Google is preparing to launch a new cloud storage service that will compete directly with popular start up Dropbox and similar services. The Wall Street Journal on Wednesday evening reported that Google is almost ready to announce the new service, which will be called Google Drive. Similar to Dropbox, which creates a virtual drive containing files that are mirrored on a user’s local hard drive and on cloud servers, Google Drive will allow users to store photos, videos, documents and other files in the cloud, and it will be accessible from computers as well as Android tablets and smartphones. The service will launch in the coming weeks according to the report, and it will be free to most users, though the report does not elaborate on the amount of free storage Google will provide or which customers might be charged.

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The security experts at zVelo have discovered a vulnerability in Google Wallet that allows them to “easily reveal” users’ PINs. If a Google Nexus is rooted, Google Wallet’s PIN verification system can be cracked using a brute force attack. zVelo said on Wednesday that it immediately reported its findings to Google, and the company “agreed to work quickly to resolve it,” although the researchers said Google “ran into obstacles.” To fix the problem, the PIN verification must be moved into the secure element of the NFC chip in a device, however to do so Google must apparently coordinate with banks. Moreover, changing the way a PIN is stored will also change which company is responsible for its security. Read on for more.

If users refrain from rooting their devices, enable a passcode to lock their device, disable USB debugging and enable Full Disk Encryption, they will be better protected from a possible attack. Google released a statement to TheNextWeb and ensures users that the vulnerability only affects rooted devices. “We strongly encourage people to not install Google Wallet on rooted devices and to always set up a screen lock as an additional layer of security for their phone,” said a company spokesperson.

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A public interest group asked a federal judge on Wednesday to block Google from changing its privacy policy, reports Reuters. The lawsuit comes from the Electronic Privacy Information Center, which claims the search giant is in violation of a consent agreement made with U.S. regulator last March. The group is asking a federal judge to issue a temporary restraining order and a preliminary injunction against Google in the hopes that the Federal Trade Commission will enforce the consent agreement. “The Court must act now to prevent irreparable injury to EPIC and the public,” the group said in its court filing. Read on for more.

Google announced last month that it would combine individual privacy policies from a variety of its products into one main policy. Critics of the change were worried that Google was collecting more data, however the company ensured users that it is “not collecting any new or additional data about users,” a claim EPIC disagrees with. The group states that aggregated data would give advertisers access to information about users that they never had before, such as logged-in users’ YouTube search histories. ”Thus, Google will share new or additional information with third-party advertisers without first obtaining ‘express affirmative consent’ from Google users,” EPIC noted in court documents.

A Google spokesman said the company had not seen the filing and could not comment on the specifics. He did add, however, that “protecting people’s privacy is something we think about all day across the company and we welcome discussions about our approach.”

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Owners of Apple’s iPhone and iPod touch can now enjoy a remake of the first-ever PC game, co-written by Bill Gates himself, which came pre-installed on several IBM computers in 1981. First released late last month, XVision’s DONKEY.BAS is a terrific recreation of the PC game by the same name. Players control a race car as it advances up the screen. Donkeys repeatedly come into view, and the simple goal is to switch lanes before colliding with any curious creatures. “We did this game as a tribute to the original,” XVision founder Johnny Ixe told BGR, noting that the firm added a number of new features to the game in order to distinguish it from the original. The spirit of the game remains, however, and gamers looking for a bit of nostalgia would be hard-pressed to find a better blast from the past. DONKEY.BAS is available now in the App Store for $0.99.

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The National Oceanic and Atmospheric Administration, an agency within the United States Department of Commerce, will stop using BlackBerry phones later this year and instead supply workers with Apple’s mobile devices. In a memo relayed by Loop Insight, NOAA’s Chief Information Officer and Director for High Performance Computing and Communications said that support for BlackBerry phones will cease in May of this year. Apple’s iPhone 4 and iPhone 4S will replace the agency’s BlackBerry handsets, and NOAA plans to adopt current and future generations of Apple’s iPad tablet as well. Research In Motion’s BlackBerry smartphones have been the U.S. government’s go-to solution for wireless devices due to their enhanced security and robust messaging capabilities. Loop Insight’s report did not indicate that the NOAA memo provided an explanation for the agency’s decision.

