Nokia nanotech cell phone - Morph

Nokia and the University of Cambridge are showing off a new stretchable and flexible mobile device of the future called Morph.

The new concept phone is part of an online display presented in conjunction with the "Design and the Elastic Mind" exhibition underway through May 12 at the Museum of Modern Art in New York City. The device, which is made using nanotechnology, is intended to demonstrate how cell phones in the future could be stretched and bent into different shapes, allowing users to "morph" their devices into whatever shape they want. Think Stretch Armstrong for cell phones. Want to wear your cell phone as a bracelet? No problem, just bend it around your wrist.

Nokia says the concept device demonstrates handset features that nanotechnology might be capable of delivering, including flexible materials, transparent electronics, and self-cleaning surfaces.

"Nokia Research Center is looking at ways to reinvent the form and function of mobile devices," Bob Iannucci, chief technology officer for Nokia, said in a statement. "The Morph concept shows what might be possible."

Even though Morph is still in early development, Nokia believes that certain elements of the device could be used in high-end Nokia devices within the next seven years. And as the technology matures, nanotechnology could eventually be incorporated into Nokia's entire line of products to help lower manufacturing costs.

Motorola W230 Cell Phone

Unveiled on CES last January and showcased on the recently concluded MWC 2008 is Motorola's new low-end music phone -- the Motorola W230. The phone is part of the W-series along with the W161 and the W181. The Motorola W230 is a phone which goes straight to the nitty-gritty. No frills, no added layers of useless fat. In short, it only has basic features. A candybar, it has 1.6” 128 x 128 color screen, 9 hours of talk time, and the CrystalTalk audio technology. It also features support for Hinglish (Hindi + English), as well as seven different African languages. Its main attraction though, is the dedicated music key, which audio (iMelody, MIDI, MP3, AMR) listening easier. The Motorola W230 comes with two color faceplates: manadarin-bordered dark titanium gray and lustrous silver-bordered licorice. It's now currently available in some countries for around US$50-75, depending upon the market. Yes, that's 50 to 75 bucks. And that's not the price after a mail-in rebate either. The phone costs just that, without plans of any sort whatsoever.

Apple's iPod shuffle price cut will buoy iPod sales

Apple's decision to cut prices on its iPod shuffle range should help the company meet shipment forecasts across its iPod range, an analyst said Wednesday.
American Technology Research analyst Shaw Wu said: "We view this development as an incremental positive that helps eliminate one of the key risks lingering from its December quarter, namely that being light iPod units (we think from poor low-end shuffle sales) caused Apple to miss consensus shipments by 2-3 million."
The analyst, who rates the stock as one to buy with a price target of US$175 per share, expressed a little disappointment that Apple management failed to cut prices in the crucial Christmas quarter, saying that doing so would have helped drive "incremental demand" as new users grew hooked on Apple's music ecosystem.
"We believe these lower-cost shuffles could bring incremental sales of 500,000-1 million units per quarter, he said, observing the move will likely "put pressure on competitors."
The analyst concluded: "While near-term trends look difficult with a looming recession and a slow-down in consumer spending, we continue to believe Apple is well-positioned to weather the storm better than most with its strong fundamentals."

Apple lowers price of iPod shuffle to $49, intros 2GB model

Apple on Tuesday introduced a new 2GB model of its iPod shuffle that will cost $69 and lowered the price of its original model, which is now 1GB, to $49.

“At just $49, the iPod shuffle is the most affordable iPod ever,” said Greg Joswiak, Apple’s vice president of Worldwide iPod Product Marketing. “The new 2GB model lets music lovers bring even more songs everywhere they go in the impossibly small iPod shuffle.”

The iPod lineup now includes the iPod shuffle; iPod classic holding up to 40,000 songs; the iPod nano with video playback and the iPod touch.

The $49 1GB shuffle is available immediately. The $69 2GB model will be available later this month.

New iPhone and iPod Touch models debut with higher prices

Apple on Tuesday rolled out new iPhone and iPod Touch models with beefed-up memories and bumped-up prices.

A premium iPhone with 16 gigabytes of memory and a 499 dollar price tag is now the top of that line, ahead of a model with half the memory and a price of 399 dollars.

An iPod Touch with 32 gigabytes of memory costs 499 dollars, relegating the 399 dollar 16-gigabyte model to second position. Apple sells an eight-gigabyte iPod Touch for 299 dollars.

