Lawsuit against Microsoft brings gates to the stand
Story first appeared in the Associated Press.
Microsoft's Bill Gates returns to the witness stand Tuesday to defend his company against a $1 billion antitrust lawsuit that claims the software giant tricked a competitor into huge losses and soared onto the market with Windows 95. A Boston Intellectual Property Lawyer was keeping himself posted as the case continued.
Utah-based Novell Inc. sued Microsoft in 2004. The company says Gates duped them into thinking he would include its WordPerfect writing program in the new Windows system, then backed out because he feared it was too good. A Frankfurt Intellectual Property Lawyer watched the high profile case closely.
Novell said it was later forced to sell WordPerfect for a $1.2 billion loss.
Gates testified Monday that Microsoft was racing to put out Windows 95 when he dropped technical features that would no longer support the rival's word processor because engineers warned it would crash the system. A Leeds Intellectual Property Lawyer thought that this appeared to be a reasonable answer.
Windows 95 was a major innovation, and Gates said he had his mind on larger issues. A Nashville intellectual Property Lawyer said this is not uncommon.
Gates said Novell just couldn't deliver a Windows 95 compatible WordPerfect program in time for rollout, and its own Word program was actually better. He said that by 1994, Microsoft Word was rated No. 1 in the market above WordPerfect. A Pittsburgh Intellectual Property Lawyer said she liked Microsoft Word.
WordPerfect once had nearly 50 percent of the market for computer writing programs, but its share quickly plummeted to less than 10 percent as Microsoft's own office programs took hold.
Microsoft lawyers say Novell's loss of market share was its own doing because the company didn't develop a Windows compatible WordPerfect program until months after the operating system's rollout. A San Francisco intellectual Property Lawyer agreed this would be a tough argument.
Gates called it an "important win" in an email to executives.
Attorneys for Novell, a wholly owned subsidiary of The Attachmate Group as a result of a merger earlier this year, concede that Microsoft was under no legal obligation to provide advance access to Windows 95 so Novell could prepare a compatible version. The Redmond, Wash.-based company, however, enticed Novell to work on a version, only to withdraw support months before Windows 95 hit the market, Novell attorney Jeff Johnson said. A Zurich intellectual Property Lawyer listen closely.
Microsoft lawyer David Tulchin argued that Novell's missed opportunity was its own fault, and that Microsoft had no obligation to give a competitor a leg up.
U.S. District Judge J. Frederick Motz late Monday denied Microsoft's request to dismiss the case. He said Novell's claims appeared thin but that he would let the case continue another month and allow a jury to decide. An Athens Intellectual Property Lawyer said a jury would have a tough choice to make.
Gates was the first witness to testify Monday in his company's defense after a month-long case by Novell. Cross-examination begins Tuesday.
Gates, a billionaire, began by testifying about Microsoft's history. He was just 19 when he helped found the company. Today, Microsoft is one of the world's largest software makers, with a market value of more than $210 billion. A Bucharest Intellectual Property Lawyer would like to have Gates as a client.
Wednesday, November 30, 2011
Tuesday, November 29, 2011
Problem with iPhone Battery
Story first appeared in USA TODAY.
Apple concedes there's a problem with the new iPhone 4S battery life after all — a snag that apparently extends to other devices running the new iOS 5 mobile operating system software.
A small number of customers have reported lower-than-expected battery life on iOS 5 devices. Apple has found a few bugs that are affecting battery life, and they will release a software update to address those in a few weeks.
Apple didn't reveal the nature of the bugs or go into any other specifics.
Apple's statement follows a rash of complaints in various online Apple forums from customers upset about battery woes on the new iPhone 4S. As previously reported in USA TODAY, users said they've lost as much as 15% of the battery power per hour, even when the phone is not in active use. Last Friday, TheGuardian reported that Apple engineers contacted iPhone 4S owners seeking an answer to the battery issue.
Some speculation has centered around a location setting involving a "time zone" function that is useful for customers who travel a lot but that may potentially sap the battery. Also, iOS 5 brings a systemwide Notification Center that keeps users constantly informed of missed calls, messages, appointments, reminders and more.
Apple touted great battery life for the iPhone 4S — up to eight hours of 3G talk time — when it introduced the phone last month.
Creative Strategies President Tim Bajarin believes the fact that the issue can be resolved through a software fix makes a big difference and that sales won't be hurt. Apple tends to wait until they're certain of a problem and then works very fast to try and correct it.
The fact that Apple said the bugs lie within iOS 5 suggests other products may be affected, including the iPad, iPod Touch and iPhone 4 and 3GS.
Apple concedes there's a problem with the new iPhone 4S battery life after all — a snag that apparently extends to other devices running the new iOS 5 mobile operating system software.
A small number of customers have reported lower-than-expected battery life on iOS 5 devices. Apple has found a few bugs that are affecting battery life, and they will release a software update to address those in a few weeks.
Apple didn't reveal the nature of the bugs or go into any other specifics.
Apple's statement follows a rash of complaints in various online Apple forums from customers upset about battery woes on the new iPhone 4S. As previously reported in USA TODAY, users said they've lost as much as 15% of the battery power per hour, even when the phone is not in active use. Last Friday, TheGuardian reported that Apple engineers contacted iPhone 4S owners seeking an answer to the battery issue.
Some speculation has centered around a location setting involving a "time zone" function that is useful for customers who travel a lot but that may potentially sap the battery. Also, iOS 5 brings a systemwide Notification Center that keeps users constantly informed of missed calls, messages, appointments, reminders and more.
Apple touted great battery life for the iPhone 4S — up to eight hours of 3G talk time — when it introduced the phone last month.
Creative Strategies President Tim Bajarin believes the fact that the issue can be resolved through a software fix makes a big difference and that sales won't be hurt. Apple tends to wait until they're certain of a problem and then works very fast to try and correct it.
The fact that Apple said the bugs lie within iOS 5 suggests other products may be affected, including the iPad, iPod Touch and iPhone 4 and 3GS.
Wednesday, November 23, 2011
Lenovo Tablet Review
Story first appeared in USA TODAY.
Persuading people to embrace a tablet that's not an Apple iPad compels rivals to come at buyers from a different angle. Lenovo's angle is to market a tablet at mobile professionals and students for office or classroom use. As the Chinese computer maker behind the ThinkPad-branded notebooks that are popular in business, Lenovo would appear to have the chops to pull it off.
The result is the ThinkPad Tablet that went on sale recently. I've appreciated many ThinkPad notebooks dating back to the IBM days — Lenovo snagged the ThinkPad franchise from IBM more than six years ago — so I was curious how Lenovo's tablet would measure up. Well, Lenovo has produced a solid machine — one that in the end I liked but didn't love.
Though the design and use of a tablet obviously differ from a laptop, you get the sense that the device was meant to evoke warm feelings from fans of ThinkPad notebooks. It costs $499 for a model with 16 gigabytes of storage, $569 for 32 GB and $669 for 64 GB. All are Wi-Fi-only; Lenovo hasn't announced specifics for versions with cellular connectivity, though a SIM slot is on board.
The tablet fuses business needs with entertainment and runs Android version 3.1 Honeycomb. It's about an inch taller than an iPad 2 and thicker. At 1.65 pounds, it's got some girth — providing space for a full-size USB 2.0 port that is concealed behind a sliding door. (Apple iPad has no USB.) There's also a microUSB port (you can use for charging) and a miniHDMI port for connecting to a high-definition television (at 1080p) and microSD card reader. There are front- and rear-facing cameras but no flash.
ThinkPad has a 10.1-inch multitouch display protected by Corning's Gorilla Glass. The screen didn't wow me. The home screens are a combination of icons, widgets, a carousel app wheel and a so-called Lenovo Launcher for quick access to frequently used apps, but I found the overall software interface to be cluttered and a little confusing. I rarely used the four physical buttons at the bottom of the screen (in portrait mode) for locking the screen, browsing, returning to a previous screen, and returning to the home screen.
As with the iPad, you can browse the Web (including Adobe Flash video, unlike iPad), fire slingshots on Angry Birds or watch a flick via Netflix. Those are among the preloaded apps, joining an app collection that includes Amazon's Kindle app, Amazon MP3, Slacker radio and the Zinio magazine reader. You can, of course, tap into the Android Market to fetch additional apps or browse through a modest selection in Lenovo's own App Shop, a nod to IT managers who might be concerned about viruses turning up on apps purchased elsewhere.
Still, you are drawn to this machine for its serious side. Along those lines, Lenovo supplies free Documents To Go software that lets you create and edit Microsoft Word, Excel and PowerPoint files — an app that otherwise costs $14.99 in the Android market. The machine has security and remote access tools aimed at keeping the IT manager at your company happy. A USB file manager app lets you easily drag and organize files from a USB drive onto the tablet.
What stood out for me, though: a pair of optional accessories. For starters, ThinkPad is one of the few modern tablets to take advantage of a pressure-sensitive digitizer pen that you can use to draw, doodle or capture notes in a lecture hall or meeting room. The pen costs $30 at Lenovo.com. Too bad the company didn't include it gratis.
One place to use the pen is in MyScript's Notes Mobile app. You can leave notes in a notebook just as you wrote them or convert your scribbles into text, with more misses than hits in my test. You can also use the pen in Documents To Go.
The other accessory is a $100 keyboard folio that lets you prop up the tablet to use with a physical qwerty keyboard. When you're done, you leave the tablet inside and fold the whole thing up into a neat cover. It's a fine mobile keyboard, even if it doesn't measure up to the ones on ThinkPad notebooks. I was less pleased with the finicky optical Trackpoint that made me long for its eraser-head counterpart on Lenovo notebooks. Lenovo says the machine will last 8.7 hours off a single charge with Wi-Fi turned on. But I got only a little more than six hours in an informal battery test with brightness turned up to the max and a heavy dose of streaming video. The machine should do better under less-taxing conditions.
If you're looking for a tablet that mixes business and pleasure, ThinkPad fits the bill.
Persuading people to embrace a tablet that's not an Apple iPad compels rivals to come at buyers from a different angle. Lenovo's angle is to market a tablet at mobile professionals and students for office or classroom use. As the Chinese computer maker behind the ThinkPad-branded notebooks that are popular in business, Lenovo would appear to have the chops to pull it off.
The result is the ThinkPad Tablet that went on sale recently. I've appreciated many ThinkPad notebooks dating back to the IBM days — Lenovo snagged the ThinkPad franchise from IBM more than six years ago — so I was curious how Lenovo's tablet would measure up. Well, Lenovo has produced a solid machine — one that in the end I liked but didn't love.
Though the design and use of a tablet obviously differ from a laptop, you get the sense that the device was meant to evoke warm feelings from fans of ThinkPad notebooks. It costs $499 for a model with 16 gigabytes of storage, $569 for 32 GB and $669 for 64 GB. All are Wi-Fi-only; Lenovo hasn't announced specifics for versions with cellular connectivity, though a SIM slot is on board.
The tablet fuses business needs with entertainment and runs Android version 3.1 Honeycomb. It's about an inch taller than an iPad 2 and thicker. At 1.65 pounds, it's got some girth — providing space for a full-size USB 2.0 port that is concealed behind a sliding door. (Apple iPad has no USB.) There's also a microUSB port (you can use for charging) and a miniHDMI port for connecting to a high-definition television (at 1080p) and microSD card reader. There are front- and rear-facing cameras but no flash.
ThinkPad has a 10.1-inch multitouch display protected by Corning's Gorilla Glass. The screen didn't wow me. The home screens are a combination of icons, widgets, a carousel app wheel and a so-called Lenovo Launcher for quick access to frequently used apps, but I found the overall software interface to be cluttered and a little confusing. I rarely used the four physical buttons at the bottom of the screen (in portrait mode) for locking the screen, browsing, returning to a previous screen, and returning to the home screen.
As with the iPad, you can browse the Web (including Adobe Flash video, unlike iPad), fire slingshots on Angry Birds or watch a flick via Netflix. Those are among the preloaded apps, joining an app collection that includes Amazon's Kindle app, Amazon MP3, Slacker radio and the Zinio magazine reader. You can, of course, tap into the Android Market to fetch additional apps or browse through a modest selection in Lenovo's own App Shop, a nod to IT managers who might be concerned about viruses turning up on apps purchased elsewhere.
Still, you are drawn to this machine for its serious side. Along those lines, Lenovo supplies free Documents To Go software that lets you create and edit Microsoft Word, Excel and PowerPoint files — an app that otherwise costs $14.99 in the Android market. The machine has security and remote access tools aimed at keeping the IT manager at your company happy. A USB file manager app lets you easily drag and organize files from a USB drive onto the tablet.
What stood out for me, though: a pair of optional accessories. For starters, ThinkPad is one of the few modern tablets to take advantage of a pressure-sensitive digitizer pen that you can use to draw, doodle or capture notes in a lecture hall or meeting room. The pen costs $30 at Lenovo.com. Too bad the company didn't include it gratis.
One place to use the pen is in MyScript's Notes Mobile app. You can leave notes in a notebook just as you wrote them or convert your scribbles into text, with more misses than hits in my test. You can also use the pen in Documents To Go.
The other accessory is a $100 keyboard folio that lets you prop up the tablet to use with a physical qwerty keyboard. When you're done, you leave the tablet inside and fold the whole thing up into a neat cover. It's a fine mobile keyboard, even if it doesn't measure up to the ones on ThinkPad notebooks. I was less pleased with the finicky optical Trackpoint that made me long for its eraser-head counterpart on Lenovo notebooks. Lenovo says the machine will last 8.7 hours off a single charge with Wi-Fi turned on. But I got only a little more than six hours in an informal battery test with brightness turned up to the max and a heavy dose of streaming video. The machine should do better under less-taxing conditions.
If you're looking for a tablet that mixes business and pleasure, ThinkPad fits the bill.
Tuesday, October 4, 2011
HP Board Discusses Ousting CEO
Story first appeared on Reuters.
A change could be underway at the top at Hewlett-Packard. The company’s board convened on Wednesday to discuss the possibility of ousting CEO Leo Apotheker after less than a year on the job and may appoint former eBay chief Meg Whitman to fill in as interim CEO, a source familiar with the matter told Reuters. HP’s board of directors has come under increasing pressure in recent months after a raft of controversial decisions has left investors uncertain of the company’s leadership.
Newly minted Apple CEO Tim Cook will try his hand as star presenter at an October 4 company event widely expected to include the launch of the latest version of the tech behemoth’s iPhone handset, according to a report on AllThingD. Sources told the website that the plan is to make the iPhone 5 available to consumers within weeks of the event. Apple has yet to officially announce or even acknowledge that the new device exists at all. For those tired of yet another story about a rumored release date, there was something akin to a confirmation on Wednesday from an unlikely source: former U.S. Vice President Al Gore. Gore, an Apple board member, apparently told a tech conference that the next-generation phone will indeed be available next month. Oops?!
Google Executive Chairman Eric Schmidt traveled to Washington on Wednesday to face critics who say his company has become a dominant and potentially anti-competitive force on the Internet. Schmidt told a Senate antitrust hearing that his company has not “cooked” its search results to favor its own products and listings, despite accusations to the contrary from senators and other Web companies. “Google is in a position to determine who will succeed and who will fail on the Internet,” said Republican Senator Mike Lee, a member of the Senate Judiciary Committee’s antitrust panel. Google has been broadly accused of using its clout in the search market to stomp rivals as it moves into related businesses, like travel search.
Dust your library cards off, Kindle users. Amazon announced on Wednesday its Kindle ebooks will now be available for borrowing from more than 11,000 libraries across the U.S. Borrowing a book seems pretty simple: customers find the book they want on their local library’s website and choose the “Send to Kindle” option, which will then redirect them to Amazon.com where they must log in to complete the check out. Amazon then gives customers the option of delivering the book wirelessly to their device of choice – the books are compatible with all Kindle models and mobile apps – or transferring it manually using a USB drive.
Netflix and Discovery Communications reached an agreement to bring episodes of popular TV adventure shows including “Man vs. Wild” and “River Monsters” to the streaming service, the companies confirmed to Reuters correspondent Paul Thomasch on Wednesday. The two-year deal covers only material from prior seasons of the TV shows and is limited to Netflix subscribers in the United States. Discovery has an option for a third year.
A change could be underway at the top at Hewlett-Packard. The company’s board convened on Wednesday to discuss the possibility of ousting CEO Leo Apotheker after less than a year on the job and may appoint former eBay chief Meg Whitman to fill in as interim CEO, a source familiar with the matter told Reuters. HP’s board of directors has come under increasing pressure in recent months after a raft of controversial decisions has left investors uncertain of the company’s leadership.
Newly minted Apple CEO Tim Cook will try his hand as star presenter at an October 4 company event widely expected to include the launch of the latest version of the tech behemoth’s iPhone handset, according to a report on AllThingD. Sources told the website that the plan is to make the iPhone 5 available to consumers within weeks of the event. Apple has yet to officially announce or even acknowledge that the new device exists at all. For those tired of yet another story about a rumored release date, there was something akin to a confirmation on Wednesday from an unlikely source: former U.S. Vice President Al Gore. Gore, an Apple board member, apparently told a tech conference that the next-generation phone will indeed be available next month. Oops?!
Google Executive Chairman Eric Schmidt traveled to Washington on Wednesday to face critics who say his company has become a dominant and potentially anti-competitive force on the Internet. Schmidt told a Senate antitrust hearing that his company has not “cooked” its search results to favor its own products and listings, despite accusations to the contrary from senators and other Web companies. “Google is in a position to determine who will succeed and who will fail on the Internet,” said Republican Senator Mike Lee, a member of the Senate Judiciary Committee’s antitrust panel. Google has been broadly accused of using its clout in the search market to stomp rivals as it moves into related businesses, like travel search.
Dust your library cards off, Kindle users. Amazon announced on Wednesday its Kindle ebooks will now be available for borrowing from more than 11,000 libraries across the U.S. Borrowing a book seems pretty simple: customers find the book they want on their local library’s website and choose the “Send to Kindle” option, which will then redirect them to Amazon.com where they must log in to complete the check out. Amazon then gives customers the option of delivering the book wirelessly to their device of choice – the books are compatible with all Kindle models and mobile apps – or transferring it manually using a USB drive.
Netflix and Discovery Communications reached an agreement to bring episodes of popular TV adventure shows including “Man vs. Wild” and “River Monsters” to the streaming service, the companies confirmed to Reuters correspondent Paul Thomasch on Wednesday. The two-year deal covers only material from prior seasons of the TV shows and is limited to Netflix subscribers in the United States. Discovery has an option for a third year.
New Memory Chip Line Hurts Competition
Story first appeared on Reuters.
Samsung Electronics, the world's No.1 memory chip maker, said on Thursday it had started operations at a new memory chip line, a move that may further exacerbate semiconductor oversupply and hit smaller rivals.
The South Korean firm said the new line was the industry's largest and most advanced memory fabrication facility, producing chips with 20-nanometre class processing technology, which improves manufacturing costs by some 50 percent.
Lower line-widths processing technology allows more circuits on a chip, making them smaller, cheaper, more powerful and more energy efficient.
The new line comes as computer memory prices have fallen more than 30 percent over the past three months to below production costs due to faltering demand from computer makers.
