Sony Corp believes its TV division will swing into the black this financial year after a decade in the red, even if it falls short of its volume sales target, the head of the newly independent division said on Monday.
Masashi Imamura told a media round table that the TV business, which will become a separate subsidiary of Sony Corp on July 1, had reduced fixed costs during the last financial year, and profitability was now in sight.
He said Sony this year would be able to absorb the impact of any fluctuations in emerging market currencies, a factor he blamed for the unit’s failure to make a profit last year.
Sony has forecast an 18.5 percent rise in TV sales to 16 million units this year from 13.5 million units a year ago, an increase that analysts said was well above the industry’s average growth forecasts.
Imamura said the sales target was achievable, but added that the TV business would still turn a profit even if sales fell short of this goal.
Sony’s TV division will be split off from the parent company on Tuesday, a move aimed at boosting transparency and accountability in a bid to achieve and maintain profitability.
Sony Chief Executive Kazuo Hirai said at a corporate strategy meeting last month that the company had not ruled out an equity tie-up for the TV business, which is to be known as Sony Visual Products Inc, although nothing had been decided on the matter.
Sony’s TV business has seen relatively rapid turnover at the top over the past decade with six different chiefs, although Imamura has had the longest tenure, serving since August 2011.
Sony’s shares are down 8 percent so far this year, in line with the benchmark Nikkei average’s 7 percent drop.
The 3DS stumbled at launch, enduring sluggish sales until Nintendo instituted a drastic price cut on the hardware. While Moffitt noted the impact of the price cut, he said a pair of first-party releases was another key driver in reversing the handheld’s fortunes.
“We had the price cut in August , and then we had Mario Kart 7, Super Mario 3D Land, which really drove sales that first holiday, and on 3DS we haven’t looked back,” Moffitt said. “So we’ve had momentum ever since that first holiday and we’ve got now 260 some games in the library and some of the best, most highest rated, most highest quality content we’ve ever had on that platform. Everything we launched seems to do above forecast and surprises us on the positive side.”
The situation with the Wii U is similar, Moffitt said, adding that the console is about to reach a very similar tipping point.
“As I look at what we have coming this holiday, now with Mario Kart and Super Smash Bros, plus the innovation of Amiibo, I think we are right at that tipping point where we have a lot of great content that is about to be released for that platform that’s going to tempt gamers into buying the system,” Moffitt said. “From the comments I’m reading online, and following gamers’ comments, I think there are a lot of people that are going to have a hard time resisting buying a Wii U once Smash Bros comes out. I think that’s going to be a major hardware driver for us. So that’s the narrative we hope that plays out and that I think we are starting to see play out.”
One avenue that Nintendo won’t be pursuing to spike Wii U sales is an unbundling of the GamePad, Xbox One Kinect-style. Both companies pitched the peripherals as essential components of their visions, but when Xbox One sales lagged, Microsoft found the demands of potential customers more convincing than their original plans. While Moffitt said Nintendo is still working to create gameplay experiences that demonstrate the true benefits of the Wii U GamePad, he said removing it from the hardware bundle is not in consideration.
“We think GamePad is the only innovation that’s come in this new generation of consoles. So we have the only real point of difference. Certainly graphics are faster, graphics are better. This is not a real innovation for gamers. We are fully committed to leveraging the GamePad, to keeping it bundled with the system.”
As for the problem of third-party support for Wii U, Moffitt namechecked the continued efforts of partners like Sega, Warner Bros. Interactive Entertainment, and Activision. While some big companies who have dropped the system, Moffitt understood why that would have happened and acknowledged it was Nintendo’s problem to fix.
“It’s all about driving the install base and so that’s our work to do, right? We need to get to a critical mass where it makes financial sense for them,” he said.
Moffitt added that third-party games don’t all come from the big AAA publishers. He touted the company’s efforts in lowering the barriers to entry for indie developers looking to publish on Nintendo platforms.
