Paul Sancya, AP 
 
 Paul Sakuma, AP 
 
 Sponsored Links 
 
 If 2010 taught us anything, it's that few people are able to accurately predict even the simplest events in the near-term future, let alone the big ones. From the price of gold, to unemployment, to Google Wave, prognosticators got more than a few major items wrong in their predictions lists.Here, in no particular order, are "10 for 10" -- 10 of the worst predictions of 2010."Unemployment Drops Below 9 Percent," Newsweek "business predictions for 2010," December 2009.Unfortunately, despite increasing efforts to contain our nation's unemployment epidemic, the unemployment rate never dipped below 9.5 percent, and climbed to 9.8 percent in November. Let's hope that a dip in the unemployment rate below 9.5 percent is something we will see in the coming year."The GOP will make good, though not great, gains in the midterms," John Berbyshire, National Review , Dec. 30, 2009Republicans took an incredible 63 seats in the House and came within just a few seats of taking the Senate. But the next part of Derbyshire's prediction -- "They will immediately embark on a strategy guaranteed to snatch defeat from the jaws of victory" -- may still come to pass."A new social network will rise to join the big ones." Marshall Kirkpatrick, ReadWriteWeb , Dec. 24, 2009.Not quite. In fact, 2010 was the year of Facebook. It topped 500 million users, it was the subject of constant IPO speculation, Time named its founder Person of the Year, and it spawned a hugely successful feature film. Meantime, its competitors struggled to stay afloat (looking at you, MySpace and Bebo). In short, no one is even attempting to challenge Facebook for supremacy. Perhaps someday a new player will rise to make the king of all social networks a second-rate choice, but that day doesn't look to be coming any time soon."Twitter, as we know it, will fade away. Either acquired or shut down." CNBC Tech Check Predictions 2010 , Dec. 1, 2009Many predicted the downfall and/or complete demise of Twitter in 2010, and many were completely wrong. Twitter has instead silenced its critics by gaining more than 100 million users, increasing staff from 130 to 350 people and raising more than $200 million in financing, raising its value to $3.7 billion, all during the past 12 months "To believe that Apple can somehow succeed where all others have failed is to ignore some fundamental realities of tablet computing." Randall C. Kennedy, Infoworld.com , Dec. 22, 2009Apple still hasn't lost its golden touch: More than 4 million iPad buyers in a single quarter can attest to that."In 2010 ... netbooks will take off," Julia Boorstin, CNBC , Dec. 1, 2009Between the announcement and introduction of the iPad and its many tablet-based competitors, and the lack of performance and high prices, netbook sales spiraled downward in 2010. Expect a continued free-fall in sales unless prices are slashed drastically, or the iPad ceases to exist."In 2010, Wave's utility will become more apparent," Pete Cashmore, CNN Tech , Dec. 3, 2009Massively over-hyped during its introduction in late 2009, Google Wave was to be the central hub of our lives, merging our e-mail, social networking, instant messaging, wiki and every other form of digital media in one "easy to use" package. "Easy to use" it was not, however. So while some were optimistic that Google Wave's utility would shine through eventually, the rest of us decided to simply ignore its clunky, scatterbrained approach to digital life.Google promptly flushed Wave down the toilet in August, less than a year after its introduction."A serious correction could send the precious metal toward $870," Saxo Bank analysts, cited by CNBC , Dec. 17, 2009.Not even close to coming true. Gold prices have steadily rallied upward in the past year, rising past the $1,400 mark per troy ounce late in the year."By late 2010, paying for products and services via a mobile device such as a cell phone will begin to emerge in the mainstream U.S.," Jonathan Reichental, reichental.com , Jan. 1, 2010.Another prediction that may come to pass someday but that wasn't meant to be in 2010. Simply put, people are not yet ready to give up their credit cards in favor of a "credit phone" to pay for purchases on- or offline."We project that at least half the cast will, of their own volition, opt to stay," Sarah Ball, Newsweek , December 2009While the cast of ABC's monumental hit would probably have liked to stay on the island and continue to collect their handsome paychecks, writers instead opted to kill everyone off in the series' finale.Here's one prediction you can count on coming true: Most 2011 predictions will also be spectacularly wrong, and I'll be watching.J. Conboy is a highly opinionated freelance writer with many specialties. You can find more of his work on AOL News, AOL Travel Luxist and various other AOL sites. ||||| Google says its mission is to organize the world’s information, but that statement should be probably updated to include the verb “sell” now that Google is launching an e-bookstore on Monday. 
 
 Google’s long awaited e-book-only bookstore, Google eBooks, puts the company in competition with Amazon, Apple and Borders for the burgeoning electronic-book market. The move, limited at the start to U.S. customers only, also marks the first real retail venture for the search and online-advertising behemoth, if you don’t count the Android app market. 
 
 “The fundamental idea is buy anywhere and read anywhere,” said James Crawford, an engineer for Google eBooks, who emphasized that the system makes it easy to read the same book on multiple devices. “The fundamental architecture is cloud-based, and you never wonder where to put your books.” 
 
 The company claims that it will have more books in its catalog than any other online bookstore — more than 3 million titles, but only about 200,000 of those are books licensed from publishers. About 2.8 million of the books are books no longer under copyright in the United States that Google has scanned from university libraries as part of its controversial Google Books project. Started in 2004, Google Books has scanned millions of books, mostly without permission from copyright holders, making them searchable online. 
 
 The venture is yet another attempt by Google to diversify its money making. That’s key for the company’s long-term health since it derives nearly all its revenue (nearly $5.5 billion in the third quarter of 2010) from online ads, with the majority of that coming from text ads on its own properties. 
 
 Google is seeking to differentiate itself from Amazon and its popular Kindle reader by selling books that can be read on a wide range of devices, from iPhones, iPads and Android-based devices, along with computers running any browser that can use JavaScript. Books can also be read on Barnes and Noble’s Nook and Sony’s E Reader, but not on Amazon’s Kindle — because of compatibility issues with the Adobe copyright management DRM attached to the e-books, Google said. 
 
 Book buyers will have all their books tied to their Google account, and the service will use Google checkout for payment. 
 
