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Apple’s Mac Slump Continues, Sales Tumble 12%

April 29, 2016 by mphillips  
Filed under Computing

Apple revealed that it sold 4 million Macs in the March quarter, a 12% decline from the same period the year before, and a larger contraction than for the personal computer business as a whole.

The year-over-year downturn in Mac sales was the second straight down quarter, and excepting a brutal 22% drop at the end of 2012, the largest since Apple introduced the iPhone in 2007.

Analysts at IDC and Gartner earlier this month pegged the continued contraction of the PC industry at 11.5% and 9.6%, respectively. Both also missed the actual Mac number for the quarter in their forecasts for Apple, overestimating by 11% to 13%: IDC had tapped shipments at 4.5 million, while Gartner said it was 4.6 million.

Apple had been on an extended streak of besting the PC average, with sometimes-impressive gains during the four-years-and-counting slump of the overall market. But the March quarter’s results put an end to the years-long run, which the Cupertino, Calif. company often touted.

Neither CEO Tim Cook or CFO Luca Maestri mentioned the end of the streak in Tuesday’s earnings call with Wall Street.

“It was a challenging quarter for personal computer sales across the industry,” said Maestri, stating the obvious.

Cook said that Mac sales “met our sell-in expectations” and added that he remained optimistic about Apple’s computer business, a sentiment a CEO is duty-bound to share. “We’re confident in our Mac business and our ability to continue to innovate and gain share in that area,” Cook said.

But Mac-generated revenue for the quarter was $5.1 billion, 9% lower than the same period in 2015, and the smallest amount recorded for the line in almost three years.

Macs accounted for 10.1% of Apple’s total revenue of $50.1 billion, but the computer group slipped to No. 3 on the company’s list, behind — by a country mile — the iPhone (accounting for 65% of all revenue) and, for the first time, the relatively new Services category, which contributed 11.8% of all incoming dollars.

 

 

 

Is Nintendo Making A Mistaking With The NX?

April 29, 2016 by Michael  
Filed under Gaming

Nintendo has confirmed that its next-gen console, the Nintendo NX, will launch in March 2017.

Causing many to screw up their Christmas lists, the company told shareholders during its earnings call on Tuesday: “For our dedicated video game platform business, Nintendo is currently developing a gaming platform codenamed ‘NX’ with a brand-new concept. NX will be launched in March 2017 globally.”

Probably also causing some to cancel a trip to Los Angeles, Nintendo said that the NX will not be demonstrated at the upcoming E3 video games conference in June, despite speculation that Sony plans to show off its so-called PlayStation 4.5 console.

Nintendo’s keynote at the games show will focus instead on the next Legend of Zelda game, which will launch simultaneously on the Wii U and Nintendo NX in 2017. Rumour has it that Smash Bros 4, Splatoon and Super Mario Maker are all set to receive an NX makeover too.

A launch is now less than a year away, but we still don’t know much about the Nintendo NX, which Nintendo confirmed this week is just a codename for the incoming console. However, rumour claims that it will arrive as a hybrid between a home console and a mobile games console to sit alongside the New Nintendo 3DS.

Nintendo president and CEO Tatsumi Kimishima reiterated in December last year that the company is “not building the next version of Wii or Wii U” and that the device will be something “unique and different”.

News of the Nintendo NX’s launch date no doubt came as the firm looked to play down the fact that its profits fell 61 per cent year over year. Worked, didn’t it?

Courtesy-TheInq

 

Apple Optimistic About iPhone SE Sales

April 28, 2016 by mphillips  
Filed under Mobile

After experiencing its first-ever drop in iPhone sales, Apple Inc sought to reassure investors by saying its latest and cheapest model was in strong demand after being launched in late March. Some retailers and suppliers in Asia aren’t so sure.

In a Reuters survey of 10 retailers in Hong Kong, Beijing, Shanghai and Shenzhen, seven – including four Apple Stores – reported solid early demand, but three third-party retailers said sales were weak. Two suppliers of components for Apple phones, including the new iPhone SE, said they were seeing lower orders.

