Showing posts with label Gadgets. Show all posts

BlackBerry Q10 sells strongly in Canada, Britain: analyst



By Euan Rocha

TORONTO (Reuters) - BlackBerry's new Q10 smartphone, which comes with the physical keyboard that many BlackBerry fans prize, is selling well in both Canada and Britain, an industry analyst said on Friday.

The company introduced the Q10, its second smartphone to run the new BlackBerry 10 operating system, in Canada and Britain this week.

"Our checks indicate broad sellouts with generally limited stock otherwise," Jefferies analyst Peter Misek said in a note to clients on Friday. "Based on our store checks, the BlackBerry Q10 has been selling extremely well and has been sold out or seeing limited availability in Toronto and across the U.K."

Jefferies, which has a "buy" rating on shares of BlackBerry, said its findings were based on checks with top mobile carriers and retailers in both countries, including Bell, Rogers and Telus in Canada, and Carphone Warehouse, Vodafone, and Orange in Britain.

BlackBerry hopes its new line of smartphones, led by the touchscreen Z10 device it introduced earlier this year, will help claw back market share lost to the likes of Apple Inc's iPhone and Samsung Electronics Co's wildly popular line of Galaxy devices, which are powered by Google Inc's Android operating system.

Shares of BlackBerry were up 2.2 percent at $16.04 in early trading in the United States on Friday, while its Toronto-listed shares were up 2.8 percent at C$16.21.

PENTAGON CLEARANCE

The Jefferies report came a day after the Pentagon gave the BlackBerry 10 devices, along with Samsung's mobile devices, security clearance for use on U.S. defense department networks.

Earlier this week, the Pentagon said it also plans to clear Apple mobile devices that use the iOS 6 system at some point in early May.

The move is expected to set the stage for a tough fight over defense department orders among Apple, Samsung and BlackBerry. BlackBerry devices have so far dominated the segment.

The Pentagon said its move to open up its networks to a broad array of mobile devices is part of an effort to ensure the military has access to the latest communications technology without locking itself in to a particular equipment vendor.

That said, the Pentagon's stamp of approval was crucial for BlackBerry as it makes it easier for the company to market the devices to other security-conscious government, legal and financial industry clients.

Last week, international law firm Clifford Chance announced that it would roll out roughly 1,600 BlackBerry 10 smartphones to its employees.

Earlier in April, Canadian Tire Corp, which owns a wide range of retail outlets across Canada, said it planned to roll out the new BlackBerry devices to its corporate team across the country.

SECURITY SOLUTIONS

Waterloo, Ontario-based BlackBerry reiterated on Thursday that it plans soon to extend its security capabilities to devices powered by both Apple's iOS software and Google's market-leading Android software.

BlackBerry said in March it planned to offer a service that will separate and secure work and personal data on iOS and Android. The offering is an attempt to encourage large government and corporate customers to continue to use BlackBerry's services to manage mobile devices on their networks at a time when a growing number of people seek to use their personal devices on corporate networks.

The company said testing of the new offering, dubbed "Secure Work Space", has already started and that it will be generally available by the end of June.

The service, powered by the company's mobile device management (MDM) tool BlackBerry Enterprise Service 10 (BES 10), will help secure data stored on devices as well as data that is being transmitted to a device.

Misek said he believes that BlackBerry's device management offering is under appreciated and that BES 10 is being widely tested by corporations.

"We think BlackBerry's MDM software will gain traction throughout this year and see a significant ramp in revenues next year," Misek said in his note to clients.

(Reporting by Euan Rocha; Editing by Grant McCool; and Peter Galloway)

Google invades Siri's turf with iPhone, iPad app



SAN FRANCISCO (AP) Siri may be feeling a little job insecurity. The sometimes droll assistant that answers questions and helps people manage their lives on Apple's iPhone and iPad is facing competition from an up-and-coming rival made by Google.

The duel began Monday with the release of a free iPhone and iPad app that features Google Now, a technology that performs many of the same functions as Siri.

It's the first time that Google Now has been available on smartphones and tablet computers that aren't running on the latest version of Google's Android software. The technology, which debuted nine months ago, is being included in an upgrade to Google's search application for iOS, the Apple Inc. software that powers the iPhone, iPad and iPod Touch. It's up to each user to decide whether to activate Google Now within the redesigned Google Search app, which is available through Apple's app store.

Siri tried to dismiss the competitive threat. When asked for an opinion about Google Now, Siri responded: "If it's all the same to you, I'd rather Google later."

Mike Allton, a St. Charles, Mo., resident who has owned an iPhone for four years, could hardly wait to check out Google Now, even if Siri might interpret it as a betrayal.

Siri "is looking a little green with envy," Allton, 36, said with a laugh after he installed Google's new app. "I love Apple products, but I like to see the competition because it probably will lead to even more improvements. I believe this technology is going to be even more deeply ingrained in our lives a few years from now."

Other iPhone users even those who have grown fond of Siri welcomed Google Now's arrival to iOS in mostly enthusiastic and sometimes amusing remarks posted on Twitter and Google Plus. One person joked that Google Now is so helpful that the technology prompted him to wash his hands after using the bathroom. The biggest gripe was about the possibility of Google Now's location-tracking features draining a device's battery more quickly.

Google Now's invasion of Siri's turf marks Google Inc.'s latest attempt to lure iPhone and iPad users away from a service that Apple built into its own devices.

Google quickly won over millions of iPhone users in December when it released a mapping application to replace the navigation system that Apple dumped when it redesigned iOS last fall. Apple's maps application proved to be inferior to Google's ousted service. The app's bugs and glitches made Apple the butt of jokes and fueled demand for Google to develop a new option.

Apple has been losing to Google on other fronts in a rapidly growing mobile computing market, an arena that was revolutionized with the iPhone's release in 2007. Smartphones and tablet computers running Google's free Android software have been steadily expanding their market share in recent years, partly because they tend to be less expensive than the iPhone and iPad. In 2012, Android devices held about 69 percent of the smartphone market while iOS had about 19 percent, according to the research firm IDC.

Android's success has been particularly galling for Apple because its late CEO, Steve Jobs, believed Google stole many of its ideas for the software from the iPhone. That led to a series of court battles over allegations of patent infringement, including a high-profile trial last year that culminated in Apple winning hundreds of millions in damages from Samsung Electronics, the top seller of Android phones. That dispute is still embroiled in appeals.

The rise of Android also is squeezing Apple's profit margins and has contributed to a nearly 40 percent drop in the company's stock price since it peaked at $705.07 last September around the time that the iPhone 5 came out.

Android's popularity is good news for Google because the company's services are built into most versions of the operating system. That brings more traffic to Google services, creating more opportunities for the company to sell ads the main source of Google's revenue.

Siri is billed by Apple as an "intelligent feature." Since the technology's release in October 2011, Apple has made it a centerpiece of some marketing campaigns that depict Siri and its automated female voice as an endearing and occasionally even pithy companion.

Google believes its Siri counterpart is smarter because Google Now is designed to learn about a user's preferences and then provide helpful information before it's even asked to do so. The technology draws upon information that Google gleans from search requests other interactions with the company's other services. Knowing a person's location also helps Google Now serve up helpful information without being asked.

"This concept of predicting your needs and showing you them at the right time is unique to Google Now," said Baris Gultekin, Google Now's director of product management. "We want computers to do the hard work so our users can focus on what matters to them so they can get on with their lives."

If the technology is working right, Google Now is supposed to do things like automatically tell people what the local weather is like when they wake up to help decide what to wear and provide a report on traffic conditions for the commute to work. During the day, Google Now might provide an update on the score of a user's favorite sports team or a stock quote of a company in a user's investment portfolio. On a Friday evening, Google Now might offer suggestions for movies to see or other weekend events tailored to a user's interests. For international travelers, Google Now might provide currency conversion rates, language translations of common phrases and the time back home.

