new iPhone 6 and 6 Plus have 99 percent customer satisfaction rates, he said. The Apple Pay payment system is now accepted at 700,000 locations, and Time Warner Inc's (TWX.N) HBO in April will debut its streaming HBO NOW service on Apple TV.Apple also is offering researchers new development tools, called ResearchKit, to help medical researchers design apps for clinical trials, the company said.

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Exelis to offer drone-tracking system as industry, NASA seek to ease safety fears U.S. aerospace company Exelis Inc (XLS.N) is close to unveiling a low-altitude surveillance system for drones, the latest sign of how a "highway in the sky" is likely to evolve.The system, whose existence has not been previously reported, shows how Exelis and other companies are racing to create technology that enables drones to safely fly over long distances to do everything from inspections of remote pipelines to surveys of crops or delivery of packages.The U.S. Federal Aviation Administration recently proposed regulations that largely ban unmanned aircraft systems from many of those tasks by requiring that remote pilots keep the drones in sight. This is giving foreign companies the chance to leap ahead of the U.S. in figuring out how to best exploit drone technology.But the National Aeronautics and Space Administration (NASA) is working with Exelis and other companies, universities and government agencies, to develop an air traffic management system that could persuade the FAA to allow flights beyond the line of sight, provided the operator is using such a tracking system.Exelis' products, called Symphony UAS-Vue and RangeVue, are significant because Exelis has a head start on competitors: It has the exclusive right to use a data feed it already supplies the FAA to track manned aircraft, using 650 ground stations. It will augment the feed with lower-altitude data that pinpoint drone locations, says Exelis, which is being taken over by communications company Harris Corp (HRS.N) in a $4.75 billion deal."For any drone that needs to go beyond line of sight, this is a potential solution," Edward Sayadian, vice president of civil aerospace systems at Exelis, told Reuters.Exelis said it plans to announce the products this month and make RangeVue available this summer at some of the six sites the FAA has set up to test drones. The company developed the system quickly in the last six months, and hasn't yet set prices. For graphic click here reut.rs/1DTMW03While Exelis sees potential markets overseas, it is focused initially on the U.S., where it can leverage its ground stations and FAA feed. It also wants to be part of whatever overall system the FAA adopts after NASA finishes work on the prototype in three to five years.In the meantime, Exelis said it plans to market its UAS-Vue and RangeVue directly to companies that want to operate drones commercially in the U.S.    SAFETY FEARSNASA and the industry face steep challenges overcoming fears of thousands of drones crisscrossing the skies, crashing into planes and people. A Reuters/Ipsos online poll recently found 73 percent of U.S. respondents want drone regulations.When drones are in the same airspace as airliners, "I need to be able to see them on my display just like I see a 747," said Capt. Tim Canoll, president of the Air Line Pilots Association International, the world's largest union for pilots.Canoll and aviation safety experts also worry about latency, the lag time as control commands are transmitted to drones, and what happens when the control link is lost and the drone is out of control.Other companies also are addressing drone safety. San Francisco-based startup DroneDeploy, for example, has a system that automatically checks the drone's battery life, surrounding terrain, weather and other parameters and prevents flight if there's a problem. NoFlyZone.org, based in El Segundo, California, is building a database to keep drones away from private residences and other properties. Airware, based in San Francisco, is building an operating system for commercial drones that works with a variety of aircraft, cameras and other tools. Sagetech, of White Salmon, Washington, is making transponders for drones so that they can send location data to a system like the one Exelis has built.Amazon.com Inc (AMZN.O) is developing its own technology for drone package delivery, known as Prime Air, but says it sees the importance of a drone traffic management system and is working with NASA on the prototype."We won't launch Prime Air until we are able to demonstrate safe operations," said Gur Kimchi, vice president of Amazon Prime Air.NASA has decades of experience with air traffic management research and development, and plans multiple "builds" of the prototype unmanned aircraft traffic management (UTM) system. NASA's system will provide services such as airspace configuration, weather and wind data, strategic flows of drones, sequencing, separation management between drones and contingency support, said Parimal Kopardekar, the NASA principal investigator of the project at the Ames Research Center in Silicon Valley. It also will allow "geo-fences" to be placed around airports and other sensitive areas such as the White House, where a small quad copter breached a security perimeter and crash landed in January. MOVING MAPExelis' drone tracker will show terrain, weather and airspace boundaries in real time. The system can be called up on tablets and laptops, and can send emails and text message alerts if a drone is in a danger area."It's like the moving map that you have on the GPS in your car," Exelis' Sayadian said. Exelis also is creating portable relay stations that can be set up in the field to extend the range a drone can fly away from the pilot. It plans to test them on the trans-Alaska oil pipeline this year.Though NASA is working with Exelis, it said other communications companies also could provide drone tracking in the final system. The system that is ultimately adopted could be operated and maintained by federal, state or local governments - or by private companies using a fee for service model, NASA says.A spokeswoman for the FAA, which will chose the final configuration, said it is too early to discuss what the system might look like.

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First round-the-world solar flight takes off from UAE Two pilots attempting the first flight around the world in a solar-powered plane began the maiden leg of their voyage on Monday, the mission's official website said. Solar Impulse 2 took off from Abu Dhabi in the United Arab Emirates en route to the Omani capital Muscat at the start of a five-month journey of 35,000 km (22,000 miles) organized to focus the world's attention on sustainable energy."Solar Impulse wants to mobilize public enthusiasm in favor of technologies that will allow decreased dependence on fossil fuels, and induce positive emotions about renewable energies," said the mission website, which maps out the plane's location and broadcasts audio from the cockpit in real time.The plane is only as heavy a family car (2,300 kg, 5,100 pounds) and but has a wingspan as wide as the largest passenger airliner. Its journey will span approximately 25 flight days broken up into 12 legs at speeds between 50 and 100 km (30 to 60 miles) per hour.Studies, design and construction took 12 years and a first version of the craft rolled out in 2009 broke records for heights and distances traveled by a manned solar plane.The flight will make stopovers in India, Myanmar and China before crossing the Pacific Ocean and flying across the United States and southern Europe to arrive back in Abu Dhabi."Miracles can be achieved with renewables such as solar power," Swiss pilot Bertrand Piccard, who also made the first non-stop circumnavigation of the globe in a balloon in 1999, told Reuters in January."We want to show we can fly day and night in an aircraft without a drop of fuel," he said.Companies involved in the project include Bayer AG, Solvay, ABB, Schindler, Omega and Abu Dhabi's Masdar.

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N.Y. man missing ahead of fraud trial over Facebook claim: lawyer An upstate New York man, who was set to face trial in May for attempting to defraud Facebook Inc and founder Mark Zuckerberg, is missing, his lawyer said on Monday.Paul Ceglia, 41, had been required to wear an electronic bracelet before his trial. But Robert Fogg, his lawyer, said Ceglia's ankle bracelet was found at his home after the U.S. Marshals Service was dispatched to check on him on Sunday.Fogg said he has not heard from Ceglia. U.S. District Judge Vernon Broderick has scheduled a hearing for Tuesday that was "most definitely spawned by the recent event," Fogg said.Representatives for Bharara's office and the Marshals Service did not respond to requests for comment.Ceglia, of Wellsville, New York, was first charged in 2012. He claimed he was entitled to ownership of half of Facebook, based on a 2003 contract the two had signed, but prosecutors accused him of forging the contract with Zuckerberg, who would be expected to testify at trial.Ceglia, who was to face trial May 4, has pleaded not guilty. Fogg said Monday that Ceglia has "always been concerned with justice.""He has always been concerned about if he'd get a fair trial," Fogg said. The charges flowed from a 2010 civil lawsuit Ceglia filed against Zuckerberg and Facebook in Buffalo, New York.The lawsuit contended the two men signed a contract when Zuckerberg was a freshman at Harvard University that gave Ceglia half of a planned social networking website.Zuckerberg had previously done some programming work for Ceglia's company, StreetFax.com, and Facebook has said the only valid contract between them related to that company.Prosecutors said Ceglia forged documents as part of the Buffalo litigation, including the contract and email correspondence with Zuckerberg.Last year, a Buffalo federal judge dismissed Ceglia's lawsuit, finding the purported contract for an ownership stake in Facebook was doctored. Ceglia is appealing.The case is U.S. v. Ceglia, U.S. District Court, Southern District of New York, No. 12-cr-00876.

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Four Hewlett-Packard patents invalidated in ServiceNow case A federal judge in California on Tuesday invalidated four Hewlett-Packard Co patents for being too abstract, marking a setback in the company's patent infringement lawsuit against competitor ServiceNow Inc. Hewlett-Packard last year accused its competitor, a Santa Clara, California-based software company, of infringing eight patents on software for managing computer networks. But the federal court in San Jose, California said four of them were too abstract to deserve legal protection. The ruling involves one of the biggest companies to have its patents struck down in the wake of a highly influential 2014 U.S. Supreme Court decision, Alice v. CLS Bank, which experts say has placed thousands of software-related patents in peril. That ruling stated that when an idea is too abstract, or basic, to deserve a patent, it does not become eligible for a patent if run on a computer.Since that high court decision last June, more than 20 lower-court rulings have used the ruling to invalidate software patents, according to a Reuters tally. By contrast, only a handful have upheld the soundness of the patents involved. In her ruling on Tuesday, U.S. District Judge Beth Freeman said she was invalidating the patents because even if Hewlett-Packard may have been first with an innovative idea, "this does not entitle HP to a patent."Freeman's ruling left intact HP's case involving the remaining four patent. Representatives from both companies could not immediately be reached for comment. Palo Alto-based Hewlett Packard was slightly lower in late afternoon trading, down 0.45 percent at $32.80. The case is Hewlett-Packard Co v. ServiceNow, Inc, in the U.S. District Court for the Northern District of California, No. 14-cv-570.

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Wikipedia feels 'targeted' by NSA, co-founder says The Wikimedia Foundation believes it can win its case against the U.S. National Security Agency because it has evidence that mass surveillance had caused it harm, Wikipedia co-founder Jimmy Wales said on Wednesday.Wales also said he thought the lawsuit, brought Tuesday by Wikimedia and rights groups, would end up in the U.S. Supreme Court because either side is likely to appeal any ruling against it. A U.S. Department of Justice spokeswoman did not immediately respond to a request for comment on Wednesday.In the legal challenge to the spy agency, Wikimedia and eight other groups said one of the NSA's mass surveillance programs violates privacy rights and makes people worldwide less likely to share sensitive information.The U.S. Supreme Court in 2013 rejected another challenge to NSA surveillance of email and other communications, ruling that a similar coalition of plaintiffs did not prove they had been spied upon or would be. The ruling, however, was made just three months before documents made public by former NSA contractor Edward Snowden revealed extensive U.S. spying. "We have proof that it's actually impacting us from the Snowden documents. Wikipedia was specifically targeted for upstream surveillance," Wales said during a question-and-answer session at a pensions conference in Edinburgh. The lawsuit takes on what is often called "upstream" collection because it happens along the so-called backbone of the Internet and away from individual users.One Snowden-released document, which was included in the lawsuit, had the logo of Wikipedia among organizations whose online user data the spy agency was interested in."We have other evidence that will be presented in court of the harm that has caused us," Wales said, without elaborating on the evidence. U.S. lawyers with expertise in national security have called the lawsuit a longshot because of the difficulty of showing harm and because spy agencies are sometimes able to block litigation by citing the need to protect state secrets.The case is Wikimedia Foundation, et al, v. National Security Agency, et al, U.S. District Court for the District of Maryland, No. 15-662.

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Apple seeks to dismiss lawsuit filed by electric battery maker Apple Inc asked a U.S. court on Tuesday to dismiss a civil lawsuit filed by battery maker A123 systems over engineers hired by Apple, saying A123's claims were too speculative to proceed, according to a court filing. Apple is exploring how to make an electric car and has been hiring engineers with deep expertise in automobile systems. Around June 2014 Apple began aggressively poaching A123 engineers tasked with leading some of the company's most critical projects, A123's lawsuit said.Last week Apple asked for an extension to respond to the lawsuit because the two companies were exploring a settlement. The latest filing did not provide any update on those talks.An A123 spokesman declined to comment, and an Apple representative was not immediately available.A123 sued Apple and five former A123 employees in February, alleging breach of contract and several other claims.In its motion to dismiss on Tuesday, Apple said A123 did not present enough concrete evidence to move forward in court. "Apple hiring five A123 employees, without more, does not indicate improper means or motive to support a claim for tortious interference or 'raiding,'" the company said in its filing. A123 Systems is a pioneering industrial lithium-ion battery maker, which was backed by a $249 million U.S. government grant. It filed for bankruptcy in 2012 and has been selling off assets.Lithium-ion is a battery technology that can be used in applications from computers to airplanes, but A123 specializes in big batteries that can be used in big machines, including cars. A123 did not say what specifically the engineers worked on.In its filing on Tuesday, Apple said nothing in A123's complaint suggests that the engineers are working on a product that would compete with A123.The case in U.S. District Court, District of Massachusetts is A123 Systems LLC vs. Apple Inc et al., 15-10438.

