Tuesday, October 30, 2007

Is U.S. stuck in Internet's slow lane?

By PETER SVENSSON, AP Technology Writer 2 hours, 51 minutes ago

NEW YORK - The United States is starting to look like a slowpoke on the Internet. Examples abound of countries that have faster and cheaper broadband connections, and more of their population connected to them.

What's less clear is how badly the country that gave birth to the Internet is doing, and whether the government needs to step in and do something about it. The Bush administration has tried to foster broadband adoption with a hands-off approach. If that's seen as a failure by the next administration, the policy may change.

In a move to get a clearer picture of where the U.S. stands, the House Energy and Commerce Committee on Tuesday approved legislation that would develop an annual inventory of existing broadband services — including the types, advertised speeds and actual number of subscribers — available to households and businesses across the nation.

The bill, introduced by Rep. Ed Markey, D-Mass., is intended to provide policy makers with improved data so they can better use grants and subsidies to target areas lacking high-speed Internet access. He said in a statement last week that promoting broadband would help spur job growth, access to health care and education and promote innovation among other benefits.

The inventory wouldn't cover other countries, but a cursory look shows the U.S. lagging behind at least some of them. In South Korea, for instance, the average apartment can get an Internet connection that's 15 times faster than a typical U.S. connection. In Paris, a "triple play" of TV, phone and broadband service costs less than half of what it does in the U.S.

The Organization for Economic Co-operation and Development — a 30-member club of nations — compiles the most often cited international comparison. It puts the U.S. at 15th place for broadband lines per person in 2006, down from No. 4 in 2001.

The OECD numbers have been vigorously attacked by anti-regulation think tanks for making the U.S. look exceedingly bad. They point out that the OECD is not very open about how it compiles the data. It doesn't count people who have access to the Internet at work, or students who have access in their dorms.

"We would never base other kinds of policy on that kind of data," said Scott Wallsten, director of communications policy studies at the Progress and Freedom Foundation, a think tank that favors deregulation over government intervention.

But the OECD numbers are in line with other international measures. Figures from the British research firm Point-Topic Ltd. put the U.S., with 55 percent of its households connected, in 17th place for adoption rates at the end of June (excluding some very small countries and territories like Macau and Hong Kong).

"We're now in the middle of the pack of developed countries," said Dave Burstein, telecom gadfly and the editor of the DSL Prime newsletter, during a sometimes tense debate at the Columbia Business School's Institute for Tele-Information.

Burstein says the U.S. is lagging because of low levels of investment by the big telecom companies and regulatory failure.

Several of the European countries that are doing well have forced telephone companies to rent their lines to Internet service providers for low fees. The ISPs use them to run broadband Digital Subscriber Lines, or DSL, often at speeds much higher than those available in the U.S.

The U.S. Federal Communications Commission went down this regulatory road a few years ago, but legal challenges from the phone companies forced it to back away.

In 2004, President Bush called for nationwide broadband access by 2007, to be nurtured by an absence of taxation and little regulation. The U.S. is very close to Bush's goal, thanks to the availability of satellite broadband across the lower 48 states.

But the Internet by satellite is expensive and slow. Nearly everyone may have access to the Internet, but that doesn't mean they're plugging in.

Part of the problem may be that people don't see fast Internet access as an essential part of modern life, and may need more of a push to get on. The U.S. does have wider income disparities than many of the countries that are outdoing it in broadband, and people in poverty may have other priorities for their money.

Dan Correa, research analyst at the Information Technology and Innovation Foundation, believes the U.S. needs a more "proactive" broadband policy, and compares the lack of government involvement in the field with the situation in other utilities, which are mostly heavily regulated.

"In the 1930s, we recognized that electricity was essential. We're not quite at that level in broadband," Correa said.

An FCC chairman appointed by a Democratic president in 2009 may agree. Current Democratic Commissioner Michael J. Copps has said broadband availability could be encouraged with tax incentives and loans to rural utilities.

The United States doesn't look set to catch up to South Korea or even Canada (with 65 percent of households connected to broadband, according to Point-Topic) by then, because broadband adoption is slowing down after an initial growth spurt.

In the last few weeks, the U.S.'s three largest Internet service providers reported adding 1.2 million subscribers in the third quarter, down from 1.54 million in the same quarter last year, according to a tally by UBS analyst John Hodulik.

But the U.S. does have a few aces up its sleeve. Apart from satellite broadband it has widespread cable networks, which provide an alternative to DSL. Cable has some technical advantages over phone lines, and a new cable modem technology called Docsis 3.0 could allow U.S. Internet speeds to leapfrog those in countries dominated by DSL in a few years.

On the phone side, the country's second largest telecommunications company, Verizon Communications Inc., is spending $23 billion to connect homes directly with super-fast fiber optics.

"Twenty percent of the U.S. is getting a decent network," Burstein acknowledges. The new network can match or outdo the 100 megabits per second Internet service widely available in Japan and Korea, but Verizon isn't yet selling service at that speed.


AP Business Writer Dibya Sarkar contributed to this report from Washington, D.C.


On the Net:

Columbia Institute for Tele-Information: http://www.citi.columbia.edu

Wednesday, October 17, 2007

Cafe Latte attack steals data from Wi-Fi PCs

Robert McMillan Wed Oct 17, 4:56 PM ET

San Francisco (IDGNS) - If you use a secure wireless network, hackers may be able to steal data from your computer in the time it takes to have a cup of coffee.

At the Toorcon hacking conference in San Diego this coming weekend, security researcher Vivek Ramachandran, will demonstrate a technique he's developed to attack laptops that use the WEP encryption system to log on to secure wireless networks.

Developed in the late 1990s, WEP was the default method of securing Wi-Fi networks. Though the WPA (Wi-Fi Protected Access) system replaced it, about 41 percent of businesses continue to use WEP. That percentage is even higher among home users, security experts say.

That's unfortunate because WEP has been riddled with security problems. In fact, WEP was blamed for the recent TJX Companies data breach in which thieves were able to access 45 million credit- and debit-card numbers.

To date, however, researchers have tended to focus on exploiting WEP flaws in order to break into wireless networks. That generally meant that the attacker would roll up near the WEP-encrypted router, crack the WEP key used to encrypt network traffic, and then log on to the network.

Ramachandran, a senior wireless security researcher with AirTight Networks, has taken a look at the client side of things and developed a way of tricking a WEP-enabled client into thinking that it is logging on to a network that it already knows.

His technique, which he calls the Cafe Latte attack, allows an attacker to circumvent firewall protection and attack the laptop or to set up a "man in the middle" attack and snoop on the victim's online activity. "Until now, the conventional belief was that in order to crack WEP, the attacker had to show up at the parking lot," he said. "With the discovery of our attack, every employee of an organization is the target of an attack."

There are several steps to Cafe Latte, all of which exploit known flaws in the WEP architecture. First, the attacker programs a laptop computer to act like a malicious wireless network, setting up shop in an Internet cafe or an airport. The malicious PC then begins communicating with other Wi-Fi laptops in range, figuring out the name of the WEP-enabled routers that these laptops are programmed to look for and then cracks the keystream encryption code required to send messages to the victim's laptop.

Knowing the keystream only gets the attacker halfway. To truly crack the WEP encryption key and read messages coming from the victim, the attacker must somehow trick the victim into sending a large amount of information -- about 70,000 messages, actually -- to the malicious network. Those messages could then be analyzed and cracked using WEP-cracking tools.

Cafe Latte does this by taking advantage of the way the Internet's ARP (Address Resolution Protocol) ensures that two computers do not share the same IP address. ARP is used when a new computer joins a LAN to announce the IP address it will be using and to ensure that no other machine shares that address. These network messages are ignored by the victim's PC unless it shares that address. Then it sends a message back to the attacker's PC saying that the IP address in question is already being used.

Once the attacker gets a response from the victim's PC, he knows he has guessed the correct IP address and he can bombard the victim's PC with the same message, essentially saying over and over again "I'm joining the network and I'd like to use this IP address. Are you already using it?"

As the victim's laptop continues to reply, "Yes, I am," the attacker eventually stores up enough samples of encrypted messages to be able to figure out the WEP key. Now messages from the victim can be read by the attacker.

"It's definitely a novel attack," said Jon Ellch, a Wi-Fi security researcher who also goes by the name johnny cache. While an attacker could use this WEP key to log on to the victim's WEP network, the real danger here is from the man-in-the-middle attack, which would let the attacker see everything the victim is doing on the Internet, he added.

Still, a victim might notice that something was up during the estimated 30 minutes that Cafe Latte requires in order to crack the WEP key, Ellch said. The attack would have a better chance of succeeding if the laptop were simply turned on and trying to connect to the Wi-Fi network in the background, he said. "If they're trying to do something with the Internet, obviously it's not going to pan out so well."

Toorcon runs from Friday to Sunday.

Sunday, October 14, 2007

You might wear computing's next wave

By BRIAN BERGSTEIN, AP Technology Writer Fri Oct 12, 4:01 PM ET

BOSTON - From clothes riddled with sensors to name tags that detect our moods, computing's next wave could unleash small devices that increasingly augment everyday activities with digital intelligence.

That was the predominant vision at a conference on "wearable computing" held this week in Boston, where researchers showed off prototypes and discussed ideas.

Some attendees took wearable computing to its extreme, donning cyborg-like miniaturized displays attached to eyepieces. But most of what was on exhibit seemed much closer to jumping into a mainstream commercial product.

For example, researchers from the Swiss Federal Institute of Technology (known as ETH Zurich) showed off stretchable, threadlike sensors that can be woven into shirts to detect their wearers' posture. People with back pain or injuries could be prompted on a PC or a mobile device to straighten up, pronto.

Stephane Beauregard of Germany's University of Bremen displayed a shoe-borne sensor whose tiny accelerometers perform electronic dead reckoning — providing real-time location tracking in places satellite navigation systems either can't reach or can't describe with precision. For now the sensor has to be held in place by the shoelaces, but Beauregard expects a version that can fit inside a boot heel could be a year away. His first intended market is firefighters and other emergency responders.

