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Will Sony Exit TV, Mobile Phone Markets?

February 19, 2015 by mphillips  
Filed under Consumer Electronics

Sony Corp hopes to increase operating profit 25-fold within three years by growing its camera sensors and PlayStation units, its chief executive said, laying out a strategy that could see the company exit the ultra competitive TV and smartphone markets.

CEO Kazuo Hirai said on Wednesday the Japanese consumer electronics firm would no longer pursue sales growth in areas such as smartphones where its has suffered competition from cheaper Asian rivals as well as industry leaders like Apple Inc and Samsung Electronics.

Sony would instead focus its spending on more profitable businesses such as camera sensors, videogames and entertainment as it seeks to return to growth after forecasting for this financial year its sixth net loss in seven years.

“The strategy starting from the next business year will be about generating profit and investing for growth,” Hirai told a briefing, adding that Sony’s units would be given greater autonomy to make their own business decisions.

Asked about the TV and mobile phone units, Hirai said he would not “rule out considering an exit strategy”, Sony’s clearest statement to date about the possibility of selling or finding partners for these struggling units.

Sony is in the midst of a restructuring that has so far seen it sell off its personal computer division and spin off the TV business. It has also axed thousands of jobs.

Sony shares have risen more than 80 percent over the past year as investors applauded the restructuring, which accelerated since Hirai appointed Kenichiro Yoshida as his chief strategy officer in late 2013.

 

 

Samsung Puts Pressure On Other Internal Divisions

February 11, 2015 by Michael  
Filed under Computing

Samsung’s components businesses is finding itself under pressure to pick up the slack and secure external customers for chips and display panels and might even start flogging them to rival mobile companies.

According to Reuters the reason for this is that the Smartphone industry is tanking and the only one making any money out of it is Apple — and even it is suffering a bit.

Samsung Display has begun supplying organic light-emitting diode (OLED) panels to Chinese smartphone makers Lenovo, Coolpad, Oppo Electronics and Vivo Electronics.

The subsidiary says it’s on the lookout for more clients, aiming to have half its total revenue by 2017 from sales to outside customers, up from just over a third in 2013.

Industry experts think that external clients account for around a fifth of Samsung Display’s sales of smaller smartphone and tablet panels compared to about 50 percent for large panels for TVs, underscoring a need for more mobile clients.

Samsung was not interested in overseas sales when Samsung Electronics’ Galaxy S devices were selling well, but suddenly it is trying to push into new pastures.

Samsung’s systems chips business is also trying to grow its customer base . It lost a $1 billion last year on declining sales of Galaxy smartphones and the loss of a contract to supply the processor for Apple Inc’s iPhone 6.

Samsung’s next Galaxy S smartphone is widely expected to be powered by its own Exynos processor.

The outfit is in talks with third-party customers about supplying its Exynos mobile processors. Samsung is likely to win back the Apple contract and supply the majority of mobile processors for the next iPhone.

Courtesy-Fud

VMware Launches vSphere Powered By nVidia vGPU

February 5, 2015 by Michael  
Filed under Computing

VMWare has revealed an update to its vSphere visualization platform, powered by Nvidia’s Grid vGPU.

Set to be available later this quarter, this is the first major release of the visualization platform in over three years that supports VMware’s cloud products.

The updated vSphere and Horizon 6 software is said to aid enterprise graphics visualization by allowing designers, architects and engineers to run more advanced graphics-rich applications in a virtualised environment.

The VMware Horizon 6 platform will allow end users to run Windows 2D, 3D and graphics applications on essentially any device, bringing workstation-like performance to mobile workers remotely. Nvidia said that this will work even over high-latency networks.

The update is also said to give IT departments greater flexibility to support as many as 96 users on a single server as well as being more cost-effective for those who don’t require maximum GPU performance but whose applications benefit from GPU acceleration.

More than 300 customers have already tried out the visualized remote graphics under an “early access programme” conducted over the past five months.

“This gave access to Grid vGPU technology, which allows data centre GPUs to be shared across multiple users, enabling greater density and scalability,” explained Nvidia.

“[It] showed that Nvidia Grid vGPU with VMware Horizon 6, built on vSphere, enhances desktop visualization with immerse graphics, greater security for mission-critical data, scalable performance and cost-effectiveness.”

