News : Brazil Isolated tribe photographed

Amazon Indians from one of the world's last uncontacted tribes have been photographed from the air, with images released showing them painted bright red and brandishing bows and arrows.

The photographs, taken by Survival International near the border between Brazil and Peru, are rare evidence that such groups exist.

A Brazilian official involved in the expedition said many such tribes are in increasing danger from illegal logging.

Of more than 100 uncontacted tribes worldwide, more than half live in either Brazil or Peru, Survival International says.

It says all are in grave danger of being forced off their land, killed or ravaged by diseases they've never been exposed to because of their isolation.

News : Crane collapses in New York City

The crane collapse occurred during the morning rush hour at a construction site on New York's Upper East Side.

Initial unconfirmed media reports say at least two people were killed and the crane operator was injured. Aerial video shows a large portion of the crane tumbled onto a residential apartment building.

Jon Decker reports.

News : Computer trained to "read" mind images of words

By Maggie Fox, Health and Science Editor

WASHINGTON (Reuters) - A computer has been trained to "read" people's minds by looking at scans of their brains as they thought about specific words, researchers said on Thursday.

They hope their study, published in the journal Science, might lead to better understanding of how and where the brain stores information.

This might lead to better treatments for language disorders and learning disabilities, said Tom Mitchell of the Machine Learning Department at Carnegie Mellon University in Pittsburgh, who helped lead the study.

"The question we are trying to get at is one people have been thinking about for centuries, which is: How does the brain organize knowledge?" Mitchell said in a telephone interview.

"It is only in the last 10 or 15 years that we have this way that we can study this question."

Mitchell's team used functional magnetic resonance imaging, a type of brain scan that can see real-time brain activity.

They calibrated the computer by having nine student volunteers think of 58 different words, while imaging their brain activity.

"We gave instructions to people where we would tell them, 'We are going to show you words and we would like you, when you see this word, to think about its properties,'" Mitchell said.

They imaged each of the nine people thinking about the 58 different words, to create a kind of "average" image of a word.

"If I show you the brain images for two words, the main thing you notice is that they look pretty much alike. If you look at them for a while you might see subtle differences," Mitchell said.

"We have the program calculate the mean brain activity over all of the words that somebody has looked at. That gives us the average when somebody thinks about a word, and then we subtract that average out from all those images," Mitchell added.

Then the test came.

"After we train on the other 58 words, we can say 'Here are two new words you have not seen, celery and airplane.'" The computer was asked to choose which brain image corresponded with which word.

The computer passed the test, predicting when a brain image was taken when a person thought about the word "celery" and when the assigned word was "airplane."

The next step is to study brain activity for phrases.

"If I say 'rabbit' or 'fast rabbit' or 'cuddly rabbit', those are very different ideas," Mitchell said.

"I want to basically use that as a kind of scaffolding for studying language processing in the brain."

Mitchell was surprised at how similar brain activity was among the nine volunteers, although the work was painstaking. For an MRI to work well, the patient must sit or lie very still for several minutes.

"It can be hard to focus," Mitchell said. "Somewhere in the middle of that their stomach growls. And all of sudden they think, 'I'm hungry -- oops.' It's not a controllable experiment."

(Editing by Eric Walsh)

News : Dell eyes two-thirds of sales from outside U.S. in 5 years

BEIJING (Reuters) - Dell Inc (DELL.O: Quote, Profile, Research), the world's No. 2 personal computer maker, said on Friday sales outside the United States were growing much faster than its home market and could account for two-thirds of total revenues within five years.

Revenue from international regions topped U.S. revenue for the first time, with Brazil, Russia, India and China (BRIC) leading the way with 73 percent shipment growth in the first quarter, Steve Felice, president of Dell Asia-Pacific and Japan, told reporters during a teleconference.

At the rate things are going "two-thirds could come in five years," said Felice, referring to sales from outside the U.S.

The comments came after Dell posted higher-than-expected quarterly profit, driven by cost cuts and strong demand from consumers and foreign markets, pushing its shares up nearly 10 percent in after-hours trade.

Dell pointed to the strong performance as evidence that a year-long turnaround led by founder Michael Dell, who returned to the chief executive post in January 2007, was yielding results.

However, Dell said U.S. corporate customers were still cautious about buying given the uncertain economic outlook.

The firm's Americas revenue rose 1 percent in the quarter ended May 2, although server unit shipments soared 20 percent, four times that of the industry.

Dell has announced a plan to cut 8,900 jobs to reduce costs, but said Asia -- with faster sales growth and a large part of the company's supply chain -- would see more job growth.

"You will continue to see continued head-count growth in Asia," he said.

In March, the company said it would buy $23 billion of components from China this year and $29 billion in 2009, rising from $18 billion last year to help reduce costs.

($=6.94 yuan)

(Reporting by Kirby Chien; Editing by Anne Marie Roantree)

News : Hutchison Telecom in deal with Apple on iPhone

HONG KONG (Reuters) - Hutchison Telecommunications (2332.HK: Quote, Profile, Research) has sealed a deal with Apple Inc (AAPL.O: Quote, Profile, Research) to market the U.S. firm's popular iPhone handset in the city and Macau as soon as the next quarter, a Hong Kong newspaper reported on Friday.

