Samsung Report on Earnings Reveals Challenges Ahead

TOKYO — No wonder Samsung Electronics is so busy looking for a new hit product. Its signature device, the high-end smartphone, seems to be facing unanticipated challenges.

Samsung, the world’s largest maker of smartphones, said on Tuesday that its operating profit in the fourth quarter had declined from the previous quarter, and also when compared with the fourth quarter of 2012.

As usual, the company, based in Suwon, South Korea, released only a bare-bones forecast in advance of a full quarterly earnings report later this month. It provided no reasons for the expected decline. But analysts said softness in smartphones, which account for more than half of Samsung’s earnings, was probably a big reason.

“One by one, players in the premium price band have been squeezed out, and now it looks like Samsung may be squeezed out as well,” said Thomas Kang, an analyst at Counterpoint Technology Market Research.

Samsung still has about a third of global smartphone sales, but there are multiple challenges to its dominance. At the low end, several Chinese companies are offering phones with similar features at a lower price. But more worrying for investors are new signs of vulnerability in premium-price phones, which account for the vast majority of the profit in the business.

For several years, Samsung and Apple have been battling for leadership in high-end phones. Now Apple is making new gains. In November, it sold 65 percent of the smartphones priced at $400 or more worldwide, up from 35 percent a year earlier, according to Counterpoint. And that was before Apple added China Mobile, the world’s largest network operator, as an iPhone partner, with sales set to begin this month.

In the same period, Samsung’s share of the premium market fell to 21 percent from 40 percent, according to Counterpoint.

A year ago, Samsung had two strong entrants in the high-end category, the Galaxy S3 smartphone and the Note 2, a so-called phablet, or cross between a phone and a tablet computer. But the current flagship smartphone, the Galaxy S4, has been a relative disappointment, leaving a new phablet, the Note 3, to carry the load.

Faced with sluggish sales, Samsung resorted to price cuts in the fourth quarter in an effort to clear inventories, analysts said. The average selling price of the company’s smartphones was $290, down from $320 a year earlier, according to analysts at Sanford C. Bernstein.

Bernstein estimated that overall sales of Samsung handsets, including smartphones and old-fashioned feature phones, slipped to 119 million in the fourth quarter from 120 million in the third quarter. Normally, the fourth quarter is a strong period because of holiday sales.

Samsung is expected to introduce a new flagship phone to succeed the Galaxy S4 this winter. It is experimenting with new kinds of handsets, including ones with curved screens, and the company is doing research on devices with flexible displays.

Last fall, the company introduced a so-called smartwatch called the Galaxy Gear, which works as a companion to certain smartphones. At the Consumer Electronics Show in Las Vegas this week, Samsung has introduced or shown off a flurry of new products, including high-end home appliances, tablet computers and televisions. One of the new TVs features a screen that can be flat or curved, according to the viewer’s preference; another has a giant 105-inch, ultra-high-definition display.

But smartphones are Samsung’s cash cow, and the new challenges in that business have raised concerns among some investors. The forecast Tuesday was below most analysts’ estimates.

The company predicted operating income of about 8.3 trillion won ($7.8 billion) for the final three months of the year, down from 10.2 trillion won in the third quarter and 8.84 trillion won in the fourth quarter of 2012. Revenue is expected to total about 59 trillion won, roughly even with the third quarter.

The company’s shares have fallen nearly 15 percent in the last year, and nearly 9 percent in the last month. On Tuesday, the shares fell 0.2 percent, to 1.3 million won, or $1,220.

Analysts say Samsung’s earnings were reduced by a special bonus to employees to celebrate the 20th anniversary of what the company calls its new management initiative. In 1993, the Samsung group patriarch, Lee Kun-hee, began a drive to raise the quality of the company’s products, telling managers to “change everything except your wife and children.”

Byun Han-joon, an analyst at KB Investment and Securities, estimated that the special bonus cost Samsung 800 billion won. Other analysts said the recent strength of the South Korean currency might have lowered earnings by reducing the amount of won received for exports.

“I don’t think that today’s results show any fundamental problem in Samsung Electronics,” Mr. Byun said. But he added that the new forecast raised the possibility of a faster-than-expected swing from high-end to lower-priced smartphones, which would continue to put pressure on the company’s earnings in future quarters, unless Samsung comes up with some new, must-have products.

