iPhone 5 hits China as Apple market share slips

SHANGHAI (Reuters) – The China release of its iPhone 5 on Friday should win Apple Inc some respite from a recent slide in its share of what is likely already the world’s biggest smartphone market, but its longer-term hopes may depend on new technology being tested by China‘s top telecoms carrier.

Cupertino, California-based Apple has been in talks about a tie-up with China Mobile for four years. A deal with China’s biggest carrier is seen as crucial to improve Apple’s distribution in a market of 290 million users – which is forecast to double this year.

China is Apple’s second-largest and fastest-growing market – it brings in around 15 percent of total revenue – but the company’s failure to strike a deal with China Mobile means it is missing out on a large number of phone users. As the China pie grows, Apple’s sales increase, but without China Mobile, it’s losing ground at a faster rate compared to other brands.

“In absolute terms, this (iPhone 5) launch will certainly result in strong sales for Apple in China. However, in relative terms, I don’t believe it will move the needle enough in market share,” said Shiv Putcha, a Mumbai-based analyst at Ovum, a global technology consultant.

China Mobile and Apple initially said they were separated only by a technical issue – as the Chinese carrier runs a different 3G network from most of the world – but that has evolved into a broader and more complex issue of revenue-sharing.

“China Mobile and Apple still have to solve many issues, such as the business model, articles of cooperation and revenue division, but I believe we will reach an agreement eventually,” China Mobile CEO Li Yue was reported by Chinese media as saying in Guangzhou last week.

Apple China declined to comment. China Mobile said it had no update to the Apple discussions.

STRONG PRE-ORDERS

Apple’s ranking in China’s smartphone market slipped to sixth in July-September, according to research firm IDC, [ID:nL4N09G1QK] but investors, primed to look to China product launches for an uptick in Apple’s quarterly sales, have good headline numbers to digest – more than 300,000 iPhones pre-ordered on one carrier alone. But it’s the lack of a deal with the No.1 carrier that prevents those numbers being stronger.

The iPhone is currently sold through Apple’s seven stores, resellers and through China Unicom and China Telecom – which together have fewer than half the mobile subscribers of bigger rival China Mobile.

“Apple’s market share declined because of the transition between the iPhone 4S and 5. Their market share will recover (with the iPhone 5), but if you don’t have China Mobile, the significant market share gains will be very difficult,” said Huang Leping, an analyst at Nomura in Hong Kong.

TD-LTE: STILL DISTANT

Cutting a deal with a Chinese state-owned carrier may be less optimal than the deals Apple is used to in other markets, and analysts note that China Mobile wouldn’t necessarily open the flood gates for Apple.

Ovum’s Putcha believes Apple and China Mobile will eventually strike a deal – though this would be for an iPhone running on China Mobile’s next-generation network rather than its current 3G network.

Of China Mobile’s 704 million subscribers, only 79 million are on its 3G network, and Apple has been reluctant to sign up to China Mobile’s under-utilized, homegrown TD-SCDMA technology. “Apple likely doesn’t see the return-on-investment in extending themselves for TD-SCDMA,” Putcha said.

China Mobile is currently trialling its next-generation network, TD-LTE, which could be of more interest to Apple, but full-scale commercial use – and an iPhone tie-up – could still be years away.

ANDROID THREAT

Meanwhile, rivals are circling, eating away at Apple’s smartphone market share. Samsung Electronics, Lenovo Group and little-known Chinese brand Coolpad held the top three slots in the third quarter, according to IDC.

All three have relationships with China Mobile and offer smartphone models at different price points. Apple competes exclusively at the high-end, and even there, rivals are rolling out models with China Mobile. Last week, Nokia said it planned to release its latest Lumia smartphone with China’s top carrier, which is also expected to launch Research in Motion’s new Blackberry 10, analysts predict.

“The threat will still come more from the Android camp where they have many vendors already working with China Mobile and offering high-end phones,” said TZ Wong, a Singapore-based IDC analyst.

While these smartphones don’t generate the buzz of a new iPhone, Chinese buyers are not known for their brand loyalty, and this could siphon away users considering an Apple upgrade.

“I’ve used a Blackberry, Android and iOS and, personally, I want to try the Windows 8,” said Andy Huang, a 37-year-old fund manager, who owns most iPad models, an iPhone 4 and a 4S. “I think the Windows 8 is very innovative.”

With a China Mobile deal looking some way off, Apple could always boost market share by offering cheaper models – the basic iPhone 5 will cost 5288 yuan ($ 850) without a contract – though this appears an unlikely route for a high-end brand.

