Apple has biggest impact on world consumers: survey

LONDON (Reuters) - The Apple brand has the biggest impact on the world's consumers, while Microsoft and the United States nation brand are those considered most in need of a remake, a survey showed on Monday.

The poll by online magazine brandchannel.com asked its readers to identify the brands with the greatest impact on their lives, and say how they affected readers' behaviour and their view of the world.

The nearly 2,000 professionals and students who voted named Apple overwhelming winner. The creator of the iPod and Mac computer triumphed in six categories including most inspiring brand and the one readers cannot live without.

Microsoft, the world's largest software maker was also a winner, but it received the dubious honor of the brand most readers wanted to argue with, and the one they most wanted to revamp. Voted into second place in the category was brand USA.

"Apple has clearly captured the hearts and minds by leading across most categories. Others, such as the USA nation brand, which ranks highly as most in need of a rebrand, requires help according to our readers," said brandchannel editor Jim Thompson.

The poll does not take account of economic brand value, the murky science of assigning a financial value to brand, which regularly puts Coca-Cola Co's (KO.N) Coke in first place.

One of the more surprising results from the survey, was that few of the respondents -- who came from 107 countries -- thought that there was such a thing as a "green" brand.

The result comes despite millions of dollars spent by some of the world's biggest companies to rebrand themselves as "environmentally-friendly".

Discussing Apple, one anonymous reader said there was "never a dull moment" with the company "reinventing itself all along and providing, over and over again, a new perspective on what we thought was carved in stone".

At the other end of the spectrum, Microsoft had "gone from innovative and bold to stodgy and follower," said another unnamed reader.

After Apple, the most inspiring brands were Nike, Coca-Cola, Google and Starbucks, the survey showed.

The same brands, except with Virgin in place of Starbucks, were the brands most readers would "like to sit next to at a dinner party".

The rankings by brandchannel.com were based on answers from almost 2,000 readers from 107 countries. The survey was conducted online from February 24 to March 9.

(Editing by Richard Balmforth)

Related Stories:

Apple US PC share up 32.5% in 1Q

MySpace Signs Deal to Aim Its Content for Overseas TV

Flickr to add video streaming

Adobe shoots an AIR ball with new Media Player

The geeks were right; music labels bow to technology

Apple takes top music retailer spot

Three Record Companies Team Up With MySpace for Music Web Site

Shell Signs Nearly $4B in IT Contracts

Yahoo/AP, Monday March 31, 8:03 am ET

Royal Dutch Shell Signs Almost $4B in IT Service Contracts With AT&T, EDS and T-Systems

NEW YORK (AP) -- Royal Dutch Shell PLC, Europe's largest oil company, said Monday it signed technology service contracts with AT&T, Electronic Data Systems Corp. and a division of Deutsche Telekom AG worth nearly $4 billion over the next five years.

Under the terms of the deal, EDS and AT&T will manage Shell's worldwide communications infrastructure in over 100 countries. EDS said its services will include desktop, backup and recovery, mobile information protection and messaging systems. AT&T will provide wide and local area networks, voice services, security solutions and mobility services.

Deutsche Telekom unit T-Systems will provide Shell with worldwide hosting and storage services. EDS and T-Systems value their contracts at $1 billion each, and AT&T set the value of its contract at $1.6 billion over the five-year term.

Related Story:

Sara Lee Extends Contract with HP for Technology Operations

No Recession at Red Hat

By STEVE LOHR, The New York Times

Red Hat, the Linux software company, gave a nice welcome present Thursday to its new chief executive, James Whitehurst.

The company, which distributes Linux and other open-source software, reported that its quarterly sales grew 27 percent and earnings slightly surpassed analysts’ consensus estimate. The company also presented an upbeat outlook for its just-started fiscal year, predicting growth of another 30 percent. In after-hours trading, Red Hat shares rose nearly 5 percent.

