Google unveils first 10-inch Nexus tablet

SAN FRANCISCO (Reuters) - Google Inc unveiled a larger version of its Nexus-branded tablet computer on Monday, and updated its mobile gadget and online content offerings as competition with Apple Inc, Amazon.com Inc and Microsoft Corp heats up ahead of the holiday sales season.

The device follows a spate of new product launches by the technology leaders in recent weeks, including Apple's iPad Mini last week and software-maker Microsoft's first-ever home-built tablet, the Surface.

Google, the world's No.1 Internet search engine, has pushed deeper into the hardware business at a time when consumers are increasingly accessing the Web on mobile devices.

Google's new Nexus 10, made in partnership with consumer electronics company Samsung Electronics Co, is the first 10-inch tablet to come to market under Google's Nexus brand. The device, with prices starting at $299, will be available on November 13 in the United States and seven other countries, Google said in its official blog on Monday.

Google was scheduled to introduce the device at a media event in New York on Monday, but was forced to cancel because of Hurricane Sandy.

Google also said it was expanding its online movie and music retail businesses to several countries in Europe.

And the company introduced an improvement to its online-music storage service. The new "matching" feature scans songs in a consumer's music collection and automatically creates an online or "cloud-based" library of the same tracks which consumers can access from any device or computer.

Google said the music matching feature, which only works with tracks that are part of the Google Play store's music catalog, will be available in Europe on November 13 and in the United States soon after.

Google also updated its smaller, Nexus 7 tablet released earlier this year. It increased the storage on the $199 version of the device to 16GB from 8GB, and introduced a new $299 version of the Nexus 7 with a cellular data service option. Google also unveiled a new Nexus 4 smartphone, made in partnership with LG Electronics, that features a quad-core processor and a 4.7-inch display.

(Reporting by Alexei Oreskovic; Editing by Richard Chang)

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Apple software, retail chiefs out in overhaul

SAN FRANCISCO (Reuters) - Apple Inc CEO Tim Cook on Monday replaced the heads of its software and retail units in the company's biggest executive shake-up in a decade following embarrassing problems with its new mapping program and unpopular store-related decisions.

Software chief Scott Forstall, who oversaw the launch of the flawed mapping software and much criticized Siri voice-enabled assistant, will leave Apple next year.

Forstall, seen as a polarizing figure inside Apple, had been billed as one of the future candidates to take the top job at Apple. He was the executive behind the panned Apple Maps app that the company announced with much fanfare in summer.

Apple said in a statement that retail chief John Browett "is leaving," without elaborating; that a search for his replacement is underway; and the retail team would report directly to Cook. Browett had riled up the retail store staff when he reduced the number of employees in his unit.

The departures come a little more than a year into Cook's tenure as chief executive. Cook replaced the late Apple founder Steve Jobs, considered one of the best executives of all times by many analysts and investors.

"These changes show that Tim Cook is stamping his authority on the business," Ben Wood, analyst with CCS Insight, said. "Perhaps disappointed with the Maps issues, Forstall became the scapegoat."

Apple upended the tech industry with the release of its iPhone smartphone in 2007. But the company is facing increasing competition from search giant Google, whose Android has become the world's most popular mobile software, as well as from Amazon.com Inc, Microsoft and Samsung.

"Competition is moving much faster to be more Apple-like," said Tim Bajarin, president of technology research and consulting firm Creative Strategies. "They're finding they need to streamline the management team in order to get things going faster."

Apple's launch of its own mapping service in September, when it began selling the iPhone 5 and rolled out its updated iOS 6 software, led to widespread user complaints, particularly since it replaced the popular Google Inc Maps.

Apple's Siri personal assistant software also came under a lot of criticism, including for not providing information on business location, when it was launched last year.

Both the services were introduced with much fanfare by Forstall, who had supervised their development as senior vice president of iOS software.

The executive changes hand over substantially more responsibility to Eddy Cue, the head of Internet Software and Services who helped create the iTunes music store and App Store. The 23-year Apple veteran already is in charge of Cloud services and will take on Apple Maps and Siri. Craig Federighi will oversee Apple's mobile iOS software as well as its OS X Mac software, Apple said.

Putting the mobile and personal computer software teams under the same manager could improve operations within the company, particularly as the capabilities and features of smartphones and PCs increasingly converge, said analysts.

"If you have two different heads, you have two different fiefdoms," said BGC Partners analyst Colin Gillis.

Another executive who will get extra responsibility under the shake-up is Jonathan Ive, Apple's head of industrial design, who has played a key role in Apple's success by imbuing its gadgets with a distinct look and feel.

That magic touch could help reinvigorate the look of Apple's software, which has been criticized by some technology observers, Gillis said.

RETAIL SWITCH

Shares of Apple, the world's largest publicly traded company by market value, have declined 14 percent in the past month since reaching a 52-week high of $705.07 in September.

Browett, former CEO of British electronics retailer Dixons, took over as senior vice president of Apple's retail stores earlier this year, replacing Ron Johnson, who went on to become the CEO of JCPenney.

"I think ultimately they probably discovered that his experience with Dixons didn't translate that well to the Apple stores and he just probably wasn't the right fit," Bajarin of Creative Strategies said.

Apple, which described Monday's moves as a way to increase "collaboration" across its hardware, software and services business, said Forstall will serve as an advisor to Cook until his departure.

Last week Apple delivered a second straight quarter of disappointing financial results, and iPad sales fell short of Wall Street's targets, marring its record of consistently blowing past investors' expectations.

(Reporting by Alexei Oreskovic; Editing by Richard Chang)

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Taxpayer data exposed in cyber attack on South Carolina agency

CHARLESTON, South Carolina (Reuters) - As many as 3.6 million Social Security numbers and 387,000 credit and debit card numbers used by state taxpayers could have been exposed to a hacker in recent cyber attacks on the state Department of Revenue's computers, officials said on Friday.

The vast majority of the credit card numbers used by South Carolina taxpayers were encrypted, but about 16,000 were not, meaning the data was fully exposed, state police said.

None of the Social Security numbers were encrypted, said State Law Enforcement Division spokesman Thom Berry.

Berry said the hacker used a foreign Internet Protocol (IP) address to gain access to the data.

"This is not a good day for South Carolina," Governor Nikki Haley said at a news conference in the state capital of Columbia. "I want this person slammed against the wall," she said of the hacker.

"I want to get this person and make sure he can never do this to anybody or any state again," Haley said "I want that man just brutalized."

Officials said no public funds were accessed or put at risk. An investigation into the security breach is ongoing.

Investigators this month discovered two attempts to probe the Department of Revenue's system in early September, and later learned of an attempt made in late August, state officials said.

Two other intrusions occurred in mid-September, and the department determined the hacker had obtained data for the first time, according to a statement from the state.

Officials said the vulnerability in the system was closed on October 20 and the system is now believed to be secure.

Anyone who filed a South Carolina tax return since 1998 is being urged to find out whether their information was affected. The state will provide those affected with one year of credit monitoring and identity theft protection.

Earlier this year, police arrested a South Carolina state health agency employee they said had made off with almost 230,000 Medicaid recipients' personal information.

Also, the University of South Carolina said in August that a hacker had breached the personal information of as many as 34,000 people connected to its College of Education.

(Reporting by Harriet McLeod; Editing by Colleen Jenkins and Todd Eastham)

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SAP eyes "long" period of high sales growth: report

BERLIN (Reuters) - Germany's SAP may be able to sustain high sales from software and related services for a "very long time," co-chief executive Bill McDermott told a German newspaper.

"It's our ambition to grow with double-digit numbers for a very long time to come," Euro am Sonntag quoted McDermott as saying in an interview published on Sunday.

"I believe that's possible."

The newspaper also cited the co-CEO as saying SAP currently has no plans for further acquisitions following the purchases of cloud-computing company Ariba and Success Factors.

(Reporting By Andreas Cremer; Editing by Hans-Juergen Peters)

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Surface tablet buzz starts, but Windows 8 excitement muted

SEATTLE (Reuters) - U.S. shoppers woke up with mild Surface fever on Friday, lining up in moderate numbers to buy Microsoft's groundbreaking tablet computer designed to challenge Apple's iPad.

The global debut of the Windows 8 operating system was greeted with pockets of enthusiasm, but not the mania reserved for some previous Apple Inc launches.

Microsoft is positioning the slick new computing device, which runs a limited version of Windows and Office with a thin, click-on keyboard cover, as a perfect combination of PC and tablet that is good for work as well as entertainment.

"I like the flexibility of having the keyboard and the touch capability," said Mike Gipe, 50, who works in sales for bank Barclays, and was planning to buy a Surface tablet at Microsoft's pop-up store in Times Square in New York.

"It's the combination of having the consumer stuff and the work stuff," he said, looking forward to using Excel spreadsheets and PowerPoint presentations on the new device.

The Times Square store was the first to sell the Surface -- Microsoft's first ever own-brand computer -- and other Windows 8 devices late on Thursday and will be open through the holiday shopping season. On Friday morning it was crowded with a mix of tourists and local office workers, but the cash tills were not jammed.

"With the other tablets you're a consumer. With this you can have input," said Peter Townsend, on vacation in New York from Australia with his wife, who bought a Surface tablet because he liked the keyboard.

Mark Pauluch, 28, who works for a New York private equity firm, said he would like a Surface because he does not want to take a laptop on a plane, but was disappointed when the sales representative told him the wifi-only Surface would not work with Cisco VPN networking.

"I can't use this to replace my work laptop unless it supports VPN," he said.