 Google’s inclusion of scanned books (those in the public domain) from its Books project could rile Amazon. Amazon told a federal court looking into the project that allowing Google to scan and sell millions of out-of-print books whose copyright owners can’t be found gives Google an unfair advantage. That objection comes despite Google’s offer to let Amazon and other booksellers resell the orphans, as well. 
 
 The fate of these so-called orphan books remains in the hands of a federal court judge in Manhattan, and are not available in the bookstore launching Monday. 
 
 Google is also partnering with independent bookstores, including Powell’s, to let them sell e-books on their website and share in the revenue from the sale. Independent and local bookstores can drop technology from the American Booksellers Association onto their sites to enable them to sell e-books through Google. 
 
 Google also hopes to create book-selling widgets that will let books be purchased through its service on any site on the net. It’s starting one such partnership with Goodreads, a leading site for book clubs. Starting Monday, users of that site can click on a book for their reading group straight from Google. 
 
 “The idea is that you buy where you are and read on devices you already own,” Crawford said. “We are committed to open structure, and building up a wider and wider retailer network.” 
 
 
 
 The decentralization of book-selling venues is a clever way to take on Amazon.com, which for many is synonymous with online book sales, and iTunes, which is closely tied to Apple’s iPad/iPod/Mac ecosystem and fighting to become as powerful in digital print sales as it is in digital music. 
 
 However, Google eBooks does not yet have an open-affiliate program like Amazon’s, that lets reviewers and website owners insert custom code into a link so they get a small percentage of every purchase initiated from that link. 
 
 Book readers will be able to switch from reading in a browser (Chrome and Safari only), to their mobile devices (Android and iPhone) to an e-book reader, without losing their place. However, with copy-protected books, there is no cut-and-paste, no printing and no lending or giving a book away. 
 
 Readers who travel outside U.S. borders will be able to read books already in their account, unless those books are not out of copyright in the country the reader is visiting. Users can’t purchase books when visiting the store from a non-U.S. IP address, the company said. 
 
 All the nation’s top publishers have signed onto the venture, making the service’s debut far less rocky than Google TV, which was quickly blocked by the websites of the country’s top broadcasters, despite the fact that integrating meant more viewers of online TV episodes that come with unskippable commercials. 
 
 All of the largest publishers, except for Random House, are opting for a model where the publishers set the price and Google and other retailers are simply acting as their agents. In this model, publishers and Google/retailers roughly split the price. 
 
 Other publishers and Random House are opting for a model where they sell books to Google at a set price and on a schedule of discounts, leaving the retailers free to price the books as they like. 
 
 Book prices will range between $1 and $300, since the service will include technical and academic publications, such as books from O’Reilly and university publishers. 
 
 Publishers can choose whether to lock down their books with DRM. Google also says it will have a strict privacy policy that forbids it from using your book-buying habits to advertise to, or profile readers. 
 
 Google also seems cognizant that it is under scrutiny from government regulators. Currently, when books in print come up in Google and Google book-search results, Google includes links to places to buy them online, including Amazon.com. That behavior won’t change, the company said, but Google eBooks will now be one of the options. 
 
 Google hopes to layer social features into the service in the near future and says the infrastructure is in place to let people buy both a digital and paper copy of a book in a bundle. ||||| Stock Chart for Facebook Inc (FB) 
 
 Facebook Inc. (FB) fell in late trading after its first earnings report as a public company showed a slower sales gain and narrower profit margins, failing to allay the concerns over growth that have sliced shares 29 percent. 
 
 Operating margin, excluding certain costs, was 43 percent in the second quarter, a decline from 53 percent a year earlier, amid a fourfold surge in sales and marketing expenses. Revenue rose 32 percent, the slowest pace on record, and payments- related sales were $192 million, below the $199.3 million average prediction from analysts surveyed by Bloomberg. 
 
 Facebook executives led by Chief Executive Officer Mark Zuckerberg, addressing analysts for the first time since the company’s May 17 initial public offering, issued no growth forecasts and said little else to reassure investors who fret that the company is overvalued. The largest social network is adding users faster than it can generate ad sales, the company said, reiterating remarks it made on the cusp of the IPO. 
 
 “It has become a show-me story,” said Nabil Elsheshai, a senior equity research analyst at Thrivent Financial. “The problem is deceleration, and there wasn’t anything from an outlook perspective that would indicate that is going to stop.” 
 
 Facebook shares slumped 12 percent to as low as $23.75 after the results were released. It had dropped 8.5 percent to $26.85 by the close in New York, and it’s down from $38 at the IPO. 
 
 Expenses Surge 
 
 Sales increased to $1.18 billion, Menlo Park, California- based Facebook said in a statement today. That compares with an average estimate of $1.16 billion, according to data compiled by Bloomberg. Monthly active users rose to 955 million, exceeding the 950.1 million prediction by analysts surveyed by Bloomberg. 
 
 The revenue increase was dwarfed by an increase in spending on marketing and sales, which surged to $392 million. The company reported a net loss of $157 million, or 8 cents a share, and profit excluding certain costs of 12 cents a share. 
 
 Today’s report and conference call -- the mostly highly anticipated earnings release since Google Inc.’s inaugural figures in 2004 -- gave management its first chance since May to make a case that Facebook deserves a higher price relative to earnings than 98 percent of the Standard & Poor’s 500. 
 
 “A little bit of earnings guidance, a little bit of optimism about future performance would have been nice,” said Jordan Rohan, analyst at Stifel Nicolaus & Co. in New York, who has a hold rating on Facebook. “Facebook trades at a premium to many companies, including Google, and is only growing at a slightly faster pace than companies like Google.” 
 
 Twitter, Google 
 
 Shareholders sought assurances that the company can keep users engaged amid rising competition from Twitter Inc. and Google and that it can overcome challenges making money from advertising on mobile devices. 
 
 Facebook said in May that sales growth wasn’t keeping pace with user expansion as more members accessed the service with mobile phones. The number of ads delivered in the U.S. in the second quarter decreased 2 percent even as the number of daily users increased 10 percent, Chief Financial Officer David Ebersman said on the conference call. 
 
 “Ad impressions continued the recent trend of growing more slowly than users as more of our usage is on mobile devices,” Ebersman said. “This trend is particularly true in markets such as the U.S., where smartphone use is expanding rapidly.” 
 
