Nokia, Qualcomm tie up after years in court battles

Top cellphone maker Nokia will use Qualcomm's chips in its advanced cellphones, the firms said on Tuesday, marking a further warming of ties between the former courtroom rivals.

The cooperation gives Qualcomm access to a major share of the smartphone market, while it enables Nokia to further lower production costs.

"In the end of the day Qualcomm needs Nokia as much as Nokia needs Qualcomm," said Gartner analyst Carolina Milanesi.

The deal marks the first time Nokia will use Qualcomm chipsets in its 3G phones, and brings the firms closer together after years of bitter disputes over intellectual property rights and royalty payments.

"We are very very excited about this opportunity," Andrew Gilbert, the head of Qualcomm's European business told the media in an interview. "We are going to compete for as much of their business as we can."

Nokia's key suppliers of 3G chipsets have been Texas Instruments and STMicro, which has spun off wireless chips into a joint venture with Ericsson.

Nokia and the new ST-Ericsson venture said on Tuesday they would cooperate on providing ST-Ericsson's U8500 chips for 3G smartphones using Symbian foundation software.

Nokia said on Tuesday it had tapped also Broadcom , its current supplier of second-generation technology chips, to supply 3G chipsets.

Nokia eyes U.S. Market

Nokia and Qualcomm agreed last July to a 15-year settlement that included a hefty 1.7 billion euro one-time payment from Nokia, ending a three-year legal battle where the firms raised dozens of cases against each other on three continents.

The agreement also comes against the backdrop of an ailing cellphone market, with 2009 sales set to drop as consumers rein in spending on new gadgets due to the economic recession.

Nokia said it would introduce the first model using Qualcomm chipset and Nokia's software in the middle of next year.

The phones would initially be for the North American market and work on third-generation networks and run on the Symbian operating system, the most widely-used smartphone software that is currently controlled by Nokia but will eventually be made royalty-free for all users.

Nokia shares were down 2.2 percent at 9.11 euros on a weaker Dow Jones Stoxx European Technology Index.

"I don't see the markets reacting since the products are expected to be sold only around mid-2010," said Nordea analyst Martti Larjo. "(But) at least the cooperation shows that Nokia is focusing its efforts on the North American market."

Nokia has long struggled in the U.S. market. North American sales dropped 20 percent year-on-year in the fourth quarter, and Nokia's North American market share of some 8.7 percent was well below its global figure of 37 percent.

Agencies

Is Wipro riding on the recovery wave?

The last two quarters were a bitter time for the computer industry in India. However, with a slight recovery seen in sales during January, Wipro Infotech wants to ride on the recovery wave in the notebook segment by launching its new series.

As per IDC reports, notebooks market will see a growth of 12% in India and with this expectation, Wipro has rolled out e.go, its new range of notebooks in India.

Talking to CXOtoday, Anand Sankaran, Chief Exclusive of Wipro Infotech said, “The industry has gone through a rough period during the last two quarters but we are seeing a sign of recovery since January 2009 and expect this trend to continue. We have launched our new range we reach out to the bold new Indian.”

This is Wipro’s second range of notebooks launched and will cater primarily to the Indian market. What more the e.go comes in three models and most unique one is the 7F3800 with a 10 inch ultra portable netbook priced at Rs 19,990 excusive of taxes. It comes in four vibrant colours including chrome red, ocean blue, racer yellow, autumn red and coral blue. “We are setting a new revolution by coming out with a netbook priced sub of Rs 20,000 that more ever comes with such high features,” said Ashok Tripathy, General Manager & Head, Computing Division, Wipro Infotech.

The notebooks have been designed integrating aerodynamics contours with advanced thermo dynamics to ensure perfect harmony of design and function.

The company plans to reach out to the enterprise as well as the consumer segment. “We have seen a negative growth in the enterprise segment but the consumers’ continue to show a positive trend in sales,’ said Sankaran.

Besides the range also comes with all ‘Green’ features that are eco-friendly and have all RoHS complaint features installed that can be recycled without causing any damage to the environment.

In fact, Wipro recorded a 60-70% jump in notebook sales during the last year but due to the present global scenario doesn’t permit similar growth this year, said Sankaran.

Wipro will target the consumers segment by selling its new desktops at Reliance Digital, Next and Pantaloon’s E Zone outlets across the country. “We expect to add more retailers in the coming months,’ said Tripathy.

Wipro has a manufacturing capacity of 1.5 million units from its two units at Pondicherry and at Uttaranchal. However, they did not disclose if the plant is utilizing its full capacity at it two units or not.

IT Cos Eye Slice of Aerospace Outsourcing!

With the global recession impacting IT companies, Indian software firms are eying the huge aerospace and defense (A&D) market as airplane makers and Defense companies look to control costs by outsourcing design and management systems.

Research firm Frost & Sullivan estimates the Indian Defense market to touch $36 billion by 2013 and companies in India are expected to get offset orders worth nearly $4 billion through 2011.