Most of this automatic information is provided in summaries that Google calls "cards." Like Siri, Google Now also is equipped with voice technology that allows it to respond to questions and interact with users, though it hasn't shown the wit that delights some of Siri's users.

The Google Now app for iOS isn't as comprehensive as the Android app, which only works on devices running on the latest version of Android known as "Jelly Bean." Some of the Android features missing from Google Now's iOS app include cards for showing airline boarding passes and movie tickets bought though online vendor Fandango. Both of those options are available on the iOS through Apple's built-in Passbook feature that's designed to be a digital wallet.

Google Now's expansion on to the iOS underscores Google's ambitions for the service. The company, which is based in Mountain View, Calif., views it as a pivotal tool in its effort to peer deeper into its users' brains. In doing so, Google believes it will be able to provide more useful services and also show more relevant ads. For Google Now to become more intuitive, it needs to widen its availability.

"The more you use Google Now, we will have a better chance of understanding what your needs are and providing you with the right information," Gultekin said. "It's a virtuous cycle."

Shawn Jacob, a student at the University of North Texas, activated Google Now on his iPhone Monday and was startled by how much the service already knew about him when he logged in for the first time. "I was blown away," Jacob, 21, said. "It made me wonder if I really want Google to know this much about me. It's like Google wants to take over the world."

Gultekin declined to discuss whether there are plans to make Google Now apps for mobile devices running on Microsoft's Windows system. He also refused to comment on speculation circulating in technology blogs that a Web version of Google Now will be offered as a replacement for iGoogle, a tool that allows people to encircle the Google search engine with a variety of services suited to their tastes. IGoogle is scheduled to close in November.

___

Online:

http://www.google.com/landing/now/

Insight: Good life goes on as Syrian elite sit out war



By Michael Stott and Samia Nakhoul

DAMASCUS (Reuters) - It might sound absurd to talk about normal life in Syria after two years of civil war which have killed more than 70,000 people and left five million more destitute and homeless.

Yet in the neighborhood of Malki, a tree-lined enclave of central Damascus, a wealthy group of elite, pro-government Syrians still enjoy shopping for imported French cheeses, gourmet hand-made chocolates and iPad minis in the well-stocked, recently built Grand Mall and in nearby boutiques.

Such are the parallel realities of a conflict in which, for all the gains made by rebels and the current chatter about U.S. "red lines" crossed that might ultimately draw in Western might, President Bashar al-Assad is holding his ground in the capital, bulwarked by his own foreign allies and by many Syrians who fear his end could prove fatal for them too. And so life goes on.

In Malki, sprinklers water the manicured lawns outside their blocks of million-dollar apartments. Maids and drivers cater to their every whim and birds sing in the trees. Fuel for their BMWs and electricity for their air-conditioning is plentiful and the well-guarded streets are free of loiterers.

"Look at this display and you feel all is well, life is good and everything is here," said an elegantly dressed Hiyam Jabri, 50, as she placed her order at the delicatessen counter in the mall's main supermarket.

Malki residents continue to enjoy material comforts and abundant supplies of imported goods, even as millions of their compatriots subsist on food handouts.

The United Nations World Food Programme estimates it is feeding 2.5 million people inside Syria - a tenth of the population - and a further million who have fled the country, offering them subsistence rations of flour and rice.

"We are trying to keep up with the enormity of the crisis and the impact of the brutality," the WFP's deputy regional emergency coordinator Matthew Hollingworth said in the capital.

Most of those whom his staff help "haven't been displaced once but sometimes twice, three times". Food is so scarce for those uprooted by the fighting that rations intended to feed a family of five are being shared by three families.

ILLUSIONS

Even in Malki, though, the air of normality is an illusion - as unreal as the oft-repeated assertions of government officials that victory is near and Assad still controls almost all Syria.

Scratch the surface of the illusion and the normality quickly becomes anything but.

Pasted to the lamp-post outside the elegant chocolatier Ghraoui, whose interior boasts award certificates from France, is a wad of black and white fliers. They are printed by families and they mourn sons and husbands killed in the war.

It is a war, however, that seems to be going nowhere fast.

Recent days have shown again the reluctance of the United States and its allies, in the face of evidence Assad's troops may have crossed President Barack Obama's "red line" by using chemical weapons, to intervene militarily against him - not least as some rebels have espoused the cause of al Qaeda.

Among the few independent outsiders seeing at first hand the mosaic of opinion and suffering in Syria, many aid workers lament that international discourse has become a monotone debate on supplying weapons, with little push for a negotiated peace.

"We need a political solution for this conflict," said Marc Lucet, the local emergency coordinator for UNICEF, whose fellow humanitarian workers recount grim tales of hungry refugees found cowering in half-built apartment blocks or idle factories.

The surface serenity of Malki contrasts with what aid groups say is a country splintered by ever shifting frontlines and a fragmenting opposition; many fear violence will spread beyond Syria's borders and are baffled by the debate in the West over how far to arm rebels, saying this will only make matters worse.

Stressing the need for a political settlement, however, unpalatable and, so far, unattainable, UNICEF's Lucet said: "The solution is certainly not to give more weapons to either side."

Attempts to bring Assad down by diplomatic means have failed to break the impasse, even if they do make life less comfortable in Malki.

Inside the Ghraoui chocolate boutique, as everywhere else in Syria, sales are strictly cash only - sanctions have forced international credit card networks to boycott transactions here.

Prices on restaurant menus in local currency, the Syrian pound, have been hastily updated with stickers multiple times - a tell-tale sign of rapid inflation.

At the luxury mall supermarket, Eyad al-Burghol says he is selling fewer imported foodstuffs than before because many wealthy customers have left the country.

FIGHTING TALK

A distant thump of artillery fire serves as a reminder that, just a few kilometers (miles) away, fierce street-to-street battles are being fought between government and rebel forces. Some days, Russian-made MiG fighter jets streak across the sky on their way to bomb insurgent positions.

The abundant security in Malki, residents say, is provided by men who speak the Iranian tongue of Farsi, rather than Syrian Arabic. Tehran has long been Assad's sponsor against his fellow Arab leaders and the word on the street - impossible to verify - is that this heavily guarded area of town may be home to the Syrian president himself and to his immediate family.

Assad is not seen in public these days and officials refuse to comment on his movements or whereabouts.

Senior Syrian officials try hard to show visiting reporters a picture of normality in which the government is firmly in control. But even the cocoon in which they live and work is starting to be punctured by the facts of war.

Syria's central bank governor Adeeb Mayaleh gave Reuters an interview last week at a headquarters building bearing the scars of a car bomb attack earlier in the month. Blinds hung twisted and useless in front of warped window-frames without glass. A palm tree outside had been reduced to a charred skeleton.

The bank chief insisted that the government had plenty of foreign currency available to guarantee imports and enough cash to pay public employees' wages in advance each month. For how long? Iran and Russia, he said, were about to agree fresh funds.

Deputy Foreign Minister Faisal Mekdad gave an upbeat assessment of the war in an interview - but a Syrian who works nearby told us that the complex housing the ministry had been attacked four times by rebels in the past few months.

UNICEF regional coordinator Youssef Abdul-Jalil estimated that at least three million children inside Syria now needed humanitarian assistance because of the war: "There is a crisis of the children of Syria," he said. "They are paying a terrible price in their lives, in their surroundings, in their health, in their education and in their lack of protection".

REALITY INTRUDES

Cars still choke central Damascus and traffic police still issue tickets for speeding and even clamp badly parked vehicles. But armed checkpoints snarl progress to a snail's pace.

Travel agents still offer flights and holidays. But the road to the city's airport is considered too dangerous by many and flights are available only to a few, friendly, destinations.

Telephones still work and officials still show up for work in neatly ironed shirts and well-pressed suits - but many scuttle off early to be home before nightfall.

One resident spoke of a distant relative, a Christian from a prosperous family of car dealers, who was kidnapped. Accused of supporting Assad, he was beaten while hanging upside down. His captors then they injected fuel into his veins. Released for a ransom worth over $20,000, the man died a few days later.

