Microsoft has released free software that people can use to protect computers against viruses, spyware and other malicious codes in arsenals of cyber criminals.
Microsoft Security Essentials is available for download at microsoft.com/security_essentials and is built on technology that the global software giant uses in computer security programs it designs for businesses.
"With Microsoft Security Essentials, consumers can get high-quality protection that is easy to get and easy to use, and it won't get in their way," said Amy Barzdukas, general manager for consumer security at Microsoft.
"Consumers have told us that they want the protection of real-time security software but we know that too many are either unwilling or unable to pay for it, and so end up unprotected."
Microsoft hopes that the free software will be broadly adopted, particularly by those who have not been vigilant about protecting computers from hackers, and thereby "increase security across the entire Windows ecosystem."
More than 90 percent of the computers worldwide run on Windows operating systems made by the US technology firm.
"Microsoft is helping to reduce some of the barriers that constrain consumers from running (anti-virus software)," said IDC security analyst Jon Crotty. "Microsoft is focused on the challenges that prevent consumers from running up-to-date anti-virus software today, particularly in emerging markets where there is a growing prevalence of malware."
Security Essentials is designed to run behind the scenes, defending machines against infection by malicious computer codes.
The real-time nature of the software means it is automatically kept up-to-date regarding viruses.
Computer security specialty firm Symantec downplayed the Microsoft offering, saying it is lightweight and isn't tuned for new forms of attack being used by hackers.
Symantec referred to Security Essentials as a stripped-down version of an old Microsoft OneCare product that got poor ratings.
"From a security perspective, this Microsoft tool offers reduced defenses at a critical point in the battle against cyber crime," Symantec said of the free offering that competes with Norton products sold by the firm.
"Unique malware and social engineering tricks fly under the radar of traditional signature-based technology alone -- which is what is employed by free security tools such as Microsoft's," it said.
Agencies
Showing posts with label analyst. Show all posts
Showing posts with label analyst. Show all posts
Wednesday, September 30, 2009
Saturday, September 26, 2009
Acquisitions are 'back on' says Google CEO
Google, facing slowing growth amid a slump in advertising spending, is again considering acquisitions, CEO Eric Schmidt said.
"Acquisitions are back on," Schmidt, 54, said in an interview at an event in Pittsburgh this week. His company had more than $19 billion in cash and short-term investments at the end of its most recent quarter.
Schmidt's comments suggest Google's business is improving, giving the company confidence to spend on purchases, said Jeff Lindsay, an analyst at Sanford C. Bernstein in New York.
Google, the world's most popular Internet search engine, has relied on smaller acquisitions since buying DoubleClick for $3.2 billion in 2008 and YouTube for $1.65 billion in 2006.
"It's definitely a sign that Google is seeing stronger cash flow," said Lindsay, who recommends buying the stock and doesn't own it. "In the down economy all of the Internet players, including Google, cut back on capital expenditures to preserve cash flow."
Google typically buys 10 to 12 companies a year, Lindsay said. The company acquires smaller rivals, including startups, to boost its technology development, he said.
This month, Google bought ReCaptcha, a company that helps prevent fraud and spam at Web sites such as Ticketmaster.com, for an undisclosed sum. In August, it agreed to buy video-technology company On2 Technologies for $106.5 million.
Google reported a sales gain of 2.9 percent last quarter — down from 39 percent a year earlier — as ads fetched lower prices and the recession crimped marketing budgets.
The company is also facing increasing competition from main rivals Yahoo and Microsoft, which agreed to combine their search businesses in July.
Google may buy wireless-technology providers and so-called cloud-computing companies to supplement its product lines, said Jim Friedland, an analyst at Cowen in New York.
The purchases might range from $10 million to $75 million, said Friedland, who rates the stock "buy" and doesn't own it.
Cloud-computing services let customers store and access data over the Internet.
Agencies
"Acquisitions are back on," Schmidt, 54, said in an interview at an event in Pittsburgh this week. His company had more than $19 billion in cash and short-term investments at the end of its most recent quarter.
Schmidt's comments suggest Google's business is improving, giving the company confidence to spend on purchases, said Jeff Lindsay, an analyst at Sanford C. Bernstein in New York.
Google, the world's most popular Internet search engine, has relied on smaller acquisitions since buying DoubleClick for $3.2 billion in 2008 and YouTube for $1.65 billion in 2006.
"It's definitely a sign that Google is seeing stronger cash flow," said Lindsay, who recommends buying the stock and doesn't own it. "In the down economy all of the Internet players, including Google, cut back on capital expenditures to preserve cash flow."
Google typically buys 10 to 12 companies a year, Lindsay said. The company acquires smaller rivals, including startups, to boost its technology development, he said.
This month, Google bought ReCaptcha, a company that helps prevent fraud and spam at Web sites such as Ticketmaster.com, for an undisclosed sum. In August, it agreed to buy video-technology company On2 Technologies for $106.5 million.
Google reported a sales gain of 2.9 percent last quarter — down from 39 percent a year earlier — as ads fetched lower prices and the recession crimped marketing budgets.
The company is also facing increasing competition from main rivals Yahoo and Microsoft, which agreed to combine their search businesses in July.
Google may buy wireless-technology providers and so-called cloud-computing companies to supplement its product lines, said Jim Friedland, an analyst at Cowen in New York.
The purchases might range from $10 million to $75 million, said Friedland, who rates the stock "buy" and doesn't own it.
Cloud-computing services let customers store and access data over the Internet.
Agencies
Wednesday, September 16, 2009
Omniture to be acquired by Adobe for $1.8 billion
Adobe Systems Inc plans to pay $1.8 billion for fast-growing business software maker Omniture Inc as the maker of Photoshop and Acrobat looks to turn around declining sales.
Adobe, which announced the deal on Tuesday as it reported lower quarterly sales and profit, has been struggling over the past year as the recession hurt technology spending and customers declined to upgrade older versions of its programs.
The acquisition would give Adobe a new stream of revenue to offset that decline. Omniture charges customers fees based on monthly website traffic, so sales are less sensitive to economic swings than Adobe.
"There is no way Adobe can grow organically. This is a smart move," said Global Equities Research analyst Trip Chowdhry.
Advertising agencies and companies use Omniture's software to analyze how consumers use websites. It is the biggest provider of such services, competing with Google Inc and other smaller players. The vast majority of all professional websites are built with Adobe's Creative Suite line of design software.
Janney Montgomery Scott analyst Sasa Zorovic said Adobe's customers will not necessarily choose to subscribe to Omniture's services simply because its technology is embedded into Creative Suite.
"It will require some selling, but I think the opportunity is there," he said.
Adobe, whose software competes with products from Microsoft Corp and Apple Inc, agreed to pay $21.50 per share in cash for Omniture, a 24 percent premium over Omniture's closing price on Tuesday.
Omniture shares soared 25 percent to $21.74 in after-hours trading, while Adobe shares slid 4.5 percent to $34.06.
The deal would be Adobe's second-largest acquisition after its $3.4 billion purchase of Macromedia in December 2005.
Omniture would become a unit of Adobe, headed by its current chief executive, Josh James. Adobe said the deal should close in the fourth quarter of fiscal 2009 and would add to Adobe's per-share earnings in fiscal 2010.
Adobe said it would be paid a fee of $64 million by Omniture if the deal is terminated, according to a regulatory filing.
Adobe also reported on Tuesday that fiscal third-quarter earnings, excluding items, fell to 35 cents per share from 50 cents per share a year ago. That beat Wall Street's average forecast by a penny, according to Thomson Reuters I/B/E/S.
Second-quarter sales fell 21 percent to $697.5 million, but beat analysts' average forecast of $686.2 million. For the fiscal fourth quarter, not counting any effect of the Omniture deal, Adobe forecast revenue and earnings, excluding items broadly in line with analysts' estimates.
Agencies
Adobe, which announced the deal on Tuesday as it reported lower quarterly sales and profit, has been struggling over the past year as the recession hurt technology spending and customers declined to upgrade older versions of its programs.
The acquisition would give Adobe a new stream of revenue to offset that decline. Omniture charges customers fees based on monthly website traffic, so sales are less sensitive to economic swings than Adobe.
"There is no way Adobe can grow organically. This is a smart move," said Global Equities Research analyst Trip Chowdhry.
Advertising agencies and companies use Omniture's software to analyze how consumers use websites. It is the biggest provider of such services, competing with Google Inc and other smaller players. The vast majority of all professional websites are built with Adobe's Creative Suite line of design software.
Janney Montgomery Scott analyst Sasa Zorovic said Adobe's customers will not necessarily choose to subscribe to Omniture's services simply because its technology is embedded into Creative Suite.
"It will require some selling, but I think the opportunity is there," he said.
Adobe, whose software competes with products from Microsoft Corp and Apple Inc, agreed to pay $21.50 per share in cash for Omniture, a 24 percent premium over Omniture's closing price on Tuesday.
Omniture shares soared 25 percent to $21.74 in after-hours trading, while Adobe shares slid 4.5 percent to $34.06.
The deal would be Adobe's second-largest acquisition after its $3.4 billion purchase of Macromedia in December 2005.
Omniture would become a unit of Adobe, headed by its current chief executive, Josh James. Adobe said the deal should close in the fourth quarter of fiscal 2009 and would add to Adobe's per-share earnings in fiscal 2010.
Adobe said it would be paid a fee of $64 million by Omniture if the deal is terminated, according to a regulatory filing.
Adobe also reported on Tuesday that fiscal third-quarter earnings, excluding items, fell to 35 cents per share from 50 cents per share a year ago. That beat Wall Street's average forecast by a penny, according to Thomson Reuters I/B/E/S.
Second-quarter sales fell 21 percent to $697.5 million, but beat analysts' average forecast of $686.2 million. For the fiscal fourth quarter, not counting any effect of the Omniture deal, Adobe forecast revenue and earnings, excluding items broadly in line with analysts' estimates.
Agencies
Tuesday, August 25, 2009
New tablet may replace keyboard with touch-screen
Apple is shrinking its Mac computer and bringing out a tablet that is small enough to be carried in a handbag but big enough for comfortable web surfing, newspaper reading and watching movies. The computer will revolutionize laptops as we know them because it is one flat touch-screen device without a keyboard.
