Mobile video market to grow five-fold by 2014

Those of us who pay to watch online video on our mobile devices are about to be joined by a lot more people.

The number of users globally paying for mobile video and TV services is expected to jump to 534 million by 2014, a five-fold increase from 2008, says a report released Thursday by market researcher Pyramid Research. Much of the recent growth has been fueled by increased bandwidth, lower data costs, and more advanced handheld devices, and that trend will continue.

(Credit: Pyramid Research)

In the report, mobile video includes paid video clips, music videos, TV episodes, TV programming, and online movies that are delivered directly to a mobile device.

In the U.S. alone, Pyramid estimates that revenue from mobile video services will reach $16 billion by 2014. However, much of the demand will come from Europe and Asia/Pacific.

"The availability of improved devices and networks are contributing to a higher level of adoption and spending on mobile video services," says Derek Medlin, senior analyst at Pyramid Research and author of the report. "Pyramid Research believes that a substantial proportion of mobile Net additions in the next five years will come from emerging markets, especially in Asia/Pacific, and will drive a 37 percent growth in total mobile subscriptions from 2009 to 2014."

In the Asia/Pacific region, countries such as Japan, Hong Kong, and South Korea already lead the way in the number of mobile video subscriptions. However, Pyramid also forecasts higher growth from India and the LATAM region over the next five years.

"Looking ahead, Asia/Pacific will remain in the top spot, attaining more than 281 million subscriptions by 2014," says Medlin in the report, "although we expect Latin America to grow at the fastest pace, increasing at a CAGR (compounded annual growth rate) of 39 percent from 2009 to 2014."

________________________________________________________________

ATM malware lets criminals steal data and cash

Malware has been found on ATMs in Eastern Europe and elsewhere that allows criminals to steal account data and PINs and even empty the machine of its cash, a computer forensics expert said.

About 20 ATMs have been compromised in that manner, mostly in Russia and the Ukraine, but there are "early indications" of compromised ATMs in the U.S., said Nicholas Percoco, vice president and head of SpiderLabs at Trustwave, which provides data security and payment card compliance services.

Nicholas Percoco heads up Trustwave's SpiderLabs, the forensics team that discovered the malware on the ATMs.

(Credit: Trustwave)

Percoco said he could not elaborate further on where the compromised ATMs were located and how they were used.

Someone had to manually install the malware on the machines, so it's likely that an insider is responsible; either an employee at the bank, the ATM vendor, a company that services the machines or someone close to an insider, Percoco said in a telephone interview late on Wednesday.

The machines, all running Windows XP, had an executable on them that was masquerading as a legitimate Windows protected storage service, he said. The malware looks at all the data being processed by the ATM and records account information that is stored on the magnetic stripes on cards inserted into the machine and encrypted PIN blocks that are generated when someone types in their personal identification number, he said.

Although the PINs are encrypted, criminals could potentially intercept the encryption keys exchanged with the bank and use them to decrypt the PINs, he added.

Once the malware has been hidden on the ATM for a period of time, the criminal can return to the machine and use a special "trigger" card to control the ATM and print out the stolen data directly from the machine or instruct the ATMS to dispense all the cash it has, according to Percoco. ATMs can hold as much as $600,000 at a time, he said.

"There is evidence that (trigger) cards were used," he said, adding that he could not comment on the number of accounts affected or amount of money stolen. The malware was first installed on at least one of the machines in July 2007, he said.

This is not the first time malware has been discovered on ATMs, Percoco said. "But this is probably the most sophisticated malware found on an ATM," he said. "In all the versions we've looked at (the criminals) are enhancing the application as they go. They must be getting feature requests from someone."

The latest version of the malware code found on some of the machines includes a function for writing the stolen data onto a card with a memory chip on it, which are commonly used in Europe, he said. However, that function does not appear to work, he added.

Although the malware was installed on the ATMs manually, it's possible that future attacks would involve the propagation of the malware through the ATM network, he said.

