Will SoftBank Raise The Stakes?

SoftBank Corp President Masayoshi Son may get a less than enthusiastic reception when he comes to the United States this week to meet Sprint Nextel Corp’s major shareholders, as he tries to drum up support for the Japanese company’s proposed takeover of the No. 3 U.S. wireless service provider.

SoftBank’s billionaire founder, who proposed a $20 billion deal for a 70 percent stake in the U.S. wireless carrier, said on Tuesday that he would discuss the deal with shareholders in a bid to fight off rival Dish Network, a U.S. satellite TV provider, which offered Sprint a $25.5 billion bid.

The executive for the Japanese mobile operator may have a tough time selling the deal, as several shareholders have told Reuters that SoftBank would need to raise its bid in order to win their vote at Sprint’s June 12 shareholder meeting.

Two big Sprint shareholders, Paulson & Co and Omega Advisors, have publicly said the Dish offer looks better than SoftBank’s. Other shareholders said on Tuesday that they would go to meet Son during his trip but they were skeptical about his arguments against Dish.

While Dish’s offer would provide more cash upfront to shareholders, Son has argued that Dish would not be good for the company as it would require Sprint to take on a heavy debt load. He also promises a July 1 close for the deal and warned that Dish regulatory approval may not come until 2014.

Robert Lynch, the director of research for Westchester Capital Management, which owned over 14 million shares in Sprint at the end of December, said that the prospect of a quicker deal close would not be enough to win over his company’s vote.

“We think right now that Dish has a better offer on the table. We think SoftBank’s going to have to improve their offer,” Lynch said, noting that SoftBank’s comments about the prospective debt leverage from a Dish deal were overdone.

“We think the leverage is manageable. We think there are synergies here. While raising the leverage is something we looked at we think its not as big of a obstacle as SoftBank is saying,” Lynch said.

A big Sprint investor who asked not to be named said they were happy to meet with Son while he is in the United States but that they were hoping to convince him to raise his bid.

“If Mr. Son wants to own Sprint he will have to raise his bid,” said the person from a top 25 Sprint shareholder who did not want to be quoted by name ahead of the meeting.

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Adobe Reader Security Issue Found

McAfee has discovered a vulnerability in Adobe’s Reader program that allows people to track the usage of a PDF file.

“Recently, we detected some unusual PDF samples,” McAfee’s Haifei Li said in a blog post. “After some investigation, we successfully identified that the samples are exploiting an unpatched security issue in every version of Adobe Reader.”

The affected versions of Adobe Reader also include the latest “sandboxed” Reader XI (11.0.2).

McAfee said that the issue is not a “serious problem” because it doesn’t enable code execution, however it does permit the sender to see when and where a PDF file has been opened.

This vulnerability could only be dangerous if hackers exploited it to collect sensitive information such as IP address, internet service provider (ISP), or even the victim’s computing routine to eventually launch an advanced persistent threat (APT).

McAfee said that it is unsure who is exploiting this issue or why, but have found the PDFs to be delivered by an “email tracking service” provider.

The vulnerability works when a specific PDF JavaScript API is called with the first parameter having a UNC-located resource.

“Adobe Reader will access that UNC resource. However, this action is normally blocked and creates a warning dialog,” Li said. “The danger is that if the second parameter is provided with a special value, it changes the API’s behavior. In this situation, if the UNC resource exists, we see the warning dialog.

“However, if the UNC resource does not exist, the warning dialog will not appear even though the TCP traffic has already gone.”

McAfee said that it has reported the issue to Adobe and is waiting for their confirmation and a future patch. Adobe wasn’t immediately available for comment at the time of writing.

“In addition, our analysis suggests that more information could be collected by calling various PDF Javascript APIs. For example, the document’s location on the system could be obtained by calling the Javascript “this.path” value,” Li added.

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Is Verizon Interested In Clearwire?

Verizon Wireless reportedly has offered $1 billion to $1.5 billion to acquire some of Clearwire’s spectrum leases, possibly complicating Sprint Nextel’s attempt to buy out the company in conjunction with its acquisition by Softbank.

Clearwire is struggling financially but owns broad swaths of spectrum, the lifeblood of wireless networks. The April 8 bid from “Party J,” which Clearwire disclosed in a Securities and Exchange Commission filing on Friday, is the latest in a series of offers for its spectrum licenses. Unnamed people familiar with the matter identified “Party J” as Verizon Wireless, according to a report in The Wall Street Journal.

Clearwire is a key part of a complicated set of possible transactions that could make a much stronger competitor out of Sprint, the country’s third-largest mobile operator. Sprint already owns roughly half of Clearwire and is bidding about $2.2 billion to buy the rest of its stock. That deal depends on Softbank’s planned $20.1 billion offer for 70% of Sprint, which is still undergoing regulatory review.