Speculations have reached a feverish pitch that by 2010, the revolutionary touch-screen gadget will be in a store near you. Blogs are alive with rumours that the tablet’s launch will be announced in September by Steve Jobs, Apple founder and CEO, and launched in time for the Christmas market, reports the Telegraph.
The product is believed to have been in development for the past six years, with Jobs personally involved over the last two. If the speculation is true, it could be the next technological breakthrough for Apple, which has sold more than 200 million iPods since its launch in 2001. The tablet will be billed as the solution for people who work a lot on the move, but don’t want to be burdened with a laptop.
Pundits are predicting that our lives will never be the same. “People expect it to be the ultimate Apple surprise. This thing will knock people’s socks off,”Leander Kahney, a blogger and author of The Cult of Mac, told the Observer.
“Apple will totally rejig the computing experience. You won’t manipulate a keyboard and mouse any more but rather use an intuitive touch-screen. It will very tactile. It will be a whole new paradigm.”
Gene Munster, a technology research analyst, estimated that the tablet, with an onscreen keyboard like the iPhone, would cost around $600, putting it between the high-end iPod Touch at $399 and the Mac-Book, which starts at $999.
Agencies
Speculations have reached a feverish pitch that by 2010, the revolutionary touch-screen gadget will be in a store near you. Blogs are alive with rumours that the tablet’s launch will be announced in September by Steve Jobs, Apple founder and CEO, and launched in time for the Christmas market, reports the Telegraph.
The product is believed to have been in development for the past six years, with Jobs personally involved over the last two. If the speculation is true, it could be the next technological breakthrough for Apple, which has sold more than 200 million iPods since its launch in 2001. The tablet will be billed as the solution for people who work a lot on the move, but don’t want to be burdened with a laptop.
Pundits are predicting that our lives will never be the same. “People expect it to be the ultimate Apple surprise. This thing will knock people’s socks off,”Leander Kahney, a blogger and author of The Cult of Mac, told the Observer.
“Apple will totally rejig the computing experience. You won’t manipulate a keyboard and mouse any more but rather use an intuitive touch-screen. It will very tactile. It will be a whole new paradigm.”
Gene Munster, a technology research analyst, estimated that the tablet, with an onscreen keyboard like the iPhone, would cost around $600, putting it between the high-end iPod Touch at $399 and the Mac-Book, which starts at $999.
Agencies
Tuesday, August 18, 2009
OLED technology emerges big in new smartphone
It consumes little power, gives superior picture quality and was touted as the future of all displays, but organic screen
technology has been languishing in manufacturers' backrooms until now.
Active-matrix organic light-emitting diode (AM-OLED) displays are making a belated appearance in pricier smartphones as makers latch on to the technology to get an edge in a sector where competition is fierce and features matter more than price.
Samsung Electronics, the world's No.2 mobile phone maker and a main proponent of the technology, has eight models featuring organic screens and plans to roll out about 10 more by the year-end.
In the United States, its Impression model is sold via AT&T, and Sprint Nextel will also offer at least one Samsung phone using AM-OLED technology.
Global cellphone leader Nokia is offering AM-OLED in its N85 and N86 high-end models as it fends off smartphone rivals such as Research In Motion and Apple.
Fans of the technology say that while AM-OLED mobile phone screens are 50-80 percent more expensive than conventional LCD screens and their high price has kept them from mass-production, their time may have come.
"I think the economics of it are somewhat irrelevant," said Ben Wood, an analyst at wireless research firm CCS Insight. "It's a real differentiator. I predict you'll see AM-OLED devices from all the major manufacturers within 12 months from now."
But AM-OLED technology failed to catch on for a reason. The screens are more expensive to produce, and supply is restricted to a few manufacturers, primarily Samsung Mobile Display, which has 97 percent share of the market.
"I've no doubt about (AM-OLED) growth over the long term. But whether all players would immediately follow the trend set by Samsung, I'm not sure," said Oh In-bum, an analyst at Dongbu Securities.
The appeal of AM-OLED technology lies in the thin layer of organic materials that allow screens to glow on their own, unlike liquid crystal display (LCD) panels, resulting in slimmer screens that use less power, boast faster response speed and have more vivid colours.
Samsung is the main proponent of a wider adoption of the technology, and forecasts 37.5 percent of all mobile phones sold in 2015 will have AM-OLED screens, up from 2.3 percent in 2009.
Samsung Mobile Display aims to sell 23 million units of AM-OLED displays this year, up from 7 million in 2008. Jeff Kim, an analyst at Hyundai Securities, expects Samsung's sales to reach 49 million next year.
LCDS TOUGH TO BEAT
Analysts are hopeful that AM-OLED prices will come down as output increases, lifting the biggest hurdle for wider adoption.
"Technologies have been advancing at a faster-than-expected rate and even in the downturn, consumers are keen to buy high-end products," said Hyundai Securities' Kim.
He expects the premium for a 2.8-inch AM-OLED display (used largely in handsets) over the same-size LCD screen to narrow to 10-20 percent within two years from 50 percent now. Displays typically make up 10-20 percent of a phone's manufacturing cost.
But some analysts have lower expectations as many manufacturers remain comfortable with mass-produced LCD screens. Vinita Jakhanwal, analyst at iSuppli, expects AM-OLED phones to account for only about 10 percent of all phones sold in 2013.
"This still means LCD has the bulk of the market," Jakhanwal said. "LCD screens are evolving too and they're improving their performance." LG Electronics, Samsung's home rival and the third-ranked handset maker, went for a premium LCD display on its 'New Chocolate' touchscreen phone.
Its screen-making affiliate LG Display is also building a new production line for more technologically advanced LCD screens for mobiles.
And for the AM-OLED business to grow in scale and turn profitable, the technology needs more manufacturers. Apart from Samsung, the only other two manufacturers are LG Display and a unit of Taiwan's Chi Mei Optoelectronics Corp.
Industry specialists also note that while organic displays for handsets appear ready to take off, the sheer cost of using the technology on larger PC and TV screens is still prohibitive. Japan's Sony Corp launched the world's first OLED TV in late 2007, but has not followed with new models.
Agencies
technology has been languishing in manufacturers' backrooms until now.
Active-matrix organic light-emitting diode (AM-OLED) displays are making a belated appearance in pricier smartphones as makers latch on to the technology to get an edge in a sector where competition is fierce and features matter more than price.
Samsung Electronics, the world's No.2 mobile phone maker and a main proponent of the technology, has eight models featuring organic screens and plans to roll out about 10 more by the year-end.
In the United States, its Impression model is sold via AT&T, and Sprint Nextel will also offer at least one Samsung phone using AM-OLED technology.
Global cellphone leader Nokia is offering AM-OLED in its N85 and N86 high-end models as it fends off smartphone rivals such as Research In Motion and Apple.
Fans of the technology say that while AM-OLED mobile phone screens are 50-80 percent more expensive than conventional LCD screens and their high price has kept them from mass-production, their time may have come.
"I think the economics of it are somewhat irrelevant," said Ben Wood, an analyst at wireless research firm CCS Insight. "It's a real differentiator. I predict you'll see AM-OLED devices from all the major manufacturers within 12 months from now."
But AM-OLED technology failed to catch on for a reason. The screens are more expensive to produce, and supply is restricted to a few manufacturers, primarily Samsung Mobile Display, which has 97 percent share of the market.
"I've no doubt about (AM-OLED) growth over the long term. But whether all players would immediately follow the trend set by Samsung, I'm not sure," said Oh In-bum, an analyst at Dongbu Securities.
The appeal of AM-OLED technology lies in the thin layer of organic materials that allow screens to glow on their own, unlike liquid crystal display (LCD) panels, resulting in slimmer screens that use less power, boast faster response speed and have more vivid colours.
Samsung is the main proponent of a wider adoption of the technology, and forecasts 37.5 percent of all mobile phones sold in 2015 will have AM-OLED screens, up from 2.3 percent in 2009.
Samsung Mobile Display aims to sell 23 million units of AM-OLED displays this year, up from 7 million in 2008. Jeff Kim, an analyst at Hyundai Securities, expects Samsung's sales to reach 49 million next year.
LCDS TOUGH TO BEAT
Analysts are hopeful that AM-OLED prices will come down as output increases, lifting the biggest hurdle for wider adoption.
"Technologies have been advancing at a faster-than-expected rate and even in the downturn, consumers are keen to buy high-end products," said Hyundai Securities' Kim.
He expects the premium for a 2.8-inch AM-OLED display (used largely in handsets) over the same-size LCD screen to narrow to 10-20 percent within two years from 50 percent now. Displays typically make up 10-20 percent of a phone's manufacturing cost.
But some analysts have lower expectations as many manufacturers remain comfortable with mass-produced LCD screens. Vinita Jakhanwal, analyst at iSuppli, expects AM-OLED phones to account for only about 10 percent of all phones sold in 2013.
"This still means LCD has the bulk of the market," Jakhanwal said. "LCD screens are evolving too and they're improving their performance." LG Electronics, Samsung's home rival and the third-ranked handset maker, went for a premium LCD display on its 'New Chocolate' touchscreen phone.
Its screen-making affiliate LG Display is also building a new production line for more technologically advanced LCD screens for mobiles.
And for the AM-OLED business to grow in scale and turn profitable, the technology needs more manufacturers. Apart from Samsung, the only other two manufacturers are LG Display and a unit of Taiwan's Chi Mei Optoelectronics Corp.
Industry specialists also note that while organic displays for handsets appear ready to take off, the sheer cost of using the technology on larger PC and TV screens is still prohibitive. Japan's Sony Corp launched the world's first OLED TV in late 2007, but has not followed with new models.
Agencies
Thursday, August 13, 2009
RIM now gets double attack from Microsoft, Nokia
Microsoft Corp and Nokia announced an alliance on Wednesday to bring business software to smartphones and counter the dominance
Apple of Research in Motion Ltd's BlackBerry.
The alliance between the world's largest software company and cellphone maker means the latest versions of Microsoft's Office applications, including Word, Excel, PowerPoint and messaging, will be available on a range of Nokia cellphones, which make up 45 per cent of the global smartphone market.
The two companies, at one time fierce rivals in the mobile telecommunications business, expect to offer Nokia phones running Office sometime next year.
