SoftBank Corp President Masayoshi Son may get a less than enthusiastic reception when he comes to the United States this week to meet Sprint Nextel Corp’s major shareholders, as he tries to drum up support for the Japanese company’s proposed takeover of the No. 3 U.S. wireless service provider.
SoftBank’s billionaire founder, who proposed a $20 billion deal for a 70 percent stake in the U.S. wireless carrier, said on Tuesday that he would discuss the deal with shareholders in a bid to fight off rival Dish Network, a U.S. satellite TV provider, which offered Sprint a $25.5 billion bid.
The executive for the Japanese mobile operator may have a tough time selling the deal, as several shareholders have told Reuters that SoftBank would need to raise its bid in order to win their vote at Sprint’s June 12 shareholder meeting.
Two big Sprint shareholders, Paulson & Co and Omega Advisors, have publicly said the Dish offer looks better than SoftBank’s. Other shareholders said on Tuesday that they would go to meet Son during his trip but they were skeptical about his arguments against Dish.
While Dish’s offer would provide more cash upfront to shareholders, Son has argued that Dish would not be good for the company as it would require Sprint to take on a heavy debt load. He also promises a July 1 close for the deal and warned that Dish regulatory approval may not come until 2014.
Robert Lynch, the director of research for Westchester Capital Management, which owned over 14 million shares in Sprint at the end of December, said that the prospect of a quicker deal close would not be enough to win over his company’s vote.
“We think right now that Dish has a better offer on the table. We think SoftBank’s going to have to improve their offer,” Lynch said, noting that SoftBank’s comments about the prospective debt leverage from a Dish deal were overdone.
“We think the leverage is manageable. We think there are synergies here. While raising the leverage is something we looked at we think its not as big of a obstacle as SoftBank is saying,” Lynch said.
A big Sprint investor who asked not to be named said they were happy to meet with Son while he is in the United States but that they were hoping to convince him to raise his bid.
“If Mr. Son wants to own Sprint he will have to raise his bid,” said the person from a top 25 Sprint shareholder who did not want to be quoted by name ahead of the meeting.
As Chief Executive Mark Pincus, 47, leads the online games developer he founded in 2007 through perhaps the most crucial year of his tenure, he is pushing to restore revenues by doubling down on “FarmVille,” the franchise that took Facebook users by storm four years ago and launched Zynga to stardom.
Though some industry observers had declared farm simulation games a fad and predicted FarmVille 2′s early demise, the sequel to Zynga’s best-known title has defied expectations at its San Francisco headquarters, Pincus said in an interview. FarmVille 2 has clung to its perch near the top of Facebook charts and the number of people who play the game each day still hovers near all-time highs of 8 million, even six months after launch.
Given a glaring weakness in mobile games, however, one of Zynga’s current priorities is porting FarmVille 2 to mobile devices so players can move from PCs to smartphones and back without losing their data. That presented technical challenges that the company is ironing out, Pincus said.
“The ideal is to make that one seamless experience between Web and mobile so you can take your farming experience from work to home,” Pincus said. “We’re having to retool and reinvent around our process and technology.”
Pincus badly needs a reliable hit franchise. In the past nine months, Zynga has shuttered 20 titles and closed offices in Baltimore, Boston and Tokyo. It has trimmed 5 percent of its workforce, though its headcount of nearly 3,000 still dwarfs that of fierce rivals like Supercell, a Finnish company with 100 people that claims an equivalent amount of revenue, or the 600-strong Rovio, the publisher behind the “Angry Birds” games.
Gone is the swagger that defined the early years, when Zynga’s army of developers flooded the market with dozens of new titles from cooking games to bingo variations, its deal makers splashed money to snap up smaller rivals, and its managers opened studios in cities around the world.
Wall Street is viewing Pincus’ shift with cautious approval, having been burned by Zynga’s abysmal stock performance — an 80 percent decline over the past year that began around the time it invested $180 million in then-promising game studio OMGPOP.
Investors place much stock on Zynga’s future prospects in Internet gambling, because of its massive poker-playing community and existing game software. But with meaningful income from real-money casino efforts likely to be months, if not years, away.
Dish Network Corp, the No. 2 U.S. satellite television provider, offered to acquire Sprint Nextel Corp for $25.5 billion in cash and stock, a move that could endanger the proposed acquisition of Sprint by Japan’s SoftBank Corp.
Sprint shares soared as much as 17.8 percent after the announcement to their highest level since August 2008 and slightly topped the value of the Dish bid.