MIDWEST, WEST COAST

Elsewhere in the United States, there was solid but not overwhelming interest for the Surface.

"It's a good tablet. I am not a huge i-anything fan, I like Windows," said Matt Shanahan, a software developer who drove four hours to the tiny Michigan Avenue pop-up store in Chicago from Grand Rapids, Michigan to buy a Surface. "My friend and I are software developers and this gives us an opportunity to develop new apps," he said.

In a pop-up store at the San Francisco Centre mall about 50 people lined up to buy the new Surface.

"On an iPad you have to use half the screen for a keyboard, or buy an accessory. I love that the Surface is so integrated, that you can type and use Word and all my other programs," said Malte von Sehested, a textbook creator who bought a Surface.

"With the Surface you get a steeper learning curve -- I had to get someone to show me how to side-swipe, swipe out to get the menus for instance," he said. "It may take a week, before it all becomes natural. That could be a problem for Microsoft. My old dad, he would get hit by that steeper learning curve."

ANALYSTS PATIENT

Wall Street and tech industry experts failed to show great enthusiasm for Windows 8, but were prepared to give Microsoft time to succeed.

"Microsoft did not come out with Windows 8 thinking it will be an overnight success," said Daniel Ives, an analyst at FBR Capital Markets. "But there's hope that this could be the silver bullet of growth (for Microsoft) as well as giving the PC industry some optimism that there's better days ahead."

The next six to 12 months is a "crucial period" for Microsoft to get traction with consumers, added Ives.

Sarah Rotman Epps, an analyst at tech research firm Forrester, said consumers may be best served waiting for tablets running the full Windows 8 Pro and Intel Corp chips, which are due out early next year.

"Windows 8 has a lot of great features, but RT has a long way to go," she said, citing a lack of apps and poor video performance on the Surface.

"It's not really a PC. RT is too restricted. Some people will be happier with the full Windows 8," she said.

Microsoft shares were up 33 cents at $28.21 on Nasdaq on Friday. Apple shares were down slightly after disappointing earnings on Thursday.

(Reporting By Nivedita Bhattacharjee in Chicago, Sinead Carew and Nicola Leske in New York, Edwin Chan in San Francisco; Editing by Alden Bentley)

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Star Silicon Valley analyst felled by Facebook IPO fallout

SAN FRANCISCO (Reuters) - The firing of Citigroup stock analyst Mark Mahaney on Friday in the regulatory fallout from Facebook Inc's initial public offering was greeted with shock and dismay in Silicon Valley, where Mahaney was a well-known and well-liked figure.

"Pretty shocked," was the reaction of Jacob Funds Chief Executive Ryan Jacob, who described Mahaney as one of the most respected financial analysts covering the Internet industry.

"I'd put him at the top. If not at the top, then near the top," said Jacob. "He really knew what to look for."

In addition to firing Mahaney, Citigroup paid a $2 million fine to Massachusetts regulators to settle charges that the bank improperly disclosed research on Facebook ahead of its $16 billion IPO in May.

The settlement agreement said Mahaney failed to supervise a junior analyst who improperly shared Facebook research with the TechCrunch news website. (Settlement agreement: http://r.reuters.com/pyj63t)

The settlement agreement also outlined an incident in which Mahaney failed to get approval before responding to a journalist's questions about Google Inc -- and told a Citigroup compliance staffer that the conversation had not occurred -- even after being warned about unauthorized conversations with the media.

Mahaney declined to comment.

Mahaney got his start in the late 1990s, during the first dot-com boom where he worked at Morgan Stanley for Mary Meeker, one of the star analysts of the time. He went on to work at hedge fund Galleon Group before moving to Citigroup in 2005. Unlike most of his New York-based peers in the analyst world, Mahaney worked in San Francisco's financial district, close to the companies and personalities at the heart of the tech industry.

Earlier this month, Mahaney was named the top Internet analyst for the fifth straight year by Institutional Investor. The review cited fans of Mahaney who praised a "systematic" investment approach that allows him to avoid the "waffling" often evidenced by other analysts.

Mahaney's Buy rating on IAC/InteractiveCorp in April 2011, when the stock traded at $33.32, allowed investors to lock in a 51 percent gain before he downgraded the stock to a Hold at $50.31 a few months later, according to Institutional Investor.

But it wasn't only his stock picks that put him in good stead. He earned kudos for simply being a nice guy.

"He's a kind and thoughtful person and that's evident in the way he deals with people," said Jason Jones of Internet investment firm HighStep Capital. "He's very well liked on Wall Street because of that."

A CAUTIOUS VIEW ON FACEBOOK

Mahaney was only indirectly involved in the incident involving the Facebook research, according to the settlement agreement by Massachusetts regulators released on Friday. But the actions of the junior analyst who worked for him provide an unusual glimpse into the type of behind-the-scenes information trading that regulators are attempting to rein in.

While the Massachusetts regulators did not identify any of the individuals by name, Reuters has learned that the incident involved TechCrunch reporters Josh Constine and Kim-Mai Cutler as well as Citi junior analyst Eric Jacobs.

Jacobs, Constine and Cutler all did not respond to requests for comments.

In early May, shortly before Facebook's IPO, Jacobs sent an email to Cutler and Constine. Constine attended Stanford University at the same time as Jacobs.

Constine, who studied social networks such as Facebook and Twitter for his 2009 Master's degree in cybersociology at Stanford, had a close friendship with Jacobs, according to the settlement agreement.

"I am ramping up coverage on FB and thought you guys might like to see how the street is thinking about it (and our estimates)," Jacobs wrote in the email. The email included an "outline" that Jacobs said would eventually become the firm's 30-40 page initiation report on Facebook.

He also included a "Facebook One Pager" document, which contained confidential, non-public information that Citigroup obtained in order to help begin covering Facebook after the IPO.

Asked by Constine if the information could be published and attributed to an anonymous source, Jacobs responded that "my boss would eat me alive," the agreement said.

A spokeswoman for AOL Inc, which owns TechCrunch, declined to answer questions on the matter, saying only that "We are looking into the matter and have no comment at this time."

Ironically, Mahaney was one of a small group of analysts at the many banks underwriting Facebook's IPO who had cautious views of the richly valued offering. Mahaney initiated coverage of the company with a neutral rating.

Analysts at the top three underwriters on Facebook's IPO - Morgan Stanley, Goldman Sachs and J.P. Morgan - started the stock with overweight or buy recommendations.

Earlier this year, Reuters reported that Facebook had pre-briefed analysts for its underwriters ahead of its IPO, advising them to reduce their profit and revenue forecasts.

Facebook, whose stock was priced at $38 a share in the IPO, closed Friday's regular session at $21.94 and has traded as low as $17.55.

"There were tens of billions of dollars in losses based on hyping the name, a lack of skeptical information and misunderstanding the company," said Max Wolff, chief economist and senior analyst at research firm GreenCrest Capital.

"It's highly unfortunate and darkly ironic that one of the signature regulatory actions from this IPO so far involves punishing analysts for disseminating cautious information about Facebook," he added.

(Editing by Jonathan Weber, Mary Milliken and Lisa Shumaker)

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Tech CEOs trade barbs, warm up for holiday tablet wars

SAN FRANCISCO (Reuters) - The biggest names in consumer technology, stung by a string of disappointing quarterly results this month, are suiting up for what's shaping to be the fiercest holiday battle in years.

Investors and consumers have already largely written off flaccid quarterly numbers from tech behemoths like Microsoft, Apple, Google and Amazon. What counts is the next 60 days, when the biggest names in technology do battle at a near-unprecedented scale and pace.

Just on Thursday, Amazon compared its Kindle Fire with Apple's new iPad mini, point by point, in its earnings release, an unusual forum to name rivals. Apple CEO Tim Cook compared Microsoft's Surface tablet to an over-engineered car that can fly and float. And Microsoft went for the iPad, saying its Surface boasted twice its storage.

All three tablets will vie for the shrinking consumer dollar these holidays. By tech standards, it's getting ugly.

"The tablet space is where the growth is. That's why they are all fighting over it. PC shipments are down and some tablet buyers may never buy another PC," said Michael Allenson, strategic consulting director in the Technology and Telecom Research Group at Maritz Research.

"Last holiday season, we saw a lot of buying of tablets in the $200 to $300 price range. This year, the iPad mini and Amazon's Kindle Fires are targeted as large gifts. They are trying to ride that wave and win as much as they can."

The impending clash is far from decided.

Odds-on favorite Apple has lost some of its aura of invincibility, with Google's Android and Samsung making inroads into its reign in smartphones, Microsoft's quickening marketing blitz, and Amazon's Kindle nipping at its heels as the No. 2 tablet in the United States market.

That competition has weighed on Apple's share price, which is at three-month lows after it reported a second straight quarter of disappointing results, sullying its reputation for blowing away Wall Street estimates.

Google is struggling to figure out the dollars and cents of the mobile market and Microsoft is facing witheringly unimpressed reviews for its new Windows 8 platform and Surface tablet.

Meanwhile, Amazon's outlook for the holiday season is being taken as a disappointment, and Best Buy warned late Wednesday that sales and margins are falling.

CLAWS COME OUT

Tech companies hope lackluster calendar third-quarter results mean consumers have held off from buying gadgets so they can save up for something new and shiny this Christmas -- from the lowest-end Fire at $159 to a Surface around $499 or the biggest, fastest, newest iPad at $829.

The technology industry is grappling with a fundamental shift from deskbound computers or heavy laptops to sleek mobile devices like tablets, which are upending the traditional PC model and prompting companies like Google and Microsoft to invest deeply in hardware manufacturing.

