(BN) China Vehicle Population Hits 240 Million as Smog Engulfs Cities

(Bloomberg ) China added more cars last year than the total number plying its roads in 1999, illustrating the challenges the government faces in controlling vehicular emissions and traffic congestion in its cities.

The vehicle population reached 240 million last year, of which 120 million were passenger cars, according to a statement by the Ministry of Public Security on its website. The 15.1 million new cars added last year were more than the entire car population at the end of 1999, the ministry said.

Sales of new vehicles are forecast to top 20 million this year for the first time, as growth rebounds in the world's second-largest economy. Beijing implemented vehicle emission standards today that match the strictest European guidelines in an attempt to cut down on pollutants as toxic smog engulfed the capital for much of the past month.

U.S. embassy readings showed air quality in Beijing reached "hazardous" levels on 20 days in January.

Demand for vehicles will be supported by the number of first-time drivers, which reached 26.5 million. That alone was higher than the total number of motorists in 1997 and helped boost the entire driving population to 260 million last year, the ministry said.

Car ownership exceeded one million in 18 Chinese cities, according to the ministry.

Passenger-vehicle sales this year may climb 8.5 percent to about 16.8 million units, as the total number of vehicles sold surpass 20 million for the first time, according to the state- backed China Association of Automobile Manufacturers.

(BN) Audi Opens Digital Showroom in Beijing to Draw Shopppers

(Bloomberg ) Audi AG (NSU) opened its first interactive digital showroom in Asia in a Beijing shopping mall, as the world's second-largest luxury automaker steps up efforts to soften its image in China as a brand for bureaucrats.

The 2,100-square meter (22,600 square feet) showroom at the Oriental Plaza in the Wangfujing shopping district can display 14 vehicles and features six floor-to-ceiling projection walls that can call up as many as 100 million vehicle combinations through touch-screen tables. Staff are dressed in sweaters and khakis, rather than the usual business suits, to project a younger and more leisurely image.

The showroom is part of measures by the Ingolstadt, Germany-based automaker to broaden its appeal in China beyond that of an official car used by bureaucrats and company executives. Transforming the brand has taken on added urgency as Communist Party chief Xi Jinping pushes to reduce government expenditure and promote the use of cheaper auto brands.

"The team has done a tremendous job in evolving the image of the brand," Luca de Meo, member of the management board at Audi, said yesterday in a tour of the showroom. "You can probably understand the intention to keep going in the direction of positioning Audi as the most progressive brand in the premium automotive market."

To attract more Chinese consumers, Audi has introduced sport-utility vehicles and sports cars like the TT and R8, he said. Private individuals account for nine out of every 10 customers in China today, he said.

Audi sales in China and Hong Kong rose 30 percent last year to a record 405,838 units, the company said last month.

Research Center

The carmaker also opened its first research and development center outside Germany today in Beijing, with about 300 staff. About 60 percent to 70 percent of the employees are Chinese and the automaker is targeting to increase that proportion in the future, according to Lorenz Fuehrlinger, who heads the center.

"Our designers here they are Chinese and they are young and I think is exactly addressing what you expect,' said Fuehrlinger. ''The younger buyer in China is so important.''

Audi, which is controlled by Volkswagen AG (VOW), supplied an estimated 70 percent of cars used by the government and state- held enterprises during the 1980s, according to an estimate by Guotai Junan Securities.

Official Car

At the 18th Communist Party Congress held in Beijing in November, the official parking lots for ministerial delegates were filled with black Audi A6 sedans with tinted windows.

Local leaders have responded to Xi's calls to cut down on wasteful expenditure by canceling banquets, police escorts and issued directives for senior cadres to use Chinese auto brands instead of those by Bayerische Motoren Werke AG and Daimler AG.

''If ministers and state-owned company bosses start to switch to Chinese brand cars, it will be a tremendous push to local automakers and a major blow to Audi,'' said Chi Yifeng, head of the Beijing Asian Games Village Automobile Exchange, a vehicle dealer in the capital. ''Unlike BMW and Mercedes, Audi doesn't have as strong the individual consumer base and they have been working on changing that.''

(BN) Cannabis Farming Has Kentucky Republicans Seeing Economic Boost

(Bloomberg ) Kentucky Republicans and business leaders are promoting an unlikely way to boost the state's economic development: Grow cannabis.

Kentucky leaders want their state to become the king of hemp, a plant that comes from the same species as marijuana, though doesn't contain enough of the intoxicating ingredient to cause a high.

They want to help state farmers overcome the federal government's treatment of hemp as an illegal drug, and produce it on an industrial scale, for use in items such as soap, horse bedding, building materials and auto body parts. Kentucky is one of at least five states, including Indiana and Vermont, where lawmakers have introduced measures allowing hemp farming.

The Kentucky effort is supported by legislative leaders, the state chamber of commerce, Republican U.S. Senator Rand Paul and agricultural commissioner James Comer, a Republican who campaigned on bringing the crop to his state.

"It could produce thousands of jobs," Comer said in an interview."Industrial hemp is totally different than marijuana. It should be treated like corn or soybeans."

U.S. retail sales of products with imported hemp were more than $452 million in 2011, according to an estimate by the Hemp Industries Association, based in Summerland, California.

All One God Faith Inc., a closely held company in Escondido, California, that markets Dr. Bronner's soaps, is considering expanding to Kentucky if hemp is grown there, said David Bronner, the company's chief executive officer. The soaps contain hemp.

Passing Laws

Since 1996, at least eight states have passed laws removing legal barriers to hemp farming, according to a report last year by the Congressional Research Service in Washington. Colorado voters in November signed off on hemp farming.

Even in those states, anyone who wants to grow hemp needs a permit from the U.S. Drug Enforcement Administration, said Dawn Dearden, an agency spokeswoman. Dearden said she didn't know when the agency, which doesn't distinguish between hemp and marijuana, last issued a permit and referred a question on the matter to the Justice Department. A telephone message left with the department's press office wasn't immediately returned.

The hemp association is aware of only one DEA permit issued, for a now-ended research project in Hawaii, said Eric Steenstra, the group's executive director.

Importing Hemp

U.S. businesses import hemp, usually from Canada and China. The plant is also grown in Europe, and is approaching harvest now in the Southern hemisphere.

Hemp has been a source of oilseed and fiber for centuries, according to the congressional report. It was grown in the U.S. from the colonial period until the mid-1800s, when cotton became more competitive as a clothing fabric. More than 30 countries grow hemp as an agricultural commodity.

The Kentucky State Police oppose growing hemp, saying fields could be used to hide marijuana and that pot growers will claim their plants are hemp, requiring state police to prove otherwise in overburdened state labs.

"It would be a nightmare," said Trooper Michael Webb, a police spokesman. "You can't look at the plants and tell the difference between the two."

Kentucky Governor Steve Beshear, a Democrat, has said law enforcement concerns must be satisfied before he would support allowing hemp.

Cannabis Plant

The cannabis plants used for hemp typically look different from those cultivated for marijuana. Hemp grows taller and in a single main stalk with few leaves. Marijuana usually is bushy with leaves and branches to promote flowers and buds, according to the research service report.

The chemistry of the plants is more distinct. Marijuana typically contains about 10 percent tetrahydrocannabinol, or THC, which gives users a high, compared to less than 1 percent THC in hemp, according to the congressional service report.

A smoker would need a hemp joint the size of a telephone pole to get high, said Michael Bowman, a wheat farmer in Colorado. Bowman, 53, said he plans to plant hemp on 100 acres in April -- without a permit. He said he doesn't anticipate being prosecuted.

The law restricting hemp farming is the 1970 Controlled Substances Act. Those who raise hemp without a DEA permit risk as much as 20 years in prison and forfeiture of their property, according to federal guidelines.

Permit Application

An application for a DEA hemp permit is identical to asking for permission to grow pot.

Representative David Monson, a Republican in the North Dakota House and a wheat farmer, is among those who have unsuccessfully sought permission.

In 1999, Monson watched hemp growing across the Canada border, at a time when a disease was ruining wheat and barley. Rotating those crops with fast-growing, disease-resistant hemp was a way to fight the blight, Monson said in an interview.

North Dakota created a hemp farm licensing program. Two farmers applied, including Monson. Both got state permits and applied unsuccessfully to the DEA. The application process included a criminal background check and a questionnaire that asked questions like "Where are you going to sell this drug?" and "Will you have a 12-foot high chain link fence with guards and razor wire?"

Monson said he planted no hemp.

"I wasn't going to do it without a permit," he said. "They could threaten to take my farm."

Comer and Bronner said that as more states approve hemp production, the DEA may be forced to change its approach.

"It's becoming increasingly ridiculous that the non-drug form of cannabis is still caught up in this prohibition," said Bronner, 39, in an interview.

(BN) Nissan, NRG Plan U.S. Fast-Charger Network

(Bloomberg ) Nissan Motor Co. (7201), the biggest seller of electric cars, and NRG Energy Inc. (NRG) said they'll install 500 rapid-charge stations across the U.S. to help boost the appeal of rechargeable vehicles.

Nissan and NRG, the largest independent power producer, said yesterday at the Washington Auto Show that the stations will be put in place in major U.S. cities, including Washington, over the next 18 months. The project triples the number of such devices, able to recharge Nissan's Leaf hatchback to 80 percent in less than 30 minutes, they said in an e-mailed statement.

"Having a robust charging infrastructure helps build range confidence, which boosts interest in and use of electric vehicles," Brendan Jones, Nissan's director of electric vehicle marketing and sales strategy, said in the statement.

Nissan wants to increase sales of the Leaf after two years of lower demand than the Yokohama, Japan-based automaker predicted. The company sold 9,819 Leafs last year, less than half of Nissan's 20,000-unit goal.

Combined U.S. sales of models including Leaf and plug-in models including General Motors Co. (GM)'s Volt and Toyota Motor Corp. (7203)'s Prius jumped 181 percent in 2012 to 50,188, according to data compiled by Bloomberg. Carlos Ghosn, Nissan's chief executive officer, has predicted that electric cars will account for 10 percent of global auto sales by 2020.

