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HP Claims That Smart Watches Have Major Flaws, Fail To Nominate Which Brand Is Exposed

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HP the Company that acquired the Palm OS operating system and then screwed up the launch of the Palm smartphone running on the now LG owned Web OS, is now claiming that smart watches have significant security flaws.

HP who has not launched a smart watch in Australia and are struggling to market their own brand of smart watch claim that they discovered the flaws after testing 10 devices, they have not nominated whose brand of smartphone they were testing or whether they tested multiple brands.

What is also not known is whether they were testing their own brand of smart watch. 

Late last year, HP announced a collaboration with fashion designer Michael Bastian for a new smart watch that they said would appeal to more than just nerds. The watch doesn’t have a touchscreen and instead relies on a black and white LCD for notifications. It doesn’t track your step count or have a microphone for voice commands. 


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All of them “contain significant vulnerabilities, including insufficient authentication, lack of encryption and privacy concerns,” the company’s HP Fortify security group said.

 
The security issues could enable hackers to get unauthorized access to a smart watch’s stored health data and deliver unauthorized access to connected homes and cars, HP warned.

 
“Smart watches have only just started to become a part of our lives, but they deliver a new level of functionality that could potentially open the door to new threats to sensitive information and activities,” said Jason Schmitt, general manager of HP Fortify.


“As the adoption of smart watches accelerates, the platform will become vastly more attractive to those who would abuse that access, making it critical that we take precautions when transmitting personal data or connecting smart watches into corporate networks.” HP recommends that users not enable a smart watch’s car- and home-control functions unless strong authorization is offered.


“In addition, enabling passcode functionality, ensuring strong passwords and instituting two-factor authentication will help prevent unauthorized access to data,” HP said. HP’s full report outlines guidelines for secure smart-watch use. The most common – and easily addressable – security issues, HP said, include: Insufficient User Authentication/Authorization: Every tested smart watch was paired with a phone interface that lacked two-factor authentication and the ability to lock out accounts after three to five failed password attempts.


Three of the 10 were vulnerable to “account harvesting,” meaning an attacker could access the device and its data via a combination of weak password policy, lack of account lockout, and user enumeration.

 
The latter vulnerability enables hackers to identify user accounts through feedback received from reset password mechanisms. Lack of transport encryption: All of the tested products implemented transport encryption using SSL/TLS, but 40 percent of the cloud connections were vulnerable to the Poodle attack, allowed the use of weak cyphers, or still used SSL v2. Insecure interfaces: Thirty percent of the tested smart watches used Cloud-based web interfaces, all of which exhibited “account-enumeration concerns.

 
” In a separate test, 30 percent also exhibited account enumeration concerns with their mobile applications. Insecure software/firmware: A full 70 percent of the smart watches presented concerns with their protection of firmware updates, including transmitting firmware updates without encryption and without encrypting the update files.

 
Although many updates were designed to prevent the installation of contaminated firmware, the lack of encryption allows the files to be downloaded and analysed. Privacy concerns: All smart watches collected some form of personal information, such as name, address, date of birth, weight, gender, heart rate and other health information. “Given the account enumeration issues and use of weak passwords on some products, exposure of this personal information is a concern,” HP said.

Big Vendors Oppose JB Hi Fi Takeover Of The Good Guys

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Several vendors are believed to have approached the Australian Competition and Consumer Commission seeking reassurance that their submissions to an inquiry into the potential merger of JB Hi Fi and The Good Guys will remain confidential.

ChannelNews has been told that several vendors in the consumer electronics market are concerned that a consumer electronics monopoly could be formed following the demise of Dick Smith. Some of these CE Vendors also sell appliances. 

This is despite the fact that several retailers including Aldi Big W, David Jones, Betta Electrical, Leading Edge, Officeworks, Myer, Kogan as well as more than 20 online resellers currently sell consumer electronics products in competition to JB Hi Fi and The Good Guys.

The ACCC told ChannelNews that closing date for submissions is Thursday 30 June 2016 and that a ruling or indication, will be made on August 4th.