“I’ve been dealing with iPhones for five to six years now. This current quarter for Apple feels weak,” said an executive at a Taiwan-based company whose components are used in iPhones including the SE model, which markets for $399. “Our current shipment situation for Apple is not like the last two years. There are more iPhone models, but the total volume of iPhones is falling.”

Such a mixed outlook from Greater China, its most important market after the United States and generator of a quarter of the company’s revenue, could be a major cause of concern for Apple.

The company’s revenue from the region, which includes Hong Kong and Taiwan, dropped 26 percent in the March quarter, making it the weakest region in the world.

“iPhone is still popular but sales have dropped because… there’s no new model and the SE is similar to 5C. So it doesn’t sell well,” said Zhu You Peng, a salesman at Apple product reseller Xiongyu in Shenzhen. The 5C was Apple’s last attempt to produce a cheaper phone, back in 2013.

Zhu said it sold around 300 iPhones per month last year but the number has dropped to around 100-200 this year.

That view contrasts with upbeat comments about the phone from Apple’s Chief Financial Officer Luca Maestri on Tuesday.

“The situation right now around the world is that we are supply-constrained,” he told Reuters, referring to the iPhone SE. “The demand has been very, very strong.”

The iPhone SEs are sold out in Apple’s own stores in mainland China and customers have to wait about three weeks to get the product delivered by Apple, according to Apple’s websites. The size of the original supplies to the stores is unclear.

 

 

 

Netflix International Subscriber Growth Slows

April 21, 2016 by mphillips  
Filed under Consumer Electronics

Streaming video service Netflix Inc forecast U.S. and international subscriptions would grow at a slower pace than Wall Street expected this quarter, causing its stock price to tumble by 8 percent earlier in the week.

Netflix said it expected to add about 500,000 customers in the United States in the second quarter that ends in June, compared with Wall Street targets of 586,000, according to FactSet StreetAccount. The forecast includes a “modest impact” from the beginning of a price increase for its monthly movie and TV subscription service, the company said.

The company known for its original shows including “Orange is the New Black” and “House of Cards” said it expected to add about 2 million subscribers in markets outside the United States, versus analyst expectations of 3.5 million, according to FactSet. It also reported results for the first quarter, when subscriptions outpaced its own target.

Netflix is prone to large stock price swings as investors bet on the possible success of its mission to redefine television viewing around the world.

The company’s long-term results depend in large part on how fast and profitably it expands. Netflix has launched in almost every country in the world, at a substantial cost, and now faces the task of adapting the service to different markets and cultures as competitors also rush in.

In January, Netflix went live in more than 130 countries, a huge global push by Chief Executive Reed Hastings to counter slowing growth in the United States.

Initial sign-ups were limited in some countries because the service at this point offers only English-language content and does not accept all of the local payment options.

 

 

Intel To Cut 12,000 Jobs As PC Market Slowdown Continues

April 21, 2016 by mphillips  
Filed under Computing

Intel Corp announced that it will eliminate up to 12,000 jobs globally, or 11 percent of its workforce, as it refocuses its business towards making microchips that power data centers and Internet connected devices and away from the declining personal computer industry it helped found.

Tech companies including the former Hewlett Packard Co and Microsoft Corp have reorganized in the face of the PC industry decline. Many new tech users around the world turn to mobile phones for their computing needs, and corporations increasingly rely on big machines rather than desktop models to run their businesses. Global personal computer shipments fell 11.5 percent in the first quarter, tech research company IDC said on Monday.

Intel, the world’s largest chipmaker, lowered its revenue forecast for the year. It now expects revenue to rise in mid-single digits, down from its previous forecast of mid- to high-single digits.

Most of Intel’s factories are in the United States, although it did not identify where cuts would be focused geographically. It said it would record a pretax restructuring charge of $1.2 billion in the second quarter and expected annual savings of $1.4 billion per year starting mid-2017.

The company also said Chief Financial Officer Stacy Smith will move to a new role leading sales, manufacturing and operations. Intel said it would begin a formal search process for a new CFO.

Smith said that Intel now expects the PC market to decline by a percentage in the high single digits in 2016 versus a prior forecast of a mid single-digit decline. Declines in China and other emerging markets are also leading to greater than anticipated reductions in worldwide PC supply chain inventory, Intel Chief Executive Brian Krzanich said on a conference call.