Graduate students at the Massachusetts Institute of Technology's Media Lab had black plastic badges around their necks that analyze multiple factors — including motion and speech patterns — to detect the level of engagement two people are exhibiting in a conversation.

Information gathered from the badges, which weigh just a few ounces and are a bit smaller than a deck of cards, can be sent wirelessly to a computer or a phone to give their wearers helpful tips. Sales reps could be advised that a customer's interest seems to be waning. A doctor could be alerted to indications of depression in a patient being monitored remotely.

The badges might find their first use in gathering reams of data for social network analysis, the study of how groups form and interact. There's big money in applying such research in corporations, which want to ensure that important knowledge doesn't stay trapped in organizational silos. But a lot of data for social network analysis is gathered from e-mail traffic, which only says so much about how people connect with each other.

MIT graduate student Daniel Olguin Olguin said the devices were tested on 25 employees at a German bank and produced surprising insights about alternative ways the office might be laid out. Now Hitachi Ltd. is interested in making the badges for corporate consultants to use with their clients, he said.

Each badge could probably be made for under $100, "and in the future, of course, all of this will be smaller and integrated into your name card," Olguin said.

A prototype shown off by Carsten Mehring of the Colorado School of Mines was far more about convenience. He has embedded sensors into gloves so that snowboarders or motorists could control portable music devices with the faintest squeeze of their fingers — and nary a glance away from a snowy slope or the road.

"The idea," he said, "is to wear your remote, not to carry it."

Thursday, October 4, 2007

50 years ago, Sputnik changed technology

By SETH BORENSTEIN, AP Science Writer Wed Oct 3, 3:46 PM ET

WASHINGTON - With a series of small beeps from a spiky globe 50 years ago Thursday, the world shrank and humanity's view of Earth and the cosmos expanded.

Sputnik, the first artificial satellite, was launched by the Soviets and circled the globe Oct. 4, 1957. The Space Age was born. And what followed were changes to everyday life that people now take for granted.

What we see on television, how we communicate with each other, and how we pay for what we buy have all changed with the birth of satellites.

Communications satellites helped bring wars and celebrations from thousands of miles away into our living rooms. When we go outside, weather satellites show us whether we need to carry an umbrella or flee a hurricane. And global positioning system satellites even keep us from getting lost on unfamiliar streets.

Sputnik gave birth to more than mere technology. The threat of a Soviet-dominated space spurred the U.S. government to increase tenfold money spent on science, education and research. Satellite pictures of Earth inspired an embryonic environmental movement.

Spy and communications satellites also kept the world at relative peace, experts say. Just last week, scientists used commercial satellite images to document human rights violations in Myanmar.

When Sputnik was launched, the public thought a space future would consist of gigantic space stations and colonies on the moon and other planets. The fear was warfare in space raining down on Earth.

"The reality is that the things we expected did not come to pass, and the things that we did not fathom changed our lives in so many ways that we cannot even envision a life that's different at this point," said Roger Launius, senior curator at the Smithsonian Institution's National Air and Space Museum.

America got a taste of that in May 1998. Just one communications satellite malfunctioned. More than 30 million pagers went silent. Credit card payment approvals didn't work. National Public Radio and CNN's Airport Television Network went off the air in some places.

"The civilization we live in today is as different from the one that we lived in the mid-1950s as the mid-1950s were from the American revolution," said Howard McCurdy, an American University public policy professor. "It's hard to imagine these things happening without space. I guess I could have a computer, but I wouldn't be able to get on the Internet."

All thanks to an 184-pound metal ball with spikes shot into space by a country that doesn't exist anymore.

Because Sputnik was launched by a centralized communist government, people feared that space would help totalitarianism, said Georgia Tech University history professor Steve Usselman.

However, satellites "clearly undermined state authority, particularly national authority," Usselman said. "It's taken us in exactly the opposite direction."

As satellites went commercial, they spurred on financial markets, opened up information to people across the globe — which is not what centralized governments want, Usselman said.

Spy satellites also enabled countries to keep an eye on their enemies.

"Except for crazy guys in airplanes, nobody can pull off a sneak attack," McCurdy said. "I think it made the world much less dangerous than it was in 1956."

President Lyndon B. Johnson in 1967 said that it was thanks to satellites that "we know how many missiles the enemy has and, it turned out, our guesses were way off. We were doing things we didn't need to do. We were building things we didn't need to build. We were harboring fears we didn't need to harbor."

Weather satellites now give people an accurate view of threats from nature, as well as vastly improved everyday forecasts, said Keith Seitter of the American Meteorological Society. They save lives when hurricanes approach, giving days of notice instead of hours.

"It's very hard to be surprised these days with the kind of data we have available with satellites," Seitter said. "Certainly 50 years ago that wasn't the case."

In television, satellite communications let upstart networks like HBO, CNN and ESPN develop and feed cable systems via satellite. That brought world events live to people around the globe. But it also allowed people to isolate themselves with niche channels, Usselman said.

Henry Lambright, a professor at Syracuse University, said satellites have had practical benefits, but "the more important benefits are looking at Earth as a whole and looking outward at Earth in the cosmos."

Initial pictures of Earth from space, especially Apollo images from the moon, were embraced by an environmental movement to show how fragile the planet is.

The orbiting Hubble Space Telescope and others have given people views of the universe that not only go trillions of miles away, but billions of years back in time.

"The launch of Sputnik actually triggered heightened interest among the American people, not only in space, but in science, mathematics and education," said White House science adviser John Marburger. "It also opened up people's eyes to the possibility that space could actually be used for something."

Sunday, September 2, 2007

Nearly half of cities see home prices fall

A 287-city report finds the slowest growth in two decades, with metro areas in California and Florida showing year-over-year declines of as much as 8%.

By Marilyn Lewis

It's housing whiplash: The boom is biting back in the places where it ran highest and fastest just a couple of years ago, a government report for the second quarter shows.

Nationally, the Office of Federal Housing Enterprise Oversight (OFHEO) said prices were essentially flat, growing just 0.1% from April through June, and nearly half of cities profiled showed declines for the quarter. Not since 1994 have home prices grown so little over a quarter.

Compared with a year ago, prices were up 3.2%. But that number reveals nothing about the recent mortgage market turmoil, whose influence will show up in third-quarter numbers, revealed in late November. Also, the OFHEO index, while prized for its scope -- it tracks prices in 287 metro areas -- can appear rosier than some other instruments because it does not contain refinances or mortgages larger than $417,000.

Of those 287 metro areas, 131 showed price declines for the quarter. Over the past four quarters, 61 areas reflect declines. But over five years, no metro area shows up in the red.

"These newest data show price declines in many areas that were once at the center of the housing boom," said OFHEO chief economist Patrick Lawler. The worst declines were in California, Florida and Nevada, all centers of huge housing booms until recently, and in Michigan, which is reeling from epic job losses.
Best and worst
The biggest decline was in the Merced, Calif., area. Homes there lost 8.65% of their value over this time last year and 3.76% from the past quarter. Merced's experience underscores Lawler's point: Even with the whiplash correction, Merced prices show growth of nearly 90% in the last five years.

Runners-up for the biggest decline included the California metro areas in and around Santa Barbara, Stockton, Salinas, Modesto, Yuba City, Sacramento, Santa Rosa, Santa Cruz, San Luis Obispo, Oxnard and Vallejo, and Reno, Nev., in the California orbit. Prices dived in Florida communities in and around Punta Gorda, Sarasota, Cape Coral, Palm Bay, Port St. Lucie and West Palm Beach.

Smaller cities in the West and Northwest were the stage for much of the best price growth last quarter. Topped by Wenatchee, Wash.'s nearly 24% yearly price increase -- 5% for the quarter and nearly 80% growth in five years, the fastest growth areas were dominated by Washington, Utah, Colorado, Oregon and Texas. The list also includes cities in Alabama, the Carolinas, Virginia, Mississippi and Pennsylvania.

The OFHEO report tracks data from the previous quarter, but there has been nothing in the interim to suggest that prices have stopped slowing, "I don't know if we are going to go into a steep decline or just keep coasting to the bottom," says Amy Crews Cutts, the deputy chief economist at Freddie Mac. "Stabilization is key."

Cutts has been surprised by the downturn's persistence. "I had originally been thinking (it would end in) the middle of this year." But the August financial crisis probably has pushed any recovery "into 2008," and that's "predicated on the financial markets getting their act together pretty quickly."
Bad news mounts
Other news underscores the seriousness of the downturn:

* The National Association of Realtors reported last week that median price of existing homes fell in July to $228,900 -- a 0.6% drop from the previous month and the fifth straight monthly decline. The volume of house sales hasn't been this low in nearly five years.

* The widely respected Standard & Poor's/Case-Shiller Home Price Index shows that prices fell 3.2% on average in the second quarter. It was the biggest drop recorded in the report's 20-year history. Unlike OFHEO, Case-Shiller includes "jumbo" loans over $417,000 not held by Freddie Mac and Fannie Mae. The report tracks prices in 20 cities and found prices declining in 17 of them.

* Inventory -- the supply of single-family homes on the market -- is at 9.2 months nationally, which is to say it would normally take that long for the backup to sell. Nearly a year's supply of condos is currently on the market. Inventories in a balanced market run at about six months, says Walt Molony of the National Association of Realtors. "During much of the boom we averaged 4.5 months," he says. The low point, in January 2005, was 3.6 months.

* Mounting defaults and foreclosures have inspired North Carolina, Ohio, Minnesota and Maine limit subprime lending. Others are trying to help borrowers refinance. The New York Times reports that in about 30 states lawmakers have introduced nearly 100 bills to curb deceptive lending and foreclosures.

Bubble theorists are growing louder in the insistence that prices must revert all the way to pre-boom levels before a recovery begins. Bruce Marks, the CEO of the Neighborhood Assistance Corporation of America, believes prices could drop 10%, 15% or even, in some places, 25%.

"You are not seeing bubbles bursting in certain parts of the country -- you are seeing a nationwide decline," says Marks, whose nonprofit advocacy organization lends to lower-income buyers.