Their entry however is raising the competitive stakes. Companies like Apple usually spend most of their time talking about how great their own products are, but with the competition more intense than ever, Apple CEO Cook spared a not-so-kind thought for Microsoft on Thursday.

"I haven't personally played with the Surface yet, but what we're reading about it, is that it's a fairly compromised, confusing product," he said, later adding "I suppose you could design a car that flies and floats, but I don't think it would do all of those things very well."

Cook may have been going for levity, but the Twitterati booed his joke, since after all most gadget-heads would be very content with a flying, floating car.

Microsoft CEO Steve Ballmer, for his part, was pretty impressed with the company's handiwork, notwithstanding reviews that used words like "disappointing" and "undercooked."

"We have a device that's uniquely good at being a tablet and a PC (with) no compromise on either one," Ballmer told Reuters Television ahead of the Windows 8 launch event in New York on Thursday. "Work. Play. Tablet. PC. Boom! One product."

Google Executive Chairman Eric Schmidt, in a talk this month, took a shot at Apple, which has faced a barrage of complaints about glitches in its mapping software since dumping Google's service from its iPhone.

"What Apple has learned is that maps are really hard. They really are hard," he said. "Apple should have kept with our maps."

Not to be outdone in the sniping, Amazon Chief Executive Jeff Bezos took a subtle swipe at Apple's high prices in the Internet retailer's quarterly results statement Thursday, saying "our approach is to work hard to charge less."

Right below those comments, Amazon listed head-to-head comparisons between its $299 8.9-inch Kindle Fire HD tablet, its $199 7-inch Kindle Fire HD device and Apple's iPad mini, which was unveiled on Tuesday.

Analysts were taken aback by how brazen Amazon was being in taking shots at peers.

"I have never seen them directly compare products in a results release like this, and in so much detail clearly calling out their competitors," said RJ Hottovy, an equity analyst at Morningstar. "This shows they are taking the tablet wars very seriously."

(Additional reporting by Bill Rigby in Seattle; Writing by Ben Berkowitz; editing by Edwin Chan and Raju Gopalakrishnan)

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Surface tablet buzz starts, but Windows 8 excitement muted

SEATTLE (Reuters) - U.S. shoppers woke up with mild Surface fever on Friday, lining up in moderate numbers to buy Microsoft's groundbreaking tablet computer designed to challenge Apple's iPad.

The global debut of the Windows 8 operating system was greeted with pockets of enthusiasm, but not the mania reserved for some previous Apple Inc launches.

Microsoft is positioning the slick new computing device, which runs a limited version of Windows and Office with a thin, click-on keyboard cover, as a perfect combination of PC and tablet that is good for work as well as entertainment.

"I like the flexibility of having the keyboard and the touch capability," said Mike Gipe, 50, who works in sales for bank Barclays, and was planning to buy a Surface tablet at Microsoft's pop-up store in Times Square in New York.

"It's the combination of having the consumer stuff and the work stuff," he said, looking forward to using Excel spreadsheets and PowerPoint presentations on the new device.

The Times Square store was the first to sell the Surface -- Microsoft's first ever own-brand computer -- and other Windows 8 devices late on Thursday and will be open through the holiday shopping season. On Friday morning it was crowded with a mix of tourists and local office workers, but the cash tills were not jammed.

"With the other tablets you're a consumer. With this you can have input," said Peter Townsend, on vacation in New York from Australia with his wife, who bought a Surface tablet because he liked the keyboard.

Mark Pauluch, 28, who works for a New York private equity firm, said he would like a Surface because he does not want to take a laptop on a plane, but was disappointed when the sales representative told him the wifi-only Surface would not work with Cisco VPN networking.

"I can't use this to replace my work laptop unless it supports VPN," he said.

MIDWEST, WEST COAST

Elsewhere in the United States, there was solid but not overwhelming interest for the Surface.

"It's a good tablet. I am not a huge i-anything fan, I like Windows," said Matt Shanahan, a software developer who drove four hours to the tiny Michigan Avenue pop-up store in Chicago from Grand Rapids, Michigan to buy a Surface. "My friend and I are software developers and this gives us an opportunity to develop new apps," he said.

In a pop-up store at the San Francisco Centre mall about 50 people lined up to buy the new Surface.

"On an iPad you have to use half the screen for a keyboard, or buy an accessory. I love that the Surface is so integrated, that you can type and use Word and all my other programs," said Malte von Sehested, a textbook creator who bought a Surface.

"With the Surface you get a steeper learning curve -- I had to get someone to show me how to side-swipe, swipe out to get the menus for instance," he said. "It may take a week, before it all becomes natural. That could be a problem for Microsoft. My old dad, he would get hit by that steeper learning curve."

ANALYSTS PATIENT

Wall Street and tech industry experts failed to show great enthusiasm for Windows 8, but were prepared to give Microsoft time to succeed.

"Microsoft did not come out with Windows 8 thinking it will be an overnight success," said Daniel Ives, an analyst at FBR Capital Markets. "But there's hope that this could be the silver bullet of growth (for Microsoft) as well as giving the PC industry some optimism that there's better days ahead."

The next six to 12 months is a "crucial period" for Microsoft to get traction with consumers, added Ives.

Sarah Rotman Epps, an analyst at tech research firm Forrester, said consumers may be best served waiting for tablets running the full Windows 8 Pro and Intel Corp chips, which are due out early next year.

"Windows 8 has a lot of great features, but RT has a long way to go," she said, citing a lack of apps and poor video performance on the Surface.

"It's not really a PC. RT is too restricted. Some people will be happier with the full Windows 8," she said.

Microsoft shares were up 33 cents at $28.21 on Nasdaq on Friday. Apple shares were down slightly after disappointing earnings on Thursday.

(Reporting By Nivedita Bhattacharjee in Chicago, Sinead Carew and Nicola Leske in New York, Edwin Chan in San Francisco; Editing by Alden Bentley)

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Samsung posts $7.4 billion profit, handsets mask weak chips

SEOUL (Reuters) - South Korean technology powerhouse Samsung Electronics Co posted a fourth straight record quarterly profit - of $7.4 billion - with strong sales of its Galaxy range of phones masking sharply lower memory chip sales.

The record run, though, is likely to end in December, with profit growth slowing even more next year as TV markets stagnate and growth in the high-end smartphone market eases from the recent breakneck speed. Profit is expected to grow 16 percent next year down from a forecast 73 percent this year, according to Thomson Reuters I/B/E/S.

"The biggest concern for Samsung is that its smartphone growth momentum will slow. It'll be difficult for Samsung to maintain such a high profit margin from handsets as the market gets crowded and competition will intensify," said Nam Dae-jong, analyst at Hana Daetoo Securities.

Samsung said July-September operating profit almost doubled from a year ago to 8.12 trillion won, in line with its earlier estimate.

Reporting its results just hours after main rival Apple Inc, Samsung did not detail its third-quarter smartphone shipments, though these are estimated to have soared to 58 million. Apple, which launched its latest iPhone 5 on September 21, said it shipped 26.9 million iPhones in July-September.

NEXT BIG THING

While Samsung outsells Apple in gadgets, the Korean group's market value is just a third of the U.S. firm's $578 billion, and investors question whether Samsung can narrow that gap at a time when the stellar handset business is set to lose steam and Apple, also its biggest customer, looks to spread its supplier base wider.

"Samsung has a lot of strong businesses like tablets, OLED TVs and micro-processor chips that could become its next big thing and step it up to the next level," Lee Sun-tae, analyst at NH Investment & Securities, said ahead of the earnings. "But these aren't fully ready to become a real earnings driver like the Galaxy."

Illustrating the might of Samsung's handset business, third-quarter profits from the mobile division more than doubled to 5.63 trillion won, as sales of the Galaxy S III, introduced in late May, powered ahead of the iPhone 5 launch. Samsung is estimated to have shipped 18-20 million S IIIs in July-September. The mobile business generated 69 percent of total quarterly profit.

But strong sales of Apple devices - iPhones, iPads and iPods - also help the Korean group, which makes chips, micro-processors and flat screens for the popular gadgets.

Still Samsung shares trade more cheaply - at 7.5 times next year's estimated earnings versus Apple's 11.6 times - as its broader business portfolio, including thin-margin washing machines and fridges, makes it more vulnerable to weak consumer spending. Shares in Samsung have climbed 24 percent so far this year, easily outpacing the benchmark KOSPI's 5 percent gain, but only half the gains made by Apple.

The stock traded down 1.3 percent in Seoul early on Friday.

"It will take time for Samsung to narrow the gap with Apple in tablets. Its Galaxy Tab tablet PCs aren't sexy enough to outsell Apple's iPad," said NH Investment's Lee. "There are concerns Samsung's earnings would peak this year. There's little room for its mobile business to make more money, while there's a limited upside in chips and displays."

NEW DRIVERS

Samsung is now looking to a new range of mobile products, such as its Ativ tablets using Microsoft's new Windows operating system, to propel growth. It is also seeking new clients for its screens and chips as Apple peels away to other suppliers.

Samsung has stopped supplying displays for the iPhone, and has a reduced role in the iPad panel - down to 26 percent this quarter from 38 percent a year ago, according to DisplaySearch. Apple is buying fewer memory chips from Samsung for the iPhone 5, relying more on SK Hynix Inc and Elpida Memory.

Bernstein analysts reckon Apple will also gradually phase out Samsung as the main supplier of the mobile micro-processor, used to power the iPhone and iPad, and shift to rival supplier TSMC, starting late next year.

