BURLINGAME, Calif.--If you're in the PC business, life is pretty bleak right now. Sales of computers are plummeting. Prices are falling, fast. Outlets selling your wares, such as Circuit City, are folding. Oh, and just about the only thing that's selling right now are low-cost netbooks, lower-cost iPods and canned food.

It could be about to get worse. Much worse. According to a report in the Chinese-language Commercial Times, Taiwanese manufacturer Wintek will supply the touch panels for an Apple (nasdaq: AAPL - news - people ) device of some kind, possibly a netbook, that will launch by the third quarter.

It's unclear, as always, what the computer and gadget maker is doing. An Apple spokesman declined to comment on "rumors and speculation," and the Cupertino, Calif.-based company is known for working hard to keep upcoming products secret. These guys just aren't big talkers, period, saying little about the health of Apple co-founder Steve Jobs, who remains out on medical leave through June.

Apple, however, has continued to publicly resist the idea of competing in the market for low-cost netbooks. Chief Operating Officer Tim Cook criticized them as "inferior" during a call with investors in January, saying only that Apple will "watch" the space.

Apple can do that, in part, because its powerful, high-end notebooks have remained steady sellers, despite the downturn. Yet it remains a little baffling, considering that Gartner predicts sales of low-cost netbooks will double to 21 million units in 2009 from 11.7 million units last year. It's also possible that Apple is working on a better idea, something that could move its iPod line up market, rather than its notebook computers down market.

Here's what we know: Apple purchased PA Semi, a chip designer that builds powerful, power-sipping processors for the U.S. military, for $278 million in cash last year. Then Apple slugged it out in court with IBM (nyse: IBM - news - people ) to grab IBM chip designer turned blade-server honcho Mark Papermaster. It then put Papermaster in charge of its iPod and iPhone hardware. And now it looks as if Apple has placed orders for a whole bunch of touch screens.

Oh, and those chips Papermaster designed? Based on the same PowerPC architecture as PA Semi's. You connect the dots.

So when does the bomb drop? We can't be sure. But Jobs is due back by the end of June, and Apple's Worldwide Developers Conference is usually slated for June as well. If Jobs strides onto the stage with his coat glossy and his eyes shiny, chances are good he'll be there to rip the lid off an economy-sized box of pain for the rest of the PC business. He could unveil a powerful, media-friendly tablet based on the iPod Touch, or some other form of multi-core, touch-screen monster.

TITLE:
Apple Airport Extreme / Time Capsule Multiple Vulnerabilities

SECUNIA ADVISORY ID:
SA34105

VERIFY ADVISORY:
http://secunia.com/advisories/34105/

DESCRIPTION:
Some vulnerabilities have been reported in Apple Airport Extreme and
Time Capsule, which can be exploited by malicious people to conduct
spoofing attacks, disclose potentially sensitive information, or to
cause a DoS (Denial of Service).

1) An error exists in the implementation of the Neighbor Discovery
protocol when processing Neighbor Discovery messages.

For more information:
SA32112

2) An unspecified error exists in the handling of PPPoE discovery
packets. which can be exploited to cause an out-of-bounds memory
access error by sending a specially crafted PPPoE discovery packet.

3) An error exists in the handling of incoming ICMPv6 "Packet Too
Big" messages, which can be exploited to shutdown the device.

This is related to:
SA31745

SOLUTION:
Update to firmware version 7.4.1.

PROVIDED AND/OR DISCOVERED BY:
Reported by vendor.

ORIGINAL ADVISORY:
HT3467:
http://support.apple.com/kb/HT3467

Apple Inc. introduced a refreshed line of Macintosh desktop computers Tuesday that the company touted as more affordable, even though price tags for all but one model top $1,000.

The rollout, which many analysts expected to come this year, included a price cut to the low end of the iMac line of desktops with built-in monitors. A version with a 20-inch screen starts at $1,199, $300 less than the previous generation. The 24-inch model starts at $1,499.

Apple (nasdaq: AAPL - news - people ) unveiled a long-rumored update to the Mac Mini, a petite computer sold without a monitor, keyboard or mouse. The company's cheapest computer, at $599, was updated with a faster graphics processor and the ability to run more than one monitor at a time. In a press release, Apple also promoted the Mini's energy efficiency and said it draws less than 13 watts of power when idle, or about one-tenth the power of a typical machine.