Red Hat, based in Raleigh, N.C., has done the difficult — built a solid, profitable business around open-source software. It charges its corporate customers yearly subscriptions for its flavor of the Linux operating system along with technical support and training. For its current fiscal year, ending in March 2009, Red Hat expects sales to reach $665 million to $680 million, above Wall Street projections, while earnings per share should rise to 78 cents to 82 cents. The per-share number is a bit below the consensus estimate, but that is more than explained by Red Hat’s assumption that in a recessionary environment, interest rates will fall further, reducing the income on the $1 billion in cash the company is sitting on.

Mr. Whitehurst, who joined the company in January, said that in a recession Red Hat should continue to gain ground, since open-source software is regarded by many corporate customers as a lower-cost alternative to proprietary products.

Red Hat has now established itself as a strong player in the corporate software market. For a year, Oracle has tried to undercut Red Hat by offering a similar version of Linux and charging less for technical support. But it has made scant progress to date.

Red Hat certifies that 4,000 different software applications run on its brand of Linux and has worked closely for years with all the significant hardware vendors. “There’s a network effect there,” Mr. Whitehurst said in an interview. “Oracle doesn’t have the ecosystem.”

Nor does anyone else have that kind of Linux-based ecosystem. It could look attractive to enterprise software companies that increasingly seek to offer corporate customers several layers in the so-called software stack — an operating system, middleware, perhaps a database and applications too. If the Red Hat ecosystem is valuable, it would also not be too expensive at current prices. Its market capitalization is $3.4 billion, a price tag that would be reduced substantially by that $1 billion in cash.

Oracle, Sun Microsystems, I.B.M., EMC (parent of VMware) and even Google have been rumored as possible suitors. The recent flurry, to be sure, is but the most recent round of rumors about Red Hat.

It is flattering to be mentioned, Mr. Whitehurst said, but he noted that corporate customers and the industry benefit from what he called Red Hat’s “Switzerland status” — not being a province of one of the major powers in the technology industry.

Related Story:

Gartner: Windows is collapsing

Intel shuns Microsoft, taps Linux for mobile Net devices

Inexpensive computers may give Linux operating system a big lift

Google's Android work far from finished

Unhacked Linux

Adobe joins Linux Foundation, Previews Air for Linux

3G iPhone Update; Rumors Of 10 Million Orders May Not Be True

Washingtonpost.com

Tricia Duryee, MocoNews.net, Friday, March 28, 2008; 2:00 PM 

Taiwan's Hon Hai Precision, which also goes by the name of Foxconn, has secured an exclusive contract with Apple (NSDQ: AAPL) to assemble a new iPhone, an unnamed person familiar with the situation told Dow Jones Newswires today. The report comes a couple days after a Gartner analyst had reportedly heard that Apple had placed an order for 10 million 3G iPhones, but coincidentally, reports today are now saying those statements were misunderstood. 

Dow Jones (NYSE: NWS) reported that a Hon Hai official, who declined to be named, told them that the company was in talks with Apple for the supply of a "more advanced version" of the current iPhone, but provided no further details. The more advanced version of the iPhone is likely one that comes with the faster 3G chip inside, which some analysts speculate could come out as early as May. 

This week, the iPod Observer reported that Gartner analyst Ken Dulaney heard Apple may have ordered 10 million iPhones that support 3G networks. InfoWorld reported today the comments were misinterpreted Dulaney's boss, Bob Hafner, said. To clarify, Hafner said they do believe the next version of the phone will be 3G, but "we have not got confirmation that an order had been placed." 

Related Stories: 

RIM shares surge on talk of flip-phone BlackBerry

Skype and more now accessible with iPhone

Nokia launches new phone with electronic wallet

Nokia Confirms Its iPhone Killer: Nokia Tube

Betting big: Intel says ultra mobiles will rival PC market in 5 years

Google's Android work far from finished

Nokia unveils 4 new phones for emerging markets

Apple, Google vie for hearts (and wallets) of developers

Apple has biggest impact on world consumers: survey

BofA sees 3G iPhone build in May, predictions "too conservative"

Are Lagging European Sales Bringing A 3G iPhone To Market?

