Tech CEOs trade barbs, warm up for holiday tablet wars

SAN FRANCISCO (Reuters) – The biggest names in consumer technology, stung by a string of disappointing quarterly results this month, are suiting up for what’s shaping to be the fiercest holiday battle in years.

Investors and consumers have already largely written off flaccid quarterly numbers from tech behemoths like Microsoft, Apple, Google and Amazon. What counts is the next 60 days, when the biggest names in technology do battle at a near-unprecedented scale and pace.

Just on Thursday, Amazon compared its Kindle Fire with Apple’s new iPad mini, point by point, in its earnings release, an unusual forum to name rivals. Apple CEO Tim Cook compared Microsoft’s Surface tablet to an over-engineered car that can fly and float. And Microsoft went for the iPad, saying its Surface boasted twice its storage.

All three tablets will vie for the shrinking consumer dollar these holidays. By tech standards, it’s getting ugly.

“The tablet space is where the growth is. That’s why they are all fighting over it. PC shipments are down and some tablet buyers may never buy another PC,” said Michael Allenson, strategic consulting director in the Technology and Telecom Research Group at Maritz Research.

“Last holiday season, we saw a lot of buying of tablets in the $ 200 to $ 300 price range. This year, the iPad mini and Amazon’s Kindle Fires are targeted as large gifts. They are trying to ride that wave and win as much as they can.”

The impending clash is far from decided.

Odds-on favorite Apple has lost some of its aura of invincibility, with Google’s Android and Samsung making inroads into its reign in smartphones, Microsoft’s quickening marketing blitz, and Amazon’s Kindle nipping at its heels as the No. 2 tablet in the United States market.

That competition has weighed on Apple’s share price, which is at three-month lows after it reported a second straight quarter of disappointing results, sullying its reputation for blowing away Wall Street estimates.

Google is struggling to figure out the dollars and cents of the mobile market and Microsoft is facing witheringly unimpressed reviews for its new Windows 8 platform and Surface tablet.

Meanwhile, Amazon’s outlook for the holiday season is being taken as a disappointment, and Best Buy warned late Wednesday that sales and margins are falling.

CLAWS COME OUT

Tech companies hope lackluster calendar third-quarter results mean consumers have held off from buying gadgets so they can save up for something new and shiny this Christmas — from the lowest-end Fire at $ 159 to a Surface around $ 499 or the biggest, fastest, newest iPad at $ 829.

The technology industry is grappling with a fundamental shift from deskbound computers or heavy laptops to sleek mobile devices like tablets, which are upending the traditional PC model and prompting companies like Google and Microsoft to invest deeply in hardware manufacturing.

Their entry however is raising the competitive stakes. Companies like Apple usually spend most of their time talking about how great their own products are, but with the competition more intense than ever, Apple CEO Cook spared a not-so-kind thought for Microsoft on Thursday.

“I haven’t personally played with the Surface yet, but what we’re reading about it, is that it’s a fairly compromised, confusing product,” he said, later adding “I suppose you could design a car that flies and floats, but I don’t think it would do all of those things very well.”

Cook may have been going for levity, but the Twitterati booed his joke, since after all most gadget-heads would be very content with a flying, floating car.

Microsoft CEO Steve Ballmer, for his part, was pretty impressed with the company’s handiwork, notwithstanding reviews that used words like “disappointing” and “undercooked.”

“We have a device that’s uniquely good at being a tablet and a PC (with) no compromise on either one,” Ballmer told Reuters Television ahead of the Windows 8 launch event in New York on Thursday. “Work. Play. Tablet. PC. Boom! One product.”

Google Executive Chairman Eric Schmidt, in a talk this month, took a shot at Apple, which has faced a barrage of complaints about glitches in its mapping software since dumping Google’s service from its iPhone.

“What Apple has learned is that maps are really hard. They really are hard,” he said. “Apple should have kept with our maps.”

Not to be outdone in the sniping, Amazon Chief Executive Jeff Bezos took a subtle swipe at Apple’s high prices in the Internet retailer’s quarterly results statement Thursday, saying “our approach is to work hard to charge less.”

Right below those comments, Amazon listed head-to-head comparisons between its $ 299 8.9-inch Kindle Fire HD tablet, its $ 199 7-inch Kindle Fire HD device and Apple’s iPad mini, which was unveiled on Tuesday.

Analysts were taken aback by how brazen Amazon was being in taking shots at peers.

