ZTE Attempts To Double Marketshare

China’s ZTE Corp, the world’s seventh-largest smartphone maker, wants to nearly double its U.S. market share in the next three years by increasing spending on marketing.

ZTE, which trails nearby rival Huawei Technologies Co Ltd in selling both smartphones and telecoms equipment, wants more share of the fat profit margins promised by sales of high-end phones in the United States.

But the company needs to first work on its image. Its mainstay telecom equipment business was essentially shut out of the U.S. and other markets after government officials flagged security concerns about Chinese-made equipment.

ZTE targets a U.S. market share of 10 percent by 2017 from 6 percent in 2013, Lv Qianhao, global marketing director of mobile devices, told Reuters at a company event on Thursday.

That would place it a distant third behind Apple Inc with 41 percent and Samsung Electronics Co Ltd with 26 percent, according to September-November data from researcher comScore.

To that end, ZTE will increase its U.S. marketing budget by at least 120 percent this year from last, Lv said without elaborating. Like other Chinese handset makers, ZTE is grappling with low brand awareness in the world’s second-largest smartphone market and perceptions of inferior quality.

Samsung Electronics, which earns around two-thirds of its operating profit from its mobile division, spent $597 million on marketing in the United States in 2012, according to researcher AdAge.

Last year, ZTE signed a deal with the Houston Rockets basketball team and released a Rockets-branded phone.

“We want young U.S. consumers to participate in our marketing activities, so we will have more NBA (National Basketball Association) stores and channels that sell our products,” Lv said.

Globally, ZTE aims to ship around 60 million smartphones this year compared with about 40 million smartphones last year, said Senior Vice President Zhang Renjun.

The company sees much of that growth in developed markets – including Russia and China- which accounted for 68 percent of mobile device revenue last year compared with 35 percent in 2007, said Lv.

ZTE’s mobile device business sells feature phones as well as smartphones. It was the fifth-biggest mobile phone vendor in July-September, according to researcher Gartner, though it fell out of the top five smartphone sellers list in the same period.

ZTE expects to have swung to a profit for last year having booked its first-ever loss as a public company in 2012.

It based its turnaround on cutting costs, signing fewer low-margin contracts, and winning contracts to build fourth generation telecommunication networks.

The company expects global investment in 4G to reach $100 billion this year, Zhang said.

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NSA Developing System To Crack Encryption

The U.S. National Security Agency is working to develop a computer that could ultimately break most encryption programs, whether they are used to protect other nations’ spying programs or consumers’ bank accounts, according to a report by the Washington Post.

The report, which the newspaper said was based on documents leaked by former NSA contractor Edward Snowden, comes amid continuing controversy over the spy agency’s program to collect the phone records Internet communications of private citizens.

In its report, The Washington Post said that the NSA is trying to develop a so-called “quantum computer” that could be used to break encryption codes used to cloak sensitive information.

Such a computer, which would be able to perform several calculations at once instead of in a single stream, could take years to develop, the newspaper said. In addition to being able to break through the cloaks meant to protect private data, such a computer would have implications for such fields as medicine, the newspaper reported.

The research is part of a $79.7 million research program called “Penetrating Hard Targets,” the newspaper said. Other, non-governmental researchers are also trying to develop quantum computers, and it is not clear whether the NSA program lags the private efforts or is ahead of them.

Snowden, living in Russia with temporary asylum, last year leaked documents he collected while working for the NSA. The United States has charged him with espionage, and more charges could follow.

His disclosures have sparked a debate over how much leeway to give the U.S. government in gathering information to protect Americans from terrorism, and have prompted numerous lawsuits.

Last week, a federal judge ruled that the NSA’s collection of phone call records is lawful, while another judge earlier in December questioned the program’s constitutionality. The issue is now more likely to move before the U.S. Supreme Court.

On Thursday, the editorial board of the New York Times said that the U.S. government should grant Snowden clemency or a plea bargain, given the public value of revelations over the National Security Agency’s vast spying programs.