Submissions should be forwarded electronically (preferably in PDF format) to mergers@accc.gov.au with the title: Submission re: JB Hi-Fi – The Good Guys – attention Karina Geddes/Madeleine Houghton.

According to one source a meeting took place between vendors who were attending a recent Harvey Norman function.

The primary discussion was JB Hi Fi and the potential that JB Hi Fi could demand better trading terms from vendors.

During the discussion concerns were raised as to whether any submissions made to an ACCC inquiry into the potential merger would remain confidential.

One attendee told ChannelNews that vendors are concerned that if the two companies merge pressure could be put on vendors over pricing especially vendors who currently only deal with Harvey Norman, The Good Guys and JB Hi Fi.

Currently The Good Guys have a small share of the overall consumer electronics market with the exception of TV’s, they do have a larger share of the large appliance market.

JB Hi Fi has only has around 3% of the appliance market.

Several of the vendors at the Harvey Norman event have admitted to ChannelNews that in the appliance market that JB Hi Fi does not currently get the same discounts or rebates as a Harvey Norman or The Good Guys due to the fact that the mass retailers only have only a small share of the appliance market and that the mass retailer is primarily in the small appliance market where Dick Smith were trying to compete before they were placed into liquidation with debts of over $400M. 

One attendee at the Harvey Norman event said “The fear among some vendors is that they will be identified as having complained. Some of these vendors are looking at the cost of doing business in a market where several of these vendors only deal with Harvey Norman, The Good Guys and JB Hi Fi directly”.

They added “The rest of their business in particular with other smaller retailers is quite often via distributors”.

JB Hi Fi has not commented for this story.

ChannelNews understands that the mass retailer is still doing due diligence on a proposed takeover of The Good Guys.

A spokesperson for the ACCC said “Submissions do remain confidential”.

ChannelNews understands that a submission can be made for documents, under Freedom of Information laws, however the ACCC can still claim certain documentation as “commercially in confidence”.

EXCLUSIVE: Lidl Still Keen To Take On Aldi, Master Stores On Radar

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Giant European retailer Lidl has not written off taking on Aldi in the Australian market according to sources.

The group who has been talking to commercial real estate Companies and distributors in Australia with the Company now believed to be looking at several Masters locations where Woolworths is set to relinquish a lease. 

ChannelNews has been told that Aldi is also interested in several Masters locations in an effort to expand their presence in Australia.  

Both Aldi and Lidl sell house brand appliances and consumer electronic goods with both Companies now holding more than 11% of the European appliance market.  

Recently Lidl ratcheted up its UK expansion plan by issuing almost three times as many planning applications as Aldi.

In November, Lidl said it would invest $3 Billion dollars over the next three years to ramp up its store expansion globally. 

Sources have said that the Company’s is planning on launching upmarket outlets that included self-checkouts and customer toilets, which had previously been missing from its budget superstores.

Currently the German retail group is expanding their operations into the US market. In the UK Lidl has more than 630 stores in England, Scotland and Wales, and a goal to double in size and operate 1,500 stores across the UK.

Insiders are claiming that the group will not open any stores in Australia until 2018/19 which will be after the rollout of their US stores.

“What could make a difference in when they launch in Australia is whether they can secure some of the Masters locations with the Company looking at a series of Mega stores which the Masters stores would deliver said a retail source. 

Harvey Norman Cuts Exclusive Deal With OZ Distributor

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Harvey Norman who this week moved to exclusively distribute Monster and Solo 3DR drones has teamed up with Kaiser Baas to exclusively distribute their products.

The deal will see Harvey Norman Ireland partnering with the Australian distributor of drones and Hoverboards to sell their products exclusively in Ireland.

The deal was cut after Harvey Norman first ranged the Kaiser Baas products back in December 2015. 