"For some users, there's never enough memory," said Apple vice president for iPod and iPhone marketing Greg Joswiak.

Apple chief executive Steve Jobs says the California company has sold more than four million iPhones, touch-screen mobile devices combining telephone, video, music, and Internet connectivity.

IPod Touch models are essentially iPhones without the mobile telephone capabilities.

Apple's enhancement of memory capacities in its devices comes a month after the company added a movie rental service to its iTunes online entertainment store menu.

IPhone and iPod Touch models can download and present content from iTunes.

Charger juices iPhone, iPod at wall, car

Incase has introduced its 2-in-1 Wall & Car Charger, a device that can top off your iPod or iPhone's battery either from an AC outlet or from the cigarette lighter/accessory jack found in your automobile. It costs $39.95.

The device is worldwide-compatible with wall voltages, and DC-compatible with 12v and 24v power supplies. It features hideaway wall socket prongs, and it will charge the iPod or iPhone in standby or play mode. It sports a smooth rubber grip exterior and five-foot cable extension with built-in management system. An LED indicates when the unit is powered.

The 2-in-1 Wall & Car Charger is certified for use with iPods with a dock connector (it works with the iPhone as well, according to Incase). Look for it later this month at Apple retail stores and at the Apple store online, as well as Incase's Web site.

Incase's Web site had not been updated with information about the new accessory as Macworld

posted this article.

Mac owners officially sexier than Windows

Mac users spend more on sex toys than Windows users, but less than Linux louches

Computer users argue over many statistics, but when it comes to sex toys: Mac users spend more on adult recreation than Windows users; but it's Linux users that invest the most in enhancing the pleasures of the flesh, an adult toys website claims.

Adult toy seller Lovehoney has published its Google Analytics logs, which show the system platform preferences of its sensation-seeking customer base.

As reported by Reg Hardware: "Mac users spent an average of five minutes 56 seconds on the site, just ahead of Linux users' five minutes 16 seconds and Windows folks' five minutes 14 seconds."

The report claims Linux users spend on average £48.55 when they shop on the site, Mac users £40.38 and Windows users £35.90. iPhone users are also reportedly purchasing hanky-panky products using their device, spending slighly less than Windows users do on average, £34.59. iPod touch users spend £31.76.

This report into the sexual significance of operating systems emerges scant days since the publication of new research from the University of Portsmouth.

Cybersex expert Dr Trudy Barber (who doesn't reveal which OS she uses) earlier this week delivered a Royal Society lecture during which she disclosed that fetishism and sexual proclivities are helping change the way people use technology.

Dr Barber, an expert on cyberspace and sexual subcultures, has spent years researching how people's sexual choices help shape new technology, including the internet, which she likens to the development of video players which brought pornographic films into the home in the late 1970s.

"Computer technology touches so many aspects of our lives it's really not so surprising that it would infiltrate and influence our sex lives. In contemporary western society sex is for pleasure and for entertainment and computers will have an increasing role to play," she said.

She observes: "The role of deviation as a key to innovation must not be overlooked as it will contribute to our understanding of new intimacy, culture and the future of developing information and communications technologies."

iPod dominates Amazon

iPod models hold eight of ten top-selling slots on Amazon in US and UK

Apple's iPod continues its dominance at online retail giant, Amazon.

In the UK, iPod's hold eight of the top ten places within Amazon's list of top-selling products, with the 80GB iPod classic the leading model sold by the retailer, followed by the silver 4GB iPod nano, with the 8GB black iPod nano in third place.

The 16GB iPod touch is the fourth most popular iPod model sold by Amazon, despite its £234 (excluding VAT) price on that store. In fifth place sits the 80GB silver iPod classic, with the 8GB iPod touch in sixth place.

The only two non-Apple products among the top ten sellers in Amazon UK's MP3 and Digital Audio categories come from Sony and Creative, with SOny'sNWZA818 Walkman at number eight, and the recently-launched Creative Zen Stone Plus 2GB player at number ten.

Amazon US displays a similar pattern of iDominance, with Apple holding eight of the top ten selling models within the retailers MP3 Players list. Miccrosoft's Zune, while briefly in the top ten, has now slipped to 22nd place.

The silver 4GB iPod nano is the top-selling iPod on Amazon US, followed by the 8GB iPod touch and, in third place, the 80GB iPod classic.

