Amazon unveils new generation of Kindles

The new Kindle comes in a 3G/Wi-Fi or WiFi-only version.

(Credit: Amazon)

Yes, the rumors are true.

Amazon on Wednesday officially unveiled a next-generation Kindle that is what many tech pundits thought it would be: smaller and lighter, with a better screen and some Wi-Fi thrown into the mix.

The new e-reader comes in a couple of flavors, one with both Wi-Fi and 3G wireless for $189, and a Wi-Fi-only version that costs $139, some $10 less than Barnes & Noble's Nook Wi-Fi. The new Kindles are available in graphite or white and ship on August 27, with Amazon taking pre-orders for both e-readers now.

On top of the more compact design, some other key additions include more memory--4GB instead of 2GB--and double the battery life (four weeks instead of two weeks with the wireless turned off).

Here's a look at the highlights:

• 6-inch E-Ink display
• Wi-Fi and 3G ($189), Wi-Fi only ($139)
• 21 percent smaller than previous Kindle
• 15 percent lighter (8.7 ounces)
• Like the new Kindle DX, screen offers 50 percent better contrast
• 20 percent faster page turns, according to Amazon
• 4GB built-in memory
• Smaller page-turn buttons that are also quieter (clicking noise is nearly silent)
• Up to four weeks of battery life from sealed-in battery (wireless turned off)
• New "experimental" WebKit-based browser. Amazon says the updated web browser is "faster, easier to navigate, and provides a new 'article mode' feature that simplifies web pages to just the main text-based content for easier reading."
• Expanded text-speech options. New text-to-speech enabled menus allow you to navigate the Kindle without having to read menu options. You can not only listen to books aloud (certain ones, anyway) but content listings on the home screen, item descriptions, and all menu options.
• Amazon says the new Kindle uses an improved built-in PDF reader, with new dictionary lookup, notes and highlights, and support for password protected PDFs.
• No cover included but Amazon will sell two new covers, one of which has a built-in flip-out light for $59.99.

Recently, the Kindle was listed as "out of stock" on Amazon, fueling speculation that a new Kindle was on the way. Based on a report by Bloomberg, rumor had it that Amazon's next-generation Kindle would lack color and a touch screen, and that it would arrive in August.

For those who ordered an older model within the past 30 days, Amazon says you'll be able to return that Kindle and get a new model when it ships. (For those who ordered a Kindle just outside that 30-day window, you can call Amazon customer support and see what they say).

We got a chance to play around with the new Kindle for a short time, and while Amazon wouldn't immediately let us photograph it side by side with the old Kindle, the new model is clearly smaller and sleeker and the screen definitely pops a little more, much like the new Kindle DX's screen does. The letters appear a little darker and Amazon has tweaked the font options, so they also appear slightly sharper.

Amazon has apparently spent well over a year designing the new model and the resulting product is more evolutionary than revolutionary. But the changes--particularly the size and the addition of Wi-Fi--should tempt current Kindle owners to upgrade and attract a new batch of e-reader buyers who've been sitting on the fence, waiting for the new Kindle to arrive. While not the $99 device some were hoping for, at $139 the Wi-Fi-only version is pretty affordable.

We should get our hands on a review unit fairly soon and will put it through its paces and compare it to the previous Kindle. We'll also want to take a closer look at the Web browser using both 3G and Wi-Fi. In our short look, it works significantly better than the current web browser (particularly on Wi-Fi), though it obviously doesn't support Flash or video.

As always, feel free to comment and let us know what you think about the new Kindle models

Netflix delights studios with big checks

LOS ANGELES--Netflix probably won't get a star on Hollywood's Walk of Fame anytime soon, but the Web's top video-rental service has recently become a blockbuster hit with film-industry chieftains.

Just nine months ago, sources in the film industry told CNET that Netflix's long string of Wall Street wowing earnings reports hadn't gone unnoticed at the studios. With all that money rolling in, many studio decision makers weren't happy with their cut--especially when it came to the company's blossoming streaming-movie service.

