The State Department is putting into force control guidelines for exports of unmanned aerial systems (UAS), known commonly as drones, the agency said Monday. State didn’t say when it would publish regulations on the guidelines, but said end users will have to meet the following criteria: Recipients are to use these systems in accordance with international law, including international humanitarian law and international human rights law, as applicable; armed and other advanced UAS are to be used in operations involving the use of force only when there is a lawful basis for use of force under international law, such as national self-defense; recipients are not to use military UAS to conduct unlawful surveillance or use unlawful force against their domestic populations. Also this week, the White House released a memo on drone privacy, and the Federal Aviation Administration released a draft of proposed rules for commercial drone operations (see 1502170038 and 1502160003).

CEA hails the Federal Aviation Administration for finally releasing its proposed rules on small drones, President Gary Shapiro said Monday in a statement. But the rulemaking notice is “only the liftoff stage toward needed final rules,” Shapiro said. “It will be important to strike the appropriate regulatory balance between innovation and safety, and we urge the FAA to expedite this rulemaking action to fully realize commercial drones’ potential as a truly disruptive technology.” CEA thinks drones “will revolutionize a broad array of consumer and commercial sectors, bringing with them innovative new businesses and thousands of jobs,” Shapiro said. Amazon had asked the FAA for an exemption to test-fly small commercial drones on its Seattle property (see 1407150075). The FAA’s proposed rules wouldn't prohibit industries from using drones to transport cargo, “so long as it is not done for compensation and the total weight of the aircraft, including the property, is less than 55 pounds,” the notice said. The agency seeks comment on whether drones should be permitted to transport property for payment “within the other proposed constraints of the rule,” such as the requirements for line of sight operations. It also seeks comment on whether a special class of “air carrier certification” should be developed for commercial operations of small drones. Release of the rulemaking notice came roughly 11 months after CEA and the Aerospace Industries Association joined in urging the FAA to speed the rulemaking process along (see 1403280033). The rulemaking notice also came nearly five years after an FAA-“chartered” aviation rulemaking committee completed work on a 74-page report of comprehensive recommendations on small drones use (see 1403310035). Comments on the proposed rules are due 60 days after they’re published in the Federal Register. Although privacy issues as they pertain to drones "are beyond the scope" of its rulemaking, the FAA and the Department of Transportation will participate in NTIA's "multi-stakeholder engagement process" on the "privacy, accountability, and transparency issues" of commercial drone operations, the notice said (see 1502170038).

Amazon, with a score of 83.72, finished behind first-place Wegmans Food Markets in the 2015 Harris Poll Reputation Quotient study. Consumers rated companies on key "reputational dimensions" of products and services, emotional appeal, financial performance and vision and leadership, Harris said Wednesday. The reputations of the 100 most visible companies range from excellent (scores of 80+) to poor (scores of 50 to 64). Apple (80.69), at ninth, has fallen five spots since 2012. Among consumer tech companies, Google came in at 10 (80.44), Sony at 13 (79.93), Microsoft at 15 (79.94), Intel at 20 (78.54), LG at 23 (78.20), Hewlett-Packard at 42 (75.26) and Dell at 60 (72.13). Verizon led wireless carriers in 66th place with a “fair” rating of 69.74, followed by Sprint at 72 (67.66), T-Mobile at 75 (67.54), and AT&T at 76 (67.26). Video operators hovered in the fair to poor range on the list. DirecTV posted at 83 (65.27), Charter at 92 (60.30) and Comcast at 93 (60.64). Dish Network came in 98th out of the 100, with a rating of 58.07, according to rankings. Goldman Sachs bottomed out the list. “Reputation is far from static and is a business asset that is earned every day as people evaluate companies through the lens of what matters most to them,” Harris spokeswoman Carol Gstalder said. The study was done online among 27,278 U.S. respondents Oct. 20 to Dec. 18, with preliminary nominating research done with 4,034 respondents, Aug. 26-28 and Sept. 24-26.

The FTC settled a lawsuit against two individuals for alleged involvement in a multi-million dollar international telemarketing fraud scheme that targeted U.S. senior citizens. Defendants Marc Ferry and Robert Barczai allegedly withdrew money from the accounts of seniors without authorization, while claiming to sell fraud protection, legal protection and pharmaceutical benefit services for $187 to $397, the complaint said. As part of the settlement, Ferry and Barczai are barred from using remotely created checks, are required to obtain consumers’ consent before debiting accounts and are prohibited from misrepresenting any goods or services. They also must turn over proceeds from the scheme, which the FTC estimates are around $11 million. “Scammers thought they could cover their tracks by operating across borders, but law enforcement caught up with them,” said Jessica Rich, Consumer Protection Bureau director. “We’ve shut down their scheme of lying to older people and stealing their money.” The settlement announced Tuesday is part of a complaint issued against Ari Tietolman and his associates who “established a network of U.S. and Canadian entities to carry out their scam,” the FTC said.