“I have never seen them directly compare products in a results release like this, and in so much detail clearly calling out their competitors,” said RJ Hottovy, an equity analyst at Morningstar. “This shows they are taking the tablet wars very seriously.”

(Additional reporting by Bill Rigby in Seattle; Writing by Ben Berkowitz; editing by Edwin Chan and Raju Gopalakrishnan)

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Spike TV offers $10 million for proof of Bigfoot’s existence

LOS ANGELES (TheWrap.com) – Forget Donald Trump‘s $ 5 million offer for President Obama‘s college and passport records – Spike TV has a much more lucrative offer. And it might even be more humorous than Trump’s guffaw-inducing “October surprise.”

The cable network is teaming with Lloyd’s of London for a new one-hour reality show, “10 Million Dollar Bigfoot Bounty.” The title pretty much says it all – teams of explorers will go on a grand expedition for proof that Bigfoot – the mythical hairy creature said to roam the forests of America’s Pacific northwest and other areas – actually exists.

Should one of the teams accomplish the mission, a $ 10 million prize – underwritten by renowned insurers Lloyd’s of London – awaits.

It would be the largest cash prize in history, in the unlikely event that one of the teams actually comes up with evidence.

Ah, Spike TV – you really can’t buy publicity like that. And in this case, you probably won’t have to pay a dime.

The 10-episode series, which will film in various areas throughout the country, comes from Original Media (the people who brought the world “Ink Master” and “Swamp People”), with Original’s Charlie Corwin, Michael Riley and Jon Kroll (“The Amazing Race,” “Big Brother”) executive-producing.

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Landmark Medicare settlement could change lives

CHICAGO (Reuters) – Glenda Jimmo has had a challenging life. Blind since the age of 19, the 76-year-old Bristol, Vermont, resident is confined to a wheelchair due to disabling conditions that include a below-the-knee amputation stemming from her diabetes.

“But it’s been an interesting, full life,” she says. “I have four children.”

Now, she’s lent her name to a class action lawsuit. Its settlement, announced this week, is expected to transform the way that Medicare covers long-term care.

Jimmo requires regular skilled nursing services in her home for wound care and management of her condition. Medicare has not been paying for those services, because the program’s policy was to cover skilled nursing care only when patients had a demonstrated medical potential to improve. That left patients like Jimmo, who need care to maintain their current health status, to fend for themselves.

Under the settlement of the lawsuit, Jimmo v. Sebelius, the U.S. Department of Health and Human Services has agreed to relax Medicare’s requirements for coverage of skilled nursing and therapy services in institutional or home care settings.

The key criterion for coverage will be a demonstrated need for skilled care – regardless of whether there is a recovery prognosis. That means patients already enrolled in Medicare Part A (hospitalization) who need care to maintain their current condition but aren’t likely to improve will qualify for Medicare’s standard benefits.

Medicare already pays for a stay of up to 100 days in a nursing or rehabilitation home following a related hospital admission, with a $ 139 daily co-pay after 20 days of care. (Most Medigap supplemental policies will cover those co-pays.) It also covers skilled home healthcare – like physical therapy or nursing services – if a physician has certified that it is necessary.

Medicare Part A covers up to 100 home visits following a hospital stay. For patients who need care in their homes, Medicare Part B covers care without a prior hospitalization with no limits on visits and no co-payments for services, and a 20 percent co-payment for durable medical equipment.

The settlement‘s impact on patients will be wide, though its focus on skilled nursing care and home-based care means that it won’t be broad enough to allow an elderly, demented assisted-living resident to have her or his bill paid by Medicare. Those people typically rely on unskilled help with their activities of daily living, such as bathing and dressing.

Some 46 percent of Medicare beneficiaries have three or more chronic conditions, according to the Kaiser Family Foundation. About 8 percent use home health services – a figure that certainly will rise as a result of the settlement.

The financial impact on Medicare isn’t clear. Medicare’s direct costs for providing the additional coverage will rise, but the higher costs could be offset if the new preventive services reduce the need for acute care, hospitalization or nursing home care.

“With access to some basic therapies, many of these patients may well be able to avoid nursing and hospital care,” said Judith Stein, director of the Center for Medicare Advocacy (CMA) and a lawyer who represented plaintiffs in the class action. “The settlement is a victory for people who need care, and it will save money for states and the federal government who otherwise would be paying for services that shouldn’t be necessary.”

