Apple’s new Snow Leopard operating system has hit the ground running, according to research data released Thursday

Sales during the first two weeks of Snow Leopard’s release “far exceed those of the last two Apple operating systems,” market research company NPD said. The group tracks U.S. retail sales. Snow Leopard launched Aug. 28, available as an upgrade at an affordable price of $29.

According to NPD, Snow Leopard sales were more than two times higher than those for the initial release of Leopard back in 2007, and almost four times higher than the Tiger OS in 2005.

“Even though some considered Snow Leopard to be less feature-focused than the releases of Leopard or Tiger, the ease of upgrading to Snow Leopard and the affordable pricing made it a win-win for Apple computer owners - thus helping to push sales to record numbers” NPD’s Stephen Baker said in a statement.

Apple is the No. 4 PC maker in the U.S., according to research group Gartner, with 8.7 percent of that market.

Arch foe Microsoft’s new Windows 7 operating system goes on sale October 22. It starts at $119.99.

LONDON, Aug 13 (Reuters) - Once they were warriors battling one another on the digital battlefield. Nowadays, Microsoft and Nokia are worriers, huddling together for comfort.

The world's top phone and software companies need each other to compete with Apple, Google and Blackberry-maker Research in Motion (RIM), whose products increasingly define what users expect from phones and charge premium prices in consequence.

In the market for so-called "smartphones", Deutsche Bank estimates Apple and RIM now take home more than half of all profits, despite producing less than a third of high-end mobile phones. Nokia held a 45 percent share of the smartphone market in June, according to Gartner Inc. (Table 2 in Gartner release)

The news this week that Nokia will feature Microsoft's office software -- features such as Word and Excel -- on phones aimed at business users is symbolic of what is possible rather than significant in itself. It fell short of predictions in the gadget trade press that Nokia might introduce phones running on Microsoft's own Windows Mobile software.

But that doesn't mean their collaboration should be dismissed. There's more to this budding relationship than meets the eye.

First and foremost, Microsoft and Nokia say they are taking on the Blackberry email-phone, a must have among corporate professionals. So far the they haven't done very much, for all the big talk. But they have pledged to make Microsoft Outlook work smoothly on Nokia phones.

This is crucial in overcoming Blackberry's key advantage -- the underlying software that companies rely on to securely manage corporate e-mail.

The opportunity here is that corporate technology managers are no longer content to supply only Blackberry devices but are gearing up to support a wider range of devices and software systems, reflecting shifting user tastes and demands.

Microsoft and Nokia need one another because despite being leaders in their respective fields -- computer software in Microsoft's case and phones for Nokia. But these powers have not translated into dominance in the era of converged devices.

To some extent, they have themselves to blame. The two giants spent the first half of the decade at war with one another over Microsoft's bid to enter the mobile phone business with its Windows Mobile software and Nokia's half-hearted attempts to do the reverse and expand its presence in computer
markets.

Years of legal and technology standards battles resulted in a stalemate. Windows-based phones number only a little over 20 million in a market of billions, and Nokia has made only tentative steps to enter computer tablet or netbook computer markets. Nimbler rivals have exploited these distractions.

Microsoft isn't the only technology giant Nokia is cuddling up to. In June, the Finnish company announced that it would team up with computer chip king Intel Corp on chips for future phones. Nokia was careful this week to underscore that the Intel deal is about future generations of Nokia products while the Microsoft ties are for phones in the here and now.

Whether or not Nokia sells some Windows-based phone models or Nokia eventually introduces a mini-netbook computer running Windows software is largely irrelevant to the central problem these two companies face.

Microsoft and Nokia must create differentiated products that help users do things Apple and Research in Motion cannot do. Otherwise these two giants face marginalization in the era when phones become computers.

You can read some of Eric's recent columns here.

(Photo: Reuters/Vivek Prakash, Singapore)

Microsoft — ruffled by constant ridicule by Apple — launched its latest counter-punch last night with an explicit jab at its cool but expensive archrival in a prime-time ad featuring one thrifty young woman’s quest to find a 17-inch laptop for under four figures.

“Lauren”, a feisty, red-haired computer-shopper, is given $1,000 to score a laptop with a 17-inch screen, and told she can keep the change.

First stop: the Apple store. Cue disappointment. The cheapest Macbook laptop, with a 13-inch screen, is $999. Lauren consoles herself that she is “not cool enough to be a Mac person” anyway.