"In the worst 'thermonuclear warfare' case, we size this risk at up to 20 percent of 2013 earnings per share ... This worst case assumes Samsung is caught by surprise and is unable to fill its fabs and hence suffers significant idle costs," a recent Bernstein note said.

CHIPS ARE DOWN

Third-quarter profit at Samsung's chip division, which competes against Toshiba Corp and SK Hynix, dropped 28 percent to 1.15 trillion won as prices of dynamic random access memory (DRAM) chips sagged, though a recovery in NAND flash chips, widely used in mobile devices, helped offset the weakness.

The company said on Friday it expected DRAM oversupply to run on into the current quarter, but sees a tight NAND flash memory market.

Samsung competes against Sony Corp and LG Electronics Inc in televisions, and LG Display in screens.

The good news for Samsung is that more electronics vendors are reshuffling their products to make more tablets and slim ultrabooks, which consume expensive flat-screens, more sophisticated packaged chips and memory chips.

"That key component market is getting tighter, thanks to the mobile boom. There are now lots of IT companies producing tablets and ultrabooks. This will restore the component supply imbalance, which has been extremely skewed to Apple due to its huge bargaining power," Kim Sung-in, an analyst at Kiwoom Securities, said ahead of the earnings release. ($1 = 1103.6500 Korean won)

(Reporting by Miyoung Kim; Editing by Ian Geoghegan)

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Tech CEOs trade barbs, warm up for holiday tablet wars

SAN FRANCISCO (Reuters) - The biggest names in consumer technology, stung by a string of disappointing quarterly results this month, are suiting up for what's shaping to be the fiercest holiday battle in years.

Investors and consumers have already largely written off flaccid quarterly numbers from tech behemoths like Microsoft, Apple, Google and Amazon. What counts is the next 60 days, when the biggest names in technology do battle at a near-unprecedented scale and pace.

Just on Thursday, Amazon compared its Kindle Fire with Apple's new iPad mini, point by point, in its earnings release, an unusual forum to name rivals. Apple CEO Tim Cook compared Microsoft's Surface tablet to an over-engineered car that can fly and float. And Microsoft went for the iPad, saying its Surface boasted twice its storage.

All three tablets will vie for the shrinking consumer dollar these holidays. By tech standards, it's getting ugly.

"The tablet space is where the growth is. That's why they are all fighting over it. PC shipments are down and some tablet buyers may never buy another PC," said Michael Allenson, strategic consulting director in the Technology and Telecom Research Group at Maritz Research.

"Last holiday season, we saw a lot of buying of tablets in the $200 to $300 price range. This year, the iPad mini and Amazon's Kindle Fires are targeted as large gifts. They are trying to ride that wave and win as much as they can."

The impending clash is far from decided.

Odds-on favorite Apple has lost some of its aura of invincibility, with Google's Android and Samsung making inroads into its reign in smartphones, Microsoft's quickening marketing blitz, and Amazon's Kindle nipping at its heels as the No. 2 tablet in the United States market.

That competition has weighed on Apple's share price, which is at three-month lows after it reported a second straight quarter of disappointing results, sullying its reputation for blowing away Wall Street estimates.

Google is struggling to figure out the dollars and cents of the mobile market and Microsoft is facing witheringly unimpressed reviews for its new Windows 8 platform and Surface tablet.

Meanwhile, Amazon's outlook for the holiday season is being taken as a disappointment, and Best Buy warned late Wednesday that sales and margins are falling.

CLAWS COME OUT

Tech companies hope lackluster calendar third-quarter results mean consumers have held off from buying gadgets so they can save up for something new and shiny this Christmas -- from the lowest-end Fire at $159 to a Surface around $499 or the biggest, fastest, newest iPad at $829.

The technology industry is grappling with a fundamental shift from deskbound computers or heavy laptops to sleek mobile devices like tablets, which are upending the traditional PC model and prompting companies like Google and Microsoft to invest deeply in hardware manufacturing.

Their entry however is raising the competitive stakes. Companies like Apple usually spend most of their time talking about how great their own products are, but with the competition more intense than ever, Apple CEO Cook spared a not-so-kind thought for Microsoft on Thursday.

"I haven't personally played with the Surface yet, but what we're reading about it, is that it's a fairly compromised, confusing product," he said, later adding "I suppose you could design a car that flies and floats, but I don't think it would do all of those things very well."

Cook may have been going for levity, but the Twitterati booed his joke, since after all most gadget-heads would be very content with a flying, floating car.

Microsoft CEO Steve Ballmer, for his part, was pretty impressed with the company's handiwork, notwithstanding reviews that used words like "disappointing" and "undercooked."

"We have a device that's uniquely good at being a tablet and a PC (with) no compromise on either one," Ballmer told Reuters Television ahead of the Windows 8 launch event in New York on Thursday. "Work. Play. Tablet. PC. Boom! One product."

Google Executive Chairman Eric Schmidt, in a talk this month, took a shot at Apple, which has faced a barrage of complaints about glitches in its mapping software since dumping Google's service from its iPhone.

"What Apple has learned is that maps are really hard. They really are hard," he said. "Apple should have kept with our maps."

Not to be outdone in the sniping, Amazon Chief Executive Jeff Bezos took a subtle swipe at Apple's high prices in the Internet retailer's quarterly results statement Thursday, saying "our approach is to work hard to charge less."

Right below those comments, Amazon listed head-to-head comparisons between its $299 8.9-inch Kindle Fire HD tablet, its $199 7-inch Kindle Fire HD device and Apple's iPad mini, which was unveiled on Tuesday.

Analysts were taken aback by how brazen Amazon was being in taking shots at peers.

"I have never seen them directly compare products in a results release like this, and in so much detail clearly calling out their competitors," said RJ Hottovy, an equity analyst at Morningstar. "This shows they are taking the tablet wars very seriously."

(Additional reporting by Bill Rigby in Seattle; Writing by Ben Berkowitz; editing by Edwin Chan and Raju Gopalakrishnan)

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Tech focus now on Microsoft Windows 8, Surface tablet

SEATTLE (Reuters) - Firm sales numbers for Microsoft Corp's Windows 8 and its new Surface tablet will not be available for three months, but it may be clear long before then if it has a hit on its hands.

"We can definitely gauge it by chatter," said Emily Chan, an analyst at Bernstein Research. "There is a slight learning curve, so I don't think we will see that big pop that iPad saw."

Microsoft is desperate for the new-look, touch-friendly Windows 8 to grip customers' imaginations, as it looks to regain ground lost to Apple Inc and Google Inc in mobile computing and shake up the moribund PC market.

Perhaps more important is its new own-brand tablet called the Surface, available only through its own stores and website, which will challenge Apple's iPad head on.

"I'd want to know the sales - and return rate - of the Surface," said Sarah Rotman Epps at tech research firm Forrester. "But those numbers will be hard to get since Microsoft is the only retailer."

Early reviews of the Surface have been mixed, generally praising the slick hardware, but faulting battery life and the limited software and applications available.

Some worry that the first Surface model, which runs on a stripped-down version of Windows 8 called RT that is not compatible with old Windows programs, will cause some confusion and dissatisfaction among customers.

The three models for sale on Microsoft's U.S. website are already on back order, suggesting strong demand, but it is not known how many Surfaces Microsoft has manufactured.

"The fact it's back ordered is indicative that there's consumer interest," said Michael Gartenberg, an analyst at tech research firm Gartner. "How Microsoft introduces it, evangelizes it and explains it will determine long term success."

BALLMER NOISE

Microsoft has not said if it will reveal sales figures for Windows 8 or of the Surface before its next scheduled earnings on January 24. The company tends to trumpet good news and stay silent otherwise.

After the launch of Windows 7 three years ago, CEO Steve Ballmer waited only a month to announce strong sales. A year later, he waited only 10 days to report record-breaking sales of the Kinect, the motion-sensing add-on for the Xbox. But Microsoft has never shared the sales of Windows-powered phones, which have a lowly 3 percent of the market.

If Ballmer stays silent about Windows 8 sales, it might indicate a less than stellar performance.

"I would definitely take it a sign that it's not super, super strong, but I won't take it as something negative," said Chan at Bernstein, who is expecting 8.3 million Surface sales by the middle of next year.

That averages out at about 1 million a month, a third the rate of the iPad, which notched up its first million sales in 28 days and has now sold more than 100 million units, averaging about 3.2 million a month.

Gartner forecasts that Surface and other tablets running Windows RT will sell about 2.3 million units this year and 9.3 million next year, grabbing about 2 percent and 5 percent of the worldwide tablet market, respectively.

DOOR-BUSTERS

Retail activity will be closely watched. Microsoft will have more than 60 brick and mortar stores open for the release of Windows 8 on Friday, half of them 'pop-up' stores that will stay open for the holiday shopping season.

Third-party retailers are cautiously optimistic.

"We have seen pretty good response to our pre-orders for Windows 8," said Best Buy Co Inc spokesman Jeff Haydock. "Quite honestly, I don't know what to expect from Friday. I don't know if there will be lines or not. My sense is it will take some time for people to kind of come into the stores and check it out."

Best Buy may give some color on how PC sales are going when it reports earnings on November 20.

Wal-Mart Stores Inc, the No. 1 U.S. retailer, said U.S. pre-orders for Windows 8 PCs "have been better than expected."

Online retailers Amazon.com Inc, Newegg Inc and TigerDirect Inc have been silent on Windows 8 pre-orders.

The full impact of PC sales on retailers will not be evident until chains report same-store sales for November.