Non-Apple media players among the top ten in the US at time of writing include the Creative Zen 4GB player in seventh and the 1GB Sansa Clip in eighth place.

Inside Apple's iPod sales figures

From October to December 2007, Apple sold more iPods than in any quarter since the introduction of the mobile music player six years earlier. Record quarterly sales of 22.1 million iPods helped Apple tally $9.6 billion in revenue and a $1.5-billion profit for its fiscal first quarter.

And financial analysts and media reacted by clobbering Apple’s stock, partly because Apple offered projections for its second-quarter performance that were below what Wall Street was anticipating but also because the record iPod sales failed to meet expectations. Headlines proclaimed that sales of the music player were a warning bell for investors, that the shine was off the company , and that iPod sales totals were plodding.

What gives? The disparity between Apple’s reported iPod sales and the strong reaction to them boils down to what aspect of the iPod results you’re looking at.

As is readily apparent from glancing at a chart showing the number of iPods sold, unit sales have never been higher. “Apple’s results are actually quite good compared to the rest of the category,” said Ross Rubin, director of analysis at market research firm NPD Group. Apple moved more than 22 million iPods last quarter, keeping the company lodged securely in first place in the digital music player market in December with a share of 67 percent, according to NPD.

All about the growth

But what the analysts and the media were reacting to was a lack of growth in iPod sales over the previous year. For the fiscal first quarter 2007, Apple sold 21 million iPods, meaning that year-over-year, the iPod unit sales grew only 5 percent—still an increase, though not the kind of robust growth Wall Street had come to expect.

Over the last few years, iPod sales numbers have shown dramatic growth, particularly in the quarter that encompasses holiday purchases. The 21 million iPods Apple sold in the 2007 first quarter was 50 percent higher than what it sold in the previous year. In the 2006 quarter, iPod sales grew 207 percent while 2005 first-quarter iPod sales shot up an astounding 525 percent from the year-ago quarter.

iPod sales are affected by a high degree of what analysts call seasonality, meaning yearly sales figures typically follow the same pattern. In the iPod’s case, the highest sales peak typically comes in Apple’s fiscal first quarter, which coincides with the holiday buying season. While total unit sales grew over the 2006 quarter, sale growth rate had fallen. Most analysts attribute that slowdown to market saturation: MP3 players in general, and the iPod in particular, have become so popular that the market of people looking to buy one is dwindling.

That’s not the only potential reason for slowing growth in iPod sales, however. Tim Bajarin, president of consulting firm Creative Strategies, thinks the strained economy could also clamp down on iPod sales growth.

“In the holiday quarter, consumers were very cautious on buying technology that’s not mission critical, such as music players,” he said. Many analysts were looking to Apple’s results for good news about the economy and were not reassured by the lower growth rate of iPod sales.

But the holiday quarter wasn’t the only one to see slower growth in the past year. For Apple’s 2007 fiscal year, fourth-quarter iPod sales grew 16 percent over the previous year, third-quarter sales rose 21 percent, and second quarter figures rose 23 percent—again, all positive numbers, but in 2006 those quarterly iPod sales grew by 35 percent, 31 percent, and 60 percent, respectively. Clearly, iPod sales growth has been slowing for at least the past year and, even though the numbers of iPod sold each quarter continue to trend upwards on the whole, they’re increasing more slowly than they have in the past.

Then again, slowing growth isn’t really a surprise. Apple would have had its work cut out for itself if, say, it hoped to sustain that 525-percent growth of 2005’s first quarter: that would have meant selling 28 million iPods in the first quarter of 2006, more than 174 million for the 2007 quarter, and an outrageous 1 billion iPods in the most recent quarter.

Keep in mind that, as of April of last year, Apple sold its 100 millionth iPod. Given the runaway success of iPod sales in the past several years, growth was bound to slow eventually; it was just a matter of when and by how much.

The touch emerges

Even as iPod unit-sales growth slows, it’s hardly the end of the world for Apple. During a conference call with analysts last week, Apple Chief Financial Officer Peter Oppenheimer pointed out that the holiday season is just one of two major sales drivers for music players; the other is product launches.

Oppenheimer repeatedly stressed that Apple was concentrating on creating innovative products, and both he and Apple Chief Operating Officer Tim Cook cited the iPod touch as a specific example of how the iPod’s market is bigger than just playing music and videos. According to Oppenheimer, the touch is an “entirely new type of iPod,” one that Apple sees moving the iPod beyond its roots as a mere media player, becoming “the first mainstream Wi-Fi mobile platform.”