Karl Rove loves his iPhone

YouTube Feature Tells Video Creators When and Where a Clip Is Being Watched

By STEPHANIE CLIFFORD, The New York Times, Published: March 27, 2008

In a move to provide better data to its users, YouTube formally announced late Wednesday that it had added a free feature that will show video creators when and where viewers are watching their videos. With this, the company hopes to turn YouTube from an online video site into a place where marketers can test their messages, Tracy Chan, YouTube product manager, said.

This program, called YouTube Insight, provides a detailed view of a video’s popularity, both over time and geographically, broken down by state. (Internationally, YouTube Insight is not as insightful, providing only popularity by country.)

YouTube has provided basic analytical information to creators of videos since its introduction, including the number of views, the viewers’ ratings of the video, and the number of comments left. Advertisers received a slightly more sophisticated summary.

With the Insight information, video creators can dig into the specifics of a video’s performance and find, for example, that it peaks on Fridays in winter months, or it has taken several weeks to get traction — information that can help better promote their work. The information, presented as a color-coded map and a graph of a video’s popularity, is accessible through a link from a video creator’s account page on YouTube. The company will update the data once a day.

But it is likely that marketers rather than casual users will be clamoring for these tools the most. YouTube executives suggest that marketers can use the tools in several ways. A movie studio might run several versions of a trailer to see what is catching on where, and if a humorous spot is catching fire in Texas, might start running that trailer as a TV ad in the state.

A political campaign could test spots of a candidate discussing the environment or the economy; if an environmental spot is popular in Pennsylvania, that might help decide what the candidate stumps about there.

During a YouTube test of the feature, a band uploaded its music performances, determined which states it was popular in via Insight, and planned a tour around that.

“Effectively, YouTube has become an ad-effectiveness, or an insight-effectiveness, tool,” Mr. Chan said.

In a couple of weeks, Mr. Chan says, YouTube will start providing even more information, showing video creators where their viewers have come from, whether it is Google, which owns Youtube, or a link on Gawker.

“YouTube has millions of viewers every single day, and has become the world’s largest focus group,” Mr. Chan said.

Related Stories:

Yahoo, MySpace and Google Get Social

Google's Ad-Click Data Disappoint

Adobe Launches Online Photoshop Beta

Internet gets bigger slice of Unilever pie

Paul McIntyre, SMH.com.au, March 27, 2008

UNILEVER Australia will shift more than $10 million a year out of mainstream media advertising by the end of next year in a bid to match the company's North American target for 20 per cent of its advertising budget to be allocated to digital media platforms.

The packaged goods giant's swing to online advertising is a response to rapid growth in the amount of time people are spending online: the latest Google estimates for Australia show the internet takes up 25 per cent of individual media consumption time, although the sector attracts just 9 per cent of advertising. A report last week by Nielsen Online showed Australians for the first time were spending more time each week on the internet (13.7 hours) than watching TV (13.3 hours).

Unilever would not say what percentage of its media budget was spent on the internet, but said spending had quadrupled in the past 12 months and was expected to double again next year.

The move by Unilever Australia follows the announcement by GM in the US two weeks ago that it would allocate half of its media budgets to digital channels within three years.

Unilever's digital strategist for Australia and New Zealand, Nicole Still, said the rapid increase in the amount of time consumers spent online was forcing the company to move its media budgets around more aggressively. The GM move, she said, was overdue.

"For the US market, it's long overdue. It's likely competitors like Toyota have already surpassed that [GM figure]. It's moving at such an accelerated rate."

The reworking of Unilever's media allocations here follows a series of successful digital marketing projects for the company. In the latest, for Streets Cornetto, social media sites were used to reach a million people and generate more than a million video views before the company deployed any online or mainstream media advertising.

