Red Hat updates enterprise Linux platform

San Francisco - Red Hat is announcing availability Wednesday of Red Hat Enterprise Linux 5.2, with enhancements in virtualization, clustering, and hardware support.

Version 5.2 was described as a minor update by Red Hat's Daniel Riek, product marketing manager for Red Hat Enterprise Linux.

"We do these twice-a-year updates," Riek said.

With the release, virtualization of very large systems with as many as 64 CPUs and 512GB of memory is possible. Support for NUMA architectures is featured as well as improvements in security, performance, and management, Red Hat said.

CPU frequency scaling is offered for virtualized environments and for reduction of?? power consumption. Also, enhanced capabilities are featured for such hardware architectures as Intel X/86/x86-64, Itanium, and IBM Power and System z. These capabilities provide for improved performance, power usage, scaling, and manageability, Red Hat said.

Support for Intel's Dynamic Acceleration Technology permits power saving by "quiescing" idle CPU cores, Red Hat said. With quiescing, a computer is put into an inactive state to save power but can be reactivated quickly because it is still available and has not been completely shut down.

Also, performance is improved by "overclocking" of busy cores within safe thermal levels. Other hardware enhancements include device driver updates and certification of IBM Cell Blade systems.

A smarter scripting facility boosts clustering in version 5.2, said Riek. "The ability to talk to the applications that are being clustered has been improved," he said.

Red Hat Enterprise Linux 5.2 Desktop, meanwhile, includes enhanced support for laptop suspend/hibernate and resume, updated graphics drivers, and an update of desktop applications including OpenOffice 2.3 and Firefox v3.

Red Hat Linux 5.2 is available Wednesday via a Red Hat Network subscription.

U.S. military cites growing China space, cyber threat

WASHINGTON (Reuters) - The U.S. military painted China on Tuesday as posing a growing threat to the United States and others in space and cyberspace.

China is "aggressively" honing its ability to shoot down satellites along with other space and counter-space capabilities, said Army Brig. Gen. Jeffrey Horne of the U.S. Strategic Command.

Such know-how has big implications for Beijing's potential to curb access in the Taiwan Straits "and well beyond," he told the U.S.-China Economic and Security Review Commission, a congressionally created advisory group.

Horne, deputy head of the Strategic Command's joint component for space, said recent Chinese People's Liberation Army writings suggested China might target an enemy's spy satellites along with navigation and early-warning spacecraft "to blind and deafen."

China's unannounced destruction of one of its own defunct weather satellites in January 2007 showed the PLA's ability to attack satellites operating in low-Earth orbit, he said.

The United States and the old Soviet Union demonstrated such anti-satellite capabilities of their own, initially in the 1980s. The Chinese embassy did not return a call seeking comment.

Horne did not spell out the implications for possible U.S. responses to any Chinese attack on Taiwan but said the United States must "proactively protect our space capabilities."

Among arms makers eyeing this market are Lockheed Martin Corp, Boeing Co and Northrop Grumman Corp, the Pentagon's top three contractors by sales.

Beijing regards Taiwan, a self-ruled island of 23 million people, as a breakaway province to be brought back to the fold, by force if necessary.

Another Strategic Command officer described cyber attacks as perhaps the most significant 21st century threat and said China was boosting its capability to carry them out.

Col. Gary McAlum of the command's Joint Task Force for Global Network Operations said several Chinese advances had surprised U.S. defense and intelligence officials.

He cited a new report by Kevin Coleman of the Technolytics Institute, a McMurray, Pennsylvania, consultancy, as saying China aims to achieve global "electronic dominance" by 2050, including the ability to disrupt information infrastructures.

"I think we could discuss that date offline," McAlum told the commissioners, seeming to imply he thought China might get there sooner than mid-century. Coleman is a former chief strategist of the Netscape division of America Online Inc.

One U.S. expert countered, in a telephone interview, that it would be odd to expect China to sit still if it perceived a threat to its strategic weapons and communications in any future conflict.

"It is unreasonable to think that Beijing will permanently accept vulnerability," said David Lampton of the Johns Hopkins School of Advanced International Studies and author of the new book "The Three Faces of Chinese Power: Might, Money, and Minds."

In a third presentation to the commissioners, a State Department official described China's nonproliferation record as mixed.

Chinese companies have kept on shipping weapons to Iran, despite evidence Tehran is supplying insurgents in Iraq and Islamist groups, said Patricia McNerney, principal deputy assistant secretary for international security and nonproliferation.

But she praised two big Chinese companies sanctioned repeatedly in the past by the United States for alleged violations of international arms-export pacts.

McNerney said the United States had conferred with the two -- China North Industries Corp, or NORINCO, and China Great Wall Industries Co. Their response has been "very encouraging," she said.

"Both companies have adopted comprehensive internal compliance programs and are implementing policies to ensure that inadvertent transactions do not occur," she testified.

NORINCO, for example, had committed to not selling arms to North Korea and Iran and claims to have turned down more than $100 million in potential contracts with such governments, McNerney added.

Hungarian student hurls eggs at Microsoft CEO Ballmer

SEATTLE - Microsoft Corp. Chief Executive Officer Steve Ballmer scrambled for cover from an egg-hurling protester during a talk at a Hungarian university Monday.

Unlike his boss, Chairman Bill Gates, who was hit in the face with a cream pie a decade ago, Ballmer managed to dodge the eggs.

Ballmer was delivering a speech entitled "You can change the world" to a group of business and technology students at Budapest's Corvinus University when the incident occurred, according to Microsoft spokesman Lou Gellos.

A young man in glasses stood up, pointed at Ballmer and loudly demanded that Microsoft return money it had stolen from the Hungarian people. Then he calmly threw three eggs at Ballmer.

A video of the outburst in a large classroom was widely distributed over the Internet Tuesday. In the footage, Ballmer crouched on the floor behind a large podium as the third egg smashed against the white board behind him.

The man, wearing a white shirt that read "Microsoft corruption," was escorted out of the room at the behest of the dean of the university.

Gellos said Microsoft does not know who the heckler was. The video shows him leaving peacefully; the crowd even laughs at one point.

Ballmer, who initially looked shaken, appeared to recover quickly. He smiled, shrugged and drew laughter from the audience with a quip: "It was a friendly disruption."

Gellos declined to comment on what, if any, security measures were in place that day.

Ballmer was in Budapest to announce Microsoft's leading role and investment a technology skills training program in Hungary, in partnership with the government and other companies. Later in the day, he also accepted an honorary fellowship from the university, according to Gellos.