Dish’s surprise bid on Monday is the latest twist in a wave of consolidation in the U.S. wireless industry. Dish had already made a counter-offer against Sprint for Clearwire Corp, the wireless company majority-owned by Sprint.
It was also the boldest step yet by Dish Chairman Charlie Ergen, who has bought billions of dollars worth of wireless spectrum in the last few years and has been seeking some sort of deal to make use of the airwaves.
“This is the culmination of a lot of years of work. Whether it be the purchase of spectrum, entering auctions, the acquisition of Sling Media, all those things come together now with the merger with Sprint,” Ergen said on a conference call with analysts and reporters.
Dish said it would pay $4.76 per share in cash and about 0.05953 shares in Dish stock for each Sprint share. The offer, which works out to $7 per share, represents a premium of roughly 12 percent to Sprint’s close on Friday.
Sprint said it would evaluate the proposal but declined further comment.
Dish claimed its offer represented a premium of roughly 13 percent above SoftBank’s existing bid. Sprint shareholders would own 32 percent of the combined company under the Dish offer compared with a 30 percent ownership in the SoftBank deal.
Some analysts said the Dish offer could lead to a bidding war with SoftBank.
“I wouldn’t be surprised if both parties revised their offers. The Dish bid strikes me as superior from an operational perspective because they operate a U.S. business,” said RBC Capital Markets analyst Jonathan Atkin.
Sprint, the No. 3 U.S. mobile services provider, agreed in October to sell 70 percent of its shares to SoftBank for $20.1 billion. That deal is currently being reviewed by regulators.
Japan’s NEC Corp is in negotiations to sell its struggling mobile phone unit to its PC venture partner Lenovo Group Ltd, a source familiar with the discussions said, confirming media reports of the negotiations.
NEC is also in talks with potential domestic buyers, the source said on condition that he wasn’t identified.
“Amid the rapidly changing market we are considering a number of ways to bolster the competitiveness of our mobile phone business, but nothing has been decided,” NEC said in a statement through the Tokyo Stock Exchange on Friday in response to the media reports.
Lenovo officials could not be immediately reached for comment.
Japanese phone makers have struggled to gain traction overseas inmarkets dominated by Samsung Electronics Co Ltd and Apple Inc where they are also being challenged by upcoming Chinese makers. In Japan, the two foreign giants are whittling down their share of cell phone sales.
Last October, NEC cut its mobile phone sales target for the year ending March to 4.3 million from a previous estimate of 5 million units. Lenovo, the world’s No.2 maker of PCs, is cranking up overseas expansion in smartphones after solid growth in China.
Japan’s biggest cell phone maker, Sony Corp, is vying with China’s Huawei Technology Co and ZTE Corp to be No.3 in the global smartphone market.
NEC also plans to sell its mobile services subsidiary NEC Mobiling Ltd for as much as $850 million, separate sources told Reuters this month.
Marubeni Corp’s telecommunications unit and TD Mobile, a joint venture between Toyota Tsusho Corp and Denso Corp, are vying for the 51 percent stake, the sources said.
The company said its new camera, which is called the “EOS Rebel SL1″ in the U.S. and the “EOS Kiss X7″ in Japan, will go on sale from next month. It measures 116.8mm wide by 90.7mm tall, with a thickness of 69.4mm.
Digital SLR makers like Canon are increasingly feeling competition from lower-priced “bridge cameras,” that offer a step up from a digital point-and-shoot models but are far cheaper and easier to use. Bridge models typically feature a single optical zoom lens that cannot be swapped out.
Canon said it is the smallest digital SLR with an APS-C image sensor, a format used in many mid-range and high-end single lens cameras. In Japan it has a suggested retail price of $833 for the body alone.
The company said its size and weight are about 25% less than previous models.
The image sensor and graphics processor in the X7 allow for shooting about four frames per second. It will also allow auto-focus on about 80% of image area it shows.
The company said the new camera and lens combination were designed for video as well as still shots, with quieter and smoother operation than previous models.
Canon also announced a separate camera, called the X7i in Japan, that offers a slightly upgraded feature set, including an LCD display that can be rotated for shooting at different angles.
Canon said it will initially produce 200,000 units per month of the smaller sized model.
Amazon.com Inc said on Wednesday it has dropped the price of its largest Kindle Fire tablet, part of an effort by the world’s biggest Internet retailer to get the device into the hands of as many consumers as possible.