 

 

Britain’s Daily Mail Said To Be Bidding For Yahoo

April 12, 2016 by mphillips  
Filed under Around The Net

Britain’s Daily Mail is holding discussions with potential partners to mount a joint bid for Yahoo’s internet assets, eyeing a plan to acquire the troubled U.S. Internet pioneer to help boost advertising revenues from the Mail’s globally popular online news site.

The parent company of the British newspaper, the Daily Mail & General Trust, said on Monday that it was in early stage discussions with several parties about a possible bid for Yahoo, confirming a Wall Street Journal report it had approached private equity buyers to team up.

“We have been in discussions with a number of parties who are potential bidders,” a spokeswoman for DailyMail.com said in an emailed statement, declining to name the private equity firms or give any financial details.

DailyMail.com and MailOnline are the celebrity-focused news websites of the right-leaning London-based Daily Mail newspaper. Globally the websites attract 14 million visitors a day, putting them among the world’s most popular English language news sites.

Buying Yahoo’s assets – which range from search and email to news, sports, photos and other properties – would expand DailyMail.com’s reach and improve its digital ad revenues, which for its 2015 financial year came in at 73 million pounds ($104 million), a tenth of the company’s overall annual turnover.

Liberum analyst Ian Whittaker said a deal with Yahoo would be positive for the company, helping it sell more U.S. advertising and reducing its dependence on shrinking advertising sales from its newspaper business in Britain.

“The U.S. has been the main driver of digital growth for Daily Mail & General Trust, whilst traffic has grown well they haven’t quite monetized this traffic as successfully as they would have liked,” Whittaker said.

Daily Mail & General Trust PLC’s  potential bid could take one of two forms, according to the WSJ report, citing people familiar with the matter. In one scenario, a private-equity partner would acquire Yahoo’s core web business, with the Mail taking over the news and media properties.

In the other scenario, the private-equity firm would acquire Yahoo’s core web business and merge its media and news properties with the Mail’s online operations. The merged units would form a new company that would be run by the Mail and give a larger equity stake to the Mail’s parent company than under the first scenario, the report said.

Bids for Yahoo are due on April 18, in an auction which is likely to be hotly-contested.

 

 

 

Samsung’s Galaxy S7 Aided In Quarterly Profit Bump

April 8, 2016 by mphillips  
Filed under Mobile

Samsung Electronics Co Ltd recorded a 10 percent jump in quarterly profit on Thursday – a sign of robust early sales for its new Galaxy S7 smartphones although doubts abound whether momentum can be maintained in the face of new rival offerings.

The South Korean tech giant’s estimate for first-quarter operating profit handily beat market forecasts and has boosted hopes that its struggling mobile business will post its first annual profit gain in three years, also benefiting from an improved performance for mid-to-low tier devices and cost-cutting efforts.

Samsung said January-March operating profit was likely 6.6 trillion won ($5.7 billion), well above the 5.6 trillion won profit tipped by a Thomson Reuters StarMine SmartEstimate derived from a survey of 23 analysts.

The firm will not disclose a full breakdown of its results until late April, and gave no comment on the performance of its business divisions.

More than a dozen brokerages had lifted forecasts for Samsung earnings since late March encouraged by reports of better-than-expected sales of its Galaxy S7 models, which boast an improved camera, waterproofing and microSD storage support. Samsung’s mobile business was probably the top earner for the first time in seven quarters, analysts say.

A decline in the value of the South Korean won is also expected to help lift the firm’s first-quarter bottom line.

But even so, competition from new products such as Apple Inc’s recently launched iPhone SE and Huawei Technologies Co Ltd’s upcoming flagship P9 phone are tempering investor enthusiasm.

“First quarter earnings will be the peak this year,” said HMC Investment analyst Greg Roh, adding that marketing costs for the mobile business will rise in the next quarter, pushing profits lower.

Investor caution stems from last year’s launch of Galaxy S6 phones, which boasted major design changes and features and were widely praised. Initially expected to be Samsung’s best-selling phones ever, sales fizzled following the launch.