"Seven of the top 15 websites in Australia are controlled by consumers, not by traditional portals like Fairfax or ninemsn," Ms Still said. "We knew if we could tap into this space of consumer-controlled content where they could be entertained and take it on themselves, we could build great reach before we could buy advertising in that space."

Although banks, insurance companies, airlines and hotels are big buyers of online media because of their transactional emphasis, packaged goods companies have been hesitant to divert traditional media funds used for brand building to the internet.

Ms Still said online search advertising could play an important role for packaged goods brand marketing by using it as a branding option rather than a consumer response generator.

Asian IT services market to hit $56 bln by 2011: report

Bangalore (ANTARA News) - Asia's IT services market, led by India, is poised to expand at an average annual pace of 10.5 percent to reach 55.9 billion dollars by 2011, an industry research firm said on Tuesday.

Demand for IT services in the region, excluding Japan, was estimated to be worth 37.5 billion dollars in 2007, according to the findings of a report by Springboard Research, an IT market research firm.

India's information-technology services market, forecast to expand at an annual 18.6 percent rate, will remain the fastest growing, said the report.

But as a region, Greater China will offer the largest market opportunity in dollar terms at the end of the forecast period, it said.

"The Asia Pacific IT Services market is arguably the global leader in terms of growth, supplemented with a mix of mature and emerging markets," Phil Hassey, vice president for services research at Springboard, said.

"The markets of interest are not just the top four -- China, India, Australia and Korea -- but the emerging ones like Indonesia and Vietnam, which will register significant growth," Hassey added in a statement.

In India, annual economic growth of nine percent is spurring domestic IT spending as companies upgrade computer systems to stay competitive and consumers log onto the Internet.

The domestic market has largely been ignored by India's industry, which has boomed on work from Western firms trying to cut costs by taking advantage of India's English-speaking, computer-savvy graduates who work for lower salaries.

The Indian market is still "fragmented and a long way from maturity," Hassey said in e-mailed replies to queries from AFP.

Related Stories:

China SMBs set to spend US$42B on ICT

America, We Have A Problem

Forbes.com, Norman R. Augustine 03.24.08, 6:00 AM ET

Congress recently scrambled to place a $152 billion band-aid on the nation's economy, but left untreated the underlying problems are likely to require such fixes with increasing frequency in the future.

These problems were brought to the fore three years ago when the National Academy of Sciences, the National Academy of Engineering and the Institute of Medicine--organizations that count 195 Nobel Laureates among their membership--conducted a study on America's ability to compete for jobs in an emerging global economy where five chemists in China or 20 assembly workers in Vietnam can be hired for the cost of one of these workers in America, and where physicians in India now read the CAT scans of patients in American hospitals.

 The resulting report, titled Rising Above the Gathering Storm, concluded that without both a dramatic increase in investment in basic research and reform of the nation's K-12 educational system, America's children are likely to have a lower standard of living than their parents.

The report's warning did not go unheeded.

A new research university is scheduled to launch soon with a day-one endowment of $10 billion, equal to what it took MIT 142 years to accumulate. Next year, over 200,000 students will study abroad, mostly in the fields of science and engineering, often under government-provided scholarships. Government investment in nondefense R&D is set to increase by 25% over the next few years. 

A multi-year initiative is under way to make the country a global nanotechnology hub. The world's most powerful particle accelerator will begin operation this year. And a high-level commission will conduct a followup to the Gathering Storm study with the objective of creating more jobs at home. 

The problem is that these actions were taken by Saudi Arabia, China, the U.K., India, Switzerland and Australia, respectively. As chair of the committee that wrote Gathering Storm, I have been asked to speak about its findings from Japan to Canada and from Australia to Europe. But what about America? 