“We talked to a lot of them before launching the Wii U and we addressed some of the issues that really were holding some of them back from developing realistic content on our platform,” Moffitt said. “At least for the indie community, we’ve become a lot easier to do business with and we’re seeing a steady flow of content now.”
However, those efforts were largely invisible at E3. Where Microsoft and Sony devoted sections of their booths to indie developers working on Xbox One and PlayStation 4 respectively, there was no such equivalent in Nintendo’s booth.
“With any show, you have choices to make,” Moffitt said. “Every time I go down to our booth floor and see how many people are waiting to play Super Smash Bros, when I look outside at the Best Buys… Last night we had four hours of game play on Super Smash Bros. and we had 1,000 people in line. We had to turn people away. So it’s a tough choice for us as a platform holder. We don’t have enough game stations down there on Smash Bros. We try to feature as much content as we can in the limited space that we have. Right now we just have a lot of demand for Super Smash Bros. We could have used 10 more game stations on that game alone. Choices have to be made.”
Finally, Moffitt weighed in on the VR trend. While Nintendo has a distant history in the field with the Virtual Boy headset, Moffitt suggested Nintendo was taking a wait-and-see approach toward returning to it
“What I’d say is it’s appealing technology,” Moffitt said. “It’s interesting. We’re going to follow it closely to see where it goes. It’s got a lot of advantages. It’s got one disadvantage relative to what we know is often very fun for gamers, which is playing games socially in a living room. This is a very single player solitary gaming experience. Not all of our games are fun to play with multiple people in a living room in front of a game console but it doesn’t lend itself to that kind of an experience as well as what Wii U does now. That would be a disadvantage of going in that direction. Could it be a nice addition to our hardware platform? Sure.”
Mickey Mouse outfit Walt Disney expects global retail sales from its 10-month-old Infinity video game to reach $1 billion.
Disney launched Infinity in August to help turn around its interactive gaming unit, which lost $1.4 billion from fiscal year 2008 to 2013. In an overhaul in March, the division laid off about one-quarter of the workforce, cut the number of games it develops and focused its advertising more on the fast-changing mobile market.
A month ago, Disney reported global retail sales of $550 million for Infinity. Sales of the game helped the interactive unit post a $14 million profit for the quarter that ended in March. Jimmy Pitaro, president of the company’s interactive unit said that Infinity will be a billion-dollar franchise. It is expected to do even better when the game’s next version, “Disney Infinity 2.0: Marvel Super Heroes” is launched. Infinity lets users play with characters from Disney and Pixar films such as Anna and Elsa from “Frozen,” Captain Jack Sparrow from “Pirates of the Caribbean” and Lightning McQueen from “Cars.” The 2.0 version that will be launched in the fall brings in Marvel heroes such as Captain America, Iron Man and Spider-Man.
Still Infinity has not done as well as its rival Activision Blizzard “Skylanders” franchise which has made $2 billion in revenue.
The No. 2 U.S. telecom services provider said on Tuesday it now expects full-year revenue to increase 5 percent, compared with its prior forecast of 4 percent.
AT&T shares inched up 0.3 percent at $35.55.
By the end of 2014, analysts expect two-thirds of AT&T’s postpaid wireless customers to be on its NEXT pricing plan, which unbundles device payments from mobile service payments. Due to the growing popularity of the plan, the company said it expects no service revenue growth in the second quarter and lower average revenue per user.
Net subscriber additions to the company’s wireless services are expected to exceed 800,000 in the second quarter, it said, well above Wall Street estimates of 525,000.
AT&T reaffirmed its full-year forecast for adjusted profit, margins, capital expenditure and free cash flow.
The company, which is scheduled to report second-quarter results on July 23, said it expects to report sales of about 3.2 million AT&T Next smartphones in the current quarter.
AT&T also expects increased content costs on its wireline business, a concern the company has said drove its $48.5 billion bid on DirecTV last month.
MediaTek is the second biggest SoC supplier on the planet in terms of unit shipments, if not revenue, but so far the company has kept a low profile. This year marks its debut at Computex, which we find quite unusual, as the trade show attracts a wide range of tech companies of all sizes.