“This now gets worth thinking about in depth,” Mr. Byun said.

Disruptions: Privacy Challenges of Wearable Computing

Pam Berry/The Boston Globe Thad Starner, second from right, is a technical adviser to the Google Glass team. He said he believed most people are respectful and would not use wearable computers inappropriately.

Perhaps the best way to predict how society will react to so-called wearable computing devices is to read the Dr. Seuss children’s story “The Butter Battle Book.”

The book, which was published in 1984, is about two cultures at odds. On one side are the Zooks, who eat their bread with the buttered side down. In opposition are the Yooks, who eat their bread with the buttered side up. As the story progresses, their different views lead to an arms race and potentially an all-out war.

Well, the Zooks and the Yooks may have nothing on wearable computing fans, who are starting to sport devices that can record everything going on around them with a wink or subtle click, and the people who promise to confront violently anyone wearing one of these devices.

I’ve experienced both sides of this debate with Google’s Internet-connected glasses, Google Glass. Last year, after Google unveiled its wearable computer, I had a brief opportunity to test it and was awe-struck by the potential of this technology.

A few months later, at a work-related party, I saw several people wearing Glass, their cameras hovering above their eyes as we talked. I was startled by how much Glass invades people’s privacy, leaving them two choices: stare at a camera that is constantly staring back at them, or leave the room.

Memoto Memoto can snap two photos a minute and later upload it to an online service.

This is not just a Google issue. Other gadgets have plenty of privacy-invading potential. Memoto, a tiny, automatic camera that looks like a pin you can wear on a shirt, can snap two photos a minute and later upload it to an online service. The makers of the device boast that it comes with one year of free storage and call it “a searchable and shareable photographic memory.”

Apple is also working on wearable computing products, filing numerous patents for a “heads-up display” and camera. The company is also expected to release an iWatch later this year. And several other start-ups in Silicon Valley are building products that are designed to capture photos of people’s lives.

But what about people who don’t want to be recorded? Don’t they get a say?

Deal with it, wearable computer advocates say. “When you’re in public, you’re in public. What happens in public, is the very definition of it,” said Jeff Jarvis, the author of the book “Public Parts” and a journalism professor at the City University of New York. “I don’t want you telling me that I can’t take pictures in public without your permission.”

Mr. Jarvis said we’ve been through a similar ruckus about cameras in public before, in the 1890s when Kodak cameras started to appear in parks and on city streets.

The New York Times addressed people’s concerns at the time in an article in August 1899, about a group of camera users, the so-called Kodak fiends, who snapped pictures of women with their new cameras.

“About the cottage colony there is a decided rebellion against the promiscuous use of photographing machines,” The Times wrote from Newport, R.I. “Threats are being made against any one who continues to use cameras as freely.” In another article, a woman pulled a knife on a man who tried to take her picture, “demolishing” the camera before going on her way.

This all sounds a bit like the Yooks and Zooks battling over their buttered bread.

Society eventually adapted to these cameras, but not without some struggle, a few broken cameras and lots of court battles. Today we live in a world with more than a billion smartphones with built-in cameras. But, there is a difference between a cellphone and a wearable computer; the former goes in your pocket or purse, the latter hangs on your body.

“Most people are not talking about privacy here, they are talking about social appropriateness,” said Thad Starner, who is the director of the Contextual Computing Group at the Georgia Institute of Technology and a technical adviser to the Google Glass team. He said he believed most people are respectful and would not use their wearable computers inappropriately.

Mr. Starner has been experimenting with different types of wearable computers for over 20 years, and he said that although some people are initially skeptical of the computer above his eye, they soon feel comfortable around the device, and him. “Within two weeks people start to ignore it,” he said. Over the years, his wearable computers have become less obtrusive, going from bulky, very visible contraptions, to today’s sleeker Google Glass.

Mr. Starner said privacy protections would have to be built into these computers. “The way Glass is designed, it has a transparent display so everyone can see what you’re doing.” He also said that in deference to social expectations, he puts his wearable glasses around his neck, rather than on his head, when he enters private places like a restroom.

But not everyone is so thoughtful, as I learned this month at the Google I/O developer conference when people lurked around every corner, including the bathroom, wearing their glasses that could take a picture with a wink.