There are currently about 160 U.S. rapid chargers, the companies said. Princeton, New Jersey-based NRG is spending about $150 million to set up chargers in the U.S., through its eVgo subsidiary.

Tesla Motors Inc. (TSLA), the electric-car maker led by Elon Musk, last year began building its own network of fast-chargers to allow owners of the company's Model S to eventually drive across the U.S. on electricity.

(BN) EU, Singapore Trade Tax-Free Oil Deal May Start End 2014

(Bloomberg ) A free-trade agreement between the European Union and Singapore that removes taxes on jet fuel and diesel imports to the continent will come into force as early as 2014, potentially boosting petroleum shipments to the EU.

The full ratification process will take about two years from Dec. 16, when a draft deal was reached, the Singapore Trade Ministry said yesterday in an e-mail. The pact is similar to an accord between the EU and South Korea that led to an unprecedented flow of North Sea crude oil to the Asian nation.

The EU and Singapore are seeking to build on the growing trade in goods, estimated at S$106 billion ($86 billion) in 2011 by the island nation's trade ministry. Removal of taxes would allow refiners in Singapore, such as Royal Dutch Shell Plc (RDSA) and Exxon Mobil Corp. (XOM), to ship so-called distillate fuels including diesel to the EU, opening an export route that is dominated by companies in India and the Middle East. It may also exacerbate worsening refining profit margins in Europe, where the second recession in four years is cutting demand.

"This could be disastrous for European refiners," Olivier Jakob, managing director at Zug, Switzerland-based Petromatrix GmbH, said by phone Jan. 25. "The FTA with Korea is already taking crude out of Europe and increasing the cost of it for Europeans, now you have another challenge for them with competition for distillate flows from Singapore. It's already bad for them and is going to get worse."

Export Refiner

Singapore, Asia's largest export refiner, ships oil products including gasoline, diesel and jet fuel to nations as far away as the U.S., according to government data. The EU currently imposes a 4.7 percent tax on jet fuel and 3.5 percent tariff on diesel imports from Singapore.

Asian gasoil, a benchmark for diesel and jet fuel, for February settlement was at a discount of $18.22 a metric ton to European prices as of 4:15 p.m. London time, according to data compiled by Bloomberg. Import taxes and shipping costs erode potential profits in moving fuels to other markets.

"Complex refineries in Asia are able to process heavy and cheaper crude to produce top of the barrel oil products at a much lower cost and are hence able to export products to destinations as far as Europe at a competitive price," Abhishek Deshpande, an analyst at Natixis SA in London, said today in an e-mailed response to questions.

There are currently no taxes levied on EU petroleum or crude imports into Singapore.

The pact will be presented to EU legislators for approval by May, a government official involved in the talks said Jan. 25, asking not to be identified, citing policy.

Crude Flows

A free-trade deal between the EU and South Korea prompted the flow of crude exports to the Asian nation. The European Parliament approved that deal in February 2011, overcoming the final hurdle to the agreement, which then took effect in July that year.

At least 53 million barrels of North Sea crude have been exported to South Korea since the agreement that exempted refiners in the Asian nation from a 3 percent tariff began. That is equivalent to about three weeks of imports.

"The EU and Singapore will now seek approval for the deal from their respective political authorities and envisage initialling the draft agreement in Spring 2013," the EU said in a Dec. 16 statement, citing Trade Commissioner Karel de Gucht and Minister of Trade and Industry Lim Hng Kiang.

The accord still requires the approval within the European Commission and by EU member states and the European Parliament. We "cannot give a precise forecast as to when they will all be completed and the FTA will enter into force," John Clancy, a trade spokesman of the commission, the 27-nation EU's executive arm in Brussels, said by e-mail on Jan. 25.

Jet Fuel

Buyers in Europe were to import about 1.4 million tons of jet fuel from the Middle East and Asia this month, according to a Jan. 21 Bloomberg survey of six traders and brokers who specialize in the trade of the aviation fuel. The increase is from 1.5 million tons in December when volumes rose to the highest in three months.

Singapore, which has refining capacity of about 1.4 million barrels a day, roughly equal to U.K. consumption, didn't export any jet fuel or diesel to the EU in the five weeks through Jan. 30, data from the trade ministry show.

In the first half of last year, the EU imported 8.8 million tons of diesel a month from all countries, according to data from the bloc.

Several European refineries have reduced production counter-seasonally due to a fall in processing margins and more will probably curb operations if profits don't recover, the International Energy Agency said Jan. 18 in its monthly report.

Shell's Pernis facility in the Netherlands and Exxon Mobil's Fawley in the U.K. were among sites operating at reduced rates, the IEA said citing press reports.

Singapore's Trade Ministry said in December that local exporters of electronics, pharmaceuticals, chemicals and processed food products will benefit from the removal of EU tariffs.

A technology joke of the day: nuclear weapons

"nuclear bombs are safer because they explode less often."

- Nassim Nicholas Taleb, Antifragile.

(BN) Facebook Unveils Gift Card Users Can Send to Other Members

Facebook Inc. unveiled a service that lets users give gift cards to other members for purchases at retailers and restaurants.

The card can be used at four businesses, including Target Corp. (TGT) and Jamba Juice Co., Facebook said on its website. With the new service, users select gift amounts to be put on the card and sent to their friends. The recipient is notified of the present and receives the card in the mail a few days later.

Facebook is investing in new products to attract users and keep them on the site longer. Earlier this month, the company announced a revamp of its search service that lets members find information on people, places, photos and interests. Last year, Facebook debuted tools that let members purchase physical gifts for friends on the site.

The latest gift feature works for members in the U.S., and the refillable cards can carry balances from multiple businesses in varying amounts. The cards can also be used for LVMH Moet Hennessy Louis Vuitton SA (MC)'s Sephora cosmetics chain and for Darden Restaurants Inc. (DRI)'s Olive Garden eateries.

(BN) BlackBerry’s Slow Arrival Underscores Testing Differences

(Bloomberg ) U.S. BlackBerry (RIMM) users' long wait for the latest model to reach stores has underscored the extensive testing that the nation's carriers use to add phones to their networks, putting them weeks behind counterparts overseas.

Verizon Wireless and AT&T Inc. (T), the two largest U.S. wireless-service providers, have multistep tests that can take months to complete. The devices are checked for signal strength, battery life, call quality, heat tolerance and data performance, according to the carriers.

That means the new BlackBerry Z10, unveiled at a New York event yesterday, will go on sale in the U.S. in March -- more than a month after its debut in the U.K. today. The lag has frustrated efforts to roll out the phone globally, contributing to a 17 percent decline in BlackBerry's shares. It also means the company is getting less value from its first-ever Super Bowl ad this weekend, when no one in the U.S. can buy the phone.

"It's really hard to have a global, simultaneous launch of anything," Tavis McCourt, an analyst with Raymond James & Associates in Nashville, Tennessee. "And you only get one chance a year for a Super Bowl ad."

When BlackBerry unveiled the new smartphone yesterday, it gave a range of release dates for the product's initial markets. British carriers such as Vodafone Group Plc began offering the Z10 today, while Canadians will get the phone on Feb. 5. It arrives in the United Arab Emirates on Feb. 10.

Carriers' Fault

BlackBerry didn't offer a firm release date for the U.S., the Waterloo, Ontario-based company's single biggest market, saying it would be sometime in March. After the slow rollout irked investors, Chief Executive Officer Thorsten Heins pointed the finger at U.S. carriers.

All the carriers got the final software for the phones, known as the "gold code," at the same time, Heins said in an interview yesterday. U.S. service providers received the phones themselves at the same time as other carriers around the world, BlackBerry confirmed today.

"Verizon, AT&T, Sprint, T-Mobile -- they have to comply with certain rules they are subject to," Heins said. "They're trying to speed it up."

The situation reflects a balance of power in the U.S. where carriers rather than phone manufacturers dictate the terms, said Michael Cote, a wireless strategist at the Cote Collaborative in Chicago.

"It's different for phone makers here," said Cote, a former sales executive at T-Mobile USA, the fourth-largest U.S. carrier. "U.S. carriers are accustomed to running roughshod over phone manufacturers."

Apple's Clout

An exception to that rule may be Apple Inc. (AAPL), which demanded a revenue-sharing agreement from AT&T when the companies first introduced the iPhone in 2007. When Sprint Nextel Corp. (S), the No. 3 carrier, got the rights to the iPhone in 2011, Apple required it to buy at least $15.5 billion worth of the phones -- a requirement that weighed on Sprint's shares.

BlackBerry, formerly known as Research In Motion (RIM), is counting on the new lineup to reverse six quarters of sales declines and win back market share from Apple and Google Inc.'s Android. Despite positive reviews for the Z10, BlackBerry shares tumbled for a second day amid concerns that U.S. sales will suffer from the delay.

The BlackBerry Q10, a second model equipped with a keyboard, is set to go on sale in April. No specific date was given for any carrier debut of that device.

Mark Siegel, a spokesman for Dallas-based AT&T, declined to comment on the BlackBerry delay.

Torod Neptune, a spokesman for Basking Ridge, New Jersey- based Verizon Wireless, said the testing process can be more lengthy for devices running on new operating systems, as is the case with the Z10 and Q10.

"There's really no typical length of time for a phone to go through testing," he said. "We have a rigorous and extensive testing protocol, and how long that process takes depends on the device and the issues we may encounter."

(BN) Nordic Companies a Magnet for Foreigners as Europe Stalls

(Bloomberg ) Companies shopping for businesses in Europe are hot on the Nordics, cool on their southern neighbors.

Sweden, Norway, Denmark, Finland, and Iceland have seen about $288 billion in deals since the financial meltdown began in 2007, according to data compiled by Bloomberg. That puts the region, with a population of about 26 million, well ahead of countries such as Spain, which has about 47 million people, and Italy, with about 61 million.

