Yahoo Inc is expected today to reveal cost-cutting efforts and give details of how it is evaluating possible acquisitions as it faces mounting pressure from an activist investor, the Wall Street Journal reported, citing a person who was briefed on the plan.
Yahoo is considering purchasing one or more large technology startups with some of the $5.8 billion it made from the initial public offering of Alibaba Group Holding Ltd, the newspaper said.
Representatives at Yahoo did not immediately respond to an email seeking comment outside regular U.S. business hours.
Last month, activist investor Starboard Value LP publicly pressured Yahoo to cut what it referred to as a “bloated” cost structure.
Starboard, the second activist investor to target Yahoo in the last three years, also said the company should quickly “monetize” its Asian assets, which exceed the enterprise value of its actual business.
Earlier this month, Yahoo said it is reducing the size of its operations in Bangalore, India, the Internet company’s largest engineering facility outside its California headquarters. It is also closing its office in Jordan.
Yahoo is “streamlining” its operations in foreign offices, which might involve a combination of closing offices, cutting jobs and moving workers to its Sunnyvale, California, headquarters, the Journal said.
BlackBerry’s new qwerty Passport smartphone quickly sold out just hours after going on sale online last Wednesday, with another 200,000 back orders waiting in line, BlackBerry CEO John Chen proudly announced.
Chen didn’t indicate how many units were sold online, but said ShopBlackBerry.com sold out the Passport in six hours, with Amazon.com selling iout in 10 hours before customers began leaving online orders that had reached 200,000 as the day it debuted. The device has a price tag of $599 unlocked.
“That’s extremely good receptivity” for Passport, Chen said.
But that wasn’t Chen’s only good news in what he called a “very solid” second quarter that ended Aug. 30 with an earnings loss of $11 million, or 2 cents per share, compared to an 11-cent per share loss the previous quarter. Still, revenues were $916 million for the quarter, down from $966 million in the previous quarter, and well below the $1.5 billion reported for the same quarter a year ago.
Chen predicted profitability for BlackBerry by mid-year 2015, possibly in the first fiscal 2016 quarter that starts in March 2015. “You can see a progressively good trend going forward,” Chen said.
Chen said that large companies, especially in banking and government, are coming back to BlackBerry for its smartphones and BlackBerry Enterprise Server 10 software for security and management. They are coming for “stability,” he said.
“The product is broader and deeper and has history with most customers,” Chen added. “I have spoken to many executives and people are very interested in working with us. Our technology works and works well. Governments use it and major banks use it. We’re winning them back — knock on wood, I don’t want to be overconfident — and we’re starting to see that with very big companies.”
He also predicted more interest in BlackBerry once it launches its next operating system, BlackBerry 12, on Nov. 13 at an event in San Francisco.
The company posted a number of successes, including what it called a “normalized” use of cash of $36 million in the recent quarter, compared to $255 million in the prior quarter.
BlackBerry Ltd reported a smaller quarterly loss on Friday and is showing encouraging signals about its endangered smartphone business as well as its software and services sales, spurring a more than 4 percent jump in its shares.
The Canadian company, a smartphone pioneer pushed to the margins by Apple’s iPhone and devices running Google’s Android software, is now focusing more on software and services than on hardware as it works through a long turnaround.
On the services front, the company reported a huge number of conversions in its second quarter to its heavily promoted new device management platform. But BlackBerry’s hardware unit also offered hopeful news, posting an adjusted profit for the first time in five quarters, helped by lower manufacturing costs and strong demand for its low-end Z3 handsets in emerging markets.
“This is the first time in a long time that we have actually made money on hardware,” Chief Executive John Chen told reporters, while hinting at plans to unveil new phones at Mobile World Congress in Barcelona in 2015. “We think we can continue on that track, so hardware is no longer going to be a drag to the margin and the earnings.”
The Waterloo, Ontario-based company’s revenue in North America rose from the previous quarter, but sales slipped elsewhere. Its total revenue was down more than 40 percent from a year earlier.