By the end of “The Butter Battle Book,” the arms race has escalated to a point at which both sides have developed bombs that can destroy the world. As two old men, a Yook and a Zook, debate what to do next, the story ends with one saying: “We’ll just have to be patient. We’ll see, we’ll see.”

E-mail: bilton@nytimes.com

DealBook: SoftBank Chief Is Defiant as Dish Challenges His Bid for Sprint

Yuya Shino/ReutersMasayoshi Son, the chief of SoftBank, the Japanese telecommunications company.

Earlier this month, Charles W. Ergen’s Dish Network made a bold bid to pre-empt Softbank’s $20 billion bid for Sprint Nextel with its own offer.

But SoftBank‘s outspoken chief executive, Masayoshi Son, said on Tuesday that his proposal would prevail — unmodified.

It is the first time that the Japanese telecommunications mogul has spoken out since Dish surprised many with a $25.5 billion offer for Sprint, the country’s third-biggest cellphone service provider.

Dish has said that its cash-and-stock bid for all of Sprint, valued at $7 a share, would create a new wireless titan whose phone, data and video services would rival those from Verizon Wireless and AT&T.

For now, Mr. Son insists that his proposal, a two-step process that would leave 30 percent of Sprint publicly traded, is straightforward and can be closed by mid-July. (The first part of the process, in which SoftBank invested $3.1 billion in the American company to keep it afloat, has already been competed.)

“Charlie’s proposal does not provide any new cash into the company, and it provides heavy burden of debt,” Mr. Son said in a telephone interview. “I believe our deal will go through.”

Mr. Son insisted that he was not surprised by the arrival of Mr. Ergen, who has publicly amassed a cash hoard that many assumed would finance some sort of acquisition. Though Dish had already made a play for Clearwire, Mr. Son said he guessed that the satellite-TV company had even bigger ambitions.

“My guess was right,” he said.

He repeatedly attacked Dish’s bid as unworkable and his rival’s numbers as misleading. By his own reckoning, factoring in both cost savings and potential costs like delays, SoftBank’s offer was worth $7.65 a share, while Dish’s was valued at $6.31.

Chief among Mr. Son’s criticisms was the amount of debt that the interloping offer would pile on to Sprint, which he estimated at $50 billion. In a long presentation to SoftBank’s shareholders, Mr. Son argued that his proposal would increase Sprint’s debt by three times, while Dish’s would do so by nearly six times.

“It would be prohibitively high debt,” he said.

Dish has proudly trumpeted the amount of wireless spectrum the combined company would control, but Mr. Son said that the holdings would be wastefully excessive and expensive to maintain. And it would still require spending what he estimated was $6 billion to upgrade Sprint’s network.

And Mr. Son contended that Mr. Ergen, a wily deal maker whose net worth Forbes estimates is more than $10 billion, is an amateur when it comes to the mobile industry. By contrast, he pointed repeatedly to SoftBank’s rise over the last seven years to become one of Japan’s three biggest wireless companies.

Still, much of SoftBank’s hopes are tied to Sprint’s bid to buy the remainder of Clearwire, an offer that has drawn significant shareholder opposition.

Mr. Son dismissed concerns about the proposal’s fate, saying that Sprint has not signaled any desire or need to raise its offer of $2.97 a share. The company can’t raise its bid without the blessing of its benefactor, SoftBank.

In the worst-case scenario, Sprint will raise its ownership in Clearwire to about 65 percent from 50 percent through agreements to buy out partners in the company, including Intel and Brighthouse.

Speaking of dissident investors who think Sprint’s offer is too low, Mr. Son said, “They can stay as shareholders for however long they want. We are happy with just 65 percent.”

State of the Art: Nexus 7, Google’s New Tablet, Seriously Challenges the iPad - State of the Art

Steve Jobs hated the mimicry. Google’s Android software “ripped off the iPhone, wholesale ripped us off,” he told his biographer, Walter Isaacson. “I’m going to destroy Android, because it’s a stolen product.”

But there’s a positive aspect to the imitation, too. You could argue that Apple’s copycats fill in markets where Apple dares not tread, or offer an alternative to Apple’s very pure, controlled, choice-constrained world.

In that worldview, Google’s 2012 new-product announcements must seem like a cornucopia of good news. First, Google opened a unified online store with separate tabs for apps, e-books, TV shows, movies and music, modeled on the iTunes store.