Next stop, Best Buy, where a plethora of Windows-powered machines are excitedly examined. She walks out with a suitable model for $699.99. “I’m a PC and I got just what I wanted,” she exclaims delightedly to the camera.

Microsoft’s reasoning is sound. They can’t acquire Apple’s fashion appeal, and pushing value over coolness will strike a chord in the recession.

But the need to respond to Apple — which still controls only a tiny fraction of the overall PC market — shows just how well the Mac has set the terms of the contest.

And Microsoft’s point is still moot. What if Lauren has to take the laptop back in six months because it goes too slow and has a virus?

Hewlett-Packard and Dell, the world’s No. 1 and No. 2 PC makers, weighed in Thursday on Microsoft’s Windows 7 operating system, which is expected early next year.

Michael Dell, on a conference call following the company’s quarterly earnings report, was asked whether Dell is seeing any changes from enterprise customers related to Windows 7. He said:

We’re starting to get pretty excited about Windows 7 and believe it’s going to be an important catalyst for growth. Having said that, it will also push purchases until Windows 7 comes out.

Microsoft sounded a similar note at the Goldman Sachs Technology and Internet Conference. CFO Christopher Liddell said Windows 7 could help PC sales bounce back next year. He also expects some users to delay buying a new computer to wait for Windows 7:

We might see a bump (in PC sales) next year, just as a result of lower demand this year. It will be helpful, but it will not outweigh the general macro-economics.

Earlier in the day at the Goldman conference, HP CFO Cathie Lesjak was also asked about the impact of Windows 7 on consumer and corporate demand:

We didn’t think there was going to be a Vista moment. We don’t think there’s going to be a Windows 7 moment either… We are not expecting that there’s going to be this huge hockey stick effect when Windows 7 comes out. The good news is we’re hearing positive things about Windows 7.

Two days ago, Microsoft CEO Steve Ballmer said Yahoo should team up with his company on search so they can take on Google. That’s not a new idea; after all, Ballmer’s been talking about a search deal of some sort at every public forum for months.

But then, Yahoo CFO Blake Jorgensen sent out a message loud and clear the following day, endorsing the idea of a search partnership. Yahoo is “not opposed” to doing a deal on search, he said, adding that such a deal could be in the form of a partnership or a sale of it search business. When Carol Bartz took over as Yahoo CEO last month, she said her first instinct was to hold on to search, but of course, “everything is on the table.”

So could something be brewing on that front?

Collins Stewart’s Internet analyst Sandeep Aggarwal thinks so. In a research note today, Aggarwal writes the “posturing” from both sides suggests that a search deal is in the offing:

Less than 36 hours after Microsoft’s CEO mentioned about increasing likelihood for a possible MSFT/YHOO search deal due to recent management changes at Yahoo (new CEO), yesterday Yahoo’s CFO essentially not only expressed Yahoo!’s interest in a search deal but also publicly set the stage for some possible negotiations with Microsoft. As we highlighted several times before, we continue to believe that a MSFT/YHOO search deal is very likely and appears to be a near-term event. We believe that a search deal with Microsoft can provide $8 to $10 per share lift to Yahoo.

Aggarwal even goes so far as to suggest that the next step for a possible search deal between Microsoft and Yahoo is the deal announcement itself. Do you think Ballmer and Bartz will be shaking hands soon?

Keep an eye on:

• Don’t write off Steve Jobs yet. Apple tells shareholders he will return. (New York Times)
• Gannett slashed its dividend 90 percent, but if you’re an investor in publishing companies, maybe you’re just happy it didn’t get scrapped entirely. (USAToday)
• Cablevision posts a loss on Newsday writedown. (Reuters)
• If Apple can make mobile phones, why can’t Nokia make laptops? (Reuters)

(Photo: Reuters)

Rumors of a Yahoo management reshuffling, two newspaper publisher bankruptcies and a bit of PR unsavvy on Microsoft’s part do not make for a quiet weekend. Although not exactly high-octane breaking news, the stuff kept happening in dribs and drabs throughout the weekend, leading me to update my Facebook status thus: “Anupreeta would have liked at least 30 percent more weekend.” But so it goes.

On Friday night, All Things Digital’s Kara Swisher reported that a major Yahoo management reorganization was underway, and could come as early as this week. The Wall Street Journal, which shares an owner — News Corp’s Dow Jones — with All Things D, followed with its own story a day later.