"If I'm selling a business with lots of exposure to France, the interest goes down fast," said Kristian Terling, who handles the Nordic business for Los Angeles-based investment bank Houlihan Lokey. "I say 'Sweden,' the mood softens."

Sweden's economy has grown by more than 10 percent since 2009, according to government records. While Sweden's growth for 2012 is projected to have slowed to 0.9 percent, it's still expected to beat the euro region, which is contracting. All of the Nordic countries boast triple-A credit ratings and the region overall is projected to expand by 2.1 percent this year.

"The countries are very well established with good growth records, they speak English, and they have stable politics," says Pip McCrostie, global vice chair of transaction advisory services at Ernst & Young, based in London. "Money always flows to the safe haven when it's looking to avoid risk."

Global Footprint

Foreign buyers are especially drawn by the global footprint of the region's companies.

"Many Nordic-headquartered businesses have specific technologies and products with global reach," says Tom Bernhardsen, a director at Credit Suisse Group (CSGN)'s investment bank handling Nordic countries and energy services.

In December, Deerfield, Illinois-based Baxter International (BAX) agreed to pay about $4 billion to acquire Swedish medical- equipment maker Gambro, which has 13 production facilities in nine countries and sales in more than 100 nations.

That same rationale applies to speculation of an eventual takeover of Finnish mobile-phone maker Nokia Oyj (NOK1V) by Microsoft Corp. (MSFT), which already collaborate on smartphones, analysts and bankers have said. Another deal that could break: Nokia Siemens Networks, Nokia's equipment joint venture with Siemens AG, may reignite takeover interest after the company topped Nokia's earlier quarterly estimates, analysts said.

Among the Scandinavian countries, Sweden draws the most buyers, with $113 billion of acquisitions since 2007 by companies with headquarters abroad, followed by Norway with $95 billion, according to data compiled by Bloomberg. About 631,000 Swedish companies, amounting to more than 20 percent of the country's private sector, were owned by foreign companies in 2011, compared with less than 5 percent in 1980, according to a report from the country's official statistics bureau.

Little Opposition

Stefan Folster, chief economist at the Confederation of Swedish Enterprise, said the country appreciates the new capital, ideas, and markets that come with foreign ownership.

"The history of Volvo Cars is a very good example of a company people believe wouldn't have survived had it remained Swedish," he said.

Ford Motor (F) bought Volvo in 1999, then sold it to China's Zhejiang Geely Holding (175) Group in 2010. There's been little opposition to the fallout from cross-border deals in Scandinavia, in contrast to increasing protest elsewhere in Europe, says Folster. Volvo saw minimal resistance when it cut production in Sweden while seeking to expand operations in China.

Acquisitions by Nordic buyers in 2012 fell 42 percent from 2008 levels, to $45 billion, according to Bloomberg data, even though Scandinavian companies hold about $103 billion of cash, 30 percent more than they did four years ago.

"They have the financial strength for deals but are worried about the economic outlook," Terling, of Houlihan Lokey, said.

Statoil

One company that may look outward is Statoil ASA (STL), Norway's biggest energy explorer and 67 percent-owned by the government. It's hunting for targets in the U.S., people familiar with the company have said. It would have the financial muscle to pursue companies such as EOG Resources Inc. (EOG), a $34 billion Houston- based crude oil producer whose chief executive officer, Mark Papa, is retiring in June, analysts said earlier this year.

Meanwhile, local companies are showing no skittishness in acquiring one another -- for the same reasons that attract foreign buyers. Fiskars, a 363-year-old Finnish maker of kitchenware, agreed to buy Danish porcelain maker Royal Copenhagen (RBREW) in December for 66 million euros ($89 million) in a push to become more global, said Kari Kauniskangas, Fiskars's chief executive officer.

"We'll build on Royal Copenhagen's position in Asia, and can access new markets such as central Europe," he said.

(BN) IBM Lands McDonald’s as Customer for Its Social Software

(Bloomberg ) International Business Machines Corp. (IBM) signed on McDonald's Corp. (MCD)'s South Africa division as a customer for its business-focused social-networking software, landing the highest-profile client yet for the product. 

McDonald's will have 8,000 employees in South Africa using the Connections software, IBM said today in a statement. The product is part of an effort to create internal networks for companies, letting employees use Facebook-style tools to communicate, sign off on documents and report expenses.

IBM aims to build on the McDonald's contract by winning deals with other retail and food-services business. After years of sluggish revenue, the world's biggest computer-services provider sees social-networking software as a source of growth. The company declined to give financial terms for the contract with McDonald's, the largest fast-food chain by sales.

"It's really going to attract more companies," said Sandy Carter, vice president of social-business strategy for Armonk, New York-based IBM. "McDonald's South Africa also demonstrates that the power of social has moved beyond major markets into the emerging opportunity."

After a $1.3 billion acquisition of Kenexa Corp.'s human- resources software last year -- along with several data-analysis companies -- IBM is betting its social software can compete with offerings from Microsoft Corp. (MSFT), Salesforce.com Inc. and Jive Software Inc. By making it easier for employees to access and share data, social-networking services will help IBM make $16 billion from business analytics by 2015, the company has said.

IBM shares fell less than 1 percent to $203.07 at the close today in New York. The stock gained 4.2 percent last year, compared with a 13 percent gain for the Standard & Poor's 500 Index.

(BN) Samsung Doubles Market Share in Tablet PCs as Apple Holds Lead

(Bloomberg ) Samsung Electronics Co. (005930) more than doubled its share of the tablet computer market in the fourth quarter, gaining on segment leader Apple Inc. (AAPL) as total unit shipments jumped 75 percent, researcher IDC said.

Worldwide tablet sales surged to 52.5 million units in the period, IDC said in a statement yesterday. Samsung's market share jumped to 15 percent from 7.3 percent a year earlier, while Apple's dropped to 44 percent from 52 percent.

New products, lower average prices and increased holiday spending all contributed to the surge in demand for tablets, IDC said. Apple's iPad faced stronger competition from Samsung tablets based on Google Inc. (GOOG)'s Android software and Microsoft Corp. (MSFT)'s Windows 8, though it held the top spot as sales benefited from the introduction of the iPad mini and a fourth- generation device, the researcher said.

"New product launches from the category's top vendors, as well as new entrant Microsoft, led to a surge in consumer interest and very robust shipment totals during the holiday season," Tom Mainelli, IDC's research director for tablets, said in the statement. "The record-breaking quarter stands in stark contrast to the PC market, which saw shipments decline."

Samsung fell 0.4 percent to 1,443,000 won as of 10:01 a.m. in Seoul trading, extending its decline this year to 5.2 percent. Apple fell 0.3 percent to $455.49 in New York yesterday, extending its drop this year to 14 percent.

Amazon's Share

Amazon.com Inc. (AMZN) was in third place with 12 percent of shipments, IDC said, followed by Asustek Computer Inc. (2357) and Barnes & Noble Inc. (BKS) Amazon increased shipments of its Kindle Fire tablets to 6 million in the fourth quarter from 4.7 million a year earlier, boosting the online retailer's share to 12 percent from 8.3 percent in the previous three months, the researcher said. Still, Amazon's market share dropped from 16 percent in the fourth quarter of 2011.

Even as Samsung's shipments more than tripled from a year earlier to 7.9 million units, the Suwon, South Korea-based company's market share held steady at its third-quarter level of 15 percent, according to IDC. Cupertino, California-based Apple, which shipped 22.9 million iPads in the recent period, saw its slice of the market shrink from 46 percent in the third quarter.

Microsoft's Surface tablet didn't land a spot in the top five, shipping less than 900,000 units, the research firm said. The company introduced Surface, its first computer, in late October in an effort to blunt the effect of declining sales of personal computers. Microsoft's software runs more than 90 percent of the world's PCs.

"Reaction to the company's Surface with Windows RT tablet was muted at best," Ryan Reith, program manager at IDC, said in the statement. "Microsoft and its partners need to quickly adjust to the market realities of smaller screens and lower prices."

Lunch Talk: (@TED) Teaching surgeons around the world.

Laparoscopic surgery uses minimally invasive incisions -- which means less pain and shorter recovery times for patients. But Steven Schwaitzberg has run into two problems teaching these techniques to surgeons around the world -- language and distance. He shares how a new technology, which combines video conferencing and a real-time universal translator, could help.

Youtube link.

tags: education, lunchtalk, health, system, distribution, video

e-mail is a security black hole.

(NYT. Jan 31, 2013) SAN FRANCISCO — For the last four months, Chinese hackers have persistently attacked The New York Times, infiltrating its computer systems and getting passwords for its reporters and other employees. 

Security experts found evidence that the hackers stole the corporate passwords for every Times employee and used those to gain access to the personal computers of 53 employees, most of them outside The Times’s newsroom.

Over the course of three months, attackers installed 45 pieces of custom malware. The Times — which uses antivirus products made by Symantec — found only one instance in which Symantec identified an attacker’s software as malicious and quarantined it, according to Mandiant.

E-mail is a mature technology where bugs and security holes were all supposed to be extinguished. If e-mail servers at a major news institution cannot be protected from outside intruders, the situation with thousands of mobile apps is probably much worse.
The effectiveness of anti-virus software is quite pathetic - 44 our 45 malware pieces not detected.

tags: security, internet, control, mobile, communications

(BN) Cascades, Apple, Megaupload, Hexbug:Intellectual Property

(Bloomberg ) Cascades Computer Innovation, an Illinois company with the right to own 38 patents, lost its antitrust suit against a group of companies that refused to take a license to the patents.