The company also overhauled its professional-grade work horse, the Mac Pro, with a quad-core processor from Intel Corp. (nasdaq: INTC - news - people ), while cutting its price by $300 to $2,499. An eight-core version starts at $3,299.

Apple has long focused on selling higher-end computers to consumers willing to pay extra for beautiful design. To date, Apple has made few concessions to the global economic crisis that's crimping consumer spending, and strong sales overseas during the holiday quarter helped offset a slower shopping season in the United States.

Apple's Mac line, which also includes laptops, fared better than the overall PC market in the last three months of 2008.

But Apple's moderate price changes don't seem to reflect the growing severity of the downturn, which could make 2009 the worst year on record for computer sales, according to estimates out Monday from research group Gartner Inc. (nyse: IT - news - people )

And so far, Apple has stayed away from the one fast-growing PC category, netbooks, or cheap, low-powered notebooks that have been a hit with recession-bitten consumers. Those machines start well below $300.

Apple Inc. CEO Steve Jobs still expects to return from his medical leave at the end of June. That's according to an Apple director who responded to an investor at the company's annual shareholder meeting Wednesday.

The investor had pressed for details about when the board of directors knew Jobs planned to step away from his daily duties. Apple (nasdaq: AAPL - news - people ) director Arthur Levinson responded only by saying that since Jobs announced Jan. 14 that he needed to go on leave, "nothing has changed."

Jobs, who turned 54 on Tuesday, was not at the meeting.

A survivor of pancreatic cancer who looked very thin last year, Jobs said Jan. 5 that he had a treatable hormone imbalance and would continue to run Apple. But the following week he went on leave to treat medical issues that were "more complex" than he had believed.

Copyright 2008 Associated Press. All rights reserved. This material may not be published broadcast, rewritten, or redistributed

The InfoTech 100

Which companies are logging the strongest growth, which industries are the hottest, and how the winners are faring in a treacherous economic climate

How do you pick the best-performing tech companies in the world? At BusinessWeek, we sort through the financial results of 30,500 publicly traded companies and rank the tech players on four criteria: shareholder return, return on equity, total revenues, and revenue growth. The companies leading the list are those with the lowest aggregate ranking.

Amazon.com and Apple took the top two spots this year. Still, the dominance of U.S. companies is in decline: The country has 33 companies among the IT 100 this year, down from 43 in 2007. When we first started compiling the list in 1998 to rank tech's top performers, 75 of the winners were U.S. companies.

NOTE: A more complete explanation of methodology is below the table.