“We were ecstatic with the GFK numbers, we got a 78% sell through in the action camera category in the first month of trade. We now look forward to continuum our strong partnership with Kaiser Baas across their full range of products. ” said Joe Duigan General Manager Harvey Norman Ireland 

Neil Kaberry Global Sales Director, Kaiser Baas said “We now have a great range of products that are selling well in retail stores both in Australia and Europe where we are witnessing significant growth”. Kaberry, who moved to live in London last month so that he better manage their expansion said that the Company has several new products coming that he was confident would grow the Companies revenues in 2016″. 

“We see adventure technology as a growth category and the new drones and action cameras that we are launching we believe will generate enormous consumer appeal”. 
  
“Kaiser Baas have proven to be a solid brand in our stores and with the exclusivity of Kaiser Baas product range into our stores throughout Ireland, we believe the strategic partnership between both businesses will drive adventure technology as a prominent category for Harvey Norman.” Adam Lester Product and Marketing Manager at Harvey Norman Ireland said.



Major CE Distributor Accused Of Restrictive Practises

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EXCLUSIVE: A Sydney-based retailer has asked the Australian Competition & Consumer Commission to investigate claims of “restrictive trading practises” by Amber Technology, who are a share-listed company and one of Australia’s largest consumer technology distributors.

Paul Godfrey, a director at Digital Cinema has accused Amber Technology of engaging in practises which are primarily designed to harm his business. They include failing to supply warranty on products that Amber have sold in Australia and have been purchased via Digital Cinema and of threatening suppliers in Australia who have sold his company Onkyo and Optima stock.
He claims to have evidence that senior Amber Technology executives have visited his store on two occasions to buy stock in an effort to trace his suppliers. They have then forced these suppliers to stop doing business with Digital Cinema.
He also claims that Amber Technology employed the services of Eastwood Hi Fi to purchase Onkyo stock on their behalf in an effort to trace the source of stock being sold by the retailer.

Godfrey, who admits to buying Onkyo and Optima products from overseas suppliers in the past, has also been buying stock from both JB Hi Fi and Harvey Norman. Under the arrangement with JB Hi Fi he got a 50 per cent discount on the recommended retail price of the goods he purchased from the mass retailer.

He claims that both JB Hi Fi and Amber Technology benefited from this arrangement. In some cases he was buying between 10 and 15 products at a time. 

Godfrey claims that Amber Technology is refusing to honour the warranties on the stock purchased via the mass retailers, despite the stock being sold to JB Hi Fi and Harvey Norman by Amber Technology who are the sole distributor in Australia of Onkyo and Optima products.
Brian Lee, the marketing director of Amber Technology, admitted to SmartHouse that his company is refusing warranty on the basis that the stock is “second hand” when it is purchased by Digital Cinema.
He also admits that Amber is “stretching a fine line” in doing this and that the issue of whether the products can be classified as second hand have not been tested in a court of law.
Digital Cinema claims that the stock is “definitely not second hand”.
“They come in new boxes, are unopened, and are brand new and should be given the same warranty considerations as customer who purchase the products from a mass retailer”. 

 
Eastwood Hi Fi director, Steve Neil, said that he was approached four months ago by Amber Technology executives to buy an Onkyo receiver from Digital Cinema in an effort to trace the source. 
The Onkyo X SR807 receiver, being sold by Digital Cinema, had at the time not been launched by Amber Technology in Australia.
Digital Cinema also claims that they have the credit card details of Scott McKenzie, an Amber Technology executive, who visited their store to purchase goods in an effort to trace the source.
Brian Lee, in a frank admission to SmartHouse, admitted that after Amber Technology identified the source of the goods they wrote to JB Hi Fi in an effort to stop supply to Digital Cinema.
Lee claims that as part of the contract of supply between both Harvey Norman and JB Hi Fi  is a clause that prevents the mass retailers from selling on stock to other Hi Fi or consumer electronics retailers.
He also said that Digital Cinema staff were not “trained to sell” Onkyo or Optima products and that Amber was “protecting the interests of consumers” by stopping supply to Digital Cinema.
Lee said: “12 months ago when we found out that JB Hi Fi was supplying Digital Cinema, I wrote to them. Shortly afterwards they instructed all their store managers to stop selling products to Digital Cinema”.
Digital Cinema executives claim that they are qualified to sell the Optima and Onkyo products. “We are an authorised dealer for Denon, Sharp and Epsom projectors as well as other leading CE brands.  We are well qualified to sell Optima and Onkyo products. We offer full warranty on the products we sell and when Amber Technology refuses warranty support we take responsibility for the warranty. We also pay for C Tick certification. We also use the same service centres as Amber Technology to repair goods when the situation arrives which is not very often”.