In a Jan. 24 ruling, U.S. District Judge Yvonne Gonzalez Rogers granted the defendants' motions to dismiss the case. Among the defendant companies are Samsung Electronics Co., HTC Corp. (2498) and Dell Inc. (DELL)
Cascades filed suit in federal court in Oakland, California, in March 2012, alleging that the companies and RPX Corp. (RPXC), a patent risk-management company, had conspired to oppose licensing and enforcement of its patents, with the ultimate aim of forcing Cascades to go out of business or accept a below- market offer for the licenses.
Rogers said the suit may have been "nothing more than a tactical ploy to regain economic advantage" that Cascades lost in licensing negotiations. She also said that Cascades failed to provide sufficient facts to demonstrate the harm it claims to have suffered is the result of a conspiracy.
The judge gave the Illinois-based company an opportunity to amend its claims and re-file its complaint.
The case is Cascades Computer Innovation LLC v. RPX Corp., 4:12-cv-01143-YGR, U.S. District Court, Northern District of California (Oakland).
Delaware Needs a Fifth Federal Judge, U.S. Judicial Panel Says
Delaware, home to courts that specialize in business cases and a popular venue for patent cases, needs a fifth federal judge to help the district court keep up with increasing corporate litigation, a panel of judges concluded.
If the recommendation by a subcommittee of the Judicial Conference of the U.S. is accepted in March, Congress will be asked to create a position as the number of U.S. patent suits is rising.
"It makes sense to add capacity for dealing with this situation, which most of us expect to persist," Frank Scherkenbach, a patent attorney whose clients included Microsoft Corp. (MSFT), said in an e-mail. "It makes sense to add that capacity in one of the courts most affected by these recent trends."
Delaware handles more patent cases per judge than any of the other 93 federal districts, with 179 cases filed for each of the four judges from September 2011 to June 2012, according to the Judicial Conference. During the same period, all types of cases climbed in the state, putting the load at 1,077 cases per judge, second-highest in the U.S.
The subcommittee met in December and issued a memorandum outlining its recommendation earlier this month.
Business costs rose more than fourfold since 2005 over royalty demands filed by patent owners seeking quick profits, according to a study by Boston University School of Law.
Companies face $29 billion in expenses from 5,842 claims of infringement filed in 2011 by so-called non-practicing entities, patent owners collecting license fees instead of making products. That's up from 1,401 claims and $6.6 billion in costs in 2005, according to the study, published in June.
The court in Delaware was considered the second-most favorable to patent owners from 1995 to 2011, based on a 42 percent success rate and a median damage award of $20.6 million, according to an October 2011 report by PricewaterhouseCoopers LLP. The Eastern District of Virginia, which also is considered the fastest for getting cases to trial, ranked first.
Delaware is tied with New Jersey courts for the busiest when it comes to litigation over generic drugs, according to PriceWaterHouseCoopers.
It also vies with the Eastern District of Texas as the busiest courthouse when it comes to new patent-infringement filings, according to an April 2012 study by James Pistorino, a lawyer with Seattle-based Perkins Coie LLP.
Congress last created a federal judgeship in Delaware in 1984. Senate confirmation is required to fill a post, and there are currently 85 judicial vacancies and 33 nominees awaiting approval.
Trademark
Apple Loses New Trial Bid Against Samsung on Trade Dress
Apple Inc. (AAPL) lost its bid for a new trial over trade-dress claims against Samsung Electronics Co. (005930) for its iPad and iPad 2 in a ruling stemming from the patent-infringement case it won in San Jose, California, last year.
U.S. District Judge Lucy Koh, who oversaw the infringement trial, yesterday denied Apple's argument that jurors erred by finding Apple's trade dress, or how a product looks, for the iPad and iPad 2 wasn't protectable. Trade dress is protected by U.S. trademark law.
The judge also denied Apple's request that she overrule jurors' conclusion that Samsung's Galaxy Tab 10.1 didn't infringe one patent covering the design of Apple's iPad tablet computer.
Apple's bid to increase the $1.05 billion in damages it won against Samsung was rejected by Koh. The judge denied all of Apple's post-trial requests in her ruling except one. She found that two claims, or elements, of Samsung's patent covering data transmission over wireless systems are invalid.
The jury didn't find Apple infringed any of Samsung's patents, and Koh didn't say yesterday in her ruling how Apple might benefit from her decision invalidating the claims. Koh ruled that Samsung's acts of patent infringement weren't willful.
Jurors decided Aug. 24 at the end of a trial that Samsung should pay the $1.05 billion for infringing six Apple patents. Apple, which lost its bid to block U.S. sales on 26 of the Galaxy maker's devices, failed to establish that consumer demand for Samsung products was driven by technology it stole, Koh ruled earlier.
Adam Yates, a spokesman for Suwon, South Korea-based Samsung, declined to comment on Koh's rulings. Kristin Huguet, a spokeswoman for Cupertino, California-based Apple, also declined to comment on the rulings.
The San Jose case is Apple Inc. v. Samsung Electronics Co. Ltd., 11-cv-01846, U.S. District Court, Northern District of California (San Jose).
Copyright
Megaupload Urges U.S. Judge to Dismiss 'Mega-Conspiracy' Charges
Megaupload.com, the file-sharing website that was shut down last year on copyright infringement charges, urged a U.S. judge to throw out the indictment to make up for what it called a lack of "due process" in the case.
The U.S. Justice Department failed to give the company legal notice that it was charged, froze its assets and left servers containing content owned by customers "gathering dust and in danger of deteriorating," Megaupload's lawyer Ira Rothken wrote in a filing in federal court in Alexandria, Virginia.
"More than a year has now passed since Megaupload was branded a criminal, with no opportunity to date to clear its name or challenge the charges against it," Rothken wrote. The government's conduct in the case raises "grave questions about whether the government is intent on being judge, jury, executioner and asset collector," he wrote.
Kim Dotcom, the founder of Megaupload, was indicted in what was dubbed a "mega conspiracy" by U.S. prosecutors, who accused his website of generating more than $175 million in criminal proceeds from the exchange of pirated film, music, book and software files. On Jan. 20, Dotcom began running a successor website called Mega from his home in New Zealand.
The U.S. is seeking Dotcom's extradition, with a hearing scheduled for August in Auckland.
Peter Carr, a spokesman for U.S. Attorney Neil H. MacBride, referred questions about the seizures of the websites and Dotcom's assets to the government's court filings.
In a Jan. 13 affidavit, referred to by Carr, an investigator whose name is blacked out in the document cited a U.S. law that allows seizure of property when an injunction wouldn't guarantee the property would be available for seizure upon conviction.
The domain names had to be seized to prevent Megaupload's supporters, or others, from redirecting content to servers elsewhere in the world, the investigator said. Injunctions wouldn't prevent that, according to the investigator.
The U.S. won the court order and shut down Megaupload.com without notice after the charges against seven individuals, including Dotcom, were unsealed in federal court in Alexandria on Jan. 19, 2012. Dotcom spent a month in jail before winning his release on bail.
The New Zealand case is Between Kim Dotcom and Attorney General. CIV2012-404-001928. High Court of New Zealand (Auckland). The U.S. case is USA v. Dotcom. 12-cr-00003. U.S. District Court, Eastern District of Virginia (Alexandria).
Google's Lobbying Boost Belies Decline in Total Spending
Google Inc. (GOOG), the subject of a U.S. antitrust investigation, increased its lobbying costs by 88 percent to move into the top 10 of spenders seeking to influence the federal government on a wide range of IP and other issues even as the total price of persuasion declined for the second straight year.
"Technology issues are a large part of the policy discussion in Washington these days," said Samantha Smith, a Google spokeswoman. "It is important to help people understand our business and the work we do to keep the Internet open and encourage economic opportunity."
The company helped scuttle anti-piracy legislation in the last Congress, and is organizing an effort to limit government access to digital communications. Early last year, Google hired as its chief lobbyist former Representative Susan Molinari of New York, the keynote speaker at the 1996 Republican National Convention.
Mountain View, California-based Google spent $18.2 million last year, including $1.7 million by its Motorola Mobility subsidiary acquired in May. That was up from $9.7 million in 2011, according to the Center for Responsive Politics, a Washington-based group that tracks lobbying expenditures aimed at lawmakers, the White House and federal agencies.
The Federal Trade Commission voted Jan. 3 to close a 20- month investigation into whether Google favored its own services in results provided by its search engine, the world's largest. Google also settled FTC allegations it misused patents owned by Motorola Mobility to thwart competitors in smartphone technology.
Google bought Motorola Mobility Holdings for $12.4 billion. The company is embroiled in patent-infringement litigation with iPhone maker Apple Inc. over features in smartphones.
For more copyright news, click here.
Trade Secrets/Industrial Espionage
Hexbug Wants to Hook Chinese Robo Fish at U.S. Trade Agency
At the Dallas Toy Fair in October 2011, the makers of Hexbug robotic toys spotted a swimming mechanized fish they say incorporates their company's research on making waterproof battery-operated gadgets.
Innovation First International Inc. sued, claiming a former employee stole its trade secrets and went to work for the fish's Chinese manufacturer. A federal judge told the company to take its complaint to China, where much of the evidence and most principal witnesses are located.
"For fairly obvious reasons, we're not excited about going to China to sue a Chinese engineer," Vince Mouer, general counsel for Greenville, Texas-based Innovation First, whose Hexbug Nano Hive Habitat Set was named specialty toy of the year by the Toy Industry Association in 2011 and 2012, said in an interview.
Innovation First instead decided if it couldn't stop the products from being made, it would try to stop them from being sold. The company took its complaint to the U.S. International Trade Commission in Washington which, because it can block imports of products that violate U.S. intellectual-property rights, is becoming an attractive forum for companies alleging trade-secret theft overseas.
Innovation First filed its case Jan. 4, naming CVS Caremark Inc. (CVS)'s CVS Pharmacy unit as a retailer selling Zuru Robo Fish. Zuru Inc., the Guangzhou-based manufacturer, denied stealing trade secrets and said the engineer's idea for the fish predated his time at Innovation First.
Mouer said Zuru wasn't named in the ITC complaint for strategic reasons he declined to explain. Carolyn Castel, a spokeswoman for CVS, didn't return messages seeking comment.
Innovation First initially persuaded a Texas state judge to temporarily halt sales of Zuru Robo Fish at the Dallas Toy Fair. The case was then transferred to federal court, where District Judge Jane Boyle in Dallas ruled China was the more convenient forum.
Innovation First is appealing. Arguments are scheduled for Feb. 5 in New Orleans.
Hexbug is a line of robotic inchworms, scarabs and spiders that move realistically and sell for less than $20 each.
Zuru sells its fish for about $15. Zuru President Nick Mowbray, who started the toy company with his brother in New Zealand eight years ago, said the engineer worked on the technology in his home for 13 years and left Innovation First after being rebuffed three times over two years in efforts to build a robotic fish.
"They realize they made the wrong move by not licensing this technology," Mowbray said. "They can't make it work, so put out press releases saying that we copied them."

