Daily Tech Snippet: Thursday February 26

• Apple suffers shock loss in gaming patent infringement suit, ordered to pay $533M to small Texas firm; will appeal: (more coverage here and here)Apple Inc. was told to pay $532.9 million after a federal jury said the company’s iTunes software used a Texas company’s patented inventions without permission. Closely held Smartflash LLC, which claimed that Apple infringed three patents, was seeking $852 million in damages, while Apple said it was worth $4.5 million at most. A federal jury in Tyler, Texas, where Smartflash is based, on Tuesday rejected Apple’s arguments that it didn’t use the inventions and that the patents were invalid. The dispute is over digital rights management and inventions related to data storage and managing access through payment systems. Smartflash claimed that iTunes used the inventions in applications such as Game Circus LLC’s Coin Dozer and 4 Pics 1 Movie. Apple pledged to appeal. “Smartflash makes no products, has no employees, creates no jobs, has no U.S. presence, and is exploiting our patent system to seek royalties for technology Apple invented,” said Kristin Huguet, an Apple spokeswoman. “We refused to pay off this company for the ideas our employees spent years innovating and unfortunately we have been left with no choice but to take this fight up through the court system.” In asking for $852 million, Smartflash argued it was entitled to a percentage of sales of Apple’s devices, including the iPhone, iPad and Mac computers, that were used to access iTunes. It claimed that Apple had intentionally infringed the patents, in part because one of its executives had been given a briefing on the technology more than a decade ago. “Apple doesn’t respect Smartflash’s inventions,” the company’s lawyer, John Ward of Ward & Smith in Longview, Texas, told the jury. “Not a single witness could be bothered with reviewing the patent.”

• China's state procurement agency pushes to buy local; has dropped several global brands from approved lists - Cisco, McAfee and Citrix worst hit: China has dropped some of the world's leading technology brands from its approved state purchase lists, while approving thousands more locally made products, in what some say is a response to revelations of widespread Western cybersurveillance. Others put the shift down to a protectionist impulse to shield China's domestic technology industry from competition. Chief casualty is U.S. network equipment maker Cisco Systems Inc (CSCO.O), which in 2012 counted 60 products on the Central Government Procurement Center's (CGPC) list, but by late 2014 had none, a Reuters analysis of official data shows. Smartphone and PC maker Apple Inc (AAPL.O) has also been dropped over the period, along with Intel Corp's (INTC.O) security software firm McAfee and network and server software firm Citrix Systems (CTXS.O). The number of products on the list, which covers regular spending by central ministries, jumped by more than 2,000 in two years to just under 5,000, but the increase is almost entirely due to local makers. The number of approved foreign tech brands fell by a third, while less than half of those with security-related products survived the cull. An official at the procurement agency said there were many reasons why local makers might be preferred, including sheer weight of numbers and the fact that domestic security technology firms offered more product guarantees than overseas rivals.