The Kindle Fire HD 8.9 inch Wi-Fi tablet will now be priced at $269 in the United States, down from $299. The 4G wireless version now starts at $399, compared with $499 before, Amazon said.
Amazon is launching its larger tablet in the UK, Germany, France, Italy, Spain and Japan. Dave Limp, president of Amazon’s Kindle business, said the company has increased production of the devices in conjunction with the overseas launch. The cost of making the tablets has fallen with greater economies of scale, letting Amazon cut prices, he said.
“Whenever we are able to create cost efficiencies like this, we want to pass the savings along to our customers,” Limp said in a statement.
Amazon launched its first Kindle Fire tablet in 2011 to compete with Apple Inc’s dominant iPad and other tablets from companies such as Samsung that run on Google Inc’s Android operating system.
Amazon sells its devices at cost, undercutting Apple prices. Amazon aims to make money when customers use its tablets to buy physical and digital products from the company, such as movies, music, games and apps.
However, Amazon’s strategy rests on selling a lot of tablets. This may not be working well yet for its larger 8.9 inch Kindle Fires, according to recent research by Chad Bartley, an analyst at Pacific Crest Securities.
Amazon does not disclose device sales numbers. But Bartley said in a research report last month that demand for the larger Kindle Fire tablet was weak, citing checks with contacts in the device supply chain.
Amazon’s price reductions on Wednesday may be designed to try to maintain sales during the early part of the year, which is typically a slow period for retail sales, said Colin Gillis, an analyst at BGC Partners.
Amazon may also be cutting prices before it comes out with new versions of its tablets later this year, when sales normally increase during the back-to-school shopping season and the holidays, Gillis added.
An Amazon spokeswoman said the price cuts were not driven by weak demand, but rather the cost benefits of increasing production for overseas sales.
Several Sony stores in the US have discounted the 3G PlayStation Vita by $100, with some branches asserting that it’s because the 3G machine is due to be discontinued.
A news story at Joystiq discovered the price cut, which extends to many but not all of the Sony stores in the US. Wi-Fi only models have not been discounted.
Sony employees from Denver, Las Vegas and New Jersey told Joystiq that the model is being taken off the market, but others were uncertain. Nobody was able to say whether the model would be replaced by a 4G machine or if we’d only see Wi-Fi only Vitas in the future.
The 3G package, which includes an 8GB memory card and a PSN voucher now costs $199.97 and comes with a data plan contract – which would seem to run contrary to any discontinuation rumours. However, if a 4G Vita is in the works, continuing data plan deals with networks would make more sense.
Sony has been contacted for clarification on the story and whether any price cut will become global.
Nanotechnology involves manipulating matter that’s measured at the tiny “nanometer” length level. The diameter of a human hair is between 40,000 and 60,000 nanometers, said Valerie Moore, a patent agent and one of the authors of the study.
Nanotechnology patents come into play in everything from aerospace to medicine to energy, the study noted. For example, the technology can be used to incorporate antibacterial material into wound dressings, to increase the strength of car parts while decreasing their weight, and to enhance paint colors.
U.S.-based inventors accounted for 54 percent of the nanotechnology patent applications and grants reviewed in the study, followed by South Korea with 7.8 percent, Japan with 7.1 percent, Germany with 6.2 percent and China with 4.9 percent.
The study also looked at the geographic location of the owner of the nanotechnology patents and proposed patents. If an inventor works in the Silicon Valley office of South Korea’s Samsung Electronics Co, for instance, the U.S. is home to the invention, but the South Korean employer might own the patent.
McDermott’s intellectual property practice includes more than 200 attorneys and patent agents, and is one of the top ten law firms for nanotech patent and applications filings, according to information provided by the firm.
The number of nanotechnology patents has grown continuously since the early 2000s, the study said. Between 2007 and 2012 the total number of U.S. patent applications, U.S. granted patents and published international patent applications grew from about 14,250 to almost 18,900.
The United States, the European Union, as well as Japan and South Korea, have increased funding for nanotechnology education and research since 2000, the study said.
The site is now branded “Rakuten,” after Japan’s largest e-commerce firm, a massive online conglomerate that dominates even giants like Amazon at home. Rakuten (the site suggests it is read “rack” – “ah” – “ten”) boughtBuy.com in 2010 for $250 million as part of a global spending spree, and has been gradually rebuilding it since.
The old Buy.com, which mainly sold directly to customers, has been swallowed whole. It is now one of thousands of stores in a giant online shopping mall, along with those run by firms like Petco and wine.com. The online mall, “Rakuten Shopping,” is an attempt to recreate the brand’s success in Japan, where it is a household name and about 60% of the population are members.