Global shipments of computers are projected to grow only a low-to-mid single digit percent this year as consumers switch to more popular tablets and smartphones.
Samsung competes with local rival Hynix Semiconductor Inc, Japan's Elpida Memory Inc and Taiwan's Powerchip.
Smaller rivals are struggling with worsening profitability and bracing for a tough outlook as weak demand and falling prices force them to delay capital-intensive facility upgrades.
Elpida said last week it was considering shifting some production to Taiwan to cope with a currency near record highs and to survive in a dwindling market.
Samsung invested 12 trillion won ($10.4 billion) in construction of the new facility in Hwaseong, south of Seoul, since it started construction in May last year.
Samsung said it would also boost production of NAND-type flash memory chips to meet market demand. They currently do not sell Used NetVanta Routers.
Samsung Electronics, the world's No.1 memory chip maker, said on Thursday it had started operations at a new memory chip line, a move that may further exacerbate semiconductor oversupply and hit smaller rivals.
The South Korean firm said the new line was the industry's largest and most advanced memory fabrication facility, producing chips with 20-nanometre class processing technology, which improves manufacturing costs by some 50 percent.
Lower line-widths processing technology allows more circuits on a chip, making them smaller, cheaper, more powerful and more energy efficient.
The new line comes as computer memory prices have fallen more than 30 percent over the past three months to below production costs due to faltering demand from computer makers.
Global shipments of computers are projected to grow only a low-to-mid single digit percent this year as consumers switch to more popular tablets and smartphones.
Samsung competes with local rival Hynix Semiconductor Inc, Japan's Elpida Memory Inc and Taiwan's Powerchip.
Smaller rivals are struggling with worsening profitability and bracing for a tough outlook as weak demand and falling prices force them to delay capital-intensive facility upgrades.
Elpida said last week it was considering shifting some production to Taiwan to cope with a currency near record highs and to survive in a dwindling market.
Samsung invested 12 trillion won ($10.4 billion) in construction of the new facility in Hwaseong, south of Seoul, since it started construction in May last year.
Samsung said it would also boost production of NAND-type flash memory chips to meet market demand. They currently do not sell Used NetVanta Routers.
Monday, October 3, 2011
Another New CEO This Year HP
Story first appeared in USA TODAY.
Hewlett-Packard on Thursday named Meg Whitman CEO, ending the disastrous 10-month run of Leo Apotheker.
Whitman, the former eBay CEO for a decade, immediately takes over a tech giant that has seemingly lost its way. HP (HPQ) said Ray Lane, a former Oracle executive, will become executive chairman of the company's board of directors after previously serving as non-executive chairman.
The ouster of Apotheker, who also lasted less than a year as CEO of SAP, didn't happen overnight. It was an incremental decision brought on by the board's mounting frustration with missed sales forecasts and the poor handling of HP's announcement last month to spin off or sell its multibillion-dollar PC division.
But investors are just as frustrated with HP's board, which has burned through two CEOs — Apotheker and Mark Hurd— in rapid succession.
The crisis is deep. At a time when consumers increasingly are snapping up smartphones and tablets in lieu of lower-cost PCs, HP decided to switch course. Apotheker wanted to transform HP into a provider of more profitable software and services for businesses, like IBM and others. HP still may follow that course as that is the right long-term strategy.
Rumblings of Apotheker's ouster gained steam this week, prompting HP's board to powwow Thursday to hash out issues. One topic was canning Apotheker, who slashed sales forecasts, reneged on promises to integrate mobile software into devices and faced a slumping stock price. HP shares fell 5%, to $22.80, Thursday before the Whitman appointment.
Apotheker will get a handsome severance package, including $7.2 million in pay and bonuses and stock worth about $3.5 million, based on Thursday's closing price. He also gets to keep the $8.6 million bonus and relocation assistance he received in the 2011 employment contract he signed last November, according to company filings. Hurd received severance valued at about $37 million when he was ousted in August 2010.
Hewlett-Packard on Thursday named Meg Whitman CEO, ending the disastrous 10-month run of Leo Apotheker.
Whitman, the former eBay CEO for a decade, immediately takes over a tech giant that has seemingly lost its way. HP (HPQ) said Ray Lane, a former Oracle executive, will become executive chairman of the company's board of directors after previously serving as non-executive chairman.
The ouster of Apotheker, who also lasted less than a year as CEO of SAP, didn't happen overnight. It was an incremental decision brought on by the board's mounting frustration with missed sales forecasts and the poor handling of HP's announcement last month to spin off or sell its multibillion-dollar PC division.
But investors are just as frustrated with HP's board, which has burned through two CEOs — Apotheker and Mark Hurd— in rapid succession.
The crisis is deep. At a time when consumers increasingly are snapping up smartphones and tablets in lieu of lower-cost PCs, HP decided to switch course. Apotheker wanted to transform HP into a provider of more profitable software and services for businesses, like IBM and others. HP still may follow that course as that is the right long-term strategy.
Rumblings of Apotheker's ouster gained steam this week, prompting HP's board to powwow Thursday to hash out issues. One topic was canning Apotheker, who slashed sales forecasts, reneged on promises to integrate mobile software into devices and faced a slumping stock price. HP shares fell 5%, to $22.80, Thursday before the Whitman appointment.
Apotheker will get a handsome severance package, including $7.2 million in pay and bonuses and stock worth about $3.5 million, based on Thursday's closing price. He also gets to keep the $8.6 million bonus and relocation assistance he received in the 2011 employment contract he signed last November, according to company filings. Hurd received severance valued at about $37 million when he was ousted in August 2010.
Thursday, September 29, 2011
Purchases Using Tablets Has Surprising Results
Story first appeared in the Wall Street Journal.
Retailers have found an interesting characteristic of consumers who browse their websites using tablets: They're much more likely to pull the trigger on purchases than other online shoppers.
That discovery is making retailers focus on tablets ahead of the all-important holiday season, as the tough economic backdrop puts a premium on what the industry calls "conversion"—making sure the shoppers who show up actually buy something.
Tablets still account for only a small percentage of overall e-commerce, but they are punching above their weight. While the conversion rate—orders divided by total visits—is 3% for shoppers using a traditional PC, it is 4% or 5% for shoppers using tablets, says Sucharita Mulpuru, an analyst at Forrester Research.
Many retailers also report that tablet users place bigger orders—in some cases adding 10% to 20% more to the tab—on average than shoppers using PCs or smartphones. Retailers are trying to take advantage of that trend by tweaking their websites to better accommodate tablets and rolling out catalogs that have been developed for the device.
Journal Community
The tablet market is still dominated by Apple Inc.'s iPad. Offerings from new entrants including Amazon.com Inc., which is expected to unveil a tablet Wednesday, could further broaden the market. Forrester Research thinks one-third of U.S. adults could own tablets by 2015.
For most retailers, e-commerce is the fastest growing part of their businesses, posting double-digit revenue gains each year even as in-store growth remains muted. Around 3% of the nearly $150 billion U.S. consumers spent online last year came via mobile devices, of which tablets are a rapidly growing component.
Members of the media examined Sony's new Android-based tablet computers. Tablets account for a small percentage of overall e-commerce, but they are punching above their weight.
While only 9% of online shoppers own tablets, their behavior is encouraging for retailers. Consumers tend to spend more time on the Web after buying a tablet, and nearly half shop from the device, according to a survey of more than 2,300 consumers by Forrester. Tablet owners tend to be wealthier, which gives retailers a self-selected audience of their best customers. They may also be encouraged to spend by less tangible attributes: large touchscreens that draw users into the content, and a portability that helps users get more comfortable than when surfing on PCs.
Macy's, teen retailer Abercrombie & Fitch Co. and Gap Inc. all say they are seeing the highest percentage of conversions from shoppers using tablets. The companies wouldn't disclose figures.
Blake McCrossin, a public-relations associate in New York, says he thought shopping would be the last thing he would do on his iPad. The 30-year-old has since used the Apple device to order everything from clothes to a flat-screen television and has already finished most of his Christmas shopping using it. "The visuals and graphics are amazing, and I get caught up in impulse buying.
Shopping network QVC promotes tablet use on-air and through its social media channels. It is also using alternative technologies to Flash on its website to accommodate the iPad, which doesn't support that software.
Mobile commerce accounts for about 3% of QVC's revenue, which last year came to $7.8 billion. Tablets are the fastest growing part of mobile and deliver a higher conversion rate than mobile or PC users.
Macy's, which owns its namesake department store as well as Bloomingdale's, began making its sites compatible with devices that don't support Flash this year. The department store owner is rethinking the "point and click" experience of its website, which like most others was designed on the premise that links would be clicked with an arrow controlled by a mouse rather than by a user's finger, which is more blunt.
Many retailers are finding tablet users prefer to visit their main websites directly through a browser, just as they would from a PC, even though some companies have pumped lots of money into creating specialized sites that would work better with mobile phones' small screens and long load times.
Cosmetics chain Sephora uses the same website for tablets as it does for PCs, says Bridget Dolan, Sephora's vice president of interactive media. Sephora also has a free tablet app. QVC also says more tablet users visit directly through its website than via its apps.
Some retailers are revamping their catalogs in light of tablets, which allow them to add videos, slideshows, how-to demonstrations and 'order' buttons. Sephora dropped its summer catalog for the first time this year and shifted entirely over to tablets in an experiment to see what effect it would have on sales. The company will continue to produce print versions of its other seasonal catalogs.
Sephora has partnered with Google Inc. and online shopping site TheFind, both of which have tablet apps that aggregate catalogs from brands such as Nordstrom Inc., Crate & Barrel, Neiman Marcus and Urban Outfitters Inc. Users can swipe through their favorite catalogs and place orders through the free apps.
Siva Kumar, CEO of TheFind, says the conversion rate on its Catalogue app is about 10% higher than on its website, and average order size is between 10% and 20% higher.
Tablet users on average are spending three times as much time on the catalog app than on the website, he says.Sephora receives as much revenue from tablets as it does through mobile, even though people visit Sephora by smartphone much more often. Sephora's tablet conversion rate and average order size is also higher than PC and mobile.
Retailers have found an interesting characteristic of consumers who browse their websites using tablets: They're much more likely to pull the trigger on purchases than other online shoppers.
That discovery is making retailers focus on tablets ahead of the all-important holiday season, as the tough economic backdrop puts a premium on what the industry calls "conversion"—making sure the shoppers who show up actually buy something.
Tablets still account for only a small percentage of overall e-commerce, but they are punching above their weight. While the conversion rate—orders divided by total visits—is 3% for shoppers using a traditional PC, it is 4% or 5% for shoppers using tablets, says Sucharita Mulpuru, an analyst at Forrester Research.
Many retailers also report that tablet users place bigger orders—in some cases adding 10% to 20% more to the tab—on average than shoppers using PCs or smartphones. Retailers are trying to take advantage of that trend by tweaking their websites to better accommodate tablets and rolling out catalogs that have been developed for the device.
Journal Community
The tablet market is still dominated by Apple Inc.'s iPad. Offerings from new entrants including Amazon.com Inc., which is expected to unveil a tablet Wednesday, could further broaden the market. Forrester Research thinks one-third of U.S. adults could own tablets by 2015.
For most retailers, e-commerce is the fastest growing part of their businesses, posting double-digit revenue gains each year even as in-store growth remains muted. Around 3% of the nearly $150 billion U.S. consumers spent online last year came via mobile devices, of which tablets are a rapidly growing component.
Members of the media examined Sony's new Android-based tablet computers. Tablets account for a small percentage of overall e-commerce, but they are punching above their weight.
While only 9% of online shoppers own tablets, their behavior is encouraging for retailers. Consumers tend to spend more time on the Web after buying a tablet, and nearly half shop from the device, according to a survey of more than 2,300 consumers by Forrester. Tablet owners tend to be wealthier, which gives retailers a self-selected audience of their best customers. They may also be encouraged to spend by less tangible attributes: large touchscreens that draw users into the content, and a portability that helps users get more comfortable than when surfing on PCs.
Macy's, teen retailer Abercrombie & Fitch Co. and Gap Inc. all say they are seeing the highest percentage of conversions from shoppers using tablets. The companies wouldn't disclose figures.
Blake McCrossin, a public-relations associate in New York, says he thought shopping would be the last thing he would do on his iPad. The 30-year-old has since used the Apple device to order everything from clothes to a flat-screen television and has already finished most of his Christmas shopping using it. "The visuals and graphics are amazing, and I get caught up in impulse buying.
Shopping network QVC promotes tablet use on-air and through its social media channels. It is also using alternative technologies to Flash on its website to accommodate the iPad, which doesn't support that software.
Mobile commerce accounts for about 3% of QVC's revenue, which last year came to $7.8 billion. Tablets are the fastest growing part of mobile and deliver a higher conversion rate than mobile or PC users.
Macy's, which owns its namesake department store as well as Bloomingdale's, began making its sites compatible with devices that don't support Flash this year. The department store owner is rethinking the "point and click" experience of its website, which like most others was designed on the premise that links would be clicked with an arrow controlled by a mouse rather than by a user's finger, which is more blunt.
Many retailers are finding tablet users prefer to visit their main websites directly through a browser, just as they would from a PC, even though some companies have pumped lots of money into creating specialized sites that would work better with mobile phones' small screens and long load times.
Cosmetics chain Sephora uses the same website for tablets as it does for PCs, says Bridget Dolan, Sephora's vice president of interactive media. Sephora also has a free tablet app. QVC also says more tablet users visit directly through its website than via its apps.
Some retailers are revamping their catalogs in light of tablets, which allow them to add videos, slideshows, how-to demonstrations and 'order' buttons. Sephora dropped its summer catalog for the first time this year and shifted entirely over to tablets in an experiment to see what effect it would have on sales. The company will continue to produce print versions of its other seasonal catalogs.
Sephora has partnered with Google Inc. and online shopping site TheFind, both of which have tablet apps that aggregate catalogs from brands such as Nordstrom Inc., Crate & Barrel, Neiman Marcus and Urban Outfitters Inc. Users can swipe through their favorite catalogs and place orders through the free apps.
Siva Kumar, CEO of TheFind, says the conversion rate on its Catalogue app is about 10% higher than on its website, and average order size is between 10% and 20% higher.
Tablet users on average are spending three times as much time on the catalog app than on the website, he says.Sephora receives as much revenue from tablets as it does through mobile, even though people visit Sephora by smartphone much more often. Sephora's tablet conversion rate and average order size is also higher than PC and mobile.
Thursday, September 15, 2011
Can Best Buy Compete With The Internet?
Story first appeared in the Wall Street Journal.
Investors abandoned Best Buy Co. Tuesday amid new signs its big-box strategy is being undermined by cost-conscious shoppers shifting more of their spending to online rivals.
The world's largest electronics chain reported a 30% drop in quarterly profit and saw its stock decline after saying sales at its U.S. stores open at least 14 months dropped for the fifth-consecutive quarter. However, Used HP Procurve Routers say a slight increase in sales.
Its shares, which reached their lowest level since December 2008 in Tuesday trading, fell 6.5% to $23.35 in 4 p.m. composite trading on the New York Stock Exchange.
While the retailer said it gained market share in smartphones and tablets—the hot growth categories in electronics retailing—those gains fell short of offsetting declines in its old cash cows, sales of televisions and computers.
Best Buy also cut its full-year earnings forecast, saying it expected tough consumer spending trends to continue through the holidays.
Some analysts said investors appear to be losing confidence with what they see as a slow response by management to a growing crisis.
Executives earlier this year set plans to cut the company's big-box square footage by 10% over the next five years as leases expire, but company critics want the retailer to close underperforming stores faster.
Best Buy Chief Executive Brian Dunn said in an interview the company's 1,100 U.S. namesake stores are still an advantage over online-only rivals such as Amazon.com Inc. Roughly 40% of online purchases from Best Buy are picked up by customers in stores, it said during a conference call with analysts.
Mr. Dunn said he understands there is sentiment in the market that they'd like to see him close more stores, but the company's mixture of online and store retailing is the winning scenario for the long haul. He added that there are still things in the physical world that are going to be important: expert advice and the ability to see and touch the latest tablets.
Best Buy became the dominant electronics retailer in America through oversized stores that carried a broad assortment of music and movie discs, televisions and computers, all under one roof. But online competitors now offer vastly greater assortments—without collecting sales taxes in most U.S. states—and movie and music sales have dwindled due to the rise of digital downloads, turning what was once an advantage into a potential liability.
Best Buy has responded by beefing up its online assortment by more than 20,000 extra items this year, and expanding a smaller new store format called Best Buy Mobile that is focused on selling smartphones inside malls, but not Used Adtran Switches. But its signature stores are still struggling to adapt to the changes in the electronics market, and analysts worry many of them have become showroom" for merchandise that consumers wind up purchasing online from competitors such as Amazon.
In addition to concerns its big-box stores may be too large for modern electronics retailing, Best Buy faces questions about its struggling venture into U.K. retailing. Best Buy said Tuesday it remains committed to opening namesake stores in the U.K. despite disappointing early results from a partnership with Carphone Warehouse Group PLC.
Best Buy established its electronics dominance largely by grabbing an outsized market share in lucrative categories such as high-definition televisions and laptop computers. But sales of those products are stagnating, as many consumers are being cautious with new purchases and delaying replacing older models.
Profit for its fiscal second quarter, ended Aug. 27, fell to $177 million, or 47 cents a share, from $254 million, or 60 cents a share, a year earlier. Revenue was up a hair at $11.35 billion.
Meanwhile, Best Buy is facing tough competition for such items as tablets and smartphones, for which the market is significantly more fragmented due to rival stores run by mobile-phone carriers, as well as the retail outlets of Apple Inc.
For example, mobile phones now make up 15% of all electronic sales but are only 5% of Best Buy's sales. However, they have considered increasing sales by selling Used Cisco Catalyst Switches.
Best Buy said it now expects a lower profit this year than it had previously projected. Though the company actually raised its per-share earnings outlook to a range of $3.35 to $3.65, up from $3.30 to $3.55, it was now factoring in the expected benefits of buying back $1.5 billion in stock to reduce shares outstanding.
Investors abandoned Best Buy Co. Tuesday amid new signs its big-box strategy is being undermined by cost-conscious shoppers shifting more of their spending to online rivals.
The world's largest electronics chain reported a 30% drop in quarterly profit and saw its stock decline after saying sales at its U.S. stores open at least 14 months dropped for the fifth-consecutive quarter. However, Used HP Procurve Routers say a slight increase in sales.
Its shares, which reached their lowest level since December 2008 in Tuesday trading, fell 6.5% to $23.35 in 4 p.m. composite trading on the New York Stock Exchange.
While the retailer said it gained market share in smartphones and tablets—the hot growth categories in electronics retailing—those gains fell short of offsetting declines in its old cash cows, sales of televisions and computers.
Best Buy also cut its full-year earnings forecast, saying it expected tough consumer spending trends to continue through the holidays.
Some analysts said investors appear to be losing confidence with what they see as a slow response by management to a growing crisis.
Executives earlier this year set plans to cut the company's big-box square footage by 10% over the next five years as leases expire, but company critics want the retailer to close underperforming stores faster.
Best Buy Chief Executive Brian Dunn said in an interview the company's 1,100 U.S. namesake stores are still an advantage over online-only rivals such as Amazon.com Inc. Roughly 40% of online purchases from Best Buy are picked up by customers in stores, it said during a conference call with analysts.
