Michael Dell is still struggling to reclaim his company’s former glory, and the latest cutbacks show he still has a long way to go.

Dell (DELL) said Monday that it will close an Austin, Texas plant that makes desktop PCs. It's just the latest step in a plan management laid out nearly a year ago, in which the company plans to shed 8,300 workers and save $3 billion in costs. The remarkable thing about Dell's announcement isn't the simple shuttering of a U.S. manufacturing facility – that sort of thing is happening across the country every day. It's how precipitously Dell has fallen. More

Two complaints about Apple's popular aluminum iMac line — the "washed out" look of the 20-inch iMac that surfaced on Apple's discussion boards last summer (see here) and the "millions of colors" issue that was recently settled by the company — were rolled into one class-action lawsuit filed Monday in U.S. District Court in San Jose.

The plaintiff — a Texan named Chandra Sanders — claims to represent tens of thousands of customers who purchased the smaller of the two iMacs introduced last August. She is demanding a jury trial.

At the center of her complaint is the allegation that while 24-inch iMacs are capable of displaying 16,777,216 colors on 8-bit, in-plane switching (IPS) screens, the 20-inch iMac have 6-bit twisted nematic film (TN) LCD screens that can display only 262,144 colors.

Much of the 15-page complaint is taken up repeating statements made by Steve Jobs at the product introduction and by marketing messages issued later by Apple (AAPL) that describe the two displays as if they were interchangeable.

Apple's website, for example, says that "No matter what you like to do on your computer — watch movies, edit photos, play games, even just view a screen saver — it’s going to look stunning on an iMac.”

In fact, say the plaintiff's representatives, "the inferior technology of the 20-inch iMac is particularly ill-suited to editing photographs because of the display’s limited color potential and the distorting effect of the color simulation processes… Apple deceptively marketed its new 20-inch iMac in a way that grossly inflated the capabilities of its monitor, which is vastly inferior to the previous generation it replaced."

“Apple is duping its customers into thinking they’re buying ‘new and improved’ when, in fact, they’re getting stuck with ‘new and inferior,’” said Brian Kabateck of Kabateck Brown Kellner, the Los Angeles firm that is handling case. “Beneath Apple’s ‘good guy’ image is a corporation that takes advantage of its customers. Our goal is to help those customers who were deceived and make sure Apple tells the truth in the future.”

Ms. Sanders claims to have lost "money or property" as a result of Apple's "unfair, unlawful and fraudulent" actions, although no dollar figure is provide.

It its press release, Kabateck Brown Kellner LLD describes itself as "one of the nation's foremost consumer law firms." The firm claims that its clients have won more than $750 million against Google (GOOG), Farmer's Insurance, Eli Lilly (LLY) and other major corporations.

Piper Jaffray analyst Gene Munster took a lot of heat back in June 2007 when he predicted, three weeks before Apple even began selling the iPhone, that the company would be shipping them at the rate of 45 million a year by 2009.

But Munster is sticking to his guns, and on Monday released a detailed report to clients in which he lays out the steps by which he expects Apple (AAPL) to hit his target — quadrupling 2008 sales.

• By introducing a 3G iPhone within the next 3 to 6 months
• By offering a family of 2 to 3 iPhones — including lower-priced models selling for $200 to $300 — by Jan 2009 at the latest
• By entering new countries, effectively doubling the addressable market every year for the next two years.
• By adding new features, such as games (Tiger Woods Golf, played by swinging the iPhone?) and remote purchases (Starbucks lattes without the wait?) starting in June.

Conceding that most investors consider his 45 million estimate "outrageously aggressive," Munster supports it with a somewhat mysterious chart that compares the 409% year-to-year growth rate of the iPod in its breakout years with his estimate of just over 300% for the iPhone.

What's mysterious about this chart is that it shows sales of 35.6 million iPhones in fiscal 2009, not the 45 million Munster is projecting. The discrepancy may be due to the difference between Apple's fiscal year and our calender year, but Munster does not explain it.

Slightly clearer is the roadmap Munster offers for Apple's overseas expansion. He points out that iPhone has achieved roughly 3% penetration of the 153 million subscriber base in the six countries in which it is currently sold. The following chart shows how he expects Apple to double that addressable market over the next two years. Note that Japan is the only Asian country he's counting on for 2008. China, he says, is not likely to sign on until Apple drops its insistence on revenue sharing, something he expects the company to do in 2009.