Jimmo’s care, for example, has been covered by Vermont’s Medicaid program, but some patients have had to dip into their own pockets to cover some of these services.

Court approval of the final settlement isn’t expected for several months. After that, Medicare will have a year to implement the changes and educate healthcare providers about them.

But under the terms of the settlement, more than 10,000 Medicare beneficiaries who were denied benefits for skilled services before January 18, 2011 (when the lawsuit was filed) will have their claims re-examined.

CMA urges patients who think they qualify for coverage under the settlement’s terms to start pushing for it right away by submitting their claims to Medicare. “This is the policy that the government says is now in effect, so patients should push that immediately,” says Gil Deford, CMA’s lead counsel on the case.

ADVOCATING FOR BENEFITS

If you think your care should be covered under the terms of the settlement, here are some key steps to take while you wait for the new rules:

* Educate healthcare providers. Patients shouldn’t assume that skilled nursing facilities or home healthcare providers will immediately understand the settlement’s impact. “Ask them how they plan to implement it, and make the question specific to your own needs,” said Joe Baker, president of the Medicare Rights Center, a non-profit organization that provides free Medicare counseling services.

* Be persistent. “It will take a while for this to be operationalized,” says Baker, who recommends that patients appeal any denials of claims.

* Get help. Free one-on-one help with Medicare claims is available from the State Health Insurance Assistance Program (SHIP), a network of non-profit Medicare counseling services. Use this link to find the SHIP program in your state: https://shipnpr.shiptalk.org/shipprofile.aspx.

The Medicare Rights Center also offers free counseling by phone; (1-800-333-4114).

For Jimmo and other Medicare beneficiaries affected by the settlement, the direct impact will be better care, according to Michael Benvenuto, project director of the Medicare Advocacy Project at Vermont Legal Aid, who served as co-counsel in the lawsuit.

“When healthcare providers don’t think Medicare will pay their bills, they’re less likely to provide the full care that patients need,” he says. “For Glenda, this settlement will insure that she gets adequate maintenance care in her home for as long as she can stay there.”

(The writer is a Reuters columnist. The opinions expressed are his own. For more from Mark Miller, see link.reuters.com/qyk97s)

(Follow us @ReutersMoney or at http://www.reuters.com/finance/personal-finance. Editing by Linda Stern and Steve Orlofsky)

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Insight – BP oil spill settlement before election seen unlikely

HOUSTON (Reuters) – For a president locked in a tough re-election fight, it may look like political gold: a settlement between the U.S. Justice Department and BP Plc over the Gulf of Mexico oil spill that could send billions of dollars to Florida, one of a handful of politically divided states that could decide the November 6 contest.

Yet a last-minute settlement with London-based oil giant BP is unlikely before the election, experts say. Neither the Justice Department or President Barack Obama, whose race with challenger Mitt Romney is deadlocked in most polls, want to appear to politicize a deal. And Obama appears to face more potential risks than benefits from any settlement at this point.

BP has been locked in a year-long legal battle with the U.S. government and Gulf Coast states to settle billions of dollars in civil and potential criminal liability from the April 20, 2010, explosion aboard the Deepwater Horizon rig that killed 11 workers and soiled the shorelines of four Gulf Coast states in the worst offshore spill in U.S. history.

BP and the Justice Department have had protracted closed-door negotiations on a settlement to avoid a potentially years-long court battle. But experts say that any settlement with BP would be complex enough to allow Obama’s critics to attack him. And as they say in Washington: If you’re explaining, you’re losing.

“No matter what the President does, he can’t win on this one because it’s not going to be good enough for someone,” said James Lucier, managing director at Capital Alpha Partners LLC in Washington.

“A TERRIBLE IDEA”

To date, the spill’s profile in the 2012 presidential campaign has been slim. And inking a settlement with BP at this point could open Obama up to attacks as someone who buckles to Big Oil. A pre-election settlement of the Justice Department’s biggest ongoing case could also be seen as playing politics with the law, said David Uhlmann, a University of Michigan law professor and former head of the Justice Department’s environmental crimes section.

“It would be a terrible idea for the Justice Department to announce a settlement over the last two weeks before the election,” Uhlmann said, predicting instead a deal before the civil trial next year.