“They’re taking all the right steps, which is great. It’s encouraging to see,” said BGC Partners analyst Colin Gillis. “Now we’ve got to see what Chen can do about the revenue decline.”
BlackBerry shares were up 5.2 percent at C$11.45 on the Toronto Stock Exchange and up 4.6 percent at $10.26 on Nasdaq.
The one-time smartphone industry pioneer recently concluded a three-year long restructuring process and has largely halted the bleed, but it is now up to Chief Executive John Chen to prove that the company’s new devices and services are capable of generating sustainable new streams of revenue and returning it to profitability.
“BlackBerry is still fighting for survival. They still need to turn around and develop a viable ongoing business model,” said Morningstar analyst Brian Colello.
“Their products are certainly pointing toward that and the new strategy makes sense, but there is still a lot of execution risk at this point in a very competitive market.”
BlackBerry debuted the Passport on Wednesday in Toronto, with simultaneous events also held in London and Dubai.
The launch of the Passport, which boasts a big square screen and a unique touch-sensitive tactile keyboard, will kick off a frenzied spell for Waterloo, Ontario-based BlackBerry. The company is set to report fiscal second-quarter results on Friday and within a couple of months it is also expected to launch the long-awaited BlackBerry Classic, which bears similarities to its once wildly popular Bold smartphone.
“BlackBerry just needs one hit phone for now,” Colello said. “It doesn’t quite matter whether it is the Passport, the Classic or anything else, but they do need one device to jump-start the hardware business again. The big question really is whether any of these devices will kick-start it.”
The company is hoping the Classic and the launch of its new mobile device management system – BlackBerry Enterprise Service 12 (BES12) – will help it claw back ground ceded to rivals in both the hardware and services market.
The BES 12 platform will allow IT managers at large firms and government agencies to not only manage and secure BlackBerry devices, but also all Android, iOS and Windows-based devices on one platform.
Chen, a well-regarded turnaround expert in the tech sector, intends to remain a competitor in the smartphone arena, but is focused on reshaping the company to build on its core strengths in areas like mobile data security and mobile device management.
French budget-conscious telecom operator Iliad has set a mid-October deadline to decide whether to improve its bid for T-Mobile US or walk away as it faces resistance from seller Deutsche Telekom, several people familiar with the situation said.
Deutsche Telekom, which owns 66 percent of the fourth-largest U.S. carrier, has doubts that Iliad will be able to improve the U.S. business since the French startup has no track record in the country, a source close to the German company’s management said.
Under the deal structure proposed by Iliad, Deutsche Telekom would have to keep a stake in the combined company.
Iliad is currently in talks with several U.S. banks to help it finance a possible improved bid for T-Mobile US alongside existing lenders HSBC and BNP Paribas, the people familiar with the situation said, after a $33 per share offer for 56.6 percent of T-Mobile US was rejected by Deutsche Telekom.
Chief Financial Officer Thomas Reynaud said Iliad’s key leverage ratio would not surpass 4.5 times net debt to earnings before interest, tax, depreciation and amortization (EBITDA). He also said that Iliad would limit any capital increase to fund the T-Mobile bid to 2 billion euros ($2.57 billion).
Iliad is also seeking to team up with private equity funds including KKR to raise about $5-6.5 billion, the sources, who could not be named because the talks are private, said.
T-Mobile US, Iliad and KKR declined to comment. Deutsche Telekom could not be reached immediately for comment.
Iliad’s management team has now finished road shows to meet U.S. investors and is waiting to hear back from potential investors, the sources said.
Depending on how positive the feedback is from private equity investors, the French firm could be able to table an improved bid in the second week of October, two of the sources said.
Iliad could offer between $35 and $40 per share for a stake in T-Mobile of between 60 percent and 90 percent, depending on the appetite of private equity funds and lenders for the deal, two other sources said.