Mr. Dunn said he understands there is sentiment in the market that they'd like to see him close more stores, but the company's mixture of online and store retailing is the winning scenario for the long haul. He added that there are still things in the physical world that are going to be important: expert advice and the ability to see and touch the latest tablets.
Best Buy became the dominant electronics retailer in America through oversized stores that carried a broad assortment of music and movie discs, televisions and computers, all under one roof. But online competitors now offer vastly greater assortments—without collecting sales taxes in most U.S. states—and movie and music sales have dwindled due to the rise of digital downloads, turning what was once an advantage into a potential liability.
Best Buy has responded by beefing up its online assortment by more than 20,000 extra items this year, and expanding a smaller new store format called Best Buy Mobile that is focused on selling smartphones inside malls, but not Used Adtran Switches. But its signature stores are still struggling to adapt to the changes in the electronics market, and analysts worry many of them have become showroom" for merchandise that consumers wind up purchasing online from competitors such as Amazon.
In addition to concerns its big-box stores may be too large for modern electronics retailing, Best Buy faces questions about its struggling venture into U.K. retailing. Best Buy said Tuesday it remains committed to opening namesake stores in the U.K. despite disappointing early results from a partnership with Carphone Warehouse Group PLC.
Best Buy established its electronics dominance largely by grabbing an outsized market share in lucrative categories such as high-definition televisions and laptop computers. But sales of those products are stagnating, as many consumers are being cautious with new purchases and delaying replacing older models.
Profit for its fiscal second quarter, ended Aug. 27, fell to $177 million, or 47 cents a share, from $254 million, or 60 cents a share, a year earlier. Revenue was up a hair at $11.35 billion.
Meanwhile, Best Buy is facing tough competition for such items as tablets and smartphones, for which the market is significantly more fragmented due to rival stores run by mobile-phone carriers, as well as the retail outlets of Apple Inc.
For example, mobile phones now make up 15% of all electronic sales but are only 5% of Best Buy's sales. However, they have considered increasing sales by selling Used Cisco Catalyst Switches.
Best Buy said it now expects a lower profit this year than it had previously projected. Though the company actually raised its per-share earnings outlook to a range of $3.35 to $3.65, up from $3.30 to $3.55, it was now factoring in the expected benefits of buying back $1.5 billion in stock to reduce shares outstanding.
Technology: IPad Outsells 19-1
Story first appeared in Bloomberg News.
Research In Motion Ltd., depending on its new PlayBook to bolster sales as demand for its BlackBerry phones withers, may have shipped just one of the tablet computers last quarter for every 19 iPads from Apple Inc.
The company, which reports earnings tomorrow, probably sold about 490,000 PlayBooks during the first full quarter of sales, according to a Bloomberg survey of analysts, compared with the 9.25 million iPads shipped last quarter. Analysts cut estimates for full-year PlayBook shipments, to an average of 2.2 million, according to the survey.
RIM overplayed the PlayBook in terms of its sales and prospects,
said Charlie Wolf, an analyst at Needham & Co. in New York. What this really shows is that the company’s prospects will depend on the next generation of BlackBerrys.
When RIM first disclosed plans for a tablet last year, analysts including Tero Kuittinen, then at MKM Partners LLC, said the device had the potential to evolve into a significant new product category.
Yet RIM didn’t get the 7-inch tablet to market until April, a year after the first iPad and behind rivals such as Samsung Electronics Co.
Even then, RIM drew criticism for introducing the PlayBook without dedicated e-mail or instant messaging and a shortage of consumer applications like Netflix Inc. movies.
The company will ship about 1.5 million tablets this year, compared with 39.2 million for Apple and 7 million for Samsung, said Michael Walkley, an analyst at Canaccord Genuity Ltd.
Minneapolis-based Walkley, who has a hold rating on the company said RIM hasn’t given up on the PlayBook, but it’s clearly off to a poor start. That creates huge pressure on the new BlackBerry phones, he said.
Revenue Decline
Last week, Walkley lowered his PlayBook forecast for fiscal 2012 to
1.5 million from 2.2 million, and William Power, an analyst at Robert W Baird & Co., cut his 2012 estimate to 2 million units from 2.45 million. This week, Steven Li, an analyst at Raymond James Ltd., reduced his PlayBook forecast to 2.4 million units from 4 million.
The Waterloo, Ontario-based company will likely report its first revenue decline in nine years when it releases results tomorrow. Sales for the fiscal second quarter will probably decline to $4.53 billion from $4.62 billion, according to a Bloomberg survey of analysts.
Profit may drop to 91 cents a share from $1.46, according to analysts.
New Smartphones
RIM is struggling to compete in the smartphone market against Apple and companies such as Samsung and Motorola Mobility Holdings Inc. that use Google Inc.’s Android operating system. RIM’s share of the global smartphone-software market dropped to 12 percent in the second quarter from 19 percent a year earlier, according to Gartner Inc. In the same period, Apple climbed to 18 percent from 14 percent, and Android rose to 43 percent of the market.
After its last earnings report in June, RIM tumbled 21 percent as the company cut its profit forecast for the year. RIM also unveiled plans to eliminate about 2,000 jobs, or a 10th of its workforce.
RIM slipped 4 cents to $30.13 yesterday in Nasdaq Stock Market trading and has dropped 48 percent this year.
The company is introducing new smartphones to gain back ground against rivals. RIM started selling phones that run on the BlackBerry 7 operating system in the U.S. this month and in Europe last month. The company plans to shift to a new operating system, QNX, with a lineup of phones that co-Chief Executive Officer Mike Lazaridis said will come out in early 2012.
Analysts have mixed impressions of the latest phones. Power, of Robert W Baird, said early sales of the BlackBerry 7 phones are sluggish.
Ehud Gelblum, an analyst at Morgan Stanley, said positive initial reviews may bolster sales.
QNX Prospects
Models like the new touchscreen Bold 9900 are proving popular with corporate users and existing BlackBerry fans, while phones without keyboards like the Torch 9810, aimed at ordinary customers, are selling less well, said Canaccord’s Walkley.
He said consumer-centric retail store checks indicated smartphone customers continue to overwhelmingly choose the iPhone 4 or new Android smartphones.
The real test of RIM’s ability to compete with Apple and Google will come when it introduces the first QNX phones, said Gelblum. Because of how long it took RIM to get the PlayBook on the market, he’s concerned they may be delayed.
Gelblum, who is based in New York and rates RIM equal weight and said BB7 is just a stepping stone to QNX devices, but given RIM’s recent track record, it is difficult to know for certain if these devices ship on time.
Slow sales of RIM’s PlayBook raise the stakes for the next generation of smartphones. Now more than ever, RIM needs a hit to rebound the company's fortunes.
Research In Motion Ltd., depending on its new PlayBook to bolster sales as demand for its BlackBerry phones withers, may have shipped just one of the tablet computers last quarter for every 19 iPads from Apple Inc.
The company, which reports earnings tomorrow, probably sold about 490,000 PlayBooks during the first full quarter of sales, according to a Bloomberg survey of analysts, compared with the 9.25 million iPads shipped last quarter. Analysts cut estimates for full-year PlayBook shipments, to an average of 2.2 million, according to the survey.
RIM overplayed the PlayBook in terms of its sales and prospects,
said Charlie Wolf, an analyst at Needham & Co. in New York. What this really shows is that the company’s prospects will depend on the next generation of BlackBerrys.
When RIM first disclosed plans for a tablet last year, analysts including Tero Kuittinen, then at MKM Partners LLC, said the device had the potential to evolve into a significant new product category.
Yet RIM didn’t get the 7-inch tablet to market until April, a year after the first iPad and behind rivals such as Samsung Electronics Co.
Even then, RIM drew criticism for introducing the PlayBook without dedicated e-mail or instant messaging and a shortage of consumer applications like Netflix Inc. movies.
The company will ship about 1.5 million tablets this year, compared with 39.2 million for Apple and 7 million for Samsung, said Michael Walkley, an analyst at Canaccord Genuity Ltd.
Minneapolis-based Walkley, who has a hold rating on the company said RIM hasn’t given up on the PlayBook, but it’s clearly off to a poor start. That creates huge pressure on the new BlackBerry phones, he said.
Revenue Decline
Last week, Walkley lowered his PlayBook forecast for fiscal 2012 to
1.5 million from 2.2 million, and William Power, an analyst at Robert W Baird & Co., cut his 2012 estimate to 2 million units from 2.45 million. This week, Steven Li, an analyst at Raymond James Ltd., reduced his PlayBook forecast to 2.4 million units from 4 million.
The Waterloo, Ontario-based company will likely report its first revenue decline in nine years when it releases results tomorrow. Sales for the fiscal second quarter will probably decline to $4.53 billion from $4.62 billion, according to a Bloomberg survey of analysts.
Profit may drop to 91 cents a share from $1.46, according to analysts.
New Smartphones
RIM is struggling to compete in the smartphone market against Apple and companies such as Samsung and Motorola Mobility Holdings Inc. that use Google Inc.’s Android operating system. RIM’s share of the global smartphone-software market dropped to 12 percent in the second quarter from 19 percent a year earlier, according to Gartner Inc. In the same period, Apple climbed to 18 percent from 14 percent, and Android rose to 43 percent of the market.
After its last earnings report in June, RIM tumbled 21 percent as the company cut its profit forecast for the year. RIM also unveiled plans to eliminate about 2,000 jobs, or a 10th of its workforce.
RIM slipped 4 cents to $30.13 yesterday in Nasdaq Stock Market trading and has dropped 48 percent this year.
The company is introducing new smartphones to gain back ground against rivals. RIM started selling phones that run on the BlackBerry 7 operating system in the U.S. this month and in Europe last month. The company plans to shift to a new operating system, QNX, with a lineup of phones that co-Chief Executive Officer Mike Lazaridis said will come out in early 2012.
Analysts have mixed impressions of the latest phones. Power, of Robert W Baird, said early sales of the BlackBerry 7 phones are sluggish.
Ehud Gelblum, an analyst at Morgan Stanley, said positive initial reviews may bolster sales.
QNX Prospects
Models like the new touchscreen Bold 9900 are proving popular with corporate users and existing BlackBerry fans, while phones without keyboards like the Torch 9810, aimed at ordinary customers, are selling less well, said Canaccord’s Walkley.
He said consumer-centric retail store checks indicated smartphone customers continue to overwhelmingly choose the iPhone 4 or new Android smartphones.
The real test of RIM’s ability to compete with Apple and Google will come when it introduces the first QNX phones, said Gelblum. Because of how long it took RIM to get the PlayBook on the market, he’s concerned they may be delayed.
Gelblum, who is based in New York and rates RIM equal weight and said BB7 is just a stepping stone to QNX devices, but given RIM’s recent track record, it is difficult to know for certain if these devices ship on time.
Slow sales of RIM’s PlayBook raise the stakes for the next generation of smartphones. Now more than ever, RIM needs a hit to rebound the company's fortunes.
Apple Winning Sales Race
Story first appeared in USA TODAY.
The breathless anticipation swirling around the upcoming iPhone 5 release, and the runaway success of the iPad 2, may make it seem like Apple is entirely focused on its iOS devices these days.
But the company's Mac division is no slouch, either.
According to the latest figures from research firm NPD, MacBooks, Mac Minis and iMacs had a really strong summer, with sales rising 22% in July and August. Based on those figures, Gene Munster — a veteran Apple analyst at Piper Jaffray — released a short note predicting Apple will sell a total of 4.5 million Macs this quarter. (And that's a conservative estimate, based on the notion sales will slow to 16% growth for the quarter overall.)
To put that in perspective, Apple sold 4.1 million Macs during the 2010 holiday quarter — traditionally the strongest time of year. That marks the company's previous one-quarter record.
What's driving all the sales? In part, they represent a roaring start for Lion, the latest version of OS X, which came out in July and is packed with more cool, new features than the average OS X upgrade. On its first day of release, Lion — which is only available online or pre-installed in new Macs — saw an incredible 1 million downloads. That made it more popular than any previous Apple desktop operating system.
Timed to the Lion release, Apple also launched updated versions of the MacBook Air, Mac Mini and Apple Cinema Display. After this the sales of IBM pSeries Servers leveled off.
Things should naturally quiet down a bit in the Mac section of Apple Stores as Lion gets a little longer in the tooth. On the other hand, nobody knows how much foot traffic the iPhone 5 launch will bring into stores next month — or how many customers might pick up a laptop or a Mini while they're there.
But it seems a fair bet that the passing of the baton from Steve Jobs to Tim Cook has not slowed the juggernaut that is Apple — just as we predicted.
The breathless anticipation swirling around the upcoming iPhone 5 release, and the runaway success of the iPad 2, may make it seem like Apple is entirely focused on its iOS devices these days.
But the company's Mac division is no slouch, either.
According to the latest figures from research firm NPD, MacBooks, Mac Minis and iMacs had a really strong summer, with sales rising 22% in July and August. Based on those figures, Gene Munster — a veteran Apple analyst at Piper Jaffray — released a short note predicting Apple will sell a total of 4.5 million Macs this quarter. (And that's a conservative estimate, based on the notion sales will slow to 16% growth for the quarter overall.)
To put that in perspective, Apple sold 4.1 million Macs during the 2010 holiday quarter — traditionally the strongest time of year. That marks the company's previous one-quarter record.
What's driving all the sales? In part, they represent a roaring start for Lion, the latest version of OS X, which came out in July and is packed with more cool, new features than the average OS X upgrade. On its first day of release, Lion — which is only available online or pre-installed in new Macs — saw an incredible 1 million downloads. That made it more popular than any previous Apple desktop operating system.
Timed to the Lion release, Apple also launched updated versions of the MacBook Air, Mac Mini and Apple Cinema Display. After this the sales of IBM pSeries Servers leveled off.
Things should naturally quiet down a bit in the Mac section of Apple Stores as Lion gets a little longer in the tooth. On the other hand, nobody knows how much foot traffic the iPhone 5 launch will bring into stores next month — or how many customers might pick up a laptop or a Mini while they're there.
But it seems a fair bet that the passing of the baton from Steve Jobs to Tim Cook has not slowed the juggernaut that is Apple — just as we predicted.
Monday, September 12, 2011
Free TV and Movies
Story first appeared on Kiplinger.com.
Not long ago, TV reception depended on how well your rooftop antenna picked up the signal. But now cables and satellites have commandeered our screens. Today, about 87% of U.S. households subscribe to a multi-channel video service, mainly cable or satellite TV.
Thanks to new offerings via the Internet, viewers are increasingly catching their favorite shows free or for a fraction of what their cable company charges. And going online to view TV shows or movies doesn't mean you're stuck watching programs on your computer or tablet screen.
The Apple TV box ($99), for example, streams iTunes, Netflix, YouTube and some sports programming to your TV. Or you may be able to use a video-game console -- such as a Sony Playstation 3, Wii or Xbox 360 -- or a device designed to stream TV shows and movies from the Web to television, such as a Roku box ($60 to $100) or Boxee ($200). Plus, some Blu-ray players and HDTVs have built-in connections for receiving shows online. Using either a cable or a wireless device, you can connect your PC to your TV and view anything that's streaming to your laptop on your big screen. An HDMI cable, for HDTVs, offers the best-quality picture, and you can find a cable for $15 or less. For about $100 to $200, you can buy a wireless device, such as the Warpia StreamHD, to do the same job.
You may already be paying for Netflix or other services that can substitute for cable, and some replacement programming is free. Here's an incentive: Letting go of cable or satellite TV would save the average household about $840 a year.
Television
A new antenna or shows ordered a la carte from the Web may be all you need.
First, find out what you can watch free on local broadcast TV. At www.antennaweb.org, enter your address and other information about your home to see the stations you can likely receive and the kind of antenna you need to access them. You may be able to find an outdoor antenna for $30 to $150, depending on the type; indoor antennas cost $40 or less, but reception may not be as good.
Then check Hulu.com to see whether you can watch your favorite shows free. Hulu has partnerships with many network and cable channels. A lot of prime-time shows appear on Hulu the morning after they air, although you won't find popular shows from premium cable channels. With Hulu's free service, you can typically watch only the five most recent episodes in the current season; the subscription service, Hulu Plus ($7.99 per month), provides access to full seasons and the ability to stream programs to your TV via gaming consoles and other devices. Also explore the Web sites of networks and cable channels to see what's available. Many have partnerships with Hulu to aggregate content.
Fans of Fox TV shows, take note: If you don't pay for participating cable or satellite services, you now must wait eight days after episodes air before you can watch them free with Hulu's regular service or at Fox.com; Hulu Plus subscribers can watch them the next day. More networks may follow Fox's lead as they try to boost revenue and ratings.
Some services offer TV shows to rent or buy. With iTunes, you can rent single episodes for 99 cents, and Amazon Instant Video sells discounted episodes if you sign up for a TV pass. Full seasons of shows are also available for purchase. These services may be most useful if you've missed most of a current season and want to catch up, if you'd like to buy previous seasons of shows, or if you prefer to own episodes so that you can watch them repeatedly. Otherwise, find out whether you can view new episodes free on Hulu or on the network's Web site.
Movies
Ditch the premium channels and stream or download the latest blockbusters.
Some services allow you to stream the newest movies. Vudu, for example, has a wide selection of high-definition movies available to stream the day they are released on Blu-ray. (You can also watch Vudu movies at Walmart.com.) Amazon Instant Video, CinemaNow, iTunes and Zune also stream new movies that you can watch on your computer or TV. Most of the services also offer a selection of movies (and TV shows) in HD, usually for an additional price. You may not be able to watch HD programming in all formats. Amazon Instant Video, for example, currently streams HD movies to your TV through compatible devices, but not to your computer.
Many online services limit the amount of time you have to watch a rental to one to two days after you begin to play it. Netflix, however, lets you keep discs as long as you wish, and its streaming content is available to view anytime. Netflix is getting heat from customers for changing its pricing model, charging separately for disc-rental and streaming subscriptions. But if you watch several movies in a month, a subscription service could still save you money. If you're primarily interested in newer, popular movies, stick with disc rental. If you'd rather browse for less-current movies, documentaries and TV shows, Netflix's streaming service has a broad selection.
You can search elsewhere for lesser-known or older movies at a discount. Look for 99-cent movie specials from CinemaNow and iTunes. Vudu offers a different 99-cent special every day, and you can choose from thousands of movies to rent for $2 for two nights. Amazon Instant Video has special deals on movies and TV shows, and it compiles movies into price categories. Recently, for example, the first six movies in the Harry Potter series were available to rent for $2.99 each. Hulu has a collection of free movies and documentaries but no new releases.
Willing to get up from the couch? Aside from visiting a standard movie-rental store, you can go to Redbox or Blockbuster Express kiosks to rent new movies on DVD or Blu-ray for $3 or less per night. And renting films from the local library is free.
Sports
It's not as easy for rabid fans to watch their favorite teams without cable.
Depending on which sports and teams interest you, you may be able to catch games you want to see free. Fan of the home team? Local broadcast TV may carry most of the games, depending on whether blackout policies prohibit coverage in local markets. (The National Football League, for example, doesn't allow games to be broadcast locally unless they sell out.)
