Apple suppliers building cheaper, 8GB iPhone 4: Sources

Asian suppliers to Apple Inc have begun manufacturing a lower priced version of its hot-selling iPhone 4 with a smaller 8 gigabyte flash drive, according to two people with knowledge of the matter.

The flash drive for the 8GB iPhone 4 is being manufactured by a Korean company, one of the people said on Tuesday, declining to name the company. Apple currently sources its flash drives from Japan's Toshiba and South Korea's Samsung Electronics .

(In pics: Apple copycat 'hiPhone 5' for $31 in China | Apple launches White iPhone | What to expect in next gen iPhone? )

The sources declined to be identified because the information has not been made public.

Apple, which demands high levels of secrecy and security from suppliers and employees, declined to comment.

The existing iPhone 4 was first launched in June 2010 with 16 GB and 32 GB versions, with a white version added to the lineup in April. The 8 GB version expected to launch within weeks, one of the sources said.

In addition to launch of the smaller iPhone 4, Apple is targetting an end September launch for the next-generation iPhone 5, one source said, confirming earlier reports on Apple follower blogsites and industry websites.

The new iPhone, which some call the iPhone 4S because of its largely identical appearance to the existing iPhone 4, will have a bigger touch screen, better antenna and an 8-megapixel camera, one of the people said.

The iPhone 5's two manufacturers have been told to prepare production capacity for up to 45 million units altogether, the source said. The phone will be made by Hon Hai and Pegatron , the person added.

Your Android, Windows, iPhone or BlackBerry smartphone is the next target of hackers

Hackers are out to stymie your smartphone. Last week, security researchers uncovered yet another strain of malicious software aimed at smartphones that run Google's popular Android operating system.

The application not only logs details about incoming and outgoing phone calls, it also records those calls. That came a month after researchers discovered a security hole in Apple's iPhones, which prompted the German government to warn Apple about the urgency of the threat.

Security experts say attacks on smartphones are growing fast - and attackers are becoming smarter about developing new techniques. "We're in the experimental stage of mobile malware where the bad guys are starting to develop their business models," said Kevin Mahaffey, co-founder of Lookout, a San Francisco-based maker of mobile security software. Wrong-doers have infected PCs with malicious software, or malware, for decades.

Now, they are fast moving to smartphones as the devices become a vital part of everyday life. Some 38% of American adults now own an iPhone, BlackBerry or other mobile phone that runs the Android, Windows or WebOS operating systems, according to data from Nielsen.

The smartphone's usefulness, allowing people to organize their digital lives with one device, is also its allure to criminals. All at once, smartphones have become wallets, email lockboxes, photo albums and Rolodexes.

And because owners are directly billed for services bought with smartphones, they open up new angles for financial attacks. The worst programs cause a phone to rack up unwanted service charges, record calls, intercept text messages and even dump emails, photos and other private content directly onto criminals' servers.

Apple pips Google, Facebook to become No 1 international brand in China

A year after opening a flagship store here,Apple has a problem that any retailer would envy: The huge 16,000-square-foot space is already too small.

Huge crowds descend the store's glass staircase, only to discover legions of mostly young Chinese crowding around spare displays of Apple's devices. Another Apple Store, four miles away, is also packed.

To cope, Apple says it is now planning a third, even largerShanghai store, as well as dozens of other stores throughout the country. The expansion is driven by customers like Wang Shangyan, a 17-year-old professed Apple maniac.

"I have many Apple products, likeTouch, iPod,iPad 2 andMacBook," Wang said after browsing the Apple Store here this week. "I don't have an iPhone but I'm waiting for the fifth generation. I will come to the Apple Store to buy it; it doesn't matter how much it costs."

Apple says its Chinese outlets - two inBeijing and two in Shanghai - are now the four most heavily trafficked Apple stores in the world. They also generate the most revenue, outselling even the Fifth Avenue Apple Store in New York, which is open around the clock. (Apple plans to open another store in Grand Central Terminal. Analysts say few globalbrands have achieved such a feat in China.

"Apple has done what Google and Facebook cannot do: become No. 1 in China," said John Quelch, former senior associate dean of Harvard Business School and now head of theChina Europe International Business School in Shanghai. "Scarcity sells, and this is the same strategy Apple has used in the US"

Apple's push into China may be important for other reasons: It shows the depth of this country's fast-growing upper middle class.