 Facebook has had little time to gain traction in mobile advertising, having just announced its inaugural mobile- advertising platform in February. 
 
 Mobile Challenges 
 
 Zuckerberg, who gave opening remarks on the call, said mobile is a key area of focus for the company. Mobile users, who make up more than half of the membership, are more active than counterparts who use only the desktop version, he said. 
 
 “Mobile is a huge opportunity for Facebook,” Zuckerberg said. “Our goal is to connect everyone in the world. And over the next five years, we expect 4 or 5 billion people to have smartphones. That’s more than twice as many people as have computers today.” 
 
 Early results on mobile ads show some promise, according to AdParlor, which provides services for marketers. Click-through rates are 15 times higher on mobile than on desktops, while the pricing is 30 percent less, according to AdParlor. 
 
 Owing to the success of new services, Facebook should boost both mobile and desktop advertising revenue in the future, Chief Operating Officer Sheryl Sandberg said on the call. Still, the company must educate companies about how they should advertise on a social service, still a relatively new avenue for marketers, she said. 
 
 Like TV 
 
 “It took a long time for the TV market and advertising to be truly understood, it took a long time for search, and I think we’re still in that learning curve with a lot of our clients,” Sandberg said. “If our ads work, and we continue to make our ads work and they work for advertisers and our users, we’ll be able to educate the market over time.” 
 
 Facebook raised $16 billion in the May 17 IPO, the largest ever for a technology company. Yet its debut was marred by technical glitches, and the stock only managed to close above $38 on the first day of trading. The company had first proposed a price range of $28 to $35 before raising it to $34 to $38 just days before the IPO. 
 
 Facebook derives most of its revenue from ads that reach users as they post comments, embed videos or check photos uploaded to the site by friends. The company also makes money when users pay for digital items, including on games made by Zynga Inc. (ZNGA) Facebook shares were weighed down earlier today after Zynga announced earnings that missed analysts’ estimates. 
 
 Progress Made 
 
 Facebook is making progress in some areas, including online display advertising, which includes photos and other graphical elements. Facebook will have 16.8 percent of the U.S. market this year, after grabbing the top spot from Yahoo! Inc. last year, according to EMarketer Inc. in New York. Google will have 16.5 percent, up from 13.8 percent last year and Yahoo’s share will be 9.1 percent, down from 10.8 percent. 
 
 Users are also spending more time on the service. Average time spent online increased 5.1 percent in June to 400.2 minutes, or more than six-and-a-half hours, after a gain of less than 1 percent the previous month in the U.S., according to researcher ComScore Inc. (SCOR) 
 
 To contact the reporter on this story: Brian Womack in San Francisco at bwomack1@bloomberg.net 
 
 To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net ||||| Amazon.com Inc. (AMZN), the world’s largest online retailer, unveiled its Kindle Fire tablet computer, taking aim at Apple Inc. (AAPL)’s bestselling iPad with a device that’s smaller and less than half the price. 
 
 The Kindle Fire will have a 7-inch display and sell for $199, compared with $499 for Apple’s cheapest iPad, Amazon executives said in interviews with Bloomberg Businessweek. The device, a souped-up version of the Kindle electronic-book reader, will run on Google Inc.’s Android software, the Seattle-based company said. Amazon also introduced a touch-screen version of its e-reader, to be called Kindle Touch. 
 
 Chief Executive Officer Jeff Bezos is betting he can harness Amazon’s dominance in e-commerce to pose a real challenge to Apple’s iPad, after tablets from rivals such as Hewlett-Packard Co. (HPQ) and Research In Motion Ltd. have fallen short. Sales of Amazon’s electronic books, movies and music on the device may help make up for the narrower profit margins that are likely to result from the low price, said Brian Blair, an analyst at Wedge Partners Corp. in New York. 
 
 “Amazon is really the only other guy, the only other potential tablet player, that has a similar offering to what Apple has,” Blair said in an interview last week. “If you look across their product offerings, they have content that none of the other tablet makers currently have because they have content on the media side.” 
 
 IPad Appeal 
 
 While the Kindle Fire can vie with the iPad in access to media content, it lacks a camera, microphone or a connection to a 3G wireless network. It may not appeal to consumers who are drawn to the iPad’s larger screen and willing to pay a premium for added features such as video chat. 
 
 “The Amazon tablet is not necessarily a direct competitor to the iPad,” said Colin Sebastian, an analyst at Robert W. Baird & Co. in San Francisco, in a telephone interview. Another version of the Kindle may debut next year with more features to directly compete with Apple, he said. Right now, “the price point is the headline rather than the functionality.” 
 
 Starting today, customers can order the new tablet, as well as a basic version of the Kindle e-reader for $79 and two new touch-screen readers, one for $99 and another for $149 that has 3G wireless access. The lowest-priced Kindle can ship today, the tablet will go out Nov. 15, and touch-screen readers will be released Nov. 21, Amazon said. 
 
 Shares Rise 
 
 Amazon’s shares rose $5.50, or 2.5 percent, to $229.71 at 4 p.m. New York time on the Nasdaq Stock Market. The stock has increased 28 percent this year. 
 
 Apple fell $2.25 to $397.01. Shares of Barnes & Noble Inc., maker of the Nook e-reader, declined 91 cents, or 6.9 percent, to $12.30 on the New York Stock Exchange. 
 
 The Kindle Fire offers Wi-Fi connectivity and comes with a 30-day free trial of Amazon Prime, the company’s $79-a-year membership service that includes streaming video and free two- day shipping. A web browser called Amazon Silk will use so- called cloud computing to speed access to content over the Internet. The tablet will be available on Amazon’s website and at retailers that already sell the Kindle e-readers. 
 
 Amazon has painted over the rough surfaces of Google’s Android operating system with a fresh and easy-to-use interface and tied the device closely to its own large and growing content library of movies, magazines and music. Cambridge, Massachusetts-based Forrester Research Inc. predicts the tablet market will grow 51 percent a year through 2015. 
 