While the Syrian elite continue to insist that the military campaign against the rebels is succeeding, aid workers in Aleppo say that the area of the country's biggest city that is now controlled by the government is very small.

The main north-south highway which connects Aleppo to Damascus via the major cities of Homs and Hama now features some 38 checkpoints, about nine of which are manned by various groups of rebels, NGO workers who have traveled along it recently say.

In the capital, the government says it guarantees a "Square of Security" in the center; some locals joke that rebel gains have shorn it to a rather smaller "Security Triangle".

Damascus's walled Old City, a UNESCO World Heritage site and home to the 7th-century Umayyad mosque, retains its beauty. But these days it is eerily empty. Tourists have long gone and the souvenir sellers have all but given up hope of selling anything.

Inside the mosque's main prayer hall, featuring a shrine said to contain the head of St. John the Baptist, mournful guides tell of how the imam was recently murdered.

At a jewelry shop in the al-Hamidiyeh bazaar, Anas Hallawi, 25, sat looking bored: "People are selling their gold not buying these days," he said. "Our business thrived on foreign tourists and Syrians buying gold for their brides.

"Now the tourists are gone. And nobody is getting married."

At the Al-Naranj restaurant in the Christian Quarter, one of Damascus's finest eateries, diners discussed the relative risks of car bombings versus random mortar attacks and kidnap. Little wonder that so many with the means have left for Lebanon, as life in the capital becomes a kind of ghoulish Russian roulette.

Across the room, a smartly dressed family group celebrated a betrothal with a lavish spread of traditional Syrian food on a table decorated with red roses.

As the strains of the old songs died away and a festive cake was eaten, a fighter jet roared across the sky. Artillery fire thudded in the distance. The family looked upwards through the restaurant's glass roof, eyes suddenly fearful. (Editing by Alastair Macdonald)

BlackBerry set to add Skype to its app line-up



TORONTO (Reuters) - BlackBerry said on Wednesday it plans to fill one of the biggest gaps in the app line-up on its new BlackBerry 10 devices with a long-awaited Skype application.

Skype, which was acquired by Microsoft Corp in 2011, allows its users to communicate via voice, video or chat over the Internet, by-passing traditional telephone networks. The service has hundreds of millions of users across the globe.

The announcement comes a day after BlackBerry said its new Q10 smartphone will be available in Canada on May 1, and in the United States before the end of May. The Q10, which comes with the physical keyboard that many of BlackBerry's core fan base cherish, is the second device to be powered by the company's new BB10 operating system.

Skype will be available on the Q10 on launch day. Users of the existing Z10 touchscreen device will have to wait a few weeks more to get Skype, after a software upgrade on the operating system, BlackBerry said.

A smaller app base than Apple's iOS and Google Inc's Android platforms has been one of the biggest criticisms of the new BlackBerry system. It has yet to offer some big-name apps like Netflix and Instagram.

(Reporting by Euan Rocha; Editing by Bernard Orr)

Amazon to sell set-top box to challenge Apple TV: report



SAN FRANCISCO (Reuters) - Amazon.com Inc will release a set-top TV box later this year that will stream video over the Internet, challenging Apple Inc's Apple TV device and a similar gadget sold by start-up Roku, BloombergBusinessweek reported on Wednesday.

The box will plug into TVs and give viewers access to Amazon's digital video content, which the company has been expanding, BloombergBusinessweek said, citing three unidentified people familiar with the project.

An Amazon spokeswoman declined to comment.

Amazon's video content is already available on other devices, including Roku, Microsoft Corp's Xbox and Sony Corp's PlayStation 3. However, it is not available on Apple TV.

Having its own gadget will help Amazon put its content more directly in front of consumers and give developers another reason to create apps for Amazon's digital platform, BloombergBusinessweek said.

"Amazon has a good content distribution strategy but not a great one," said Ron Josey, an analyst at JMP Securities. "Doing their own box maybe them admitting that it's a little bit harder to get embedded in all these different devices and platforms."

Amazon has been investing heavily in licensing, distributing and even creating its own digital content such as video, music, apps and games. The company has focused on getting that content on as many devices as possible, rather than building a lot of its own hardware.

However, the company has designed its own gadgets in situations where it believes it can bring a different approach to a market. When it launched its Kindle Fire tablet computer in 2011, for instance, the device's screen was 7 inches which at that time was not a popular size.

JMP's Josey, who said he was not privy to any Amazon plans in this area, speculated on Wednesday that any Amazon set-box device could include the ability to stream music, play games, access other apps and even shop through TVs, rather than just watch videos.

The set-top box is being developed by Amazon's Lab126 division, based in Cupertino, California, near Apple's headquarters. It's being run by Malachy Moynihan, a former vice president of emerging video products at Cisco Systems Inc, BloombergBusinessweek added.

BloombergBusinessweek also said that while Netflix Inc's video streaming service will likely be available on Amazon's TV box, Amazon's own video and music services will be more prominently integrated.

A Netflix spokesman declined to comment.

(Reporting by Alistair Barr; Editing by Carol Bishopric)

Slowdown in Apple orders weighs on LG Display's first-quarter profit



SEOUL (Reuters) - LG Display Co Ltd reported its smallest profit since it returned to the black in the second quarter of last year, as demand for iPhone and iPad screens from Apple weakened amid concerns the U.S. company is losing its luster in the mobile device market.

Apple Inc, which analysts say provides about 30 percent of LG Display's revenue, is facing intensifying competition from Samsung and up-and-coming rivals. A disappointing forecast by a U.S. supplier to Apple last week heightened fears about slowing demand for the iPhone and iPad, pushing shares of Asian suppliers including LG Display sharply lower.

LG Display, which vies with Samsung Electronics Co Ltd's panel unit for the top position in LCD flat screens globally, made 151 billion won ($135 million) in operating profit in its January-March first quarter. That compared with the average forecast of a 147 billion won profit in a Thomson Reuters poll of analysts.

It was the South Korean company's fourth straight quarterly profit after seven straight quarters of losses, as makers of liquid crystal display panels have since curtailed output after about two years of oversupply.

The result was also a sharp improvement from a loss of 211 billion won a year earlier. But it was down 74 percent from the previous quarter, hurt by a seasonal slowdown in demand and by weaker sales to Apple, which is scheduled to report quarterly results on Tuesday.

Sales of tablet and smartphone panels, which are largely bought by Apple, accounted for 27 percent of LG Display's total screen shipments in the first quarter, down from 31 percent in the fourth quarter.

Jay Yoo, an analyst at Korea Investment & Securities, estimated before the results announcement that LG Display's panel shipments for the iPhone 5 and the latest iPad had fallen 42 percent and 66 percent, respectively, from the prior quarter as Apple struggles with slowing sales growth.

On Tuesday, Apple is expected to report just an 8 percent increase in revenue for its fiscal second quarter, among the weakest showings in years, according to analysts' estimates.

Still, analysts see earnings for LG Display improving in the coming quarters as Apple is expected to introduce upgraded products later this year, and as demand for mobile device screens from affiliate LG Electronics Inc increases.

Samsung Securities analyst Harrison Cho expects Apple to introduce a less costly iPhone around July, helping LG Display improve its sales to Apple from June when initial parts shipments are expected to begin.

LG Display said on Monday that it expects panel shipments will rise by 5 percent to 10 percent in the second quarter from the previous quarter.

Shares in LG Display have fallen about 3 percent in the year to date, compared with a roughly 5 percent drop in the benchmark KOSPI index. The stock closed 2.2 percent higher prior to the results announcement.

(Reporting by Miyoung Kim; Editing by Chris Gallagher)

Drop in Apple shares, weak profits drag Wall Street lower



By Caroline Valetkevitch

NEW YORK (Reuters) - Stocks fell in a broad market selloff Wednesday, led by a sharp drop in Apple shares on worries about slowing demand for its products and weaker-than-expected results from Bank of America that battered the financial sector.