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The Apple Watch: Is it a gadget or a fashion statement? Apple CEO Tim Cook summed up the problem during a conversation with sales staff at a London Apple Store: "We've never sold anything as a company that people could try on before."With the expected launch next month of the Apple Watch, the company’s first new product in five years, Apple will be stepping into new territory. To conquer the marketplace, the watch will have to appeal not only as a gadget but as a fashion statement, a fact tacitly acknowledged by Apple's decision to launch its advertising campaign with a 12-page insert in the March issue of Vogue.The company isn’t talking about plans for marketing the Apple Watch in advance of its much-touted "Spring Forward" event on Monday, but it clearly intends to keep a tight grip on initial sales and distribution, leaving many retailers guessing about when - or if - they'll be able to sell it. Sources with direct knowledge of the matter said that Best Buy Co Inc, one of the largest sellers of Apple products, may not get the watch at launch time, though the company wouldn't comment on the situation. Other large retailers, including Macy's, Saks 5th Avenue, Bloomingdales and Barneys said they had no immediate plans to carry the watch. Target and Nordstrom, along with all the major phone carriers, declined to comment on their plans, though a source with knowledge of the situation said Nordstrom has engaged in discussions with Apple. "Apple is being cautious. There are too many unknowns around how this product will perform," said Van Baker, research vice-president, technology research firm Gartner Inc.That might mean restricting initial sales to company stores, where Apple has complete control over the experience and staff can be specially trained to sell the watch, Baker said.Apple's Cook seems very aware of the challenge. The Telegraph, which sent a reporter with the CEO to the company's Covent Garden store, reported that he explained to the staff that selling the watch might require "tweaking the experience in the store." In the absence of hard information about what the tweaks might look like, speculation has been intense. The Washington Post last week suggested that Apple might add carpeting and mirrors and change store lighting to enhance the watch-buying experience.Media outlets and websites have also posited that the watch will be offered at special pop-up stores installed at luxury retailers such as Selfridges in London and Colette in Paris.Apple hosted a private event at Colette last September, at which guests were able to try on the watch, but a spokesman for Colette declined to comment on whether the store would carry it. Until now, wearable gadgets have not been big sellers for technology companies. Rival products such as Samsung's Gear watches have sold poorly. Apple hopes to change that, but it is still a big if whether the watch will appeal to buyers seeking a fashion accessory, especially if it needs to be upgraded every few years like Apple's phones, tablets and computers."It could do wonders for the watch market if it means people might wear watches again, but realistically, there are a lot of doubts," said Eric Wilson, fashion news director of InStyle."Fashion customers are more skeptical than anyone, so Apple has picked a tough crowd."(Refiles to change spelling of "its" in para 4; Barneys in para 6)

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Apple Watch not yet setting Chinese pulses racing Apple Inc (AAPL.O) had China front and center at the San Francisco launch of its smart Apple Watch, trumpeting a new store in Hangzhou city and demo-ing hit Chinese messaging app WeChat.Also, the new Apple Watch will go on sale in China on April 24, the same day as the United States - unlike the iPhone 6, which hit Chinese stores almost a month after the U.S.But even in this Apple-crazed country - the second-biggest iPhone market after the U.S. - it seems too early to say whether the curved wristpieces from Cupertino will command that must-have cachet for millions of middle-upper-class Chinese.Beyond the is-it-fashion-or-is-it-gadget argument, the Apple Watch carries a hefty price tag in China. The cheapest Sport model will sell at a little below 3,000 yuan ($479), including tax, versus $349 in the United States, while the top-end luxury Edition will set buyers back more than 145,000 yuan ($23,157), against $17,000 in the U.S.That's a lot to pay for a luxury digital product that could be swiftly outdated if Apple does what it does with its smartphones, and brings out a new version each year. There may be other practical drawbacks, too, for Chinese users - from the screen size to the lack of any 'killer app'."It's almost impossible to send WeChat messages when staring at such a small screen," said Huang Hongwen, 46, a freelancer in Shanghai. "I'd rather buy a traditional luxury watch at the same price," she said of the luxury Edition.Also, Chinese haven't taken to personal health-related consumer technology in the same way as Americans have on wearable devices."For health-related products in China, most consumers buy them because they're cheap," said Bryan Wang, vice president of Forrester Research in Beijing. "How many are buying those? Not many," he said.Wang predicts that most early adopters of the Watch, likely tech and Apple fans, will opt for the mid-range standard version rather than the Sport or luxury Edition.AUSTERITY CHALLENGEApple is launching its smart timepiece into a Chinese market where President Xi Jinping's austerity and anti-graft campaign has stigmatized ostentatious gift-giving and conspicuous consumption by officials - who make up a sizeable part of the luxury market. Many recall 'Watch Brother', the online moniker given to a provincial official handed a 14-year jail sentence for corruption in 2013 after pictures surfaced on the Internet of him wearing more than a dozen different expensive watches.Luxury goods sales in mainland China slipped 1 percent last year to 115 billion yuan ($18.7 billion), with watches, menswear and high-end luggage hardest hit, a Bain & Co study showed.But Zhou Ting, the Shanghai-based dean of the Fortune Character Institute, a membership club for Chinese elite, said the new Apple Watch will be a draw for urban Chinese who increasingly shun bejeweled Rolexes or thick gold bracelets as signs of 'tuhao' – or the uncultured rich."The Chinese wealthy want to show discernment, their taste," said Zhou. "They're constantly searching for the newest experience, something different. Apple can satisfy that."LOCAL SUPPORTApple laid the groundwork in China prior to launching its Watch, turning to social messaging and entertainment giant Tencent Holdings Ltd (0700.HK) and Alibaba Group Holding Ltd (BABA.N), the world's largest e-commerce company.While Tencent's WeChat messaging service, ubiquitous in China, featured at the San Francisco launch, Alibaba has developed an app for its online marketplace Taobao, and its online payment arm has customized its Alipay Wallet app for the Watch - which will be sold online by both Alibaba's Tmall.com and rival JD.com Inc (JD.O).A spokesman for Baidu Inc (BIDU.O) said the Internet search leader is experimenting with its own potential products for the Apple Watch.Winnie Koo, 26, a secretary from Foshan City in Guangdong province, on a shopping trip to Hong Kong, said she considered the Watch price high, but not unreasonable."It won't be as commonly used as the iPhone, but I think a lot of people would like it because its innovative functions are quite attractive," she said.($1 = 6.2615 Chinese yuan / renminbi)

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Developers wrestle with making 'killer app' for Apple Watch Software developers say it will not be easy to come up with a "killer app" for Apple Inc's Watch - few have seen the product and the software is still in test mode.While app makers are passionate about developing for the Apple Watch, some are skeptical about the prospects of coming up with a big idea for the little computer on a wrist that hits stores on April 24, said Markiyan Matsekh, product manager at software engineering firm Eleks. A killer app that grabs consumers' attention will be key to the success of the Apple Watch and could spawn new companies, as the iPhone did. The photo-sharing app Instagram grew into a $1 billion business bought by Facebook Inc, and Snapchat has gone from a mobile messaging app to a company valued at $19 billion.Apple has blocked some features, such as the gyroscope and accelerometer, on the development kit, and the watch simulator cannot test all functions, developers said. Apple declined to comment on why developers cannot access certain features."The limitations are discouraging," said Matsekh, who helped develop a Watch app to control a Tesla Model S without involvement from the electric carmaker.App designer Mark Rabo believes Apple is spurring creativity though restraint.The challenge he believes is "not trying to take a phone app and cram it into a Watch." Rabo is developing an app called "Revere," that ties notes to calendars. The Watch will recognize the wearer is walking into a meeting and pull up previously dictated notes about the attendees, for instance. Apple listed about 40 apps on its website as it unveiled its smartwatch on Monday with "thousands" more in the works, it said. Watch apps showcased by Apple so far are mostly extensions of services like Uber, American Airlines and Twitter. "People are playing it pretty safe and right now just extending their application," Ryan Taylor, design director at Normative Design, the software firm hired by Rabo. Once the Watch is released, it will be easier to develop, he said.Taylor points out that there has been no "killer app" so far on Android smartwatches that have been on the market for two to three years. What Apple is "trying to do is get people to think of apps differently than an iPhone app. That cultural shift is taking a little bit more time and that's OK," he said.

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Officials identify suspect behind cyanide letter sent to White House Investigators have identified a homeless man from the Chicago area as the suspect behind the letter sent to the White House that tested positive for cyanide, a U.S. law enforcement source told CBS News on Thursday.The man is known to FBI, Secret Service, and U.S. postal inspectors. Officials believe the individual might suffer from mental illness because of the rambling nature of the letter, and it appears he may have sent previous letters to President Obama, which put him on law enforcement's radar. The return address on the letter, which was received Monday at a facility that screens mail to the White House, was the address of a merchant who told law enforcement that the homeless man uses the store's address to get mail.CBS News chief White House correspondent Major Garrett reports the letter had what was described as a milky substance inside a container. The initial biological testing came back negative, a Secret Service spokesman said, but further testing revealed a "presumptive positive" for cyanide-- a deadly toxin that prevents cells in the body from using oxygen. The sample has been taken to another facility for further testing. There are no reports of mail handlers at the facility being exposed to cyanide.

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Jeb Bush calls on Obama, Congress to boost defense budget U.S. Republican presidential hopeful Jeb Bush on Wednesday called for President Barack Obama to work with lawmakers to boost the defense budget, saying U.S. military power should be rebuilt.Bush, the former governor of Florida, also said the United States needed to be prepared for a long-term commitment to fighting Islamic extremism.

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Venture firm Kleiner's lawyer sharply questions ex-partner A lawyer for venture firm Kleiner Perkins Caufield & Byers peppered former partner Ellen Pao with questions in court Tuesday afternoon, but Pao stayed calm on the witness stand, answering with short, measured, responses.“You understand what humble means, Ms. Pao?" asked Lynne Hermle, Kleiner’s lawyer.“I do,” replied Pao, who is suing the firm for gender discrimination and retaliation in a move that helped spark a broad and ongoing conversation about gender issues in Silicon Valley.“It would… mean someone who doesn’t believe they’re better?” Hermle asked, seeking to establish that Pao considered herself superior to other partners and was not cut out for her job at the firm that backed Amazon, Google, and other iconic technology companies. “It would,” Pao responded.“Not being dismissive of co-workers’ accomplishments?”Pao agreed, without conceding the lawyer's underlying point. Into the third week of this case, Tuesday afternoon's exchanges mark the first time that Pao has been on the defensive about her 7-year tenure at the firm. Earlier in the day, she testified that she filed her lawsuit only after Kleiner failed to respond to numerous complaints. "I had gone through every possible internal process I thought I could go through," Pao told jurors.After an internal Kleiner investigation in early 2012 concluded Pao had not suffered discrimination, she sued the firm but continued working there. "It was extremely difficult and very uncomfortable," Pao said about that time. She left Kleiner later that year.Pao's lawsuit argues that she suffered discrimination and retaliation following a brief affair with another Kleiner partner, Ajit Nazre."You're not trying to blame him for what happened to you?" Hermle asked in reference to an incident where a taxi hit her in early 2006."Not this part," Pao answered, drawing laughs from the courtroom. So far, Kleiner's case has tried to tread a fine line between acknowledging that Pao excelled in some areas, such as critical thinking, and arguing that she fell short on the leadership and interpersonal skills needed to advance at the firm.Under questioning from her lawyer, Pao said that before filing her lawsuit she implored fellow Kleiner partners to address instances of unequal treatment for women at the firm.In one email, Pao asked them to "imagine your wife or daughter in my position."The case is Pao v. Kleiner Perkins Caufield & Byers LLC, CGC-12-520719, in California Superior Court, in the County of San Francisco.

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Kleiner questions whether ex-partner Pao raised HR concerns Kleiner Perkins Caufield & Byers tried to undercut a former partner's claims that she flagged "loosey-goosey" personnel policies at the venture firm but was ignored, as its lawyer cross-examined her for a second day.Ellen Pao had previously testified that she told senior Kleiner partners that the firm's human resources policies were too lax as early as 2007, but nothing was done to address her concerns. Pao, who left the firm in 2012, is suing the firm for gender discrimination and retaliation in a move that helped spark a broad and ongoing conversation about gender issues in Silicon Valley.In San Francisco Superior Court on Wednesday, Kleiner attorney Lynne Hermle displayed several emails written by Pao to senior partners, including senior partner John Doerr, about a brief affair she had with a colleague. Pao has claimed she faced retaliation for breaking off the affair, first from the colleague and eventually from other senior Kleiner executives."I'm sorry to have brought stress into your life with the issues I raised," Pao wrote in the email.Hermle asked if Pao had mentioned anything about HR policies in her correspondence. "No," Pao answered.Into the third week of this case, Kleiner's cross examination of Pao marks the first time that she has been on the defensive about her 7-year tenure at the firm, best known for backing Amazon, Google, and other iconic technology companies.The first witness in the case, former Kleiner partner Trae Vassallo, was called by Pao's attorneys to testify about unwanted advances Vassallo suffered from the same male colleague Pao had the affair with. Vassallo also described additional slights at the hands of male senior partners. During cross examination on Wednesday, however, Hermle questioned Pao about tension in her own relationship with Vassallo. At one point, Pao acknowledged she heard she made Vassallo cry in the office after accusing her of being untrustworthy.The case is Pao v. Kleiner Perkins Caufield & Byers LLC, CGC-12-520719, in California Superior Court, in the County of San Francisco.

