Tuesday, August 12, 2008

Intel on Intel from Reuters

Intel, the world's biggest computer chipmaker, is comfortable with its forecast for revenue in the current third quarter in spite of the continued macroeconomic woes, its CFO said on Tuesday.  Asked if he was OK with Intel's (NASDAQ: INTC) forecast for third-quarter revenue of $10.0 to $10.6 billion, CFO Stacy Smith told Reuters: "Of course I'm still comfortable with it. It's still my forecast."  Analysts currently expect the company to have third-quarter revenue of $10.3 billion, according to Reuters Estimates.

"It's a very uncertain macro environment," Smith said in an interview. "It's not true just in the United States, it's true in Europe in terms of slowing growth. That being said, what we've seen in the last nine months is our business being pretty normal."

Intel last month reported a 25 percent rise in quarterly profit, helped by strong sales of its microprocessors used in notebook computers and gave a forecast that topped expectations at the time. It continues to do well despite a weak global economic environment, aided by market share gains against its smaller rival Advanced Micro Devices (NYSE: AMD)

Smith also said demand for Intel's low-power, low-cost chip called Atom is off to a good start. It is designed to go into super-slimmed-down notebook PCs, consumer electronics devices and embedded markets such as set-top cable boxes.  "Atom is off to a very, very rapid start, far exceeding our expectations when we started the year," Smith said. "It's the perfect recession product to have in the marketplace.

"It plays very well, in the mobile marketplace, it plays in emerging markets, it plays into people's desire to have a second PC or one for the kids that's low coast yet sill capable," Smith said of Atom. "It's off to the races."

Smith also said that he was not unduly concerned about Atom cannibalizing sales of its existing Core chips, but allowed that he would not mind sales of Atom eating a bit into those of its low-cost Celeron processors. "If it's cannibalizing from the Celeron part of the market, I'll take that any day," Smith said.

He said that Intel gets about 2,500 Atom processors per silicon wafer, meaning that its profitability on Atom -- while not as great as on a Core or Xeon chip -- is still quite healthy.

"We'll know kind of in six months how much of this demand [for Atom] is real and how much is customers thinking they're going to win in the market place and double ordering," Smith added. "It seems to be growing the market rather than cannibalizing existing PC sales."

Smith also said that interest among customers that would use Atom in the embedded market has been strong. While it takes longer for Intel to realize revenue from the embedded market because of longer design cycles, once its product has been designed in to a car or cable box, it remains for years.

"They now have a product that's designed much more for their market than what they've had available to them in the past," Smith said of Atom in the embedded market. "They're getting great interest from their own customer base." Smith also said that despite economic uncertainty in markets around the world, Intel's own business continues to hold up well.

Smith said he believes the strength of Intel's product lineup relative to AMD is helping it to weather uncertain economic times, as well as a rapid move to mobile PCs and devices.

"Even in the downturn we're seeing investments in technology continue," Smith said. Intel's shares rose 4 cents to $24.42 in late trading

Cost Plus World PIN Debit Breach Spreads to Arizona

I've blogged about the Cost Plus World Breach in California. Now it seems that the breach includes their stores in Arizona as well. Detectives have said that the criminals are taking out $500 at a time. Once again, I reiterate that using a HomeATM Wedgie for online purchases is eminently safer and more secure than using one provided by bricks and mortar retailers. Look for more breaches similiar to the Cost Plus World one in the near future...

Several stories hit the newswire today regarding the Arizona breach. Here's one of them...

Tucson police Detective Doug Musick said the scam has spread and now includes the Cost Plus store at 5975 E. Broadway.

Tucson Police say the criminals replaced existing counter card pin pads with their own, then later came back and switched them again, gaining access to consumers card and pin information. He explained that the scammers will replace PIN pads left on the counter with their own PIN pad. "Their PIN pad looks the same, but stores the credit card information," Musick said.

"Once the fraudulent PIN pad has been used, the scammers will come back and retrieve it and its stored information."

Information from Cost Plus customers' debit and credit cards has been used to make counterfeit debit cards, he said. "Be very cautious of using PIN pads left out on the counter like that," Musick said. "They can be unplugged and replaced within three seconds."

Shoppers at the Cost Plus World Market on East Broadway in March or April most likely had their credit or debit card information stolen, police said Monday. The problem started in California, where the company reported in July that customer information was taken from eight stores in February, March and April.