(BN) Mercedes Enlists Kate Upton, Takes Aim at BMW With CLA

(Bloomberg ) Daimler AG (DAI)'s Mercedes-Benz ceded leadership in the U.S. luxury market in 2012 because Bayerische Motoren Werke AG (BMW) used "sales engineering" in December, the head of its U.S. operations said.

"There was some engineering, we'll call that sales engineering, to get to a number to say 'We're No. 1,'" Steve Cannon, chief executive officer of Mercedes-Benz USA, said in an interview with Betty Liu on Bloomberg Television. "That's a Pyrrhic victory for me."

BMW U.S. sales surged 39 percent in December, powered by the 3 Series and 5 Series, helping the Munich-based carmaker top U.S. luxury-auto deliveries for the second consecutive year. That surpassed Stuttgart, Germany-based Mercedes's 9.5 percent increase for the month. Mercedes lost the 2012 U.S. luxury- vehicle sales crown after being ahead through November.

BMW brand finished 2012 with 281,460 luxury vehicles sold, topping Mercedes-Benz by 7,326 excluding non-luxury models. The two German automakers sought to be the top U.S. luxury-auto brand after outselling Toyota Motor Corp. (7203)'s Lexus in 2011. Lexus was the top-selling luxury brand in the U.S. for 11 years until natural disasters in Asia curtailed vehicle production two years ago.

Kenn Sparks, a spokesman for BMW, didn't immediately respond to an e-mail seeking a comment on Cannon's remarks.

Mercedes has released a preview of a commercial featuring model Kate Upton due to air during the Super Bowl on Feb. 3 that will promote the new CLA sedan. The luxury small car will be introduced later this year.

"When we beat BMW and we do it straight up because we've out-marketed them, we've got better products than them, that's going to be a victory that I will celebrate," Cannon said.

(BN) German Wind Market May Defy Global Slump to Grow 43% This Year

(Bloomberg ) German wind-turbine installation may rise as much as 43 percent in 2013 as the home of Siemens AG (SIE) and Nordex SE (NDX1) defies a global slump, according to an industry lobby.

Developers may add 3 gigawatts to 3.5 gigawatts after 2.44 gigawatts in 2012 as on and offshore projects grow, said Sylvia Pilarsky-Grosch, vice president for the BWE lobby.

"We expect significant growth that could be even bigger depending on the development in the offshore sector," Thorsten Herdan, head of the manufacturers' group VDMA Power Systems, said at the same press conference in Berlin.

Germany is investing in clean energy as it phases-out nuclear power. It plans to build offshore wind farms covering an area as much as six times the size of New York City and raise renewable-energy production to about 40 percent of total power output by the end of the decade, from about 25 percent now.

Global installations are expected to fall about 9 percent to 42 gigawatts, led by the U.S., weighing on margins of the producers, who have about 80 gigawatts of capacity, Herdan said.

While 1.7 gigawatts of offshore wind turbines are being built in the German North Sea, new projects aren't developing because delays in connecting the machines to the power grid have unsettled investors, Herdan said. That could lead to a "gloomy" period for suppliers from 2015, he said.

Germany had 33.33 gigawatts of wind turbines installed by Dec. 31, including 0.28 gigawatts offshore, the BWE lobby said.

(BN) China to Boost Solar Power Goal 67% as Smog Envelops Beijing

(Bloomberg ) China plans to increase its goal for solar-power installations in 2015 by 67 percent to reduce reliance on fossil fuels blamed for greenhouse gases and as smog in Beijing reached record hazardous levels this month.

The world's biggest emitter of carbon-dioxide plans to raise the solar target to 35 gigawatts by 2015 from 21 gigawatts set last year, boosting demand for manufactures that suffer from slowing sales in Europe, Shi Dinghuan, the counselor of China's State Council and the president of Chinese Renewable Energy Society, said today by phone.

"We've got more pressure to save energy and reduce emissions as smog worsens due to pollution," he said. China will use renewable energy to cut coal consumption and support the domestic industry amid U.S. and Europe anti-dumping charges against Chinese solar products, Shi said.

The increase in solar installations first appeared in the Economic Observer today. Shares of solar-device maker China Singyes Solar Technologies Holdings Ltd. (750) rose 2.1 percent in Hong Kong. The new target would increase solar power installations by more than five-fold from 6.5 gigawatts of capacity as of the end of last year, according to Bloomberg New Energy Finance data.

"China always wants to increase solar power capacity," said Wang Xiaoting, a Beijing-based analyst at New Energy Finance, a unit of Bloomberg LP. "The nation adjusts the targets from time to time with consideration for practical factors such as related policies and construction conditions."

Slower Demand

Chinese manufacturers led by Suntech Power Holdings Co. (STP) and Yingli Green Energy Holding Co. (YGE) faced weaker demand and a supply glut that has driven panel prices down by 25 percent in the past year.

The U.S. last year imposed tariffs on Chinese-made solar cells and the European Union began probing whether Chinese manufacturers are selling cells and panels below cost in European markets.

Earlier this month, the Chinese government said it planned to install 10 gigawatts of solar capacity this year. China allocated 13 billion yuan ($2.1 billion) in subsidies for domestic solar project developers in 2012, the official Xinhua News Agency reported last month.

Interest in renewable energy is getting a boost as Beijing warned the city's 20 million people to prepare for at least another day of smog. Officials closed some factories and ordered government cars off the road as pollution remained at hazardous levels.

Premier Wen Jiabao said China should promote energy-saving and reduce emissions to cut pollution, the official Xinhua News Agency reported. The smog has remained dense after hitting record levels on Jan. 12.

(BN) Vegetarian Diet Cuts Heart Risk by 32%, Study Says

(Bloomberg ) Vegetarians were 32 percent less likely to be hospitalized or die from heart disease than people who ate meat and fish, scientists at England's Oxford University reported.

The researchers followed almost 45,000 adults, one-third of them vegetarians, for an average of 11 1/2 years and accounted for factors such as their age, whether they smoked, alcohol consumption, physical activity, education and socio-economic background, according to the study published today in the American Journal of Clinical Nutrition.

"Probably most of the difference is accounted for by the fact that the vegetarians had lower cholesterol and lower blood pressure," Francesca Crowe, one of the authors of the study and a nutritional epidemiologist at Oxford, said in a telephone interview. "Diet is an important determinant of heart disease."

Cardiovascular disease is the biggest cause of death in developed countries and accounted for an estimated 17.3 million deaths in 2008 worldwide, including 6.2 million deaths from strokes, according to the World Health Organization.

The Oxford study reinforces previous research that has concluded a healthy diet can reduce heart disease by lowering cholesterol, blood pressure and the risk of diabetes. Another study of more than 31,000 people who had been diagnosed with cardiovascular disease or diabetes, published in the journal Circulation in December, found that those who ate a diet that favored fish, vegetables, fruit, beans and nuts over meats and eggs were 35 percent less likely to die from cardiovascular disease.

Bill Clinton

Plant-based diets have long been advocated by doctors including Dean Ornish, a California-based cardiologist, and Caldwell B. Esselstyn, a retired surgeon at the Cleveland Clinic in Ohio, who have argued the benefits of vegetarian diets in their books. Former U.S. President Bill Clinton cited both doctors as influences after he switched to a plant-based diet. Clinton, who became known for consuming hamburgers while president, developed heart disease and underwent coronary bypass surgery in 2004.

"When these patients will fully commit to plant-based nutrition, they can not only halt but they can arrest and on occasion there will be significant evidence of disease reversal," Esselstyn, a vegetarian for 29 years, said in a telephone interview.

"It's getting to the point where it will be unconscionable for patients with cardiovascular disease not to be informed that this option exists," he said.

(BN) Cellular Garbage Collectors Beat West Nile, Study Shows

(Bloomberg ) Augmenting the body's innate ability to rid itself of "garbage" that regularly builds up in human cells may help defend against the West Nile and chikungunya virus, and slow the spread of HIV, scientists said.

Mice infected with chikungunya, a mosquito-borne illness in humans, were given a peptide that's known to rev up the cleaning system for cells, said Beth Levine, a professor at the University of Texas Southwestern Medical Center in Dallas who led the study. About 37 percent survived, compared to none in the control group, according to the study today in the journal Nature. In mice with West Nile disease, 20 percent survived.

While scientists were aware that the cleansing process called autophagy occurred in cells, this is the first agent known to increase it, a potential key to fighting aggressive pathogens in the future, Levine said in a telephone interview.

"Autophagy is a survival mechanism, to get rid of garbage," said Kay MacLeod, an associate professor at the University of Chicago, in a telephone interview. She wasn't involved in the study. "This peptide is waking the cleaning person up, and getting them back on the job."

In cell cultures, introduction of the peptide called Tat- Beclin 1 slowed replication of HIV and the foodborne illness listeria and cleared the characteristic protein of Huntington's disease from cells, Levine reported.

Clinical Development

Levine is looking for a pharmaceutical company to take Tat- Beclin 1, into clinical development. Until then, her group is continuing with the trials needed to register the compound with the U.S. Food and Drug Administration as an investigational new drug that may be tested in humans, she said.