Do smartphones really need physical keys?

The folks who designed Apple's iPhone bet that touchscreen keys would be good enough for most users, and based on a February survey of iPhone owners that found 72% "very satisfied" (versus 55% for RIM), Apple's gamble seems to have paid off.

The complaints about the virtual keys that were so persistent when the iPhone first came out have largely gone away.

But not quite. Just as Apple (AAPL) begins manufacturing the second coming of its famous smartphone, we have two new data points suggesting that the keyboard wars are far from over.

The first comes from an open letter to Steve Jobs posted by Dan Tynan at PC World in which he lists "5 Things iPhone 2.0 Must Have." No. 1 on his list: "Enlarge the Friggin' Keyboard." (link)

Tynan cites an Aug. 2007 User Centric test in which 20 veteran thumb typists were confronted with the iPhone for the first time and, not surprisingly, took twice as long to enter text and made more errors. (link)

What does Tynan suggest that Apple do about that? He likes the slide-out keyboard that HTC built for AT&T's (T) Tilt, a solution he describes as "nifty."

Given how hard Steve Jobs and his team worked to design the iPhone — stripping it down to bare essentials and selecting a form factor with as few moving parts as possible — they are unlikely to take kindly to Tynan's suggestion.

The second data point comes from Engadget, which has released what it says are the first leaked photographs of the new RIM (RIMM) BlackBerry 9000. (See their gallery of photos here.) SteveJack at MacDailyNews was the first to point out the resemblance to — and the key difference with — the iPhone. He writes:

"RIM clearly seems to have tried to copy Apple's iPhone's exterior look, but beyond that derivative bit of attempted tomfoolery, the anachronistic physical buttons remain, taking up space whether or not they're in use.

Also remaining is the small screen, mashed into the upper half of the device in order to make room for those tiny, slippery-looking plastic buttons festooned all over the bottom half of the device. The software's UI has been prettied or messed up (depending on your taste), but it has none of the multi-touch goodness of Apple's iPhone. It's the same old, same old in an iPhone-inspired wrapper.

You can judge the distance behind and overall cluelessness of iPhone's future roadkill by the amount they copy the iPhone's exterior. See: LG, HTC, and now RIM, among many others. This ceaseless quest to dress up antiques in Apple veneer is pathetic and sad."(link)

A partisan review, to be sure, and more than a bit over the top. But he may have a point.

It should be no surprise that Apple has turned to Foxconn, the trade name for Hon Hai Precision Industry Co., to build the next generation iPhone.

China's Commercial Times reported early Friday that Foxconn was competing for the business, and the Dow Jones newswire, citing "a person familiar with the situation," now reports that Apple (AAPL) has awarded the Taiwan-based firm the exclusive contract. (link)

Apple has chosen a supplier it knows and trusts. Although it keeps a relatively low profile in the United States, Foxconn is one of the world's largest manufacturers of electronics and computer components. It built many of the first generation iPhones, as well as MacBook Pros, MacBook Airs, iPod nanos and Mac Minis.

It also makes motherboards for Intel (INTC), Dell (DEL) and HP (HPQ), Playstations for Sony (SNE), Wii's for Nintendo, Xbox 360s for Microsoft (MSFT), cell phones for Motorola (MOT) and Kindles for Amazon (AMZN).

Foxconn employs nearly half a million people and does most of its manufacturing in mainland China. It was China's largest exporter in 2007.

In 2006 the British press charged that it used abusive employment practices. Apple investigated those charges and declared them largely unfounded, although the company did find that some Foxconn employees were working longer than the 60 hours a week Apple's Code of Conduct finds acceptable.

Ever since Steve Jobs told the British press last September that they could "expect a 3G iPhone late next year," the question has been not "if" but "when" exactly.

Speculation grew in October when Broadcom began delivering samples of what it called a "3G Phone on a Chip" (link) and again in November when AT&T CEO Randall Stephenson promised that we'd "have it next year" at whatever price Jobs decides to set.