Last week, it introduced the Nexus Q, a black sphere that connects to your TV and plays those songs and videos, pretty much the way the black square Apple TV does. (You can read my review of the Q online at nytimes.com/personaltech.)

Above all, Google has just introduced the Nexus 7, a shiny black tablet that aims to challenge both the iPad and Amazon’s Kindle Fire. (Nexus phone, Nexus tablet, Nexus sphere thing; what is Google thinking, anyway? If it truly wants to emulate Apple, it should minimize confusion, not foster it.)

The Kindle Fire’s most important feature is its price: $200. That’s an eye-popper in a world where the dominant tablet, the iPad, costs $500 and up. Of course, the Fire isn’t the same thing as the iPad. Its seven-inch screen is much smaller. It’s thicker and blockier. It doesn’t have a camera, microphone, GPS function, Bluetooth or memory-card slot. Its primary function is playing material you buy from Amazon, like books and video.

But that’s why Google’s tablet, manufactured by Asus, is a ground-shaking arrival. It, too, has a seven-inch screen and costs only $200, but this time, you don’t get any sense that its creators skimped to keep the price down. It’s sleek and beautiful, with rounded edges, unlike the sawed-off rectangular back of the Fire, and a “pleather” back panel that feels great. And it weighs 2.6 ounces less than the Fire, which makes a world of difference. It’s slightly thinner, too, although thicker than the iPad.

More important, the Nexus is a full-blown tablet. It’s almost as capable of letting you create stuff as consuming it. It’s fast, smooth and capable of running any Android tablet app.

So yes, the Google tablet pretty much blows the Kindle Fire’s value proposition into a cloud of ash. But it also undercuts its own Android-tablet competitors. For example, Samsung’s similar seven-inch Android tablet, the Galaxy Tab 2, costs $250 for the same eight gigabytes of memory.

How is Google able to offer a deluxe tablet for the same price as Amazon’s bare-bones one? I asked the Nexus tablet team if it was playing a game of razors-and-blades here, losing money on every tablet with the intention of making money by selling books, movies, music and TV shows. Google concedes it makes no profit when it sells this tablet from its Web site — and therefore it must lose money on each one it sells in a store.

In any case, the Nexus 7 is well-equipped — for a $200 tablet. It has Wi-Fi, Bluetooth, a nine-hour battery, a bright and very sharp screen, a loud mono speaker and GPS function. A seven-inch Android tablet makes a sensational GPS navigator.

The hardware is missing only a few tidbits. There’s a camera on the front for video calls, but no camera on the back. The battery isn’t removable. There’s no cellular option; you can connect to the Internet only over Wi-Fi. And since there’s no memory-card slot, the built-in eight gigabytes of storage is all you’ll ever have. (You can get a 16-gigabyte model for $50 more.)

What the Nexus 7 has that no other tablet has at the moment, however, is the latest version of Android 4.1, named Jelly Bean. Part of life in Androidland is never knowing whether or not an Android software update will be available for your brand and model.

Jelly Bean offers dozens of new features. For example, swiping your finger up the screen produces the Google Now screen: little “cards” bearing information it thinks you could use right now, based on your location, location history, calendar and Google searches. If you’ve recently searched for a sports team or a flight, for example, you see the latest scores or flight status. Weather, traffic and appointments are also part of this intriguing but only partly baked feature.

You can now save a city’s worth of Google Maps onto your tablet, so that you won’t need an Internet connection to navigate. That’s handy when you travel overseas.

This article has been revised to reflect the following correction:

Correction: July 7, 2012

The State of the Art column on Thursday, about the Google Nexus 7 tablet, misstated the music downloading practices of the Google music store. While a song or an album can be downloaded from a personal collection to the Google Nexus 7 only twice using a Web browser, the user can make unlimited downloads using Google’s Music Manager program; it is not the case that Google’s music store allows only two downloads of a song.

State of the Art: Nexus 7, Google’s New Tablet, Seriously Challenges the iPad - State of the Art

Steve Jobs hated the mimicry. Google’s Android software “ripped off the iPhone, wholesale ripped us off,” he told his biographer, Walter Isaacson. “I’m going to destroy Android, because it’s a stolen product.”

But there’s a positive aspect to the imitation, too. You could argue that Apple’s copycats fill in markets where Apple dares not tread, or offer an alternative to Apple’s very pure, controlled, choice-constrained world.