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SAP to cut 2,250 posts while creating similar number in refocusing Business software maker SAP SE (SAPG.DE) will cut about 2,250 posts, or around 3 percent of its global workforce, while creating a similar number in expanding parts of the company, as it accelerates a push to sell its products via the Internet.Last year SAP, Europe's largest software maker, which employs about 75,000 workers worldwide, cut a similar percentage of posts, said Stefan Ries, SAP's chief of human resources. "In principle this is a continuation of the (company's response to) changes in market circumstances," Ries said, adding the cuts were not part of a cost reduction plan but a refocusing of the company.He said SAP expects to create about 2,200 jobs this year in growth areas such at its cloud business, its in-memory database Hana and Concur, the expenses software maker it bought last year for $7.3 billion.Last year SAP created a similar number of new jobs, Ries said.SAP has launched a high-stakes overhaul of its core software line, aiming to convince major corporate customers that its software can run their most critical applications to predict business conditions.Established software makers such as SAP are battling to boost internet software sales and fend off pure cloud-based rivals such as Salesforce.com (CRM.N) and Workday (WDAY.N).SAP workers in Europe can make use of voluntary leave arrangements. In Germany, France, the United Kingdom and the United States, SAP will in addition be offering early retirement.SAP said it excludes forced redundancies in Europe.

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Apple lets companies fine-tune apps before watch debut: Bloomberg Apple Inc (AAPL.O) has allowed some companies to test their apps on its yet-to-be-launched Apple Watch and adjust the tools to the watch's design, Bloomberg reported.Facebook Inc (FB.O), United Continental Holdings Inc (UAL.N), BMW AG (BMWG.DE) and others have spent weeks at Apple's headquarters, working with the smartwatch to test and fine-tune apps that will debut alongside the device, Bloomberg reported, citing people familiar with the process. The watch, which will let consumers check their email, pay for goods at retail stores and monitor personal health information, will be Apple's first major product launch since the iPad in 2010.The company has scheduled a special event in San Fransisco on March 9 where it is expected to showcase Apple Watch, which will be launched in April.Apple uses extreme measures to keep its work secret - Internet access is blocked inside the rooms and no outside materials can be brought in, Bloomberg reported, citing a person who attended the tests.Apple spokeswoman Trudy Muller and Facebook spokeswoman Johanna Peace declined to comment. Reuters could not immediately reach United Continental and BMW for comment outside regular business hours.German carmaker BMW said on Thursday its talks with Apple did not involve developing or building a car, denying a German magazine report.

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China expects to issue taxi app regulations in first-half 2015: state media China's transport minister said on Thursday he hopes to have regulations issued on using mobile apps to book private cars within the first half of 2015, state media reported, amid doubts on the legal status in China of Uber and similar services.In January, China's Ministry of Transport banned taxi hailing apps such as Uber Technologies Inc and local rivals Kuaidi Dache and Didi Dache, who have since announced a merger, from using cars and drivers without taxi licenses in a bid to regulate the rapidly growing sector.The Ministry of Transport has finished evaluating opinions on regulating private drivers, and will seek public comment after the annual full session of China's parliament, said Yang Chuantang, the ministry's chief, according to the official China National Radio (CNR). The parliamentary session concludes on March 15."I'm hopeful (the regulations) will be published within the first half of the year," CNR quoted Yang as saying.January's ban hit Uber and its rivals just weeks after Chinese internet firm Baidu Inc invested an undisclosed amount for an undisclosed stake in San Francisco-based Uber.Since then, the status of Uber in China and the private car-hailing functions of taxi hailing apps Didi Dache and Kuaidi Dache has been uncertain. Didi is backed by social networking and gaming firm Tencent Holdings Ltd and Kuaidi by e-commerce giant Alibaba Group Holding Ltd.Uber, Didi and Kuaidi were not immediately available for comment. Baidu declined to comment.Private car services have a positive effect on the transport market, said Yang, according to a separate report from official state news agency Xinhua. But there are currently private car services where private cars are operating illegally, the responsibility of the operators isn't clear and passengers' safety and legal rights are not protected, creating a taxi market with unfair competition and other issues, Xinhua cited Yang as saying.Last month, Didi Dache and Kuaidi Dache said they would merge to create one of the world's largest smartphone-based transport services.

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Microsoft warns Windows PCs also vulnerable to 'Freak' attacks Hundreds of millions of Windows PC users are vulnerable to attacks exploiting the recently uncovered "Freak" security vulnerability, which was initially believed to only threaten mobile devices and Mac computers, Microsoft Corp warned.News of the vulnerability surfaced on Tuesday when a group of nine security experts disclosed that ubiquitous Internet encryption technology could make devices running Apple Inc's iOS and Mac operating systems, along with Google Inc's Android browser vulnerable to cyber attacks.Microsoft released a security advisory on Thursday warning customers that their PCs were also vulnerable to the "Freak" vulnerability. The weakness could allow attacks on PCs that connect with Web servers configured to use encryption technology intentionally weakened to comply with U.S. government regulations banning exports of the strongest encryption.If hackers are successful, they could spy on communications as well as infect PCs with malicious software, the researchers who uncovered the threat said on Tuesday. The Washington Post on Tuesday reported that whitehouse.gov and fbi.gov were among the sites vulnerable to these attacks, but that the government had secured them. (wapo.st/18KaxIA)Security experts said the vulnerability was relatively difficult to exploit because hackers would need to use hours of computer time to crack the encryption before launching an attack."I don't think this is a terribly big issue, but only because you have to have many ducks in a row," said Ivan Ristic, director of engineering for cybersecurity firm Qualys Inc. That includes finding a vulnerable web server, breaking the key, finding a vulnerable PC or mobile device, then gaining access to that device. Microsoft advised system administrators to employ a workaround to disable settings on Windows servers that allow use of the weaker encryption. It said it was investigating the threat and had not yet developed a security update that would automatically protect Windows PC users from the threat. Apple said it had developed a software update to address the vulnerability, which would be pushed out to customers next week.Google said it had also developed a patch, which it provided to partners that make and distribute Android devices. "Freak" stands for Factoring RSA-EXPORT Keys.

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Star Wars-inspired prototype creates holographic display A new 3D technology aims to give mobile devices the power to display holographic images and video. Partly inspired by a scene from Star Wars where a holographic image of Princess Leia pleads for help from Obi-Wan Kenobi, the appropriately named 'Leia' recently demonstrated a prototype of its display at the Mobile World Congress in Barcelona.A 3D projection like the one featured in Star Wars may be a step too far at the moment. But, unlike conventional 3D movies that can only be seen from one angle, Leia's designers say it offers a real sense of depth and can be viewed from 64 different angles - all without the need for 3D glasses.Leia CEO David Fattal says their technology is a first for mobile displays: "It's a display that is able to project 64 different images, going in different directions of space. So that when you look at it, your left eye and your right eye will actually see a different image and you will see in 3D. And not only that, but when you move your head around the display - you can rotate or tilt or shift the display - your eyes will see a different pair every time and you will get the sense of parallax, which means you will be able to see around objects as well."Fattal hit upon the idea for the holographic display while he was a researcher at HP Labs. His work with optical interconnects, which let computers exchange information encoded in light, led him to realize the same principle could be used to display holographic images. Structures called diffraction gratings normally send light rays through cables to transmit data, but Fattal engineered the gratings to transmit light in prescribed directions in space.The makers also developed a way to make the holograms come out of a conventional LCD screen, by simply incorporating their own technology. Conventional LCDs have a component called a backlight, consisting of a light source and a plastic light-guiding panel that directions the light toward the display's pixels. Leia essentially replaces the standard light guide with their own more sophisticated panel."It's a very simple LCD technology, which is the technology that equips most of the cell phones and most of the regular displays today. As we essentially change just one small chief component which is called the backlight and we introduce our nano technology on to it. It sounds very scary but actually it's very benign and cheap to do. And out of this we're able to send rays of light into space instead of disorganized light that would propagate in all directions," said Fattal.Fattal says their technology could be easily integrated with existing displays: "Anywhere you have a display you would be able to replace the display and augment it with this 3D imagery. So, for example, you start with a smart watch or eventually a smart phone or a tablet. But you could have (it) in any appliance; you could have a display on a fridge or any appliance at home, a remote control or your garage opener. You could have something in a car, for example, it might be a key fob or it might be a GPS display in a car where you would see, for example, building coming out slightly in 3D, like a Google map application."To demonstrate how the technology could be applied to real-time video chat, the team arranged 64 cameras to produce a holographic image of a volunteer at the Mobile World Congress. Although it required a bulky camera array, Fattal says it could eventually be miniaturized.Later this year the company plans to release a small display module that can produce full-color 3D images and videos. It was the switch from a black-and-white to color display that proved most difficult for the developers, Fattal said."Probably the hardest part was to move from monochrome to color. The physics that this display is based on is called diffraction. Diffraction is basically a technology that behaves very differently with different colors of light. So if you don't pay attention the red, green and blue component of your image should go in very different directions. And our core technology and our core invention was how to make these three colors work together to produce, for example, a white image that you saw or a full color image."

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Snapchat management holds talks with Saudi's Prince Alwaleed Senior management of Snapchat held talks with Saudi Arabia's Prince Alwaleed bin Talal on potential cooperation, the prince's investment company said in a statement on Sunday.The meeting, which included the mobile messaging company's Chief Executive Evan Spiegel and Chief Strategy Officer Imran Khan, comes as Snapchat embarks on a new funding round that values the business at up to $19 billion."On the agenda of discussions was future potential business cooperation between Kingdom Holding and Snapchat in the technology field," Kingdom Holding, which is 95 percent owned by Prince Alwaleed, said in a statement without elaborating.The billionaire prince has made a number of investments in technology brands in the past, including social messaging service Twitter and Chinese e-commerce company JD.com Inc.Los Angeles-based Snapchat, which allows its more than 100 million users to send messages that disappear after a few seconds, is looking to raise as much as $500 million in its latest funding round.

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BMW says talks with Apple don't involve developing a car German carmaker BMW said on Thursday its talks with technology giant Apple did not involve developing or building a car, denying a German magazine report. Auto Motor und Sport said in its March 4 edition that the two firms were discussing possibilities for cooperating on the development of a passenger car.Apple was impressed with BMW's carbon-fiber electric cars, the magazine said, citing a "high ranking BMW manager."The BMW spokesman said: "We are in regular talks with companies from the IT and telecommunications sector, including Apple, concerning topics like connected vehicles. Developing or building a car is not a topic of these discussions."An Apple spokesman said the company did not comment on rumor or speculation. Auto Motor und Sport said Apple cars could be sold in Apple stores and serviced at BMW dealerships. Among the issues that needed to be resolved was whether BMW would allow Apple to develop an operating system for its i3 model, a step that would require BMW to reveal details of its own vehicle software to the technology giant, the magazine said.Last month, a source told Reuters that Apple was looking beyond mobile devices to learn how to make a self-driving electric car, and was talking to experts at carmakers and automotive suppliers.

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Venture firm Formation8 dropped from U.S. lawsuit over sexual assault Venture firm Formation8 was dropped as a defendant in a U.S. civil lawsuit that accused one if its co-founders, Joe Lonsdale, of sexual assault, according to a court document filed Thursday.In the filing, attorneys for plaintiff Elise Clougherty did not explain their reasoning but said the case, filed in January, should move forward only against defendant Lonsdale, who is also a co-founder of secretive technology firm Palantir. Clougherty, a former girlfriend of Lonsdale who started dating him in 2012 while she was a Stanford student and he was her mentor, accused him of sexual assault and related charges. The case has gripped Silicon Valley, in part because of its lurid details.In a countersuit, Lonsdale denied the charges, accusing Clougherty of defamation and emotional distress as part of a "vicious and vengeful campaign" that seeks to destroy his reputation.In her original suit, Clougherty accused Formation8 of negligent supervision, saying she worked for Lonsdale and Formation8 as an intern in the summer of 2012. Clougherty's complaint against it lacks merit, Formation8 said in a February filing, in part because Clougherty did not identify any harm she suffered as a result of negligence by Formation8, only from her personal relationship with Lonsdale. The allegations against Lonsdale have surfaced as another high-profile case involving a venture-capital firm and gender issues in Silicon Valley reached the trial stage. Ellen Pao, a former partner at Kleiner Perkins Caufield & Byers, is set to testify in coming days in her discrimination and retaliation suit against that firm.

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Condoleezza Rice leads potential 2016 U.S. Senate hopefuls in California Former U.S. Secretary of State Condoleezza Rice polled at the head of a crowded pool of potential candidates to succeed long-time Senator Barbara Boxer, according to a Field Poll released on Wednesday.The poll showed that when likely California voters were asked whether they would vote for or against 18 prominent possible candidates in 2016, 49 percent of likely California voters said they would be inclined to support Rice, a Republican.Rice's support was significantly stronger among likely Republican voters, with almost three-quarters saying they would back her. The next closest Republican candidate, former State Senator Phil Wyman, saw only 51 percent support from Republicans. California Attorney General Kamala Harris, who is a Democrat and the only person listed in the poll who has formally announced they are running, saw the most support of any Democrat, with about three-quarters of likely voters in her party saying they would back her. She was second to Rice overall, drawing support from 46 percent of those polled.Hispanic voters rallied behind former Los Angeles Mayor Antonio Villaraigosa, with 60 percent saying they would back the Democrat, though he trailed Harris among all poll-takers in his party by nearly 20 percentage points.Boxer's departure is the first of three anticipated retirements among California's top leaders that should clear the way for a younger generation of politicians.Governor Jerry Brown, 76, will leave office at the end of his fourth term in 2018 because of term limits. U.S. Senator Dianne Feinstein, 81, will be 85 when her term ends.The poll surveyed 972 likely voters in California, broken into two groups, from late January to mid-February by phone. The results from both groupings have a sampling error of plus or minus 4.5 percentage points.

