U.S. Justice Department Charges Apple, 5 Publishers with Price Fixing

High flying Apple, whose market value recently topped $600 billion, has been hit by charges from the United States Justice Department alleging that Apple and five publishing partners have engaged in price fixing.

The charges allege that Apple and five publishers: Simon & Schuster, HarperCollins, Hachette, Penguin Group (USA), and Macmillan conspired to end competition on ebooks and set a higher price, with Apple being guaranteed a 30% commission on each sale.

The deal was reached in 2010 the reports said, right when Apple introduced the iPad and was aimed at Amazon and was intended to limit Amazon’s ability to discount ebooks, which it was then selling at $9.99 for new and recently released offerings.

According to a report in the Wall Street Journal three of the publishers have already reached an accord with the Justice Department and have said that they will terminate any such agreement with Apple. Those are Hachett, Simon & Schuster and HarperCollins.

The overall outcome of this will be interesting to see. In the past the Justice Department has gone after some other major players in hi-tech, notably IBM and Microsoft, and has won its cases. Apple has been increasingly litigious in recent years but this is a much bigger foe than someone such as Samsung or Motorola Mobility.

However when you ask people about what Apple does, very few would mention that it makes a competitive e-reader. In fact some may not know that is a very valuable use of the iPad, showing that this is not really a major market for its products.

So why not settle? It has been reported that three of the publishers already have, but also that Apple has been fighting the charges. I suspect that in the long run Apple will find that it is cheaper simply to tag along on the settlements negotiated by its former partners.

Toshiba Shows 13.3-inch Tablet — Perfect for Watching Sports?

Are you looking for a tablet but so far none have met your needs, with the small Galaxy Note not even in the conversation, the kindle and Nook not even close to the correct size and the iPad and its ilk closer but no cigar? Then Toshiba might just have what you are looking for.

Toshiba’s Digital Products Division has introduced its line of Excite tablets today with a trio of offerings including one that features a 13.3-inch display, along with a 7.7 and a 10.1-inch offering to fill out the new Excite line.

The company said that it believes that a one size fits all model does not work in the tablet space and that it believes that the growing usage of tablets in an increasingly wide number of user applications calls for multiple sizes and features.

The three will share a few features including operating with the Android 4.0 OS, a Tegra 3 Super 4-Plus-1 quad core processor, having scratch resistant Gorilla glass and a full suite of Google mobile service applications. All three will also feature a 5MP rear facing camera as well as a 2MP front facing camera and stereo speakers.

The company recently unveiled the details on the 10-inch model so we covered that here but both the 7-inch, which will compete with the Nooks’ and Kindles’ of the market as well as the 13-inch monster are the talk of the release. The Excite 10 tablet will be available for purchase at the beginning of May 2012 for $449.99 for the 16GB model, $529.99 for the 32GB model and $649.99 for the 64GB model.

The company said that it sees the Excite 13 tablet as one that will appeal to groups for things such as watching movies, playing games and sharing photos. The tablet is 0.4 inches thick and weights 2.2 lbs. It features a 13.3-inch LED backlit display with 1600 x 1900 resolution. The Excite 13 tablet will be available for purchase at the beginning of June 2012 for $649.99 for the 32GB model and $749.99 for the 64GB model.

The Excite 7.7 is targeted at an on-the go user that does not want the bulk of a larger tablet. The Excite 7.7 tablet will be available for purchase at the beginning of June 2012 for $499.99 for the 16GB model and $579.99 for the 32GB model

I have to say that I really like their thinking on this product. It is not positioned as another iPad killer but rather as a product that serves different segments such as family and group use or users on the go rather than delivering a banal push for a tablet user. Samsung’s growing success with its Galaxy Note and other tablets shows that consumers are open to alternative sizes if they have the features that fit their needs.

I can certainly see the popularity of the person that brings a 13.3-inch tablet to an event where a group of friends can watch a playoff game that they would have missed if not for the tablet- even the ten-inch displays would not serve their needs as well. I wonder what the top end of tablet size will be? I suspect not any larger for mainstream users.

What’s a Picture Worth? To Facebook, $1 Billion as it Buys Instagram

Social media powerhouse Facebook has purchased Instagram in a combination cash and stock deal that is valued at $1 billion. Instagram is a photo sharing site that permits users to share photos with their friends.