• Salesforce stock up 12%, at all-time high after strong earnings: 2014 revenue $5.3B, +32% Y/Y: Salesforce.com Inc. raised its revenue forecast for fiscal 2016, thanks to Chief Executive Officer Marc Benioff’s push into new businesses and bigger deals with long-standing customers. Sales will be $6.48 billion to $6.52 billion, the company said in a statement Wednesday, up from its prior prediction for $6.45 billion to $6.5 billion. Analysts had projected $6.5 billion, according to the average of estimates compiled by Bloomberg. Billings rose 32 percent to $2.54 billion in the fiscal fourth quarter, which ended Jan. 31, exceeding analysts’ average projection for 25 percent. Salesforce’s expansion into data analytics, corporate social networks and marketing services is starting to deliver results, with sales in the company’s Marketing and Salesforce1 Platform divisions up from prior quarters. President Keith Block, who joined the company in mid-2013, has been leading the push to generate new revenue from large companies, building on Salesforce’s position as the largest maker of customer-management software. The shares of Salesforce rose as much as 12 percent in extended trading. The stock advanced 1.6 percent to $62.90 at the close in New York, leaving it up 6.1 percent this year, compared with a 2.7 percent gain for the Standard & Poor’s 500 Index. Salesforce’s fourth-quarter net loss narrowed to $65.8 million, or 10 cents a share, from a loss of $116.6 million, or 19 cents, a year earlier. Profit excluding some costs was 14 cents and sales for the period rose 26 percent to $1.44 billion, with both results matching analysts’ predictions. For the just-ended fiscal year, revenue rose 32 percent to $5.37 billion, the third straight period of slowing growth as the business matures.Today after the bell, Salesforce reported $1.44 billion in fourth quarter revenue, and adjusted earnings per share of $0.14. Both were dead in-line with market expectations. The company’s shares are up more than 6 percent in after-hours trading. The company is currently trading at an all-time high. Tomorrow morning should be a watershed moment for the SaaS firm. Is strong guidance pushing Salesforce higher? To a certain extent. The company raised its guidance, but only to levels that match market demands. Salesforce expects $1.48 billion to $1.50 billion in current-quarter revenue. The market expects the company to post $1.5 billion, so, both teams are mostly in agreement. It’s the same story when it comes to the company’s fiscal 2016 (current calendar year), with the company anticipating $6.47 billion to $6.52 billion in top line. The market? $6.5 billion.

• Buggy Bluetooth and unreliable voice recognition systems are now top drivers of car-buyer dissatisfaction, JD Power survey reveals: As communications systems proliferate in cars, they are becoming the biggest source of aggravation for owners, according to a study by the market research firm J.D. Power. From buggy Bluetooth systems to voice recognition systems that do not recognize voices, the problems with in-car computer systems have surpassed excessive wind noise as the most-cited issue. Of owners who had problems with their Bluetooth systems, 55 percent said their vehicle would not recognize their phone and 31 percent said the phone would not automatically connect when they entered the vehicle. The No. 2 problem was voice recognition systems misinterpreting commands. Effective voice recognition is seen as a critical function in cars if consumers are to be discouraged from distracted driving. Google and Apple are poised to enter the market widely, with new dashboard computer systems that will allow consumers to use their smartphones. The study also showed that technology was playing an increasingly important role in buying decisions. Fifteen percent of new-car buyers said they avoided a model because it lacked certain technological features, up from 4 percent in last year’s study. The study covered 177 specific problems grouped into eight major vehicle systems like exterior, seats, steering, suspension, braking and engine and transmission. J.D. Power then ranked brands by the number of problems reported per 100 vehicles; the lower the number of problems, the higher the ranking.

• Uber is offering UberX free in Seoul in a bid to defuse regulatory pressure; also faces potential of IP blockage in India: Global online car hire service major Uber’s IP address may get blocked in India if it does not obtain a radio taxi licence to ply its cabs in the national capital, according to a The Economic Times report citing unnamed Delhi Transport Department official. This will effectively shut down the company’s operations across all 11 cities in India. U.S. taxi service provider Uber Technologies Inc on Wednesday said it will make its low-cost uberX ride-sharing service available free of charge in Seoul, in its second bid this month to operate legally in South Korea. Uber started charging a fee last year for the taxi-like service, which matches passengers via a smartphone app with private drivers who do not hold commercial transport licenses. Prosecutors subsequently indicted Uber's chief executive, Travis Kalanick, as well as its South Korean unit for violating a law prohibiting individuals or firms without proper commercial licenses from providing or facilitating transportation services. "We want to actively work towards a consensus, and the first step to that process is switching off the fare," Uber's head of north Asia Allen Penn said in a statement. Uber proposed a new registration system for its drivers in South Korea earlier this month in a bid to operate legally. But the transport ministry rejected the proposal and said it would stop the company offering its services. Uber has been the subject of similar regulatory ire in countries around the world, even as it expanded into more than 290 cities. In January, the city of Seoul declared Uber's services illegal and started offering rewards of up to 1 million won ($911) for people who reported private drivers providing transport through the company.