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U.S. charges three in ring that stole one billion email addresses Two Vietnamese citizens and a Canadian have been charged with running a massive cyberfraud ring that stole 1 billion email addresses, then sent spam offering knockoff software products, the U.S. Department of Justice said on Friday.The Justice Department described the hacking spree as "one of the largest" data breaches uncovered in U.S. history. It declined to name the email companies that were victimized, though it appeared that the breaches included a massive 2011 attack on email marketing firm Epsilon. Security blogger Brian Krebs reported that Epsilon, a unit of Alliance Data Systems Corp, was among the victims. That high-profile 2011 attack was followed by a wave of customer notifications from Epsilon clients, including Citigroup Inc and JPMorgan Chase & Co. (reut.rs/1En1udF)Krebs noted that the government's press release said the data breach "was the subject of a congressional inquiry and testimony before a U.S House of Representatives subcommittee on June 2, 2011.” The House Energy and Commerce Committee held a hearing on that data about breaches at Sony Corp <6758.T) and Epsilon, according to Krebs. Epsilon representatives could not be reached. Viet Quoc Nguyen, 28, is charged with hacking at least eight email service providers between February 2009 and June 2012.The government alleges that Nguyen and Giang Hoang Vu, 25, both Vietnamese citizens, used the stolen email addresses to identify tens of millions of people who they targeted in a spam campaign. The spam emails directed recipients to websites selling software that was falsely branded as Adobe Systems Inc's.Both men resided in the Netherlands. Vu, who was extradited to the United States in March of last year, pleaded guilty on Thursday to conspiracy to commit computer fraud.Nguyen remains at large.The other defendant, Canadian David-Manuel Santos Da Silva, 33, was charged with conspiracy to commit money laundering. He is the co-owner of a company called 21 Celsius Inc, which struck up a marketing arrangement with Nguyen and Vu to generate revenue and launder the proceeds, according to the indictment.Court documents allege that Da Silva and Nguyen received about $2 million in commissions from the sale of the software, which they marketed as Adobe Reader 10 for $65 a copy.Da Silva was arrested at a Florida airport last month and was set to be arraigned on Friday in Atlanta federal court, according to the Justice Department.

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Computing, telecoms industries set on collision course Telecom network gear makers are on a collision course with Silicon Valley computing giants as software and cloud computing have begun to change the way operators from AT&T to China Mobile run their networks.The shift, while in its early stages, involves relying on ever cheaper computer boxes and powerful software that promises to make networks more flexible and efficient.As networks move to relatively standard hardware, formerly entrenched equipment groups must increasingly compete for contracts with the likes of Cisco, Hewlett-Packard and VMware, as well as a slew of startups.Relying more on software to run networks could boost the gear makers' profit margins one day, but will also force them to search for new sources of revenue. They must learn skills such as acting more as consultants or finding business beyond their traditional telecom operator clients.The changes, which simplify how networks are managed, are blurring the lines between the telecom and computer industries, setting the stage for a wave of acquisitions as a virtual showdown in the clouds takes shape.At the annual Mobile World Congress in Barcelona this week, the brewing battle was apparent in dozens of partnership and product announcements.Likewise, some equipment makers talked tough about their rivalry with information technology (IT) groups as the operators make greater use of cloud computing - running software networks and storing data remotely on centralized servers."We actually see the transition to the cloud as less of a threat that IT players will disrupt our markets and more of a threat that we will disrupt theirs," Nokia Chief Executive Rajeev Suri told a news conference in Barcelona before the Congress.Finland's Nokia, the world's third largest mobile equipment maker after Ericsson of Sweden and Huawei of China, believes its strengths in wireless radio, navigational map systems and its large amount of patented technology cannot be easily duplicated by fast-moving Internet players.The pace will accelerate over the next five years as industrial rivals compete for trillions of dollars in contracts to build a new generation of networks known as 5G.These networks must handle mushrooming demand for video and billions of new devices including wireless connections to cars, industrial sensors and home appliance. They must do all this while helping operators to slash costs in an industry looking to pare back capital spending.BREAD AND BUTTERNetwork operator Telefonica set the cat among the pigeons this week by awarding a major contract to computer company HP for it to overhaul how the operator's networks run to make them more flexible and cheaper."What we are seeing is a coming together of two industries," Ian Miller, an executive with Telefonica, which runs networks in Europe, the Americas and Asia. "Each industry is moving into the other side," he said.Meanwhile, Cisco Systems, which started out building computer networks, announced smaller deals with carriers across Europe to deliver new cloud-based Internet services and "small cell" antennas to improve mobile phone and data coverage in busy calling areas.Such contracts would once have been the bread and butter for telecom network gear makers such as Ericsson, Nokia, France's Alcatel-Lucent, or their newer Chinese peer Huawei.Firing back, Ericsson, the world's largest mobile telecom equipment maker, teamed up with computer chip giant Intel Corp to build advanced datacentres to help the telecoms industry match the firepower of Internet groups such as Google or Amazon.SLICING UP THE PIEThe likes of Ericsson and Nokia will have to snap up smaller start-ups to gain software expertise but they'll also have to compete for targets with deep-pocketed technology rivals. In the years to come, bigger consolidation moves are likely to shore up one side or the other, as well as ones which create hybrid players.The first phase already has begun: Ericsson bought five cloud and software start-ups in 2014, VMware paid $1.26 billion for Nicira in 2012 and Cisco has made nearly a dozen small scale deals in the telecom arena in the last three years.Marcus Weldon, who heads Alcatel-Lucent's Bell Labs, acknowledged that competition with software makers and technology companies was intensifying, but said telecom network companies were also raising their skills."It's not clear yet whether the overall pie of available revenue will be bigger, or if we'll be fighting with new entrants for a similar-sized pie," he said.Software-based products accounted for roughly 5 percent of Alcatel, Ericsson and Nokia's revenue in 2014, but will grow to the low teens in 2017, according to Exane BNP Paribas analyst Alexander Peterc.Weldon and other executives pointed out in Barcelona this week that telecom networks have peculiarities, such as a low tolerance for outages and society's growing reliance on mobile airwaves, making it difficult to swap some equipment for software and ensuring that telecom players are far from obsolete.But their role with major customers such as AT&T and Vodafone will change markedly as they move into new service lines like network consulting and systems integration, to displace falling hardware sales. (editing by David Stamp)

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Apple lets companies fine-tune apps before watch debut: Bloomberg Apple Inc (AAPL.O) has allowed some companies to test their apps on its yet-to-be-launched Apple Watch and adjust the tools to the watch's design, Bloomberg reported.Facebook Inc (FB.O), United Continental Holdings Inc (UAL.N), BMW AG (BMWG.DE) and others have spent weeks at Apple's headquarters, working with the smartwatch to test and fine-tune apps that will debut alongside the device, Bloomberg reported, citing people familiar with the process. The watch, which will let consumers check their email, pay for goods at retail stores and monitor personal health information, will be Apple's first major product launch since the iPad in 2010.The company has scheduled a special event in San Fransisco on March 9 where it is expected to showcase Apple Watch, which will be launched in April.Apple uses extreme measures to keep its work secret - Internet access is blocked inside the rooms and no outside materials can be brought in, Bloomberg reported, citing a person who attended the tests.Apple spokeswoman Trudy Muller and Facebook spokeswoman Johanna Peace declined to comment. Reuters could not immediately reach United Continental and BMW for comment outside regular business hours.German carmaker BMW said on Thursday its talks with Apple did not involve developing or building a car, denying a German magazine report.

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For the 'unbanked', mobile money still has some way to go Globally, an estimated 2.5 billion people don't have a bank account, but many own a cellphone, fuelling a race to turn these phones into bank books for the 'unbanked' to store cash, manage their accounts, make purchases and send and receive money - part of so-called 'financial inclusion'.In a report this week, the GSMA, the association of mobile phone companies, said mobile money "has been growing at a dizzying rate." The Boston Consulting Group said last month mobile money transfers in sub-Saharan Africa alone could generate fees of up to $1.5 billion by 2019.However, consultants and others working at banks, government agencies and even the phone companies note that, while many people have mobile money accounts – usually with the phone companies - few are actively used. While money flows through these networks, nearly two thirds of the volume comes from users merely topping up prepaid mobile accounts in transactions averaging less than a dollar."If you take out air-time, you have a true view of mobile money, and it's not a good story, more than a decade on," says South Africa-based Johan de Lange, who works with banks and phone companies.And, when people do make remittances, those receiving the money tend to cash it in, taking the money out of the system and limiting the potential for mobile money to become a medium of exchange – a mobile wallet for buying things or to provide banking services over mobile networks.A GSMA spokesperson said air-time top-ups were decreasing as a proportion of overall transactions, and domestic money transfers via mobile were cheaper or safer than other options, and so were "a key piece of the financial inclusion story."POLICE PAYUse of mobile money, indeed, is spreading and there are success stories, but these are few relative to the number of projects, and consultants and others question just how successful they are.In Afghanistan, for example, much has been made of a service to send police salaries direct to their cellphones via a code they present to an agent or bank for cash. This has reduced corruption, where police pay was often halved as it made its way through the bureaucratic chain.But the service last year reached less than 1 percent of the police force, and cost the Law and Order Trust Fund For Afghanistan more than $10 per transaction - much of which goes to Roshan, the phone company which runs the service with Vodafone. The fund said last year it was exploring cheaper options.The poster child for telco-driven mobile money services is M-Pesa, set up by Vodafone and run by Kenya's Safaricom Ltd. Mobile money accounts for more than a fifth of its 145 billion shillings ($1.59 billion) annual revenue.Daniel Maison, a consultant in Kenya, uses M-Pesa to buy petrol, pay restaurant bills or shop at the supermarket. "It's a part of our lives. We wonder what we did without it. I don't need to physically have cash. The beauty is you can even have a savings account on your mobile phone," he told Reuters.But some note the M-Pesa service owed much of its take-off to the electoral violence in 2007-08 that displaced many Kenyans and made it hard for others to travel. Sending money by phone was the next best thing. Consultants also say the company's figures hide the fact that mobile money transactions involve sending notifications via short service message (SMS), a cost the operator effectively subsidizes."If everyone had to pay for these messages, I wonder how many (telco) 'rock stars' there would be," said Malcolm Vernon, a London-based mobile money consultant who works in Africa, Asia and Europe.TAKING WINGThis is not to say that mobile money has no future in emerging markets.After six years, Wing in Cambodia made a modest profit last year with fewer than 50,000 active accounts, many of them held by farmers and shopkeepers paying their suppliers remotely.Anthony Perkins, CEO of Wing, once part of Australia and New Zealand Banking Group, says the secret is to think more like a bank than a phone company, such as nurturing a network of agents who can receive and dispense cash. Some of these 'human ATMs' can earn eight times the average national income. "Running an agent network is really no different than running a branch network," Perkins said.He and others say that while phone companies, with their reach and flexibility, are good tools for rolling out networks, they aren't necessarily the best to move mobile money beyond simple transactions into becoming a nationwide, or international, digital money system.The telcos' main priorities, they point out, aren't so much the social goals of financial inclusion, but to reduce churn – keeping customers from jumping to a rival firm - and to maximise the amount users spend on their network."I don't understand why it's being left to telcos to bring this financial inclusion to the masses," said Perkins. "Even in a small country like Cambodia you can make money out of this."  Â

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The new 'Horsemen of the Nasdaq' - how long will they ride? Will the tech leaders of today be the has-beens of tomorrow?Apple, Google, Facebook and Amazon hold dominant positions in the tech sector and have been among the biggest engines driving the Nasdaq above the 5,000 mark this week for the first time since 2000. But analysts are far from confident that they will maintain their perch in the tech stratosphere.Such an upheaval would fit with previous tech eras, which saw companies drop out of the top tier, like Microsoft, or become shadows of their former selves, as with the now-private Dell.The tech world moves so quickly that in 2000 Google wasn't yet public and Facebook didn't exist. Apple had yet to introduce the iPod, let alone the iPhone.Of roughly 20 investors, strategists and analysts polled by Reuters, all expected at least one of the current leaders - dubbed by some the "Four Horsemen of the Mobile Age" - to continue setting trends, but opinions differed on which might wane in importance, and which companies could replace them."In other sectors there's a greater sense of permanence in the leadership, but tech is always changing," said Scott Kessler, head of technology sector equity research at S&P Capital IQ in New York.Looking 10 years down the road, the "sharing economy" could come to define tech, said several experts, including Walter Price, managing director of the AllianzGI Global Technology funds in San Francisco; David James, of James Investment Research; and Kessler. Names like Uber and AirBNB - which provide marketplaces for buyers and sellers of services - have been already valued at tens of billions of dollars, though they are not publicly traded."These new companies have already become valuable because they've invented a new way of doing things, and tech is all about creating cheaper or more efficient ways of doing things," said Price.Other potential horsemen of the future mentioned at least once include real estate firm Zillow Group Inc, the privately held messaging service Snapchat, and Paypal, which will be spun off by eBay later this year. "Any company that has a 50 percent share of the mobile payments market seems like a worthy contender regardless of any development of a sharing economy," said Daniel Kurnos, an analyst covering internet stocks at Benchmark Co in Boca Raton, Florida.Even so, some of today's top players could maintain their top positions.Apple, whose iPhone provides customer access to services like Uber, could be among the companies to benefit from a rise in "sharing" activity.Apple, Google and Facebook all have the dexterity to stay where the action is and hold their own over the next decade, said Skip Aylesworth, portfolio manager of the Hennessy Technology Fund. He sees Facebook - which recently spent $2 billion to buy virtual software company Occulus Rift - also staying at the top of the heap of social network firms, some of which could disappear into mergers and acquisitions.But in Aylesworth's view, the fourth horseman won't be Amazon. It will be "a name we haven't heard of or is insignificant today," he said.

