Chip Maker, Posting a Loss, Seeks to Enter Game Market

Still, A.M.D. said gross margins would fall as it sought a foothold in game consoles.

A.M.D., which for decades has competed against the semiconductor market leader, Intel, in supplying chips for PCs, is rushing to refocus on new markets as consumers buy fewer laptops and more tablets and smartphones.

A.M.D. processors are being used in Microsoft’s coming Xbox One and Sony’s next-generation PlayStation game consoles. These devices are largely behind A.M.D.’s upbeat revenue forecast.

A.M.D. said its gross margin in the second quarter was 40 percent and would fall to about 36 percent in the third quarter. Analysts on average had expected a third-quarter gross margin of 39 percent.

With consumers increasingly playing games on tablets, it is also unclear how many of the new consoles Microsoft and Sony will sell, but optimism about the impact on A.M.D.’s revenue has helped drive its stock up 73 percent since the beginning of April.

Intel warned on Wednesday that it did not expect revenue to grow in 2013 because of slowing PC industry.

Global shipments of personal computers dropped 11 percent in the second quarter, the fifth consecutive quarterly decline in a market that has been devastated by the popularity of tablets.

A.M.D. reported second-quarter revenue of $1.16 billion, down from $1.41 billion a year earlier. It said third-quarter revenue would rise 22 percent, plus or minus 3 percent, compared with the June quarter. That increase would take it to about $1.42 billion.

Analysts, on average, had expected revenue of $1.11 billion in the second quarter and $1.22 billion in the third quarter, according to Thomson Reuters.

A.M.D. posted a net loss of $74 million, or 10 cents a share, in the second quarter, compared with a profit of $37 million, or 5 cents a share, in the same quarter last year.

The company, which is based in Sunnyvale, Calif., said that excluding onetime items, its loss was 9 cents a share, better than the 12-cent loss expected by analysts.

Detroit, Embracing New Auto Technologies, Seeks App Builders

Mr. Mulloy is part of a group of workers that Detroit is suddenly hungry for — software developers and information technology specialists who can create applications for the next generation of connected vehicles.

“You’re going to see developers set up shop in Detroit because they’re going to follow the money,” Mr. Mulloy said, “and there will be lots of money.”

Already, the money is flowing.

General Motors, newly flush with cash after emerging from bankruptcy, is on a hiring binge, quadrupling its information technology staff and recruiting software developers to create a spate of apps for its 2014 model-year vehicles. While the hiring is taking place across the country, many of the new recruits will be working out of the Detroit area.

The Ford Motor Company plans to fill 300 positions in information technology this year, said Laura Kurtz, Ford’s manager of United States recruiting. The Chrysler Group, which declined to specify its plans, said it would hire more entry-level workers and was focused on attracting a highly skilled work force.

For Detroit, the hiring is a rare bright spot in a city teetering on the edge of bankruptcy. For the state over all, the Michigan Department of Labor projects that job growth in software developers for applications is expected to grow 23.5 percent from 2010; for software developers for systems software, 36.9 percent, the highest of any technical job classification. Michigan’s overall average for selected technical occupations is 8.5 percent growth.

The demand for in-vehicle applications is a “substantial job generator with high-end pay,” said Donald R. Grimes, an economic researcher at the University of Michigan.

Beyond the three Detroit automakers, the push for the connected car is helping support homegrown technology businesses like Mr. Mulloy’s as well.

Detroit Labs, founded two years ago to create smartphone apps, is shifting to work with automakers to build in-vehicle apps. The company has grown tenfold since 2011, to 40 people, and aims for 60 workers by the end of the year.

“If you go to the coasts, you are one of thousands,” said Paul Glomski, one of its founders. “In Detroit, you have the opportunity to make an impact. It’s for real.”

Mr. Mulloy’s company, Apigee Labs, provides systems that help companies build applications for media ranging from phones and vehicles to fitness equipment and power grids. He chose to put Apigee in Detroit’s fledgling downtown technology hub, where he shares space with Detroit Labs, which uses Apigee’s products to build apps.