While some have seen Instagram as a potential rival to Facebook and others just a flash in the pan the deal is the biggest in Facebook’s history by a large margin and will help expand its already enormous reach in the social media space.

Instagram had been only available on Apple’s iPhones until just last week when the platform moved to the Android platform where it was greeted with a tremendous rush of downloads and usage by an entire new group of users.

Facebook made it clear to customers wondering if it would just assimilate the company that the answer was no, but that it would use some of its technology in Facebook going forward. Instagram is expected to continue to operate, and develop, as an independent company.

I wonder if this will really add that much to the Facebook empire. When Yahoo was still a high flying company back in 1999 it purchased one of the most popular Internet portal sites, GeoCities, for $3.6 billion in a deal what looked like it would greatly enhance Yahoo’s position as a portal site. You may well as ask what is a portal site now.

A user can already post a photo pretty easily to Facebook, maybe not with the bells and whistles that come with Instagram but still pretty quickly. Now with some f those bells & whistles incorporated into Facebook, will there be a need for an independent Instagram in the long run? I bet no.

Microsoft to buy $1 Billion in AOL Patents

Patent protection is apparently the name of the game these days in the high tech world, and if so Microsoft just bought itself a chuck of protection in a deal with AOL that will give Microsoft 800 patents for approximately $1 billion.

The patents were sold after an auction in which other major consumer electronics and social media players reportedly participated. The deal is expected to close by year end 2012 and AOL said that it intends to pass a large portion of the sales down to shareholders. As part of the deal Microsoft is buying a business unit of AOL.

Patents are increasingly being used as a weapon against competitors, either being used to ban their products such as what Apple, Samsung, Motorola and others are doing in various places around the globe or being leveraged for financial purposes, such as Motorola demanding $4 billion a year in royalties from Microsoft.

This growing use of patents has lead to a number of major players making big buys similar to what Microsoft has done here. The Google $12.5 billion purchase of Motorola Mobility for example; Facebook recently purchased 750 patents from IBM and Sony and Apple gained a huge number of new patents via their $4.5 billion purchase of Nortel Networks.

From reports this looks like the bulk of the patents that AOL currently holds. It said that the company retains approximately 300 patents including ones in advertising, search and mapping. Microsoft will grant the company a license to the purchased patents as well.

I wonder what companies will feel Microsoft’s wrath in the patent market space. I believe that they must have had talks with AOL about what patents will protect them from rivals and which ones AOL believes are currently being violated. Stay tuned because it has probably never been a better time to be a patent or intellectual property lawyer.

Want Golf Tips from Paul Azinger? Here You Go

Dropped into Starbucks for a refresher to keep my caffeine level stable and noticed that the free iTunes Pick of the Week was not a song but rather a sports app. To be specific it was “Golfplan with Paul Azinger” and its tagline was- Personalized tips from the Ryder Cup Captain.

Since my game needs all of the help it can get, even though in the wet, wintery area I live in its unlikely that I will be on the links anytime soon, I gave the app the quick one over to see if it looked like it should join the increasingly crowded area on my phone dedicated to sports apps.

The program can be used with or without a second app called Gameshot and has a number of training categories that enable a user to focus on the areas that matter the most to them and their game. They include Driving, greens in regulation, short game, bunkers and putting. Nothing about hitting from the rough, my specialty?

What really grabbed my interest was the large number of videos that are included in the app-63 in all if my count is correct. The program received a very solid rating from users that have already downloaded and used the program, 4 out of 5 overall and slightly higher with the latest version.

On iTunes the program has a listed price of $4.99 but is free with the little card that is available where you pick up your fancy drinks. It is available for both iPads and iPhones.

Cloak Seeks to Secure Apple iOS Traffic

We write a lot here about using mobile technology to view sports, order food at games and a host of other interesting things, at least to us. Most users by now know that streaming a game can kill your data plan so most savvy users do so over Wi-Fi.

So what if you are out? Then you head to Starbucks or some other place that has hopefully free, Wi-Fi available. But security risks abound, and it seems that you hear about a new one each day. Well an app caught my eye in the Hartford Courant and it might fit the bill.

It is called Cloak and it is designed for Apple’s iOS devices including the Mac and it encrypts and reroutes your traffic through a Virtual Personal Network (VPN) whenever you use a public Wi-Fi network. You sign up and the basic app is free, or for a heavier user there are plans that start at $8 a month. I plan to try it out and it got generally good reviews at the iTunes app store.