 Sales Potential 
 
 While the new Kindle will add to Amazon’s sales, estimated by analysts to rise 32 percent to $64.6 billion in 2012, the company may disappoint if the tablet doesn’t bring in revenue quickly, Steve Weinstein, an analyst at Pacific Crest Securities in Portland, Oregon, said in a note this week. 
 
 Consumer reaction to the device will play a “critical” role in the company’s growth, he said. Analysts on average predict Amazon’s gross margin, a measure of profitability, will fall to 22.17 percent in 2012 from 22.35 percent last year, according to a Bloomberg survey. Gross margin is the percentage of sales left after subtracting production costs. 
 
 “Without success in tablets, investor growth expectations for 2012 could prove too aggressive,” Weinstein said Sept. 26. 
 
 Apple started selling the original iPad in April 2010, and introduced the iPad 2 in March of this year. The touch-screen device, which has a 9.7-inch diagonal display, is already Apple’s biggest source of revenue after the iPhone. The company shipped 9.25 million iPads in the quarter that ended June 25. 
 
 Mobile Applications 
 
 Apple also leads the market for mobile applications, with more than 425,000. Over 100,000 of those apps are custom- designed for the iPad. 
 
 Two other tablets have failed to make a dent in Apple’s dominance so far. Research In Motion Ltd.’s PlayBook, introduced in the second quarter, shipped 200,000 units, less than half of what analysts predicted. Analysts had already cut estimates for full-year PlayBook shipments to an average of 2.2 million, according to a Bloomberg survey. 
 
 Hewlett-Packard Co., meanwhile, discontinued its TouchPad in August -- only about a month after its debut. And Microsoft Corp. (MSFT), the world’s largest software maker, may not have its Windows operating system for tablets ready until next year. 
 
 The iPad accounted for 68 percent of all tablets shipped worldwide in the second quarter, according to Framingham, Massachusetts-based research firm IDC. Other Android-based tablets, including models from Motorola Mobility Holdings Inc. and Samsung Electronics Co., accounted for 27 percent. 
 
 While Amazon has the clout and the content to take on Apple, the company will have to go beyond the tablet released today to be a serious competitor, Blair said. 
 
 “I don’t actually believe 7-inch is going to be a viable tablet for anybody,” he said. “It’s a ‘tweener. A real tablet offering has got to be a 10-inch screen.” 
 
 To contact the reporters on this story: Brad Stone at bstone12@bloomberg.net; Danielle Kucera in San Francisco at dkucera6@bloomberg.net 
 
 To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net ||||| James Martin/CNET 
 
 Having already won a standing ovation for its iPhone 6 and iPhone 6 Plus smartphones, Apple seemed content with garnering polite applause for its newest iPads and Macs. 
 
 At least, that's what it looked like after CEO Tim Cook on Thursday unveiled the iPad Air 2, iPad Mini 3, a new Retina 5K Display-packing iMac desktop computer and an upgraded Mac Mini computer at an event that was heavy on filler and, surprisingly, comedy. 
 
 The enhancements to each device were welcome, but not earth-shattering. 
 
 While the mature PC business has settled into the occasional incremental update, tablets are at a potentially more critical turning point: Are there still more days of wild growth ahead, or is the recent slump a sign of things to come? Recent data and Apple's own financial performance suggests it's the latter, with a sluggish market looking for a jolt of innovation and enthusiasm. 
 
 Apple instead opted to play it safe. After shaking off criticism that it lacked the ability to "think different" by debuting the Apple Watch and the larger-screen iPhone 6 and iPhone 6 Plus, it went back to its old ways -- proffering incremental updates to existing products with Thursday's announcements. 
 
 The new iPad Air 2 and iPad Mini 3 seem almost perfunctory. The iPad Air 2 is housed in a thinner and lighter body, boasts a faster processor and gains the Touch ID fingerprint-reading home key that debuted a year ago in the iPhone 5S. The iPad Mini 3, which was essentially glossed over, also gets Touch ID. 
 
 "Unless you really want it for the better camera capability on your iPad or are dying to have the thinnest iPad yet, there's not a huge incentive to upgrade from the previous model," said Lynette Luna, an analyst at Current Analysis. 
 
 Specs and year-old features don't consumers excited. And they badly need a reason to buy a new tablet, as people who own one are more than likely to hang on to it rather than trade up to a new device. 
 
 That's why the tablet market is starting to see its growth stall. The category is expected to post full-year shipment growth of 11 percent over 2013, respectable until you compare that to the year-over-year growth of 55 percent the tablet market experienced last year, according to market research firm Gartner. 
 
 iPad in a rut? 
 
 Apple's results more dramatically illustrate the stagnant market. While the iPad remains the top-selling tablet, sales have declined from a year ago and have fallen short of Wall Street expectations for two straight quarters. That begs the question: Have tablets, and specifically the iPad line, peaked? 
 
 Apple argues it hasn't. Cook today cited the 100 percent customer satisfaction rate for the iPad -- an unusually high score for any product. He also touted the iPad's key advantage: The 675,000 apps specifically designed for the tablet. Apple has sold 225 million iPads since the device was introduced by former CEO Steve Jobs in 2010. 
 
 And some do believe Apple was wise to stick with modest improvements. "Being safe might actually yield a better return," said Carolina Milanesi, an analyst at Kantar Worldwide. "They're trying to improve something that is best in class." 
 
 James Martin/CNET 
 
 It's easy to see how the once exploding category has fallen back to earth. Tablets aren't the same kind of personal device as a smartphone, which gets replaced every two years -- or less. They're more like PCs, with consumers willing to make do with an aging gadget for longer periods. 
 
 The advent of large-screen smartphones, known as phablets because they look like a mash-up between a phone and tablet, are also eating away at the need for the larger tablet. Some phablets, including Samsung's Galaxy Note line, are packed with a smart stylus and tools that enable people to use them as their primary computing device. 
 
 "There was nothing in today's announcements which would convince someone who's stopped using an existing iPad to buy a new one -- the new iPads do the same things better, but don't do anything dramatically new and different," said Jan Dawson, an analyst at Jackdaw Research. "For people who have found a large smartphone and a laptop sufficient, the new iPads won't change the equation." 
 
