By Ian Sherr

Hewlett-Packard Co. wants to persuade appliance and car manufacturers to use its webOS operating system in their products. But the software’s late arrival to the market and relatively small footprint are prompting companies to pause before licensing the platform.

In June, Leo Apotheker, chief executive of the electronics giant based in Palo Alto, Calif., said his company plans to begin talks with various companies to gauge interest in webOS, which powers H-P’s TouchPad tablet computers and Pre smartphones.

H-P says webOS, which uses touch commands and connects to the Internet, can make machines easier to use while adding functionality that customers have come accustomed to in their mobile gadgets.

For example, a touch screen could replace the buttons on a stove, displaying recipes pulled from the Internet. Similarly, a refrigerator could be programmed to make extra ice during certain times of the day.

“We’re looking at expending the base and bringing to the webOS community an ecosystem that inspires developers out there,” said Stephen DeWitt, who is in charge of webOS for H-P. He said there is already an “enormous amount of interest,” but declined to name companies that might potentially license the software.

H-P hopes that getting webOS on appliances and in cars will create an ecosystem of devices and accessories around the operating system. That will encourage developers to write programs that can be used on those products, spurring a market of software like Apple Inc. has done with its App Store bazaar. Analysts say H-P also hopes that licensing the software to manufacturers will create a regular and predictable revenue stream.

The company’s ambitions, however, face a host of challenges from already-specialized software makers and companies uninterested in putting an advanced operating system in their products, analysts and industry insiders say.

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(Originally published Aug. 16, 2011 in the Wall Street Journal.)

By Ian Sherr

People don’t have tablet fever; it seems they simply have a mania for iPads.

The latest evidence: Hewlett-Packard Co. is dropping the price of its TouchPad tablet by 20% little more than a month after it hit stores, as the computer giant tries to goose sales of its answer to Apple Inc.’s iPad.

H-P, Motorola Mobility Holdings Inc. and Research In Motion Ltd. have all jumped into the tablet market this year, trying to close the gap with Apple.

The electronics giant created a multi-billion-dollar business last year when it launched the iPad—and has since seen its profits and market value swell as others have tried to keep pace.

Rivals have been routed so far. Motorola cut the price of its Xoom tablet after its February launch, released a cheaper model and warned shipments will decline this quarter. RIM’s PlayBook was delayed until April and still isn’t being offered for sale by the two biggest U.S. wireless carriers.

Samsung Electronics Co., which was the quickest to market an iPad rival and has shipped millions of tablets based on Google Inc.’s Android software, is now embroiled in a patent dispute with Apple that threatens sales of its Galaxy Tab in most of Europe.

Apple, meanwhile, says it is having difficulty keeping up with demand and selling every iPad it can manufacture. Five months after its release, its iPad 2 can be hard to find in retail stores. The company said it shipped 9.3 million iPads in the June-ended quarter.

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(Originally published Aug. 12, 2011 in the Wall Street Journal.)

By Ian Sherr and Nick Wingfield

On a Tuesday afternoon last month, engineers working for Sony Corp. were baffled when several servers running the company’s PlayStation Network suddenly turned themselves off and then back on.

At the time, the unexpected rebooting seemed like an odd malfunction. The next day, however, the engineers found the first evidence that an intruder had penetrated Sony’s systems, prompting the Japanese company to take what it calls “the almost unprecedented step” of shutting down the popular online gaming network.

Sony Chief Executive Howard Stringer issued a public apology this week for what the company later disclosed was a data breach that compromised more than 100 million user accounts on three public networks, and a delay in informing users of the theft. Sony says the loss included users’ names, birthdates and passwords. It also hasn’t ruled out the loss of credit card numbers associated with the Sony PlayStation network.

Some analysts believe the incident, which has drawn the attention of authorities around the world, will cost the company more than $1 billion for measures that include new security and a $1 million insurance policy for any victims of identity theft. The company hasn’t provided its own estimate of the cost. It also hasn’t resumed operating the network, but has said it is in final testing and is expected to do so within days.

“Taken as a whole, the number of customers affected, the PR impact and now the legislative inquiries,” this ranks “at the top” of data breaches to date, said Cynthia Larose, an attorney specializing in privacy matters with Mintz Levin in Boston.

PlayStation Network, which is accessed by owners of Sony game consoles, uses 130 server systems, 50 software programs and has 77 million user accounts, according to a letter that Kazuo Hirai, president and group chief executive of Sony Computer Entertainment Inc., sent Wednesday to a U.S. congressional committee. That letter, and a similar account included in a letter Friday to Sen. Richard Blumenthal (D., Conn.) provide the most detailed accounts of the incident.