Rank	Company Name	Industry*	Country	Revenues Millions	Revenues Rank	Rev. Growth Percent	Rev. Growth Rank	ROE Percent	ROE Rank	Shareholder Return Percent	Shareholder Return Rank	Profits Millions
1	AMAZON.COM	NET	U.S.	15,955.0	23	39	29	35	22	28	29	508
2	APPLE	COMP	U.S.	28,747.0	15	33	39	24	44	74	10	4348
3	RESEARCH IN MOTION	COMM	Canada	5,765.9	55	66	8	33	24	152	1	1241
4	NINTENDO	SOFT	Japan	14,876.5	25	73	5	21	60	55	17	2289
5	WESTERN DIGITAL	COMP	U.S.	7,448.0	47	44	25	36	19	64	12	866
6	AM?ICA M?IL	TELE	Mexico	28,761.5	14	33	40	46	10	10	56	5408
7	CHINA MOBILE	TELE	China	45,863.1	9	21	61	23	48	90	9	11780
8	NOKIA	COMM	Finland	73,344.4	6	24	55	49	8	8	60	10350
9	ASUSTEK COMPUTER	COMP	Taiwan	17,343.8	20	57	11	16	76	38	21	672
10	HIGH TECH COMPUTER	COMP	Taiwan	3,232.5	70	45	23	59	5	111	6	782
11	GOOGLE	NET	U.S.	18,116.1	18	51	16	19	70	22	36	4509
12	MTN GROUP	TELE	S. Africa	10,208.4	35	42	28	22	53	41	20	1480
13	IBM	COMP	U.S.	101,259.0	4	9	95	38	17	20	38	10893
14	MOBILE TELESYSTEMS	TELE	Russia	8,252.4	44	29	47	38	16	26	31	2072
15	TELEF?ICA	TELE	Spain	81,077.0	5	7	98	44	11	16	44	12793
16	VIMPELCOM	TELE	Russia	7,164.6	49	47	20	27	32	19	39	1463
17	HON HAI PRECISION IND.	COMP	Taiwan	40,876.4	11	45	22	23	50	-3	82	1853
18	AT&T	TELE	U.S.	120,703.0	1	58	9	11	95	4	68	12564
19	ACCENTURE	SVCS	U.S.	23,276.6	16	19	65	69	3	-3	83	1450
20	LG ELECTRONICS	COMP	Korea	56,834.8	8	15	81	15	81	151	2	1307
21	BHARTI AIRTEL	COMM	India	4,605.8	61	58	10	35	20	11	55	1016
22	ORACLE	SOFT	U.S.	21,020.0	17	24	57	24	43	11	52	5088
23	MICROSOFT	SOFT	U.S.	57,954.0	7	17	76	44	12	-3	84	16419
24	MAROC TELECOM	TELE	Morocco	3,495.6	65	22	59	46	9	49	18	1020
25	TURKCELL ILETISIM HIZMETLERI	TELE	Turkey	6,328.6	52	35	35	23	47	34	24	1350
26	LG DISPLAY	COMM	Korea	15,267.5	24	35	33	16	78	17	41	1430
27	NHN	NET	Korea	686.3	100	56	12	40	15	59	14	160
28	COSMOTE MOBILE TELECOM.	TELE	Greece	4,396.1	63	28	49	53	7	17	43	519
29	MILLICOM INTL. CELLULAR	TELE	Lux.	2,630.6	77	67	6	34	23	12	50	439
30	HEWLETT-PACKARD	COMP	U.S.	107,671.0	2	14	83	21	61	11	54	7850
31	COMPAL ELECTRONICS	COMP	Taiwan	11,838.4	32	44	24	12	94	18	40	271
32	SISTEMA	TELE	Russia	10,862.8	34	43	27	18	71	10	57	813
33	ORASCOM TELECOM	TELE	Egypt	4,545.8	62	35	32	36	18	5	66	755
34	SAMSUNG ELECTRONICS	SEMI	Korea	104,791.6	3	15	80	12	93	25	32	7894
35	CHINA UNITED TELECOMMUNICATIONS	TELE	China	13,594.1	30	25	54	10	98	64	13	762
36	MOBINIL	TELE	Egypt	1,471.9	92	29	48	104	2	36	22	327
37	CARSO GLOBAL TELECOM	TELE	Mexico	16,154.6	22	7	97	43	13	4	70	1156
38	KONINKLIJKE KPN	TELE	Neth.	17,900.1	19	4	99	59	6	-3	81	3810
39	CISCO SYSTEMS	COMM	U.S.	37,684.0	13	18	72	25	41	-4	86	8069
40	WISTRON	COMP	Taiwan	6,843.4	50	34	36	19	69	17	42	165
41	MOBILE TELECOMMUNICATIONS	TELE	Kuwait	6,038.0	54	39	30	20	64	13	49	1154
42	ACTIVISION	SOFT	U.S.	2,608.2	78	88	2	15	82	35	23	286
43	REDECARD	SVCS	Brazil	984.6	97	305	1	135	1	NA	78	385
44	CYPRESS SEMICONDUCTOR	SEMI	U.S.	1,695.6	87	43	26	26	36	23	34	378
45	ZTE	COMM	China	4,705.6	59	51	15	10	99	34	25	169
46	LENOVO GROUP	COMP	Hong Kong	14,590.2	27	10	94	14	86	91	8	161
47	TELEMAR NORTE LESTE	TELE	Brazil	9,645.8	39	4	100	20	67	111	5	1478
48	CORNING	COMM	U.S.	6,170.0	53	18	70	27	34	13	47	2852
49	PRICELINE.COM	NET	U.S.	1,390.8	93	24	56	27	33	129	4	157
50	TAIWAN SEMICONDUCTOR MFG.	SEMI	Taiwan	9,826.4	37	19	66	25	39	2	73	3932

Memo to President Bringdown. Cool it with the "catastrophe" talk, Barack. It's contagious.