Rakuten, the characters for which mean “optimism,” is converting acquisitions to branded online shopping malls all over the world. It has already rebranded online retailers Ikeda in Brazil and Tradoria in Germany, and sites like Play.com in the U.K. are on the way, as it moves toward its ultimate goal of establishing a global mega-mall. Rakuten already offers cross-border purchases on some products through its “Global Market.”
The company feels strongly that this strategy, which focuses on luring retailers and fostering relationships between them and customers, is different from the one taken by the online retailer it is chasing in most markets.
“You can’t think about e-commerce without thinking Amazon,” said Mark Kirschner, global chief marketing officer. “But Amazon is really focused on a vending-machine shopping experience – you search, you find, you buy, you’re done.”
In Japan, where Rakuten is omnipresent, its businesses include online travel, auction and e-books, plus a bank and securities firm, as well as a baseball team, the Rakuten Eagles.
The U.S. Department of Justice and the Department of Homeland Security have requested more time to consider Softbank’s proposed takeover of Sprint Nextel, a move that may signal a rough road ahead for the US$20 billion deal.
In a letter to the Federal Communications Commission, dated Monday, the DOJ asked the FCC to defer action on the deal because it hasn’t finished reviewing the proposal for national security, law enforcement and public safety issues. It filed the letter in conjunction with the Federal Bureau of Investigation, which is part of the DOJ, and the Department of Homeland Security. The DOJ asked that the FCC hold off until the agencies have finished their review and requested FCC action. The filing was reported earlier Tuesday by GigaOm.
The letter didn’t change Sprint’s forecast for completion of the deal.
“This is a routine request so the appropriate federal agencies can review network security for transactions involving foreign companies. We continue to anticipate that the transaction will be completed in mid-2013,” Sprint spokesman Scott Sloat said in an email message. The FCC had no comment on the letter.
Last October, Softbank proposed investing $20 billion in Sprint and acquiring a 70 percent stake in the company. Though Japan is considered a close U.S. ally, some observers have said lawmakers might object to significant foreign ownership of Sprint, the third-largest U.S. mobile operator.
If approved, the deal would greatly strengthen Sprint to better compete against AT&T and Verizon Wireless. It would also allow Sprint to buy out the rest of partner company Clearwire and gain access to that company’s large reserves of wireless spectrum.
Sony’s CEO claims that the company, which has not been doing very well for the last couple of years, is about to make a comeback which will be just as interesting as David Bowie’s.
Kazuo Hirai told reporters that Sony is now more nimble and focused under his leadership and can see off the Ninja’s of despair. True Sony has lost money for the past four years, and has fallen behind rivals like Microsoft, Apple and Samsung in profitability and innovation. But that was then and this is now. Hirai thinks Sony was bogged down in its sprawling bureaucracy, and he is making sure that good ideas don’t get squelched any more. He is shepherding several of those projects personally to make sure that it doesn’t get held up in the bureaucracy, or it doesn’t suddenly fade away in the approval process.
Hirai said Sony will target customers willing to pay more and won’t get sucked into a price war with cheap and cheerful Chinese players. This means that he probably has not learnt that the overpriced Playstation 3 was probably the end of Sony’s influence in the games market. Hirai said he wanted “wow” people with new products so he showed hacks a new waterproof, full-HD mobilephone, set to go on sale around the world in the next few months. This is likely to wow those who tend to drop their phones down the loo and er… that is it.
He is also planning a 4K or “ultra-HD” TV, whose displays have four times the pixels although he admits that it may take a decade for 4K technology to catch on.
Sharp plans to sell its subsidiary operating a LCD TV assembly plant in Nanjing to the Chinese PC maker this year and convert its other Chinese subsidiaries into 50 percent joint ventures, the Japanese daily said.
The two companies plan to enter markets other than China, including southeast Asia and South America, Nikkei reported.
Sharp, which has been losing money for years, signed a 360 billion yen ($4.07 billion) syndicated lending agreement last September with Mizuho Corporate Bank and Bank of Tokyo-Mitsubishi UFJ, the business daily said.
The company is expected to report a consolidated net loss of 450 billion yen for the year ending March 31, Nikkei added.
Sharp is also in talks to sell its Malaysian factory to Taiwanese electronics manufacturing service Wistron Corp, the Nikkei said.
