xfdci NEWS-STREAM-01


<Date: December 24, 2012>

<Time: 08:00:00>

<Tran: 122401cb.k31>

<Type: SHOW>

<Head: Biggest Technology Stories of 2012 - Part 2>

<Sect: News; International>

<Byline: Kristie Lu Stout, Felicia Taylor, Maggie Lake>

<Guest: Nilay Patel, Nicholas Thompson, Michael Dell, Steve Ballmer, Reggie

Fils-Aime, Rob Schmitz, Tim Berners-Lee>

<High: A look at the biggest technology stories of 2012. First, Apple and

Samsung's patent wars. Then, Nintendo decides to put a touch screen in the

controller of their new game console. Finally, interview with the creator

of the World Wide Web.>

<Spec: Technology; Economy; Business; World Affairs; Apple; Samsung;

Foxconn; Internet>

<Time: 08:00:00>

<End: 09:00:00>

Finally, 2012 was the year you just couldn't escape "Gangnam Style." The distinctive dance became a worldwide hit, and the song's artist Psy showed up everywhere, from "The Ellen Show" to the United Nations, performing his infamous horse dance wherever he went. "Gangnam Style" is now the most viewed video of all time on YouTube.

Kickstarter wasn't founded this year. But 2012 was the year the crowd- funding website garnered a lot of attention and tens of millions of dollars. It allows filmmakers, musicians, artists and others to raise money from the public for a specific project. Let me show you how it works. Here is one project on the site that aims to update the classic PC game "Elite". The creators are looking for over one million pounds in funding. That's about $2 million. They passed the halfway mark and had over 700,000 pounds with 22 days to go, but if they don't reach their funding target by the project deadline of January the 4th, they won't get anything. So, to entice people to give them money, there are different tiers of different rewards. Pledging 20 pounds gets you the game. 50 pounds adds the ability to play the game early in a beta test. Pledge 750 pounds, and you get a planet named after you. And for 5,000 pounds, you get to have dinner with the development team.

And this year has seen a succession of Kickstarter projects that raised millions of dollars each. PC game project "Eternity" raised almost $4 billion. Ouya, a videogame console running Android, raised $8.5 million. And Pebble, a watch that connects to your phone, raised over $10 million. But Kickstarter isn't just about big projects or building gadgets, or even technology. This Kickstarter project raised $150,000 to build an underground park in abandoned space in New York.

But there is a downside to Kickstarter. Once you sent in your money, there is no guarantee that you'll get what you paid for. Kickstarter says they do not investigate a creator's ability to successfully complete their project. That responsibility is left to you. Kickstarter says that backers decide how valid a project is by funding it. And how can you tell whether a project is legitimate? Well, Kickstarter says you should, quote, "use your Internet street smarts." Now, despite the lack of guarantees, the site's co-founder says he thinks the process works.


YANCEY STRICKLER, CO-FOUNDER, KICKSTARTER: The projects on Kickstarter run the gamut of many things. Everything has to meet some guidelines for us, but those are about content more than anything, and so you know, some projects aren't going to come as well as people want them to. The creative process is rarely a linear one, and it's hard to tell whether that inspiration will strike. But we've had no issues to date with someone running with the money or anything like that. People are really excited to get support, and they do their best to pull the projects off, and have happy backers.


STOUT: It seems people don't mind too much about the potential downside of the Kickstarter. As of the middle of December, over $373 million had been successfully invested in projects via the site.

Now, Apple and its major supplier, Foxconn, came under renewed scrutiny in 2012. But some of that was of Apple's own making. In January, Apple became the first tech company to join the Fair Labor Association, or FLA, and that meant Apple agreed to let the FLA audit its supply chain. The initial report came out in March. The FLA reported the following violations. Workers reported excessive overtime, sometimes 12 or 14-hour day six days a week. Also, blocked exits and lack of protective equipment . And 43 percent of workers said that they had witnessed accidents, though not all caused injuries.

Apple and Foxconn came up with an action plan to address the issues. In August, a follow-up report found that more than 280 of them had been completed. The remaining 76 are due by July 2013. Among other things, they include reducing working hours to legal limits; improved health and safety; better worker representation. The FLA's president has praised the companies.


AURET VAN HEERDEN, PRESIDENT AND CEO, FAIR LABOR ASSOCIATION: I really believe that with the commitment that Foxconn has made in response to our findings, they really are going to become a driver. They will set the bar high, and their peers and their competitors will now have to align themselves with those new standards, because Foxconn will start to attract workers from other factories. And so other factories will have to match the increased -- the improved standards that Foxconn is adopting.