The vSphere 6 update includes over 650 revisions, delivering greatly increased scale, performance and availability for virtual machines, VMware said.

This includes the ability to support up to 2,048 virtual machines per physical host, and up to 8,000 per cluster.

Memory support is increased to 12TB per host to back this, while each virtual machine can now have up to 4TB of virtual memory.

Courtesy-TheInq

Sprint, Amazon Considering Acquiring Some RadioShack Stores

February 4, 2015 by mphillips  
Filed under Around The Net

Amazon.com Inc and Sprint Corp are considering buying some RadioShack stores once the troubled electronics retailer files for bankruptcy, accoring to Bloomberg.

Amazon has considered using the RadioShack stores as showcases for the Seattle-based company’s hardware as well as potential pickup and drop-off centers for online customers, Bloomberg said.

Sprint and RadioShack have had talks about co-branding some of the stores, Bloomberg reported, citing two anonymous sources. The rest of the stores would close down, Bloomberg reported on Monday.

The New York Stock Exchange (NYSE), meanwhile, said its regulatory arm was acting to delist RadioShack shares, and would suspend their trading immediately.

Another bidder could yet emerge to buy RadioShack and continue operating the 94-year-old chain, Bloomberg said.

RadioShack declined to comment on the Bloomberg report and said it had not confirmed any of the information. Sprint declined to comment. Amazon could not immediately be reached for comment outside regular U.S. business hours.

The Wall Street Journal reported on Sunday that Standard General, a hedge fund and the largest investor in RadioShack, was in talks to serve as the lead bidder at a bankruptcy auction.

On Monday, the NYSE said it started the delisting process as RadioShack did not intend to submit a business plan to address its non-compliance with the exchange’s listing standards.

RadioShack had received a warning from the NYSE last month — the second time in a year — that it had 45 days to come up with a business plan.

The exchange sends such a notification when companies listed on it fail to maintain an average market capitalization of $50 million over 30 consecutive days.

RadioShack warned last September that it faced bankruptcy if talks with lenders and stakeholders about a sale or a restructuring failed.

The electronics retailer was once the operator of go-to shops for innovators and engineers for products ranging from vacuum tube speakers to the first mass-produced PC.

But the company has failed to transform itself into a destination for mobile phone buyers, losing out to rivals such Amazon.com Inc and Wal-Mart Stores Inc.

RadioShack said in October that it would seek to convert a loan of $120 million, given by investors including Standard General and Litespeed Management LLC, into equity “in the coming months”.

 

 

Is Nintendo On The Right Course?

February 3, 2015 by Michael  
Filed under Gaming

Nintendo is heading back to black, with the company’s financial announcements this week revealing that it’s expecting to post a fairly reasonable profit for the full year. For a company that’s largely been mired in red ink since the end of the glory days of the Wii, that looks like pretty fantastic news; but since I was one of the people who repeatedly pointed out in the past when Nintendo’s quarterly losses were driven by currency fluctuations, not sales failures, it’s only fair that I now point out that quite the reverse is true. The Yen has fallen dramatically against the Dollar and the Euro in recent months, making Nintendo’s overseas assets and sales much more valuable in its end-of-year results – and this time, that’s covering over the fact that the company has missed its hardware sales targets for both the 3DS and the Wii U.

In short, all those “Nintendo back in profit” headlines aren’t really worth anything more than the “Nintendo makes shock loss” headlines were back when the Yen was soaring to all-time highs a few years ago. The company is still facing the same tough times this week that it was last week; the Wii U is still struggling to break 10 million units and the 3DS is seeing a major year-on-year decline in its sales, having faltered significantly after hitting the 50 million installed base mark.

In hardware terms, then, Nintendo deserves all the furrowed brows and concerned looks it’s getting right now. Part of the problem is comparisons with past successes, of course; the Wii shipped over a million units and the DS, an absolute monster of a console, managed over 150 million. In reality, while the Wii U is having a seriously hard time in spite of its almost universally acclaimed 2014 software line-up, the 3DS isn’t doing badly at all; but it can’t escape comparison with its record-breaking older sibling, naturally enough.