QUICK REACTION

One early indicator of Windows 8's success will be the contents of the online Windows Store. Microsoft has had a harder time drumming up interest among developers for Windows 8, given the risk that there will be fewer users than competing platforms.

Microsoft will not disclose numbers, but there are expected to be 5,000 or so third-party apps available to U.S. users, in comparison with the iPad's 275,000. Some big names such as Facebook Inc will be missing.

In social media, the tenor of comments on the Twitter hashtags #Windows8 and #Surface will give an indication of their reception after Ballmer unveils them both on Thursday.

Many users likely will be shocked by the new design, which dispenses with the Start button and features square tiles for apps.

"Public reaction to the new UI will depend how well Microsoft explains why 'different' is better and teaches how the new experience works," said Gartenberg. "That all starts on Thursday."

BY THE NUMBERS

The ultimate test for Windows 8 will be PC sales.

Industry trackers are expecting a bump for PC sales in the last two months of the year, but not enough to rescue the whole year, which is forecast to dip for the first time since 2001.

Some analysts had expected an uptick in production of laptops ahead of the Windows 8 launch, but PC makers facing an uncertain global economy have been wary about committing.

Chip maker Intel Corp, which is a good gauge of future PC demand due to its position early in the production process, expects the PC business to grow at only half the normal seasonal rate in the fourth quarter.

Chief Executive Paul Otellini recently told analysts he expects to have a better understanding of the success of Windows 8 in 90 days.

Stephen Baker, an analyst at retail research firm NPD Group, is expecting a 10 percent jump in PC sales for November and December over last year, but said comparisons will be difficult given a profusion of new devices and the volatility of year-ago data.

Fourth-quarter PC shipment numbers from research firms Gartner and IDC will not be published until early January, although analysts say PC makers might start to drop hints about demand before then.

"There will likely be many milestones, but very few will ultimately be decisive. The key point is will PC sales continue to shrink or will they experience a boost," said Al Hilwa at research firm IDC. "We can probably begin to properly judge that with some ambiguity in January."

(Additional reporting By Dhanya Skariachan in New York, Jessica Wohl in Chicago and Noel Randewich in San Francisco. Editing by Andre Grenon)

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Apple's Mac flies in under the radar

SAN FRANCISCO (Reuters) - Amid the fanfare accompanying the noisy launch of the iPad mini this week, Apple Inc also took the wraps off new Mac computers.

The facelift may help revitalize an important lineup that -- while seeing growth tail off in the early part of 2012 -- yields 14 percent of revenue and still racks up sales growth numbers that are the envy of a flagging PC world.

On Tuesday, Apple took the lid off a slimmed-down iMac and a 13-inch laptop with a vastly improved screen, setting the stage for a potential revival in sales even as Hewlett-Packard and Dell Inc struggle just to stay level.

Earlier this year, Apple had also launched an updated MacBook Air - a product analysts say spawned over 20 touch-enabled designs from rivals called "Ultrabooks," which run Microsoft Corp's upcoming Windows 8 software.

Apple remains No. 3 in U.S. market share behind HP and Dell. But the Mac's premium pricing, at $1,000 and above, and its subsequent outsized margins mean a spike in revenue growth can give its bottom line a significant boost.

"The pricing and feature set of the refreshed iMac present an attractive combination, and I would not be surprised to see the new iMac stimulate desktop sales in the December quarter and beyond," Barclays analyst Ben Reitzes said.

The decades-old Macintosh line that helped set a stumbling computer company back on its feet -- today overshadowed in both revenue and media appeal by the popular iPhone and iPad -- saw growth drop to single-digit percentages in the first two quarters of 2012 for the first time since 2009.

Yet sales outgrew the PC market, overall, by more than seven times over the 12 months to June, according to CEO Tim Cook, and has outpaced PC growth over the last six years.

Apple reports fiscal fourth quarter results on Thursday. The company will likely have sold 5.1 million Macs in the October quarter, up just 5 percent, Piper Jaffray & Co analyst Gene Munster estimates.

HALO EFFECT

On Tuesday, Apple Marketing Chief Phil Schiller called the Mac "what began it all," and he claimed the Mac was America's No. 1 laptop and desktop among individual models. Research houses Gartner and IDC figures place Apple third in the United States with a market share of about 13 percent.

Regardless where it places, at prices starting at $1,000 for its MacBook Air and going all the way close to $4,000 and growth -- while well off the 30-percent range of 2010 -- still defying the market, the Mac has proven a consistent money-spinner for the company even during troubled times for the traditional PC.

Intel Corp, HP and other stalwarts of the PC industry are now fighting to sustain growth as tablet computers eat into their PC-related businesses.

While the Mac line has not completely side-stepped PC market trends, it has held up better partly because it is targeted at a higher-spending clientele that values its consistency, vis-a-vis the often fragmented PC, where multiple vendors supply different components that don't always work seamlessly.

But it also owes its success in large part to a so-called halo effect stemming from consumers' experiences with the iPhone and iPad, said Loren Loverde, analyst with research firm IDC.

"They are on the positive end of halo effect both in terms of traffic and brand image," Loverde said, adding that Apple also has yet to fully realize the international growth opportunities for Mac, and expects the new products to see good demand during the holiday quarter.

Late Apple co-founder Steve Jobs introduced the Macintosh in 1984, and it became the first successful computer to feature a mouse and a graphical user interface -- a model that has stayed intact through the succeeding decades. The desktop Mac itself stuck to that interface but has radically shifted in design over the years, to today's slim, all-in-one form.

Analysts say the redesigned Macs may give Apple's December quarter an extra lift, but the quarter will hinge mostly on how many consumers bought iPads and iPhones, which combined accounts for 72 percent of the company's revenue.

Cook and other executives are likely to be questioned on the smartphone's supply issues and the ramp-up of the new "iPad mini," available in stores on November 2.

"The bigger question is likely the company's ability to ramp supply to meet the strong demand," Baird Equity Research analyst William Power said. Recent investor concerns regarding Apple have included "perceived slowing iPhone innovation, the lack of a strong developing market strategy for iPhone and current iPhone supply constraints."

Apple's stock has reflected some of those concerns. While the stock is up 52 percent this year, it is down 12 percent from its record high of $705 on September 21. Despite the pullback, Apple is trading at 11.6 times next year's estimated earnings, same as the S&P 500 and far lower than some rivals like Amazon.com Inc, which trades at 100 times estimated 2013 earnings.

Investors will focus initially on the headline shipment numbers during the fiscal third quarter on Thursday. It is estimated to have sold between 24 million and 26 million iPhones in the July-September period.

And Apple said on Tuesday that it sold its 100 millionth iPad two weeks ago, which means that the company sold under 16 million last quarter. This is below the 17 million to 18 million some analysts had forecast.

Longer term, Apple could also face margin pressure as smartphones pass the 50 penetration rate in major developed markets, said BGC analyst Colin Gillis.

"The next stage of smart phone growth could be more focused on mid-to-lower priced offerings," Gillis said. "Apple may find it difficult to maintain margin while growing massive scale, particularly as the overall market for smartphones slows."

(Reporting by Poornima Gupta; Editing by Lisa Shumaker)

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Apple unwraps mini-iPad to take on Amazon, Google

SAN JOSE (Reuters) - Apple Inc will begin to sell an 8-inch version of the iPad on Friday to compete with Amazon.com Inc's Kindle and other smaller tablets, but it set a higher-than-expected price tag of $329 that Wall Street fears could curb demand.

The 7.9 inch "iPad mini" marks the iPhone-maker's first foray into the smaller-tablet segment. Apple hopes to beat back incursions onto its home turf of consumer electronics hardware, while safeguarding its lead in a larger tablet space - one that even deep-pocketed rivals like Samsung Electronics have found tough to penetrate.

Apple Chief Executive Tim Cook and marketing chief Phil Schiller took the wraps off the new tablet, which essentially has most of the functions and features of the full-size iPad but in a smaller package.

Priced at $329 for a wi-fi only model, the iPad mini is a little costlier than some predicted, but some analysts see that as a bid to retain premium pricing levels. Others fear the gadget will lure buyers away from Apple's $499 flagship 10-inch iPad, while proving ineffective in combating the threat of Amazon's $199 Kindle Fire and Google's Nexus 7, both of which are sold at or near cost.

"Apple has always been a premium hardware manufacturer. It's basically a hardware company and they don't have Google advertising or Amazon's online store to fall back on," said Destination Wealth Management CEO Michael Yoshikami.

"But people are happy to pay a premium because it's quality hardware, and the ecosystem (of content and apps) cannot be underestimated."

JMP Securities analyst Alex Gauna said, however, "It's coming in the range that most were grumbling about and that, quite frankly, we're a little bit concerned about."

"It's a little confusing at this juncture to try and figure out how it fits into the line-up. Is it going to cannibalize the more expensive iPad?" he said.

"It is worth noting that there are zero-margin products out there competing with them now ... and that is presenting some challenges to Apple."

Frank Gillett, an analyst with Forrester who attended the event, said he was impressed with the lightness of the iPad mini, which he got a chance to play with following the event.

"Apple went for the high end of what people have been thinking of," Gillett said, adding that Amazon and Google may have to adjust their product lineups to compete with the iPad mini.

The focus on growing competition was evident as Schiller - at the iPad mini's launch event, held in San Jose's California Theatre - compared the iPad mini with Google's popular 7-inch Nexus 7 tablet, citing feature by feature why the new Apple device was superior. It is unusual for Apple to single out a specific competitor in its product launches.

"Theirs is made of plastic," Schiller said, referring to the Android tablet. "The entire Android product is thicker and heavier."

