Xerox Moving Into IT Services

Printer and copier maker Xerox Corp forecast current-quarter earnings below estimates as it quickens efforts to transform itself into a technology services provider.

Xerox, whose shares were little changed at midday, also offers services such as managing toll systems and healthcare programs to counter sluggish growth in its printers and copiers business, which accounts for about 40 percent of its revenue.

Services is now the larger part of the company’s business and lower margins in IT and business process outsourcing is dragging overall margins.

The company said it expects second-quarter revenue from its document technology business, which includes printers and copiers, to decline in the mid-single digits. Revenue fell 9 percent to $2.14 billion in the business in the first quarter.

Based in Norwalk, Connecticut, Xerox moved into business services with its purchase of Affiliated Computer Services Inc (ACS) for $5.5 billion in 2009 – the company’s biggest deal in its 106-year history.

Xerox said it plans to quicken the pace of a restructuring plan kicked off in the last quarter of 2012 and included a 2-cent restructuring charge in its second-quarter forecast.

Xerox said it expects flattish revenue for the full year, compared with previous expectations of up to a 2 percent growth, it said on a conference call with analysts.

The company said it was on track to reach its target of adjusted EPS of $1.09 to $1.15 for the full year and to generate operating cash flow of $2.1 billion to $2.4 billion.

“Europe remains weak. US remains stable, but weak. We have not seen a pickup in the US,” Xerox CEO Ursula Burns said on a conference call with analysts.

“We did see a slowdown, a bit of a slowdown, in some developing market economies. But our business model is fairly resilient in the developing markets,” she said.

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Will Microsoft Sell The Surface RT For $199?

Microsoft’s Surface for Windows RT tablet will sell for $199 when it ships on Oct. 26, according to an unidentified source in an Engadget story.

At that price, Microsoft would surely be selling below its costs, analysts said. However, Microsoft could take the loss in hopes of making up revenues on apps and media sales for the device.

Also, Microsoft would be trying to make an impact against the Nexus 7 and Kindle Fire sold at the same $199 price, since Microsoft arrived arrived late to the tablet game.

Engadget said it learned the price from an inside source at Microsoft’s recent Tech Ready15 conference, where launch details for Surface were announced.

Microsoft said the Surface tablet would be priced in-line with Windows RT tablets from other makers such as Asus, which hasn’t announced a price. However, given the components in the Surface and other Windows RT tablets, analysts have suggested it could cost more than $600.

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Huawei Investigating Security Flaws

Huawei Technologies said on Thursday it was investigating claims that its routers contained critical vulnerabilities, after security researchers disclosed alleged problems last.

“We are aware of the media reports on security vulnerabilities in some small Huawei routers and are verifying these claims,” Huawei said in an email. The company added it uses “rigorous security strategies and policies” to protect the networks of its customers, while following industry standards and best practices concerning security.

“Huawei has established a robust response system to address product security gaps and vulnerabilities,” the company said. The company is also calling on industry to promptly report all product security risks so that the problems can be addressed and fixed, it said in its email.

The alleged security vulnerabilities were disclosed at the Defcon hackers conference this past Sunday by two security researchers. The vulnerabilities were found in the firmware of Huawei AR18 and AR29 series routers, which once exploited through the flaws, could be taken over via the Internet.

One of the researchers, Felix Lindner the head of security firm Recurity Labs, described the security of the Huawei devices he analyzed as “the worst ever”, and said there were bound to be more security flaws with the products.

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Windows Phone 7 Roadmap Leaked?

A purported Microsoft slide showing the 2012 Windows Phone roadmap seems to indicate that we could see the next major update by mid-2012.

The Tango update is scheduled for the second quarter of 2012, but it won’t be aimed at high-end phones. Instead, Tango is supposed to bring Windows Phone to dirt cheap devices, or “products with the best prices” as Microsoft calls them. This seems to indicate that it will be even better at resource management than Mango, which is already far ahead of iOS and Android in terms of its OS footprint.

The big new, of course, is Apollo. The new OS is scheduled to appear in Q4 and it should enable Microsoft to offer competitive superphones. Currently Windows Phone devices max out at WVGA resolutions and single-core Qualcomm chips. Apollo could change all this and pave the way for dual-core designs with high resolution screens, probably 720p.

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Nokia Drops Luxury Brand Vertu

Nokia’s Vertu mobile phones sell for thousands but the firm is looking to unload this relatively low volume part of its business as it tries to focus on producing Windows Phones. According to the Financial Times (FT), Nokia has appointed Goldman Sachs to oversee the sale of its UK subsidiary.

Vertu’s market value is not known but the firm makes between 300 to 400 millionin annual sales and, according to the FT, private equity groups have expressed interest. The brand is fairly well known as a maker of expensive mobile phones and it might attract high-end ‘designer’ brands that want to break into the mobile phone market.

