The company–whose roots are in e-commerce and not mobile–aspires to merchandise and sell apps better than Google does on its own platform.

And, potentially as well as Apple, which up until now has been the shining star in mobile.

Beginning tonight, the Appstore will be accessible online at amazon.com/appstore. Android owners will also be able to download a version of the store to their handset. The store will support hundreds of mobile operators and hardware manufacturers.

Amazon has been recruiting developers since at least January to convince them to get on board with the venture. Initially, users will have access to a catalog of 3,800 applications.

While selling apps is not a particular stretch for the company since it already dabbles in a lot of digital content, like music and e-books, working with mobile developers is not exactly a home run since their time and attention is fragmented among so many competing stores and platforms.

However, the company’s efforts seem to be paying off.

At launch, apps will be available from dozens of developers, spanning big names like Gameloft, Handmark and Glu Mobile. (It’s also worth noting that its efforts have also not gone unnoticed by Apple, which is suing Amazon, claiming trademark infringement and unfair competition over the name.

To start, the store will be nowhere near the long tail of applications found on Android Market or Apple iTunes, which respectively have catalogs of roughly 150,000 and 350,000 applications. But Amazon is trying to make a big splash in terms of quality. The store launches today with an Angry Birds exclusive to its new hit game based on the movie Rio.

“The developer response has been really strong,” said Aaron Rubenson, category leader for Amazon Mobile Services. “We’ll be launching with a broad range of paid and free and the customers will find lots of best selling titles from Doodle Jump to Call of Duty to Zagat and Tweetcaster. The list goes on and it’s just day one. We are adding more every single day.”

One problem that Amazon is trying to solve is discoverability.

While there’s a huge number of apps in the market, customers have a hard time finding the ones they want to buy. Conversely, developers have a hard time monetizing.

Amazon will be doing four things to help with that:

• Amazon will offer one free app a day to help with promotion.
• Amazon will offer a feature called Test Drive, which will allow a customer to try an app out before they buy. The technology is using Amazon’s cloud services. Users will be able open and use the app from within their computer browser. The simulation will last for about 30 minutes at which point they’ll have to buy it.
• Lastly, Amazon will drive recommendations based on a user’s purchase history. If they are someone who purchases cook books and high-end utensils, Amazon may recommend a recipe app.
• Amazon is also enabling one-click purchasing for anyone with a credit card on file.

The retailer is also doing a few uncharacteristic things, including being the one to set the price of the app.

For instance, if the developer recommends the app be sold at $1, and Amazon agrees, they’ll make 70 percent, or 70 cents on each download. If Amazon decides to make it free for a day, the developer will make 20 percent off their original recommendation of $1, or 20 cents. The developer will always make whichever is greater.

Rubenson said the response has been positive. “As we’ve gotten closer to launch and have talked more tactically about our merchandising capabilities and programs, they [developers] are getting very excited about the potential.”

Amazon is clearly banking on Android’s success since it is unlikely to ever sell iPhone applications on Apple’s closed system. With more than 300,000 phones based on the operating system being activated everyday, and many more tablets coming, the company sees it as a very large opportunity.

Rubenson said Amazon works closely with Google in a number of ways, especially as a major reseller of its devices. It also maintains a site called Android 101, which teaches customers about the OS. “In that regard we are engaged on multiple fronts,” he said. “But one of the strengths of the OS is the openness. We’ve taken that and focused on making the best possible store for customers.”

So far, Amazon will mostly rely on driving traffic to their store through their own referrals. However, increasingly they expect to partner with carriers or handset makers. Rubenson said its first third-party partnership will be with Cellular South, which will make the Appstore available to its customers through preloads and other methods.

He declined to discuss revenue splits or the financial relationship with partners.

It turns out that if you don’t use the part of the chip that has the problem, it works just fine. The problem is with the SATA port connections on the Cougar Point chipset. There are six such connections and only one is of which four are affected. (For the finer technical points about the design problem, read this post at AnandTech.)

In the days after Intel disclosed the design error on its Cougar Point chipset, PC makers called up to ask if they could continue to ship if they tweaked their designs in such a way that used only the SATA port connections on the Cougar Point chipset that worked. Intel said this was A-OK, and has restarted shipping the chips to those PC makers that have promised to make the necessary changes.

Meanwhile, Intel says it has started manufacturing a new version of the chips, and it should start shipping to new customers later this month

News of the flaw hurt Intel stock last week, mainly because of the potential for financial impact. Intel said it will reduce its revenue forecast for the first quarter by $300 million as it ends production of the old chip and gets volume of the new one ramped up, and that the full impact could reach $700 million for the fiscal year. However, today’s disclosure suggests that Intel may have initially outlined a worst-case scenario just in case. Still, it hasn’t changed its forecast for the quarter. Intel shares, however, are up in after-hours trading.