Existing subscribers of Hutchison Telecom, a unit of conglomerate Hutchison Whampoa (0013.HK: Quote, Profile, Research), were expected to be the first users of the iPhone in an early program starting this summer, the South China Morning Post said.

"Due to the confidential agreement with Apple, we can't say too much beyond the formal announcement," the newspaper quoted a Hutchison Telecom spokesman as saying.

The South China Morning Post, citing a statement from the international mobile and telecommunication services provider, disclosed the deal but did not specify whether Hutchison Telecom would launch the 2G or 3G model.

Hutchison Telecom officials were not immediately available for comment.

At present, Hong Kong people can only buy the iPhone, a mobile phone that allows Internet access and plays music, through unofficial channels often in the form of parallel imports.

Other mobile operators in Hong Kong were expected to announce similar partnerships with Apple to launch 3G iPhones shortly, the newspaper said.

China Mobile (0941.HK: Quote, Profile, Research), the world's largest mobile phone operator, said earlier this year it had called off talks with Apple to launch the iPhone in China.

Analysts had expected talks to fail at least initially, predicting that the two sides would lock horns over revenue sharing and a series of technical difficulties.

(Reporting by Donny Kwok; Editing by Anne Marie Roantree)

News : Plumber needed at warp speed

The toilet at the International Space Station is broken.

Now the key date is May 31 when the Shuttle Discovery is set to make a delivery to the Space Station. The hope is that some replacement parts will be part of the cargo.

Deborah Lutterbeck reports from Washington.

News : Monkey controls robot using brain

A monkey has been able to control a robotic arm using brainpower.

With tiny microelectrodes implanted in its brain, the monkey could direct a robotic arm to pluck a marshmallow from a skewer and feed itself.

News : India, RIM meet again, no details on BlackBerry

NEW DELHI (Reuters) - BlackBerry-maker Research In Motion met Indian officials on Thursday over the government's security concerns, two sources in the know of the matter said, but there was no official statement.

India's security agencies have said the BlackBerry e-mail device posed a risk as the mails could not be traced or intercepted.

Two officials from the Canadian High Commission in New Delhi were also seen at the headquarters of the telecoms ministry on Thursday.

"There was a meeting, that is for sure," one source said. Another source also confirmed, but both were not present at the meeting and could not comment on any development.

Media reports have said Canadian High Commission officials have been attending RIM's meetings with the Indian government to resolve this issue.

Indian Telecoms Minister Andimuthu Raja said last week the Canadian firm had assured the government to provide a solution in two months.

But last Friday, Research In Motion said in a customer update that the company does not have a copy of the customer's encryption key and would "simply be unable to accommodate" any such request.

(Reporting by Devidutta Tripathy; Editing by Ranjit Gangadharan)

News : Monkey think, monkey do: with robotic arm

By Julie Steenhuysen

CHICAGO (Reuters) - Using only its brainpower, a monkey can direct a robotic arm to pluck a marshmallow from a skewer and stuff it into its mouth, researchers said on Wednesday.

"They are using a motorized prosthetic arm to reach out, grab and bring the food back to their face," said Andrew Schwartz of the University of Pittsburgh School of Medicine, whose study will appear in an upcoming issue of the journal Nature.

Schwartz said the technology behind this feat may lead to brain-powered prosthetic limbs for people with spinal cord injuries or disabling diseases that make such simple tasks impossible.

Until now, such brain-machine interfaces have been used to control cursor movements on a computer screen. Schwartz and colleagues wanted to apply the technology to real-world tasks.

The monkey guides the robot arm the same way it does its natural limbs, through brain signals.

Schwartz' team picks up those signals through an array of microelectrodes half the size of a thumbtack that has been implanted in the monkey's brain. These signals are amplified and relayed to a computer that operates the robotic arm.

Schwartz said his team has learned that certain motor neurons fire rapidly when the monkey wants to move a certain way. "What is important is each neuron seems to have a preferred direction," Schwartz said in a telephone interview.

"One cell will fire a lot if you move upward. Another cell will fire a lot if you move to the right. All you really need to do is listen to these neurons at the same time to determine which direction the animal wants to move in," he said.

COMPUTER CONTROL

"We record those patterns of action potential, interpret them with a computer and extract the monkey's intention to move. That serves as a control signal to the robot."

Schwartz said it takes about three days for a monkey to learn to operate the arm, and they continuously improve.

So far, they have trained two monkeys to feed themselves with the robotic arm. The monkeys sit in a chair with their arms gently restrained in sleeves that keep them from simply grabbing the food on their own. "These animals will just relax their arms as they control these devices," Schwartz said.

The monkeys appear to enjoy the task. "They sure like eating their marshmallows." Sometimes the team will use pieces of apple, orange or zucchini. "Just about anything we can that doesn't make too big of a mess," Schwartz said.

The ultimate goal is to develop a brain-powered prosthesis that can restore near-natural function to an amputee or person with a spinal cord injury.

But first, they want to refine the system. The next step is to develop an operating wrist and jointed fingers to add dexterity to the device.

"If you look at what these patients really need, they need to be able to use their fingers to increase their quality of life. They need to button shirts and pull zippers and things like that," Schwartz said.

The researchers must overcome several engineering challenges, including developing more durable electrodes that do not lose their signal over time, but Schwartz believes such devices are feasible.

"We're learning more and more about brain function as we do this," he said.