Musick said the information retrieved from Tucson customers' debit cards has been used at ATMs in the Phoenix area and in California. He said the scammers are taking out around $500 at a time. Musick said Vantage West Credit Union in Tucson first noticed that its customers' cards were compromised and brought it to the attention of the Tucson Police Department. Police are collecting information for use in a federal case.

Cost Plus customers who have had problems with their checking account are encouraged to discuss them with their banks. Musick said local banks are collecting information about which customers have been compromised and are passing that information on to authorities.

Nordstrom's Chooses First Data

First Data has announced that they have entered into a payment processing agreement with Nordstroms which will run for the next 7 years.  Here's the press release:

First Data Corp., a global technology leader in transaction processing and information commerce, announced today it has entered into a new payment processing agreement with Nordstrom fsb, a wholly owned subsidiary of Nordstrom, Inc. and a federally chartered thrift savings bank.

The seven-year agreement calls for First Data to provide card processing, call center and back office automation tools, fraud and risk management, customer analytics as well as e-statements and email alerts for Nordstrom's entire card portfolio including Nordstrom Visa(R), private label credit and debit cards and commercial cards for Nordstrom employees. The portfolio totals about 4.5 million card accounts on file. Financial terms of the agreement were not disclosed.

"We are always looking at ways to improve the experience our customers have with us, even regarding details such as how we process our credit transactions," said Kevin T. Knight, chairman and chief executive officer of Nordstrom fsb, president of Nordstrom Credit, Inc. "We're pleased to partner with First Data, a company that has such a strong reputation for their technological capabilities and expertise, and has a clear understanding of our strategic needs."

"It is a great honor to have earned the confidence of such a renowned retailer," said Ed Labry, president, First Data's U.S. division. "Our strategic view of the payments industry, our ability to offer the full spectrum of industry-leading services and the expertise of our dedicated employees is the value we can bring to Nordstrom."

Nordstrom, Inc. works with First Data's TeleCheck(R) unit for check verification services. The new processing contract with Nordstrom fsb runs through March 2016.

About First Data

First Data is a global technology leader in information commerce. The company processes transaction data of all kinds, harnesses the power of that data and delivers innovations in secure infrastructure, intelligence and insight for its customers. With operations in 37 countries, First Data serves over 5.4 million merchant locations, 2,000 card issuers and their customers. It powers the global economy by making it easy, fast and secure for people and businesses around the world to buy goods and services using virtually any form of payment.  The company's portfolio of services and solutions includes merchant transaction processing services; credit, debit, private-label, gift, payroll and other prepaid card offerings; fraud protection and authentication solutions; electronic check acceptance services through TeleCheck; as well as Internet commerce and mobile payment solutions.

The company's STAR Network offers PIN-secured debit acceptance at 2.1 million ATM and retail locations. Through First Data's centers of excellence, such as security, analytics, customer loyalty and mobile payments, it offers data-driven commerce solutions for customers around the globe. For more information, visit www.firstdata.com.

Forrester Research/eBillMe Webinar on August 26th

eBillme, the alternative payment provider that brings online banking to the eCommerce checkout, has announced that it will host an industry Webinar featuring Forrester Research Retail Analyst, Sucharita Mulpuru, who will discuss the opportunity offered by alternative cash payments for eCommerce checkout, with timely analysis based on the current economic downturn.

The Webinar will discuss the obstacles facing the retail industry and identify solutions to help retailers succeed, despite the economic climate. Topics will include lowering cart abandonment, increasing consumer confidence, and increasing sales though credit card alternative payment options.

"The Webinar, which will be held on Tuesday August 26th, 2008 at 1 PM EST, is an opportunity for merchants and industry executives to receive a leading analyst’s report of the current state of the industry, and to learn about the role of alternative payment options for retailers to capture sales during today’s economic climate."

“Consumers are looking for better ways to manage their spending and limit debt,” says Marwan Forzley, President and CEO of eBillme. “We understand that it is now more important than ever for online merchants to find ways to attract consumers to their checkout. This Webinar will discuss how merchants can use cash-like payment options to gain a competitive edge, reach new customers, increase sales, and build customer loyalty. Sucharita is a leading analyst in the retail space and we are thrilled to have her lead this Webinar and educate participants on this timely topic.”