 Low-cost tablets, such as the Nexus 7, a competitive tablet from Asus that is $270 less than the base iPad Air, are also eating into Apple's share. On Wednesday, Google unveiled a new Nexus products, including the larger Nexus 9 tablet, priced at $399 -- that's $100 less than the iPad Air. 
 
 To offset that, Apple is keeping its original iPad Mini and pricing it at $249. It's also keeping its year-old iPad Mini 2 and iPad Air, fleshing out its product portfolio to hit a range of prices between $249 and the base $499 iPad Air 2. 
 
 "The $249 iPad Mini is a nice door opener for them," Milanesi said. 
 
 Perhaps the jolt Apple needs will come next year, when it's expected to unveil a larger "iPad Pro" for the business and professional market. 
 
 Mac line gets badly needed refresh 
 
 The tagline of Apple's event invitation, "It's been way too long," may have referred more to its Mac lineup. Both the iMac desktop and Mac Mini got an upgrade -- the first time Apple has made significant tweaks to both computers in two years. 
 
 The iMac finally joined the club of Apple devices with a higher-resolution Retina Display. The iMac now has an option of a Retina 5K Display, with a resolution of 5,120x2,880 and 14.7 million pixels. 
 
 "It is stunning," said Philip Schiller, senior vice president of marketing for Apple. 
 
 CNET 
 
 But at $2,499, the iMac with Retina 5K Display is a niche product. Analysts believe there will be a market for those who highly value an improved screen. Apple interestingly compared the iMac to Ultra HD televisions instead of comparing it to other desktop computers. Schiller said the 5K Display has 67 percent more pixels than an Ultra HDTV. 
 
 The Mac Mini, Apple's most affordable computer, also got an upgrade, although the design remained the same (it's a box that ships without a monitor, keyboard or mouse). The biggest change: a $100 haircut off the starting price, which now begins at $499. 
 
 Apple's Mac business might not be as big -- or as sexy -- as its mobile business, but it remains an important focus for Apple. The company now generates less than 15 percent of its revenue from Macs, but the devices help flesh out its family of products -- which are increasingly designed to work together. 
 
 Apple in July reported Mac unit sales rose 18 percent to 4.4 million in the quarter ended June 28. Cook said the Mac boosted Apple's overall financial results, and the company saw strong sales in some regions weak for other PC makers. 
 
 Apple hasn't yet reported its most recent quarter, but research firm IDC last week said the company moved into the No. 5 ranking for global PC sales in the calendar third quarter. For the past several years, Apple has controlled a much smaller chunk of the market, but its sleek designs, such as the MacBook Air, have attracted customers. 
 
 Software gets turn in the limelight 
 
 Apple spent time delving into the software side, underscoring the importance of the company's strategy of controlling all aspects of the user experience. One of Apple's upcoming key advantages will be the ability to have hand-offs between its various products. 
 
 The company spent a large chunk of the presentation at the beginning running through many of the features it showed off at the Worldwide Developers Conference in June, peppered with bits of comedy, including an audio appearance by comedian and TV host Stephen Colbert and a parody video on Apple's intense handshake security. 
 
 Apple touched upon desktop operating system OS X 10.10 Yosemite, which most importantly will be able to synchronize with mobile operating system iOS through AirDrop file-sharing, iMessage messaging, and the ability to make and receive phone calls. 
 
 As with OS X Mavericks last year, Apple said Yosemite would be free to download, and made the software available after the event ended on Thursday. 
 
 Apple 
 
 Craig Federighi, senior vice president of software engineering overseeing iOS and Mac OS X, tacitly acknowledged the issues with iOS 8. The initial release of iOS 8 caused issues with connectivity, slower performance on Safari and lag in some apps such as photos. Apple also removed the camera roll folder in Photos, which users complained about. 
 
 "When we put a major new OS in the hands of hundreds of millions of users, we do get a little feedback," he said, drawing guffaws from the audience. 
 
 Fererighi briefly talked about iOS 8.1, which brings back camera roll. 
 
 Also coming with iOS 8.1 is Apple Pay, which will allow users to pay for goods at retailers and restaurants using a special chip found in the iPhone 6 and iPhone 6 Plus and the TouchID sensor for verification. 
 
 The service, which was unveiled last month at the iPhone event, but hasn't gone live, has the potential to transform how we pay for goods and services, and accelerate the long-gestating advent of the mobile wallet. 
 
 Apple said Apple Pay would launch on Monday. ||||| Hewlett-Packard's Mark Hurd didn't sit down for an interview with me, but he's begun doing phoners post-earnings and I'm still holding out hope that 2010 will be the year for a two-camera, in-depth production. Come on, Mr. Hurd. Now's a good time! 
 
 I predicted that Google would come up with new revenue streams, and with YouTube turning a profit and Android looking good, that prediction came true too, and its stock price reflects a new found euphoria. 
 
 Microsoft's redesign of the Zune came true, but it didn't include the phone I expected. Steve Ballmer tells me no way, but I still see the company entering the smart phone arena with a handset of its own. 
 
 I predicted that Intel , HP, Cisco , IBM and Oracle were all oversold and that such lows presented good opportunities for investors. All of them would have been good bets last December. 
 
 I asked whether Palm would survive 2009. Despite the Pre and the Pixi, I think the jury's still out. Dell is entering the smart phone market with hardware of its own. Maybe that means Nokia is the best (last? Only?) hope for Palm in 2010. 
 
 I predicted that Advanced Micro Devices would be acquired in 2009. Didn't happen. With that $1 billion from Intel as part of that new settlement, 2010 could be a much better year for AMD. But "much better" is relative when you're scraping for Intel scraps merely to survive. 
 
 I said Apple posed the biggest opportunity for tech investors in 2009 and I was right. I'd say the same holds true for 2010. Look for the tablet Mac, but not anywhere close to the $2,000 price tag being thrown around. Apple will re-invent mobile computing once again with this device, but beyond hardware and software, it'll do so with price as well. 
 
 If 2009 was a big year for 3D movie-making, 3D TV will blossom big in 2010. New TVs from Sony , Samsung, LG and others will grab lots of attention, and new 3D TV production from upstarts like 3Ality will show viewers enormous possibilities. 
 
 Some other predictions. 
 