U.S. District Judge Carl Barbier in New Orleans, presiding over a sprawling three-part non-jury hearing to decide BP’s liability for the spill, said on Friday the trial will begin on February 25, 2013. The trial, which had been delayed by nearly a year already due to a pending $ 7.8 billion BP settlement with private plaintiffs, had been set to start on January 14. The delay leaves more time for a pre-trial deal.

In big settlements, the Justice Department has striven to avoid the taint of politics, and the BP case is no different, Uhlmann said.

But politics has run through the BP spill from the day it happened. Gulf Coast states stand to reap billions of dollars in funds from a potential BP settlement, thanks to a law passed by Congress that would route 80 percent of funds to the states from violations of the Clean Water Act.

That amount could approach $ 17 billion if BP is found grossly negligent in the disaster, experts say. The well spewed 4.9 million barrels of oil into the Gulf of Mexico over a period of 87 days. The torrent fouled shorelines from Texas to Alabama and eclipsed in severity the 1989 Exxon Valdez spill in Alaska.

FLORIDA’S ELECTORAL VOTES

Florida and its potential 29 electoral votes are one of the key prizes seen as tipping the November 6 presidential election. So the temptation may be great for Obama’s advisers to gain favour with voters there by agreeing to a jumbo settlement before the election, said Kevin Book, managing director at ClearView Energy Partners LLC in Washington.

“We know the Administration wants one, and the best political timing for a final deal is probably right about now,” Book said.

But any political good will from the deal could be over-rated. Of the Gulf Coast states affected by the spill, Florida is the only one that appears to be within Obama’s reach, with polls in others leaning heavily toward Romney.

A pre-election settlement could also expose Obama to criticism for selling out Gulf Coast politicians and environmental groups. Rumours have been flying.

Gulf Coast lawmakers recently and loudly protested press reports that BP and the Justice Department have discussed shifting settlement payments based on the Clean Water Act – with their promised billions of dollars to Gulf state coffers – instead to payments based on natural resource statutes, which would not only go to the U.S. Treasury but also be tax-deductible for BP.

“BP, who is responsible for this, would also get a tax deduction that could write off millions,” Representative Jo Bonner, an Alabama Republican, told Reuters. “The audacity of giving BP a tax write-off!”

Environmentalists are also worried about press reports that peg BP’s settlement offer is as low as $ 18 billion — far short of penalties demanded by U.S. environmental and criminal statutes.

“We believe a full throated debate over the settlement amount needs to happen before any deal is done,” said John Kostyack, a vice president at the National Wildlife Federation, who estimates BP’s potential liability at more than $ 50 billion.

Given the prolonged and secretive negotiations, state officials have also warned the Obama administration not to rush headlong into a deal with BP.

“Personally I believe the Administration does have a desire to make an announcement, which has the potential to cloud their judgment,” said Garret Graves, senior environmental advisor to Louisiana Gov. Bobby Jindal.

After paying nearly $ 4 a gallon for gasoline over the summer, potential voters would also likely have no patience seeing Obama let a big oil company off the hook with a spill settlement that stops short of maximum potential penalties.

“A settlement that is not tough enough makes him look like he’s letting BP off the hook,” Lucier said. “It’s much better to do this outside of the context of a presidential election.”

(Additional reporting by Kathy Finn in New Orleans and Verna Gates in Birmingham, Alabama; Editing by Peter Bohan and Tim Dobbyn)

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Amnesty Int: Ivory Coast torturing detainees

ABIDJAN, Ivory Coast (AP) — Ivory Coast security officials are torturing dozens of detainees by administering electric shocks and other forms of abuse, Amnesty International alleged Friday.

The victims include people charged with endangering state security in the wake of a recent spate of attacks targeting military installations. Since early August, unknown gunmen have carried out roughly 10 attacks at checkpoints, military bases and other installations throughout the country, including in the commercial capital of Abidjan.

United Nations officials have said that more than 200 people have been detained on suspicion of involvement in the attacks, and that torture has been documented at multiple detention facilities.

Gaetan Mootoo, West Africa researcher for Amnesty, said an investigation team received reports of a range of abuses during a recent month-long visit.

“We were able to meet dozens of detainees who told us how they have been tortured by electricity or had molten plastic poured on their bodies,” Mootoo said. “Two of them have been sexually abused. Some have been held for many months denied contact with their families and access to lawyers.”

Army spokesman Cherif Moussa denied the torture allegations Friday. “Our camps are not concentration camps,” he said.