(Editing by Maggie Fox and Eric Beech)

News : "Metal Gear" creator cool under pressure

By Scott Hillis

SAN FRANCISCO (Reuters) - The pressure on Hideo Kojima could hardly be greater, but the creator of the "Metal Gear Solid" video game series is cool as a cucumber.

Kojima's "Metal Gear Solid 4" makes its debut next month in one of the most highly anticipated game releases of 2008.

Not only will the military stealth-action game wrap up the decade-long adventures of mustachioed protagonist Solid Snake, it is expected to boost sales of Sony's PlayStation 3 console and to help close the gap with Microsoft's Xbox 360.

Kojima's flair for exquisite detail and intricate stories have gained him a reputation as one of the top game developers in the world, on par with "The Sims" creator Will Wright or even Shigeru Miyamoto, creator of Nintendo's Mario.

Published by Japan's Konami, the previous three games in the series have sold a total of more than 17 million copies worldwide.

Kojima talked to Reuters about the positive side of pressure and why he is ready to say goodbye to his signature game series.

Q: There is a lot of expectation that "Metal Gear Solid 4" will help Sony sell more PS3s. Did that create more pressure for you?

A: "Indeed, there is pressure. There is always pressure. But I'm not talking pressure in a negative way. I can use it to push up the bar for what I'm creating. In that sense there's a positive pressure."

Q: Sum up two or three things about the game that make it different from not only past ones in the series but other games out there. What makes it unique?

A: "The MGS series has always been about action, or actually they call it stealth-action. This time the setting is a war zone or a battlefield, which is a unique experience. It's a war zone, so there is shooting as side A fights side B, but there's a lot of freedom so you can take advantage of being in a war zone and find various ways to play."

Q: What did you do with the story? How important was it to the game and does it wrap up the series?

A: "Yes, it wraps up all the stories of the past MGS games. I'm not a genius like George Lucas, I didn't have this story planned out. I always tried to finish the story in each game. But by some miracle in MGS4 I was able to resolve the mysteries left behind in past games and resolve the side stories from past games."

Q: What was your creative inspiration for "Metal Gear Solid", either the series as a whole or MGS4 specifically?

A: "Actually, I can tell you one incident that was not so much inspiration but that influenced the game design. We have a great military adviser and we take lessons and go to training camps. This was a great experience in designing the game. It wasn't just about how to handle guns or weapons, it was more mental or psychological, like how to blend in with the environment, how to disappear into a forest."

Q: You've indicated that this will be your last "Metal Gear Solid" game. Are you looking forward to other projects or will you continue to be involved in the series?

A: "MGS will always be around. I feel a responsibility to continue this series as long as users demand it. But it doesn't mean I'm going to sit in completely. I'll probably take a different role in the next game. Maybe I'll sit in as producer and let the young staff take control of the new series. I really want to go on to new things."

Q: Games are gaining a status on par with Hollywood blockbusters. Are developers getting more recognition for the art they create?

A: "Yes, I totally agree. When entertainment becomes digital, there can be a great collaboration between games and other kinds of entertainment like movies or even novels. All these things might form together to form a coherent medium.

"I can't really predict precisely that this will happen in two or three years or whatever. But the trend is there, things are happening and I believe that convergence will happen sooner or later.

(Reporting by Scott Hillis; editing by Patricia Reaney)

News : Talk of the Town: Pollack dies

Talk of the Town brings you the latest in news, music and celebrity talk.

The latest celebrity news including the passing of film legend Sydney Pollack, Kirsten Dunst opens up on her battle with depression and Brad and Angelina purchase their dream home.

John Russell reports.

News : Mars lander to deploy robotic arm

At a press conference in California, new images from NASA's martian lander are displayed as scientists prepare to deploy a robotic arm.

The Phoenix lander relayed new images of the landing site and showed the terrain of the red planet. A robotic arm is soon to be deployed that will be able to take soil samples.

The three-month Phoenix mission will examine the Mars arctic permafrost for the liquid water and minerals necessary for basic life to exist. These experiments are expected to begin in June.

SOUNDBITE: PETER SMITH, PRINCIPAL INVESTIGATOR OF PHOENIX LANDER.

News : Volkswagen, Sanyo to develop lithium-ion batteries

By Chang-Ran Kim and Noriyuki Hirata

TOKYO (Reuters) - Sanyo Electric Co (6764.T: Quote, Profile, Research) and Volkswagen AG (VOWG.DE: Quote, Profile, Research) said on Wednesday they would jointly develop lithium-ion batteries, joining an intensifying race to provide the key component for the next generation of hybrid cars.

Sanyo, which has the biggest global market share of lithium-ion batteries used in personal computers and mobile phones, said it would spend 80 billion yen ($769 million) over the next seven years for the project, aiming to begin mass production in 2009.

Top global automakers are all working on developing vehicle-use lithium-ion batteries to replace nickel-hydride ones currently used in gasoline-electric hybrid cars, since they can store more energy in lighter, smaller packs.

"Our focus in future will be directed more strongly at making electrically powered automobiles alongside ones driven by more efficient combustion engines," Volkswagen Group CEO Martin Winterkorn said in a statement.

"This cooperation is an important step for us."

