Tech wrap: Earnings hit as Apple reigns
Quarterly earnings suffered at major technology and telecoms companies in part because of demand for gadgets made by Apple, one day after core suppliers to Apple savored strong earnings results posted by the iPhone and iPad maker on Tuesday.
AT&T posted a $6.7 billion quarterly loss as it was weighed down by a hefty break-up fee for its failed T-Mobile USA merger and other big charges on top of costly subsidies for smartphones such as Apple’s iPhone. While the wireless provider beat analysts’ expectations for subscriber additions, the growth came at a massive cost as its wireless service margins plummeted. On top of the $4 billion break-up package charge, AT&T also took a big impairment charge for its telephone directory business, which it said it was considering selling.
Nokia reported a 73 percent fall in fourth-quarter earnings as sales of its new Windows Phones failed to dent the dominance of Apple’s iPhone or compensate for diving sales of its own old smartphones. Apple reported earlier this week sales of 37 million iPhones for the December quarter. Nokia has sold over 1 million Windows “Lumia” smartphones since its launch in mid-November. Nokia said it expected its phone business’ underlying earnings to be around breakeven in the first quarter, well below analysts’ forecasts, with sales falling more than usual in the seasonally weaker quarter.
Motorola Mobility posted a quarterly loss after it warned earlier this month that it was having a tough time competing in the smartphone market amid intense competition from rivals such as the Apple iPhone. The company, which is seeking approval to be bought by Google, reported a net loss of $80 million or 27 cents per share compared with a profit of $80 million or 27 cents per share in the same quarter the year before. Revenue rose slightly to $3.436 billion from $3.425 billion in the year ago quarter.
Nintendo posted a sharp drop in quarterly profit and forecast a bigger-than-expected full-year loss, as it battles a strong yen and its games devices lose ground to gadgets such as Apple’s iPhone. Nintendo now expects an annual operating loss of 45 billion yen ($575 million), dwarfing expectations of a 4.2 billion yen loss, based on the average of 21 analyst forecasts.
“To say that (the days of consoles) are over is likely an overstatement, but social network and Internet delivered games are growing and structurally changing the future of the industry, which is a strong wind against Nintendo,” said Shigeo Sugawara, at Sompo Japan Nipponkoa Asset Management.
Lawmakers on the House Energy and Commerce Committee asked Google to provide answers about recent changes to the search engine’s privacy policy. On Tuesday, Google announced that it was unifying its privacy policy across 60 of its Web services, which allows the company to share data between any of those services. In a letter to Google Chief Executive Larry Page, the lawmakers said the company’s announcement “raises questions about whether consumers can opt-out of the new data sharing system either globally or on a product-by-product basis.”
Nokia’s Weber devises U.S. plan of attack
If Nokia’s big challenge this year is getting back in with US consumers and operators, it should be a busy 2012 for Chris Weber.
Weber – who heads the Finnish company’s business here – took a moment with us at the Consumer Electronics Show in Las Vegas to lay out some of his plans a day after AT&T announced it would sell Nokia’s Lumia 900, and a day before the Lumia 710 goes on sale at T-Mobile USA.
Weber told Reuters that he has to first find a way to convince enough consumers to at least try out Nokia’s Windows Phone-based devices, to at least give them a chance.
In this regard, he expects a lot of help from T-Mobile in the form of flagship phone status in their stores. This involves 6 Lumia display locations in each store, a poster out front, and a center island display to top it all off. At AT&T, Weber says, details on a promotional assist from the carrier are “still being worked out.”
But if the AT&T keynote announcement of eight LTE devices yesterday was anything to go by, Weber may have to fight harder for attention there. Weber also needs to gain attention at other U.S. operators, such as Verizon Wireless and Sprint Nextel.
To do this, the executive promised to bring out a broader range of phones and more devices exclusive to carriers.
“We’re going to have a broad portfolio with multiple devices, mutiple price points, multiple user experiences and multip operators. That’s a lot of multipes,” Weber said. Asked about other operators, he said: “Certainly Verizon is a very important partner in that equation.”