MediaTek’s low key approach is illustrated by the MT8127 SoC, which it launched at the show. It’s a no frills SoC for affordable tablets. MediaTek even coined a new market segment for the part – “super mid-range.”
It is a quad-core Cortex A7 part clocked at 1.5GHz. It features ARM Mali-450 MP4 graphics and it is designed specifically for affordable tablets, hence there is no LTE on board. The MT8127 supports displays up to 1920×1200, Bluetooth 4.0, Miracast and H.265 video playback. There is even an FM radio on the platform.
It probably explains why MediaTek never bothered showing up at Computex. It was too busy designing frugal chips for high-volume products and silently conquering the market. Plus, MediaTek really doesn’t tend to do spectacular stuff, it just makes down to earth chips and a lot of money in the process.
Sony Corp make seek an equity partner in its TV unit, which has racked up losses every year for a decade, but the Japanese consumer giant was not entertaining selling or exiting the business, its chief executive said on Thursday.
Sony plans to turn its struggling TV business into a separate entity – Sony Visual Products Inc – within a few months to boost transparency.
The splitting off of its TV unit had fired up speculation about a sale, which CEO Kazuo Hirai sought to dispel.
“We are not thinking about selling our TV operations or shutting them down or anything like that,” he said.
“We’re doing business in the competitive environment of a market. I wouldn’t rule out the possibility of an equity tie-up, but right now we are not doing business under the assumption that would happen.”
Hirai, speaking on Thursday at a briefing outlining Sony’s annual strategy, acknowledged TV sales could fall below the company’s forecast for an industry-beating 20 percent rise this fiscal year.
He said, however, that Sony had restructured the business so it could withstand external shocks.
“We’re aware of criticism that the TV target of 16 million units this fiscal year is too high,” he said.
“Even if those risks on volume are borne out, we’ve put in place the capacity to minimise the impact on profitability in the TV operations.”
Sony, roundly criticised for its habit of making overly optimistic forecasts that it repeatedly fails to meet, has pledged that a blast of restructuring in its electronics division this year will return the troubled unit to profit.
The company said it would be possible to expand operating profit threefold in the 2015/16 business year to 400 billion yen, with its aggressive restructuring expected to yield annual cost savings of 100 billion yen.
Hirai’s newly appointed Chief Financial Officer Kenichiro Yoshida said the company did not plan to change the focus of its electronics division away from the three core businesses of mobile, imaging and games through the next fiscal year at least.
China’s Lenovo Group Ltd, the world’s fourth-biggest smartphone maker, saw net profit swell by 29 percent for the business year ended March, as strong smartphone sales helped shore up weak growth in China.
Lenovo is expanding into smartphones to offset a decline in its once-mainstay personal computers (PC) as consumers switch to mobile devices, to the extent that it agreed in January to buy the Motorola Mobility smartphone unit of Google Inc for $2.9 billion.
The company, which became a global brand in 2005 after buying the PC unit of International Business Machines Corp (IBM), also in January agreed to buy IBM’s low-end server unit for $2.3 billion as another way to combat slow PC sales.
Chief Executive Yang Yuanqing said the acquisitions would weigh on finances in the near term. But observers will now be watching to see whether a U.S. move to indict Chinese military officers for cyber espionage on Monday will affect the acquisitions, as they are still subject to U.S. regulatory scrutiny.
However, the acquisitions did not have an impact on net profit for the year through March, which rose 28.7 percent to $817.2 million, Lenovo said in a statement on Wednesday.
That was in line with the $819.7 million SmartEstimate of 34 analysts according to Thomson Reuters Eikon. SmartEstimate’s give greater weighting to estimates of the more accurate analysts.
Revenue rose 14.3 percent to $38.7 billion. Overall weakness in China was offset by growth outside Lenovo’s home market – particularly Europe, the Middle East and Africa (EMEA) and the Americas – as well as a surge in the company’s mobile Internet unit, home to its smartphone business.
