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HP today announced that will discontinue operations for its webOS devices, effectively removing iPhone and iPad competitors such as the Pre line of phones and touchPad tablet computer from the market. “HP reported that it plans to announce that it will discontinue operations for webOS devices, specifically the TouchPad and webOS phones,” reads a statement from the company. “HP will continue to explore options to optimize the value of webOS software going forward.”

Notably, the same press release states that the company is exploring alternatives for its Personal Systems Group (PSG), where former Apple executive Jon Rubinstein now serves as senior vice president of product innovation. Options for the group, which is responsible for business and consumer PCs, mobile computing devices and workstations, include a full or partial separation from HP “through a spin-off or other transaction,” suggesting that HP will exit the hardware businesses for computers, phones, and tablets in the near future. Should the webOS software team be joined with the PSG, it could create an organization similar to Apple, leaving products such as enterprise services and software under the HP banner. However, the announcement may signal a substantial liquidation of HP’s patents or hardware businesses, which would be a stunning blow to a previously strong rival to Apple’s various businesses.

Google today announced that it has entered into an agreement to acquire Motorola Mobility for $12.5 billion. Motorola Mobility—formerly the Mobile Devices division of parent company Motorola before being spun off earlier this year—is described in the release as a “dedicated Android partner, and will be run by Google as a separate business, used to “supercharge the Android ecosystem” and “enhance competition.” Larry Page, CEO of Google, said, “Motorola Mobility’s total commitment to Android has created a natural fit for our two companies. Together, we will create amazing user experiences that supercharge the entire Android ecosystem for the benefit of consumers, partners and developers. I look forward to welcoming Motorolans to our family of Googlers.” The deal is subject to regulatory and stockholder approval.

Some investors in gaming stalwart Nintendo are growing increasingly concerned with its strategy for the future and are calling for the company to consider smartphone platforms such as iOS as an alternative source of revenue, according to a Bloomberg report. The report states that the company’s most recent handheld gaming system, the 3DS, has been a flop thus far, prompting price cuts of 40 percent in Japan and 32 percent in the U.S. and a 82 percent slashing of its profit forecast, and that, combined with the company’s refusal to make titles for any products other than its own, has driven the company’s stock to six-year lows. “Smartphones are the new battlefield for the gaming industry,” said Ohki, a fund manager at Tokyo-based Stats Investment Management Co. “Nintendo should try to either buy its way into this platform or develop something totally new.”

As noted in the report, Nintendo shares jumped the most in nearly four months after former Nintendo unit Pokemon Co. said it was developing a game for iOS devices, only to see the gains slip away after Nintendo denied any change in strategy towards outside platforms. “They just don’t get it,” MF Global FXA Securities Ltd. said in a sales note that day, referring to Nintendo. “Sell the stock, because a management once feted for creative out-of-box thinking have just shown how behind the times they are.” While the company’s next-generation home console, the Wii U, also met with mixed reactions upon its unveiling, the company does have nearly $14 billion in cash, equivalents, and short-term investments, giving it more strategic options than some competitors.

Apple and five leading U.S. book publishers have been hit with a class-action lawsuit over eBook pricing. According to a statement on the website of Hagens Berman, the firm that filed the suit, Apple, HarperCollins, Hachette, Macmillan, Penguin, and Simon & Schuster are accused of colluding to increase the prices on popular eBook titles in order to boost profits and force Amazon to abandon its “pro-consumer discount pricing.” The suit claims that Apple and the publishers are in violation of a variety of federal and state antitrust laws, the Sherman Act, the Cartwright Act, and the Unfair Competition Act, and, if approved, would represent any purchaser of an eBook published by a major publisher after the adoption of the agency model—the pricing model used on the iBookstore. It seeks damages for the purchase od the books, an injunction against pricing eBooks with the agency model and “the forfeiture of the illegal profits received by the defendants as a result of their anticompetitive conduct.” [via TUAW]

Walmart has announced that after eight years in business, it is closing its music download store. Citing a certified letter sent by Walmart to its distribution and licensing partners, Digital Music News reports that the store, located at mp3.walmart.com, will close on August 28. The retail giant will continue to sell physical CDs in its brick-and-mortar stores, and will continue to provide support for older, DRM-laden WMA files that were purchased from the store prior to its move to DRM-free MP3 files; it will also continue to operate its Soundcheck live streaming site. [via The Atlantic]

In a recent interview with IndustryGames, Epic Games President Mike Capps made several statements questioning the validity of next-generation gaming consoles in light of the advancements being made in mobile gaming, and more specifically by Apple. “Before the problem was between the consoles and PC where they had very different levels. The power of your PC could be 100 times the power of somebody else’s PC. This time the problem could be mobile. If you look at the ridiculous acceleration of iPhone hardware and technology, trying to find a sweet spot for tech to make your mobile game… I mean, what would your mobile game look like in 2015? Who knows how fast that’s going to operate, but you can bet it’s going to be faster than an Xbox 360,” said Capps.