Update: I corrected this post because I got the number of affected SATA ports on the chip wrong. Sorry about that.

The war between Google and Microsoft is clearly heating up.

After being accused of copying Google’s search results on Tuesday, Microsoft is now going after Google, accusing it of injecting inconsistency and legal uncertainty into the Web video arena by natively supporting only the newly open-sourced WebM video format in its Chrome browser, rather than the H.264 format preferred by Microsoft and Apple.

In response, Microsoft said it will build a Chrome plug-in that will restore support for H.264, an older and more commonly used video format. Microsoft said it plans to support H.264 in the next version of Internet Explorer, although it will also allow plug-ins that enable WebM support.

“Our point of view is totally clear,” Internet Explorer head Dean Hachamovitch writes in a blog post being posted on Wednesday. “Our support for H.264 results from our views about a robust web and video ecosystem that provides a rich level of functionality, is the product of an open standards process like the W3C’s HTML5 specification, and has been free from legal attacks. Microsoft is agnostic and impartial about the actual underlying video format for HTML5 video as long as this freedom continues.”

For its part, Google has said its decision to base its HTML5 video support around WebM is due to the royalties associated with H.264.

“We acknowledge that H.264 has broader support in the publisher, developer, and hardware community today (though support across the ecosystem for WebM is growing rapidly),” Google said in a blog post in mid-January.

However, it said, “To use and distribute H.264, browser and OS vendors, hardware manufacturers, and publishers who charge for content must pay significant royalties–with no guarantee the fees won’t increase in the future.”

Google added that, to companies like itself “the license fees may not be material, but to the next great video startup and those in emerging markets these fees stifle innovation.”

Hachamovitch, meanwhile, encouraged more discussion on the topic.

“Web video is still, in many ways, in its infancy,” he said. “Working through these questions is part of moving the web forward. The web is a product of consensus and open dialog. This post is meant to be part of the dialog.”

Your move, Google.

DRAM is the ultimate commodity chip market, and its boom-or-bust cycles are legendary. When demand picks up, manufacturers like Samsung, Hynix and Micron always rush to add manufacturing capacity–prices pick up; chips become scarce.

Everything seemed to be going well for the chip companies until the third quarter of 2010. After five straight quarters where the average price for a DRAM chip increased, it suddenly turned south as demand for notebook PCs slacked. That’s in line with what Gartner and IDC reported yesterday about the PC market.

There’s good news for consumers, however. All that stacked-up inventory has to go somewhere. If you’re planning to buy a notebook this year, the base models will now start shipping with four gigabytes of memory instead of two. And for those who bought a machine with only two in the last year or so, upgrades will be more affordable.

The one bright spot for the memory companies? You got it: Smartphones and tablets. Memory content in phones is expected to increase by nearly two-thirds. And the 57 million tablets that iSuppli expects will ship this year will also need some DRAM. More details here from iSuppli.

Consider this: In 2009, HTC, Samsung and LG accounted for 67 percent of Windows Mobile shipments. In the third quarter of 2010, those same companies accounted for 44 percent of Android handset shipments. Motorola and Sony Ericsson, also longtime Windows Mobile licensees, accounted for an additional 30 percent.

With Android commanding that kind of OEM attention, Microsoft is going to have to work harder than ever to rewrite the weak mobile story it’s written for itself over the past few years.

“To ensure Window Phone 7’s success, Microsoft must sign up virtually all of the name brand smartphone vendors who deserted Windows Mobile for Android when Microsoft failed to modernize the operating system for three years,” says Needham analyst Charlie Wolf. “Microsoft has signed up three of them and has two to go. Google would argue that it has the upper hand in this tussle because it licenses Android for free while Microsoft charges a licensing fee (albeit a small one compared to its PC licensing fees). But Microsoft simply has more at stake.”

And it knows it. Which is why it’s putting so many marketing dollars into Windows Phone 7.

Says Wolf, “We suspect the company will devote a material portion of [its marketing budget] to buy the support of the leading smartphone manufacturers.”

The engine for that spike in sales? Samsung’s Galaxy S phones, which the company distributes through six U.S. carriers, among them AT&T, Verizon, Sprint and T-Mobile. Samsung says it has now shipped three million Galaxy S smartphones since the line’s mid-July launch.

And how did other Android vendors fare in Gartner’s rankings? Motorola placed second, HTC came in a close third and LG a very distant fourth.

U.S. RANKINGS: ANDROID

1. Samsung
2. Motorola
3. HTC
4. LG

Seems Motorola’s alliance with Verizon is finally beginning to cost it a bit of market share.

“Motorola, by launching its key Android devices on Verizon Wireless, was able to gain significant market share in the U.S. but is now in a difficult position as their Android business is too reliant on Verizon Wireless with roughly 40-50% of their worldwide Android sales coming from Verizon,” Gartner analyst Hugues De La Vergne told me. “With a rumored iPhone coming to Verizon in Q1, Motorola is the hardware vendor that has the most to lose.”