Europe is a tiny market for hybrid cars now, preferring cheaper diesel engines to reduce carbon dioxide emissions and boost fuel efficiency. But new limits on CO2 emissions proposed in Europe and due to take effect in 2012 will significantly raise the need for hybridization, a Sanyo executive said.

The first lithium-ion batteries are due to be mounted on an Audi AG (NSUG.DE: Quote, Profile, Research), Volkswagen's luxury car, in 2010.

Production of the lithium-ion batteries will initially begin on a new manufacturing line to be set up at Sanyo's Tokushima factory in western Japan.

Sanyo will look for a new location for further production starting in the business year from April 2010, to meet future demand of about 15,000 to 20,000 batteries a year, it said.

In view of anticipated demand in Europe, Sanyo was considering building a production base there for lithium-ion batteries in future, Executive Vice President Mitsuru Honma said.

By 2015, Sanyo aims to boost production capacity to 10 million cells a month, enough for 1.7 to 1.8 million cars. That would give it a share of about 40 percent of a global hybrid market that Sanyo estimates at 4 to 4.5 million vehicles by mid-decade. It includes rechargeable plug-in hybrid vehicles, which Sanyo hopes to supply from 2011.

At the Geneva Motor Show in March, Volkswagen showcased its Golf TDI Hybrid concept, which combines a high-tech diesel engine and an electric motor.

Sanyo and Volkswagen are currently collaborating on the next generation of nickel-metal hydride systems. Sanyo has separately supplied batteries for hybrid vehicles made by Ford Motor Co (F.N: Quote, Profile, Research) and Honda Motor Co (7267.T: Quote, Profile, Research).

Japan's Toyota Motor Corp (7203.T: Quote, Profile, Research), Nissan Motor Co (7201.T: Quote, Profile, Research) and Mitsubishi Motors Corp (7211.T: Quote, Profile, Research) have separate joint ventures with Matsushita Electric Industrial Co (6752.T: Quote, Profile, Research), the NEC Corp (6701.T: Quote, Profile, Research) group and GS Yuasa Corp (6674.T: Quote, Profile, Research), respectively, to mass-produce lithium-ion batteries.

(Editing by Michael Watson)

News : U.S. files WTO case vs EU over tech tariffs

WASHINGTON (Reuters) - The United States launched a new trade row with European Union on Wednesday by complaining to the World Trade Organization over the EU's import tariffs on computer screens and other technology products.

Technology heavyweights such as Hewlett Packard Co. have long accused the EU of violating the spirit and the letter of the WTO's 1997 Information Technology Agreement (ITA), which axed tariffs on a range of high-tech goods to boost trade.

"The EU should be working with the United States to promote new technologies, not finding protectionist gimmicks to apply new duties to these products," said Trade Representative Susan Schwab.

"Therefore, we urge the EU to eliminate permanently the new duties and to cease manipulating tariffs to discourage technological innovation," she said in a statement.

Global exports of products concerned are estimated to be worth more than $70 billion, Schwab's office said.

The European Commission said it "strongly rejected" the arguments of the United States and accused Washington of refusing to heed its calls for negotiated changes in the products covered by the ITA deal.

"The ITA has a review clause which can be invoked by members at any time. The EU has said it is willing to negotiate with all other ITA members. The U.S. is not willing to do this. Why not?" the Commission said in a statement.

As products such as television set-top boxes, large monitors and multifunction printers have evolved, EU customs officials have decided they are no longer covered by the pact and hit them with tariffs of up to 14 percent.

Most of the products at issue in the case are manufactured in countries such as China and Malaysia but are based on U.S. design and engineering and sold under U.S. brand names.

(Writing by William Schomberg in Brussels; editing by Andrew Roche)

News : Next Microsoft operating system has touch controls

By Eric Auchard

CARLSBAD, California (Reuters) - Microsoft Corp plans to give users of the next version of its Windows operating system touch screen controls as one option for controlling the software, its top executives said on Tuesday.

Chairman Bill Gates and Chief Executive Steve Ballmer showed off new Windows features based on software it calls "multi-touch" that will be part of Windows 7, the next version of Windows, which Ballmer said was due out in late 2009.

The ability to use touch to give users fingertip control of their screens could help revolutionize how computer desktops and mobile phones are controlled and would be an alternative to existing mice, keyboard and pen-based user controls.

During a joint interview that kicked off the Wall Street Journal's three-day D: All Things Digital conference, an annual gathering of the computer industry elite taking place north of San Diego, Ballmer said touch screen controls was one example of how Microsoft would improve on existing Windows software.

Microsoft is seeking to one-up Apple Inc, which made touch-screen software central to the success of its iPhone mobile device, which combines computer, phone and Web features and has sold around 6 million units in its first 11 months.

After more than a decade of slow development, Gates said new ways of interacting with computers other than keyboards and mice have matured to the point where they are ready to go mainstream.

"We are at an interesting juncture where almost all of the interaction is with the computer and mouse, today, and, over the years to come, the role of speech, vision, ink, all of those will become huge," Gates said.

He was referring to technologies that gives users the ability to control computers with voice commands, detect and sort different kinds of images and use electronic ink instead of typing for computer input.

SURFACE

Multi-touch software builds on existing capabilities Microsoft has introduced in recent years including Surface, for interacting with large tabletop computer displays, TouchWall for mounted screens and Tablet PCs for touch-screen notebooks.