Since the report was issued, the world-renowned Fermilab in Illinois responded to reductions in government research funding with layoffs and mandatory two-day-a-month unpaid "holidays" for its research staff. The U.S. portion of the international program to develop plentiful energy through nuclear fusion is being reduced to "survival mode." 

The U.S. trade deficit in high-technology goods further increased. Nearly all major U.S. high-tech firms now have research laboratories outside the country and are poised to expand them. American companies spent three times more on litigation than on research. 

Eighty percent of American CFOs surveyed said they would curtail R&D in order to meet short-term profit projections. The latest international standardized test for high school seniors in 30 nations revealed that students in only four nations performed significantly worse than U.S. students in science, and only five rated worse in math. Two-thirds of the Ph.D.s in engineering awarded by U.S. universities went to non-U.S. citizens. And U.S. K-12 teachers were reported to have worked 43 hours to earn $1,000, while Kobe Bryant earned that amount in five minutes and 30 seconds, and Howard Stern in only 24 seconds. 

Industrial firms in the U.S. and elsewhere have found an answer to these problems. 

Howard High, spokesman for Intel (nasdaq: INTC - news - people ) prior to his retirement, explains, "We go where the smart people are. Now our business operations are two-thirds in the U.S. and one-third overseas. But that ratio will flip over in the next 10 years." General Motors (nyse: GM - news - people ) spokesman Greg Martin put it: "We're a global car company that happens to be based in the U.S." Addressing root causes, Bill Gates observed, "When I compare our high schools with what I see when I'm traveling abroad, I'm terrified for our workforce of tomorrow." 

The irony is that America's leaders seem convinced of the importance of fixing K-12 math and science education and increasing government investment in basic research. In fact, the president made specific proposals to those ends in his 2006 State of the Union address, and the resulting authorization passed in the House 397-20 and the Senate by unanimous consent. However, due to an avalanche of 12,000 earmarks (Stanislaw Lee observed that "each snowflake in an avalanche pleads 'not guilty' "), and exacerbated by what can perhaps best be characterized as a system failure, the omnibus budget act that actually provides the funds to implement the government's programs failed to address America's competitiveness in any meaningful way. 

Churchill said that you can always count on the Americans to do the right thing after they have tried everything else. Our nation's leaders need to succeed in their bipartisan efforts to help Americans compete in a job market increasingly dominated by 3 billion would-be capitalists who entered the workplace after many of the world's political systems were restructured at the end of the last century. Otherwise, our nation's greatest export is likely to be our jobs and our standard of living. 

Norman Augustine is retired chairman of Lockheed Martin, former under secretary of the Army and past chair of the National Academy of Engineering.

Related Stories:

Yahoo to Work With Tata Sons Unit on 'Cloud Computing' Research

VMware says to invest $100 mln in India by 2010

Microsoft and HP to set up Taiwan Technology centre 

IBM Invest in Future Web 2.0 Developers on Campus

Dell Plans New PCs for China, India

Karl Rove loves his iPhone

CNNMoney.com, By Philip Elmer-DeWitt, MARCH 23, 2008, 6:56 AM

This was a week for unsoliticited celebrity Apple (AAPL) endorsements. 

First there was Charlie Rose, falling on his face to save his MacBook Air. Then Martha Stewart, posing her French bulldog Sharkey in front of the “razor-thin” machine. 

And now, via Newsbusters.org, former Bush political advisor Karl Rove. Here he is, interviewed by Matthew Sheffield, talking about his iPhone and his MacBook Air: 

NB: All right, I’ve got just one more quick question for you. Last time I saw you, you’d just gotten an iPhone. How’s that working out for you? 

ROVE: I love it. My life has changed. I have a shred of coolness. I’ve got my 3,500 people in my addressbook on the phone, I can sync my calendar. I keep track of my modest little stock investments. I can check the weather of my house in Washington, my house in Florida, my boy at school, my hunt-lease in south Texas. I can surf the web, I’m just–I get part of my email there. 