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Pentagon to focus more on hack-proofing weapons Cyber attacks on U.S. weapons programs and manufacturers are a "pervasive" problem that requires greater attention, the top U.S. arms buyer said Thursday, saying that he would add cybersecurity to the Pentagon's guidelines for buying weapons."It’s about the security of our weapons systems themselves and everything that touches them. It’s a pervasive problem and I think we have to pay a lot more attention to it," Defense Undersecretary Frank Kendall told Reuters after a speech to the American Society of Naval Engineers in Washington.Kendall said he planned to add cybersecurity to the next phase of his "better buying power" initiative, and was also working on a special section on cybersecurity requirements to be added to the Pentagon's guidelines for buying weapons.President Barack Obama's fiscal 2016 budget proposal requested $14 billion for cybersecurity efforts to better protect federal and private networks from hacking threats, including $5.5 billion for the Pentagon alone.The Defense Department's chief weapons tester told Congress in January that nearly every U.S. weapons program showed "significant vulnerabilities" to cyber attacks, including misconfigured, unpatched and outdated software.Kendall echoed those concerns on Thursday and said he was trying to raise awareness about what he described as a "big problem" that affected the Pentagon and all layers of industry, including the larger supply chain involved in weapons systems.Increased funding and focus on cybersecurity could result in more work for Lockheed Martin Corp, General Dynamics Corp and other firms that already play a big role in cybersecurity, encryption and analysis for government agencies.Kendall said some measures had already been adopted to defend U.S. weapons systems and the companies that build them against escalating cyber attacks, but more work was needed.In January, when Kendall released the latest version of the Pentagon's acquisition guidelines, called Department of Defense Instruction 5000.02, he said he had started work on a new section to deal with designing for and managing cybersecurity.National Security Agency Director Admiral Mike Rogers told a House Armed Services Committee subcommittee on Wednesday that the Pentagon needed a new approach that allowed rapid, recurring updates to cyber protections for weapons, rather than locking in designs five to 10 years before they were fielded. Kendall told the conference that the latest version of his Better Buying Power initiative would be released later this month. It too will include a section on cybersecurity, he said.

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Banking cyber thieves may be too slick for their own good Fraudsters are slick and smooth when they request new bank accounts or credit cards -- a characteristic an Israeli company wants to use against them.Banks and other financial firms are coming under sustained attacks from increasingly sophisticated cyber criminals, forcing them to spend more money and resources trying to fight hackers.The opening of fake accounts using stolen identities or details obtained from social media is one obvious trouble spot, with fraud typically only spotted weeks later.Looking to tackle the problem, Tel Aviv-based Biocatch on Thursday launched a product which aims to use the efficiency of the hackers to catch them when they try to open accounts in retail banking, credit cards, on eCommerce or other sites.Its concept is simple: fraudsters behave differently when opening a new account than a normal customer. "(Fraudsters) experience surprising familiarity with the account opening process, their fluency patterns are distinctive, they have all the required information at hand and never spend time researching it, they do not bother with completing optional elements," Biocatch said."The way they interact with specific fields can be very uncharacteristic when compared to the behavior and cognitive choices done by real users," it said.The new product aims to use behavioral biometrics to identify the wrongdoers.Biocatch, formed in 2011 by experts in neural science research, machine learning and cyber security, is one of dozens of firms developing software to fight hackers.Banks are among the most prominent and high profile victims of cyber attacks. Criminals obtained details of 83 million clients from JPMorgan Chase last year, and Russian security firm Kaspersky last month said more than 100 banks had been raided by cyber criminals and $1 billion could have been stolen.Banks are seen as vulnerable, despite spending hundreds of millions of dollars a year on cyber defenses, due to the potential financial gains and because their size, complexity and old IT systems can leave gaps.

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Lenders want bold overhaul of Japan's Sharp as another bailout looms Loss-making Japanese electronics firm Sharp Corp meets its main banks on Thursday in an effort to secure its second major bailout since 2012, betting they will have little choice but to pay up despite their call for more drastic overhauls.Sharp Chief Executive Kozo Takahashi will meet officials from Mizuho Bank and Bank of Tokyo-Mitsubishi UFJ, hoping to discuss further funding and buy time, people with direct knowledge of the matter said.Sharp may consider an exit from solar panels and plant closures, but these would not be enough for the banks, which want Sharp to follow the more successful Panasonic Corp and Sony Corp with bolder moves, the sources said."There is no next time," said a senior executive at one of the banks. "I am giving instructions to our people that Sharp needs to make an unprecedented, bold plan."But while the banks are loath to throw good money after bad, they are keen to avoid triggering a collapse of the globally known, 100-year-old maker of TVs and high-end panel displays.The banks agreed in September 2012 to save Sharp with loans and credit lines worth 360 billion yen, or $3 billion at today's exchange rates, in exchange for promises to return to the black by this year. Sharp exited the European TV market and closed solar-panel businesses in Europe and the United States.The banks have had representatives on Sharp's board since the last bailout, so cannot claim to have been misled about its finances. The firm recently reversed a profit forecast for the year ending this month to a 30 billion yen loss, blaming weak sales of displays for smartphones and tablet computers.Banks say a debt-for-equity swap - writing off their loans in return for ownership of Sharp - would be a logical option for any new rescue, one source said.Japanese media on Tuesday put a new bailout at up to 200 billion yen, but bankers insist no amounts have been discussed and that any funding would be determined only after deciding what is needed to help Sharp take specific restructuring steps.A Mizuho spokeswoman said nothing had been decided, with Sharp and the banks due to begin talks ahead of the company's expected release of its medium-term business plan in May.Sharp and MUFG representatives declined comment.Troubles at Osaka-based Sharp underline a decline in competitiveness for Japanese consumer tech firms, which have lost market share to the likes of Apple Inc and Samsung Electronics Co Ltd, as well as more nimble Asian rivals.Sharp gets most of its sales from LCD panels, TVs and cellphones. It could consider such steps as exiting the solar energy business and shutting some plants in its ailing electronic parts business, company sources said.But executives are so far unwilling to take more radical options such as merging the display business with that of rival Japan Display Inc, or cutting more jobs, the company sources added.Credit rating agency Standard & Poor's Corp on Tuesday slashed Sharp's rating deeper into "junk" territory to CCC+, with more downgrades likely. S&P said it expected the company's main banks to pump in more cash in what the ratings firm considered a "selective default".Sharp and the banks thought things were on the mend until late last year, when a sudden drop in demand from Chinese smartphone makers hit profits. As recently as November, the head of Sharp's device business, Norikazu Hohshi, said screen shipments were going strong as it expanded its client base in China to 15 smartphone makers from an earlier eight.Sumitomo Mitsui Banking Corp, Japan's third-largest lender, also appeared optimistic as it announced a 10 billion yen loan, despite the lack of a prior relationship. A major downdraft for Sharp has been an unexpected recovery by rival Japan Display Inc, which won business in the high-end display market late last year at Sharp's expense. Japan Display reported a profit last month after two quarters of losses, boosted by demand from Apple and Chinese smartphone makers such as Xiaomi Technology Co [XTC.UL]. A weaker yen has worsened Sharp's outlook because its home appliances business imports much of its products from offshore factories."It's a shame," said one of Sharp's senior bankers. "But how could we have expected the yen's sharp fall and Japan Display's sharp improvement in competitiveness back then?"Another reason the banks may again reach into their pockets is tradition."As long as a company has the possibility to survive, Japanese banks try to help," one of the bankers said, stressing he was speaking generally. "That's different from U.S. banks. I know the criticism that this is how Japanese banks make zombie companies."($1 = 119.6900 yen)

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Silicon Valley debate on self-driving cars: do you need a map? The Silicon Valley race to build a self-driving car may revolve around one simple question: to map or not to map. The company at the forefront of the race, Google Inc, is creating intricate maps that detail every tree and curb along the road - an expensive endeavor that other companies could find difficult to match.Newer entrants such as ride-share service Uber and Apple Inc could take a shortcut and develop a car capable of piloting itself without such elaborate and expensive blueprints, industry experts say.The dueling technological approaches represent more than a philosophical divide: they hint at how and when the companies, competing to expand into a significant new class of product, could put autonomous cars onto the road.Raj Rajkumar, one of the leading experts on self-driving cars at Carnegie Mellon University, said the map-based approach makes sense for a company with Google’s resources but is not required. “Google is capable of collecting all this information. In our case, we don’t have that capability, so we have to be creative. It turns out that’s sufficient” said Rajkumar, who has developed a modified Cadillac that relies on radars, video cameras and six laser scanners and in 2013 drove 33 miles (53 km) to the local airport without human intervention or 3D maps.Both approaches currently have limitations, and even the most optimistic acknowledge that a variety of technological, regulatory and legal issues mean it will be years, perhaps longer, before completely self-driving cars hit the road.Apple is studying the potential for a self-driving car, a source familiar with the matter has told Reuters. Uber, which operates the popular ride-hailing service, announced a partnership with Carnegie Mellon University in January to focus on self-driving cars. Electric car maker Tesla Motors Inc is developing self-driving technology, and traditional automakers including General Motors Co and Nissan Motor Co Ltd are also adding automated features into their vehicles.And companies such as Nokia's Here are also developing detailed 3D maps that potentially could be licensed by car companies. Apple, Uber and Google declined to discuss self-driving cars.MAPS OF THE FUTUREMapping the entire United States to the level of detail used by Google’s cars could easily cost hundreds of millions of dollars and take five to seven years, said Egil Juliussen, an analyst with research firm IHS Automotive.All autonomous cars rely on basic electronic maps for navigation and lane centering. But Google’s cars use far more detailed 3D maps, which the company creates by using laser scanners. Google analyzes the data, determining where traffic lights and stop signs are, for instance, so that the vehicle "knows" exactly where it is.Google’s pod-shaped prototype cars use on-board sensors, including the distinctive spinning laser on the car’s roof, to detect anything not on the map, such as vehicles or baby carriages. Google’s existing mapping know-how and resources give it an extra advantage, said Boris Sofman, the co-founder and CEO of Anki, a robotics company that makes self-driving toy cars.But the maps can quickly become stale, he said. Fresh snow could change the landscape.“The map-based approach allows you to drive accurately in a controlled environment, where you know that things don’t change much,” said Dirk Langer, the chief technology officer of ASCar, which makes sensors for autonomous vehicles.Gated retirement communities and college campuses would be examples, he said, arguing that for broader uses sensors are more important than 3D maps. Cars might be able to pilot themselves without using 3D maps in specially designated lanes on streets and highways, said John Absmeier, the global business director of autonomous driving for auto supplier Delphi Automotive Plc.But advances in sensor technology are also needed for cars to truly become autonomous. Carnegie Mellon's Cadillac required some sensors mounted on street lights to make its 2013 journey to the airport.“We think we can handle 90 percent of road cases," said Carnegie Mellon's Rajkumar, "but getting to 100 percent will take longer.”

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U.S. says inaction on online piracy risks public safety The U.S. trade office on Thursday called for a crackdown on website name registrars who fail to take action against sellers of illegal goods such as counterfeit medicines and warned that turning a blind eye puts public safety at risk.The U.S. Trade Representative also said it is keeping an eye on China's Alibaba Group Holding Ltd's  consumer shopping website for sales of fake and pirated goods, but refrained from reinstating the site on its piracy blacklist.USTR named a domain name registrar, a company which manages the registration of internet names, for the first time in its annual "notorious markets" list as an example of concern about some registrars not taking action to block or suspend sites selling illegal goods. The registrar, Canada's Tucows Inc, said it took down dozen of sites every day but unlike some competitors, it considered all complaints carefully to ensure they were justified."We want to make sure that our registrants are protected and respected as well as making sure there are not bad actors on our system, and that requires striking a balance on a daily basis," said Graeme Bunton, Tucows manager of public policy.USTR cited an Interpol report which found some drugs sold online were adulterated with rat poison and said the public faced "substantial risk" in finding safe online pharmacies. "Registrars can play a critical public safety role in the Internet ecosystem. Ignoring that role, or acting affirmatively to facilitate public harm, is of great concern," USTR said.It urged trading partners and ICANN, a California-based organization which oversees the introduction of new internet addresses, to "investigate and address this very serious problem."USTR named 25 online marketplaces and 19 physical markets in the report. It decided against reinstating Alibaba's consumer-to-consumer shopping website Taobao.com, which was removed in 2012, and said it would continue to monitor the site. An Alibaba spokeswoman said the company was dedicated to the fight against counterfeits. "We work closely with our government partners, brands and industry associations to tackle this issue at its source," she said. Alibaba says it spent more than 1 billion yuan ($160.7 million) combating fake goods and improving customer protection from the beginning of 2013 to the end of November. But a Chinese regulator said in January many products sold on Alibaba sites infringed trademarks, were substandard or fake.

