Monday, January 28, 2008

Palm to close retail stores

Palm plans to close its retail stores in an effort to focus on fewer programs and better compete, the company said on Thursday.
All of Palm's eight branded retail stores, as well as its 26 stores within Airport Wireless shops, will close.

The move may stem from increased competition from Research In Motion's BlackBerry products. Prior to about a year ago, BlackBerry dominated the enterprise market and Palm was popular among prosumers, who typically buy devices in retail outlets, said Bill Hughes, an analyst at In-Stat. But since then, BlackBerry has grown more successful at selling its handhelds at retail, encroaching on Palm's traditional prosumer market, he said.

The stores didn't make much sense for Palm from the beginning, according to Hughes. "This doesn't really surprise me," he said. Usually, manufacturers open their own stores when their retail distribution strategy isn't working, he said. But Palm has reported a string of quarterly losses and may have decided to close the stores and boost its efforts to sell through other retail outlets as a way to cut costs.

Palm said the store closings come as the company continues to focus on core business initiatives, consolidating resources behind fewer programs. For a similar reason, it cancelled its controversial smartphone companion product, the Foleo, that was scheduled for release in the middle of 2007.

Palm has struggled over the past couple of years as the smartphone market grows increasingly crowded, and as it tries to phase out its PDA (personal digital assistant) business. The company is building a new Linux-based operating system that is scheduled to be released at the end of this year, with commercial products hitting the market shortly after. The software, which many thought would hit the market at the end of last year, will compete with Google's Android Linux-based smartphone operating system. Phones based on Android are expected to ship starting in the second half of this year.

Hackers hit Scientology with online attack

A group of hackers calling itself "Anonymous" has hit the Church of Scientology's Web site with an online attack.
The attack was launched Jan. 19 by Anonymous, which is seeking media attention to help "save people from Scientology by reversing the brainwashing," according to a Web page maintained by Anonymous.

Anonymous claims to have knocked the Church's Web site offline with a distributed denial-of-service attack, in which many computers bombard the victim's server with requests, overwhelming it with data in the hope of ultimately knocking the system offline. True to its name, Anonymous does not disclose the true identities of its members.

The attacks were spurred by the Church's efforts to remove video of movie star Tom Cruise professing his admiration for the religion, according to an Anonymous video manifesto posted to Youtube.

"For the good of your followers, for the good of mankind and for our own enjoyment, we shall proceed to expel you from the Internet and systematically dismantle the Church of Scientology in its present form," a creepy computerized voice states in the video. Anonymous followed up this dispatch with a second video blasting the media for failing to completely report the group's criticisms of the church. This video was taken down Friday by Youtube, citing a "terms of use violation."

Anonymous has managed to generate a measurable attack against the Scientology.org Web site. Over the past few days, the site was hit with several DDOS (distributed denial-of-service) attacks, which flooded it with as much as 220M bps of traffic, according to Jose Nazario, a senior security engineer with Arbor Networks, whose company compiles data on Internet attacks.

The Anonymous campaign shows some level of organization. "220M bps is probably about in the middle of attack sizes," Nazario said. "It's not just one or two guys hanging out in the university dorms doing this."

On average, the attacks lasted about 30 minutes and used up 168M bps of bandwidth. In the past year, Arbor has seen attacks on other sites hit 40G bps, or 200 times the strength of the Anonymous event.

Shortly after it was hit with the DDOS flood, the Scientology.org Web site was moved to a server hosted by Prolexic Technologies, according to data compiled by Netcraft, an Internet monitoring company. Prolexic specializes in protecting companies from DDOS attacks.

A Prolexic spokeswoman confirmed that the Church of Scientology is one of the company's clients, but declined to offer more details on the matter. The Church of Scientology did not answer questions relating to the online attacks, but in a statement it said that the controversy over the Tom Cruise video had driven traffic to its Web site.

The secretive Church of Scientology's practices, including its efforts to use copyright law to restrict the dissemination of information about the church, have engendered a lot of criticism within the Internet community. But one Web site set up to criticize Scientology -- called Operation Clambake -- called the DDOS attacks a bad idea. "Attacking Scientology like that will just make them play the religious persecution card," wrote Andreas Heldal-Lund, the Web site's owner. "They will use it to defend their own counter actions when they try to shatter criticism and crush critics without mercy."

If publicity was Anonymous' ultimate goal, the group has had some success. Late in the day Friday, seven of the top 10 stories on the Digg.com news-linking site related to Scientology or to Anonymous' communiques.

Although the group's Web page exhorts participants to "begin bumping Digg," Anonymous did not manipulate the news site's promotional algorithm system, which determines which stories get top billing, according to Digg CEO Jay Adelson.

"They must have done a very good job of bringing in a diverse set of interests," he said. "It just happened to hit a nerve that the Digg community was interested in."

It is unusual for Digg's front page to be so dominated by a single topic, but not unprecedented, Adelson said. Last year's shootings at Virginia Tech and the 2005 terrorist bombings in London achieved a comparable level of coverage. "In the history of Digg, there's no question that the topic of Scientology has been of great interest to the community," he said. "I can't explain why."

Lenovo enters the server business

Lenovo announced its intent to jump into the server business by licensing x86 server technology from IBM, helping extend its product offerings to small and medium-sized businesses.
Under the agreement, Lenovo will manufacture one- and two-way x86 servers based on IBM's System x technology, which Lenovo will distribute under its own brand name.

The servers will add to Lenovo's corporate product lineup that includes ThinkPad laptops and Think workstations. The company also distributes IdeaPad notebooks for the consumer market.

This will be a new business for Lenovo, as the company does not sell servers outside China, said Ray Gorman, executive director of external communications at Lenovo. Lenovo will start distributing the servers worldwide within the next year.

IBM will continue to distribute System x servers under its own brand name, said Tim Breuer, an IBM spokesman. IBM is not worried about competition from Lenovo, Breuer said, adding that the deal would in fact boost IBM's licensing and financing business.

Lenovo also has an excellent reach to companies with less than 500 employees, so the deal will be a natural extension of IBM's server distribution channel, Breuer said. It will give IBM a better reach to SMB customers globally, Breuer said.

The companies have been partners since Lenovo bought IBM's PC business in 2004 for US$1.25 billion.

Lenovo will compete with HP and Dell in the global x86 server market, which grew at a clip of 9.5 percent in the third quarter of 2007, according to numbers from analyst firm Gartner. HP was the top vendor, with a 30 percent market share, followed by Dell and IBM.