In that worldview, Google’s 2012 new-product announcements must seem like a cornucopia of good news. First, Google opened a unified online store with separate tabs for apps, e-books, TV shows, movies and music, modeled on the iTunes store.

Last week, it introduced the Nexus Q, a black sphere that connects to your TV and plays those songs and videos, pretty much the way the black square Apple TV does. (You can read my review of the Q online at nytimes.com/personaltech.)

Above all, Google has just introduced the Nexus 7, a shiny black tablet that aims to challenge both the iPad and Amazon’s Kindle Fire. (Nexus phone, Nexus tablet, Nexus sphere thing; what is Google thinking, anyway? If it truly wants to emulate Apple, it should minimize confusion, not foster it.)

The Kindle Fire’s most important feature is its price: $200. That’s an eye-popper in a world where the dominant tablet, the iPad, costs $500 and up. Of course, the Fire isn’t the same thing as the iPad. Its seven-inch screen is much smaller. It’s thicker and blockier. It doesn’t have a camera, microphone, GPS function, Bluetooth or memory-card slot. Its primary function is playing material you buy from Amazon, like books and video.

But that’s why Google’s tablet, manufactured by Asus, is a ground-shaking arrival. It, too, has a seven-inch screen and costs only $200, but this time, you don’t get any sense that its creators skimped to keep the price down. It’s sleek and beautiful, with rounded edges, unlike the sawed-off rectangular back of the Fire, and a “pleather” back panel that feels great. And it weighs 2.6 ounces less than the Fire, which makes a world of difference. It’s slightly thinner, too, although thicker than the iPad.

More important, the Nexus is a full-blown tablet. It’s almost as capable of letting you create stuff as consuming it. It’s fast, smooth and capable of running any Android tablet app.

So yes, the Google tablet pretty much blows the Kindle Fire’s value proposition into a cloud of ash. But it also undercuts its own Android-tablet competitors. For example, Samsung’s similar seven-inch Android tablet, the Galaxy Tab 2, costs $250 for the same eight gigabytes of memory.

How is Google able to offer a deluxe tablet for the same price as Amazon’s bare-bones one? I asked the Nexus tablet team if it was playing a game of razors-and-blades here, losing money on every tablet with the intention of making money by selling books, movies, music and TV shows. Google concedes it makes no profit when it sells this tablet from its Web site — and therefore it must lose money on each one it sells in a store.

In any case, the Nexus 7 is well-equipped — for a $200 tablet. It has Wi-Fi, Bluetooth, a nine-hour battery, a bright and very sharp screen, a loud mono speaker and GPS function. A seven-inch Android tablet makes a sensational GPS navigator.

The hardware is missing only a few tidbits. There’s a camera on the front for video calls, but no camera on the back. The battery isn’t removable. There’s no cellular option; you can connect to the Internet only over Wi-Fi. And since there’s no memory-card slot, the built-in eight gigabytes of storage is all you’ll ever have. (You can get a 16-gigabyte model for $50 more.)

What the Nexus 7 has that no other tablet has at the moment, however, is the latest version of Android 4.1, named Jelly Bean. Part of life in Androidland is never knowing whether or not an Android software update will be available for your brand and model.

Jelly Bean offers dozens of new features. For example, swiping your finger up the screen produces the Google Now screen: little “cards” bearing information it thinks you could use right now, based on your location, location history, calendar and Google searches. If you’ve recently searched for a sports team or a flight, for example, you see the latest scores or flight status. Weather, traffic and appointments are also part of this intriguing but only partly baked feature.

You can now save a city’s worth of Google Maps onto your tablet, so that you won’t need an Internet connection to navigate. That’s handy when you travel overseas.

This article has been revised to reflect the following correction:

Correction: July 7, 2012

The State of the Art column on Thursday, about the Google Nexus 7 tablet, misstated the music downloading practices of the Google music store. While a song or an album can be downloaded from a personal collection to the Google Nexus 7 only twice using a Web browser, the user can make unlimited downloads using Google’s Music Manager program; it is not the case that Google’s music store allows only two downloads of a song.

State of the Art: Nexus 7, Google’s New Tablet, Seriously Challenges the iPad - State of the Art

Steve Jobs hated the mimicry. Google’s Android software “ripped off the iPhone, wholesale ripped us off,” he told his biographer, Walter Isaacson. “I’m going to destroy Android, because it’s a stolen product.”