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New York chief judge calls for grand jury reforms after chokehold case Responding to outrage over a grand jury's decision against indicting a New York City police officer for killing an unarmed black man with a chokehold, the state's top judge on Tuesday proposed giving courts unprecedented authority over grand jury proceedings involving police. Chief Judge Jonathan Lippman of the New York Court of Appeals said in his annual address in Albany that the public's trust in the justice system had been shaken by the secretive proceedings that did not lead to indictments in the cases of the NYPD officer who killed Eric Garner and an officer in Ferguson, Missouri, who shot and killed an unarmed black teen last year.Lippman said he would soon submit a bill to the state legislature that would require judges to preside over grand jury proceedings in cases involving allegations of homicide or felony assault against police officers.  Such oversight, he said, would be a check on the outsized role of prosecutors in grand jury proceedings, giving the public greater confidence in the process.Currently, judges may play a supervisory role when grand juries convene but are not present in the courtroom and do not get involved unless the jurors ask for guidance. The United States is one of the only countries to still use grand juries to indict people for crimes. The practice has come under renewed scrutiny due to the cases of Garner and Michael Brown, the victim in the Ferguson shooting. Lippman's proposal, which would give judges the ability to question witnesses, block evidence they find inadmissible and give instructions to jurors before they deliberate, could come under fire from the state's district attorneys.Prosecutors have generally defended the current system despite claims that their close relationship with local police departments makes it difficult for them to remain impartial in cases where officers may face criminal charges.Lippman's proposal would also create a presumption that grand jury records would be released in cases of "significant public interest," even if no charges are brought.The judge's call for grand jury reform comes after Governor Andrew Cuomo last month said he would appoint a special monitor to review cases in which grand juries choose not to indict police officers. New York Attorney General Eric Schneiderman, meanwhile, has asked Cuomo to grant his office the authority to prosecute police who kill unarmed civilians.

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Sharp asks turnaround fund for help, on top of aid from banks: source Loss-making Sharp Corp has asked a domestic corporate turnaround fund to invest up to $250 million in capital - aid which would come on top of plans to tap its two main lenders for a second major bailout, a source said on Friday.Weak sales of smartphone screens in China, aggravated by an unexpected comeback by rival Japan Display Inc, have derailed Sharp's recovery efforts. It has warned of its third annual net loss in four years and is now working on a fresh plan to overhaul its business.Sharp Chief Executive Kozo Takahashi met with officials from its main lenders Mizuho Bank and Bank of Tokyo-Mitsubishi UFJ on Thursday, although he did not request specific amounts or make promises about restructuring, sources familiar with their exchange said.The embattled electronics manufacturer has also reached out to Japan Industrial Solutions to offer a stake worth up to 30 billion yen, according to one source with knowledge of the situation. The turnaround fund is backed by several financial institutions including Mizuho and Bank of Tokyo-Mitsubishi as well as the state-backed Development Bank of Japan.The Nikkei earlier reported that the fund would purchase preferred or common shares in Sharp, and that Sharp hopes to receive the investment by March next year.Such a move would help to prop up Sharp's capital. For the banks, involvement by the turnaround fund as a shareholder could grant them greater oversight of the turnaround process. Japan Industrial Solutions' portfolio includes Unitika Ltd, which makes advanced textiles and plastics, and silicon wafer supplier Sumco Corp. Successful exits include Spa Resort Hawaiians, a resort in Fukushima that saw attendance slide in the wake of the 2011 earthquake.A spokeswoman for Sharp declined to comment, saying only that nothing had been decided and that it was working on restructuring plans that are due to be announced in May. A spokesman for Japan Industrial Solutions declined to comment.BANKS FEAR COLLAPSEFinancial sources have said a debt-for-equity swap - writing off their loans in return for ownership of Sharp - would be a logical option for any new rescue by the banks. The Nikkei has put the potential value of such a deal at around 150 billion yen ($1.3 billion).The sources have said banks want Sharp to embark on bold restructuring in return, similar to recent efforts by Panasonic Corp and Sony Corp which are showing signs of a turnaround. Company sources say Sharp officials are not willing to consider more radical steps such as merging its display business with Japan Display, which announced on Friday that it would build a new $1.4 billion plant and which a source said would supply screens for Apple.In ruling out plans for a deal with Japan Display, insiders say they hope the latest downturn is temporary, while analysts say the 100-year-old electronics company is too proud.The lenders are expected to avoid pursuing too tough a stance for fear of triggering a collapse."Sharp will survive again despite large net losses and its financials being a lot worse than Elpida's," said Jefferies analyst Atul Goyal, referring to the failed Japanese chipmaker. "This is because the bank management... are highly unlikely to let Sharp go under."The banks agreed in September 2012 to rescue Sharp with loans and credit lines worth 360 billion yen, or $3 billion at today's exchange rates, in exchange for promises to return to the black by this year. Sharp then exited the European TV market and closed solar-panel businesses in Europe and the United States.Sharp shares rose 1.7 percent on Friday. They have fallen around 11 percent so far this year.

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Apple plans fix next week for newly uncovered Freak security bug Apple Inc and Google Inc said on Tuesday that they have developed fixes to mitigate the newly uncovered 'Freak' security flaw affecting mobile devices and Mac computers.The vulnerability in web encryption technology could enable attackers to spy on communications of users of Apple's Safari browser and Google Inc's Android browser, according to researchers who uncovered the flaw.Apple spokesman Ryan James said the computer company had developed a software update to remediate the vulnerability, which would be pushed out next week.Google spokeswoman Liz Markman said the company had also developed a patch, which it has provided to partners. She declined to say when users could expect to receive those upgrades.Google typically does not directly push out Android software updates. Instead they are handled by device makers and mobile carriers.The Washington Post reported that the bug left users of Apple and Google devices vulnerable to cyberattack when visiting hundreds of thousands of websites, including Whitehouse.gov, NSA.gov and FBI.gov. http: (wapo.st/18KaxIA)Whitehouse.gov and FBI.gov have been fixed, but NSA.gov remains vulnerable, the paper cited Johns Hopkins cryptographer Matthew D. Green as saying.A group of nine researchers discovered that they could force web browsers to use an form of encryption that was intentionally weakened to comply with U.S. government regulations that ban American companies from exporting the strongest encryption standards, according to the paper. Once they caused the site to use the weaker export encryption standard, they were then able to break the encryption within a few hours. That could allow hackers to steal data and potentially launch attacks on the sites themselves by taking over elements on a page, the newspaper reported. Markman said that Google advises all websites to disable support for the less-secure, export-grade encryption. "Android's connections to most websites - which include Google sites, and others without export certificates - are not subject to this vulnerability," she added. The group of researchers dubbed the flaw Freak, for "Factoring RSA-EXPORT Keys," according to a website where they described the vulnerability.

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Continental wants to be partner on possible Apple car: CEO Germany's Continental AG would be interested in acting as partner for technology giant Apple should the U.S. company decide to build a car, Chief Executive Elmar Degenhart said."Apple has an excellent reputation on information and communication systems and has incredible financial strength," the CEO said on Thursday during an earnings call."We would be interested" in acting as partner if Apple decides to produce a vehicle, he said.Separately, Degenhart was skeptical on prospects for battery-powered cars, saying Continental's electric-car operations may fail to make money "at least in the next 3-4 years."The company remains on the lookout for potential acquisitions, though another major takeover is not on the cards in coming months, the CEO said.

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At long last, Dow gets a taste for Apple Apple Inc (AAPL.O), the largest U.S. company by market value, will join the Dow Jones industrial average .DJI, replacing AT&T Inc (T.N), in a change that reflects the dominant position of the iPhone maker in the U.S. consumer economy.The decision to nudge aside AT&T, which has been part of the Dow for the better part of a century, is a recognition of how communications and technology have evolved. It's also a marker of Apple's transformation, from a struggling company with a small, fervent following two decades ago, into the nation's predominant consumer tech company."This is a sign of the times, and it might get everyone to look at the Dow more than they have been," said Richard Sichel, who oversees $2 billion as chief investment officer at Philadelphia Trust Co. "It would be difficult to pick any 30 companies that would cover the entire economy, especially compared with the S&P 500, but it does give the Dow more credibility." The action, by S&P Dow Jones Indices, had been widely expected since Apple split its shares seven-for-one in June of last year. AT&T declined to comment on its removal from the average, of which it has been a member for most of the last 100 years. The stock was added to the Dow in 1916, the year after the first-ever transcontinental telephone call. It was removed in 2004, but after SBC Communications renamed itself AT&T following a 2005 merger, it was reinstated. "It was a new way of life: telephones, back then 100 years ago, these talking machines," said Howard Silverblatt, index analyst at S&P Dow Jones Indices. "Back then, AT&T was it, end of story." TWIST OF FATEAfter Apple's stock split, many investors felt it was only a matter of time before the company, whose high stock price had previously made it unsuitable for the price-weighted index, would join it.The Dow industrials is the oldest U.S. stock average, first published in 1896. Its compact size - just 30 names - and its mission to reflect the U.S. economy means that many retail investors are more familiar with it than other indexes covering a broader cross-section of the market. Even though professional managers generally benchmark against the S&P 500, additions and removals from the Dow are still a big event on Wall Street. It was last altered in September 2013 when Goldman Sachs Group Inc (GS.N), Visa Inc (V.N) and Nike Inc (NKE.N) were added.Apple did not respond to requests for comment. The company has a market capitalization of $737 billion, making it twice the size of the second-largest Dow component, Exxon Mobil Corp (XOM.N). Shares of Apple rose 0.15 percent to $126.60 on Friday, while those of AT&T fell 1.5 percent to $33.48.In a twist of fate, Apple owes some of its success to its partnership with AT&T over the iPhone, the device that propelled Apple's dominance. The iPhone first hit the market in 2007 with AT&T as its exclusive carrier, a deal that continued for more than three years. Since the iPhone's introduction, Apple's annual revenue has risen more than sevenfold, from $24.6 billion in 2007 to $182.8 billion most recently. AT&T saw 11 percent revenue growth over the same period to $132.4 billion in 2014. "There’s irony in that they are replacing AT&T, which helped them lift off to begin with,” said Neil Azous, founder of Stamford, Connecticut-based advisory firm Rareview Macro.Despite Apple's size, as of Thursday's close it would only have a 4.66 percent weighting in the Dow because of its price, the index company said. Apple will join the average after the close of trading on March 18. Most of the assets indexed to the Dow industrials do so through the S&P Dow Jones Industrials exchange-traded fund (DIA.P), commonly known as the "Dow Diamonds." It had about $12.5 billion in assets as of Thursday. By comparison, more than $1.9 trillion in assets track the S&P, including mutual funds and ETFs.Kevin Landis, chief investment officer of Firsthand Capital Management, a Silicon Valley-based technology-investing specialist with $300 million in assets under management, said he hopes that this is not a sign that Apple is past its prime. “The Dow Jones is such a backwards-looking list, I cringed when Intel (INTC.O) and Microsoft (MSFT.O) were added," Landis said. "I'm cringing today. Let's hope Apple can defy the forces of history."Intel and Microsoft joined the average in November 1999, and their performance was weak for years following.

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Apple Pay stung in transactions using data stolen from retailers: WSJ Apple Inc's (AAPL.O) mobile payment system Apple Pay has been hit by a wave of fraudulent transactions using stolen credit-card data from a spate of breaches at retailers, the Wall Street Journal reported, citing people familiar with the matter. The transactions stemmed from breaches at retail giants including Home Depot Inc (HD.N) and Target Corp (TGT.N), the Journal reported on Thursday. The majority of unauthorized purchases have been for big-ticket items bought with smartphones at Apple's own stores, the Journal said.Apple could not be reached immediately for comment.

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Game of drones: As U.S. dithers, rivals get a head start Drones, or unmanned aerial vehicles (UAVs), are a hot ticket in Silicon Valley, but U.S. government dithering over regulations has given overseas companies a head-start in figuring out how best to exploit them.Global spending on drones could add up to close to $100 billion over the next decade, with commercial uses - from farming and filming to pipelines and parcels - accounting for around an eighth of that market, according to BI Intelligence.But for years, the Federal Aviation Administration (FAA), the authority largely responsible for regulation in the United States, has dragged its feet, only last month issuing draft rules on who can fly drones, how and where. It's likely to be a year or more before the regulations are in place - good news for companies operating outside the U.S. and looking to build a business around drones.Sky-Futures, a British company that dominates the use of drones to collect and analyze inspection data for oil and gas companies, says its business soared 700 percent last year as the normally conservative energy industry embraced the new technology. Co-founder and operations director Chris Blackford said the company is coupling drones with software and a better understanding of what works in the field, giving Sky-Futures "a head-start over the U.S because we understand pretty intimately the problems facing the oil and gas market, and how we can solve them with technology."Looser regulations outside the U.S. have created pockets of innovation attracting ideas, money and momentum, says Patrick Thevoz, co-founder and CEO of Swiss-based Flyability, which builds drones inside a spherical cage that allows them to bump through doors, tunnels and forests without losing balance.Another British company, BioCarbon Engineering, hopes to speed up reforestation by using drones to plant germinated seeds, and shares in New Zealand-based Martin Aircraft trebled in the first few days after listing in Australia last month, on investor hopes for the personalized aircraft maker which is developing a UAV that could be used by the military, oil and gas, mining and farming industries.In Japan, the government is looking to fast track industry-friendly regulation to give its drone business an edge.PALM OIL, PACK DOGSBut the real work, say those in the industry, is in building out the drone ecosystem: the payload, software, operator and end user, and making sense of the data. That can only come by connecting to potential customers. "As long as you don't have the end user because they can't use it, you're basically missing a lot of the ecosystem," says Thevoz.In Singapore, Garuda Robotics is already moving beyond just being a drone operator. "The drones are a means to get the data out of the sky," says co-founder and CEO Mark Yong, "but if you can't process it you've not created any value for the customer."While the company has been helping map the boundaries of palm oil plantations in Malaysia, it has added the ability to calibrate the drones' cameras to measure moisture levels in individual trees. It's now working with agronomists to figure out how to make sense of that thermal data to judge the health of trees and their likely yield.Other projects include assembling real-time 3D maps of building sites to help construction schedules, monitoring and reducing algae blooms and keeping tabs on packs of stray dogs using infrared cameras.All of this would be hard, if not impossible, under FAA regulations that limit drones flying out of sight of the operator, or at night.While regulation typically lags technology, no one's betting against Silicon Valley dominating the industry in the long run. Last year, more than $100 million flowed into U.S. drone start-ups, according to CB Insights, double 2013 levels."Let's not kid ourselves," said Philip Von Meyenburg, who runs a drone operating company out of Singapore. "They know what they're doing in the U.S."And China, too, is in the game as hardware prices fall rapidly. China's DJI sells consumer grade drones for $500, making it hard for companies producing lower volumes to justify their higher prices."The challenge for all drone manufacturers now is that we're in a market that is constantly updating," said Flyability's Thevoz.