So far, the jobs are primarily attracting people who already live in the area and people like Mr. Mulloy, natives of Michigan who are drawn back to the area not only for the work but also for the lower cost of living. The next challenge will be to recruit developers without ties to Detroit, and that could be a tall order.

“In general,” Mr. Grimes said, “Michigan is not perceived as the hippest place for young technology geeks.”

Automakers are stressing the career opportunity: even though cars have had computer-controlled systems for years, software innovation is in its early stages and there will be a chance for a worker to stand out. G.M.’s 2014 models, for example, will be the first to include in-car apps.

“They view it as a new space to be creative,” said Nick Pudar, director of G.M.’s new developer ecosystems program, which was created to connect the automaker with developers in other cities. “The vehicles are becoming this new channel of innovation.”

Mr. Pudar travels to software developer hubs around the country — San Francisco, New York, Boston, Denver, Chicago and Austin, Tex., among them — to persuade developers to turn from developing phone apps to working on automotive apps.

Bill Vlasic contributed reporting from Detroit.

F.T.C. Head Seeks End to Misuse of Patents

At a patent and antitrust seminar here, Ms. Ramirez laid out her recommendation for the F.T.C. to use its subpoena power and begin a sweeping inquiry into so-called patent trolls, a derogatory term for patent-assertion entities, or P.A.E.’s, as they are called by the F.T.C. The companies buy bundles of patents and make money by threatening infringement lawsuits.

Despite the rapid growth in the number of lawsuits filed by those patent-focused companies, regulators have little more than anecdotal evidence of how patent trolls affect business innovation, Ms. Ramirez said, and whether the patent-enforcement companies help to produce benefits that small companies could not enjoy on their own.

“We have a role to play in advancing a greater understanding of the impact of P.A.E. activity and using our enforcement authority where appropriate to curb anticompetitive and deceptive conduct,” she said.

However, she added, the activity of patent-assertion entities “raises tough competition policy and enforcement issues that defy a one-dimensional answer.”

Antitrust experts and patent litigators said the inquiry could provide clarity in what has become a muddied field.

“For the F.T.C. to roll up its sleeves and study what the real problems are in a rational way is going to be helpful,” said William C. Rooklidge, a patent litigator at Jones Day in Irvine, Calif.

The F.T.C., Ms. Ramirez said, is particularly interested in the methods employed by what she referred to as hybrid P.A.E.’s, which may have incentives that are secretly aligned with those of the company from which it acquires patents.

Those arrangements are part of a practice known as privateering, Ms. Ramirez said, where an operating company takes patents that it owns that might be applicable to a rival’s products and transfers them to a patent-assertion entity.

The sale might be structured to encourage the buyer of the patents to single out the seller’s rivals, which would benefit the original patent owner to the degree that it raises its rival’s costs.

Often, Ms. Ramirez explained, the practice is aided by a level of secrecy, with the patent-assertion entity filing its claims of infringement through a shell company, so that the subject of a lawsuit does not know that its industry rival is behind the harassment.

Bits Blog: Google Seeks Permission to Publish Data on Security Requests

Jeff Chiu/Associated Press Google’s motion with the Foreign Intelligence Surveillance Court on Tuesday is the company’s latest move to control the public relations crisis that has resulted from revelations of government Internet surveillance.

Google on Tuesday filed a motion with the secret Foreign Intelligence Surveillance Court, asking permission to publish data on national security requests that were made to it and authorized by the court.

The motion is the company’s latest move to control the public relations crisis that has resulted from revelations of government Internet surveillance. It is an escalation of Google’s efforts to publish the data. Last week, it sent a letter to the director of the F.B.I. and the director of national intelligence, asking for the same thing.

By law, recipients of national security requests are not allowed to acknowledge their existence. But with the permission of the government, Facebook, Yahoo, Microsoft and Apple have in the last few days published aggregate numbers of national security and criminal requests, including those authorized by the Foreign Intelligence Surveillance Act. Google has not, because it said that would be less transparent than what it had already published. Its transparency report has since 2010 broken out requests by type, and if it agreed to the same terms the other companies did, it would not be able to publish the report that way in the future.

In the motion, Google argued that it had a First Amendment right to publish a range of the total number of requests and the number of users or accounts they cover.