Plenty of commentators reckon they know the answer to Nintendo’s woes, and they’ve all got the same answer; the company needs to ditch hardware and start selling its games on other platforms. Pokemon on iOS! Smash Bros on PlayStation! Mario Kart on Xbox! Freed from the limited installed base of Nintendo’s own hardware – and presumably, in the case of handheld titles, freed to experiment with new business models like F2P – the company’s games would reach their full potential, the expensive hardware division could be shut down and everyone at Nintendo could spend the rest of their lives blowing their noses on ¥10,000 notes.

I’m being flippant, yes, but there’s honestly not a lot more depth than that to the remedies so often proposed for Nintendo. I can’t help but find myself deeply unconvinced. For a start, let’s think about “Nintendo’s woes”, and what exactly is meant by the doom and gloom narrative that has surrounded the company in recent years. That the Wii U isn’t selling well is absolutely true; it’s doing better than the Dreamcast did, to pick an ominous example, but unless there’s a major change of pace the console is unlikely ever to exceed the installed base of the GameCube. Indeed, if you treat the Wii as a “black swan” in Nintendo’s home console history, a flare of success that the company never quite figured out how to bottle and repeat, then the Wii U starts to look like a continuation of a slow and steady decline that started with the Nintendo 64 (a little over thirty million consoles sold in total) and continued with the GameCube (a little over twenty million). That the 3DS is struggling to match the pace and momentum of the DS is also absolutely true; it’s captured a big, healthy swathe of the core Nintendo market but hasn’t broken out to the mass market in the way that the DS did with games like Brain Training.

Yet here’s a thing; in spite of the doom and gloom around downward-revised forecasts for hardware, Nintendo was still able to pull out a list of this year’s million-plus selling software that would put any other publisher in the industry to shame. The latest Pokemon games on 3DS have done nearly 10 million units; Super Smash Bros has done 6.2 million on 3DS and 3.4 million on the Wii U. Mario Kart 8 has done almost five million units, on a console that’s yet to sell 10 million. Also selling over a million units in the last nine months of 2014 on 3DS we find Tomodachi Life, Mario Kart 7 (which has topped 11 million units, life to date), Pokemon X and Y (nearly 14 million units to date), New Super Mario Bros 2 (over 9 million), Animal Crossing: New Leaf (nearly 9 million) and Kirby: Triple Deluxe. The Wii U, in addition to Mario Kart 8 and Super Smash Bros, had million-plus sellers in Super Mario 3D World and Nintendo Land.

That’s 12 software titles from a single publisher managing to sell over a million units in the first three quarters of a financial year – a pretty bloody fantastic result that only gets better if you add in the context that Nintendo is also 2014′s highest-rated publisher in terms of critical acclaim. Plus, Nintendo also gets a nice cut of any third-party software sold on its consoles; granted, that probably doesn’t sum up to much on the Wii U, where third-party games generally seem to have bombed, but on the 3DS it means that the company is enjoying a nice chunk of change from the enormous success of Yokai Watch, various versions of which occupied several slots in the Japanese software top ten for 2014, among other successful 3DS third-party games.

Aha, say the advocates of a third-party publisher approach for Nintendo, that’s exactly our point! The company’s software is amazing! It would do so much better if it weren’t restrained by only being released on consoles that aren’t all that popular! Imagine how Nintendo’s home console games would perform on the vastly faster-selling PS4 (and imagine how great they’d look, intones the occasional graphics-obsessive); imagine how something like Tomodachi Life or Super Smash Bros would do if it was opened up to the countless millions of people with iOS or Android phones!

Let’s take those arguments one at a time, because they’re actually very different. Firstly, home consoles – a sector in which there’s no doubt that Nintendo is struggling. The PS4 has got around twice the installed base of the Wii U after only half the time on the market; it’s clear where the momentum and enthusiasm lies. Still, Super Smash Bros and Mario Kart 8 managed to sell several million copies apiece on Wii U; in the case of Mario Kart 8, around half of Wii U owners bought a copy. Bearing in mind that Nintendo makes way more profit per unit from selling software on its own systems than it would from selling it on third-party consoles (where it would, remember, be paying a licensing fee to Sony or Microsoft), here’s the core question; could it sell more copies of Mario Kart 8 on other people’s consoles than it managed on its own?