In a demonstration of touch-screen capabilities to be offered in Windows 7, Microsoft showed a new application called "Touchable Paint" that lets a user paint with their fingers, as well as software to organize photos or navigate maps by touch.

"It is not about complete replacement of the mouse," Julie Larson-Green, Microsoft's corporate vice president in charge of Windows Experience Program Management, said in a first-time demonstration of multi-touch features to run inside Windows 7.

Ballmer said Microsoft is trying to learn from the reaction to Windows Vista, the latest version of its operating system, which was introduced in January 2007 but faced initial criticism for being incompatible with many older applications.

He said Microsoft has sold 150 million copies of Vista, up from 140 million the company reported it had sold a month ago.

"When you read the customer research, the No. 1 people found jarring is that we changed the user interface," Ballmer said. "People take a while to get used to it."

He said Microsoft had learned lessons about making dramatic changes in the way users interact with new versions of Windows. Conference co-host Walter Mossberg asked Ballmer whether Microsoft was done changing the user interface.

"We will polish it," Ballmer replied. "We will change it, but there are ways to change it and there are times to do it."

Vista followed five years after the previous Windows upgrade and was beset by delays due to the complexity of updating a piece of software with some 50 million lines of code that runs on more than 90 percent of the world's computers.

After the problems of releasing Vista in a timely manner, Ballmer pledged to never again wait so long between releases of its Windows operating system. Microsoft has said it expected to release the new operating system code-named Windows 7 around three years after the early 2007 release of Windows Vista.

Ballmer acknowledged that Microsoft considered Apple a formidable competitor. But he said the two companies' audiences were vastly different in scale, with Apple supplying around 10 million computers this year versus the roughly 290 million machines which PC makers will sell running Microsoft Windows.

"Whether Apple has a PC with touch in it to market first, we'll see," Ballmer said.

(Additional reporting by Daisuke Wakabayashi in Seattle; editing by Sue Thomas)

News : Probe lands safely on Mars

The Phoenix Mars probe has landed successfuly on the Red Plant after a 680 million kilometre journey from Earth.

The Phoenix Mars probe was launched ten months ago with its primary mission being to search for evidence of extraterrestrial life. A robotic arm will be used to explore vast amounts of frozen water thought to be buried beneath the surface.

Liz Kennedy reports

News : China to act over shoddy building

China says design defects and aging are the reasons why so many school buildings collapsed in the recent earthquake.

The central government has launched an investigation and vowed to take harsh action against any state-owned companies found to have built substandard public buildings.

Michelle Carlile-Alkhouri reports.

News : The mammoth aid task in Myanmar

World Food Programme says 750,000 people in Myanmar are at risk unless they get food and other assistance soon.

The Red Cross says although Myanmar has relaxed restrictions on foreign aid workers entering the country to help cyclone victims not enough has happened to avoid a further deterioration in the situation. Separately, dissidents protested outside the Myanmar embassy in Bangkok, calling for more aid. More 134,000 people were killed and one million left homeless after the cyclone swept through the Irrawaddy delta.

Penny Tweedie reports.

News : Microsoft sees Windows Mobile unit sales up 50 pct

By Sheena Lee

TAIPEI (Reuters) - Microsoft Corp (MSFT.O: Quote, Profile, Research) expects global unit sales of its Windows Mobile software for cellphones to grow at least 50 percent per year in fiscal years 2008 and 2009 as demand for smartphones rises rapidly.

"Fifty percent growth is the minimum," Eddie Wu, the software company's managing director of OEM embedded devices Asia, told Reuters on the sidelines of a news conference on Tuesday.

He said Microsoft expects to sell 20 million units in its 2007/2008 fiscal year ending in June, and expects to grow at least 50 percent annually over the next two years. It sold over 11 million units of its Windows Mobile software in its 2006/2007 fiscal year ended June.

"We're actually still seeing very good growth (for our mobile software) in markets like Europe and the United States," said Wu.

Wu added that growth of Windows Mobile is seen fastest in Asia-Pacific, Middle East, Brazil, Russia and India.

Microsoft's mobile communications division provides operating systems for smartphones and other mobile devices based on the Windows Mobile platform. Its clients include South Korea's Samsung Electronics (005930.KS: Quote, Profile, Research), Motorola (MOT.N: Quote, Profile, Research), High Tech Computer (HTC) (2498.TW: Quote, Profile, Research) and Asustek Computer (2357.TW: Quote, Profile, Research).

Microsoft competes against Symbian-based operating systems which are used by vendors such as Nokia (NOK1V.HE: Quote, Profile, Research) and LG Electronics (066570.KS: Quote, Profile, Research).

It also faces stiff competition from other players such as Apple Inc (AAPL.O: Quote, Profile, Research), Blackberry maker Research in Motion (RIMM.O: Quote, Profile, Research) (RIM.TO: Quote, Profile, Research), and Palm Inc (PALM.O: Quote, Profile, Research).

"Even if Microsoft is growing at a rate of 50-60 percent, it doesn't mean they can gain that much share since Microsoft and Apple's mobile operating system is still much smaller compared to the Symbian system," said Citigroup analyst Kevin Chang.

"But they (Microsoft) are one of the few players which are offering touchscreen platforms so that is helping them grow," said Chang, adding that vendors such as Sony Ericsson may soon also launch touchscreen smartphones with Windows Mobile.

