Intel to cut thousands of jobs

17 January 2014 Last updated at 16:38 ET

The world's biggest computer chip maker, Intel, says it will cut its workforce by 5% as it expects no revenue growth in 2014.

The company told Reuters news agency that it would reduce its global workforce of 107,000.

Intel's gloomy earnings report this week knocked its share price, which was down 2.6 at the close.

A spokesman, Chris Kraeuter, said: "This is part of aligning our human resources to meet business needs."

The weak forecast comes as chip makers continue to be hurt by a drop in sales of personal computers (PCs).

Revenues at Intel's division which makes chips for desktop computers fell 4% in 2013.

However, the company said there had been signs in the past few months that the PC sector was "stabilising".

According to its latest earnings, the PC chip division generated revenues of $8.6bn (£5.2bn) in the October-to-December quarter of 2013, compared with $8.5bn a year ago.

"We had a solid fourth quarter with signs of stabilisation in the PC segment and financial growth from a year ago," said Intel chief executive Brian Krzanich.

For the full year 2013, the firm reported a net profit of $9.6bn, down 13% from a year ago.

'Disappointed again'

Continue reading the main story

We've built a strong foundation for our business by bringing innovation to the market more quickly across a wide range of computing platforms"

End Quote Brian Krzanich Intel

Sales of PCs have fallen for six quarters in a row, hurt by the growing popularity of tablets and smartphones.

As a result, computer chip makers have been looking to boost growth in other divisions and areas to try and sustain their growth.

In case of Intel, analysts have been focussing on the performance of its data centre business.

Intel said the division's revenues rose 8% in the last quarter of 2013, from a year earlier. However, the rise was less than what some analysts had expected.

"The incremental nugget we got from fourth quarter earnings was that data centre group disappointed again," said Patrick Wang an analyst with advisory firm Evercore. He said investors were anticipating a healthy performance from the division.

Intel's chief financial officer, Stacy Smith, said the division's revenues in 2014 would probably come in toward the bottom of the previous estimate of 10% to 15% growth.

'Bringing innovation'

Intel has also taken other steps to create new growth areas and offset the impact of slowing PC sales on its business.

At the recently held Consumer Electronics Show (CES), in Las Vegas, the firm showcased various new technologies.

That included a 3D-camera technology, where one of its depth sensors could be used to interpret gesture controls and to separate foreground objects from the background.

It said laptops featuring the technology would go on sale this year.

The company also unveiled a series of new concept wearable technologies - seen by many as a key growth area in the coming years.

The products showcased included Smart earbuds -which act as an activity tracker as well as play music and a smartwatch hat can connect to the internet without needing to be linked to a phone.

"We've built a strong foundation for our business by bringing innovation to the market more quickly across a wide range of computing platforms," said Mr Krzanich.

"At [the] CES, we demonstrated multiple devices that weren't on our roadmap six months ago."

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IBM in cloud data centre investment

17 January 2014 Last updated at 02:55 ET

IBM, the global computing giant, has said it is investing more than $1.2bn (£735m) expanding its data centres and cloud storage business.

It plans to build 15 new centres around the world, bringing the total number up to 40 during 2014.

IBM bought cloud services company SoftLayer for $2bn last year, and this investment will double the subsidiary's storage capacity, the company said.

IBM believes the cloud services market could be worth $200bn by 2020.

Businesses are increasingly leasing data storage, computing power and web hosting services from a growing number of specialist cloud companies - effectively outsourcing their IT needs to cut costs and improve efficiency.

IBM says it has added 2,400 new clients since it acquired Dallas-based SoftLayer.

Supercomputer investment

In a related announcement last week, IBM said it would spend $1bn creating a new division for Watson, its supercomputer.

Watson, which aims to mimic how people think, using natural language capabilities and analytics, beat its human rivals in the US TV quiz show Jeopardy in 2011.

IBM plans to farm out Watson's abilities to businesses and consumers via SoftLayer, and is encouraging developers to create new apps that tap in to the supercomputer.