“S7 sales popped in the beginning but could very well fade as rivals launch new models,” said Alpha Asset Management fund manager C.J. Heo. “We have learned from the past.”

Other analysts said Samsung’s decision to launch the Galaxy S7 models a month earlier than their predecessors may have simply have brought forward sales that would have been made in later quarters.

 

 

Yahoo Sets April 11th Deadline For Bids On Assets

March 30, 2016 by mphillips  
Filed under Around The Net

Yahoo Inc has announced  April 11 as the deadline date to submit preliminary bids for its web business and Asian assets, according to The Wall Street Journal.

Yahoo asked bidders details regarding financing, conditions or approvals that would have to be met on their end, and what key assumptions they would be making by deciding to move forward with a deal, the Journal said, citing a letter sent to possible bidders.

A deadline for preliminary bids in April could mean that Yahoo could close a deal by June or July, the Journal said.

Yahoo could not be immediately reached for a comment outside regular business hours.

The faded Internet pioneer launched an auction of its core business in February after it shelved plans to spin off its stake in Chinese e-commerce giant Alibaba Group Holding Ltd.

Activist hedge fund Starboard Value LP, which owns about 1.7 percent of Yahoo, launched a proxy fight last week in an attempt to overthrow the entire board of Yahoo.

Telecommunications company Verizon Communications Inc and publisher Time Inc are among companies expected to bid for Yahoo’s core business, while some private equity firms are expected to team up to make offers.

 

Is This The Year For Nintendo’s NX?

March 9, 2016 by Michael  
Filed under Gaming

Last year, it was loose lips in the supply chain for console manufacture, now it’s seemingly loose lips within Nintendo’s own marketing department, but there’s a common thread to every leak or rumour that spreads about the platform holder these days – they all point to a late 2016 launch for the company’s next console platform, codenamed NX.

The numbers Nintendo was said to be targeting for NX that were floated around from sources at overseas parts suppliers checked out pretty well. Similarly, the more recent marketing leak has lent significant credibility by being on the money regarding the now-announced Pokemon Sun and Moon titles. It’s all still in the realm of rumour – a dedicated faker could have done the maths required to arrive at plausible manufacturing numbers for NX, just as we did when we dissected the claims; someone with knowledge of a soon-to-be-announced Pokemon game could have tacked on fake information about an upcoming console in order to troll gaming forums. It happens.

Besides, in the skeptics’ corner, there are some solid reasons to question the 2016 launch window. For a start, there’s the simple fact that we know nothing about NX. It’s already March, and all we know is a codename and some vague, hand-waving stuff about the console bridging home and handheld paradigms. That’s pretty much it. Assuming a November launch, that would leave Nintendo with a grand total of eight months to unveil, explain, market and promote an entire new console launch – even assuming that they were to start that process tomorrow. It’s not impossible, of course; that eight months would encompass E3, GamesCom, Tokyo Games Show and as many Nintendo Direct shows as the company wanted, so getting the message out there is plausible… But bear in mind that this is also the year in which Nintendo’s mobile gaming partnership with DeNA will bear its first fruit, and while I maintain that the company views that as a support to its console business, not a replacement for it, it’s reasonable to be dubious of the idea that it would willingly completely overshadow the marketing of those games with a blitz of promotion for a new console.

There’s also the simple matter of history to consider. Nintendo has never, as far as I can recall or uncover, announced a console in the same calendar year that it released it. The pattern for its systems’ pre-launch promotion has been fairly consistent since the turn of the millennium; a slow build-up from the reveal of hardware to further details and the introduction of software, with a launch often as much as 18 months after the unveiling. Compressing that into eight months (or seven, or six) might be possible, but it would be totally outside the pattern of what Nintendo has done up until now with its consoles.

On the other hand, Nintendo is in a pretty unique situation right now. It has a new CEO who, although he’s essentially pledged to follow the path Iwata set the company upon, will also have his own way of doing things and his own vision for the firm. It also has an absolute albatross in the form of the Wii U, which has not been saved from commercial disaster even by successful, acclaimed games like Splatoon and Super Mario Maker – and, almost uniquely for the company, it faces giving the Wii U an early bath at the same time that its all-conquering handheld platform, the 3DS (which has done very well despite not matching sales of its predecessor, the DS) is also slowing down significantly. Nintendo does face entering 2016 without a particularly strong handheld or home console platform and only the 3DS’ installed base to keep things ticking over – which might be a significant impetus to speed things up on the introduction of something new.