The Webinar will be hosted on Tuesday August 26th at 1:00 pm EST. It is open to the media, online retailers, and the entire retail industry. To register, please visit:


More on the 40 Million Card Data Breach

The graphic (click to enlarge) from today's story "On the Trail of a Global Crime Ring" in the New York Times provides us with more   information  regarding the members of the  international identity theft ring.

Last week came the announcement that the DoJ had indicted 11 people in the 40 million card T.J. Max WarDriving Bust.  I found it interesting that, until then, it T.J. Max had bore the brunt of being the company involved in the hackattack.  In reality, there were 11 companies that were breached.  (1 for each culprit indicted?)  Why then, was T.J. Max so independently maligned?  Why were the other companies nary a mentioned?

According to an article in the Wall Street Journal it's because...

...only four of the chains clearly alerted their customers to breaches. Two others -- Boston Market Corp. and Forever 21 Inc. -- say they never told customers because they never confirmed data were stolen from them.  The other retailers -- OfficeMax Inc., Barnes and Noble Inc., and Sports Authority Inc. -- wouldn't say whether they made consumer disclosures. Computer searches of their Securities and Exchange Commission filings, Web sites, press releases and news archives turned up no evidence of such disclosures.

The other companies allegedly targeted by the ring charged last week were: TJX Cos., BJ's Wholesale Club Inc., shoe retailer DSW Inc., and restaurant chain Dave and Buster's Inc. They each disclosed to customers they were breached shortly after the intrusions were discovered.

The disclosure issue emerged after the government charged 11 men in five countries, including the U.S., Ukraine and China, with orchestrating a high-tech operation to steal credit-card numbers from 2003 to 2008.

After an increasing number of such thefts in recent years, more than 40 states have adopted laws requiring companies to give consumers an early warning when their personal information is stolen. Companies typically have made disclosures by letter, whenever possible, and through public announcements on the Web sites and in press releases to the media. Disclosure allows consumers to act quickly to limit losses -- by canceling their credit cards, changing their passwords or setting up credit-monitoring services. The Federal Trade Commission estimates nearly $50 billion is lost annually as a result of identity theft and credit-card fraud, with part of it absorbed by banks.

"If I were the companies, I would be issuing public disclosures five nanoseconds after the indictments were announced," says Evan Stewart, an adjunct professor at Fordham University School of Law and an electronic-data breach expert. "If not, there could be big checks the companies will have to be writing" to cover consumer litigation, he said.

Dan Clements, chief executive of Affinion Security Center's CardCops unit, which monitors Internet chat-rooms for illegal trafficking of credit and debit cards, says many companies are reluctant to disclose breaches. "Telling the public that they've been breached is embarrassing for them, it makes them suffer a loss of goodwill and in the case of public companies, the stock price goes down."

OfficeMax has denied having any knowledge of a breach. New Jersey authorities who investigated the company in 2005 believed it was one of a number of retailers who was compromised, and last week's indictments describe how the defendants allegedly broke into their networks. Boston Market and Forever 21 say their own investigations couldn't corroborate the government's findings. Federal officials say they stand by the information in the indictments.

The indictments allege that one of the suspects, Christopher Scott and another man identified only by initials broke into the wireless network of an OfficeMax store in Miami in 2004 and gained access to credit-card data. Mr. Scott, through family members, declined to comment.

Authorities also said they discovered in 2005 that OfficeMax's computer systems had been breached by another group that obtained customer data and used it to make counterfeit credit cards. "We believe the [credit-card] information was coming out of an OfficeMax in North Carolina," said Lt. Tom Cooney, of the Hudson County Prosecutor's office in Jersey City, N.J. "It turned out that a number of the victims" were customers at the same OfficeMax.

Edward DeFazio, a Hudson County prosecutor, says investigators in the joint federal-state probe notified OfficeMax and other retailers that their systems had been breached in a card-theft ring. Fourteen people were arrested in March 2006.

That month, OfficeMax acknowledged in an SEC filing an "ongoing federal investigation involving legitimate debit-card use at various retailers that was later tied to fraudulent transactions outside the U.S." But the filing added that "we have no knowledge of a security breach at OfficeMax."

In a statement following last week's indictments, the Naperville, Ill.-based company said, "it would be inappropriate to express our views relating to an ongoing criminal investigation." It said it has cooperated with authorities in their probe and was "confident in the integrity and security of our systems."