The growth of mobile devices, wireless connectivity and cloud computing means businesses and public sector organisations - particularly healthcare providers - will increasingly access intelligent data services remotely from a range of providers, such as IBM.

Investment bank Credit Agricole has predicted that Watson spin-offs could account for more than 12% of IBM's total revenue by 2018.

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Children can turn off net filters

16 January 2014 Last updated at 10:54 ET

Filters put in place by parents to stop children viewing inappropriate content are easily bypassed by the youngsters themselves, according to a nreport from regulator Ofcom.

It found that 18% of 12-15-year-olds know how to disable internet filters.

Almost half of children aged 12-15 know how to delete their browsing history and 29% can amend settings to mask their browser activity.

Some 83% of eight to 11 year-olds said they knew how to stay safe online.

In response to the report, Culture Secretary Maria Miller said that filters were not "a silver bullet".

"Parents have a central role to play in protecting their children, including by talking to them about how to stay safe online," she said.

According to the report, many parents feel their computing skills are far inferior to their children's.

Almost half (44%) of parents with children aged between eight and 11 say their child knows more about the internet than they do. That rises to 63% for parents of 12-15-year-olds.

YouTube video

The government has put pressure on UK ISPs to introduce network-level filters that screen out pornography and other content deemed inappropriate.

But the filters have proved controversial.

Sky's system hit the headlines when it emerged that it was blocking a legitimate news website that covered file-sharing issues.

Meanwhile a BBC investigation found that filters were blocking out sex education websites.

Sebastien Lahtinen, co-founder of internet news site ThinkBroadband, told the BBC that the filters were easy to bypass.

"As soon as I type the filter name into Google it suggests the search term 'bypass'. The second result is a YouTube video of what sounds like a kid explaining how to work around it," he said.

"The report acknowledges that children often know more about the internet than their parents, and it is therefore no surprise that many children are able to bypass technical limitations put in place to restrict their access or delete their browsing history," he added.

"This only re-emphasises the need for active parenting and regular communications about how children use the internet, particularly at the age where they start doing so away from parents and on their own devices."

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NSA 'collected 200m texts per day'

16 January 2014 Last updated at 21:01 ET

The US National Security Agency (NSA) has collected and stored almost 200 million text messages a day from around the world, UK media report.

The NSA extracts and stores data from the SMS messages, and UK spies have had access to some of the information, the Guardian and Channel 4 News say.

The reporting is based on leaks by ex-NSA contractor Edward Snowden and comes ahead of a key US policy announcement.

The NSA told the BBC the programme stored "lawfully collected SMS data".

"The implication that NSA's collection is arbitrary and unconstrained is false," the NSA said.

President Barack Obama is set on Friday to announce changes to the US electronic surveillance programmes, based in part on a review of NSA activities undertaken this autumn by a White House panel.

On Thursday, the White House said Mr Obama had briefed UK Prime Minister David Cameron on the review.

Continue reading the main story

The public disquiet and the shock of allies means [Obama] has to act. As so often, his liberal instincts may be at war with his perceived duty as commander in chief - and he may be doomed to disappoint many on both sides of the debate. "

End Quote

The documents also reveal the NSA's UK counterpart GCHQ had searched the NSA's database for information regarding people in the UK, the Guardian reports.

In a statement to the BBC, GCHQ said all of its work was "carried out in accordance with the strict legal and policy framework".

'Privacy protections'

The programme, Dishfire, analyses SMS messages to extract information including contacts from missed call alerts, location from roaming and travel alerts, financial information from bank alerts and payments and names from electronic business cards, according to the report.

Through the vast database, which was in use at least as late as 2012, the NSA gained information on those who were not specifically targeted or under suspicion, the report says.

The NSA told the BBC its activities were "focused and specifically deployed against - and only against - valid foreign intelligence targets in response to intelligence requirements".

While acknowledging the SMS data of US residents may be "incidentally collected", the NSA added "privacy protections for US persons exist across the entire process".

"In addition, NSA actively works to remove extraneous data, to include that of innocent foreign citizens, as early as possible in the process."