Review: Netflix delivers Internet movies to TV

NEW YORK - It's the big horse race in the gadget market this year: Who's going to win consumers' hearts with a box that brings Internet movie downloads to the TV set? Now, we have a tiny box that deserves to be a winner.

Roku Inc., a small maker of Internet-connected media devices, this week introduced a black box that grabs movies and TV shows from Netflix, the DVD rental-by-mail pioneer.

You attach the Netflix Player to your TV, and connect it to your home broadband connection over Wi-Fi or a cable. Pick a movie using the included remote, wait a minute for the download to start, and then watch on your TV.

There are couple of other boxes on the market that do the same thing, including the Apple TV. The Roku Netflix Player, which is half the size of a Nintendo Wii, isn't really better than any of them, but it has one tremendously attractive feature: its price. In a shaky economy, that's the kind of feature that seals the deal.

It costs just $99.99. Even more importantly, it's cheap to use. If you already subscribe to Netflix's DVD rentals, you pay nothing extra to watch as much Internet video as you want, as long as your monthly plan is $8.99 or more.

This makes the Roku-Netflix combination a far better deal than its competitors. Apple Inc.'s device costs $229 and lets you rent movies from iTunes for $2.99 to $4.99 each. Vudu Inc. sells an eponymous box for $295, with similar rental prices. Various TiVo Inc. digital video recorders will let you download movies from Amazon.com. The catch with all of these is that you have just 24 hours to watch a rented movie; if you need more time, you have to pay the rental fee again.

If you're the kind of person who sits down once a week to a watch a movie straight through, that will cost you about $15 a month for four movies with either box. But if you watch those movies in half-hour segments four days a week, you're paying more like $60 a month.

Apple, Vudu and Amazon.com aren't directly to blame for their rental terms, which are set by movie studios. Vudu has managed to double the rental period on independent movies.

Netflix, on the other hand, manages to skirt these onerous rental terms entirely by licensing the movies from the studios not for downloading, but for streaming.

The downside to this model is that Netflix has fewer "big" movies available, and they take longer to show up after they leave theaters. Some of its 10,000 instant-view movies are exercises in obscurity, like the Italian horror movie "Planet of the Vampires." But there are enough good flicks to give you your money's worth and more, like "Letters from Iwo Jima," "La Vie en Rose" and "Pan's Labyrinth." TV shows include "Dexter" and "Heroes."

You pick the movies on the Web site, using your computer, and place them in a "queue." Back at the TV, you pick among the movies in the queue with the remote. You can't access the entire instant-view catalog through your remote — you have to preselect on the computer. I didn't find this to be a problem.

So how do the movies look? Good enough, in most cases. Everything is in standard definition, but the quality varies considerably from movie to movie, and with the speed of your Internet connection. At a download speed of 2.2 megabits per second, the maximum quality delivered by Netflix, "Heroes" looks as good as or better than a DVD. "Blade Runner" looks terrible at any speed, apparently because of low-quality source material.

Most of the content is watchable, but if your broadband line is medium-range DSL at 1.5 mpbs, the quality will be substantially less than if you have 3 mbps or more.

I also found that if I connected the player to the Internet using Wi-Fi, the speed of the download varied between 1 mbps and 2.2 mbps, with an attendant change in picture quality. When I connected the box to my Internet router with a cable, everything came down at 2.2 mbps.

There's no surround sound, but if Netflix were to add that to its movies, the box would play it, according to Anthony Wood, chief executive of Roku. Wood also said the player is capable of high-definition video, if Netflix would provide it. HD would probably require a download speed of at least 6 mbps, and it might be tough to get it to work over Wi-Fi.

The Apple TV and Vudu are less dependent on the speed of your Internet connection, because they contain hard drives that can store a movie for later viewing if the connection is slow. Each also has about 100 HD movies available.

The lack of a hard drive in the Netflix Player is part of the reason it's so cheap, but it's also behind its one really annoying feature: reversing and fast-forwarding takes much too long. Since it takes up to a minute for the box to "find its place" in a movie by downloading the content from Netflix, skipping back 10 seconds to listen again to a missed line can take much longer.

For me, the low price was an effective dose of Gold Bond powder on this irritation. Starting a movie takes up to a minute? Yes, but hey, it's cheap! The picture quality varies a great deal, and there's no HD? Yes, but you can't expect the world for $8.99 a month.

Roku's box is just the first of what Netflix hopes is a whole family of products that get movies from its Web site. LG Electronics is planning to include the streaming capability in a Blu-ray DVD player later this year, and two other unnamed manufacturers are bringing out set-top boxes.

But I don't see a big reason to wait for them. Even if the Roku player sacrifices a few things to limbo under the $100 price level, it's a no-brainer for the 8 million-plus Netflix customers out there. If you're not one, this is an added reason to become one.

Time Warner to reap $9.25 billion windfall in cable spinoff

NEW YORK - Time Warner Inc. said Wednesday it would formally split off its cable TV business, giving the media conglomerate a $9.25 billion windfall and allowing it to focus on cable network, entertainment and publishing operations.

The separation with Time Warner Cable Inc. gets Time Warner out of the media distribution business altogether, something investors had been clamoring for. The company announced its decision to split up last month and said Wednesday that the boards of the two companies had agreed to financial terms.

Time Warner Cable is the second-largest cable provider in the country after Comcast Corp. with about 13.3 million video subscribers. It has been a public company for more than a year, but Time Warner had held on to an 84 percent stake.

Jeff Bewkes, Time Warner's CEO, said in a statement that separating Time Warner Cable into its own business will give both companies "greater strategic, financial and operational flexibility" in order to compete.

Cable operators tend to have much different capital requirements than entertainment and other kinds of media companies, with significant demands for investing in infrastructure and new technologies as well as a reliable base of cash flows needed to service the debt needed for those investments.

Having its own stock will also allow Time Warner Cable to have a currency to use in potential acquisitions for other cable providers.

Time Warner said it would distribute the proceeds of the $9.25 billion dividend from Time Warner Cable to its shareholders in a yet-to-be-determined "tax-efficient manner." The split, which is expected to close in the fourth quarter, must receive a favorable tax ruling from the IRS as well as other regulatory approvals and local franchise clearances.

Investors cheered the terms of the spinoff and dividend, which Time Warner Cable with fund with its existing credit facility and a two-year bridge loan from a syndicate of banks.

Time Warner Cable's shares rose $1.18, or 3.9 percent, to $31.40 Wednesday morning while Time Warner's shares rose 19 cents, or 1.1 percent, to $16.34.