ESPN3.com streams live broadcasts of professional baseball, basketball, soccer, golf and tennis, as well as college football and basketball. You can stream ESPN3.com content to an Xbox 360 gaming console and watch it on your TV, but you must have an Xbox Live Gold membership, which is $9.99 per month or $59.99 per year. (Ditto for streaming Netflix content to your TV with the Xbox 360.)
Some sports leagues, including Major League Baseball, the National Basketball Association and the National Hockey League, offer packages that stream out-of-market games. So if you're a Los Angeles Dodgers fan living in New York City, you can catch your team's games with MLB.tv (depending on blackout rules). NHL GameCenter Live and NBA League Pass Broadband allow subscribers to watch up to 40 out-of-market games per week.
If you want to watch all the NFL games, you have to buy DirecTV's NFL Sunday Ticket package ($335) -- available only if you're a DirecTV customer. (One exception: If you can't get DirecTV -- say, because your condo prevents you from using a satellite dish -- DirecTV allows you to buy Sunday Ticket and stream to your computer without subscribing to a TV package.)
Broadband
You'll need a fast connection.
Enter your address at Broadbandexpert.com to compare prices and data speeds for broadband Internet services available in your area. A tool on the site tests the speed of your current Internet connection. The average bill for Internet service from cable and satellite companies is about $47 a month, but you may find that your current service is still the best deal.
Streaming quality increases with the amount of bandwidth you have. Some services list minimum requirements to stream video. Vudu, for example, suggests a connection speed of at least 1 megabit per second for standard-definition movies (480p), 2.25 Mbps for HD (720p) and 4.5 Mbps for HDX movies (1080p). Netflix automatically chooses the level of video quality you'll stream based on your connection speed.
Not long ago, TV reception depended on how well your rooftop antenna picked up the signal. But now cables and satellites have commandeered our screens. Today, about 87% of U.S. households subscribe to a multi-channel video service, mainly cable or satellite TV.
Thanks to new offerings via the Internet, viewers are increasingly catching their favorite shows free or for a fraction of what their cable company charges. And going online to view TV shows or movies doesn't mean you're stuck watching programs on your computer or tablet screen.
The Apple TV box ($99), for example, streams iTunes, Netflix, YouTube and some sports programming to your TV. Or you may be able to use a video-game console -- such as a Sony Playstation 3, Wii or Xbox 360 -- or a device designed to stream TV shows and movies from the Web to television, such as a Roku box ($60 to $100) or Boxee ($200). Plus, some Blu-ray players and HDTVs have built-in connections for receiving shows online. Using either a cable or a wireless device, you can connect your PC to your TV and view anything that's streaming to your laptop on your big screen. An HDMI cable, for HDTVs, offers the best-quality picture, and you can find a cable for $15 or less. For about $100 to $200, you can buy a wireless device, such as the Warpia StreamHD, to do the same job.
You may already be paying for Netflix or other services that can substitute for cable, and some replacement programming is free. Here's an incentive: Letting go of cable or satellite TV would save the average household about $840 a year.
Television
A new antenna or shows ordered a la carte from the Web may be all you need.
First, find out what you can watch free on local broadcast TV. At www.antennaweb.org, enter your address and other information about your home to see the stations you can likely receive and the kind of antenna you need to access them. You may be able to find an outdoor antenna for $30 to $150, depending on the type; indoor antennas cost $40 or less, but reception may not be as good.
Then check Hulu.com to see whether you can watch your favorite shows free. Hulu has partnerships with many network and cable channels. A lot of prime-time shows appear on Hulu the morning after they air, although you won't find popular shows from premium cable channels. With Hulu's free service, you can typically watch only the five most recent episodes in the current season; the subscription service, Hulu Plus ($7.99 per month), provides access to full seasons and the ability to stream programs to your TV via gaming consoles and other devices. Also explore the Web sites of networks and cable channels to see what's available. Many have partnerships with Hulu to aggregate content.
Fans of Fox TV shows, take note: If you don't pay for participating cable or satellite services, you now must wait eight days after episodes air before you can watch them free with Hulu's regular service or at Fox.com; Hulu Plus subscribers can watch them the next day. More networks may follow Fox's lead as they try to boost revenue and ratings.
Some services offer TV shows to rent or buy. With iTunes, you can rent single episodes for 99 cents, and Amazon Instant Video sells discounted episodes if you sign up for a TV pass. Full seasons of shows are also available for purchase. These services may be most useful if you've missed most of a current season and want to catch up, if you'd like to buy previous seasons of shows, or if you prefer to own episodes so that you can watch them repeatedly. Otherwise, find out whether you can view new episodes free on Hulu or on the network's Web site.
Movies
Ditch the premium channels and stream or download the latest blockbusters.
Some services allow you to stream the newest movies. Vudu, for example, has a wide selection of high-definition movies available to stream the day they are released on Blu-ray. (You can also watch Vudu movies at Walmart.com.) Amazon Instant Video, CinemaNow, iTunes and Zune also stream new movies that you can watch on your computer or TV. Most of the services also offer a selection of movies (and TV shows) in HD, usually for an additional price. You may not be able to watch HD programming in all formats. Amazon Instant Video, for example, currently streams HD movies to your TV through compatible devices, but not to your computer.
Many online services limit the amount of time you have to watch a rental to one to two days after you begin to play it. Netflix, however, lets you keep discs as long as you wish, and its streaming content is available to view anytime. Netflix is getting heat from customers for changing its pricing model, charging separately for disc-rental and streaming subscriptions. But if you watch several movies in a month, a subscription service could still save you money. If you're primarily interested in newer, popular movies, stick with disc rental. If you'd rather browse for less-current movies, documentaries and TV shows, Netflix's streaming service has a broad selection.
You can search elsewhere for lesser-known or older movies at a discount. Look for 99-cent movie specials from CinemaNow and iTunes. Vudu offers a different 99-cent special every day, and you can choose from thousands of movies to rent for $2 for two nights. Amazon Instant Video has special deals on movies and TV shows, and it compiles movies into price categories. Recently, for example, the first six movies in the Harry Potter series were available to rent for $2.99 each. Hulu has a collection of free movies and documentaries but no new releases.
Willing to get up from the couch? Aside from visiting a standard movie-rental store, you can go to Redbox or Blockbuster Express kiosks to rent new movies on DVD or Blu-ray for $3 or less per night. And renting films from the local library is free.
Sports
It's not as easy for rabid fans to watch their favorite teams without cable.
Depending on which sports and teams interest you, you may be able to catch games you want to see free. Fan of the home team? Local broadcast TV may carry most of the games, depending on whether blackout policies prohibit coverage in local markets. (The National Football League, for example, doesn't allow games to be broadcast locally unless they sell out.)
ESPN3.com streams live broadcasts of professional baseball, basketball, soccer, golf and tennis, as well as college football and basketball. You can stream ESPN3.com content to an Xbox 360 gaming console and watch it on your TV, but you must have an Xbox Live Gold membership, which is $9.99 per month or $59.99 per year. (Ditto for streaming Netflix content to your TV with the Xbox 360.)
Some sports leagues, including Major League Baseball, the National Basketball Association and the National Hockey League, offer packages that stream out-of-market games. So if you're a Los Angeles Dodgers fan living in New York City, you can catch your team's games with MLB.tv (depending on blackout rules). NHL GameCenter Live and NBA League Pass Broadband allow subscribers to watch up to 40 out-of-market games per week.
If you want to watch all the NFL games, you have to buy DirecTV's NFL Sunday Ticket package ($335) -- available only if you're a DirecTV customer. (One exception: If you can't get DirecTV -- say, because your condo prevents you from using a satellite dish -- DirecTV allows you to buy Sunday Ticket and stream to your computer without subscribing to a TV package.)
Broadband
You'll need a fast connection.
Enter your address at Broadbandexpert.com to compare prices and data speeds for broadband Internet services available in your area. A tool on the site tests the speed of your current Internet connection. The average bill for Internet service from cable and satellite companies is about $47 a month, but you may find that your current service is still the best deal.
Streaming quality increases with the amount of bandwidth you have. Some services list minimum requirements to stream video. Vudu, for example, suggests a connection speed of at least 1 megabit per second for standard-definition movies (480p), 2.25 Mbps for HD (720p) and 4.5 Mbps for HDX movies (1080p). Netflix automatically chooses the level of video quality you'll stream based on your connection speed.
TOUCHPAD IS DISCONTINUED
Story first appeared on ABC News.
When HP announced its most recent quarterly financial results, the company had some shocking news: it would no longer offer its recently released tablet, the Touchpad. HP followed up this unexpected announcement with a closeout sale, with prices at many retailers initially slashed to a mere $99 -- one fifth of the price of the popular iPad 2 or Samsung Galaxy Tab 10.1. Those promotions spurred such demand for the device that it can now be very hard to find.
Of course, many buyers were no doubt opportunists looking to resell at a higher price. If you happen to come across one, though, it may be worth buying and keeping.
The Touchpad's dimensions are very close to those of the original iPad. Unlike the wide screens on many Android tablets, the dimensions of Touchpad's 9.7-inch screen are more like those of a photo. In fact, the Touchpad's controls and jacks -- including volume, power, and the microUSB charging and transfer port -- are arranged so similarly to those of the iPad that some cases designed for the original iPad may fit the HP device very well.
(The Touchpad is significantly thicker than the iPad 2 and lacks the iPad 2's rear-facing camera. That said, it does have a front-facing camera for video chat, as well as tightly integrated support for the popular Skype service.)
But a big part of the story is webOS, the Touchpad's operating system, which made its debut with the Palm Pre and became part of HP when the company purchased Palm about a year ago. The larger screen really allows webOS to perform well -- particularly its innovative system of managing different on-screen cards that can be grouped to keep parts of related tasks together. For example, if you're a singer using a Touchpad rehearse music, you can have several sheets open at once, alongside a media player screen the plays music tracks, so you can hear how a song should sound as you read the music.
Another Touchpad benefit is Just Type, which lets you search a wide range of Web sites and information on the tablet just by tapping an area of the screen and starting to type. The Touchpad also boasts great sound, courtesy of its stereo speakers and Beats Audio interface for headphones. That should come in handy when watching TV shows and movies, a key way consumers use tablets according to the Broadband Video survey by NPD Connected Intelligence.
Unfortunately, while the Touchpad has solid Web and email apps, only a few hundred third-party applications take advantage of the product today, and the system can get bogged down and present messages about having too many cards open. Like Palm before it, HP has had limited success in wooing developers attracted to the high volumes of the iPad and the promise of sleek Android-based competitors.
Making matters worse, HP compounded its problems before the Touchpad's release by changing a key method for developing webOS applications. Now many apps created for older devices simply won't run on the Touchpad, and it may take some time for even wiling developers to come up to speed with the new system. HP says it will continue to encourage developers to create webOS programs, but it will be an even steeper uphill climb than it has in the past, since there is now so much doubt hanging over the webOS operating system.
Even so, HP did offer a number of nifty accessories in its Touchpad lineup, including a custom Bluetooth keyboard and a Touchstone wireless charging dock. The dock allows you to charge the tablet's battery just by placing it against a flat stand, and the tablet can display a clock or photos as its battery refills. If you can make do with the basics of tablet apps while hoping that HP will be able to finally fill out the Touchpad's app gap, you'll enjoy an elegant if occasionally balky tablet experience.
When HP announced its most recent quarterly financial results, the company had some shocking news: it would no longer offer its recently released tablet, the Touchpad. HP followed up this unexpected announcement with a closeout sale, with prices at many retailers initially slashed to a mere $99 -- one fifth of the price of the popular iPad 2 or Samsung Galaxy Tab 10.1. Those promotions spurred such demand for the device that it can now be very hard to find.
Of course, many buyers were no doubt opportunists looking to resell at a higher price. If you happen to come across one, though, it may be worth buying and keeping.
The Touchpad's dimensions are very close to those of the original iPad. Unlike the wide screens on many Android tablets, the dimensions of Touchpad's 9.7-inch screen are more like those of a photo. In fact, the Touchpad's controls and jacks -- including volume, power, and the microUSB charging and transfer port -- are arranged so similarly to those of the iPad that some cases designed for the original iPad may fit the HP device very well.
(The Touchpad is significantly thicker than the iPad 2 and lacks the iPad 2's rear-facing camera. That said, it does have a front-facing camera for video chat, as well as tightly integrated support for the popular Skype service.)
But a big part of the story is webOS, the Touchpad's operating system, which made its debut with the Palm Pre and became part of HP when the company purchased Palm about a year ago. The larger screen really allows webOS to perform well -- particularly its innovative system of managing different on-screen cards that can be grouped to keep parts of related tasks together. For example, if you're a singer using a Touchpad rehearse music, you can have several sheets open at once, alongside a media player screen the plays music tracks, so you can hear how a song should sound as you read the music.
Another Touchpad benefit is Just Type, which lets you search a wide range of Web sites and information on the tablet just by tapping an area of the screen and starting to type. The Touchpad also boasts great sound, courtesy of its stereo speakers and Beats Audio interface for headphones. That should come in handy when watching TV shows and movies, a key way consumers use tablets according to the Broadband Video survey by NPD Connected Intelligence.
Unfortunately, while the Touchpad has solid Web and email apps, only a few hundred third-party applications take advantage of the product today, and the system can get bogged down and present messages about having too many cards open. Like Palm before it, HP has had limited success in wooing developers attracted to the high volumes of the iPad and the promise of sleek Android-based competitors.
Making matters worse, HP compounded its problems before the Touchpad's release by changing a key method for developing webOS applications. Now many apps created for older devices simply won't run on the Touchpad, and it may take some time for even wiling developers to come up to speed with the new system. HP says it will continue to encourage developers to create webOS programs, but it will be an even steeper uphill climb than it has in the past, since there is now so much doubt hanging over the webOS operating system.
Even so, HP did offer a number of nifty accessories in its Touchpad lineup, including a custom Bluetooth keyboard and a Touchstone wireless charging dock. The dock allows you to charge the tablet's battery just by placing it against a flat stand, and the tablet can display a clock or photos as its battery refills. If you can make do with the basics of tablet apps while hoping that HP will be able to finally fill out the Touchpad's app gap, you'll enjoy an elegant if occasionally balky tablet experience.
Wednesday, September 7, 2011
Farmers’ Almanac Still Used
Story first appeared in USA TODAY.
The Farmers' Almanac has a hole punched in the corner, made for hanging it on a hook in the outhouse "library" in the olden days. These days, though, there are some higher-tech options, including social networks, cellphones and e-readers used for predicting when you should do fall lawn care.
Known for forecasts that use an old-fashioned formula, the almanac now has a mobile website for smartphones and nearly 6,000 followers on Twitter. More than 30,000 people "like" the publication's Facebook page. By year's end there'll be software applications for Kindle, Nook and iPad.
Karen Shackles, of Dillon, Colo., follows the almanac on Twitter and Facebook, checks its website and receives its email newsletter. She likes the folksy style of the almanac and appreciates its embrace of technology. She and her husband use the information for their snow-plowing business.
She said they try to reach out to see who is giving some long-range forecasts and then they go through them all and put them together and come up with what we might expect for the winter, and the Farmers' Almanac is one of the best sources for long-range forecasts, which is used by those doing fall lawn maintenance.
The latest version of the annually updated almanac, released this week, is predicting stormier-than-usual weather this winter from the Middle Atlantic to New England. Its reclusive weather prognosticator, who works under the pseudonym Caleb Weatherbee, sums it up as a winter of "Clime and Punishment."
Editor Peter Geiger said this one is definitely wet, and definitely stormy, and depending upon where you are, it's going to be either snow or rain, leading farmers to purchase new ag tires.
Elsewhere, the weather formula dating to the 1800s suggests it'll be colder than usual in the Upper Midwest and wetter than usual in the Pacific Northwest.
The Farmers' Almanac has a hole punched in the corner, made for hanging it on a hook in the outhouse "library" in the olden days. These days, though, there are some higher-tech options, including social networks, cellphones and e-readers used for predicting when you should do fall lawn care.
Known for forecasts that use an old-fashioned formula, the almanac now has a mobile website for smartphones and nearly 6,000 followers on Twitter. More than 30,000 people "like" the publication's Facebook page. By year's end there'll be software applications for Kindle, Nook and iPad.
Karen Shackles, of Dillon, Colo., follows the almanac on Twitter and Facebook, checks its website and receives its email newsletter. She likes the folksy style of the almanac and appreciates its embrace of technology. She and her husband use the information for their snow-plowing business.
She said they try to reach out to see who is giving some long-range forecasts and then they go through them all and put them together and come up with what we might expect for the winter, and the Farmers' Almanac is one of the best sources for long-range forecasts, which is used by those doing fall lawn maintenance.
The latest version of the annually updated almanac, released this week, is predicting stormier-than-usual weather this winter from the Middle Atlantic to New England. Its reclusive weather prognosticator, who works under the pseudonym Caleb Weatherbee, sums it up as a winter of "Clime and Punishment."
Editor Peter Geiger said this one is definitely wet, and definitely stormy, and depending upon where you are, it's going to be either snow or rain, leading farmers to purchase new ag tires.
Elsewhere, the weather formula dating to the 1800s suggests it'll be colder than usual in the Upper Midwest and wetter than usual in the Pacific Northwest.
Tuesday, September 6, 2011
Are PCs Dead?
Story first appeared in USA TODAY.
Steve Jobs' bombshell resignation as CEO. Hewlett-Packard's abdication of its multibillion-dollar PC group. Google's $12.5 billion purchase of Motorola Mobility. Dell's wobbly sales forecast.
The whipsaw sequence of recent events in the technology industry highlighted what many are calling the rise of mobility and the marginalization of the PC. Meteoric spikes in the sale of smartphones and tablets are merely hastening the diminished status of the traditional desktop PC, whose sales have flattened the past few years with little relief in sight. This has great benefits for Used HP Blade Servers.
The shift from PCs to mobile devices and so-called cloud-based computing has sent ripples throughout the high-tech industry, uprooting HP's business strategy and propelling a Google wireless partnership that seemed unthinkable weeks ago.
Google Chairman Eric Schmidt put it bluntly last week at a cloud conference here: He said tech had exhausted the limits of the PC as a platform, and the future would center on mobile devices.
Absent Jobs' daily wizardry and exacting standards, many now openly question whether even Apple can maintain its innovative ways and marketing guile several years from now, further jeopardizing its own PC sales and inflicting more damage on an-already reeling PC industry.
PC's waning dominance
Certainly the PC isn't necessarily going the way of the dinosaur, pay phones and space shuttle missions. But "personal computer" isn't necessarily the first thing most people think of when they talk computers. For many, it's iPhone, Android phone, iPad, Kindle — even BlackBerry.
Mark Dean, an IBM veteran who helped build the first PC 30 years ago, recently wrote that when he helped design the PC, he didn't think he would live long enough to witness its decline on his blog. But, while PCs will continue to be much-used devices, they're no longer at the leading edge of computing.
The social revolution is driving a paradigm shift in hardware and software, says Salesforce.com CEO Marc Benioff, who has predicted the end of the PC for years. HP was the first to go, and others will if they don't keep up with changes, he added.
The rise of software and cloud computing have paralleled the waning dominance of the PC and contributed mightily to its current state, say venture capitalists and tech executives. Kids, in particular, are eschewing desktop PCs and laptops for smartphones and iPads to play games, use e-mail and perform other tasks that do not require large screens.