“If they want to expand market share, probably the only way to do it here dramatically would be to put out a lower cost phone,” said Michael Clendenin, managing director at RedTech Advisors. “It’s really uncertain if they’d decide to go that route … Apple’s a mystery in that regard.”

($ 1 = 6.2518 Chinese yuan)

(Additional reporting by the Shanghai Newsroom and Jane Lee; Editing by Kazunori Takada and Ian Geoghegan)

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A Minute With: Director Peter Jackson on shooting “The Hobbit”

LOS ANGELES (Reuters) – After bringing J.R.R. Tolkien‘s “The Lord of the Rings” trilogy to life, filmmaker Peter Jackson is back in the world of Middle Earth with the author’s prequel, “The Hobbit.”

The three-film series is due to open in U.S. theaters on Friday with “The Hobbit: An Unexpected Journey.”

The Oscar-winning director, 51, told Reuters about the 3D film, including the 48 frames per second (fps) format he used, which was widely debated by fans and critics.

Q: You originally intended “The Hobbit” to only be two parts. Why stretch it out to three?

A: “Back in July, we were near the end of our shoot and we started to talk about the things that we had to leave out of the movies. There’s material at the end of ‘The Return of the King’ (the final part of ‘The Lord of the Rings‘ trilogy) in the appendices that takes place around the time of ‘The Hobbit.’

“We were thinking, this is our last chance because it’s very unlikely we’re ever going to come back to Middle Earth as filmmakers. So we talked to the studio and next year we’re going to be doing another 10 to 12 weeks of shooting because we’re now adapting more of Tolkien’s material.”

Q: At what point did you decide you would direct the film yourself after originally handing it to Guillermo del Toro?

A: “At the time (we wrote the script), I was worried about repeating myself and worried that I was competing with myself. I thought it would be interesting to have another director with a fresh eye coming in and telling the story. But after Guillermo left, having worked on script and the production for well over a year at that stage, I was very emotionally attached to it. I just thought, this is an opportunity I’m not going to say no to.”

Q: You hired Gollum actor Andy Serkis to do second unit directing on the film, something he has never done before. What made you hand the task to a novice?

A: “I know how strongly Andy has been wanting to direct. One of the problems with second unit is that you tend to have conservative footage given to you by the director. They play it safe. I knew that I wouldn’t get that from Andy because he’s got such a ferocious energy. He goes for it and doesn’t hold back. I knew that if Andy was the director I would be getting some interesting material, that it would have a life and energy to it.”

Q: What inspired you to make a film in 48 fps?

A: “Four years ago I shot a six or seven minute King Kong ride for Universal Studios’ tram ride in California. The reason we used the high frame rate was that we didn’t want people to think it’s a movie. You want that sense of reality, which you get from a high frame rate, of looking in to the real world. At the time, I thought it would be so cool to make a feature film with this process.”

Q: Not everyone has embraced “The Hobbit” in 48 fps.

A: “For the last year and a half there’s been speculation, largely negative, about it and I’m so relieved to have gotten to this point. I’ve been waiting for this moment when people can actually see it for themselves. Cinephiles and serious film critics who regard 24 fps as sacred are very negative and absolutely hate it. Anybody I’ve spoken to under the age of 20 thinks it’s fantastic. I haven’t heard a single negative thing from the young people, and these are the kids that are watching films on their iPads. These are the people I want to get back in the cinema.”

Q: Why all the hoopla over a frame rate?

A: “Somehow as humans, we have a reaction to change that’s partly fear driven. But there are so many ways to look at movies now and it’s a choice that a filmmaker has. To me as a filmmaker, you’ve got to take the technology that’s available in 2012, not the technology we’ve lived with since 1927, and say how can we enhance the experience in the cinema? How can we make it more immersive, more spectacular?”

Q: George Lucas sold Lucasfilm to Disney for $ 4 billion. Do you think you will sell your New Zealand facility Weta someday?

A: “I would if I want to retire at some stage and want to have a nice easy life, which will hopefully happen one day. But in the foreseeable future, the fact that I’m an owner of my own digital effects facility is a fantastic advantage for me.”

Q: How so?

A: “When we asked the studio if we could shoot ‘The Hobbit‘ at 48 fps, we promised the budget would be the same. But it actually does have a cost implication because you’ve got to render twice as many frames and the rendering takes more time. The fact that we owned Weta and could absorb that in-house was actually part of the reason we were able to do the 48 frames.”