STOUT: While Foxconn opened its factories to the FLA, it's very rare for reporters to get past the front gates. Foxconn's biggest facility is in the southern Chinese city in Shanjin (ph). It's the one that makes Apple's iPhones and iPads, and Apple invited Rob Schmitz, the China correspondent for "Marketplace" to see life on the Foxconn production line in April. We spoke to him shortly afterward.


ROB SCHMITZ, CHINA CORRESPONDENT, MARKETPLACE: I spent about a week with workers prior to my Apple and Foxconn coordinated tour. And I spent a lot of that time outside the gates talking to many workers, over two dozen, and I followed one worker's money back to his home village, to see how it was being spent.

But the workers, when they were able to speak candidly with me, they did have complaints about the management structure at Foxconn, but for the most part, they saw their jobs in this way. Many of them are from poor villages in rural China, and for them, this was a good opportunity to make money, save money, send it back home, and then hopefully at the right time after a few years, go back home with some savings.


STOUT: Schmitz said most of the workers he spoke to only stayed at the factory for two to five years. He also reported a continuous supply of people lining up for jobs at Foxconn. Schmitz told us standards there are better even if the work is dull.


SCHMITZ: The work is obviously very tedious. It's very boring, and these are workers that are doing motions that last sometimes no more than 10 seconds, and so they do that for eight to 10 hours a day. So I think on your body, I don't know what that would do to your body, but it's obviously psychologically -- it's very, you know, it's very boring. But the conditions that I saw in the tour that I was given, you know, I've been to factories before in China, and the conditions were, I thought, on par with what I would say decent conditions at a factory. I've seen a lot worse in my time in China, and you know, but you also have to understand that the campus that I toured has 240,000 workers at it. I mean, this is one of the largest electronics factories in the world. And so to call it a factory is almost kind of silly, because it's actually an enormous factory campus. And so there are amenities like soccer fields and basketball courts and pools and things like that. So it's not a typical factory.


STOUT: And remember, Foxconn doesn't just make products for Apple. Foxconn has also produced Microsoft's XBox 360, as well as Amazon's Kindle and products for HP, one of the world's largest PC makers.

Coming up, did digital kill the film star? Kodak could not keep up with the competition. The photography icon moves largely out of the picture. That's next.


STOUT: You are watching NEWS STREAM's roundup of the top stories in technology in 2012. But 2012 hasn't just been about the introduction of new technology. It's also seen the end of an old icon. Earlier this year, after more than a century, Kodak said it would get out of the camera and film business. Felicia Taylor tells us about Kodak's legacy.



FELICIA TAYLOR, CNN CORRESPONDENT: The celebrated Kodak moment. These nostalgic commercials once helped define the brand to a new generation.

UNIDENTIFIED MALE: New Kodak Extra 1 (ph) camera--

TAYLOR: Capturing moments in time forever.

The company's place in history stretches back to 1881, when George Eastman founded the Eastman Dry Plate Company in Rochester, New York. The Kodak name wasn't born until 1888, and the iconic logo has barely changed in more than a century.

WILLIS HARTSHORN, DIRECTOR, THE INTERNATIONAL CENTER OF PHOTOGRAPHY: He actually chose a name that he knew would be able to be read in multiple languages throughout the world, hence Kodak. Everybody can read Kodak.

TAYLOR: Eastman is seen here with Thomas Edison, who was a life-long friend. And they set a standard for motion picture film that is still in use today. Kodak brought the camera to the public, selling it for $1 with the mass production of the Brownie, and that changed photography forever.

HARTSHORN: Not only was there the Brownie of the 1900s, the phrase that went along with it was "you push the button and we do the rest," but all the way into the '50s, that little Brownie, that little black one that all the kids had, it was probably their first camera. So it was enormously important in terms of getting the idea of photography out to the mass public.

TAYLOR: And Kodak's technology enables photographers like Steve McCurry to capture some of the world's most iconic images.

(on camera): This is a darkroom, and frankly a pretty rare place to find these days, but of course, this is where film is processed. Maybe 35 millimeter or medium format, and of course, film was a core business for Kodak for many decades. And then once again, they revolutionized the industry by inventing the digital camera in 1975.

(voice-over): The very technology that was to undermine their original business.

Sales of film declined, and Kodak began to feel pressure from foreign competitors. Kodak's solution, to sell the patents behind its digital imaging technology, which is widely used in mobile phones.

UNIDENTIFIED MALE: Kodak is the first company--

TAYLOR: The company is now pinning its future on its commercial printing business. Time will tell if this develops into profit. But whatever the outcome, an American icon has been transformed far beyond the original blueprints of George Eastman.