Cutts discounts that view. It would take a catastrophe like the Great Depression to see that kind of thing, she says. "I know it feels like the sky is falling. It's bad out there." But she says sales of new and existing homes are down 20% in the past two years, more resembling pre-boom 2001 than the 1930s.
Although few analysts share the extent of Marks' pessimism, but plenty are sobered by the past quarter's performance. The trend "is horrible," Ian Shepherdson, the chief U.S. economist for High Frequency Economics told his newsletter readers, adding, "the market is "much worse than headline sales numbers suggest -- and still deteriorating."

Robert J. Shiller, the chief economist at MacroMarkets and originator of the Case-Shiller system of market analysis, said in a news release that "the pullback in the U.S. residential real estate market is showing no signs of slowing down."

The research firm Global Insight told The New York Times to expect a decline of 4%, roughly 10% after inflation, from this year's peak to a low in 2009. The company forecasts prices in California to drop 16% to 20%, counting inflation.

Cutts is not sanguine about the near term, either. She sees potential for more subprime mortgages failing. Currently, most delinquencies are in Northeastern industrial cities plagued with layoffs and poor economies.

Most risky loans, however, are concentrated on the coasts. There, housing became so unaffordable that large numbers of borrowers purchased time-bomb subprime loans that they could only temporarily afford to repay -- for houses they could not realistically support.

Already, 2.9% of subprime loans issued just last year are in default. That's alarmingly high, Cutts says, and an unprecedented number of borrowers are not making even the first few payments.
A variety of regional problems
For signs of recovery, look to New England, where economic activity appears to be increasing. Cutts expects that, before too long, prices will hit bottom and at least stabilize. Boston was first, in 2006, to show falling prices from year to year, and, with the region's strong, diversified economy, Cutts and other economists are watching it for signs that it also could lead the way back.

Regions hardest hit by falling prices are Florida, the northern industrial cities of the Midwest in Michigan and parts of Ohio, Illinois and Indiana, and the once-white-hot growth markets of the arid West, including parts of Nevada, Arizona and California.

Housing in the former industrial Rust Belt will take extra long to recover. "Job losses were so deep that it's going to take a modern miracle to show a turnaround there," Cutts says.

The housing scene in the arid West is troubling, particularly in California, she says. That's where the riskiest mortgages were sold to feed demand as prices soared to record levels. California foreclosures still aren't showing up in massive numbers, but they're increasing surprisingly fast, she says, particularly among the riskiest of the mortgages, issued just last year.

In San Diego and fast-growing inland cities, the economic pressure from collapsing housing prices may become exacerbated by job losses in the subprime-mortgage industry, making it harder for housing to pull out of the tailspin.

"As the lenders go down, they fire a lot of people," says Cutts. "I saw that 40,000 mortgage-related jobs (nationally) have been lost this year. There are a lot of subprime lenders headquartered in California."

Mike Inselmann is concerned about California, too -- and Florida and maybe even Nevada. The co-founder of the housing market research firm American Metro/Study says that despite strong economies, these markets have "more serious issues."

He blames local regulatory obstacles to growth for creating a housing scarcity, especially in California, where the strong economy was driving housing demand.

"Everything got disconnected between supply and demand and pricing," he says, and as a result, he says, prices were pushed artificially high. That invited speculation, flipping, risky lending and, eventually, overbuilding.

The collapse was inevitable. Then, the coup de grace: "The breath was knocked out of the whole marketplace when the subprime deal blew up in April and May, and that whole thing has reached hysterical levels of fear."
Discretionary buyers step back
Florida's cosmopolitan appeal has amplified its troubles from overbuilding and run-up prices: The real estate market is a haven for Latin Americans with discretionary cash as well as a magnet for northern retirees and workers anticipating retirement. As prices rose, these discretionary buyers retreated, leaving legions of empty homes to too few local buyers. "When the chill enters the marketplace, those people can sit on their hands (and wait)," Inselmann explains.

Las Vegas, a similar market on the other side of the country, still is growing, just more slowly. Now 5,000 newcomers arrive monthly, many for casino jobs; before, it was 7,000. The city is awash in new condos that investors had hoped to flip or chose not to keep. They compete with even-newer developments coming on line, says Mark Weinberg, who's been an agent there for Prudential Americana Group Realtors for 13 years.

"I gotta be honest," he says. "I've seen the inventory extend out; I've seen people, unfortunately, losing their homes." A home that used to sell in three or four months now takes four to seven months or more. Weinberg's wife, a loan officer, lost a job when her employer went bankrupt.

Builders concentrated on million-dollar condos aimed at out-of-towners, leaving a paucity of homes for working people, say analysts. As in Florida, "the rich people are suddenly saying, 'You know, I don't need a condo in Vegas right now,' " says Cutts, of Freddie Mac.

But Las Vegas always reinvents itself, Weinberg says. With "job growth consistently every month, population growth every month, very low unemployment and money still pouring into development on The Strip," he is anticipating a recovery by late 2008.

Cutts, too, has the end in sight. "If homes are being bought for the long run, housing is still a very good deal," says Cutts. Eventually, values will return, she adds. After the collapse of the Southern California defense industry in the early 1990s, prices took 10 years to reach previous levels.

Thursday, August 30, 2007

Dollar gains amid anxious trading

hu Aug 30, 1:44 PM ET

LONDON (AFP) - The dollar gained slightly against the euro on Thursday as more volatile trading on global stock markets helped underpin the US currency.

In late European trading, the euro dropped to 1.3652 dollars, from 1.3676 dollars in New York late on Wednesday.

The dollar fell to 158.18 yen, from 116.13 yen on Wednesday.

"In the current environment movements in other markets, rather than data are what's driving currencies, and rising risk aversion is helping support the dollar," said Ian Stannard, currency strategist at BNP Paribas.

The dollar is seen as a safe-haven in times of financial instability and therefore tends to rise when conditions on markets are turbulent.

Choppy trading showed no sign of ending on Thursday, with a pattern established since the beginning of the month of large falls followed by large gains set to continue.

In the US on Thursday, data showed the US economy grew at a 4.0 percent pace in the second quarter, indicating strong momentum heading into the turbulence from housing and credit woes of August.

The Commerce Department marked up its estimate of gross domestic product (GDP) from last month of 3.4 percent growth, based on new data showing stronger US exports and business investment.

It was the strongest year-on-year growth spurt since the first quarter of 2006, but many economists say the world's biggest economy was slowing in the third quarter, hurt by a severe housing slump and the recent credit squeeze.

The Labor Department also reported 334,000 new jobless claims for the week ending August 25, while economists had predicted 322,000 new claims.

The figure was the highest since the 341,000 in the week ending April 14 and prompted concerns that troubles in the US housing sector were spreading to the labour market.

Sentiment on global stock markets had been buoyed on Wednesday after the release of a letter from Federal Reserve chairman Ben Bernanke to Senator Chuck Schumer.

The letter said the Fed was "prepared to act as needed to mitigate the adverse effects on the economy arising from the disruptions in financial markets."

This led may to conclude that the Fed would cut interest rates in September.

Attention has now turned to a speech on Friday by Bernanke in Jackson Hole, Wyoming, with market participants looking for hints on whether the cut will materialise.

"Bernanke is likely to leave many in the market disappointed and play down the prospect of a cut, emphasising that the Fed will only lower rates as the economy slows, and not because of what's happening in the markets," added analyst Stannard.

In France OECD deputy-director Adrian Blundell-Wignall told reporters: "To cut interest rates in response of a crisis like this would be a mistake in my opinion.

"The Fed should only cut interest rates in response to its basic objectives which is the inflation rate and the health of the US economy."

The euro was changing hands at 1.3652 dollars, against 1.3676 dollars late on Wednesday, 158.18 yen (158.84), 0.6774 pounds (0.6778) and 1.6417 Swiss francs (1.6406).

The dollar stood at 115.86 yen (116.13) and 1.2025 Swiss francs (1.1995).

The pound was being traded at 2.0154 dollars (2.0173).

On the London Bullion Market, the price of gold climbed to 666 dollars per ounce, from 664.25 dollars late on Wednesday.

10 reasons to be paranoid

Every bit of your virtual existence is being monitored -- get scared accordingly

By Dan Tynan
August 27, 2007

The truth is out there ... and so is your data. And just because there are no virtual black helicopters following you doesn't mean somebody somewhere doesn't have a bead on who you are and what you are doing.

From buttinski bosses to spies and spooks, there are plenty of reasons to be, well, a little paranoid about the vulnerability of your data and the potential loss of your privacy. To help you gauge the appropriate level of hysteria, we've rated each threat on our Paranoia Meter, using a scale of 1 (Don't worry, be happy) to 5 (Be afraid, be very afraid). Though we've taken a lighthearted approach, concerns about data privacy are not all fun and games.

“You can look at 'paranoia' as just a good way of having a long horizon,” says Jim Harper, director of information policy studies at the Cato Institute. “Incentives exist for data practices to be abused very badly in the future. Being paranoid about them today is being rational about protecting yourself tomorrow.”

Here are 10 ways to practice your paranoia:

Paranoia No. 1: Your boss is watching
Paranoia No. 2: Google knows what you searched last summer
Paranoia No. 3: There's a spook in your inbox
Paranoia No. 4: Information brokers are bungling your data
Paranoia No. 5: The Feds are on your tail
Paranoia No. 6: Zombies abound
Paranoia No. 7: Hollywood wants to terminate you
Paranoia No. 8: Your ISP knows too much
Paranoia No. 9: Your Wi-Fi net is wide open
Paranoia No. 10: You are your own worst enemy
Dan Tynan is contributing editor at InfoWorld.

Get paranoid: Your boss is watching
Reason No. 1: Privacy and the workplace just don't mix

Ever get the feeling your boss -- or your boss's IT department -- is lurking through the network, spying on you? Odds are quite good your instinct is right. And the bigger the organization, the more likely it monitors employees' e-mail, IM, or Web surfing.

According to a 2005 survey by the American Management Association and The ePolicy Institute, three out of four companies monitor where their employees go on the Web, and more than half scan their e-mail. One out of four organizations report having terminated employees for e-mail abuse, and another 25 percent have canned workers for inappropriate Web surfing. Think that blog is safe for speaking your mind? Think again. Two percent of companies have fired workers over offensive blog entries, according to the 2006 version of the survey.