 
 
 This is cool stuff. Digital books and eReaders from Amazon , Sony, Barnes & Noble and 17 other manufacturers will enjoy their true break-out year. 
 
 Microsoft will enjoy a big-time renaissance. Cisco continues to be one of this region's most exciting growth stories. Netbooks start to fade as a fad as consumers realize that their iPhones, Research In Motion's Blackberrys and Nokia smart phones get the job done at a fraction of the size (and cost.) 
 
 And Twitter, as we know it, will fade away. Either acquired or shut down. $155 million in venture capital so far, and still no meaningful revenue stream to speak of. And certainly no profits. At some point, someone will step up and yell "Tulips!" 
 
 Meantime, I'm sure of a few key predictions in 2010: Innovation and the entrepreneurial spirit will continue to thrive here in Silicon Valley. It's what makes my job so fun and America so great. ||||| Verdict is in on Apple iPad: It's a winner 
 
 Months of speculation, feverish lust, an überhyped prize that could disrupt the status quo of computing. You wouldn't be the first person to compare the run-up to Saturday's arrival of the iPad to the prelaunch mania that surrounded the iPhone. Apple 's freshly conceived slate-style computer promises to influence the media, mobile entertainment and publishing industries the way its close cousin the iPhone has affected wireless. 
 
 The first iPad is a winner. It stacks up as a formidable electronic-reader rival for Amazon's Kindle. It gives portable game machines from Nintendo and Sony a run for their money. At the very least, the iPad will likely drum up mass-market interest in tablet computing in ways that longtime tablet visionary and Microsoft co-founder Bill Gates could only dream of. 
 
 IPAD QUESTIONS: USA TODAY answers your iPad queries 
 
 For more than a decade, nobody, not even a deep-pocketed company like Microsoft, has successfully cracked the tablet market. Apple, based on my tests over several days, is likely to be the first. Back in 2001, Gates predicted tablets would be the most popular form of PCs sold in America within five years. That obviously didn't come to pass. Apple's roots with the tablet form of computing date at least to its ill-fated Newton, an early 1990s personal digital assistant pushed by then-CEO John Sculley and later killed by Steve Jobs. 
 
 These days, several large computing companies have shown off or announced some sort of slate-type computer, including Dell, Hewlett-Packard and Lenovo. Netbook pioneer Asus told Forbes that it, too, plans to roll out tablets. But Apple's new tablet will do the most to spawn renewed interest in the category and could tap into markets as varied as medicine and education. This week, Pennsylvania's Seton Hill University announced plans to give every full-time student this fall an iPad. Piper Jaffray analyst Gene Munster expects 2.7 million iPads to be sold in 2010 and 8 million next year. Endpoint Technologies analyst Roger Kay ups the sum to about 4 million units the first year. 
 
 An often-asked question after Jobs unveiled the tablet at the end of January was: What is iPad's purpose for being? I answered that question by surfing the Web, watching the movies Up and Michael Jackson's This Is It, reading the late Sen. Edward Kennedy's True Compass, playing Scrabble and an accelerometer-driven game called RealRacing HD, and boning up on the periodic table of elements. 
 
 The iPad is larger than a smartphone but smaller than a typical laptop. Depending on your perspective, the space between is either fertile ground for an electronic device or a no-man's land. Even Apple seems unsure to what degree the iPad may hurt sales of its MacBook or MacBook Pro notebooks. 
 
 The iPad is not so much about what you can do — browse, do e-mail, play games, read e-books and more — but how you can do it. That's where Apple is rewriting the rulebook for mainstream computing. There is no mouse or physical keyboard. Everything is based on touch. All programs arrive directly through Apple's App Store. Apple's tablet is fun, simple, stunning to look at and blazingly fast. Inside is a new Apple chip, the A4. The machine is the antithesis of the cheap underpowered netbook computers that Jobs easily dismisses. "Netbooks aren't better at anything," Jobs scoffed during his January presentation introducing the iPad. "They're slow, they have low-quality displays and they run clunky old PC software." 
 
 What does a successful iPad launch mean for traditional netbooks? They'll have to adapt or disappear — especially since their price advantage compared with the entry-level iPad isn't as great as some might have thought it would be. "You can use the iPhone as the blueprint for how this will play out," Munster says. 
 
 Early buyers (and those who were among the first to reserve the iPad online) can get one Saturday at Apple Stores and certain Best Buys. Those who preorder it now online must wait until April 12 because of apparent shortages. 
 
 Wi-Fi-only models will cost $499 for a 16-gigabyte version, $599 for 32 GB, and $699 for 64 GB. Models with Wi-Fi and 3G wireless — which lets you connect through AT&T's data network when Wi-Fi isn't available — come later in April, at $629 for 16 GB, $729 for 32 GB and $829 for 64 GB. 
 
 The latter models don't require a wireless contract. Monthly AT&T prepaid data rates are attractive: $14.99 for 250 MB or $29.99 for an unlimited plan. You buy 3G service directly from the iPad. The charge doesn't show up on your AT&T bill or through iTunes, but rather on your credit card. 
 
 You will have to buy into the iTunes ecosystem, of course, to watch movies, read e-books and sync up the apps. 
 
 Basic design 
 
 The half-inch-thick, magazine-size iPad is thin and, at 1.5 pounds, light with a gorgeous, glossy, backlit 9.7-inch multitouch display. The fingerprint-resistant screen has an exceptionally wide viewing sweet spot for a movie and is terrific for showing off most of a Web page. The device resembles an iPhone on growth hormones. It shares many of the smaller handheld's design elements, down to the lone home button below the display. As on the iPhone, you can have up to 11 screens of icons. 
 
 IPad has the same kind of smart sensors that change the orientation of the screen from portrait to landscape, depending on how it's rotated. (It's always right side up.) And, like the iPhone, it takes its cue from your fingers, whether you pinch to zoom in or out on Web pages, location-based maps and pictures — or flick to scroll up or down a page. You can easily search across all content. 
 
 There's a hidden microphone but no built-in voice recorder app (for leaving voice notes, say). The single speaker isn't stereo, but you can get stereo output when you plug in headphones. 
 