Talking about Google’s characterization of the Android platform as open and Apple’s as closed, Jobs said, “We find this a bit disingenuous.” The open vs. closed argument is a “smokescreen,” Jobs said. The real issues, in terms of satisfying consumers, are the advantages of Apple’s integrated approach in contrast to the multiple flavors of Android as adapted by various manufacturers and carriers.

Noting too that there will be at least four Android app stores, as opposed to Apple’s one-stop shop, Jobs said that “this is going to be a mess for both users and developers.”

Android may be Apple’s biggest competitor in the mobile market, Jobs said, but Apple’s goal is to create products that “just work” and “their approach is very different from that.”

Furthermore, he said, “Even if Google were right, and the real issue was closed vs. open, it’s important to remember that open systems don’t always win.”

“We are very committed to the integrated approach, no matter how many times Google tries to characterize it as closed,” he said.

A wide range of companies have seen sales get hit. General Electric Co. (GE) said supply constraints for electronic components used in its healthcare equipment cost the company $50 million in sales for the quarter.
Network-equipment vendor Telefon AB L.M. Ericsson said shortages cost the company $400 million to $550 million in sales and delayed shipments. Royal Philips Electronics NV said shortages constrained sales in its TV and lighting businesses.

Read the rest of this post on the original site

Although the iPad is unproven at market, some Chinese electronics manufacturers are betting that it will succeed in doing just what Jobs foresees. And they’re cloning the hell out of Apple’s (AAPL) device.

Among them, Teso debuted two tablets at a Chinese trade show last week–an Intel (INTC) Atom-based “iPhone-style” tablet that runs Windows 7 and an ARM-based device running Android–and Yinlips plans an iPad look-alike with a six-inch E-Ink display.

Meanwhile, Micro-Star International will show off an Android-based tablet with a 10-inch screen at the Computex electronics show in June.

Then there’s Asus, which is prepping two iPad rivals for launch in the coming months, one for Android and another for Windows. Asus, of course, is the company that earlier this month disparaged the iPad as “one big screen iPhone” and said it was something it could improve.

Finally, Shenzhen Huayi expects big things from its ridiculous-looking iPad knockoff. “We basically made the designs to look like a jumbo iPhone,” President Xiong Yiwei told Korea IT Times. “The profit margin of counterfeit cell phones reached up to 30 percent in the past, but only 10 yuan (US$1.50) profit margin is made per one product. We had a great expectation of netbooks last year, but only 100 yuan (US$15) profit margin was made. The success of iPhonish product is a matter of life or death for us.”

No wonder microprocessor outfit ARM is predicting we’ll see some 50 iPad clones by year’s end.

[Image credits: midbbs.cn, imp3.net and Shanzai]

And according to Gartner, PC sales rose 22.1 percent–the strongest quarter-over-quarter growth the market has experienced in the last seven years.

“These preliminary results indicate the recovery of the PC market on a global level,” said Mikako Kitagawa, principal analyst at Gartner (IT). “The U.S. and Asia/Pacific had already shown positive indicators last quarter, however the fourth quarter 2009 results were more concrete evidence of the recovery.”

Signs that the econalypse is coming to an end seem to have loosed the pent-up demand that’s been building over the past year, and most major PC manufacturers benefited–particularly Hewlett-Packard (HPQ), which, with either 20.7 percent (IDC) or 19.8 percent (Gartner) market share worldwide, remains the PC leader.

Also faring particularly well in Q4: Acer, whose strong netbook sales pushed it to second place behind HP, with market share of 13.4 percent according to IDC, and 13.5 percent according to Gartner.

And the rest of the industry’s big players? Dell (DELL) ranked third with a worldwide market share that fell to 12.5 percent from 13.6 percent a year ago, according to IDC, or to 11.5 percent from 13.3 percent, according to Gartner.

Lenovo and Toshiba ranked fourth and fifth, according to both firms, which put the former’s market share at around nine percent and the latter’s well above five percent.

Here are the summary tables; click to enlarge:

Hence, Sony’s announcement that it’s making a big bet on…3-D TVs. CEO Howard Stringer is using the IFA Technology Show in Berlin to announce that Sony will make 3-D Bravia sets.

And 3-D Vaio laptops. And 3-D PlayStation3s. And 3-D Blu-ray DVD players.

No plans for a 3-D Walkman, though. (But wait!)

This is a recurring theme for Sony, by the way: Stringer also talked up 3-D in January at the Consumer Electronics Show. I still wonder about the actual demand for this; I sampled some new-fangled 3-D at CES and left underwhelmed. But the stuff I saw–a live broadcast of the college football championship game–was, admittedly, an experiment.