And then there’s background checks (80 percent of businesses conduct them, according to Spherion), drug tests (50 percent), surveillance cameras, and that GPS transponder in the company car.

This doesn't mean employers are evil. They do have a lot to worry about: trade secrets leaking out via e-mail, employee misrepresentation, harassment suits stemming from inappropriate e-mail or Web surfing, folks just plain goofing off on the company dime.

“There is enormous pressure on companies to expand their workplace surveillance,” notes Frederick Lane, author of The Naked Employee: How Technology Is Compromising Workplace Privacy.

“The biggest problem is that increased surveillance inevitably collects non-work-related information about employees and offers employers more opportunity to make employment decisions -- hiring, firing, promotion, etc. -- based on criteria other than qualifications and job performance,” Lane says.

“Workplace privacy”? That's just another oxymoron.

Get paranoid: Google knows what you searched last summer
Reason No. 2: Lusting after your personal data is the lifeblood of this beast

Not long ago, Google was the cuddly search engine that could. Now it's a bona fide data monster, and your personal information is its meat.

Google's pending acquisition of DoubleClick has shed new light on just how much data the G-men control, from search histories to e-mail, calendars, blogs, videos, and more. So notable is Google's stranglehold over personal data that even Microsoft claims to offer more privacy than Google, which is enough to tell you the universe has shifted.

The question is, What will Google do with this vast trove of information? Global privacy counsel Peter Fleischer points out that Google alone challenged the Department of Justice in January 2006 when the department demanded millions of search terms from the top four engines. And Google did voluntarily agree to anonymize the search data it retains after 18 months.

But privacy advocates are far from convinced. The next time everyone's favorite Uncle asks the company to display its assets, Google might not prevail. And if Google were ever acquired or chopped into bits, that data could be its most valuable commodity.

Worse, Google Desktop may represent a security risk to the data on your hard drive. In a Ponemon Institute survey of IT pros conducted in June, more than 70 percent believe Google Desktop is still vulnerable to cross-site scripting attacks.

The solution? Be very careful about how you use Google products. When in doubt, log out.

Get paranoid: There's a spook in your inbox
Reason No. 3: Every call is a could-be conference call with Uncle Sam

Remember when the CIA was a dark, malevolent force lurking in the shadows of our lives, tapping our phones, reading our mail, and planting explosive devices in Castro's cigars? Well, they're baaaack. Only now it's the National Security Agency, and they're snooping into your e-mail, cell phone conversations, and Lord knows what else.

What we do know is fairly limited. According to an account in The New York Times, the spooks are heavily involved in data mining, combing through billions of electronic records, looking for patterns that might identify the behavior of terrorists.

We know that the Electronic Frontier Foundation is suing AT&T for allowing the spooks to tap into their datacenters and that the government is trying to quash the suit by claiming such information is a state secret -- which is about as far from a denial as you can get.

We also know Attorney General John Ashcroft, Acting Attorney General James Comey, and FBI Director Robert Mueller nearly resigned over domestic spying activities in 2004, forcing the Bush administration to change tactics.

And we know that Congress recently handed the spooks a virtual blank check for spying on conversations with foreign nationals, although they promise to revisit said blank check in six months.

And even if we did tell you what the agency is doing, we'd have to kill you -- and then flush all evidence of your existence down the memory hole.

“Until recently, we didn't have to worry much about the government spying on us,” says Larry Ponemon, director of the Ponemon Institute, a privacy management consultancy. “Now somebody decides that you're a terror threat or they don't like you for some reason, and you can't get on a plane. It may not necessarily happen to you, but it could happen to someone you know.”

Bottom line: Keep your nose clean and watch the plainclothes.

Get paranoid: Information brokers are bungling your data
Reason No. 4: Shoddy report vendors put the "credit" in discrediting your reputation

Anybody who requests a background or credit check on you -- or provides them to others -- has a ton of sensitive information about you that (a) may not be accurate and (b) is highly vulnerable to spills. That includes data brokers, credit bureaus, banks, insurance companies, cell carriers, and your employer.

Report vendors have morphed into one-stop data-mining shops, selling everything from credit scores to criminal records. A 2004 study by the U.S. Public Interest Research Group found that 80 percent of all credit reports contained errors and that one in four were serious enough to keep you from obtaining credit or getting a job.

Not surprisingly, report vendors' track records for protecting this information is abysmal (of course, Uncle Sam's record isn't too hot, either). According to the Privacy Rights Clearinghouse, nearly 160 million Americans have had sensitive personal information exposed by data breaches since January 2005.

What to do? Find out what information is out there by requesting a free copy of your credit report. Correct any mistakes and opt out whenever possible. Most data brokers now give you the option of removing your name from their marketing lists (although not credit or background checks); privacy policies on their Web sites usually spell out how. In September, ReputationDefender is launching its MyPrivacy service, which will remove you from some brokers' lists for a small fee.

The moral of this story: Keep your friends close and your data brokers closer.

Get paranoid: The Feds are on your tail
Reason No. 5: That letter in your doctor's hand may be hazardous to your health

If the National Security Agency is spying on you, you're probably connected in some way to a terrorist investigation -- even if it's just because you invited your neighbor Ahmed over for a barbecue.

But the FBI can investigate you for all kinds of reasons, and you may never know it until they slap on the cuffs. Are you a vegan, a member of People for the Ethical Treatment of Animals, or part of an antiwar organization? All of these groups have been investigated for “domestic terrorism” since September 11, according to documents obtained by the American Civil Liberties Union under the Freedom of Information Act.

Under the Patriot Act, FBI agents can issue NSLs (national security letters) to your employer, bank, ISP, doctor, library, or any other entity demanding your records without a warrant. Recipients of NSLs must comply with the FBI's demands and cannot notify the person under investigation. Between 2003 and 2005, the Feds issued more than 140,000 such letters, according to a March 2007 report by the inspector general for the Department of Justice.

In a random sample of nearly 300 NSLs, the inspector general found possible violations of FBI procedures or the law in 48 of them, or about one out of every six.

Worse, you can be an absolute saint and still be the target of an NSL. According to a November 2005 report in The Washington Post, “Senior FBI officials acknowledged in interviews that the proliferation of national security letters results primarily from the bureau's new authority to collect intimate facts about people who are not suspected of any wrongdoing.”

Feeling paranoid yet?

Get paranoid: Zombies abound
Reason No. 6: Hackers, crackers, and phishers -- need we say more?

We are in the midst of a zombie epidemic that shows no signs of slowing. During the second half of July, the volume of spam e-mails containing variations on the Storm worm increased tenfold. The result? A zombie network estimated by IT security company SecureWorks at more than 1.7 million PCs -- big enough to do serious damage to the Net.

The degree of your personal risk depends almost entirely on what you do and don't do online, says Bill Rosenkrantz, director of product management at Symantec.

“On one hand, the hackers are definitely out there, they are very creative, and there is significant financial gain available to them,” Rosenkrantz says. “On the other hand, you have decent control over that. If you don't randomly download files onto your system, have a full security solution on your desktop, and keep your browser and your OS updated, the risk is probably a 3 on a scale of 5. If you don't do any of that, your risk is probably closer to a 5.”

In the case of Storm, the solution is relatively straightforward. Because the zombies connect to one another via a P2P network, IT managers can mitigate damage by blocking each PC's ability to use p-to-p networking.

In short, be careful out there.

Get paranoid: Hollywood wants to terminate you
Reason No. 7: Copping the latest 50 Cent single could translate to doing time

No, the Recording Industry Association of America and the Motion Picture Association of America aren't spying on you. They've got people for that, specifically companies such as BayTSP and SafeMedia, which infiltrate peer-to-peer networks so they can record file swappers' IP addresses and the types and number of files they're sharing. An IP address isn't proof positive of your identity, but it's good enough for most civil suits -- unless, of course, it belongs to a dead person or someone who doesn't actually own a computer.

If you never visit p-to-p nets, you're probably safe. If you do, using anonymous IP networks, Web proxy services, or open Wi-Fi connections can make your identity much harder to trace, says Peter Eckersley, staff technologist for the Electronic Frontier Foundation.

“Aside from the huge, open p-to-p networks like Gnutella/LimeWire or eDonkey/eMule, many people share files with their friends on small-scale networks,” Eckersley adds. “In those situations, copyright holders would have to send undercover agents to infiltrate those groups if they wanted to trace the participants.”

Given the revenue at stake and the history of the players involved, if you're swapping tunes with a small circle of friends, be sure to keep your attorney's phone number handy, just in case.

Get paranoid: Your ISP knows too much
Reason No. 8: Detailed logs. Of everything you've ever done online

If you think Google knows more about you than your parents do, imagine the kind of dope your ISP could drop if pushed to give up the goods.

As the gateway to all our personal Internet communications, service providers could create detailed logs of everything you've ever done online: e-mail, Web surfing, IM, file downloads, and more. The potential for using such records in criminal investigations (or worse) is huge, which is why some lawmakers have been pushing legislation that requires ISPs to retain user data for a year or longer.

“We are more trusting of ISPs than we should be,” says Jim Harper, director of information policy studies at the Cato Institute. “You may not be able to see it, but there's a big stream of data going out of your house through your ISP. It's foolish to rely on ISPs to protect us from their own interests or the government's interests in us."

And it's that second party's interests that send the deepest shivers down most folks' spines.

“I've even heard stories that some ISPs are reselling anonymous data about their traffic,” Harper adds. “Won't that suck if we find out the anonymized data they've been selling can be de-anonymized and re-identified.”

Can you trust your ISP? Don't be so sure.

Get paranoid: Your Wi-Fi net is wide open
Reason No. 9: Oh, I'll just hop on to this FraudDaddy3 Wi-Fi connection and pay bills while I wait for the bus

Got a secure Wi-Fi connection? Good for you. But your neighbors may not be so lucky.

According to an October 2006 survey by the Wi-Fi Alliance, three out of 10 home networks are insecure. More surprisingly, one out of four business Wi-Fi networks is totally open, according to a May 2006 survey by RSA.