Sensing this potential, companies such as IBM, Wipro and HCL are working on IT implementation contracts. The offset programme is expected to open up new opportunities for these IT vendors for A&D contract worth over Rs 300 crore.

Talking to CXOtoday, Anup Vittal, Industry Leader-Aerospace & Defense of IBM India, said, "With A&D OEMs and tiered suppliers increasingly outsourcing IT and engineering services, there is a very large window of opportunity created for software (IT) companies. A&D companies are increasingly being asked to demonstrate product development agility, human capital management, improve upon service offerings in the aftermarket space and enable enterprise cost effectiveness."

"All of these capabilities can be developed by partnering with established software organizations that are capable of driving innovation and improvements. This, in turn, makes it a very lucrative market for software companies to exhibit their expertise," said Vittal.

IBM is bullish about the A&D market in India and sees a huge potential to earn up to $5 billion from these sectors in India over a 10-year period. Additionally, as a qualified A&D offsets partner in India, IBM is well-poised for significant growth in this region, as companies in India are expected to get offset orders worth nearly $4 billion through 2011.

Similarly, Wipro offers application development and maintenance and enterprise business integration. It also has the expertise to offer IT services for the maintenance, repair and overhaul (MRO) of civilian aircraft, and is already offering these services to some of its clients.

HCL's main area of expertise in A&D sector are avionics, aero structures and mechanical engineering services for aero engines and addresses the aerospace industry's key points.

Karun Khanna, director of Alpha Design Technologies, said, "Looking at the huge demand for software in the A&D sector, most of the IT software players are all now eying a large share in this sector. Since they all have high domain knowledge, it will give this sector the much-needed boost."

India's opening up of the Defense sector to foreign direct investment, the ongoing modernization plan of its Armed Forces and enormous new opportunities in the civil aviation sector have opened innumerable new avenues.

CXOtoday.com

Infosys to award 5 top Indian scientists

Infosys Technologies on Tuesday said it has instituted a Rs 50 lakh award each for five top Indian scientists in recognition of their outstanding research contributions and achievements.

The five awards will be given annually under the aegis of Infosys Science Foundation, a non-profit trust set up with a corpus of Rs 21.5 crore, the software major said in a statement here.

"The company will also annually grant Rs 2 crore to the trust to supplement the prize for each of five scientists of Indian origin working in the country or abroad. The award carries the largest prize money (Rs 5 million) to be given to any Indian scientist," the Infosys board member, T.V. Mohandas Pai, told reporters.

The five top scientists will be selected by a jury of five consisting of eminent international personalities and academic experts in each area.

The five Infosys awards will be given under the category of Physical Sciences in physics and chemistry, mathematical sciences in mathematics and statistics; engineering sciences in all branches of engineering; life sciences in biology and medicine; and social sciences and economics in economics, history, sociology and political science.

"India needs bright minds across all areas of academics, government, business and society to strive for global excellence. We need to encourage research in India to address our developmental problems. This award will honour outstanding researchers who will make a difference to India's future," the Infosys chairman and chief mentor, N.R. Narayana Murthy, said.

Are 1,000 employees of TCS under scanner?

Putting employees under performance scanner seems to be the new thing at IT companies. The country's largest software company TCS has reportedly put its 1,000 employees under performance scanner.

The Mumbai-based IT company joins its smaller rival Infosys which too has put around 5,000 of its employees under the so-called performance scanner.

Incidentally, TCS spokesperson denied that the company's performance improvement plan is any different this year than previous years. The spokesperson claimed that this is an annual exercise to ensure that we continue to drive delivery excellence for our customers. Less than 1% of our workforce has been put under the scanner in the current fiscal.

Last year, the company had asked 500 employees to leave after a similar performance improvement plan.

Recently, in a client note, brokerage CLSA Asia-Pacific Markets said that TCS has seen project cancellations in the last four weeks. Quoting TCS chief financial officer S Mahalingam, CLSA said that the company sees slowdown in demand bottoming out in the March quarter and expects a recovery in the June quarter.

In Infosys case, the company has asked senior managers (project managers, senior and group project managers, delivery managers) to give lowest performance rating (4 on a scale of 1-4) to the 'underperforming' 5 per cent as a part of its consolidated relative ranking (CRR). Though lowest rankings are not new in the company, this is the first time that Infosys has made it compulsory.

Some 40-50 sales executives at Infosys too have been reportedly asked to quit in the last two months. Most of these were located in the US and were from consulting background.

Indiatimes

No impact on KPOs due to global downturn

Knowledge Processing Outsourcing (KPO), over which India's holds the sway with a potential $12 billion market by 2010, is expected to grow despite global recession and the country could maintain its leadership in the KPO sector with stable government policies.