However, he acknowledged the possibility that individual soldiers may occasionally “go beyond what they are allowed to do” when dealing with inmates.

He added that the government tried to ensure that inmates’ rights were respected. “We want to prove that we are not abusing people’s rights,” he said. “We’re working for the state’s security. We’re working for the people’s security.”

Earlier this month, the Associated Press interviewed former detainees at a military camp in the southwestern port town of San Pedro who described widespread beatings as well as the use of electric shocks. A guard at the camp corroborated most of the claims, though camp commanders denied them.

In its statement Friday, Amnesty described how one detainee, a police officer, had died as a result of the torture he endured at the San Pedro camp.

“Serge Herve Kribie was arrested in San Pedro on August 21 by the national army and interrogated about recent attacks,” Amnesty said. “He was stripped naked, tied to a pole, had water poured on his body, and was then subjected to electric shocks. He died a few hours later.”

Amnesty said that some detainees were only released after ransoms were paid. One detainee told the rights group: “My parents first paid 50,000 CFA (a little under US $ 100) and then after my release, my jailers went at my house and demanded a higher sum. I told them that I couldn’t pay such an amount and they agreed to receive 20,000 CFA more (about US$ 40).”

The government has blamed the attacks on allies of former President Laurent Gbagbo, who was arrested in April 2011. Gbagbo’s refusal to cede office after losing the November 2010 election to now-President Alassane Ouattara sparked six months of violence in which at least 3,000 were killed.

Amnesty researchers also met with some of the more than 100 Gbagbo allies – including his wife, Simone – who are being detained on charges stemming from the post-election violence.

“Some of them told us that despite the fact that they have been held since April 2011, they only saw an investigating judge twice for less than a few hours,” Mootoo said.

Despite widespread evidence that forces loyal to Ouattara also committed atrocities during the violence, none have been arrested or credibly investigated, sparking allegations of victor’s justice.

Also Friday, in Amsterdam, judges at the International Criminal Court rejected a request for release by former president Gbagbo, who is being detained on suspicion of crimes against humanity.

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Tax gains lift Merck, but sales disappoint

(Reuters) – Merck & Co Inc reported a higher-than-expected third-quarter profit, as a favorable tax rate and lower merger costs helped offset plunging sales of its former flagship product, Singulair, an asthma drug that began facing cheaper generics in August.

But overall company sales came in slightly below Wall Street expectations, as Singulair’s decline outpaced already grim predictions for it.

Merck, the No. 2 U.S. drugmaker, said on Friday it earned $ 1.73 billion, or 56 cents per share, compared with $ 1.69 billion, or 55 cents per share, a year earlier.

Excluding special items, Merck earned 95 cents per share. Analysts, on average, expected 92 cents.

The better-than-expected profit was largely due to the favorable impact of an overseas tax settlement as well as realization of foreign tax benefits, Merck said.

Jefferies & Co analyst Jeffrey Holford had predicted a tax rate of 26 percent, but it came in at 20.3 percent. He called the profit beat “low quality” because it was mostly due to the one-time tax gains.

“Gross margins were also weaker than expected,” Holford said, and noted that Singulair sales were about $ 75 million below what he had expected.

Merck spokesman Ron Rogers said the tax gains are not expected to carry over into the fourth quarter and that the drugmaker continues to expect a full-year tax rate of about 25 percent.

Global company revenue fell 4 percent to $ 11.49 billion in the quarter, below Wall Street expectations of $ 11.57 billion.

Merck tightened its full-year profit forecast to between $ 3.78 and $ 3.82 per share, from its earlier view of $ 3.75 to $ 3.85 per share.

Sales of Singulair tumbled 55 percent to $ 602 million. But a number of its newer products – including treatments for diabetes, hepatitis C and HIV – generated double-digit sales gains that helped cushion Singulair’s free fall.

And revenue from Gardasil, the company’s vaccine against cervical cancer, jumped 31 percent to $ 581 million.

But Merck will need to launch new drugs to withstand looming generic competition for other important medicines. Its Maxalt migraine drug, with $ 600 million in annual sales, goes generic in December, followed next year by its Temodar brain cancer medicine, which has near-blockbuster sales of $ 900 million.

Over the next 18 months, the company aims to seek six drug approvals, including marketing applications for new types of therapies for insomnia and osteoporosis.

(Reporting by Ransdell Pierson; Editing by Lisa Von Ahn, Jeffrey Benkoe and Steve Orlofsky)

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