In the key smartphone market, an area led by Samsung until recently, the popularity of Apple’s iPhone 6 and 6 Plus handsets and the rise of lower-cost phones from Chinese vendors squeezed Samsung at both the high and low end of the market.
The company said Galaxy S6 and S6 Edge sales were lower than expected.
It still managed to make money but not nearly as much as the same time last year. Operating profit for the quarter was 2.8 trillion won, down about 38 percent on the same period of 2014.
The results come against a backdrop of continuing record quarterly results at smartphone rival Apple. It sold 47.5 million phones in the quarter and recorded sales of $49.6 billion and a quarterly net profit of $10.7 billion — both squarely ahead of sales and profits at Samsung.
For the rest of this year, Samsung said it will attempt to boost smartphone sales by reducing the price of the Galaxy S6 and introducing new large-screen models. This time more than ever before, the company is under intense pressure to score a hit with a new phone to help turn around its declining business.
United Microelectronics (UMC) expects to post an up to 5 per cent decrease in wafer shipments for the third quarter of 2015.
The outfit’s capacity rate will fall below 90 per cent for the first time after being flat out for ages.
UMC CEO Po-Wen Yen said the third quarter, would suffer from the inventory correction problems that were first noticed in the first quarter.
Current weakness in overall demand, partly due to the uncertainties in economic outlook, will prolong the inventory adjustment through the second half of 2015,” he said.
UMC used 94 per cent of its overall capacity in the second quarter of 2015, when the company shipped a record 1.54 million 8-inch equivalent wafers.
Shipments during the quarter were driven mainly by 28nm products, the foundry noted.
UMC reported consolidated revenues of $1.23 billion for the second quarter, down 6 per cent on last year. Gross margin came to 22.9 per cent compared with 24.3 per cent in the first quarter and 22.9 per cent in second.
UMC created net profits of $1.45 billion in the second quarter of 2015 – the highest level in nine quarters.
Looking into the third quarter, UMC expects to use 87-89 per cent of its overall capacity in the third quarter. Wafer shipments and ASPs will fall up to 5 per cent and about 3 per cent, respectively, on quarter.
Finland’s Nokia, once the world’s largest mobile phone manufacturer, has debuted a spherical camera designed for making 3D movies and games that can be watched and played with virtual reality headsets.
The device, showcased at an event in Los Angeles, takes video and audio in 360 degrees with eight sensors and microphones, and is the first from Nokia’s digital media solutions business — one of its new focuses for future growth.
Nokia is going through restructuring after selling its mobile phone business to Microsoft last year and following that up with a proposed 15.6 billion euro ($17.2 billion) acquisition of Alcatel-Lucent, which is set to boost its main network equipment business.
“We expect that virtual reality experiences will soon radically enhance the way people communicate and connect to stories, entertainment, world events and each other,” Nokia executive Ramzi Haidamus said in a statement.
In May, GoPro introduced a similar system using 16 cameras and Google’s software, while several other technology companies such as Facebook and Samsung have announced different plans to enter the virtual reality market.
Nokia is also planning to come back to the phone business by designing and licensing handsets once its deal with Microsoft allows it to do that late next year.
The U.S. National Security Agency will no longer have access to the bulk telephone records data it has collected at the end of November, the Office of the Director of National Intelligence announced .
Congress voted in June to rein in the NSA’s mass collection of U.S. phone metadata, which includes information such as the timing and location of calls. The Foreign Intelligence Surveillance Court, also known as the FISA court, then gave the NSA 180 days to wind down the program.
The Director of National Intelligence had been evaluating whether the NSA should maintain access to the historical data it collected after that 180 days is up. It’s now determined that access to that data will cease on Nov. 29.
After that date, the NSA must receive approval from the FISA court to request the data from phone companies on a case-by-case basis.
NSA personnel will have continued access to the historical data for an additional three months, “solely for data integrity purposes” to verify records produced under that new, case-by-case system.
The NSA will also need to preserve the metadata until civil lawsuits over the program have been resolved, or until “the relevant courts relieve NSA of such obligations,” the Office of the Director of National Intelligence said Monday.
The metadata “will not be used for any other purpose,” and will be destroyed when the litigation is over, the office said.
Police in Beijing have raided a factory that made more than 41,000 fake iPhones worth as much as 120 million yuan ($19 million), including some that reached the United States, and have arrested nine suspects in the counterfeiting operation.
