Week in review: Apple shines, then sours

Apple reported record quarterly earnings this week, but not everyone was pleased by the news.

Apple reported record quarterly earnings this week, but not everyone was pleased by the news.

The company reported first-quarter profit of $1 billion as iPod sales totaled 21 million, an increase of 50 percent compared with the same period a year ago. Revenue was $7.1 billion, up about 25 percent from the previous year's first quarter of $5.7 billion. The results far exceeded analyst expectations, as tallied by Thomson First Call. The projection was for revenue of $6.4 billion and earnings per share of 78 cents.

On the Mac side, unit shipments increased 28 percent compared with the previous year, and revenue increased by 40 percent.

However, investors seemed unimpressed the next day as Apple shares fell as much as 5 percent on weaker-than-expected forecasts for the second quarter and concerns over Macintosh sales.

Some MacBook Pro and MacBook customers have the faster 802.11n Wi-Fi chip already sitting in their systems, but it will cost $1.99 to light it up. Apple plans to charge customers a fee to download software that will enable the 802.11n capability in the Wi-Fi chips found in some MacBook and MacBook Pro systems.

The software will be available on Apple's Web site, according to a company representative. Apple said it is required under generally accepted accounting principles to charge customers for the software upgrade.

The news was not well-received on CNET News.com's TalkBack Forum, with Apple faithful and critics alike decrying the charge.

"I own Apple products. I like Apple, but this idea is stupid. What's next--charge for every driver upgrade or fix?" one reader wrote to the forum. "It's only 2 bucks, but still, has greed no bounds?"

Crime and punishment
California's attorney general offered former Hewlett-Packard Chairman Patricia Dunn and four others charged in the HP spying scandal a chance to plead guilty to a misdemeanor. An attorney for data broker Bryan Wagner, one of the defendants in the case, said the plea agreement tendered by state prosecutors would enable all five defendants to avoid four felony charges stemming from an investigation launched last year by HP to find the source of a news leak.

The U.S. Department of Justice last week cut a plea deal with Wagner, who agreed to testify against some of the other defendants in exchange for a lighter sentence. Wagner's attorneys appeared in Santa Clara County Superior Court in San Jose, Calif., on Wednesday to answer to the state charges and said they wanted the court to dismiss those against Wagner because of California's double-jeopardy laws.

By the way, it's official: "pretexting" to buy, sell or obtain personal phone records--except when conducted by law enforcement or intelligence agencies--is now a federal crime that could yield prison time. President Bush affixed his signature to the Telephone Records and Privacy Protection Act of 2006.

The measure threatens with up to 10 years behind bars anyone who pretends to be someone else, or otherwise employs fraudulent tactics, to persuade phone companies to hand over what is supposed to be confidential data about customers' calling habits.

Meanwhile, a California man faces up to 101 years in federal prison after a jury found him guilty of sending out e-mail scams and of other, related crimes. Jeffrey Brett Goodin, 45, of Azusa, was convicted on multiple counts by a jury in the U.S. District Court for the Central District of California in Los Angeles, the U.S. Attorney's Office said in a statement.

Goodin, who was arrested last year, was found guilty of operating a sophisticated phishing scheme, the prosecutors said in the statement. As part of the scam, he sent e-mails posing as AOL's billing department to trick people into giving up their credit card information, according to the statement. He then used the credit card data to make purchases, prosecutors said Tuesday.

On the Hill
Attorney General Alberto Gonzales appeared before a key U.S. Senate committee but yielded little new information about the Bush administration's sudden revelation that it would seek court approval for its domestic eavesdropping activities. Senate Judiciary Chairman Patrick Leahy (D-Vt.) and ranking Republican Arlen Specter said they were pleased to hear that future activities associated with a controversial National Security Agency operation known as the Terrorist Surveillance Program would undergo review by judges on the secret Foreign Intelligence Surveillance Court.

Sen. Chuck Schumer (D-N.Y.) grilled the attorney general on whether the orders described in his letter amounted to a blanket warrant for the entire eavesdropping program or were tailored to particular targets.

Gonzales said he could reveal only that the orders "meet the legal requirements" under the Foreign Intelligence Surveillance Act (FISA), a 1978 law that was intended to govern eavesdropping on suspects outside the United States.

The Bush administration also plans to approach Congress again this year about the possibility of new rules requiring Internet service providers to retain information about their subscribers for a certain period of time. Gonzales said he is continuing to explore such legislation, pertaining not to "data retained by government but (to) data retained by ISPs that could be accessed with a court order."

U.S. Department of Justice officials began quietly shopping around the controversial policy move, akin to a set of requirements the European Union has already enacted. Their intentions grew increasingly public last year. The attorney general suggested that "reasonable" data retention is necessary to help investigators of online sex crimes, and members of Congress and state attorneys general voiced support for legislation mandating the practice.

The Justice Department, which also wants to help police use the Internet to investigate everything from cyberstalking to spam and illegal hacking, has a new resource. The department's Office of Justice Programs published a manual for tech-challenged gumshoes, covering everything from tracking suspects through an Internet Relay Chat network to targeting copyright thieves on peer-to-peer networks.

The new 137-page manual appears to represent the Justice Department's attempt to offer at least some basic technical and legal tips to law enforcement agencies that may not have computer experts on the payroll. The manual warns of the perils of assuming that the owner of a computer--especially if it is a Windows PC, which can be vulnerable to security breaches--is responsible for what's actually on it.

Also of note
Contrary to earlier reports, investigators in California now say a cell phone did not cause a fire that severely burned a man last weekend...MySpace.com and News Corp. are being sued by the parents of girls who were allegedly solicited and sexually assaulted by adult users of MySpace...Under fire from both the U.S. government and parental organizations, MySpace has announced that it is creating software designed to give parents a window into what their children are posting in their online profiles.

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