That same RSA survey found that 20 percent to 30 percent of access points in major cities throughout the world use the user name and password supplied by their router manufacturer, allowing knowledgeable "war drivers" to log in to the device and change its security settings.

Aside from sucking up bandwidth, war drivers can use your connection to send spam, download porn, and snoop around your shared folders.

Using an open Wi-Fi network yourself isn't exactly safe, either. You could log on to an open network in an airport or other public space and end up on an “evil twin,” a Wi-Fi network set up to mimic a legit one but operated by some creep with a laptop and a mobile access point, notes Paul Henry, vice president at Secure Computing. The crooks could then sniff your data, grab passwords and other sensitive information, and gain access to your corporate network or steal your identity.

If your home net isn't already locked down, now's the time. And if you must access open Wi-Fi nets, use end-to-end encryption for the sensitive stuff.

Get paranoid: You are your own worst enemy
Reason No. 10: Having 185 million close personal friends does have its downside

Got a MySpace page? LinkedIn résumé? Facebook profile?

When it comes to sharing personal data (sometimes a bit too personal), many people are their own worst enemy. Letting it all out online is fine, until the day of that big job interview when you're asked to explain how you ended up in that Geeks Gone Wild video.

Roughly one out of five employers look at social networks when making hiring decisions, according to a survey by Viadeo, a European business social network. And with the ongoing proliferation of the social networking phenomenon, that number is only likely to grow.

“In general, people should be more concerned about the image they portray in places like MySpace and Facebook,” says Beth Givens, director of the Privacy Rights Clearinghouse. “More and more employers are searching them. Or one day you want to volunteer for an organization like Big Brothers or Big Sisters. You don't want to look like a drunk on the beach.”

OK, fine, you're hot. But does the world have to know it? Consider being a little more anti-social.

Dan Tynan is contributing editor at InfoWorld.

Honeypots as sticky as ever

New developments make honeypots even more valuable

By Roger A. Grimes
August 24, 2007

Longtime readers of my column know what a honeypot proponent I am. I run several around the world, collecting information on malware and malicious hackers, and I think every company should have one.

Companies should have a honeypot, not to learn hacker and malware tricks, but as an early warning system. All computer security defenses will ultimately fail. And if they fail and a bad thing gets by your defenses, what's the next best thing? Early warning.

Take a box you're getting ready to throw away, and make it a honeypot. Stick it somewhere in your environment where it's likely to get noticed by an intruder, and tell it to page your incident response team (or you) if anything unexpected tries to connect to it. It's a fake computer asset, and nothing (once you've fine-tuned the false positives out) should ever connect to it. When something does, it's more than likely malicious. I've caught many hackers this way, identified bots that no other defenses found, and even participated in the capture of a Russian hacker. Honeypots work. They are high value and low noise. I've always been perplexed about why they haven't had stronger adoption and use in the computer security community.

Perhaps part of the problem is that the honeypot development world can be quite frozen at times. Months and months go by without any significant updates, but this month has seen a cornucopia of new developments and updates. Here are some of my favorites:

New honeypot book
Niels Provos (creator of Honeyd and senior staff engineer at Google) and Thorsten Holz have written an excellent honeypot book in "Virtual Honeypots: From Botnet Tracking to Intrusion Detection."

As a seasoned honeypot and honeyclient professional (and honeypot book author), I had high hopes for this book -- and it delivers. Niels and Thorsten provide a solid reference to beginners and more experienced honeypot users alike. The book covers how to install and use (step by step) dozens of honeypot products.

The list of what they cover is far too long to report here, but let's say they get to 95 percent of what any honeypot enthusiast would want to read about. My favorite subjects in the book are user-mode Linux, Honeyd, Honeywall, honeyclients, collecting malware with honeypots, tracking botnets, and analyzing malware.

The only downsides I could even come up with is that the book deals with a lot of Unix/Linux-only products, just like the honeypot software world, which might be a put-off for Windows-only readers. And it didn't cover Kfsensor, my favorite Windows honeypot product. Other than that, it is an excellent, excellent book that I would recommend to any honeypot enthusiast. In the end, what I really liked about this book is its coverage of a wide range of products and its practical application to capturing and analyzing malware. It's a great addition to the books on honeypots already written by Lance Spitzner and myself.

Updated Honeyd for Windows
Honeyd, originally a Unix/Linux-only product by Niels Provos, is one of the best virtual honeypot software programs in existence. It is very flexible and useful. Michael Davis did the original Honeyd port to Windows (thank you very much, Michael), but that version didn't keep up as Windows XP and later came out. Changes in Microsoft Windows and a few other notorious bugs made it hard for me to ever recommend using Honeyd for Windows over the last year or so.

Instead, I'd suggest that people use the Unix/Linux version of Honeyd, but that meant learning new skills if you were a Windows-only person. Or they could use Kfsensor.

Jesper Jurcenoks, co-founder of netVigilance, has released an updated version of Honeyd for Windows. You can get it at the netVigilance Web site. Jesper and his company took the time to do a complete rewrite and free update of Honeyd for Windows. He even corrected one bug that remains in the Linux/Unix version to make sure it didn't get replicated to the Windows version, and netVigilance offers a $99 GUI configurator, which can save you hours of configuring and troubleshooting. Thanks to Jesper and netVigilance (and Michael Davis for his earlier contributions) for allowing us Windows security types to play with Niels' excellent honeypot software.

CaptureBAT is a neat, free tool for Win32 honeypots that analyzes file, registry, and process information. It's an excellent addition to Sebek in that it provides far more information. It works on all Win32 systems, including Vista, and comes with the ability to exclude predefined types of activity (which is a must when you're doing real-time file and registry analysis).

Capture-HPC is a high-interaction honeyclient. The New Zealand Honeypot Project, which produced Capture-HPC, also wrote an excellent white paper on using Capture-HPC to identify malicious Web servers. The group includes the paper, data, and tools for anyone to replicate, and it inspected more than 300,000 URLs (nearly 149,000 hosts) found on 194 malicious servers. It's an interesting read.

If you haven't investigated the honeypot world in a while, this is the time to come back and get involved.
Roger A. Grimes is contributing editor of the InfoWorld Test Center. He also writes the Security Adviser blog and the Security Adviser column.

Monday, August 27, 2007

Monster.com Shuts Down Rogue Server

By Brian Prince
August 23, 2007

As many as 1.6 million job seeker identities may have been lifted.

Officials at Monster.com confirmed that they had identified and shut down a rogue server accessing contact information through the unauthorized use of compromised legitimate employer/client log-in credentials.

The server contains names, addresses, phone numbers and e-mail addresses. Monster.com is currently analyzing the number of job seeker contacts impacted by the situation and will be communicating with those affected as appropriate, officials said. The company did not offer any details about the location of the server that it shut down.

Last week, researchers at SecureWorks found a server containing data from 46,000 people that was stolen by hackers running ads on job hunting sites and injecting those ads with a Trojan.

When a user views or clicks on one of the malicious ads, their PC is infected and all the information that enters into their browser—such as financial information entered before it reaches SSL protected sites—is captured and sent off to servers used by the hackers, SecureWorks officials said.

The discovery seems to have been part of a larger effort by hackers to target job hunting sites, as Symantec also reported finding another remote server with more than 1.6 million entries with personal data belonging to people who had posted their resumes on Monster.com. Symantec dubbed the Trojan Infostealer.Monstres, and stated the Trojan was using the credentials of recruiters to log in to the Web site and perform searches for resumes of candidates in certain countries or working in certain fields.

The personal details of those candidates were then uploaded to a remote server under the control of the attackers.

"Monster is in the process of reaching out to its entire employer population to mitigate any ongoing issues," officials at the job hunting site said. "In addition, Monster is placing a security alert on the Monster.com site."

PointerCheck out eWEEK.com's Security Center for the latest security news, reviews and analysis. And for insights on security coverage around the Web, take a look at eWEEK's Security Watch blog.

Yahoo adds features to popular e-mail

By RACHEL KONRAD, AP Business Writer Mon Aug 27, 8:09 AM ET

SAN FRANCISCO - Yahoo Inc. will introduce new features Monday for its popular Web-based e-mail program, including software that allows computer users to type text messages on a keyboard and send them directly to someone's cell phone.

The enhancements make it easier to send e-mail, instant messages or text messages from a single Web site — no need to launch or toggle between separate applications or devices. The features will be available to users in the United States, Canada, India and the Philippines.

The most obvious beneficiaries will be parents, who will be able to use their keyboards to type messages sent to their children's cell phones — no thumb-twisting typing on a dial pad, said Yahoo Vice President John Kremer.

"We're giving you the right way to connect at the right time with right person," said Kremer, whose two preteen sons vastly prefer text and instant messages to e-mail.

The changes come amid fierce competition among providers of free, Web-based e-mail services. Yahoo and Microsoft Corp.'s Hotmail have long dominated the niche, but Google Inc.'s Gmail has grown quickly since its introduction in April 2004.

In March, Yahoo announced that it would provide unlimited storage space, and earlier this month Redmond, Wash.-based Microsoft said Hotmail would increase free storage from 2 to 5 gigabytes. Time Warner Inc.'s AOL, the fourth largest e-mail provider, began offering unlimited storage last summer. Google provides nearly 3 gigabytes.

Sunnyvale-based Yahoo bills the changes as the most significant overhaul of Yahoo Mail since its launch in 1997. The new version replaces a one-year-old beta program and adds new features, including text messaging, a more comprehensive e-mail search engine and an easier to read and edit contacts database.

Users who don't want the upgrades — or whose computers are too slow to handle them — can opt to remain with the current version, which Yahoo will call "Classic."

The new version allows users to click on a contact and then select whether to send that person an e-mail, instant message or text message. You could send an e-mail or instant message if you know the recipient is at the computer — or a text message if the recipient is on the road with a cell phone.

"This gives people the ability to reach anybody in their contact database anytime," said Mike McGuire, vice president of research at industry analysis firm Gartner Inc. "For good or evil, it's going to be much easier for anybody to get a hold of you."