“Lenovo’s smartphone unit shipments achieved a record-high level of over 50 million for the fiscal year, growing by 72 percent year-on-year, driven by the strong growth in China and emerging markets outside of China,” the company said in the statement.
Analysts see tough times ahead for Lenovo, saying it may take at least until the end of 2014 to make the acquisitions profitable. In the meantime, smartphone leaders Samsung Electronics Co and Apple Inc will only intensify competition, they say.
Philips is looking to get Nintendo’s Wii U games consoles banned in the US.
Philips has patents in its sights and it said that those patents belong to it and are being used without permission.
The firm has filed a complaint for patent infringement with the US District Court for the District of Delaware, and that has been published on Scribd.
The complaint accuses Nintendo of infringing two Philips patents, and Philips said that they are used in the Wii console and its peripherals. It is pushing for a US sales ban.
The patent numbers at issue end in 379 and 231. Philips claims that it alerted Nintendo to its infringing use of 379 as early as 2011. It registered patent 231 last year and the patent covers interactive device pointing, which is rather a key element of the Wii experience.
Philips is asking for a ban on Wii U sales in the US and monetary damages. The impact on Nintendo could be significant if a sales ban in put in place. So far we have not been able to get a response from the company.
The Philips complaint identifies a long list of infringing hardware. “The infringing interactive virtual modeling products of Nintendo include but are not limited to motion-controlled gaming consoles and motion-detecting devices such as the Wii video gaming systems and related software and accessories including, for example, the Wii console, Wii Remote Plus Controller, Wii Remote Controller, Wii Nunchuk Controller, Wii MotionPlus, Wii Balance Board, Wii U console, Wii U GamePad, and Wii Mini,” it says. “The infringement by Nintendo has been deliberate and willful.”
Philips has requested a jury trial.
Total revenue for the period ended March 31 was roughly $250 million, Twitter stated, more than double the $114 million recorded for the same period in 2013. Twitter’s sales topped analysts’ consensus estimate of $241 million, as polled by Thomson Reuters.
“We had a very strong first quarter,” said Twitter CEO Dick Costolo in the company’s announcement. “Revenue growth accelerated on a year over year basis fueled by increased engagement and user growth.”
However, Twitter hasn’t managed to turn a profit since it became a public company. The company reported a net loss of more than $132 million for the quarter, nearly quintupling the loss of roughly $27 million reported for the year-ago period.
The company’s earnings per share loss was $0.23, a tad worse than a loss of $0.21 reported last year. On a pro forma basis, excluding share-based compensation and other adjustments, Twitter broke even, beating analysts’ expectations of a loss of $0.03 per share.
Twitter’s stock was down to $38.30 in after hours trading, down considerably from its $42.62 Tuesday close.
Twitter, like Google and Facebook, makes the bulk of its money from advertising — $226 million for the quarter, up 125 percent. The lion’s share of its advertising — 80 percent in the first quarter — comes from mobile.
To continue growing its ad revenue, Twitter needs to attract more users and increase the time they spend using the service. As a public company, Twitter is under pressure to make its service more accessible to a mainstream audience.
The company in recent months has tried to address this, partly through cosmetic changes like redesigning user profile pages and making photos more prominent in people’s streams.
Twitter is making progress in this area, but not very rapidly. Compared to the same period last year, Twitter grew its monthly active users by 25 percent, to 255 million. But compared to the fourth quarter of 2013, Twitter grew its monthly active users sequentially by less than 6 percent.
On mobile, Twitter now has 198 million monthly active users — a 31 percent increase, the company said.
MediaTek has shown off one of its most interesting SoC designs to date at the China Electronic Information Expo. The MT6595 was announced a while ago, but this is apparently the first time MediaTek showcased it in action.
It is a big.LITTLE octa-core with integrated LTE support. It has four Cortex A17 cores backed by four Cortex A7 cores and it can hit 2.2GHz. The GPU of choice is the PowerVR G6200. It supports 2K4K video playback and recording, as well as H.265. It can deal with a 20-megapixel camera, too.
