MediaFile

In the Playstation debacle, Sony plays a serious game

There is a truism in business, and politics: it’s never the offense that gets you into trouble, it’s how you handle the aftermath. “Watergate” would not have become shorthand for corruption if the massive criminal cover up of political dirty tricks hadn’t unraveled. “Tylenol” might just have been a trivia answer had Johnson & Johnson not rebounded from the seven tragic deaths of people who took their tainted pain killers into a case study of pitch-perfect crisis management.

Apple and Google both had some explaining to do in recent days about how they collect, store and use tracking information on the smartphones which, combined, account for nearly two thirds of the market. But Sony might have an even bigger challenge on its hands.

Sometime between April 16 and 19 hackers gained access to private information about some 77 million Playstation customers, including logins, passwords, e-mail addresses, home addresses, and possibly account history and credit card information. It took Sony nearly a week to disclose this, even though it shaped up to be one of the biggest data breaches in history.

On Sunday — nearly two weeks later — the company took the first meaningful step to regain the public’s trust. It included both ritualistic and material elements. But as PR professionals will tell you, doing ritual wrong makes material unbelievable.

Sony’s quest began with a simple bow — though not from the company’s CEO, a curious decision given that humility from no less than a chief executive is usually required to turn public opinion in high-stakes damage control. In Sony’s case it is all the more odd since its CEO, Howard Stringer, is no Tony Hayward, the tone deaf BP CEO who apparently forgot that people had died in the Gulf Horizon disaster when he told an interviewer that he’d “like his life back.”

Tech wrap: Microsoft earnings fail to excite

Microsoft reported a dip in quarterly sales of its core Windows operating system, mirroring a recent downturn in personal computers. The world’s largest software company met Wall Street profit estimates, as strong sales of its Office suite of applications and game systems took up the slack. “Microsoft to me is no longer a growth stock but it is a very attractive value stock. They continue to generate tremendous free cash flow. Their balance sheet is really unmatched,” Channing Smith of Capital Advisors said.

Sony could face legal action across the globe after it delayed disclosing a security breach of its popular PlayStation Network, infuriating gamers and sending the firm’s shares down nearly 5 percent in Tokyo Thursday.

Mobile privacy safeguards should also extend to third party application developers, two lawmakers said after reviewing the practices of four major U.S. wireless carriers.

Tech wrap: Privacy storm strikes Sony, passes Apple

Apple denied it is tracking the movements of its iPhone customers, but said it will provide a software update that stores less location information on phones in response to public outcry over privacy issues. Apple plans to release a software update that would cut the size of the wireless hotspot location database stored on its iPhones, and stop backing up that information. The software will be released in the next few weeks, it said.

Users of location-based services like those offered on iPhones have a hard time reconciling the security and privacy implications that come with allowing third parties access to their information, writes Mashable’s Christina Warren.

Sony’s delay in announcing that hackers had stolen names, addresses and possibly credit card details from the 77 million user accounts of its video game online network sparked an online furor from users. Some gamers writing in online forums called for a boycott of Sony products, while shoppers at London video-games stores said they might leave the PSN network, which allows them to play games with other members and buy games online. A Sony spokesman said that after learning of the breach it took “several days of forensic investigation” before the company knew consumers’ data had been compromised.

from Reuters Money:

Sony PlayStation users: How to fight a data breach

If you've ever lost a credit card, had your identity stolen or even lost your wallet, you know what a pain it is and what worry is attached. For an estimated 77 million Sony PlayStation subscribers, today is that day.

With the risk that their credit card data has been pilfered along with all other information they entrusted to Sony when signing up (name, address and phone number, etc.), it's time to start acting like victims.

That means considering canceling credit cards, planning to systematically— one every four months — order credit reports (you are entitled to one a year free from each of the three major credit agencies from this site) to see if someone has taken credit in your name. That means closely monitoring all your bills to make sure that no extra charges are lopped on.

Tech wrap: Sony admits PlayStation Network privacy breach

A visitor plays with a Playstation at an exhibition stand at the Gamescom 2009 fair in Cologne in this August 22, 2009 file photo. Reuters/Ina Fassbender

An unauthorized person stole names, addresses and other personal data belonging to about 77 million people who have accounts on Sony’s PlayStation Network, Sony said. The person gained access to people’s names, addresses, email address, birthdates, usernames, passwords, logins, security questions and more, Sony said on its U.S. PlayStation blog.

Amazon.com’s quarterly sales beat expectations but earnings fell steeply as it spent heavily on everything from online multimedia services to its Kindle e-reader. Net income for the world’s largest online retailer was $201 million, down 32.8 percent from $299 million, a year earlier. Revenue was $9.86 billion. “This is another investment year…It’s probably not going to be until Q4 that we see some leverage from that,” Lazard Capital Markets’ Colin Sebastian said.

Shellacking Apple

Apple was outed last week for doing something either sinister or stupid (or both): Researchers revealed that the iPhone remembers where you’ve been pretty much all the time and saves that information in a way that almost anyone can access.