Teen 'unlocks' iPhone from AT&T network

By PETER SVENSSON, AP Technology Writer Sat Aug 25, 2:20 AM ET

NEW YORK - Armed with a soldering iron and a large supply of energy drinks, a slight, curly haired teenager has developed a way to make the iPhone, arguably the gadget of the year, available to a much wider audience.

George Hotz of Glen Rock, N.J., spent his last summer before college figuring out how to "unlock" the iPhone, freeing it from being restricted to a single carrier, AT&T Inc.

The procedure, which the 17-year-old posted on his blog Thursday, raises the possibility of a cottage industry springing up to buy iPhones, unlocking them and then selling them to people who don't want AT&T service or can't get it, particularly overseas.

The phone, which combines an innovative touch-screen interface with the media-playing abilities of the iPod, is currently sold only in the U.S.

An AP reporter was able to verify that an iPhone Hotz brought to the AP's headquarters on Friday was unlocked. Hotz placed the reporter's T-Mobile SIM card, a small chip that identifies a phone to the network, in the iPhone. It then connected to T-Mobile's network and placed calls using the reporter's account.

T-Mobile is the only major U.S. carrier apart from AT&T that is compatible with the iPhone's cellular technology, but smaller carriers also use the technology, known as GSM. In Europe and Asia, GSM is the dominant network technology.

The hack is complicated and requires skill with both soldering and software, and missteps may result in the iPhone becoming useless, so few people will be able to follow the instructions.

"But that's the simplest I could make them," Hotz said.

Technology blog Engadget on Friday reported successfully unlocking an iPhone using a different method that required no tinkering with the hardware. The software was supplied by an anonymous group of hackers that apparently plans to charge for it.

AT&T spokesman Mark Siegel and Apple spokeswoman Jennifer Bowcock said their companies had no comment on Hotz' exploit. Hotz said the companies had not been in touch with him.

Apple shares rose $4.23, or 3.2 percent, to close at $135.30 on Friday. AT&T shares gained 26 cents, or 0.7 percent, to close at $40.36.

The iPhone has already been made to work on overseas networks using another method, which involves copying information from the SIM chip, or Subscriber Identity Module.

The SIM-chip method does not involve any soldering, but does require special equipment, and it doesn't unlock the phone — each new SIM chip has to be reprogrammed for use on a particular iPhone.

Both hacks leave intact the iPhone's many functions, including a built-in camera and the ability to access Wi-Fi networks. The only thing that won't work is the "visual voicemail" feature, which lists voice messages as if they were incoming e-mail.

Since the details of both hacks are public, Apple may be able to modify the iPhone production line to make new phones invulnerable.

Analysts said it's unlikely Apple would overhaul the iPhone's wiring to thwart the new hack because the difficulty of the procedure is likely to keep it confined to hardcore hobbyists.

"I'm having a hard time figuring out where the real pain is going to come from in this," said David Chamberlain, principal analyst with market researcher In-Stat who follows mobile devices and services. "Just selling the piece of hardware, they've made a nice profit off that."

Apple has said it plans to introduce the phone in Europe this year, but it hasn't set a date or identified carriers.

There is apparently no U.S. law against unlocking cell phones. Last year, the Library of Congress specifically excluded cell-phone unlocking from coverage under the Digital Millennium Copyright Act. Among other things, the law has been used to prosecute people who modify game consoles to play a wider variety of games.

Hotz collaborated online with a large number of people to develop the unlocking process. Of smaller core group, two were in Russia.

"Then there are two guys who I think are somewhere U.S.-side," Hotz said. He knows them only by their online handles.

Hotz himself spent about 500 hours on the project since the iPhone went on sale. On Thursday, he put the unlocked iPhone up for sale on eBay, where the high bid was at $12,600 late Friday. The model, with 4 gigabytes of memory, sells for $499 new.

"Some of my friends think I wasted my summer but I think it was worth it," he told The Record of Bergen County, which reported Hotz's hack Friday.

Hotz heads for college on Saturday. He plans to major in neuroscience — or "hacking the brain" as he puts it — at the Rochester Institute of Technology.


Associated Press Writer Jordan Robertson in San Francisco contributed to this story.

Thursday, August 23, 2007

Is the Internet Over?


It's old, vulnerable, and overloaded. Yeah, the Net has its problems, but the thing is, it works.

By John C. Dvorak

I used to joke around about shutting down the Internet so that its protocols and basic architecture could be rewritten from scratch. I was semiserious. More recently, Elton John, who apparently can't use a computer, said the Net should be shut down for five years so that the arts can flourish. Okay, whatever. Myself and Elton John aside, we're actually now seeing serious initiatives that may result in the closing of the Internet as we know it.

There have always been undercurrents that have tried to eat away at the foundations of the current Internet. One is Internet2, a parallel-universe Internet that would be used by academia and perhaps the military. It would have ultra-high-speed file transfer without a lot of the latency issues that we experience with the current model.

A few years ago, people were chatting up Internet2, but most of that chit-chat has died down. Begun in 1996 to much hoopla, the project seems somewhat bogged down by the academicians it aims to serve. In the meantime, another parallel project, called National LambdaRail, appeared. It promoted more new technologies and ideas to achieve ultra-high-speed international networking. It recently merged with Internet2.


Meanwhile, our old-fashioned plain-vanilla Internet is seriously planning on changing from IP version 4 to IP version 6. This is, for the most part, because of the never-ending complaint that "we're running out of IP addresses." IPv6 is supposed to be able to solve some security and spam issues, too. The problem here seems to be integrating IPv6 into the current network without causing all sorts of routing complications and other problems. From what I can tell, it's a nightmare.

Japan has just announced a 7.8 billion yen project to develop all-new security-centric architectures to replace the Internet in that country. This is supposed to be rolled out by 2020. Every so often, the Japanese get an itch to leapfrog everyone, and the results have been spotty. Their last overhyped project was the 1982 "Fifth Generation" scheme whereby Japan Inc. was going to jump past all current computer technology and develop a massively parallel architecture that actually works. It generated a lot of fretting and little else.

Not to be left out are the English. The House of Lords recently demanded that the Internet be rewritten from scratch because of the "wild West" nature of the current system. The primary concern is that of identity. The "nobody knows you're a dog when you're on the Internet" kind of thing seems to upset the upper crust in the U.K., although I doubt that many of them can even send an e-mail. Still, they are now all experts.

The fact of the matter is that the Net, as designed, is more robust and versatile than anyone imagined, and the likelihood that a new Internet would be as reliable might be sheer folly. Despite predictions that the Net was overtaxed and would collapse under its own weight, it keeps humming away.

There are four current concerns about the Internet. The main one seems to be security. How vulnerable are the Net and its users to various security attacks? This involves the anonymity factor as well. Old-line thinking does not like the idea that you can hide on the Net. They fear something bad will come from this.

The second concern is that we are out of IP addresses (as mentioned above), and we've been forced to share them.

The next serious concern is the eventuality of IPTV and the likelihood that most TV will be running over the Internet someday. This has already been predicted to triple the load on the Net from the outset, with continued increases in bandwidth demand.

Then there is simply the Net's age. It's old. We know a lot more about protocols than we did in 1969 when the proto-Internet first appeared as Arpanet. Over time, the Net has been a transport mechanism for an amazing hodgepodge of protocols and subsystems, many of them quite old. Some think that newer is always better and that we need to scrap the old and reinvent the wheel.

Reinventing the wheel is problematic when that wheel is attached to a wagon that's moving. There is more to this than merely upgrading a recent "build" of AOL. The only way any change will work is literally to roll out a parallel system that can be used jointly with the current Internet. You know, like having a Mac and a PC on the same desk, or something like that.

That way we can make the change at our own pace—if we even want to change, that is. I'm not holding my breath that anything will happen for years to come.

IBM: Internet Threatens To Eclipse TV

Mark Long, newsfactor.com 33 minutes ago

According to a new survey from the IBM Institute for Business Value, the amount of personal time that consumers now spend on the Internet rivals the amount of time they spend watching TV.

A total of 66 percent of the new survey's respondents reported viewing television programs from one to four hours per day, versus 60 percent who reported the same levels of personal Internet use. Moreover, researchers said the traditional TV set is increasingly taking a back seat to PCs and cellular handsets among consumers between the ages of 18 and 34.

In addition to conducting the new survey online, IBM researchers stopped young people on the streets of New York to record opinions on videotape. IBM said its informal street sample returned surprisingly similar results to its official survey.

As one of the respondents put it in an IBM video clip now available on YouTube, "If I had to pick between TV and the Internet at this point in my life, I would almost always choose the Internet." When asked why, he replied, "interactivity, for one, and No. 2, my entire life is on the Internet."

Traditional TV's Demise

So are we approaching the end of television as we have come to know it? Keep in mind that IBM's new survey was conducted online, which suggests that its results are skewed in favor of those already tasting the fruit of the Internet's vast global tree.

But with computer prices in freefall and a global push already underway to put computers into the hands of more people in developing nations, the Internet's rise to the top of media markets worldwide might not be as far off as traditional broadcasters, publishers, and advertisers would like to think.

"Just as the 'Kool Kids' and 'Gadgetiers' have replaced traditional landlines with mobile communications, cable and satellite TV subscriptions risk a similar fate of being replaced as the primary source of content access," noted IBM Media & Entertainment Strategy and Change practice leader Saul Berman.

Consolidated Content

IBM's surveyors said that today's Internet audiences are more in control than ever and increasingly savvy about finding ways to filter out marketing messages. And when it comes to mobile and Internet entertainment, consumers say what they really want is consolidated, trustworthy content.

Advertising agencies are going to have to move beyond their traditional creative roles and become brokers of these and other consumer insights, IBM's researchers said. In particular, online marketers will be forced to experiment to find new ways to make advertising more compelling, or risk being ignored.

Moreover, cable companies will need to evolve to embrace home media portals, while broadcasters and publishers will need to move to new media formats that cater to the evolving preferences of today's sophisticated online consumers, the researchers added.

Other TV Viewing Trends

Out of the 2,400 households responding to IBM's survey, which was conducted from mid-April through mid-June, 81 percent said they have already watched, or want to watch, video on their PCs, and 42 percent have watched or want to watch mobile video.