Netflix CEO Reed Hastings has apparently solved the problem, at least for now, by writing checks. In the quarter that ended June 30, 2009, Netflix spent $9 million on acquiring films and television shows for its streaming service. Last week, Netflix reported that for the same period this year, it spent $66 million--more than seven times as much.

That wasn't a fluke. For the first six months of 2010, Netflix has paid the studios $116 million for streaming content, compared with $31 million for the same period last year. Some analysts expect those payments to keep going up as the company continues to fill out its film library.

Netflix's ability and willingness to shell out big bucks for higher and higher grades of movies and TV shows was clearly illustrated earlier this month when the company announced it had struck a $100 million deal with film financier Relativity Media to acquire about a dozen movies per year starting in 2011. As part of the agreement, Netflix will offer the upcoming film, "The Fighter," starring Mark Wahlberg, Amy Adams, and Christian Bale.

And don't bother to check if your Netflix charges have shot up. The company has paid these millions to the studios without raising subscription prices one cent. What Netflix did do is boost the number of movies and TV shows in its streaming service, which everybody knows is the company's future. In the past nine months, Netflix seems to have answered a major question, one asked by the likes of Mark Cuban and many others: could the company generate the kind of revenue needed to pay for premium films and TV shows without raising prices?

This appeared to be a real threat to Netflix. Had the studios refused to deal with Netflix, they might have choked off content and hobbled the fledgling streaming service in its infancy (remember, Hollywood tried numerous times to prop up brick-and-mortar rental chains by trying to prevent Netflix from obtaining specific DVDs). What Netflix's recent performance indicates is that the company has the bankroll and the stature in Hollywood to compete for content with the Comcasts and HBO's of the world. This should come as welcome news to consumers who may be looking to dump their cable bill.

So, how did Netflix do it?

First, delivering digital versions of films over the Web is far cheaper than shipping physical discs. As Netflix users have opted to watch more streaming movies and receive fewer DVDs delivered by mail, the company has been able to trim postage and DVD-acquisition costs. For example, Netflix spent $24 million in the June quarter this year on DVDs, compared with $43 million during the same period last year, according to the company's June earnings report.

For the first six months of this year, Netflix spent $61 million on discs, down from $89 million for the same period last year.

Netflix didn't just throw money at the content-acquisition problem. In January, the Los Gatos, Calif., company agreed not to offer any films from Warner Brothers Studios to help protect that shop's DVD sales. The thinking was that if discs weren't available for rent, people would be more inclined to buy them. In exchange, the studio agreed to license more titles for Netflix's streaming service.

"In order for Netflix to continue to thrive they are going to have to cut the studios a bigger piece of pie."

--Michael Pachter, security analyst

Clever horse trading and old-fashioned cash payments are important, because Netflix likely needs the studios more than they need Netflix. Film industry managers aren't going to hand over premium content for less than what they're getting from the cable companies, says Michael Pachter, a financial analyst with Wedbush Morgan Securities.

"The studios have to be thinking, 'We're getting 50 percent of revenue from HBO,'" Pachter said. "Netflix's streaming service is only paying something like 30 percent of revenue. In order for Netflix to continue to thrive, they are going to have to cut the studios a bigger piece of pie."

That, of course, could make investors nervous, because spending bigger with the studios could cut into Netflix's profits. But at some point, the studios may end up courting Netflix as enthusiastically as its executives are now courting them.

None of Netflix's competitors has managed to move Web video content from the PC to subscribers' TV sets as elegantly. Netflix cut numerous deals with set-top makers, such as Roku, Microsoft, LG, Sony and Nintendo, just to name a few. This has apparently made Netflix more attractive to consumers.