The Guardian and Channel 4 also reported on a GCHQ document on the Dishfire programme that states it "collects pretty much everything it can" and outlines how the GCHQ analysts are able to search the database, with certain restrictions.

The GCHQ statement said: "All of GCHQ's work is carried out in accordance with the strict legal and policy framework which ensures that our activities are authorised, necessary and proportionate and that there is rigorous oversight."

'Cosmetic'

Mr Snowden, a former contractor with the NSA, has been charged in the US with espionage and is currently a fugitive in Russia.

Last month, a US panel gave President Barack Obama dozens of recommendations for ways to change US electronic surveillance programmes.

On Friday, Mr Obama is expected to outline his response to those suggestions as well as his own conversations with a variety of US groups concerned with spying, in a speech at the justice department.

He is expected to support the creation of a public advocate to argue in front of the Foreign Intelligence Surveillance Court, a secretive bench that approves the bulk records collections, according to details leaked to US media by the White House.

Mr Obama is also expected to extend some privacy protections to foreigners, including more oversight on how the US monitors foreign leaders, and limit how long phone information is kept.

But he is not expected to take the bulk phone collection out of the hands of the NSA, as the panel recommended, instead leaving that question to Congress.

Civil rights and privacy groups were wary ahead of the speech.

"While we welcome the president's acknowledgement that reforms must be made, we warn the president not to expect thunderous applause for cosmetic reforms,'' David Segal of Demand Progress told the Associated Press news agency.

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Google unveils 'smart contact lens'

16 January 2014 Last updated at 22:47 ET

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Google said the sensors on the smart contact lens are so small they look like bits of glitter

Google has said it is testing a "smart contact lens" that can help measure glucose levels in tears.

It uses a "tiny" wireless chip and a "miniaturised" glucose sensor embedded between two layers of lens material.

The firm said it is also working on integrating tiny LED lights that could light up to indicate that glucose levels have crossed certain thresholds.

But it added that "a lot more work" needed to be done to get the technology ready for everyday use.

"It's still early days for this technology, but we've completed multiple clinical research studies which are helping to refine our prototype," the firm said in a blogpost.

"We hope this could someday lead to a new way for people with diabetes to manage their disease."

'Exciting development'

Continue reading the main story

It is likely to spur a range of other innovations towards miniaturizing technology and using it in wearable devices to help people monitor their bodies better"

End Quote Manoj Menon Frost & Sullivan

Many global firms have been looking to expand in the wearable technology sector - seen by many as a key growth area in the coming years.

Various estimates have said the sector is expected to grow by between $10bn and $50bn (£6bn and £31bn) in the next five years.

Within the sector, many firms have been looking specifically at technology targeted at healthcare.

Google's latest foray with the smart contact lens is aimed at a sector where consumer demand for such devices is expected to grow.

According to the International Diabetes Federation, one in ten people across the world's population are forecast to have diabetes by 2035.

People suffering from the condition need to monitor their glucose levels regularly as sudden spikes or drops are dangerous. At present, the majority of them do so by testing drops of blood.

Google said it was testing a prototype of the lens that could "generate a reading once per second".

"This is an exciting development for preventive healthcare industry," Manoj Menon, managing director of consulting firm Frost & Sullivan told the BBC.

"It is likely to spur a range of other innovations towards miniaturizing technology and using it in wearable devices to help people monitor their bodies better."

Open innovation?

Google said it was working with the US Food and Drug Administration (FDA) to bring the product to mainstream use.

It added that it would look for partners "who are experts in bringing products like this to market".

Google said it would work with these partners to develops apps aimed at making the measurements taken by the lens available to the wearer and their doctor.

Mr Menon said it was "commendable" that Google was willing to work with other partners even before the product was commercially ready.

"Their open innovation approach is going to help accelerate the development of this product and get it out to the market much faster," he said.

Other firms have also been looking towards wearable products that help monitor the health of the wearer.

Earlier this month, a gadget called Sensible Baby was unveiled at the Consumer Electronics Show (CES) in Las Vegas. It is a sensor put in an infant's night clothes that tracks their temperature, orientation and movement.