Once Time Warner Cable is split off, Time Warner will be a largely entertainment-focused company centered on the Warner Bros. movie and TV production studio, the Time Inc. magazine publishing group and a large portfolio of cable networks that includes HBO, CNN, TBS and TNT.

The next strategic imperative for Time Warner and Bewkes, who became CEO at the beginning of the year, is to figure out what to do with its struggling AOL division, which is trying to remake itself as an online advertising company as revenues from its legacy dial-up Internet access service rapidly dwindle.

Time Warner is in the process of separating AOL's advertising operations from the access service and has been considering various possibilities for a transaction or combination with another major Internet company such as Yahoo Inc., Microsoft Corp. or News Corp.'s MySpace.

Those talks have been complicated by Microsoft's continuing interest in some kind of transaction with Yahoo, an effort by the software maker to delve further into the growing online advertising market and compete with market leader Google Inc.

Investors have been adamant that Time Warner further simplify its sprawling capital structure and take other aggressive action to boost its lagging share price, which has largely traded below $20 for the past five years.

The splitoff calls for Time Warner Cable paying a total dividend of $10.27 per share or $10.9 billion to shareholders, of which parent company Time Warner will receive $9.25 billion.

Time Warner also will convert its supervoting Class B shares into common stock on a 1-for-1 basis, creating a single class of stock.

IT companies now largest sector in S&P 500

IT was last the top dog of the index in early 2002 as tech bubble was deflating, according to Howard Silverblatt, senior index analyst at Standard & Poor's.

At Tuesday's close, IT represented 16.26 percent of the S&P 500, compared with 16.19 percent for financials, Silverblatt wrote in a report. It expanded its lead on Wednesday.

At the peak of the boom in March 2000, the IT sector made up 34.51 percent of the index, Silverblatt said.

This time, the IT sector is not the biggest because of giddy growth, but because it's been hit less hard than the financial sector by the credit crunch and economic weakness.

Financial stocks have retreated 29.11 percent since their peak on Oct. 9 last year, according to Silverblatt's calculation, while IT companies have lost 8.74 percent.

"Information Technology stocks didn't go up, the leaders went down," Silverblatt wrote.

The trend continued Wednesday with the financial sector losing 2.6 percent and IT retreating 1.9 percent.

Microsoft lures search traffic with cash rebates

REDMOND, Wash. - Microsoft Corp. is offering cash rebates when people make purchases after using its search engine as the software maker begins to reveal how it plans to take on Google Inc. following the failure of its $47.5 billion bid for Yahoo.

Analysts and investors have been eagerly awaiting details about "Plan C" after Microsoft acknowledged that its Plan A of going solo was troubled but also withdrew its Plan B — acquiring Yahoo — because Yahoo executives sought more money.

Under the cash program revealed Wednesday, Web shoppers who sign up for an account and buy items found using Microsoft's Live Search cashback site will receive a percentage of the purchase price deposited into their account.

When the total reaches $5, the shoppers can redeem their "cold, hard cash" via eBay Inc.'s PayPal. Microsoft said the rebates are funded with a portion of the money it collects from advertisers.

So far, more than 700 merchants, including Home Depot and Zappos.com, have listed products on the site.

Microsoft Chairman Bill Gates said in a speech that he believes the cashback program will boost the number of people using Live Search for shopping, at least. More grandly, he predicted it will change the economics of the search advertising market as advertisers shift from paying for click on links to paying for concrete actions, like completing a purchase.

The online advertising market overall has begun to move in that direction with advertisers under increased pressure to deliver results from their spending. Historically, search ads that have made companies like Google Inc. successful are typically sold by the click, which itself was seen as revolutionary compared with the traditional method of paying for ads by the number of viewers.

"It's exciting. I think years from now you may look back and say, 'Wow, search started to get a fair bit more competitive,' and you can look back to that announcement," Gates said.

"By giving money directly back to the consumer, Microsoft hopes to change the balance of power," wrote IDC research analysts Caroline Dangson and Susan Feldman. They predicted that if Microsoft's effort is successful, advertisers will sink the bulk of their advertising into such rebate programs.

This isn't the first time Microsoft has resorted to buying search traffic. The software maker has tried offering large companies software and services credits for every employee who used Microsoft's search engine at work.

Microsoft also developed a collection of free games last year that triggered a Web search with every play. Players could rack up points and exchange them for prizes, including software, Xbox consoles and Zune media players.

The tactic — more common among fledgling or niche search engines trying to make a splash — may not make much of a difference, if the past efforts are any indication. The corporate bounty program remains in pilot phase and the games only temporarily boosted its search share.

Danny Sullivan, editor of the search news site SearchEngineLand.com, said in a recent interview that he recommended Microsoft pay people to use Live Search — as an April Fool's joke. Microsoft, however, is under very serious pressure to come up with a way to boost search market share.

In the absence of a coherent Plan C, Microsoft is said to have revived talks with Yahoo Inc. about a more limited search and advertising deal, but executives barely mentioned the Y-word during the two-day annual conference for advertisers and ad agencies at its headquarters in Redmond.

Gates' closing keynote left the impression that improving its own search engine over the coming years is, in fact, its Plan C. Live Search cashback is a "good illustration of what we'll be doing," Gates said. "We're about having the best search, the best results ... but also, some of these innovations in the business model will help excite that and drive that."

Also on Wednesday, Kevin Johnson, president of Microsoft's platforms and services division, said Microsoft does not currently have its eye on buying any single company, and that it plans to build its digital advertising business in-house, helped by past acquisitions.

The Web site describing the Live Search cashback program is up and details were reported Wednesday in the Seattle Post-Intelligencer and The Wall Street Journal.

Facebook preparing for redesign to clear clutter

PALO ALTO, Calif. - Having nearly tripled its audience and added about 20,000 new applications over the past year, Facebook Inc.'s popular online hangout is about to undergo a housecleaning.

Visitors who can't stand the clutter that's been piling up will be glad to see that the site's new look sweeps disparate bits of information into categories marked by tabs at the top of each user's customized home page.

Basic personal background and interests will be filed under an "info" tab, for instance, while news about users' buddies' latest activities will land under a "feed" tab, pictures will be corralled in a "photo" section and applications will be easily located under a "programs" tab. That content is now scattered, creating a confusing mishmash that has frustrated some Facebook users.

The facelift, in the works since January, is to debut in June.