Global smartphone unit shipments grew 52.5 percent from a year ago to hit around 12 million units in 2007, based on data by Gartner, and the market is set to continue to increase in high double-digits in 2008 and in 2009, analysts said.

Microsoft also said earlier this year that it would offer full Web browsing capabilities for mobile phones in the third quarter this year, following in the footsteps of Apple's iPhone, which has won praise for the way it displays Web sites as they would appear on a computer.

(US$1=T$30.5)

(Reporting by Sheena Lee, Editing by Baker Li and Anshuman Daga)

News : TSMC may raise prices for high-end chips

By Baker Li

HSINCHU, Taiwan (Reuters) - Top contract chip maker Taiwan Semiconductor Manufacturing Co Ltd (TSMC) (2330.TW: Quote, Profile, Research) (TSM.N: Quote, Profile, Research) said on Tuesday it may raise prices for its higher-end chips as rising costs threaten to squeeze profits.

Semiconductor makers face higher costs to build state-of-the-art chip plants for most cutting-edge chips, and are also feeling the pain of rising inflation.

As the industry's leading and oldest player, with more than three times the sales of closest rival, United Microelectronics Corp (UMC) (2303.TW: Quote, Profile, Research), TSMC has stressed in recent years that its products should command a pr emium over its peers.

"Average selling prices have been falling and profits have been under pressure, and we have to work together to create value," Jason Chen, a company vice president in charge of global sales and marketing, told a TSMC technology symposium.

He said price changes would be mostly for chips made by advanced process technology, but would not say how big they would be or when they would occur.

He did not say when TSMC last raised prices.

"We face some structural profit pressure. In the short term, we also face pressure from inflation and oil prices," Chen said.

Consumer prices in Taiwan, where TSMC is based, rose 3.86 percent in April, with core inflation up 3.1 percent -- a nine year high.

BNP Paribas analyst Eric Chen said TSMC's customers could accept higher prices if TSMC provided better services and higher-performance chips.

"The semiconductor industry is still vibrant, and 2008 will be better than last year," TSMC's Chen said, betting on growing emerging market demand for PCs and mobile phones.

TSMC, Samsung Electronics Co Ltd (005930.KS: Quote, Profile, Research) and Intel Corp (INTC.O: Quote, Profile, Research) have said they would jointly develop next-generation bigger silicon wafers to boost efficiency in chip manufacturing.

Analysts say a factory designed to make chips on 18-inch wafers could cost $10 billion or more to build, nearly triple the price of a current 12-inch wafer factory.

TSMC said last month its profit grew by half in the first quarter, but it forecast sales would be flat to slightly higher in the second quarter from the first.

TSMC had a gross margin of 43.7 percent in the first quarter, but predicted second quarter gross margins would be relatively flat at 43-45 percent.

TSMC's Taipei-listed shares rose 0.46 percent on Tuesday, while UMC shares were up 0.54 percent. The main TAIEX market rose 0.81 percent.

Year-to-date, TSMC shares are up 5.5 percent, outperforming the TAIEX's 2.7 percent gain.

(US$1=T$30.5)

(Writing by Doug Young and Baker Li, Editing by Ken Wills & Ian Geoghegan)

News : Vodafone rings the changes with Sarin departure

By Kate Holton

LONDON (Reuters) - Arun Sarin, the chief executive who safeguarded Vodafone's (VOD.L: Quote, Profile, Research) dominance among mobile operators by expanding into emerging markets, announced his departure on Tuesday, saying he had achieved all he had set out to do.

He will be replaced by his deputy, Vittorio Colao, in July.

Analysts welcomed the smooth transition at the top of the world's largest mobile phone group by revenue but said that it had come slightly earlier than expected.

Shares in Vodafone opened 3.7 percent higher before slipping back to be 1 percent up at 0925 GMT.

"I have achieved what I set out to achieve on becoming CEO and therefore I felt the timing was right," Sarin told reporters on a conference call, adding that he did not expect the group's strategy to change.

He warned that Colao, 46, will have to navigate the tricky economic slowdown ahead.

Vodafone made the announcement as it issued a solid outlook for 2009 and annual results for the year ending March 2008 either in line with or slightly ahead of forecasts.

Under Sarin, the mobile group expanded into faster-growing emerging markets such as India and Turkey and developed new tariffs and products for services such as downloading games and music to attract customers in the more mature markets of Europe.

INTENSE PRESSURE

"Arun Sarin ... leaves with his reputation intact," analysts at ING said in a note to clients. "He has successfully implemented Vodafone's new strategy after coming under intense pressure a couple of years ago.

"The timing ... may have caught the market unaware (maybe a year earlier than expected?), but Arun Sarin's successor is no surprise."

During Sarin's time as CEO, Vodafone has increased its customer base from 120 million to more than 260 million, including its share of affiliates.

The British-based company said on Tuesday its annual group earnings before interest, tax, depreciation and amortization (EBITDA) rose over 10 percent to 13.2 billion pounds ($26.11 billion) on revenues of 35.5 billion pounds.

Analysts were expecting EBITDA of 13.1 billion pounds and revenues of 35.3 billion pounds, according to Reuters Estimates.

Publishing its forecasts for the year ahead, Vodafone said it expected group revenue of between 39.8 billion and 40.7 billion pounds, with adjusted operating profit of 11 billion pounds to 11.5 billion pounds.