Let’s think in more details about the factors that would be involved in launching the NX by the end of the year. It would absolutely have benefits; perhaps the most clear one is that it would prevent 2016 being a “wasted” holiday season for Nintendo. The flatlining Wii U and the rapidly slowing 3DS suggest that without the introduction of a new platform this year, holiday 2016 will likely be Nintendo’s worst for many years – arguably not something Kimishima will want on his report card so early in his tenure. A rapid build-up and launch for the NX would give the company a blow-out Christmas, since Nintendo platforms pretty much always do well at launch – and of course, this would also place NX in the window to receive a prettied-up port of the upcoming Zelda title for Wii U at the same time as the Wii U version itself launches, a mirror of the very successful strategy the company used for Twilight Princess across the GameCube and Wii a couple of hardware generations ago. Even if the game isn’t totally exclusive to NX, a Zelda game at launch would be an enormous boon for the new platform and a great way to ensure a solid holiday season.

It’s definitely a short period of time, though, and the window in which Nintendo can announce the console is probably quite limited. It’s highly unlikely that it would wait for E3 to unveil its plans; much as turning up with a brand new console to the show would be a very effective way to “win” E3, it’s probably more sensible to unveil some aspects of the device, at least, in a Nintendo event well ahead of the show. Indeed, if NX details aren’t revealed to some degree either this month or next, I suspect a 2016 launch can be said to be entirely off the cards – although I wouldn’t actually put money on that, since if we’re talking about reducing the pre-launch promotion window from 18 months to 8 or 7 months, why on earth not make it six, or five, or four?

In fact, it might be more instructive to think about that window in terms of how other devices manage it. Consoles are actually quite unusual in having a lengthy, protracted period where everyone is talking about them, everyone is showing off software for them, but nobody can buy them. Compare that to smartphones or tablets, which are generally available to buy within a matter of days or weeks after they’re first unveiled. That short lead time doesn’t seem to stop Apple’s devoted fans from camping out to buy a new iPhone; perhaps a short lead time for a console might actually spur fans to excitement, rather than denying the new system a build-up? If the NX console is really a complex concept that it takes people a while to get their head around, then perhaps that will be problematic – you don’t want to launch a device that hardly anyone actually understands yet – but if it’s merely an interesting twist on the familiar, then perhaps a short, intense few months of promotion is actually a marketing advantage over a year or more of drawn-out arguments regarding the merits of a still-vapourware device.

Whatever Nintendo actually plans for the NX, it will represent a very dramatic choice for the company. A 2016 launch will be an aggressive strategy that overturns its previous approach to console launches and suggests dramatic reforms under Kimishima’s guidance. Pushing its launch out into next year, though, will leave the company facing a bleak holiday season with an ailing, albeit still popular, handheld device and a home console that’s almost totally dead in the water – and even with the prospect of a Zelda swan song on the Wii U, that will be a bitter pill to swallow for Nintendo. The company is, in some regards, painted into a corner – no matter what it does next, it’ll require a very different Nintendo difference.

Courtesy-GI.biz

 

Yahoo Announces First Round Of Layoffs

February 12, 2016 by mphillips  
Filed under Around The Net

Yahoo Inc  announced Wednesday it will terminate 107 employees in the first of what is expected to be more than 1,500 job eliminations.

The layoffs take effect April 11 and affected employees received 60-day advance notice of the move, Yahoo said in a notice filed with the California Employment Development Department. The layoffs were spread across a range of departments and job titles.

Yahoo shares closed up 1 percent at $27.10 on Wednesday and are down about 18.5 percent so far this year.

Yahoo Chief Executive Officer Marissa Mayer said during the company’s fourth quarter earnings call this month it will cut roughly 15 percent of its workforce as part of a strategy to revamp its core Internet business.

Yahoo had about 11,000 employees as of June 30, according to its website, down from a Dec. 31, 2014, total of about 12,500 full-time employees and what it called fixed-term contractors.