He continued, “So I think that’s the real challenge for us now, rather than worrying about the difference between a couple consoles and some order of magnitude, whether 3X or 4X. It’s about how do we deal with iPhone 8… if you watch where the gamers are going that’s where they are. Your iPhone 8 will probably plug into your TV, or better yet, wirelessly connect to your television set to give you that big screen gaming experience with good sound. So really, what’s the point of those next-gen consoles? It’s a very interesting situation to be looking at. That’s what we’re starting to think about more… not how do we scale from some Nintendo platform to some other future console.” Notably, wireless gaming is already possible between the iPad 2 and the Apple TV via AirPlay in iOS 5. [via Cnet]

David Drummond, Senior Vice President and Chief Legal Officer for Google, has posted an open letter in which he accuses Apple, Microsoft, Oracle, and others of waging “a hostile, organized campaign against Android” using what he calls “bogus” patents. “They’re doing this by banding together to acquire Novell’s old patents (the “CPTN” group including Microsoft and Apple) and Nortel’s old patents (the “Rockstar” group including Microsoft and Apple), to make sure Google didn’t get them; seeking $15 licensing fees for every Android device; attempting to make it more expensive for phone manufacturers to license Android (which we provide free of charge) than Windows Phone 7; and even suing Barnes & Noble, HTC, Motorola, and Samsung. Patents were meant to encourage innovation, but lately they are being used as a weapon to stop it,” he writes.

“This anti-competitive strategy is also escalating the cost of patents way beyond what they’re really worth,” Drummond continues. “The winning $4.5 billion for Nortel’s patent portfolio was nearly five times larger than the pre-auction estimate of $1 billion. Fortunately, the law frowns on the accumulation of dubious patents for anti-competitive means — which means these deals are likely to draw regulatory scrutiny, and this patent bubble will pop.”

Following the publication of Drummond’s post, Microsoft General Counsel Brad Smith stated on Twitter that Microsoft asked Google to bid jointly for the Nortel patents, and that they said no, a claim corroborated by screenshot of an email to Smith from Google General Counsel Kent Walker stating as much, which was published online by Frank X. Shaw of Microsoft. Notably, Google attempted to purchase the Nortel patents on its own, despite its inference that they are of a “dubious” nature; Apple has yet to respond on the issue.

Apple is considering making a bid for the online video service Hulu, according to a new report. Citing two people with knowledge of the auction, Bloomberg reports that Apple is in early talks that may lead to an offer. An acquisition of Hulu would give Apple new ad-based free and subscription video service offerings, and would also likely include a five-year extension of program rights, including two years of exclusive access. Apple already sells TV programming from Hulu’s owners Disney, News Corp., and NBC Universal; notably, Apple CEO Steve Jobs is the largest single shareholder of Disney. The report states that the service has also drawn interest from Google, Yahoo, AT&T, and Microsoft, the latter of which dropped out of the bidding, according to the report.

Netflix today announced changes to its streaming and DVD-by-mail plans that will see users paying more for combined service. The company’s new DVD-only plans now start at $7.99 per month for the one DVD at a time plan, and $11.99 per month for the two DVD at a time plan. Gone is the $9.99 combined streaming + one DVD plan; users will now need to subscribe to both the $7.99 streaming plan and the $7.99 one DVD plan to receive the same service, for a combined monthly total of $15.98. The changes are effective immediately for new customers; current customers will see the new pricing structure take effect on September 1. [via Engadget]

Perhaps in response to Apple’s upcoming iTunes Match service, Amazon has announced that all Cloud Drive users can now enjoy unlimited storage space for music for $20 a year. The deal, which is described as a “limited time” offer, is available to customers who purchase any Cloud Drive storage plan—including the base 20GB for $20/year plan—and the unlimited space for music does not appear to count towards the 20GB file storage cap. In addition, customers who already received 20GB of free storage through prior promotions will receive the unlimited space for music at no additional cost, and users can now upload all Amazon MP3 purchases for free in Cloud Drive, including all purchases made before the launch of Cloud Drive and Cloud Player. Finally, Amazon has announced its new Cloud Player on Web for iPad, which enables customers to play music stored in the cloud via an interface specifically optimized for Safari on the iPad.