"This is giving some of our competitors -- let's spell it out, RIM -- a run for their money," said Nokia Executive Vice President Robert Andersson, in a telephone interview. "I don't think BlackBerry has seen the kind of competition we can provide them now."
Research in Motion's BlackBerry created the market for mobile e-mail, and its dominant position in the corporate sector, especially in North America, has protected it from Nokia's attempts to crack the market in recent years.
"RIM should be reasonably safe in the near-term because Nokia's presence in the US is relatively small," said Neil Mawston from research firm Strategy Analytics. "Partnering more closely with Microsoft will help to raise Nokia's profile in the US"
The alliance also aims to counter Google Inc's recent move into free online software, targeted at Microsoft's business customers, and the growing popularity of Apple Inc's iPhone device.
"It's clear that Nokia and Microsoft are both facing competitive challenges, most notably from Google," said John Jackson, an analyst at wireless research firm CCS Insight. "It makes sense for these two companies to work together to see if they can pool their competitive strengths to try and counter some of this pressure."
The alliance means Microsoft's new Office suite of applications could be available to a much wider audience than the users of Windows Mobile phones, which make up 9 per cent of the smartphone market.
"We see this as a great opportunity to deliver Office Mobile to 200 million Nokia smartphone customers," said Takeshi Numoto, an executive at Microsoft's Office business.
Analysts said Microsoft is clearly looking at the largest possible audience with the Nokia deal.
"The deal is a good win for Microsoft and it will surely now be hoping to upsell the Microsoft suite of operating systems
into Nokia's possible portfolios of smartphones, mobile Internet devices and netbooks over the next couple of years," said Strategy Analytics' Mawston.
The two companies stressed that the new venture will not affect the future of Microsoft's Windows Mobile and Nokia's Symbian operating systems for smartphones. Executives said Nokia has no plans to make a Windows Mobile device.
"We are extremely committed to Symbian," said Andersson. "This is very clear. This is a multi-year collaboration building on Symbian. We are as committed as before, if not more," he said.
Microsoft shares rose 2.1 per cent to $23.62 on Nasdaq while Nokia rose less than 1 per cent to 9.30 euros in Helsinki. Shares in RIM were 0.5 per cent lower in Toronto.
Agencies
Apple of Research in Motion Ltd's BlackBerry.
The alliance between the world's largest software company and cellphone maker means the latest versions of Microsoft's Office applications, including Word, Excel, PowerPoint and messaging, will be available on a range of Nokia cellphones, which make up 45 per cent of the global smartphone market.
The two companies, at one time fierce rivals in the mobile telecommunications business, expect to offer Nokia phones running Office sometime next year.
"This is giving some of our competitors -- let's spell it out, RIM -- a run for their money," said Nokia Executive Vice President Robert Andersson, in a telephone interview. "I don't think BlackBerry has seen the kind of competition we can provide them now."
Research in Motion's BlackBerry created the market for mobile e-mail, and its dominant position in the corporate sector, especially in North America, has protected it from Nokia's attempts to crack the market in recent years.
"RIM should be reasonably safe in the near-term because Nokia's presence in the US is relatively small," said Neil Mawston from research firm Strategy Analytics. "Partnering more closely with Microsoft will help to raise Nokia's profile in the US"
The alliance also aims to counter Google Inc's recent move into free online software, targeted at Microsoft's business customers, and the growing popularity of Apple Inc's iPhone device.
"It's clear that Nokia and Microsoft are both facing competitive challenges, most notably from Google," said John Jackson, an analyst at wireless research firm CCS Insight. "It makes sense for these two companies to work together to see if they can pool their competitive strengths to try and counter some of this pressure."
The alliance means Microsoft's new Office suite of applications could be available to a much wider audience than the users of Windows Mobile phones, which make up 9 per cent of the smartphone market.
"We see this as a great opportunity to deliver Office Mobile to 200 million Nokia smartphone customers," said Takeshi Numoto, an executive at Microsoft's Office business.
Analysts said Microsoft is clearly looking at the largest possible audience with the Nokia deal.
"The deal is a good win for Microsoft and it will surely now be hoping to upsell the Microsoft suite of operating systems
into Nokia's possible portfolios of smartphones, mobile Internet devices and netbooks over the next couple of years," said Strategy Analytics' Mawston.
The two companies stressed that the new venture will not affect the future of Microsoft's Windows Mobile and Nokia's Symbian operating systems for smartphones. Executives said Nokia has no plans to make a Windows Mobile device.
"We are extremely committed to Symbian," said Andersson. "This is very clear. This is a multi-year collaboration building on Symbian. We are as committed as before, if not more," he said.
Microsoft shares rose 2.1 per cent to $23.62 on Nasdaq while Nokia rose less than 1 per cent to 9.30 euros in Helsinki. Shares in RIM were 0.5 per cent lower in Toronto.
Agencies
Tuesday, July 28, 2009
Apple,Palm battle it for the smartphone market
Palm Inc has fired another volley at Apple Inc in their smartphone war, as the two rivals tussle over whether iTunes should be compatible with Palm's new Pre smartphone.
Palm, whose executive ranks include former Apple brass, released a software update for the Pre this week that allows it to sync again with Apple's iTunes media management software.
The move comes after Apple last week issued its own software update to close a loophole in iTunes that had allowed it to sync with the Pre. ITunes is designed to work with Apple's iPod and iPhone products.
Palm mimicks Steve Jobs
Palm announced the software update in a blog post that mimicked Steve Jobs' signature catchphrase "Oh, and one more thing," which the Apple chief executive has often used to announce a brand new product.
"Oh, and one more thing: Palm webOS 1.1 re-enables Palm media sync. That's right -- you once again can have seamless access to your music, photos and videos from the current version of iTunes (8.2.1)," said Palm's blog posted late on Thursday.
It was not immediately clear when Apple may issue another software patch to counter Palm's move. When asked for comment, an Apple spokesman said, "As we've said before, newer versions of Apple's iTunes software may no longer provide syncing functionality with unsupported digital media players.
$200 Pre was launched in June
The $200 Pre launched in early June as a competitor to Apple Inc.'s iPhone, became the first non-Apple device that could connect directly to iTunes. Palm launched the Pre to good reviews, seeking to win a slice of the touch screen smartphone market now dominated by Apple's iPhone. Prior to the launch, Palm had touted that the Pre "synchronizes seamlessly with iTunes."
RBC Capital Markets analyst Mike Abramsky estimates Palm has sold 325,000 to 375,000 Pre phones so far, ahead of expectations. In comparison, Apple sold more than a million iPhone 3GS units in the first three days on the market.
While analysts and the Pre's carrier, Sprint Nextel Corp, have said it's too soon to know if the phone will be a real hit, it has already sparked a huge rally in Palm shares this year.
War with Apple generating plenty of drama
Avian Securities analyst Matthew Thornton said the war with Apple is generating plenty of drama, even though few Pre users bought their phone with the intention of syncing with iTunes.
"There's a lot of hype around it," he said, noting that some senior Palm personnel formerly worked at Apple, making the rivalry between the two companies seem that much sharper even if the dispute will likely have a limited economic impact.
Palm Chief Executive Jon Rubinstein had helped create the iPod, and senior vice president of product development Mike Bell also used to work at Apple.
Rubinstein was brought in as Palm's executive chairman from Apple
Rubinstein was brought in as Palm's executive chairman when private equity firm Elevation Partners bought a stake in the company in 2007, and he was named CEO last month. Elevation's co-founders include tech investor Roger McNamee, former Apple Chief Financial Officer Fred Anderson and singer Bono.
Kaufman Bros analyst Shaw Wu called Palm's move a "modest negative" for the company.
"While we acknowledge this is a short-term fix, frankly, we would have preferred Palm respond in a more professional and mature fashion," he wrote in a research note. "We do not believe hacking third-party software to work with one's hardware is a viable long-term business model, especially for a publicly traded company."
Palm was a pioneer of handheld devices
Palm was a pioneer of handheld devices, but has fallen well behind competitors like Apple and BlackBerry maker Research in Motion Ltd.
"Palm believes that openness and interoperability offer better experiences for users by allowing them the freedom to use the content that they own without interference across devices and services," Palm spokeswoman Leslie Letts said.
Indiatimes
Palm, whose executive ranks include former Apple brass, released a software update for the Pre this week that allows it to sync again with Apple's iTunes media management software.
The move comes after Apple last week issued its own software update to close a loophole in iTunes that had allowed it to sync with the Pre. ITunes is designed to work with Apple's iPod and iPhone products.
Palm mimicks Steve Jobs
Palm announced the software update in a blog post that mimicked Steve Jobs' signature catchphrase "Oh, and one more thing," which the Apple chief executive has often used to announce a brand new product.
"Oh, and one more thing: Palm webOS 1.1 re-enables Palm media sync. That's right -- you once again can have seamless access to your music, photos and videos from the current version of iTunes (8.2.1)," said Palm's blog posted late on Thursday.
It was not immediately clear when Apple may issue another software patch to counter Palm's move. When asked for comment, an Apple spokesman said, "As we've said before, newer versions of Apple's iTunes software may no longer provide syncing functionality with unsupported digital media players.
$200 Pre was launched in June
The $200 Pre launched in early June as a competitor to Apple Inc.'s iPhone, became the first non-Apple device that could connect directly to iTunes. Palm launched the Pre to good reviews, seeking to win a slice of the touch screen smartphone market now dominated by Apple's iPhone. Prior to the launch, Palm had touted that the Pre "synchronizes seamlessly with iTunes."
RBC Capital Markets analyst Mike Abramsky estimates Palm has sold 325,000 to 375,000 Pre phones so far, ahead of expectations. In comparison, Apple sold more than a million iPhone 3GS units in the first three days on the market.
While analysts and the Pre's carrier, Sprint Nextel Corp, have said it's too soon to know if the phone will be a real hit, it has already sparked a huge rally in Palm shares this year.
War with Apple generating plenty of drama
Avian Securities analyst Matthew Thornton said the war with Apple is generating plenty of drama, even though few Pre users bought their phone with the intention of syncing with iTunes.
"There's a lot of hype around it," he said, noting that some senior Palm personnel formerly worked at Apple, making the rivalry between the two companies seem that much sharper even if the dispute will likely have a limited economic impact.