But there’s a positive aspect to the imitation, too. You could argue that Apple’s copycats fill in markets where Apple dares not tread, or offer an alternative to Apple’s very pure, controlled, choice-constrained world.

In that worldview, Google’s 2012 new-product announcements must seem like a cornucopia of good news. First, Google opened a unified online store with separate tabs for apps, e-books, TV shows, movies and music, modeled on the iTunes store.

Last week, it introduced the Nexus Q, a black sphere that connects to your TV and plays those songs and videos, pretty much the way the black square Apple TV does. (You can read my review of the Q online at nytimes.com/personaltech.)

Above all, Google has just introduced the Nexus 7, a shiny black tablet that aims to challenge both the iPad and Amazon’s Kindle Fire. (Nexus phone, Nexus tablet, Nexus sphere thing; what is Google thinking, anyway? If it truly wants to emulate Apple, it should minimize confusion, not foster it.)

The Kindle Fire’s most important feature is its price: $200. That’s an eye-popper in a world where the dominant tablet, the iPad, costs $500 and up. Of course, the Fire isn’t the same thing as the iPad. Its seven-inch screen is much smaller. It’s thicker and blockier. It doesn’t have a camera, microphone, GPS function, Bluetooth or memory-card slot. Its primary function is playing material you buy from Amazon, like books and video.

But that’s why Google’s tablet, manufactured by Asus, is a ground-shaking arrival. It, too, has a seven-inch screen and costs only $200, but this time, you don’t get any sense that its creators skimped to keep the price down. It’s sleek and beautiful, with rounded edges, unlike the sawed-off rectangular back of the Fire, and a “pleather” back panel that feels great. And it weighs 2.6 ounces less than the Fire, which makes a world of difference. It’s slightly thinner, too, although thicker than the iPad.

More important, the Nexus is a full-blown tablet. It’s almost as capable of letting you create stuff as consuming it. It’s fast, smooth and capable of running any Android tablet app.

So yes, the Google tablet pretty much blows the Kindle Fire’s value proposition into a cloud of ash. But it also undercuts its own Android-tablet competitors. For example, Samsung’s similar seven-inch Android tablet, the Galaxy Tab 2, costs $250 for the same eight gigabytes of memory.

How is Google able to offer a deluxe tablet for the same price as Amazon’s bare-bones one? I asked the Nexus tablet team if it was playing a game of razors-and-blades here, losing money on every tablet with the intention of making money by selling books, movies, music and TV shows. Google concedes it makes no profit when it sells this tablet from its Web site — and therefore it must lose money on each one it sells in a store.

In any case, the Nexus 7 is well-equipped — for a $200 tablet. It has Wi-Fi, Bluetooth, a nine-hour battery, a bright and very sharp screen, a loud mono speaker and GPS function. A seven-inch Android tablet makes a sensational GPS navigator.

The hardware is missing only a few tidbits. There’s a camera on the front for video calls, but no camera on the back. The battery isn’t removable. There’s no cellular option; you can connect to the Internet only over Wi-Fi. And since there’s no memory-card slot, the built-in eight gigabytes of storage is all you’ll ever have. (You can get a 16-gigabyte model for $50 more.)

What the Nexus 7 has that no other tablet has at the moment, however, is the latest version of Android 4.1, named Jelly Bean. Part of life in Androidland is never knowing whether or not an Android software update will be available for your brand and model.

Jelly Bean offers dozens of new features. For example, swiping your finger up the screen produces the Google Now screen: little “cards” bearing information it thinks you could use right now, based on your location, location history, calendar and Google searches. If you’ve recently searched for a sports team or a flight, for example, you see the latest scores or flight status. Weather, traffic and appointments are also part of this intriguing but only partly baked feature.

You can now save a city’s worth of Google Maps onto your tablet, so that you won’t need an Internet connection to navigate. That’s handy when you travel overseas.

This article has been revised to reflect the following correction:

Correction: July 7, 2012

The State of the Art column on Thursday, about the Google Nexus 7 tablet, misstated the music downloading practices of the Google music store. While a song or an album can be downloaded from a personal collection to the Google Nexus 7 only twice using a Web browser, the user can make unlimited downloads using Google’s Music Manager program; it is not the case that Google’s music store allows only two downloads of a song.