Apple Inc slid 5.5 percent to $402.80 after falling below $400 for the first time since December 2011. A key supplier, chipmaker Cirrus Logic , gave a disappointing revenue forecast, fueling worries about weakening demand for the iPhone and iPad.

The CBOE Volatility index , a measure of investor anxiety, jumped 18.3 percent to 16.51. It remains well below the 20 mark, however, suggesting market volatility is still considered relatively subdued.

Wednesday's losses were the week's second big sell-off, adding to views the market may be starting the pullback analysts have been speculating about for months. The market has had strong gains since the start of year, yet on Monday, the S&P 500 posted its worst day since November 7 following a sharp drop in gold prices.

"After Monday's gold selloff spooked U.S. equities, it seems as though the dip buyers are a bit less aggressive, allowing the market to fall a bit more," said Gordon Charlop, a managing director at Rosenblatt Securities in New York.

"This could also be indicative of a muted risk tolerance and perhaps mark the beginning of a long-awaited equity pullback."

The Dow Jones industrial average was down 138.19 points, or 0.94 percent, at 14,618.59. The Standard & Poor's 500 Index was down 22.56 points, or 1.43 percent, at 1,552.01. The Nasdaq Composite Index was down 59.96 points, or 1.84 percent, at 3,204.67.

Volume was roughly 7.89 billion shares traded on the New York Stock Exchange, the Nasdaq and the NYSE MKT, well above the average daily closing volume of about 6.36 billion this year. Decliners outpaced advancers by nearly 4 to 1 on both the NYSE and the Nasdaq.

Financial stocks also fell after Bank of America Corp posted revenue and profits that were below Wall Street expectations. Shares of the Dow component slumped 4.7 percent to $11.70.

The S&P financial index was down 1.9 percent and shares of Morgan Stanley , due to report Thursday, were down 1.7 percent.

Besides financials and technology, energy and materials sectors fell sharply along with oil and copper prices. The S&P 500 energy companies fell 1.9 percent and shares of Chevron slid 1.9 percent to $114.81 and helped lead declines on the Dow.

As Apple shares moved lower, the stock's implied volatility shot higher, reflecting more risk for the stock in the next 30 days.

"This continues a trend since December 2012 where the risk paradigm in Apple has changed," said Ophir Gottlieb, managing director of San-Francisco-based options analytics Livevol.

In a notable technical move, the S&P 500 came close to falling below its 50-day moving average. It has not fallen below the level since the end of last year.

Among other tech decliners, Texas Instruments shed 4.3 percent to $34.21. Yahoo Inc declined 0.4 percent to $23.70 after the Internet company reported first-quarter revenue that missed expectations, though many Wall Street analysts raised their price targets on the stock.

S&P 500 earnings are now expected to have risen 1.7 percent in the first quarter, based on actual results from 56 companies and estimates for the rest, according to Thomson Reuters data.

That expectation is up from a previous estimate of 1.5 percent growth at the start of the month, but so far just 48.2 percent of companies this reporting period have beaten revenue expectations.

After the closing bell, shares of eBay and memory chipmaker SanDisk fell after reporting results. EBay was down 2.3 percent at $54.80 while shares of SanDisk were down 3.1 percent at $54.

Adding to uncertainty in the market, authorities said a letter sent to President Barack Obama and intercepted at a mail screening facility contained the deadly poison ricin, according to preliminary testing.

"The ongoing sequence of these terrorist incidents ... doesn't create an environment for good investor psychology," said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.

(Additional reporting by Doris Frankel and Chuck Mikolajczak; Editing by Kenneth Barry and Nick Zieminski)

Supplier woes stir Apple demand fears, stock drops below $400



By Poornima Gupta and Noel Randewich

SAN FRANCISCO (Reuters) - Apple Inc's shares fell below $400 on Wednesday for the first time since December 2011 after a chip supplier's disappointing revenue forecast fanned fears about weakening demand for the iPhone and iPad as competition intensifies.

The stock dropped below $400 briefly before bouncing back to end 5.5 percent lower at $402.80, losing more than $22 billion of market value in a single day.

Cirrus Logic, which makes analog and audio chips for the iPhone and iPad, on Tuesday warned of a reduced product forecast from one customer - which it did not name. But 90 percent or more of its business comes from Apple, making it a key indicator of demand for iPhones and iPads.

The surprise warning fueled fears that demand for the iPhone - which makes up more than half of Apple's revenue - is falling faster than expected as Samsung Electronics and other rivals who use Google Inc's Android software flood the market with cheaper phones. Typically, many Apple fans also hold off on buying the gadgets if they believe a new model will be introduced in the next few months.

Apple is to report quarterly results on Tuesday. Analysts say Cirrus Logic's reduced outlook lends weight to arguments that consumers' love affair with the iPhone is waning as challengers such as Samsung vie for their attention.

"This is a tough environment. Apple is in transition between products," said Michael Yoshikami, a portfolio manager at Destination Wealth Management, which owns about 50,000 Apple shares. Cirrus's warning "makes it more likely Apple's not going to surprise on upside."

Since its September 2012 peak, Apple has lost 40 percent of its market value or more than $280 billion - slightly more than Google's entire capitalization - battered by worries about the effect on Apple's industry-leading margins if it's forced to do faster updates of its products to keep up.

Some believe Apple will not be able to sustain its high gross margins as competition in the tablet and smartphone markets leads to lower prices. Shorter product cycles limit Apple's ability to bring down component costs, Bernstein Research analyst Toni Sacconaghi said in a note to clients.

Cirrus's weak forecast follows a 19 percent decline in first-quarter sales at Taiwan's Hon Hai Precision Industry Co Ltd, Apple's main contract manufacturer.

"It's a reminder of weakening demand and the challenges around product transitions," Shannon Cross, of Cross Research, said. "There's not a lot of conviction about what the second half is going to look like."

Verizon Communications Inc, which with Vodafone controls the No. 1 U.S. wireless carrier Verizon Wireless, reports results on Thursday and may offer more clues to iPhone and iPad demand in the quarter.

NERVES

Investors are growing increasingly nervous about Apple's growth prospects.

Shares of other chip makers and Apple suppliers, including Qualcomm, Avago Technologies, Broadcom and Skyworks, fell between 2 and 6 percent on a day that saw broad weakness in financial markets.

Goldman Sachs analyst Bill Shope said in a note on Wednesday that Apple's momentum could weaken further before it launches new products later this year.

Apple, which relies heavily on new products to drive its revenue growth, has not had a launch since last October when it unveiled its 7.9-inch iPad mini and an updated full-size iPad.

The company typically launches a new iPad in the spring, but it is unlikely to do so because of the October update. Looking forward, investors now expect an upcoming new iPhone to power earnings in the second half. The two versions of the iPad are also likely to get an update in the fall.

In the past week, analysts had reduced their estimates for Apple's March quarter revenue on average to $42.53 billion from $42.68 billion. Following Cirrus' warning on Tuesday, some think Apple's results could miss those already reduced expectations.

Apple is expected to report a 9 percent increase in quarterly revenue, with net profit expected to decline 17 percent to $9.59 billion, or $10.08 a share, for its fiscal second quarter, according to average analysts' estimates.

Sacconaghi, who lowered his revenue estimate to $41.1 billion from $42.4 billion, said he expects mixed results with Apple's revenue coming in below consensus and earnings per share largely as expected.

Apple's implied volatility, which measures perceived risk of future stock movement, shot up on Wednesday. The implied volatility for the next 30 days for Apple stood at 43.73 percent, a 16.7 percent increase.

Share price volatility should increase into earnings and surpass an annual high in the next few days, said Ophir Gottlieb, managing director of options analytics firm Livevol.