In any case, even if you believe Stringer’s assertion that consumers really love the new 3-D experience, there are some big hurdles before Sony (SNE) or anyone else in home electronics can capitalize on it. For instance:

• A looming format war, the same thing that kept Blu-ray from taking a running start at the DVD market.
• Ginormous prices: Sony hasn’t said how much its 3-D-enabled TV sets will cost, but the ones that rival LG go for something like $5,500.

It’s going to be a rough couple of months for the wireless industry.

As expected, the Federal Communications Commission on Thursday approved a broad inquiry into the wireless market. In a unanimous vote, the agency’s five commissioners–three Democrats and two Republicans–approved two so-called notices of inquiry, one that will examine competition and innovation and another that will evaluate truth-in-billing practices.

“I can’t think of a more important moment to be considering these issues,” FCC chairman Julius Genachowski told a hearing in Washington. “Many Americans are learning to do more with less. A surprise charge on a monthly bill, or a new service that does not perform as advertised, can be a major budget-buster, especially as household spending on communications grows ever larger. This FCC will have a relentless focus on innovation and investment, on competition and consumers.”

Genachowski added that these inquiries could lay the groundwork for the examination of other industries such as cable and Internet. “I hope the new wireless competition report will help set a standard for fact-based, analytically deep analysis of the mobile industry,” he said. “It is essential that the commission develop policies that encourage a new generation of innovators, working with new tools, on new platforms, and having an extraordinary impact on our economy and society.”

The wireless industry’s trade group, CTIA, welcomed the inquiry through gritted teeth, saying it “appreciates the opportunity to respond” to the FCC’s questions. “The wireless ecosystem–from carriers to handset manufacturers to network providers to operating-system providers to application developers–is evolving before our eyes and this is not the same market that it was even three years ago,” said president and chief executive Steve Largent. “In this industry, innovation is everywhere.”

In a research note today, FTN Equity Capital Markets analyst James Hardiman said “evidence is mounting” that Sony will announce a PS3 price cut, perhaps during its Tuesday presentation at GamesCon.

Videogame analyst Heath Terry of FBR Capital Markets shares this view, and in a note to clients, he put a dollar figure on the cut. “With Sony set to announce a $100 price cut on the PS3 on Tuesday at Gamescom in Germany according to our retail checks, we believe the other hardware manufacturers will respond with a combination of price reductions and bundling strategies that should drive significant acceleration in hardware sales,” Terry wrote, adding that the cut, should it come to pass, will mark “the first of a series of catalysts that should drive a return to growth” for the videogame industry.

Certainly, it would give Sony (SNE) a nice boost in sales in the run-up to the winter holiday consumer binge. And given its most recent financials, the company could really use one right now.

And by many accounts, Windows 7 is poised to do just that. Unlike Vista, it was completed on time. And unlike Vista, early reviews have been positive.

“Even in beta form, with some features incomplete or imperfect, Windows 7 is, in my view, much better than Vista, whose sluggishness, annoying nag screens, and incompatibilities have caused many users to shun it,” Walt Mossberg said of the OS back in January. “It’s also a serious competitor, in features and ease of use, for Apple’s current Leopard operating system.”

So Microsoft (MSFT) has good reason to be proud of this release-to-manufacturing, or RTM, milestone. There’s a lot riding on Windows. And the company seems to be very much on point as it brings the newest version to market.

“Today’s release is the result of hard work and collaboration with our partners in the industry to make Windows 7 a success,” wrote Microsoft’s Brandon LeBlanc in a post to the Windows 7 Team Blog. “We delivered Windows 7 with a predictable feature set on a predictable timetable that allowed OEMs [original equipment manufacturers] to focus on value and differentiation for their customers. We continue to be overwhelmed at the community’s response to Windows 7 and it has been an extremely rewarding experience to witness. We hope the enthusiasm will continue to grow even more as our partners build amazing experiences with their products and Windows 7.”

Ironically, this particular build of Windows 7–Build 7600.16385–which Microsoft designated as RTM, was leaked to the Internet nearly a week ago and has been available for download via BitTorrent ever since.

It would seem then that the so-called “fastest-growing segment of the PC market” is also the most misunderstood. For what is a netbook but an underpowered laptop or a giant Gallagher-sized smartphone? Consumers are intrigued by the netbook’s low prices, but they don’t understand its value proposition.

“We need to make sure consumers are buying a PC intended for what they plan to do with it,” said NPD’s Stephen Baker. “There is a serious risk of cannibalization in the notebook market that could cause a real threat to netbooks’ success. Retailers and manufacturers can’t put too much emphasis on PC-like capabilities and general features that could convince consumers that a netbook is a replacement for a notebook. Instead, they should be marketing mobility, portability, and the need for a companion PC to ensure consumers know what they are buying and are more satisfied with their purchases.”