Last week, the company reported that subscribers who watched at least 15 minutes of streaming content in the second quarter grew 61 percent, up from 37 percent in the year ago period. From June 2009 to the same month this year, Netflix added nearly 5 million subscribers, a 42 percent increase. By the end of this year, the company says it could possess as many as 18.5 million subscribers.

Sometime next year, Netflix will likely top the 20 million subscriber mark, making it a peer to Comcast, the nation's largest cable company with 24.6 million cable TV subscribers. Comcast, which reported earnings of $3.6 billion for 2009, still dwarfs Netflix, with its $115 million in earnings for last year. But when it comes to eyeballs, there won't be that big of a difference.

"It took Netflix how long to reach 20 million subscribers," asked one film studio executive, who was referring to the 12 or 13 years the company took to reach the mark. "Now look at how long it took Comcast to reach 20 million customers. You don't have to look cause I can tell you: it took like 20 years."

Security researcher demonstrates ATM hacking

Security researcher Barnaby Jack demonstrates how he bypassed the security of two ATMs.

(Credit: Declan McCullagh/CNET)

LAS VEGAS--Hacking into an ATM isn't impossible, a security researcher showed Wednesday. With the right software, it's actually pretty easy.

Barnaby Jack, director of security testing at Seattle-based IOActive, hauled two ATMs onto the Black Hat conference stage and demonstrated to a rapt audience the fond daydream of teenage hackers everywhere: pressing a button and having an automated teller machine spew out its cash until a pile of paper lay on the ground.

"I hope to change the way people look at devices that from the outside are seemingly impenetrable," said Jack, a New Zealand native who lives in the San Jose area. One vulnerability he demonstrated even allows a hacker to connect to the ATM through a telephone modem and, without knowing a password, instantly force it to disgorge its entire supply of cash.

Jack said he bought the pair of standalone ATMs--one manufactured by Tranax Technologies and the other by Triton--over the Internet and then spent years poring over the code. The vulnerabilities and programming errors he unearthed during that process, Jack said, let him gain complete access to those machines and learn techniques that can be used to open the built-in safes of many others made by the same companies.

"Every ATM I've looked at, I've found a game-over vulnerability that allows an attacker to get cash from the machine," Jack said. "I've looked at four ATMs. I'm four for four." (He said he has not evaluated built-in ATMs like those used by banks and credit unions.)

He said both Tranax and Triton had patched the security vulnerabilities since he brought them to the companies' attention a year ago. If a customer with an ATM such as a convenience store or a restaurant doesn't apply the fix, though, the machines remain vulnerable.

Hacking into ATMs is not exactly a new idea: It was immortalized by a young John Connor in the "Terminator 2" movie, and techniques like "card skimming" and "card trapping" are well-known by police.

Some enterprising thieves have even seized on ways to use a little-known configuration menu to trick ATMs into thinking that they're dispensing $1 bills instead of $20 ones. (Traditional methods of stealing an ATM, ramming it, cutting into its safe, or blowing it up still work too.)

But those other electronic cash-extraction techniques were limited because they didn't rely on a deep analysis of an ATM's code. Many run Windows CE with an ARM processor and an Internet connection or a dialup modem, all of which controls access to the armored safe through a serial port connection. Jack said he used standard debugging techniques to interrupt the normal boot process and instead start Internet Explorer, giving him access to the file system and allowing him to copy off the files for analysis.

In the case of Tranax, a Hayward, Calif.-based company, Jack said he found a remote access vulnerability that allows full access to an unpatched machine without a password needed. He wrote two pieces of software to exploit that programming error: a utility called Dillinger, which attacks an ATM remotely, and one called Scrooge, a rootkit that inserts a backdoor and then conceals itself from discovery.

Scrooge "hides itself from the process list, hides itself from the operating system," Jack said. "There's a hidden pop-up menu that can be activated by a special key sequence or a custom card."

Triton's ATMs didn't have an obvious remote access vulnerability. And the built-in vaults were well-armored. But the PC motherboard that dispenses cash from the vault was protected only by a standard (not unique) key that could be purchased over the Internet for about $10. So Jack did, and found he could force the machine to accept his backdoor-enabled software as a legitimate update.