Apple is one of the most popular brands in China, where authorities have stepped up efforts in recent years to dispel the country’s reputation for turning out counterfeit goods.
Officials have taken stiffer action to enforce intellectual property (IP) rights, pushed firms to apply for trademarks and patents and cracked down on fakes.
Police arrested nine people, including a married couple who led the operation, after a raid in May on the factory, run under the guise of a gadget maintenance shop on the northern outskirts of the Chinese capital.
The details were revealed in a social media posting on Sunday by the public security bureau in Beijing.
The group, headed by a 43-year old man, surnamed Yu, and his 40-year old wife, surnamed Xie, both from the southern hardware manufacturing city of Shenzhen, allegedly set up the Beijing factory with six assembly lines in January, the bureau said.
They hired “hundreds” of workers to repackage second-hand smartphone components as iPhones for export, it added.
Police seized 1,400 handsets and large quantities of accessories during the May 14 raid. In the United States, the newest Apple Inc handsets can fetch $649, or more, depending on the model.
Beijing police said their investigation followed a tip-off from U.S. authorities who seized some of the fake devices.
The destination of the counterfeit phones, and how many made it there, remains unknown.
Public security representatives declined to comment on Monday, telling Reuters they had no additional information.
Apple also declined to comment, saying the investigation was ongoing.
The flaws could potentially be exploited to execute malicious code on computers when users visit compromised websites or open specially crafted documents. They were reported through Hewlett-Packard’s Zero Day Initiative (ZDI) program.
HP’s TippingPoint division, which sells network security products, pays researchers for information on unpatched high-risk vulnerabilities in popular software. The company uses the information to create detection signatures, giving it a competitive advantage, but also reports the flaws to the affected vendors so they can be fixed.
The ZDI team gives vendors 120 days to develop fixes before making limited information about the flaws reported to the public. That deadline was apparently reached for the four Internet Explorer vulnerabilities this week.
The ZDI advisories describe the type, impact and general location of the flaws, but intentionally leave out technical details that could help attackers create exploits for them. In other words, they don’t classify as full disclosure.
Three of the new ZDI advisories don’t have sufficient information for other researchers or hackers to easily rediscover the issues, said Carsten Eiram, the chief research officer at vulnerability intelligence firm Risk Based Security, via email. The fourth one, however, is a bit more detailed, he said.
That advisory, tracked as ZDI-15-359, covers a vulnerability that was used by security researcher Nicolas Joly during the Mobile Pwn2Own hacking contest organized by ZDI in November last year. As part of the contest rules, researchers disclose the vulnerabilities they use with ZDI, which then shares them with the affected vendors.
Microsoft said in an emailed statement that it would take “appropriate steps” to protect its customers, but noted that no attacks had been reported so far.
Database outfit Oracle’s moves to try and copyright APIs appear to be part of an attempt for Oracle to make money on Android.
Oracle has asked a U.S. judge for permission to update its copyright lawsuit against Google to include the Android which it claims contains its Java APIs.
Oracle sued Google five years ago and is seeking roughly $1 billion in copyright claims if it manages to convince a court that its APIs are in Android it could up the damages by several billions.
Oracle wrote in a letter to Judge William Alsup on Wednesday that the record of the first trial does not reflect any of these developments in the market, including Google’s dramatically enhanced market position in search engine advertising and the overall financial results from its continuing and expanded infringement.
Last month, the US Supreme Court upheld an appeals court’s ruling that allows Oracle to seek licensing fees for the use of some of the Java language. Google had said it should use Java APIs without paying a fee.
Paypal appears to have had technical problems as it tried to free itself from the corporate networks of Ebay and has been stopping some users from spending money for nearly six weeks.
The company, which appeared on the stock market again free from Ebay for the first time today, has been blocking some users from spending their money.
It is flagging transactions as being problematic and refusing to let them go through. The user gets a message suggesting that they should try later. However, waiting never improves anything, the account is blocked.
We noticed the problem about six weeks ago and it was hinted to us that the problem was caused as engineers tried to liberate PayPal from its eBay overlords.
Paypal customer support did not know what to do and is blaming all of Paypal’s suppliers as security risks. Ironically it has also been saying that eBay transactions have been security risks. Initially customner support suggested that payments were sent out to email addresses but then the unfixed security feature started blocking these too.
