Samsung is expected to announce its first annual increase in quarterly profit in two years following a dismal third quarter in 2014, but word on the street is that things are not going well.
Samsung’s July-September operating profit to have risen 64 percent marking the first pickup since a record profit in the third quarter of 2013, but investors are not exactly excited.
Most of Samsung’s problems are its phone business. Though overall phone shipments likely rose, the brokerage says the greater share of lower-end products and price cuts for the Galaxy S6 models weighed heavily on the company’s bottom line.
At the lower end it launched new products targeting markets such as India, while at the high end it switched from plastic to metal, introduced curved screens and cut the price for its flagship Galaxy S6 devices after sales fell short of high expectations in the second quarter.
The smartphone market is saturated and no one is selling that many anymore. Chinese makers have eaten up its lower end market. New hardware features can be quickly matched by rivals. Samsung lacks service or software offerings that can pique consumer interest and not easily be replicated, a problem it hopes its recently launched Samsung Pay service can help address.
None of this has convinced investors that the company is back on track for sustained growth and the sustained growth is likely soon. The company is under pressure to return some of a cash pile of $53 billion through dividends or share buybacks.
Samsung’s semiconductor business probably remained its top earner for the fifth straight quarter as new premium phones came to market.
U.S. retailers are considering filing lawsuits against banks and credit card companies over the slow implementation of chip-based card technology and the possible financial liability merchants began facing that started Oct. 1.
Retailers that did not install newer chip-enabled point of sale terminals in stores, restaurants and hotels as of Oct. 1 have to pay an extra fee to cover counterfeit fraud. Before banks were liable for consumers’ use of magnetic stripe credit and debit cards. The liability shift deadline on Oct. 1 was set by banks four years ago to prompt the use of more secure chip technology to help lower the cost of fraud.
The passing of the deadline didn’t apparently cause any significant problems for store operations, according to comments from five national retail and credit card officials. That’s partly because consumers can still use magnetic stripe cards and might not even possess the newer chip cards.
For merchants, the situation is often more dire. Many retailers — with the notable exceptions of Walmart and some other big chains — have complained of backlogs of six to nine months in getting card companies to certify their new card terminals for use. Without the certification, retailers can’t use their new chip card payment terminals and face extra costs for fraud insurance.
The backlog is unfair to retailers, and is likely to lead to a lawsuit by one or more of the affected merchants, said Mark Horwedel, CEO of Merchant Advisory Group. MAG has 97 members, including some of the nation’s largest retailers, that collectively represent $2.6 trillion in annual sales.
“We’ve been the leading complainer about how the card brands are implementing [chip] cards in the U.S.,” Horwedel said in an interview. Card providers and banks “picked the Oct. 1 date without providing a blueprint to merchants on how to process debit transactions with chip cards.”
The launch of the phones, the Nexus 6P and the Nexus 5X, comes a day after Apple Inc reported record first-weekend sales of its new iPhones.
The Nexus 5X 16 GB model will be priced at $379, while the Nexus 6P 32 GB will cost $499, Google said at an event live-streamed on YouTube.
Apple’s 6s and 6s Plus start at $199 and $299, respectively, with a two-year service-provider contract.
Nexus devices, which typically do not sell as much as iPhones or iPads, are a way for the tech giant to showcase its latest advancements in mobile hardware and software.
Google also unveiled a tablet built entirely by the company based on its Android operating system.
The latest version of Android, dubbed Marshmallow, will be available to existing Nexus customers from next week.
The Android mobile platform is a key element in Google’s strategy to maintain revenue from online advertising as people switch from Web browser searches to smartphone apps.
The Nexus 5X is made by South Korea’s LG Electronics Inc and the Nexus 6P by China’s Huawei Technologies Co Ltd . Both phones feature Google’s new fingerprint sensor, Nexus Imprint, which is located on the back.
The fingerprint sensors will help quickly authorize purchases made through Android Pay, the one-touch payment app on Android devices that competes with Apple Pay.
The phones are available for pre-order on the Google Store from a number of countries including the United States, the United Kingdom, Ireland and Japan.
The Pixel C tablet will cost $499 for the 32 GB model and can be bought with a detachable keyboard, which will cost $149.
The tablet will be available in time for the holiday season on the Google Store.
The change in policy is a huge change for the fourth-largest U.S. retailer, which until now only matched prices at its own stores and not at online rivals, AP said.
Target is increasing the number of online rivals that it will match from five to 29, including for the first time stores that require membership, such as Costco Wholesale Corp and Sam’s Club.