Now, with less than three months before Apple's (AAPL) Worldwide Developers Conference (June 9-13), we're getting a flurry of leaks and rumors offering fresh details about the 3G iPhone and zeroing in on a late-May to June release.

• Last Friday, Digg founder Kevin Rose, who has a mixed record on iPhone predictions, told the audience for his Diggnation podcast that the 3G iPhone would have live video-conferencing capabilities. (YouTube link)
• On Tuesday, Gartner Group analyst Ken Delaney told iPod Observer that slower than expected sales in Europe for the EDGE-based iPhone had increased pressure on Apple to release a 3G model, and that according to his Asian sources Apple had ordered "a second round of 10 million iPhones based on the 3G network."
• On Wednesday, Digg's Rose followed up on his Friday podcast with a Twitter post in which he reports that a high level vice president with a big company that works with Apple told him that the new iPhone "will ship in June w/3G and GPS."
• Reflecting the newly reported 3G iPhone build plans, BMO Capital Markets' Keith Bachman on Thursday raised his bearish 2008 estimate of 8.5 million iPhones to 9.9 million, just a hair under Apple's own target of 10 million. Even his new estimate, he now says, may prove conservative.

Jobs' keynote address at the WWDC that second week in June would seem a logical moment to reveal the new phone, of course. But that's what many observers thought last year, when they predicted that Jobs would release the original iPhone at the end of his speech. Instead, Apple began selling the phone a few weeks later, on June 29.

The most detailed speculation we've read to date about the likely specs of the new iPhone is still Seth Weinraub's "best guesses," posted in mid-February in his Apple, Ink column at Computerworld.

Devices like the Razr2 V8 haven't done enough to raise Motorola's profile and its revenues. Image: Motorola

CEO Greg Brown says splitting the company will improve Motorola's focus. Image: Motorola

The year is 2010, and the Motorola brand is hot again. By aggressively retooling its design and manufacturing processes, the independent cell phone business has returned to profitability, grabbed back market share from Samsung and Sony Ericsson, and gained on Nokia (NOK) with low-cost handsets in developing markets like India and China.

Meanwhile, in its separate wireless equipment business, Motorola has outmaneuvered tech titan Cisco (CSCO) in the corporate market, and out-innovated both Cisco and Apple (AAPL) by reinventing set-top boxes that bring the Internet to the TV. Investors are thrilled, and they trace it all back to Motorola's (MOT) breakup announcement in March 2008.

Sound like a fantasy?

Odds are, that's all it is – and that's the downside to the Schamburg, Ill., company's announcement Wednesday that it will split itself in half in 2009. Though the news is probably music to the ears of activist investor Carl Icahn, who has been agitating for a breakup to boost Motorola's flagging stock price, it's difficult to see how two mini-Motos will be better positioned to compete with some of the best-managed competitors in the technology world.

Motorola CEO Greg Brown sees the spin-off differently. "I think it provides a clear sense of our intentions and direction," Brown tells Fortune. "The independence, improved focus and alignment of individual organizations will facilitate and enable stronger performances."

We've been here before, however. In previous slumps, Moto management hocked heirlooms like the automotive and semiconductor divisions in the name of raising money and gaining focus. Did it work? Well, if trimming divisions were the recipe for its success, Motorola would be thriving by now. Instead the firm has swung from a $3.6 billion profit in 2006 to a $49 million loss in 2007, and the stock is flirting with five-year lows. Motorola's problem isn't size – it's discipline. "Every time they go back to the drawing board, they start talking about selling off businesses, splitting up the company," says Shawn Campbell, of Campbell Asset Management, who has followed Motorola for years. "They're running out of things to sell." More

Former vice president Al Gore, who sits on Apple's compensation committee and supervised the company's internal investigation of its option backdating case, has been granted options to buy 10,000 shares of Apple (AAPL) at the strike price of $129.67, according to Jonny Evans at Macworld UK.

With Apple shares closing at $140.98 Tuesday night, the options would be worth $113,100 if exercised today. Should Apple reach its 2007 high of 202.96 before the options expire in 10 years, the grant would be worth more than $730,000, not counting taxes.