Palm Chief Executive Jon Rubinstein had helped create the iPod, and senior vice president of product development Mike Bell also used to work at Apple.
Rubinstein was brought in as Palm's executive chairman from Apple
Rubinstein was brought in as Palm's executive chairman when private equity firm Elevation Partners bought a stake in the company in 2007, and he was named CEO last month. Elevation's co-founders include tech investor Roger McNamee, former Apple Chief Financial Officer Fred Anderson and singer Bono.
Kaufman Bros analyst Shaw Wu called Palm's move a "modest negative" for the company.
"While we acknowledge this is a short-term fix, frankly, we would have preferred Palm respond in a more professional and mature fashion," he wrote in a research note. "We do not believe hacking third-party software to work with one's hardware is a viable long-term business model, especially for a publicly traded company."
Palm was a pioneer of handheld devices
Palm was a pioneer of handheld devices, but has fallen well behind competitors like Apple and BlackBerry maker Research in Motion Ltd.
"Palm believes that openness and interoperability offer better experiences for users by allowing them the freedom to use the content that they own without interference across devices and services," Palm spokeswoman Leslie Letts said.
Indiatimes
Tuesday, July 14, 2009
Can MS takes on Google with free Office software?
Microsoft will release a free version of its dominant Office software that users can access over the Web, catching up with products that arch rival Google launched three years ago.
The world’s largest software maker will offer a word processor, spreadsheet, presentation software and a note-taking program with the same look and feel of their counterparts in the Office suites that it sells for personal computers.
It is the latest salvo in an intensifying war between the two technology giants. Google announced plans last week to challenge Windows with a free operating system. Microsoft introduced a new search engine, dubbed Bing, last month, that has taken a small amount of market share from Google.
A free version of Office could hurt sales of Microsoft's top-selling and most profitable business unit. One of Office's most popular titles is a home version that sells for $150. It includes the four programs that Microsoft will give away.
“Microsoft is in a tough spot. Their competition isn't just undercutting them. They are giving away the competitive product,” said Sheri McLeish, an analyst with Forrester Research. The Office division rang up operating profit of $9.3 billion in the first three quarters of the software maker's current fiscal year. — Reuters
McLeish said she expects Microsoft to overtake Google in the market as the hundreds of millions of people who use Office flock to try out the Internet version.
Microsoft will seek to make money by using it to lead those users to its ad-supported websites, including the Bing search engine. Analysts have said that Bing's early signs of success suggest Microsoft may be rounding the corner in efforts to turn around its money-losing Internet division.
Microsoft will release the free offering when it starts selling Office 2010, it next major release of the product, sometime in the first half of next year. Its current version came out in January 2007.
The software maker unveiled an early release on Monday at a conference for business partners in New Orleans. It will be distributed to tens of thousands of testers.
Company spokeswoman Janice Kapner said the free Web version will provide "a very rich experience" and probably have more functionality than Google.
Office 2010 is among a wave of upgrades to Microsoft programs planned over the next year. A new version of its ubiquitous Windows operating system is coming out in October and a new version of its widely used email server is also in the works.
Microsoft also plans two other Internet versions of Office for businesses.
It will host one of them at its own data centers, charging a yet-to-be-announced fee for that service. Businesses with premium service contracts will have the choice of running the Web-based version from their own data centers at no extra cost.
Agencies
The world’s largest software maker will offer a word processor, spreadsheet, presentation software and a note-taking program with the same look and feel of their counterparts in the Office suites that it sells for personal computers.
It is the latest salvo in an intensifying war between the two technology giants. Google announced plans last week to challenge Windows with a free operating system. Microsoft introduced a new search engine, dubbed Bing, last month, that has taken a small amount of market share from Google.
A free version of Office could hurt sales of Microsoft's top-selling and most profitable business unit. One of Office's most popular titles is a home version that sells for $150. It includes the four programs that Microsoft will give away.
“Microsoft is in a tough spot. Their competition isn't just undercutting them. They are giving away the competitive product,” said Sheri McLeish, an analyst with Forrester Research. The Office division rang up operating profit of $9.3 billion in the first three quarters of the software maker's current fiscal year. — Reuters
McLeish said she expects Microsoft to overtake Google in the market as the hundreds of millions of people who use Office flock to try out the Internet version.
Microsoft will seek to make money by using it to lead those users to its ad-supported websites, including the Bing search engine. Analysts have said that Bing's early signs of success suggest Microsoft may be rounding the corner in efforts to turn around its money-losing Internet division.
Microsoft will release the free offering when it starts selling Office 2010, it next major release of the product, sometime in the first half of next year. Its current version came out in January 2007.
The software maker unveiled an early release on Monday at a conference for business partners in New Orleans. It will be distributed to tens of thousands of testers.
Company spokeswoman Janice Kapner said the free Web version will provide "a very rich experience" and probably have more functionality than Google.
Office 2010 is among a wave of upgrades to Microsoft programs planned over the next year. A new version of its ubiquitous Windows operating system is coming out in October and a new version of its widely used email server is also in the works.
Microsoft also plans two other Internet versions of Office for businesses.
It will host one of them at its own data centers, charging a yet-to-be-announced fee for that service. Businesses with premium service contracts will have the choice of running the Web-based version from their own data centers at no extra cost.
Agencies
Thursday, July 9, 2009
Will Google-Microsoft war cut down PC prices?
Google Inc's bid to compete with Microsoft Corp's Windows operating system may help lower the cost of personal computers at a time when prices are already being pinched by inexpensive netbooks.
Google said it will offer its just-announced Chrome operating system for free when it is launched in the second half of 2010, a move that could force Microsoft into a price war.
Although Windows is the dominant operating system -- installed on 90 percent of the world's PCs, Microsoft won't take Google's challenge lightly, analysts said. Its new Windows 7 operating system will be available in October.
"Microsoft's strategy is likely to be to compete on price," said Brent Williams, an analyst with the Benchmark Co. "Now there's a competitor with the muscle and the brand recognition. Google is that company."
Google said Chrome OS, which is based on the open-source Linux code, is being designed for all PCs but will debut on netbooks. It makes sense for Google to initially target the stripped-down, Web-centric netbooks, one of the only segments showing any growth in a PC market that is contracting.
Netbooks generally sell for $300 to $400, but prices are dropping as new offerings flood the market and wireless carriers offer subsidies with the purchase of a data plan.
Kaufman Bros analyst Shaw Wu noted that while the prices on nearly all PC components have been falling, "the one thing that has not been coming down is the cost of the operating system. This is going to put some pressure on Microsoft."
Microsoft doesn't say how much it charges PC brands for Windows, but analysts estimate it gets $20 to $40 for the older XP system used in the vast majority of netbooks, and at least $150 for the current Vista system.
Wu said price competition could ultimately give a bump to PC makers' margins.
"I think overall it should improve the profitability for PC vendors. It's really a question of how much they pass on to the customers," he said.
REWRITING THE RULES
Between 20 million and 30 million netbooks are expected to be shipped this year, and the devices continue to rewrite the rules for the PC industry.
Even as heavyweights such as Hewlett-Packard Co and Dell Inc roll out new netbooks, analysts expect new players, including Taiwan-based equipment manufacturers and carriers such as AT&T Inc, to release branded netbooks running on either Intel Corp's x86 chip platform or ARM chips.
Google said Chrome will work on either architecture.
Agencies
Google said it will offer its just-announced Chrome operating system for free when it is launched in the second half of 2010, a move that could force Microsoft into a price war.
Although Windows is the dominant operating system -- installed on 90 percent of the world's PCs, Microsoft won't take Google's challenge lightly, analysts said. Its new Windows 7 operating system will be available in October.
"Microsoft's strategy is likely to be to compete on price," said Brent Williams, an analyst with the Benchmark Co. "Now there's a competitor with the muscle and the brand recognition. Google is that company."
Google said Chrome OS, which is based on the open-source Linux code, is being designed for all PCs but will debut on netbooks. It makes sense for Google to initially target the stripped-down, Web-centric netbooks, one of the only segments showing any growth in a PC market that is contracting.
Netbooks generally sell for $300 to $400, but prices are dropping as new offerings flood the market and wireless carriers offer subsidies with the purchase of a data plan.
Kaufman Bros analyst Shaw Wu noted that while the prices on nearly all PC components have been falling, "the one thing that has not been coming down is the cost of the operating system. This is going to put some pressure on Microsoft."
Microsoft doesn't say how much it charges PC brands for Windows, but analysts estimate it gets $20 to $40 for the older XP system used in the vast majority of netbooks, and at least $150 for the current Vista system.
Wu said price competition could ultimately give a bump to PC makers' margins.
"I think overall it should improve the profitability for PC vendors. It's really a question of how much they pass on to the customers," he said.
REWRITING THE RULES
Between 20 million and 30 million netbooks are expected to be shipped this year, and the devices continue to rewrite the rules for the PC industry.
Even as heavyweights such as Hewlett-Packard Co and Dell Inc roll out new netbooks, analysts expect new players, including Taiwan-based equipment manufacturers and carriers such as AT&T Inc, to release branded netbooks running on either Intel Corp's x86 chip platform or ARM chips.
Google said Chrome will work on either architecture.
Agencies
Sunday, June 21, 2009
IT, ITeS industry growth may fall to 5-year low, says IDC
Indian IT and IT-enabled services industry is expected to grow at 10.8 per cent in 2009, the lowest in the last five years, due to the global economic meltdown, a report said.
But in next four years, it would grow at 13.9 per cent to touch revenue of USD 110 billion, the report by analyst firm IDC India has said.
"In the backdrop of one of the worst ever global financial and economic meltdown, it is estimated that in 2009, the overall India IT/ITeS industry is expected to grow at 10.8 per cent, which is the lowest in the last five years.
"Going forward, the overall IT/ITeS industry is expected to grow at 13.9 per cent (CAGR 2008-2013) to touch over USD 110 billion in 2013," IDC India Country Manager Kapil Dev Singh said in the report.
The total revenue for the Indian IT industry in 2008 stood at over USD 57 billion in 2008.
"The ongoing global slowdown will definitely have its impact on the Indian IT sector. Despite that the industry is still expected to grow at a CAGR of 11.4 per cent by 2013," IDC India Country Manager Kapil Dev Singh said.