Consumers should avoid using any ATM that does not "look right," Percoco said, for instance, if the screen has a different interface or strange commands.

Also, criminals use "skimmers" over the slot where the card is inserted that steal the data that way and can record PINs with a hidden video camera positioned nearby.

________________________________________________________________

Solar bus shelters for San Francisco

Mayor Gavin Newsom unveiling San Francisco's new bus shelters.

(Credit: Office of the Mayor of San Francisco)

San Francisco Mayor Gavin Newsom and the San Francisco Municipal Transportation Agency (SFMTA) have unveiled new energy-efficient bus shelters for the city.

The first of these bus shelters has been put up on the corner of Geary Boulevard and Arguello Boulevard with plans for four more to be rolled out in the coming weeks. The city plans to evaluate the five bus shelters throughout the summer to see what, if any, changes need to be made to the existing design.

Following the evaluation, SFMTA plans to replace a minimum of 1,100 existing bus shelters throughout San Francisco beginning this year, with plans to have them all in place by 2013.

The pilot bus shelters, which were designed by Lundberg Design, incorporate a bright red plastic wavy roof containing photovoltaic panels, two maps, LED lighting, Wi-Fi, space for two advertisements, and a NextMuni display that informs users of impending arrivals.

Many will power lights and info systems via organic dye-based photovoltaic solar film that's free of heavy metals and be encapsulated in bright red plastic made of 40 percent recycled content. The bus shelter structure itself is made from steel consisting of 60-70 percent recycled material.

The LED lights being used in the new bus shelters use about 74.4 watts, making them four and half times more efficient that than fluorescent lighting in the old shelters, which uses about 336 watts, according to the Mayor's office.

The new shelters will be installed and maintained by billboard advertising giant Clear Channel Outdoor.

While the San Francisco bus shelters are progress in terms of energy efficiency, they're arguably not as high-tech as the EyeStop bus shelters recently unveiled in Florence, Italy.

The EyeStop bus shelters designed by Carlo Ratti include touch-screen computers offering real-time mapping of buses, mobile alerts for bus schedule changes, Web access, and tall beacons that brighten as buses near to alert approaching pedestrians in the distance. All the Florence, Italy, bus shelter computers can also be accessed in several languages to accommodate tourists.

________________________________________________________________

Neil Young Archives Blu-ray: Rip off?

It's pricey. The "Neil Young Archives, Vol. 1: 1963-1972" Blu ray box goes for $349; the DVD is $250; and the CD set a mere $100. The Blu-ray box contains a sprawling 11-disc collection. Young's been working on this set for what feels like decades; was it worth the wait?

There's a beautifully bound, embossed-"leather," covered book with tons of cool pictures. Hard-core fans will love it, everyone else will look through it once and be done with it.

There's only one unreleased live disc, "Live at the Riverboat 1969." The Blu ray box also includes "Live at Canterbury House" (not a Blu-ray, just a DVD and CD), "Live at the Fillmore East 1970," and "Live at Massey Hall 1971," which have been individually released over the past couple of years. I already bought them, as I'm sure many fans have. What a rip off to make us buy them again.

Most discs have music running times of under 60 minutes, so why oh why didn't Neil fill up more of the discs' capacity, or did he just need to justify an exorbitant MSRP? $350 for 11 discs? Strange, Hollywood movies that cost hundreds of millions of dollars to make retail for under 20 bucks a pop, so why does Neil charge $31 for a disc for music he made nearly 40 years ago? Rip off.

The Blu-ray features ultrahigh resolution 24-bit /192 kHz stereo sound, which you can play over some newer AV receivers, but I'm not so sure that any high-end electronics can access the superduper-sounding PCM tracks. Surround sound? Only one disc has surround. Blu-ray sound quality is about the same as the previously released 24 bit/96 kHz sound on the DVDs that came out years ago. Don't buy the Blu-ray box for the sound; the DVDs are fine.