The FCC is further beefing up its Enforcement Bureau, adding Phillip Rosario, former head of the Consumer Protection Department at the Connecticut Attorney General’s Office, as deputy chief. Rosario established the department and collaborated with the FCC on recent cramming settlements with AT&T and T-Mobile, said a news release.

Hype about the launch of the iPhone 6 and 6 Plus last fall took a toll on sales of iPads in Q4 for Apple, which shipped 4.6 million fewer tablets versus the previous-year quarter, an industry research firm said. Apple had a 17.8 percent shipment decline over Q4 2013, to 21.4 million units in 2014 Q4, a Monday report​ from IDC said. Apple CEO Tim Cook said last week when releasing quarterly results that the iPhone was the star of that quarter (see 1501280031). The company expanded its iPad lineup by keeping around older models and offering a lower entry price point of $249, but the strategy “wasn't enough to spur iPad sales given the excitement around the launch of the new iPhones,” Jitesh Ubrani, IDC senior research analyst, said. Apple’s efforts to maintain iPad momentum “have fallen flat” because the latest generation of iPads offer “very minimalistic upgrades over their previous versions,” IDC said. "Cannibalization at the bottom from the iPhone and at the top from the Mac appears to be a serious issue for the iPad.” Worldwide tablet shipments, meanwhile, had a year-over-year decline for the first time since the market's inception in 2010, IDC said. It said overall shipments for tablets and 2-in-1 devices slipped 3.2 percent, to 76.1 million in Q4, compared with 78.6 million for the 2013 period. "The tablet market is still very top heavy" because Apple and Samsung are largely carrying the market each year, Ubrani said. Fifth-place Amazon had the steepest annual volume decline of the top five tablet vendors, IDC said. Despite a product refresh at the end of September with the Kindle Fire HDX 8.9 and 7-inch Fire HD, holiday sales tumbled nearly 70 percent compared with 2013, IDC said. Of the top five, it said that only Lenovo, in a distant third place, had growth in Q4, boosting tablet shipments by 9 percent to 3.7 million units for 4.8 percent global market share. IDC forecasts growth for the tablet category in 2015, Jean Philippe Bouchard, research director-tablets, said. Potential growth contributors include Microsoft's new operating system, a shift toward larger screen sizes and “productivity focused solutions,” along with technology innovations such as gesture control, he said.

The table is set for Thread Group-branded connected home products to reach store shelves during the second half of 2015, Sujata Neidig, its vice president-marketing and Freescale Semiconductor business development manager, told us Friday. The alliance, which said last week it had surpassed 80 members, is on a fast track to bring the connected home mainstream, Neidig said. Thread’s initial goal is to get the spec released, due for summer, and then to increase awareness of the protocol among developers, manufacturers and software developers, Neidig said. The group then will raise awareness among consumers, she said. Success will be launching products that are Thread-enabled and expanding the market from there, she said. The connected home has been talked about for many years, Neidig said, “and we want to enable it as soon as possible.” The alliance positions Thread as a simple, low-cost way to connect devices in the home. “We built Thread based on existing technologies,” Neidig said, adding that Thread runs on any existing 802.15.4 radio, of which “millions” are in homes today. “All you’re doing is adding the Thread software stack,” she said. “Theoretically, any device on the market today that has an 802.15.4 radio in it can be updated on the air via software to run Thread.” Thread’s position in the Internet of Things is that it’s targeted only to the connected home, it’s focused on connecting devices and enabling them to communicate, and it’s an IP-based standard in a mesh network configuration that’s low power and scalable, Neidig said. Founding companies include Nest, Samsung and Silicon Labs. Thread Group also announced last week its enabler program that’s designed to spur development among startups that don’t have the $2,500 funding necessary to join the group (see 1501280033).

Consumer education is needed to make people aware of their privacy rights as more health data is put online and/or stored electronically, a civil liberties advocate said at an event Thursday. The event was declared otherwise off the record in the middle of the program. Privacy concerns related to an individual’s health records were discussed at the panel hosted by the Center for Democracy & Technology. Panelists included FTC Commissioner Julie Brill; Corinne Carey, assistant legislative director, New York Civil Liberties Union, who was the one panelist who agreed to speak on the record; Ben Heywood, co-founder of PatientsLikeMe; Indiana University law professor Nicolas Terry; and Chris Boone, executive director of the Health Data Consortium. Panelists discussed whether sharing health data would help medical professionals accurately diagnose patients and help researchers find cures for medical conditions more quickly, whether the Health Insurance Portability and Accountability Act should be abolished, expanded or amended, who owns the rights to health data, and the need for consumer education when it comes to digital health care rights -- especially as wearables and health apps become increasingly popular. Privacy doesn't matter to consumers until their information is revealed, Carey said, and most consumers believe they're protected by HIPAA -- the most misunderstood law, she said, that doesn't include the word privacy in its acronym. "Privacy laws are decades old" and patients don't own the rights to their health records -- the creators of those records, the health providers, do, she said.