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Will Businesses Accept The Chromebook?

Sales of Chromebooks enjoyed rapid growth,going from basically nothing in 2012 to more than 20 percent of the U.S. commercial PC market, analyst firm NPD reported, while Windows PCs and Macs remained flat at best.

NPD estimated that, throughout all of 2013, 14.4 million desktops, notebooks, and tablets were sold through U.S. commercial channels, typically resellers. That compares to 16.4 million PCs, overall, sold in the U.S. during the third quarter alone–excluding tablets, according to IDC. All told, about 46.2 million PCs have been sold in the U.S. during 2013, IDC found.

Within that segment, however, NPD reported some intriguing findings. Chromebooks, once largely the province of Acer and Samsung, have been embraced by Dell, HP, and others–not the least of which are paying customers. In 2012, Chromebook sales were “negligible,” NPD reported. But in the space of a single year, they climbed to 21 percent, NPD found, helping push overall notebook PC growth up by 28.9 percent.

Windows notebooks, however, contributed nothing to that, as NPD found that growth was flat. Worse still, Macs actually declined, with combined sales of desktops and notebooks falling by 7 percent. Windows tablet sales tripled, albeit off what NPD called “a very small base”.

The message? Businesses are turning to the Web, which Chromebooks almost exclusively run. And those low-cost, Net-focused devices are becoming engines of productivity. As a result, they’re receiving validation from traditional PC vendors including Acer, Asus, Dell, and Hewlett-Packard, plus Google’s own Pixel.

“The market for personal computing devices in commercial markets continues to shift and change,” saidA Stephen Baker, vice president of industry analysis at NPD, in a statement.A “New products like Chromebooks, and reimagined items like Windows tablets, are now supplementing the revitalization that iPads started in personal computing devices. It is no accident that we are seeing the fruits of this change in the commercial markets as business and institutional buyers exploit the flexibility inherent in the new range of choices now open to them.”

Naturally, tablet sales continued to explode, capturing 22 percent(or about 3.16 million units) of all the computing device sales sold through the U.S. channel. Of all tablets sold commercially, iPads dominated with 59 percent of all unit sales, leaving the rest to Android (which grew more than 160 percent) and Windows.

Baker said that diversity will be key to the future success of hardware makers, a signpost for what vendors might release at 2014 and the weeks and months following.

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Is The Tech Industry Going Independent?

The tech industry is undergoing a shift toward a more independent, contingent IT workforce. And while that trend might not be cause for alarm for retiring baby boomer IT professionals, it could mean younger and mid-career workers need to prepare to make a living solo.

About 18% of all IT workers today are self-employed, according to an analysis by Emergent Research, a firm focused on small businesses trends. This independent IT workforce is growing at the rate of about 7% per year, which is faster than the overall growth rate for independent workers generally, at 5.5%.

The definition of independent workers covers people who work at least 15 hours a week.

Steve King, a partner at Emergent, said the growth in independent workers is being driven by companies that want to stay ahead of change, and can bring in workers with the right skills. “In today’s world, change is happening so quickly that everyone is trying to figure out how to be more flexible and agile, cut fixed costs and move to variable costs,” said King. “Unfortunately, people are viewed as a fixed cost.”

King worked with MBO Partners to produce a recent study that estimated the entire independent worker headcount in the U.S., for all occupations, at 17.7 million. They also estimate that around one million of them are IT professionals.

A separate analysis by research firm Computer Economics finds a similar trend. Over the last two years, there has been a spike in the use of contract labor among large IT organizations — firms with IT operational budgets of more than $20 million, according to John Longwell, vice president of research at Computer Economics.

This year, contract workers make up 15% of a typical large organization’s IT staff at the median. This is up from a median of just 6% in 2011, said Longwell. The last time there was a similar increase in contract workers was in 1998, during the dot.com boom and the run-up to Y2K remediation efforts. Computer Economics recently published a research brief on the topic.

