Apple's New Era

The Jobs era has been defined by software. Is that changing?

The Internet portal didn't shed light on a possible deal with the software giant as it reported a loss and more job cuts.

Almost all software publishers suffer from piracy, companies as diverse as:

• Autodesk, which makes software used by civil engineers and industrial designers to create everything from buildings to cars to movie animation.

• Adobe, which makes the ubiquitous Photoshop, Acrobat Reader, and other Web tools.

• Symantec, which makes antivirus, security and system maintenance software.

• IBM, which makes large database management software, email systems, and development tools.

• Oracle, which makes large database management systems.

• Macromedia, which makes software for Web and multimedia designers and animators.

But Microsoft is the juiciest target for pirates. This is a function of demographics (Microsoft has more kinds of software that run on more computers than any other company), expediency (you can't run 90 percent of the computers in the world without Microsoft's operating system software), culture (these are American monopolists, right?), and envy (Bill Gates won't miss my hundred and fifty bucks).

Apple says it is expanding iPhone features

Apple Inc. is broadening the ways that third-party software programmers can sell content on the iPhone.

Apple (nasdaq: AAPL - news - people ) says software developers now will be able to create applications that have items for sale within them, such as electronic books or additional levels of a video game.

he company unveiled the new tools along with the third generation of software for its iPhone during an event for journalists at its headquarters in Cupertino.

Apple launched the most recent iPhone last summer. The company sold 13.7 million iPhones in 2008.

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When the Kindle e-reader first appeared 14 months ago, Amazon-watchers were surprised to see the e-commerce giant redefine itself as a gadget maker. But Tuesday, when Amazon.com released a free application for the iPod and iPhone that allows users to read its e-books on those devices, it cemented its original book-selling mission.

In other words, it's all about the content.

The Kindle software for the iPhone and iPod, which Amazon.com (nasdaq: AMZN - news - people ) Chief Executive Jeff Bezos first hinted at during the release of the Kindle 2 last month, allows users to buy and read any of Amazon 230,000 e-books on any of the three devices and seamlessly move them among the gadgets.

While the software gives up the Kindle's exclusive hold on Amazon's digital catalog, it taps into a potentially much larger audience for Amazon's e-books--Apple (nasdaq: AAPL - news - people ) has sold around 15 million iPhones, while Amazon had sold only around 500,000 Kindles at last count, according to an estimate by Citigroup analyst Mark Mahaney. And that, says Forrester Research analyst James McQuivey, means Amazon has definitively focused on selling e-books above selling e-readers.

"This puts a stake in the ground around the idea that they really want you to be able to access the content you buy from them on any platform. And that's something we haven't seen other major media initiatives do," McQuivey says.

Apple's iTunes store, by contrast, has traditionally sold content tied to its music players--a bid to sell more hardware rather than content. Amazon, McQuivey says, has now made clear it's taking the opposite approach. "Amazon is saying, 'This is about books. We want you to feel that you can read our books anywhere, and we want you to buy more of them,'" McQuivey says. "They're saying, 'We're not a Kindle maker. We're a content provider and a content liberator.'"

Amazon may be liberating its content, but it's not liberating its hardware. Even as the company's book-selling platform expands, it's not likely to become compatible with other content providers. That could give the e-retailer a stranglehold on the budding market for e-books, a strategy likely to rankle publishers.

In an essay for Forbes last month, tech publisher Tim O'Reilly criticized Amazon's decision to close the Kindle to non-Amazon content (see "Why Kindle Should Be An Open Book"). Unless the company opened the Kindle to formats like epub, which work across a variety of non-Amazon-sanctioned devices, the Kindle would become irrelevant in two or three years, he predicts.

Chris Morris

More From Chris Morris

Not too long ago, Electronic Arts and Take-Two Interactive Software were the giants of the videogame world. With their "Madden" and "Grand Theft Auto" franchises consistently dominating the sales charts, they seemed an unstoppable force.

Over the course of the past few months, though, weak sales and questionable deals have left both companies looking remarkably vulnerable. Share prices are dropping as takeover chatter about both companies grows louder.

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It would be easy to point to the failed merger negotiations of the two gaming companies as the start of the trouble. It would be just as easy to blame the recession. But neither reason deserves the lion's share of the blame. Both EA and Take-Two have had a series of recent stumbles that are catching up with them.

Changing course at EA has proven easier said than done, though. The company brought back former president John Riccitiello, who had left to form venture firm Elevation Partners, to be its chief executive in 2007. (Elevation is an investor in Forbes).

Riccitiello had the right idea: Spend less and make better games. But EA's spending remains high and some games aren't resonating with the audience. The company is still franchise dependent--and when those franchises tank, earnings suffer. Disappointing sales of this year's installment of "Need for Speed," for instance, are part of the reason for last week's additional layoffs and studio closures at EA.

Franchises are a critical part of a videogame publisher's success, but EA long ago fell into the habit of barely changing a game, updating the title on the cover and waiting for the money to roll in. While the company is less guilty of this now, consumers got wise to the practice shortly before Riccitiello came on board. As a result, EA is still feeling their wrath.

EA's "Rock Band 2," for instance, isn't performing as well as expected this year. The game hasn't changed dramatically enough for players. Fans of the original are able to extend the life of the first game with downloadable content, making them less eager to spend $60 (or considerably more) for the follow-up. And people who weren't enticed by the original game don't see enough difference with this one to spend their money.

Cyber Monday may not be the digital shopping extravaganza it was once purported to be. But even if consumers are spreading out their online sales, cybersecurity firm Webroot software believes the Monday after Thanksgiving will still be a special day: The company issued a warning last week that Dec. 1 is still the most likely 24 hours of the year to have your banking information stolen by cyber fraudsters.

That's been a common refrain from security researchers in years' past. And Webroot's recommendations--including updating security software and buying from trusted sites--makes sense. But just how worried should online shoppers be? (Back to main story: "Holiday E-Deals Come Early.")

Much of the hype around Cyber Monday's cyber threats is overblown, says Patrik Runald, a security researcher with software company F-Secure. To steal your banking codes while you use a site like Amazon.com (nasdaq: AMZN - news - people ) or eBay (nasdaq: EBAY - news - people ), hackers would need to place hidden "keylogger" software on your computer. And F-Secure, he says, has never tracked a spike in that kind of malicious software either on Cyber Monday or even in the weeks leading up to it. This implies that hackers aren't using the opportunity to infect PCs for future fraud, either. "Cyber Monday is just another day for us," he says.

There are still reasons to shop with care. Runald warns of Cyber Monday-themed "phishing" e-mails that impersonate messages from legitimate sites and send consumers to lookalike pages designed to steal passwords, he says. Security researchers have also warned that search engines could be populated with fake pages that impersonate retailers.

But navigating directly to a known site will be as safe on Monday as it would be on any other day. In fact, while F-Secure tracks about 30,000 new samples of malicious software daily, Runald says he rarely sees noticeable bursts of new identity theft software.

"We don't really have doomsdays anymore,” he says. "We get so many new samples all the time that it's hard to see a spike on any particular day.” (Back to main story: "Holiday E-Deals Come Early.")

Meta Data: iPhone 2.2

Apple's software update promises improved call quality and adds Google Street View.