 Apps 
 
 The iPad will run just about all of the 150,000-plus iPhone or iPod Touch apps sold (or available free) in the App Store, presenting boundless "there's an app for that" possibilities. If you own an iPhone or Touch, you already have a stable of programs to work on the iPad. 
 
 Those older apps appear in a small window on the iPad display. You can blow them up to fill the screen through a process called "pixel doubling." It's more than adequate for many apps, but enlarging the characters reveals any imperfections. 
 
 None of this is lost on Apple, which is encouraging developers to write for the bigger screen. Apple expects more than 1,000 iPad-specific apps to be available at launch, and I've already sampled a few, including Reuters News Pro from Thomson Reuters, the Bento for iPad database from FileMaker, and the Twitterrific Twitter program from the Iconfactory. 
 
 I've enjoyed racing games and Labyrinth on the iPhone, but playing such titles on the iPad spoils you. The once-appealing iPhone screen looks puny. I played Scrabble over my home network, with one player using an iPhone, the other an iPad. 
 
 A larger screen is perfect for a recipe app such as Epicurious or the digital painting app called Brushes. The built-in Maps app also benefits from the larger display. As with the similar iPhone app, you can zoom in to a street-level view or locate nearby restaurants. 
 
 The iPad's splendor and power may be best shown by The Elements: A Visual Exploration The $13.99 program is more electronic book than traditional app, but it's not like any e-book you've seen. The periodic table of elements comes to life when you touch your finger against any element. Handsome photographs of objects spin around so you can observe them from all vantage points. 
 
 Equally attractive: the Marvel Comics app, which closely replicates printed comics. 
 
 USA TODAY will be launching its own app. 
 
 Electronic publishing 
 
 Apple is taking solid aim at the burgeoning electronic-reader market dominated by the Kindle. Judged solely from a sizzle standpoint: There's no contest. Titles on the iPad such as Winnie the Pooh (which comes preloaded on the iPad) boast colorful illustrations. The 6-inch Kindle screen is grayscale. 
 
 You can change pages on the iPad by tapping the screen: The page turns naturally, like a book. On Kindle, you have to press physical buttons and wait an instant while the page refreshes. Rotate the iPad, and you'll see two pages side by side. 
 
 Newspaper and magazine layouts look vastly superior on the iPad compared with Kindle. The iPad is backlit, so you can read in the dark. You have to supply a reading light with Kindle. 
 
 The covers you buy in Apple's new iBookstore land on a handsome depiction of a wooden bookshelf, again more elegant and easier to navigate than Kindle's clunky menus. 
 
 But Amazon retains some bragging points for avid readers, starting with a cheaper $259 price that I suspect will need to drop a lot further. At 10 hours or so, the iPad battery life, while impressive, falls far short of the two weeks you might get off a Kindle charge. It remains to be seen whether reading on a backlit screen for hours will be as easy on the eyes as the Kindle is. Curling up in bed was more comfortable with a 10.2-ounce Kindle than with the weightier iPad. 
 
 Amazon has about 450,000 book titles in the Kindle Store vs. 60,000 in iBookstore. Many best sellers in Apple's store cost $12.99, though some are $9.99. Amazon is likely to charge similar prices after iPad arrives; Amazon wouldn't comment. Out of the gate, Apple has support from major publishers Hachette, HarperCollins, Macmillan, Penguin and Simon & Schuster. Random House remains on the sidelines; it does support the Kindle. 
 
 Deficiencies 
 
 The iPad has its share of Version 1.0 inadequacies. It doesn't multitask, save playing iTunes music in the background. There's no webcam for those of us hoping to do video chats. The battery is sealed. It's too big for your pocket. 
 
 Videos failed to play at Hulu and ESPN, among other Web destinations. Why? The Safari browser on the iPad doesn't support videos based on the popular Adobe Flash Internet video standard. 
 
 The issue may be alleviated over time. Apple is backing an emerging video standard called HTML5. Just this week, Brightcove, whose video technology is used by many media companies, said it plans to offer HTML5 video streaming to its customers. The iPad can also display video at YouTube (there's an app for that), Vimeo and the White House website, whitehouse.gov. 
 
 Some will decry the absence of a USB port or other connectors, which might let you hook up a printer or bolster storage. Everything comes through the standard iPod-like dock connector on the bottom of the iPad. You can purchase a $29 iPad Camera Connection Kit, which lets you connect a USB camera or import photos via an SD card. 
 
 Another quibble: Controls to start a flick from the beginning or to resume where you left off are buried in settings rather than presented when you launch the videos app. 
 
 Many people will still need a more traditional computer. You can't edit video on an iPad. And the virtual onscreen keyboard that pops up when needed is fine for e-mails or scribbling notes, but I wouldn't want to regularly write articles using it. 
 
 You can employ a wireless Bluetooth keyboard, and Apple sells an optional $69 iPad Keyboard Dock. It's a full-size keyboard that connects to the dock connector. 
 
 Apple sells a $39 soft microfiber case that doubles as a stand for watching videos and slideshows. You can bank on third-party companies to provide other accessories and how-to books. (Disclosure: I'm co-writing one, iPad For Dummies.) 
 
 The iPad has built-in notes, calendar and contacts applications, and Apple sells slick, redesigned versions of its iWork productivity applications — $10 each for the Keynote presentation program, the Pages word processor and the Numbers spreadsheet. Still, for most folks, the iPad is more about consuming content than creating it. 
 
 Nowhere is this more true than with photos. The built-in Photo app is similar to the iPhoto program on Macs. Photos are placed in stacks. Tap one, and the picture album spreads apart so that each picture is visible. Tap a picture, and it swells up. Pinch and spread your fingers to zoom. The Faces and Places feature lets you find pictures based on who is in them or where they were shot. 
 
 Apple has pretty much nailed it with this first iPad, though there's certainly room for improvement. Nearly three years after making a splash with the iPhone, Apple has delivered another impressive product that largely lives up to the hype. 
 
 E-mail: ebaig@usatoday.com ||||| Apple Inc. (AAPL) plans to debut a smaller, cheaper iPad by year-end, two people with knowledge of the plans said, to help maintain dominance of the tablet market as Google Inc. (GOOG) and Microsoft Corp. (MSFT) prepare competing handheld devices. 
 
