What Will Facebook Do With WhatsApp?

Facebook, which closed its acquisition of mobile messaging service WhatsApp earlier this week, has said that it has no near-term plan to make money from it.

Chief Executive Mark Zuckerberg, who is visiting India to participate in an event to boost Internet usage, refused to say much more, but it does indicate that the company has not worked out a cunning plan yet.

Facebook’s final WhatsApp acquisition price tag has risen an additional $3 billion to roughly $22 billion because of the increased value of Facebook’s stock in recent months. This means that Zuckerberg is under pressure to make a bob or two from the deal.

WhatsApp works across different types of phones, across borders, and without advertising. The app only charges a 99 cent annual subscription fee, which is waived for the first year.

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FBI Worried About Encryption

The U.S. Federal Bureau of Investigation expressed some concerns about moves by Apple and Google to include encryption on smartphones, the agency’s director has stated.

Quick law enforcement access to the contents of smartphones could save lives in some kidnapping and terrorism cases, FBI Director James Comey said in a briefing with some reporters. Comey said he’s concerned that smartphone companies are marketing “something expressly to allow people to place themselves beyond the law,” according to news reports.

An FBI spokesman confirmed the general direction of Comey’s remarks. The FBI has contacted Apple and Google about their encryption plans, Comey told a group of reporters who regularly cover his agency.

Just last week, Google announced it would be turning on data encryption by default in the next version of Android. Apple, with the release of iOS 8 earlier this month, allowed iPhone and iPad users to encrypt most personal data with a password.

Comey’s remarks, prompted by a reporter’s question, came just days after Ronald Hosko, president of the Law Enforcement Legal Defense Fund and former assistant director of the FBI Criminal Investigative Division, decried mobile phone encryption in a column in the Washington Post.

Smartphone companies shouldn’t give criminals “one more tool,” he wrote. “Apple’s and Android’s new protections will protect many thousands of criminals who seek to do us great harm, physically or financially. They will protect those who desperately need to be stopped from lawful, authorized, and entirely necessary safety and security efforts. And they will make it impossible for police to access crucial information, even with a warrant.”

Representatives of Apple and Google didn’t immediately respond to requests for comments on Comey’s concerns.

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Apple Changes Policy In China

Apple Inc has started the processing of keeping the personal data of some Chinese users on servers in mainland China, marking the first time the tech giant is storing user data on Chinese soil.

The storage of user data in China represents a departure from the policies of some technology companies, notably Google Inc, which has long refused to build data centers in China due to censorship and privacy concerns.

Apple said the move was part of an effort to improve the speed and reliability of its iCloud service, which lets users store pictures, e-mail and other data. Positioning data centers as close to customers as possible means faster service.

The data will be kept on servers provided by China Telecom Corp Ltd, the country’s third-largest wireless carrier, Apple said in a statement.

“Apple takes user security and privacy very seriously,” it said. “We have added China Telecom to our list of data center providers to increase bandwidth and improve performance for our customers in mainland china. All data stored with our providers is encrypted. China Telecom does not have access to the content.”

A source with knowledge of the situation said the encryption keys for Apple’s data on China Telecom servers would be stored offshore and not made available to China Telecom.

Apple has said it has devised encryption systems for services such as iMessage that even Apple itself cannot unlock. But some experts expressed scepticism that Apple would be able to withhold user data in the event of a government request.

“If they’re making out that the data is protected and secure that’s a little disingenuous because if they want to operate a business here, that’d have to comply with demands from the authorities,” said Jeremy Goldkorn, director of Danwei.com, a research firm focused on Chinese media, internet and consumers.

“On the other hand if they don’t store Chinese user data on a Chinese server they’re basically risking a crackdown from the authorities.”

Goldkorn added that data stored in the United States is subject to similar U.S. regulations where the government can use court orders to demand private data.

A spokesman for China Telecom declined to comment.

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Will Sprint Cut It’s Staff?

Sprint’s new CEO Marcelo Claure addressed employees for the first time and promised price reductions are coming very soon, according to a report.

Sprint didn’t deny the report of Marcelo’s comments. A spokesman also confirmed Friday that Sprint is “focusing on providing the best value in the market.”

