Week in review: Eye on iPod

Apple Computer kicked off the Macworld Expo by unveiling the "iPod Mini," which uses a new generation of tiny hard disks, holds 4GB of storage--or about 1,000 songs--in a half-inch-thick case the size of a business card. The device will cost $249 and come in a choice of five colors.

Hewlett-Packard will start selling an HP-branded version of the iPod this summer as part of a broad expansion into consumer electronics. Apple will manufacture the player, which will not have the iPod name but will have the same design and features as Apple's third-generation iPod players.

As part of Apple's stream of new multimedia products, the company is providing a substantial update of its iLife media creation products--including the addition of home-recording software called GarageBand. With dozens of simulated software instruments, virtual guitar amplifiers, and recording and mixing capabilities, the software makes much of what is available in professional studios available on the desktop.

Apple is also releasing a new version of the iPhoto digital photography package, which will now support up to 25,000 photos without slowing down, CEO Steve Jobs said. Previous versions had slowed substantially when trying to load a large number of photos.

The iLife package, including GarageBand, iTunes, iDVD, iPhoto and iMovie, will cost $49 or will be free with new Macs. The company will no longer provide free downloads of iPhoto or iMovie, a plan it seriously considered last year, which could anger some customers. The decision is part of a clear shift by the Mac maker to try to recoup more of the dollars it invests in creating software for the Mac.

In a sign that Microsoft plans to be in the Apple market for some time, the software giant says that a new version of Office for the Mac is on its way and that another is already in the works. Until recently, the software maker had a deal with Apple that required it to develop both Office and Internet Explorer for the Mac, but that pact had lapsed.

Betting on entertainment
Proving there is more to do in Las Vegas than marrying a pop star for 55 hours, 100,000 people descended on the desert community for its largest convention of the year.

Microsoft Chairman Bill Gates kicked off the Consumer Electronics Show (CES) by demonstrated new technology for connecting digital content on Windows PCs to home entertainment centers, TVs and portable devices.

Gates also previewed a new family of products dubbed Windows Media Center Extender. The technology will allow TVs and other devices to display content from PCs equipped with Windows Media Center software, which Gates called "a centerpiece product for our vision of what's going to go on in the home."

Intel wasn't kidding when it said it was interested in consumer electronics. Intel president Paul Otellini fleshed out the company's strategy for the home at CES on Thursday---and it involves getting into a number of new markets and designing new products for manufacturers.

One of the first products to come out of this effort will be the Entertainment PC, or EPC, a fully-fledged Windows XP Media Center PC that more closely resembles a VCR. There is no keyboard, and people operate it with a remote control. Instead of having its own screen, it sits on top of a television set. Ideally, consumers will use these as a vault for storing music, viewing pictures or video, or recording TV programs the same way a TiVo box does.

The EPC will contain Intel's upcoming Prescott chip, running at more than 3GHz, and will cost about $799 when it debuts in the middle of the year, Otellini said in an interview. Intel designed the machine but is licensing it to PC makers. Last year, the company worked on the design of an all-in-one, flat-panel TV that Gateway is now selling.

Microsoft also unveiled updated versions of its MSN family of Web sites and services in the hope of attracting the growing number of consumers who have broadband connections. Gates also gave a tour of MSN Premium, Microsoft's Web software pack that it hopes will attract customers who access the Internet through a high-speed connection.

Online auctioneer eBay said it will offer access to personalized content via the MSN Web portal, the first time eBay has allowed its users to manage their eBay accounts through a portal. As a result, individuals will be able to access their personalized "My eBay" account through MSN's own personalized pages.

Sing along
The rush to tap the Net's new gold mine continued, with Sony Electronics throwing its hat into the ring for music download services, as part of its parent company's ongoing efforts to meld its content and electronics businesses. The music download service is called Connect and will be available this spring. It will offer more than 500,000 titles for 99 cents per track.

The service is also part of a larger conglomerate-wide plan to make its hardware--from computers to digital music players--the centerpiece of digitally networked homes. Sony aims to provide entertainment content directly to consumers and bets that it will drive demand for the company's hardware.

RealNetworks also joined a digital download fray, part of a sweeping overhaul of its digital audio and video software. Real is betting that the flexibility of its RealPlayer 10 music-playing software--the latest entry in an increasingly crowded digital-download market--will distinguish it from rival stores and software packages.

To this end, the company has created a jukebox that will play all the media formats used by its own and other song stores--including secure downloads from the iTunes store.

Real and Sony may find themselves competing with a little-known online music store that is experimenting with a new pricing system. At MusicRebellion, most songs start out costing a dime, and their prices fluctuate from there, based on customer demand.

The 10 cent songs are a temporary phenomenon. Like every other music service, MusicRebellion has fixed costs it must pay music labels and other rights holders, and it is taking a substantial loss at that price.

Hacks, flaws and worms--oh my!
Microsoft released a removal tool for the MSBlast worm after Internet service providers complained that home users' PCs infected with the malicious program are still causing network congestion. While most corporations have cleaned up the worm, Microsoft has found that a large number of home users are still unknowingly infected, the software giant said in a statement.

Meanwhile, open-source developers released a new version of the Linux kernel in a move aimed at quickly fixing several bugs--among them two serious security flaws. The 2.4.24 upgrade to the Linux kernel comes a month after the release of the previous version of the core system software and only includes patches for six software issues, including the two flaws.

Also of note
A Mississippi man pleaded not guilty to charges that he threatened to reveal security weaknesses in the Web site of electronics seller Best Buy unless the company paid him $2.5 million...Adrian Lamo, the "homeless hacker" famous for his rootless lifestyle and boasts of high-profile electronic intrusions, pleaded guilty to hacking into The New York Times Co.'s computer network...Microsoft has launched a marketing assault on Linux, in a sign that the open-source solution may be a mounting threat to the company's server system sales...Actor Morgan Freeman's production company says it will release a movie on the Net at the same time the film debuts in theaters, a move that could challenge others to follow suit.