Bob Douglas, Triton's vice president of engineering, showed up at the conference to stress to reporters that the vulnerability has been fixed. "We have developed a defense against that attack," he said. "We released it in November of last year."

In addition, Douglas said: "We have an optional kit available to replace the lock with a unique key. It's a high-security lock as well. I think it's a Medeco lock." But he said because some companies that service ATM machines might own 3,000 of them and visit dozens or hundreds a day, not all customers choose to upgrade.

Tranax did not respond to queries from CNET on Wednesday.

Jack was scheduled to present a similar talk at Black Hat last year, but it was pulled at the last minute after an ATM vendor complained to Juniper Networks, his then-employer.

The difficult part in hacking the ATMs was evaluating the software for vulnerabilities--but the Dilligner and Scrooge utilities Jack created as a result are easy enough for a child to use.

And will he release them? Teenage hackers, random criminals, and the Mob would surely be interested. "I'm not going to," Jack said in response to a question from CNET after his talk.

BlackBerry revamp to take on iPhone?

Research in Motion is expected to unveil a new touchscreen BlackBerry next week to rival Apple's iPhone and other smartphones, like ones using Google's Android operating system.

Shares of RIM were up Wednesday on the speculation, reports Reuters.

RIM is expected to announce next week a new BlackBerry to rival the iPhone and other new smartphones.

(Credit: CNET)

The new BlackBerry 9800 is expected to be launched at an event in New York City on Tuesday next week. AT&T, which is expected to be the exclusive carrier for the new phone, will be joining RIM for the announcement. CNET reported news of the press conference earlier this week.

For months, bloggers and others watching RIM closely have speculated that the new BlackBerry 9800 will be the first to use RIM's new operating system, BlackBerry OS 6. This new software comes with a revamped Web browser, which should help it compete more aggressively with more Web-centric devices like the iPhone, as well as devices that use the Google Android operating system.

The BlackBerry 9800 is also expected to offer a touch screen and a full slide-out keyboard. The new phone is being viewed as RIM's big chance to silence critics who say the company's technology and products look a bit long in the tooth compared to other devices in the market.

While RIM has done well selling low-end BlackBerry devices throughout the world, it is starting to slip in the high end of the smartphone category, especially in North America, where new iPhones and Android devices get more attention from consumers. RIM is also facing more competition from other smartphone makers in the enterprise market, as more companies start letting employees swap BlackBerrys for other smartphones, Reuters said.

The new BlackBerry 9800 is expected to go on sale in mid-August in the U.S., the news agency reports. Pricing for the device is still unknown, but consumers can expect it to be competitive with other new smartphones, which typically means around $200 with a two-year contract after rebates.

RIM is not commenting on the rumors of the new 9800 phone.

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The latest version of Norton 360 4.0 is finally here. Norton 360, developed by Symantec, is marketed as an “all-in-one” security suite. The package includes a personal firewall, phishing protection, ability to detect and remove malware, file backup and PC maintenance capabilities. The previous Norton 360 v3 is based on Norton 2009 products and it’s no surprise that this latest Norton 360 v4 is based on Norton 2010.

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Google Gets Playful With Facebook Rivalry

Facebook has taken on the sheen of invulnerability with its half a billion strong membership, but one company that could possibly mount a challenge is Google -- and it appears to be doing just that. Although unconfirmed, word is out that Google is in serious talks with social gaming companies to collaborate on an ambitious new social networking service.

Adobe Gets Its Say on Microsoft's MAPP Security Channel

Adobe will be able to communicate its own security projects to other companies using Microsoft's MAPP program, a system designed by Redmond to keep security companies up to date on vulnerability information before it sends out its usual monthly patch set. Microsoft also announced a new vulnerability disclosure program that will let flaw finders report directly to a CERT-CC.

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