The domestic IT and IT-enabled services (ITeS) revenue is slated to touch about Rs 2,06,398 crore by 2013 from Rs 99,254 crore in 2008, growing at a CAGR of Rs 15.8 per cent, the study said.
Agencies
But in next four years, it would grow at 13.9 per cent to touch revenue of USD 110 billion, the report by analyst firm IDC India has said.
"In the backdrop of one of the worst ever global financial and economic meltdown, it is estimated that in 2009, the overall India IT/ITeS industry is expected to grow at 10.8 per cent, which is the lowest in the last five years.
"Going forward, the overall IT/ITeS industry is expected to grow at 13.9 per cent (CAGR 2008-2013) to touch over USD 110 billion in 2013," IDC India Country Manager Kapil Dev Singh said in the report.
The total revenue for the Indian IT industry in 2008 stood at over USD 57 billion in 2008.
"The ongoing global slowdown will definitely have its impact on the Indian IT sector. Despite that the industry is still expected to grow at a CAGR of 11.4 per cent by 2013," IDC India Country Manager Kapil Dev Singh said.
The domestic IT and IT-enabled services (ITeS) revenue is slated to touch about Rs 2,06,398 crore by 2013 from Rs 99,254 crore in 2008, growing at a CAGR of Rs 15.8 per cent, the study said.
Agencies
Tuesday, June 16, 2009
Softpro buys SA software company for $19 million
The Hyderabad-based SoftPro Systems, a IT Solution provider has acquired 100% equity stake in South Africa-based Cura Risk Management software for $19 million in an all cash deal. The move is likely to help the Indian company grow six fold to over Rs 60 crore by the end of this fiscal.
“The acquisition is the first step towards the turnaround of our fledgling company. The deal draws strategic benefits as we can utilise the established client base of the acquired firm. Also, we hope to become a $200 million company in the next five years,” said G. Bala Reddy, chairman & managing director, SoftPro.
SoftPro has tied up about $14.5 million of funds with Bank of India and Andhra Bank. Andhra Bank will part guarantee the funds. The company is also looking at infusing fresh equity in the business through a preferential allotment of shares. This will help the firm raise about Rs 53 crore over the next one and a half year. It will also use a part of the money to fund the acquisition.
The promoter group currently holds 46.5% stake in the company. However, the stake will come down to 41% after the preferential allotment. The equity base of the company will increase from Rs 6 crore to Rs 9.5 crore. “While a part of the money raised through preferential allotment will be used to fund the deal, the balance will be used to meet working capital needs,” said Reddy.
SoftPro will pay $16 million upfront and the balance in the next three years based on performance of the acquired company, Cura.
“We see the acquisition as the next stage of growth,” said Alon Apteker, director, Cura. The $8-million company provides integrated software solutions addressing the Governance Risk & Compliance (GRC) requirements. It has about 200 clients across the globe. According to an IT analyst, small IT firms can leverage on such deals as they get to expand demographically and bring business home. Also a company can utilise the technology and expertise locally.
Economictimes
“The acquisition is the first step towards the turnaround of our fledgling company. The deal draws strategic benefits as we can utilise the established client base of the acquired firm. Also, we hope to become a $200 million company in the next five years,” said G. Bala Reddy, chairman & managing director, SoftPro.
SoftPro has tied up about $14.5 million of funds with Bank of India and Andhra Bank. Andhra Bank will part guarantee the funds. The company is also looking at infusing fresh equity in the business through a preferential allotment of shares. This will help the firm raise about Rs 53 crore over the next one and a half year. It will also use a part of the money to fund the acquisition.
The promoter group currently holds 46.5% stake in the company. However, the stake will come down to 41% after the preferential allotment. The equity base of the company will increase from Rs 6 crore to Rs 9.5 crore. “While a part of the money raised through preferential allotment will be used to fund the deal, the balance will be used to meet working capital needs,” said Reddy.
SoftPro will pay $16 million upfront and the balance in the next three years based on performance of the acquired company, Cura.
“We see the acquisition as the next stage of growth,” said Alon Apteker, director, Cura. The $8-million company provides integrated software solutions addressing the Governance Risk & Compliance (GRC) requirements. It has about 200 clients across the globe. According to an IT analyst, small IT firms can leverage on such deals as they get to expand demographically and bring business home. Also a company can utilise the technology and expertise locally.
Economictimes
Wednesday, June 3, 2009
New lighter, power-saving Intel chips for laptops
Intel Corp has launched a lighter, power-saving microprocessor intended for use in ultra-thin laptops, a move by the top chip
maker to shore up its lead in mobile computing.
The new processor, dubbed the Pentium SU2700, comes amid investors' fears that cheaper processors such as the Atom, designed for use in ultra-cheap netbooks, are cannibalizing the market share for higher-margin, more expensive chips.
Acer and Asustek have said they will build laptops with the chip, and Microsoft will ensure its software supports it.
Intel expects that by the fourth quarter of 2009, about a fifth of its consumer shipments will be for the new-generation laptops, slimmer and more energy-efficient.
Intel is upbeat on the ultra-thin market and expects "explosive growth in 2009, very similar to the netbook growth," Intel's director of mobile platforms product marketing Uday Marty said on a conference call.
Asutek, which in 2007 pioneered the successful low-cost, no-frills netbook PC in 2007, is expected to unveil five new laptop models based on the technology this year.
Analysts say Intel's CULV platform may offer a cheaper - but virtually as powerful - alternative to the traditional processors it makes for laptops, while enabling laptops to begin to approach the diminutive size of netbooks.
Intel released three new Core 2 Duo processors and a new mobile chipset.
Agencies
maker to shore up its lead in mobile computing.
The new processor, dubbed the Pentium SU2700, comes amid investors' fears that cheaper processors such as the Atom, designed for use in ultra-cheap netbooks, are cannibalizing the market share for higher-margin, more expensive chips.
Acer and Asustek have said they will build laptops with the chip, and Microsoft will ensure its software supports it.
Intel expects that by the fourth quarter of 2009, about a fifth of its consumer shipments will be for the new-generation laptops, slimmer and more energy-efficient.
Intel is upbeat on the ultra-thin market and expects "explosive growth in 2009, very similar to the netbook growth," Intel's director of mobile platforms product marketing Uday Marty said on a conference call.
Asutek, which in 2007 pioneered the successful low-cost, no-frills netbook PC in 2007, is expected to unveil five new laptop models based on the technology this year.
Analysts say Intel's CULV platform may offer a cheaper - but virtually as powerful - alternative to the traditional processors it makes for laptops, while enabling laptops to begin to approach the diminutive size of netbooks.
Intel released three new Core 2 Duo processors and a new mobile chipset.
Agencies
Thursday, May 7, 2009
Have computer sales dipped by 12%; As cos cut IT spends
Personal computer (PC) sales in India fell about 11.7% during the first quarter of the calendar year to about 2.1 million units as enterprises slowed down IT spending, according to research firm Gartner.
Both desktop PC and laptop sales declined about 11% during the period, as both large enterprises and small and medium businesses delayed their IT hardware purchases.
“Cost pressure seems to have kept away enterprises from spending on IT hardware during the first quarter of 2009, while there are signs of some turnaround in the consumer sentiment,” Gartner principal analyst Diptarup Chakraborti said.
Hewlett-Packard continued to lead India’s PC market, selling about 300,000 PCs in the quarter. The PC maker, however, saw an year-on-year decline in both desktop and laptop sales during the period. HCL Infosystems (200,000) and Dell (158,000) were ranked second and third, respectively. Acer was ranked fourth.
Gartner said it expects PC sales in India to decline 3.7% year-on-year to 8.98 million units this year. The firm had projected sales of 11 million units for the calendar year in the beginning of January, but the first quarter made it revise its projection downwards.
“Production of desktops and laptops has come to near a halt in manufacturing destinations such as Taiwan,” Mr Chakraborti said. PC makers say they saw some growth in new categories, such as netbooks and higher retail sales, in the first quarter but the good news is limited to the consumer space.
“Large enterprises and small and medium businesses are not buying. The e-government projects are also in a limbo with the Model Code of Conduct in place,” Acer India chief marketing officer S Rajendran said.
With the slowdown in enterprise spending, corporate buyers are expected to account for 69% of total PC sales in 2009, down from 71% last year.
The economic slowdown has resulted in a slump in PC sales across the globe. Worldwide PC shipments declined 6.5% in the first quarter of 2009 to 67.2 million units. As per Gartner, the decline could have been steeper but for low-priced laptops such as netbooks.
Agencies
Both desktop PC and laptop sales declined about 11% during the period, as both large enterprises and small and medium businesses delayed their IT hardware purchases.
“Cost pressure seems to have kept away enterprises from spending on IT hardware during the first quarter of 2009, while there are signs of some turnaround in the consumer sentiment,” Gartner principal analyst Diptarup Chakraborti said.
Hewlett-Packard continued to lead India’s PC market, selling about 300,000 PCs in the quarter. The PC maker, however, saw an year-on-year decline in both desktop and laptop sales during the period. HCL Infosystems (200,000) and Dell (158,000) were ranked second and third, respectively. Acer was ranked fourth.
Gartner said it expects PC sales in India to decline 3.7% year-on-year to 8.98 million units this year. The firm had projected sales of 11 million units for the calendar year in the beginning of January, but the first quarter made it revise its projection downwards.
“Production of desktops and laptops has come to near a halt in manufacturing destinations such as Taiwan,” Mr Chakraborti said. PC makers say they saw some growth in new categories, such as netbooks and higher retail sales, in the first quarter but the good news is limited to the consumer space.
“Large enterprises and small and medium businesses are not buying. The e-government projects are also in a limbo with the Model Code of Conduct in place,” Acer India chief marketing officer S Rajendran said.
With the slowdown in enterprise spending, corporate buyers are expected to account for 69% of total PC sales in 2009, down from 71% last year.
The economic slowdown has resulted in a slump in PC sales across the globe. Worldwide PC shipments declined 6.5% in the first quarter of 2009 to 67.2 million units. As per Gartner, the decline could have been steeper but for low-priced laptops such as netbooks.
Agencies
Saturday, April 25, 2009
Will Yahoo layoff 700 more jobs?