Foreign brands can absorb another lesson as well. Apple's success shows that with products that are not so easy to counterfeit, Chinese consumers are willing to pay a premium.

The Apple Store, however, is another matter. Last week, an American blogger living in China posted images of what she believed was a fake Apple Store in the southwestern city of Kunming. The store mimicked the Apple decor, right down to the bright blue T-shirts and white tags Apple employees are required to wear.

"It appears the middle class in China is growing faster than Apple's presence," said Charles Wolf, a securities analyst who follows Apple for Needham & Co. "I mean China has taken rip-offs to a new level, pirating Apple Stores themselves. It speaks to the demand for Apple products throughout China."

Apple declined to comment. The company has no authorized store in Kunming, only licensed resellers, which are barred from creating look-alike outlets or even calling themselves an Apple Store.

On Friday, China said its own regulators had begun inspecting electronics stores in Kunming to ensure they comply with the law.

Rack it up to Apple mania, with Chinese characteristics. Scarcity does seem to be feeding the frenzy. Shortages, bottlenecks and delays have created a thriving gray market in Apple products in China, with many consumers paying hefty prices for iPhones or iPads that have been smuggled in from overseas, ahead of the Chinese release date. Apple recently said its bottlenecks had eased.

Last week, Apple reported blockbuster sales and profits in its third quarter, including $3.8 billion in revenue in greater China, which includes Taiwan and Hong Kong. For the first three quarters of Apple's fiscal year, revenue in greater China was $8.8 billion - six times that of a year earlier. Last quarter, Apple may have even generated more revenue in China than Lenovo - the Chinese PC maker that seven years ago acquired IBM's personal computer business, according to a survey by Bloomberg News.

China has become the second-largest market after theUS for apps that run on the smartphone and tablet, according to Distimo, a Dutch company that tracks the popularity of apps. Strong sales of the iPhone and iPad are also helping drive up sales of Apple's other major products, including desktop computers and laptops.

Apple mania has even inspired grass-roots inventors. A year ago, a 22-year-old programmer and his 25-year-old brother introduced what they called the Apple Peel, essentially a case they said helped turn aniPod into a smartphone capable of making calls.

Samsung pips Apple, Nokia in smartphone sales for first time

Samsung Electronics, maker of the Galaxy mobile phone, may have surpassedNokia and Apple in smartphone sales for the first time on demand for devices that run on Android software, a research company said.

 

Samsung is estimated to have sold between 18 million and 21 millionsmartphones globally in the April-June quarter, compared with 16.7 million for Nokia and 20.3 million iPhones, Neil Mawston, a London-based analyst at Strategy Analytics, a research company based in Boston, said in an e-mailed response to questions on July 22. The data exclude tablet-computer sales.

The estimates show Google's Android is gaining ground on Apple in smartphones as Nokia, which is turning toMicrosoft for software support, struggles to keep up with the pace. Samsung, which also produces low-end phones that aren't capable of downloading applications, has said it aims to more than double sales of high-end devices this year.

"Samsung's Android portfolio is selling strongly in most regions," said Mawston. "Samsung stands a reasonable chance of capturing the top spot on a quarterly basis if it can continue expanding its Android portfolio across high-growth markets like China and Brazil.Samsung and Apple will be at similar levels in smartphones by the end of the year."

Catching Nokia

Including basic phones, Samsung will probably have a 20% share this year, compared with Nokia's 26%, closing the gap between the world's two largest handset makers to the narrowest ever, he said. Samsung wasn't immediately able to verify the figures, said Nam Ki Yung, a Seoul-based spokesman for the Suwon, South Korea- based company. Steve Park, a Seoul-based spokesman for Apple, declined to comment.

Cherry Gong, a Nokia spokeswoman in China, didn't immediately respond to an e-mail seeking comment. Samsung fell 0.4% to 847,000 won at the 3:00 p.m. close in Seoul, while South Korea's benchmark Kospi index lost 1%. The shares have declined 11% this year.

Samsung's global smartphone sales had lagged behind Nokia, Apple andResearch in Motion in the first quarter, according to researcher International Data Corp. The South Korean company's sales are accelerating after it began selling the Galaxy S II, a successor to its best-selling Android device introduced last year to counter Apple.