Then, Microsoft — a big employer of foreign workers which took some heat last month from politicians for announcing plans to lay off 5,000 people — dug its heels deeper into the mess. It seems the software giant overpaid some laid-off workers because of an accounting error, and now wants the money back. Yikes. Does Microsoft need to do more damage control than this?

Meanwhile, newspaper publishers continue to collapse like dominoes. On Saturday, Journal Register said it had sought bankruptcy protection, becoming the latest U.S. newspaper company to buckle under a load of debt and falling ad sales. Close on its heels, the Philadelphia Inquirer owner announced it too was filing for Chapter 11 — sending out the press release bang in the middle of Oscars.

Keep an eye on:

• Will Rupert Murdoch’s love of newspapers drag his entire empire down? Maybe, but that isn’t stopping the mogul from looking for alliances to save on costs. (The New York Times)
• Falling DVD sales could hurt the fortunes of media conglomerates. (Financial Times)
• Social networks are a telco’s best friend. (Reuters)

(Photo: Reuters)

Technology companies, which have laid off hundreds of thousands of workers, are already feeling the heat from politicians about their support of the H-1B foreign worker program at a time when many Americans are jobless. (Read the Reuters story explaining why, as a result, tech companies might have to tone down their campaign to hire more H-1B workers this year.)

Last month, Microsoft was the specific target of Republican Senator Charles Grassley, who shot off a letter to the tech bellwether saying it should lay off foreign workers before laying off domestic workers.

Microsoft responded it was laying off both H-1B workers and Americans, and that it was extending support equally to all affected employees. While that may be the case, foreign workers often have a harder time if they’re laid off.

Under the H-1B visa rules, a worker who loses his job cannot stay on in the United States without changing to a different visa or finding another job. With layoffs all around, it’s not the best market in which to find a job, which means foreign workers could be forced to drop their American lives and head back home.

But some recruiters say companies are sympathetic to the plight of these workers. Recruiter Adam Charlson, who works at Korn/Ferry International’s Silicon Valley office, said companies have been quite aggressive about trying to protect people on H-1B visas. “Organizations are actively doing whatever possible to keep the loopholes open to help H-1Bs find other employment,” he said.

That could mean setting an employment termination date in the future so that the laid-off foreign worker has some time to look for another job or settle his affairs, he said. It could also include things like outplacement services, including helping people brush up on interview skills and writing resumes, and even emotional counseling.

Outplacement services can be especially helpful for H-1B workers, said John Challenger, CEO of outplacement services firm Challenger, Gray & Christmas. Unlike their American counterparts, foreign workers may not have access to informal networks — such as alumni groups and family networks — which can ofte provide leads for new jobs, he said. Tough times for all.

Keep an eye on:

• Barry Diller’s IAC. They sold off Internet dating site Match.com’s European business and appointed a new CEO. Could more assets be on the block? (Paidcontent.org)
• Consumer advocacy blog The Consumerist. It was a post on their website that eventually led to Facebook backtracking on its terms of service. Maybe they’ll have something else to say soon. (The New York Times)
• The New York Times, which killed its dividend for the time being, saying it will help reduce debt. (Reuters)

(Photo: Reuters)

Google just keeps on truckin’. The Internet powerhouse posted results yesterday that show advertisers haven’t completely cut their spending — at least not on search.

Excluding one-time charges, profit was $5.10 a share, beating the average analyst forecast of $4.95 according to Reuters Estimates.

Revenue rose 18 percent to $5.7 billion — a shadow of the 50 percent growth levels that Google used to enjoy, but considered by analysts to be a robust performance given the weak economy and corporate cutbacks in advertising spending.

But CEO Eric Schmidt also took pains to keep investors, analysts and the press realistic about the world today: “Now clearly we’re in a worldwide recession as everybody knows, rising unemployment, foreclosures, that sort of thing,” he said on a conference call. “But we don’t know how long this period will last. We obviously hope it will be short.”

Shares of Google were up more than 4 percent in early trade, and analysts offered mostly upbeat responses to the earnings despite Schmidt’s caution.

“We would be buyers of Google shares coming out of 4Q earnings. Macro risks remain, but we think Google grows high-single digits in ‘09 & is among the best-positioned companies to weather the storm,” wrote Barclays analyst Douglas Anmuth, who reiterated an “overweight” rating on the company and set a price target of $460.

You just know this sort of talk drives Steve Ballmer bonkers.