I mean it is just shocking how much better, how much more productive I am. I no longer carry around a giant address book, if I don’t have my calendar close at hand, I can quickly check it out of my– I don’t have to carry, I used to carry several notecards, now it’s just as easy to scribble on my little notepad, I can take photographs and forward them on immediately, it’s just remarkable. 

NB: All right. Well it sounds like Steve Jobs should call you up as a spokesman. 

ROVE: There we go, there we go. And not only that, I also have the Mac Book Air which is really cool. Even my wife is jealous of my MacBook Air. 

NB: Ahh, well it sounds like you’ll have to get her one then. 

ROVE: No I don’t, no I don’t. I’m the only cool one in the family with a MacBook Air. 

For more of the Rove interview, including his take on left-leaning blogs (”… most of them are hate-filled, obscenity-clogged rants of anger and hatred”) click here. 

Thanks to superbaka at TMO’s Apple Finance Board for the tip

Related Articles:

Microsoft looks to cash in on the iPhone

Safari 3.1 on Windows: a true competitor arrives (seriously)

Safari 3.1 Crashes On Windows XP, Users Complain

Apple may offer music subscription service

Question to Mozilla CEO: what do you fear?

Mozilla CEO: Apple's Safari-To-Windows Distribution Scheme Is Wrong

Dell Plans New PCs for China, India

Google/AP, JOE McDONALD – 2 days ago

BEIJING (AP) — Dell Inc., the world's No. 2 PC maker, is developing new models aimed at Chinese and Indian consumers to drive sales in fast-growing Asian markets, CEO Michael Dell said Thursday.

Personal computer makers increasingly are designing products with Chinese buyers in mind. Both Dell and China's Lenovo Group unveiled low-cost PCs last year for rural and novice users.

"This year, we plan to introduce 50 percent more notebook platforms than we introduced last year, including exciting new products aimed exactly at Chinese customer needs," Dell said at a news conference.

New models are meant to meet "specifically the requirements that we see in countries like China and India," he said.

Dell says its consumer sales in China grew by 54 percent last year, more than three times the industry average of 17 percent.

"When we look at the potential for expansion, we do see enormous opportunity ahead," Dell said. "As far as the U.S. goes, I think the U.S. will be OK, but not the fastest-growing. We expect more growth in Asia."

The company last month reported its fourth-quarter profit fell 6.4 percent and cautioned that more cautious spending by U.S. customers could hurt its business.

Dell says it has about 18 percent of China's market by revenue and 10 percent by number of units sold. Worldwide, it has a 16.1 percent market share, according to consulting firm Gartner Group.

In a bid for a bigger share of China's market, Dell broke with its Internet sales model and struck a deal in September to sell PCs through the country's biggest electronics retailer, Gome Group.

Dell's retail presence in China will expand to 1,200 cities by the end of this year, up from just 45 in 2007, said Amid Midha, Dell Greater China president, who appeared with Dell.

"By this summer, we will have more unique products coming to China," Midha said.

The Round Rock, Texas-based company has two factories in Xiamen, a southeastern Chinese city, and a design center in Shanghai that the company says is its biggest outside the United States. Dell said the company expects its purchases of components and other products in China to rise by 27 percent this year to $23 billion.

The company is undergoing a restructuring that Dell said has made growth in China "dramatically better" than a year ago.

Still, Midha said, "We have a lot of things to do before we can consider ourselves to be successful in China."

Also Thursday, Dell said it will donate $210,000 to build six education centers in China to teach computer skills to the children of migrant workers.

Dell shares rose 50 cents to close at $20.01 Thursday.

Microsoft and HP to set up Taiwan technology centre

TAIPEI (Reuters) - Microsoft (MSFT.O: Quote, Profile, Research) and Hewlett-Packard (HPQ.N: Quote, Profile, Research), the world's top software and PC firms, on Thursday announced plans for a new technology centre in Taiwan, the world's computer-manufacturing hub.

