An Ignoble Experiment

2. Google confirms Waze acquisition targeted in FTC antitrust probe

Facebook (NASDAQ:FB) is quietly working on a mobile news reader application that curates content from the social network's users and digital content providers in a magazine-style visual format optimized for smartphones and tablets, The Wall Street Journal reports.

Citing sources with knowledge of Facebook's efforts, the report states the project--internally called Reader--has been in the pipeline for more than a year, adding that recent iterations of the app closely resemble Flipboard, a free social magazine application for Apple's (NASDAQ:AAPL) iOS and Google's (NASDAQ:GOOG) Android that brings together stories, photos and videos from across multiple content platforms and social networks. Flipboard boasts more than 50 million users worldwide.

Facebook engineers are focusing their Reader efforts on iOS, building an app that leverages design elements of the company's iPhone and iPad tablet. One insider said Facebook CEO Mark Zuckerberg is paying close attention to the Reader project, providing input and reviewing the design at various junctures: Contrary to Facebook's "Move fast and break things" mantra, Reader development has been comparatively slow and deliberate, with engineers exploring different methods for highlighting news content, including showing public posts that are trending on the platform.

A Facebook spokesperson declined to comment.

A source told The Wall Street Journal that Reader is intended to encourage mobile device users to engage with Facebook on a deeper, more meaningful level, in turn viewing more advertisements. Facebook's total mobile monthly active users eclipsed desktop users earlier this year and reached 751 million in the first quarter of 2013, a year-over-year increase off 54 percent. Its mobile-only MAUs also increased to 189 million, up from 157 million in the previous quarter. First-quarter advertising revenues reached $1.25 billion, with mobile generating 30 percent of that total, up from 23 percent in the previous quarter.

The Reader initiative also underscores Facebook's ongoing efforts to transition its platform away from social interactions into a hub for all their interests. Earlier this month, Facebook launched hashtag support, enabling users to find public conversations based on keywords marked by the "#" sign. This spring, Facebook also unveiled a revamped News Feed design that unifies how content appears to users on the Web and on mobile: "What we're trying to do is give everyone in the world the best possible newspaper we can," Zuckerberg said at that time.

News reader applications like Flipboard have become increasingly popular in recent years. In April, professional networking platform LinkedIn acquired mobile news app Pulse from Alphonso Labs for a reported $90 million. Pulse counts more than 30 million users across its iOS, Android and HTML5 apps in more than 190 countries.

"The opportunity to own the place where people go for long-form reading is a very large opportunity, especially for advertising," Josh Elman, a venture capitalist at Greylock Partners who previously worked on products for Facebook and Twitter, told The Wall Street Journal.

For more:
- read this Wall Street Journal article (sub. req.)

By Jason Ankeny

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3. Forecast: Worldwide device shipments to top 2.5B in 2014, led by Android

Google (NASDAQ:GOOG) revealed that Federal Trade Commission attorneys are investigating its $1.1 billion acquisition of Israeli crowdsourced location services firm Waze.

A Google spokesperson confirmed the rumored antitrust review to The Wall Street Journal but declined to comment on details. Lawyers familiar with the antitrust investigation process say the FTC may have asked Google to halt integration with Waze, pending the outcome of its review. Representatives of the agency did not respond to a request for comment.

Waze is a crowdsourced location services app that offers turn-by-turn GPS navigation, traffic reports and social networking features to users on the go. Over 47 million drivers use Waze apps across Google's Android and Apple's (NASDAQ:AAPL) iOS platforms. Apple also licenses data from Waze for its Apple Maps service.

Google agreed to purchase Waze earlier this month, announcing the firm will continue to operate independently and remain in its native Israel. The FTC must identify whether Waze would have become a direct competitor to Google's market-leading Maps service or if Google acquired the startup to keep it out of the clutches of the company's competitors. Google reportedly was one of several tech giants courting Waze: Facebook (NASDAQ:FB) also entered merger negotiations, but it ended the talks because of Waze's reluctance to relocate to the U.S.

Some antitrust lawyers told The Wall Street Journal that it is unlikely the FTC would ask Google to dissolve the deal, explaining the agency would have to dig up evidence suggesting the agreement will hamper competition in the mapping market.

Immediately after the acquisition was announced, Consumer Watchdog Privacy Project Director John Simpson sent a letter to William J. Baer, assistant attorney general in the Department of Justice's Antitrust Division, urging the agency to block the deal. "Google already dominates the online mapping business with Google Maps," Simpson wrote. "The Internet giant was able to muscle its way to dominance by unfairly favoring its own service ahead of such competitors as Mapquest in its online search results. Now with the proposed Waze acquisition the Internet giant would remove the most viable competitor to Google Maps in the mobile space. Moreover, it will allow Google access to even more data about online activity in a way that will increase its dominant position on the Internet… Approval of the Waze deal can only allow Google to remove any meaningful competition from the market. It will hurt consumers and hinder technological innovation."

For more:
- read this Wall Street Journal article
- read this ZDNet article

Read more about: Federal Trade Commssion
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By Jason Ankeny

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4. Apple details payout process for in-app purchase settlement

Worldwide shipments of mobile phones, tablets and PCs are on pace to reach 2.35 billion units in 2013, a 5.9 percent year-over-year increase, and will eclipse the 2.5 billion milestone in 2014, research firm Gartner forecasts.