 
“What Amber Technology is doing is engaging in restrictive trading practises. They are acting harsh, and restrictive. We have been told by other distributors, that we have to play within their rules or they will discredit us within the industry. They said that Amber will limit the supply of products through the channel and that they will intimidate other distributors to not supply us”.
Ken Dwyer the Managing Director of Audio Products Australia said of Digital Cinema: “Until recently, we had a major issue with this organisation unofficially selling Denon.  The business did not have a retail presence and as such, we seriously questioned their ability to support customers who purchased sophisticated Denon AVRs.  Also we had concerns regarding the source of origin, C-Tick, warranty and other important issues with quality electronics”.
“Recently Digital Cinema opened a store in West Ryde. Given this significant change in business model, APG has elected to support this shop.  The store sits geographically well in our retail network.  We obviously met with the owner and explained the important issues relating to the Denon brand prior to agreeing to an “account” as we would with any prospective Denon Dealer. After serious consideration, we felt that the retail store met our requirements for a Denon Dealer.  Consequently, the store was appointed about a month ago”.
Smarthouse is still waiting for a response from the ACCC.

Samsung Revenues Up

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Samsung Electronics has generated better than expected sales in the fourth quarter of 2005, with a 1.5% rise and a 7.5% rise from the previous forecasts, according to Samsung Securities who made the announcement at the CES Show in Las Vegas.

The electronics giant made 1.589 trillion won (approximately US$1.580 billion) in revenues and 2.49 trillion won ($2.477 billion) in operating profits in the fourth quarter, up 9.3% and 17.3%, respectively, over the prior quarter,

By business sector, sales from NAND flash and TFT-LCD segments were better than expected, while earnings from the DRAM business remained close to expectations. Samsung Securities also estimates the performance in the information and telecommunication segment remained below expectations due to the increasing costs.

Samsung Securities adjusted upward its operating profit forecasts from TFT-LCD and semiconductor units by 14.7% and 0.6%, respectively, whereas the information and telecommunication operating profit estimates were revised downward by 1.3%. In addition, the securities company predicts that Samsung Electronics will earn 2.58 trillion won ($2.566 billion) in operating profits in the first quarter this year and 2.12 trillion won ($2.11 billion) in the second quarter.

Samsung has also announced what it claims is the world’s fastest multimedia-downloa mobile handset. The phone, equipped with an MSM6 chip from the Qualcomm of the Uni States, enables users to download music or other multimedia content speed of 3.6 megabits per second, approximately 10 MP3 music files aminute.

It also appears that Competition between European and U.S. standards is heating up as rival phone makers support both standards.Simultaneous announcements of cell phones that support competing standards from South Korean rivals Samsung Electronics and LG Electronics could kick the emerging market for mobile broadcast-style TV into high gear.

 Both Samsung and LG said they have developed cell phones that support the two leading standards for broadcast-style TV on cell phones: DVB-H (digital video broadcasting-handheld) and Media FLO (forward link only). And both companies will unveil the phones at the International Consumer Electronics Show (CES) taking place this week in Las Vegas.

 DVB-H was developed by Nokia and is designed to optimise broadcast video on personal handheld devices such as cell phones. Italian operator 3 is currently using DVB-H technology to launch a broadcast TV service (see TechSpin: Triple Play for 3). So far the DVB-H standard is most popular in Europe.