It sounds a smartphone app alarm if it detects a problem.

Several smartwatches that can monitor data by studying key indicators such as the the wearer's heart rate and temperature have also been launched.

Last year, Japanese firm Sony filed a patent for a 'SmartWig', with healthcare cited as one of its potential uses.

It said the wig could use a combination of sensors to help collect information such as temperature, pulse and blood pressure of the wearer.

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Silk Road forfeits $28m in Bitcoins

17 January 2014 Last updated at 02:15 ET

The clandestine online marketplace, Silk Road, has forfeited Bitcoins worth $28m (£18m), US prosecutors have said.

Prosecutors had seized the Bitcoins - a virtual currency - as they shut the website, which allowed users to trade in illegal drugs, last year.

The seized Bitcoins were allegedly used "to facilitate money laundering", the prosecutors claimed.

Bitcoins have gained popularity recently but there have been fears they may be used for illegal activities.

"We continue our efforts to take the profit out of crime and signal to those who would turn to the dark web for illicit activity that they have chosen the wrong path," US prosecutor Preet Bharara said in a statement.

Continue reading the main story

Bitcoin is often referred to as a new kind of currency.

But it may be better to think of its units as being virtual tokens that have value because enough people believe they do and there is a finite number of them.

Each bitcoin is represented by a unique online registration number.

These numbers are created through a process called "mining", which involves a computer solving a difficult mathematical problem with a 64-digit solution.

Each time a problem is solved the computer's owner is rewarded with bitcoins.

To receive a bitcoin, a user must also have a Bitcoin address - a randomly generated string of 27 to 34 letters and numbers - which acts as a kind of virtual postbox to and from which the bitcoins are sent.

Since there is no registry of these addresses, people can use them to protect their anonymity when making a transaction.

These addresses are in turn stored in Bitcoin wallets, which are used to manage savings. They operate like privately run bank accounts - with the proviso that if the data is lost, so are the bitcoins contained.

Mr Bharara added that prosecutors were treating Bitcoins like any other asset involved in money laundering and criminal activity.

"These Bitcoins were forfeited not because they are Bitcoins, but because they were, as the court found, the proceeds of crimes," he said.

Additional seizures

The US authorities have alleged that Silk Road had been designed to "enable its users to buy and sell illegal drugs and other unlawful goods and services anonymously".

They said they had also filed charges against Ross William Ulbricht, the alleged owner of the site.

Mr Ulbricht is also known as Dread Pirate Roberts, DPR and Silk Road, the prosecutors said.

As part of the action against the Mr Ulbricht, prosecutors said they had seized an additional 144,336 Bitcoins.

These are worth nearly $130m at current value.

Mr Ulbricht has filed a claim contesting the seizure of the Bitcoins, asserting that they were found on his personal computer and belong to him rather than Silk Road.

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Nintendo hit by weak Wii U sales

17 January 2014 Last updated at 05:06 ET

Nintendo, the Japanese gaming giant and creator of the Super Mario franchise, has issued a profit warning blaming weaker-than-expected Wii U console sales.

It now expects to make an operating loss of 35bn yen ($335m; £205m) for the financial year ending 31 March 2014.

Its initial estimate was for an operating profit of 100bn yen.

Nintendo said the key reason behind the downgrade was weaker-than-expected sales during the holiday season.

"In the year-end sales season which constitutes the highest proportion of the annual sales volume, software sales with a relatively high margin were significantly lower than our original forecasts," the firm said in a statement.

Losing faith

It said weak software sales were "mainly due to the fact that hardware sales did not reach their expected level".

The company cut its global Wii U sales forecast for the business year from nine million to 2.8 million units - a cut of nearly 70%.

It also reduced the sales forecast for its 3DS console from 18 million to 13.5 million units.

Three months ago Nintendo was standing by its sales projections for the Wii U, despite signs, from the UK at least, that retailers were losing faith in the product.

In July last year, UK supermarket chain Asda said it would no longer be selling the Wii U in its stores.