Pat Richards, a former IBM executive that worked with IBM Memory, is now chief technology officer of SCIenergy, an energy-management software company, says the PC device has evolved in terms of size, shape, use and ubiquity, and there is no doubt software and apps are a huge part of that by letting consumers perform computing tasks everywhere at any time.
He says we are moving from the general-purpose PC to task-specific devices. He adds that the iPad can do a lot of what a PC does, and, increasingly, TV screens are replacing computer screens.
Kevin Spain, general partner at Emergence Capital Partners, which has invested in Salesforce.com and Yammer, a social-networking service for companies says Cloud-based services eliminate the need for heavy local software.
And, despite its formidable stronghold at businesses, there are signs that the Microsoft Windows monopoly is "cracking," says Ben Horowitz, co-founder and general partner at venture-capital firm Andreessen Horowitz.
The massive move to mobile devices and tablets is reflected in worldwide sales. Market researcher Gartner says sales of smartphones will soar 56%, to 467.6 million, this year. Tablet sales will grow nearly four times, to 69.8 million this year, Gartner says.
Worldwide PC shipments, meanwhile, are expected to edge up 9%, to 383.6 million this year, Gartner says.
As PC shipments slacken, so have sales of the peripherals that work with them. U.S. consumer sales of printers and keyboards/mice are flat to slightly up, while those for monitors are flat or slightly declining, says researcher The NPD Group. Intel, meanwhile, increasingly is going mobile. Though it builds chips that power 80% of the world's PCs, it cannot escape the inevitability of the smartphone age.
HP's cautionary tale
The jump to mobile devices, especially outside the U.S., happened so fast that it caught many flat-footed. The immolation of HP, the world's No.1 PC maker, is Exhibit A.
The original garage start-up's abdication of the PC business is the latest blow to an industry reeling from paper-thin margins and a massive migration to mobile computing.
Just a year ago, HP was inhaling lesser rivals such as 3Par and ArcSight and posting sterling financial numbers. Today, it's contemplating whether to sell or spin off its PC division, which could mean more than one-third of its 300,000 employees might be working for someone else soon. With less new sales the sales of Used HP Procurve Routers increases.
HP's decision to distance itself from the PC business reflects CEO Leo Apotheker's desire to expand the company into software and services that help customers deliver computing over the Internet, via the so-called cloud.
Its challenges are underscored by lackluster quarterly results and dim prospects for the near future. HP's about-face echoes a plan laid out by IBM CEO Sam Palmisano in 2005. Then, IBM sold its PC business to Lenovo to focus on services and software. This drove up sales in Used IBM Storage Arrays.
Not dead yet
Or is the PC era — whose roots stretch back 30 years — not dead but merely changing in size and shape?
The post-PC era, if that's the right terminology, is essentially a new mix of desktop PCs and laptops, with smartphones and tablets thrown in. Analysts believe hand-held devices, which are selling like digital hotcakes, are new must-have "addictive" markets and that the PC will continue to rule workplaces and have a place in the home.
Mark Anderson, publisher of Strategic News Service, one of the longest-running tech newsletters, says the PC is not dead. Its paid subscribers include tech executives such as Microsoft CEO Steve Ballmer, Oracle co-president Mark Hurd and Dell CEO Michael Dell.
Anderson says two things are happening: There has been an explosion in consumer devices for watching a movie, reading a book, playing games, looking at photos, and these devices that Steve Jobs incorrectly calls post-PC are mobility devices and carry-alongs, but they have nothing to do with personal computing.
He says the recession impacted PC sales more than anything else, because corporations and government agencies cut back on purchases, and consumers saved their money during a down economy. That means more people are re-purposing old equipment and looking for Used HP Server Racks.
Gartner analyst Michael Gartenberg says tablets such as iPad and Samsung's Galaxy won't displace PCs but will increasingly be used as a second or third device for consumers and business users.
A worldwide installed base of 1.2 billion Windows-based PCs is proof of the PC's relevance, says an analyst at market researcher The NPD Group.
By comparison, Gartner predicts an astounding 1 billion smartphones will be sold in 2014, about double that of PCs in the same year.
Former Microsoft executive Paul Maritz envisions consumers getting mountains of information from whatever device or cloud-based application is best for them.
He says we inexorably are shifting from a device-centric world to an information-centric world.
He added that an individual's data will determine what devices look like, rather than the other way around, because it will outlive any particular piece of hardware where it may reside.
Hardware — whether a desktop PC or tiny smartphone — will always be necessary to encase data, says Sandy Kurtzig, the former Ask CEO who came out of retirement to launch cloud computing-based company Kenandy last week.
Reinventing an industry
History is littered with dead industries that were victims of new ideas or new business models, says Michael Lenox, professor at the University of Virginia's Darden School of Business. In the case of diminished industries, survivors must reinvent themselves. For example, we still have mainframe (computers); they just have a new role. The same will happen with PCs. They may end up being used for PowerPoint presentations. Some have been searching frantically for Used HP Procurve Switches.
Lest anyone else dismiss the PC as an endangered species, consider speculation that Oracle is sniffing at HP's PC division. Even Microsoft has been mentioned as a possible suitor for HP.
Analyst Anderson says HP's situation is unrelated to the health of PC sales. Adding that Lenovo just announced great numbers.
The Hong Kong-based PC maker, benefiting from low-manufacturing costs and government contracts in China, announced $5.8 billion in third-quarter sales.
Microsoft's role
And Microsoft is a multibillion-dollar testament to the power of the PC market. Some 31% of its nearly $70 billion in fiscal year 2011 revenue came from Windows Operating System-related products and services. The Windows OS is still used in more than 90% of the world's PCs, and Microsoft plans to roll out 75 retail outlets called Microsoft Stores in the near future.
Microsoft co-founder Bill Gates said in a 1999 opinion piece in Newsweek, that they prefer to think of this as a PC-plus era that will be just as revolutionary. He added that it will take the PC's power and make it available almost anywhere, on devices that haven't yet been dreamed up, including those that may use a Dell Poweredge Server.
Microsoft still adheres to that credo.
Steve Jobs' bombshell resignation as CEO. Hewlett-Packard's abdication of its multibillion-dollar PC group. Google's $12.5 billion purchase of Motorola Mobility. Dell's wobbly sales forecast.
The whipsaw sequence of recent events in the technology industry highlighted what many are calling the rise of mobility and the marginalization of the PC. Meteoric spikes in the sale of smartphones and tablets are merely hastening the diminished status of the traditional desktop PC, whose sales have flattened the past few years with little relief in sight. This has great benefits for Used HP Blade Servers.
The shift from PCs to mobile devices and so-called cloud-based computing has sent ripples throughout the high-tech industry, uprooting HP's business strategy and propelling a Google wireless partnership that seemed unthinkable weeks ago.
Google Chairman Eric Schmidt put it bluntly last week at a cloud conference here: He said tech had exhausted the limits of the PC as a platform, and the future would center on mobile devices.
Absent Jobs' daily wizardry and exacting standards, many now openly question whether even Apple can maintain its innovative ways and marketing guile several years from now, further jeopardizing its own PC sales and inflicting more damage on an-already reeling PC industry.
PC's waning dominance
Certainly the PC isn't necessarily going the way of the dinosaur, pay phones and space shuttle missions. But "personal computer" isn't necessarily the first thing most people think of when they talk computers. For many, it's iPhone, Android phone, iPad, Kindle — even BlackBerry.
Mark Dean, an IBM veteran who helped build the first PC 30 years ago, recently wrote that when he helped design the PC, he didn't think he would live long enough to witness its decline on his blog. But, while PCs will continue to be much-used devices, they're no longer at the leading edge of computing.
The social revolution is driving a paradigm shift in hardware and software, says Salesforce.com CEO Marc Benioff, who has predicted the end of the PC for years. HP was the first to go, and others will if they don't keep up with changes, he added.
The rise of software and cloud computing have paralleled the waning dominance of the PC and contributed mightily to its current state, say venture capitalists and tech executives. Kids, in particular, are eschewing desktop PCs and laptops for smartphones and iPads to play games, use e-mail and perform other tasks that do not require large screens.
Pat Richards, a former IBM executive that worked with IBM Memory, is now chief technology officer of SCIenergy, an energy-management software company, says the PC device has evolved in terms of size, shape, use and ubiquity, and there is no doubt software and apps are a huge part of that by letting consumers perform computing tasks everywhere at any time.
He says we are moving from the general-purpose PC to task-specific devices. He adds that the iPad can do a lot of what a PC does, and, increasingly, TV screens are replacing computer screens.
Kevin Spain, general partner at Emergence Capital Partners, which has invested in Salesforce.com and Yammer, a social-networking service for companies says Cloud-based services eliminate the need for heavy local software.
And, despite its formidable stronghold at businesses, there are signs that the Microsoft Windows monopoly is "cracking," says Ben Horowitz, co-founder and general partner at venture-capital firm Andreessen Horowitz.
The massive move to mobile devices and tablets is reflected in worldwide sales. Market researcher Gartner says sales of smartphones will soar 56%, to 467.6 million, this year. Tablet sales will grow nearly four times, to 69.8 million this year, Gartner says.
Worldwide PC shipments, meanwhile, are expected to edge up 9%, to 383.6 million this year, Gartner says.
As PC shipments slacken, so have sales of the peripherals that work with them. U.S. consumer sales of printers and keyboards/mice are flat to slightly up, while those for monitors are flat or slightly declining, says researcher The NPD Group. Intel, meanwhile, increasingly is going mobile. Though it builds chips that power 80% of the world's PCs, it cannot escape the inevitability of the smartphone age.
HP's cautionary tale
The jump to mobile devices, especially outside the U.S., happened so fast that it caught many flat-footed. The immolation of HP, the world's No.1 PC maker, is Exhibit A.
The original garage start-up's abdication of the PC business is the latest blow to an industry reeling from paper-thin margins and a massive migration to mobile computing.
Just a year ago, HP was inhaling lesser rivals such as 3Par and ArcSight and posting sterling financial numbers. Today, it's contemplating whether to sell or spin off its PC division, which could mean more than one-third of its 300,000 employees might be working for someone else soon. With less new sales the sales of Used HP Procurve Routers increases.
HP's decision to distance itself from the PC business reflects CEO Leo Apotheker's desire to expand the company into software and services that help customers deliver computing over the Internet, via the so-called cloud.
Its challenges are underscored by lackluster quarterly results and dim prospects for the near future. HP's about-face echoes a plan laid out by IBM CEO Sam Palmisano in 2005. Then, IBM sold its PC business to Lenovo to focus on services and software. This drove up sales in Used IBM Storage Arrays.
Not dead yet
Or is the PC era — whose roots stretch back 30 years — not dead but merely changing in size and shape?
The post-PC era, if that's the right terminology, is essentially a new mix of desktop PCs and laptops, with smartphones and tablets thrown in. Analysts believe hand-held devices, which are selling like digital hotcakes, are new must-have "addictive" markets and that the PC will continue to rule workplaces and have a place in the home.
Mark Anderson, publisher of Strategic News Service, one of the longest-running tech newsletters, says the PC is not dead. Its paid subscribers include tech executives such as Microsoft CEO Steve Ballmer, Oracle co-president Mark Hurd and Dell CEO Michael Dell.
Anderson says two things are happening: There has been an explosion in consumer devices for watching a movie, reading a book, playing games, looking at photos, and these devices that Steve Jobs incorrectly calls post-PC are mobility devices and carry-alongs, but they have nothing to do with personal computing.
He says the recession impacted PC sales more than anything else, because corporations and government agencies cut back on purchases, and consumers saved their money during a down economy. That means more people are re-purposing old equipment and looking for Used HP Server Racks.
Gartner analyst Michael Gartenberg says tablets such as iPad and Samsung's Galaxy won't displace PCs but will increasingly be used as a second or third device for consumers and business users.
A worldwide installed base of 1.2 billion Windows-based PCs is proof of the PC's relevance, says an analyst at market researcher The NPD Group.
By comparison, Gartner predicts an astounding 1 billion smartphones will be sold in 2014, about double that of PCs in the same year.
Former Microsoft executive Paul Maritz envisions consumers getting mountains of information from whatever device or cloud-based application is best for them.
He says we inexorably are shifting from a device-centric world to an information-centric world.
He added that an individual's data will determine what devices look like, rather than the other way around, because it will outlive any particular piece of hardware where it may reside.
Hardware — whether a desktop PC or tiny smartphone — will always be necessary to encase data, says Sandy Kurtzig, the former Ask CEO who came out of retirement to launch cloud computing-based company Kenandy last week.
Reinventing an industry
History is littered with dead industries that were victims of new ideas or new business models, says Michael Lenox, professor at the University of Virginia's Darden School of Business. In the case of diminished industries, survivors must reinvent themselves. For example, we still have mainframe (computers); they just have a new role. The same will happen with PCs. They may end up being used for PowerPoint presentations. Some have been searching frantically for Used HP Procurve Switches.
Lest anyone else dismiss the PC as an endangered species, consider speculation that Oracle is sniffing at HP's PC division. Even Microsoft has been mentioned as a possible suitor for HP.
Analyst Anderson says HP's situation is unrelated to the health of PC sales. Adding that Lenovo just announced great numbers.
The Hong Kong-based PC maker, benefiting from low-manufacturing costs and government contracts in China, announced $5.8 billion in third-quarter sales.
Microsoft's role
And Microsoft is a multibillion-dollar testament to the power of the PC market. Some 31% of its nearly $70 billion in fiscal year 2011 revenue came from Windows Operating System-related products and services. The Windows OS is still used in more than 90% of the world's PCs, and Microsoft plans to roll out 75 retail outlets called Microsoft Stores in the near future.
Microsoft co-founder Bill Gates said in a 1999 opinion piece in Newsweek, that they prefer to think of this as a PC-plus era that will be just as revolutionary. He added that it will take the PC's power and make it available almost anywhere, on devices that haven't yet been dreamed up, including those that may use a Dell Poweredge Server.
Microsoft still adheres to that credo.
Tuesday, August 30, 2011
New Tablet To Be Introduced
Story first appeared on eWeek.com.
Amazon.com (NASDAQ:AMZN) could sell anywhere between 3 million and 5 million Google (NASDAQ:GOOG) Android tablets in the fourth quarter, making it far and away the most successful slate provider on the open-source platform, according to Forrester Research.
The e-commerce giant is expected to introduce a tablet based on Google's Android "Honeycomb" operating system in October. To compete with Apple's iPad, which has sold more than 30 million units to date, Amazon is expected to leverage its expertise in content distribution.
The company will sell applications from its Android Appstore, movies through Amazon Instant Video and MP3 downloads supported by the Amazon Cloud Player storage service for consumption on its media tablet.
Forrester analyst Sarah Rotman Epps, who has first predicted an Amazon tablet in March, said that while she believes the e-tail giant could find success with a tablet, the company would have to price it under $300 and make sure that it has enough devices to meet consumer demand.
Epps' report comes two weeks after Creative Strategies analyst Tim Bajarin said the Amazon tablet might cost $300 to make, but Amazon would discount it by $51 to entice consumers to buy it. Amazon could make up the difference in movie rentals, music downloads, Kindle book sales, other application purchases and advertising.
Amazon, using its one-click buying method as an easy-on-ramp to customers to make purchases through its Android Appstore and regular e-commerce offerings, could make back the $51 difference within six months and make a profit between 10 percent and 30 percent over the last 18 months of the device's accounting period, Bajarin noted.
One interesting caveat to this punditry: Even if the Amazon tablet is built with Google's Android "Honeycomb" operating system, Epps said they shouldn't market it as such. In fact, Amazon might want to take a page out of Barnes & Noble's playbook and play down the Android software on the slate.
Apparently, product strategists from Android tablet OEMs have expressed frustration with the bugginess of the Honeycomb software and the weak user experience of the Android Market.
Only 9 percent of consumers considering buying a tablet actively prefer an Android tablet—compared with 16 percent who prefer iOS and 46 percent who prefer Windows. Barnes & Noble has chosen to emphasize its own brand and user experience on the Nook Color rather than emphasize the Google or Android brands, even though the Nook is built on Android. Amazon may not wish to go that far on the curation spectrum, but it does need to differentiate its flavor of Android from all the rest, and that may come from emphasizing the Amazon experience over the Google one.
On the other hand, the benefit of hitching itself to Android is that Amazon can over time provide its software and services on slates from Samsung, Motorola, Asus, Acer, Toshiba and others.
In a year from now, we could see a range of “Amazon tablets” made by different hardware manufacturers. That is, of course, assuming Apple won't successfully sue to block Android tablet distribution the way it has with Samsung overseas.
Amazon.com (NASDAQ:AMZN) could sell anywhere between 3 million and 5 million Google (NASDAQ:GOOG) Android tablets in the fourth quarter, making it far and away the most successful slate provider on the open-source platform, according to Forrester Research.
The e-commerce giant is expected to introduce a tablet based on Google's Android "Honeycomb" operating system in October. To compete with Apple's iPad, which has sold more than 30 million units to date, Amazon is expected to leverage its expertise in content distribution.
The company will sell applications from its Android Appstore, movies through Amazon Instant Video and MP3 downloads supported by the Amazon Cloud Player storage service for consumption on its media tablet.
Forrester analyst Sarah Rotman Epps, who has first predicted an Amazon tablet in March, said that while she believes the e-tail giant could find success with a tablet, the company would have to price it under $300 and make sure that it has enough devices to meet consumer demand.
Epps' report comes two weeks after Creative Strategies analyst Tim Bajarin said the Amazon tablet might cost $300 to make, but Amazon would discount it by $51 to entice consumers to buy it. Amazon could make up the difference in movie rentals, music downloads, Kindle book sales, other application purchases and advertising.
Amazon, using its one-click buying method as an easy-on-ramp to customers to make purchases through its Android Appstore and regular e-commerce offerings, could make back the $51 difference within six months and make a profit between 10 percent and 30 percent over the last 18 months of the device's accounting period, Bajarin noted.
One interesting caveat to this punditry: Even if the Amazon tablet is built with Google's Android "Honeycomb" operating system, Epps said they shouldn't market it as such. In fact, Amazon might want to take a page out of Barnes & Noble's playbook and play down the Android software on the slate.
Apparently, product strategists from Android tablet OEMs have expressed frustration with the bugginess of the Honeycomb software and the weak user experience of the Android Market.
Only 9 percent of consumers considering buying a tablet actively prefer an Android tablet—compared with 16 percent who prefer iOS and 46 percent who prefer Windows. Barnes & Noble has chosen to emphasize its own brand and user experience on the Nook Color rather than emphasize the Google or Android brands, even though the Nook is built on Android. Amazon may not wish to go that far on the curation spectrum, but it does need to differentiate its flavor of Android from all the rest, and that may come from emphasizing the Amazon experience over the Google one.
On the other hand, the benefit of hitching itself to Android is that Amazon can over time provide its software and services on slates from Samsung, Motorola, Asus, Acer, Toshiba and others.
In a year from now, we could see a range of “Amazon tablets” made by different hardware manufacturers. That is, of course, assuming Apple won't successfully sue to block Android tablet distribution the way it has with Samsung overseas.