Gore, who describes himself as a "recovering politician," has won the Nobel Peace Prize and an Academy Award since leaving office. He took a seat on the Apple board in 2003 and co-founded the cable network Current TV in 2004. He also advises Google (GOOG) and venture capital firm Kleiner Perkins Caufield & Byers.

Bloomberg News reports that in January, Gore exercised options to buy 1,000 shares at $7.48, reaping a potential profit of more than $124,000.

Microsoft Surface is a tabletop computer that's controlled by physical touch instead of a mouse or keyboard. Image: Microsoft

Microsoft's tabletop computer could appear in homes in three years or less, the executive in charge of its development said this week.

Since unveiling the Microsoft Surface product last year, the company has gotten plenty of feedback from businesses and enthusiasts who want to get their hands on the technology, said Tom Gibbons, corporate vice president of Microsoft's (MSFT) Specialized Devices and Applications business. And Gibbons said he feels confident that the touch-based computer could be affordable enough for consumers in three years or less. "In the three-year time window, we absolutely see how to get there," Gibbons said. "If we can beat that, we'll try to beat that."

Surface is a computer built into a coffee table, and its 30-inch screen is controlled by touch rather than by a mouse or keyboard. (The complex manufacturing, of course, makes it expensive — the commercial version will be priced between $5,000 and $10,000) Though the concept is similar to Apple's (AAPL) touchscreen iPhone, the implementation of the technology is quite different. Surface works using digital cameras under the glass, which track movements above. More

When you're a company as high profile and as rich as Apple, you get sued for a lot things, from patent infringement (eight cases since January alone, according to Barron's) to "sexual harassments with Apple gadgets" (see here). But one suit that was widely derided as frivolous when it was filed last year has been quietly settled out of court, the Chicago Tribune reports.

The terms were not disclosed, and Apple as usual won't comment, but "settled" usually means that the company paid the plaintiffs something to make their case go away.

At issue is that pull-down menu in the Mac OS that lets users choose between 256, thousands and "millions of colors."

Here's how we reported on the case last May (link):

The complaint — filed in a California superior court — reads like a long, angry comment thread on an Apple forum, which is largely what it is.

Two MacBook owners, Fred Greaves and Dave Gately, have filed a class action lawsuit against Apple (AAPL), charging the company with deceptive advertising, misrepresentation and unfair competition over the use of the phrase "millions of colors" to describe the capability of the LCD displays in MacBook and MacBook Pro computers.

But as Charles Jade puts it in Ars Technica Infinite Loop, the legal filing tells …

"a story … that will sound familiar to longtime Mac users. It begins with a perceived problem, the discovery that others have this problem, a refutation by Apple of that problem, and the ensuing legal action." (link; see also Ryan Block at Engadget)

At the heart of the case is plaintiff's claim that rather than delivering 16,777,216 colors with an 8-bit LCD, Apple chose a cheaper route, delivering the illusion of millions of colors using a 6-bit LCD and dithering.

What makes the complaint sound especially familiar to longtime Mac users, is that to buttress their case, Greaves and Gately have copied and pasted long stretches of exchanges from discussion threads on apple.com support and other online fora. They tell stories of dismissive Apple geniuses telling them they are being "too picky," of off-the-street tests performed at Best Buy and Tekserve, of ordering replacement computers and being afraid to open the box, of exhausted phone support reps encouraging users to "take the refund."

"I'm so tired of dealing with Apple at this point," writes one anonymous poster, "that I don't have the energy or time to continue even though they've done everything they possibly could."

What do you do when you run into a brick wall at tech support? Greaves and Gately sued. They've requested a jury trial, which means a half dozen of their peers could be trying to sort out the kinds of meandering arguments we slog through every day. You want in on the case, which Techmeme has filed with a Netflix suit under the heading "from the who-to-root-for dept"? You can read the complaint as a PDF here or here at a mirror site.

Well, Greaves and Gately didn't get their jury trial. Their lawyer told the Tribune that they weren't able to pursue the case as a class action because it was difficult to find other people who bought Macs solely based on the "millions of colors" claim.

The plaintiffs did get the satisfaction of a hearing with Apple lawyers and a settlement — albeit one they've agreed not to talk about. That pull-down menu, meanwhile, still says "millions."

Thanks to Daring Fireball for the tip.