"Given the rising power of individuals and communities, media and entertainment industry players will have to become much better at providing permission-based advertising and related consumer-driven ratings services," said IBM Global Business Services Communications Sector managing partner Bill Battino.

With respect to the digital video recorder (DVR) market, 24 percent of U.S. respondents said that they have a DVR in their home and that at least 50 percent of their TV viewing takes place on replay. The good news for broadcasters is that 33 percent of U.S. respondents reported watching more television content now than before they owned a DVR.

On the other side of the Atlantic Ocean, however, video-on-demand services prove to be twice as popular as DVRs among UK consumers. Moreover, fewer than one-third of UK respondents said they had changed their overall TV consumption as a result of DVR ownership.

Wednesday, August 22, 2007

Google Sky allows users to tour galaxies

By DAN NEPHIN, Associated Press Writer 5 minutes ago

PITTSBURGH - The heavens are only a few mouse clicks away with Google Inc.'s latest free tool. A new feature in Google Earth, the company's satellite imagery-based mapping software, allows users to view the sky from their computers.

The tool provides information about various celestial bodies, from stars to planets, and includes imagery from the Hubble Space Telescope and other sources. It also allows users to take virtual tours through galaxies, including the Milky Way, from any point on Earth they choose.

"By working with some of the industry's leading experts, we've been able to transform Google Earth into a virtual telescope," Lior Ron, a Google product manager, said in a statement.

The new software also promises users the ability to see planets in motion and witness a supernova.

There are other programs that provide information and pictures of the universe, but Google Sky blends it seamlessly, said Andrew Connolly, a University of Washington associate professor of astronomy and part of Google's visiting faculty program.

"What's unique about this is you have all of the imaging data over the whole of the sky actually streaming. So I can look at something that covers most of the sky, say our Milky Way galaxy, and I can zoom right into a tiny galaxy that's in the formation cycle," he said.

Google engineers stitched together "terabytes and terabytes" of images and other data, Connolly said. A terabyte can hold the text of roughly 1 million books.

"Sky in Google Earth will foster and initiate new understanding of the universe by bringing it to everyone's home computer," said Dr. Carol Christian of the Space Telescope Science Institute.

Current Google Earth users must download a new version from http://earth.google.com. The software works on computers running Microsoft Corp.'s Windows, Apple Inc.'s Mac OS X and Linux operating systems.

Google, the leading Internet search engine, already provides surface images of Mars and the Moon through its Web site, along with animated and satellite-based maps of Earth.

Google Sky was developed at the company's Pittsburgh engineering office.

Tuesday, August 21, 2007

YouTube videos to have 'overlay' ads

By ANICK JESDANUN, AP Internet Writer 18 minutes ago

NEW YORK - Video advertising is coming to YouTube, but it won't be the type common at sites elsewhere. Starting Wednesday, the popular video-sharing site plans to feature semitransparent "overlay" ads at the bottom of selected video clips.

The ad disappears after about 10 seconds if the viewer does nothing; the featured clip automatically pauses if the viewer clicks on the overlay to launch the full pitch.

YouTube said it was trying to avoid pre-rolls that precede the main feature at sites like Microsoft Corp.'s MSN, which partners with The Associated Press on a video news service.

Shiva Rajaraman, product manager for YouTube, said internal tests show more than 70 percent of people give up when they see a pre-roll. By contrast, less than 10 percent decide to close an overlay, which they can exit by clicking on an "X" in a corner.

The overlay format also gives advertisers more flexibility, he said, because they aren't constrained to keeping a video ad at 15 or 30 seconds to avoid defection. Because a viewer chooses to watch, a video ad can run much longer — clicking on one pre-launch overlay launched a 2-minute trailer for "The Simpsons Movie."

YouTube, which Google Inc. bought last year for $1.76 billion, is still trying to justify its hefty sales price. Despite its huge audience, YouTube generated about $15 million in revenue last year, based on figures provided in Google's annual report.

The site already has been showing display ads, but video ads look to be far more lucrative, particularly as they attract brand-name advertisers already used to buying video spots on television.

Initial video advertisers on YouTube include Warner Music Group Corp., News Corp.'s 20th Century Fox and Time Warner Inc.'s New Line Cinema. They will accompany video clips from selected partners, including Warner Music, the band Killswitch Engage and dozens of heavy video contributors accepted into a user-partner program.

Marketers can target their ads by user demographics, location, time of day or genre, such as music videos or sports. They won't be able to buy ads by keywords, though, the way Google allows merchants to purchase text ads triggered by a user's search terms.

And unlike Google's pay-per-click search ads, advertisers will be charged by eyeball — $20 per thousand viewers — regardless of whether the user clicks on the overlay.

Revenues will be split with the video owner, although officials won't say how. The video owner can decline all ads or selected ones, such as those from competitors.

Despite differences with Google's keyword ads, which generate the bulk of the company's revenues, officials said the two share a common goal of being nonintrusive.

"Ads need to provide value to the user community," said Eileen Naughton, Google's director of media platforms. "We've proved over and over again on Google that ads are really useful information when users raise their hands and engage with them."

Apple's notebook market share climbs to 17.6 percent

Jim Dalrymple - MacCentral 1 hour, 12 minutes ago

While Apple may be focusing a lot of its attention on the iPhone lately, consumers are clearly still interested in the company’s computer offerings. Data from one market research firm shows Apple’s notebook business broke 17 percent while another research firm said Apple has moved into third place among computer makers.

According to NPD, Apple’s U.S. retail notebook market share for June 2007 was 17.6 percent, an increase of 2.2 percentage points over the same period last year when Apple posted a 15.4 percent market share.

As good as the notebooks are doing, Apple’s overall standing among computer makers is up too.

According to data from research firm IDC, Apple’s continued rise in computer sales puts it in third place overall among all computer makers in the U.S. This is the first time since 1996 that Apple finds itself this high on the list of top selling manufacturers.

Dell took the top spot with HP coming in second place of total unit sales. With Apple taking the number three spot, Gateway and Acer round out the top five.

The good news continues for Apple — with increased notebook sales pushing it forward, the company now has an overall market share of 5.9 percent, up 1.1 percentage points from the 4.8 percent it posted this time last year.

In its most recent financial quarter Apple sold 1.76 million Macs, a 33-percent rise over what it shipped in the third quarter of 2006 and 2.5 times the industry-wide growth rate published by market-research firm IDC.

Mac sales for the quarter marked a record for the company, topping the previous quarterly high of 1.61 million Macs shipped during the fourth quarter of 2006.

While there was a rise in desktop sales for the quarter — 634,000 units compared to 529,000 for the same period in 2006 — laptop unit sales skyrocketed 42 percent to 1.13 million portables. All told, 64 percent of the Macs sold during the quarter were laptops.

Update: Clarified Apple's market share was in the U.S. and fixed the language for the percentage increases. 10:20 pm ET

Core 2 E6850: The Sweetest CPU of All

Has it really been only just over a year?

Thirteen months ago, we wrote our first review of Intel's Core 2 Extreme X6800 processor. Since then, Intel has been a juggernaut, shipping new CPU models based on the Core 2 architecture, including the first quad-core desktop CPU, built by embedding two Core 2 dies on a single package and sharing the front side bus, as well as mobile and server CPUs based on Core 2.

Last month, Intel began shipping newer processors, built around the new G stepping, and increasing the front side bus speed to an effective 1333MHz. At that time, we took a look at the mainstream Core 2 E6750 and the new member of the Core 2 Extreme line, the QX6850.

Today, though, we look at the CPU that's really the current sweet spot in terms of price/performance ratios: the Core 2 E6850. Clocking in at 3.0GHz, this sub-$300 CPU runs at a marginally higher clock speed than the original Core 2 Extreme X6800, but is priced nearly 75% lower. Just as importantly, the E6850 is rated at a TDP (thermal design power) of 65W. We decided to pop in an E6850 in our standard test platform, built around an Intel P35-based motherboard, and put the CPU through its paces. We compare the results against a Core 2 E6750 and AMD's fastest mainstream desktop CPU, the Athlon 64 X2 6000+.

A Note about Motherboards
If you want to run one of Intel's new CPUs, you may need a new motherboard. Intel began shipping boards based on their new P35 and G33 chipsets back in June, which support the faster 1333MHz front side bus.

Test Systems and Benchmarks

We installed a Core 2 E6850 into a system consisting of an MSI P35 Platinum motherboard, using DDR2-800 memory.


Why buy this 2 core chip when i could buy a Q6600 and overclock it using the stock fan to over 3 GHz, and get 4 cores for the same price. I dont see how this is a sweet spot when almost ALL the Core 2 processors with a decent motherboard will run stably at over 2.8 GHz - ive built about ten such systems in the past 9 mths and they all run stable with the intel box fans at over 2.8 GHz. And dont give me that "for those who dont overclock" as the latter will probably be buying a dell and reading PC Magazine. In my opinion "those who dont overclock" a Core 2 duo chip is really an education issue. If you go to newegg and read the thousands of customer reviews on Core 2 Duo Chips 95% of them are talking about overclocking - so how is this chip a "9" and the sweetspot and you dont even mention the word overclock in your article

Question: Which revision of the MSI board did you use?

Comment: The price/performance is a tough argument for me. We are talking about a 40%+ increase in price over the E6750 with only about an average performance increase of around 10%. On the other hand, it's likely to add only around 10% or less to the overall cost of the system. Still, tough for me to say it hits the price/performance sweet spot. I would still give that to the E6750.

Suggestion: I would have loved to have seen the Q6600 thrown into the mix. Wilmark makes a good point about the potential benefits of quadcore. It would be nice to see the current performance gap between the E6850 and Q6600.