(Additional reporting By Edwin Chan; Editing by Maureen Bavdek, Andrew Hay, Leslie Adler and Cynthia Osterman)

Microsoft beats Street, readies new mobile devices



NEW YORK (AP) Microsoft is working with manufacturers to produce a line of small touch-screen devices powered by Windows, apparently intended to compete with 7-inch tablets like the iPad Mini and Amazon Kindle Fire.

Peter Klein, Microsoft's chief financial officer, told investors and analysts on a conference call Thursday that the new devices will be available in coming months at competitive prices.

Microsoft Corp. is struggling to extend its software into smartphones and tablets as consumers are turning away from PCs, the foundation of its empire. Over the winter, it launched two larger tablets under the Surface brand. And in October, the company took a large stake in Barnes & Noble's digital unit, which sells a line of entertainment-oriented 7-inch tablets under the Nook brand.

Microsoft reported financial results for its latest quarter Thursday, showing a deep but largely expected impact from the slowdown in global PC sales. Investors seemed to be expecting worse after some recent dismal reports on the PC slump.

Outside the Windows division, Microsoft posted solid results from its Office, software tools and Xbox divisions.

Even if the company has a lot of challenges, "there's a lot of good things going on at Microsoft," said Colin Gillis, an analyst at BGC Partners.

The Redmond, Wash.-based company's shares rose 81 cents, or 2.8 percent, to $29.60 in extended trading, after the release of the report.

The software company's net income was $6.1 billion, or 72 cents per share, for the fiscal third quarter, which ended in March. That was up 18 percent from $5.1 billion, or 60 cents per share, a year ago, and beat the forecast of analysts polled by FactSet, at 68 cents. However, analysts have trimmed their forecasts quickly in the last few weeks a month ago, they were expecting Microsoft to post 77 cents in earnings.

Last week, research firm IDC said PC sales fell 14 percent in the quarter, a record. It blamed, in part, Microsoft's new Windows 8, which makes a clean break with the look and workings of old Windows in order to work better with touch screens. Buyers seem daunted by the new interface, IDC said.

Klein said that an updated version of Windows 8 to be released later this year and code-named "Blue," will be in part a response to "customer feedback." Many complaints have focused on the lack of a Start button for those who prefer the older "Desktop" environment, which is hidden behind the new tile-based interface. Klein didn't offer details.

Revenue was $20.5 billion, up 18 percent from a year ago and matching analyst forecasts.

Both earnings and revenue were skewed by software accounting practices. Microsoft offered a $15 upgrade to Windows 8 for Windows 7 PCs purchased June 2 or later. It wasn't able to start recognizing the full value of the software licenses until these offers were redeemed or expired. In the latest quarter, Microsoft was able to recognize $1.1 billion of such deferred Windows revenue, greatly boosting the overall figure.

Stripping out the deferred revenue, overall revenue rose 8 percent, and revenue in the Windows division was flat with a year ago. Even if consumers aren't buying many Windows 8 PCs, businesses are still upgrading from Windows XP to Windows 7 at a rapid clip.

Stripping out deferred revenue and the effect of a $733 million fine levied by the European Commission, Microsoft earned 65 cents per share, up 8 percent from a year ago.

At the company's largest division, Business, revenue rose 8 percent from a year ago to $6.3 billion. The increase was 5 percent adjusting for upgrade offers for the new Office suite.

Microsoft also said CFO Klein is leaving at the end of the fiscal year, in June. He has been in his current role for four years and at the company for 11 years. The company plans to name a new CFO from its finance team in the next few weeks.

Samsung says considers Hynix chips for its mobile products



SEOUL (Reuters) - Samsung Electronics Co is considering purchasing mobile memory chips from rival SK Hynix Inc for future products including its new flagship Galaxy S smartphone to be launched this month, J.K. Shin, head of Samsung's mobile business, said on Thursday.

A supply deal would be a boost to SK Hynix, which relies heavily on Apple Inc as a customer for its mobile dynamic random access memory (DRAM) chips.

It also points to tightening chip supplies as mobile gadget makers prepare to upgrade their flagship product lines with greater variety and increased memory storage capacity.

Prices of mobile DRAM chips have increased steadily since early this year, reflecting a tightening supply outlook.

Samsung, the world's biggest maker of DRAM chips, has largely depended on internal supplies of memory chips for its Galaxy range of smartphones, but the market has expected it may also begin looking to outside chip suppliers to ensure no supply disruptions for key models of its Galaxy S smartphone.

The Galaxy S4, which will go on sale later this month, is expected to outsell its predecessors, with monthly sales of about 10 million, and could leapfrog past Apple's iPhone which recaptured the top spot in global smartphone sales in the fourth quarter, analysts said.

Shares in Hynix dropped 2.8 percent on Thursday as Apple suppliers were hit by concerns of weaker demand from the iPhone and iPad maker, after a disappointing revenue forecast by one of its suppliers.

Shares in LG Display Co, which makes flat screens for Apple's iPhone and iPad, tumbled 4.3 percent.

(Reporting by Miyoung Kim; Editing by Edmund Klamann)

Supplier woes stir Apple demand fears, Asian parts makers dive



By Poornima Gupta and Noel Randewich

SAN FRANCISCO (Reuters) - Apple Inc's shares fell below $400 on Wednesday for the first time since December 2011 after a U.S. chip supplier's disappointing revenue forecast fanned fears about weakening demand for the iPhone and iPad as competition intensifies.

The surprise warning by Cirrus Logic Inc knocked down shares of key component suppliers like South Korea's LG Display Co Ltd and Japan's Toshiba Corp on Thursday in Asia, a region that supplies the lion's share of chips, cases and displays for the Cupertino, California-based company.

The Cirrus Logic revenue forecast fueled fears that demand for the iPhone - which makes up more than half of Apple's revenue - is slowing more quickly than expected as Samsung Electronics Co Ltd and other rivals that use Google Inc's Android software flood the market with cheaper phones. It has also thrown the spotlight on Apple's quarterly earnings announcement due out next week, with some analysts saying the results could miss already reduced estimates.

"This is a tough environment. Apple is in transition between products," said Michael Yoshikami, a portfolio manager at California-based Destination Wealth Management, which owns about 50,000 Apple shares. Cirrus's warning "makes it more likely Apple's not going to surprise on upside."

Cirrus Logic, which makes analog and audio chips for the iPhone and iPad, warned of a reduced product forecast from one customer - which it did not name. But 90 percent or more of its business comes from Apple, making it a key indicator of demand for iPhones and iPads.

That sent shares of Apple below $400 briefly before they ended 5.5 percent lower at $402.80. The drop wiped off more than $22 billion of market value.

In Asia, shares of flat-screen supplier LG Display shed 4 percent and mobile chip maker SK Hynix slipped 3 percent. NAND flash maker Toshiba and component maker Murata Manufacturing Co Ltd both fell 2 percent.

LG Display will report earnings on Monday and SK Hynix next Wednesday.

BEARISH ON SUPPLIERS

"We've been bearish about shares of Apple's suppliers for quite some time," said Andrew Wang, Chief Investment Officer of Manulife Asset Management in Taiwan.

"It is now very clear that Apple's market share has reached the peak, given that Samsung has taken a big chunk of it and HTC has had a few nice models since last year," he said, referring to Taiwanese smartphone maker HTC Corp.

Cirrus's weak forecast followed a 19 percent decline in first-quarter sales at Taiwan's Hon Hai Precision Industry Co Ltd, Apple's main contract manufacturer. The Taiwanese company makes an estimated 60 to 70 percent of its revenue assembling iPhones and iPads, and carrying out other work for Apple.

Hon Hai shares were down 1.2 percent on Thursday.

Since its September 2012 peak, Apple has lost 40 percent of its market value or more than $280 billion - slightly more than Google Inc's entire capitalization - battered by worries about the effect on Apple's industry-leading margins if it is forced to do faster updates of its products to keep up with rivals.

Some say Apple will not be able to sustain its high gross margins as competition in the tablet and smartphone markets leads to lower prices. Shorter product cycles limit Apple's ability to bring down component costs, Bernstein Research analyst Toni Sacconaghi said in a note to clients.