If you think the answer to that is “yes”, here’s what you’re essentially claiming; that there’s a large pent-up demand among PlayStation owners for Mario Kart games. Is there really? Can you prove that, through means other than dredging up a handful of Reddit posts from anonymous people saying “I’d play Nintendo games if they were 1080p/60fps on my PS4″? To me, that seems like quite a big claim. It’s an especially big claim when you consider the hyper-competitive environment in which Nintendo would be operating on the PS4 (or Xbox One, or both).

Right now, a big Nintendo game launching on a Nintendo console is a major event for owners of that console. I think Nintendo launches would still be a big event on any console, but there’s no doubt that the company would lose focus as a third-party publisher – sure, the new Smash Bros is out, but competing for attention, pocket money and free time against plenty of other software. It’s not that I don’t think Nintendo games could hold their own in a competitive market, I merely don’t wish to underestimate the focus that Nintendo acquires by having a devoted console all of their own underneath the TVs of millions of consumers – even if its not quite the number of millions they’d like.

How about the other side of the argument, then – the mobile games aspect? Nintendo’s position in handheld consoles may not be what it used to be, but the 3DS has roundly trounced the PlayStation Vita in sales terms. Sure, iPhones and high-end Android devices have much bigger installed bases (Apple shifted around 75 million iPhones in the last quarter, while the lifetime sales of the 3DS are only just over 50 million), but that comparison isn’t necessarily a very useful one. All 50 million 3DS owners bought an expensive device solely to play games, and the lifetime spend on game software of each 3DS owner runs into hundreds of dollars. The “average revenue per user” calculation for Pokemon on the 3DS is easy; everyone paid substantial money for the game up front.

By comparison, lots and lots of iOS and Android users never play games at all, and many of those who play games never pay for them. That’s fine; that’s the very basis of the F2P model, and games using that model effectively can still make plenty of money while continuing to entertain a large number (perhaps even a majority) of players who pay nothing. Still, the claim that moving to smartphones is a “no-brainer” for Nintendo is a pretty huge one, taken in this context. The market for premium, expensive software on smartphones is very limited and deeply undermined by F2P; the move to F2P for Nintendo titles would be creatively difficult for many games, and even for ones that are a relatively natural fit (such as Pokemon), it would be an enormous commercial risk. There’s a chance Nintendo could get it right and end up with a Puzzle & Dragons sized hit on its hands (which is what it would take to exceed the half a billion dollars or so the company makes from each iteration of Pokemon on 3DS); there’s also an enormous risk that the company could get it wrong, attracting criticism and controversy around poor decisions or misjudged sales techniques, and badly damage the precious Pokemon brand itself.

In short, while I’m constantly aware that the market seems to be changing faster than Nintendo is prepared to keep up with, I’m not convinced that any of the company’s critics actually have a better plan right now than Satoru Iwata’s “stay the course” approach. If you believe that PlayStation fans will flock to buy Nintendo software on their console, you may think differently; if you think that the risk and reward profile of the global iOS market is a better bet than the 50-odd million people who have locked themselves in to Nintendo’s 3DS platform and shown a willingness to pay high software prices there, then similarly, you’ll probably think differently. Certainly, there’s some merit to the idea that Nintendo ought to be willing to disrupt its own business in order to avoid being disrupted by others – yet there’s a difference between self-disruption and just hurling yourself headlong into disaster in the name of “not standing still”.

There’s a great deal that needs to be fixed at Nintendo; its marketing and branding remains a bit of a disaster, its relationships with third-party studios and publishers are deeply questionable and its entire approach to online services is incoherent at best. Yet this most fundamental question, “should Nintendo stay in the hardware business”, remains a hell of a lot tougher than the company’s critics seem to believe. For now, beleaguered though he may seem, Iwata still seems to be articulating the most convincing vision for the future of the industry’s most iconic company.

Courtesy-GI.biz

 

AT&T Spends Big At Spectrum Auction

February 2, 2015 by mphillips  
Filed under Mobile

AT&T Inc shelled out nearly half the total in the record-setting U.S. sale of airwaves for mobile data, followed by Dish Network Corp spending heavily to manage a surprise win at No.2 ahead of Verizon, results showed on Friday.