New Galaxy

Samsung planned to roll out the model in 120 countries through 140 operators from May, the company said in April. The latest Galaxy handset went on sale last week in five cities in China, including Beijing and Shanghai, as the company seeks to make a push into the world's largest market for mobile phones.

The latest 4.27-inch Galaxy phone, unveiled in February, helped Samsung more than double operating profit at its mobile phone business in the second quarter, say five analysts polled by Bloomberg News. Apple reported net income that beat estimates on July 19, lifted by record sales of iPhones andiPads. Nokia reported its first quarterly loss since 2009 as the Finnish company struggles to sell handsets based on its Symbian software.

Apple beats Nokia in smartphones category

Apple has beaten world's largest mobile phone maker Nokia in the smartphones category, an area the Finnish company had been losing ground to the US tech giant since the iPhone hit the market, as per the April-June quarter results filed by the two companies.

 

Nokia, which filed its second quarter results today, sold 16.7 million smartphones worldwide, while Apple's third quarter numbers reveal that it sold 20.34 million units, across the globe.

Apple came up with its June quarter results on Tuesday. During the June quarter, Nokia saw the erosion of its smartphone sales, which dipped 34 per cent compared to 25.2 million units sold by the company in the same quarter of 2010.

Sales of other mobile phone devices of Nokia was down by 16 per cent to 71.8 million compared to 85.8 million in the same quarter a year ago.

Apple during the third quarter ended June 25, reported sales of 20.34 million iPhones, a 142 per cent growth, over the same period a year-ago quarter.

Nokia in its June quarter results reported a 20 per cent decline in its total sales volume of mobile phones (both multimedia phones and smartphones) to 88.5 million unit from 111 million unit it sold in the corresponding period a year ago.

Nokia witnessed a 42 per cent decline in sales in North America, 41 per cent in Greater China, 30 per cent in Europe, 20 per cent in Asia Pacific, 2 per cent in Middle East and Africa combined.

Its sales volume, however, grew by 10 per cent in Latin America.

Rumours of 'BlackBerry Cyclone' to take on Apple TV

BlackBerry company Research In Motion (RIM) is rumoured to be toying with the idea of entering the home entertainment business .

If it is true, this will be the second major departure for the Waterloo-based RIM from its core business of smart phones where it ruled the market till last year. Last April, RIM unveiled its PlayBook tablet - the first non-BlackBerry product - to challenge Apple's iPad.

Now it is rumoured to be working on a media box to match Apple TV .

"We have confirmed with one of our source's RIM is working on just that a media hub. The media hub's code-name is 'BlackBerry Cyclone','' Nerdberry web site has reported.

According to the report, the 'BlackBerry Cyclone' will be Wi-Fi-enabled and connect to your home TV via HDMI. It will also have Netflix, YouTube and access to media devices on the WiFi network.

"We are hearing the release of the 'BlackBerry Cyclone' will be later this fall. We are waiting for more info to come in at this time. This is going to be a great product for streaming media,'' the web site has said.

Apple has not only beaten the BlackBerry company in the smart phone market but also become the undisputed leader in mobile computing with its iPad.

RIM's efforts to take on the iPhone with its BlackBerry Storm and the iPad with its PlayBook tablet have failed to make any dent on Apple's supremacy in the mobile computing market.

It remains to be seen how much of a challenge the rumoured 'BlackBerry Cyclone' will pose to Apple TV.

At its annual shareholder meeting this week, RIM also announced to unveil seven new models of BlackBerry in the coming months to replace its aging handset line-up.

Bu the announcement failed to revive RIM stock which - at $27 - has fallen more than 50 percent this year, reducing its market worth to just $14 billion. 

Apple makes first S. Korea payout over tracking

US technology giant Apple said Thursday it has made its first compensation payment in South Korea over a feature in its smartphone which can track the location of users.

Apple Korea said it had paid one million won ($950) to iPhone user Kim Hyung-Suk, complying with a compensation order from a court in the southern city of Changwon.

Kim, a 36-year old lawyer, filed suit against Apple on April 26. He said the smartphone's location recording infringed on his constitutional rights to privacy and freedom and caused psychological stress.

