iTunes Outsells Brick and Mortar Stores

Research firm NPD Group said Monday that Apple's iTunes Music Store broke into the top ten list of music retailers, marking the first time a digital music store has done so.

With the iPod still selling briskly and the holiday season now upon us, it is likely that Apple will increase its share of music sales even further and possibly rise higher in the rankings next quarter.

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Cingular Wireless to Become AT&T

Last month, SBC said it would adopt the AT&T brand name following the completion of its $16 billion merger with the company. But SBC did not say what would happen to Cingular, in which it controls a 60 percent stake. On Monday, however, the company confirmed plans to phase out the Cingular name and replace it with AT&T.

Although Cingular owners SBC and Bell South have made big efforts to promote the brand, SBC CEO Ed Whitacre says the company wants to use AT&T to market all of its products. Cingular had already acquired AT&T Wireless last year, and the SBC merger will bring with it a revamped image for the former Ma Bell. No date for the change was announced.

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Movielink to Offer Fox Movie Downloads

Movielink announced on Monday that it had signed a deal with Twentieth Century Fox to offer the company's movies for download. The agreement means Movielink -- a joint venture between five Hollywood studios -- can now offer movies from all the major studios.

"Robots" and other Fox flicks will be available this week, with more titles added over the coming months. Fox previously offered content on CinemaNow.com, but said it waited on movies until broadband adoption was higher. The "Star Wars" saga will not be available online, however, as Fox only owns the theater and home video distribution rights to the films.

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Texas Sues Sony BMG Over CD Rootkit

Texas Attorney General Greg Abbott announced Monday that he has filed suit against Sony BMG over the use of illegal spyware in its copy-protection mechanism that gained national attention earlier this month.

Abbott also disputed Sony's claims that it had recalled all affected CDs, saying investigators were able to purchase "numerous titles at Austin retail stores as recently as Sunday evening."

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Jamster Tries to Clean Up its Act

The company that was made famous with its annoying yet popular Crazy Frog ringtone is trying to make peace with angry parents. Under investigation in the UK and sued in California for its business practices, Jamster rolled out a brand new ad campaign along with parental controls over downloading.

Parents are now able to enter phone numbers into Jamster's new Guardian service that would block those phones from downloading content. Critics of the service say the company misleads customers by advertising free ring tones that actually cost SMS charges in addition to a $1.99 fee. VeriSign, the company that now owns Jamster, believes these new features will help to allay such concern.

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Apple to Buy Intel-Micron Flash Memory

Intel and Micron Technology said on Monday they have agreed to form a new company to produce NAND flash memory chips for use in consumer electronics. Called IM Flash Technologies, the company would combine Micron's strengths in the NAND market with Intel's experience in multi-level cell technology.

One of the company's first customers will be Apple, who plans to pay $250 million to both Intel and Micron to secure a supply of flash chips for its popular iPod music players through the year 2010.

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RadioShack to Sell Skype Kits, Headsets

Internet telephony provider Skype has inked its first retail distribution deal in the United States, with RadioShack agreeing to sell a Skype starter kit and accessories across 3,500 stores. The deal gives Skype much-needed access to consumers and could help the service go mainstream.

RadioShack will setup a special Skype kiosk that showcases wireless headsets from Motorola and Logitech, along with a $129 cordless phone from Linksys. The $5 starter kits will come with an earpiece microphone and 30 minutes of Skype calling to any number in the world.

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First Blu-ray Movie Disc Completed

Sony Pictures has completed the first full-length Blu-ray disc and will be shipping it to hardware manufacturers for player testing. The movie, "Charlie's Angels: Full Throttle," was recorded in MPEG-2 high definition, which offers a resolution of 1920x1080 pixels.

The move by Sony follows recent criticism by Blu-ray detractors over a vague launch date for the next-generation DVD technology. Sony has still not committed to a time frame for public availability, only stating that mass production of Blu-ray movies would begin in the "near future."

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Microsoft Debuts E-Mail Hosting Service

Free Web mail with massive storage may be all the rage, but Microsoft is taking a different approach with a new Windows Live service: bring your own domain. Users can point their own domain name at Microsoft and take advantage of the company's infrastructure and online e-mail interface.

As services like Hotmail, Gmail and others fill up with millions of users, it becomes increasingly more difficult to find available usernames. Microsoft's service, called Custom Domains, aims to free users from this Big Brother-like requirement by letting them pick their own domain.

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Napster, XM Launch Co-Branded Store

Satellite radio service XM on Monday announced that a beta version of its co-branded digital music store with Napster is now available. The software will allow users to listen to more than 70 XM channels, as well as download music they hear on the service.

The interface would also enable a user to mark songs as they hear them on the radio for later download. Customers would also be able to browse the rest of the service's catalog like the stand-alone version of the Napster service.

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Xbox 360 Launch Set for Midnight

Electronics retailers across the country are preparing for the expected onslaught of excited gamers as the Xbox 360 officially launches on Tuesday. At least one major retailer will open its doors early, and over 4,500 others nationwide will open at midnight to begin selling the console.

To celebrate the impending launch, Microsoft held a special event called "Xbox 360: Zero Hour" in California's Mojave Desert that began Sunday night. Attendees will have the chance Monday night to buy the console, games and accessories before leaving the invite-only party.

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TiVo to Transfer Video to iPod, PSP

TiVo on Monday announced plans to enable customers to transfer video recorded on its popular digital video recorders to Apple iPods and Sony PlayStation Portable devices. Previously, the company only supported devices that ran Microsoft's Windows Media Video format.

At CES 2005, the DVR maker rolled out TiVoToGo to allow users to transfer TV shows off of its players and onto their laptops or desktops. To prevent piracy, TiVo implemented DRM technology from Macrovision that required the use of a password set by TiVo.

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NBC Universal Licenses Content to P2P

Marking the first time a major studio has agreed to work with a peer-to-peer service, NBC Universal on Friday announced a deal with Wurld Media, creator of the legal Peer Impact P2P service. The agreement would allow users to download Universal movies and NBC TV events for a fee.

Customers would be able to "rent" movies from the service and view them within a 24-hour window. NBC said that it wanted to give its viewers another way to access the studio's content in a way that protects it from illegal distribution.

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Alltel Acquires Midwest Wireless

Rural cellular carrier Alltel said on Friday it would acquire Midwest Wireless in a deal worth just over $1 billion. The purchase would give Alltel another 400,000 customers, and help it better compete with the four major carriers. Midwest would add to Alltel's network across the states of Minnesota, Iowa and Wisconsin.

The Midwest merger is Alltel's second this year. In January, the company merged with Western Wireless in a $6 billion transaction. Analysts say they expect more consolidation in the industry. Possible buyout targets include local GSM operators Centennial and Dobson, mixed network operator Rural Celullar, and CDMA provider Leap Wireless.

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Critical Flaw Found in Apple's iTunes

Security firm eEye Digital Security on Thursday warned of a critical flaw in Apple's iTunes software that could allow for remote code execution, and has rated it as a high-risk vulnerability. The flaw affects both iTunes for Windows and Mac OS X on "various" versions of the software.

According to the advisory, a flaw exists "that allows arbitrary code to be executed in the context of the logged in user." The discovery comes just a few days after Apple patched another security hole in the Windows version of iTunes. That vulnerability involved using the iTunes 5 helper application to launch a potentially malicious program.

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