Shares in Apple Inc fell below $500 for the first time in almost one year after reports it is scaling down orders for screens and other components as intensifying competition erodes demand for its latest iPhone.
Japan’s Nikkei reported on Monday that the world’s largest technology corporation began sharply reducing buying of liquid crystal displays about a month ago from suppliers like Japan Display Inc and Sharp Corp.
The report, later matched by the Wall Street Journal, comes as hard-charging rivals like Samsung Electronics, which makes phones based on Google Inc’s popular Android software, continue to expand market share globally.
Apple stock slid more than 4 percent to an intraday low of $498.51 — a level not seen since February 16, 2012 — before bouncing back to trade just above $500 at midday. The news also hurt shares of suppliers such as Cirrus Logic Inc, which dived 9 percent.
Some analysts argued that Apple and its manufacturing partners had struggled with quality issues that might have curtailed production times.
“Our checks with supply chain contacts close to the situation identified a very different cause: a slower ramp in the manufacturing of iPhones and iPads (reflecting some quality control issues) and insufficient production lines,” said Joane Feeney of Longbow Research.
“Rather than ordering more components and having inventory build up further, Apple put component suppliers on notice to hold off, for the time being, on further shipments until it expanded its production lines – which it plans to complete by the end of the quarter.”
By some estimates, the holiday quarter may have been the worst for U.S. retailers since the 2008 financial crisis, with sales growth far below expectations. Other data yields a more mixed picture of holiday season demand.
A large Clearwire Corp shareholder has stepped up its campaign to block the planned sale of the wireless service provider to its majority owner, Sprint Nextel Corp, saying it plans to ask the U.S. telecoms regulator to halt the deal.
Crest Financial’s general counsel also said on a call with reporters that it will ask the U.S. Federal Communications Commission to block Sprint’s plan to sell 70 percent of itself to Softbank Corp of Japan for $20 billion.
Going to the FCC is a new line of attack on the Sprint deal by Crest, which has also filed a class action lawsuit on behalf of Clearwire investors. Dave Schumacher, Crest’s general counsel, said the fund said other minority investors told Crest they did not support the Sprint deal, but he did not provide details.
The investment fund, which owns around 8 percent of Clearwire, has said Sprint’s offer of $2.97 share for the roughly 50 percent of Clearwire it does not currently own, “grossly undervalues Clearwire.” Sprint’s offer is worth about $2.2 billion, but Schumacher said Crest had not done its own valuation and was basing its criticism of the price on estimates by analysts.
In going to the FCC, Crest will argue that the Clearwire deal artificially undervalues the company’s spectrum holdings, Schumacher said. That in turn potentially devalues future revenue for the U.S. government when it auctions off spectrum licenses.
“The merger is therefore a bad deal all around for Clearwire shareholders and also for the public at large,” said Schumacher.
Sprint spokesman Scott Sloat said the deal with Clearwire was the right one for Sprint, Clearwire and American consumers. He said the class action lawsuit was baseless.
A spokesman for Clearwire, Mike DiGioia, declined to comment on Crest’s intention to go to the FCC.
The Tokyo-based firm said the new chips will be able to support capturing 30 frames per second at full resolution. They will also be able to shoot video at 60 frames per second at 1080P or 100 frames at 720P.
Toshiba said it will begin shipping samples of the new CMOS chips in January, with mass production to begin in August of 300,000 units monthly. Toshiba is best known in components for its NAND flash memory, which it develops with partner SanDisk, but is also a major manufacturer of LSI and other semiconductors.
Digital point-and-shoot cameras are steadily falling in price, squeezed between brutal competition among manufacturers and the increasing threat of smartphones and mobile devices. While the number of pixels a camera can capture is not always a direct measure of the overall quality of its images, it is a key selling point to consumers.
The image resolution of top-end smartphones now often meets or exceed that of digital cameras. The Nokia 808 PureView launched earlier this year has a 41-megapixel image sensor.
The Japanese manufacturer said it has increased the amount of information pixels in the new chip can store compared to its previous generation of CMOS, producing better overall images. It has also reduces the size of pixels – the new 20-megapixel version has individual pixels that measure 1.2 micrometers, down from 1.34 micrometers in its 16-megapixel product.
CMOS, or complementary metal-oxide semiconductor, sensors contain rows of electronic pixels that convert light into digital signals, as well as on-chip processing technology that can enhance images or speed transfers.
Toshiba says its goal is to achieve a 30 percent market share in CMOS sensors for digital cameras in the fiscal that ends in March of 2016.