Besides tidying the site, the overhaul should give users more control over their profiles, Facebook managers said Wednesday as they previewed the redesign at the startup's Palo Alto headquarters. Users will be able to magnify information they want to emphasize and downplay other features, for example.

Even so, many users are likely to protest, said Mark Slee, the Facebook product manager overseeing the facelift.

"Change is difficult for our users, even positive changes," Slee said. "But we are pretty confident that we can walk everyone through this so they will be engaged with the changes and enjoy them."

Facebook has had to quell two user rebellions since Mark Zuckerberg started the site a little over four years ago while he was still an undergraduate at Harvard University.

In 2006, users railed against a feature called "news feed" as too intrusive because it shared too much information about their activities. The backlash caused Zuckerberg to apologize and tweak the application to give users more control over how the information was shared. The news feed is now a Facebook staple.

Zuckerberg, 24, apologized again late last year after a tracking tool called "Beacon" caught users off guard by broadcasting information about their shopping habits and personal preferences expressed by their activity at other Web sites. Facebook decided to allow users to turn off Beacon, diminishing its reach and possible value to advertisers.

Despite those hiccups, Facebook has emerged as Silicon Valley's hottest startup since Internet search leader Google Inc., which recently has been losing some of its prized employees to Facebook. Ben Ling, a former top engineer at Google, is part of the team working on Facebook's overhaul.

Microsoft Corp. put its stamp of approval on Facebook late last year by paying $240 million for a 1.6 percent stake in the startup — a deal that implied a $15 billion value for Facebook.

Since dropping a $47.5 billion offer to buy Yahoo Inc., Microsoft reportedly has been mulling a bid for Facebook, although Zuckerberg has repeatedly indicated he wants to preserve the privately held company's independence.

Facebook turned into a potential gold mine as it extended beyond its initial goal of allowing college students swap information about each other. The site now has 70 million users worldwide, up from about 24 million a year ago.

Zuckerberg's decision to open Facebook to outside applications last year has played a key role in Facebook's rapid growth. Since then, developers have contributed 20,000 applications that make it easier to distribute photos, share music and play games.

But all those programs were starting to make Facebook look jumbled — a problem that also has plagued the Internet's largest social network, News Corp.'s Myspace.com.

Facebook is trying to address the situation without alienating the outside developers who helped fuel the site's success. That's taken on added importance since Google launched a network last year to help developers create applications to run on multiple Web sites.

After spending months addressing their concerns, Facebook plans to open a "sandbox" where programmers can experiment with how things will work at the redesigned Facebook.

"There may be some short-term pain, but I think there will be more long-term gains," predicted Ling, who is Facebook's director of platform product marketing.

Plan to trim cell phone cancellation fees draws criticism

WASHINGTON - A wireless industry proposal under consideration by the government that would make it easier for cell phone customers to break up with their service providers was met with withering criticism by consumer advocates on Wednesday.

The plan would give consumers a break on fees charged when they quit their service early, but would also let cell phone companies off the hook in state courts where they are being sued for hundreds of millions of dollars by angry customers.

Cell phone companies routinely charge customers $175 or more for quitting their service early. Under a proposal being reviewed by the Federal Communications Commission, the wireless industry would give consumers the opportunity to cancel service without any penalty for up to 30 days after they sign a cell phone contract or until 10 days after they receive their first bill.

The proposal would require companies to reduce fees month by month over the course of a contract based on how long customers have left, according to people familiar with the offer who spoke on condition of anonymity because the FCC has not approved it.

It would not abolish cancellation fees entirely and would not refund such fees to anyone who already paid them.

If approved by the FCC, the proposal would take away the authority of states to regulate the charges, known as early termination fees.

"If this plan goes through, the nation's largest cell phone carriers get a get-out-of-court-free card," said Chris Murray, senior counsel for Consumers Union, the nonprofit publisher of Consumer Reports magazine. "We have long opposed limiting consumers' rights to sue, and that seems to be what we're doing here."

Another expert agreed.

"The consumer protections are an inadequate fig leaf to justify federal pre-emption," said Patrick Pearlman, a lawyer with the consumer advocate division of West Virginia's Public Service Commission. "The FCC is not an adequate policeman."

The nation's No. 2 wireless company, Verizon Wireless, offered the proposal to the FCC for its review after high-level meetings with senior FCC officials. It did so in consultation with other leading wireless companies, whose executives indicated they would not oppose its provisions, people familiar with the offer told The Associated Press.

The FCC has declined to comment on the proposal.

Wireless companies said the cancellation fees are necessary to recover the cost of cell phones, which they subsidize under long-term service contracts, and to defray their costs for signing up new customers. Consumer groups said the fees are unreasonable and intended to discourage customers from switching among providers.

The expensive fees have led to class-action lawsuits in several states and legislative proposals on Capitol Hill and in state legislatures around the country.

The industry's proposal would link cancellation fees to actual costs incurred by a wireless company, and it would require companies to prorate any fees over the course of the contract. Verizon Wireless currently prorates fees down to $60. AT&T Inc. will begin prorating fees Sunday.

The proposal also would prohibit a wireless company from imposing a termination fee on customers who change terms of their contract or end one contract period and begin another.

Verizon Wireless is a joint venture between Verizon Communications Inc. and the Vodafone Group PLC of Britain. Verizon Wireless, with about 66 million subscribers, is second to AT&T Inc., with 70 million customers.

The wireless industry is increasingly worried about a series of long-running, class-action lawsuits in state courts. One lawsuit against Sprint Nextel is under way in California, and plaintiffs in a New York case in arbitration are seeking $1 billion in refunds.

Federal law prohibits states from regulating wireless rates but gives them authority over some terms and conditions under wireless contracts. The industry's Washington lobbying group, CTIA, previously asked the FCC to consider cancellation fees to be rates, which would preclude state governments and courts from any jurisdiction over them.

In September, Sens. Amy Klobuchar, D-Minn., and Jay Rockefeller, D-W.Va., introduced the Cell Phone Consumer Empowerment Act, which would require prorated fees and a 30-day window for customers to exit a contract.

Klobuchar said in a statement Wednesday that carriers should not be given a "multimillion-dollar handout" by the FCC for making the "practical and reasonable change" of prorating early termination fees.

FCC Chairman Kevin Martin has been mum on the negotiations and there has been no word on how far the proposal has progressed or when it might be made public by the agency.

American Airlines to slash jobs, charge for bags

FORT WORTH, Texas (Reuters) - American Airlines' shares fell 24 percent on Wednesday as it said it will cut thousands of jobs, retire old aircraft and charge passengers to check bags in a move to counter record fuel prices and a weak U.S. economy.