The latest example: Analysts are predicting Apple (nasdaq: AAPL - news - people ) will launch a $99 iPhone that will sell like crazy--after a quarter during which iPods sold like crazy--causing one analyst to argue that the Cupertino, Calif.-based company's shares are at risk.

Crazy, right? Apple's shares are up 15% to $97.83 this year, even as the broader stock market has fallen 8%. In January, Apple reported net income for its holiday quarter rose to $1.78 a share, or $1.61 billion, from $1.16 a share, or $1.05 billion, during the year-ago period. That's 39 cents better than the $1.39 per share analysts had expected.

The prospect of a hot new product at a great price would seem to be cause for celebration, then. But not in this economy.

In a note to investors Tuesday, RBC Capital Markets analyst Mike Abramsky became the latest to predict that Apple will launch an entry-level $99 iPhone in June or July. The result: Abramsky is now penciling in sales of between 20 million and 30 million units in fiscal 2010 for the new device. That would boost Apple's share of the global smart phone market to between 14% and 19%, he writes.

The problem: With consumer spending declining to its lowest levels since 2002, a cheap phone could damage Apple's sweet iPhone business. "The economics of an entry-level iPhone appear less attractive when factoring in iPhones/iPod cannibalization," Abramsky wrote. "Apple must sell three $99 iPhones to replace gross profit from one 3G iPhone."

Abramsky figures the new phone can sell for $99, thanks to a $200 carrier subsidy. However, it will come without a high-speed, so-called 3G connection to wireless carriers or GPS. It will also get a "light" data plan that will cost users $15 a month, less than the $30 a month users pay now.
In other words, Abramsky is predicting that the foul economic mood will turn the cheap new phone into a cannibalistic margin killer. "We remain concerned re: elevated risks to valuation from a growth and/or margin 'downshift' for Apple," Abramsky writes, slapping a target price of $70 on Apple's stock.

Even Apple bulls are cautious. "The primary concern with Apple these days is its high average selling prices and whether it can deal with the deteriorating macroeconomic environment," Kaufman Bros. analyst Shaw Wu wrote in a note arguing that Apple' shares still merited a "Buy" rating and a $120 price target.

What that really means, of course, is it's time for President Obama to slap some optimism back into the economy. And if he's not up to that, maybe he should grab his iPod, relax and wait until he's in a better mood.

Associated Press

Apple CEO Jobs backtracks on health, takes leave

Apple Inc. co-founder and Chief Executive Steve Jobs said Wednesday he is taking a medical leave until the end of June - just a week after the cancer survivor tried to assure investors and employees his recent weight loss was caused by an easily treatable hormone deficiency.

Apple (nasdaq: AAPL - news - people )'s stock plunged 7 percent.

Jobs, 53, said in a letter last week that he would remain at Apple's helm despite the hormone problem, and that he had already begun a "relatively simple and straightforward" treatment. But in an e-mail to employees Wednesday, Jobs backtracked.

"During the past week I have learned that my health-related issues are more complex than I originally thought," he wrote.

Apple's shares have surged and crashed over the last year in step with rumors or news about the CEO's health and his gaunt appearance. While the top executive's health is an issue for investors in any company, at Apple the level of concern reaches fever pitch because Jobs has a hand in everything from ideas for new products to the way they're marketed. Investors fear that without Jobs, Apple will not be able to sustain its growth of the last decade, which has seen Apple branch out from its Mac computers into the iPod and the iPhone.

Last week, Jobs said his disclosure of his hormone problem was "more than I wanted to say, and all that I am going to say" about his health. It came on the eve of Macworld, the biggest Apple trade show of the year, and Jobs said he wanted everyone to relax and enjoy the show.

Even so, the limited amount of medical information in that announcement did little to soothe Wall Street's nerves, and in interviews last week analysts predicted that the health watch would continue.

Apple Inc. is cutting the price of some songs in its market-leading iTunes online store to as little as 69 cents and plans to make every track available without copy protection.