Schiller later defended Apple's pricing of the iPad mini, telling reporters he expects consumers to recognize quality and be willing to pay for it.

FASTER AND SLIMMER

In a surprise move, Apple also announced a fourth-generation full-sized iPad just six months after unveiling a third generation device to much fanfare. The latest tablet, which again sells for $499, is faster and slimmer and comes just days before Microsoft is due to show off its own "Surface" tablet.

Apple also unveiled thinner MacBook Pro laptops, including a 13-inch Retina display.

SIGHTS ON AMAZON

The iPad was launched in 2010 by late Apple visionary Steve Jobs and since then it has taken a big chunk out of PC sales, upending the industry and reinventing mobile computing with its apps-based model, often called an ecosystem.

A smaller tablet is the first device to be added to Apple's compact portfolio under Cook, who took over from Jobs just before his death a year ago.

"It's very cool," Cook said of the iPad mini. "We told you earlier this year you would see some incredible innovation from Apple across the year. We think we kept our promise."

In a rarity for a company that tightly controls events, Apple live-streamed its invitation-only presentation to Apple devices such as the iPad and Macintosh computers.

The Kindle and Nexus 7 have grabbed a chunk of the lower end of the tablet market and proved demand for a pocket-sized slate exists. Those companies' tablets - the most successful other than Apple's - have forced Apple into a space it has avoided and at times derided, analysts say.

Amazon's 7-inch Kindle Fire released last year for $199 was one of the hottest-selling holiday gadgets. It pressured Amazon's margins but potentially garnered millions of new high-spending customers for the online retailer.

Amazon sold more than a million Kindles a week during December, paving the way for Google to try out a similarly sized small tablet.

Amazon has now launched its second-generation Kindle Fire HD, which it says is the "best-selling product across all of Amazon worldwide," based on undisclosed U.S. sales figures and international preorders.

Google's Nexus 7 tablet, built by Asian manufacturer Asustek, won top marks from reviewers and quickly ran out of stock after its July launch.

All three companies will be vying to get their devices on shopping lists during the U.S. holiday season, which traditionally starts next month.

Surveys conducted ahead of Tuesday's news suggested some consumers had hoped for a more affordable Apple mini tablet.

The "starting sweet spot" for the tablet would be in the $249-$299 range, according to a survey of more than a thousand consumers by Baird Equity Research.

PRICE IS KEY

Jobs famously derided the 7-inch screen, saying such a device should come with sandpaper so users can file down their fingers. But an internal email revealed during a patent trial showed he turned more favorable to the idea by early 2011.

Apple has sold 100 million iPads so far, with the device accounting for 26 percent of Apple's fiscal third-quarter revenue.

But analysts are concerned now about erosion of Apple's industry leading margins as it takes on the Kindle Fire. It earned gross margins of 23 percent to 32 percent on U.S. iPad sales between October 2010 and the end of March 2012, according to a July court filing by Apple.

Amazon's first Kindle Fire just about breaks even after manufacturing costs, according to IHS iSuppli estimates, and Google has said its Nexus 7 is being sold at cost.

"The pricing may limit sales. From a profitability perspective though, I think at $330 Apple is still getting adequate gross margins on the sales," said Morningstar analyst Brian Colello. "But at that price point it may limit adoption and unit volumes."

Apple's shares ended regular trading down 3.2 percent at $613.36, after gaining 4 percent on Monday in the run-up to the event.

(Additional reporting by Alistair Barr and Alexei Oreskovic, Editing by Edwin Chan, Richard Pullin, Andrew Hay and Steve Orlofsky)

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Zynga cuts 5 percent of work force, ending 13 games

SAN FRANCISCO (Reuters) - Zynga Inc laid off 5 percent of its full-time workforce and shut its Boston office on Tuesday as it embarked on a sweeping cost-cutting campaign that may eventually see the "FarmVille" game creator close its Japanese and British studios as well.

The company, which is trying to arrest a steep decline in earnings as users gradually migrate onto mobile devices or rival games, plans to "sunset" 13 unspecified older titles, Chief Executive Mark Pincus said in a staff memo on Tuesday that was published on the company blog.

"This is the most painful part of an overall cost reduction plan that also includes significant cuts in spending on data hosting, advertising and outside services, primarily contractors," Pincus wrote in his memo.

Pincus said the cuts would accompany a regime of "more stringent budget and resource allocation around new games and partner projects," hinting at a fundamental change for a company that was known for expanding aggressively through hires and acquisition deals before it went public to fanfare last December.

In March, Pincus made a gamble to acquire game studio OMGPOP for $180 million before acknowledging this month that the deal didn't pan out, leading to a $90 million writedown.

The memo came on the eve of Zynga's earnings report on Wednesday, when Pincus and Chief Financial Officer David Wehner are expected to provide Wall Street with more comprehensive details about the company's overhaul strategy.

Tuesday's cuts were presaged on October 4, when Zynga slashed its 2012 outlook and warned investors that it would record a steep drop in sequential quarterly revenues for the first time since its December initial public offering. At the time, Pincus said the company would examine how to proceed with cuts.

As the first step of Zynga's reduction plan unfolded Tuesday, Pincus said that Zynga would significantly pull back its investment in "The Ville" game - a major recent initiative - and scale back on its Austin, Texas studio as it sought to cut costs. He also said the company was "proposing" to close its Japanese and British offices.

Rumors of the layoffs in Austin and Boston had spread on gaming blogs and over social networks during the day, and the company's shares closed down more than 5 percent, at $2.20. But they bounced back 4.5 percent to $2.30 in after-hours trade, following news of the cost-cutting initiatives.

"It's good to see them be realistic, but the real question is not a matter of profitability, it's 'can you get revenue going the right direction?'" said Ben Schachter, a senior analyst at Macquarie Securities. "The Street doesn't want to see cost-cutting for what was supposed to be a growth company."

Pincus, who grew the company behind such ageing Facebook hits as "CityVille" "and Mafia Wars", will face employees at a quarterly gathering next week at the company's San Francisco headquarters.

Employees say morale is in steep decline, with Zynga forced this month to slash its 2012 results outlook for the second time.

Since going public at $10 a share, Zynga has lost over three-quarters of its market value. It has been hit by delays in its game pipeline as older titles fade, while it has struggled to come up with new hits for mobile devices.

Tuesday's layoffs amounted to roughly 150 out of Zynga's 2,900 workers.

Pincus said on Wednesday the company's management did not make the decision to cut employees "lightly" and that it recognized the "impact to our colleagues and friends."

But with the company's top line stagnant, analysts warned they expected news of further cuts on Wednesday's earnings call.

"They probably need to cut more people, and they probably will," said Michael Pachter of Wedbush Securities.

(Reporting By Gerry Shih; Editing by Leslie Adler, Tim Dobbyn and Richard Pullin)

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Size of Colorado bank accounts shrink last year, study says

Colorado consumers set aside less money in savings and checking accounts last year, even as average account balances rose nationwide, according to an analysis Monday from Pitney Bowes Software.

The size of the average consumer savings account in the state was $5,324 in 2011, down 1.26 percent from the $5,392 reported in 2010. That ran counter to the country as a whole, where savings account balances rose 3 percent last year to $5,923.

Colorado ranked 45th among states for the average size of savings accounts, although it fared better, 19th, for the average balances in non-interest bearing checking accounts.

But even there, Colorado checking account balances declined -0.57 percent from $3,160 in 2010 to $3,142, while they rose 5.2 percent to $3,100 nationally.

Pitney Bowes Software examined data from more than 100 million U.S. commercial bank accounts for its survey.

Copyright 2012 The Denver Post. All rights reserved.

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Obama, Romney begin final presidential debate in Florida

BOCA RATON, Fla. — Foreign policy took command of the campaign spotlight Monday at the third and final debate between President Barack Obama and Republican Mitt Romney, two weeks before Election Day in a close race for the White House dominated by pocketbook issues and the economy.

Wars in Iraq and Afghanistan, the recent attack on the U.S. Consulate in Benghazi, Libya, and Iran's nuclear ambitions were all ripe for disagreement in the 90-minute event at Lynn University.

Both men spent the weekend in rehearsals, the president at Camp David in Maryland and Romney in Florida. They paid brief visits to the debate hall in the hours before its start.

Obama and Romney are locked in a close race in national opinion polls.

For both men, the final days of the long campaign are likely to be a whirlwind of rallies in the far-flung battleground states. Already four million ballots have been cast in early voting in more than two dozen states.

Barring a last-minute change in strategy by one campaign or the other, Obama appears on course to win states and the District of Columbia that account for 237 of the 270 electoral votes needed for victory. The same is true for Romney in states with 191 electoral votes.

The battlegrounds account for the remaining 110 electoral votes: Florida (29), North Carolina (15), Virginia (13), New Hampshire (4), Iowa (6), Colorado (9), Nevada (6), Ohio (18) and Wisconsin (10).

The televised debate brought no cessation to other campaigning.

Obama's campaign launched a television ad in Florida that said the president ended the war in Iraq and has a plan to do the same in Afghanistan, accusing Romney of opposing him on both. It was not clear how often the ad would air, given the fall's overall focus on the economy.

Vice President Joe Biden, campaigning in Canton, Ohio, emphasized differences between the two candidates on the war in Afghanistan.

"We will leave Afghanistan in 2014, period. They say it depends," he said. "Ladies and gentlemen, like everything with them, it depends. It depends on what day you find these guys."

Romney's running mate, Wisconsin Rep. Paul Ryan, was in Colorado. "We are in the midst of deciding the kind of country we're going to be, the kind of people we're going to be, for a generation," he said.