While it's true the E6850 and Q6600 are about the same price, you're missing a key point (which Loyd clearly mentions) ==> the thermal design power of an E6850 is only 65w ... so it will run VERY cool relative to a Q6600 (with a TDP of 105w). And there are still some of us who elect to run systems at their designed specs rather than overclock them Smile I have two fundamental requirements for systems I build: (1) QUIET, and (2) STABLE. An E6850-based system with an Intel chipset and a good 3rd party heatsink/fan combo (Zalman 9500) easily meets both of these criteria. A Q6600 solution will also ... which I would use depends very much on what use the system is for. At the moment I'm building two new systems => one in an HTPC case (for which I'll use the E6850 since the cooling in a crowded case like that is a factor) and one for my study (for which I'll use the Q6600 ... since the Antec P182 case I'm using has much better airflow). Bottom line: I'd say BOTH the E6850 and Q6600 are at "sweet spots) in price/performance ... it simply depends on the projected use of the system.

As for the arguement that the E6750 is more of a "sweet spot" ... clearly that's a matter of opinion => and just how price-sensitive you are. If the $75 or so savings is important to you, then by all means use an E6750 ... but for the small price differential many of us would prefer to get the E6850. The performance of either is not likely to disappoint Big Smile

Hello again Loyd. You know how to get us to chatter about your CPU reviews.

I am still waiting and eager to see you put an overclocked E4400 or E4500 into the comparison. Flight simulator supports up to four cores and therefore the Q6600 overclocked will yield better performance than the E6850, although most games will benefit from the latter CPU if overclocking is not in the mix.

Any good P35 motherboard that cost over $115 can yield over 3GHz from the E4xxx CPUs. Using stock Intel cooling, with the FSB set at only 300MHz an E4500 will be at 3.3GHz, compare that to the non-overclocked E6850 and let us know which is the winner, in performance and cost.

Clearly there are some trade offs between the Q6600 and E6850. I would never suggest overclocking as a primary method of comparison (that comment came for Wilmark). What I think would be interesting is to see an analysis of the tradeoffs. Clearly the E6850 is a more energy efficient processor, and it should have an overall performance advantage in single benchmarks. However, since most of us are running multiple apps, the question is: How much multitasking does it take before the Q6600's 4 cores pass the E6850's 2 cores in performance?

Now that there is a quad-core CPU at such a reasonable price, I would love to see at what point it's multi-core design offers a practical advantage over a comparably priced dual-core CPU.

Perhaps you've already seen this, but if not it comes pretty close to what you are asking for:


As for the overclocking, if you're going to compare, I think you have to compare overclocked to overclocked. Otherwise, you're really just saying: "I'm going to buy the cheaper CPU and want to know if OC'ing gets me the same performance as the stock speed of the higher priced CPU. BTW, I've seen the E6750 top 4GH on air cooling, although not stock cooling.


Perhaps you've already seen this, but if not it comes pretty close to what you are asking for:


As for the overclocking, if you're going to compare, I think you have to compare overclocked to overclocked. Otherwise, you're really just saying: "I'm going to buy the cheaper CPU and want to know if OC'ing gets me the same performance as the stock speed of the higher priced CPU. BTW, I've seen the E6750 top 4GH on air cooling, although not stock cooling.

Thank you for the link, I had not read that one from Tom's Hardware.

I agree with your overclocked to overclocked suggestion, and that is one of the problems with the article from Tom's Hardware, they did not include a comparison that included the same hardware, with just swapping out the CPUs.

As in this thread, when I write to Loyd, I already know the answers to any questions or suggestions, I make them for the benefit of the readers of this forum. While Core 2 Duo CPUs have been pushed to over 5GHz it takes special cooling and extra cost, which negates the reason that people purchase inexpensive CPUs. Also, most people are unaware of overclocking or how to do it, therefore those people will purchase components or computers based upon stock CPU speed and a price they can afford. Often overclocking is done for cost reasons, to save money and have a more powerful computer.

As to overclocking my own CPU, I want my computer to be able to last for years, so I only use very slight or no voltage increases [for the CPU only, none for RAM, chipset, and etc.], and I use Intel's supplied cooling if appropriate. Also, the FSB is important as this impacts more than the CPU. In my above example, an E4500 at a FSB of 300 would yield 1200MHz quad pumped. The E6850 or E6750 is already quad pumped at 1333MHz, which can limit further overclocking especially price/performance overclocking, which many overclockers use as a reason to overclock. So, a P35 motherboard will be very happy running an E4xxx CPU at a 50% overclock while using inexpensive DDR2 800 RAM and stock Intel cooling.

Most people overclock to either make their $115 Core 2 Duo yield more performance than a $1000 CPU, while a few [including some companies] use a $1000 CPU overclocked to yield performance yet unseen from non-overclocked CPUs.

Thank you for your input, your points are valid.

In Japan, 3D images in your pocket

TOKYO (AFP) - Japanese mobile phones already let users shoot films and share them with friends. It may not be long before the images go another step -- becoming completely three-dimensional.

Japan's Hitachi, Ltd. has developed a lightweight 3D display that can potentially be adapted for mobile devices such as telephones.

The gadget, using what is known as stereoscopic vision display, weighs only one kilogram (2.2 pounds) and resembles an upside-down, multiangular pyramid full of mirrors on top of a liquid crystal display.

"It's very small and portable," Rieko Otsuka of Hitachi's Advanced Research Laboratory said Tuesday.

Taking advantage of the portability of the display, the company expects it can be put to use to show museum pieces at schools so they will appear as if they are standing up right in front of students.

Otsuka expects to put the device to further use.

"I'd like to see the technology eventually applied to mobile phones, so people could see images three-dimensionally from their handsets," she said.

Thursday, August 16, 2007

Review: New iMac tempts a Windows user

By PETER SVENSSON, AP Technology Writer Wed Aug 15, 4:16 PM ET

NEW YORK - Apple Inc. has dropped "Computer" from its name, but its computer business is still growing, even if the iPod player is the company's real star.

Apple's resurgence started with the first iMac, in 1998. Little by little, Apple has been persuading people to opt for Macintosh computers over Windows PCs.

After Apple refreshed its iMac line last week, I decided to test one from the perspective of a Windows user. I found it to be a powerful if not completely irresistible enticement to switch.

If you haven't looked at iMacs in a while, they now look like half a laptop — the display half, with the processor and other components built into the flat-panel screen. The new iMacs ditch the plasticky look that's been a hallmark of the line since the beginning, replacing it with an aluminum casing that's even thinner than before.

It's very sleek-looking, but do you remember the first iMacs? They resembled colorful television sets and looked more fun than a pack of bubble gum. Then there was a special edition with a transparent gray cover, through which you could see the copper coils on the back of the cathode-ray tube. That was hot.

With the latest models, the iMac has grown up, gone to business school and now wears a suit — a very well-cut suit. It won't look out of place anywhere, but it's not as exciting.

The basic model costs $1,199 and has a 20-inch screen. Another $300 gives you a faster processor and graphics card and a bigger hard drive. The top model, for $1,799, has all those components but a 24-inch screen instead. All have one gigabyte of memory. The prices are roughly $300 less than the previous line, for the same size screen.

I tested the middle model, but with an extra gigabyte of memory, which costs $150. When I removed the extra memory, I didn't find a difference in how fast the unit started up, switched between programs or rendered a high-definition movie in iMovie.

That tells me that most users will probably be fine with the cheapest model and the standard 1 GB of memory, because processor speed is not that important anymore. Apple's operating system clearly makes good use of memory; Microsoft Corp.'s new Windows Vista will barely give you the time of day on 1 GB.

I found the iMac very easy to get working on, even though I haven't used a Mac intensively for some time. Getting online through my home wireless network using the built-in Wi-Fi card was a cinch, as was video chatting using the built-in camera and my AOL Instant Messenger account. The iMac's iTunes software immediately found the iTunes music library on my home PC and gave me access to the songs.

Along with the new computers, Apple updated its iLife suite of software, which normally sells for $79 but comes free with the iMac.

The iMovie program, in particular, has been thoroughly revised, with a new and very handy interface. Despite little experience with movie editing, it took me just half an hour to boil down an hour of footage into a 2-minute high-definition movie of my baby, shot with a brilliant camera from Panasonic, the HDC-SD1 (street price $750). Uploading the movie to a gallery on Apple's .mac Web service took only a few more steps.

That's the Apple experience in a nutshell: Tight integration of hardware, software and Web services, along with great interface design, allowed me to download, edit and upload the video without ever going to the user manual.

So why am I not completely sold?

Well, I found some flies in the ointment. I'd call them "maggots in the apple," but that's trite and makes too big a deal of them.

I had problems accessing files on my home PC via the wireless network. The iMac would only sometimes show the PC's shared folders. There's probably a fix for this, but this is something that should work out of the box.

Like many other computers, the iMac has three different modes of inactivity: display off, sleep mode and shut down. The trouble is, there's no clue which state your iMac is in, and different inputs can be used to wake the computer up. If the display is off, moving the mouse will turn it on. But if it's in sleep mode, you need to click the mouse. If it's off, neither of those will work, and you have to press the power button.

Turning on a computer shouldn't be a guessing game. Sure, minimalism is great, but it wouldn't have killed the design to put in an LED that indicates the computer's state of relaxation.

In the iMac's favor, power consumption in operation is low, at around 75 watts according to my meter. That's comparable to a laptop, and about half of what a powerful desktop PC will draw, excluding the monitor (Remember: the iMac's power usage includes the built-in monitor). In Sleep mode, the iMac draws just 2 watts.

My other complaint is with how the screen displays small type, like the body text of Web sites. It looks faint and blurry on the iMac screen. This isn't unique to the iMac, as it has to do with how Apple's operating system places text relative to the pixel grid on LCD monitors.

Microsoft's ClearType technology produces text that has better contrast and is more legible. It's less faithful to the design of the font, which is why Apple resists it. But I'm not a graphic designer and not particularly appreciative of the beauty of fonts, and I should have the option to engage something like ClearType on the iMac.

These are minor complaints.

The iMac deserves to be a strong contender for any PC user looking to get a new computer. If I was looking to replace my PC right now, I would be sorely tempted. Even the Windows software I've accumulated over the years isn't a real reason not to switch, because Macs can now run Windows, too (with some additional software purchases).

However, unless you're shopping for a computer in preparation for the fall semester, wait to get an iMac in October, when Apple is to roll out a new version of its operating system, called "Leopard," with improvements to the user interface. If you've already bought a computer, the upgrade will cost $129.