Clearwire holds 150MHz of spectrum or more in most major markets of the U.S. Verizon would buy only a portion of that spectrum. “Party J offered to acquire Clearwire spectrum leases generally located in large markets,” Clearwire said in the Friday filing, a proxy statement to shareholders on the Sprint buyout bid. The proposed gross price of $1 billion to $1.5 billion would be reduced by what Clearwire pays for the leases, which could be substantial, according to Clearwire’s filing. The company said it would discuss the offer with “Party J” and Sprint.

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6 of 10 Companies Approve BYOD

More than six out of 10 companies allow or mandate the use of employee-owned mobile devices for work in order to increase productivity, according to a survey published on Tuesday.

While the BYOD (bring your own device) push has been at the forefront of press coverage, the majority of companies still provide at least a subset of devices to employees. One third of companies strictly mandate which devices can be used for work purposes and don’t allow any type of device provided by the employee, according to the survey conducted by the Computing Technology Industry Association (CompTIA), a nonprofit trade group.

The online survey of 502 U.S. IT and business executives was conducted in February. It also found that the most popular option, at 58%, was to have a mix of corporate-owned and employee-owned devices.

For 53% of those surveyed, the top reason for allowing employees to use or select their own devices was to increase productivity while employees are away from the office. Another reason was that employees like to use familiar devices.

Twelve percent of the respondents stated it was simply too difficult to stop employees from using their own devices.

CompTIA’s report said that companies looking to maximize the benefits of a mobile device-enabled workforce must “look beyond simply which devices are used and re-examine business processes and workforce needs.”

Companies should assess the specific needs of workers, rather than just deploying one device over another on a corporate-wide basis, said Seth Robinson, director, technology analysis, at CompTIA.

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Blackberry Plans New Tablet

BlackBerry plans to roll out a larger tablet and two phone-tablet combos, or phablets, over the next year, according to a leaked road map presentation slide.

The three devices will run the BlackBerry 10 mobile operating system, which powers the Z10 smartphone and the upcoming Q10, which features a physical qwerty keyboard, according to the slide, which first appeared over the weekend on Twitter as @BB10Leaks.

BlackBerry officials didn’t comment on the road map. However, in comments to analysts last Thursday, CEO Thorstein Heins said repeatedly that the company will introduce more BlackBerry 10 devices this year, though he didn’t indicate what form factors the products would feature.

The three new devices shown in the slide include a BlackBerry 10 tablet with a widescreen aspect ratio, as well as a “U10″ phone-tablet, which some call a phablet, and an “R10″ phablet with a physical qwerty keyboard.

The slide indicates that the B10 tablet will ship in the third or fourth quarter, while the two phablets will be released later, with the U10 shipping at the end of the year and the R10 in spring of 2014.

There are no specifications on the slide, but the devices appear to be shown roughly in proportion to one another, with the phablets appearing to be wider than the existing Z10 and Q10 smartphones.

BlackBerry already has a 7-in. tablet called the PlayBook that is more square in shape than the widescreen look of the B10 in the slide. Some analysts and bloggers said it’s possible that BlackBerry is developing a competitor to the various 9-to-11-in. tablets already on the market, including many Android tablets, as well as the 9.7-in. iPad.

“BlackBerry wants to be a full-line competitor, particularly for business users, so they have to have a full line of products to compete head-on with Apple and Android, primarily Samsung,” said Jack Gold, an analyst at J.Gold Associates. “I would expect any viable competitor to establish a full line of products touching on all the various preferences of the marketplace, which includes smartphones, phablets and tablets.”

Gold couldn’t confirm whether any of the details in the leaked slide were accurate, but he noted that it doesn’t appear to include the mid-priced smartphones that Heins and other executives have hinted that BlackBerry may launch over the next few quarters.

The PlayBook tablet first went on sale in April 2011, running on what BlackBerry then called the BlackBerry Tablet OS, based on QNX. BlackBerry later said it would merge that tablet operating system into BlackBerry 10. The company also released a major update to the PlayBook tablet operating system in February 2012.

The first release of the PlayBook was criticized for not having native email.

Analysts are not sure that BlackBerry can keep up with production demand for so many new devices that depend on a relatively constrained supply chain for displays and other components. But to boost its global smartphone market share, currently at less than 10%, BlackBerry will need a product lineup with a variety of options.

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Lenovo To Buy NEC’s Mobile Phone Unit

Japan’s NEC Corp is in negotiations to sell its struggling mobile phone unit to its PC venture partner Lenovo Group Ltd, a source familiar with the discussions said, confirming media reports of the negotiations.

NEC is also in talks with potential domestic buyers, the source said on condition that he wasn’t identified.

NEC has until now said its mobile business is an important part of its overall operations. But after two years of losses the company is shedding assets to bolster profitability.

“Amid the rapidly changing market we are considering a number of ways to bolster the competitiveness of our mobile phone business, but nothing has been decided,” NEC said in a statement through the Tokyo Stock Exchange on Friday in response to the media reports.

Lenovo officials could not be immediately reached for comment.

Japanese phone makers have struggled to gain traction overseas inmarkets dominated by Samsung Electronics Co Ltd and Apple Inc where they are also being challenged by upcoming Chinese makers. In Japan, the two foreign giants are whittling down their share of cell phone sales.