Apple doesn’t break out individual product lines when reporting its quarterly results, so there are no specific numbers on iPod touch sales. But the impact of the widescreen iPod first introduced last September is definitely being felt.

For one thing, Apple reported that the average selling price of an iPod in the most recent quarter was $181, the highest that number’s been in the last year and a half. It’s likely that the touch, available for either $299 or $399, is helping drive that.

Another sign of the touch’s impact comes from the growth in revenue for Apple’s iPod and music segment—up 147 percent in the fiscal first quarter from the previous quarter. That number also compares favorably to the same quarter from last year, in which the segment grew just 120 percent in revenue—another indication that the iPod touch has bolstered the iPod’s bottom line.

“Consumers have been very familiar with what Apple has in the iPod line,” Bajarin said. “They’re waiting for the next level of innovation. There’s still a market for the nano and the shuffle, but there could be greater pent-up demand for something like the touch.”

Since that’s the direction in which Apple clearly intends to push the iPod line, it bodes well for the continued success of the iPod segment. “The touch did quite well for a premium-priced product, particularly one with low capacity in its price range,” NPD’s Rubin said. “Even though the iPod is known for its media playback features, the promise of the [forthcoming Software Development Kit for the iPhone] is to turn it into a platform for future development.”

MacBook Air Chip Going Into Other Computers

More computers will be running on Air. Chip-maker Intel is reportedly selling to other computer makers the miniaturized Core 2 Duo processor that helps make Apple's new MacBook Air so thin.

The manufacturers include Lenovo and Fujitsu, who will use the 65-nanometer custom chip to create their own Windows-based ultrathin notebooks. No date has been announced for the new machines, and Intel and the computer makers have declined to comment.

No Exclusivity Announced

Earlier this month, Apple CEO Steve Jobs unveiled the MacBook Air at the annual Macworld conference. The new laptop is so thin -- three-quarters of an inch at the thickest part -- that it fits into a manila envelope. The svelteness is achieved in part by a special chip Intel designed for the new machine, based on the older Merom line of processors.

During the Macworld presentation, Intel CEO Paul Otellini said Jobs had asked Intel to design a smaller processor. But Intel has not made any public commitment to Apple for exclusivity.

While nearly two-thirds smaller than earlier Meroms and requiring less power, the MacBook Air's Core 2 Duo has reduced performance compared to other Intel Core 2 Duo chips. But Apple has optimized the operating system and other features to maximize performance.

Since small is in, Intel has also been working on other small chips, especially for new generations of handheld devices and the ultra-portable PC that it has helped promote. In particular, it has been developing smaller processors using its new 45-nanometer process.

Difference in Packaging

Martin Reynolds, an analyst with industry research firm Gartner, noted that the difference in the Air chip is in the packaging, not in the chip itself. He added that he expects to see it appear in various computer makers' small devices.

The MacBook Air represents a new level in the game of creating the most portable, most powerful computer. It weighs three pounds, features a 13.3-inch display, a built-in iSight camera, a backlit full-size keyboard, and its Core 2 Duo runs at 1.6 GHz. It is also heir to the multi-touch interface made famous by Apple's iPhone, with a trackpad that, for instance, allows the user to expand a photo with a two-fingered gesture.

Steven Levy of Newsweek, citing the MacBook Air's "gorgeous design," called it "the Audrey Hepburn of laptops." But, unlike the virtually perfect Hepburn, there are several omissions in the Air. Lenovo, Fujitsu or others could exploit these omissions in smaller laptops with the same chip.

Among other things, the Air lacks an optical drive, although there is an option for wirelessly connecting to an external drive. The battery is not removable by the owner and the initial version includes a hard drive of only 80GB.

Jonathan Ive wins 'Great Briton' award

The UK's own Jonathan Ive has been declared a "Great Briton" by Morgan Stanley.

Ive took the Morgan Stanley Great Briton award in the Creative Industries category, with the judges declaring him a "rock star in the technology world".

Morgan Stanley declares: "Ive was instrumental in the turnaround of Apple and a period of unrivalled creativity and innovation which continues to this day."

By combining what he describes as “fanatical care beyond the obvious stuff” with relentless experiments into tools, materials and production processes, he and the Apple design team have designed and developed a succession of iconic products including the iBook, iPod and iPhone.