I had a rough time navigating the Blu-rays' stupidly designed menus and accessing some of the "bonus" material and "hidden" tracks. Hey, I paid my money, why do I have to go round and round to find the music I paid for?

As for video "content," I don't know about you, but watching an LP playing on a turntable or reel-to-reel tapes spinning gets old really fast. Reading pages of text off my TV is also less than entertaining. The photo galleries are nice.

Young's film "Journey through the Past" is included, but the Blu-ray's video quality is wasted. You might as well be watching a blurry VHS tape. The film's audio quality varies between awful and decent. Songs are interrupted by dialogue and edits, and there's no shortage of pointless imagery. There's a shot that goes on for five minutes of Young and a woman eating berries, smoking a joint, and drinking from a large jug, while sitting on the bumper of an old car. Can you say "self indulgent?"

Summing up, I can't recommend "Neil Young Archives, Vol. 1: 1963-1972" on Blu-ray. If you really love Young, get the CD box. Then again, if Young really cared about his fans he'd ditch the filler and put out a killer two-disc set of just the unreleased stuff.

Yes, of course, the Blu-ray, DVD, and CD sets are heavily discounted. Amazon has the Blu-ray for $279. It's still a rip off.

________________________________________________________________

Hybrid ship ahoy: Valence to supply Siemens

Lithium ion battery company Valence plans to supply batteries to Siemens for hybrid ships and to Chicago utility S&C Electric for grid storage.

Its deal with Siemens Drive Technologies calls for Valence to develop energy storage for a planned hybrid marine propulsion system from Siemens. Valence will hook up its lithium iron magnesium phosphate batteries to Siemens' drive system via a standard interface, the company said.

The two companies have already supplied a hybrid drive train for double-decker buses from Wrightbus.

Valence on Wednesday said it intends to supply grid-connected storage systems for S&C Electric, which will enable the utility to use more wind and solar power.

Austin, Texas-based Valence is one of several small battery companies vying for business from large industrial companies in transportation and the power industry. Making deals with large corporations is vital to their success.

A123 Systems, for example, signed a deal with Chrysler for electric vehicles, though that deal is now in question, as Chrysler may be acquired by Fiat. Boston Power last week said it is already testing its Swing car battery packwith automakers.

Grid storage, too, has become a potential market, as more utilities look to large-scale storage--on the order of 1 or 2 megawatts of capacity--to stabilize the flow of electricity on the grid, and to store solar and wind powe

________________________________________________________________

NetApp ups offer to buy Data Domain

The battle to buy Data Domain is in full swing.

Late Wednesday, NetApp upped its bid to acquire Data Domain to $30 a share after EMC jumped in earlier in the week with its own buyout offer. On the surface, both proposals seem similar. But EMC claims its bid is superior and predicts Data Domain shareholders won't approve the NetApp agreement.

The initial buyout agreement between NetApp and Data Domain was unveiled on May 20. NetApp's offer then was $25 a share, or $1.5 billion total, a deal that seemed to sit well with Data Domain. But on Monday, EMC raised the stakes with its own offer for Data Domain of $30 a share, a total price tag of $1.8 billion. On Wednesday, NetApp then parried EMC by raising its own proposal to $30 a share.

Though both bids rest at the same price per share, EMC claims its offer isn't subject to the same conditions and limitations as the NetApp offer and that it's a better deal for Data Domain shareholders.

"EMC's all-cash tender offer remains superior to NetApp's proposed part-stock merger transaction," Joe Tucci, EMC's chairman, president, and CEO said in a statement. "We are proceeding with our superior cash tender offer, which is not subject to any financing or due diligence contingency. We do not believe that the Data Domain stockholders will approve the merger transaction with NetApp."

Data Domain is a top provider of deduplication storage systems, which let enterprise customers more easily back up data across different systems. Despite the global recession, Data Domain is doing well compared to its competition. First-quarter revenue for 2009 jumped 50 percent over the previous year, thanks in part to a surge in new customers.