The group hasn't seen signs of toxicity, although they aren't finished with all the tests required, Levine said.

"We're really excited about the possibility of moving forward to address this, to find out if this will work," Levine said in a telephone interview. She is in early phase discussions with drug companies about later research, though she declined to say which.

There is no treatment beyond symptomatic relief for West Nile or chikungunya, infections that are largely carried to humans by mosquitos. Symptoms for both can include fever, headache and nausea that can last for weeks and months.

West Nile is common the U.S., with 48 states reporting 3,969 human cases and more than 160 deaths last year, according to the U.S. Centers for Disease Control and Prevention. The largest outbreaks happened in Greece, Israel, Romania, Russia and the U.S., according to the World Health Organization. The worst cases can cause neurological damage.

Chikungunya, which isn't yet in the U.S., has been cited in outbreaks in Africa, Asia and Europe. It can also cause severe joint pain and long term fatigue, and is particularly dangerous to the very young and the elderly.

15-Year Study

Levine's group discovered the protein that led to this peptide 15 years ago, and has been studying it since.

Cell structures called lysosomes regularly clear debris, invaders, and defective proteins to keep cells from choking. The lysosomes rip apart the material, spitting useful parts back into the cell, where they can be reused in the autophagy process.

Over the last several years, researchers have found links between autophagy and heart disease, diabetes, some brain illnesses, cancer, and infections, said Daniel Klionsky, a professor of life scientists at the University of Michigan, who studies the process.

The implications of Levine's study may end up being "huge because the connections of autophagy and disease are tremendous," said Klionsky, who wasn't involved in the research, by telephone.

Cultures to Mice

Levine's group tested its peptide first in cell cultures, where Tat-Beclin 1 cleared small aggregations of the characteristic protein of Huntington's disease. It decreased the survival of the chikungunya virus, West Nile, HIV and listeria in cell culture as well.

Then the group tested mice. By the 20th day of infection with the chikungunya virus, all the control mice were dead, compared to 37 percent of those dosed with Tat-Beclin 1.

In the West Nile mice, all control mice died by day 10. By day 20, about 20 percent of the treated mice were still alive.

(BN) Killer Waves in California Claim 5 Lives Without Warning

(Bloomberg ) Northern California beachgoers are being warned that the Pacific can kill in an instant as powerful breakers known as "sneaker waves" surge ashore without warning and drag their victims to sea. Five people have died since November.

"Don't turn your back to the ocean," said Pamela Boehland, a Coast Guard spokeswoman in California.

Sneaker waves, which can be six to 10 feet high, originate in winter storms perhaps thousands of miles west of the U.S. coast, said Troy Nicolini, a meteorologist at the National Weather Service in Eureka, California. When waves travel long distances, they can group into sets with quiet periods in between, he said.

"When you have that wave arrive at our beach, they can look very benign," he said. "Then suddenly the very long, quiet period can be broken by a series of really big waves."

A man, a woman and their teenage son walking their dog were swept away at Big Lagoon Beach near Eureka, about 270 miles (438 kilometers) north of San Francisco. Another man died Jan. 1 when he and his wife went into the surf for their dog at Point Reyes National Seashore, north of the city. A woman perished Jan. 27 while walking with a friend on Black Sands Beach near Shelter Cove, south of Eureka, according to the Coast Guard.

Each of the deaths involved people walking their dogs or attempting to save dogs being swept out to sea, Boehland said. All of the pets survived.

"Don't go in after your dog, because dogs are typically better swimmers than people," Boehland said.

In California, the peak season for sneaker waves is from October to February, when there are more storms at sea in the Northern Hemisphere, Nicolini said. Similar waves are not as common on the East Coast, he said.

The weather service is using social media, including Twitter and Facebook (FB), to alert the public to beach hazards or high surf, said Kevin Baker, supervisory meteorologist at the National Weather Service forecast office in Monterey, California.

The Web is Dead, a social media edition.

(San Francisco. Jan 30, 2012) Facebook Inc. said its mobile daily active users exceeded its desktop daily active users for the first time in the fourth quarter of 2012.

The trend hasn't touched the enterprise world that much yet - a huge technology opportunity.

P.S. VentureBeat and Yahoo Mail web pages are the worst browser hogs ever. The pages contain sloppy scripts and flash widgets that pull data constantly, even when the the page is not visible in the tab view.

tags: s-curve, internet, web, mobile, social, networking

Lunch Talk: (@Google) Nassim Taleb

Nassim N. Taleb, author of
Fooled By Randomness and The Black Swan, talks about his new book.

Link

tags: lunchtalk, economics, strategy

Quote of the Day: Simplicity vs Complexity

Nassim Taleb in his new book "Antifragile: Things That Gain From Disorder"

A complex system, contrary to what people believe, does not require complicated systems and regulations and intricate policies. The simpler, the better. Complications lead to multiplicative chains of unanticipated effects. Because of opacity, an intervention leads to unforeseen consequences, followed by apologies about the “unforeseen” aspect of the consequences, then to another intervention to correct the secondary effects, leading to an explosive series of branching “unforeseen” responses, each one worse than the preceding one.

Yet simplicity has been difficult to implement in modern life because it is against the spirit of a certain brand of people who seek sophistication so they can justify their profession.

Steve Jobs figured out that “you have to work hard to get your thinking clean to make it simple.”

Essentially, he talks about one of the basic differences between problems and puzzles: problems are open-ended, while puzzles have pre-defined solutions. A typical school test is a puzzle. Over the years, we are trained to solve increasingly sophisticated puzzles using increasingly sophisticated solutions. By contrast, solutions to open-ended problems lead to new problems: the more complex the solution, the more complex the resulting problem.

tags: problem, solution, quote, puzzle, quote

(BN) Google Fends Off BrightRoll in $7.6 Billion Video Market

(Bloomberg) Google Inc. (GOOG), the world's biggest seller of Web-search advertising, is getting one-upped in the surging $7.6 billion market for online-video ads from a six- year-old startup one-tenth its size.

BrightRoll Inc., a San Francisco-based company that helps marketers place video ads on websites, has surpassed Google when ranked by number of online video ads in two of the last three months, according to researcher ComScore Inc. (SCOR)

Google makes money from selling slots for commercials that run before users view clips on YouTube, which it owns and operates. BrightRoll matches marketers to competing websites, and takes a cut. That has helped it to siphon advertisers away from Google in a market that, according to AccuStream Research, jumped 52 percent last year as more people watch television and movie programming online.

"BrightRoll and Google are neck-and-neck," said Dan Piech, a senior product manager at ComScore. "BrightRoll has been doing an amazing job in growing their business."

Like an old-fashioned ad agency, BrightRoll acts as an intermediary between marketers and content providers. Instead of buying ad space during a television show on behalf of clients, BrightRoll finds websites and companies seeking to run video ads, gets them together, and then takes a cut when they make a deal. While Google concentrates mainly on selling ads on YouTube, the biggest Web-video site, it also competes with BrightRoll with a similar agency-style service.

BrightRoll has kept up the pressure by offering advertisers a network of more than 6,000 mobile applications and websites to target a wider audience, and also offers tools to help them measure the effectiveness of their campaigns.

Reaching Scale

About five percent of large television advertisers' media budgets are going into Web videos, and the percentage is higher for industries such as cars, according to Tod Sacerdoti, chief executive officer of BrightRoll. Video will account for 14.5 percent of all U.S. digital-ad revenue in 2016, up from 7.9 percent last year, according to EMarketer Inc.

"Online video is finally at the scale that's big enough for national advertisers," said Sacerdoti, previously an executive at online address-book provider Plaxo Inc. "It's large enough to matter."

Co-founded in 2006 by Sacerdoti, BrightRoll has also partnered with Arlington, Virginia-based Veenome Inc., which helps advertisers find content and track campaigns. Veenome is just one of several video-ad technology startups -- including Eyeviewdigital Inc. and Brainient Ltd. -- that received venture funding in the past year.

Venture Funding

BrightRoll, which has 220 employees, has raised $46 million in venture funding to date, Sacerdoti said. The last investment round of $30 million in November 2011, was led by Trident Capital, and included existing investors True Ventures, Scale Venture Partners and Adams Street Partners.

After trailing BrightRoll in October and November, Google took back the lead in December by serving 2 billion video ads on personal computers in the U.S., versus 1.83 billion for BrightRoll, ComScore said. While Google delivered more ads, BrightRoll's network of video providers reached a larger part of the population, at 43 percent, compared with Google's 32 percent in December. ComScore's data excludes some video ads that reach Google's sites from third-party networks, including BrightRoll.

BrightRoll works with 90 percent of the top 50 U.S. advertisers, and has doubled revenue annually for the past five years. At that growth rate, BrightRoll "could easily be doing over $100 million per year in revenue," according to Tom Taulli, an independent analyst who covers initial public offerings.

Google, YouTube

Growth in search-based advertising -- Google's main cash cow -- has fueled a 30 percent gain in the company's shares over the past year, compared with a 12 percent rise in the Nasdaq Composite Index. Google, based in Mountain View, California, rose less than 1 percent to $753.68 in New York yesterday. Three-quarters of analysts tracking the stock rate Google a buy, at an average price target of $824.83, according to data compiled by Bloomberg.

Google acquired YouTube in 2006 for $1.65 billion to boost its video content, which attracts more than 800 million monthly unique visitors. Google generates video-ad revenue of about $1.3 billion a year, said Brian Wieser, an analyst at Pivotal Research Group LLC.

Video-Ad Tools

Many advertisers remain reluctant to plunge into online video ads because much of the content is created by consumers. They're concerned that commercials might appear alongside low- quality or inappropriate content, according to EMarketer.

"The content is often unsafe for brands, or too short to support advertising," said Clark Fredricksen, a spokesman for EMarketer.