Nintendo’s Shigeru Miyamoto doesn’t want to make games for “passive” people; the attitude that games ought to be to be a roller-coaster ride, to entertain without challenge, is, to his mind, “pathetic”. That was the message from the legendary game designer in an E3 interview with Edge magazine, published in this month’s edition; it’s been presented by other news outlets as a sign of a Nintendo U-turn, moving away from the casual market it sought with the Wii and the DS in favour of re-engaging core gamers.
That’s exactly the sort of message that most of the games media wants to hear, of course. The media, after all, speaks exclusively to core gamers; casual players generally don’t bother with specialist media. “Nintendo has seen the error of its ways and realised that the only people worth making games for are you, my dear brethren!” is a crowd-pleaser of a message; but it’s also a pretty big leap to make from the comments Miyamoto actually made.
First, the context. Edge had just challenged Miyamoto over the fact that his prototype games at E3 were all somewhat difficult to play. They used the Wii U GamePad in new ways which it took a while to get accustomed to; the question implied in the text of Edge’s interview isn’t about casual games at all, but about the difficulty level of the prototypes. Miyamoto’s response does make clear a mental distinction between different types of game consumer and a preference for those who enjoy some challenge in their entertainment, but to extrapolate that into a U-turn in Nintendo’s development priorities is an overreach.
In fact, Miyamoto’s comments – equating passivity with “the sort of people who, for example, might want to watch a movie. They might want to go to Disneyland. Their attitude is ‘OK, I am the customer; you are supposed to entertain me’” – are punching in a number of directions at once. Certainly, he’s frustrated by people who play games without ever really engaging with them as a challenge; I doubt he’s a fan of free-to-play systems that allow you to pay money to bypass challenges. Equally, though, those comments are an attack on some approaches to AAA game design; barren technological wonders which serve as little more than on-rails galleries for artwork and pale narrative. Miyamoto isn’t saying “casuals have ruined the market”; far from it. He’s saying that there are consumers who demand spoon-fed entertainment at all points of the spectrum from core to casual, and that he doesn’t want to make games for any of them. (It’s also worth noting that he’s not really blowing his top over this; “pathetic” doesn’t carry the same kind of stinging indictment in Japanese that it does in translation.)
Later in the Edge interview, Miyamoto veers back to similar territory when he talks about the proliferation of mainstream game-capable platforms like iOS and Android devices. While adamant that Nintendo needs to continue to make hardware as well as software, he’s delighted that these new platforms exist, because they provide an “on-ramp” for consumers who haven’t engaged with games before. Nintendo previously saw itself holding a responsibility to try to open up new demographics for the games industry; now it seems that we’ve reached a tipping point, technologically and culturally, where that’s happening by itself.
Edge speculates that this means Miyamoto (and hence Nintendo) believes that the window has shut on making games for entry-level gamers. Titles like Brain Training, which opened up the DS to a huge audience of people who had rarely if ever played games before, may now be pointless; the consumers they ought to target are all playing games on their phones and tablets, so there isn’t an addressable market remaining there for dedicated hardware and more expensive (non-F2P) games. This is fair analysis, and indeed, it probably features in Nintendo’s thinking; let iOS serve as the entry level for new gamers and then hope that those who enjoy the experience will ultimately upgrade to the superior offerings available on a dedicated console.
At the same time, though, Nintendo itself has a conception of “casual” and “core” that probably isn’t shared by the majority of sites reporting Miyamoto’s comments. Miyamoto talks not about themes but about enjoyment of challenge as the distinction between the two groups. To him, a supposedly “adult” game full of blood and ripe language could be utterly casual if it spoon-feeds players with dull, linear gameplay. Meanwhile, a brightly coloured Mushroom Kingdom epic could qualify as “core” if it challenges players in the right way. Consequently, Nintendo’s family-friendly IP and the broad appeal of its themes is entirely compatible with a focus on “core games”, to Miyamoto’s mind. What he’s talking about changing is something at the root of design, not the thematic wallpaper of the company’s games; he wants to challenge people, not to force Nintendo’s artists to remove all the primary colours from their Photoshop palettes.