The world's largest airline, owned by AMR Corp (AMR.N), said it would reduce domestic capacity by 11 percent to 12 percent in the fourth quarter, its biggest service cutback since the attacks of September 11, 2001.

"The airline industry as it is constituted today was not built to withstand oil prices at $125 a barrel and certainly not when record fuel expenses are coupled with a weak U.S. economy," AMR Chief Executive Gerard Arpey said in a statement.

"The industry will not and cannot continue in its current state," Arpey told shareholders at the company's annual meeting in Fort Worth, Texas on Wednesday.

As all the major U.S. airline stocks slumped amid a brokerage downgrade for the sector, AMR shares fell $1.98 to close at $6.22.

U.S. crude oil futures soared to a record above $133 on Wednesday, more than twice the price a year ago.

American Airlines plans to charge $15 for many passengers' first checked bag starting in mid-June, an unprecedented move by a major U.S. airline as it tries to claw back more of its extra fuel costs.

Rivals are considering following suit.

A spokeswoman for UAL Corp's (UAUA.O) United Airlines said it was "seriously studying" American's $15 charge and a spokeswoman for Delta Air Lines Inc (DAL.N) said it was looking at every area of its business, but "at this time" has no plans to charge for a first checked bag.

RETIRING OLD PLANES

American said it would take at least 75 mainline and regional aircraft out of its aging fleet, including some of its old MD-80s, which were grounded last month because of maintenance issues.

The airline said it would cut domestic capacity, as measured by available seat miles, by 11 percent to 12 percent in the fourth quarter.

Only last month, it had projected a 4.6 percent drop in capacity from the fourth quarter of 2007.

Available seat miles is the standard way of gauging the scale of a carrier's operations, reflecting the number of seats available for sale and the length of the flights.

The capacity cut will mean work force reductions at American and its American Eagle regional unit.

Asked if the job cuts would run into the thousands, Arpey said they would and added that every work group will be impacted.

"We are not doing our best by employees if one of our considerations is not being competitive," Arpey said.

More than 100 employees protested outside the annual meeting, calling for management changes.

"Our message is that we want new leadership," said Laura Glading, president of the Association of Professional Flight Attendants.

American's $15 checked bag fee will not apply to international flights, some of its AAdvantage reward program members, or people with full-fare tickets.

The company also increased fees for services such as reservations, pet handling and oversized bags. Most of the increases range from $5 to $50.

In the last two years, most U.S. carriers have removed capacity from less profitable domestic routes and introduced charges for checking extra bags as they try to keep up with rising fuel costs and fierce competition.

On Wednesday, the Soleil brokerage cut the U.S. airlines sector to neutral from outperform, according to flyonthewall.com, which tracks analyst ratings.

Shares of United Airlines parent UAL Corp (UAUA.O) fell 29.5 percent to $8.15, Continental Airlines (CAL.N) fell 13 percent to $14.20 and Delta Air Lines (DAL.N) fell 16.4 percent to $5.77.

The Amex airline index (.XAL) fell 11.95 percent.

(Additional reporting by Bill Rigby and Mark McSherry, Editing by Andre Grenon, Tim Dobbyn, Gary Hill)

Fed lowers growth forecast, raises inflation

WASHINGTON (Reuters) - The Federal Reserve on Wednesday slashed its U.S. economic growth forecast for 2008 and signaled that mounting concerns over inflation would make further interest rate cuts unlikely.

"Several members noted that it was unlikely to be appropriate to ease policy in response to information suggesting that the economy was slowing further or even contracting slightly in the near term," the Fed said in minutes from its April 29-30 policy meeting.

Fed officials said that cutting benchmark interbank lending rates by a quarter percentage point to 2 percent at their last meeting was "a close call," reinforcing the impression that policy-makers may be putting further interest rate moves on hold.

"If you had any doubt that the Fed is signaling a pause, that doubt is gone," said Christopher Low, chief economist at FTN Financial in New York.

In an accompanying forecast, the Fed cut its projection for 2008 growth to a scant 0.3 percent to 1.2 percent, down from the 1.3 percent to 2 percent it forecast three months ago.

At the same time, the U.S. central bank said it expects inflation to remain "elevated" and unemployment to increase "significantly."

Wall Street stocks tumbled after the Fed forecast, with the Dow Jones industrials (.DJI) closing off nearly 1.8 percent. Treasury debt prices also fell while the dollar eased against the euro and the yen.

U.S. short-term interest rate futures expect no imminent change from the Fed, but point to rate increases in the final months of the year.

SLOW RECOVERY

The minutes showed a Fed increasingly concerned about inflation and anticipating sluggish growth for a while, but cautiously optimistic the worst of the most serious financial crisis in years has passed.

"Much of the concern about severe disruptions to financial markets, which had motivated the aggressive policy actions at the beginning of the year, appears to have abated in the minds of most members," said Lehman Brothers economist Michael Hanson.

Given recent shocks to the economy, it could be years before growth rates and unemployment levels return to their optimal levels, the Fed said.

The interest rate cut on April 30 was the seventh in a series of that has taken the interbank lending rate down by 3.25 percentage points since September as the central bank moved to buffer an economy battered by the housing downturn and a credit crunch.

The economy has expanded at a sluggish 0.6 percent annual rate in both the last three months of 2007 and the first quarter of this year.

At the same time, however, record high oil prices have pushed up energy and food prices, raising the consumer price index by 3.9 percent in the 12 months to April.

Policy-makers felt at their April meeting that the risks that growth could slow were more closely balanced than in the past by the risks that inflation could spike higher.

"Members were ... concerned about the upside risks to the inflation outlook, given the continued increases in oil and commodity prices and the fact that some indicators suggested that inflation expectations had risen in recent months," the Fed said.

DIFFERENCES OVER INFLATION RISK

Participants at the Fed's meeting were about evenly divided as to whether the risks to the inflation outlook were balanced or were tilted to the upside, the minutes said.

The Fed boosted its forecasts for inflation to 3.1 percent to 3.4 percent in 2008 from its January 2.1 percent to 2.4 percent projection for the personal consumption expenditures index. It expects unemployment to rise to 5.5 percent to 5.7 percent for the year. The jobless rate was at 5 percent in March and employers had cut jobs for the fourth month in a row.

The Fed also warned that the risks to its scaled-down growth projection remain to the downside, particularly if house prices continue to slide lower.

"Participants saw little indication of a bottoming out in either housing activity or prices," the minutes of the meeting said.