 The new model will have a screen that’s 7 inches to 8 inches diagonally, less than the current 9.7-inch version, said the people, who asked not to be identified because Apple hasn’t made its plans public. The product, which Apple may announce by October, won’t have the high-definition screen featured on the iPad that was released in March, one of the people said. 
 
 A smaller, less expensive iPad could undercut the ambitions of Google, Microsoft and Amazon.com Inc. (AMZN) to gain traction in the advancing tablet market, said Shaw Wu, an analyst at Sterne Agee & Leach Inc. The new device will probably have a price closer to Google’s Nexus 7 tablet and Amazon’s Kindle Fire, both of which have 7-inch screens and cost $199. 
 
 “It would be the competitors’ worst nightmare,” Wu said in an interview. “The ball is in Apple’s court.” 
 
 Trudy Muller, a spokeswoman for Cupertino, California-based Apple, declined to comment yesterday. 
 
 Since the iPad went on sale in April 2010, Apple has dominated the tablet market, which is predicted by DisplaySearch to reach $66.4 billion this year. Apple has 61 percent of the market, according to Gartner Inc. 
 
 Photographer: David Paul Morris/Bloomberg Hugo Barra, director of product management at Google Inc., with the Nexus 7 tablet during the Google I/O conference in San Francisco on June 27, 2012. Close Hugo Barra, director of product management at Google Inc., with the Nexus 7 tablet... Read More Close Open Photographer: David Paul Morris/Bloomberg Hugo Barra, director of product management at Google Inc., with the Nexus 7 tablet during the Google I/O conference in San Francisco on June 27, 2012. 
 
 Apple’s rivals are eager to gain a toehold. Google said on June 27 that it will sell a tablet-style device called the Nexus 7. Earlier in the month, Microsoft announced a tablet called Surface that will have a similar screen size as the current iPad. Amazon’s Kindle Fire was released last year. 
 
 Google Strategy 
 
 The entrants’ best chance of success has been to focus on markets where Apple had no toehold, said Jan Dawson, an analyst at Ovum Ltd. The Surface comes in two models that are most likely to appeal to buyers who want to continue using Microsoft’s Windows software, Dawson said. While Microsoft has not disclosed pricing or timing for either, the higher-end version will probably be pricier than the iPad and targeted more at an emerging class of laptop PCs called Ultrabooks, he said. The latest iPad ranges in price from $499 to $829. 
 
 Google’s Nexus 7 could stack up well against Amazon’s Kindle Fire, which went on sale in November. The Nexus 7, manufactured by Asustek Computer Inc. (2357), has a faster processor and better battery life than the Kindle Fire, as well as a front-facing camera. 
 
 Still, competing with a lower-priced iPad will be more challenging, Wu said. Apple benefits from having more than 225,000 apps that have been tailored specifically for the current iPad. 
 
 Apple Retail 
 
 The company also boasts more than 360 retail stores where the device can be purchased and tested by consumers. Google said the Nexus 7 will be available only from its online store, while Microsoft will sell its tablets online and at its smaller chain of 20 stores. 
 
 Apple has considered introducing a smaller tablet since the original iPad was released, one person said. That approach has worked for Apple’s iPod, which is the world’s top music player and comes in various sizes and colors. 
 
 Yet Apple co-founder Steve Jobs spoke skeptically of smaller tablets before his death in October. He said in 2010 that the iPad’s current size was the minimum required to ensure a good user-experience and enable attractive software applications. 
 
 The screen of the small model will have the same number of pixels as those in the iPad before it was upgraded to the so- called Retina Display earlier this year, one person said. 
 
 Fatter Margins 
 
 Apple also may be at an advantage profit-wise. The gross margin on the latest iPad is about 37 percent, according to Wu. Apple could earn a similar profit on a smaller iPad because it will probably use the cheaper screen, Wu said. Apple can also charge more for the device without sacrificing sales, he said. 
 
 “This isn’t like the old days, when it cost thousands of dollars more to buy an Apple product,” Wu said. “Fifty or a hundred bucks wouldn’t be enough to make someone switch.” 
 
 Amazon, by contrast, loses money on every Kindle Fire it sells, with the aim of profiting from sales of books and other digital media. At the $199 price of the Nexus 7, Google’s plan should be to break even on the hardware, in exchange for the opportunity to win advertising and related revenue, said Michael Gartenberg, an analyst at Gartner Inc. 
 
 Apple’s plans to release a smaller sized iPad were reported previously in blogs, including DigiTimes. 
 
 Microsoft’s Stakes 
 
 The stakes are high for Microsoft and Google to succeed at hardware sales. Both companies have risked alienating long-time hardware partners, such as Samsung Electronics Co., by selling their own tablets, Gartenberg said. 
 
 “How does Samsung make money in tablets, when Google is partnering with Asus to make a product that makes no money?” he asked. 
 
 A failure to gain traction with the Nexus 7 and Surface, respectively, might also undermine the credibility of Google’s Android strategy and of Microsoft’s introduction of the next version of the Windows operating system, Wu said. If Google and Microsoft can’t make a must-have product around their own software, consumers may be harder to convince that hardware manufacturers could do it, he said. 
 
 “They’re really sticking their necks out this time, putting their own brands on this front and center,” Wu said. 
 
 To contact the reporters on this story: Peter Burrows in San Francisco at pburrows@bloomberg.net; Adam Satariano in San Francisco at asatariano1@bloomberg.net 
 
 To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net
– The media gave us plenty of predictions for 2010, and plenty of them simply didn’t come true. AOL News lists some of the most glaring: Job growth will begin again. Newsweek predicted it unemployment would fall “below 9%,” but it was never less than 9.5%. Republicans won’t storm the midterms. The National Review foresaw “good, though not great, gains.” The GOP won 63 House seats. Twitter will fizzle. Tell that to the 100 million new users this year, CNBC. We’ll start riding Google Wave. Or so thought CNN. Google shut it down within a year of its debut. Netbooks will be hot. CNBC was wrong here, too: sales sunk. The iPad won’t sell. More than 4 million buyers proved Infoworld.com incorrect. Americans will use mobile devices like credit cards. So said reichental.com. Swiped your smartphone lately?