In 2007, Ive received the 2007 National Design Award in the product design category for his work on the iPhone.

Ive pipped Royal Shakespeare Company artistic director Michael Boyd and acclaimed English actor Stephen Fry to clinch the title in this category. Stephen Fry was famously the second person in the UK to buy an Apple computer, with his close friend Douglas Adams acquiring two.

iTunes usage overtakes RealPlayer

iTunes usage has overtaken that of RealPlayer for the first time in the US, new research claims.

In a report that reveals US broadband penetration has increased to 86.79 per cent among active internet users, it has also been confirmed that iTunes usage surpassed that of RealPlayer from April 2007.

Further, the report adds: "Among the four major streaming media players, only iTunes had a positive growth rate over the past year." Usage grew 26.8 per cent between December 2006 and December 2007.

QuickTime usage fell 8.6 per cent, RealPlayer fell 17.5 per cent, and Windows Media Player was essentially flat.

iTunes ended 2007 with 35,664,000 US users. RealPlayer had 27,565,000 (down from 33,408,00 the preceeding year) while Windows Media Player accounted for 75,865,000 users in the US, the report reveals.

As a signal of growth, iTunes held 669,000 users in December 2003, the report informs.

MacBook Air Chip Going Into Other Computers

More computers will be running on Air. Chip-maker Intel is reportedly selling to other computer makers the miniaturized Core 2 Duo processor that helps make Apple's new MacBook Air so thin.

The manufacturers include Lenovo and Fujitsu, who will use the 65-nanometer custom chip to create their own Windows-based ultrathin notebooks. No date has been announced for the new machines, and Intel and the computer makers have declined to comment.

No Exclusivity Announced

Earlier this month, Apple CEO Steve Jobs unveiled the MacBook Air at the annual Macworld conference. The new laptop is so thin -- three-quarters of an inch at the thickest part -- that it fits into a manila envelope. The svelteness is achieved in part by a special chip Intel designed for the new machine, based on the older Merom line of processors.

During the Macworld presentation, Intel CEO Paul Otellini said Jobs had asked Intel to design a smaller processor. But Intel has not made any public commitment to Apple for exclusivity.

While nearly two-thirds smaller than earlier Meroms and requiring less power, the MacBook Air's Core 2 Duo has reduced performance compared to other Intel Core 2 Duo chips. But Apple has optimized the operating system and other features to maximize performance.

Since small is in, Intel has also been working on other small chips, especially for new generations of handheld devices and the ultra-portable PC that it has helped promote. In particular, it has been developing smaller processors using its new 45-nanometer process.

Difference in Packaging

Martin Reynolds, an analyst with industry research firm Gartner, noted that the difference in the Air chip is in the packaging, not in the chip itself. He added that he expects to see it appear in various computer makers' small devices.

The MacBook Air represents a new level in the game of creating the most portable, most powerful computer. It weighs three pounds, features a 13.3-inch display, a built-in iSight camera, a backlit full-size keyboard, and its Core 2 Duo runs at 1.6 GHz. It is also heir to the multi-touch interface made famous by Apple's iPhone, with a trackpad that, for instance, allows the user to expand a photo with a two-fingered gesture.

Steven Levy of Newsweek, citing the MacBook Air's "gorgeous design," called it "the Audrey Hepburn of laptops." But, unlike the virtually perfect Hepburn, there are several omissions in the Air. Lenovo, Fujitsu or others could exploit these omissions in smaller laptops with the same chip.

Among other things, the Air lacks an optical drive, although there is an option for wirelessly connecting to an external drive. The battery is not removable by the owner and the initial version includes a hard drive of only 80GB.

What happens if Microsoft acquires Yahoo?

E-mail and instant messaging would likely change little

You’ve got a Yahoo e-mail account, and your best friend uses MSN.

You use Yahoo Messenger and she uses MSN Messenger for instant messaging.

When it comes to search, you both use both Google, and sometimes Yahoo and MSN.

So, what could Microsoft’s acquisition of Yahoo mean in all these areas if the software giant acquires the Internet company? (Msnbc.com is a joint venture of Microsoft and NBC Universal.)

Keeping an e-mail address is probably the biggest issue for most consumers, and one that is likely to be left as is for awhile, with each brand staying in place, said Allen Weiner, research director for Gartner, Inc. market research.