Mobile phones will account for 1.8 billion devices shipped this year and 1.9 billion next year, with tablet shipments expected to grow 67.9 percent in 2013, reaching 202 million units and growing to 276 million units in 2014. Google's (NASDAQ:GOOG) Android will outstrip all other operating systems during the forecast period, powering 866 million devices shipped in 2013 and 1.06 billion in the year to follow. Microsoft's (NASDAQ:MSFT) Windows (including its Windows Phone mobile OS) is second with 2013 shipments of 339 million and 2014 shipments of 378 million, followed by Apple's (NASDAQ:AAPL) iOS/Mac platform at 296 million in 2013 and 354 million in 2014. BlackBerry (NASDAQ:BBRY) trails a distant fourth with 2013 shipments of 25 million, a figure expected to decline to 22 million in the year to come.

"Although the numbers seem to paint a clear picture of who the winner will be when it comes to operating systems in the device market, the reality is that today ecosystem owners are challenged in having the same relevance in all segments," said Carolina Milanesi, research vice president at Gartner. "Apple is currently the more homogeneous presence across all device segments, while 90 percent of Android sales are currently in the mobile phone market and 85 percent of Microsoft sales are in the PC market."

Consumer demand for smartphones and tablets continues to spell doom for the PC market: Worldwide desktop and notebook PC shipments are forecast to total 305 million units in 2013, a 10.6 percent year-over-year decline, sliding to 289 million in 2014. Gartner notes that the steep decline in PC sales recorded during the first quarter of 2013 was the result of evolving user preferences but also an adjustment in the channel to make room for new products coming to market in the next six months.

"Consumers want anytime-anywhere computing that allows them to consume and create content with ease, but also share and access that content from a different portfolio of products," Milanesi said. "Mobility is paramount in both mature and emerging markets."

For more:
- read this release

Read more about: Metrics, BlackBerry
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By Jason Ankeny

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SPOTLIGHT ON... Foxconn hiring 3,000 to support development of Firefox OS devices

Four months after agreeing to pay out more than $100 million to settle a class action lawsuit filed by parents whose children purchased virtual goods and enhancements sold inside iPhone and iPad applications without permission, Apple (NASDAQ:AAPL) is sending out notices detailing the settlement and deadlines for submitting reimbursement requests.

Per terms of the February settlement, Apple will provide refunds to as many as 23 million U.S. consumers whose children purchased virtual weapons and goods marketed within iOS apps and games. According to the email sent this weekend by Apple's In-App Purchase Litigation Administrator, Apple will award a $5 iTunes Store credit for unauthorized purchases under $30. Parents whose kids spent $30 or more, or those who no longer maintain an active iTunes account, will be entitled to receive a cash payment instead of credit.

"The Claim Form will require you to attest that you: (a) paid for Game Currency charges in Qualified Apps charged to your iTunes account by a minor without your knowledge or permission; (b) did not knowingly enter your iTunes password to authorize any such purchase(s) and did not give your password to the minor to make any such purchase(s); and (c) have not received a refund from Apple for those charges," Apple states.

To claim a settlement benefit, consumers must submit a valid claim form on or before Jan. 13, 2014. "If you do not claim a settlement benefit within this time period, you will lose your right to obtain this benefit," the Apple email notes. "If you don't want to make a claim and you don't want to be legally bound by the settlement, you must postmark your request to exclude yourself by August 30, 2013, or you won't be able to sue, or continue to sue, Apple about the legal claims and allegations in this case. If you exclude yourself, you will not be eligible to receive a payment from this settlement."

The class action suit, filed in 2011 on behalf of Philadelphia-based plaintiff Garen Meguerian and "other parents and guardians who permitted their minor children to download a free application and then incurred charges for game-related voidable purchases that the minor was induced by Apple to make," contends that iOS games like Bakery Story, Tap Zoo and Sundae Maker generated millions of dollars by selling "Game Currency" to children. Calling the freemium model "unlawful exploitation in the extreme," the suit states "These games are highly addictive, designed deliberately so, and tend to compel children playing them to purchase large quantities of Game Currency, amounting to as much as $100 per purchase or more."

The settlement prompted Apple to add a line of text to freemium download pages in its App Store, alerting users when an iOS title supports in-app purchases. Apple subsequently introduced age-rating notification boxes below each iOS app's developer credits, a move to assuage consumers and watchdog groups calling for greater transparency around the App Store shopping experience.

For more:
- read this 9to5Mac article

Also Noted

Taiwanese electronics manufacturing giant Foxconn Technology Group plans to hire as many as 3,000 workers to support development of devices running Mozilla's fledgling Firefox OS. Foxconn "will do its best to develop the Kaohsiung [Taiwan] software center as the company's software powerhouse," the firm said in a statement. "There will be no budget limit for fostering software talent."

Foxconn intends to create more than five Firefox OS-based smartphones and tablets by the end of this year. Foxconn--best known in the U.S. for building Apple's iPhone and iPad--is making aggressive moves to expand its business beyond contract manufacturing, adding new clients while mulling investments in media content and software as well as plans to sell its own brand of accessories. "As our production capacity has grown to such a large scale and existing major-brand customers offer limited order growth, we need to actively expand our client base to help increase our manufacturing volume," one Foxconn executive told The Wall Street Journal last month. Article

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