Felicia Taylor, CNN, New York.


STOUT: And Kodak did try to make it, but just couldn't keep pace with the rise of digital photography, and Kodak isn't the only one being left behind. Here to talk about the next tech titan to fall and the other key trends for 2013 is our regular contributor Nick Thompson. He is the senior editor of Nick, good to see you. Let's talk about Kodak and after Kodak. You know, Kodak, we just heard just then from that report from Felicia Taylor, just couldn't catch up with all the trends in technology. But who else could be next to fall in 2013?

NICHOLAS THOMPSON, THENEWYORKER.COM: Well, I think we are going to see one large company fall. My guess is that it's either going to be Nokia or RIM. There have been a lot of change in the smartphone business, obviously. Both those companies have had a very, very hard time. RIM seems on a track for acquisition or possibly bankruptcy unless it can really, you know, pull a rabbit out of its hat. So I think there will be at least one major tech company to go down in the next year, unfortunately.

STOUT: Now, Microsoft is also under a lot of scrutiny. It's betting big time on Windows 8 and Surface, its answer to the rise of touch screen devices. Nick, what do you think will happen to Microsoft and its leadership in the next year?

THOMPSON: I think the biggest -- I think Steve Ballmer is going to lose his job. I think he's probably going to be forced out, or he's going to see the writing on the wall and step down. He's presided, since he took over the CEO position, the company has been entirely flat. It's been more than a decade. The newest product launches have not gone spectacularly well. We need to give it some more time to really evaluate, but he's not doing a great job. He's very close to Bill Gates, who controls the board at that company, so he's held on to now, but I think this is the last gear of his reign.

STOUT: So Ballmer has to watch his back. Now, Nick, on a more positive note, what kind of gadgets should we look forward to in 2013? For example, will 3D printers finally get mainstream?

THOMPSON: Oh, I think -- they won't be mainstream. I think 3D printers are one of the absolutely most exciting things in technology. I think they are going to start to get closer to mainstream. I think that people -- you're not going to be using one this year, I'm not going to be using one this year, but we're going to know people who are using them this year. I think that is a very exciting trend. I think that we are also going to see -- there's going to be a lot of news about drones. They're not going to be heading into sort of mainstream civilian life, but we're going to start hearing about their use outside of the military. I'm very excited about both of those. And I think mobile payments are going to be a big thing that comes in this year and starts really moving towards the mainstream. Right now it's early adapters, and it will be more people soon.

STOUT: Mobile payments is very interesting, because we've heard about buying things on our phones for a while now. So are you saying that next year will be the year when it becomes a real thing?

THOMPSON: I think next year will be the year where you can really walk into a store in the United States -- and I go Christmas shopping in 2013, I'll bring my phone and I'll be able to sort of bang it on the counter to pay for something. I think we'll be, you know, this will of course be in the United States, which is where I'm most attuned to, is a little behind, actually, on this, but I think it's really starting to catch up and starting to be big here.

STOUT: All right. Now, we've had you on NEWS STREAM this last year to comment on some disturbing uses of technology, namely in modern warfare. I want to get your thoughts on cyber warfare. How real is the threat?

THOMPSON: Oh, I think absolutely. I think we've seen a lot of sort of asymmetric cyber warfare, for example, the Stuxnet attack on Iran, where one side that's very digitally advanced has been able to do real damage to an opponent that's not as digitally advanced. And I think that this year will be the first year where there will be some major conflict or some specific conflict where both sides are able to do real damage to each other.

We saw a little bit of this in the Israel and Hamas confrontation this fall. But I think it's going to -- I think it's going to take another step up. It's going to escalate even further in a dangerous and dark way.

STOUT: Well, that's a very dark vision of the future there. Nick Thompson of, thank you very indeed for that.

THOMPSON: Thank you, Kristie.

STOUT: Now, there is one invention sure to stick around through 2013 and beyond. The World Wide Web. We hear from its inventor, Tim Berners-Lee. That straight ahead.


STOUT: We're going to end our look at technology in 2012 with what we thought was one of the most remarkable moments of the year, when the world's biggest sporting even paid tribute to one of the world's biggest geeks. It happened at the opening ceremony of the London Olympics, when the focus suddenly shifted to one man sitting at a computer. This man, Tim Berners-Lee, the inventor of the World Wide Web. And then his message flashed across the stadium in enormous letters, "this is for everyone."

Now, a few days after the opening ceremony, we spoke to Berners-Lee on NEWS STREAM, and I began by asking him how it felt to be recognized at the Olympics opening ceremony.


