Microsoft explains the Nokia deal: The phone is key to everything

In a Tuesday morning conference call to investors, Microsoft will justify why it acquired Nokia’s hardware business for a tad over $7 billion: It all starts with the phone.

In its “strategic rationale” explaining the deal, slide 15 of Microsoft’s presentation makes the case that the foundation for Windows PCs begins with Windows Phone, and pushes forward something of a domino effect toward platform dominance. Microsoft’s focus hasn’t shifted away from its “devices and services” message, but the balance of the company’s mantra seems to have tilted toward prioritizing hardware over software.

”Windows: 300M+ devices a year,” the slide notes. “Success in phone is important to success in tablets. Success in tablets will help PCs.” Elsewhere on the page, Microsoft notes that “high value experiences light up on great devices”.

”We will take additional steps to promote the app ecosytem for Windows,” the deck adds.

Slide 15 of Microsoft’s presentation to investors suggests the company is looking to juice all hardware sales with phone buzz.

It firmly cements a drift away from Microsoft’s historical PC-centric focus. But Microsoft’s no stranger to realpolitik: If the market’s moving in the direction of the smartphone and tablet, Microsoft will follow.

The slide deck will apparently be used as the basis for Microsoft’s conference call with Wall Street analysts Tuesday morning, when Microsoft will explain how the Nokia acquisition will fit in with its current strategy.

In July, Microsoft chief executive Steve Ballmer reorganized the company, flattening the company’s organizational structure and pushing technologies, not products, across Microsoft. What Ballmer and Microsoft clearly hope to do is continue that trend, and make the Windows Phone platform the focus of the Nokia deal, not the Lumia hardware. If hardware partners buy that argument, then Microsoft will have won a key battle of perception.

But that’s a long shot. Microsoft will have its work cut out to convince companies like HTC that they still have a place at the Windows Phone table. The smart money says that Microsoft may not bother: According to AdDuplex, Nokia’s phones represent under 10 percent of all Windows Phone ad traffic, and they’re declining. Nokia owns 85 percent of the Windows Phone market, and its own share is heading up.

”My take on the slide overall is highlighting the halo effect and leverage,” Reticle Research and former NPD analyst Ross Rubin said via a Twitter message on Monday night.

The conclusion, then, is that Microsoft plans to go it alone, and with its own hardware. And why not? Microsoft’s Xbox dominated the U.S. game console market for over two years, with Microsoft’s brand on the box. The Xbox One hopes to continue the trend. Although Microsoft will continue to sell Nokia’s branded featurephones, it’s a likely bet that it will facilitate a quick transition to smartphones as fast as it can. And if Nokia’s engineering teams can build a tablet, than the Surface may gain some competition.

Consumers haven’t shown that Microsoft’s operating system platforms will make them open their wallets. But the Xbox, Xbox One, the recent Nokia Lumia 1020, and (to a far lesser extent) the Surface tablet show that consumers are still interested in Microsoft-branded products, as long as they’re great devices.

”My take on the slide overall is highlighting the halo effect and leverage,” Reticle Research and former NPD analyst Ross Rubin said via a Twitter message on Monday night. “[It] addresses oversimplifying critics who might say, oh, you’re going all in on phones so PCs are dead, right?”

Microsoft certainly isn’t ignoring the patent portion of the deal. After all, that’s what the conventional wisdom says drove Google’s purchase of Motorola. But Microsoft’s concerns are far more practical: It just has to sell devices, period.

If phones are what consumers are buying, not PCs, then Microsoft can move to where the puck is. But Microsoft’s entertainment (Xbox) business isn’t a money-maker; its business and server businesses are. At this point, putting more devices in consumer hands is paramount, regardless of those devices’ use cases and form factors. Devices are what consumers are buying, but services are what Microsoft wants to sell. As long as Nokia’s phones can run Office in some fashion and connect to a server, Microsoft appears to be happy.

Will Wall Street buy that argument? We’ll find out later on Tuesday.

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FAQs about hacks: Everything you need to know about the Syrian Electronic Army

In the past 24 hours, the New York Times went down and Twitter images went wonky, while the Huffington Post dodged a digital bullet. All the chaos comes courtesy of the Syrian Electronic Army, a hacker group in love with Syrian president Bashar al-Assad—and this isn't the first time the cyber boogeymen have lashed out at Western targets.

But what's all the hubbub about? Should you be worried about the Syrian Electronic Army? Is there a chance you and I could get caught in the crossfire, the way Lulzsec leaked so many passwords a few summers back? Read on to learn everything you need to know about the Syrian Electronic Army.

Nobody knows for sure, but all indications suggest that is a group of pro-al-Assad hackers, rather than an official government group.

Syrian Electronic ArmyThe SEA seized control of the DNS records for Twitter's image servers Tuesday. (Click to enlarge.)

The Syrian Electronic Army has been responsible for numerous high-profile hack attacks, including the hijacking of the Twitter accounts across the media spectrum—from venerable outlets like NPR, CBS, and the Associated Press all the way to BBC Weather, The Onion, and E! Online. Yesterday, the group claimed responsibility for the DNS-based troubles fouling the New York Times, Twitter, and the Huffington Post UK.