AT&T bid a total of $18.2 billion to win licenses of so-called AWS-3 spectrum. Dish itself did not win any licenses, but had invested in bidding partners SNR Wireless LicenseCo LLC and Northstar Wireless LLC, which bid a total of $13.3 billion.

The two companies, backed also by financial firms including BlackRock Inc  but with little to no revenue, had applied to receive a discount as small-business entities, bringing their net bid amount to $10 billion.

Verizon and T-Mobile bids were $10.4 billion and $1.8 billion, respectively, according to the results of the Federal Communications Commission’s largest ever auction.

“Dish was the one that surprised most, spending a couple of billion more than anticipated,” said Jefferies & Co analyst Mike McCormack.

Dish’s larger-than-expected bid for over 700 licenses put a damper on the investors’ hypothesis that the satellite company had expected to turn around and sell the newly acquired airwaves to Verizon or another buyer. However, Dish’s plans remain unclear.

Verizon made slightly lower-than-expected bids but the company had hinted to investors that it would do so in December, McCormack added.

The record $44.9 billion auction, which ended on Thursday, demonstrated the voracious appetite of wireless carriers and other companies for spectrum to satisfy the growing consumer demand to stream video and other data-guzzling content.

AT&T, Dish’s partners and Verizon snapped up airwaves in some of the most coveted and expensive markets, such as New York and California.

 

 

 

 

Box Riding High After Success IPO

January 26, 2015 by mphillips  
Filed under Around The Net

Box made a splashy entrance on the New York Stock Exchange Friday, opening at $20.20 per share, or 44 percent higher than the price it had set for itself the night before.

With 12.5 million shares for sale, the initial public offering raised some $175 million that Box can now use to invest in its business, and a market capitalization of $1.6 billion.

By Friday afternoon, the stock — trading under the symbol “BOX” — had reached as high as $24.73 per share, or 77 percent above its IPO price.

“It was unbelievable,” said Steve Sarracino, a founder and partner at Activant Capital, noting that current prices were giving Box a valuation on a par with the $2 billion it saw in its last private funding round in July.

“We were watching closely because for the first time it looked like the public market was going to impose discipline on the private market, but they blew right through there. I don’t know if it’s good or bad, but it tells us the market is risk-on,” he said.

Wall Street’s warm reception can only come as welcome reassurance for Box, whose IPO journey has been a rocky one. After originally filing to go public last March, the company ended up postponing those plans, citing unfavorable market conditions.

Looking ahead, though, there’s no doubt Box will have to move quickly. Storage is a commodity business,analysts have noted, and Box will have to make sure customers see it as a provider of more than just storage.

 

 

 

Rumors Say Samsung Is Quietly Seeking To Buy Blackberry

January 23, 2015 by Michael  
Filed under Mobile

For a while, the rumor mill has manufactured hell on earth yarns claiming that Samsung is set to buy the Canadian smartphone maker Blackberry.

The deal always seems to fall through, and in any event has never happened.

However the Financial Post has found evidence that this time Samsung is actively pursuing a plan to take over or buy a significant stake in BlackBerry.

The story is still a rumour because both companies have denied such a plan may be in the works, but a document obtained by the Financial Post, prepared for Samsung by New York-based independent investment bank Evercore Partners, outlines the case for, and the potential structure of a possible purchase of BlackBerry.

The paper is a little elderly and was written in the last quarter of 2014, but a source familiar with the matter said that Samsung remains very interested in acquiring all or part of BlackBerry for the right price.

J.K. Shin, Samsung’s co-chief executive, told The Wall Street Journal that his company is in talks to use some of BlackBerry’s technology in the South Korean company’s devices, but is not interested in an acquisition. “We want to work with BlackBerry and develop this partnership, not acquire the company.”

But it appears that Samsung was caught off guard by a Reuters leak earlier this week. It had hoped it could move in quickly on BlackBerry, and the company’s share price would stay low. When the news went up and the share price rose its bid looked a little weak.

BlackBerry appears to have learned of the price Samsung was hoping to pay through the Reuters leak, before the company could make a formal offer. This is the sort of thing Samsung wanted to avoid.

In five years, BlackBerry thought the return on their turnaround strategy as implemented by John Chen was going to do better than the cash they will be receiving today.