The revelation whipped up a media frenzy, and why not? Internet privacy is a hot topic — rightly so — as more of our computing goes mobile. The biggest subsidy for access to free and cheap content remain targeted ads. The more relevant the ad, the more valuable they are to advertisers and publishers — and the less annoying to the consumer. Google alone makes about $5 billion every three months mainly on ads that are more likely to pique your interest because they are determined by what you are searching for, or key words in your e-mails.

This iPhone dossier should not exist, at least in its current form. It lives, zombie-like, without any form or protection of encryption, not only on your iPhone but also on the computer you use to sync and back it up. Even if Apple isn’t hand-feeding your bread trail into the salivating mouths of sleazy marketers (and there is no evidence it is) the mere existence of this database is very problematic for very practical reasons: It could, for example, give a jealous spouse new leverage to demand you produce actual evidence to back your word about working late last week, and your employer a means to verify that you really did have that expensive lunch you expensed.

Tech wrap: Apple beats Google to the music cloud

Storm clouds gather over Hanoi's skyline September 21, 2009. REUTERS/KhamApple has completed work on an online music storage service and is set to launch it ahead of Google, whose own music efforts have stalled, according to several people familiar with both companies’ plans. The sources revealed that Apple’s plans will allow iTunes customers to store their songs on a remote server, and then access them from wherever they have an Internet connection and that Apple has yet to sign any new licenses for the service and major music labels are hoping to secure deals before the service is launched. Amazon.com launched a music locker service earlier in April without new licensing agreements leading to threats of legal action from some music companies.

Verizon gained wireless subscribers with Apple’s iPhone, but the device’s affect on its financials failed to impress investors. Verizon Wireless posted 906,000 net new subscribers, roughly in line with expectations. That was much better than AT&T, which added only 62,000 net subscribers in the quarter as it lost iPhone exclusivity. However, a key sticking point for investors when comparing the two operators was the fact that AT&T won more new iPhone customers in the quarter than Verizon. Verizon announced that it would sell a new version of the iPhone later this year that, unlike its current iPhone, would work globally.

The risky attempt by The New York Times to charge fees to website readers looks to be paying off, although it still faces stiff challenges in turning around a fall-off in print advertising revenue at its core business. The company gained more than 100,000 new subscribers since it introduced its digital subscription service on March 28, representing at least an estimated $26 million in annual revenue and trouncing early expectations for the service.

Tech wrap: Apple raises the earnings bar

A shop assistant in Sydney gestures in front of an advertising sign moments before Apple's iPad 2 became available for direct purchase in Australia March 25, 2011.  REUTERS/Tim Wimborne Apple reported quarterly revenue of $24.67 billion on strong iPhone and Mac sales, racing past Wall Street estimates. In the quarter, the company sold 18.65 million iPhones and 3.76 million Macintosh computers. Analysts expected 16.3 million and 3.64 million, respectively. Sales of iPads and iPods fell short. The number of iPads sold was 4.69 million, shy of the 6.3 million expected. Sales of iPods were 9 million, versus expectations of 9.85 million.

Analysts said that the weaker-than-expected iPad sales will not detract from strong long-term demand. “We can attribute some of the weakness to stocking issues at some of the retail outlets and obviously the supply chain issue in Japan,” said Capital Advisors Growth Fund’s Channing Smith.

The next-generation iPhone will have a faster processor, look largely like the iPhone 4 and will begin shipping in September, three people with direct knowledge of the company’s supply chain said.

Live Coverage: Will Apple finally disclose iPad 2 sales figures?

Apple Madrid.jpg

Apple should report another spectacular quarter, but tempered by growing caution over how supply constraints will squeeze margins and restrain iPhone and iPad sales.

Tops on the agenda will be the impact of Japan’s unfolding crisis on component prices and availability, while the spectre of Steve Jobs health and the uncertain timing of the next iPhone continues to hover in the background. Join us for a live chat at 5pm ET / 2pm PT after Apple reports its quarterly financials.

Tech wrap: Q1 earnings beat expectations, RIM’s PlayBook – not so much

A video wall displays Intel's logos at the unveiling of its second generation Intel Core processor family during a news conference at the Consumer Electronics Show (CES) in Las Vegas January 5, 2011. REUTERS/Rick WilkingIntel forecast quarterly revenues well above Wall Street’s estimates despite a hiccup in sales of its Sandy Bridge processors after the discovery of a chipset design flaw and defying fears the world’s top chip maker is struggling to find its footing as personal computer sales growth wanes.

IBM raised its profit forecast as the tech giant released quarterly earnings ahead of Wall Street projections, citing strong sales of its mainframe computers and brisk business in emerging markets.

Yahoo posted quarterly earnings that topped Wall Street targets amid threats to the No. 1 provider of online display ads in the U.S. from Facebook and continuing pressure from search leader Google.