Digital Zone 223: Evaporating Food

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In this edition of the Digital Zone, we talked about:

  • Microsoft betting big on Windows Phone 7
  • Google and AP make nice
  • Google planning to expand YouTube
  • Intel buy Infineon
  • Microsoft raises prices
  • Cisco eying Skype
  • Apple keeping up with iPad demand
  • MySpace gives in to Facebook
  • Longer music samples possible for iTunes

Microsoft is rumored to be spending $500 million just on marketing for the Windows Phone 7 launch. One source understood that $1 billion was being spent on the fall release, only half of which was actually focused on development. Microsoft executives have said they would spend “billions” in the first year on both selling and developing WP7. Only HTC, LG and Samsung are committed to Windows Phone 7. Dell, Garmin-ASUS, Sony Ericsson and Toshiba still have WP7 plans, but most of their attention is now on Android devices. HP, which bought Palm, is focusing on webOS. Microsoft has not only turned to paying for phone development costs but to incentivize app developers by providing guaranteed income for WP7 apps even if the Windows Phone Marketplace fails during the same period.


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Intel has decided to buy Infineon for $1.4 billion in an all-cash deal which means they now own the chips used in Apple’s iPhone. Intel bought mobile software maker Wind River Systems for $884 million last summer and is developing the open-source Moblin software, which is designed to run on mobile devices that use Intel chips. Two weeks ago, they purchased McAfee for $7.68 billion which means Intel can embed security into its mobile chips. Infineon owns only about 5 percent of the market.

TechCruch is reporting that Cisco has made an offer to acquire Skype before they make an IPO. Skype is looking to make five billion dollars. Google is also interested in Skype.

Google plans to significantly expand its YouTube movie rentals to a full-fledged, worldwide service. Several contacts told the Financial Times that talks are underway for a service that would stream major movie releases and would be tied into both Google’s search engine and YouTube. Movies would cost $5 to rent and would be available at the same time as on Blu-ray, DVD and Internet services. The company is reportedly aiming for an end-of-year unveiling. It would launch in the US first, but it would eventually spread to other countries.


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Google has retained the right to publish content from The Associated Press under a new licensing deal. The multiyear agreement has two key components: an undisclosed payment for the rights to AP’s content, and a data-sharing arrangement aimed at helping the news company make more money across the Internet. According to one report, Google could provide the AP with more insights about the types of information and images people are looking for in the minutes, hours and days after a major news story breaks. Google also could help AP develop more ways to ensure its content is more likely to be highlighted by search engines. Google earned $6.5 billion on revenue of nearly $24 billion last year. Its net income is on pace to surpass $8 billion this year.

Microsoft announced it is raising the price of its Xbox Live community. The cost for a full-access Xbox Live Gold one-year subscription will jump 10 dollars to 60 dollars in the United States in November.

Apple promised that US orders iPad would ship within 24 hours, a sign that supply is catching up with demand. The iPad went on sale in the United States on April 3 and Apple sold more than three million in 80 days. iPad has released in more than a dozen countries, and China is expected to start selling it in mid to late-September.

According to CNET, longer music samples, possibly 60 seconds, will be part of Apple’s iPod refresh presentation tomorrow. They’re not expected to announce streaming music for an website.

MySpace is allowing users synchronize updates with Facebook since they have more than 500 million members.


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