Still, the source maintains that Samsung is still keen on making a deal happen. The talk earlier this week about Samsung extending its cooperation with BlackBerry, which was notably lacking in specifics, is “just setting it up,” the source said. “Samsung hasn’t walked away” from an acquisition. “They’re leaning towards it.”

Courtesy-Fud

Samsung Dumped Qualcomm Processors In Next Galaxy S Phone

January 22, 2015 by mphillips  
Filed under Mobile

Samsung Electronics Co Ltd will not use Qualcomm Inc’s  processors for the next version of the South Korean technology giant’s flagship Galaxy S smartphone, according to Bloomberg.

Such an outcome would be a blow for Qualcomm’s prospects for 2015, with the company already having guided for weaker-than-usual annual revenue growth in a five-year outlook issued in November. Samsung, the world’s No.1 smartphone maker, has been one of the U.S. company’s top customers.

Qualcomm’s new Snapdragon 810 chip overheated during Samsung’s testing, Bloomberg reported. The South Korean company will use its own processors instead, Bloomberg said.

A Qualcomm spokesman declined to comment on the report. A Samsung spokeswoman said the company does not comment on rumours.

Analysts have said the Snapdragon 810 chip has been dealing with a variety of performance issues that may not be corrected in time for the launch of Samsung’s next Galaxy S smartphone.

The South Korean firm is widely expected to unveil the device on the sidelines of the Mobile World Congress trade show in early March. Samsung will need to ensure that the phone does not disappoint in order to keep its global market share from slipping further, analysts said.

Samsung has already used its own Exynos processors in flagship devices such as the Galaxy S5 to some extent, though analysts said Qualcomm’s Snapdragon chips were more widely used. Greater adoption of Exynos chips in Samsung smartphones would help boost sales for the struggling foundry business.

“Samsung will likely show off the new Galaxy S phone in about a month and a half, so one would have to assume that the chips have been tested a fair amount in order for them to be used,” said HMC Investment analyst Greg Roh.

 

 

IBM Seeking Cloud Expansion Through Acquisitions

January 22, 2015 by mphillips  
Filed under Computing

IBM will favor purchases that strengthen its cloud services, the company’s CFO said Tuesday, as it seeks ways to expand its business after 11 straight quarters of declining revenue.

“Most of our acquisitions will probably be on an ‘as a service’ basis, as opposed to an on-premise model,” CFO Martin Schroeter said during IBM’s quarterly earnings call, in response to a question.

“That’s the nature of the market and where we have a lot of opportunity, because we don’t play in some of those areas today,” he said.

IBM could use the growth. On Tuesday it said revenue for the last quarter declined across all major segments — hardware, software and services. Profits were down as well, though they beat the forecast of financial analysts polled by Thomson Reuters.

IBM sees cloud services as one of its best chances for growth, as sales of its more traditional products, including mainframes and Unix servers, continue to decline.

Two years ago it bought SoftLayer to help it compete with Amazon Web Services, and last year it bought Cloudant, which provides a database as a service, and Light House Security, another cloud provider. This year, it looks like more cloud deals will be in the works.

Meanwhile, CEO Ginni Rometty has been selling off businesses that produce little or no profit. In October, she announced a plan to sell IBM’s chip manufacturing business for US$1.3 billion to Global Foundries, and before that she sold its x86 server business to Lenovo.

So IBM’s revenue is shrinking in part by design, but it needs to expand its other, more profitable businesses to compensate for the losses. And that isn’t yet happening at a fast enough rate.

 

 

Is Samsung In Pursuit of BlackBerry?

January 16, 2015 by mphillips  
Filed under Mobile

Samsung Electronics recently offered to purchase BlackBerry Ltd  for as much as $7.5 billion, hoping to acquire its valuable patents as it battles Apple in the corporate market, according to a person familiar with the matter and documents seen by Reuters.

South Korea’s Samsung  proposed an initial price range of $13.35 to $15.49 per share, representing a premium of 38 percent to 60 percent over BlackBerry’s current trading price, the source said on Wednesday.

Representatives from the two companies, which are working with advisers, met last week to discuss a potential transaction, the source said, asking not to be identified because the conversations are private.

The Waterloo, Ontario-based company said in a statement that it “has not engaged in discussions with Samsung with respect to any possible offer to purchase BlackBerry. Shares of BlackBerry, which soared nearly 30 percent following the Reuters report, fell back about 15 percent in after-hours electronic trading following the statement.