Online streaming

Nintendo has faced tough competition from rival games console makers, such as Microsoft with its new Xbox One, and Sony with its new PlayStation 4.

There is also a general trend towards online streaming of games to make them available over a variety of devices, such as mobiles and smart TVs.

At the recent Consumer Electronics Show in Las Vegas, Sony announced that PlayStation Now subscribers will be able to play some of the platform's greatest hits without the need to own a console.

Sony said it may offer its games to third-party products as well.

'Disappointing'

This month Nintendo's shares received a boost after China lifted a sales ban on foreign video games consoles.

The Chinese government said it would allow foreign firms to make consoles in the recently-launched Shanghai free trade zone and sell them across the country.

Nintendo's shares have risen 56% over the last 52-week period, reaching a two-and-a-half year high in January, but this latest profits warning - issued after the Tokyo markets closed - is likely to affect the share price on Monday.

"The fact that the Wii U strategy has failed is disappointing and will likely trigger a sell-off as soon as the market opens," said Makoto Kikuchi, chief executive of Myojo Asset Management.

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UK 'complacent' over spying leaks

17 January 2014 Last updated at 05:57 ET

British politicians have shown "complacency" about revelations of mass surveillance by the security services, the editor of the Guardian has said.

Alan Rusbridger said both Labour and the Conservatives "feel compromised" by the information revealed in documents leaked by Edward Snowden.

The foreign secretary said he had seen no evidence of privacy law breaches.

US President Barack Obama is set to announce new restrictions on the collection of phone records later.

Foreign Secretary William Hague's comments followed new allegations revealed by the Guardian and Channel Four News about a National Security Agency (NSA) programme that has collected and stored almost 200 million text messages per day across the globe.

The programme extracted and stored data from the SMS messages to gather location information, contacts and financial data, according to the Guardian and Channel Four.

'World's strongest system'

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Mr Hague told BBC Radio 4's Today programme he could not address those specific allegations, but said the UK had "very strong legal checks and balances" requiring warrants from himself or the home secretary to intercept the content of the communications of anyone within the United Kingdom.

"That system is not breached," he said. "I've never seen anything to suggest that system is breached.

"We have perhaps the strongest system in the world, in which not only do I and the home secretary oversee these things, there are then commissioners - the interception of communications commissioner, for instance - who oversee our work and report to the prime minister on how we do that."

However, Mr Rusbridger claimed the American NSA liked working in the UK because of the "light legal regime".

Continue reading the main story

• Accessing internet company data
• Tapping fibre optic cables
• Eavesdropping on phones
• Targeted spying

He told the Today programme: "Here, there's been barely a whisper from Westminster.

"I think they are closing their eyes and hoping it will go away. But it's not going to go away, because it's impossible to reform the NSA without that having a deep knock-on effect on what our own intelligence services do."

He said the leaks by former intelligence contractor Mr Snowden - who has been granted asylum by Russia - compromised both main political parties.

"Labour are not keen to get involved because a lot of this stuff was done on their watch," he said.

"That of course has raised the whole question of oversight. We have a parliamentary committee with a tiny budget of £1m overseeing the three agencies [the intelligence service MI6, security service MI5 and communications monitor GCHQ] with over £2bn.

"I just don't believe they've got the technological expertise or the resource to look into this."

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Obama 'to end NSA data hoarding'

17 January 2014 Last updated at 10:29 ET

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LIVE: President Obama's speech

President Barack Obama is expected to order the National Security Agency (NSA) to stop storing data from Americans' phones, after a series of leaks about intelligence operations.

Reports suggest Mr Obama will ask Congress to arrange how the data is stored, and how agencies can access it.

The president is due to announce a number of changes to the spying system.

Former intelligence worker Edward Snowden has leaked an array of details about the NSA's spying programme.

Continue reading the main story

"Start Quote

As so often, [President Obama's] liberal instincts may be at war with his perceived duty as commander in chief - and he may be doomed to disappoint many on both sides of the debate"

End Quote

He is wanted for espionage in the US and now lives in exile in Russia.