(Editing by Patricia Reaney)

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World’s Population Living Longer, New Report Suggests

A sharp decline in deaths from malnutrition and diseases like measles and tuberculosis has caused a shift in global mortality patterns over the past 20 years, according to a new report, with far more of the world’s population now living into old age and dying from diseases more associated with rich countries, like cancer and heart disease.

The shift reflects improvements in sanitation, medical services and access to food throughout the developing world, as well as the success of broad public health efforts like vaccine programs. The results are dramatic: infant mortality has declined by more than half between 1990 and 2010, and malnutrition, the No. 1 risk factor for death and years of life lost in 1990, has fallen to No. 8.

At the same time, chronic diseases like cancer now account for about two out of every three deaths worldwide, up from just over half in 1990. Eight million people died of cancer in 2010, 38 percent more than in 1990. Diabetes claimed 1.3 million lives in 2010, double the number in 1990.

But while developing countries made big strides – the average age of death in Brazil and Paraguay, for example, jumped to 63 in 2010, up from 28 in 1970 – the United States stagnated. American women registered the smallest gains in life expectancy of all high-income countries between 1990 and 2010. The two years of life they gained was less than in Cyprus, where women gained 2.3 years of life, and Canada, where women gained 2.4 years. The slow increase caused American women to fall to 36th place in the report’s global ranking of life expectancy, down from 22nd in 1990.

“It’s alarming just how little progress there has been for women in the United States,” said Christopher Murray, director of the Institute for Health Metrics and Evaluation, a health research organization financed by the Bill and Melinda Gates Foundation at the University of Washington that coordinated the report. Rising rates of obesity among American women and the legacy of smoking, a habit women in this country formed later than men, are among the factors contributing to the stagnation, he said.

The World Health Organization issued a statement Thursday saying that some of the estimates in the report differ substantially from those done by United Nations agencies, though others are similar. All comprehensive estimates of global mortality rely heavily on statistical modeling because only 34 countries – representing about 15 percent of the world’s population – produce quality cause-of-death data.

Health experts from more than 300 institutions contributed to the report, which measured disease and mortality for populations in more than 180 countries. It was published Thursday in the Lancet, a British health publication.

The one exception to the trend was sub-Saharan Africa, where infectious diseases, childhood illnesses and maternal causes of death still account for about 70 percent of all illness. In contrast, they account for just one-third in South Asia, and less than a fifth in all other regions. Sub-Saharan Africa also lagged in mortality gains, with the average age of death there rising by fewer than 10 years from 1970 to 2010, compared with a more than 25-year increase in Latin America, Asia and North Africa.

The change means that people are living longer, an outcome that public health experts praised. But it also raises troubling questions. Behavior affects people’s risks of developing noncommunicable diseases like cancer, heart disease and diabetes, and public health experts say it is far harder to get people to change their ways than to administer a vaccine that protects children from an infectious disease like measles.

“Adult mortality is a much harder task for the public health systems in the world,” said Colin Mathers, a senior scientist at the World Health Organization in Geneva. “It’s not something that medical services can address as easily.”

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S.&P. Streak Comes to an End on Fiscal Worries

The Standard & Poor’s 500-stock index ended its six-day winning streak Thursday, retreating as worries intensified that Washington’s fiscal negotiations were dragging on with little progress.

Anxiety about the talks between Democrats and Republicans was enough to offset encouraging data on retail sales and jobless claims.

Investors are concerned that tax increases and spending cuts, set to begin in 2013 if a deal is not reached in Washington, will hurt growth. The stock market had taken the heated talk in stride lately, but downbeat remarks from the House speaker, John A. Boehner of Ohio, prompted some selling Thursday.

Mr. Boehner accused President Obama of “slow walking” the economy toward the automatic tax increases and spending cuts that will occur on Jan. 1, 2013, if no deal is reached. He was scheduled to meet with Mr. Obama later on Thursday.

“There is no conviction here and Boehner’s comments — as harsh as they were — were realistic,” said Jason Weisberg, managing director at the Seaport Securities Corporation in New York.

“The fiscal cliff is already built in,” Mr. Weisberg said. “That being said, people don’t like to be told the apocalypse is coming over and over and over again. The real players in this market have already closed their books.”

After nearing a 1 percent decline for the day, the S.& P. 500 pared losses late in the session. The index had posted six consecutive sessions of gains through Wednesday, and at one point Wednesday, the S.& P. 500 touched its highest intraday level since Oct. 22.