A new report has emerged offering details on Apple’s cloud music offering. Citing people briefed on the talks between Apple and the major music labels, Bloomberg reports that Apple will be able to scan customers’ digital music libraries in iTunes and quickly mirror their collections on its own servers, replacing low-quality songs with higher quality versions, after which users will be able to stream their songs and albums directly to their devices. According to the report, users will be able to store their entire music collections in the cloud—including songs that may have been obtained illegally, giving the music labels a way to earn money on pirated music through whatever fee Apple plans to charge. The report claims that the labels are negotiating aggressively to ensure they make a profit from the shift to the cloud, as it may be the last opportunity to stem piracy and dropping sales. Apple has already signed deals with three of the four major labels for the service, and is said to be close to reaching a deal with the final holdout, Universal Music. Apple could announce its cloud music service as early as its Worldwide Developers Conference, which begins with a keynote address on June 6.

The iPhone, iPod touch, and iPad collectively account for 80 percent of all wireless video viewing, according to the latest data from Internet video ad firm FreeWheel (PDF Link). During Q1 2011, the iPhone accounted for 30 percent of all wireless video views, as did the iPod touch. The iPad—despite its much smaller user base—accounted for 20 percent of wireless video views, tied with Google’s Android platform as a whole. FreeWheel attributes iOS’ overwhelming majority to its larger user base and the fact that “so many content producers prioritized their video development for this platform ahead of others.” Overall, wireless video viewing remains small—less than one percent—compared to online video viewing in general. FreeWheel’s data is comprised of 10 billion video views and 5.5 billion video ad views in Q1 2011 and is primarily U.S.-based. [via NYT]

Google today announced the preliminary launch of its new cloud-based music service. Dubbed Music Beta by Google, the service allows users to upload up to 20,000 songs—including iTunes libraries and playlists—for playback across devices. Features include an automatic playlist creation tool, similar in concept to Apple’s Genius feature, automatic wireless syncing, and the ability to “pin” music for offline access. The service is currently available by invitation only and will be free while in beta; formal pricing has yet to announced. In addition to the Music Beta service, Google today also announced movie rentals from the Android Market, an Android Open Accessory initiative for creating third-party accessories, and the Android @ Home protocol that will allow Android devices to communicate with other products, such as lighting, audio, appliances, and heating/cooling systems, using low-voltage technology. More information on Google’s announcements is available on This Is My Next.

Microsoft has announced that it has entered into an agreement with Skype Global to acquire VoIP service provider Skype for $8.5 billion in cash. According to the announcement, the agreement has already been approved by the boards of directors of both companies, and “will increase the accessibility of real-time video and voice communications, bringing benefits to both consumers and enterprise users and generating significant new business and revenue opportunities.” With 170 million users, Skype will be integrated into Microsoft devices like Xbox, Windows Phone, and Windows, while Microsoft will in turn connect Skype users with Lync, Outlook, Xbox Live and other communities, and will continue to invest in and support Skype clients on other, non-Microsoft platforms.

“Skype is a phenomenal service that is loved by millions of people around the world,” said Microsoft CEO Steve Ballmer. “Together we will create the future of real-time communications so people can easily stay connected to family, friends, clients and colleagues anywhere in the world.”

“Microsoft and Skype share the vision of bringing software innovation and products to our customers,” said Skype CEO Tony Bates, who will assume the title of president of the Microsoft Skype Division. “Together, we will be able to accelerate Skype’s plans to extend our global community and introduce new ways for everyone to communicate and collaborate.”

Amazon has quietly updated the Cloud Player music component of its Cloud Drive online storage service, allowing for playback over iOS devices using the Safari browser. Launched in late March, Cloud Player gives users to access both MP3 and AAC files stored using the Cloud Drive service, allowing for browser-based playback. As noted by Engadget and confirmed in iLounge’s brief testing, the feature appears to work well, with a small but notable delay between song selection and the beginning of playback. Playlist management features also work, and, surprisingly, the Cloud Player also works well with iOS’ multitasking audio controls. To utilize the new offering, iOS users simply need to navigate to their Cloud Player from within Safari.