Target will now allow 14 days, up from seven days, for shoppers to get a price adjustment, AP said.
This is the company’s latest move under Chief Executive Brian Cornell, who has sought to narrow the retailer’s focus to a handful of product lines where Target believes it has an edge on quality and price while also investing to catch up with rivals online.
“If Apple does it, then it must be good enough for Samsung,” said Roger Entner, an analyst at Recon Analytics. “The two companies are in an intense fight and Samsung cannot let Apple have a leg up on just about anything.”
Samsung did not comment directly on any plans to set up a leasing program, but a spokeswoman did tell Computerworld, “Samsung continuously evaluates trends and assesses business growth opportunities…. We remain committed to growing our mobile business in the U.S.”
Samsung launched its newest Galaxy devices on Aug. 21: the Galaxy S6 Edge Plus and Note 5.
Forbes reported Sunday that Samsung may be launching its leasing program for Galaxy devices within the next several months in the U.S., quoting an unnamed industry official.
Apple announced its iPhone Upgrade Program on Sept. 9; it lets a U.S. customer select an unlocked iPhone at an Apple retail store after making an appointment.
After the Apple announcement, several financial and technology analysts declared Apple’s move as a bold one that allows savvy smartphone users to mostly bypass a carrier. Jan Dawson, an analyst at research firm Jackdaw, called Apple’s upgrade plan a game-changer.
While Apple’s distribution of installment plan phones is limited, Samsung’s “will be even more limited, unless Samsung can get some retailers to partner with for distribution,” Entner said. Samsung today sells devices through Best Buy and other U.S. retailers, but Entner said that is still a limited channel. He estimated the top four U.S. wireless carriers together have 10,000 retail outlets.
Major U.S. carriers have mostly been quiet about the Apple announcement, and didn’t respond to questions about Samsung’s expected launch of a leasing plan.
Payments processing company Stripe Inc unveiled a new tool on that will connect retailers and brands to sell on platforms like Twitter Inc and tap an increasing number of consumers shopping on mobile apps.
Twitter’s adoption of Stripe’s new product, Relay, is expected to help the microblogging site further dabble in e-commerce and generate revenue through its “buy buttons,” which lets shoppers buy a product and enter payment and shipping information without leaving Twitter’s platform.
Twitter has been struggling to increase its audience and in July said its number of monthly average users grew at its slowest pace since it went public in 2013.
“Almost two-thirds of our users say they bought something specifically because of what they saw on Twitter. … As mobile and social (media) continue to grow, consumers are going to discover and transact right in the apps where they spend their time every day,” Nathan Hubbard, Twitter’s head of commerce, said at a launch event in San Francisco, where both companies are based.
Stripe, which makes software that helps businesses accept various types of payments on websites and in apps, counts grocery-delivery startup Instacart, ride-sharing app Lyft and e-commerce platform Shopify among its clients.
The payments company’s new Relay product functions as a universal sell button for retailers, allowing companies like eyewear brand Warby Parker to list products in a single place and sell them directly on Twitter as well as other e-commerce platforms like ShopStyle.
Amazon appears to finally be putting an end to the Fire Phone. The product page for the smartphone on Amazon’s website shows both the 32GB and 64GB models out of stock, with no estimate about when they’ll be available again.
According to Amazon spokeswoman Michelle Taylerson, the company has “sold through our Fire phone inventory in the U.S. and globally.” Amazon ran out at the end of August, but the news was first reported Tuesday by GeekWire — a testament to how unpopular the Fire has been.
While Amazon didn’t say that the Fire will be permanently absent from its website, the company reportedly restructured its Lab126 hardware development division and laid off dozens of engineers who had been working on the Fire. It’s not clear when, if ever, the company plans to release a new smartphone.
It’s an ignoble end for a smartphone that fizzled shortly after Amazon announced it a year ago. While the company built a great deal of anticipation for its first foray into the smartphone market, Amazon wasn’t able to convince users to buy the device. In October of last year, the company took a $170 million write-down on the Fire, based primarily on unsold inventory.
The lack of sales didn’t stem from a lack of trying on Amazon’s part. While the Fire originally cost $199 with a two-year contract from AT&T, Amazon later cut the price to 99 cents with a similar contract.
The phone was hobbled by Amazon’s insistence upon using its own FireOS, a fork of Android the company developed to power its tablets and smartphone. Developers needed to port their Android apps over to Amazon’s AppStore if they were to work with the phone, which meant it had a smaller catalog of applications compared to the Google Play Store.