"India has competitive people costs which is sustainable at least for the next seven to ten years. There is an established ITeS (Information Technology Enabled Services) sector with good management, plus a reasonable sized talent-pool of human expertise in many areas. All this coupled with fairly stable government policies could help India in its quest to maintain leadership in the KPO sector by a wide margin," Chandu Nair, President and Director of Scope e-Knowledge Center, a leading KPO company, said.

According to an earlier estimate of National Association of Software and Service companies (NASSCOM), the apex business association, the KPO sector is expected to be worth $17 bn by 2010 of which $12 bn would be outsourced to India.

“Despite the recession in the US and UK/Europe, Nasscom still feels that IT/BPO sector would grow in the FY 2008-09. There has been an impact on certain companies, especially those with clients predominantly in certain sectors -- financial services -or high exposure to clients which have gone bankrupt,” he said.

Seeking to differentiate KPO and BPO, Nair said BPO is essentially process or rules based while KPO is more expertise or judgment based. Asked about the competition, he said India's key competitors in the KPO domain are Russia, China, Ireland, Israel, Philippines among others. The competition for India could vary depending on the nature of work.

"For instance for certain kinds of foreign language oriented services, locations in Eastern Europe or South America are favoured. Russia and Israel have scientific talent pool to provide certain specialist KPO services. The major challenge for them as also for say, the Philippines, Ireland is that the talent pool is much smaller while for China and Russia, non-English speaking population is relatively small."

About the scenario five-ten years hence, he said the KPO sector has the potential to grow faster and bigger and create more jobs.

“There is certainly a challenge in terms of availability of certain skill sets and basic employability of fresh graduates which hits small and medium sized companies,” he said.

Nasscom has embarked on some initiatives with respect to improving the skills and is working closely with the government, he said.

Agencies

Oil near $35 amid grim US economic news

Oil prices rose slightly to above $35 a barrel on Thursday in Asia despite grim U.S. economic news that pointed to a deep recession and weaker crude demand.

Light, sweet crude for March delivery rose 54 cents to $35.18 a barrel by late afternoon in Singapore on the New York Mercantile Exchange. The contract on Wednesday fell 31 cents to settle at $34.62.

The March contract expires on Friday, and traders switched their focus to the April contract, which rose 62 cents to $38.03.

The Federal Reserve on Wednesday confirmed what many investors already suspected _ that the US economy has significantly deteriorated in the last few months.

The Fed said it expects the economy will contract between 0.5 and 1.3 per cent this year. Its previous forecast from November had a 0.2 per cent contraction as the worst case scenario.

The Fed also said the unemployment rate will likely rise to between 8.5 and 8.8 per cent this year, higher than its previous forecast of between 7.1 and 7.6 per cent.

The current global economic slump began in 2007 with a crisis in the US sub-prime mortgage sector, and the housing market continues to buckle under the weight of surging foreclosures.

A report from the Commerce Department on Wednesday said construction of new homes and apartments plunged 16.8 per cent in January from the previous month, to a seasonally adjusted annual rate of 466,000 units, a record low.

``The housing data suggests the recession is even worse than we thought,'' said Christoffer Moltke-Leth, head of sales trading for Saxo Capital Markets in Singapore. ``We need to see the housing market stabilize because consumer sentiment is very much correlated to it.''

Investors are skeptical that a $787 billion stimulus bill signed this week by President Barack Obama will spark a quick recovery. The White House on Wednesday said the government will spend $75 billion to help prevent millions of Americans from losing their homes.

Crude investors are also concerned a jump in oil inventories is reflecting a steep drop-off in demand.

Analysts expect crude stocks will grow by 3.5 million barrels when the Energy Department releases inventory data for the week ended Feb. 13, according to a survey by Platts, the energy information arm of McGraw-Hill Cos. Inventories have risen more than 30 million barrels in the last six weeks.

``Inventories are the focus now,'' said Moltke-Leth. ``If they rise again, it will put more downward pressure on crude.''

The Organization of Petroleum Exporting Countries has struggled to bolster prices as output cuts fail to keep up with falling demand.

Venezuelan Oil Minister Rafael Ramirez said Wednesday the group may cut production again at a meeting on March 15, on top of the reduction of 4.2 million barrels a day announced since September. Ramirez said the 13-member cartel would like prices to rise to $70 a barrel.

``OPEC is looking very weak right now,'' said Moltke-Leth said. ``There's a lot of chatter from them, but the market isn't really listening.''

Moltke-Leth said prices will likely fall to about $32 a barrel, which would test the 10-year average price.

``$32 and a half is a significant line in the sand,'' he said. ``It's a key support level, and I expect the market to test how strong it is.''

In other Nymex trading, gasoline futures rose 0.83 cent to $1.07 a gallon. Heating oil gained 1.71 cents to $1.16 a gallon, while natural gas for March delivery jumped 3.0 cents to $4.24 per 1,000 cubic feet.

In London, the March Brent contract rose 98 cents to $40.54 on the ICE Futures exchange.

Agencies