This year, Google and BrightRoll plan to introduce new analytical tools that would provide advertisers with better data on responses to their ads. Both are also stepping up efforts to target viewers on mobile devices. Google subsidiary AdMob, which delivers ads to mobile devices, added BrightRoll as a video-ad provider in May. The partnership lets AdMob offer its clients a wider pool of video providers to advertise on mobile devices, an emerging area of online advertising.

BrightRoll also lets advertisers bid for online commercials in real-time, as they are delivered.

"Real-time bidding is the fastest-growing part of our business," Sacerdoti said. "It will be the biggest growth driver in the next 24 months."

Interactive Commercials

BrightRoll has also introduced tools that make it easier for advertisers to analyze ad-campaign performance against benchmarks, and roll out interactive online commercials, which let viewers design a car, for example.

"We are able to target the right consumer easier," Bob Arnold, associate director of global digital strategy at cereal- maker Kellogg Co. (K), said in an interview. "Sometimes it can be cheaper, and we feel we have a little more control."

Aside from bringing more original content to YouTube, Google already offers a number of channels on topics such as cars, entertainment and fashion. It has also pioneered new ad formats, such as TrueView, which lets viewers select which video ads they want to watch.

"Viewers are choosing to watch the ads," Baljeet Singh, group product manager at YouTube, said in an interview. "The lines between ads and content are starting to blur."

About 182 million U.S. Internet users watched 38.7 billion online content videos in December, according to ComScore.

"We've been gaining share, and a lot of it has been driven by having a platform that's working," Sacerdoti said. "YouTube is a huge player, but there's very strong interest in alternatives to YouTube."

Fischer Focus on Growth Helped Israel Beat World on Returns

(Bloomberg ) 

"He's done marvels in Israel," Nobel laureate Robert Solow, who taught with and then worked alongside Fischer at the Massachusetts Institute of Technology, said in a telephone interview. "He's played a terribly important role and I've no idea how they'll replace him."

Triggering the praise was the surprise announcement that the 69-year-old former International Monetary Fund No. 2 will step down June 30, midway through his second five-year term. He'll leave behind an economy that has rebounded from the global financial crisis faster than most peers and whose main stock index has outperformed its U.S. and European counterparts.

The challenge for Fischer's successor will be stepping into the shoes of a man who once served as thesis adviser to Federal Reserve Chairman Ben S. Bernanke, and who at the Bank of Israel broadened the focus to include growth as well as inflation. The first items on the agenda will be to prod Prime Minister Benjamin Netanyahu to shrink a budget deficit that grew to 4.2 percent of gross domestic product last year and to slow the rise in housing prices.

Responsible Adult

"Fischer was the responsible adult," Amir Kahanovich, chief economist at Clal Finance Brokerage Ltd. in Tel Aviv, said in a phone interview. "There is no doubt that foreign investors trusted him and the policies he put in place."

Israel, under threat of war from its neighbors since its foundation in 1948, produced better risk-adjusted returns than all other developed stock markets in the past decade as the technology-driven economy attracted global investors.

The BLOOMBERG RISKLESS RETURN RANKING shows the Tel Aviv TA-25 Index returned 13.4 percent in the 10 years ended Jan. 29 after adjusting for volatility, the highest among 24 developed- nation benchmark indexes. Israel beat the Oslo OBX Index (OBX), the next-best market with a risk-adjusted gain of 13.2 percent.

Israel outperformed as it fought a monthlong battle against Hezbollah in 2006, was involved in a similar conflict with Hamas two years later and is now threatened by Iran's nuclear program. International investors including Warren Buffett bought local companies. Under Fischer, gross domestic product expanded by 14.7 percent from 2009 to 2012, compared with 3.2 percent in the U.S. and a contraction of 1.5 percent in the euro region.

Rising Shekel

The shekel has surged 17.3 percent against the dollar since Fischer took office in May 2005, making it the second-best performer in Europe, the Middle East and Africa. Israel's Tel Aviv 25 Index (TA-25) climbed 78 percent and hit a record 1,341.89 in April 2011, outperforming U.S. and European benchmarks.

Israel's local bonds have rallied 96 percent in dollar terms since May 1, 2005, compared with a 42 percent increase for a global index of government debt, data compiled by Bank of America Merrill Lynch show.

Fischer told Netanyahu yesterday of his plan to leave on June 30, the bank said in a statement. No reason was given for the early departure and the governor scheduled a press conference for today to discuss his plans.

In addition to Bernanke, Fischer taught European Central Bank President Mario Draghi at MIT in Cambridge, Massachusetts. Bank of England Governor Mervyn King said in a statement he has the "highest admiration" for Fischer and called his resignation "a loss to the central banking community."

Successor Search

Among possible successors are Avi Ben-Bassat, head of the Bank of Israel's research department and former director general of the Finance Ministry, as well as the central bank's former deputy governor, Zvi Eckstein, said Jonathan Katz, a Jerusalem- based economist for HSBC Holdings Plc. Another mentioned is Galia Maor, the woman who stepped down last year as chief executive of Bank Leumi Le-Israel (LUMI) Ltd., the country's biggest lender, and a former senior director of the central bank.

"When push comes to shove, when Netanyahu appoints the next governor, he is well aware that Israel needs a well-known and credible figure, independent, with central banking experience," Katz said.

Fischer's dual focus on employment and growth alongside price stability has marked a shift at the Bank of Israel, where previous governors placed an emphasis on inflation. It's among a raft of changes that the Zambian-born economist introduced during almost eight years in charge. Among them: shifting responsibility for the monthly interest-rate decision from the governor alone to a seven-member Monetary Committee, including three outside academics. He helped lobby a new law through the Knesset to get the group created.

Harder Without

"We faced a lot of unexpected circumstances, obviously, since I joined the bank in 2005, and sitting down with colleagues you trust, and thinking your way through, should we do this, should we do that, there is nothing quite like it," Fischer said in a Jan. 25 interview at the World Economic Forum in Davos, Switzerland, on Bloomberg Radio's "Surveillance" with Tom Keene.

"If they weren't there, it would be a heck of a lot harder to figure out what to do," he said.

Fischer was approached in early 2005 by then-prime minister Ariel Sharon and Netanyahu, serving as finance minister, to succeed David Klein as central bank governor -- even though he wasn't an Israeli citizen or resident.

Kibbutz Resident

Fischer's connection with Israel dates back decades. In Zambia, he was a member of Habonim, a Zionist youth group, along with Rhoda Keet, his future wife, with whom he has three sons. In the early 1960s, he spent six months on a kibbutz on Israel's Mediterranean coastal plain, where he combined learning Hebrew with manual labor. He conducts his official business in Hebrew with an accent that indicates his upbringing in southern Africa.

Fischer has previously toyed with leaving before the end of his term in 2015. In 2011 he put himself forward as a candidate for the leadership of the IMF. He was disqualified for the post as he was over the organization's age limit of 65, and the position went to France's Christine Lagarde.

Fischer's "experience, his wisdom and his international connections opened a door to the economies of the world and assisted the Israeli economy in reaching many achievements, during a period of global economic crisis," Netanyahu said in an e-mailed statement.

Slowing Growth

Still, last year's economic growth rate of 3.3 percent was the slowest since 2009. Weakening growth has eased demand and helped keep inflation within the government target of 1 percent to 3 percent since September 2011, the longest such period since 2007, leaving room for Fischer and the monetary policy panel to lower rates.

Some of Fischer's innovations have been aimed at making the bank more transparent, such as publishing minutes of rate meetings and holding quarterly sessions with economic forecasters.

He leaves for his successor the issue of home prices, which increased 5.7 percent in the 12 months through November, according to the Bank of Israel. Housing debt rose 7.5 percent to 275 billion shekels ($73.5 billion) at the end of October. The Bank of Israel capped the loan-to-value ratio in new housing credits in an effort to keep mortgages in check.

(BN) No Job Creation on Farms as Owners Automate

(Bloomberg ) The property Kevin Liefer and his son, Kirk, cultivate in southern Illinois has been expanding for decades without adding a single manager. These are boom times for farming and a bust for farm jobs.

The 3,600 acres of mostly corn, wheat and soybeans the Liefers hold were about 30 separate, individually operated farms more than 40 years ago, said Kevin. As families left, the homesteads near Red Bud, about 40 miles (64 kilometers) southeast of St. Louis, melded into one operation.

Older tractors were replaced with models that cultivate more ground and serve as miniature offices, complete with global positioning systems that allow them to steer themselves. Mobile phones enable communication while in the fields.

"There's so much more you can do now without as much labor," said Kevin, 58. "The consolidation has been rapid."

A U.S. farm boom showing few signs of a let-up isn't translating into more opportunities in one of the most robust areas of the economy. Farmers, ranchers and other agricultural managers will see the steepest decline of any employment category by 2020, losing a projected 96,000 jobs this decade out of 1.2 million positions, part of a broader trend toward less labor in the sector, according to the Bureau of Labor Statistics.

The drop comes even as agricultural managers have the highest median wage of any of the top 20 declining categories, at more than $60,000 a year. Farm owners like the Liefers are able to manage larger tracts of land without hiring overseers. Full-time farm managers hired by others can handle more property for more clients, said Jerry Warner, a past president of the American Society of Farm Managers and Rural Appraisers, a farm- management organization based in Denver.

Industry Contraction

Many of the fastest-declining U.S. job categories result from industry contraction: post offices closing because of lower mail volume and textiles factories because of outsourcing, for example. Agriculture is an expanding sector with rising profits, even as overall employment, including laborers, is projected to drop 2.3 percent over this decade.

Total planted acreage has risen in seven of the past 10 years, the prices of corn and soybeans reached records last year, and profits for 2012 of $114 billion are estimated to be second only to 2011, even after the worst drought since the 1930s. Farmer debt is near its lowest in at least 60 years of record-keeping while land prices are at an all-time high. Still, all 291,000 of the farm-manager positions expected to become available in the decade up to 2020 -- net of those lost -- will be replacement jobs, according to the Labor Department.