Tech wrap: Nokia throne in Samsung’s sights
Samsung CEO Choi Gee-sung told reporters in Las Vegas the company overtook Nokia in handset revenue terms in its latest reported quarter and was confident of topping the Finnish group in shipments this year. Samsung’s bullish forecast is in line with some analysts, including Royal Bank of Scotland, but on average analysts have expected Nokia to keep its lead on the market. According to the latest polls by Reuters, Nokia was expected to sell 418 million phones in 2011, versus Samsung’s 320 million, the gap narrowing this year to 388 million versus 359 million.
Google made changes to its search engine, combining content posted by users of Google’s social network Google+ and pic sharing site Picassa with regular search results. Links shared by a Google+ user’s connections are given more weight and will show up in Web search results with a person icon beside them, VentureBeat’s Jolie ‘Odell writes. The changes increase Google+’s prominence online, which is lagging behind Facebook in total number of users.
Sony’s videogaming business, led by its just-launched handheld “Vita”, will prove pivotal in returning the company to profitability, Kazuo Hirai, the executive pegged to succeed Howard Stringer as president, said.
YouTube is looking to increase viewership on its online video service by making the service available on an array of connected devices and by adding new content, according Robert Kyncl, vice president in charge of content partnerships. Kyncl spent 2011 forging new partnerships with content providers to expand YouTube’s offerings. YouTube has also reorganized its website to offer consumers video “channels” to cater to personal interests with an aim to making the site more appealing. Kyncl said that from about 500 content provider proposals YouTube received last year, YouTube had signed on about 100 partners, with whom it shares advertising revenue.
The U.S. government embarked on a rare criminal trial against a publicly traded company, AU Optronics, indicted in 2010 for fixing prices of liquid crystal display panels. The conspiracy illegally cost the U.S. economy billions of dollars, a U.S. prosecutor said in court on Tuesday. Several other companies, including LG, have already pleaded guilty in the LCD probe, while Samsung cut an early deal to avoid prosecution.
Telecom startup LightSquared is mounting a last-ditch effort to win U.S. regulatory approval for a new wireless network after being outmaneuvered by the GPS industry, which has spun doomsday scenarios of interference problems that could cause planes to fall out of the sky and threaten national security, Jasmin Melvin writes. It is a long shot, analysts say, for LightSquared to overcome the scare tactics effectively sold to lawmakers by the GPS industry. The company is staring down an end-of-the-month deadline for the government to give the green light, before partners start bolting and as its cash position gets more dire, Melvin adds.
Tech wrap: Huawei takes slimmest smartphone crown
Huawei, China’s largest maker of telecommunications gear, unveiled the “Ascend” smartphone, touting it as the slimmest on the market as it moves to boost its share on the global consumer market. Huawei unveiled the Ascend smartphones – available in black, white and pink – at the Consumer Electronics Show in Las Vegas. The 6.68-mm thin phone will be available in April 2012 in markets from North America, Europe to Asia and will cost roughly $400, but the final price has not been set, the company said.
AT&T announced plans to launch seven new smartphones and a tablet computer early this year for a new wireless network it is building. The product line-up will include a phone with a 16 megapixel camera from HTC using Microsoft software along with Microsoft-based smartphone from Nokia. AT&T said it will also sell three new high-speed smartphones from Samsung as well as a high-speed phone from Sony and Pantech. In an unusual pricing move, AT&T also announced that it would sell Pantech Element, a waterproof tablet based on Google Android software with a smartphone, the Pantech Burst, for a combined price of $249.
Olympus sued its current president and three ex-directors for several million dollars in compensation, sources told Reuters, as the company seeks to draw a line under one of the nation’s worst accounting scandals. The company filed suit against its president, Shuichi Takayama, with the Tokyo district court on Sunday, along with three former executives identified by investigators as having engineered or helped cover up a $1.7 billion fraud at the firm, the sources said.
Netflix launched in Britain and Ireland, taking on BSkyB’s premium drama and movies offerings and prompting Amazon-owned rival Lovefilm to offer a new cut-price service. Lovefilm, which has 2 million customers in its core British market, immediately announced Lovefilm Instant — an Internet streaming-only offer to undercut Netflix — in addition to its current offer that combines streaming and DVD rental by post.
Deutsche Telekom is overhauling its strategy for its U.S. wireless unit T-Mobile USA after AT&T last month dropped its planned $39 billion takeover of the unit, a person familiar with the strategy planning said, adding that no date had been set to unveil the plan but it would certainly not be before 2011 results are published on February 23. The company’s Chief Financial Officer Tim Hoettges said one of the first steps could be to sell and lease-back the company’s mobile phone masts.