Yahoo Inc said it would cut 5 per cent of its global workforce (nearly 700 jobs) and reported quarterly results that showed progress towards controlling costs, sending shares higher in an after-hours relief rally.
The Internet company said economic conditions remained challenging, as revenue on Yahoo Websites from both display ads and search ads fell during the first quarter.
But the decline in revenue was offset by better cost controls, as new Chief Executive Carol Bartz seeks to revive Yahoo's fortunes. "People were really looking at the profit structure of the business and for things not to be falling apart," said Kaufman Brothers analyst Jason Avilio.
Yahoo said last October it would cut about one-tenth of its workforce, or about 1,600 jobs. The company finished 2008 with roughly 13,600 employees and said it would take severance charges from the new round of layoffs during the second quarter.
The company also announced in an internal memo to employees on Tuesday that it planned to implement a mandatory shutdown of operations during the holiday week of December 25, 2009 through January 1, 2010.
Yahoo said its operating cash flow, excluding certain items, was $409 million in the first quarter, at the high end of the $365 million to $415 million range it forecast in January.
Yahoo shares were up 54 cents at $14.92 in after-hours trading on Tuesday. The company's stock is up roughly 9 per cent from its Monday close of $13.66.
Yahoo's financial report comes as speculation has mounted that the firm has restarted discussions with software giant Microsoft Corp about an Internet search partnership, following last year's failed merger negotiations.
Bartz, who replaced Yahoo co-founder Jerry Yang in the top job in January, declined to comment on anything related to Microsoft during the conference call on Tuesday.
But she reiterated her belief that search is a very valuable part of Yahoo's business.
"I'm well-versed enough in the search business at Yahoo to say it's absolutely critical to Yahoo," Bartz said in response to a question regarding whether she is now familiar enough with the business to respond to an offer for search.
In the first full quarter under Bartz's leadership, Yahoo generated revenue of $1.58 billion, down 13 per cent from the year-ago period. Exclud
ing traffic acquisition costs (TAC), Yahoo's revenue was $1.16 billion, compared with the average analyst expectation of $1.2 billion, according to Reuters Estimates.
The Sunnyvale, California-based company reported a net profit in the first quarter of $118 million, or 8 cents a share -- down from $537 million, or 37 cents a share, a year earlier. Wall Street analysts, on average, had forecast earnings at 8 cents a share, according to Reuters Estimates.
While revenues were "a bit light," Jefferies & Co analyst Youssef Squali said in an email that Yahoo's overall results, particularly on the bottom line, were not bad given the environment.
Yahoo said that revenue from display ads on its owned and operated websites slid 13 per cent year-over-year in the first quarter, with revenue from automotive advertisers down "substantially" and spending by retail advertisers "softened" compared to the year ago period.
Revenue from search-based ads on Yahoo sites were down 3 per cent. And Yahoo said that advertisers were spending less money to bid for the individual keywords that their ads appear alongside, echoing a theme present in results last week from Google Inc, the No.1 US Internet search company.
Yahoo, like Google, stressed the importance of keeping costs in line amid the difficult economy. The new round of job cuts come about two months after Bartz announced a reorganization of Yahoo's internal management structure.
The layoffs, said Bartz, are a "natural outgrowth" of the reorganization, which will allow Yahoo to streamline its operations and eliminate duplication of efforts.
The Internet company said it would also continue to implement unspecified "non-headcount cost reductions," so it can increase its ability to make strategic investments and target hiring in its core operations
"It's crucial that management adjusts the cost structure to the new growth (or lack thereof) realities; so margin protection is paramount to Yahoo right now," said Jefferies analyst Squali. "We think there is potential outperformance on margins."
Chief Financial Officer Blake Jorgensen told Reuters there were "still very dark clouds on the horizon" for the economy.
"I'll try to resist calling the bottom in any way," he said in a telephone interview.
Yahoo projected that sales in the current quarter would range between $1.425 billion and $1.625 billion.
Agencies
The Internet company said economic conditions remained challenging, as revenue on Yahoo Websites from both display ads and search ads fell during the first quarter.
But the decline in revenue was offset by better cost controls, as new Chief Executive Carol Bartz seeks to revive Yahoo's fortunes. "People were really looking at the profit structure of the business and for things not to be falling apart," said Kaufman Brothers analyst Jason Avilio.
Yahoo said last October it would cut about one-tenth of its workforce, or about 1,600 jobs. The company finished 2008 with roughly 13,600 employees and said it would take severance charges from the new round of layoffs during the second quarter.
The company also announced in an internal memo to employees on Tuesday that it planned to implement a mandatory shutdown of operations during the holiday week of December 25, 2009 through January 1, 2010.
Yahoo said its operating cash flow, excluding certain items, was $409 million in the first quarter, at the high end of the $365 million to $415 million range it forecast in January.
Yahoo shares were up 54 cents at $14.92 in after-hours trading on Tuesday. The company's stock is up roughly 9 per cent from its Monday close of $13.66.
Yahoo's financial report comes as speculation has mounted that the firm has restarted discussions with software giant Microsoft Corp about an Internet search partnership, following last year's failed merger negotiations.
Bartz, who replaced Yahoo co-founder Jerry Yang in the top job in January, declined to comment on anything related to Microsoft during the conference call on Tuesday.
But she reiterated her belief that search is a very valuable part of Yahoo's business.
"I'm well-versed enough in the search business at Yahoo to say it's absolutely critical to Yahoo," Bartz said in response to a question regarding whether she is now familiar enough with the business to respond to an offer for search.
In the first full quarter under Bartz's leadership, Yahoo generated revenue of $1.58 billion, down 13 per cent from the year-ago period. Exclud
ing traffic acquisition costs (TAC), Yahoo's revenue was $1.16 billion, compared with the average analyst expectation of $1.2 billion, according to Reuters Estimates.
The Sunnyvale, California-based company reported a net profit in the first quarter of $118 million, or 8 cents a share -- down from $537 million, or 37 cents a share, a year earlier. Wall Street analysts, on average, had forecast earnings at 8 cents a share, according to Reuters Estimates.
While revenues were "a bit light," Jefferies & Co analyst Youssef Squali said in an email that Yahoo's overall results, particularly on the bottom line, were not bad given the environment.
Yahoo said that revenue from display ads on its owned and operated websites slid 13 per cent year-over-year in the first quarter, with revenue from automotive advertisers down "substantially" and spending by retail advertisers "softened" compared to the year ago period.
Revenue from search-based ads on Yahoo sites were down 3 per cent. And Yahoo said that advertisers were spending less money to bid for the individual keywords that their ads appear alongside, echoing a theme present in results last week from Google Inc, the No.1 US Internet search company.
Yahoo, like Google, stressed the importance of keeping costs in line amid the difficult economy. The new round of job cuts come about two months after Bartz announced a reorganization of Yahoo's internal management structure.
The layoffs, said Bartz, are a "natural outgrowth" of the reorganization, which will allow Yahoo to streamline its operations and eliminate duplication of efforts.
The Internet company said it would also continue to implement unspecified "non-headcount cost reductions," so it can increase its ability to make strategic investments and target hiring in its core operations
"It's crucial that management adjusts the cost structure to the new growth (or lack thereof) realities; so margin protection is paramount to Yahoo right now," said Jefferies analyst Squali. "We think there is potential outperformance on margins."
Chief Financial Officer Blake Jorgensen told Reuters there were "still very dark clouds on the horizon" for the economy.
"I'll try to resist calling the bottom in any way," he said in a telephone interview.
Yahoo projected that sales in the current quarter would range between $1.425 billion and $1.625 billion.
Agencies
Tuesday, April 21, 2009
Oracle may layoff 10,000 jobs after Sun deal
Global IT giant Oracle's $7.4 billion acquisition of Sun Microsystems could terminate 10000 jobs, predicted a financial analyst, as per a report in IDG News Service.
Excluding charges related to the restructuring, Oracle expects the Sun deal to contribute $1.5 billion toward its earnings next year and $2 billion in the second year of the acquisition, making it more profitable in per-share contribution in the first year than the company had planned for the acquisitions of BEA, PeopleSoft and Siebel combined, according to Oracle President Safra Catz. Meanwhile, Tony Sacconaghi, a well-respected technology analyst with Sanford C. Bernstein & Co said, "That profitability will come via layoffs." Sacconaghi had been forecasting $800 million in operating profit for Sun's fiscal 2010, rather than the $1.5 billion predicted by Oracle.
"In order to deliver $1.5 billion in profit, Oracle would need to boost profits by $700 million assuming no material revenue erosion, which suggests incremental headcount reductions of 5,500 to 10,000 depending on timing," Sacconaghi wrote in a research note. But, Oracle declined to comment on any possible layoffs.
The acquisition was announced Monday, just two weeks after Sun's previous suitor, IBM, had walked away from the table after being unable to come to acquisition terms.
Analyst firm Technology Business Research (TBR) agreed that layoffs are coming, predicting that sales and marketing staff will be hit hardest. "Oracle will rapidly rationalize Sun's cost-base," the company said in a report on the deal. "This means general layoffs and a reshaping of cost centers such as services and support."
Sun is already in the process of slashing between 15 to 18 percent of its workforce, or as many as 6,000 employees.
Agencies
Excluding charges related to the restructuring, Oracle expects the Sun deal to contribute $1.5 billion toward its earnings next year and $2 billion in the second year of the acquisition, making it more profitable in per-share contribution in the first year than the company had planned for the acquisitions of BEA, PeopleSoft and Siebel combined, according to Oracle President Safra Catz. Meanwhile, Tony Sacconaghi, a well-respected technology analyst with Sanford C. Bernstein & Co said, "That profitability will come via layoffs." Sacconaghi had been forecasting $800 million in operating profit for Sun's fiscal 2010, rather than the $1.5 billion predicted by Oracle.
"In order to deliver $1.5 billion in profit, Oracle would need to boost profits by $700 million assuming no material revenue erosion, which suggests incremental headcount reductions of 5,500 to 10,000 depending on timing," Sacconaghi wrote in a research note. But, Oracle declined to comment on any possible layoffs.
The acquisition was announced Monday, just two weeks after Sun's previous suitor, IBM, had walked away from the table after being unable to come to acquisition terms.