Fed officials took some comfort from signs that fragile credit markets, which have been severely shaken by doubts about bad credit, appear to be on the mend.

"The generally better state of financial markets had caused participants to mark down the odds that economic activity could be severely disrupted by a further substantial deterioration in the financial environment," the minutes said.

(Reporting by Mark Felsenthal and Glenn Somerville; Editing by Gary Crosse)

Big Oil defends profits before irate senators

WASHINGTON - On a day oil prices leaped to unheard-of highs, senators lined up Big Oil's biggest executives and pummeled them with complaints that they're pretending to be "hapless victims" while raking in record profits.

"Where is the corporate conscience?" Sen. Dick Durbin, D-Ill., asked the top executives of the five largest U.S. oil companies.

It's all about economics, came the reply. Supply and demand. The company leaders tried to shift attention from motorists' anger over $4-a-gallon gasoline to a debate over new areas for drilling.

But senators at the Judiciary Committee hearing weren't having any of that. They wanted to press the executives about public anguish over paying $60 or more to fill up a car's gas tank.

"People we represent are hurting, the companies you represent are profiting," Sen. Patrick Leahy, D-Vt., told the executives. He said there's a "disconnect" between legitimate supply issues and the oil and gasoline prices motorists are seeing.

The executives, sitting shoulder to shoulder in the hearing room, said they understood people were hurting, but they tried to blunt the emotion with economic analysis.

Profits have been huge "in absolute terms," conceded J. Stephen Simon, executive vice president of Exxon Mobil Corp., but they "must be viewed in the context of the massive scale of our industry." And high earnings "in the current up cycle" are needed for investments in the long term, including when profits will be down.

"'Current up cycle,' that's a nice term when people can't afford to go to work" because gasoline is costing so much, replied Leahy with sarcasm.

"The fundamental laws of supply and demand are at work," said John Hofmeister, chairman of Shell Oil Co., acknowledging it is something the oil industry has been saying for some time and that the explanation may sound "repetitive and uninteresting."

Hofmeister was joined by executives of Exxon Mobil Corp., Chevron Corp., BP America Inc. and ConocoPhilips Co. Together the five companies earned $36 billion during the first three months of this year.

As the executives sought to explain their profits and why prices are so high, the global oil markets were moving into new, uncharted highs, touching $133 a barrel for the first time. The national average price of a gallon of gasoline hit $3.80, with $4 showing up in more places. Crude prices increased even more in late electronic trading Wednesday hitting $134 for the first time.

It was the second time this year the executives had been summoned to testify before Congress. When they came in early April oil cost about $98 a barrel.

This time the exchanges got personal.

Simon was asked what his total compensation was at Exxon, a company that made $40.6 billion last year. Simon replied it was $12.5 million.

John Lowe, executive vice president of ConocoPhillips Co., said he didn't recall his total compensations. So did Peter Robertson, vice chairman of Chevron Corp. Hofmeister said his was "about $2.2 million" but was not among the top five salaries at his company's international parent. Robert Malone, chairman of BP America Inc., put his "in excess of $2 million."

Sen. Arlen Specter, R-Pa., noting that Exxon's profits had nearly quadrupled from $11.5 billion in 2002, said he had heard nothing from the oilmen that would explain "why profits have gone up so high when the consumer is suffering so much."

The executives, appearing under oath, cited tight global supplies with scant spare production capacity and the fact that large areas of land and offshore waters remain offlimits to drilling. And they said they're worried Congress was talking of requiring the five companies to pay more taxes.

"I urge you to resist these punitive policies," said Hofmeister.

It was not what many senators wanted to hear.

You have "just a litany of complaints that you're all just hapless victims of a system," Sen. Dianne Feinstein, D-Calif., told the executives. "Yet you rack up record profits ... quarter after quarter after quarter."

One senator after another cited the pain that high energy prices are causing farmers, small businesses and people trying to find a way to afford a vacation trip this summer.

"Is there anybody here that has any concerns about what you're doing to this country with the prices that you're charging and the profits that you're taking?" Durbin asked.

The titans of America's oil industry sat quietly for a moment.

"Senator," replied Exxon's Simon, "We have a lot of concern about that. And we're doing all we can to put downward pressure on prices."

Honda to roll out cheap new hybrid model in early '09

TOKYO (Reuters) - Honda Motor Co (7267.T) said on Wednesday it would launch a new, low-cost hybrid car in Japan, North America and Europe in early 2009 as it seeks to cut the lead of Toyota Motor Corp (7203.T) in the green car race.

Despite the pressure of record-high oil prices and concerns over climate change, fuel-efficient and low-emission hybrids still occupy a small niche in the global car market, partly due to their higher costs for both consumers and automakers.

Japan's top two automakers lead the industry in the fuel-saving technology which runs on both electricity and gasoline, but Toyota has dominated sales with its groundbreaking Prius model, which is only available as a hybrid.

Koichi Ogawa, chief portfolio manager at Daiwa SB Investments, said it was hard to know whether Honda could challenge Toyota's dominance.

"When you say 'hybrid,' the image that really comes to mind is Prius," he said. "Honda is very dependent on the U.S. market, which is shifting towards things like hybrids, and for survival having a hybrid (model) is essential."

By twinning a conventional engine and battery-powered electric motor, hybrids currently add $5,000 or more to comparable gasoline models, a premium Honda Chief Executive Takeo Fukui sees coming down to around $2,000 in the next generation of hybrids.

"It is important to move hybrid vehicles from the current image-oriented stage to the new stage toward full-scale penetration," Fukui told a news conference.

Executive Vice President Koichi Kondo said Honda hoped to price the hybrid-only car under 2 million yen ($19,290).

Honda now only sells one hybrid car -- a gasoline-electric version of the mass-volume Civic sedan which starts at around 2.3 million yen -- after discontinuing its hybrid-only Insight 2-seater in 2006 and a hybrid version of its Accord in 2007.

Honda expects annual sales of 200,000 for the new hybrid. Total hybrid sales, including the Civic hybrid, a new hybrid version of its popular Fit subcompact and a planned sports car based on the CR-Z concept model, are expected to reach 500,000 vehicles a year after 2010, roughly one-tenth of total sales.

FIVE-DOOR, FIVE-SEATER

Announcing other details of the new hybrid-only car for the first time, Honda said the car would be a 5-door, 5-seater similar in design to its sleek FCX Clarity fuel-cell vehicle.

The car would use more compact and lightweight components for the hybrid system and have a new vehicle platform that places the control unit and battery underneath the cargo space.