Google said that its executives had responded to allegations — that it cooperated with the government in Internet surveillance — as best they could, given the government’s restraints on discussing them. But the company said that it wanted to do more for the sake of its reputation, business and users, and for the sake of public debate.

“Google’s reputation and business has been harmed by the false or misleading reports in the media, and Google’s users are concerned by the allegations,” the motion said. “Google must respond to such claims with more than generalities.”

The tech companies have been pressing to be able to publish the number of government requests largely to prove that the requests cover a tiny fraction of users. Though the other companies said they were also pushing the government for permission to publish more detailed data, they said the aggregate numbers were useful to control speculation by setting a ceiling on the number of requests.

Other tech companies affected by the government’s surveillance program, called Prism, have considered going to the secret court, an option that is still on the table, according to two people briefed on the discussions. So far, the companies have been individually negotiating with the government instead of acting in concert.

Still, even if they are allowed to publish more detailed numbers, it would leave many questions unanswered, including details of how Prism works. Also, the number of people affected by FISA requests could be much larger than the number of requests, because once the government makes a broad request, it can add individuals and additional search queries for a year.

Google’s motion also revealed that two of its top lawyers, Kent Walker and Richard Salgado, have security clearance, which FISA requires for handling classified legal orders and materials. It was filed on behalf of the company by Albert Gidari, a partner at the law firm Perkins Coie who has earned a reputation in tech and legal circles as the go-to man on surveillance law.

Commissioner Seeks End to Roaming Fees in Europe

Ms. Kroes, the European commissioner for digital policies, told members of the European Parliament’s Internal Market and Consumer Protection Committee, “I want you to be able to go back to your constituents and say that you were able to end mobile roaming costs.”

The speech was the latest effort by Ms. Kroes, a Dutch economist and former European Union antitrust chief, to fundamentally redefine the rules of the union’s telecommunications market. In theory, the market is a single economic zone. But in reality, it is a patchwork of 27 national markets where operators charge people fees whenever they cross a border with their smartphones.

Because competition has made basic mobile phone service relatively inexpensive in Europe compared with other developed countries, the roaming fees are a profitable part of network operators’ businesses. As a result, the European Parliament is expected to face heavy lobbying from the telecommunications industry against the proposal.

The association representing Europe’s largest phone operators, the European Telecommunications Network Operators’ Association, said that lawmakers should further deregulate the telecommunications market before considering an end to roaming fees.

The group said in a statement Thursday that the industry needed “a much less intrusive and a simplified regulatory framework, which will facilitate new investments and pave the way towards a digital single market.”

Ms. Kroes earned the nickname “Steely Neelie” for her hard-charging approach to regulation during her previous job in Brussels. As the bloc’s competition commissioner, she imposed a $1 billion penalty on Microsoft in 2008 as part of a decade-long battle over the way the software giant used its Windows computer operating system to curtail competition. She also went after Oracle and Intel, and gave Google a close examination on its proposal to buy DoubleClick.

Yet Ms. Kroes has a friendly and informal manner, and she prides herself on real-world business experience, having sat on numerous corporate boards before joining the European Commission.

Smaller operators fear that Ms. Kroes’s single-market proposal could extend the dominant influence of the big operator groups — Vodafone, Telefónica, Deutsche Telekom and France Télécom — from isolated national markets to wide swaths of Europe.

Mobile roaming fees are charged when a person makes or receives calls and text messages, or uses the Internet, while outside that person’s home country. Since 2007, the retail and wholesale levels of the fees have been limited by law in Europe. They account for about 5 percent of carriers’ revenue, analysts say.

Carriers in the European Union can now charge up to 35 euro cents (46 United States cents) per minute for a roaming call within the bloc, and up to 79 euro cents for every downloaded megabyte of data.

Deutsche Telekom, the big German carrier, issued a statement opposing Ms. Kroes’s proposal. “The telecommunications sector stands to lose millions of euros under such a proposal,” the company said. “At the same time it is expected in the European Union that telecom companies are going to invest sizable sums in the construction of modern broadband networks. The political decision makers are the ones who must resolve this apparent contradiction.”