Analyst firm Technology Business Research (TBR) agreed that layoffs are coming, predicting that sales and marketing staff will be hit hardest. "Oracle will rapidly rationalize Sun's cost-base," the company said in a report on the deal. "This means general layoffs and a reshaping of cost centers such as services and support."
Sun is already in the process of slashing between 15 to 18 percent of its workforce, or as many as 6,000 employees.
Agencies
Tuesday, April 14, 2009
Is Google showing signs of vulnerability?
With three rounds of layoffs announced since the year began, Google Inc is showing rare signs of vulnerability. As it prepares to deliver first-quarter results on Thursday, investors are anxious to see if the Google machine has any visible cracks, or if the No 1 US Internet search company continues to sidestep the worst of the storm.
"Whenever Internet companies cut costs, people take any cost cutting as a really negative signal," said Sanford Bernstein analyst Jeff Lindsay. But he said Web searches on Google continue to increase, while revenue from paid clicks, people clicking on Google's text-based search ads, appears to be holding up.
"We think they've been cutting costs prudently and sensibly, and it's probably a good indication that they're going to have good margin performance," said Lindsay, who rates Google's stock "outperform." With global economies sputtering, and one recent report forecasting a 5 percent decline in US online advertising spending this year, business conditions for Google and other Internet companies are as bad as they have ever been.
Analysts expect a sequential drop in revenue for the first time in Google's history as a public company. The average forecast, according to Reuters Estimates, is for first-quarter revenue of $5.53 billion, a 3 percent fall quarter over quarter, or a 6.6 percent gain year on year. Still, that is better than Google's rivals.
Yahoo Inc has projected sales falling as much as 16 percent year-over-year in the first quarter. And some analysts expect revenue at Time Warner Inc's AOL unit to slide 19 percent or more in the first quarter from a year ago. Thus Google's stock, which was trading at around $378 on Monday, has risen 23 percent since the eve of its last quarterly earnings report, outperforming the broader market. Google shares trade at 18 times forward earnings versus the 38 times multiple for rival Yahoo.
Shares outperform
Analysts, on average, expect Google to earn $4.20 a share in the first quarter, up about 2 percent from $4.12 in the year-earlier period, according to Reuters Estimates. Roughly 97 percent of Google's revenue comes from advertising. Of that, the vast majority is tied to Google's search-based advertising system.
Because advertisers only pay when a Web surfer clicks on one of Google's search ads, analysts say the ads provide customers with a better return than other forms of advertising such as broadcast radio ads or Internet banner ads. But JP Morgan analyst Imran Khan said in a recent note to investors that the tight credit market could force small businesses, which he reckons accounts for 20 percent of Google's revenue, to cut back on ad spending.
Google does not give financial guidance but Wall Street will be paying close attention to the comments executives make about the economy on Thursday's conference call. Google said in March that it was laying off 200 workers in its sales and marketing groups, following job cuts in its recruiting group and its shuttered broadcast radio advertising business in January and February.
"It is not news that Google is being impacted by the economy. The real question is how much will the economy impact Google from here on out and how long will this recession last," said Cowen & Co analyst James Friedland. "If the ad pie keeps shrinking, eventually Google's ad pie will shrink," said Friedland, who has an outperform rating on Google. While the company ended 2008 with $15.8 billion in cash and short-term securities on its books, investors and analysts are also eager for any updates about how Google plans to use the money.
Agencies
"Whenever Internet companies cut costs, people take any cost cutting as a really negative signal," said Sanford Bernstein analyst Jeff Lindsay. But he said Web searches on Google continue to increase, while revenue from paid clicks, people clicking on Google's text-based search ads, appears to be holding up.
"We think they've been cutting costs prudently and sensibly, and it's probably a good indication that they're going to have good margin performance," said Lindsay, who rates Google's stock "outperform." With global economies sputtering, and one recent report forecasting a 5 percent decline in US online advertising spending this year, business conditions for Google and other Internet companies are as bad as they have ever been.
Analysts expect a sequential drop in revenue for the first time in Google's history as a public company. The average forecast, according to Reuters Estimates, is for first-quarter revenue of $5.53 billion, a 3 percent fall quarter over quarter, or a 6.6 percent gain year on year. Still, that is better than Google's rivals.
Yahoo Inc has projected sales falling as much as 16 percent year-over-year in the first quarter. And some analysts expect revenue at Time Warner Inc's AOL unit to slide 19 percent or more in the first quarter from a year ago. Thus Google's stock, which was trading at around $378 on Monday, has risen 23 percent since the eve of its last quarterly earnings report, outperforming the broader market. Google shares trade at 18 times forward earnings versus the 38 times multiple for rival Yahoo.
Shares outperform
Analysts, on average, expect Google to earn $4.20 a share in the first quarter, up about 2 percent from $4.12 in the year-earlier period, according to Reuters Estimates. Roughly 97 percent of Google's revenue comes from advertising. Of that, the vast majority is tied to Google's search-based advertising system.
Because advertisers only pay when a Web surfer clicks on one of Google's search ads, analysts say the ads provide customers with a better return than other forms of advertising such as broadcast radio ads or Internet banner ads. But JP Morgan analyst Imran Khan said in a recent note to investors that the tight credit market could force small businesses, which he reckons accounts for 20 percent of Google's revenue, to cut back on ad spending.
Google does not give financial guidance but Wall Street will be paying close attention to the comments executives make about the economy on Thursday's conference call. Google said in March that it was laying off 200 workers in its sales and marketing groups, following job cuts in its recruiting group and its shuttered broadcast radio advertising business in January and February.
"It is not news that Google is being impacted by the economy. The real question is how much will the economy impact Google from here on out and how long will this recession last," said Cowen & Co analyst James Friedland. "If the ad pie keeps shrinking, eventually Google's ad pie will shrink," said Friedland, who has an outperform rating on Google. While the company ended 2008 with $15.8 billion in cash and short-term securities on its books, investors and analysts are also eager for any updates about how Google plans to use the money.
Agencies
Thursday, January 22, 2009
Microsoft cuts 5,000 jobs as part of first layoffs
Microsoft Corp. said Thursday it is cutting 5,000 jobs over the next 18 months -- more than 5 percent of its work force -- a sign of how badly even the biggest and richest companies are being stung by the recession.
The layoffs appear to be a first for Microsoft, which was founded in 1975, aside from relatively limited staff cuts the software company made after acquiring companies.
The company announced the cuts as it reported an 11 percent drop in second-quarter profit, which fell short of Wall Street's expectations. Microsoft shares plunged 8 percent in morning trading.
The biggest names in the technology sector have been no stranger to layoffs lately. Giants such as chip maker Intel Corp. and even Google Inc. are among the companies that have pulled back on jobs to hunker down in the recession.
Even with $20.7 billion in cash on hand, Microsoft said its business prospects were hurt by the deteriorating global economy and lower revenue from software for PCs. The holiday quarter of 2008 was the worst the PC market had seen since 2002, with computer shipments declining about a half of 1 percent, according to IDC, a technology research group.
Making matters worse, the one type of PC consumers have warmed to in tight times -- the low-cost, low-power "netbook" -- actually cut further into Microsoft's earnings. The tiny portable computers run on Windows XP, which is older and less profitable for Microsoft than Windows Vista.
In a memo to employees, Chief Executive Steve Ballmer acknowledged that Microsoft is "not immune to the effects of the economy. Consumers and businesses have reined in spending, which is affecting PC shipments and IT (information technology) expenditures."
Ballmer said Microsoft cut operating expenses by $600 million in the quarter, but that it wasn't enough.
The layoffs, starting with 1,400 on Thursday, will affect workers in research and development, marketing, sales, finance, legal and corporate affairs, human resources and information technology, and mostly in Redmond, Wash., where the company is based. Ballmer also said changes would occur in departments that handle support, consulting, operations, billing, manufacturing, and data center operations, but he did not say whether layoffs are planned in those cases.
Microsoft won't stop hiring entirely. Ballmer said the company will add new jobs to support "key investment areas" over the next 18 months, so the total number of employees will drop by 2,000 to 3,000. Microsoft employs 94,000 people overall.
"I would have expected a more aggressive cut," said Cowen and Co. analyst Walter Pritchard. "They're trying to have their cake and eat it too, in terms of not cutting and hoping to have everything they were going to have before."
The software maker is trimming costs for travel, contractors and vendors, and said it will scale back a massive expansion to its Redmond campus.
Microsoft said its job cuts will reduce operating costs by $1.5 billion as it prepares for lower revenue and earnings in the second half of the year. The company says it is unable to offer profit and revenue guidance for the rest of the year, because of the market volatility.
Microsoft said profit in the last quarter fell to $4.17 billion, or 47 cents per share, from year-ago earnings of $4.71 billion, or 50 cents per share.
Total revenue edged up 2 percent to $16.63 billion.
The results missed Wall Street's forecast for earnings of 49 cents per share on sales of $17.08 billion.
Microsoft makes most of its profits on sales of the Windows operating system and its Office package of software, which includes programs such as Word, PowerPoint and Excel. Revenue and earnings shrank in both of those divisions.
A bright spot for Microsoft is software for corporate server computers, where revenue is still rising. Gartner analyst Neil MacDonald noted that the server business can thrive in a downturn because back-office software can help companies improve efficiency and save money.
Agencies
The layoffs appear to be a first for Microsoft, which was founded in 1975, aside from relatively limited staff cuts the software company made after acquiring companies.
The company announced the cuts as it reported an 11 percent drop in second-quarter profit, which fell short of Wall Street's expectations. Microsoft shares plunged 8 percent in morning trading.
The biggest names in the technology sector have been no stranger to layoffs lately. Giants such as chip maker Intel Corp. and even Google Inc. are among the companies that have pulled back on jobs to hunker down in the recession.
Even with $20.7 billion in cash on hand, Microsoft said its business prospects were hurt by the deteriorating global economy and lower revenue from software for PCs. The holiday quarter of 2008 was the worst the PC market had seen since 2002, with computer shipments declining about a half of 1 percent, according to IDC, a technology research group.
Making matters worse, the one type of PC consumers have warmed to in tight times -- the low-cost, low-power "netbook" -- actually cut further into Microsoft's earnings. The tiny portable computers run on Windows XP, which is older and less profitable for Microsoft than Windows Vista.