According to the account of Claure’s comments, he told workers, “We’re going to change our plans to make sure every customer in America thinks twice about signing up to a competitor.” The report, which first appeared in LightReading.com, also said that “very disruptive” rate plans are coming this week.

Sprint didn’t dispute Light Reading’s report, but a spokesman said Sprint is not commenting on “any potential pricing plans before they are announced.”

The spokesman, Doug Duvall, said Marcelo held his first all-employee town hall meeting before a standing-room-only crowd. He added: “He shared his passion for his family, work and soccer team and his commitment to leading Sprint. He discussed Sprint’s challenges and pledged to get Sprint ‘back in the game’ by focusing on providing the best value in the market, completing our network build and optimizing Sprint’s cost structure.”

By confirming Sprint wants to offer the “best value in the market,” it’s pretty clear that Sprint, the third-largest U.S. carrier, will soon wage a price war with the T-Mobile, the fourth-largest U.S. carrier that has quickly been gaining on Sprint.

Analysts recently said Sprint’s recent “Framily plan” isn’t competitive in the market, which former CEO Dan Hesse acknowledged in late July before his departure on Monday.

The Sprint Framily plans costs $160 a month for 4GB of data, but comes with overage charges and won’t allow tethering. Meanwhile, T-Mobile has a family plan offered through September that costs $100 a month for four lines and 10GB of data, although each line is limited to 2.5GB.

Hesse had earlier described subscriber plans Sprint was testing that have tiers of data and unlimited data.

According to Light Reading, Claure also told employees that price cuts are needed because Sprint’s network isn’t at the level of performance and reach that it should be. “When you have a great network, you don’t have to compete on price,” he reportedly said. “When your network is behind, unfortunately you have to compete on value and price.”

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FCC Mandates Text-To-911

The U.S. Federal Communications Commission voted last week to require U.S. mobile carriers and many text-messaging apps to support functionality that allows texting emergency dispatch centers, even after questions about whether the centers will be ready by the deadline.

The commission’s vote requires U.S. mobile carriers and some texting apps to put emergency text-to-911 functionality in place by the end of the year.

Even though the nation’s four largest mobile carriers have all added text-to-911 functionality this year, less than 2 percent of the nation’s 6,800 emergency dispatch centers are ready to receive texts, said Commissioner Ajit Pai. The commission’s action will give smartphone users the impression they can send text to emergency responders, when many will not be able to, he said.

The FCC’s action “encourages the public to dive into text-to-911 functionality, when in reality, there’s hardly any water in the pool,” Pai said. “The order is sure to result in massive consumer confusion, and therefore will endanger, rather than advance, public safety.”

FCC Chairman Tom Wheeler applauded the largest mobile carriers — Verizon Wireless, AT&T, Sprint and T-Mobile USA — for adding text-to-911 functionality. The agency needs to push other carriers and emergency dispatch centers, called public-safety answering points or PSAPs, to do the same, he added.

“A lot of time of has passed since [the four largest] carriers stepped up and did something voluntarily, and the other carriers serving the consumers of America did not,” he said. “If you don’t step up to your responsibility, we will.”

Smartphone users should still call 911 if possible, but text-to-911 services need to be more widely available, Wheeler said.

The adoption of text-to-911 will let smartphone users contact police and other emergency responders when it’s not safe to talk on the phone, Wheeler said. It will also aid people with hearing or speech disabilities, he noted.

“Texting is now as important a function on a mobile device as talking,” Wheeler said. “Some of those text messages are cries for help.”

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Can BB Benefit From The WhatsApp Deal?

Facebook Inc’s awe-inspiring $19 billion bid for fast-growing mobile-messaging startup WhatsApp sent shares of BlackBerry Ltd surging after the closing bell as early as Wednesday, as investors were cheered by the lofty valuation for the messaging platform.

The deal sent shares in BlackBerry up as much as 9 percent in trading after the bell because it put a rough valuation metric around the smartphone maker’s own BlackBerry Messaging service.