Unlike Lulzsec, which sowed havoc across the Web for nothing more than giggles (and eventual betrayal and jail time), the Syrian Electronic Army operates with more ideological goals. The hacker collective targets media entities with large followings, then uses the hijacked Twitter accounts and Websites to spread a pro-al-Assad message.

"There are many targets that were vulnerable that we felt were fair to Syria and had balanced coverage, we did not strike them," a Syrian Electronic Army representative told the Verge in May.

Yesterday's DNS attacks occurred as rumors of a U.S. strike in Syria abound, after the American government said there was "no doubt" that al-Assad deployed chemical weapons to kill hundreds of Syrians.

Not quite.

Tweets from the SEA-hijacked E! Online account weren't exactly highbrow. (Click to enlarge.)

Sure, the group's hijackings didn't take much skill beyond adept social engineering, and yes, a lot of the Syrian Electronic Army's shouting has been of the juvenile and meme-filled variety.

"The Syrian Electronic Army actually makes a lot more sense if you think of them as pranksters who also happen to love Assad than as state-aligned hackers in pursuit of concrete goals," the Washington Post recently wrote.

But don't mistake the group's silliness for stupidity!

Melbourne IT, the registrar that was attacked in order to fell the Times and other yesterday, has a reputation for strong security chops, according to CloudFlare. Indeed, after a group of HP researchers studied the Syrian Electronic Army for a number of months, they noted that the SEA is considered "one of the top 10 most skilled hacking teams in the world."

Yes and no.

Thus far, the Syrian Electronic Army has largely been targeting the digital equivalent of microphones, rather than the masses: It's trying to spread the pro-al-Assad word via hijacked media accounts. Yesterday's attack didn't affect user accounts or data in any way, as far as experts can tell.

But that doesn't mean the group intends to stay mostly harmless. In the midst of Tuesday's attacks, experts from Google, OpenDNS, and Cloudflare found that the Syrian Electronic Army site that replaced the New York Times homepage appeared to be infested with malware.

You shouldn't have anything to worry about if you take some basic online security precautions—the kind of stuff you should already be doing, anyway. Install an antivirus program and keep it up to date to protect against potential malware infections.

Likewise, you can keep your online accounts buttoned up by activating two-factor authentication wherever possible—Twitter offers both SMS- and app-based two-factor authentication, for example—and, more importantly, by never reusing passwords across multiple sites. It's not as hard as it sounds! Password managers can take a lot of the hassle out of, well, password management, and PCWorld has a guide to building better passwords without losing your mind.

Brad Chacos spends the days jamming to Spotify, digging through desktop PCs and covering everything from BYOD tablets to DIY tesla coils.
More by Brad Chacos

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Review: Peazip 5 decompresses everything

PeaZip 5.0 You won't find an easier, more capable compressed archive utility, though performance could be better on some file types.

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Peazip is one of the most versatile file compression and archiving utilities out there—possibly the most versatile—and it's free. It's also quite easy to use and offers the same features found in programs such as WinZip and WinRAR such as context menu integration, passwords, command line usage, etc.

Peazip supports every compressed archive format I'm aware of: 7Zip, ARC, GZ, TAR, ACE, RAR, etc. There's also support for both ISO and UDF disc images and Linux package formats such as DEB, RPM, PET/PUP, and SLP. As a bonus, you can open Mac HFS DMG files. There are more, but the point is that there's little out there in the way of compressed file you can't browse and extract from.

As you can tell from the file type associations dialog, Peazip supports a lot of formats.

While I've always appreciated the effort that goes into this piece of free software, I've also installed, then uninstalled Peazip several times over the years because of operational and performance issues. This has left me using WinRAR, which while a bit old-school looking, is rock-solid and fast. Version 5 of Peazip seems quite a bit more stable, but it still has a tendency to not close and launch 100% smoothly when you're dealing with multiple instances. Also, the progress bar is still inaccurate, claiming far less progress than as actually been made. Several times, it was only 25% across when the task completed.

Peazip also did not not like that fact that I'd redirected my Downloads folder to a non-default location, complaining that it was no longer accessible. I could of course browse to the real location, but obviously Windows Vista/7/8/8.1 compatibility isn't complete. The program depends on a lot of open source and free libraries to handle the various archive types, and some of them are faster than others. That's a minor complaint: Peazip is easily fast enough on any modern PC.

One thing I most definitely do like about Peazip is its interface, which is clean with lots of nice little touches. For instance, it ignores unpopulated higher-level folders when you open archives. E.g. if you have a batch of zipped pictures in say “\Picture\Holiday 2013\Grandma”, it takes you directly to the Grandma folder rather than forcing you to tunnel down three levels. Also, it keeps the files that you've already viewed open till the archive is closed. This is handy when you're using the Windows image preview and want to scroll through the pictures you've selected to view from within the archive without permanently extracting them.

The Peazip interface is simple and clean.

There are other compression utilities out there: WinZIP, 7Zip, and WinRAR just to name a few, but Peazip compares favorably with all of them. I wish it was a little faster, but on a modern PC or laptop, the difference isn't as significant as it once was. I'm liking it so much so far that I may not be uninstalling again.

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