Studios like Disney, which has made blockbuster films like “Frozen” and Marvel’s “Guardians of the Galaxy,” have been attempting to steer movie fans towards digital purchases as sales of DVDs decline.
Walt Disney Studios added that it would launch the app on video streaming-device maker Roku Inc and Google Inc’s Android TV on Sept. 15, coinciding with the DVD release of “Cinderella.”
The collection in Disney Movies Anywhere can be accessed through its new app for theMicrosoft Xbox 360 and for Amazon’s Fire tablets, Fire TV and Fire TV Stick.
The media company launched Disney Movies Anywhere in February 2014 with Apple Inc’s iTunes, and in November partnered with the Google Play online store and Walmart Stores Inc’s online store Vudu.
The two new additions come on the same day as its early digital release of Marvel’s “Avengers: Age of Ultron.”
The company’s Prime members can now purchase the button for $4.99 and get the amount discounted on their first purchase using the button, the e-commerce giant said on Wednesday.
The button will now be available to all Prime members – those paying $99 a year for two-day delivery and other benefits.
The company said it will add 11 more brands to the button, bringing the total to 29.
The ‘Dash’ button, launched earlier this year, allows Amazon’s Prime members to order a product with just a push, using a WiFi connection, and can be hung or hooked anywhere in the home.
The company, which has grown throughoutn Europe and gained a 10 percent share of the Northern European e-commerce market, said it had partnered with around 10 U.S. merchants so far.
Sweden-based Klarna, founded in 2005 and backed by investors such as Sequoia Capital and Atomico, is now planning for rapid expansion in the United States, where it will take on rivals such as PayPal and Stripe.
“I would be disappointed if we didn’t have hundreds of merchants on the platform doing millions of transactions as early as in 2016,” Klarna North America CEO Brian Billingsley, told Reuters.
Klarna’s services allow online consumers to buy goods by entering easy-to-remember details such as an e-mail address and zip code. It also lets consumers pay after delivery with Klarna assuming the risk in the interim and paying the retailer immediately.
Klarna, which had net sales of $319 million last year, said it was currently seeing “significant growth” in its core markets in the Nordics and Germany.
Asked how much the group could grow in 2016, Klarna CEO Sebastian Siemiatkowski said it was to early to tell as the U.S business was still in its infancy.
“There is definitely a potential to quickly reach half a billion dollars in revenue in a very short period of time,” he said.
Klarna said the company would double in size if it was to capture half a percentage of the U.S market.
“And while of course our ambitions are much higher than half a percentage, it is definitely an interesting reflection of how extremely big the market is,” Siemiatkowski said.
By Sept. 4, the Apple Watch will be available in 900 Best Buy stores, and it will appear in the retailer’s remaining locations by the end of the month, CEO Hubert Joly said.
Best Buy began selling the wearable in 100 stores as well as online on Aug. 7. The company had planned to expand availability to 200 additional stores by the Christmas shopping season.
However, “early momentum” from the Apple Watch “triggered” Best Buy to expand and accelerate the rollout, Joly said during a conference call to discuss the company’s second-quarter earnings.
Joly didn’t say how many Apple Watches the chain has sold so far. Apple hasn’t shared watch sales data either.
During Apple’s third-quarter earnings conference call, CEO Tim Cook said customers would have more ways to purchase the smartwatch because the company expects it to be a popular Christmas gift. A few days later, Best Buy said it would carry the wearable.
Best Buy is the only major retailer to stock the Apple Watch. The device can also be purchased from Apple’s retail and online stores and from a few high-end clothing and department stores.
Joly also discussed plans to expand Best Buy’s relationship with Apple.
The Apple shop-in-a-shop sections of 740 Best Buy stores are getting a makeover, with new fixtures and larger display tables to show Apple hardware, he said. So far, Best Buy has remodeled 350 of those departments and will revamp another 170 by the holiday shopping season.
The online retailer is expanding Prime Now, its one- and two-hour service, to Seattle, where the company is headquartered, and offering alcohol deliveries there.
Amazon Prime, the company’s $99 per year shopping membership program, offers free two-day delivery on millions of items. It is a key testing ground for the retailer’s new services, ranging from TV and on-demand video to fast delivery.
Amazon has said it has “tens of millions” of Prime subscribers. Analysts estimate the program to have around 40 million users worldwide.
The company has steadily expanded Prime Now since it launched the service in New York City last year. It facilitates integration of the retailer’s grocery delivery service, Amazon Fresh, which has been slower to expand to new markets.
On-demand grocery delivery is a growing and competitive market in the United States. Instacart, a grocery delivery company, announced on Tuesday that it had expanded to Indianapolis, its 17th city. Other startups, like Postmates, which focuses on meal delivery, also deliver personal care goods and alcohol for customers using a network of couriers.