Amazon MP3 has dropped the price on a number of its top-selling songs to $0.69 each, nearly half the price of the majority of best-selling tracks on iTunes. The Los Angeles Times reports that it is unclear whether Amazon or the music labels themselves are eating the cost of the price reduction; currently discounted tracks include “Born This Way” by Lady Gaga, “On the Floor” by Jennifer Lopez, and “E.T.” by Katy Perry. As of this writing, 13 of the top 20 best-selling songs on Amazon MP3 are selling for the reduced $0.69 price, where as only one song in iTunes’ top 50—“Barbra Steisand” by Duck Sauce—is priced below $1.29, selling for $0.99. Curiously, Amazon’s move comes exactly a month after its rollout of a new Cloud Player online music service, which it launched without the consent of the major music labels.

Condé Nast is pulling back on its goal to deliver iPad versions of all of its magazines, according to an AdAge report. Citing anonymous company employees, the report claims that the change in strategy is due to lower sale volumes than are optimal for attracting advertisers. The report states that the company is still committed to the iPad as a platform, and has another undisclosed iPad edition of one of its magazines arriving in May. “It’s a shift,” one Condé publisher said. “The official stance was we’re going to get all our magazines on the iPad because this is going to be such an important stream. The new change is maybe we can slow it down. In my opinion it makes Condé look smart because we have the ambition, but we’re not rushing. They’re not all doing all that well, so why rush to get them all on there?” The company was one of the earliest supporters of the iPad, announcing prior to the iPad’s launch its intentions to bring out iPad editions of Wired, GQ, Vanity Fair, Glamour, and The New Yorker. [via Mac Rumors]

Cirrus Logic, Apple’s primary audio chip supplier for the iPod, iPhone, and iPad, has disclosed manufacturing problems related to a new audio device. The Wall Street Journal reports that while Cirrus didn’t specify Apple as the customer for the new chip, the iPod maker accounts for roughly half the company’s revenue, and is therefore the company most likely to have ordered such a component. According to the report, the chips went into volume production last month, but it was determined that few were performing properly, and an even lower ratio of chips were meeting standards as production increased. “While this is unfortunate, our highest priority was ensuring that we did not prevent a successful launch for our customer, said Cirrus CEO Jason Rhode, “and we believe that we have been successful in that regard.”

While the exact nature of the new chip and its capabilities is unknown, Apple has continued to push for lower-power chip solutions, and recently has touted the ability of certain AirPlay accessories—including the recently-released Bowers & Wilkins Zeppelin Air—to handle 96KHz/24-bit audio. Apple has reportedly been in talks with music labels to obtain higher-quality audio files, which would offer the potential for sonic improvements that would likely be imperceptible to human ears under most conditions; the higher bitrates might be used in lossless, multi-channel audio, but not in most compressed audio files.

Amazon today launched its new Cloud Drive online storage service, alongside a new Cloud Player that allows users to play back music stored using the service. The Cloud Player supports both MP3 and AAC files, and can be accessed from any PC or Mac, as well as from Amazon’s MP3 app for Android; purchases made on Amazon’s MP3 store can be automatically added to the service and do not count against the user’s storage limit. Amazon is offering 5GB of storage for free, with higher storage capacities priced at $1 per GB per year. Notably, customers who purchase an album from the Amazon MP3 store receive 20GB of free storage for one year. The service makes Amazon the first among itself, Google, and Apple with a cloud-based music service; Apple is reportedly working on a such a service for introduction later this year.

The Consumer Electronics Association (CEA), the owner and producer of the International CES, is now offering a discounted price on its membership just for individuals. The membership, called the Tech Enthusiast membership, is designed exclusively for early adopters and fervent supporters of consumer technology. It gives you entry to the CEA and offers a members-only website, offering such features as insider information on the latest technology trends, consumer electronics product giveaways, access to a community of like-minded technophiles, and discounts from technology companies.

CEA is offering a special for iLounge readers to receive the CEA Tech Enthusiast membership at a discounted rate of $29 (valued at $49). To learn more or join today, visit CEAtechenthusiast.com and enter promo code “INSIDER” at checkout to receive the discount.