Development for Apple Watch “is right on schedule” and shipments are expected to begin in April, Apple CEO Tim Cook said Tuesday on an earnings call. Developers are hard at work on apps “all designed specifically” for the Apple Watch's user interface, he said. Cook has “very high” expectations for the Apple Watch, he said. “I'm using it every day and love it and I can’t live without it. So I see that we’re making great progress on the development of it. The number of developers that are writing apps for it" is "impressive and we’re seeing some incredible innovation coming out there.” The iPhone was the star of Apple’s Q1 ended Dec. 31, Cook said. That Apple sold on average 34,000 iPhones every hour that quarter is a volume that’s “hard to comprehend,” Cook said. Apple sold 74.5 million iPhones in the quarter, an increase of 23.4 million over last year, representing 46 percent unit growth, said Chief Financial Officer Luca Maestri. Sales of iPhones grew strongly in both developed and emerging markets, Maestri said, including a 44 percent increase in the U.S. and a 97 percent increase in Brazil, Russia, India and China, he said. The company's stock closed up 5.6 percent at $115.31 Wednesday. The introduction of the large-screen iPhone 6 Plus helped push iPhone average selling prices $50 higher than a year earlier, to $687, Maestri said. The downside of iPhone’s popularity was that iPhone “channel inventory” fell by 200,000 units in the quarter, “and we were not able to reach supply-demand balance until this month,” Maestri said. “This left us below our target range of five to seven weeks of channel inventory on a look-forward basis.” Apple works with "about 375 carriers, representing 72 percent of the world’s mobile phone subscriber base, and we have over 210,000 points of sale for iPhone across the globe,” said the CFO. Apple thinks its iPhone strength will be sustainable throughout calendar 2015, Cook said. “We are incredibly bullish about iPhone going forward,” he said. “We believe that it’s the best smartphone in the world. Our customers are telling us that. The market is telling us that. We’re doing well in virtually every corner of the world." Only a “small fraction” of the iPhone installed base has upgraded to iPhone 6 or iPhone 6 Plus, he said, suggesting sales momentum will continue. “We had the highest number of customers new to iPhone last quarter than in any prior launch,” including the “highest Android switcher rate in any of the last three launches in the three previous years,” he said. Asked to quantify that “small fraction” of iPhone users who have upgraded to an iPhone 6 or 6 Plus, it’s “a number that's in the mid-teens or barely in the teens,” Cook said. “There is an enormous amount left. And given there are fair amount of Android units out there, there is also an enormous amount of Android customers that could switch. And I’d also remind you that there is a lot of people that have not yet bought a smartphone. And I know it doesn’t feel like that when you’re sitting in the United States.”

Microsoft’s “most strategic objective” is to build “developer momentum” behind Windows 10, and that’s what the company is focusing on “with a lot of different actions,” CEO Satya Nadella said on an earnings call. Microsoft plans to release Windows 10 later this year as a free upgrade for Windows 7, 8 and 8.1 users who act to redeem the offer in the first year, Microsoft has said. Its goal with Windows 10 is to create a “great opportunity for every developer” to write these “universal” applications that will run on the desktop as well as on Microsoft phones and tablets, Nadella said Monday. With Windows 10, “we're building a device platform for the mobile-first, cloud-first world,” Nadella said. “It's a world where the mobility of a person's experience is paramount, requiring a platform that spans devices from small screens to large screens, to no screens at all. It's a world where interacting with technologies is as natural as interacting with other people and it's a world that demands trust and security." For developers, Windows 10 “will be the most attractive windows development platform ever,” Nadella said. “We ... have made this our most collaborative project yet with more than 2 million insiders giving us feedback every day.” Microsoft also is “making progress with our own devices,” Nadella said. For Q2 through Dec. 31, Microsoft surpassed the $1 billion revenue mark with its Surface tablets for the first time, he said. For Microsoft Surface, “the value proposition of being the most productive tablet is resonating,” he said. But the company's stock closed down 9.3 percent to $42.66 Tuesday. Microsoft sales of Lumia phones topped 10 million units in Q2 and are up 30 percent compared with the same quarter a year earlier, Nadella said. Sales were particularly strong of Lumia 500 and 600 series “affordable smartphones,” he said. “In this segment of the market, the combination of our brand and value stand out and we plan to continue to build a beachhead here.”