Whatever the outcome of the final face-to-face confrontation, the debates have left an imprint on the race. Romney was widely judged the winner of the first debate over a listless president on Oct. 3, and he has risen in polls in the days since. Obama was much more energetic in the second.

Monday night marked the third time in less than a week that the president and his challenger shared a stage, following the feisty 90-minute town-hall-style meeting last Tuesday on Long Island and a white-tie charity dinner two night later where gracious compliments flowed and barbs dipped in humor flew.

The most memorable exchange of the second debate concerned Libya, and Romney's contention that Obama's administration has responded poorly to an attack on the U.S. Consulate in Benghazi last month that killed the ambassador and three other Americans.

As for the Al Smith charity dinner, Obama previewed his all-purpose fallback to criticism on international affairs.

"Spoiler alert: We got bin Laden," he said, a reminder of the signature foreign policy triumph of his term, the death at the hand of U.S. special operations forces of the mastermind behind the terror attacks on the United States more than a decade ago.

The president and his challenger agreed long ago to devote one of their three debates to foreign policy, even though opinion polls show voters care most about economic concerns.

Growth has been slow and unemployment high across Obama's tenure in the White House. Romney, a wealthy former businessman, cites his experience as evidence he will put in place policies that can revive the economy.

In recent weeks, the former Massachusetts governor has stepped up his criticism of the president's handling of international matters, although his campaign hasn't spent any of its television advertising budget on commercials on the subject.

In a speech earlier this month, Romney accused the president of an absence of strong leadership in the Middle East, where popular revolutions have swept away autocratic regimes in Egypt and elsewhere in the past two years. He has also accused Obama of failing to support Israel strongly enough, of failing to make it clear that Iran will not be allowed to develop a nuclear weapon and of backing cuts in the defense budget that would harm military readiness.

Yet Romney has stumbled several times in attempting to establish his own credentials.

He offended the British when he traveled to England this summer and made comments viewed as critical of their preparation for the Olympic Games.

Democrats pounced when he failed to mention the U.S. troops in Afghanistan or Iraq during his acceptance speech at the Republican National Convention in late August, and officials in both parties were critical of his comments about the attack in Benghazi while the facts were unknown.

Earlier this fall, a videotape surfaced showing him telling donors "the Palestinians have no interest whatsoever in establishing peace. The pathway to peace is almost unthinkable to accomplish."

Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Motorcade fundraiser benefits family of Jessica Ridgeway

Thousands of motorcyclists and drivers came out Sunday to honor the memory of 10-year-old Jessica Ridgeway and raised an estimated $40,000 for her family.

The parking lots around the Quaker Steak & Lube restaurant on U.S. 36 and West 104th Avenue were packed with motorcycles.

The memorial car/bike cruise for the Ridgeway family was the idea of Tim Beckwith, a well-known drag racer and an Arvada resident. It came to him the night the body of the Westminster girl, who disappeared Oct. 5, was found.

"It hit so incredibly close to home," Beckwith said. "I have a 9-year-old and a 2-year-old daughter; I went to Arvada West ... this is my neighborhood."

Beckwith said he thought he would get a lot of support because of his drag-racing fan base and his links to the local biker community.

One of Beckwith's favorite restaurants, Quaker Steak & Lube, agreed to host the event.

The approximately 2,000 participants each paid $20 to participate in the event, according to organizers. Every dollar earned will go to Jessica's parents, Sarah Ridgeway and Jeremiah Bryant, Beckwith said.

Long before official registration opened at noon, the restaurant's parking lot, as well as every parking lot around the restaurant, was packed. Late arrivals lined their bikes along West 104th Avenue up to the entrance ramp of U.S. 36.

Stephan Teske, a family friend and spokesperson for the Ridgeways, said it was by far the largest fundraiser in memory of Jessica.

"I know that most of the money is going to be used for the Jessica Ridgeway Foundation" the family plans to create, Teske said. "They want to do something positive for her memory, like sending kids to camp and cheerleading stuff. Jessica really wanted to do cheerleading."

Beckwith's sponsors designed a special purple helmet that said "We Love you, Jessica" on the front and had a purple memorial ribbon on the back.

Beckwith led the motorcade on his bright red motorcycle just before 2 p.m. At the end of the tour, he and his family signed the helmet and gave it to the Ridgeways.

Megan Mitchell: 303-954-1223, mmitchell@denverpost.com or twitter.com/megs_report

Copyright 2012 The Denver Post. All rights reserved.

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Presidential campaigns hit Colorado hard this week

COLORADO SPRINGS — On the eve of the start of early voting at polling places in Colorado, Republican vice presidential candidate Paul Ryan told a crowd of close to 1,000 Sunday that the election could hinge on the state.

"Please remember, Colorado, you can decide," a hoarse-voiced Ryan said, giving a nod to the state's status as one of the few toss-ups in the election. "You have within the palm of your voting hand the ability to shape the future for this country and your kids."

Ryan's remarks, inside an airplane hangar at the Colorado Springs airport, fired the metaphorical starting gun on a four-day presidential-campaign scramble across the state. Between Sunday and Wednesday, members of the GOP or Democratic tickets will hold six campaign events in all four of the state's quadrants.

On Monday, Ryan is scheduled to hit a trifecta of rallies in Pueblo West, Durango and Grand Junction before heading back to the Front Range. On Tuesday, he and GOP presidential nominee Mitt Romney will hold a moonlit rally at Red Rocks Amphitheatre, in what could be a capstone to their campaign in Colorado. There are whispers in the campaign about high-profile musical acts appearing alongside the Republican candidates. The campaign expects the event to fill the more than 9,000-seat amphitheater.

On Wednesday, President Barack Obama will have a dramatic photo op of his own, holding a rally in Denver's City Park with the downtown skyline as a backdrop.

The reason for the burst of interest is early voting in Colorado, which is now in full swing. Mail-in ballots started going out to voters last Monday — roughly 70 percent of Colorado's active voters are permanent mail-in voters. Meanwhile, early voting at polling places begins on Monday. All told, the majority of Colorado voters are expected to cast a ballot before Election Day even arrives.

That means, after months of persuading and motivating and rallying, both campaigns are now hoping to begin banking their votes.

Following separate Monday press events promoting early voting, Gov. John Hickenlooper and U.S. Senators Mark Udall and Michael Bennet will cast their ballots at early voting locations. In a campaign stop in Greeley last week, Vice President Joe Biden also urged voters to cast a ballot early.

Though the Republicans did not make such an implicit push at Sunday's Ryan rally, the urgency of the campaign hung over the crowd.

"We have 15 days," University of Colorado Regent Kyle Hybl told the crowd at the Colorado Springs rally Sunday evening. "In this 15 days is the destiny of our country and what sort of institution we leave to our children and our grandchildren."

Ryan's speech hit on familiar themes to Colorado voters now accustomed to campaign appearances and ads. He said, if elected, he and Romney would reduce the deficit and balance the federal budget. He spoke about strengthening the armed forces, a popular promise in military-rich Colorado Springs. And he talked about boosting domestic energy production.

"This is about more than just jobs," he said. "This is about the kind of country we're going to leave our kids."

And, he made clear where he and Romney believe voters should lay their frustrations with Washington.

"If he can't change Washington," Ryan said of Obama, as the crowd cheered in approval, "then I say we change presidents."

Copyright 2012 The Denver Post. All rights reserved.

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Fern Lake Fire in RMNP sparks up in warm, dry weather

The Fern Lake Fire, burning in Rocky Mountain National Park southwest of Estes Park, sparked up on Saturday because of warm, dry weather, fire officials said.

The fire, which started on Oct. 9, is up to about 670 acres, said Ranger Julie Johndreau, a fire spokeswoman.

The fire, which is burning in a steep, rugged canyon with heavy beetle-kill laced throughout the timber, increased by about 40 acres on Saturday.

About 50 people are fighting the blaze and a helicopter was used for reconnaissance on Saturday.

Fire officials are keeping a close eye on the fire as the weather forecast calls for continued dry weather on Sunday.

Additional information about this fire can be found at www.inciweb.org, or by calling 970-586-1381. New information will be released as it becomes available.

Kieran Nicholson: 303-954-1822, knicholson@denverpost.com or twitter.com/kierannicholson

Copyright 2012 The Denver Post. All rights reserved.

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U.S. 36 ramp WB from NB I-25 shutdown by traffic accident

Traffic on Interstate 25 north of Denver is backed up as workers clean up an accident on the westbound ramp of U.S. Highway 36.

The accident happened at about 3:15 p.m. and the ramp, which accessed from the northbound lanes of I-25, remained closed at 7:30 p.m., according to the Colorado Department of Transportation.

A semi truck hauling asphalt lost its load. Officials did not give an estimated time for the reopening.

Further details on the accident were not available. Drivers should avoid the area if possible. The same accident has also shut down traffic westbound on I-270 over I-25.

Through the weekend the northbound ramp of I-225 from southbound I-25 will be closed for construction, according to CDOT. That ramp is scheduled to reopen at 5:30 a.m. Monday.

Kieran Nicholson: 303-954-1822, knicholson@denverpost.com or twitter.com/kierannicholson

Copyright 2012 The Denver Post. All rights reserved.

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Live chat: Colorado high school football's Week 8

Stop by for live updates, scores and information from around Colorado as high school football play continues in Week 8.

View on a phone.

