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Afterdawn: Last week, at the Blu-ray Disc Festival in Los Angeles, 20th Century Fox president Mike Dunn took shots at a company he characterized as an 800 pound gorilla looking for customer confusion to spark online media sales. It was a thinly veiled reference to HD DVD supporter Microsoft, and later in the week a Microsoft representative responded, saying “The [Blu-ray] camp’s claims about Microsoft’s desire to have a format war are baseless.” Kevin Collins, director in the Microsoft Consumer Media Technology Group said ”Microsoft has over 100 people working on HD DVD interactivity and we believe that HD DVD is the next-generation optical format.”

Collins said the company’s decision to back HD DVD was a result of purely pragmatic concerns such as lower disc manufacturing costs and mandated managed copying, which is supposed to make it possible to exercise some fair use rights without compromising DRM concerns. On the subject of copying, he said “AACS today is rapidly approaching the ‘final agreement’ that will start to make this available for customers, though I do not have a firm timeline on this.” He added, “The key fact is that Microsoft believed that a next-generation format should be ‘consumer friendly’ and at the time of the decision, only HD DVD supported this.”

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VNUnet: Microsoft has responded to Sony’s price cut of the PlayStation 3 by announcing that UK buyers of the Xbox 360 HD-DVD drive will receive a bundle of films free.

The Redmond firm’s gaming unit has announced that buyers will get five free HD-DVDs when they spend € 165 on an Xbox 360 HD-DVD drive. With HD-DVDs retailing for around € 36 each, the deal almost covers the cost of the drive.

When buyers of the drives make their purchases, they will be given a form to fill out which will allow them to choose from 13 digital films. The movies take 28 days to arrive and the deal will run through to Christmas.

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Mobile Magazine: Everyone wants a piece of the iPhone pie. Rumors of a Microsoft cell phone — affectionately referred to as the ZunePhone — have been floating around for some time, but now we’ve found patent drawings depicting Microsoft’s future cell phone. Based on these sketches, the user interface appears nearly identical to that of the iPhone.

The patent calls for “extensible filtered lists for mobile device user interface”. The voicemail interface mirrors Visual Voicemail, as does the album and picture flipping. They’re almost exactly the same.

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Information Week Digital Life Blog: Microsoft is reported to be looking to acquire Garmin, the navigation system company.

There are a few reasons. Let’s start with the most immediate and obvious: cars. Microsoft has a system called Sync, a $395 (around €280) option that’s going to be offered in Fords, Lincolns, and Mercurys, starting with the 2008 Ford Focus.

The system uses Bluetooth and USB; does hands-free calling and voice-activated music selection; reads text messages aloud; can sync up with iPods, cell phones, and a variety of other devices; has steering wheel controls and a dashboard screen; and may, in later models, allow drivers to create spoken text messages and e-mails.

Garmin already has partnerships with both Microsoft and Ford, offering features such as updated gas prices, weather conditions and forecasts, and dynamic trip routing based on traffic and construction, stemming from a partnership with MSN.

The system offered in Fords includes Bluetooth capability and an MP3 player, reminiscent of Sync.

Despite a recent dip, Garmin’s also seen its stock more than double since the beginning of the year and recently increased annual earnings expectations above than the already higher-than-expected initial estimates. But mobile may be where Microsoft really sees the interest.

Last week, Nokia announced it was buying Navteq for $8.1 billion. InformationWeek’s Richard Martin wrote last week that the Navteq deal might be as much about location-based services in smartphones as it is about any of the more common uses of GPS navigation today.

Microsoft’s been working hard recently to get Windows Mobile onto as many phones as possible, and navigation technology could be important for the future of that strategy.

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MarketWatch: Microsoft unveiled new versions of its Zune portable media player Tuesday, as the company continues its uphill battle to take market share from Apple’s dominant iPod.

The key developments for the new product line are flash memory-based devices the can compete with the wildly popular iPod nano. Microsoft made a public announcement about the new Zune models Tuesday night, following reports by a number of blogs and online news outlets.

Three new Zunes were introduced, including two models that feature flash memory, and a larger model that is hard-drive based. Flash memory enables a smaller, sleeker design, while forfeiting some of the storage space offered by hard drive-based devices.
The first Zune, released in November, is hard drive-based.

In addition, Microsoft said the new Zunes, which will be available in stores in mid-November, will be able to download, play and wirelessly share songs from a related online store that are free of restrictive digital rights management software.

The original Zune has been widely criticized, and has struggled to gain ground on the rapidly-evolving iPod, which has accumulated a range of cutting-edge features in various models since its initial release in 2001 – including flash memory and touch screens.

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HDTV News: Microsoft has announced new Extenders for Windows Media Center, which connects a broadband-connected PC to a home entertainment centre.