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Google is developing a home-entertainment system to stream music wirelessly throughout a users’ houses, The Wall Street Journal reports. The device will be Google-branded, marking a first for the search giant which historically develops software it then licenses to outside vendors. The system will most likely be Android-powered and will allow users to download music and stream it to Google-made speakers or other Web-connected devices in a home or office. The system may also be able to stream other digital media beyond just music. Apple, one of Google’s main rivals, has long developed both the hardware and software for its products. With its pending acquisition of Motorola Mobility, Google is looking to make waves in the hardware sector as well, and this new home entertainment solution could be one of the first own-brand devices to launch following the approval of Google’s Motorola buy, which is expected to come next week. The Android-powered entertainment system will reportedly be available later this year.

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Microsoft on Thursday revealed new details about Windows on ARM (WOA) on the company’s development blog. Both Windows 8 for x86 PCs and WOA are still under development, however both will be available at the same time while delivering the same experience. Windows on ARM will come preloaded with Office 15 — which has been enhanced to support touch controls — and users will have access to Word, Excel, PowerPoint and OneNote. To ensure that x86-based tablets and ARM-based devices are identical, WOA will feature a desktop mode, giving users access to the File Explorer, Internet Explorer 10 desktop and other Windows desktop features. Metro-style apps from the Windows Store will support both Windows on ARM and Windows for x86/64. WOA does not, however, support running, emulating or porting existing x86/64 desktop apps.

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In 1991, Apple’s co-founder Steve Jobs was considered for a sensitive position in the Bush Administration, according to a recently released FBI dossier. The 191-page file reveals a background investigation conducted on Jobs when he was being considered for the President’s Export Council. When the Bureau spoke with individuals who knew Jobs, it received a large number of negative feedback with many saying that “Jobs will twist the truth and distort reality in order to achieve his goals.” The FBI was also concerned about Jobs’s prior drug usage and estranged relationship with his daughter, Lisa, who was born out of wedlock. There were a large number of people who praised his upstanding moral character, however, and recommended him for the appointment. The material also contains previously unknown details about Jobs, such as a 1985 threat made against his life.

[Via Gawker]

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The recent federal takedown of notorious file-sharing service Megaupload was initially seen as a huge victory for owners of copyrighted music and movies, but new research shows this may not be the case. Federal prosecutors successfully shuttered the service last month and arrested seven men associated with Megaupload including site founder Kim Dotcom, who is said to have earned $42 million from the site in 2010 alone. What was initially thought to be a victory for movie studios and record labels is turning out to be an empty win, however, as Megaupload’s closure has had almost no impact on file-sharing. Read on for more.

Internet consulting firm DeepField Networks analyzed Web traffic from six companies that provide the storage facilities responsible for roughly 80% of all file-sharing traffic. According to the firm, Megaupload’s files accounted for a huge portion of that traffic before a series of raids took the service offline last month; between 30% and 40% of all file-sharing downloads came from Megaupload.

The service moved so much data that global Internet traffic immediately decreased by between 2% and 3% when Megaupload’s services were taken offline on January 18th.

As big as Megaupload was, however, the service’s closure has not had the effect on file-sharing that copyright owners might have hoped. According to DeepField, Web traffic related to file-sharing recovered almost immediately as users simply utilized other services such as Rapidshare and Mediafire.

To compound matters, it looks like Internet Service Providers in the United States will likely take the biggest hit following Megaupload’s closure. ”Instead of terabytes of North America Megaupload traffic going to U.S. servers, most file sharing traffic now comes from Europe over far more expensive transatlantic links,” DeepField noted.

The U.S. Patent & Trademark Office published a patent application from Apple on Thursday that reveals a 3D eye-tracking-based interface that could be used for gaming, digital photography and videography in future iOS and iMac devices, reports PatentlyApple. The new features could work in conjunction with Apple’s current 3D head tracking and ambient light technologies. The solution would utilize a variety of sensors such as an accelerometer and compass in combination with eye-tracking technology to alter the perspective of 3D graphics displayed on an iPhone. The result would be a 3D experience that constantly adjusts to the user’s position and a device’s position, creating a unique experience far more advanced and precise than current solutions. The patent application was originally filed in the third quarter of 2010 and it is unclear if Apple is currently experimenting with the technology.

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HTC announced on Thursday that an Ice Cream Sandwich update will be available for select devices by the end of March. The announcement came through the company’s Facebook page and states that the first devices to receive the update will be the Sensation, Sensation 4G and Sensation XE, followed shortly after by the Sensation XL. The Rezound, Vivid, Amaze 4G, EVO 3D, EVO Design 4G, Incredible S, Desire S and Desire HD will all be updated “later this year,” as previously reported. HTC is expected to launch multiple new Android 4.0-powered smartphones later this month at Mobile World Congress, including the HTC Ville and HTC Edge.