Simon Gordon, a spokesman for Vodafone, the largest mobile operator in Europe, declined to comment on the plan. But he said Vodafone already sold a special roaming package called Vodafone Red for 3 euros a day that gave customers the ability to make and receive unlimited texts and voice calls while roaming in 14 European countries. The package also allows Vodafone customers to download as much data while traveling as they would at home each day under their existing plans, Mr. Gordon said.

Last year, at the urging of Ms. Kroes, European Union lawmakers extended and lowered the price caps on roaming fees through July 2017. And starting in July of next year, under the current rules, consumers are supposed to get the right to buy roaming packages from other operators, a change intended to introduce competition in the roaming market and bring down prices. If Ms. Kroes’s new plan were to take effect, it would override the changes set to take place in July 2014.

James Kanter contributed reporting from Brussels.

Bits Blog: Facebook Seeks to Be Mobile ‘Home’ of Android Users

Jim Wilson/The New York Times Mark Zuckerberg introduced the Facebook Home app at the company’s Menlo Park, Calif., headquarters.

9:20 p.m. | Updated Added more details and analysis.

MENLO PARK, Calif. — Cellphones have long been Facebook’s Achilles’ heel. With its users flocking to mobile phones by the millions — and many of its newest users never accessing the services on computers at all — the company has struggled to catch up to them.

On Thursday, Facebook unveiled its latest, most ambitious effort to crack the challenge: a package of mobile software called Facebook Home that is designed to draw more users and nudge them to be more active on the social network.

The new suite of applications effectively turns the Facebook news feed into the screen saver of a smartphone, updating it constantly and seamlessly with Facebook posts and messages.

In so doing, Facebook has cleverly, perhaps also dangerously, exploited technology owned by one of its leading rivals, Google. Facebook Home works on Google’s Android operating system, which has become the most popular underlying software for smartphones in the world.

The Facebook News Feed appears as soon as the phone is turned on. Pictures take up most of the real estate, with each news feed entry scrolling by like a slide show. Messages and notifications pop up on the home page. To “like” something requires no more than two taps. Facebook apps are within easy reach, making the phone essentially synonymous with the Facebook ecosystem.

“Today, our phones are designed around apps, not people,” said Mark Zuckerberg, Facebook’s chief executive, at a news conference here at the company’s headquarters. “We want to flip that around.”

Facebook Home will be available for download from Google’s app store, Play, on April 12 for four popular, moderately priced phones that use Android and are made by HTC and Samsung. A fifth one, a new model called the HTC First, will be sold by AT&T for $100 with the software already loaded.

For the time being, Facebook will not show ads on the phone’s home screen, which Facebook is calling Cover Feed. Since advertising revenue is crucial to the company’s finances, however, it will almost certainly display ads there in the future.

Facebook Home is also clearly designed to get Facebook users to return to their news feeds even more frequently than they do now. Every time they glance at their phone at the supermarket checkout line or on the bus to work, they will, in essence, be looking at their Facebook page.

“It’s going to convert idle moments to Facebook moments,” said Chris Silva, a mobile industry analyst with the Altimeter Group. “I’m ‘liking’ things, I’m messaging people, and when ads roll out, I’m interacting with them and letting Facebook monetize me as a user.”

Krishna Subramanian, the chief marketing officer at Velti, a San Francisco-based company that buys targeted advertisements online on behalf of brands, pointed out that even without showing ads on the mobile cover feed, Facebook Home could prove to be a lucrative tool.

By nudging its users to do more on the social network, he said, the company will inevitably get “an explosion of mobile data that can be tied back into desktop advertising” to Facebook users.

A majority of Facebook’s one billion-plus users log in on their cellphones. Most Americans now have an Internet-enabled phone, and smartphone penetration is growing especially fast in emerging market countries, where Facebook has substantial blocs of its users.

At Thursday’s press event, Mr. Zuckerberg repeatedly signaled that he wanted the new product to enable a mass, global audience to connect to Facebook, especially those have yet to get on the Internet. “We want to build something that’s accessible to everyone,” he said.