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Mandarin Oriental says credit card systems compromised in cyberattack Hotel operator Mandarin Oriental International Ltd said on Thursday that it was the victim of a cyberattack and that it found malicious software on credit card systems at "an isolated number" of hotels in the United States and Europe.The company said in a statement on its website that it was working with credit card companies, law enforcement and forensic experts as it investigates the matter. It also said that it had implemented "additional security measures" at all of its hotels.

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Amazon opens store on Alibaba's online marketplace Tmall Amazon.com Inc has opened an online store on Alibaba Group Holding Ltd's fast-growing online marketplace, Tmall.com as it seeks to expand in China, an Alibaba spokesman said.Alibaba's Tmall offers virtual storefronts and payment portals to merchants. Several western retailers, including Zara owner Inditex, Britain's Burberry and ASOS, have joined TMall this year as they look to boost their presence in China.Imported food, shoes, toys and kitchenware are listed on Amazon's store, one of the many on Tmall that sell brand-name goods to Chinese shoppers, Bloomberg, which first reported the news, said on Thursday.Amazon also operates its own e-commerce site in China. U.S. retailer Costco Wholesale Corp last year opened an online store in China using Tmall, entering the country's booming e-commerce market to combat slowing sales at home.Amazon did not immediately respond to requests for comment outside usual business hours.

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Silicon Valley debate on self-driving cars: do you need a map? The Silicon Valley race to build a self-driving car may revolve around one simple question: to map or not to map. The company at the forefront of the race, Google Inc, is creating intricate maps that detail every tree and curb along the road - an expensive endeavor that other companies could find difficult to match.Newer entrants such as ride-share service Uber and Apple Inc could take a shortcut and develop a car capable of piloting itself without such elaborate and expensive blueprints, industry experts say.The dueling technological approaches represent more than a philosophical divide: they hint at how and when the companies, competing to expand into a significant new class of product, could put autonomous cars onto the road.Raj Rajkumar, one of the leading experts on self-driving cars at Carnegie Mellon University, said the map-based approach makes sense for a company with Google’s resources but is not required. “Google is capable of collecting all this information. In our case, we don’t have that capability, so we have to be creative. It turns out that’s sufficient,” said Rajkumar, who has developed a modified Cadillac that relies on radars, video cameras and six laser scanners and in 2013 drove 33 miles (53 km) to the local airport without human intervention or 3D maps.Both approaches currently have limitations, and even the most optimistic acknowledge that a variety of technological, regulatory and legal issues mean it will be years, perhaps longer, before completely self-driving cars hit the road.Apple is studying the potential for a self-driving car, a source familiar with the matter has told Reuters. Uber, which operates the popular ride-hailing service, announced a partnership with Carnegie Mellon University in January to focus on self-driving cars. Electric car maker Tesla Motors Inc is developing self-driving technology, and traditional automakers including General Motors Co and Nissan Motor Co Ltd are also adding automated features into their vehicles.Companies such as Nokia's Here are also developing detailed 3D maps that potentially could be licensed by car companies. Apple and Uber declined to discuss self-driving cars.MAPS OF THE FUTUREMapping the entire United States to the level of detail used by Google’s cars could easily cost hundreds of millions of dollars and take five to seven years, said Egil Juliussen, an analyst with research firm IHS Automotive.All autonomous cars rely on basic electronic maps for navigation and lane centering. But Google’s cars use far more detailed 3D maps, which the company creates by using laser scanners. Google analyzes the data, determining where traffic lights and stop signs are, for instance, so that the vehicle "knows" exactly where it is.Google’s pod-shaped prototype cars use on-board sensors, including the distinctive spinning laser on the car’s roof, to detect anything not on the map, such as vehicles or baby carriages. Google’s existing mapping know-how and resources give it an extra advantage, said Boris Sofman, the co-founder and CEO of Anki, a robotics company that makes self-driving toy cars.But the maps can quickly become stale, he said. Fresh snow could change the landscape.“The map-based approach allows you to drive accurately in a controlled environment, where you know that things don’t change much,” said Dirk Langer, the chief technology officer of ASCar, which makes sensors for autonomous vehicles.Google said its self-driving cars collect information about changing road conditions, which is used to regularly update the maps. Gated retirement communities and college campuses would be ideal environments for cars that rely on 3D maps, said Langer, arguing that for broader uses sensors are more important than 3D maps. Cars might be able to pilot themselves without using 3D maps in specially designated lanes on streets and highways, said John Absmeier, the global business director of autonomous driving for auto supplier Delphi Automotive Plc.But advances in sensor technology are also needed for cars to truly become autonomous. Carnegie Mellon's Cadillac required some sensors mounted on street lights to make its 2013 journey to the airport.“We think we can handle 90 percent of road cases," said Carnegie Mellon's Rajkumar, "but getting to 100 percent will take longer.”

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Kleiner ex-partner Pao to testify in own Silicon Valley bias case Former venture capitalist Ellen Pao could take the stand as early as Thursday in her gender discrimination lawsuit against her previous employer Kleiner Perkins Caufield & Byers, giving testimony that will likely make or break the case.Questioning Pao provides the best opportunity for each side to clinch their arguments, but it is also extremely risky, according to employment law attorneys following the trial. The lawsuit, which the former Kleiner Perkins partner filed in 2012 against the venture capital firm, has helped spark a broad and ongoing discussion about sexism in Silicon Valley.To win, Pao needs "to come across as extra-capable," said Kathleen Lucas, a San Francisco attorney who represents employees. "I don't think she necessarily has to be likeable."Pao's lawyers, Alan Exelrod and Therese Lawless, have likely spent many hours preparing their client for her testimony. And after several days of deposition with Kleiner's attorney, Lynne Hermle, Pao has had a chance to learn Hermle's style of questioning.The tough-talking Hermle must make the point through her questions that Pao lacked the chops to move ahead while not coming on so harshly that she alienates the jury.For her part, Pao must show enough vulnerability so jurors sympathize with her, but not so much that she loses gravitas, said Mark Schickman, a San Francisco attorney who primarily represents companies."She's really claiming that she can be in the rough and tumble at the highest level, so she can’t break down too easily," Schickman said.So far, Kleiner's case has tried to tread a fine line between acknowledging that Pao excelled in some areas, such as critical thinking, and arguing that she lacked the leadership and interpersonal skills needed to advance at the firm.In her lawsuit Pao, now interim chief executive at social news service Reddit, said her standing at Kleiner deteriorated after she ended a brief affair with another partner who later left the firm. Her career was sidelined after he and the firm started retaliating against her, her lawyers have argued.But some witnesses, including partner and onetime mentor John Doerr, have said her lack of advancement stemmed from her subpar performance, not discrimination or retaliation.The case is Pao v. Kleiner Perkins Caufield & Byers LLC, CGC-12-520719, in California Superior Court, in the County of San Francisco.

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As CEOs seek tax cuts, senator slams corporate tax haven use Senator Bernie Sanders lashed out on Wednesday at widespread use of offshore tax havens by U.S. companies, and the liberal independent targeted a group that represents CEOs of big corporations and wants corporate taxes lowered.Sanders, top opposition member on the U.S. Senate Budget Committee, released a report decrying what he called "legalized tax fraud." It showed that 111 of the 201 member companies of the Business Roundtable are sheltering more than $1 trillion in profits overseas, where they are not subject to U.S. taxes.Using the Cayman Islands, Bermuda and other tax havens, these companies have saved more than $280 billion in tax liabilities, Sanders concluded in the report. The senator from Vermont delivered his broadside a day ahead of a media event the Business Roundtable scheduled at its Washington office. The group was expected to call again for a rewrite of the U.S. tax code including a lower corporate income tax rate.Sanders said Business Roundtable companies account for roughly half of an estimated $2 trillion in profits held overseas by U.S. companies under a loophole that lets them defer taxation on profits from overseas subsidiaries.The "last thing" Congress should do is provide more tax breaks to such profitable businesses, Sanders said. "Instead of sheltering profits in the Cayman Islands and other offshore tax havens, the largest corporations in this country must pay their fair share of taxes so that our country has the revenue we need to rebuild America and reduce the deficit," Sanders said in a statement.Many business groups have sought a "repatriation holiday" that would allow them to bring home overseas profits at a reduced tax rate.The senator's report relies heavily on data compiled in June 2014 by Citizens for Tax Justice, a left-leaning activist group, and U.S. Public Interest Research Group, a consumer advocacy group that says it "stands up to powerful special interests."The report said the data comes from Securities and Exchange Commission filings compared with offshore subsidiaries listed in a 2008 Government Accountability Office report on tax havens.Among Business Roundtable members listed in the report with large amounts of profits held abroad were General Electric Co with $110 billion, Pfizer Inc with $69 billion and IBM Corp with $52.3 billion.A spokeswoman for the Business Roundtable said the group was studying the report and could not immediately comment on it.

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Music app Shazam to add sights to sounds Shazam, the company behind the mobile phone app that enables its 100 million users to recognize music they hear, and buy the recordings, is now promising to extend the app's scope to objects, such as products in retail outlets."Shazam is already a verb. We want to expand the universe of what you can Shazam," Chief Executive Rich Riley told Reuters at the Mobile World Congress industry fair in Barcelona.To fund the expansion the London-based company raised $30 million from several unidentified billionaires and financial institutions in January, coming on top of $40 million raised from Mexican telecoms billionaire Carlos Slim in 2013.Riley said these additional funds would help the venture-capital backed company add to its 250-strong staff and sign additional partnerships with publishers and content companies."The famous blue button that our users love will remain on the home screen but will be able to do much more," he said.Shazam has evolved markedly since 1999 when it was founded, gaining popularity with its ability to recognize a piece of music with the click of a button on the phone. It now sells songs that its users identify, having secured deals with all the major streaming music services including Spotify and Deezer, and has remained among the top 25 most downloaded apps for years.Lately it has also become a port of call for advertisers who want to find ways to instantly link up with their target audiences.The next phase of development will be to enable phone users to Shazam actual objects, said Riley, such as a cereal packet in the grocery store to get more nutritional information or a DVD case at home to buy the movie soundtrack. Riley also said that funding would give Shazam "lots of flexibility" to determine whether its next money-raising exercise would be on the public or private markets.Although Shazam does not disclose its revenues or other financials, it says the latest funding round valued it at over $1 billion.It also has the attributes of a listed company, Riley said, such as a strong brand, scale and revenue, although the company is not yet profitable since it is still seeking to grow. "Our business model is real and developed, not to be determined like so many web apps or start-ups," he said.

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In Japan, Abe's robot panel aims to give drone industry an edge The government of Japan, a country with a proven track record in electronics and robotics, is looking to fast track industry-friendly regulation to give its drone sector an edge over the United States.Companies from motorcycle maker Yamaha Motor to security firm Secom Co are readying drone technology and services, as advisers to Prime Minister Shinzo Abe drive a regulatory overhaul.The Robot Revolution Realization Committee, an advisory panel appointed by Abe, will review existing radio and civil aeronautics laws and set up industry-run best practice for drones. Another panel is asking companies for ideas on how to open up new special economic zones in Tokyo and other big cities to drones on a test basis. The Fukushima area, blighted by the 2011 tsunami and nuclear disaster, could also become a "field test zone" for robots and drones, largely free of regulation."We want to keep an eye on the world's drone market, starting with the United States, and consider Japan's way of doing things," said Tamotsu Nomakuchi, who heads the robot panel. "It's not about copying other markets, but learning about them and creating something better.""YEAR ONE"The only aviation regulations covering drones in Japan require that they fly below 150 meters and at least 9 kms (5.6 miles) away from airports. Drones used in agriculture need two operators, with precautions for the surrounding environment.Japan has been using drones in its farming industry since the 1980s, when an unmanned Yamaha R-50 helicopter took to the air to spray pesticide on rice crops. Today, more than 2,500 agriculture drones are in operation.Yamaha is now looking to adapt its drone technology for patrolling Japan's borders or for checking oil and gas pipelines, spokesman Kinji Ootsuki told Reuters.Secom will this month launch a service for small businesses that includes having a surveillance drone that can be scrambled to take photos of an intruder when an alarm sounds. Spokeswoman Asuka Saito said the company also wants to pitch its security drones for use at the 2020 Tokyo Olympics.And Ricoh Co Ltd, an office equipment maker, has been testing its digital cameras on drones to monitor crop growth in field tests, said new business development manager Wataru Ohtani.Partly due to the lack of regulations for outdoor test flights, Ryo Konomura, one of the founders of Tokyo University's Phenox Lab, developed an indoor drone with artificial intelligence capability.Japanese drone industry supporters have dubbed 2015 "Year One of the Era of the Drone."