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When new CEO Thorsten Henis took the reins at Research In Motion, he immediately pointed to the smartphone vendor’s marketing strategy as an area the company needed to focus on if it hoped to regain share in key markets like the United States. The wheels on RIM’s recent marketing efforts had already been set in motion, however, and early reports suggest that the increased volume of familiar BlackBerry ads aren’t having the impact RIM was hoping for. Read on for more.

RIM ramped up its marketing efforts in January, but the move does not appear to have paid off. “Our January checks indicated weak sell-through trends for the new BlackBerry 7 smartphones despite increased marketing efforts,” Canaccord Genuity analyst Mike Walkley wrote in a research note to investors late Wednesday night. “With very strong share gains for the iPhone 4S, increasingly price competitive Android smartphones, improving Windows smartphones, and strong sales of the affordable 7 inch Amazon Kindle Fire tablet, we anticipate increasing competition across all tiers of RIM’s products in C2012.”

As a result of weakening device sales and RIM’s poor outlook for the current quarter, the analyst lowered his estimates for RIM’s February quarter as well as the vendor’s full fiscal year. And despite a new round of marketing that kicked off in February with RIM’s “Be Bold” campaign, Walkley doesn’t see much changing for the Waterloo, Ontario-based until late in 2012.

“Given the strong share gains for Apple post the launch of the iPhone 4S and increasing Android and Windows competition in all price tiers, we believe BlackBerry 7 products will continue to struggle until BB10 products launch in late C2012,” the analyst noted. RIM expected to launch its first QNX-powered BlackBerry 10 smartphone — code-named the BlackBerry London — toward the end of the third quarter or early in the fourth quarter.

Walkley reiterated his Hold rating on RIM’s stock and maintained his $15 price target.

With great power comes great responsibility — and a flurry of advertising campaigns that target your wares. Samsung tried to make its name a verb in a recent round of anti-Apple ads where senseless iPhone owners got “Samsunged,” and the South Korea-based vendor’s campaign culminated with a $10 million extravaganza that aired during the Super Bowl. Amazon is next up to the plate, and the company’s recent commercial takes aim at Apple’s iPad. A woman sunbathing and reading a book on her Kindle is approached by a passing iPad owner who is intrigued by the fact that she can read in the sunlight. When the man mentions the Kindle’s inability to play movies, she points to a cabana where her two children are sitting, each with a Kindle Fire tablet. As a final jab, the woman points out that her three Kindles — one $79 eReader and two $199 tablets — are still cheaper than a single iPad. Amazon’s full commercial can be viewed below.

Apple and Samsung are in the midst of a patent-fueled war with no end in site, but the pair has also inadvertently joined forces to make it increasingly difficult for other vendors to continue making smartphones. New estimates suggest Apple and Samsung combined to take in a staggering 95% of smartphone industry profits in the fourth quarter of 2011. The figures paint an even bleaker picture for the rest of the players in the smartphone business than earlier estimates; UBS analyst Maynard Um said last week that Apple and Samsung’s combined take amounted to 90% of smartphone industry profits. Read on for more.

“With the strong iPhone market share gains during Q4/11 combined with Samsung’s strong share gains within the Android ecosystem, we estimate Apple and Samsung captured roughly 95% of industry profits,” Canaccord Genuity analyst Mike Walkley wrote in a note to investors on Thursday.

Walkley continued, “Apple generated a remarkable 80% share of estimated Q4/11 handset industry operating profits (vs. 56% in Q3/11 and 48% in Q4/10) with only 8.1% global handset market share. Demonstrating the strength of the iPhone’s profit share gains during Q4/11, Samsung’s share of industry profits declined from roughly 26% in Q3/11 to 15% in Q4/11, even though Samsung’s share of Android smartphones increased from 35% in Q3/11 to 39% in Q4/11.”

As Apple and Samsung each reported blowout quarters last month — Apple’s $13 billion holiday quarter was the most profitable quarter ever recorded by a technology company — other smartphone vendors are on the ropes. Nokia posted a €1 billion loss in the fourth quarter, Sony Ericsson reported a €247 million loss, LG posted its second consecutive loss last quarter, HTC continued to slump, Motorola recorded an $80 million loss and RIM continued to slide as well.

And for these struggling smartphone companies, Walkley doesn’t see things getting better in the immediate future. “With RIM, Nokia, HTC, and Sony Ericsson all in the midst of product transitions and Motorola Mobility merging with Google, we believe Apple and Samsung will maintain dominant share positions during H1/12,” the analyst wrote. ”Our January checks indicate Apple and Samsung trends remain strong versus competitors.”