“The difference now is that use of contract or temporary workers is not being driven by a boom, but rather by a reluctance to hire permanent workers as the economy improves,” Longwell said.

Computer Economics expects large IT organizations to step up hiring in 2014, which may cause the percentage of contract workers to decline back to a more normal 10% level. But, Longwell cautioned, it’s not clear whether that new hiring will be involve full-time employees or even more contract labor.

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Will Computer Obtain Common Sense?

Even though it may appear PCs are getting dumbed down as we see constant images of cats playing the piano or dogs playing in the snow, one computer is doing the same and getting smarter and smarter.

A computer cluster running the so-called the Never Ending Image Learner at Carnegie Mellon University runs 24 hours a day, 7 days a week searching the Internet for images, studying them on its own and building a visual database. The process, scientists say, is giving the computer an increasing amount of common sense.

“Images are the best way to learn visual properties,” said Abhinav Gupta, assistant research professor in Carnegie Mellon’s Robotics Institute. “Images also include a lot of common sense information about the world. People learn this by themselves and, with [this program], we hope that computers will do so as well.”

The computers have been running the program since late July, analyzing some three million images. The system has identified 1,500 types of objects in half a million images and 1,200 types of scenes in hundreds of thousands of images, according to the university.

The program has connected the dots to learn 2,500 associations from thousands of instances.

Thanks to advances in computer vision that enable software to identify and label objects found in images and recognize colors, materials and positioning, the Carnegie Mellon cluster is better understanding the visual world with each image it analyzes.

The program also is set up to enable a computer to make common sense associations, like buildings are vertical instead of lying on their sides, people eat food, and cars are found on roads. All the things that people take for granted, the computers now are learning without being told.

“People don’t always know how or what to teach computers,” said Abhinav Shrivastava, a robotics Ph.D. student at CMU and a lead researcher on the program. “But humans are good at telling computers when they are wrong.”

He noted, for instance, that a human might need to tell the computer that pink isn’t just the name of a singer but also is the name of a color.

While previous computer scientists have tried to “teach” computers about different real-world associations, compiling structured data for them, the job has always been far too vast to tackle successfully. CMU noted that Facebook alone has more than 200 billion images.

The only way for computers to scan enough images to understand the visual world is to let them do it on their own.

“What we have learned in the last five to 10 years of computer vision research is that the more data you have, the better computer vision becomes,” Gupta said.

CMU’s computer learning program is supported by Google and the Office of Naval Research.

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3D Printer Goes Retail

MakerBot, a 3D printer maker which opened two new retail stores last week, is among the companies trying to bring the cutting-edge digital manufacturing technology to Main Street consumers, but skeptics say the debut may be premature.

MakerBot, a unit of Stratasys Ltd, opened retail stores this week in Boston and in Greenwich, Connecticut, both of which are twice the size of MakerBot’s first store, 1,500 square feet in downtown Manhattan.

The company offers designs for more than 100,000 items through its “Thingiverse” online user community. The products range from knick-knacks like zombie sculptures to jewelry, sink drains and even medical devices. They are printed using its line of corn-based plastic fibers in more than a dozen colors.

“For most people 3D printing is futuristic science fiction. We’re here to make it real,” said CEO Bre Pettis, who cut the ribbon at the store on Boston’s fashionable Newbury Street using scissors made on one of MakerBot’s Replicator printers which start at $2,199.

Pettis, who has purchased splashy magazine ads to promote 3D printers as holiday gifts, believes there could soon be a 3D printer on every block in America.

Yet some technology experts say 3D printers may not be ready for prime time because they are still much less user friendly than most modern consumer electronics.

“There is so much hype,” said Pete Basiliere, an analyst at technology research firm Gartner. “People are getting a little bit misled as to how easy it is,” he said.

Some investors also are skeptical of 3D printing’s readiness for the market. Short-seller Citron this week published an article questioning the earnings of Germany’s voxeljet AG’s, and shares in the sector fell, including those of MakerBot parent Stratasys and rivals 3D Systems Corp and ExOne Co.