Viewed in this light, Miyamoto’s comments are an earnest and down-to-earth appraisal of Nintendo’s present situation; still recovering from the heady days of the Wii and figuring out how much of that flash-in-the-pan market is really sustainable, but knuckling down to the challenge of entertaining and delighting (and of course, selling to) those within the audience who really enjoyed games rather than latching onto the platform as a fad. Contrary to the more excitable reportage on his comments, Miyamoto is promising no major changes to Nintendo’s approach; rather, he’s re-committing himself and the company to the same course of action which delivered games like Mario Kart 8, a title firmly within the family-friendly Nintendo tradition and absolutely celebratory of challenge and good design.
“Core gamer” is a phrase that’s picked up a strong whiff of soi-disant elitism and exclusion over the past few years; the phrase “as a core gamer…” in a forum post or comment thread is this odd little corner of society’s equivalent of “I’m not a racist, but…”, indicating a post that’s probably going to brim with self-important awfulness. The bête noire of the core gamer is the “casual”, and just as any move by a game creator or publisher to cater to “casuals” is despised and derided, any prodigal son who declares their abandonment of the casual market and return to the core is greeted with an I-told-you-so roar of delight. This is a thin sliver of the market overall, of course, but a noisy one; as such, it’s worth reiterating that what Miyamoto absolutely did not say is that Nintendo is resetting its course to please these people. Nintendo, for many years to come, will still be a company defined by games that are broadly appealing, generally family-friendly and enormously accessible. Under Miyamoto’s watchful eye, they’ll also be challenging and engaging; but anyone taking his comments on “passivity” as near-confirmation that we’ll see Grand Theft Mario down the line is utterly misreading the situation.
A new survey commissioned by IHS in partnership with Gamer Network has shown that E3 gave a huge boost to the number of people interested in buying a Wii U, with purchasing intent growing by 50 per cent over the course of the event.
Around one thousand core gamers were surveyed on various purchase intentions before and after the LA show, revealing that, whilst Nintendo’s platform started out with the lowest number of people looking at buying it, it saw the biggest benefit from the show’s exposure. 20 per cent of respondents now intend to buy the machine, equal to those who are looking at an Xbox One, which saw a seven per cent increase in popularity.
Sony’s PS4, a clear leader going in to E3, lost ground to its competitors, sinking below 30 per cent of respondents.
In terms of anticipated games, consumers are champing at the bit for 2015′s third-party releases, with Warner’s Arkham Knight leading the charge with an incredible 60 per cent of those surveyed intending to buy the game for at least one platform. Gamers are slightly less excited for 2014′s titles, but Activision’s Destiny is the narrow leader for this year, edging out AC: Unity and GTA V with just under 50 per cent. Both Battlefield Hardline and CoD: Advanced Warfare are lagging behind slightly.
As might be expected, purchasing intent is higher amongst first-party exclusives for current platform owners. On PS4, Uncharted 4 was the most popular game both before and after E3 with 76 per cent of PS4 owners expected to buy it. On Xbox One, it’s Halo which pays the piper, garnering support from 77 per cent of One owners. Over on the Wii U and amazing 89 per cent of owners expect to buy the new Zelda game when it’s released. None of these platform-exclusive heavy hitters will land until 2015 at the earliest, which IHS predicts will increase pre-Christmas reliance on multi-platform games for Microsoft, Sony and, to a lesser extent, Nintendo.
“Although there are other exclusive titles coming in 2014 or already available,” the report reads, “none hold the influence that these leading titles have in terms of selling console hardware, with the exception of Mario Kart 8 for Wii U. As a result, the success of console sales this holiday shopping season will depend more heavily on the total value and content proposition including exclusive content offered by multi-platform games rather than a single, very influential system-selling exclusive. This factor will impact the marketing strategies of the platform holders as we move into 2014′s main shopping season.”
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.