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Week in review: Apple harvest

Apple devotees descended on San Francisco for latest crop at Macworld Expo, but one thing was missing: the surprise. Photos: Mac Mini Photos: iPod Shuffle

Apple devotees descended on San Francisco this week for the latest crop at the Macworld Expo, but there was one thing missing: the surprise.

Apple Computer CEO Steve Jobs introduced a new budget PC dubbed the Mac Mini during his keynote address at the expo, promising that the machine will expand Apple's audience beyond the Mac faithful. The Mac Mini, which will retail for $499, is a tiny machine with a processor, a hard drive and an optical drive--you supply the monitor, mouse and keyboard.

However, as low as the starting price is, it still costs about $100 more than similarly configured PCs from Gateway, Hewlett-Packard and others, according to analysts and price checks. The price delta increases as the typical equipment on PCs is factored in.

When market researcher IDC added in "the stuff you'd want," the final price came to $1,300, said IDC analyst Roger Kay, who nonetheless applauded Apple for putting out something that lets the company play in the bargain market.

Jobs also confirmed several other high-profile debuts that have been grinding through the Mac rumor mills, prompting the secretive company to sue the alleged source of several information leaks. Many of the reports turned out to be true, thus leaving the expo without a big shocker.

One of those products was a new version of its popular music player--the iPod Shuffle, priced as low as $99. Based on flash memory, rather than the more expensive computer-like hard drives that have been the centerpiece of all other iPods, the new player is aimed at the low end of the market, relatively untraveled territory for Apple.

The Shuffle comes in two sizes. The $99 version has 512MB of storage and holds about 120 songs; the $149 version has 1GB of storage and holds about 240 songs. Unlike most similar devices, the Shuffle has no display screen to show songs or playlists; it consists only of a slender white rectangle with the trademark iPod navigation wheel on one side.

While Steve Jobs was the star attraction at the conference, many Mac fans were just as interested in hearing from one of the original Mac creators. Andy Hertzfeld signed copies of his book, "Revolution in the Valley: The Insanely Great Story of How the Mac was Made" on the conference floor. He sat down with CNET to discuss his collection of dozens of short stories that provide a unique, behind-the-scenes look at the birth of the Mac.

Fixing a hole
Wireless carrier T-Mobile acknowledges that an online attacker gained access to its network but denies reports that the criminal had the run of its network or broadly threatened its customers' privacy. The mobile-phone provider said it discovered the breach in late 2003 and immediately took steps to lock out the intruder.

A subsequent investigation found that the unidentified person had accessed the name and Social Security Numbers of 400 T-Mobile customers. The customers were notified in writing of the incident, the company said.

Online intruders also nabbed the personal information of more than 30,000 students, faculty and staff at George Mason University. The attackers broke into a server that held details used on campus identity cards.

A school representative said in an internal e-mail that "the server contained the names, photos, Social Security Numbers and (campus ID) numbers of all members of the Mason community who have identification cards."

Microsoft released two "critical" patches and one "important" patch for its Windows operating system as part of its monthly update release. That announcement reflects a more active month than December, when the software giant issued no critical patches for the period.

The system for releasing patches may soon get an overhaul as Microsoft recruits software testers to vet the company's patches before monthly fixes are released to the public. The Security Update Validation Program lets selected corporate customers and consultants test Microsoft's software patches. However, the company has made the program invitation-only and does not expect to involve a large number of testers.

Gadgets galore
An Amish PC may sound like a contradiction in terms, but Truvia can make one for you--provided that you have $55,000 to spare. The company specializes in building high-end PCs into handcrafted furniture, everything from simple Amish and Shaker cabinets to ornate Louis XV creations.

After several years of working with furniture makers and wood carvers on occasional projects, Truvia founder John Wojewidka decided that there was a need for a systematic approach to custom-made desks that carefully conceal a high-end PC. The movement has attracted interest from companies such as Microsoft that are looking to popularize PCs as living-room objects.

For those who may find that price tag a bit steep, Gateway ushered in four budget PCs under its eMachines brand, including one with a DVD burner and the low-end price tag of $499 after a $50 rebate. With the eMachines line, Gateway is hoping to gain market share with rock-bottom retail buyers.

Gateway isn't alone. Hewlett-Packard now lets customers upgrade CD-ROM drives to DVD drives for free on Last summer, PCs with DVD burners typically sold in the $600 to $700 range.

And while prices keep decreasing, the shrinking sizes of hard drives have just about bottomed out. Disk drive companies say there's little room for further reducing the size of the drive platters--the silver disks that spin around and hold data.

The problem is that reducing the diameter of a drive platter greatly reduces the surface area for storing data. And less available storage space makes it more difficult for drives to distinguish themselves against flash memory.

Gunning for Google
Google remains the favorite of search consumers, but Yahoo and Microsoft are closing the gap. A survey of 2,000 consumers conducted ranked Ask Jeeves in fourth place and Lycos in the fifth spot. The survey ranked search engines based on consumer opinion and brand affinity, as well as on qualitative and behavioral data monitored as people performed tasks on these Web sites.

However, the survey found that actual search results returned by the five search engines do not differ significantly. Actual consumer success in doing complex searches showed that the performance of Lycos, Ask Jeeves and Microsoft's MSN was as good as Google and Yahoo.

Google has settled with federal and state regulators over allegations that the company violated securities laws in the handling of its stock options. The U.S. Securities and Exchange Commission also confirmed that it will not proceed with any enforcement action against Google over a high-profile interview with company co-founders Larry Page and Sergey Brin published in Playboy magazine before Google filed for its initial public offering. Companies are prohibited from promoting their companies before going public.

However, Google's clubby campus has been hit with an embarrassment of riches--literally--thanks to a rarely invoked securities law requiring the company to report stock sales of hundreds of employees rather than just of top executives and shareholders. Since its August IPO, Google has filed documents with the SEC detailing the multimillion-dollar stock sales of founders Brin and Page, all the way down to the rank and file.

Employee complaints aren't exactly piling up about Google's generous stock grant policies, which have helped create an estimated 1,000 new millionaires--at least on paper. But the SEC filings have struck something of a nerve inside the company by offering an unusually candid look into the wealth of co-workers. That's creating unaccustomed tensions inside a workplace that has long projected an image of collegial egalitarianism to the outside world, some people said.

Also of note
A British man who pleaded guilty to taking part in a massive identity theft scam has been sentenced to 14 years in prison in the United States...A researcher who published exploit codes that could take advantage of bugs in an antivirus application could be imprisoned for violation of copyright laws...It's been five years since Bill Gates surprised the technology world by announcing that he would give up his title as chief executive at Microsoft. How has the company changed?...IBM is going to let open-source developers use 500 software patents without fear of an infringement lawsuit, a new step in its encouragement of the collaborative programming philosophy.