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Can Acer Go High-End?

Most popular for its low-cost laptops, Acer doesn’t really inspire thoughts of premium products. But building high-end hardware could be the Taiwanese vendor’s best chance as it looks for a way to rescue its struggling business.

With consumers flocking to tablets and smartphones, Acer’s once-thriving PC business has been left in the dust. Quarterly financial losses have become routine at the company and its PC shipments declined more sharply in the past year than at any other major vendor, according to IDC.

The grim situation forced CEO J.T. Wang to resign from his post last Tuesday. Acer will also cut 7 percent of its global workforce and has assembled an advisory committee to come up with a new strategy, the company announced.

Bright spots are hard to find. The Wintel model that propelled Acer for years and helped it become the second-largest PC vendor in 2009 has been falling apart amid the demand for mobile gadgets. And Windows 8 and Intel’s Ultrabook strategy have failed to resuscitate the market.

It hasn’t helped that Acer is so reliant on sales to consumers, said IDC analyst Bryan Ma. The entire PC industry has been hurt by tablets, but Dell and Hewlett-Packard have at least managed to find cover selling PCs to businesses, which are still buying them. And Lenovo has capitalized on its position in China, now the world’s largest PC market.

“Acer didn’t really have the commercial PC business to protect themselves. That’s why they were hit harder,” Ma said.

Acer — whether to its benefit or detriment — has instead gained a reputation for low-priced PCs. Even in tablets it has tried to undercut rivals — its Iconia W4, an 8-inch Windows 8.1 tablet, starts at US$329.99, while its Iconia B Android tablet goes for $129.99. The low prices have helped keep the company on consumers’ radar, but at the expense of profits.

One option for Acer is to build a brand as a higher-end PC player. It took a step in that direction last year with the Aspire S7, a Windows laptop with a slender, aluminum chassis that sells for $1,200 and up. That product and its successors have had some success for the company, with sales of 2,000 to 3,000 units per month, said James Wang, an analyst with research firm Canalys.

“I think Acer has started to learn they are able to sell some expensive products,” he said.

Selling higher-end PCs could help stop the bleeding in Acer’s finances, but with the overall PC market still shrinking it’s unlikely to help it expand in any meaningful way. “You can’t really expect vendors in desktops and notebooks to find growth,” Wang said. “You win in the market by not falling in shipments.”

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Can Robots Run On (NH2)2CO?

Scientists have discovered a way to power future robots using an unusual source — urine.

Researchers at the University of the West of England, Bristol and the University of Bristol collaborated to build a system that will enable robots to function without batteries or being plugged into an electrical outlet.

Based on the functioning of the human heart, the system is designed to pump urine into the robot’s “engine room,” converting the waste into electricity and enabling the robot to function completely on its own.

Scientists are hoping the system, which can hold 24.5 ml of urine, could be used to power future generations of robots, or what they’re calling EcoBots.

“In the city environment, they could re-charge using urine from urinals in public lavatories,” said Peter Walters, a researcher with the University of the West of England. “In rural environments, liquid waste effluent could be collected from farms.”

In the past 10 years, researchers have built four generations of EcoBots, each able to use microorganisms to digest the waste material and generate electricity from it, the university said.

Along with using human and animal urine, the robotic system also can create power by using rotten fruit and vegetables, dead flies, waste water and sludge.

Ioannis Ieropoulos, a scientist with the Bristol Robotics Laboratory, explained that the microorganisms work inside microbial fuel cells where they metabolize the organics, converting them into carbon dioxide and electricity.

Like the human heart, the robotic system works by using artificial muscles that compress a soft area in the center of the device, forcing fluid to be expelled through an outlet and delivered to the fuel cells. The artificial muscles then relax and go through the process again for the next cycle.

“The artificial heartbeat is mechanically simpler than a conventional electric motor-driven pump by virtue of the fact that it employs artificial muscle fibers to create the pumping action, rather than an electric motor, which is by comparison a more complex mechanical assembly,” Walter said.