A new production line for electric motors will be added at Honda's Suzuka factory in western Japan to more than double the production speed and cut costs.

Toyota is also racing to slash production costs for future hybrid cars. It has not disclosed when the third-generation Prius would be ready, although many expect a 2009 launch.

Toyota, the world's biggest automaker, is aiming to achieve annual hybrid sales of 1 million vehicles soon after 2010, also targeting roughly one-tenth of its total sales.

Few other automakers have managed to mass market hybrid cars after Toyota blazed the trail with the first Prius in 1997.

Nissan Motor Co (7201.T), Japan's No.3 automaker, is due to launch its own, in-house developed hybrid car in 2010, the same year General Motors Corp (GM.N) plans to launch its plug-in hybrid, the Chevrolet Volt.

Honda shares ended down 2 percent in a weaker Tokyo market (.N225) and have fallen about 11 percent this year, outperforming Toyota, Nissan and GM, which have fallen 13-24 percent.

MANUFACTURING INNOVATION

At its mid-year news conference, Honda also outlined plans to introduce new manufacturing methods at several Japanese factories to boost efficiency and lower costs.

Honda said it plans to invest about 158 billion yen to make the improvements at two domestic factories, one for engines and the other for cars. The car factory, in Yorii, near Tokyo, is due to start production in 2010.

A new minivehicle factory to be built by subsidiary Yachiyo Industry Co (7298.Q) would also introduce innovations that would help Honda gain low-cost know-how, Honda said.

"Fundamental reform and improving cost competitiveness in the minivehicle market, where cost pressures and customer expectations are very severe, will enable Honda to gain a significant edge in fighting intensifying global competition in future," Fukui said.

Honda, which plans to improve fuel efficiency on bigger cars with clean-diesel technology, expects to sell more than 4.5 million cars and 18 million motorcycles worldwide in 2010. Last year, it sold 3.767 million cars and 13.48 million motorcycles.

(Additional reporting by Elaine Lies; Editing by Lincoln Feast)

($1=103.70 Yen)

Clinton launches new Fla., Mich. offensives

BOCA RATON, Fla. – With a bit of momentum from her landslide Kentucky victory and less lopsided Oregon loss, Hillary Clinton is turning her attention to two states that have already voted, Florida and Michigan, over two states and a territory that have yet to, South Dakota, Montana and Puerto Rico.

It’s part of a last-gasp strategy aimed at prolonging her campaign by convincing the party to alter the nomination math. By seating the penalized Florida and Michigan delegations, she would not only gain a significant number of delegates but also bolster her popular vote argument with the superdelegates.

The new Florida and Michigan offensive will kick off in earnest today with three campaign events in South Florida – though she’ll have to share the state with Obama, who begins a three-day campaign swing there – and will likely also include campaigning in Michigan. That’s in addition to an already circulating online petition and escalating campaign rhetoric casting Clinton as best-positioned to carry the two important big states in the fall against presumptive Republican nominee John McCain – partly because of her fight against disenfranchising Democrats there.

In an intentional bit of symbolism, Clinton’s three campaign stops will be in Palm Beach, Broward, and Dade counties – the three jurisdictions where Democrats allege voters were disenfranchised during the 2000 presidential election.

Clinton campaign officials acknowledge the target audience for the offensive is not only voters but the superdelegates who will ultimately decide the nomination as voters and the party officials who will meet May 31 to effectively rule on the fate of the Florida and Michigan delegations.

“What’s driving this effort is primarily the belief that every voice and every vote should count, something that Sen. Clinton believes very strongly,” said campaign spokesman Mo Elleithee. “And we hope that everyone shares that same value, including superdelegates, DNC members and all Democrats.”

He said more than 360,000 people had added their names to an online petition supporting the seating of the states’ delegates. And he said the campaign has been asking supporters to take that message to members of the Democratic National Committee and its Rules and Bylaws Committee.

The previously little-known committee will meet before the next primary in Puerto Rico June 1 to decide whether, or how, to allocate delegate votes from the two states. The DNC stripped the states of their delegate votes for holding their primaries earlier than the party wanted.

Clinton, who won both states’ primaries (Obama wasn’t on the ballot in Michigan), has repeatedly called for the panel to seat the delegations at this summer’s Democratic National Convention, an outcome that would cut into Obama’s lead in pledged delegates.

David McDonald, an uncommitted Washington state superdelegate who sits on the rules committee, said he wouldn’t be swayed by “mere publicity and a claim to be able to win the states.”

Still, Obama doesn’t appear inclined to let Clinton have the Florida and Michigan stages to herself.

He also arrived today in Florida and will be spending three days campaigning here, seeking to win over voters who sided with Clinton by a margin of 50 percent to 33 percent in the unsanctioned Jan. 29 primary. Last week, he paid his first visit this year to Michigan, touring a Chrysler plant, holding a town hall in Macomb County and a rally in Grand Rapids.

It’s unlikely that the rules committee will back a solution that significantly boosts Clinton’s pledged delegate tally.

But she has portrayed her effort to seat the delegations as a fight to protect voters’ franchise in the two states.

“I’m going on now to campaign in Montana, South Dakota and Puerto Rico – and I’m going to be standing up for the voters of Florida and Michigan,” she told supporters during her Kentucky victory speech Tuesday. “Democrats in those two states cast 2.3 million votes and they deserve to have those votes counted. That’s why I’m going to keep making our case until we have a nominee whoever she may be.”

Expect to hear more Florida and Michigan talk in the coming days, said Clinton campaign chairman Terry McAuliffe, who said the campaign will “probably” travel to Michigan soon.

“The reason you probably hear more frequency is we have a lot fewer contests coming up,” he said Tuesday night. “They’re two of the five remaining events that are going to be very important to determine who the nominee of the Democratic Party is. So before, you heard a lot of talk about Pennsylvania and Indiana and North Carolina. Now, we have obviously Puerto Rico, South Dakota, Montana – and to resolve these two important states.”

Thunderous applause filled the Louisville hotel ballroom where Clinton held her Kentucky victory party when she delivered the Florida-and-Michigan line, but McAuliffe admitted superdelegates are the main audience for the appeal.

The goal seems to be implanting the idea that Clinton would fare better than Obama against McCain in Florida and Michigan in November partly because of her support for seating the two delegations.

It’s a theory that has become increasingly prominent in the campaign’s message over the last few days.