Last October, NEC cut its mobile phone sales target for the year ending March to 4.3 million from a previous estimate of 5 million units. Lenovo, the world’s No.2 maker of PCs, is cranking up overseas expansion in smartphones after solid growth in China.

Japan’s biggest cell phone maker, Sony Corp, is vying with China’s Huawei Technology Co and ZTE Corp to be No.3 in the global smartphone market.

NEC also plans to sell its mobile services subsidiary NEC Mobiling Ltd for as much as $850 million, separate sources told Reuters this month.

Marubeni Corp’s telecommunications unit and TD Mobile, a joint venture between Toyota Tsusho Corp and Denso Corp, are vying for the 51 percent stake, the sources said.

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MS Surface Pro Headed To Europe

Microsoft’s Surface Pro tablet will be offered for sale Europe in the second quarter priced approximately at $1,170, while a local telco is now reselling the latest editions of its Office 365 hosted productivity suite, the company announced ahead of the Cebit trade show on Monday.

Microsoft Germany’s CEO Christian Illek didn’t give the Surface Pro’s exact price in euros, but the number will be around the same as the U.S. price in dollars, he said in a news conference at the company’s booth on the show floor in Hanover.

While an $1170 price tag appears significantly higher that the Surface Pro’s U.S. price of $899, a 30% mark-up is not unusual for electronics devices in Europe, where prices are typically displayed inclusive of value-added tax at around 20%. U.S. prices typically exclude local sales taxes. When setting international prices, vendors also tend to allow an additional margin in case exchange rates shift unfavorably.

In addition to Germany, Surface Pro will also go on sale in Australia, China, France, Hong Kong, New Zealand and the U.K. in the coming months, Microsoft said.

Illek also announced a new sales channel for two recent editions of Office 365: Deutsche Telekom.

Office 365 Small Business Premium and Office 365 Midsize Business are now on sale through Deutsche Telekom’s Business Marketplace online app store, said the German telecommunications operator’s head of marketing, Michael Hagspihl.

The Small Business Premium edition, with 25GB of storage, shared calendars, Office Web Apps, Office Professional Plus Desktop Version and support from Deutsche Telekom will sell for $14.90 per user per month for up to 25 users.

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Apple Squashes Rumors

Apple will not develop a new, inexpensive iPhone just for the sake of offering a cheaper alternative, Apple CEO Tim Cook said in a speech on Tuesday.

The company’s focus is on creating great products, and it will not make a smartphone that does not past the quality test, Cook said during a webcast from the Goldman Sachs Technology and Internet conference, which is being held in San Francisco.

“There are other companies that do that, that’s not who we are,” Cook said. “Our North Star is great products.”

Instead, the company is now dropping prices on the older iPhone models. That has been successful, and the demand for iPhone 4 models in December was greater than supply, Cook said.

“It surprised us as to the level of demand we have for it,” Cook said.

Lowering the price on older models is just one of the approaches Apple is taking to reach out to price-sensitive buyers. It’s not easy to balance quality and price, and that’s when innovation comes into play and new products could be created to meet consumer demand, Cook said.

“Sometimes you can take the issue … and you can solve it in different ways,” Cook said.

For example, the first iPod that shipped in 2001 was priced at $399, and now users can buy an iPod Shuffle for $49. There was also a big demand in the past to drop the price of Macs to under $500, and Apple tried and couldn’t do it, so it created the iPad tablet.

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Developers Gaining Interest In WP8

Developers are becoming increasingly interested in developing apps for Windows Phone and BlackBerry 10.

According to ABI Research, Android and iOS remain dominant platforms, with Android in the lead in the smartphone space and iOS dominating the tablet market.

However, developers are also focusing on Windows Phone and BB10. AI analyst Aapo Markkanen believes 45 million Windows Phone devices will be in use by the end of the year, along with up to 20 million BB10 devices. Redmond will also have 5.5 million Windows powered tablet by the end of the year.

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Blackberry Makes A Comeback

Research In Motion has hinted that it will unveil two new handsets early next month to accompany the release of its BlackBerry 10 operating system.

RIM is expected to unveil the phones at an event in New York City on Wednesday and will begin promoting BlackBerry 10 to consumers the following Sunday, Feb. 3, when it will air a TV commercial during the Super Bowl.

The sporting event attracts one of the largest TV audiences of the year in America, and companies pay millions of dollars for a 30-second advertising spot, underscoring how important it is for RIM that its new BlackBerry platform will be a hit. The same commercial will also air in Canada, RIM’s home country.

In announcing its publicity plans Friday, RIM also hinted at when the phones will be available to consumers. It said the TV spot “kicks off a week of worldwide launch activity for RIM’s BlackBerry 10 platform, along with the first two devices to run on the new platform.”

If the commercial marks the start of a weeklong buildup to the launch, that would put the North American release of the phones at roughly the start of the second week in February.

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