EMC says it wants Data Domain for its strong management and sales teams and to complement its own backup and storage technology. EMC has been in a buying mood the past few years, having picked up Iomega and start-up firm Pi last year and Network Intelligence in 2006.

Could the shopping spree end here? Data Domain seems to prefer NetApp as suitor. Its board of directors has already unanimously approved NetApp's revised transaction agreement.

"We are pleased with the revised terms of NetApp's acquisition offer," Frank Slootman, president and CEO of Data Domain, said in the company's statement Wednesday, "and feel it will provide great value to our shareholders and customers."

The NetApp deal is expected to close in 60 to 110 days, subject to regulatory approval. EMC's current tender offer will expire at June 29 unless extended.

________________________________________________________________

How Microsoft stole the show at E3

Microsoft's E3 Xbox stage.

(Credit: Daniel Terdiman/CNET)

CNET conducted a poll earlier this week asking readers which company--Nintendo, Microsoft, or Sony--had the most impressive announcements at this year's Electronic Entertainment Expo.

More than 10,000 people responded. More than 51.9 percent of the respondents said Microsoft bested its competitors. Thirty-four percent of those who answered the poll said Sony had the best announcements. Nintendo finished last, with just 5.6 percent of respondents saying it had the best E3. Ironically, the fourth option--"None of them--they were all yawners"--beat out Nintendo, with 8.4 percent of the vote.

It's a well-deserved victory for Microsoft. At this year's event, the company announced a new, expanded Xbox Live offering for the console, including a new video store with 1080p content. The Xbox 360 will also sport Facebook and Twitter integration.

Those announcements, however, paled in comparison to what came next. Microsoft will be offering full-game downloads on Xbox Live. On top of that, Halo:ODST, Left4Dead 2, Splinter Cell Conviction, and Forza Motorsport 3 will all be exclusive on the console. And in what may have shaken Sony's world more than any other announcement, Hideo Kojima took the stage, announcing that he is bringing his wildly popular Metal Gear Solid series to the Xbox 360 with Metal Gear Solid Rising.

All that's great. But Microsoft's biggest announcement was Project Natal. Taking Nintendo's motion control to a whole new level, Project Natal allows you to control on-screen action without a controller. It senses motion, sound, and 3D movement. Want to throw a pitch? Move your arm like a pitcher, and the game will throw the ball. Want to kick a soccer ball? Swing your foot forward, and the Xbox 360 will take care of the rest. It's like the Wiimote, but without the controller--and cooler.

You're probably wondering what Sony and Nintendo had to say at E3. Sony unveiled the PSP Go, a roster of exclusives, including Gran Turismo 5 and God of War 3, and a new motion controller that uses Sony's Eye technology to provide in-game motion control. It's cool, but it's no Project Natal.

Nintendo had a tough year at E3. It announced a new Super Mario Bros. title for the Wii. Super Mario Galaxy 2 is also coming to its console. But that's about it. Oh, and a pulse reader called the Wii Vitality Sensor. Yeah, I don't get it, either.

As you can see, it wasn't much of a competition for the Xbox 360. Sony's big announcement was motion control. And Nintendo is still staying true to Mario. In the meantime, Microsoft is pushing the envelope and taking its business to the next level.

I think it's time that we commend Microsoft for its gaming efforts. Nintendo played it safe, with a few minor announcements, hoping that they would be enough to stay in the lead. Sony continued its utter disregard for reality (can we please get a PS3 price drop?). But Microsoft took a step back, evaluated the market, and announced plans that could transform the industry.

Game downloads are the future. Exclusives help sell game consoles. And taking motion control to the next level is the right move for Microsoft.

You can say what you want about Microsoft and its Xbox 360. But at this year's E3, it made the competition look foolish. And in the cutthroat business of video games, that's a major victory in and of itself.

Wake up, Nintendo and Sony. Microsoft has.

Check out Don's Digital Home podcast, Twitter stream, and FriendFeed.

________________________________________________________________