Thursday, August 25, 2011
Apple Icon Steps Down
Story first appeared in USA TODAY.
Jobs, the iconic tech visionary who co-founded Apple and recently made it the most valued U.S. corporation, abruptly resigned as chief executive Wednesday night.
Jobs, 56, who has battled pancreatic cancer the past few years and looked noticeably weaker recently, told Apple's board of directors in a brief note that he could no longer meet his duties and expectations as CEO.
The company in recent days overtook Exxon for the title of most-valued corporation but is now a close No. 2.
Jobs wrote that he hereby resign as CEO of Apple, and he would like to serve, if the board sees fit, as chairman of the board, director and Apple employee. He added that as far as his successor goes, he strongly recommends that they execute their succession plan and name Tim Cook as CEO of Apple.
Apple's board quickly named Cook, a 13-year Apple veteran, as CEO and elected Jobs chairman.
But Jobs' passing of the CEO mantle is a seminal moment in corporate history.
Jobs' decision to step down is the latest jaw-dropping news to rock Silicon Valley. Last week, Hewlett-Packard said it was exploring options to sell or spin off its multibillion-dollar PC division — just as the PC industry was celebrating its 30th anniversary. Jobs played a key role in the formation, and maturation, of that industry.
A former Apple senior vice president who worked closely with Jobs from 1980 to 1985 said Hewlett-Packard has given up because of what Apple has done, and the reality is this guy was so committed to making the best products in the world.
Perhaps no tech figure in recent history — or U.S. executive, for that matter — carries as much sway as or has made more of an imprint on his company than Jobs. Since returning to the PC pioneer in late 1997, he almost single-handedly has resurrected the company from near-extinction to a company worth more than $330 billion.
Apple is widely expected to unveil the iPhone 5 this fall and a successor to its popular iPad 2 tablet shortly thereafter. Apple stock is expected to take a blow this morning, and many in the past have openly wondered whether Apple can maintain its mojo and innovative streak without Jobs at the helm.
Shares closed Wednesday at $376.18, up $2.58. But in after-hours trading, after Jobs' resignation, the stock dipped 5% to $358.50.
Taipei-based Foxconn Technology Group, which makes Apple iPhones and iPads, said in a statement that despite Jobs' resignation as CEO, it has every confidence in Apple's leadership and its ability to continue to innovate and to drive much of the global technology industry's growth.
Analysts also expect a smooth transition. Cook, 50, has earned kudos for his steady stewardship of Apple, filling in as temporary CEO, while Jobs was on medical leave. Apple is also renowned for its deep roster of engineers, marketers and other executives.
Gartner's Michael Gartenberg says that despite Jobs being considered by consumers as Apple incarnate, No individual does it alone.
The tech market has been one of the few industries largely immune to the prolonged downturn in the U.S. economy, and Apple had a lot to do with that by churning out eye-catching, popular products such as the iPad and iPhone.
Jobs' run of smash hits has been unprecedented in modern times, says Richard Doherty, an analyst at The Envisioneering Group. He said it's the power to say, “No. " He added that a lot of products could have gotten to market earlier, but he wanted it better. So many products fail because they're not ready, referring to HP's decision last week to ditch its TouchPad tablet computer less than two months after its debut.
Apple's DNA
Jobs' departure from the CEO role won't bruise Apple in the near term, though, experts say.
"The next wave of Apple products are well into the product-development cycle," says Charles Golvin, analyst at Forrester Research. "The next iPhone is certainly done. The next iPad is certainly along the way."
Financial analysts who cover Apple have repeatedly cited the unknown status of Jobs' health among risk factors to the company. That's because Jobs is viewed as a unique category of leader with a hands-on approach tied to much of the company's success.
Jobs has installed a focused and pervasive culture at the company, with people who share his passions. Nonetheless, three senior executives who reported to Jobs have left the company in the past six months. Just last week, vice president Andy Miller stepped down as mobile ad chief to join Highland Capital Partners.
In June, J.C. Penney poached Apple retail chief Ron Johnson, who will become its CEO Nov. 1. And in March, Bertrand Serlet, a senior vice president responsible for development of the Mac operating system, bolted.
What many industry experts express, however, is uncertainty about how Apple will fare without Jobs as CEO in the long term. Though he brought simple, elegant technology to the masses, the reclusive Jobs — even before his illness — rarely spoke publicly, except at Apple events.
But in one interview, in his Pixar office in 1998, he offered a rare insight into who he is. Jobs said he identified with Flik, the idealistic ant in ABug's Life, the animated movie from his Pixar Animation Studios. Flik saves his colony from an army of grasshoppers that bears an eerie resemblance to Microsoft.
Jobs discovered he had a form of pancreatic cancer in October 2003, informed Apple employees in 2004 and acknowledged the cancer during a commencement speech at Stanford University in 2005. In 2009, Jobs took a medical leave. Cook took over day-to-day operations in Jobs' absence then. Jobs later returned to the helm but then in January this year took an indefinite medical leave.
The beginning
At age 21, Jobs co-founded Apple Computer with Steve Wozniak. By 25, Jobs was a millionaire, and he made the cover of Time magazine at 26. But by 30, the prickly Jobs was unceremoniously booted from Apple, in 1985.
During the ensuing dozen "wilderness years," as they were called by Jobs followers, Jobs bought what became Pixar Animation Studios for $10 million from director and producer George Lucas in 1986 and started NeXT Computer in 1988. NeXT struggled to sell its high-priced machines, but Apple acquired it for more than $400 million in 1996, setting the stage for Jobs' return to Apple. Disney bought Pixar in 2006 for $7.4 billion.
Still, there was controversy. Later that same year, Apple — whose stock would soar past $200 per share in 2007 — appointed a special committee that discovered irregularities with roughly one in seven stock grants that Apple issued from 1996 to 2004. Apple was forced to restate earnings and took a pretax charge for unreported compensation expenses of $105 million. Disney also investigated and found backdating at Pixar during Jobs' stint as CEO. Yet the events at the two companies did not cost Jobs his job, as it did dozens of executives at other tech firms. Jobs did not directly benefit from backdated options.
Jobs, the iconic tech visionary who co-founded Apple and recently made it the most valued U.S. corporation, abruptly resigned as chief executive Wednesday night.
Jobs, 56, who has battled pancreatic cancer the past few years and looked noticeably weaker recently, told Apple's board of directors in a brief note that he could no longer meet his duties and expectations as CEO.
The company in recent days overtook Exxon for the title of most-valued corporation but is now a close No. 2.
Jobs wrote that he hereby resign as CEO of Apple, and he would like to serve, if the board sees fit, as chairman of the board, director and Apple employee. He added that as far as his successor goes, he strongly recommends that they execute their succession plan and name Tim Cook as CEO of Apple.
Apple's board quickly named Cook, a 13-year Apple veteran, as CEO and elected Jobs chairman.
But Jobs' passing of the CEO mantle is a seminal moment in corporate history.
Jobs' decision to step down is the latest jaw-dropping news to rock Silicon Valley. Last week, Hewlett-Packard said it was exploring options to sell or spin off its multibillion-dollar PC division — just as the PC industry was celebrating its 30th anniversary. Jobs played a key role in the formation, and maturation, of that industry.
A former Apple senior vice president who worked closely with Jobs from 1980 to 1985 said Hewlett-Packard has given up because of what Apple has done, and the reality is this guy was so committed to making the best products in the world.
Perhaps no tech figure in recent history — or U.S. executive, for that matter — carries as much sway as or has made more of an imprint on his company than Jobs. Since returning to the PC pioneer in late 1997, he almost single-handedly has resurrected the company from near-extinction to a company worth more than $330 billion.
Apple is widely expected to unveil the iPhone 5 this fall and a successor to its popular iPad 2 tablet shortly thereafter. Apple stock is expected to take a blow this morning, and many in the past have openly wondered whether Apple can maintain its mojo and innovative streak without Jobs at the helm.
Shares closed Wednesday at $376.18, up $2.58. But in after-hours trading, after Jobs' resignation, the stock dipped 5% to $358.50.
Taipei-based Foxconn Technology Group, which makes Apple iPhones and iPads, said in a statement that despite Jobs' resignation as CEO, it has every confidence in Apple's leadership and its ability to continue to innovate and to drive much of the global technology industry's growth.
Analysts also expect a smooth transition. Cook, 50, has earned kudos for his steady stewardship of Apple, filling in as temporary CEO, while Jobs was on medical leave. Apple is also renowned for its deep roster of engineers, marketers and other executives.
Gartner's Michael Gartenberg says that despite Jobs being considered by consumers as Apple incarnate, No individual does it alone.
The tech market has been one of the few industries largely immune to the prolonged downturn in the U.S. economy, and Apple had a lot to do with that by churning out eye-catching, popular products such as the iPad and iPhone.
Jobs' run of smash hits has been unprecedented in modern times, says Richard Doherty, an analyst at The Envisioneering Group. He said it's the power to say, “No. " He added that a lot of products could have gotten to market earlier, but he wanted it better. So many products fail because they're not ready, referring to HP's decision last week to ditch its TouchPad tablet computer less than two months after its debut.
Apple's DNA
Jobs' departure from the CEO role won't bruise Apple in the near term, though, experts say.
"The next wave of Apple products are well into the product-development cycle," says Charles Golvin, analyst at Forrester Research. "The next iPhone is certainly done. The next iPad is certainly along the way."
Financial analysts who cover Apple have repeatedly cited the unknown status of Jobs' health among risk factors to the company. That's because Jobs is viewed as a unique category of leader with a hands-on approach tied to much of the company's success.
Jobs has installed a focused and pervasive culture at the company, with people who share his passions. Nonetheless, three senior executives who reported to Jobs have left the company in the past six months. Just last week, vice president Andy Miller stepped down as mobile ad chief to join Highland Capital Partners.
In June, J.C. Penney poached Apple retail chief Ron Johnson, who will become its CEO Nov. 1. And in March, Bertrand Serlet, a senior vice president responsible for development of the Mac operating system, bolted.
What many industry experts express, however, is uncertainty about how Apple will fare without Jobs as CEO in the long term. Though he brought simple, elegant technology to the masses, the reclusive Jobs — even before his illness — rarely spoke publicly, except at Apple events.
But in one interview, in his Pixar office in 1998, he offered a rare insight into who he is. Jobs said he identified with Flik, the idealistic ant in ABug's Life, the animated movie from his Pixar Animation Studios. Flik saves his colony from an army of grasshoppers that bears an eerie resemblance to Microsoft.
Jobs discovered he had a form of pancreatic cancer in October 2003, informed Apple employees in 2004 and acknowledged the cancer during a commencement speech at Stanford University in 2005. In 2009, Jobs took a medical leave. Cook took over day-to-day operations in Jobs' absence then. Jobs later returned to the helm but then in January this year took an indefinite medical leave.
The beginning
At age 21, Jobs co-founded Apple Computer with Steve Wozniak. By 25, Jobs was a millionaire, and he made the cover of Time magazine at 26. But by 30, the prickly Jobs was unceremoniously booted from Apple, in 1985.
During the ensuing dozen "wilderness years," as they were called by Jobs followers, Jobs bought what became Pixar Animation Studios for $10 million from director and producer George Lucas in 1986 and started NeXT Computer in 1988. NeXT struggled to sell its high-priced machines, but Apple acquired it for more than $400 million in 1996, setting the stage for Jobs' return to Apple. Disney bought Pixar in 2006 for $7.4 billion.
Still, there was controversy. Later that same year, Apple — whose stock would soar past $200 per share in 2007 — appointed a special committee that discovered irregularities with roughly one in seven stock grants that Apple issued from 1996 to 2004. Apple was forced to restate earnings and took a pretax charge for unreported compensation expenses of $105 million. Disney also investigated and found backdating at Pixar during Jobs' stint as CEO. Yet the events at the two companies did not cost Jobs his job, as it did dozens of executives at other tech firms. Jobs did not directly benefit from backdated options.
Thursday, August 18, 2011
GOOGLE TO BUY MOTOROLA MOBILITY
Article First Appeared in New York Times:
In a bid to strengthen its mobile business, Google announced on Monday that it would acquire Motorola Mobility Holdings, the cellphone business that was split from Motorola, for $40 a share in cash, or $12.5 billion.
The offer — by far Google’s largest ever for an acquisition — is 63 percent above the closing price of Motorola Mobility shares on Friday. Motorola manufactures phones that run on Google’s Android software.
Android has become an increasingly important platform for Google, as global smartphone adoption accelerates. The platform, launched in 2007, is now used in more than 150 million devices, with 39 manufacturers.
The acquisition would turn Google, which makes the Android mobile operating system, into a full-fledged cellphone manufacturer, in direct competition with Apple.
“This is an emphatic exclamation point that Google is a mobile company,” said Ben Schachter, an analyst with Macquarie Capital. “This is clearly a defensive deal, they were backed in a corner and they had to protect the Android platform.”
Google, Motorola and Mobile
Both companies have met with both successes and struggles as they adapt to and influence a changing market for mobile phones.
The deal answers a big question about Google’s next strategic step in wireless. Google has been battling with Apple and Microsoft over patents.
Last month, Apple and Microsoft led a consortium of technology companies in a $4.5 billion purchase of roughly 6,000 patents from Nortel Networks, the Canadian telecommunications maker that filed for bankruptcy in 2009. Google, which lost out in the bidding, criticized the deal as an anticompetitive strategy. Several weeks later, Google acquired more than 1,000 patents from I.B.M.
Motorola holds more than 17,000 patents.
While the acquisition will move Google directly into the telecommunications hardware business, Larry Page, Google’s chief executive, said in a blog post that “this acquisition will not change our commitment to run Android as an open platform. Motorola will remain a licensee of Android and Android will remain open. We will run Motorola as a separate business.”
Still, the deal is certain to attract significant antitrust scrutiny. The Federal Trade Commission is already investigating Google’s dominance in several areas of its business. The company has agreed to pay a $2.5 billion reverse termination fee, if it walks away, and Motorola will pay a $375 million break-up fee if it takes another offer, according to a person close to the transaction, who was not authorized to speak.
In a conference call on Monday morning, Google said it was confident that it will be able to win regulatory approval, since the deal will ultimately improve competition in the smart phone market.
“We think this is a competitive transaction,” David Drummond, the company’s chief legal officer said. “This is not a horizontal transaction, Google has not materially been in the handset business.”
The acquisition of a major handset maker may still pose a significant challenge to the search giant, which has not specialized in manufacturing or marketing of smartphones. Last year, it closed down the online store for its first Google-branded phone, the Nexus One, citing the store’s underwhelming performance. A Motorola tie-up may also irk other phone manufacturers, like Samsung and HTC, which will now be competing directly with Google.
“Can they convince their competitors that Motorola will truly operate as a standalone business?” Mr. Schachter said.
And while Google has made dozens of acquisitions in recent years, most of them have been for less than $1 billion — despite a current war chest of some $40 billion in cash. On the company’s official blog, Mr. Page said Google was purchasing the handset maker to bolster its Android mobile operating system and increase the number of patents it owned.
Android accounted for 43.4 percent of smartphone sales in the second quarter, according to Gartner Research, a major increase from the year ago period, when it made up about 17 percent of sales.
“Our acquisition of Motorola will increase competition by strengthening Google’s patent portfolio, which will enable us to better protect Android from anticompetitive threats from Microsoft, Apple and other companies,” Mr. Page said.
Carl C. Icahn, Motorola Mobility’s second-largest shareholder, had urged the company last month to “explore alternatives regarding its patent portfolio to enhance shareholder value.” Mr. Icahn owns 9.03 percent of Motorola Mobility.
On Monday, he applauded the transaction, calling it “a great outcome for all shareholders of Motorola Mobility, especially in light of today’s markets.”
Lazard and the law firm of Cleary Gottlieb Steen & Hamilton advised Google. Frank Quattrone’s investment bank, Qatalyst Partners, Centerview Partners and the law firm Wachtell, Lipton, Rosen & Katz advised Motorola Mobility.
The acquisition has been approved by both boards.
In a bid to strengthen its mobile business, Google announced on Monday that it would acquire Motorola Mobility Holdings, the cellphone business that was split from Motorola, for $40 a share in cash, or $12.5 billion.
The offer — by far Google’s largest ever for an acquisition — is 63 percent above the closing price of Motorola Mobility shares on Friday. Motorola manufactures phones that run on Google’s Android software.
Android has become an increasingly important platform for Google, as global smartphone adoption accelerates. The platform, launched in 2007, is now used in more than 150 million devices, with 39 manufacturers.
The acquisition would turn Google, which makes the Android mobile operating system, into a full-fledged cellphone manufacturer, in direct competition with Apple.
“This is an emphatic exclamation point that Google is a mobile company,” said Ben Schachter, an analyst with Macquarie Capital. “This is clearly a defensive deal, they were backed in a corner and they had to protect the Android platform.”
Google, Motorola and Mobile
Both companies have met with both successes and struggles as they adapt to and influence a changing market for mobile phones.
The deal answers a big question about Google’s next strategic step in wireless. Google has been battling with Apple and Microsoft over patents.
Last month, Apple and Microsoft led a consortium of technology companies in a $4.5 billion purchase of roughly 6,000 patents from Nortel Networks, the Canadian telecommunications maker that filed for bankruptcy in 2009. Google, which lost out in the bidding, criticized the deal as an anticompetitive strategy. Several weeks later, Google acquired more than 1,000 patents from I.B.M.
Motorola holds more than 17,000 patents.
While the acquisition will move Google directly into the telecommunications hardware business, Larry Page, Google’s chief executive, said in a blog post that “this acquisition will not change our commitment to run Android as an open platform. Motorola will remain a licensee of Android and Android will remain open. We will run Motorola as a separate business.”
Still, the deal is certain to attract significant antitrust scrutiny. The Federal Trade Commission is already investigating Google’s dominance in several areas of its business. The company has agreed to pay a $2.5 billion reverse termination fee, if it walks away, and Motorola will pay a $375 million break-up fee if it takes another offer, according to a person close to the transaction, who was not authorized to speak.
In a conference call on Monday morning, Google said it was confident that it will be able to win regulatory approval, since the deal will ultimately improve competition in the smart phone market.
“We think this is a competitive transaction,” David Drummond, the company’s chief legal officer said. “This is not a horizontal transaction, Google has not materially been in the handset business.”
The acquisition of a major handset maker may still pose a significant challenge to the search giant, which has not specialized in manufacturing or marketing of smartphones. Last year, it closed down the online store for its first Google-branded phone, the Nexus One, citing the store’s underwhelming performance. A Motorola tie-up may also irk other phone manufacturers, like Samsung and HTC, which will now be competing directly with Google.
“Can they convince their competitors that Motorola will truly operate as a standalone business?” Mr. Schachter said.
And while Google has made dozens of acquisitions in recent years, most of them have been for less than $1 billion — despite a current war chest of some $40 billion in cash. On the company’s official blog, Mr. Page said Google was purchasing the handset maker to bolster its Android mobile operating system and increase the number of patents it owned.
Android accounted for 43.4 percent of smartphone sales in the second quarter, according to Gartner Research, a major increase from the year ago period, when it made up about 17 percent of sales.
“Our acquisition of Motorola will increase competition by strengthening Google’s patent portfolio, which will enable us to better protect Android from anticompetitive threats from Microsoft, Apple and other companies,” Mr. Page said.
