Security experts report that a malicious worm is tunneling its way through Dutch iPhones

This may be one of those "I told you so" moments that gives comfort to people on both sides of the Apple-Microsoft divide: Those who claim that Apple's (AAPL) products are no more immune to malware attacks than Microsoft's (MSFT), and those who insist that Apple's operating systems are nearly impenetrable, as long as you play by the rules.

According to the Dutch security firm XS4ALL, a software worm has been spreading through the Netherlands that can seize control of iPhones without their owners' knowledge and hand it over to a server in Lithuania.

"This worm is doing really bad things," XS4ALL's Scott McIntyre told security.nl.

Only a few hundred iPhones have been infected so far, according to the BBC. But if the worm gets into large Wi-Fi networks, thousands could be at risk.

This is the third reported iPhone malware incident in as many weeks and by far the most dangerous.

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Marketing online is about more than jumping on the social media bandwagon

By Sam Cece, CEO, StrongMail Systems.

A decade ago, the term social media didn’t mean much to consumers, let alone marketers and corporate executives.

Cece says platforms change but good marketing principals prevail. Photo: StrongMail

Today, none of us can get away from the term – it’s everywhere. Companies are jumping on the social bandwagon, erecting fan pages on Facebook, developing corporate Twitter accounts, creating groups on LinkedIn and producing channels on YouTube–all in the name of reaching, engaging and influencing customers on a more personal level.

While the game has certainly changed, it feels as if the social media pendulum has swung a bit too far in one direction. But by taking a closer look, it becomes clear that the more things change, the more they stay the same.

Social media isn’t new (email is considered by many to be the first social network), word-of-mouth marketing has been around for decades (look at the way Amway and Mary Kay Cosmetics products are sold) and viral marketing isn’t a fresh idea (arguably the pyramid scheme, which dates back to Charles Ponzi, was fueled by viral marketing). More

Add media and marketing executives to the long list of constituents who wish North American mobile systems were more like those in Asia.

Though the entertainment and advertising rarely are on the cutting edge when it comes to embracing new technologies, a group of muckety mucks at the Paley Center for Media International Council meeting in New York last week made it clear that the future of  media consumption is the mobile devices – at least the mobile device as used by consumers in countries such as Japan, Korea and even China.

"If you look at what's happening in Japan and Korea the potential for mobile is huge," says Nick Brien, president and CEO of Mediabrands, a media holding company and unit of Interpublic Group (IPG).'

"The future is here," Brien adds. "And it is there." More

Apple airs its first Chinese-language ads as reports of retailer intimidation emerge

Supplementing print advertisements like the one at right, the first Apple-produced iPhone ads appeared on Chinese TV over the weekend.

They come on the heels of the device's somewhat sluggish start last month in the world's largest mobile phone market (more than 720 million subscribers).

Apple's (AAPL) local carrier, China Unicom (CHU), reported signing up only 5,000 new subscribers in the iPhone's first four days of sale, a result Western analysts viewed as disappointing.

In addition to the several reasons put forward — e.g., high prices, lack of Wi-Fi, a market saturated with knock-off and black-market phones — iPhonAsia's Dan Butterfield has added another: strong-arm tactics on the part of China Unicom's chief rival, China Mobile (CHL).

According to Butterfield, some of the country's most important mobile phone distributors are not yet selling the iPhone despite signed agreements with China Unicom. Reason: threatening letters from China Mobile warning them not to.

"The precise wording of these letters is unknown," writes Butterfield, "but this is more than just a suggestion." He then quotes — in translation — an article in sina.com:

"Many cell phone distributors received formal notification that 'Selling iPhones is not recommended,' or 'Selling iPhones is not allowed or China Mobile will fine you or stop cooperation with you.' "

Tactics like this, as 9to5Mac's Seth Weintraub puts it, "make Verizon and AT&T's little sissy war seem silly."

Below the fold: An iPhone ad with a Chinese accent and Chinese apps.

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Its Cinderella contract with Apple for the iPhone runs out in seven months, says one analyst

Brian Marshall. Image: Bloomberg

Broadpoint AmTech's Brian Marshall, who has replaced Piper Jaffray's Gene Munster as the most bullish of the mainstream Apple analysts, made several assertions of fact in an Bloomberg TV interview Friday that — if true — struck me as newsworthy. Chief among them:

• The contract that gives AT&T (T) exclusive access in the U.S. to Apple's (AAPL) iPhone expires in June 2010.
• Apple is now getting a $450 subsidy from AT&T for each iPhone it sells; after June, that subsidy will be reduced to $300 for all carriers, domestic and international.
• The 4% of AT&T subscribers who use the iPhone consume roughly 40% of the network's bandwidth.

Here and in a research note issued last late month, Marshall has been lobbying heavily for Apple to start selling the iPhone through Verizon (VZ). It turns out he may have personal reasons for doing so. He told Bloomberg's Pimm Fox that whenever he travels to New York or San Francisco with his iPhone he gets dropped calls "all the time."

"A very frustrating experience," he said, "but I'm not going to move away because Apple has their hooks into me"

You can hear all this, plus what Marshall has to say about the Chinese iPhone market, Windows 7's effect on Mac sales and Apple's 2010 earnings, in the interview posted below the fold.

[Follow Philip Elmer-DeWitt on Twitter @philiped]

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The man behind #swineflu and #HowBlackAreYou was the hit at this year's NYC webfest

Baratunde Thurston. Image: O'Reilly Media

This has nothing in particular to do with Apple (AAPL), but it's very 2.0.