Samsung is expected to launch its quad-core Galaxy S III smartphone this coming May, and Apple will then reportedly launch a completely redesigned next-generation iPhone later this year.

A German court affirmed a preliminary ruling on Thursday that determined Samsung’s reworked tablet does not look so much like the iPad that it should be banned. The ruling comes as another blow to Apple, which is in the midst of several other lawsuits with rival smartphone and tablet makers over intellectual property. The court said that there were “clear differences” between the Galaxy Tab 10.1N and the iPad, reports Reuters. Apple and Samsung have been tangled in what seems like an endless patent battle in Germany, the Netherlands, the United States, Australia, Japan and Korea. Thus far, courts in several countries including the Netherlands, the United States and Australia have decided to allow Samsung to continue selling its Galaxy smartphones and tablets despite Apple’s continued efforts.

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All Things D is reporting that Apple is going to hold its annual iPad introduction event during the first week of March. Going one step further, the blog reiterates what the rumor mill (and BGR) has been reporting — faster processor, Retina Display, same basic size and shape, with possibly a dash and sprinkle of 4G LTE. The iPad 3 is expected to be available by the second or third week in March, and iOS 5.1 may be released even sooner.

More details surrounding the design of Apple’s upcoming iPad 3 have been revealed as images of a variety of internal components have been published online along with new images of the tablet’s rear shell and possibly Apple’s new Retina Display as well. Following reports on Wednesday that emerged surrounding a purported image of the iPad 3′s rear case, Cult of Mac has published higher-quality images of the same component along with a number of additional internal parts. While the various components pictured in the new leak show significant differences in many instances compared to their counterparts in the iPad 2, the external design of the upcoming iPad 3 looks like it will only offer a few minor differences compared to the current model, in line with earlier reports. Read on for more.

Separately, Japanese blog Macotakara has published an image of a 9.7-inch display panel with 2,048 x 1,536-pixel resolution. The panel is not confirmed to be destined for the iPad, the size, timing and alignment with earlier rumors certainly suggest this is the case. Apple’s next-generation iPad 3 is expected to launch early next month. Rumors suggest the new tablet will be an incremental upgrade that features a quad-core A6 processor, a new high-definition Retina Display and an upgraded camera. Additional images follow below.

Read [Cult Of Mac] Read [Macotakara]

Google’s bid to acquire Motorola Mobility for $12.5 billion is set to gain regulatory approval as soon as next week, multiple reports claim. Google announced last summer that it intended to purchase the struggling smartphone and set-top box maker for $40 per share, and CEO Larry Page explained that Motorola’s patent portfolio was a key draw for the company. Google’s Android partners had fallen under attack from patent predators such as Apple and Microsoft, and the ability to spread Motorola’s patents around as needed could be the only way to save Android. As recent events in Germany have shown, Motorola’s patents could indeed be Android’s best bet. While some regulators apparently remain unconvinced that Google intends to license Motorola’s patents on fair terms, The Wall Street Journal reports that the deal is still on track to gain approval from the Justice Department as early as next week.

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E Ink, the popular company that provides paper-look gray-scale displays for eReaders, reported consolidated revenues of $48.02 million in January, down 63.6% from the same month last year and 11% sequentially. The growing popularity of media tablets with full-color displays likely played a big role in the decline — sales of Amazon’s Kindle Fire and Barnes & Noble’s Nook Tablet are thought to be eating into the companies’ respective dedicated eReader businesses to an extent. Even though E Ink’s revenue took a nose dive in January, the company said that it expects to post revenues of $1.35 billion this year, up 5% from 2011.

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When the HP TouchPad was released in the summer of 2011 it did little to impress consumers, leading to the tablet being discontinued after a mere 49 days on the market. Remaining TouchPad stock received substantial price reductions, dropping to as low as $99 dollars during a huge fire sale. Shortly after inventory ran dry, crafty hackers had announced their intention to run the Android operating system in replace of WebOS on the TouchPad, and progress thus far has been slow, with alpha versions being released that are fairly stable but have serious bugs. In an act of good will, HP has now released an Android kernel source code to the hacking community. Read on for more.

The source code appears to have been developed separately from webOS, and was last changed in March 2011, three months before the TouchPad’s release, RootzWiki reports. The code will not help with any major fixes, however, and will instead help with minor bugs. “Kernel source from HP would have been more helpful earlier in development. Don’t expect huge gains from this source,” said Erik Hardesty, a member of the CyanogenMod team, on Twitter. “It will help with things like serial console and Bluetooth. Most other areas it *might* with will be minor.”

Read [RootzWiki] Read [Twitter]