Last week's indictments also describe "attacks on Forever 21," which operates more than 350 clothing stores. Prosecutors allege that sometime this year, Damon Patrick Toey, of Miami, broke into Forever 21's system and shared access with Albert Gonzalez, the group's alleged ringleader, "for the purpose of downloading credit-card information of customers of Forever 21." Lawyers for Mr. Gonzalez declined to comment. Mr. Toey couldn't be reached to comment.

Larry Meyer, spokesman for Forever 21, says that this spring, federal authorities notified the Los Angeles-based retailer that it was among several retailers whose computer systems were "potentially infiltrated" by a crime ring. Authorities "asked us to investigate for a breach," he says.

He says Forever 21 conducted an internal investigation but didn't find a sign of a breach. Therefore, he says, the company didn't notify customers that their credit-card information was potentially at risk. "There was no breach," he says. "There was nothing to tell people." He says Forever 21 believes it is only obligated to make a disclosure if it finds a breach.

He added that as a result of last week's indictments, the company was in discussions with federal authorities.

The indictments also allege that Boston Market, a fast-food chain based in Golden, Colo., was hit by credit-card thieves. Company spokeswoman Angela Proctor acknowledges that the company was notified by federal authorities in 2004 about a potential breach. She says it never disclosed the matter to consumers "because we couldn't find any definite information that we'd been breached."

Ms. Proctor now says it isn't likely the company will inform consumers "because there is no way for us to identify customers who might have been affected." She added, "The consumer always does have an opportunity to report fraudulent activities" to credit-card companies.

Barnes and Noble, the New York-based bookseller, issued a release last week saying it "had not received inquiries from credit card companies or customers about these alleged activities." A company spokeswoman declined to comment further.

Sports Authority, based in Englewood, Colo., didn't return phone calls.

TJX, the Framingham, Mass.-based owner of stores including T.J. Maxx, Marshalls, HomeGoods and A.J. Wright retail chains, says it has spent $202 million in expenses related to the breach, which compromised the cards of millions of its customers. Most of the money is being used to settle lawsuits brought by consumers and banks and to pay settlements with credit-card associations.

Write to Joseph Pereira at joe.pereira@wsj.com and Jennifer Levitz at jennifer.levitz@wsj.com

jetBlue Hopes to Cash In

Here's a press release regarding jetBlue and Western Union teaming up to allow their customers to pay cash for jetBlue tickets online.

Anyway, it sounded like a relatively good way for JetBlue to get their money up front and eliminate interchange fees...until I got to the part whereby they explained that a customer must first go to an ATM...hopefully one without fees, or their bank to withdraw the cash and secondly,  jet-over  Happy Jetting!  to a Western Union location following their booking.  One more important note to consumers considering this payment option...don't forget the Western Union transfer fee! (and you've got to get there before midnight of the following day, so please, hurry!) 

Paying With Cash? JetBlue Airways and Western Union Make Flight Purchases Easy and Convenient

NEW YORK, Aug 11, 2008 (PrimeNewswire via COMTEX News Network) -- JetBlue Airways Corporation (Nasdaq:JBLU) and The Western Union Company (NYSE:WU) today announced an agreement that provides customers with an easy cash payment option for purchasing flights when they book their travel reservations via www.jetblue.com or 800-JETBLUE and select the fast, reliable and convenient money transfer service.

Customers can now visit any participating Western Union(r) Agent location following their booking to send a full payment of their JetBlue reservation and Western Union service fee in cash. Through a direct link to the low-fare, high-frills airline's system, Western Union can confirm a JetBlue reservation until midnight the following day.

"We are constantly looking for ways to simplify our booking and payment process and enhance the customer experience," said Don Uselmann, Manager of Business Development for JetBlue Airways. "Our relationship with Western Union is a great example of how we can provide greater flexibility and more options for new customers to choose JetBlue for their travel needs.

Paying with cash has never been easier."  (Editors Note:  What...say again?)

"Millions of consumers already know how easy it is to pay their bills using Western Union services," said David Shapiro, senior vice president, Western Union Payment Services. "Now JetBlue customers will have the convenience of purchasing their airline travel in cash at the places they already do business every day. What could be simpler than paying for your travel while you purchase groceries or fill up your gas tank?"

Western Union is a leading provider of global money transfer services, providing consumers with fast, reliable and convenient ways to send and receive money around the world via a network of Agent locations in more than 200 countries and territories.

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