The latest revelations claim that US agencies have collected and stored almost 200 million text messages every day across the globe.

An NSA programme called Dishfire extracted and stored data from the SMS messages to gather location information, contacts and financial data, according to the Guardian newspaper and Channel 4 News.

The information was shared with the UK's spy agency, GCHQ.

Both agencies have defended their activities, saying they operate within the constraints of the law.

FISC shakeup

While he initially defended US surveillance practices, Mr Obama said in August that the US "can and must be more transparent" about its intelligence gathering.

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In Friday's speech, scheduled to take place at the Department of Justice at 11:00 (16:00 GMT), he is expected to approve a number of recommendations made by a panel that the White House commissioned last year.

Senior officials said the centrepiece of the reforms, if approved, will be the order to stop the NSA from storing information about Americans' phone calls.

Storage of the data will instead fall to firms or another third party where it can be queried under limited conditions.

It will be a programme that "preserves the capabilities we need without the government holding this bulk metadata", one official told AFP news agency.

Continue reading the main story

How intelligence is gathered

• Accessing internet company data
• Tapping fibre optic cables
• Eavesdropping on phones
• Targeted spying

Mr Obama is expected to leave the decision as to how that is implemented to Congress and the intelligence community.

Another proposal likely to be approved is the creation of a public advocate position at the Foreign Intelligence Surveillance Court (FISC), where government agencies request permission for mass spying programmes.

Currently, only the US government is represented in front of FISC judges.

Mr Obama is also expected to extend some privacy protections for foreigners, increase oversight of how the US monitors foreign leaders, and limit how long some data can be stored.

In late 2012 it was revealed that the US had spied on the communications of several foreign allies, including monitoring the personal mobile phone of German Chancellor Angela Merkel.

'More confidence'

It is unclear whether Mr Obama's speech will make any reference to Mr Snowden, who is hailed as a hero who should be pardoned by civil liberties groups, but whose actions many believe put lives in danger.

Civil rights groups had been hoping for significant reductions in the powers of government agencies to collect data.

But analysts say the proposals appear to be structured in terms of broad rules that do little to limit intelligence-gathering activities.

White House spokesman Jay Carney said on Thursday the aim was to make intelligence activities "more transparent".

He said this would "give the public more confidence about the problems and the oversight of the programmes".

The White House also said Mr Obama had briefed UK Prime Minister David Cameron on the review of NSA activities.

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Fridge sends spam emails

17 January 2014 Last updated at 12:18 ET

A fridge has been discovered sending out spam after a web attack managed to compromise smart gadgets.

The fridge was one of more than 100,000 devices used to take part in the spam campaign.

Uncovered by security firm Proofpoint the attack compromised computers, home routers, media PCs and smart TV sets.

The attack is believed to be one of the first to exploit the lax security on devices that are part of the "internet of things".

Poor protection

The spam attack took place between 23 December 2013 and 6 January this year, said Proofpoint in a statement. In total, it said, about 750,000 messages were sent as part of the junk mail campaign. The emails were routed through the compromised gadgets.

About 25% of the messages seen by Proofpoint researchers did not pass through laptops, desktops or smartphones, it said.

Instead, the malware managed to get itself installed on other smart devices such as kitchen appliances, the home media systems on which people store copied DVDs and web-connected televisions.

Many of these gadgets have computer processors onboard and act as a self-contained web server to handle communication and other sophisticated functions.

Investigation by Proofpoint into the internet addresses involved in the attack revealed the presence of the smart gadgets, said David Knight, general manager of Proofpoint's information security division.

"The results spoke for themselves when the addresses responded with explicit identification, including well-known, often graphically branded interfaces, file structures, and content," he told the BBC.

Mr Knight speculated that the malware that allowed spam to be sent from these devices was able to install itself because many of the gadgets were poorly configured or used default passwords that left them exposed.

He said attacks such as this would become much more routine as homes and furnishings got smarter and were put online.

"Many of these devices are poorly protected at best and consumers have virtually no way to detect or fix infections when they do occur," he added.

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