While the Federal Reserve’s announcement on Wednesday of a new round of economic stimulus bolstered stocks, Chairman Ben Bernanke’s comments that monetary policy would not be sufficient to offset the impact of the fiscal crisis weighed on sentiment.

The Dow Jones industrial average tumbled 74.73 points, or 0.56 percent, to 13,170.72 at the close. The S.& P. 500-stock index fell 9.03 points, or 0.63 percent, to 1,419.45. The Nasdaq composite index slid 21.65 points, or 0.72 percent, to end at 2,992.16.

Apple’s stock, down 1.7 percent at $529.69, was among the biggest drags on the Nasdaq, while I.B.M., down 0.5 percent at $191.99, was among the biggest weights on the Dow. A federal jury in Delaware Thursday found that Apple’s iPhone infringed on three patents owned by MobileMedia Ideas.

Among the day’s biggest gainers, Best Buy shares shot up 15.9 percent to $14.12 after a report that the company’s founder, Richard M. Schulze, was expected to offer to buy the consumer electronics retailer this week.

The energy and information technology sectors were the S.& P.’s weakest performers, with the S.& P. energy index declining 0.9 percent. Shares of the American refining company Phillips 66 lost 1.6 percent to $52.21.

The day’s data sent some positive signals on the economy, with weekly claims for jobless benefits dropping to nearly the lowest level since February 2008, and retail sales rising in November after an October decline, improving the picture for consumer spending.

In Europe, European Union finance ministers reached agreement to make the European Central Bank the bloc’s top banking supervisor, which could increase confidence in the ability of European Union leaders to confront the euro zone’s sovereign debt crisis.

The Treasury’s 10 year note fell 9/32 to 99 1/32, with the yield rising to 1.73 from 1.70 on Wednesday.

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'Straw' buyer of arms linked to border agent's death is sentenced

PHOENIX — A federal judge sentenced a Phoenix man Wednesday to nearly five years in prison for purchasing firearms for a Mexican drug cartel, triggering a chain of events that included the death of an elite Border Patrol agent and the unraveling of the failed federal gun-tracking operation called Fast and Furious.

Jaime Avila Jr., 25, was a "straw purchaser" of the firearms for the cartel, and his purchases included two rifles found at the scene of the death of Border Patrol Agent Brian A. Terry, who was killed two years ago this week in the desert south of Tucson.

Avila purchased 52 firearms over 10 months. Judge James A. Teilborg sentenced Avila to 57 months in prison for what he called running "weapons of war." Avila struck a deal with the federal government and pleaded guilty to a variety of weapons charges.

FULL COVERAGE: Fast and Furious

At the hearing, a cousin of Terry spoke for the slain agent's family, asking the judge to make an example of Avila.

"We believe that Mr. Avila initiated a deadly domino effect when he illegally bought those weapons and then delivered them to people who would ultimately put them in the hands of Brian's killers," said the cousin, Robert Heyer, reading from a statement.

In turn, Avila's attorney pleaded with the judge to give her client a lighter sentence, saying he was remorseful and only dabbled in drug running to feed his methamphetamine addiction.

"At the point that Mr. Avila became aware of his of connection to the incident I think he was shocked and dismayed.... He had no idea his behavior would lead to such great lengths," defense attorney Candice Shoemaker said.

Avila was one of about 20 straw buyers that were the focus of Fast and Furious, an investigation conducted by the Phoenix office of the federal Bureau of Alcohol, Tobacco, Firearms and Explosives. The investigation allowed weapons to be illegally sold in the United States so they could later be tracked across the border to Mexican drug cartels. The intent was to arrest cartel leaders, but most of the firearms disappeared. The program eventually was shut down.

During and after the court hearing, family members of Avila and Terry painted pictures of their loved ones and how their lives had collided. One, the father of a 19-month-old boy, had a drug addiction. The other, described as the backbone of his family, was nicknamed "Superman" by his Border Patrol colleagues.

On Jan. 16, 2010, Avila walked into the Lone Wolf Gun Club in Glendale, Ariz., and illegally purchased three rifles, plopping down $1,500 in cash. Nearly a year later, two of the weapons were found in a desolate section of the Arizona desert after they were dropped by the men who are suspected of killing Terry on Dec. 14, 2010.

Heyer, also chairman of the Brian Terry Foundation, described Terry as a strong, competitive, courageous and handsome man who was very patriotic. The Michigan native served in the Marine Corps after high school and went to college, where he received a degree in criminal justice. He went on to become part of the elite Tactical Unit for the Border Patrol, known as BORTAC.