We spent much of last week at a conference in New York City called Web 2.0 Expo — a celebration of the "next generation Web" where one of the centers of attention was the giant Twitter screen set directly behind the keynote speakers that showed what the audience was tweeting about whomever was onstage.

The speakers included a typical mix of Web celebrities, including O'Reilly Media's Tim O'Reilly, Digg's Kevin Rose and Jay Adelson, author Douglas Rushkoff, Flikr co-founder Caterina Fake and White House chief technology officer Beth Noveck.

But the hit of the conference — judging from the laughter, the applause and the tweets — was Baratunde Thurston, Web & Politics editor at The Onion.

His talk was entitled "There's a #Hashtag for That" and I've discovered that it's a kind of Twitter touchstone. The audience at the Javits Center thought it was knee-slapping hilarious. People who don't quite get what Twitter is for — like my wife — are even more mystified than they were before they watched it.

The video is posted below the fold. We'd love to hear what you think.

[Follow Philip Elmer-DeWitt on Twitter @philiped]

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Shareholders press Microsoft's CEO about Apple's marketing campaign

Image: Apple Inc.

Those Get-a-Mac ads make "you all look like a buffoon," one long-time shareholder (and father of four Mac-using children) told Microsoft (MSFT) CEO Steve Ballmer at the company's annual meeting Thursday. "I'm just wondering why your marketing group can't do something to try to rein in this next generation, because you've got a real bad image out there."

"We all watch television," Ballmer responded, before quickly changing the subject to Microsoft's market share.

"The truth of the matter is, we do quite well," he said, according to TechFlash's Todd Bishop, who seems to have taken the best notes. "Even among college students, we do quite well. Do we have an opportunity for improvement? We do. Some of that is marketing, some of that is phase of life. It is important to remember that 96 times out of 100 worldwide, people choose a PC with Windows; that's a good thing. Even in the toughest market, which would be the high end of the consumer market here in the U.S., 83 times out of 100 people choose a Windows PC over a Mac."

Ballmer acknowledged that Apple (AAPL) had "picked up a couple of tenths of a percent of market share," an achievement some in the audience seemed to find laughable.

But as the Wall Street Journal's Nick Wingfield points out, citing IDC numbers, Apple's share of new PC shipments in the U.S. was 9.2% in the third quarter, up from 4.8% in the same period four years ago. (Worldwide share: 3.9% compared with 2.4% four years ago.)

Wingfield also took a crack at estimating how many copies of Window 7 Microsoft has sold, a number the company has not provided.

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Yes, you can create new products and services without betting the farm

By Ilana Westerman, CEO, Create with Context

Westerman: Innovation doesn't have to be risky. Photo: Create with Context

Many companies remain shell-shocked from the past 18 months of economic disaster.  As such, innovation – despite its potential rewards – is not exactly in fashion right now.

Though gurus like Jim Collins and others extol the virtues of using the downturn to capitalize on market opportunities or a competitor’s weakness, companies today are more likely to take a wait-and-see approach to innovation:  “Look for the quick bucks and the low-hanging fruit,” you might say to your management team.

But wait a minute: why not invest in innovation? And I'm not talking about focus groups and customer feedback surveys and Friday afternoon brainstorming sessions.

Economic indicators suggest that we are slowly pulling out of this global economic downturn. Despite the uncertainties ahead, this is the optimal time to think about innovation in a different light: what new groundbreaking product or service would truly resonate with your customers? It's probably something they can't articulate themselves. But it's worthwhile to take the time to discern what motivates your customers and how you could meet a need they don't even realize they have. In our work with clients, we call this calculated innovation.

When executives think about innovation, what often comes to mind is not far from the truth: engineers and marketing chiefs sit around a table and pontificate on the next big idea. This is fuzzy and abstract, and often not grounded in reality. Where do these ideas come from and how can you measure your risk?

No wonder innovation is scary for many companies. More

A few years ago rivals mocked Jonney Shih, chairman of Asustek, and his purse-size laptop computers. Millions of netbooks later, Shih is having the last laugh.

Jonney Shih, CEO of Asus, in Taipei.

On a hillside above the Hsing Tian Kong temple in the northern reaches of Taipei, Jonney Shih sits on a wobbly stool next to an ornate low wooden table. Dressed in a taupe suit, white shirt, and silver tie emblazoned with jaguars, Shih, 57, cheerfully waves off three umbrella-wielding employees who try in vain to shield their boss from the hot sun and a swirl of menacing bees.

But Shih, who is waiting to be photographed for this magazine, sits serenely, perspiration-free in the sun, intent on a game of Chinese chess. "In Buddhism you learn to accept everything, to let it flow through you," Shih says. "Then you can slow down and think clearly."

It turns out the ferociously driven Shih is a less-than-model Buddhist. (Buddhists aren't supposed to be thinking about technology while they're meditating — something Shih is known to do.) But his ambition, combined with engineering skills and spot-on business instincts, also makes him the most brilliant technology executive you've never heard of.

He is the largest shareholder and chairman of Asustek (pronounced a-soos-tech), the $21-billion-a-year tech conglomerate that introduced the first netbook three years ago, ushering in a revolution in the stagnant PC industry. When it hit stores in the fall of 2007, Shih's $399 EeePC was derided by rivals as a low-power plaything. But Asustek, or Asus for short, went on to sell millions of the mini-notebooks and soon vaulted to No. 5 in worldwide PC market share. More