What is also alarming is that the security blocks cannot be overridden manually, in fact, most users will not even know they have been blocked.
Customer support seems to have faith that the security system and has no interest in referring the problem to someone with technical expertise:
” the reason as to why your payment using your account is being stopped is because according to our Internal Security System it may fail or there are potential problems linked to it.
Please be advised that I do not mean you, as the user or the seller or even your card/bank account has triggered our internal security system but what happened here is that when each and every payment is made through PayPal our Internal Security system will analyse each one of them.
I hope you understand that our system will analyze all factors involved in the payment being made, not just those making the payment or receiving or what is being used. It could possibly be that items or services of a certain category has had a history of failing or being done fraudulently or that the item or service is not suitable according to the Acceptable Use Policy. These are a few examples of what could have triggered our Internal Security system and it completely objective and analytical to prevent any negative outcomes to a transaction.
You may at the moment view this as protection but in actual fact this system we use has helped reduce losses for both buyers and sellers, as we only have your best interests in mind. A smooth transaction is an ideal transaction and we wish to straighten out any wrinkles for you from the start so that once an exchange of money and item or service is done, you need not worry about it anymore.”
Obviously automatically freezing people’s accounts does prevent the money from being stolen, but it equally reduces the usefulness of your service.
We asked PayPal to comment about the problem and if it was aware of the security problem it was facing. We even offered access to our accounts so they could see the problem in action.
Press officer Adam Blacker told us that we needed to talk to customer support. This makes it the first time in our long career that we have been referred to customer support when asking about a company’s security. Needless to say we thought we would get a better comment from the cat than another round of emails to customer support.
Qualcomm is preparing to axe several thousand employees following a glut of problems and stiff competition in a tough market.
A report on The Information citing sources “inside and outside the company” said that Qualcomm could announce the laying off of up to 10 percent of its 30,000-strong workforce when it releases its quarterly results on Wednesday.
However, it’s still unknown which departments will be affected by the prospective job cuts.
If the rumour is true, the move to drop such a substantial amount of its workforce could be down to increasing competition from chip firms such as MediaTek, Samsung, which recently dropped Qualcomm in favour of its own Exynos chip for the Galaxy S6, and other small Chinese companies that specialise in making chips for budget phones.
Qualcomm reported a 46 percent drop in Q2 profits in April, and the sources said that the company could shift more research and development activities to low-cost countries such as China and India to save money.
Whether that’s true or not, it’s clear that Qualcomm is going to have to make some major changes to its strategy, and quick, because the company’s outlook becomes progressively worse as the months roll on.
Qualcomm debunked chatter in April that LG ditched its octa-core Snapdragon 810 chip for the G4 owing to overheating problems. Many scoffed at the firm’s decision to go with Qualcomm’s hexa-core Snapdragon 808 chip, instead of the latest and greatest Snapdragon 810 offering.
This re-fuelled speculation that Qualcomm’s Snapdragon 810 chip has been suffering problems. Qualcomm denied the overheating claims, saying that LG’s decision to stuff the G4 with a Snapdragon 808 chip was made “over a year ago” and had nothing to do with the persistent rumours surrounding the 810.
However, a few months later, in June, Sony admitted that its latest Xperia Z3+ is overheating owing to problems with the 810 chip.
Sony acknowledged the overheating after it was detected in tests run by GSMinfo in the Netherlands, which found that the camera app crashed after a few minutes of video recording and that an unusual amount of heat was felt on the rear of the device.
The Japanese firm said that it will release a software fix in the summer to tackle the fault, which is a known problem seen in other handsets powered by the processor.
But that’s not the end of Qualcomm’s problems. Earlier this month, the chipmaker found itself under the watchful eye of the European Commission which launched two investigations into the US chipmaker’s alleged anticompetitive practices.
The first investigation will examine whether Qualcomm abused its dominant market position by offering financial incentives to customers on the condition that they order its baseband chips exclusively.
The second will look at whether Qualcomm engaged in “predatory pricing” by selling 3G chips well below cost in a bid to force competitors out of the market.
The separate but related outages left T-Mobile customers without the ability to dial in to emergency response centers for about three hours. In the settlement, T-Mobile agreed to strengthen its 911 service procedures and adopt compliance measures ensuring it adheres to the FCC’s 911 service reliability and outage notification rules in the future, the agency said.