 

Nintendo Keeps Drop Year Over Year

February 4, 2016 by Michael  
Filed under Gaming

Nintendo’s finances took a dip in the company’s third quarter report for FY 2015 – sales stayed relatively stable with just 3.9 per cent shrinkage to 427.7 billion Yen ($3.5bn), but profits dropped by 32 per cent year-on-year to 40.5 billion Yen ($336m).

Although the bottom line failed to excite, plenty of familiar faces performed well for the publisher’s software arm, as well as a few new names. Top seller was Child friendly Wii U shooter Splatoon, shifting over four million units. Super Mario maker wasn’t far behind on 3.34 million, whilst Animal Crossing Happy Home Designer reached 2.93 million. Collectively the 3DS family sold 5.88 million units of hardware and 38.87 million games. The Wii U totalled 3.06 million consoles and 22.62 million pieces of software. 20.50 million Amiibo figures were sold, and approximately 21.50 million Amiibo cards.

Those eagerly awaiting news of either the new NX system or the company’s first smartphone game will be disappointed – neither was mentioned in the company’s forward looking statements. Instead, the publisher focused on relatively known quantities.

“For Nintendo 3DS, we will globally release a special edition hardware pre-installed with Pokémon title(s) from the original Pokémon series on February 27 which marks the 20th year since the original Pokémon series release,2 read the accompanying statement.

“Furthermore, Mario & Sonic at the Rio 2016 Olympic Games and key titles from third-party publishers are scheduled for release. For Wii U, we will strive to maintain the attention level of Splatoon and Super Mario Maker, which are continuing to show steady sales, while introducing new titles such as The Legend of Zelda: Twilight Princess HD. Meanwhile, for Amiibo, we will continue to expand the product lineup in order to maintain momentum. At the same time, we will aim to further expand sales by offering new gaming experiences with the use of Amiibo. In addition, the first application for smart devices, Miitomo, is scheduled for release.”

The company has maintained its full year target of 35 billion Yen in profit.

Courtesy-GI.biz

 

Yahoo To Slash 15% Of Workforce

February 3, 2016 by mphillips  
Filed under Around The Net

Yahoo Inc Chief Executive Marissa Mayer announced cost-cutting measures that include slashing 15 percent of the company’s workforce, or roughly 1,600 jobs, and closing several business units, according to a report by the Wall Street Journal.

The plans were announced after Yahoo’s fourth-quarter results on Tuesday, the Journal reported, citing people familiar with the matter.  It did not specify which business units might be closed.

A Yahoo spokeswoman said the company could not comment during its quiet period before releasing earnings.

Activist investors have pressed Yahoo to sell its core business rather than spin it off, even though a sale would likely incur more taxes.

It is unclear whether the plan Mayer is expected to announce would satisfy their demands, but cutting costs could make Yahoo more attractive to buyers.

Verizon has said it is interested in acquiring Yahoo if it were up for sale. Other potential buyers would include media and private equity firms, analysts said.

Yahoo had about 11,000 employees as of June 30, according to its website, down from a Dec. 31, 2014 total of about 12,500 full-time employees and what it called fixed term contractors.

Separately, a former Yahoo employee filed a lawsuit against the company Monday challenging its “quarterly performance review” process, on grounds it assigned numerical ratings to workers that in some cases were used to fire those at the bottom of the scale.

The lawsuit, filed in federal court in San Jose, California, said the plaintiff was terminated in 2014, despite being previously praised, as a result of the QPR process.

The filing said Yahoo’s use of the QPR process to terminate large numbers of employees violates federal and California laws that require employers to disclose mass layoffs above a certain threshold.

 

 

News Corp Says Rumors Of Twitter Purchase Are False

January 22, 2016 by mphillips  
Filed under Around The Net

Rupert Murdoch’s News Corp said rumors about the company potentially purchasing microblogging site Twitter Inc or building a stake in it were untrue.

The stock rose from a record low after unconfirmed chatter about News Corp’s interest in Twitter circulated on Wednesday. The rumors intensified after a CNBC segment, tech website Re/code said.

The social media site was evaluated as a takeover target because of the company’s shrinking stock price, Re/code said.