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(Originally published May 7, 2011, in the Wall Street Journal.)

By Ian Sherr

New details emerged about Sony Corp.’s investigation into one of the biggest data breaches in history, as the company attempts to piece together who stole personal information from more than 100 million accounts on its online game networks.

At least some of the attacks came from a Malaysia-based server, a person familiar with the matter said, though it wasn’t clear if any of the hacking was actually done from there, or whether only the server there was used.

On Tuesday, a U.S. spokesman for Sony confirmed some of the companies helping to investigate the breach and secure its network against further intrusions. The security firms named are Protiviti Inc., Guidance Software Inc. and Data Forté Corp., which specialize variously in forensic computer investigations and security consulting.

The company has also retained the services of the law firm Baker & McKenzie in connection with the matter. Representatives of the law firm and two of the security firms didn’t respond to requests for comment. Guidance Software declined to comment.

Political pressure on Sony for a more complete accounting of its handling of the data breach has been increasing. Sen. Richard Blumenthal (D., Conn.) on Tuesday sent a letter to Sony executives saying he is “deeply concerned about the egregious inadequacy of Sony’s efforts thus far to notify its customers of these breaches or to provide adequate protections for users whose personal and financial information may have been compromised.”

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(Originally published May 4, 2011, in the Wall Street Journal.)

By Ian Sherr

Plaintiffs lawyers are targeting Sony Corp. with class-action suits after a breach of the company’s online-game network compromised the personal information of millions of users.

In one lawsuit, filed in the U.S. District Court’s Northern District of California, videogame player Kristopher Johns said Sony’s security was negligently poor and the company failed to encrypt personal information.

The lawsuit, which was filed Wednesday against Sony’s U.S. entertainment unit and seeks class-action status, also alleges Sony failed to notify customers of the breach in a timely manner.

“This has caused, and continues to cause, millions of consumers fear, apprehension, and damage,” the filing said.

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(Originally published April 29, 2011, on the Wall Street Journal website.)

By Nick Wingfield, Ian Sherr and Ben Worthen

A hacker stole the names, birth dates and possibly credit-card numbers for 77 million people who play online videogames through Sony Corp.’s PlayStation console, in what could rank among the biggest data breaches in history.

Sony, whose gaming network has been offline for six days, disclosed Tuesday that an “illegal and unauthorized intrusion” between April 17 and April 19 resulted in the loss of a significant amount of personal information that could be used in identity theft.

The PlayStation Network is used by owners of the company’s game machine to play against one another, chat online and watch movies streamed over the Internet. Sony warned users the intruders may have accessed billing addresses, purchase histories and account information for their children.

Fueled by fast Internet connections, online-gaming services have become global social hubs for tens of millions of people who spend hours competing and cooperating on fantasy quests, combat missions and other activities. People across the globe pay monthly fees to play online-computer games like “World of Warcraft.” Most titles for the PlayStation 3 and Microsoft Corp. Xbox 360 have online components.

Sony warned members of its PlayStation Network and a related entertainment service called Qriocity to closely watch their credit card statements for unauthorized charges. It also told members to be on guard against email, telephone and postal scams aided by the lost personal information.

“While there is no evidence at this time that credit card data was taken, we cannot rule out the possibility,” Sony said in a blog post.

The PlayStation Network, meanwhile, remains out of commission, sowing frustration among gamers. In the blog post, Sony spokesman Patrick Seybold said the company has a “clear path” to restore “some services within a week.”

The incident is a major black eye for the Japanese electronics giant, locked in an increasingly heated battle with Microsoft, Nintendo Co. and other companies in the gaming market. The breach also highlights the trove of personal information stored in online-gaming services.

E.J. Hilbert, a former agent with the Federal Bureau of Investigation who is now a senior vice president at security consulting firm Arixmar, called the compromise of as many as 77 million users accounts “huge.”

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(Originally published April 27, 2011 on the front page of the Wall Street Journal.)

By Ian Sherr

Apple Inc. filed a lawsuit claiming Samsung Electronics Co. Ltd. copied the look and feel of its popular iPhone smartphones and iPad tablet computers, the latest in a series of legal skirmishes that underscore the increasingly high stakes of the mobile computing market.