"It's a reminder of weakening demand and the challenges around product transitions," Shannon Cross, of Cross Research, said. "There's not a lot of conviction about what the second half is going to look like."

NERVES

Investors are growing increasingly nervous about Apple's growth prospects.

Shares of other chipmakers and Apple suppliers - including Qualcomm Inc, Avago Technologies Ltd, Broadcom Corp and Skyworks Solutions Inc - fell between 2 and 6 percent on Wednesday.

Goldman Sachs analyst Bill Shope said in a note on Wednesday that Apple's momentum could weaken further before it launches new products later this year.

Apple, which relies heavily on new products to drive its revenue growth, has not had a launch since last October when it unveiled its 7.9-inch iPad mini and an updated full-size iPad.

In the past week, analysts had reduced their estimates for Apple's March quarter revenue on average to $42.53 billion from $42.68 billion.

Apple is expected to report a 9 percent increase in quarterly revenue on April 23, with net profit expected to decline 17 percent to $9.59 billion, or $10.08 a share, for its fiscal second quarter, according to average analysts' estimates.

Bernstein Research's Sacconaghi, who lowered his quarterly revenue estimate to $41.1 billion from $42.4 billion, said he expects mixed results with Apple's revenue coming in below consensus and earnings per share largely as expected.

(Additional reporting by Edwin Chan, Faith Hung in TAIPEI, Miyoung Kim in SEOUL, Ayai Tomisawa in TOKYO; Additonal reporting and writing by Mari Saito; Editing by Maureen Bavdek, Andrew Hay, Leslie Adler, Cynthia Osterman and Chris Gallagher)

BlackBerry returns not abnormally high: Jefferies



TORONTO (Reuters) - No abnormally high return rates have been seen for the new Z10 touchscreen device that underpins BlackBerry's attempt to reinvent itself, and demand appears to be positive in Asia, Jefferies & Co analyst Peter Misek said in a report on Tuesday.

BlackBerry has already said it will ask regulators to investigate a report from Boston-based Detwiler Fenton of high return rates for the new device, which is the first BlackBerry to use the new BlackBerry 10 operating system.

Misek, a long-time bear on BlackBerry, turned bullish on the stock late last year.

He said BlackBerry, which changed its name from Research In Motion when it launched the Z10, was increasing its build plan for new devices powered by the Blackberry 10 operating system. He expects BlackBerry to launch two or three additional models before the end of the year.

That would be in addition to the already-announced Q10, which launches in some countries later this month and which uses the mini keyboard that has long been one of BlackBerry's biggest selling points.

"Our checks indicate that builds for Q10 have kicked into high gear and led overall BB10 builds to increase from 2 million a month to 2 million plus," he wrote. "Anecdotal Asia demand checks were positive and U.S. checks indicate that return rates are not abnormally high."

BlackBerry's stock was up 2.1 percent at $14 in premarket trading. The volatile shares have more than doubled in value from last year's low of $6.22.

(Reporting by Janet Guttsman; editing by John Wallace)

Ahead of the curve: but bendable screens still seek breakthrough



By Jeremy Wagstaff and Sinead Carew

SINGAPORE/NEW YORK (Reuters) - The touted arrival this year of wearable gadgets such as computer displays strapped to wrists and in wrap-around glasses is just a step towards a bigger revolution in screens - those that can be bent, folded and rolled up.

Once freed from today's relatively heavy, breakable and fixed glass displays, tomorrow's devices may look very different, with screens that can be rolled out, attached to uneven surfaces, or even stretched.

But there's still some way to go.

"It becomes a product designer's paradise - once the technology is sorted out," says Jonathan Melnick, who analyses display technology for Lux Research.

There is no shortage of prototypes - South Korea's Samsung Electronics this year showed off a display screen that extends from the side of a device - but obstacles remain: overcoming technical issues, figuring out how to mass produce parts cheaply, and coming up with devices compelling enough for gadget buyers.

Screen technology - and the global small display market is seen more than doubling to around $72 billion by 2016, according to DisplaySearch - is still dominated by liquid crystal displays (LCDs), which require a backlight and sit between two sheets of glass, making the screen a major contributor to the weight of a device, from laptops to tablets.

"Most of the weight in a tablet is the glass structure in the display and the support structure around it to prevent it from cracking," said Kevin Morishige, a former engineer at Cisco Systems Inc, Hewlett-Packard Co and Palm.

LCD's dominance is already under threat from lighter Organic Light Emitting Diodes (OLEDs) that don't need backlighting, are brighter, offer a wider viewing angle and better color contrast - and can be printed onto a few layers.

FROM GORILLA TO WILLOW

Glass, however, is getting lighter and more flexible.

Corning Inc, whose toughened Gorilla glass became the screen of choice for many smartphones, will provide phones with curved glass edges as soon as this year. It is also now promoting Willow Glass, which can be as thin as a sheet of paper and is flexible enough to be wrapped around a device or structure. Initially, Willow will be used as a coating for products like solar panels, but it is eventually expected to create curved products.

A key selling point for Willow is more efficient production which involves so-called roll-to-roll manufacturing, like a printing press, rather than today's more costly batch manufacturing. But the commercialization of Willow as a flexible product is some way off, James Clappin, who heads Corning's glass technology group, told Reuters.

And glass has its limits.

"You can bend it, but you can't keep flexing it," said Adrian Burden, a UK consultant who has worked on several start-ups related to display technology, and holds patents in the field. This means that while glass is likely to continue to play a leading role in devices with curved displays, screens that users can bend, fold and roll will likely be plastic.

But plastic is not as robust as glass. "As soon as you introduce plastic substrates you have all kinds of issues with sensitivity to the environment," says Burden.

BARRIER FILMS, NANOPARTICLES

So while OLED and plastic would seem to be companion technologies they create an extra problem when laid together: they need so-called barrier films to prevent the various layers from leaking oxygen and moisture.

"There are barrier films in all sorts of products, for example food packaging, but the challenge is that OLED is one of the most sensitive materials we follow, and so creates huge challenges," says Lux Research's Melnick.

Singapore-based Tera-Barrier Films, for example, has developed a way to plug leaks in the layers using nanoparticles. Director Senthil Ramadas says that after years of delays the company last month started production in Japan and aims for mass production by end-2014. "You have several challenges in the value chain," he said. "All these things need to be established, and only now is it coming out."

And there's another problem: all the materials in a bendable display need to be bendable, too - including the transparent conductors that drive current through the display. Several technologies are vying to replace the brittle and expensive Indium Tin Oxide (ITO) used in most fixed displays, including nanowires, carbon nanotubes, graphene and conductive mesh.

Some of these technologies are close to production. Another Singapore-based firm, Cima Nanotech, for example, rolls a coating of silver-based conductive ink on a sheet which then self-aligns into a web of strands a few microns across that forms the conductive layer.

It's unlikely such shifts in the underlying technologies will yield products immediately. For one thing, "prototypes can be made," says Melnick, "but that's a long way from mass production as many of the processes and material in these devices face big yield and scaling issues."

ON A ROLL

This is gradually changing, some in the industry say, as production shifts from making parts in batches of sheets to the more efficient roll-to-roll process. "Batch is more expensive and slower than roll-to-roll, which needs new equipment and design - and takes time," said Ramadas at Tera-Barrier.

All this requires money, and manufacturers have to be convinced to invest in the new equipment.

Even after the success of Gorilla Glass, popularized by the Apple Inc iPhone, Corning is having to work hard to prepare customers for Willow displays. Clappin said customers want thinner devices and easier to produce glass, but Willow requires a completely different manufacturing set-up.

"When we talk about commercializing Willow a big part of our development activity is enabling the ecosystem to handle what is essentially a brand new material," Clappin added. "Nobody's accustomed to working with glass that bends and moves. It's a new material. The ecosystem needs to be trained to handle it."