In a memo to employees, Chief Executive Steve Ballmer acknowledged that Microsoft is "not immune to the effects of the economy. Consumers and businesses have reined in spending, which is affecting PC shipments and IT (information technology) expenditures."
Ballmer said Microsoft cut operating expenses by $600 million in the quarter, but that it wasn't enough.
The layoffs, starting with 1,400 on Thursday, will affect workers in research and development, marketing, sales, finance, legal and corporate affairs, human resources and information technology, and mostly in Redmond, Wash., where the company is based. Ballmer also said changes would occur in departments that handle support, consulting, operations, billing, manufacturing, and data center operations, but he did not say whether layoffs are planned in those cases.
Microsoft won't stop hiring entirely. Ballmer said the company will add new jobs to support "key investment areas" over the next 18 months, so the total number of employees will drop by 2,000 to 3,000. Microsoft employs 94,000 people overall.
"I would have expected a more aggressive cut," said Cowen and Co. analyst Walter Pritchard. "They're trying to have their cake and eat it too, in terms of not cutting and hoping to have everything they were going to have before."
The software maker is trimming costs for travel, contractors and vendors, and said it will scale back a massive expansion to its Redmond campus.
Microsoft said its job cuts will reduce operating costs by $1.5 billion as it prepares for lower revenue and earnings in the second half of the year. The company says it is unable to offer profit and revenue guidance for the rest of the year, because of the market volatility.
Microsoft said profit in the last quarter fell to $4.17 billion, or 47 cents per share, from year-ago earnings of $4.71 billion, or 50 cents per share.
Total revenue edged up 2 percent to $16.63 billion.
The results missed Wall Street's forecast for earnings of 49 cents per share on sales of $17.08 billion.
Microsoft makes most of its profits on sales of the Windows operating system and its Office package of software, which includes programs such as Word, PowerPoint and Excel. Revenue and earnings shrank in both of those divisions.
A bright spot for Microsoft is software for corporate server computers, where revenue is still rising. Gartner analyst Neil MacDonald noted that the server business can thrive in a downturn because back-office software can help companies improve efficiency and save money.
Agencies
Wednesday, January 14, 2009
Is Motorola planning more layoffs?
Motorola Inc is expected to make steep cost cuts, including more layoffs, at its mobile devices division as a broad slump in demand for cell phones exacerbates its own market share declines.
With even market leader Nokia warning about weakening phone demand, analysts say Motorola could miss Wall Street's already low expectations for phone sales in the fourth quarter and the current quarter. As a result, they expect Motorola to cut the size of its handset unit -- beyond the 3,000 layoffs the company announced in October, which were mostly in its handset unit and equivalent to 4.5 per cent of its workforce.
"Resizing is necessary beyond the 3,000," said Avian Securities analyst Matthew Thornton, who estimated that Motorola's phone unit could have roughly 28,000 employees after the previously announced layoffs.
Motorola declined to comment. The Schaumburg, Illinois-based company fell to fourth place in the global phone market in the third quarter of 2008, and said key new devices would be ready in the second half of 2009, which could mean deeper market share losses until then.
This was before Nokia said in December that it expected the phone market to shrink 5 per cent or more in 2009. Some analysts now expect sales to fall as much as 15 per cent from 2008. As a result of the deteriorating market, Deutsche Bank analyst Brian Modoff estimated that Motorola needed to cut costs by roughly another $650 million, on top of the $800 million reductions already announced.
"Their cost structure is too high for where they need to be in this environment given their market share," said Modoff, who sees Motorola reporting 22 million phone sales for the fourth quarter just ended, and 17 million for this quarter. He estimated that with its current cost structure Motorola could break even if it sold about 28 million phones per quarter, but said that this figure was too high for comfort in the weak economy.
"I think they need to be profitable below 20 million units," said Modoff. Analysts on average expect Nokia to report 121.5 million phone sales for the fourth quarter, with estimates ranging from 110 million to 135 million.
They expect Sony Ericsson, which overtook Motorola in the third quarter, to sell about 26.6 million phones. Phonescoop.com, a blog about the latest phones, said Motorola could lay off as many as 50 per cent of its mobile phone workers, but analysts said this would be a "drastic" move.
Charter Equity Research analyst Ed Snyder said such a cut would mean giving up workers in research and development, and "dramatically" reducing the number of phones launched. But he said that such a move was not implausible.
"They're hemorrhaging cash. They have to cut the division," he said. But Deutsche Bank's Modoff said Motorola needs to be careful about where it makes cuts because it needs to be able to compete with popular devices such as Apple Inc's iPhone and phones based on Android, the operating system designed by Google Inc.
These phones have made the focus of industry competition more about innovative software and user interfaces than about phone hardware."They should keep (jobs) in software and chop them in hardware. The emphasis needs to be placed on low cost designs and operating systems," said Modoff. In the third quarter, Motorola's mobile unit revenue fell 31 per cent to $3.1 billion, and the unit's operating loss widened to $840 million from $248 million.
Agencies
With even market leader Nokia warning about weakening phone demand, analysts say Motorola could miss Wall Street's already low expectations for phone sales in the fourth quarter and the current quarter. As a result, they expect Motorola to cut the size of its handset unit -- beyond the 3,000 layoffs the company announced in October, which were mostly in its handset unit and equivalent to 4.5 per cent of its workforce.
"Resizing is necessary beyond the 3,000," said Avian Securities analyst Matthew Thornton, who estimated that Motorola's phone unit could have roughly 28,000 employees after the previously announced layoffs.
Motorola declined to comment. The Schaumburg, Illinois-based company fell to fourth place in the global phone market in the third quarter of 2008, and said key new devices would be ready in the second half of 2009, which could mean deeper market share losses until then.
This was before Nokia said in December that it expected the phone market to shrink 5 per cent or more in 2009. Some analysts now expect sales to fall as much as 15 per cent from 2008. As a result of the deteriorating market, Deutsche Bank analyst Brian Modoff estimated that Motorola needed to cut costs by roughly another $650 million, on top of the $800 million reductions already announced.
"Their cost structure is too high for where they need to be in this environment given their market share," said Modoff, who sees Motorola reporting 22 million phone sales for the fourth quarter just ended, and 17 million for this quarter. He estimated that with its current cost structure Motorola could break even if it sold about 28 million phones per quarter, but said that this figure was too high for comfort in the weak economy.
"I think they need to be profitable below 20 million units," said Modoff. Analysts on average expect Nokia to report 121.5 million phone sales for the fourth quarter, with estimates ranging from 110 million to 135 million.
They expect Sony Ericsson, which overtook Motorola in the third quarter, to sell about 26.6 million phones. Phonescoop.com, a blog about the latest phones, said Motorola could lay off as many as 50 per cent of its mobile phone workers, but analysts said this would be a "drastic" move.
Charter Equity Research analyst Ed Snyder said such a cut would mean giving up workers in research and development, and "dramatically" reducing the number of phones launched. But he said that such a move was not implausible.
"They're hemorrhaging cash. They have to cut the division," he said. But Deutsche Bank's Modoff said Motorola needs to be careful about where it makes cuts because it needs to be able to compete with popular devices such as Apple Inc's iPhone and phones based on Android, the operating system designed by Google Inc.
These phones have made the focus of industry competition more about innovative software and user interfaces than about phone hardware."They should keep (jobs) in software and chop them in hardware. The emphasis needs to be placed on low cost designs and operating systems," said Modoff. In the third quarter, Motorola's mobile unit revenue fell 31 per cent to $3.1 billion, and the unit's operating loss widened to $840 million from $248 million.
Agencies
Saturday, January 3, 2009
Microsoft to axe 15,000 jobs this January
The world's top software firm, Microsoft, is planning a massive reduction in its workforce where up to 15,000 jobs may be axed this month, says a media report.
"Microsoft is preparing to announce the first wide scale layoffs in its 32-year history, with up to 15,000 jobs at risk, according to some predictions," The Times said in a report published online.
Speculation about job cuts was triggered by a report by Fudzilla, a technology blog site, which said employees were told that the software group was preparing for major layoffs from its global operations on January 15, it added.
Earlier, a brokerage firm Oppenheimer & Co's analyst Brad Reback had asked Microsoft to cut its workforce by 10% or about 9,100 employees.
"Such layoff exercise "would be a healthy move for the company," Reback added. Microsoft had close to 91,000 employees on its payrolls at end of July-September quarter.
Further, The Times report stated that the news of job losses came amid the company being forced to apologise for an embarrassing hiccup with its Zune digital music player.
A bug in the device's internal clock in the original 30-gigabyte version failed to cope with the last day of the leap year and thousands of owners were left with a frozen screen on December 31.
The report quoted Microsoft statement as saying, "the issue should be resolved over the next 24 hours as the time change moves to January 1, 2009. We expect the internal clock on the Zune 30 GB devices will automatically reset."
Besides, Microsoft is scheduled to release its second quarter results for the fiscal year 2008-09 on January 22.
Battling the economic crisis, companies in their bid to save costs, have announced over one lakh job cuts in December in the US.
Source: Agencies
"Microsoft is preparing to announce the first wide scale layoffs in its 32-year history, with up to 15,000 jobs at risk, according to some predictions," The Times said in a report published online.
Speculation about job cuts was triggered by a report by Fudzilla, a technology blog site, which said employees were told that the software group was preparing for major layoffs from its global operations on January 15, it added.
Earlier, a brokerage firm Oppenheimer & Co's analyst Brad Reback had asked Microsoft to cut its workforce by 10% or about 9,100 employees.
"Such layoff exercise "would be a healthy move for the company," Reback added. Microsoft had close to 91,000 employees on its payrolls at end of July-September quarter.
Further, The Times report stated that the news of job losses came amid the company being forced to apologise for an embarrassing hiccup with its Zune digital music player.
A bug in the device's internal clock in the original 30-gigabyte version failed to cope with the last day of the leap year and thousands of owners were left with a frozen screen on December 31.
The report quoted Microsoft statement as saying, "the issue should be resolved over the next 24 hours as the time change moves to January 1, 2009. We expect the internal clock on the Zune 30 GB devices will automatically reset."
Besides, Microsoft is scheduled to release its second quarter results for the fiscal year 2008-09 on January 22.
Battling the economic crisis, companies in their bid to save costs, have announced over one lakh job cuts in December in the US.
Source: Agencies
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