BlackBerry Messaging, or BBM as it is more commonly known, was a pioneering mobile-messaging service, but its user base has failed to keep pace with that of WhatsApp, in part because BlackBerry had long refused to open the service to users on other platforms.

WhatsApp, with a user base of some 450 million, has grown rapidly. Its service works on Apple Inc’s iOS platform, Google Inc’s market-dominating Android operating system, along with devices powered by both the Windows and BlackBerry operating systems.

BBM remains popular, even though BlackBerry devices have waned in popularity. Late last year, the Waterloo, Ontario-based smartphone maker finally opened the messaging platform to users of iPhones and Android devices, and the service currently has over 80 million active users.

However, investors have attributed little value to the asset within the company. On Tuesday, Raymond James analyst Steven Li, in a note to clients, broke out a sum-of-parts valuation of the company and pegged the value of BBM at merely $240 million, or $3 per user.

Facebook’s valuation of WhatsApp translates into roughly $42 per user, and that could lead investors and analysts to rethink their valuation of the asset within BlackBerry.

BlackBerry has given no indication it is keen to sell the asset. While there has been some speculation that BlackBerry may seek to carve out the unit, or even sell it, the company’s new Chief Executive John Chen has so far said that BBM remains a core asset for the company.

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Samsung’s Eight-core Chip Goes Hacking

A Samsung eight-core chip used in some Galaxy S4 mobile devices is now available for hackers to play with on a developer board from South Korea-based Hardkernel.

Hardkernel’s Odroid XU board has incorporated Samsung’s eight-core Exynos 5 Octa 5410 chip, which is based on ARM’s latest processor designs. Samsung recently announced a new eight-core chip, the Exynos 5 Octa 5420, which packs faster graphics and application processing than the 5410. The 5420 has not yet been shipped yet, however.

The Odroid board is priced at $149 through Aug. 31, after which it will be offered for $169. Samsung for many months has said that a board with an eight-core chip would be released, and has shown prototype developer boards at conferences.

Odroid-XU will provide developers an opportunity to write programs tuned for Samsung’s octa-core chip, which has been a source of controversy. Analysts have said the eight-core design is overkill for small devices like smartphones and tablets, which need long battery life.

The eight-core chip design also takes up a lot of space, which prevented Samsung from putting LTE radios inside some Galaxy S4 models. Qualcomm, which hesitantly moved from the dual core to the quad-core design on its Snapdragon chips, on Friday criticized eight-core chips, calling the idea “dumb.”

Despite the criticism, the board will give developers a first true glimpse of, and an opportunity to write and test applications for, ARM’s Big.Little design. The design combines high-power cores for demanding applications with low-power cores for mundane tasks like texting and calling.

Samsung’s iteration of Big.Little in the Exynos 5 Octa 5410 chip combines four processors based on ARM’s latest Cortex-A15 processor design, which incorporates four low-power Cortex-A7 CPUs. The Cortex-A15 is ARM’s latest processor design and succeeds the previous Cortex-A9 core, which was used in popular smartphones like Apple’s iPhone and the Galaxy S3. Samsung said the eight-core chip provides a balance of power and performance, with the high-power cores kicking in only when necessary.

The board has an Imagination Technologies PowerVR SGX544MP3 graphics processor, 2GB of low-power DDR3 DRAM, two USB 3.0 ports and four USB 2.0 ports. Other features include Wi-Fi, Ethernet and optional Bluetooth. Google’s Android 4.2 operating system is preloaded, and support for other Linux distributions like Ubuntu is expected soon. The board has already been benchmarked on Ubuntu 13.04.

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Yahoo Still Playing Pac-Man

Yahoo announced on Wednesday that it bought Qwiki for an undisclosed sum, as the firm’s spending spree continues.

Qwiki started out as a video focused search engine in 2011, before making its way into the iTunes Store as an app that turns images and videos into digital story boards.

Yahoo announced its acquisition of Qwiki on Wednesday, although it kept quiet about what it plans to do with the company and how much it spent. However, according to Allthingsd, Yahoo spent approximately $50m to further expand its digital offerings.

What’s more, while it’s unclear what Yahoo’s plans are at present, it’s likely that the firm is looking to challenge Vine and Instagram in the social video market.