The results for the year to March 31 were boosted by booming growth from the EMAPA unit of businesses in Eastern Europe, Middle East and Africa, Asia, Pacific and Affiliates, which had 14.5 percent organic revenue growth.

The European unit had revenue growth of 2 percent.

Sarin said he expected operating conditions to continue to be challenging in Europe given the economic environment and ongoing pricing and regulatory pressures but added he expected positive trends in messaging and data revenue to continue.

Analysts at Cazenove said Colao was well known to investors and his appointment was likely to be seen as an indication of confidence in the performance of Vodafone's European operations.

Colao, who holds a business degree from Italy's prestigious Bocconi university and an MBA from Harvard, was previously a consultant at McKinsey.

He was appointed chief executive Europe and deputy group chief executive of Vodafone in 2006 after returning from two years away from the firm as Chief Executive of RCS MediaGroup.

The Indian-born Sarin, a U.S. citizen, became a Vodafone executive after his old firm, AirTouch Communications, was bought by the then fast-growing British mobile group in 1999.

He also left briefly before returning as Chief Executive in 2003.

He endured a tough time in 2006 with investors unhappy over his strategy for dealing with slowing European markets, having to defeat a challenge from rebel investors with about 10 percent of the shares who voted against his re-election.

But he has since won the respect of the City and investors with his decision to move into emerging markets, spearheaded by the acquisition of a controlling interest in India's mobile phone group Hutchison Essar.

He expects to take a break from work before returning to the
(Reporting by Kate Holton; editing by Rory Channing, Paul Bolding)

News : Goldman adds Apple to Americas conviction buy list

(Reuters) - Goldman Sachs added Apple Inc (AAPL.O: Quote, Profile, Research) to its Americas conviction buy list, saying shares will likely benefit from the launch of the company's third-generation iPhone next month, as well as from the sharply higher projections of iPhone sales for the second-half of the year.

Analyst David Bailey also raised his target on the stock to $220 from $185, and said Apple should be able to increase its available iPhone subscriber base by more than 80 percent this year due to aggressive expansion into international markets.

"We continue to expect Apple to beat its 10 million unit goal for calendar year 2008 driven by broader global distribution and the availability of third-party applications, which should keep Apple well ahead of the competition," Bailey wrote in a note dated May 22.

Apple has signed deals to bring the iPhone to Singapore, India, Australia and the Philippines this year. Earlier this month, an Apple spokeswoman said the iPhone would make its debut in those countries "later this year," but declined to comment on plans to bring the iPhone to Japan and China.

Bailey, who rates the stock "buy," expects iPhone unit shipments to increase to 11 million in 2008 from 3.7 million in 2007.

"We also expect Apple to continue to drive Mac unit growth 3 times the PC market this year," he added.

On Friday, theflyonthewall.com reported that Merrill Lynch had raised its price target on Apple stock to $215 from $186, and maintained its "buy" rating. Reuters could not immediately verify the report.

Apple shares rose nearly 3 percent to $181.68 in trading before the bell Friday. The stock has soared 42 percent in the past three months as investors regain confidence that Apple can sustain growth even in a weakening economy.

(Reporting by Tenzin Pema in Bangalore; Editing by Himani Sarkar)

News : Reuters Technology Week

Interactive urinal games, a dating website gets kinky, and a tube TV resurgence.

Fred Katayama presents. SOUNDBITE: Yonis, Festival Participant

News : Edgy nerves for Mars probe landing

NASA scientists brace themselves for the nail-biting wait to see if their latest lander arrives in one piece on the surface of the red planet.

The Phoenix is the latest in a line of probes sent to look for signs of life on Mars, where safe landings for such equipment have less than a 50 per cent record of success.

Paul Chapman reports.

News : Microsoft to pay searchers

Microsoft's new rebate program gives cash back to customers who purchase products found with its Windows Live search engine.

If it can lop just a few percentage points off of Google's growth, Microsoft will consider its new online search strategy a success, says David Schatsky of JupiterResearch.

Manoush Zomorodi reports.

Manoush Zomorodi reports.SOUNDBITE: David Schatsky, President, JupiterResearch

News : Yahoo buy not a strategy in itself: Microsoft CEO

By Amie Ferris-Rotman

MOSCOW (Reuters) - Microsoft Corp (MSFT.O: Quote, Profile, Research) Chief Executive Steve Ballmer said on Friday that buying Yahoo (YHOO.O: Quote, Profile, Research) was not a strategy in itself, and dropping the bid meant it now had $50 billion to spend on other acquisitions.

"Yahoo was never the strategy we were pursuing, it was a way to accelerate our online advertising business," he told a packed hall at a technology conference in Moscow.

"We will spend money on some acquisitions. You can do a whole lot of things with 50 billion dollars," he said.

Ballmer was responding to questions about what he planned to do with Microsoft's huge cash pile after it walked away from a proposal to buy Internet media company Yahoo for $47.5 billion, or $33 a share earlier this month. Yahoo had rebuffed the offer, saying it would only settle for $37 per share.

Microsoft's top executive was echoing a refrain heard from him in recent weeks: At a May 1 employee meeting, he said Yahoo was valuable as part of a strategy to beat Microsoft arch-rival Google (GOOG.O: Quote, Profile, Research), but there were limits on the price it would pay.