 Media FLO was developed by Qualcomm and is being championed by US Carrier Verizon Wireless, which announced a month ago that it plans to offer TV services in late 2006 or early 2007 on Qualcomm’s Media FLO network. Qualcomm’s Media FLO network is not scheduled for full commercial launch until the end of 2006. Telstra is expected to launch TV services either late in 2006 or early 2007 when the new broadband network comes online.


 DVB-H and Media FLO are not the only standards in development or use. In South Korea, there is a competing standard, DMB (Digital Multimedia Broadcasting), for sending broadcast TV via cell phones. And in Japan, there is the ISDB-T (Terrestrial Integrated Services Digital Broadcasting), which seems to have been developed primarily for domestic consumption. These standards make it possible for cell phone users to tune into broadcast TV, which has a one-to-many architecture, much like regular over-the-air, traditional broadcast TV. It is video offered on a parallel over-the-air network employing something that works more like traditional signaling.

In the case of Media FLO, it will operate on a parallel network instead of on the cluttered voice network. In the U.S., the pricing structure for broadcast-style TV over cell phones has not been established. But with TV networks charging in the neighborhood of $1 or $2 for the rebroadcast of TV shows online, the pricing model may be forming.

OZ To Get “Seriously Good” Super Fast LG G2 Smartphone In October

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Australian smartphone fans are set to get what several reviewers have called a “seriously good” smartphone with the release in October of the all new LG G2.

Carriers have confirmed to SmartHouse that the device which has been described as “significantly superior” to the Samsung Galaxy S4 and the HTC One will go on sale in the third week of October. 

The device comes with Android OS, v4.2.2 (Jelly Bean); 5.2″ Full HD IPS LCD display with zero gap touchscreen, (1080 x 1920) pixels; light weight: 143g; dimensions (138.5 x 70.9 x 8.9) mm; 13 MP camera, autofocus with optical image stabilization (OIS).
Equipped with an expansive 1080p display and 13-megapixel camera. CNet said LG’s placement of the G2’s power and volume buttons..doesn’t ruin the experience. Indeed, with its beastly specs and ultrafast processor, LG is definitely putting its gloves on for this smartphone battle.

Digital Trends said” with the G2, LG is stepping up to the plate. This is a powerful phone with a myriad of simple, but useful new features. Audiophiles and spec junkies should flock to it”.

“The first time you set eyes on the LG G2, you’re impressed. It looks like “the” smartphone we’ve been working toward for a few years now. The screen is nearly edge-to-edge, the device is dead thin at 8.9mm, and there isn’t a button in sight. From the front, there are no buttons on the G2. The navigation buttons – Back, Home, Menu – are onscreen and the power and volume controls are . not there. But you don’t really need them most of the time. A quick double tap on the screen will wake the G2 up from its slumber.

An LG Australia executive said “A number of publications have praised the new G2 we will have it on sale in Australia in mid-October”.

EXCLUSIVE: Real Concerns Over The Good Guys Growth Forecasts & IM Numbers

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The Good Guys IPO roadshow is over, with the appliance and consumer electronics retailer forecasting 20% growth in 2017 a figure that has several analysts concerned.

Questions have also been raised about the Companies Information Memorandum and the omission of costs associated with the running of the business following the recent buyout of several Good Guys stores. 

According to sources The Good Guys are forecasting an EBITDA of $109M for 2017, up from $91M in 2016. In 2015 the Company had an EBITDA of $80M and in 2014 $66M according to analysts who have seen the numbers.

One analyst said “There is a real risk that this growth is not sustainable, and if The Good Guys fail to hit their numbers in 2017, there is the potential that they could end up like Dick Smith with investors and the Muir family doing their investment”.

“Research shows that you may get growth for one, two and at the most three years, but to get 20% in the fourth year is simply not achievable. You only have to look at the likes of Harvey Norman and JB Hi Fi to see the potential growth in the consumer electronics and appliance markets over time.”.

Another analyst said that there was also “real concerns” about the identification of cost associated with the transition of the business following the buyback of several stores.

“What they have is an IM it is not like a real set of numbers, it’s an estimation of costs because the combined business did not exist until July 1st” they said.