Companies such as HP and Dell (DELL.O: Quote, Profile, Research) are the world's top sellers of PCs, but most of the actual hardware -- about 80 percent of all laptops -- is made by Taiwan firms including Quanta Computer (2382.TW: Quote, Profile, Research) and Compal Electronics (2324.TW: Quote, Profile, Research).

"Microsoft and HP solution centers will help advance the technology of our Taiwanese business partners and corporate clients," John Knutsen, Director of Global Microsoft Technology Center, said at a news conference.

Microsoft said the centre would be focused on investing in advanced software, hardware and improving technical support to its Taiwan partners.

The two companies said they expect the new centre will be able to generate a return of T$2.5 billion ($83 million) worth of sales in five years.

There are now 16 Microsoft technology centers in the world, including in Dubai, France, Germany, Britain, Bangalore and the United States, said Knutsen.

Software giant Microsoft said earlier this month that it had not seen any major impact on its businesses from an economic slowdown, particularly in the United States, and that it has been helped by emerging markets such as China, India, Brazil and Russia.

Hewlett-Packard posted forecast-beating quarterly earnings last month and has said its strategies in emerging markets will help it weather a tough economic climate this year.

(Reporting by Sheena Lee; Editing by Ken Wills)

Related Article:

Microsoft, Intel give US$20M for multicore research

Vista SP1 Chokes On Widely Used Intel Chipset Drivers

The problem affects PCs from Hewlett-Packard, Gateway, Lenovo, and other major computer makers.

By Paul McDougall, InformationWeek, March 20, 2008 02:57 PM

PCs from Hewlett-Packard (NYSE: HPQ), Gateway, Lenovo, and other major computer makers that contain a widely used Intel (NSDQ: INTC) chipset can't be upgraded to Windows Vista Service Pack 1 if they're running certain drivers.

Microsoft (NSDQ: MSFT) has said that Vista SP1 won't work with "a small number of device drivers." The list, however, includes drivers for an Intel chipset that's found in thousands of PCs and laptops.

The affected chipset is Intel's 945G Express series, which is used in computers from virtually all major system vendors. It's also found on standalone motherboards sold by Asus. The 945G Express chipset driver versions between numbers 7.14.10.1322 and 7.14.10.1403 won't work with Vista SP1, according to Microsoft.

Chipsets provide a connection point for all key subsystems within a PC.

The 945G Express chipset includes Intel's GMA 950 graphics core, which also won't work with Vista SP1 if those drivers are used.

Microsoft is urging Vista users to update all of their hardware to the latest drivers before even attempting to install SP1.

The service pack also won't work with computers that use certain, widely-deployed audio drivers from Realtek and certain drivers for security devices manufactured bySymantec (NSDQ: SYMC). Microsoft has published a full list of drivers that are incompatible with the service pack.

Meanwhile, Microsoft is continuing to receive reports from computer users who say Vista SP1 is wreaking havoc on their systems.

A user going by the name "Apolauf" said the upgrade caused the mouse cursor on his tablet PC to disappear. The "right-click circle and the special pen mouse cursor ... are no longer functional" as well, said Apolauf, in a post on the Vista team blog.

Bob Rife, a user from Canada, said in an e-mail to InformationWeek that SP1 caused one of his computer's two hard drives to become invisible to Windows Explorer and Acronis Disk Director. Rife said he complained to Microsoft, but has yet to receive a response.

Others reported having no problems. A user named "Zandor" said on the Vista team blog that his company successfully upgraded 614 computers to Vista SP1. "Great job, Windows team," wrote Zandor.

Microsoft made Vista SP1 widely available for the first time on Tuesday. The update includes more than 300 hot fixes designed to improve the operating system's speed, security, and stability.

Related Article:

Vista fiasco continues with retreat to XP

Psst! Wanna save $110 on Windows Vista SP1?