He sees demand, particularly from video gamers, for Willow-based curved screens, but remains less convinced about rollable or foldable screens. "Conformable is in the near future. As far as flexible, bendable, fold-upable goes, I see that further out and I'm not even sure that's a viable product," he said.

That in turn requires figuring out what end users might want. "For us and for our clients it's not so much about the flexible display technology," says Brandon Edwards, Shanghai-based executive creative director of frog, a design company owned by India's Aricent. "That's a huge part of it, but what are the practical ways we can bring products to market and how fast, and what's the right cadence? What are consumers going to be responsive to?"

WHAT DO PEOPLE WANT?

For companies with deep pockets, like Samsung, this can mean building prototypes such as those displayed at international technology shows. But that doesn't guarantee success in selling products. Sony Corp, for example, promoted flexible OLED displays back in 2007. "Six years later they've not come up with anything," says Zhang Jie, senior scientist at Singapore's Institute of Metals Research and Engineering. "If Samsung's going to really drive this the application really needs to drive people and make them want it."

This slows down the process. In late 2011, Samsung told analysts it planned to introduce flexible displays into handsets "some time in 2012, hopefully the earlier part than later", but a year later the company said the technology was still "under development." In an investment note last month Jefferies said that while Samsung may introduce "unbreakable" screens this year, it didn't expect to see flexible displays in Samsung devices until 2014-15.

Ultimately, teasing out the technical problems may be only half the battle.

"This is the eternal question of the specialty materials industry," says Lutz Grubel, Japan-based head of marketing for German glass maker Schott's Xensation Cover 3D glass. "You have something, a material, and you're looking for an application. That's the game."

(Additional reporting by Miyoung Kim in SEOUL; Editing by Ian Geoghegan)

BlackBerry to ask regulators to probe report on returns



TORONTO (Reuters) - BlackBerry said on Friday it would ask securities regulators in Canada and the United States to probe a report about retail return rates for its new Z10 smartphone that it called "false and misleading."

The Canadian company, which has pinned its turnaround hopes on its new BlackBerry 10 line, said return rates were at or below its forecasts and in line with industry norms.

"To suggest otherwise is either a gross misreading of the data or a willful manipulation," Chief Executive Thorsten Heins said in a statement. "Such a conclusion is absolutely without basis and BlackBerry will not leave it unchallenged."

BlackBerry said research and investment firm Detwiler Fenton had said Z10 smartphones were being returned in unusually high numbers, and had refused to share its report or its methods.

The company said it would present a formal request to the Securities and Exchange Commission and the Ontario Securities commission over the next few days.

Shares of Waterloo, Ontario-based BlackBerry fell 8.0 percent on Thursday.

(Reporting by Allison Martell; Editing by Janet Guttsman and Bernadette Baum)

TSX hit by resources issues, BlackBerry



TORONTO (Reuters) - Canada's main stock index fell for the first time in four sessions on Thursday as energy and mining stocks were hurt by declining prices and weak investor sentiment, while BlackBerry plunged on doubts about the company's recovery plan.

The Toronto Stock Exchange's S&P/TSX composite index fell 53.54 points, or 0.43 percent, to 12,481.37.

(Reporting By Cameron French)

BlackBerry tumbles as analysts rekindle turnaround doubts



TORONTO (Reuters) - Shares of BlackBerry slipped about 8 percent on Thursday as analysts questioned whether the handset maker's turnaround plan would succeed in the brutally competitive smartphone market.

Discounting of the Z10, its recent handset meant to take on the likes of Apple Inc's iPhone and Samsung Electronics Co Ltd's Galaxy line, has also raised concerns, according to one trader.

BlackBerry launched its latest handsets based on its much delayed BlackBerry 10 operating system in January, but they started selling in the United States only in March.

Investors have been skeptical about the company's prospects of regaining its lost glory and stealing back market share in the U.S. market. The stock has lost a quarter of its value since hitting a 52-week high in January.

"(The) recent optimism surrounding the ability of the new BlackBerry 10 products to get BlackBerry back to long-term profitability will ultimately prove unwarranted," Pacific Crest analyst James Faucette wrote in a research note.

"We see a combination of market maturity, more aggressive pricing from competitors and smaller resources than those of competing ecosystems frustrating the comeback attempt," added the analyst, who has an "underperform" rating on the stock.

This followed a Credit Suisse note, which suggested that the surprisingly strong gross margins that BlackBerry reported last month may have been driven more by lower amortization levels and less by operational improvements.

The weakness in BlackBerry came amid the backdrop of a broad selloff in the technology sector, led by Microsoft Corp and Hewlett-Packard Co, after an influential tech research firm said personal computer sales plunged the most in two decades.

Options on the stock were busy as well, with 107,000 puts and 87,000 calls traded so far on Thursday afternoon, according to options analytics firm Trade Alert.

The weekly $13.50, $14 and $14.50 strike puts expiring on Friday after the close are among the most active contracts in BlackBerry, on concerns that the recent drop in the stock will continue, WhatsTrading.com options strategist Frederic Ruffy said.

BlackBerry shares were down at C$13.84 on the Toronto Stock Exchange. Its Nasdaq-listed shares were down 7.8 percent at $13.53 in afternoon trading.

(Reporting by John Tilak and Euan Rocha in Toronto, and Doris Frankel in Chicago; Editing by Bernard Orr)

Microsoft developing seven-inch Surface tablet: WSJ



(Reuters) - Microsoft Corp is developing a new lineup of Surface tablets, including a 7-inch version expected to go into mass production later this year, the Wall Street Journal reported, citing people familiar with the company's plans.

Microsoft executives felt they needed to keep pace with the growing popularity of smaller tablets like Google Inc's 7-inch Nexus and the 7.9-inch iPad Mini introduced by Apple Inc last October, one person told the paper. (http://link.reuters.com/wem37t)

Microsoft declined to comment to the Wall Street Journal. The company could not immediately be reached for comment by Reuters outside of regular U.S. business hours.

(Reporting by Sakthi Prasad in Bangalore; Editing by Daniel Magnowski)

World chefs: Alain Ducasse on technology, terroir and tippling



By Alexandria Sage

PARIS (Reuters) - Talking food with top French chef Alain Ducasse is like simultaneously visiting a local farmers market, travelling across the world, stepping back into history and visiting the future.

France's ubiquitous three-star chef, whose empire includes more than 20 restaurants, a culinary institute and a publishing house, is now embracing 21st century technology with a new iPad application, "My Culinary Encyclopedia".

With 250 recipes from the Mon Grand Livre de Cuisine collection, the app offers ingredient profiles with 360 degree views, demonstration videos, and preparation tips. Ducasse, 56, spoke to Reuters in the kitchen of his Plaza Athenee restaurant about what inspires him today and how much is yet to learn.

Q: One doesn't think of great chefs as being enamored of technology. Why an app?

A: I'm all about transmitting knowledge. In cooking today it's about technical performance, cooking tools that have developed to help cooks to be more regular in cooking technique. And this technology here helps us to transmit knowledge, it's the modern book. Today a kitchen is a laboratory, it's very technical. Before it was a nightmare because it was so hot, you had gas ovens and you had to test the temperature with your finger. But just a quarter century later we've changed centuries. Our profession was so difficult 25, 30 years ago but today (cooking) is comfortable, appealing.

Q: Do you see clients in your restaurants consulting their iPads at the table before they begin to eat?

A: Of course. We want to know everything about everything. Before eating, the client is going to explain what he's about to eat. Even beforehand he's going to weigh in, it's good, it's not good, he takes a photo and then everyone knows what he's eating. But it's the limit of the exercise. You should first take pleasure before weighing in about it. It's first of all a chance to share a pleasant moment with your friends, to take the time with your food and not to make commentary.

Q: What inspires you?