“The issue is, particularly as Microsoft has moved people in their e-mail business around, from Hotmail (which Microsoft bought in 1998) to Live Mail, and created some confusion around that, they certainly don’t want to basically say, ‘We’re all going to move you now to Yahoo mail,’ ” he said.

“The question is, how do they keep those brands in place, where appropriate, and then, where appropriate, do they bring those brands together?”

David Smith, lead Microsoft analyst for Gartner, said if Microsoft acquires Yahoo, there likely “would be ways to provide interoperability, to provide support, so that people don’t have to change” their e-mail addresses.

Representatives from Microsoft and Yahoo declined to expand Friday on what the impacts of the purchase could be for users.

In terms of instant messaging, there would be little change, Weiner said.

“The thing that some people may not remember is that Yahoo and Microsoft actually integrated their messengers quite awhile ago, so from an instant messsaging perspective, you can seamlessly IM people who are on those two different networks,” Weiner said.

It’s in the search arena — a lucrative one because of advertising revenue — that the biggest change may be ahead.

Google is the leader, with a 58.4 percent market share in the U.S., said Weiner.

Yahoo is next, with a 22.9 percent share, and Microsoft is third with a 9.8 percent share. America Online has 4.6 percent, and Ask.com 4.3 percent of the market, he said.

“The combination of Yahoo and Microsoft together is still only 32 percent,” Weiner said. “They’re still significantly behind Google.

“I look at this from Microsoft’s perspective. Microsoft has a mandate to try to take on Google in the world of search, and I think they got to the point where they realized they had two paths to go down.

“One was to take a large war chest of money, invest it in rebranding their own search product, call it something different, take on Google in terms of advertising and marketing, maybe invest in R&D. To date, the investments Microsoft has made in that realm haven’t really moved the meter.

“The second path is to take on the largest person above them, which is Yahoo. I think Microsoft believes it would be a far more efficient use of dollars to buy market share than to invest in their own product with an uncertain outcome.”

The resulting search product is likely to resemble Yahoo more than Microsoft, said Smith.

“I would expect to see a very strong reliance on the Yahoo brand, and things that are out there with the Yahoo name on it are likely to continue to be supported,” said Smith.

“When you look at the big picture of Web sites and places out there on the Web where there are groups of people that can be advertised to, whether it’s e-mail, IM, sports sites — Yahoo tends to show up in the top, or near the top, of most of those categories. They’re a very, very strong presence,” he said.

“That’s really what’s it all about, is getting the access to all the potential advertising there.”

Microsoft wants to purchase Yahoo

Microsoft and Yahoo are both struggling to compete with Google

Microsoft has offered to buy the search engine company Yahoo for $44.6bn (£22.4bn) in cash and shares.

The offer, contained in a letter to Yahoo's board, is 62% above Yahoo's closing share price on Thursday.

Yahoo cut its revenue forecasts earlier this week and said it would have to spend an additional $300m this year trying to revive the company.

It has been struggling in recent years to compete with Google, which has also been a competitor to Microsoft.

In a conference call, Microsoft's Kevin Johnson said that the combination of the two companies would create an entity that could better compete with Google.

"Today the market [for online search and advertising] is increasingly dominated by one player," he said.

Chairman quit

Yahoo confirmed that it has received an unsolicited offer and said that its board would evaluate the proposal, "carefully and promptly in the context of Yahoo's strategic plans and pursue the best course of action to maximize long-term value for shareholders."

If Yahoo accepted the offer, competition authorities both in the US and the European Union would be likely to investigate the tie-up.

Yahoo chief executive, Jerry Yang, announced on Tuesday that he intended to lay off 1,000 staff as part of a restructuring plan.

Terry Semel, who stepped down as chief executive last June, also quit as non-executive chairman on Thursday.

Microsoft said that Yahoo shareholders could choose to receive either cash or shares.

Yahoo shares have fallen 46% since reaching a year-high of $34.08 in October. On Friday they closed almost 48% higher.

Microsoft closed 6.6% lower while Google shares fell 8.6%.

"Ultimately this corporate marriage was forced by the rise of Google, which has grown into a serious competitor for both Microsoft as a software company and Yahoo as an internet portal," said Tim Weber, business editor of the BBC News website.

"It is a shotgun marriage, but the person holding the shotgun is Google."

