Hot Off the Wire – Man convicted in first economic espionage case; iPhone market share grows; Electronic Arts shares falter after revenue forecast; Phone company wants to charge Google

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A roundup of the latest high-tech news from The Associated Press:

• Chinese spy gets more than 15 years in prison

SANTA ANA, Calif. — A Chinese-born engineer convicted in the United States’ first economic espionage trial was sentenced Monday to more than 15 years in prison for stealing sensitive information on the U.S. space program with the intent of passing it to China.

Dongfan "Greg" Chung, a Boeing stress analyst with high-level security clearance, was convicted in July of six counts of economic espionage and other federal charges for storing 300,000 pages of sensitive papers in his Southern California home. Prosecutors alleged the papers included information about the U.S. space shuttle, a booster rocket and military troop transports.

Before reading the sentence, U.S. District Judge Cormac J. Carney said he didn’t know exactly what information Chung had passed to China over a 30-year period. But just taking the "treasure trove of documents" from Boeing Co., a key military contractor, constituted a serious crime, he said.

"What I do know is what he did, and what he did pass, hurt our national security and it hurt Boeing," the judge said.

During brief remarks, Chung, 74, begged for a lenient sentence, saying he had taken the information to write a book.

"Your honor, I am not a spy, I am only an ordinary man," said Chung, who wore a tan prison jumpsuit with his hands cuffed to a belly chain as his wife and son watched from the audience. "Your honor, I love this country. … Your honor, I beg your pardon and let me live with my family peacefully."

Outside court, defense attorney Thomas Bienert said he would appeal.

• ComScore: Apple gains U.S. smart phone share

RESTON, Va. — Apple Inc.’s iPhone gained a percentage point of U.S. smart phone market share while BlackBerry maker Research in Motion Inc. lost a point in the last three months of 2009, according to research group comScore Inc.

ComScore reported Monday that the BlackBerry is still the most widely used smart phone system in the U.S., with 41.6 percent of the market — one point less than in the previous quarter.

At the same time, Apple gained 1.2 percentage points to reach 25.3 percent of the U.S. smart phone market.

Microsoft Corp., the No. 3 smart phone software provider, held 18 percent of the market, followed by Palm Inc. with 6.1 percent and Google Inc. with 5.2 percent.

Motorola Inc. remained the top overall handset hardware maker in the quarter, with 23.5 percent market share. Its closest competitors, LG Electronics and Samsung, made 21.9 percent and 21.2 percent of all phones used in the U.S., followed by Nokia Corp. and RIM.

• Electronic Arts shares dive on weak outlook

NEW YORK — A disappointing outlook from Electronic Arts Inc. sent shares of the video game publisher sharply lower Monday, a sign that significant cost-cuts and layoffs have not ended the company’s slump.

EA operates a game development studio in Morrisville, N.C.

The company, whose games include the popular "Madden" series and "Mass Effect 2," said Monday it narrowed its net loss in the last quarter even as game sales declined. It blamed the revenue falloff on having fewer titles than it did in the 2008 holiday period. EA also cited weak sales in Europe, which accounts for about a third of its revenue.

The results for the October-December period were not a surprise, because EA had warned in January it would miss forecasts, leading analysts to lower their estimates.

The company lost $82 million, 20 cents per share. In the same period a year earlier it lost $641 million, $2 per share.

Revenue fell 25 percent to $1.24 billion.

Accounting for deferred revenue in games with online components, EA earned 33 cents per share, down from 56 cents per share a year earlier. Analysts were expecting 31 cents, according to Thomson Reuters.

But the company gave a forecast below Wall Street’s expectations for the current quarter, even though it is launching several big-name titles during the period. And Chief Financial Officer Eric Brown said in an interview that "Mass Effect 2," the science-fiction epic that launched in late January, has sold 2 million copies so far. EA ran its first-ever Super Bowl ad Sunday to promote the upcoming "Dante’s Inferno."

For the fiscal fourth quarter ending March 31, EA is forecasting a profit of 2 cents to 6 cents per share on an adjusted basis, on revenue of $800 million to $850 million. This is below average analyst estimates of a profit of 13 cents per share on sales of $851 million.

EA said in November it was cutting its work force by 17 percent, or 1,500 people, as it tries to align its business with transformations in the industry. Game development costs are skyrocketing, forcing publishers to sell blockbuster amounts of games to justify the expenses. In turn, EA is creating fewer games — cutting out projects it is less certain can become big hits.

Besides lackluster sales and a decline in consumer spending, EA is also dealing with the changing ways people consume — and pay for — games.

Instead of spending $60 on a shiny new disc, many people are playing free or cheap games online, on their mobile devices and on Facebook. They are spending a few dollars here and there to buy virtual add-ons for the games, or they are signing up for subscription-based online games.

EA has been aggressive about such new revenue streams, and last year bought Playfish Inc., a maker of online social games, for $275 million. While digital content still is a small part of EA’s business, the company’s ability to master online gaming could determine the shape the company is in when game discs go the way of CDs.

• Spain’s Telefonica considers charging Google

MADRID – Spanish telecoms operator Telefonica says it is considering charging Internet search companies like Google and Yahoo for network use.

Speaking Monday at a press conference in the northern city of Bilbao, President Cesar Alierta said companies like Google use a lot of network bandwidth for free, something which was lucky for them but not for Telefonica.

Alierta says his company, which operates in Spain and across Latin America, provides the network, product sale, customer care, installation and maintenance to search engine companies that profit from using them.

He says things had to change. Telefonica spokesman Miguel Angel Garzon told The Associated Press on Monday the ideas expressed by Alierta were not new and had been talked about by many network service providers around the world.