TIM BERNERS-LEE, WWW FOUNDATION: It was just an incredible honor. The whole opening ceremony is to honor the athletes who have come all that way and worked all that -- who worked so hard. But it was an amazing show, so I also -- it was nice to be asked, but it was also amazing to be part of that huge piece of sort of amateur drama with thousands and thousands of people on stage.

STOUT: Let's talk about the tweet that you posted during the ceremony. It reads, quote, "This is for everyone," and I can read into it as a sort of commitment to openness and a World Wide Web that is open and accessible, but tell us in your words what you meant with that statement?

BERNERS-LEE: Yes, well, I tried to get (ph) as many things into that statement as I could. Yes, it is about the openness, it is about that anybody should be able to participate in the World Wide Web. It's about that it should be open in the sense that anybody can connect, anybody can have a website. And if I can connect to it, I can talk to any website. So that openness and that you don't have to pay royalties for patents when you use it, it is open in that sense.

And there is also, of course, the question of when you look at the stadium full of people from every country, you realize that actually, the World Wide Web is only used by 25 percent of the people in the world, regardless of reasons why there are some people in the world who don't actually use it. So when you say -- I can say in principle this is for everyone, and the technology is such that it is for everyone, but in fact, there is also the question about how we can actually make sure -- how fast can we get the other 75 percent a part of the information society.

STOUT: Yes, it is still early days for the World Wide Web, and the statement that you made during the opening ceremony, it celebrates openness and freedom, and yet the Olympic organizers, they have been exhorting strict control on copyright. I mean, for example, unauthorized videos of the Games, they are immediately taken down online, taken off YouTube. What do you make of the IOC's control of Olympic content on the Web?

BERNERS-LEE: You mustn't confuse the openness of the Internet with saying that everything is for free. This is not -- it doesn't mean that everything has to be free. No, there are some things that you pay for, and it is really important. Musicians for example, and artists, and people who make television programs, should be recompensed for their work. Sometimes the musicians choose to make their music available to anybody to download, and sometimes you're supposed to pay money for it, and then you should pay money for it.

So the World Wide Web is a place where, yes, there is a massive amount of information which is free, because all of the information which allows you to get around town, allows you to find where you are going and meet people and so on, a lot of that is free, but there are some things which -- where there is a market, and the marketplace is also a very important part of the web.

STOUT: A clear distinction there. Now, London 2012 has been called the first social media games, and we have all been watching it played on Facebook, on Twitter, but also especially here from Hong Kong, on Chinese social media sites like Sina Weibo, and active censorship takes place there and throughout the Internet in China and other markets, like in Iran and Saudi Arabia.

As the inventor of the World Wide Web, what is your thinking about these Internet censorship regimes?

BERNERS-LEE: My feeling is that censorship is generally a bad thing, that a strong government is one which is able to allow its -- the people in the country to access the (INAUDIBLE), go onto the Internet and see how things really are and discuss how things really are. And that makes for a strong country, and it is a strong government that can do it. A more weak government that is worried that it has to control the information from its own civilians, from its own citizens, then I think that is something which will -- which is a pity when it happens, and where it happens. And I think with time, we will see it go away, bit by bit. I think we will see that information just gets around the -- gets around the block enough while governments realize that for the country to work economically, it has got to be open.

STOUT: And let's ask you a question about the semantic web. Is the next stage of the web's developments, it's been set again and again -- now the regular web right now is done, because web pages, they are designed to be read by humans, but the semantic web, it includes information so computers can understand them. So Sir Tim, what does that mean for me? How will my personal web experience change with the arrival of the semantic web?

BERNERS-LEE: You personally may not know, in fact, that some of the websites you are going to already are using the semantic web. A lot of web sites, you load the web page, and then inside the web page goes -- which is a little program, it's like your web page is like a little computer, and it goes and gets information from the web, gets from the web of data.

Now, the web of data is a sort of parallel web. It is out there on the web, but it is data files which are used by programs, so when you go and look at something like a catalog for example, when you are buying things, when you look at a map, then the program running in your web page is going out and getting all this data from the web of data.

The web of data is exploding right now. It is very exciting. One of the things that is driving it is open government data. For example, a lot of governments have started to put data about how the country is running out there on the web, and people can then write websites which then pick that data up and use it to great effect.


STOUT: Tim Berners-Lee there. And finally, we go over and out there with a note of thanks. As our regular viewers know well, NEWS STREAM is a hard news show with a tech bent. We go geeky on the day's headlines with added visualization and context. We also go deep with the tech beat, a fascinating story of invention and creation. So to all the geeks and dreamers who've tuned in over the years, we thank you, because this is for you. And that is NEWS STREAM. The news continues on CNN.


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