A group of Chinese authors sued Apple for 11.9 million yuan ($1.9 million) in compensation for allegedly providing copyright-infringing books for download through its online store, Chinese financial magazine Caixin reported. The group of nine authors, under the mantle of the China Written Works Copyright Society (CWWCS), sued Apple in Beijing’s No. 2 Intermediate People’s Court for copyright infringement of 37 works, Caixin reported on Friday.
Tech wrap: Will switch to QNX save RIM?
Research In Motion has already doled out a big helping of bad news ahead of its financial results on Thursday, but surprises could still await investors hungry for details about what many see as a new, make-or-break BlackBerry.
Investors are desperate to know whether RIM will stand by its current timetable to switch its smartphones to the new QNX operating system by early next year. The transition is considered the Canadian company’s last, best chance to reverse its declining fortunes.
T-Mobile USA plans to market the Lumia 710 phone from Nokia to first-time smartphone buyers as the two companies push to recoup market share losses of recent years.
CNET’s Roger Cheng doesn’t hold any punches about the move.
Bloomberg reports that eBay’s PayPal business, aiming to challenge Groupon and LivingSocial.com in the market for online daily deals, plans to start offering coupons tailored to users’ buying habits and mobile-phone locations.
Google is making $11.5 million in grants to fight modern slavery and its hold on 27 million people worldwide, the technology company said on Wednesday.
Tech wrap: AT&T, Sprint admit using monitoring software
Phone makers RIM and Nokia denied installing on their mobile devices an app which can monitor what users are doing without their knowledge or consent while carriers AT&T and Sprint admitted to using it. The companies responded after a security researcher demonstrated in online videos how the “Carrier IQ” software worked on Google’s Android operating system and said that phones running RIM’s BlackBerry platform and Nokia’s Symbian OS also had the software installed. AT&T and Sprint said they use “Carrier IQ” to monitor network quality.
Blackstone Group and Bain Capital are preparing a bid for all of Yahoo with Asian partners in a deal that could value the Internet company at about $25 billion, a source familiar with the matter said. The potential bid by the consortium, which would include China’s Alibaba and Japan’s Softbank, has not yet been finalized, the source and two other people familiar with the matter said. E-commerce giant Alibaba, whose primary interest is in buying back a 40 percent stake owned by Yahoo, is keeping its options open and said it has not decided whether to participate in a bid for all of Yahoo.
Apple’s iPhone edged past major news events, celebrities and pop stars as the top searched term on the Web in 2011, according to Yahoo. The media company said the smartphone proved more popular than reality television celebrity Kim Kardashian, pop star Katy Perry and singer and actress Jennifer Lopez, who placed in the top five. Casey Anthony, the woman acquitted of the murder of her young daughter after a highly publicized trial, was No. 2.
Best Buy is recalling about 32,000 Rocketfish battery cases for iPhones because of a fire hazard, the Consumer Product Safety Commission and Health Canada said. The Richfield, Minnesota, company and the CPSC have received about 14 reports of the Rocketfish Model RF-KL12 Mobile Battery Case overheating while charging in the United States, the CPSC said.
The European Commission joined forces with major technology firms including Apple, Facebook and Google to improve the protection of children online. The coalition, which includes 28 companies, will develop an age-based online ratings system and aims to strengthen privacy settings. It also plans by the end of next year to make it easier to report inappropriate content. Other measures include improving parental controls and enhancing cooperation among law enforcement and hotline authorities to remove online material showing sexual abuse.
Tech wrap: Bargain hunting may hurt retailers
Broader bargain hunting driven by budgetary fears may depress overall holiday spending, mitigating any hefty gains retailers reaped from long lines of shoppers snaked around malls across the U.S.
While Black Friday has been the busiest day for years in terms of traffic at stores, it does not always mean that sales will soar for the season. Despite brisk sales right after Thanksgiving, total holiday season sales fell in both 2008 and 2009 when the recession took its hold on America’s wallets.
Shopper-related injuries were popular topics on social networks such as Twitter. A shopper at a Los Angeles-area Walmart used pepper spray on a throng of shoppers and there was a shooting in a Walmart parking lot in the Oakland area.