"At age 40, he had much to look forward to, which included getting married and starting a family; but for now, he was living his dream," Heyer said.

Terry was supposed to fly back to Michigan for Christmas after completing his shift the night of his death. True to his meticulous attention to detail, Terry had already mailed his family's Christmas gifts. The presents trickled in the same week his family received his body for burial.

"With each delivery, we felt the indescribable pain of Brian's death," Heyer said.

Avila's family made no excuses for him and described Avila as a son and brother with a "good heart" who ended up running with the wrong crowd and battling a meth habit. They said they made no excuses for their loved one but stated that Avila didn't know that the consequences to his drug running would lead to death.

"My son is not an assassin," Avila's mother, Irene Rodriguez, said after the hearing.

Avila left behind a 19-month-old son, Jayden, and his family said he had vowed to clean up his life while in prison to serve as a role model for his boy.

"His son is his pride and joy at this moment," sister Beatriz Avila said. She extended her condolences to the Terry family and said she was glad that the sentencing was over.

ALSO:

Whites to lose majority status by 2043, the census projects

Suspect in Etan Patz case pleads not guilty to murdering boy

Oregon mall shooting survivor awake, 'a fighter,' surgeon says

cindy.carcamo@latimes.com

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How “Life of Pi” animators visualized Ang Lee’s blank slate

LOS ANGELES (TheWrap.com) – “Life of Pi” is a movie that has the proverbial cast of thousands… of animals, that is. In one shot set on the ocean, there are 40,000 flying fish. In another one set on a floating island, there are 60,000 meerkats. And not one of them was living and breathing, of course.

“No real meerkats were used,” senior animation supervisor Erik-Jan De Boer told the audience at an effects-themed Q&A following TheWrap’s screening of the movie at the Landmark Theatre on Monday night. “Except of course we went to meerkat sanctuaries and zoos to shoot a lot of reference footage…”

“And the two of us watched every episode of ‘Meerkat Manor,’” interrupted visual effects supervisor Bill Westenhofer. “We were gonna watch one, but it gets addictive.”

That was about all the time these two had to indulge in reality TV during the long gestation and post-production of Pi, which establishes a new benchmark for awe-inspiring digital trickery – particularly in 3D, or “stereo,” as Westenhofer and De Boer refer to the effects-complicating process.

“In total,” De Boer told TheWrap’s editor-in-chief Sharon Waxman, “we animated 580 animals in about 290 shots for the movie, which includes a giraffe, a fox, a fish, and of course the hyena and orangutan.” Not to mention the little matter of the tiger, “Richard Parker,” whose appearances as one of the movie’s co-leads are 15 percent real, 85 percent digital.

That’s not including the aforementioned meerkat and flying fish extras, brought to life via a software program appropriately titled Massive. (If only it had been around in Cecil B. DeMille‘s day.)

“The flying fish sequence is where we start to take some artistic liberties, since Pi’s telling you a tale,” said Westenhofer. “Maybe there were a thousand flying fish in reality, or even a hundred, but you’re seeing his mind’s eye, which saw this multitude, so we have 40,000 in one particular spot. The Massive software is almost artificial intelligence, where you write a little program that’s the brain for each individual fish, and it decides if it’s going to hop out of the water, and how long it’s going to fly; if it sees someone in its path, it does avoidance.”

But before any of that was animated, there was the live-action filming that took place on a 70 meter-by-30 meter wave tank that director Ang Lee had specially built for the film. And there, said Westenhofer, “you had (star) Suraj Sharma on a boat with two guys in rubber rafts just chucking rubber fish at him as hard as they possibly can. It’s a good mixture of the low-tech and the high-tech.”

Of course, it wasn’t fish but previous experience with big cats that got Rhythm & Hues the assignment from Lee to go from lions to tigers and Pi. “He knew we had done the lion in the first Narnia movie. He asked, ‘Does a digital character look more or less real in 3D?’ We looked at each other and thought that was a pretty good question.”

As well as a leading one, since Lee had already made the decision at that point, in 2009, to shoot in 3D. “We took one of the shots and rendered it in stereo and said ‘Yeah, it gives it a little more presence and makes it more real.’” Good answer! “That was the start of our relationship with him.”

Although “Life of Pi” doesn’t exactly go for documentary-style realism, every effort was made to keep the tiger’s actions and reactions to what experts and trainers told them a creature would really do in those situations. Not having him spout any Aslan-style aphorisms was a nice start on that de-anthropomorphizing.