A: Nature and markets. Nature, what it gives us every day, in spring, autumn, summer. Cooking is all about what do I have - what can I use right now where I am - what do I know, and what do I do. Tonight I'm off to Tokyo and Thursday I'm in Kyoto. There's a street ... where you have a sort of the center of the world of food. I think the French and the Japanese are both obsessed by seasons, small producers, freshness.

Q: Do you still make new discoveries there?

A: Always. The more I discover the more ignorant I am. What I know is a lot less than what there is yet to discover, it's terrible. I've probably been to that market 50 times and I'm sure I'll find something I've never seen before.

Q: Any new cuisines of the world that lately intrigue you?

A: South America. Brazil and the Amazon. What they've found so far in the Amazon is 5 percent of what there is yet to discover to eat in the Amazon because it's completely unknown. I've eaten things I've never eaten before over there. Now I'm going to try to go to Peru in September because I think the Peruvian food is interesting.

Q: Is that frustrating, after discovering new things not being able to find them again back in France or elsewhere?

A: I think you have to have a global vision but a local expression of that. It's to nourish my curiosity, to register new tastes and maybe, for example, when I'm in Japan or China and I try gyoza, those raviolis ... traditionally, you eat them in the working-class neighborhoods and they're fantastic. What we can take away from that is the double cooking, the crisp side and the soft side. I've been inspired by the technique rather than the produce. Those local products are best eaten there.

Q: In your busy life do you still get to cook for yourself?

A: Often I cook when I'm in the country. I have a very nice garden and extraordinary markets where there are products from the earth and the sea, in the French Basque country. To make my meal, I go to the market and to the garden and then I decide what I'm going to do. That's a great pleasure. And then after - to choose the wine. The French are always interested in what you eat, but also in what you drink! And they drink well, a lot and often. With Americans it's ice tea. For lunch it's ice tea! No one drinks wine at lunch, it's incredible.

Carrots in Marsala Wine (serves 4)

8 large carrots with tops

2 oz (50 g) butter

10 coriander seeds

3 Tbs Marsala

1 1/4 tsp sugar

1/2 cup chicken stock

Salt, freshly ground pepper

Peel, trim and wash the carrots conserving 3/4 inch of shoots. In a ham slicer, slice the carrots into fine 1/10 inch slices, retaining their tops. In a heavy-bottomed casserole, melt the butter and saute the carrots. Grind the coriander seeds, then add to the carrots. Moisten with the Marsala, season with salt and add sugar. Cover the casserole and cook on a gentle heat for 3 minutes gradually, adding stock if necessary. Reduce the carrot cooking juices to thicken. Arrange the carrots on the plates. Depending on the consistency of the sauce, reduce for a further minute until syrupy. Coat the carrots. Serve hot.

(Reporting By Alexandria Sage)

Samsung Electronics marketing blitz stirs debate over innovation



By Miyoung Kim

SEOUL (Reuters) - Samsung Electronics is spending more on marketing than R&D for the first time in at least three years, prompting some pundits to warn that the IT giant is sacrificing innovation at a time when the market is teeming with ever smarter gadgets.

The South Korean firm, which warned on Friday it will not post record quarterly earnings for the first time since 2011, looks set to spend big bucks on marketing upcoming mobile devices, including the Galaxy S4 smartphone, to convert more iPhone and iPad users loyal to arch rival Apple Inc.

While the new Galaxy smartphone, unveiled to much fanfare in New York last month, will boast a motion-detecting technology that stops and starts videos depending on whether someone is looking at the screen, and flip between songs and photos at the wave of a hand, industry watchers say the device would not overturn an industry that lives and dies by innovation.

"(Samsung) lagged behind in creating a new category. Apple created a new category with tablets. We are waiting to see something like that happen from Samsung," said Rachel Lashford, an analyst at research firm Canalys in Singapore.

Samsung spent a record 13 trillion won ($11.6 billion) on marketing last year. That was $1.3 billion more than what it poured into research and development.

The firm does not provide marketing and R&D spending forecasts. Some analysts said they expect Samsung to continue spending more on its marketing campaigns than on R&D this year as it fights the next wave of products from Apple.

Smartphone makers are increasingly just tweaking existing specifications such as increasing screen sizes. Every gadget launch by a major global tech giant has so far underwhelmed, lacking the 'wow' factor of old and subsequently pushing their share prices lower, some analysts said.

Apple has tumbled nearly 40 percent since the stock soared to more than $700 in September.

Shares of Samsung hit a record in early January but have since fallen nearly 3 percent. A lack of product lineup in the longer term is also capping their upside, analysts said.

"There is not that much visibility on products next year, but we expect Galaxy Note 3 later this year," said Mark Newman, a senior analyst at Stanford Bernstein in Hong Kong, referring to the phablet that is closer in size to a tablet than a phone.

The smartphone-tablet hybrid, a surprise hit in 2012, appeals to users who prefer larger screens to better access visual content.

Samsung estimated its January-March overall operating profit rose 53 percent to $7.7 billion as mid-tier smartphones and sales in emerging markets helped it tide over the off-peak season.

That marks the end of five straight quarters of record profits for the world's biggest technology firm by revenue.

"We'll keep boosting our R&D spending, while marketing will be executed flexibly according to market conditions," a Samsung spokesman said on Friday.

AHEAD OF APPLE

Apple ramped up its R&D expenditure to $3.38 billion in the year to September 2012, from just $712 million in 2006. Yet that is still far less than what Samsung spends.

"Samsung keeps investing in R&D. They've boosted their smartphone R&D workforce to 25,000 or so from less than 20,000, and I think they have an exciting product lineup ready, probably in the second half, to upend the market," said Lee Do-hoon, an analyst at RBS.

That is a significant departure for a company which used to tear apart a Sony television in 1970s to reverse engineer rivals' products.

Samsung finally overtook Sony to become the world's top TV maker in 2006, largely aided by slim designs and super-thin displays produced as a result of aggressive capital investment.

By contrast, Samsung's mobile devices business now generates 70 percent of its total revenue.

"The Note 3, which I expect to be available in the fourth quarter, will be quite innovative. It'll have a bended display and the screen size will be bigger without having a bigger phone," said RBS's Lee.

"I think it'll be pretty cool." ($1 = 1123.7500 Korean won)

(Reporting by Miyoung Kim; Editing by Ryan Woo)

Telefonica receives $257 million credit line for Blackberry phones



MADRID (Reuters) - Telefonica, Europe's biggest telecoms operator by revenue, has received a 200 million euro ($257 million) financing facility from the Canadian export agency to buy BlackBerry smartphones and services.

Export Development Canada (EDC) said the credit line to Telefonica would be used to provide BlackBerry products and services across Telefonica's international operations.

Telefonica operates in more than a dozen fast-growing Latin American markets as well as its depressed home market of Spain and other European markets.

BlackBerry's iconic devices, often used by business people, once dominated the smartphone market. But in recent years the company has suffered as phones powered by Apple's iOS and Google's Android operating systems have eaten away at its market share across the globe.

Government export credit agencies tend to support big deals that involve exports to emerging economies and provide a boost to local manufacturing. EDC provided financing for Telefonica to buy equipment from BlackBerry as well as other suppliers in 2006.

Telefonica secured a $1 billion credit line from Sweden's export agencies last month to buy infrastructure from Ericsson.

"EDC's financing is really about making the transactions between BlackBerry and Telefonica easier, helping to enhance and broaden the relationship between these two major global players," Lewis Megaw, EDC's regional vice president for Europe, the Middle East and Africa, said in a statement.

In a bid to reinvent itself and claw back market share, BlackBerry launched a wholly re-engineered new line of devices powered by its new BlackBerry 10 operating system this year.

The first of these, a touchscreen device dubbed the Z10, is already on sale in over 25 countries across the globe. A new device with BlackBerry's traditional physical keypad is set to begin hitting store shelves later this month.

($1 = 0.7783 euros)

(Reporting by Clare Kane in Madrid; Additional reporting by Euan Rocha in Toronto; Editing by Clelia Oziel)