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Blackberry Delays Update

Last week at its BlackBerry DevCon conference, Research in Motion tried to get developers excited about the upcoming PlayBook OS 2.0 mobile operating system, to spur developers to create applications for RIM’s BlackbBerry PlayBook tablet, released last spring to poor reviews and low sales. But yesterday, RIM wrote in a blog post that it was delaying the release of the PlayBook 2.0 OS “until we are confident we have fully met the expectations of our developers, enterprise customers, and users.”

PlayBook OS 2.0 was originally promised for October 2011, but RIM has now set a target of February 2012. To meet the new February 2012 release date, RIM said it was dropping a key feature originally promised for PlayBook OS 2.0: its popular BlackBerry Messenger instant-messaging service.

Developers were looking forward to the promised October PlayBook 2.0 OS release in hopes it might spur sales of the poorly selling tablet, especially as the original timing would have taken advantage of the holiday sales season that will also see the release of the unified tablet/smartphone Android 4.0 “Ice Cream Sandwich” operating system and a bevy of new smartphones using Microsoft’s recently released Windows Phone 7.5 “Mango” operating system, in addition to Apple’s strong-selling iPad and new iPhone 4S, both featuring the recently released iOS 5 operating system.

The PlayBook OS is based on the QNX operating system that RIM bought in spring 2010 to be the basis for its tablets and, sometime in the 2012-13 timeframe, be the basis for a new operating system for its BlackBerry smartphones. Last week, RIM said that it will provide a unified tablet/smartphone operating system called BBX, based on the QNX/PlayBook platform. It said that applications developed for the PlayBook OS would be compatible with BBX, but did not make the same promise for BlackBerry OS apps.

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Will eBay Cozy Up With Facebook?

EBay Inc is attempting to strengthen its relationship with social network leader Facebook at a developer conference this week, a person familiar with the e-commerce company said on Tuesday.

EBay will also debut a new online identification service for shoppers named PayPal Access, the source added.

The company expects almost 4,000 people to attend its X.commerce conference in San Francisco on October 12, 13 and 14. The event marks the official launch of the company’s new X.commerce division, which will target e-commerce software developers.

EBay is trying to encourage outside developers to create applications for its e-commerce platforms and is making a particularly strong push in mobile commerce.

At the end of September, Katie Mitic, head of Platform and Mobile Marketing at Facebook, joined eBay’s board of directors, sparking speculation that the two companies were working on new partnerships.

Mitic is scheduled to be one of the keynote speakers at the X.commerce conference on Wednesday. Facebook Platform, which Mitic helps run, is the company’s developer unit, so any new partnership will focus on this area, the person said on condition of anonymity because the plans aren’t public yet.

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Japan Takes 1st Place On Supercomputer List

A Japanese computer has earned the number one spot on the Top 500 supercomputer list, ending China’s short reign of just six months. At 8.16 petaflops (quadrillion floating-point calculations per second), the K computer is more powerful than the next five systems combined.

The K computer’s performance was measured using 68,544 SPARC64 VIIIfx CPUs each with eight cores, for a total of 548,352 cores, almost twice as many as any other system on the Top500 list. The computer is still being put together, and when it enters service in November 2012 will have more than 80,000 SPARC64 VIIIfx CPUs according to its manufacturer, Fujitsu.

Japan’s ascension to the top means that the Chinese Tianhe-1A supercomputer, which took the number 1 position in November last year, is now in second spot with its 2.57 petaflops. But China continues to grow the number of systems it has on the list, up from 42 to 62 systems. The change at the top also means that Jaguar, built for the U.S. Department of Energy (DOE), is bumped down to third place.

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Jobs Returns To Announce Apple’s New Product

Apple Inc CEO Steve Jobs returns on Monday to the stage at San Francisco’s Moscone center to unveil what investors hope will be the next source of growth for the world’s most valuable technology company.

Jobs, who has been on medical leave for several months and last took the stage in March to present the iPad 2, will announce the iCloud, a Web-based service that lets consumers stream music they bought to any Apple device, pitting it against rivals Google Inc and Amazon.com Inc.

That expansion into cloud computing is seen as necessary if the company is to stay competitive with increasingly popular open-sourced software, such as Google’s Android operating system, according to analysts and investors.

The iCloud has the potential to make Apple’s iTunes even more powerful, making it tougher for rivals to keep up, Sterne Agee analyst Shaw Wu said.

“It looks like Apple will likely offer some base service for free,” Wu said. “Competitors, including RIM, Google, Amazon and Microsoft already have a hard time competing with iTunes as it is, but we believe will likely find it even tougher with iCloud enhancements.”

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