The settlement represents the largest fine that the FCC has assessed against a carrier in connection with a 911 outage.
The FCC has “no higher priority than ensuring the reliability and resilience of our nation’s communications networks so that consumers can reach public safety in their time of need,” FCC Chairman Tom Wheeler said in a press release. “Communications providers that do not take necessary steps to ensure that Americans can call 911 will be held to account.”
T-Mobile’s network suffered two 911 outages on Aug. 8, 2014. Both outages were nationwide outages, affecting almost all of T-Mobile’s then 50 million customers. It’s unclear how many T-Mobile customers tried to call 911 during the outages.
T-Mobile, in a statement, said the safety of its customers is “extremely important and we take the responsibility to provide reliable 911 service very seriously.”
The company said it has made “significant changes and improvements across a number of our systems” since last year and will continue working to improve those systems.
The FCC Enforcement Bureau found that T-Mobile did not provide timely notification of the outages to all affected 911 call centers, as required by FCC rules. The investigation also found that the outages would have been avoided if T-Mobile had safeguards in its 911 network architecture.
The compliance program in the settlement requires T-Mobile to develop new processes to identify risks that could result in disruptions to 911 services, detect future outages and take remedial actions, including prompt notifications to affected emergency call centers.
The European Commission has initiated proceedings against Qualcomm in two investigations, it said Thursday. The first concerns whether Qualcomm breached EU antitrust rules by offering financial incentives to phone manufacturers on condition that they buy chipsets exclusively, or mostly, from the company; the second, whether Qualcomm engaged in predatory pricing, selling below cost to force competitors out of the market.
Mobile processors and baseband chipsets, which handle the communications protocols used in wireless networks, form a significant proportion of the cost of a mobile phone and, at least at the low end of the market, margins are getting thinner, leaving phonemakers more vulnerable to pricing pressures from their suppliers.
The EU Commissioner in charge of competition policy, Margrethe Vestager, said “We are launching these investigations because we want to be sure that high tech suppliers can compete on the merits of their products. Many customers use electronic devices such as a mobile phone or a tablet and we want to ensure that they ultimately get value for money. Effective competition is the best way to stimulate innovation.”
Qualcomm’s business practices have come under antitrust authorities’ scrutiny before. Earlier this year, Chinese regulators fined Qualcomm $975 million for overcharging device makers there.
While the Commission is investigating the issue of financial incentives on its own initiative, the predatory pricing probe was triggered by a complaint.
Commission officials declined to name the complainant, but U.K. fabless semiconductor company Icera filed such a complaint against Qualcomm in 2010.
The Commission has no deadline for completion of its antitrust investigations. While it has been investigating Qualcomm’s business practices for some time, Thursday’s announcement marks a new stage in the process.
Qualcomm is undergoing major restructuring and one side-effect of the overhaul is that some 4,000 jobs might be slashed.
The company, according to our well informed industry sources, will announce this during the upcoming Qualcomm Q3 FY15 earnings conference call that Is scheduled for July 22. We could not find out which jobs will be affected, but we expect that the company will shad more light on it during the call.
In December 2014 the company announced that it would slash some 900 jobs and it ended up slashing roughly 1,500 jobs. This will be the first major announcement and it comes at a bad time, as the company’s sales numbers are not that great. Qualcomm lost its highest end customer, Samsung, and companies like HTC who are using the Snapdragon 810 are not too happy about company’s highest end SoC offering.
Qualcomm has around 31,300 employees, which is still not that much considering that Intel has some 100,000, but its main SoC competitor, MediaTek, has just over 10,000 employees making its operational costs much smaller.
If the number of employees 31,300 didn’t change in recent months, slashing 4,000 jobs would mean cutting the 12.8 percent of the workforce. This is a major adjustment, no question about it.
Still, we believe that the server division will start making some money in 2016 and the new Snapdragon 820 is expected to start shipping later this year. In the long run, the company is more than fine, it is just that the competitors have changed from Nvidia and Intel to MediaTek.
The U.S. Federal Communications Commission is backing a requirement that the country’s telecom carriers warn residential and business customers about plans to retire copper telephone networks for IP-based systems.
A proposal from FCC Chairman Tom Wheeler would also require telecom carriers retiring their copper networks to offer customers the option of purchasing battery backup systems so that they don’t lose voice service during an electrical power outage, officials said Friday. IP-based voice service depends on working Internet service, which, in turn, requires electricity.