Yahoo announced the news, naturally, on Tumblr. It said, “We’re excited to announce that Yahoo acquired Qwiki – a company that uses awesome technology to bring together pictures, music and video to capture the art of storytelling.

“We will continue to support the Qwiki app, and the team will join Yahoo in our New York city office to reimagine Yahoo’s storytelling experience. Stay tuned … there’s much more to come!”

Qwiki also had something to say, posting on its website, “Thank you for being a part of our story – one which is far from over. The Qwiki app will live on as a standalone entity inside Yahoo, where we will grow our thriving community and where our team will continue to work to help you share life’s best experiences.

“We are proud of the work we’ve done, and humbled by unwavering support from the NY tech community. New York is such a big part of who we are, and what we will become.”

Yahoo’s buyout of Qwiki is the latest in a series of acquisitions by the firm. Recently the firm announced that it bought Tumblr for a cool $1.1bn, with Yahoo CEO Marissa Mayer promising “not to screw it up”.

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Malware Infections On Android Rising

An increasing number of Android phones are infected with mobile malware programs that are capable of turning the handsets into spying devices, according to a report from Kindsight Security Labs, a subsidiary of telecommunications equipment vendor Alcatel-Lucent.

The vast majority of mobile devices infected with malware are running the Android operating system and a third of the top 20 malware threats for Android by infection rate fall into the spyware category, Kindsight said in a report released Tuesday that covers the second quarter of 2013.

The Alcatel-Lucent subsidiary sells security appliances to ISPs (Internet service providers) and mobile network operators that can identify known malware threats and infected devices by analyzing the network traffic.

Data collected from its product deployments allows the company to compile statistics about how many devices connected to mobile or broadband networks are infected with malware and determine what are the most commonly detected threats.

The malware infection rate for devices connected to mobile networks is fairly low, averaging at 0.52%, Kindsight said in its report. These infected devices include mobile phones as well as Windows laptops that use a mobile connection through a phone, a 3G USB modem or a mobile hotspot device.

In January the number of infected mobile phones accounted for slightly more than 30% of all infected devices connected to mobile networks, but by June they grew to more than 50%.

The vast majority of infected mobile phones run Android. Those running BlackBerry, iOS and other operating systems represent less than 1% of infected mobile devices, Kindsight said.

When calculated separately, on average more than 1% of Android devices on mobile networks are infected with malware, Kindsight said in its report.

The malware threat most commonly seen on Android devices was an adware Trojan program called Uapush.A that sends SMS messages and steals information, Kindsight said. Uapush.A was responsible for around 53% of the total number of infections detected on Android devices.

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Is NFC Catching On?

Near Field Communication (NFC) is steadily gaining adoption in the U.S. for sharing data and music among smartphones, but the technology faces years of slow growth as a replacement for physical wallets.

NFC will take a minimum of three more years to grab hold as a technology that enables so-called mobile wallets as a replacement for credit cards and cash in the U.S., according to a consensus of five analysts. And by “grab hold,” these analysts mean being used by only 10% of mobile phone users to make digital purchases.

Gartner analyst Avivah Litan predicts that NFC payments will hit the 10% threshold in 2015, compared to the process of SMS (texting) payments that is expected to represent 50% of mobile payment volume globally in that same year. “We’re still on the edge when it comes to NFC innovation,” Litan says. “It will take a decade before it’s mainstream across the globe.”

Dozens of new smartphones that run Android, BlackBerry and Windows, and that include an NFC chip, launched last year. But Apple notably did not put NFC in its new iPhone 5 when the phone launched in September. That move “surely had a significant detrimental impact on industry adoption of NFC,” Litan says, given Apple’s influence in the mobile market.

Apple justified the move by saying that consumers already could use its Passbook app, which shows barcodes on the display, instead of NFC. The barcodes contain information that can be scanned by optical readers to let users board planes and redeem movie tickets — tasks that Apple notes are “the kinds of things consumers need today.”

Some have criticized Apple for omitting NFC from the iPhone 5, which has led to a widespread reassessment of NFC’s immediate future, especially in the U.S.

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