Carl C. Icahn, Motorola Mobility’s second-largest shareholder, had urged the company last month to “explore alternatives regarding its patent portfolio to enhance shareholder value.” Mr. Icahn owns 9.03 percent of Motorola Mobility.
On Monday, he applauded the transaction, calling it “a great outcome for all shareholders of Motorola Mobility, especially in light of today’s markets.”
Lazard and the law firm of Cleary Gottlieb Steen & Hamilton advised Google. Frank Quattrone’s investment bank, Qatalyst Partners, Centerview Partners and the law firm Wachtell, Lipton, Rosen & Katz advised Motorola Mobility.
The acquisition has been approved by both boards.
Thursday, August 4, 2011
HP IS CHOSEN FOR GOVERNMENT CONTRACT
Story first appeared in the Silicon Valley News.
HP Enterprise Services, a division of Hewlett-Packard Co, said Monday it has been picked for a U.S. Department of Justice contract to provide information technology support services.
The Palo Alto-based company said its enterprise services division is one of 20 companies that may compete for task orders under the $1.1 billion contract, which has unspecified delivery and quantities.
HP is expected to offer application development, systems and software engineering, Web development and other IT services.
The senior vice president and general manager, U.S. Public Sector, HP Enterprise Services said the government needs to obtain high-quality technical expertise at a reasonable cost. He added HP has experts with significant technological proficiencies who can provide the Department of Justice with innovative information technology solutions while helping them achieve their cost-savings goals.
The award provides for a base year period of performance that ends Sept. 30, with six available one-year option periods.
HP Enterprise Services, a division of Hewlett-Packard Co, said Monday it has been picked for a U.S. Department of Justice contract to provide information technology support services.
The Palo Alto-based company said its enterprise services division is one of 20 companies that may compete for task orders under the $1.1 billion contract, which has unspecified delivery and quantities.
HP is expected to offer application development, systems and software engineering, Web development and other IT services.
The senior vice president and general manager, U.S. Public Sector, HP Enterprise Services said the government needs to obtain high-quality technical expertise at a reasonable cost. He added HP has experts with significant technological proficiencies who can provide the Department of Justice with innovative information technology solutions while helping them achieve their cost-savings goals.
The award provides for a base year period of performance that ends Sept. 30, with six available one-year option periods.
Tuesday, August 2, 2011
MOTOROLA’S PROBLEMS THAT HURT IN THE THIRD QUARTER
Story first appeared in Reuters.
Chief Executive Sanjay Jha said Motorola's Bionic, a high-speed device for Verizon Wireless, would be delayed until September, which was later than analysts had expected for the device whose launch had already been delayed to the summer from its original target for a second quarter launch.
The delay, which also involves a Motorola tablet computer, will put Motorola under ever more pressure to compete with Apple Inc, which is expected to launch a new iPhone this fall at Verizon Wireless.
Analyst Lawrence Harris said tt would have been nice if Motorola had a clear window prior to the release of the new iPhone. Motorola had announced the product on January 5 at the consumer electronics show.
Harris said it's highly unusual to have a product delayed this long. They really had to go back to the drawing board in this, and he noted that many people on Wall Street had hoped for an August launch of the phone.
A high-speed version of Motorola's Xoom tablet, also announced in January, will also be delayed until September, Motorola said. It had also originally slated that product launch for the second quarter.
Gross profit margins will also be worse than expected this quarter, because Motorola was forced to cut the price of its first version of Xoom to compete with rivals such as Apple Inc's iPad and Samsung Electronics's Galaxy Tab.
DELAYS AND PRICE CUT
Motorola cut the price of Xoom to $499 from $799 at Verizon Wireless on July 25 to compete with iPad and tablets like Galaxy as consumers weren't willing to pay a premium for the Motorola device, which like Galaxy is based on Android software from Google Inc. It launched Xoom at Verizon on February 24.
The company gave a third-quarter earnings target ranging from break-even to 10 cents per share, excluding unusual items, compared with analyst expectations for 24 cents a share.
Motorola's full year forecast for 2011 of 48 cents to 60 cents per share missed Wall Street expectations for 71 cents per share.
Jha said he had misjudged pricing in the highly competitive tablet market but vowed that Motorola's profit would be back on track in the fourth quarter, when he promised to introduce more competitive products.
Jha said they now recognize where the price points are. For the fourth quarter they will launch very good, new tablets and we'll have a good quarter.
By year end, Jha promised that Motorola would have five devices based on Long Term Evolution (LTE) -- the high-speed technology both Verizon Wireless and AT&T Inc are using.
This will include at least one more LTE handset besides the Bionic and two more tablets besides the LTE version of Xoom, Jha said.
For the second quarter, it reported a loss of $56 million, or 19 cents per share, compared with a profit of $80 million, or 27 cents per share, a year earlier.
Excluding unusual items Motorola earned 9 cents per share in the quarter, ahead of analyst expectations for 6 cents a share.
Revenue rose to $3.3 billion, beating the average analyst estimate of $3.12 billion, according to Thomson Reuters I/B/E/S.
Motorola said on Thursday it shipped 4.4 million smartphones in the quarter, in line with expectations from six analysts contacted by Reuters. It has also sold 440,000 tablet computers, ahead of analyst expectations for about 366,000.
The company tweaked its full year sales estimate for Android tablets and smartphones to a range of 21 million to 23 million from 20 million to 23 million.
Verizon Wireless is a venture of Verizon Communications and Vodafone Group Plc.
Motorola shares fell to $22.01 in after-hours trading, down 3.9 percent for their $22.91 close on the New York Stock Exchange.
Chief Executive Sanjay Jha said Motorola's Bionic, a high-speed device for Verizon Wireless, would be delayed until September, which was later than analysts had expected for the device whose launch had already been delayed to the summer from its original target for a second quarter launch.
The delay, which also involves a Motorola tablet computer, will put Motorola under ever more pressure to compete with Apple Inc, which is expected to launch a new iPhone this fall at Verizon Wireless.
Analyst Lawrence Harris said tt would have been nice if Motorola had a clear window prior to the release of the new iPhone. Motorola had announced the product on January 5 at the consumer electronics show.
Harris said it's highly unusual to have a product delayed this long. They really had to go back to the drawing board in this, and he noted that many people on Wall Street had hoped for an August launch of the phone.
A high-speed version of Motorola's Xoom tablet, also announced in January, will also be delayed until September, Motorola said. It had also originally slated that product launch for the second quarter.
Gross profit margins will also be worse than expected this quarter, because Motorola was forced to cut the price of its first version of Xoom to compete with rivals such as Apple Inc's iPad and Samsung Electronics's Galaxy Tab.
DELAYS AND PRICE CUT
Motorola cut the price of Xoom to $499 from $799 at Verizon Wireless on July 25 to compete with iPad and tablets like Galaxy as consumers weren't willing to pay a premium for the Motorola device, which like Galaxy is based on Android software from Google Inc. It launched Xoom at Verizon on February 24.
The company gave a third-quarter earnings target ranging from break-even to 10 cents per share, excluding unusual items, compared with analyst expectations for 24 cents a share.
Motorola's full year forecast for 2011 of 48 cents to 60 cents per share missed Wall Street expectations for 71 cents per share.
Jha said he had misjudged pricing in the highly competitive tablet market but vowed that Motorola's profit would be back on track in the fourth quarter, when he promised to introduce more competitive products.
Jha said they now recognize where the price points are. For the fourth quarter they will launch very good, new tablets and we'll have a good quarter.
By year end, Jha promised that Motorola would have five devices based on Long Term Evolution (LTE) -- the high-speed technology both Verizon Wireless and AT&T Inc are using.
This will include at least one more LTE handset besides the Bionic and two more tablets besides the LTE version of Xoom, Jha said.
For the second quarter, it reported a loss of $56 million, or 19 cents per share, compared with a profit of $80 million, or 27 cents per share, a year earlier.
Excluding unusual items Motorola earned 9 cents per share in the quarter, ahead of analyst expectations for 6 cents a share.
Revenue rose to $3.3 billion, beating the average analyst estimate of $3.12 billion, according to Thomson Reuters I/B/E/S.
Motorola said on Thursday it shipped 4.4 million smartphones in the quarter, in line with expectations from six analysts contacted by Reuters. It has also sold 440,000 tablet computers, ahead of analyst expectations for about 366,000.
The company tweaked its full year sales estimate for Android tablets and smartphones to a range of 21 million to 23 million from 20 million to 23 million.
Verizon Wireless is a venture of Verizon Communications and Vodafone Group Plc.
Motorola shares fell to $22.01 in after-hours trading, down 3.9 percent for their $22.91 close on the New York Stock Exchange.
Monday, August 1, 2011
IS BLACKBERRY A DINOSAUR
Story first appeared in USA TODAY.
With this week's announcement that Research in Motion is cutting 10 percent of its workforce, the BlackBerry death watch moved into high gear.
The smartphone that's been a corporate status symbol for more than a decade faces a rapidly declining market share amid new competition, while the company has suffered a series of missteps in both strategy and execution.
Even the management shakeup announced on Monday wasn't what Wall Street had been hoping for. RIM's stock is down more than 50 percent this year.
With Apple's iPhone and smartphones based on Google's Android operating system stealing RIM's thunder in both the consumer and corporate spaces, the BlackBerry's outlook appears grim.
One analyst says surviving in the context of being a formidable force across the industry as it was in its glorious days is not going to happen.
That doesn't mean all is lost for RIM and the BlackBerry platform. It's still wildly popular in international markets, and smartphones powered by a new operating system are coming next year.
But analysts say the company needs to act quickly and effectively, which it's had a hard time accomplishing over the past several years.
Judging from the numbers, it's obvious that fewer people want BlackBerrys.
According to market research firm comScore, RIM held 24.7 percent of smartphone subscribers in the three-month period ending in May, down 17 percent from a year ago.
In the corporate market, traditionally RIM's bread and butter, IT departments are increasingly allowing individual users to choose their own mobile devices, and more of them are choosing iPhones.
The company has taken notice. RIM is set to unveil smartphones based on version 7 of the BlackBerry operating system.
But critics have long complained that BlackBerry OS has gotten long in the tooth, especially compared with sophisticated platforms like Android and Apple's iOS.
Next year, RIM will unveil BlackBerry devices based on QNX, the operating system that powers RIM's PlayBook tablet. QNX promises to deliver performance and features that better compete with iOS and high-end Android devices.
But RIM has been snakebitten by a series of execution missteps, including product delays and releasing new devices that seem half-baked, such as the PlayBook's curious lack of built-in e-mail capabilities.
Most alarming to Wall Street, there's a sense of sluggishness in a company that operates in a rapidly changing industry.
One analyst stated that with QNX they have a real next-gen operating system. He added that those phones that come out next year will be much more competitive with the high end of the market.
But Doradla, who maintains a "Hold" rating on RIM shares, says there's little reason to be excited about the BlackBerry platform in the near term.
He says the question is between now and early next year when the QNX comes in, what is holding a customer to stick with a BlackBerry phone
Dominance Lost
Despite the near-term gloom, analysts point out there are factors that work in RIM's favor.
Although BlackBerry smartphones are falling out of favor in the United States, they're still wildly popular overseas.
Also, businesses have made significant investments in BlackBerry Enterprise Servers, so they're not likely to abandon the platform completely.
McCourt sees the corporate market playing out as a duopoly with BlackBerry and the iPhone. Doradla points out that given RIM's strong presence in corporate enterprises, the company is likely to remain viable in the long term.
Earlier this year, RIM opened its BlackBerry Enterprise Server to enable support for iPhone and Android smartphones, enabling IT departments to centrally manage those devices on a single system. The move addresses the reality that more organizations are supporting multiple mobile platforms.
But Mark McKechnie, an analyst at ThinkEquity, believes the company needs to go farther by opening up its network operations center, or NOC, to other smartphone platforms.
He says they've created this great infrastructure that all the corporations use to secure their e-mails. They collect about $5 per month per subscriber. But if you're going to have a problem competitively with your handsets, then that asset—the NOC—is a declining asset, he added
In a recent research note, McKechnie said that of ThinkEquity's $6 earnings-per-share estimate for fiscal year 2013, $4.25 comes from NOC recurring revenue, $1.75 from the handset business.
McKechnie says you could still have RIM be a niche supplier to the BlackBerry servers, but the market's a heck of a lot bigger when you start throwing in the Apples and the Androids and whatever other technologies people want to bring in from their homes and run on the corporate network.
The fall from being the dominant provider to a niche player is nothing new in the technology industry. But analysts say in RIM's case, it's a situation that could have been avoided.
All in all, these were big strategic mistakes that were made years ago and now they're feeling the pain. Ironically they've figured that out now, but it takes a few years for the new strategy to take hold. They probably don't have more than two years to re-engage the high end of the market before their brand is permanently damaged here.
With this week's announcement that Research in Motion is cutting 10 percent of its workforce, the BlackBerry death watch moved into high gear.
The smartphone that's been a corporate status symbol for more than a decade faces a rapidly declining market share amid new competition, while the company has suffered a series of missteps in both strategy and execution.
Even the management shakeup announced on Monday wasn't what Wall Street had been hoping for. RIM's stock is down more than 50 percent this year.
With Apple's iPhone and smartphones based on Google's Android operating system stealing RIM's thunder in both the consumer and corporate spaces, the BlackBerry's outlook appears grim.
One analyst says surviving in the context of being a formidable force across the industry as it was in its glorious days is not going to happen.
That doesn't mean all is lost for RIM and the BlackBerry platform. It's still wildly popular in international markets, and smartphones powered by a new operating system are coming next year.
But analysts say the company needs to act quickly and effectively, which it's had a hard time accomplishing over the past several years.
Judging from the numbers, it's obvious that fewer people want BlackBerrys.
According to market research firm comScore, RIM held 24.7 percent of smartphone subscribers in the three-month period ending in May, down 17 percent from a year ago.
In the corporate market, traditionally RIM's bread and butter, IT departments are increasingly allowing individual users to choose their own mobile devices, and more of them are choosing iPhones.
The company has taken notice. RIM is set to unveil smartphones based on version 7 of the BlackBerry operating system.
But critics have long complained that BlackBerry OS has gotten long in the tooth, especially compared with sophisticated platforms like Android and Apple's iOS.
Next year, RIM will unveil BlackBerry devices based on QNX, the operating system that powers RIM's PlayBook tablet. QNX promises to deliver performance and features that better compete with iOS and high-end Android devices.
But RIM has been snakebitten by a series of execution missteps, including product delays and releasing new devices that seem half-baked, such as the PlayBook's curious lack of built-in e-mail capabilities.
Most alarming to Wall Street, there's a sense of sluggishness in a company that operates in a rapidly changing industry.
One analyst stated that with QNX they have a real next-gen operating system. He added that those phones that come out next year will be much more competitive with the high end of the market.
But Doradla, who maintains a "Hold" rating on RIM shares, says there's little reason to be excited about the BlackBerry platform in the near term.
He says the question is between now and early next year when the QNX comes in, what is holding a customer to stick with a BlackBerry phone
Dominance Lost
Despite the near-term gloom, analysts point out there are factors that work in RIM's favor.
Although BlackBerry smartphones are falling out of favor in the United States, they're still wildly popular overseas.
Also, businesses have made significant investments in BlackBerry Enterprise Servers, so they're not likely to abandon the platform completely.
McCourt sees the corporate market playing out as a duopoly with BlackBerry and the iPhone. Doradla points out that given RIM's strong presence in corporate enterprises, the company is likely to remain viable in the long term.
Earlier this year, RIM opened its BlackBerry Enterprise Server to enable support for iPhone and Android smartphones, enabling IT departments to centrally manage those devices on a single system. The move addresses the reality that more organizations are supporting multiple mobile platforms.
But Mark McKechnie, an analyst at ThinkEquity, believes the company needs to go farther by opening up its network operations center, or NOC, to other smartphone platforms.
He says they've created this great infrastructure that all the corporations use to secure their e-mails. They collect about $5 per month per subscriber. But if you're going to have a problem competitively with your handsets, then that asset—the NOC—is a declining asset, he added
In a recent research note, McKechnie said that of ThinkEquity's $6 earnings-per-share estimate for fiscal year 2013, $4.25 comes from NOC recurring revenue, $1.75 from the handset business.
McKechnie says you could still have RIM be a niche supplier to the BlackBerry servers, but the market's a heck of a lot bigger when you start throwing in the Apples and the Androids and whatever other technologies people want to bring in from their homes and run on the corporate network.
The fall from being the dominant provider to a niche player is nothing new in the technology industry. But analysts say in RIM's case, it's a situation that could have been avoided.
All in all, these were big strategic mistakes that were made years ago and now they're feeling the pain. Ironically they've figured that out now, but it takes a few years for the new strategy to take hold. They probably don't have more than two years to re-engage the high end of the market before their brand is permanently damaged here.
Tuesday, July 26, 2011
APPLE FRAUD IN CHINA: THE WHOLE STORE IS FAKE
Story first appeared on the Associated Press.
It looks almost exactly like a sleek Apple store. Sales assistants in blue T-shirts with the company's logo chat with customers. Signs advertising the iPad 2 hang on the white walls. Outside, the famous logo sits next to the words "Apple Store" - one of the few clues that the whole thing is a fake.
China, long known for producing counterfeit consumer gadgets, software and brand name clothing, has reached a new piracy milestone - fake Apple stores.
An American who lives in Kunming in southern Yunnan province said Thursday that she and her husband stumbled on three shops masquerading as bona fide Apple stores in the city a few days ago. She took photos and posted them on her blog.
The 27-year-old blogger, who spoke on condition of anonymity, said the setup of the stores was so convincing that the employees themselves seemed to believe they worked for Apple.
It had the classic Apple store winding staircase and weird upstairs sitting area. The employees were even wearing those blue T-shirts with the chunky Apple name tags around their necks, but some things were just not right: the stairs were poorly made. The walls hadn't been painted properly. Apple never writes “Apple Store” on its signs - it just puts up the glowing, iconic fruit.
A worker at the fake Apple store on Zhengyi Road in Kunming, which most of the photos of the blog show, said that they are an "Apple store" before hanging up.
But the three stores are not among the authorized resellers listed on Apple Inc.'s website. The maker of the iPhone and other hit gadgets has four company stores in China - two in Beijing and two in Shanghai - and various official resellers.
Amy Bessette, a spokeswoman for the Cupertino, California-based company, said it had no comment on the Chinese stores, but pointed to a Web page on Apple's Chinese site that lists its authorized resellers.
The manager of an authorized reseller in Kunming, who gave only his surname, Zhang, said most customers have no idea the stores are fake.
Some of the staff in the stores can't even operate computers properly or tell you all the functions of the mobile phone.
There are more and more of these fake stores in Kunming. Although they may sell real Apple products, some of those products were not imported through legal means.
The proliferation of the fake stores underlines the slow progress that China's government is making in countering a culture of rampant piracy and widespread production of bogus goods that is a major irritant in relations with trading partners.
China's Commerce Minister promised American executives earlier this year that the latest of several crackdowns on product piracy would deliver lasting results.