Apple is well ahead of rivals in building brand loyalty among its users in a mobile market where the key brands are rushing to build as large a foothold as possible, a study by research firm GfK showed. Some 84 percent of iPhone users said they would pick iPhone also when they replace their cellphone, while 60 percent of consumers who use smartphones running Google’s Android said they would stick with phones using the same software.
The Department of Justice and Immigration and Customs Enforcement resumed “Operation In Our Sites”, seizing over 100 domain names in a bid to crack down on online piracy and counterfeiting, BitTorrent blog TorrentFreak writes.
Compared to previous seizure rounds, there are also some notable differences to report. This time the action appears to be limited to sites that directly charge visitors for their services. Most of the domains are linked to the selling of counterfeit clothing (e.g. 17nflshop.com), and at least one (autocd.com) sold pirated auto software.
Unnerved by a second profit warning in a month, investors sent HTC shares tumbling for a second straight day on concern the world’s No.4 smartphone maker may be running out of ideas in an increasingly competitive market. Sales at HTC — whose models include Desire, Sensation, Wildfire, Rhyme and ChaCha — grew four-fold in a year and a half, and in the third quarter of this year it sold more smartphones in the U.S. than any of its rivals. But its cracking performance is sputtering as it fails to bring out new products to rival the iPhone and Galaxy in the high-end smartphone market.
Earbuds from Finland: They light up your brain
Five years ago, Nokia engineer Antti Aunio was trying to brighten up his flat to deal with seasonal affective disorder, known as winter depression and a common problem in northern Finland with its dark and long winters.
His childhood friend Juuso Nissila, a scientist who had studied the impact of lights on animals, had another suggestion: instead of getting new lamps that promise to lighten your mood, why not make a device that sends light straight to your brain?
That’s how Aunio quit Nokia and joined Nissila in starting up Valkee, which now sells earplugs which send bright lights to the brain through ear canals.
On Wednesday, Valkee and scientists from the University of Oulu presented results of two small clinical trials to a science conference in Budapest, saying the earplugs can effectively prevent and treat winter depression.
Around 15-20 percent of central Europeans suffer from the winter disorder. In Valkee’s hometown of Oulu in northern Finland, there is less than four hours of daylight during the depths of winter.
Valkee launched its bright-light headset in August 2010 and sold 6,000 of them in Finland over the following winter.
It is now aiming to grow sales of earplugs, which retail for 185 euros, by around 5-6 fold by the financial year ending in March 2012.
Tech wrap: Companies continue patent buys
Tech giants continued attempts to shore up their patent portfolios continued on Wednesday, with InterDigital being targeted by Apple, Nokia and Qualcomm.
Bidders have been eager to get their hands on InterDigital”s 8,800 patents — including crucial 3G and 4G/LTE patents to strengthen operating software for smartphones.
Key potential bidder Google, who earlier this week acquired Motorola Mobility for $12.5 billion, has not formally withdrawn from the auction but it is unclear whether they will bid for the company.
In related news the head of Google’s rival Nokia warned that phone makers depending on Android software should worry about the Web search leader’s deal to buy Motorola Mobility.
Analyst concern about whether Motorola will get preferential treatment over rivals Samsung and HTC are justified said Nokia Chief Executive Stephen Elop.
Finally, want to buy a tablet but don’t want to break the bank doing it? Beetel Teletech has launched a 7-inch tablet priced at $220. The Beetel Magiq runs on Google’s Android operating system and supports both 3G and Wi-Fi networks, Beetel said in a statement.
Tech wrap: Google targets Apple with Motorola buy
Setting its sights on rival Apple, Google announced its biggest deal ever, a $12.5 billion cash acquisition of mobile phone maker Motorola Mobility.
Google’s biggest foray into hardware comes weeks after a failed attempt to buy patents from bankrupt Nortel, and gives it an intellectual property library in wireless telephony to wage war on Apple and Microsoft.
However, analysts agreed that that buy was more about the patents and less about the hardware.
The news sent shock waves throughout the tech sector on Monday. Shares of InterDigital plunged 23 percent on the news, while Nokia shares jumped over 10 percent.
In earlier news, video games publisher Electronic Arts is upbeat about Christmas holiday sales as it expects to release top titles and prepares its most high profile launch ever: “Star Wars: The Old Republic”.
Also China’s Huawei Technologies, the world’s No.2 network equipment maker, posted an 11 percent rise in its first-half sales as it closes in on market leader Ericsson.