Although HTC is rolling out the first new phone with Facebook Home installed, and AT&T has agreed to sell it, other phone makers and carriers may be reluctant to load the software.

Jan Dawson, a telecom analyst at Ovum, said that Apple’s iPhone and many Android smartphones already do a good job of integrating the Facebook application into their phones. And he said phone carriers were unlikely to give a Facebook phone made by HTC much support because the Taiwanese phone maker’s past attempt at a Facebook phone — the ChaCha, which had a physical button for posting photos on Facebook — sold poorly.

“HTC may be desperate enough to do this, but carriers aren’t likely to promote it heavily,” Mr. Dawson said. “As a gimmick, it may bring customers into stores, but they’ll mostly end up buying something else.”

At Facebook headquarters Thursday, HTC’s chief executive, Peter Chou, showed off a model of his new Facebook phone, called HTC First, in lipstick red. “HTC First is the ultimate social phone,” he said. “It combines the new Facebook Home and great HTC design.”

Whether consumers will embrace a phone that emphasizes Facebook over everything else also remains to be seen. Some are likely to have concerns about how much personal information they are being asked to share with Facebook. Additionally, checking Facebook dozens of times every day could result in hefty data use charges, unless users are connected to a Wi-Fi network or negotiate special packages with carriers.

Facebook and AT&T executives said they had taken that into account. Users will be notified when they are about to reach their data limits. The software can also be set to download data-heavy content like video only when the user is connected to a Wi-Fi network, and then save it in its memory.

The software’s most powerful feature is to turn the cellphone into a starkly personal gadget.

Facebook employees, current and past, were invited to the product announcement, a sign of how crucial it has been for Facebook to crack the mobile puzzle. Silicon Valley has whispered for months about the prospects of a Facebook phone. Mr. Zuckerberg has consistently denied building one.

Thursday’s announcement signaled that Facebook had stopped short of even building an operating system. Instead, it had simply altered its rival Google’s technology.

The Android platform, Mr. Zuckerberg said, was built to be open to new integrations. Asked at the news conference whether he feared that Google executives would change their mind about Facebook using it to advance its mobile aims, he turned somewhat testy.

“Anything can change in the future,” he said. “We think Google takes its commitment to openness very seriously.”

Google, for its part, was notably genteel. “This latest collaboration demonstrates the openness and flexibility that has made Android so popular,” the company said in an e-mailed statement. “And it’s a win for users who want a customized Facebook experience from Google Play — the heart of the Android ecosystem — along with their favorite Google services like Gmail, Search and Google Maps.”

Brian X. Chen contributed reporting.

DealBook: Still-Unhappy Southeastern Seeks Dell Shareholder List

It appears that despite Dell Inc.’s efforts to the contrary, Southeastern Asset Management remains unconvinced that the computer maker’s $24.4 billion sale to its founder is the last best hope for shareholders.

In a letter to the company’s board, Southeastern reiterated its belief that the take-private transaction denied investors the full benefits of Dell’s turnaround. To that end, Southeastern said that it was seeking a full investor list from the company, as well as other books and records.

A number of other investors, including T. Rowe Price, have publicly said they oppose the sale to Michael S. Dell and the investment firm Silver Lake, deeming the group’s $13.65-a-share offer too low. Southeastern has suggested that a better alternative is for Dell to pay out a special $12-a-share dividend, paid for by bringing back overseas cash, selling off Dell Financial Services and raising $9 billion in new debt.

Southeastern cited Dell’s willingness now to bring home some of the company’s substantial cash hoard that is currently held overseas.

The firm also took issue with Dell management for not providing financial results for its product segments, in what Southeastern argued was an attempt to mask Dell’s improving business mix. Had the computer company broken out its results in this way, Southeastern said, the data might reflect the lessening importance of Dell’s struggling PC business and the growth of its enterprise arm.

“While the board of directors characterizes the proposed transaction as a transfer of ‘the risk of the business to the buyout group,’ we believe it is more appropriately characterized as a transfer of ‘the opportunity of the business to the buyout group,’” Southeastern wrote in the letter. “Management knows the company better than anyone, and clearly sees Dell’s substantial unrealized value.”