The big stories on ZDNet this week: September 6, 2013

On September 2, Microsoft announced that it was buying out Nokia's devices and services business for $7.2 billion. ZDNet's bureaus from around the U.S., Europe, Asia, and Australia covered the story throughout the week from every angle possible.

Read more: ZDNet Special Report: The Microsoft-Nokia Deal

Related: Microsoft-Nokia deal: 11 quick facts | Does its Nokia buy thwart or fuel a possible Microsoft break-up? | Microsoft's Nokia acquisition: It was 'double down or quit' 

The U.S. Justice Dept. said it was "looking into the issues" raised by an Reuters story, that one of its law enforcement agencies collaborated with the NSA to crack down on alleged drug criminals. Later in the week, more Edward Snowden-supplied leaks detailed Project Hemisphere, confirming earlier reports.

Read more: DOJ probing claims U.S. drug agency 'collaborated' with NSA on intelligence

Related: U.S. spy system XKeyscore allows NSA to 'wiretap anyone' | PRISM: Here's how the NSA wiretapped the Internet | CNET: DEA supplied with access to vast database of AT&T phone records | DEA supplied with access to vast database of AT&T phone records

The latest monthly NetMarketShare reports contain a few eyebrow-raising numbers. Windows 8 is up sharply, XP usage has plummeted, and Google's Chrome browser seems to be falling out of favor, reports ZDNet's Ed Bott. There is a hovering asterisk to account for a key methodology change, however.

Read more: New stats show Windows 8 usage up sharply as XP usage plummets

Related: Microsoft confirms Windows 8.1 RTM; no early access to final bits | Windows 8.1 Enterprise Preview, hands on: Much more than a service pack

With the Nokia deal, Microsoft just got another ARM tablet and a new phablet to add to its hardware arsenal. ZDNet's Mary Jo Foley explores how will these fit with the coming refreshed Microsoft Surface devices, and more analysis from the ZDNet global staff.

Read more: Lumia tablets? Surface phablets? Microsoft's tricky new post-Nokia positioning challenges

Related: Microsoft does not need a Bill Gates redux, it needs an outside perspective | Why Nokia plus Microsoft won't equal Apple | The case against Stephen Elop as Microsoft CEO

Apple is finally ready to talk after dishing out invites to an event this coming Tuesday. Ahead of the media gathering, ZDNet collated everything we know about the next-generation iPhone 5S, the rumored emerging market iPhone 5C, and the redesigned iOS 7.

Read more: Apple sends invites for September 10 event

Related: Apple sends invites for September event: iPhone 5S on deck, what we know so far | Report: Two new iPhone models coming in September | iPhone 5c, iPhone 5s: Connecting up the dots in Apple's plans | 15 most wanted features in the next iPhone 5S

Google has reached into the candy jar once again for the latest moniker of its Android mobile operating system, wrote ZDNet's Rachel King, and announces there have been more than one billion activations of Android-based devices worldwide.

Read more: Google readies Android 'KitKat' amid 1 billion device activations milestone

Related: Nearly half of all Android devices running latest 'Jelly Bean' software | CNET: Android 4.4 KitKat: What's the point of co-branding? | KitKat 4.4 ad pokes fun at Apple designer Jony Ive

The Mega empire is now without its chief, as founder Kim Dotcom steps down in order to focus on fighting his extradition battle with the U.S. government, and to work on "other" projects, including politics.

Read more: Kim Dotcom resigns from Mega to focus on extradition battle, politics

Related: The Megaupload saga continues | Meet Kim Dotcom's Mega CEO | Mega to fill secure email gap left by Lavabit | CNET: Kim Dotcom eyes venture capital fund for privacy startups

The Korean electronics giant announces a new smart watch, becoming one of many in the ongoing race to clamber away from a saturated smartphone market. And as ZDNet's Rachel King notes, following a leak a week before it was launched, it was immediately clear that some may need a little time to warm up to the wearable computing concept.

Read more: Samsung finally unpacks Galaxy Gear smartwatch: By the numbers

Related: If this is Samsung's smart watch, it's already a failure | Samsung's Galaxy Gear smartwatch heading to EE, Phones 4U | Samsung Galaxy Gear smartwatch looks rushed, misses the mark | Wanted: Real convergence instead of 'accessories' like Samsung's Galaxy Gear

Now that Nokia's phone business is in the hands of the Redmond-based software giant, one has to wonder if BlackBerry's enterprise appeal may be something Microsoft would be interested in.

Read more: BlackBerry looking at 'speedy sale': Will Microsoft jump in to save it?

Related: What would Microsoft get by buying BlackBerry? | BlackBerry joins online authentication standards alliance | Five alternative futures for BlackBerry

Lenovo is betting that all laptop buyers will go multimode and meld tablets and PCs, ZDNet's Larry Dignan reports. The company said it plans to launch a high-end smartphone globally to become a leading Android device player.

Read more: Lenovo doubles down on convertible PC bet; Yoga-tizes lineup

Related: Lenovo aims for high-end smartphones with Vibe X | CNET: Lenovo Vibe X joins the 5-inch, Android 4.2 fold | Hands-on with Lenovo's high-res IdeaPad Yoga 2 Pro

A larger iPhone model with a six-inch display may be in the works, according to a new report, up from 5.7-inches claimed in an earlier Reuters report.

Read more: Apple testing six-inch iPhone: report

Related: Apple eyes 5.7 inch iPhone: report | CNET: Why 4.7 inches is the perfect screen size for the next iPhone

More from the Edward Snowden files. British and American intelligence agencies have reportedly broken encryption used to back technologies like SSH, HTTPS, and VPNs by weakening encryption standards, inserting vulnerabilities into vendors' technology, and using supercomputer-backed password crackers.

Read more: U.K., U.S. able to crack most encryption used online

Related: Has the NSA broken our encryption? | In light of the NSA, how to think about encryption | Are small-fry encrypted email ISPs using feds as excuse for closure? | Has the NSA broken SSL? TLS? AES?

ZDNet breaks out every rumor we can think of relating to the iPhone 5S, the rumored emerging market iPhone 5C, and iOS 7, ahead of Tuesday's Apple event.

Read more: Here's everything we're expecting at Apple's iPhone event

Related: iPhone 5c, iPhone 5s: Connecting up the dots in Apple's plans | 15 most wanted features in the next iPhone 5S | CNET: iPhone 5C colorful packaging pops up in leaked photos

The negotiations between Microsoft and Google, and the U.S. government have failed, reports ZDNet's Larry Seltzer, and the two technology giants are proceeding to litigation.

Read more: Microsoft, Google v. NSA lawsuit to proceed

Related: Microsoft and Google to sue government over transparency | CNET: Microsoft, Google to sue over FISA gag order | NSA paid tech firms over Prism, says latest Snowden leak

Yahoo becomes the latest firm to publish its first transparency report in a bid to clear its name in the wake of the mass NSA surveillance scandal.

Read more: Yahoo publishes first transparency report; U.S. made most requests

Related: Twitter Transparency Report sees uptick in removal requests worldwide | Google adds malware site flags to Transparency Report | Google Transparency Report: U.S. accounts for most user data requests