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Self-driving cars could generate billions in revenue: U.S. study Self-driving cars could generate billions of dollars a year in revenue from mobile internet services and products, even if occupants spend only a fraction of their free time on the web, according to a new study by McKinsey & Company.The study, released Thursday, also projects that widespread adoption of self-driving cars could lead to a 90 percent reduction in U.S. vehicle crashes, with a potential savings of nearly $200 billion a year from significantly fewer injuries and deaths.In addition, the McKinsey study warns of several risks to established companies, including vehicle manufacturers, dealers and even insurance companies.McKinsey projects that future owners of self-driving cars could save up to 50 minutes a day, some of which is likely to be spent surfing the web.The consulting firm estimates the additional free time in the car could generate about $5.6 billion a year in digital revenue for each additional minute that vehicle occupants spend on the internet - as much as $140 billion if half their free time in the car, or roughly 25 minutes, is devoted to daily web surfing and shopping.The revenue may be divided among the vehicle manufacturers, their major hardware and software suppliers and web-based providers of goods, information and services.In the future, "people will be able to shop for services or products from their mobile devices or from embedded systems in the vehicle," said Hans-Werner Kaas, senior partner and head of McKinsey's automotive practice.McKinsey said that while traditional automakers, especially premium brands such as Daimler AG's Mercedes-Benz and Volkswagen AG's (VOWG_p.DE) Audi, already are beginning to implement advanced driver assistance systems on their cars, they face new challenges in fielding fully autonomous cars from "attackers," non-traditional companies that do not have legacy vehicle platforms or sales and service networks.Those outside challengers include such newcomers as Tesla Motors Inc, as well as tech giants such as Apple Inc and Google Inc, both of which are poised to build self-driving cars.The gradual shift to self-driving cars, which may automakers don't expect to accelerate until after 2025, could trigger other profound changes in the auto industry.Those include a shift among insurers from covering risk of human error to risk of technical failure; a shift from franchised dealer service to independent shops where autonomous vehicles can drive themselves for repairs and maintenance, and fewer trips to the shop as more cars are diagnosed and updated wirelessly.

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Apple's rivals hope its Watch will boost their own wearable tech Apple's rivals want to benefit from its magic, hoping that its long awaited new smartwatch will finally conjure demand for wearable technology that has so far generated more buzz about its potential than actual sales.Gizmos that users wear on their bodies have yet to live up to the hype as the next big thing in technology. But experts say the arrival of Apple's new Watch - expected to be launched at an event announced next week - could finally get consumers excited."If Apple is successful, it'll create a rising tide that will lift the whole market," said Ben Wood, a top gadget reviewer at technology market research firm CCS Insight.His company predicts Apple will sell 20 million of its new smart watches this year, helping spur 150 percent growth in the wearable technology sector to 75 million gadgets, rising to 350 million by 2018. Strategy Analytics, a second research firm, estimates Apple is likely to sell 15 million watches this year. Making novelty products is one thing. Getting people to wear them is entirely another. Just ask Nike or Google. Sportswear maker Nike halted work on its line of sports fitness wristband products a year ago. By far the most high profile failure to date has been the futurist Google Glass, which the Internet giant quit producing in January. The gangly glasses with a computer screen fascinated the world and drew legions of celebrities, fashion models and even Prince Charles to try on a pair, but the sometimes vertigo-inducing product prototype found few regular wearers. Vendors must get over the "technology first" attitude and think in terms of specific benefits to consumers before they will buy anything so visible and intimate as wearables, according to a recent report by research firm Juniper Research. "Consumers are still unsure about the use case for many wearable devices, including watches and glasses. In particular, consumers are hesitant to adopt wearable companion devices" that function much like smartphones, the report said.Now, here comes Apple, with its track record of turbo-charging whole new categories, from music players to tablets, with products that win wide appeal. The company was as ever absent from the world’s largest annual gathering of the mobile industry this week, but it nonetheless stole the show by announcing a mysterious event next Monday, where it is widely expected to launch its much-anticipated but pricey new watch.At the Mobile World Congress in Barcelona, dozens of electronics makers were seeking attention for their own watches, fitness trackers and other wearable electronics accessories.STYLETo take their products into the mainstream, many manufacturers of smartwatches are focusing on style, trying to make them look less like futuristic gadgets with oversized rectangular screens, and more like classic watches.This year saw several companies follow the lead of Motorola, now owned by China's Lenovo, which won kudos last year by showing off a style-conscious device with a round screen. Both China's Huawei and South Korea's LG Electronics showed off round smartwatches this year."It looks like a real watch!" Huawei's head of consumer business Richard Yu boasted of his company's offering, which sports a choice of 40 round screen "faces", including replicas of classical Swiss watches.While makers of conventional watches have so far mostly resisted the move to smartwatches, there are signs that brands better known for style than technology are testing the market. American brand Guess launched what it described as the first fashion-branded smartwatch.Nike may have postponed its entry, but its U.S. sportswear rival Under Armour stepped in, launching a co-branded fitness device with Taiwanese phone maker HTC.Still, for now wearable smart devices mostly work by linking to a smartphone, and consumers do not seem to be lining up to buy a watch that acts mainly as an expensive remote control for a phone they have to carry in their pockets anyway.Some experts say the technology will only really take off when the wearables can be used independently.Forrester analyst Thomas Husson said "smartwatches will complement, not replace smartphones" for at least the next two to three years.

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France, Luxembourg lose lower VAT rate battle on ebooks France and Luxembourg lost their battle to apply reduced VAT rates to ebooks on Thursday when a top European court agreed with EU regulators that only paper books qualified for lower taxes.EU rules allow member states to set lower rates of value-added tax on printed books but the European Commission decided two years ago that the 5.5 percent and 3 percent rates imposed by France and Luxembourg respectively, were illegal.The EU executive said reduced VAT rates did not apply to ebooks as they were an electronically provided service and were not in the list of goods and services granted this privilege.The vast majority of the EU's 28 countries levy VAT rates ranging from 18 to 25 percent, according to Commission data.VAT on paper books in contrast ranges from 0 to 10 percent, with the exception of three member states.Judges at the Luxembourg-based Court of Justice of the European Union (ECJ) rejected France and Luxembourg's argument that ebooks should be considered a good rather than a service."The court finds that the VAT Directive excludes any possibility of a reduced VAT rate being applied to 'electronically supplied services'," they said."The court holds that the supply of electronic books is such a service," the ECJ ruled.Amazon, which dominates the ebooks market, has said that lower priced ebooks sell more and ultimately generate more revenue and more royalties for authors.According to data provider Statista, ebook sales in Europe are expected to account for just over a fifth of book sales in Europe in 2017 compared with 4.5 percent in 2013.The Commission is now reviewing the VAT rules as part of a revamp of the current transitional VAT system to switch over to a definitive VAT regime, a spokesman said before the court ruling.French publishers and booksellers said the policy of having higher VAT rates for ebooks than for printed ones ran counter to the goal of encouraging e-reading and urged the Commission to change the VAT rules."We call on the European Commission to quickly take the initiative to amend the law to reflect technological progress and eliminate a serious obstacle to the development of the ebook market," they said in a statement.The case is C-479/13 Commission v France and C-502/13 Commission v Luxembourg.

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Japan Display confirms new plant, source says for Apple Japan Display Inc said on Friday that it would build a new $1.4 billion liquid crystal display (LCD) manufacturing plant, which a source said would supply smartphone screens for Apple Inc.The company did not name Apple, in line with its policy of not identifying clients. A person familiar with the matter said Apple would also invest an unspecified amount in the plant, which would further the Japanese screen maker's aim of becoming the primary supplier of high-tech screens for iPhones.The source declined to be named as the investment details remained confidential. The total cost of the plant in Ishikawa, central Japan, is estimated at 170 billion yen, Japan Display said in its statement.Global iPhone sales, notably in China, have surged to make Apple the most profitable company in history.Japan Display said it aims to start operations at the plant in 2016 and expects the move to increase its LCD capacity by 20 percent.The company, formed in a government-backed deal in 2012 from the ailing display units of Sony Corp, Toshiba Corp and Hitachi Ltd, has led a volatile course since its public offering last year.But it recently reported a rebound to profit, boosted by demand from Apple and Chinese smartphone makers, in stark contrast with Japanese competitor Sharp Corp's shrinking panel business.($1 = 120.0300 yen)

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U.S. says inaction on online piracy risks public safety The U.S. trade office on Thursday urged a crackdown on website name registrars who fail to take action against sellers of illegal goods such as counterfeit medicines and warned that turning a blind eye puts public safety at risk.The U.S. Trade Representative also said it is keeping an eye on China's Alibaba Group Holding Ltd's  consumer shopping website for sales of fake and pirated goods, but refrained from reinstating the site on its piracy blacklist.Representatives of Alibaba, the world's largest e-commerce company, had no immediate comment.USTR named a domain name registrar, a company which manages the registration of internet names, for the first time in its annual "notorious markets" list as an example of concern about some registrars not taking action to block or suspend sites selling illegal goods. The registrar, Canada's Tucows Inc, said it took down dozen of sites every day but unlike some competitors, it considered all complaints carefully to ensure they were justified."We want to make sure that our registrants are protected and respected as well as making sure there are not bad actors on our system, and that requires striking a balance on a daily basis," said Graeme Bunton, Tucows manager of public policy.USTR cited an Interpol report which found some drugs sold online were adulterated with rat poison and said the public faced "substantial risk" in finding safe online pharmacies. "Registrars can play a critical public safety role in the Internet ecosystem. Ignoring that role, or acting affirmatively to facilitate public harm, is of great concern," USTR said.It urged trading partners and ICANN, a California-based organization which oversees the introduction of new internet addresses, to "investigate and address this very serious problem."USTR named 25 online marketplaces and 19 physical markets in the report. It decided against reinstating Alibaba's consumer-to-consumer shopping website Taobao.com, which was removed in 2012, and said it would continue to monitor the site. Alibaba says it spent more than 1 billion yuan ($160.7 million) combating fake goods and improving customer protection from the beginning of 2013 to the end of November. But a Chinese regulator said in January many products sold on Alibaba sites infringed trademarks, were substandard or fake.Alibaba said in a submission for the review that it would introduce a new system in early 2015 to fast track requests to remove counterfeit items.

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Handmade goods website operator Etsy files for IPO Etsy Inc, which operates a website that sells handmade goods and craft supplies, filed with U.S. regulators on Wednesday for an initial public offering of common stock.Goldman Sachs & Co, Allen & Co LLC and Morgan Stanley are underwriting the IPO, Brooklyn, New York-based Etsy told the U.S Securities and Exchange Commission in a preliminary prospectus.The company said it intended to list on the Nasdaq Global Select Market under the symbol "ETSY".Etsy, which was founded in 2005, employs 685 people and has 29 million items listed on its website. The company recorded total revenue of $195.6 million and gross merchandise sales of $1.93 billion in 2014.The company charges a 20-cent listing fee for each item on its site and a 3.5 percent fee for each completed sale. It also earns from seller services such as its advertising platform, payment processing and shipping labels.Etsy said it intended to raise up to $100 million from the IPO, but the filing did not reveal how many shares the company planned to sell or their expected price. (bit.ly/1Fbj0OX)The amount of money a company says it plans to raise in its first IPO filings is used to calculate registration fees. The final size of the IPO could be different.

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IKEA and Samsung launch embedded wireless charging range Samsung Electronics Co and IKEA both announced ambitious wireless charging plans at this week's Mobile World Congress (MWC), in conjunction with the Wireless Power Consortium (WPC).The WPC is an industry body which controls the Qi (PRON: Chee) wireless charging standard, currently powering 80 handsets and 15 cars on the market.WPC spokesman Ryan Sanderson explained to Reuters how Qi works. "This is basically inducting charging, so it's a charge that's passed between two coils," he said. "There's a coil in a transmitter. So here's an example. This would.....represent a surface, a bit of a table. There's a coil in here and then there's a coil in the receiver, so that could be built into a smartphone or a mobile device and when you put the two coils together there's a handshake between the two using a bit of power management and that essentially allows the device to charge wirelessly."Samsung announced on Sunday (March 1) that their new Samsung S6 and S6 Edge models will feature the world's first universally compatible embedded wireless charging technology in a phone.According to Samsung's UK & Ireland electronics president Andy Griffiths, "we are the first brand ever to introduce wireless charging that is built in. It is part of the product. We really get people a great charging experience, a great relationship with the battery of their smartphone."Samsung Galaxy S6 and S6 edge will be launched globally on April 10.Swedish furniture giants IKEA announced at the MWC in Barcelona their new range of wireless charging technology built directly into home furnishings, effectively turning bedside tables, lamps and desks into charging spots. USB outlets will allow additional devices to be charged simultaneously, while charging kits allow wireless charging to be built into existing furniture. Furniture with built-in wireless charging will cost an extra 20 euros (22 USD), with the wireless charging conversion kits priced at 30 euros (33 USD). The range goes on sale in Britain and North America in April.Qi isn't the only wireless charging standard and has fewer linked products than rival systems A4WP and PMA, but Sanderson says the tie-ups with Samsung and IKEA will help its presence grow. "IKEA, for example, another big announcement just over the last couple of days, they're going to have a range of furniture of home accessories with wireless, Qi wireless charging built in," he said. "So you'll be able to enable your home, your home environment, there are now more than 15 models of car that have this built in, and there's also a public infrastructure of more than 3,000 locations that all have Qi-enabled charging wireless charging within the location."The Qi standard can charge devices at a distance of four centimeters (1.6 inches) or below, meaning the phone must be positioned directly onto a specific spot marked by a 'plus' sign. Qi's current specifications work only for low-power devices, but the WPC says its next generation could feed up to 2,000 watts wirelessly.

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