Samsung also told Reuters in Seoul that it has no plans to acquire Blackberry. “Media reports of the acquisition are groundless,” a company spokeswoman said.

Separately on Wednesday, Canadian newspaper Globe and Mail reported BlackBerry has shunned a handful of takeover overtures in recent months as its board and largest investor think its restructuring strategy will deliver greater shareholder value than current acquisition offers.

 

 

Facebook, Xiaomi Discuss Potential Partnership

January 14, 2015 by mphillips  
Filed under Mobile

Mark Zuckerberg and Xiaomi Inc CEO Lei Jun held talks about a potential investment by Facebook in China’s top smartphone maker ahead of its $1.1 billion fundraising last month, but a deal never materialized, several people with knowledge of the matter told Reuters.

The discussions, at a private dinner when Zuckerberg visited Beijing in October, were never formalized, three of those people said, as the two CEOs weighed the political and commercial implications of Facebook - which has been banned in China since 2009 – buying into the Chinese tech star now valued at $45 billion.

One individual with direct knowledge of Xiaomi’s fundraising said the mooted Facebook investment was “not huge,” but the talks underscore how ties between U.S. and Chinese companies have deepened as China’s tech industry matures.

A Facebook investment in Xiaomi would have raised the international profile of the popular handset maker dubbed “China’s Apple” by its fans and linked it to a U.S. social networking phenomenon with more than 1.3 billion users.

Facebook, for its part, has long harbored ambitions to expand into the world’s most populous country, potentially with partners. One of the individuals said Facebook and Xiaomi began discussing a possible investment in mid-2014.

Xiaomi’s Lei was partly put off by the potential for political fallout at home of selling a stake to Facebook while the U.S. social network is still banned in China, two of the people said, adding Xiaomi also feared a tie-up with Facebook could threaten its relationship with Google Inc, a crucial business partner. Xiaomi’s phones are built on Google’s Android operating system.

Xiaomi ultimately announced last month it raised $1.1 billion from investors including Hong Kong-based tech fund All Stars Investment; DST Global, a private equity firm that has invested in Facebook and Alibaba Group; Singapore sovereign wealth fund GIC; Chinese fund Hopu Management; and Alibaba founder Jack Ma’s Yunfeng Capital.

The fundraising valued Beijing-based Xiaomi at $45 billion just three years after it sold its first smartphone. The company had revenue of close to $12 billion in 2014.

Zuckerberg has eyed China as a critical piece of his vision to connect the global population. But, like Google and Twitter, the social networking giant has been blocked by China’s internet censors, who cite national security concerns.

 

 

 

Huawei Smartphone Sales Growth Eclipse Bigger Rivals

January 2, 2015 by mphillips  
Filed under Mobile

Huawei Technology Co Ltd’s smartphone sales increased by almost a third to $11.8 billion in 2014, according to an internal memo, detailing the Chinese telecoms firm’s continued ascent in the global handset wars.

The division shipped about 75 million smartphones in 2014, according to the year-end memo to employees sent by Richard Yu, the head of Huawei’s consumer business. Although that represented a more than 40 percent year-on-year increase, the figure lagged behind Huawei’s previously stated sales target of 80 million units.

Huawei spokeswoman Maggie Qi said the company does not comment on internal memos.

The results, which are due to be publicly announced in the coming weeks, reaffirm Huawei’s place among a small coterie of rising smartphone makers, including Xiaomi Inc and LG Electronics, whose growth rates are eclipsing those of industry leaders.

Pressured by low-cost vendors, top ranked Samsung Electronics Co is likely to see its shipments nearly unchanged this year, while second-ranked Apple Inc may have posted around 20 percent growth after launching the iPhone 6, analysts estimate.

Those growth rates, however, pale in comparison to the expansion of Xiaomi, which sold 26 million handsets during the first half of 2014.

If it reaches its sales target of 60 million for the year, Xiaomi will have more than tripled its 2013 sales of 18.7 million. Private investors believe it will continue to soar: the Beijing-based company announced this week a new round of equity financing at $45 billion valuation, making Xiaomi the most highly valued private technology company in the world.