In the few months since co-founder Jack Dorsey returned as the chief executive, Twitter has been trying to make the site more engaging. The company said in December it was testing a feature to show ads to people who read tweets without logging in as it tries to monetize non-active users.

“Twitter inside a larger organization definitely makes theoretical sense, whether its another internet company or a media company,” Monness, Crespi, Hardt, & Co Inc analyst James Cakmak said.

A News Corp spokesman said there was no truth to the rumors.

Twitter already has several high-profile investors. Former Microsoft Corp CEO Steve Ballmer reported a 4 percent stake in October, making him the third-biggest shareholder after Twitter co-founder Evan Williams and Saudi billionaire Prince Alwaleed bin Talal.

Twitter has been the subject of takeover rumors in the past, including a fake report attributed to Bloomberg that claimed the company had received an offer to be acquired for $31 billion.

Twitter had received bids from Alphabet Inc’s Google and Facebook Inc, according to reports.

 

 

Xiaomi Misses Smartphone Shipment Goals

January 18, 2016 by mphillips  
Filed under Mobile

Xiaomi announced Friday it shipped over 70 million smartphones in 2015, short of an ambitious target it had announced last year, amid growing competition and high dependence on the Chinese market.

The Chinese company had forecast last year that it would sell at least 80 million phones during the year. It had sold 34.7 million handsets during the first half of the year.

Growth in smartphone sales is slowing down in China because of saturation of the market, said Anshul Gupta, research director at Gartner. Xiaomi is also facing stiff competition from other players who have copied the company’s strategy based on online sales, content and exclusive apps, he added.

Research firm Canalys said in October that Huawei had overtaken Xiaomi as China’s top smart phone vendor in the third quarter of last year. Xiaomi fell to second place after its shipments shrank year on year. Xiaomi is under tremendous pressure to keep growing as an international player as it slows down in its key home market, the research firm added.

About 90 percent of Xiaomi’s sales have come from China, said Neil Shah, research director at Counterpoint Research. The company, which had acquired a star status because of its meteoric growth and aggressive publicity campaigns, has tried to reduce its dependence on the Chinese market, selling in other markets such as India, Indonesia and the Philippines.

But other than in China and India, its performance in markets it has entered has been lackluster, Shah said. Even in India, it is not among the top five as it faces competition from established local and foreign brands who have been quick to match Xiaomi’s online sales strategy, he added.

Xiaomi offers an app ecosystem, which has proven to be attractive in China where the Google Play store is banned, but this has not helped the company in India and other markets where Google Play is available, Shah said.

 

 

 

Qualcomm Decides To Remain Whole, Nixes Split Idea

December 17, 2015 by mphillips  
Filed under Around The Net

Qualcomm Inc has changed its mind about splitting into separate chipmaking and technology licensing businesses, concluding a six-month strategic review instigated by hedge fund Jana Partners.

San Diego-based Qualcomm, the biggest maker of chips used in mobile phones, said its current structure offered unique strategic benefits that cannot be replicated.

Qualcomm, whose earnings have slumped by more than 40 percent in each of the last three quarters, said it had “a focused plan” in place that it believed would drive growth. Chief Executive Steve Mollenkopf did not elaborate.

The company has also said all along that its existing structure allowed it to leverage relationships with Chinese customers, which are expanding quickly into other countries.

Jana, which owned about 28.6 million Qualcomm shares as of Sept. 30, is comfortable with Qualcomm’s decision and supportive of the board’s efforts, people familiar with the matter said.

Qualcomm said business in the current quarter was stronger than expected as 3G and 4G device shipments were helping its licensing business and cost cuts were taking hold.

The chipmaker said it now expected earnings per share for the quarter to be at or modestly above the high end of its forecast range. The company had forecast earnings of 80-90 cents per share for the quarter.

The technology licensing business has driven Qualcomm’s profits for years, thanks to the royalties it collects on the chip-technology developed by its chipmaking unit.

“I think it’s better that they didn’t split. I’m happy about that,” Tigress Financial Partners analyst Ivan Feinseth said.

Qualcomm can continue to outsource hardware manufacturing without having to go through a split, he said.