“We always strive for photorealism,” said De Boer – even when they’re working on a Narnia or Cats and Dogs. “Motion-wise we strive for perfect physicality and try to get that animal to behave as characteristically as possible – and then we always have to make them talk or dance or do something really weird, and the realism goes out the window and everybody knows that we were there. For me what was really cool about this movie is not only do we stick with the real animal but we also have to intercut it with a live-action animal, so that made the challenge for us that much bigger.”

Added Westenhofer, “We told the crew we wanted to work ourselves out of any recognition by making it look as real as possible.”

It was at least as big of a challenge, as far as Westenhofer was concerned, to make the digital waves match or amplify the real tank waves – and to create the film’s skies completely from scratch. “There’s not many films where we spend this much time on the water. I think ‘Old Man and the Sea’ harkens back! But even with ‘Titanic,’ you’ll see the water and then go inside.” For much of “Life of Pi,” “inside” amounts to a few furtive peeks under a tarp.

Hence what, on a project like this, becomes a fine line where digital effects providers are also, to some extent, taking over the role of cinematography and art direction. Going to work on filling up these blue-screen shots, the Rhythm & Hues people might well have been humming Bruce Springsteen’s “Empty Sky” to themselves.

“What I’m absolutely most proud of is with these visual effects is that we were given a blank slate for a lot of these shots,” Westenhofer told the audience. “We were given a boat in front of a blue screen, and it was the visual effects team who really were a lot of the creative innovators on the movie. Certainly it was Ang’s vision we were creating. But we’d start a shot, and though Ang absolutely knows what he wants, his communication is sometimes not as specific as you want. Instead of saying ‘I want a three-quarters cloudy sky with yellow over here and some blue,’ he’d say ‘I want a pensive sky.’

Or, ‘I want it to be operatic.’ So it would be our job to go translate that, and the team did a great job of supplying that.

“And Claudio Miranda did an awesome, awesome job on the cinematography, but a lot of the cinematography on the ocean is digital effects.”

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U.S. designates Syria rebel group a terrorist organization

WASHINGTON — The Obama administration has formally designated a rebel group fighting in Syria as a terrorist organization in an effort to marginalize the Al Qaeda affiliate and reduce its chances of gaining power should the Syrian government fall.

Blacklisting Al Nusra Front is one of several diplomatic moves planned by the administration to try to maneuver moderate opposition groups into position to shape a pro-Western government if President Bashar Assad is ousted.

U.S diplomats are to take another step toward that end Wednesday at a meeting in Morocco, where the U.S. is expected to formally recognize a recently formed coalition of rebel groups — the National Coalition of Syrian Revolutionary and Opposition Forces — as Syria's legitimate government-in-waiting.

"We've made a decision that the Syrian opposition coalition is now inclusive enough, is reflective and representative enough of the Syrian population that we consider them the legitimate representative of the Syrian people in opposition to the Assad regime," President Obama told ABC News on Tuesday in advance of the Morocco meeting.

U.S. officials acknowledge, however, that the umbrella group has limited influence with the dozens of insurgent groups that have emerged in Syria's nearly 21-month-old civil war.

Most of those insurgent groups are believed to be secular in nature, but administration officials described Al Nusra Front as a wing of the group Al Qaeda in Iraq, which was responsible for the deaths of hundreds of Americans during the height of the Iraq war.

"Extremists fighting the Assad regime are still extremists, and they have no place in the transition that will come," a senior administration official, who declined to be identified because of the diplomatic sensitivity of the subject, said Tuesday.

U.S. officials said they hoped that blacklisting Al Nusra Front would persuade other opposition militias in Syria to steer clear of it and prompt Mideastern allies that may be arming its fighters to stop.

But some Syrian opposition leaders denied that Al Nusra Front is connected to Al Qaeda. Their comments raised the possibility that the U.S. move could backfire and increase rebel unhappiness with the United States. Some rebel commanders feel Washington has let them down by failing to provide military support.

Many militias respect Al Nusra Front's fighting ability and have gained access to captured weapons by collaborating with the group. At least 29 opposition groups have called for demonstrations Friday to show their support for Al Nusra Front.

An opposition activist in Morocco preparing for the meeting on Syria called the blacklisting a mistake that was supposedly based on intercepted communications between Al Nusra Front and Al Qaeda. Many of its fighters "have no links to Al Qaeda," said the activist, who asked not to be identified by name.