'Exorbitant premium'

According to its letter to Yahoo, Microsoft attempted to enter talks about a deal a year ago, but was rebuffed because Yahoo was confident about the "potential upside" presented by the reorganisation and operational activities that were being put in place at the time.

"A year has gone by, and the competitive situation has not improved," Microsoft's letter said.

But there has been some concern about the price that Microsoft is offering.

"To me, the premium seems exorbitant, for what is a dwindling business," said Tim Smalls from the brokerage firm Execution LLC.

"I personally don't see how the synergies of Microsoft-Yahoo is going to take on Google."

Other analysts were more enthusiastic about the offer.

"It is a fantastic offer. It is game on," said Colin Gillis from Canaccord Adams.

"This consolidates the marketplace down to Google versus Microsoft. These two companies will be going head to head."

Microsoft bids $44.6 billion for Yahoo

Microsoft has offered $44.6 billion in cash and shares to acquire Yahoo, the equivalent of $31 per share - 62 per cent above Yahoo's closing share price on Thursday.

"We have great respect for Yahoo!, and together we can offer an increasingly exciting set of solutions for consumers, publishers and advertisers while becoming better positioned to compete in the online services market," said Microsoft CEO Steve Ballmer.

"Our lives, our businesses, and even our society have been progressively transformed by the web, and Yahoo! has played a pioneering role by building compelling, high-scale services and infrastructure," said Ray Ozzie, chief software architect at Microsoft.

"The combination of these two great teams would enable us to jointly deliver a broad range of new experiences to our customers that neither of us would have achieved on our own."

The bid comes shortly after Yahoo confirmed Terry Semel was stepping down as non-executive chairman, six months after handing over his CEO title to Jerry Yang.

Semel is leaving the board effective immediately, Yahoo announced yesterday. He will be replaced as non-executive chairman by another board member, Roy Bostock, the company said.

Announcing its bid, Microsoft pointed out the value of the online ads market, suggesting it will be worth $80 billion by 2010.

"Today this market is increasingly dominated by one player. Together, Microsoft and Yahoo! can offer a competitive choice while better fulfilling the needs of customers and partners," the company said.

Intel To Sell Apple MacBook Air Chip To PC Makers

Other PC makers are reportedly looking to slim down their laptops like Apple did this month with its MacBook Air.

Intel has reportedly sold a version of the miniaturized Core 2 Duo processor in Apple's recently released MacBook Air to other manufactures, which could then build Windows-based competitors to the ultrathin and light notebook.

Two PC manufacturers have already signed on to use the custom-designed chip, and products powered by the processor are expected to be released soon, CNET and tech magazine PC Advisor reported Wednesday, both quoting a source familiar with the plans.

An Intel spokesman declined to give any sales details but did note that Apple is the only hardware manufacturer that sells a laptop based on this specific Core 2 Duo processor.

"If other OEMs are interested in this 65-nanometer Core 2 Duo processor, we are welcome to talk with them," an Intel spokesman told InformationWeek.

Apple chief executive Steve Jobs unveiled the Air this month at the Macworld conference in San Francisco. The thinness of the notebook was achieved in part by a miniaturized 65-nanometer Core 2 Duo processor that came from Intel's older Merom line. The processor is 60% smaller than the typical Merom chip and uses less power while delivering comparable speeds. The processor, however, is significantly slower than the latest Intel Core 2 Duo processors used in other new notebooks. Performance is not necessarily an issue with Apple as it customizes its operating system to maximize performance out of any processor it uses.

Nevertheless, the size and weight of the Air, which has a 13.3-inch display and full-size keyboard, placed the machine in a class of its own. The notebook weights 3 pounds and is three-quarters of an inch thick at the hinge, tapering to 0.16 of an inch at the opposite side.

Intel is working on smaller chips for ultramobile PCs and handheld devices, including a processor that's built using 45-nanometer process technology. But miniaturizing the Merom processor gave Intel a product that would fit Apple's slim design for the MacBook Air and deliver the necessary horsepower.

In making the Air thinner than other notebooks, Apple also left out a DVD drive, adding instead software called "remote disc" that can recognize an optical drive on a PC or Mac computer through a wireless network. Tapping into those machines, an Air user can install software from a CD or DVD.

The MacBook Air design has also caused some frustration among Mac users who want to use software from older Macs to install the sleek new laptop's operating system. The installation media that comes with other Macs can't be used to install "Leopard" on the MacBook Air, Apple said Wednesday.