In Apple (nasdaq: AAPL - news - people )'s final appearance at the Macworld trade show, Apple's top marketing executive, Philip Schiller, said Tuesday that iTunes song prices will come in three tiers: 69 cents, 99 cents and $1.29. Record companies will choose the prices, which marks a significant change, since Apple previously made all songs sell for 99 cents.

Apple gave the record labels that flexibility on pricing as it got them to agree to sell all songs free of "digital rights management," or DRM, technology that limits people's ability to copy songs or move them to multiple computers. Apple had been offering a limited selection of songs without DRM, but by the end of this quarter, the company said, all 10 million songs in its library will be available that way.

While iTunes is the most popular digital music store, others have been faster to offer more songs without copy protection. Amazon.com Inc. (nasdaq: AMZN - news - people ) started selling DRM-free music downloads in 2007 and swayed all the major labels to sign on in less than a year.

Schiller also announced that iPhone 3G users will be able to buy songs from the iTunes store using the cellular data network. Previously, iPhone users could shop for tunes when connected to a Wi-Fi hot spot.

The iTunes changes marked the highlights of Schiller's run as a stand-in for CEO Steve Jobs, who used to make Macworld the site for some of Apple's biggest product unveilings, such as the iPhone. Apple said last month that Jobs would not address the throngs this time because the company plans to pull out of Macworld next year.

Apple shares slipped $1.18, 1.3 percent, to $93.40 in afternoon trading.

Schiller got a warm welcome from the attendees - who packed the convention hall despite the pall cast over the industry by the economic downturn - especially at the start of his talk, when he thanked them for showing up despite Jobs' notable absence. He ran seamlessly through his 90-minute presentation, getting applause and oohs from the audience, varying little from the format of slides and demos established by Jobs. And like Jobs, he gushed about Apple's products being the best in the world.

Wal-Mart to start selling Apple's iPhone on Sunday

Wal-Mart will start selling Apple's popular iPhone on Sunday, the chain said, confirming earlier reports by employees.

Bentonville-based Wal-Mart Stores Inc. will become the second independent retail chain after Best Buy Inc. to sell the phone. It is also sold at Apple Inc. and AT&T Inc. stores.

Wal-Mart will sell the phones for $2 less than the regular price with a two-year contract: $197 for the 8-gigabyte model, or $297 for the 16-gigabyte model. Best Buy is discounting the phone by $9.

Reports that Wal-Mart would sell the phone, but not the exact launch date or the terms, surfaced early this month through store employees who had been briefed.

Copyright 2008 Associated Press. All rights reserved. This material may not be published broadcast, rewritten, or redistributed

Google, Apple, Microsoft sued over file preview

by Robert McMillan, IDG News Service

A small Indiana company has sued tech heavyweights Microsoft, Apple, and Google, claiming that it holds the patent on a common file preview feature used by browsers and operating systems to show users small snapshots of the files before they are opened.

Cygnus Systems sued the three companies on Wednesday saying that they infringed on its patent with products such as Windows Vista, Internet Explorer 8 and Google Chrome, which allow users to view preview images of documents on the computer. Mac OS X, the iPhone and Safari also infringe, the company said in court filings. Apple uses this technology in its Finder and Cover Flow Mac OS X features, the filings state.

While Cygnus has sued three very high profile companies, there may not be the only vendors in Cygnus’s sites. “They were a logical starting place for us,” said Matt McAndrews, a partner with the Niro, Scavone, Haller & Niro, law firm, which is representing Cygnus. “We’ve identified many other potentially infringing products that we’re investigating,” he added.

Cygnus’s owner and president Gregory Swartz developed the technology laid out in the patent while working on IT consulting projects, McAndrews said. The company is looking for “a reasonable royalty” as well as a court injunction preventing further infringement, he said.

The lawsuit was filed in federal court in Arizona, where Swartz resides, McAndrews said.

Google, Microsoft and Apple did not return messages seeking comment on the lawsuit.

Cygnus applied for its patent (# 7346850) in 2001. It covers a “System and method for iconic software environment management” and was granted by the U.S. Patent and Trademark Office in March of this year.