Week in review: Apple's mea culpa?

Apple has a message for its customers: let us make it up to you.

In an apparent attempt to make up for the problems that plagued MobileMe's launch in July, Apple has announced that it will extend user accounts another 60 days for free--that's on top of the 30-day free extension Apple gave users in July.

In an e-mail sent to MobileMe subscribers announcing the extension, Apple acknowledged that the Web services suite needs more work:

We have already made many improvements to MobileMe, but we still have many more to make. To recognize our users' patience, we are giving every MobileMe subscriber as of today a free 60-day extension. This is in addition to the one-month extension most subscribers have already received.

MobileMe allows subscribers to synchronize e-mail, calendars, contacts, photos, Safari bookmarks, Dashboard widgets, and more, among Macs, the iPhone, and the iPod Touch. But from its launch in July, subscribers had trouble accessing the site, and some even lost e-mail. Subscribers also reported problems accessing calendars and contact information, which was caused by a misjudgment in demand, according to an Apple blog post.

If you have a first-generation iPod Nano and you've noticed it has a tendency to smoke too much, Apple is willing to replace the unit. The company issued the following statement after reports out of Japan that some first-generation iPod Nanos, first released in 2005, have had battery problems that cause them to give off smoke or spark in rare cases:

Apple has determined that in very rare cases batteries in first generation iPod nanos sold between September 2005 and December 2006 can overheat causing failure and deformation of the iPod nano. Apple has received very few reports of such incidents (less than 0.001 percent of first generation iPod nano units), which have been traced back to a single battery supplier. There have been no reports of serious injuries or property damage, and no reports of incidents for any other iPod nano model.

In another coup for Apple customers, the company finally acknowledged the iPhone 3G's reception issues, confirming that the iPhone OS 2.0.2 software update was designed to fix those problems. A company representative told the Associated Press that the latest update "improved communication with 3G networks," after weeks of silence regarding the reception issues reported by iPhone 3G owners around the world. Apple was reportedly working on such a fix last week, but Monday's update was labeled with the briefest of descriptions--"bug fixes"--making it difficult to know exactly what was addressed with the update.

But that admission is a day late and a few dollars short for an Alabama woman who filed a lawsuit against Apple, claiming the iPhone 3G's network is slower than advertised. In a 10-page complaint, Birmingham resident Jessica Alena Smith charged Apple with breach of express and implied warranty and with unjust enrichment. Smith, who refers to the phone she purchased throughout the complaint as "Defective iPhone 3G," is seeking class action status.

The lawsuit claims that Apple's iPhone 3G advertising campaign is misleading. The charges in the lawsuit mirror widespread complaints about the iPhone 3G's reception that have crisscrossed the Internet since Apple and AT&T released the successor to the original iPhone on July 11.

Meanwhile, Apple blew away its PC industry peers in this year's American Customer Satisfaction Index. The University of Michigan released its annual ACSI scores for the PC industry, and Apple took top honors for the fifth straight year. Apple was the only company in the PC industry other than Dell to post an increase in customer satisfaction in 2008 compared with last year.

Inside Intel
Intel plans to bring its first dual-core Atom to market next month, it was revealed during the Intel Developer Forum. The power-efficient processor will be targeted at Atom-based desktops called nettops. Currently, Intel offers the Atom N230 processor for nettops. This chip has a slightly higher power envelope than the Atom processors built exclusively for mobile devices.

That news was revealed by an Intel employee as senior vice president Pat Gelsinger was delivering his IDF keynote, which included more specifics about Nehalem, the family of chips the company plans to begin rolling out in the fourth quarter. Gelsinger, the general manager of Intel's Digital Enterprise Group, showed the first wafer holding individual eight-core processors, detailed the power-saving features of the Nehalem processors, and confirmed future mobile Nehalem processors.

Intel also will finally enter the high-capacity solid-state drive business with the goal of replacing hard-disk drives in both consumer and corporate markets. This comes 20 years after Intel introduced its first flash memory--a 256KB flash chip in 1988. The world's largest chipmaker is announcing the line of solid-state drives at the Intel Developer Forum here.

Initially, Intel will have 80GB and 160GB solid-state drives based on multilevel cell (MLC) technology for the consumer and notebook markets, and 32GB and 64GB drives based on single-level cell (SLC) for the enterprise market. In 2009, Intel expects to have MLC drives with capacities up to 320GB.

Meanwhile, Intel is joining Yahoo in an effort to provide the software underpinnings of network-enabled TV, a move that could transform not only what it means to watch TV but also what it means to advertise on it. Yahoo hopes to spice up TV by bringing a version of its Yahoo Widget Engine, a software foundation that can run small applications called widgets, to network-enabled TVs.

This new version, called the Widget Channel, will resemble the version that's available for PCs, but will come with a different user interface to let programmers build widgets that can be controlled from a distance with a remote control, said Patrick Barry, Yahoo's vice president of connected TV at Yahoo.

Yahoo's hope is the move will bring its clout on the Internet to a new domain.

On the Web
A federal judge gave more weight to the concept of "fair use" when he threw a lifeline to a Pennsylvania mother's lawsuit against Universal Music. The judge refused to dismiss Stephanie Lenz's suit claiming that Universal abused the Digital Millennium Copyright Act when it issued a takedown notice to YouTube over a 30-second video of Lenz's baby dancing to a Prince song. In the first ruling of its kind, Judge Jeremy Fogel held that copyright owners must consider fair use before sending DMCA takedown notices.

Lenz first filed suit in October 2007, after Universal requested that her video be taken down, and YouTube kept it off its site for more than a month. Lenz argues that the Prince song is barely audible in the short clip and clearly represents fair use, which allows for limited use of copyrighted materials without permission. In order to protect First Amendment rights, the DMCA allows for targets of illegitimate takedown notices to seek damages against the copyright holder.

Comcast reportedly plans to reduce Internet service to customers it deems to be using too much bandwidth, a move that comes on the heels of federal regulators ruling that the Internet service provider violated the law by throttling BitTorrent transfers. To keep service flowing to other customers, Comcast plans to impede Internet speeds to its heaviest users for up to 20 minutes, Mitch Bowling, Comcast's senior vice president and general manager of online services.

Instead of focusing on specific applications that may be hogging traffic, Comcast plans to determine "in nearly real time" whether a heavy user is causing congestion, Bowling said. The move follows the Federal Communications Commission's ruling on August 1 that Comcast's throttling of BitTorrent traffic last year was unlawful--the first time any U.S. broadband provider has ever been found to violate Net neutrality rules.

eBay will reduce the fees it charges to sellers to list fixed-price items. The move, which will take effect September 16, is intended to help eBay compete better with online retail rivals such as Amazon.com, as well as reduce its dependency on auctions.

Under the new pricing plan, sellers who offer fixed-price items in eBay's "Buy It Now" format will pay only 35 cents to list an item for 30 days, a 70 percent reduction in upfront fees. The online auctioneer is also expected to announce that most customers will no longer be allowed to pay by check or cash--only a credit card or eBay's PayPal payment service will be accepted to complete transactions.

Also of note
Recording industry and motion picture lobbyists are renewing their push to convince broadband providers to monitor customers and detect copyright infringements, claiming the concept is working abroad and should be adopted in the United States...Word is that Jerry Seinfeld will appear as a celebrity pitchman as part of a new $300 million ad campaign being developed for Microsoft...Google released the first beta version of its software developer kit for Android phones, a significant step in the company's hope for "open" phone technology.