The really interesting bit is the modem. It can handle TD-LTE/FDD-LTE/WCDMA/TD-SCDMA/GSM networks, hence the company claims it is the first octa-core with on board LTE. Qualcomm has already announced an LTE-enabled octa-core, but it won’t be ready anytime soon. The MT6595 will – it is expected to show up in actual devices very soon.
Of course, MediaTek is going after a different market. Qualcomm is building the meanest possible chip with four 64-bit Cortex A57 cores and four A53 cores, while MediaTek is keeping the MT6595 somewhat simpler, with smaller 32-bit cores.
In response to an all-time low in user growth figures during the recent quarter, Twitter Chief Executive Dick Costolo informed worried Wall Street analysts that the company would make a number of changes to freshen up the service.
The redesign, while mostly cosmetic, hinted at what Costolo described in February as a willingness to experiment with new ways to organize content. Users can now “pin” a tweet to stay at the top of their feed, a rare instance of Twitter departing from the continuously rolling format that has defined the service.
Tweets that have received more re-tweets or replies will also appear slightly larger to spur more user engagement.
The new layout, which will be available to a small group of users initially, will be widely deployed to Twitter’s 241 million users in the coming weeks, the company said.
Twitter reported higher-than-expected fourth-quarter revenue on February 6, but investors focused on user growth of just 3.8 percent, the lowest rate of quarter-on-quarter growth since Twitter began disclosing user figures. The San Francisco-based company went public in November.
In recent weeks, Twitter has also reportedly been testing a number of new advertising units, such as ads that include download links for mobile apps.
As part of Tuesday’s refresh, Twitter said users will also be allowed to select a large banner picture to display across the top of their profile page, as well as a much larger profile picture, two features that resemble another social network familiar to most of the world’s Internet users: Facebook.
The HTC One spent its year at the top of the product line receiving rave reviews but was undermined by advertising widely criticized as confusing, sending the company’s market share into freefall.
HTC was once a firm third to Apple Inc and Samsung Electronics Co Ltd, selling 10 percent of smartphones globally two years ago, but it ended 2013 with a market share of just 2 percent, showed data from researcher Strategy Analytics.
The company started 2014 by booking a net loss of T$1.88 billion ($62.06 million) for January-March. That compared with a mean loss of T$1.59 billion estimated by 18 analysts polled by Reuters, and profit of T$85 million logged a year earlier.
Revenue fell 22.6 percent to T$33.12 billion, the company said in a statement on Monday.
HTC, however, broke 28 months of on-year revenue declines with a rise of 2.16 percent in March, and said it expected to return to profit in the second quarter thanks in part to the late-March release of its upgraded flagship, the HTC One M8.
Shares of HTC have fallen 38 percent over the past year, compared with a 12 percent rise in the Taiwan Stock Exchange Weighted Index. Ahead of the release, they closed up 3.6 percent versus the benchmark’s 0.1 percent loss.
The former contract manufacturer released a series of mid-range smartphones in recent weeks, predicting cheaper phones in emerging markets will help it return to profit this year.
It has also launched a partnership with search engine giant Google Inc to manufacture smart watches.
But it is the new flagship HTC One M8 that the company hopes will help it reestablish itself as a challenger to market leaders Apple and Samsung.
“The M8 is good, but it’s not as revolutionary as the previous flagship,” said Yuanta Securities analyst Dennis Chan. “Everyone is watching the second quarter to see how it sells.”
Tech website CNET.com awarded the phone four and a half stars out of five, calling it “a stunning sequel” to last year’s HTC One – a phone whose equally strong reviews were not matched by marketing and so did not translate into strong sales.
The new flagship could be in for a similarly rough sales ride as smartphone growth globally is likely to slow this year to 19 percent from 39 percent in 2013, and taper off over the next few years, showed data from researcher IDC.
As smartphones mature and technological upgrades become more incremental, analysts say even more importance will be placed on marketing and brand image – an area Chairwoman Cher Wang admitted HTC “didn’t do well” last year.
To distinguish itself to trend-conscious consumers, HTC must learn from Apple, whose innovative brand image and marketing strategy has won plaudits, said Taipei-based brand consultant Mark Stocker.