The technology provides easy access to HDTV, video formats including DivX, music, photos and other media, from any TV in a house, via a network connection.

The Extenders make it possible to pause a TV show in one room and then resume watching in from a TV in another room.

Extenders for Windows Media Center is compatible with PCs running Vista Premium and Ultimate.

Linksys, D-Link and Niveus are all offering units to make this work, and HP is incorporating the extender technology in its MediaSmart LCD HDTV range, and Linksys, D-Link and Niveus are all offering units to make the technology work.

HP MediaSmart LCD HDTVs are available in 42-inch and 47-inch sizes and support 1080p video, 802.11n wireless, and DivX, XVid, WMV and other video formats.

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BBC News: More than 10,000 shops across the US will open at midnight to sell the title which is Microsoft’s key weapon in the console wars with Sony and Nintendo. More than 15m copies of the first two titles in the series have been sold.

Microsoft is hoping day one sales of the game will top €100m, making it the biggest-ever entertainment launch.
Shane Kim, corporate vice president of Microsoft Game Studios, said the success Halo 3 was an essential element in the competitive console market.

He said: “Halo 3 is the biggest franchise for Xbox. The game is going to drive a lot of Xbox 360 sales and Xbox Live subscriptions this Christmas.”

Microsoft needs Halo 3 to boost sales of the Xbox 360; despite investing billions of dollars into the Xbox project it has yet to see any meaningful profitable return.

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Afterdawn.com: After data figures showed that worldwide sales of the Nintendo Wii have overtaken the Xbox 360, Microsoft has decided to firmly set their sights on Europe.

Talking to an interviewer from Bloomberg, Microsoft’s group product manager Aaron Greenberg said “The number one objective is to win on a global basis and that may mean winning some markets and losing others.”

“Europe is our priority focus right now.”

Last week however, Microsoft said it planned to not give up on the Japanese market by increasing the number of game titles available there. Even so, sales of the 360 have stalled since its introduction, lagging far behind the Wii and even the PS3.

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Electronista: Microsoft could soon implement a new watermarking system for music that would discourage piracy without restricting the usefulness of the music, according to a newly granted patent. Titled “Stealthy Audio Watermarking,” the patent originally filed in May 2004 would use audio analysis to automatically place a digital signature inside the sound itself. Encoding software on a server would either look for gaps in the energy levels of a given track or create an uneven “chess” pattern, inserting data bits in areas where they are unlikely to affect the sound. Authorized software could then piece together a signature from the resulting information, identifying who bought a given track without requiring a separate digital rights layer that might restrict which devices can play the audio file.

Because the system is dependent on the actual structure of the music, it would make stripping the watermark extremely difficult, according to Microsoft. As the data would be seamlessly integrated with the sound, there would be no easily identifiable text or other data that could be altered. The inherently semi-random nature of bit placement would also prevent hackers from easily predicting where the watermark signature would appear. In one implementation, the media encoder that writes the signature could start the process at random points in tracks to further randomize the watermark.

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ComputerWeekly: Siemens VDO plans to build a platform that integrates entertainment functions and portable consumer devices more closely into the vehicle using the Microsoft Auto platform, a general-purpose in-car software technology. Microsoft will develop Auto focusing on multimedia applications and devices integration.

The two hope this software-based approach will speed up vehicle makers’ ability to add the latest entertainment and communication devices to their vehicles.

“We will be able to incorporate the rapidly changing trends in consumer electronics into the world of automotive electronics in an ideal way,” said Helmut Matschi, member of the board of Siemens VDO.

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Xboxer: Isn’t that nice? In the week following the price cut of the Premium and Core packs, the arrival of the Elite AND the launch of Planet Gaming’s favourite new game Bioshock, UK Xbox 360 sales rocketed by 260%.Not only that, but sales stayed up for the next week, only coming down by 20 percent. We can’t do maths of that complexity, but it still sounds like good news to us.

Amusingly, in the same issue of MCV, Sony is brushing off the worst week for PSP sales since it launched. Brave Sony is saying that it’s probably down to people waiting for the thinner redesigned models, rather admitting the truth – that DS is kicking the hell out of it.

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Forbes: Microsoft Corp., facing its second Xbox 360 headache of the summer, will replace parts of its Wireless Racing Wheel video game controllers after 50 reports that they overheated and released smoke.

The €95 steering wheel-shaped controllers mimic the physical sensations of race car driving for games such as “Forza Motorsport 2.” About 230,000 have been sold to consumers worldwide, the company said Thursday.

When the unit is plugged into an electrical outlet, its AC/DC adapter can overheat, Microsoft said, adding that it’s safe to continue using the gadgets with battery power.

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