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Adobe Data Found Online

A computer security firm has discovered data it says belongs to some 152 million Adobe Systems Inc user accounts, suggesting that a breach reported a month ago is much larger than Adobe has so far disclosed and is one of the largest on record.

LastPass, a password security firm, said that it has found email addresses, encrypted passwords and password hints stored in clear text from Adobe user accounts on an underground website frequented by cyber criminals.

Adobe said last week that attackers had stolen data on more than 38 million customer accounts, on top of the theft of information on nearly 3 million accounts that it disclosed nearly a month earlier.

The maker of Photoshop and Acrobat software confirmed that LastPass had found records stolen from its data center, but downplayed the significance of the security firm’s findings.

While the new findings from LastPass indicate that the Adobe breach is far bigger than previously known, company spokeswoman Heather Edell said it was not accurate to say 152 million customer accounts had been compromised because the database attacked was a backup system about to be decommissioned.

She said the records include some 25 million records containing invalid email addresses, 18 million with invalid passwords. She added that “a large percentage” of the accounts were fictitious, having been set up for one-time use so that their creators could get free software or other perks.

She also said that the company is continuing to work with law enforcement and outside investigators to determine the cost and scope of the breach, which resulted in the theft of customer data as well as source code to several software titles.

The company has notified some 38 million active Adobe ID users and is now contacting holders of inactive accounts, she said.

Paul Stephens, director of policy and advocacy for the non-profit Privacy Rights Clearinghouse, said information in an inactive database is often useful to criminals.

He said they might use it to engage in “phishing” scams or attempt to figure out passwords using the hints provided for some of the accounts in the database. In some cases, people whose data was exposed might not be aware of it because they have not accessed the out-of-date accounts, he said.

“Potentially it’s the website you’ve forgotten about that poses the greater risk,” he said. “What if somebody set up an account with Adobe ten years ago and forgot about it and they use the same password there that they use on other sites?”

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Panasonic Drops Plasma

Panasonic has announced it will discontinue production of plasma display panels (PDP) next month and close three factories that were building the HDTVs.

The company will stop selling plasma TVs for consumer use and PDP-related products for commercial use, such as Interactive Plasma Displays, with the current line of TVs. It expects to stop business operations at three of its display plants — the Amagasaki P3 Factory, the Amagasaki P5 Factory and the Amagasaki P4 Factory — by the end of March 2014.

Samsung and LG continue to produce plasma display televisions, but theirs are lower-end or entry-level models; they have generally put development dollars into LCD TVs, according to Paul Gray, a research analyst with NPD DisplaySearch.

“Samsung and [LG] were at best uncommitted to PDP,” Gray said in a blog post. And as for Panasonic, Gray said its “PDP research team had to counter every move in LCD and translate it to their technology…. Inevitably, they slowly lost ground.”

Since 2000, Panasonic has been the leading PDP maker. It led the global flat-panel display market by using PDP for large displays and LCD screens for small- and medium-sized displays. Only three years ago, Panasonic claimed 40% of the plasma display market.

In 2010, plasmaaccounted for 40% of flat panel TVs; this year, PDPs are expected to represent only 5% of the flat-panel market, according to according to market research firm NPD DisplaySearch.

Over the past two years, Panasonic has lost $15 billion through investments in flat-panel TV production, according to financial reports.

Plasma displays have increasingly lost market share to LCD TVs as they moved to LED backlights that narrowed the performance gap between the two technologies.

“With the rapid development of large-screen LCDs, and facing the severe price competition in the global market brought on by the Lehman Shock in September 2008, the company consolidated production in the Amagasaki P4 Factory, made a shift towards commercial applications and worked to improve the earnings of the business,” Panasonic said in a recent statement.

Panasonic will now focus its attention on “non-TV applications” and is moving to reduce its fixed costs for production of both plasma and LCD panels.

The move away from plasma HDTVs is reminiscent of the video tape wars of the 1970s and 1980s.

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