He demanded one million won, and the court ordered Apple to pay the sum for violating his privacy. Apple Korea said it had not raised an objection to the order.

The settlement was expected to trigger an array of similar lawsuits since South Korea has about three million iPhone users.

In April 29 other iPhone users in South Korea filed a joint suit against Apple, following claims that the US company traced and stored geographical data from its mobile device users in countries such as France and Germany.

British security researchers have said the position-logging feature was contained in iOS 4, the operating system for the iPhone and iPad.

They said iOS 4-equipped iPhones and iPads store latitude and longitude coordinates along with a time stamp, probably through cell-tower triangulation.

The company in May released updated software for iPhones to fix "bugs" that resulted in location data being unencrypted and stored for up to a year.

Apple software running iPhones, iPads has security flaw: Germany

The software running Apple's iPhones, iPads and the iPod Touch has ``critical weaknesses'' that could be used by criminals to gain access to confidential data on the devices, Germany's IT security agency warned Wednesday.

Clicking on an infected PDF file ``is sufficient to infect the mobile device with malware without the user's knowledge'' on several versions of Apple's iOS operating system, the Federal Office for Information Security said.

The same could occur when opening a website that carries an infected PDF file, possibly opening the device to criminals spying on passwords, planners, photos, text messages, emails and even listen in on phone conversations.

``The weak points allow possible attackers to gain administrator rights and get access to the entire system,'' it said.

The problem may occur on all devices _ iPhone 3GS, iPhone 4, iPad, iPad 2 and the iPod Touch _ with software versions including iOS 4.3.3, and it ``cannot be excluded'' that other iOS versions have the same weakness, it said.

Apple Inc. has yet to offer a patch to fix the problem, the agency added.

Apple Germany spokesman Georg Albrecht told The Associated Press he was aware of the warning, adding that Apple would not comment on it.

The agency said it was in contact with the firm regarding the security hole.

No attacks taking advantage of it have been reported so far, ``but it must be expected that attackers will soon exploit the weak points,'' it said.

The agency urges the devices' users to refrain from opening PDF files of unknown origin, be it as an email attachment or those opening through websites.

``Possible scenarios for attacks by cyber criminals include the extraction of confidential information (passwords, online banking data, calendars, e-mails, SMS or contacts), accessing the device's cameras, the user's GPS data as well as listening in on phone conversations,'' the statement said.

The Bonn-based institution reported a similar security hole last year, for which Apple soon afterward presented a software upgrade fixing it.

Apple pushes BlackBerry to third spot in smartphone market

There is more bad news for slipping BlackBerry maker Research In Motion (RIM). According to the latest smartphone market data, BlackBerry is at third place as Google Android and Apple iPhone have further increased their share in the US.

Market research leader ComScore reported on Tuesday that Google Android devices have carved out as much as 38.1 percent of the market share during the past three months.

During this period ending May, Google Android ranked as the top operating system with 38.1 percent of US smartphone subscribers, up 5.1 percent, ComScore said.

Apple bumped BlackBerry from number two position with 26.6 percent of the market share, up 1.4 percent.

BlackBerry was relegated to the third rank with 24.7 percent, slipping 4.2 percent during the period.

The share of Microsoft also shrank to 5.8 percent, down almost two percent, the report said.

In its precipitous fall in the American smartphone market, BlackBerry has lost its top position in a matter of months. Just last October, it was the top-seller with a market share of more than 33.5 percent.

By January, its share had fallen to 30.4 percent. Since then, it has been all downhill for RIM. With its aging handset line-up expected to be replaced only next year, the BlackBerry company, based at Waterloo near Toronto, has little chance of bouncing back.

On the Toronto stock exchange, RIM stock continued to hover around $27, sliding 46 cents Tuesday. The stock has lost more than 50 percent of its value since January and is at its lowest in six years.

RIM is currently valued at about $14 billion, down from $83 billion in June 2008 when its stock touched the $150-mark.

In the handset market, RIM was pushed to the fifth slot (by Apple), with its share shrinking to 8.1 percent from 8.6 percent three months ago. Apple gained 1.2 percent to control 8.7 percent of the handset market.

Samsung remained the topper in the handset market, with a share of 24.8 percent, followed by LG (21.1 percent) and Motorola (15.1 percent). 

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