Meanwhile, close rival LG Electronics Inc may have seen its smartphone shipments rise around 26 percent this year, according to analysts.

Trendforce analyst Alan Chen said in a research note this month that Huawei, Xiaomi and Lenovo Group Ltd, which recently purchased Motorola from Google in a $2.91 billion deal, will battle to be the top Chinese smartphone vendor in 2015.

 

 

 

 

China’s Smartphone Maker Xiami Reaches $45B Valuation

December 30, 2014 by mphillips  
Filed under Mobile

China’s Xiaomi Inc, one of the world’s fastest-growing smartphone makers, has raised $1.1 billion in a round of funding that solidifies its status as one of the world’s most valuable private technology firms at a valuation of $45 billion.

Investors include private equity funds All-Stars Investment, DST Global, Hopu Investment Management, and Yunfeng Capital, as well as Singapore sovereign wealth fund GIC, Chief Executive Lei Jun said Monday on Weibo, confirming earlier media reports.

The deal is one of the first high-profile scores for All-Stars, a recently established fund headed by former Morgan Stanley tech analyst Richard Ji. It also strengthens ties between Lei and fellow tech magnate Jack Ma, the Alibaba Group Holding Ltd executive chairman who invests privately through his Yunfeng Capital fund.

Industry sales data from recent quarters show Xiaomi has risen in just three years to become the world’s No. 3 smartphone maker – behind only Samsung Electronics Co Ltd and Apple Inc - and the latest round of investment enforces its standing as one of the world’s most valuable private companies.

At $45 billion, Xiaomi is now worth nearly three times the market capitalization of Lenovo Group Ltd, the world’s No. 1 PC maker, and more than quadruple the $10 billion valuation it garnered during its last financing round in 2013.

Xiaomi’s skyrocketing valuation reflects investors’ belief that it will grow into a global powerhouse despite signs it is encountering intellectual property challenges outside China. This month sales in India were temporarily halted after Swedish telecommunciations firm Ericsson filed a patent complaint.

Xiaomi brands itself as an Internet company that eschews traditional marketing and sells hardware at low prices as a distribution channel for its real money maker – software and services.

 

 

Is Twitter’s CEO Dick Costolo On The Way Out?

December 29, 2014 by mphillips  
Filed under Around The Net

After reporting anemic growth and getting passed by Instagram in number of users, Twitter’s stock price jumped on speculation that CEO Dick Costolo might be exiting the company.

CNBC.com reported that Robert Peck, an analyst at investment bank SunTrust Robinson Humphrey, predicted that Costolo will leave the social network in 2015.

“We think there’s a good chance he’s not there within a year,” Peck said. He also said there are “a lot of interesting candidates” that could take over Twitter’s helm.

Twitter did not respond to a request for comment.

Zeus Kerravala, an analyst with ZK Research, said he’s not surprised that interest in Twitter spiked on even speculation that Costolo might be leaving.

“I know there’s a lot of questions about his ability to run Twitter,” Kerravala said. “If the company doesn’t perform well or the company misses a couple of quarters, there will be tremendous investor pressure to oust him. If the company performs, he’s OK.”

Twitter, though it’s increasingly used for political and social protest and company branding, has suffered from slowing growth.

In October, the company reported slower growth in active monthly users than it had in the previous quarter. In the quarter ending in September, Twitter’s monthly user base grew by 4.8%, to 284 million users around the world. In the previous quarter, however, the user base grew by 6.3%.

Earlier this month, Twitter received more unsettling news when photo-sharing site Instagram announced that its monthly user base had jumped 50%, taking its base to 300 million users.

With that leap, Instagram surpassed Twitter in number of users.

The company also shuffled several executives this year, with three different heads of product in 2014 alone. Daniel Graf, one of Twitter’s head of products this year, was demoted in November and then left the company in December,according to re/code.

“There appears to be a lot of executives leaving for other companies,” said Patrick Moorhead, an analyst with Moor Insights & Strategy. “Twitter has had a tough time compared to Facebook and that’s what investors are fixated with. I think they’re feeling mounting pressure from shareholders and employees.”

Kerravala said it would help the company if Costolo leaves his top post. “Initially, it would be a good thing,” he added. “But long term, it depends on who they bring in and if the slowing growth at Twitter is leadership related or more structural.”