The old copper-based phone service works without electrical service available at the customer’s address, and a loss of voice service during power outages is one of the major concerns of consumer groups as major telecom carriers move to retire their decades-old copper networks.
Wheeler’s proposal, likely to be voted on by the commission during its Aug. 6 meeting, would require telecom providers that are retiring copper to make battery backup systems with eight hours of standby power available to affected customers, either through the carriers themselves or for third-party retailers. Voice customers would have to pay for the battery backups, which now cost $40 and up, but they could choose whether or not they want the backup.
Most consumers and consumer groups in contact with the FCC wanted the option to purchase battery backup from sources other than carriers, an FCC official said. Requiring battery backup systems during VoIP installs could have discouraged customers from signing up for the service, he added.
Within three years, carriers would have to offer a battery backup option with 24 hours of standby power, under the rules proposed by Wheeler.
Telecom carriers retiring their copper would also have to alert customers that their old telephone service was going away. Telecom carriers currently aren’t required to notify customers, but under the proposed rules, residential customers would get a three-month warning, and business customers would get a six-month warning, agency officials said during a press briefing.
Telecom carriers would also have to notify interconnecting carriers of their copper retirement plans, and competitors using the existing copper to provide business voice and Internet services would be eligible to receive similar pricing deals from the large incumbent carriers, the FCC said.
Automobile manufacturers are limiting the data they share with technology partners Apple Inc and Google Inc through new systems that link smartphones to vehicle infotainment systems, defending access to information about what drivers do in their cars.
Auto companies hope that the vehicle data will one day generate billions of dollars in e-commerce, though they are just beginning to form strategies for monetizing the information. Apple and Google already make money from smartphone owners by providing a variety of products and services, from digital music to targeted advertising, and connecting phones to car systems will almost certainly extend their reach.
But as infotainment systems such as Apple’s CarPlay and Google’s Android Auto become more widespread, auto companies hope to keep tech providers from gaining access to a wealth of potentially profitable information collected by computer systems in cars.
Some auto companies have specifically said they will not provide Apple and Google with data from the vehicle’s functional systems – steering, brakes and throttle, for instance – as well as information about range, a measure of how far the car can travel before it runs out of gas.
“We need to control access to that data,” said Don Butler, Ford Motor Co’s executive director of connected vehicle and services. “We need to protect our ability to create value” from new digital services built on vehicle data.
Consultant AlixPartners estimates global revenues from digitally connected cars will grow in value to $40 billion a year worldwide by 2018, from $16 billion in 2013, and auto companies would like to hold on to as much of that money as possible.
“The risk is, if you give up control and somebody else figures out that business model, then you lose the future revenue stream,” said Friedmar Rumpel, vice president in AlixPartners’ automotive practice.
The move, which became effective on July 8th , makes T-Mobile the first carrier to offer continental phone service under a single plan anywhere in the world, company officials said.
The new Mobile without Borders plan means that customers can call from the U.S. to both countries for no added cost as well as when they travel in both countries.
Both consumers and business customers will be eligible, although business customers will pay $1 more per phone line for accounts with more than 10 phone lines, with no added cost for the first 10 lines.
CEO John Legere said the impact on business customers will be especially pronounced. About 70% of travel by small and medium-size businesses is to both countries, T-Mobile said, citing data from the travel industry. Also, 35% of all international calls across the phone industry were from the U.S. to the two countries last year.
Legere said it wasn’t necessary for T-Mobile to operate its own network in Canada and Mexico and will rely instead on the two largest carriers in each country to supply service. T-Mobile was able to forge reciprocal roaming deals with the four foreign carriers, which he didn’t name, to lower traditional costs. In Mexico, Telcel, with 70 million customers, and Movistar, with 20 million, are the two largest carriers, according to recent industry data. In Canada, Rogers is the largest with 9 million customers, while Telus and Bell are nearly tied with 8 million apiece.
Those T-Mobile partners have plenty of 4G LTE service in major cities that offer fast data services, Legere said. Even though T-Mobile has expanded LTE coverage in the U.S., critics often ding the carrier for having weak or spotty coverage outside of major U.S. cities. Analysts said it remains to be seen how thorough the coverage is in Canada and Mexico.