Insurers To Use Mobile Phones To Track

A new usage-based insurance (UBI) software platform will enable insurers to track drivers’ behavior through smartphone sensors and geolocation services.

Agero, one of the nation’s largest suppliers of roadside safety software and services to automakers and insurance companies, said its new UBI telematics suite will transmit to insurers the information needed to offer discounts to good drivers, penalize others, and send alerts to emergency assistance service providers.

The UBI suite consists of the PolicyPal app, which tracks driving habits in real time, and Auto Crash Notification (ACN), which automatically notifies emergency services within moments of an accident.

Currently, State Farm’s In-Drive and Progressive’s Snapshot program, offer customers the opportunity to voluntarily participate in programs in which their insurer collects vehicle data and uses the information to determine driving habits, which in turn can be used to offer lower-rate incentives to safer operators.

Unlike Agero’s new platform, however, In-Drive and Snapshot, use a small data collection device that plugs into a vehicle’s standard OBDII onboard diagnostics port under the dashboard and transmits data from a car’s central computer to insurance companies.

Agero’s new mobile suite will greatly expand upon the universe of consumers who can vie for “discount rates” based on their driving profiles. The mobile device also travels with them in or out of the vehicle.

Over the past decade, the insurance industry has been embroiled in a heated price war, with companies vying to be king of the heap for discount pricing.

“It’s becoming a cutthroat market. They’re competing on price,” said Jeff Blecher, senior vice president of strategy at Medford, Mass.-based Agero. “To break that mold, they need a new business model. UBI does that. Now, they can compete based on the risk profile of drivers.”

UBI offers the insurance industry new opportunities for tailored discount programs. Notably, they can switch from relying OBDII dongles plugged into the customer’s car and instead use mobile apps that travel with the driver, whether he’s traveling in his own car or another vehicle.

“We want to align our strategy… with the smartphone as primary data collection point,” Blecher said.

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Seagate Gobbles Up Lacie

Seagate has signed a deal to buy consumer storage vendor Lacie that values the firm at $186m.

Seagate, which recently completed the acquisition of Samsung’s hard disk unit and swiftly cut warranties on most of its drives to just one year, has now announced that it will buy hard drive packager Lacie. Seagate has signed an agreement with Philippe Spruch, Lacie’s chairman and CEO, to purchase his 63.5 percent stake in the company at $7.05 per share in cash, which values the firm at $186m.

According to Seagate the purchase should help the firm grow in Europe and Japan. The firm also announced that Spruch will be employed by Seagate and run its consumer products division.

Steve Luczo, Seagate chairman, CEO and president said, “Lacie has built an exceptional consumer brand by delivering exciting and innovative high end products for many years. This transaction would bring a highly complementary set of capabilities to Seagate, significantly expand our consumer product offerings, add a premium branded direct attached storage line, strengthen our network-attached storage business line and enhance our capabilities in software development.”

Lacie’s fancy portable hard drives are popular among those who like fancy cases wrapped around bog-standard consumer hard disks. Seagate’s purchase of Lacie should see the firm not only become the sole supplier of hard drives in Lacie products but make a renewed push in the consumer portable hard drive market following last year’s floods in Thailand that affected the three big hard drive manufacturers.

Seagate said the deal should be completed by the third quarter of 2012 pending regulatory approval in the US, France and Germany.

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SanDisk Hurt By Weak Demand, Supply Glut

Flash-memory maker SanDisk Corp warned that tepid demand from mobile phone manufacturers and a glut in supply that has led to lower prices are putting a dent its revenue margins.

The maker of NAND chips — used as storage memory in smartphones and tablets — has recently seen demand taper with some of its key customers scaling back orders.

Smartphones and tablets have caused a boom in NAND production, but SanDisk’s customers have not all done equally well from the explosion in mobile gadgets.

“Anybody who is not a Samsung or an Apple is burning through some (mobile) handset inventory,” RBC Capital Markets analyst Doug Freedman said.

“Until we get the PC market, tablet market and handset market back buying, we’ll see an oversupply situation.”

SanDisk’s weak outlook mirrors warnings from rival flash-memory makers, who have also blamed weak prices and demand for their disappointing results.

Late last month, Micron Technology said it was facing persistently low prices for memory chips and posted a wider loss. Toshiba Corp, Japan’s biggest chip maker, also posted a drop in quarterly sales at its electronics devices business, which includes semiconductors, hit by lower prices for memory chips.

SanDisk in January expressed concerns about weaker demand weighing on sales in the first half of this year and forecast lower-than-expected revenue for the first quarter.

The Milpitas, California-based company, which is set to report results later this month, said its gross margins for the January-March quarter will come in below its prior expectations of 39-42 percent, hurt by lower prices for its chips.

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Seagate To Acquire Samsung’s HD Unit

Seagate Technology is to acquire Samsung Electronics  loss-plagued hard disk drive (HDD) business for $1.4 billion as it looks to battle rival Western Digital Corp and curb price wars that continue to damage the industry.

The deal comes a month after Western Digital sought to buy Hitachi Ltd’s hard disk drive division for $4.3 billion, to create a global leader with deep resources.

It is yet to be seen whether Western Digital trump Seagate as the world’s largest hard drive maker after the deals conclude. In 2010, Seagate’s sales was $11.4 billion while Western Digital posted revenue of $9.85 billion.

Toshiba Corp and Fujitsu are the other smaller players in the hard-drive space.

The sale of the HDD business will see Samsung leave the cut-rate industry and focus on its bread-and-butter memory-chip business.

The sector is already battling persistent sales-growth declines and now faces a longer-term threat from wireless tablet devices using more power-efficient flash drives, or solid-state drives (SSD).

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