Farouk Tayfour, the deputy leader of the Muslim Brotherhood of Syria, said the designation was "very wrong and too hasty.... It is too early to categorize people inside Syria this way, considering the chaos and the gray atmosphere in the country," he told Reuters news service.

The terrorist designation will freeze the group's foreign assets and bar Americans from knowingly providing support to it. U.S. officials acknowledged that the group probably relies little, if at all, on American support.

But officials said the blacklisting will make it harder for known Al Nusra Front members to cross borders, which could hamper their operations, and will alert Syrians to a group supporting a radical Islamist ideology that most in the country don't share.

"We have called them out," a second senior administration official said.

paul.richter@latimes.com

Special correspondent Rima Marrouch, on assignment in Marrakech, Morocco, contributed to this report.

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Lawsuit claims A&E’s ‘Storage Wars’ show is rigged

LOS ANGELES (AP) — Some of the valuables found hidden in abandoned lockers on A&E’s “Storage Wars” have been added by producers to deceive viewers, a former cast member of the show claims in a lawsuit filed Tuesday.

David Hester‘s suit claims producers have added a BMW Mini and newspapers chronicling Elvis Presley‘s death to lockers in order to build drama for the show and that his complaints about the practices led to his firing.

Hester is seeking more than $ 750,000 in his wrongful termination, breach of contract and unfair business practices lawsuit. A&E Television Network declined comment, citing the pending lawsuit.

“Storage Wars” follows buyers who bid for abandoned storage lockers hoping to find valuables tucked inside.

“A&E regularly plants valuable items or memorabilia,” the lawsuit states. Hester’s suit claims he was fired from participating in the series’ fourth season after expressing concerns that manipulating the storage lockers for the sake of the show was illegal.

He claims that producers stopped adding items to his units after his initial complaints but continued the practice for other series participants. The lawsuit alleges entire units have been staged and the practice may violate a federal law intended to prevent viewers from being deceived when watching a show involving intellectual skills.

“Storage Wars” depicts buyers having only a few moments to look into an abandoned unit before deciding on whether to bid on it at auction. The lawsuit claims some of the auction footage on the show is staged.

Hester, known as “The Mogul” on the show, has been buying abandoned storage units and re-selling their contents for 26 years, according to the suit.

Nielsen Co. has ranked “Storage Wars” among cable television’s top-ranked shows several times since its 2010 debut.

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Rate of Childhood Obesity Falls in Several Cities

Jessica Kourkounis for The New York Times

At William H. Ziegler Elementary in Northeast Philadelphia, students are getting acquainted with vegetables and healthy snacks.

PHILADELPHIA — After decades of rising childhood obesity rates, several American cities are reporting their first declines.

The trend has emerged in big cities like New York and Los Angeles, as well as smaller places like Anchorage, Alaska, and Kearney, Neb. The state of Mississippi has also registered a drop, but only among white students.

“It’s been nothing but bad news for 30 years, so the fact that we have any good news is a big story,” said Dr. Thomas Farley, the health commissioner in New York City, which reported a 5.5 percent decline in the number of obese schoolchildren from 2007 to 2011.

The drops are small, just 5 percent here in Philadelphia and 3 percent in Los Angeles. But experts say they are significant because they offer the first indication that the obesity epidemic, one of the nation’s most intractable health problems, may actually be reversing course.

The first dips — noted in a September report by the Robert Wood Johnson Foundation — were so surprising that some researchers did not believe them.

Deanna M. Hoelscher, a researcher at the University of Texas, who in 2010 recorded one of the earliest declines — among mostly poor Hispanic fourth graders in the El Paso area — did a double-take. “We reran the numbers a couple of times,” she said. “I kept saying, ‘Will you please check that again for me?’ ”

Researchers say they are not sure what is behind the declines. They may be an early sign of a national shift that is visible only in cities that routinely measure the height and weight of schoolchildren. The decline in Los Angeles, for instance, was for fifth, seventh and ninth graders — the grades that are measured each year — between 2005 and 2010. Nor is it clear whether the drops have more to do with fewer obese children entering school or currently enrolled children losing weight. But researchers note that declines occurred in cities that have had obesity reduction policies in place for a number of years.

Though obesity is now part of the national conversation, with aggressive advertising campaigns in major cities and a push by Michelle Obama, many scientists doubt that anti-obesity programs actually work. Individual efforts like one-time exercise programs have rarely produced results. Researchers say that it will take a broad set of policies applied systematically to effectively reverse the trend, a conclusion underscored by an Institute of Medicine report released in May.