Navigate to: Chat | Live games

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Live chat

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Live games

Class 5A
• 7 p.m.: Fossil Ridge vs. Poudre
• 7 p.m.: Rocky Mountain vs. Mountain Range
• 7 p.m.: (2) Valor Christian vs. Palmer
• TBD

Class 2A
• 7 p.m.: (10) Brush at Sterling
• 7 p.m.: (2) Eaton at Strasburg

Class 1A
• 7 p.m.: Calhan at (2) Limon

8-man
• 7:30 p.m.: Merino at (4) Akron

Copyright 2012 The Denver Post. All rights reserved.

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U.S. Rep. Mike Coffman duplicated others' words in Post, DBJ op-eds

A pair of columns published by Republican U.S. Rep. Mike Coffman of Aurora within the past year contain passages of previously published work by other House members but did not attribute the source of the information or writing.

The op-ed columns on different subjects were published beneath Coffman's byline in The Denver Post and the Denver Business Journal.

The Post op-ed contains

unattributed material from a budget proposal crafted by Republican U.S. Rep. Paul Ryan of Wisconsin, while the Business Journal op-ed contains material earlier published by U.S. Rep. Sam Graves of Missouri.

Ethics experts contacted by The Post said the duplicative writings fall short of their definition of plagiarism. But they said Coffman's use of material by other writers failed to reach accepted standards for attribution.

Coffman is engaged in one of the most contentious congressional races in Colorado. The Post made its discovery of the duplicative writing when a Democratic operative associated with the campaign of Coffman's rival, state Rep. Joe Miklosi, provided documents and alleged plagiarism to a reporter and the news organization's editorial page.

Those documents were delivered to The Post on Monday — the day ballots were mailed to voters and a week before early voting begins.

After reviewing the documents, editorial-page editor Curtis Hubbard changed practices for future contributors

meant to ensure that submissions are original work.

"There has always been an unspoken understanding that items submitted to the opinion pages are the original work of the author and that proper credit is given to other sources when it is due," Hubbard said. "We have now spelled out that policy in writing and posted it to our website so there will be no question as to our guidelines moving forward."

Coffman on Friday called the plagiarism allegations "absurd."

"My staff are in constant collaboration with various committees, and a major role of committee staff is to help members create content," Coffman said.

The Post's editorial board operates separately from the newsroom, which conducted a review of the op-eds in question, along with recent op-eds published by Colorado's current congressional delegation.

Staff for Coffman's campaign said that in the unpaid Post op-ed April 15, House Budget Committee analyst Matt Hoffmann inserted an explanation that laid out the Republican majority's plan to reform Medicare as part of its fiscal 2013 budget proposal.

Coffman's campaign provided documents showing how the op-ed column was altered — at Coffman's request — by Hoffmann, who inserted verbatim language from Ryan's "Paths to Prosperity: A Blueprint for American Renewal," published almost a month earlier.

Coffman said he didn't know that the material came directly from the budget plan. Requests to Hoffmann seeking comment have not been returned.

Coffman's campaign provided documents that detailed the collaboration that led to publication of the Business Journal op-ed Aug. 24.

In that instance, a Republican staffer for the House Committee on Small Business wrote an op-ed about the impact should the so-called "fiscal cliff" of tax increases next year transpire.

The staffer e-mailed Coffman's staff, saying, "We've written for you to use as you wish."

The Small Business Committee staffer also gave similar — but not exactly the same — material to other Republicans, including Graves, the committee's chairman.

Coffman's campaign said that collaboration with partisan staffers was common practice in Washington. And the campaign provided two instances in which significant portions of text were repeated in two pairs of op-eds published by Republican congressmen since 2009.

Coffman's campaign also provided a copy of a Post op-ed by Denver U.S. Rep. Diana DeGette, a Democrat, that contained similar material to another source in a piece published earlier on the Rocky Mountain PBS website. DeGette's duplicative wording amounted to three copied phrases — not full sentences or paragraphs.

Independently, The Post found one instance in which sentences in a Post op-ed written by DeGette later appeared in a press release by Democratic U.S. Rep. Jesse Jackson Jr.

Roy Peter Clark of the Poynter Institute observed the Coffman documents and said these kinds of events can occur when a politician or public official makes use of a ghostwriter.

"Responsible practice requires transparency: making it clear who wrote what," Clark said in an e-mail.

Teresa Fishman, director of the International Center for Academic Integrity, said given the purpose and context of an op-ed, the original authors could easily have been noted.

"In my opinion putting forth text written by someone else as his own in an op-ed runs contrary to the legitimate expectations for an op-ed, i.e. that the content was produced by the person to whom it is attributed," Fishman said via e-mail.

Staff researcher Vickie Makings contributed to this report.

Kurtis Lee: 303-954-1655, klee@denverpost.com or twitter.com/kurtisalee

Shared writing

A Denver Post op-ed by Rep. Mike Coffman uses the following language from Rep. Paul Ryan's "Path to Prosperity" budget plan.

Identical content shown in italics.

From Rep. Coffman's April 15 Denver Post op-ed:

"The second-least expensive approved plan or the traditional fee-for-service Medicare, whichever is least expensive, would establish the benchmark that determines the premium-support amount.

" If a senior chose a costlier plan than the benchmark plan, he would be responsible for paying the difference between the premium subsidy and the monthly premium. Conversely, if that senior chose a plan that cost less than the benchmark, he would be given a rebate for the difference. Payments to plans would be risk-adjusted and geographically rated. Private health plans would be required to cover at least the actuarial equivalent of the benefit package provided by traditional fee-for-service Medicare."

From "The Path to Prosperity:"

"The second-least expensive approved plan or fee-for-service Medicare, whichever is least expensive, would establish the benchmark that determines the premium-support amount for the plan chosen by the senior.

If a senior chose a costlier plan than the benchmark plan, he or she would be responsible for paying the difference

Between the premium subsidy and the monthly premium. Conversely, if that senior chose a plan that cost less than

The benchmark, he or she would be given a rebate for the difference. Payments to plans would be risk-adjusted and

Geographically rated. Private health plans would be required to cover at least the actuarial equivalent of the benefit

package provided by fee-for-service Medicare."

Note: In preceding paragraphs of Coffman's op-ed, he references GOP House-passed fiscal year 2013 budget proposal.

Copyright 2012 The Denver Post. All rights reserved.

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Aurora theater plans call for changes to theater 9

Redesign efforts at the Century Aurora 16 call for significant changes to theater 9, according to building plans filed with the city at the beginning of October.

Theater 9, where 12 people were killed and at least 58 others were injured in a July 20 mass shooting, will become a Cinemark XD theater.

According to Cinemark's website, these XD "extreme digital" theaters features an oversize wall-to-wall and ceiling-to-floor screen.

Officials with Cinemark declined comment Thursday.

According to the building plans, Kansas City, Mo.-based TK Architects developed the redesign and Colorado Springs-based TMS Construction is the contractor heading the project.

Total costs are estimated at $950,000, according

to the building plan.

The building plan's official description of work calls for "interior and exterior" finish upgrades throughout the theater complex as well as upgrades in the auditoriums "and conversion of one auditorium to be a large screen format auditorium."

The Aurora Sentinel reported Thursday that original plans from 1997 called for 421 seats in theater 9 and the new plans call for 360 seats.

In September, Cinemark President Tim Warner told Aurora Mayor Steve Hogan that the company would reopen the theater complex. This announcement came in response to Hogan submitting a letter to the Plano, Texas-based company that said the overall consensus from the community was that the Century Aurora 16 should reopen.

Warner at the time said the company hoped to have the Century Aurora 16 reopened by the New Year.

Kurtis Lee: 303-954-1655, klee@denverpost.com or twitter.com/kurtisalee

Copyright 2012 The Denver Post. All rights reserved.

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Denver police receive awards for being "best of the best"

 In 2011, investigative work done by Denver Det. Joel Humphrey helped to put three killers behind bars for life and on Thursday, he was among six officers honored by the police department.

Manager of Safety Alex Martinez called the recipients at the officer's of the year ceremony "the best of the best."

When Kalonniann Clark — who was days away from testifying against gang boss Brian Kenneth Hicks — was gunned down in her home in 2006, Humphrey "pledged to find" her killers, said Sgt. Anthony Parisi, supervisor in the cold case homicide unit.

Humphrey, 63, pored over 800 recorded phone calls to develop cases against Hicks, Willie Clark, and Shun Birch, evidence that became the heart of the case against them.

Instead of relaxing and enjoying his success when they were convicted last year, Humphrey dived into a cold case — the 2000 murder of 36 year-old Renee Ealy, traveling to Wyoming to question Marie Lynn Marone.

His work on that case led to the arrest of John Lee Vasquez, and Marone, his girlfriend Marone. Police believe Vasquez stabbed the disabled woman to learn what it was like to kill, then pumped his arm in the air proclaiming "I did it."

Humphrey, who is the winner of a medal of valor and other awards, was named Denver's Detective of the year for 2011.

Others awarded were Officer Jarrod Foust, 41, whose work patrolling District 3 resulted in 450 arrests in 2011.

Technician of the Year went to Dean Christopherson, a department historian and community resource officer in District 4.

Corporal of the Year A.B. Allen, 49, of District 5, has been instrumental in training other officers, said Commander Les Perry.

Sergeant of the Year was Anthony Martinez of District 6. "Sergeants are the ones who run this department on a daily basis," said Lt. Steve Addison.

Commander of the Year was Vice Lt. Aaron Sanchez, 43, who was instrumental in focusing police resources on human trafficking.

Tom McGhee: 303-954-1671, tmcghee@denverpost.com or twitter.com/dpmcghee

Copyright 2012 The Denver Post. All rights reserved.

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