Keep an eye on:

• Tribune Co selected Tom Ricketts, the head of a Chicago investment bank, as the lead bidder for the Chicago Cubs baseball team, after receiving support from the bankrupt media firm’s creditors (Reuters)
• General Electric Co reported a 44 percent drop in quarterly profit, while media division NBC Universal’s profit declined 6 percent as strong cable earnings were offset by declines in the local stations (Reuters)
• The New York Times is in advanced negotiations to sell a substantial portion of its 52-story headquarters building on Eighth Avenue in Midtown Manhattan to W. P. Carey & Company (NY Times)

(Photo: Reuters)

This is turning out to be an earnings season when all bets are off on how technology giants will perform. With tech earnings taking the market on a roller-coaster ride, it wouldn’t be surprising if investors are a little sick in the stomach already. 

The hits and misses so far among the biggest and brightest:

Intel: Missed expectations, profit fell 90 percent and they said they wouldn’t give a detailed quarterly forecast due to the economic uncertainty.

IBM: Beat expectations and gave an outlook above Wall Street estimates. Not only did IBM shares surge on the news, it even lifted major U.S. indexes.

Apple: Record quarterly earnings made Wall Street delirious. Can’t blame investors for feeling relief after all the worry about CEO Steve Jobs.

Microsoft: Didn’t want to hold on to the bad news until the appointed time, so the it reported earlier than expected on Thursday. Said revenue and profit would almost certainly drop over the next quarter or two. 

Google: Saved the day, kind of, by balancing Microsoft’s disappointing results with news of a quarterly profit that topped Wall Street expectations.

Google gave Jefferies & Co analyst Youssef Squali some hope that the tech sector continues to be more resilient than other sectors. “Although it depends on the severity of the recession,” Squali wrote in an e-mail yesterday. “Nobody is immune forever.”

Squali carried this ominous tone into his Friday morning research note as well, calling this earnings season a “mixed bag” and the 2009 outlook “unanimously poor.”

With Yahoo and Amazon set to report earnings next week and no guarantee what surprises might be in store there, we wonder if investors will just call in sick until next year’s earnings.

(Photo: Reuters)

 If that notion of a recession-resistant entertainment industry hasn’t already been debunked, just get in touch with one of your pals out in Hollywood. They’ll tell you how bad it is — how jobs are disappearing.

Warner Brothers Entertainment is the latest to cut staff, announcing 800 jobs would be lost, or 10 percent of its worldwide staff.  NBC Universal and Viacom have already cut jobs, and industry watchers expect more job cuts to be announced by Walt Disney and Sony Pictures.

Perhaps more than other layoffs, the Warner Bros cuts send a signal of just how bad business look, The New York Times points out.

While not unexpected — Warner had been quietly preparing Hollywood to expect cuts — the layoffs rattled the movie capital because the studio is regarded as one of the industry’s healthiest. With a parade of hits like “The Dark Knight,” “Sex and the City,” “Get Smart” and “Four Christmases,” Warner recorded global ticket sales of $1.77 billion in 2008, up 25 percent from a year earlier.

But DVD sales plummeted in the fourth quarter and orders of scripted television programs — a huge Warner business — are expected to decline as networks cope with tumbling advertising sales. The struggles of Warner’s parent company, Time Warner, in the publishing arena have also put pressure on the studio to increase profitability.

The Wall Street Journal  also notes the challenges faced by parent Time Warner.

The deepening economic downturn has heaped added pressure on Time Warner to cut costs. The company recently announced a $25 billion fourth-quarter write-down to account for the tumbling value of its cable, publishing and AOL businesses, and once again scaled back its advertising outlook.

Warner Bros. was always seen as one of Time Warner’s more bloated divisions, with significant room for trimming and margin improvement. Time Warner’s movie business has already gone through one round of around 300 job cuts last year when Time Warner folded its New Line Cinema unit into Warner Bros. and shut down two boutique labels, Picturehouse and Warner Independent Pictures.

Keep an eye on:

• Google will halt its Print Ads program on Feb. 28 because the program to help newspapers make more money in online advertising sales was not working (Reuters)
• Tensions are rising at Sony over a restructuring aimed at cost cutting (FT.com) 
• Russian billionaire and ex-KGB agent Alexander Lebedev is buying a majority interest in London’s struggling Evening Standard newspaper for a nominal sum (Reuters)

(Photo: Reuters)