Philadelphia has undertaken a broad assault on childhood obesity for years. Sugary drinks like sweetened iced tea, fruit punch and sports drinks started to disappear from school vending machines in 2004. A year later, new snack guidelines set calorie and fat limits, which reduced the size of snack foods like potato chips to single servings. By 2009, deep fryers were gone from cafeterias and whole milk had been replaced by one percent and skim.

Change has been slow. Schools made money on sugary drinks, and some set up rogue drink machines that had to be hunted down. Deep fat fryers, favored by school administrators who did not want to lose popular items like French fries, were unplugged only after Wayne T. Grasela, the head of food services for the school district, stopped buying oil to fill them.

But the message seems to be getting through, even if acting on it is daunting. Josh Monserrat, an eighth grader at John Welsh Elementary, uses words like “carbs,” and “portion size.” He is part of a student group that promotes healthy eating. He has even dressed as an orange to try to get other children to eat better. Still, he struggles with his own weight. He is 5-foot-3 but weighed nearly 200 pounds at his last doctor’s visit.

“I was thinking, ‘Wow, I’m obese for my age,’ ” said Josh, who is 13. “I set a goal for myself to lose 50 pounds.”

Nationally, about 17 percent of children under 20 are obese, or about 12.5 million people, according to the Centers for Disease Control and Prevention, which defines childhood obesity as a body mass index at or above the 95th percentile for children of the same age and sex. That rate, which has tripled since 1980, has leveled off in recent years but has remained at historical highs, and public health experts warn that it could bring long-term health risks.

Obese children are more likely to be obese as adults, creating a higher risk of heart disease and stroke. The American Cancer Society says that being overweight or obese is the culprit in one of seven cancer deaths. Diabetes in children is up by a fifth since 2000, according to federal data.

“I’m deeply worried about it,” said Francis S. Collins, the director of the National Institutes of Health, who added that obesity is “almost certain to result in a serious downturn in longevity based on the risks people are taking on.”

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Daily Stock Market Activity

Stocks rose on Tuesday, led by gains in technology companies, helping the Standard & Poor’s 500-stock index to end at its highest level since Election Day.

A 2.18 percent gain, to $541.39, in Apple’s stock lifted the Nasdaq composite index, as the company rebounded from a week in which investors took profits before a possible tax increase next year. Before Tuesday’s trading, Apple shares had lost 25 percent from an intraday high hit in September.

Stocks pared some gains by late afternoon as more news on the negotiations over a fiscal policy in Washington emerged. The Senate majority leader, Harry Reid, said it would be difficult to reach an agreement resolving tax increases and spending cuts before Christmas.

“There’s been a real explosion in anxiety over this thing,” said James Dailey, portfolio manager of Team Asset Strategy Fund in Harrisburg, Pa. “Because markets have become the way they are, you’ve got people just stepping back.”

The Dow Jones industrial average rose 78.56 points, or 0.6 percent, to 13,248.44.

The Standard & Poor’s 500-stock index was up 9.29 points, or 0.65 percent, to 1,427.84.

The Nasdaq composite index was up 35.34 points, or 1.18 percent, at 3,022.30.

Other major tech stocks also rose. Texas Instruments gained 4 percent, to $31.01, after raising its profit target late Monday. That helped other chip makers rally. The PHLX Semiconductor index was up 1.9 percent. Microsoft rose 1.41 percent, to $27.32.

Retailers like the luggage maker Tumi Holdings and Michael Kors Holding gained after a positive report from Goldman Sachs Equity Research. Tumi was up 4.73 percent, to $21.92, and Michael Kors gained 2.35 percent, reaching $50.92.

The discount retailers Dollar General and Family Dollar declined. Dollar General, down 7.8 percent, to $42.94, said it expected margins to be under pressure in 2013. Family Dollar shares dropped 8.36 percent, to $64.68.

The Treasury is selling its remaining stake in the insurer American International Group. Shares of AIG were up 5.7 percent at $35.26.

The Fed began a two-day policy-setting meeting on Tuesday. The central bank is expected to announce a new round of Treasury bond purchases when the meeting ends on Wednesday. They will replace its Operation Twist stimulus, which expires at the end of the year.

Interest rates were higher. The Treasury’s benchmark 10-year note fell 11/32, to 99 23/32, and the yield rose to 1.66 percent, from 1.62 percent late Monday.

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