Prime Now customers can order using an app available on both iOS and Android devices. Orders are shipped from smaller warehouses, or hubs. An Amazon spokeswoman said the company opened two facilities in Seattle and Kirkland, Washington, to handle Prime Now deliveries.
The Chinese e-commerce giant has announced DT PAI, a platform designed to comb through a client’s data and analyze it for useful information.
The service could help companies find key trends within their customer data, or even recommend goods to users, according to Alibaba. For example, online shoppers could take a picture of an item they like, upload the image and then receive the e-commerce listing about where they can buy the product.
Alibaba had been experimenting with this concept back in 2011 through its own e-commerce search engine.
Alibaba’s DT PAI platform now aims to streamline AI development for the enterprise market, reducing the time and expertise needed. Interested customers can simply “drag-and-drop” what functions they want, before proceeding to application development, the company said.
“What used to take days can be completed in minutes,” said Xiao Wei, senior product expert with Alibaba’s cloud business, in a press release.
Alibaba isn’t exactly known for AI development, but there are other factors to consider. In China, the company dominates as the country’s leading e-commerce player, and its initial public offering in the U.S. was the world’s largest at US$25 billion.
In addition, the company has a fast-growing cloud computing business, which is expanding globally. It has already opened a data center in Silicon Valley, and more are slated for other markets such as Europe and Japan.
In expanding, however, Alibaba will have to contend with better-known cloud providers such as Amazon Web Services and Microsoft, according to analysts.
The cylinder-shaped router, named OnHub, can be pre-ordered for $199.99 at online retailers including the Google Store, Amazon.com Incand Walmart.com.
The router comes with in-built antennas that will scan the airwaves to spot the fastest connection, Google said in a blog post.
With the router, users will be able to prioritize a device so that they can get the fastest Internet speeds for data-heavy activities such as downloading content or streaming a movie.
The router can be hooked up with Google’s On app, available on Android and iOS, to run network checks and keep track of bandwidth use among other things.
Google said OnHub automatically updates with new features and the latest security upgrades, just like the company’s Android OS and Chrome browser.
The router is being manufactured by network company TP-LINK, Google said, hinting that ASUS could be the second manufacturing partner for the product.
The product launch comes days after Google restructured itself by creating Alphabet Inc, a holding company to pool its many subsidiaries and separate the core web advertising business from newer ventures like driverless cars.
Making products for the smart home is one such venture.
Google last year bought Nest, a smart thermostat maker, for $3.2 billion, aiming to lead the way on how household devices link to each other and to electricity grids.
The global market for “Internet of Things”, the concept of connecting household devices to the Internet, will nearly triple to $1.7 trillion by 2020, research firm International Data Corp said in June.
That smartphone you might be using may not be as secure as you thought, according to security research.
The doomsday prophet here is Trend Micro, which said that big name providers are not taking your arm armory seriously. We’ve heard HP wax lyrical on this as well.
Trend Micro apparently took its study seriously, and measured the preventative efforts on hardware including the Apple Watch, Motorola 360, LG G Watch, Sony Smartwatch, Samsung Gear Live, Asus Zen Watch and the Pebble.
Devices were all upgraded to the latest OS versions for the study, and each was paired with its related device: an iPhone 5, Motorola X or Nexus 5.
Physical protection has something like a wet paper bag ranking, and Trend Micro said that the obvious weaknesses will become apparent should a wearable be pinched. Apple seems to do the best work here, and is credited with using a timeout function to prevent easy bad man activation.
However, the Apple device contains the biggest chunks of user data, the firm said, which could cause problems if someone managed to break their way into the Watch and a partnered iPhone.
“Across all of the smartwatches that were tested, it is clear that manufacturers have opted for convenience at the expense of security,” Bharat Mistry, cyber security consultant at Trend Micro, commented.
“On the surface, a lack of authentication features can make devices appear easier to operate, but the risk of having personal and corporate data compromised is much too big an issue to forget about.”
The security company has some top-line, high-concept advice for hardware firms, including the suggestion that “simple security features” should be adopted.
“Manufacturers must ensure that simple security features, such as limited password attempts, are enabled on devices by default,” said Mistry.
“This considerably reduces the likelihood of data breaches. Smartwatch manufacturers must be cognizant of the fact they can slash data breaches by employing this best practice.”
It is estimated that wearables, and the security losses associated with them, will contribute to a criminal cost to the industry of a whopping $2tn by 2019.