The lawsuit, filed on April 15, alleged that Samsung’s smartphones, including the “Galaxy S 4G,” “Epic 4G,” “Nexus S” and its “Galaxy Tab” touchscreen tablet, violate Apple’s intellectual property. The 38-page lawsuit was filed in the U.S. court’s northern California district.

“Rather than innovate and develop its own technology and a unique Samsung style for its smart phone products and computer tablets, Samsung chose to copy Apple’s technology, user interface and innovative style in these infringing products,” Apple said in the filing.

A Samsung representative said the company’s development of core technology and intellectual property were key to its continued success.

“Samsung will respond actively to this legal action taken against us through appropriate legal measures to protect our intellectual property,” said Kim Titus, a Richardson, Texas-based spokesman for the company’s telecommunications unit.

The lawsuit is the latest in a series of legal battles among technology giants following the rapid sales growth of smartphones and touchscreen tablet computers. Apple has become the object of many lawsuits from numerous companies, including Eastman Kodak Co. and Nokia Corp., that claim the consumer electronics giant violated their intellectual property in its hit products. The Cupertino, Calif.-based company has also filed lawsuits against competitors, such as Motorola Mobility Holdings Inc. and Amazon.com Inc.

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(Originally published April 18, 2011, in the Wall Street Journal.)

By Ian Sherr

Microsoft Corp. and Apple Inc. have both hired linguists to serve as experts in the tech titan’s ongoing battle over whether or not the government can grant a trademark for the term “app store.”

Microsoft on Tuesday filed its latest argument with the U.S. Patent and Trademark Office, which included the opinions of a linguistic expert who supported the software giant’s argument that the term “app store” was generic and shouldn’t be trademarked by Apple.

“The compound noun app store means simply ‘store at which apps are offered for sale,’ which is merely a definition of the thing itself—a generic characterization,” linguist Ronald Butters wrote.

An Apple spokeswoman declined to comment.

Microsoft hired Mr. Butters to counter Apple’s own linguistic expert, Robert Leonard, who asserted that the electronics giant’s “App Store” was a proper noun and deserved to be trademarked, even though the words are generic when separated.

The legal tussle has become a prime example of how litigious the technology industry has become following the rapid sales growth of smartphones and tablet computers. Nearly all mobile-device makers are actively suing or defending themselves in lawsuits against one another.

Apple, in particular, has been the target of lawsuits from a variety of companies spanning from device makers like Nokia Corp. and patent holders such as Eastman Kodak Co., all looking to either block the consumer electronics giant’s efforts or grab some share of its success.

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(Originally published March 30, in the Wall Street Journal.)

By Ian Sherr

LinkedIn Corp. is beefing up its advertising technologies, offering marketers more ways to target ads to the social network’s users and making it easier for big advertisers to connect to its website.

The business-oriented network, which has more than 90 million members, plans to roll out updates for its marketing tools that let advertisers zero in on people based upon job titles, seniority, age and location, people familiar with the matter said.

LinkedIn, which declined to comment, will be wading into an already competitive market where social-networking rival Facebook Inc. is rapidly gaining ground. Last month, more than a quarter of all online display ads in the U.S. appeared on Facebook, according to comScore Inc. By comparison, LinkedIn represented less than 1%.

The moves come as the Mountain View, Calif., company prepares to file paperwork for an initial public offering. Advertising represents roughly a third of the closely held company’s revenue, with the rest coming from subscription services and recruiting tools.

While the company has recruited a few big advertisers such as American Express Co. and Hewlett-Packard Co., it remains to be seen whether more will follow suit.

“LinkedIn has a large and growing audience,” said David Karnstedt, chief executive of Efficient Frontier, an online marketing firm that helps advertisers place their ads on the Internet.

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(Originally published Jan. 26, 2011, in the Wall Street Journal.)

By Ian Sherr

Carmakers are taking apps for a spin.

Automakers from General Motors Co. to Hyundai Motor Co. are using the Consumer Electronics Show to announce plans that will transform dashboards into mini-computers running Internet-connected programs.

For example, Ford Motor Co. debuted an app that will allow owners of its new Focus electric car to schedule charging times from a smartphone. Toyota Motor Co. unveiled a program that lets motorists make reservations via booking site OpenTable.com.

The auto industry’s embrace of apps comes as carmakers look for new ways to differentiate their vehicles from the competition’s. “Internet-connected autos will be among the fastest-growing segments in four years,” said Gartner Inc. analyst Thilo Koslowski.

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(Originally published January 8, 2011 in the Wall Street Journal.)