Nvidia to blame for many early Vista crashes

FAQ: How to dump Vista SP1

Microsoft offers free support for Vista SP1 installs

Angry Vista users vent over SP1 driver issues

Intel cheap laptops expanding to U.S., Europe

Wed Mar 19, 2008 8:13pm EDT

By Jim Finkle and Duncan Martell

BOSTON/SAN FRANCISCO (Reuters) - Intel Corp (INTC.O: Quote, Profile, Research) said on Wednesday sub-$300 laptops initially designed for poor children will soon be available to U.S. and European consumers in a move that could further push down computer prices.

Craig Barrett (C), chairman of Intel, looks on as a student of Gwarinpa secondary school uses a laptop computer in Abuja, Nigeria, October 31, 2007.

PC makers in the United States and in Europe will sell a yet-to-be-unveiled, second-generation version of the Intel-designed Classmate PC for $250 to $350, said Lila Ibrahim, general manager of Intel's emerging market platform's group, in an interview with Reuters.

"This is a very big deal," said Laura Didio, an analyst with Yankee Group who follows the personal computer industry.

While the machines are intended for children, analysts said the launch will add momentum to the low-cost computing movement -- and will likely mean this year's bargain-basement laptops will have more power than in previous years.

"Particularly in a recession year, quality low-cost products are going to move well," said Rob Enderle, an analyst with the Enderle Group. "But the key is for them to be quality."

He said while he hasn't yet seen the machines that will be on sale this Christmas, he suspects consumers will be able to get "a pretty decent" laptop for less than $600 and perhaps for less than $500.

Didio said retailers might throw in another $50 to $100 in rebates or other incentives.

Laptop prices have been under extra pressure since last year, when Taiwan's Asustek Computer Inc (2357.TW: Quote, Profile, Research) introduced the $399 Eee PC, which has flown off store shelves from Asia to North America.

The machine runs on the Linux operating system, and people used to Microsoft's (MSFT.O: Quote, Profile, Research) Windows and Apple's (AAPL.O: Quote, Profile, Research) Mac OS X operating systems have had trouble adapting to the system, Enderle said.

The new, cheap laptops being developed from Intel's technology will likely run on Windows, he added.

The movement toward low-cost computing was also spurred by the XO laptop, the brainchild of Massachusetts Institute of Technology professor Nicholas Negroponte and his One Laptop Per Child Foundation.

The foundation began producing a laptop running on Linux at a cost of $188 in November. They sold them in the United States and in Canada for $400 through a charity drive that also provided one machine to a poor child overseas.

The chipmaker has conducted pilot tests of the Classmate PC at schools in Texas, Oregon and California, along with some schools in Australia, said Intel spokeswoman Agnes Kwan.

Intel said manufacturers in India, Mexico and Indonesia already have begun selling Classmate PC laptops on the retail market.

To date, Intel has sold fewer than 100,000 of the Classmate PCs, but plans to ramp up production in 2008.

Intel declined to identify the PC makers or discuss the features of the second-generation machine, which has not yet been released in developing markets, at the request of the companies.

It has already begun work on a third model, the Classmate 3, said Ibrahim.

The second- and third-generation models of the Classmate PC design give manufacturers flexibility to build a range of laptops with different memory configurations, screen sizes and peripheral devices including cameras, Ibrahim said.

Inventor Mary Lou Jepsen, a scientist who developed the XO Laptop, resigned from the One Laptop Per Child Foundation at the end of last year and started her own company Pixel Qi with the goal of building a $75 laptop by 2010.

(Reporting by Jim Finkle in Boston and Duncan Martell in San Francisco; editing by Carol Bishopric/Jeffrey Benkoe)

Related Stories:

Dell to step into low-cost notebook PC market: report

The Bearable Lightness of HP's 2133 Mini-Note PC

Acer low-cost PC expected to be cheaper than second-generation Eee PC