China's official Xinhua News Agency reported this month that police arrested more than 9,000 suspects in a nine-month anti-piracy campaign as it shut down more than 12,000 factories that produced counterfeit goods. China's supreme court said this spring that the nation's judicial system rendered verdicts last year in more than 40,000 intellectual property cases involving property with a combined value of almost 8 billion yuan ($1.2 billion).
Fake Apple stores are a particularly egregious example of brand piracy, but their emergence is not surprising given the amount of product counterfeiting faced by corporations such as Apple, said Ted Dean, president of BDA China Ltd., a telecommunications market research company. He said he once saw a fake Apple phone in China that had an apple logo - but with no bite taken out of it.
Apple said this week that China was very key to its record earnings and revenue in the quarter that ended in June.
Revenue was up more than six times from a year earlier to $3.8 billion in the area comprising China, Hong Kong and Taiwan, Apple's Chief Operating Officer Timothy Cook said in a conference call on Tuesday.
The company plans to open two more Apple stores in greater China - one in Shanghai and another in Hong Kong - by the end of the year.
Trade groups say illegal Chinese copying of music, designer clothing and other goods costs legitimate producers billions of dollars a year in lost potential sales. The American Chamber of Commerce in China says 70 percent of its member companies consider Beijing's enforcement of patents, trademarks and copyrights ineffective.
Piracy is especially sensitive at a time when Washington and other Western governments are trying to create jobs by boosting exports. In 2009, the World Trade Organization upheld a U.S. complaint that Beijing was violating trade commitments by failing to root out the problem.
Rampant copying also has hampered Beijing's efforts to attract technology industries because businesspeople say companies are reluctant to do high-level research in China or bring in advanced designs for fear of theft.
It looks almost exactly like a sleek Apple store. Sales assistants in blue T-shirts with the company's logo chat with customers. Signs advertising the iPad 2 hang on the white walls. Outside, the famous logo sits next to the words "Apple Store" - one of the few clues that the whole thing is a fake.
China, long known for producing counterfeit consumer gadgets, software and brand name clothing, has reached a new piracy milestone - fake Apple stores.
An American who lives in Kunming in southern Yunnan province said Thursday that she and her husband stumbled on three shops masquerading as bona fide Apple stores in the city a few days ago. She took photos and posted them on her blog.
The 27-year-old blogger, who spoke on condition of anonymity, said the setup of the stores was so convincing that the employees themselves seemed to believe they worked for Apple.
It had the classic Apple store winding staircase and weird upstairs sitting area. The employees were even wearing those blue T-shirts with the chunky Apple name tags around their necks, but some things were just not right: the stairs were poorly made. The walls hadn't been painted properly. Apple never writes “Apple Store” on its signs - it just puts up the glowing, iconic fruit.
A worker at the fake Apple store on Zhengyi Road in Kunming, which most of the photos of the blog show, said that they are an "Apple store" before hanging up.
But the three stores are not among the authorized resellers listed on Apple Inc.'s website. The maker of the iPhone and other hit gadgets has four company stores in China - two in Beijing and two in Shanghai - and various official resellers.
Amy Bessette, a spokeswoman for the Cupertino, California-based company, said it had no comment on the Chinese stores, but pointed to a Web page on Apple's Chinese site that lists its authorized resellers.
The manager of an authorized reseller in Kunming, who gave only his surname, Zhang, said most customers have no idea the stores are fake.
Some of the staff in the stores can't even operate computers properly or tell you all the functions of the mobile phone.
There are more and more of these fake stores in Kunming. Although they may sell real Apple products, some of those products were not imported through legal means.
The proliferation of the fake stores underlines the slow progress that China's government is making in countering a culture of rampant piracy and widespread production of bogus goods that is a major irritant in relations with trading partners.
China's Commerce Minister promised American executives earlier this year that the latest of several crackdowns on product piracy would deliver lasting results.
China's official Xinhua News Agency reported this month that police arrested more than 9,000 suspects in a nine-month anti-piracy campaign as it shut down more than 12,000 factories that produced counterfeit goods. China's supreme court said this spring that the nation's judicial system rendered verdicts last year in more than 40,000 intellectual property cases involving property with a combined value of almost 8 billion yuan ($1.2 billion).
Fake Apple stores are a particularly egregious example of brand piracy, but their emergence is not surprising given the amount of product counterfeiting faced by corporations such as Apple, said Ted Dean, president of BDA China Ltd., a telecommunications market research company. He said he once saw a fake Apple phone in China that had an apple logo - but with no bite taken out of it.
Apple said this week that China was very key to its record earnings and revenue in the quarter that ended in June.
Revenue was up more than six times from a year earlier to $3.8 billion in the area comprising China, Hong Kong and Taiwan, Apple's Chief Operating Officer Timothy Cook said in a conference call on Tuesday.
The company plans to open two more Apple stores in greater China - one in Shanghai and another in Hong Kong - by the end of the year.
Trade groups say illegal Chinese copying of music, designer clothing and other goods costs legitimate producers billions of dollars a year in lost potential sales. The American Chamber of Commerce in China says 70 percent of its member companies consider Beijing's enforcement of patents, trademarks and copyrights ineffective.
Piracy is especially sensitive at a time when Washington and other Western governments are trying to create jobs by boosting exports. In 2009, the World Trade Organization upheld a U.S. complaint that Beijing was violating trade commitments by failing to root out the problem.
Rampant copying also has hampered Beijing's efforts to attract technology industries because businesspeople say companies are reluctant to do high-level research in China or bring in advanced designs for fear of theft.
TABLETS REPLACE TEXTBOOKS
Story first appeared in USA TODAY.
Outside the classroom a hot summer day beckons, but fourth-grade teacher Yeon Eun-jung's students are glued to their tablet PCs as they watch an animated boy and a girl squabble about whether water becomes heavier when frozen.
The small scene in this rural town is part of something big: South Korea is taking a $2 billion gamble that its students are ready to ditch paper textbooks in favor of tablet PCs as part of a vast digital scholastic network.
France, Singapore, Japan and others are racing to create classrooms where touch-screens provide instant access to millions of pieces of information. But South Korea — Asia's fourth-largest economy — believes it enjoys an advantage over these countries, with kids who are considered the world's savviest navigators of the digital universe.
A 2009 study by the Organization for Economic Cooperation and Development, a Paris-headquartered grouping of wealthy nations, found 15-year-olds in South Korea scored highest in their ability to absorb information from digital devices, beating runners-up New Zealand and Australia by a large margin.
At Sosu Elementary School in Goesan, principal Jo Yong-deuk speaks of a future in which his students interact in virtual reality with Ludwig van Beethoven and Abraham Lincoln. In the classroom, the children scribble answers in their tablet PCs with touchscreen pens as they watch the video clip explaining the scientific properties of frozen water.
More than 60 primary, middle and high schools are now using digital textbooks as part of their curriculum, according to the state-run Korea Education and Research Information Service, which provides technical support for the program. Seoul believes it can finish the $2.1 billion program to build a single computer network packed with high-quality digital content by 2015. Replacing textbooks with tablet PCs will account for a quarter of that budget.
According to South Korean officials, France is handing out tablets in the Correze region and is pushing to expand digital material, while Japan began distributing tablet PCs in a primary school last year under a pilot program. Info-communications Development Authority of Singapore said on its website that Singapore began adopting tablet PCs in 2004.
But Kim Doo-yeon, a South Korean official leading the project, said his country will have no trouble competing.
South Korea is one of the most wired places on earth. More than 80 percent of South Korean households have broadband access to the Internet, according to the statistical office here. U.S. Web hosting company Akamai said earlier this year that South Korea enjoys the fastest Internet connection in the world. South Korea also ranks first in wireless broadband subscriptions, according to an OECD release last month.
Lee Sang-hyeob, a student at Sosu Elementary School, spends a lot of time at home playing online games and chatting with schoolmates. Another Sosu student, Jang Woo-dam, often surfs her school's website to see messages from friends.
The 2009 OECD study says there's a positive relationship between students' use of computers at home for leisure and their digital navigation skills. Proficient digital readers tend to know how to navigate effectively and efficiently.
The study said students who read online more frequently also read a greater variety of print material and report higher enjoyment of reading itself.
Another telling example of the influence of the Internet on this nation of 50 million is the number of so-called PC rooms, or Internet cafes, which stood at 15,000 as of December last year, according to the PC room business association.
PC rooms, which usually operate around the clock, have long been the breeding ground for South Korea's so-called professional e-gamers, whose popularity has given birth to an industry dedicated to airing their matches and promoting high-tech gadgets through them.
Enchanted with games, Jeong Yu-jin, 16, has been teaching himself programming since he was a child and is now developing a game that warns of the consequences of global warming as a player clears stages filled with challenges like angry polar bears and crumbling glaciers.
Kim, the South Korean official leading the tablet PC project, said the country envisions a digital scholastic network for students to go beyond digital textbooks and national boundaries. In the future, all their students will be connected to a single computer network that allows them to also learn from teachers in other countries.
Loaded with video, animation, photos, voices, songs and Web documents created by experts and by teachers and students, digital textbooks allow students to enjoy a custom-made learning experience, Kim said. Kids who fall behind in a regular curriculum can start from levels they feel comfortable with.
Young North Korean defectors struggling to adapt to South Korea could also benefit from having tablet PCs. More than 21,000 North Koreans, including children, have come to South Korea since the two countries' 1950-53 war. Many choose to study in special schools to catch up before they attend regular ones.
Those who study digital technology and education have been generally positive about introducing digital textbooks, but there have also been warnings that Internet addiction may deepen among South Korea's teenagers.
The number of students addicted to the Internet amounted to 782,000, or 12% of the total student population, the Ministry of Public Administration and Security said last year. The government, worried by the problem, plans to increase the number of counselors dealing with Internet addiction to 5,500 next year.
Outside the classroom a hot summer day beckons, but fourth-grade teacher Yeon Eun-jung's students are glued to their tablet PCs as they watch an animated boy and a girl squabble about whether water becomes heavier when frozen.
The small scene in this rural town is part of something big: South Korea is taking a $2 billion gamble that its students are ready to ditch paper textbooks in favor of tablet PCs as part of a vast digital scholastic network.
France, Singapore, Japan and others are racing to create classrooms where touch-screens provide instant access to millions of pieces of information. But South Korea — Asia's fourth-largest economy — believes it enjoys an advantage over these countries, with kids who are considered the world's savviest navigators of the digital universe.
A 2009 study by the Organization for Economic Cooperation and Development, a Paris-headquartered grouping of wealthy nations, found 15-year-olds in South Korea scored highest in their ability to absorb information from digital devices, beating runners-up New Zealand and Australia by a large margin.
At Sosu Elementary School in Goesan, principal Jo Yong-deuk speaks of a future in which his students interact in virtual reality with Ludwig van Beethoven and Abraham Lincoln. In the classroom, the children scribble answers in their tablet PCs with touchscreen pens as they watch the video clip explaining the scientific properties of frozen water.
More than 60 primary, middle and high schools are now using digital textbooks as part of their curriculum, according to the state-run Korea Education and Research Information Service, which provides technical support for the program. Seoul believes it can finish the $2.1 billion program to build a single computer network packed with high-quality digital content by 2015. Replacing textbooks with tablet PCs will account for a quarter of that budget.
According to South Korean officials, France is handing out tablets in the Correze region and is pushing to expand digital material, while Japan began distributing tablet PCs in a primary school last year under a pilot program. Info-communications Development Authority of Singapore said on its website that Singapore began adopting tablet PCs in 2004.
But Kim Doo-yeon, a South Korean official leading the project, said his country will have no trouble competing.
South Korea is one of the most wired places on earth. More than 80 percent of South Korean households have broadband access to the Internet, according to the statistical office here. U.S. Web hosting company Akamai said earlier this year that South Korea enjoys the fastest Internet connection in the world. South Korea also ranks first in wireless broadband subscriptions, according to an OECD release last month.
Lee Sang-hyeob, a student at Sosu Elementary School, spends a lot of time at home playing online games and chatting with schoolmates. Another Sosu student, Jang Woo-dam, often surfs her school's website to see messages from friends.
The 2009 OECD study says there's a positive relationship between students' use of computers at home for leisure and their digital navigation skills. Proficient digital readers tend to know how to navigate effectively and efficiently.
The study said students who read online more frequently also read a greater variety of print material and report higher enjoyment of reading itself.
Another telling example of the influence of the Internet on this nation of 50 million is the number of so-called PC rooms, or Internet cafes, which stood at 15,000 as of December last year, according to the PC room business association.
PC rooms, which usually operate around the clock, have long been the breeding ground for South Korea's so-called professional e-gamers, whose popularity has given birth to an industry dedicated to airing their matches and promoting high-tech gadgets through them.
Enchanted with games, Jeong Yu-jin, 16, has been teaching himself programming since he was a child and is now developing a game that warns of the consequences of global warming as a player clears stages filled with challenges like angry polar bears and crumbling glaciers.
Kim, the South Korean official leading the tablet PC project, said the country envisions a digital scholastic network for students to go beyond digital textbooks and national boundaries. In the future, all their students will be connected to a single computer network that allows them to also learn from teachers in other countries.
Loaded with video, animation, photos, voices, songs and Web documents created by experts and by teachers and students, digital textbooks allow students to enjoy a custom-made learning experience, Kim said. Kids who fall behind in a regular curriculum can start from levels they feel comfortable with.
Young North Korean defectors struggling to adapt to South Korea could also benefit from having tablet PCs. More than 21,000 North Koreans, including children, have come to South Korea since the two countries' 1950-53 war. Many choose to study in special schools to catch up before they attend regular ones.
Those who study digital technology and education have been generally positive about introducing digital textbooks, but there have also been warnings that Internet addiction may deepen among South Korea's teenagers.
The number of students addicted to the Internet amounted to 782,000, or 12% of the total student population, the Ministry of Public Administration and Security said last year. The government, worried by the problem, plans to increase the number of counselors dealing with Internet addiction to 5,500 next year.
Verizon Business Rises With New iPhone Subscribers
Story first appeared in USA TODAY.
Verizon is seeing a big boost from the iPhone, adding more new subscribers on contracts in the second quarter than it has in two and half years.
Yet AT&T, which was been the exclusive seller of Apple's iconic phone in the U.S. until February, still activates three iPhones for every two Verizon does.
When posting a profit for the second quarter on Friday, Verizon also said Chief Operating Officer Lowell McAdam will take over from long-time CEO Ivan Seidenberg, 64, on Aug. 1. The company has signaled the succession for the past year. McAdam, 57, is the former head of Verizon Wireless.
Seidenberg will remain chairman of the company. He became the CEO of Bell Atlantic in 1998. It changed its named to Verizon in 2000 after a major acquisition.
Verizon added 1.26 million wireless subscribers under contract in the April to June period, a result that flies in the face of the slowdown in new subscribers across the industry in the last two years. Since nearly everyone already has a cellphone, gaining new subscribers is chiefly a matter of luring them over from other carriers. A year ago, Verizon added just 665,000 subscribers under contract.
Verizon activated 2.3 million iPhones, well below the 3.6 million AT&T reported for the same period. Verizon sells only the iPhone 4, starting at $200, while AT&T also sells the older iPhone 3GS for $49.
McAdam said iPhone sales haven't quite been as good as the company expected, chiefly because it believed a new iPhone model would arrive this summer, as it usually does. Apple hasn't said why there's no new phone yet.
Even with relatively slow iPhone sales, Verizon is handily outdoing AT&T, which recruited only 331,000 new contract subscribers in the quarter. The iPhone is AT&T's chief draw, while Verizon has other advantages on its side, like a broader "3G" data network and new, ultra-fast "4G" network in many cities. In the quarter, Verizon sold 1.2 million devices that use the 4G network, including laptop modems and the HTC Thunderbolt smartphone.
Verizon ended the quarter with 106.3 million devices connected to its wireless network, making it the largest carrier in the country. No. 2 and chief rival AT&T is trying to leapfrog Verizon in size by buying No. 4 T-Mobile USA for $39 billion.
Verizon said its net income was $1.61 billion, or 57 cents per share, in the three months ended June 30. A year ago, it posted a loss of $1.19 billion, or 42 cents per share.
Analysts polled by FactSet were expecting earnings for 55 cents per share, on average.
Revenue rose 2.8% to $27.5 billion, in line with analysts' expectations.
Excluding the sale of phone lines in 14 states at the end of last year's second quarter, Verizon's revenue grew 6.3% on the back of its thriving wireless operations.
However, only 55% of Verizon Wireless' profits flow to Verizon Communication's bottom line, because British carrier Vodafone owns 45% of the cellular carrier.
Verizon shares fell $1.02, or 2.7%, to $36.55 in morning trading.
Verizon is seeing a big boost from the iPhone, adding more new subscribers on contracts in the second quarter than it has in two and half years.
Yet AT&T, which was been the exclusive seller of Apple's iconic phone in the U.S. until February, still activates three iPhones for every two Verizon does.
When posting a profit for the second quarter on Friday, Verizon also said Chief Operating Officer Lowell McAdam will take over from long-time CEO Ivan Seidenberg, 64, on Aug. 1. The company has signaled the succession for the past year. McAdam, 57, is the former head of Verizon Wireless.
Seidenberg will remain chairman of the company. He became the CEO of Bell Atlantic in 1998. It changed its named to Verizon in 2000 after a major acquisition.
Verizon added 1.26 million wireless subscribers under contract in the April to June period, a result that flies in the face of the slowdown in new subscribers across the industry in the last two years. Since nearly everyone already has a cellphone, gaining new subscribers is chiefly a matter of luring them over from other carriers. A year ago, Verizon added just 665,000 subscribers under contract.
Verizon activated 2.3 million iPhones, well below the 3.6 million AT&T reported for the same period. Verizon sells only the iPhone 4, starting at $200, while AT&T also sells the older iPhone 3GS for $49.
McAdam said iPhone sales haven't quite been as good as the company expected, chiefly because it believed a new iPhone model would arrive this summer, as it usually does. Apple hasn't said why there's no new phone yet.
Even with relatively slow iPhone sales, Verizon is handily outdoing AT&T, which recruited only 331,000 new contract subscribers in the quarter. The iPhone is AT&T's chief draw, while Verizon has other advantages on its side, like a broader "3G" data network and new, ultra-fast "4G" network in many cities. In the quarter, Verizon sold 1.2 million devices that use the 4G network, including laptop modems and the HTC Thunderbolt smartphone.
Verizon ended the quarter with 106.3 million devices connected to its wireless network, making it the largest carrier in the country. No. 2 and chief rival AT&T is trying to leapfrog Verizon in size by buying No. 4 T-Mobile USA for $39 billion.
Verizon said its net income was $1.61 billion, or 57 cents per share, in the three months ended June 30. A year ago, it posted a loss of $1.19 billion, or 42 cents per share.
Analysts polled by FactSet were expecting earnings for 55 cents per share, on average.
Revenue rose 2.8% to $27.5 billion, in line with analysts' expectations.
Excluding the sale of phone lines in 14 states at the end of last year's second quarter, Verizon's revenue grew 6.3% on the back of its thriving wireless operations.
However, only 55% of Verizon Wireless' profits flow to Verizon Communication's bottom line, because British carrier Vodafone owns 45% of the cellular carrier.
Verizon shares fell $1.02, or 2.7%, to $36.55 in morning trading.
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