“There is a lot of costs in the IM for the transition, store manager bonuses have to be paid as there is a deal in place for the next 12 months. This has been viewed as an abnormal expense by The Good Guys management and they have excluded this from their analysis”.

Some observers claim that this cost, is the bonuses that will be paid across the run of stores, and should be included in the costs associated with the running of The Good Guys.

There is also concerns about the introduction of new store managers into the group following the recent transition.

“With the level of change currently taking place at The Good Guys there is a real risk that the new store management won’t deliver the growth needed to meet the forecasted targets. We have all seen what happened with Dick Smith when store managers failed to deliver growth and investors today are sceptical about another retail IPO”.

They added “What the market really needs is to see how this transition really goes and when they have real numbers, which would be at the earliest in 12 months’ time, they should then consider an IPO”.

With a decision due by Friday insiders are still tipping a trade sale as the best option for The Good Guys.

One analyst said that Andrew Muir and his family were taking a real risk if they do an IPO.

“If the shares dip 30% they will lose a lot of money. While an IPO could look the better deal in the short term it could be expensive in the long term. What the Muir family have to come to grips with is the risks associated with an IPO and the ongoing risks associated with running a listed Company in a market where conditions and products change very quickly”.

Currently the Australian Competition and Consumer Commission is investigating the potential acquisition of The Good Guys by JB Hi Fi.

According to sources and based on current market conditions the potential deal is tipped to be given the green light.

One area of concern has been in the TV market. Last year The Good Guys turned over $300M selling TV’s this was up 10% on the prior year. The Company has also had a lot of success selling house brand TV’s in particular the JVC brand that was introduced last year.

At the same time JB Hi Fi has grown their share of the TV market in Australia, which if combined with The Good Guys share would make them the #1 TV retailer in Australia.

Both The Good Guys and JB Hi Fi management were not available to comment for this story.

New Microsoft Smartphones Set To Struggle As Consumers + B2B Dump Windows + Microsoft

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Microsoft Australia who will shortly compete head on with carriers in Australia when they open their first store in Sydney is set to launch a new range of smartphones tomorrow.

But don’t bank on their latest models being a success as consumers turn off their Windows OS machines for Macs and tens of thousands take up Google Docs and Android based smartphones.

At a media event tomorrow in New York, Microsoft plans to announce at least two high-end Lumia smartphones powered by Windows 10 software.

After five years of failing to get traction in the smartphone market and after losing billions buying up struggling smartphone Company Nokia, Microsoft no longer is gunning for the mass market, but grabbing for niches such as businesses, where the company hopes its smartphones will have a competitive advantage.

They are betting on business moving to Office 365 which is why the Company is spruiking collaboration tools. 

What Microsoft is set to pitch is that if you buy the Windows eco system and a Windows smartphone your personal computers and mobile devices will operate in a seamless system.

What they fail to tell consumers is that they won’t have access to tens of thousands of apps now available for Android and Apple OS smartphones. 

They claim that Windows users who crunch Excel spreadsheets or make Skype calls on their PCs, the thinking goes, will find it compelling to have the same experience on their mobile devices.

This is despite the fact that users of an Android smartphone can already do this with an array of Android devices. 


The Wall Street Journal said that Microsoft’s decision to narrow its focus reflects hard facts: Windows smartphones have sold poorly and bled money. Two years ago, when Microsoft plunged into the smartphone-handset business with an agreement to buy Nokia’s mobile-phone operation, Microsoft said it would own a 15% smartphone market share by 2018. 

The company has dropped that ambition. This year, about three out of every 100 smartphones sold will run Windows, research firm IDC estimates. Apple iPhones and smartphones powered by Android software together comprise the other 97%.

Microsoft’s phone operation lost 12 cents for each smartphone sold in the three months ended June 30, on average.

In July, Microsoft effectively conceded failure by wiping away about 80% of the value of the $9.4 billion Nokia deal and announcing plans to cut nearly 8,000 workers, mostly in its mobile-phone operation.