"Yahoo's not a strategy, it's a part of a strategy," Ballmer had said three weeks ago in Redmond, Washington.

"We're interested to pay for it (Yahoo) at some level and beyond that level we're not willing to pay for it."

Talks broke down May 3 and Microsoft said it had "moved on."

Early this week, the two companies said new talks were underway on a more limited deal but neither side disclosed the terms. A source familiar with the discussions said Microsoft had proposed buying Yahoo's search business and taking a stake in Yahoo after Yahoo sheds its substantial Asian assets.

In Israel this week, Ballmer said Microsoft was now not in talks to acquire Yahoo, but was looking at other types of deals with Yahoo, the world's No. 2 Web search service after Google.

The Internet start-ups sector, which has recently seen a new class of instant-messaging tools, is not being used to its full potential, Ballmer added.

"There are many businesses that are in some senses under-appreciated by the market," he said, noting particularly healthcare start-ups.

"There's an aging population -- it's one of the biggest-growing parts of the world economy."

(Additional reporting by Eric Auchard in New York; Editing by Jason Neely)

News : Tech execs plan for economic troubles ahead

By Peter Henderson

NEW YORK (Reuters) - Technology executives around the world are preparing for economic troubles to deepen.

Many hope that their products will prove indispensable for customers and see emerging economies as sure-growth markets.

But low- and middle-income consumers in the United States are struggling, and the relative strength of U.S. corporations may not last, executives said at the Reuters Global Technology, Media and Telecoms Summit in Tokyo, Paris and New York this week.

Oil -- and gasoline -- prices keep breaking records, groceries are taking larger chunks of paychecks, and the mortgage crisis is still shuddering through the U.S. economy. That is especially difficult for low- and middle-income groups, said Virgin Mobile USA Chief Executive Dan Schulman.

"People are really and truly trying to make ends meet at the end of the month," he said. "There are debts to be paid."

Far beyond Main Street, the Wall Street banks and other financial titans will need room to raise new funds, since credit is tight, said Rick Simonson, chief financial officer of cell phone maker Nokia Oyj (NOK1V.HE: Quote, Profile, Research).

"It seems since last summer people have been trying to call the bottom for financials. It seems they haven't quite been found yet in terms of the restructuring and the capital raising that has to go on there," he said.

And even those who see a relatively strong corporate America still investing in products to cut risks or improve efficiency are girding for tougher times.

"If you read some of the written stuff, you would've expected that the U.S. basically spent absolutely no money in technology, and that is absolutely not true," said John Chen, chief executive of software maker Sybase Inc (SY.N: Quote, Profile, Research).

But he is not planning on an economic revival in the second half of the year. "I have to prepare. When I run a business I have to assume that it's not going to be pretty," he said.

Fujitsu Ltd (6702.T: Quote, Profile, Research) Senior Executive Vice President Chiaki Ito said he was concerned that the costs of absorbing the crisis in subprime mortgages -- the risky home loans that have gone bust for many U.S. and U.K. lenders -- could divert government funds usually spent on technology.

"I am extremely worried about the indirect effects of the subprime problem," he said. Meanwhile, manufacturing faces risks from rising food and fuel costs. "If costs go up, this could trigger a recession," he added.

The case of nerves has spread to many customers, executives agreed. "Most of the presidents (I've spoken to) have expressed concerns," said Tadahito Yamamoto, president of Fuji Xerox, the office equipment unit of Fujifilm Holdings Corp (4901.T: Quote, Profile, Research).

EMERGING GROWTH

Hope -- and success so far -- for many companies is based on smaller economies that are increasingly investing at home.

U.S. companies with wide international exposure like International Business Machines Corp (IBM.N: Quote, Profile, Research) have benefited from stronger economies and a weak dollar. Big Blue says that infrastructure projects in the developing world are key.

"If I were in a business model where I needed double-digit growth out of the G7 to drive my performance, I would be in a cold sweat," said IBM Chief Financial Officer Mark Loughridge, referring to the Group of Seven nations.

But Loughridge said an economic tremor in such big, advanced economies would not necessarily be felt by emerging ones. "I personally see less kind of linkage, dependency between the established markets and the high-growth markets," he argued.

Indeed, telecoms company Telstra Corp Ltd (TLS.AX: Quote, Profile, Research) said the Australian economy was booming. "They can't hire enough people," Chief Executive Sol Trujillo said.

In addition, many technology executives cling firmly to the belief that their products are must-haves -- whether they are cell phones that are kept when home phones are canceled, software to make vast computer "server farms" handle more work with less energy, or services to fend off vicious new attacks from hackers who are trying to steal money rather than just make trouble.

"We've seen no slowdown economically in IT (information technology) spending related to security. It's been a nice opportunity," said Dave Dewalt, chief executive of McAfee Inc (MFE.N: Quote, Profile, Research). "Am I nervous? Do I read the headlines, too? Yes."

(Additional reporting by Kirby Chien in Tokyo and Tova Cohen and Georgina Prodhan in Paris)

(For summit blog: summitnotebook.reuters.com/)

(For more on the Reuters Global Technology, Media and Telecoms Summits see ID:nL1919425

(Editing by Jeffrey Benkoe)

(peter.henderson@thomsonreuters.com, +1 646 223 6000)