“Mimic them, but figure out what your brand stands for,” said Stocker. “If Apple is Mercedes Benz, try to make yourself BMW.”
Juniper Networks plans to reduce its global workforce by six percent and focus on its high-growth businesses. Juniper said most of the cuts would impact middle management positions and that it expected to incur cash charges of about $35 million in the first quarter, related to severance and other expenses. The company had 9,483 full-time employees as of December 31.
Juniper also said it would stop development of the application delivery controller technology, which helps remove excess load from servers, resulting in a non-cash intangible asset impairment charge of about $85 million. The company said it plans to consolidate its facilities, flog off of about 300,000 square feet of leased facilities.
Juniper added that it expected to record other non-cash asset write-downs of about $10 million in the first quarter and that it expects to carry out more restructuring in the second quarter.
Hedge fund Elliott recently claimed that Juniper shares were “undervalued” and could be worth $35-$40 if Juniper focused on revamping its core business of making routers and switches for mobile carriers such as Verizon and AT&T. Shares of Juniper are currently worth at $26.35.
Web hosting company The GoDaddy Group Inc is gearing up for a second attempt at an initial public offering, according to two people familiar with the matter, as the 2014 tech IPO pipeline continues to grow.
GoDaddy, the Internet domain registrar and web host known for its racy ads, would join a number of high-profile tech names expected to go public this year in the wake of Twitter Inc’s successful debut. They include “Candy Crush” developer King Digital and cloud services providers Box and Dropbox.
The company is in the process of selecting underwriters for its IPO, one of the two sources said on condition of anonymity.
GoDaddy was not immediately available for comment.
GoDaddy had filed to go public in 2006 but was told at the time that it would be required to take a 50 percent haircut — a percentage that is subtracted from the par value of assets that are being used as collateral — on its initial public offering.
The company instead decided to pull its filing, citing unfavorable market conditions.
The company, founded in 1997, was eventually acquired by a private equity consortium led by KKR & Co and Silver Lake in 2011 for $2.25 billion. Silver Lake declined to comment while KKR did not immediately respond to a request for comment.
Other private equity buyers included Technology Crossover Ventures.
GoDaddy, which provides website domain names, is famous for airing bawdy commercials with scantily clad women for the past decade during the Super Bowl.
The Wall Street Journal first reported on the plans.
China’s e-commerce giant Alibaba Group Holding has agreed to acquire controlling interest in ChinaVision Media Group Ltd for $804 million, giving it access to TV and movie content as competition in the world’s biggest Internet market becomes increasingly cutthroat.
The pact, which sent ChinaVision’s stock surging, comes amid a flurry of deals as Alibaba, social media giant Tencent Holdings Ltd and search engine Baidu Inc seek to expand into each other’s turf.
This week Tencent said it was taking a stake in China’s No. 2 online retailer JD.com, with the new partnership gunning for Alibaba’s Achilles heel – its weakness in mobile.
Alibaba’s acquisition of TV and movie content is aimed at retaining current users and attracting more, and comes on the heels of its launch of its Ali TV operating system last July as well as the launch of a mobile gaming platform this year.
ChinaVision and Alibaba said they will establish a strategic committee to explore future opportunities in online entertainment and media-related areas.
Alibaba will, through a subsidiary, buy 60 percent of ChinaVision’s enlarged share capital at HK$0.50 apiece, a discount of about 21 percent to its previous stock close.
ChinaVision stock jumped by more than three times in value to around HK$2.27 in early trade. The stock was suspended on February 25 ahead pending an announcement.
Tencent, which had an 8 percent stake in ChinaVision, will see its stake diluted to 3 percent after the Alibaba deal.
The agreement also comes as Alibaba prepares to launch an IPO. The company has been valued at around $140 billion, according to an average of 12 analysts’ estimates.
In the deal with ChinaVision, Goldman Sachs advised Alibaba, while Reorient Financial Markets Ltd was the financial adviser for ChinaVision.