Farm Consolidation

Consolidation tells only part of the story. The number of U.S. farms, which fell by half in the three decades up to 1986, dropped by just 3.1 percent in the past quarter-century, according to the U.S. Department of Agriculture. About one- quarter have sales of less than $100,000 annually and don't need a full-time manager, while larger farms are more easily overseen by one person, said David Anderson, an agricultural economist at Texas A&M University in College Station.

Effective farm managers need to have multiple skills, Anderson said. They must deal with buyers, sellers and regulators of agricultural products, manage complex finances for multimillion-dollar operations, understand chemical and crop technology and like working outdoors, he said.

"The hours aren't necessarily 8 to 5, and it's not office work," he said. "It's outdoors. It's snow, ice. It's being able to see the signs that an animal is sick. You may need to be able to ride a horse. Not just anybody can hop up and do that."

Farm Families

Managers hired at Farmers National Co., a real-estate and farm-management company in Omaha, Nebraska, where Warner is an executive vice president, preferably come from farm families, he said. They need a four-year degree in an agricultural-related field and five years of experience in rural lending, insurance, or perhaps with a Monsanto Co. (MON) seed-seller or Deere & Co. (DE) implement dealer. Such companies are also paying well, making it tougher to attract talent to oversee farms, he said.

Ken Schmitt manages about 13,000 acres of land for Farmers National near Jefferson, Iowa, about 50 miles northwest of Des Moines, working with about 60 different absentee owners of land used mainly to grow corn and soybeans.

That's about twice as much property as would have been manageable when he started in 1986, he said. "Some owners are more active than others, but I can handle a lot more of them than I used to," he said.

More Efficient

Financial software, better farming equipment and telecommunications that keeps him in touch with the farm owners, who range from investors to heirs, all make him more efficient, he said.

"It's a lot easier to get in touch with someone and solve a problem immediately," said Schmitt, who spends much of his day checking how crops are growing, recommending proper herbicides and assessing weather effects on properties up to 60 miles on either side of his office.

In the past, he would have to wait for farmworkers in far- flung fields to return before contacting them, sometimes after dark. Now they're always reachable, as are the seed-sellers, chemicals merchants and grain buyers he works with. "I wouldn't want to go back to the way we used to do things," he said.

Greater farm prosperity is likely to increase the trend toward more automation and fewer managers in much of the U.S., said Kristi Boswell, who handles labor issues for the American Farm Bureau Federation, the largest U.S. farmer group, in Washington.

Warmer States

With the exception of California and other warmer states, where crops that are hand-picked require managers to oversee crews, ever-larger farms need fewer people, she said.

"Rather than hire a full-blown manager, a lot of farmers will rely on themselves day-to-day," she said. "With the prices we've seen in the past two years, you're seeing capital investment that wasn't available in the past."

The Liefers farm a third more land than a decade ago, relying on family, a part-time hired hand -- and modern machinery. Every tractor, combine and spreader has monitors that can supply weather and market data in the middle of a cornfield, said Kirk Liefer, 35.

The GPS systems steer the tractors to the most efficient planting paths. That allows Kirk to take phone calls and send text messages while out in the fields. Kevin, less enamored with texting-while-tractor-driving, said that sometimes he sits back to "just enjoy being in the great outdoors."

Less Labor

Farming practices themselves have also lessened labor needs, the Liefers said. Their adoption of no-till farming, which eliminates plowing soil and instead relies on herbicides from companies including DuPont Co. to kill weeds normally eliminated through tillage, has significantly reduced the need for workers and managers to oversee them. The technique, increasingly common in crop production, gives them more time to cultivate ever-larger acreage on their own.

Still, for all their expansion and automation, the Liefers still see themselves as a family farm -- maybe not surrounded by as many families, yet still carrying on that tradition. Being one's own manager has always had appeal, and the father and son are making room for two of Kirk's younger brothers, who will oversee their own parts of the operation.

"There are still plenty of opportunities in agriculture," Kirk Liefer said.

(BN) Residents Told to Stay Inside Again, Smog Covers Beijing

(Bloomberg ) Beijing recommended the city's residents stay indoors today to avoid exposure to "serious" levels of air pollution in the Chinese capital.

Air quality was given the worst rating on the city's six- level scale today, according to the Beijing Municipal Environment Monitoring Center's website. The concentration of PM2.5, the fine air particulates that pose the greatest health risk, was an average of 370 micrograms per cubic meter near Tiananmen Square in the 24 hours to 8 a.m., it said. The World Health Organization recommends daily exposure to PM2.5 of no higher than 25.

Wang Anshun, the municipality's newly-appointed mayor, said pollution should be the city government's top priority, the China Daily newspaper reported today. Beijing has already proposed rules that would scrap old vehicles, ban new cement and steel factories, and impose fines for roadside vendors barbecuing food on smoggy days.

(BN) Apple’s $1 Billion Verdict Against Samsung Left Intact

(Bloomberg ) Apple Inc. (AAPL)'s $1.05 billion damages award against Samsung Electronics Co. (005930) from its patent- infringement trial in San Jose, California, was left intact after a judge denied Apple's bid to increase the award.

U.S. District Judge Lucy Koh in San Jose yesterday declined to increase the award after she found Samsung's infringement wasn't willful. The ruling was one of many post-trial decisions Koh issued yesterday denying both companies' bids for a new trial and leaving largely untouched the jury's finding in August that Samsung infringed six mobile-device patents.

"The court will not speculate as to how, precisely, the jury calculated its damages award," Koh wrote in her ruling. It is "reasonable to assume" that the award is "intended to compensate Apple for losses stemming from all of the violations the jury found."

Jurors decided Aug. 24 at the end of a trial that Samsung should pay the $1.05 billion for infringing the six Apple patents. Apple, which lost its bid to block U.S. sales on 26 of the Galaxy maker's devices, failed to establish that consumer demand for Samsung products was driven by technology it stole, Koh ruled earlier.

Koh rejected Apple's argument that jurors erred by finding Apple's trade dress, or how a product looks, for the iPad and iPad 2 wasn't protectable. The judge also denied Apple's request that she overrule jurors' conclusion that Samsung's Galaxy Tab 10.1 didn't infringe one patent covering the design of Apple's iPad tablet computer. She found that two claims, or elements, of Samsung's patent covering data transmission over wireless systems were invalid.

Samsung Loss

The judge also denied Samsung's request for a new trial. Samsung spokesman Adam Yates declined to comment on any of Koh's rulings, including whether the Suwon, South Korea-based company would attempt to make any new arguments based on the ruling that the infringement wasn't intentional.

Kristin Huguet, a spokeswoman for Cupertino, California- based Apple, also declined to comment on the rulings.

Koh also yesterday rejected Samsung's argument that Apple's patents may be "indefinite," meaning that its claims, or elements, aren't particular enough in describing the technology they covers.

Samsung rose as much as 2 percent today in trading in Seoul.

'Slavishly Copying'

Samsung and Apple, which together make about half of the smartphones sold worldwide, have each scored victories in their patent disputes fought over four continents since Apple accused Asia's biggest electronics maker of "slavishly copying" its devices. The companies are competing for dominance of a global mobile-device market estimated by Yankee Group at $346 billion this year.

At a Dec. 6 hearing, Koh had said that the original award "is not authorized by the law" on some of the products at issue, and that the jury's method for calculating damages was potentially flawed.

"If there is enough evidence in the record to justify that damage award then that verdict should be upheld,' Harold McElhinny, a lawyer for Apple, argued to the judge.

Kathleen Sullivan, a lawyer for Samsung, contended at the hearing that the damages should be reduced by more than $600 million. Sullivan said that while the jury's calculations were precise, the nine-member panel was hampered by a verdict form that, against Samsung's wishes, wasn't ''particularized" enough to permit jurors to properly arrive at damages on a product-by- product basis.

Reverse Engineer

"You should reverse engineer" to make sure the damages are "causally connected to the evidence," Sullivan told the judge.

The patent disputes began when Samsung released its Galaxy smartphones in 2010. Apple co-founder Steve Jobs, who died Oct. 5, 2011, initiated contact with Samsung over his concerns that the Galaxy phones copied the iPhone, according to testimony from the trial in August.

Jobs later vowed to wage "thermonuclear war" to prove that phones running on Google Inc. (GOOG)'s Android operating system copy the iPhone. Samsung devices use Android.

Apple's 2011 suit claimed Samsung products infringe four design patents and three utility, or software, patents. While finding infringement of six patents, the jury concluded that Samsung didn't infringe one patent covering the design of Apple's iPad tablet computer.

Apple argued Samsung bet that the benefits of using intellectual property from the iPhone and iPad would outweigh the money damages the jury awarded. Apple urged Koh to increase the damages by $536 million and approve the sales ban because Samsung took market share from Apple by "deliberately copying the iPhone design," according to a court filing.

Flooding Market

Apple, in court filings supporting a sales ban, claimed that Samsung started flooding the U.S. market with infringing products at the critical juncture when customers are moving to smartphones and developing "platform loyalty" that has diminished the base of iPhone users.

The iPhone maker has asked a full panel of judges at the U.S. Court of Appeals for the Federal Circuit in Washington to review two appeals seeking to block sales of Samsung products that Apple says violate its patents.

A three-judge Federal Circuit panel said in October that Samsung could continue selling its newest Galaxy Nexus smartphone while battling patent-infringement claims by Apple. To obtain an order that would block sales, Apple must show that the patented search feature under dispute drives consumer demand for the product, the panel said.

The San Jose case is Apple Inc. v. Samsung Electronics Co. Ltd., 11-cv-01846, U.S. District Court, Northern District of California (San Jose).

The appeals in Washington are Apple Inc. v. Samsung Electronics Co., 13-1129, and Apple Inc. v. Samsung Electronics Co., 12-1507, U.S. Court of Appeals for the Federal Circuit (Washington).

Eugene.