McAuliffe asserted Tuesday “it makes it a lot easier for our Electoral College map if Florida and Michigan are excited about the upcoming elections and don’t feel they were disenfranchised in the nominating process. So our argument’s always been – and all the different maps and the recent polling data show it – Hillary Clinton beats John McCain … in Ohio. She beats him in Florida. She wins Pennsylvania. She wins states we’ve got to win.”

A late April poll by Quinnipiac University found Clinton leading McCain 49 percent to 41 percent among Florida voters, while Obama and McCain were tied.

And Bill Clinton Tuesday morning told reporters that not seating the states’ delegations “violates our values and is dumb politics.”

It would alienate those states’ voters in the general election, he asserted, adding “we’re going to decapitate them, smush them, step on them, act like they never existed, act like they never voted.”

Carrie Budoff Brown and Avi Zenilman contributed to this report.

Lost parrot tells veterinarian his address

TOKYO - When Yosuke the parrot flew out of his cage and got lost, he did exactly what he had been taught — recite his name and address to a stranger willing to help.

Police rescued the African grey parrot two weeks ago from a neighbor's roof in the city of Nagareyama, near Tokyo. After spending a night at the station, he was transferred to a nearby veterinary hospital while police searched for clues, local policeman Shinjiro Uemura said.

He kept mum with the cops, but began chatting after a few days with the vet.

"I'm Mr. Yosuke Nakamura," the bird told the veterinarian, according to Uemura. The parrot also provided his full home address, down to the street number, and even entertained the hospital staff by singing songs.

"We checked the address, and what do you know, a Nakamura family really lived there. So we told them we've found Yosuke," Uemura said.

The Nakamura family told police they had been teaching the bird its name and address for about two years.

But Yosuke apparently wasn't keen on opening up to police officials.

"I tried to be friendly and talked to him, but he completely ignored me," Uemura said.

Stalled Career? 10 Tips

By Kate Lorenz

Many elements of modern-day life require a tune up every now and then: your car, your furnace, your computer, even your career. Assessing your ultimate career goals and plotting out how you will achieve them can really kick your career into overdrive and help you reach professional nirvana.

Here are 10 tips for keeping your career performing like a well-oiled machine:

1. Run full diagnostics to examine your life.
The first step in your tune up is conducting an assessment of where you are and where you want to be in your career. For example, are you at a point in your life where you truly can dedicate more time to your career or are there other areas of your life that need your attention?

2. Map out your career path.
If your goal is to be director of your department, investigate what skills and accomplishments you need and set out to acquire them. If you know the right career path for you means leaving your current company, make sure you are prepared to launch a full-scale job search.

3. Time to switch gears?
Sometimes capitalizing on your career potential means not only changing jobs, but completely changing careers. Perhaps it's time to give up the hectic corporate life for the enriching experience of teaching. Or maybe now is the time to launch that business you always dreamed of, or to explore your creative side with a job involving one of your hobbies.

4. Install career skill upgrades.
Is there a particular trend emerging in your industry? Perhaps a new way of marketing to customers or projecting sales figures? Then become an expert in those areas. It will serve you to be at the cutting edge of industry practices whether in your current job or the one you want.

5. Rev up your technology know-how.
Most industries utilize particular equipment or computer applications that are standard in their fields. Make sure you learn what these are and how to use them. Technology can move quickly. Don't fall behind or you risk being sidelined.

6. Maintain learning levels.
If the next step in your career requires a master's degree, don't hesitate to enroll in the necessary classes. There are so many flexible options today for working men and women who are seeking advanced degrees. Obtain the required certifications and attend professional seminars to keep current.

7. Polish your résumé and make it shine.
Always be prepared if a new opportunity emerges -- either internally or with a new organization. Keep your résumé updated and ready to send out at all times.

8. Test drive your interviewing skills.
Don't let those interviewing techniques get rusty. Practice in front of a mirror or friend every now and again so you're comfortable discussing your qualifications, even if it's at a professional event or cocktail party.

9. Apply fresh job-search techniques.
If the last time you looked for a job you mailed your résumé to a P.O. Box, then it's time to brush up on your job search options. Investigate Internet job sites, career fairs and professional organizations, and keep in touch with your own set of contacts.

10. Spark connections with your network.
The best way to find out about new opportunities and assess your marketability is to touch base with other professionals in your field. Reconnect with former colleagues, fellow association members and former classmates and share information.

7 Cool Bluetooth Gadgets

Bluetooth revolutionized electronics 10 years ago with its wireless technology that enables devices to communicate with each other. Here's a look at some of the latest Bluetooth-enabled devices

By Michal Lev-Ram

1. PARTY speakers from Parrot (Black Edition)

Price: Available this summer for $150

This portable, wireless speaker system lets you listen to music - beamed - from your phone or PC. It's also got a built-in technology called Near Field Communications (NFC), which allows users to pair it with a mobile device by simply tapping the two together. Unfortunately, there's just one NFC phone currently on the market, and it's only available overseas.

2. Calisto Pro Series from Plantronics

Price: $280

You know the cellular industry has made it when home phones start looking like mobile handsets. This sleek landline telephone from Plantronics is made for home use but comes with a Bluetooth headset that can also work with a cell or VoIP phone.

3. S-Frame digital photo frames from Sony

Price: $190 - $250, depending on size

You'll need a Bluetooth adapter to transfer images from your cell phone to this new picture frame. The frame's LCD screen can display images up to 48 megapixels, and offers 10 slide show variations on top of clock and calendar views. Two index modes let you preview several photos at once.

4. SUN headset by Iqua

Price: $80

This solar-powered Bluetooth headset converts light into power, which means you won't have to worry about recharging the battery every night. While it's a bit large (due to the built-in mini solar panel), the eco-friendly SUN claims to get nine hours of talk time.

5. MBW-150 watch from Sony Ericsson (Music Edition)

Price: $400

This James Bond-like, water-resistant gadget works in conjunction with your handset by vibrating each time you receive a new call or text message and letting you control your
mobile music. The one downside: The watch only works with select Bluetooth-enabled phones made by Sony Ericsson.

6. Virtual laser keyboard from Golan Technology

Price: $160

This futuristic-looking portable device uses infrared and laser technology to project a full-size, working virtual keyboard on any surface. It uses Bluetooth technology to pair with both laptops and compatible cell phones for typing messages on the go.

7. V610 EasyShare camera from Kodak

Price: $350

Using embedded Bluetooth wireless technology, the V610 allows users to take pictures and beam them straight to their PC or a compatible printer. This small, 6-megapixel camera also comes with dual-lens technology and a 2.8-inch high-resolution color display.