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Sony Exits PC Business
Sony will unload its struggling PC business to a Japanese investment firm, the company said Thursday, raising the possibility that the “Vaio” brand could all but disappear from markets outside Japan.
Tokyo-based investment fund Japan Industrial Partners (JIP) will operate the Vaio PC brand under a newly established firm and initially sell PCs in Japan only.
In another reform aimed at bolstering its restructuring efforts, Sony also said it would turn its beleaguered TV business into a subsidiary.
The moves come as Sony said it now expects a net loss of $1.1 billion for the year to the end of March, a reversal of its October profit forecast.
Vaio, which Sony introduced in 1996, looks set to vanish from most markets, at least for short term, as the new company will initially concentrate on selling consumer and corporate PCs in Japan. Whether or not Sony will continue to produce products under the Vaio brand remains to be seen, Sony said.
Although Sony is selling its PC business, it will continue to produce tablet computers, part of its renewed focus on mobile devices including smartphones.
Sony did not put a price on the sale. Sony will take a 5% stake in the new firm, it said.
Sony will stop making and selling PCs after its 2014 Spring lineup launch, but about 250 to 300 Sony staff, including some from a subsidiary that produces TV sets, cameras and computers at factories in Japan, will be hired by the new company, which is to be based at the hub of Sony’s current PC business in Japan’s Nagano Prefecture.
Meanwhile, Sony said it will turn its TV business, which has faced a decade of losses, into a wholly owned subsidiary by July 2014.
Disney To Lay Off Workers
February 14, 2014 by admin
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Walt Disney Co is making plans to lay off several hundred people in its interactive unit, the division that includes gaming products and the Disney.com website, The Wall Street Journal reported earlier this week.
The job eliminations are expected to begin after Disney releases its quarterly earnings today, the Journal said. Playdom, a social gaming business Disney acquired in 2010, is one division expected to see cutbacks, the newspaper said.
Disney is trying to turn around the interactive unit, which has about 3,000 employees. Its new Infinity video game enjoyed strong initial sales after its release last August, helping the division report a $16 million profit for the quarter that ended in September, an improvement from the $76 million loss a year earlier.
A Disney spokeswoman had no comment.
Is Acer Doomed?
Taiwanese PC maker Acer reported worse-than-expected quarterly loss. Actually, it had been expected to be bad, but no one had predicted it would be this bad.
For the fourth quarter, the world’s No.4 PC vendor reported a net loss of $254 million. The company had posted a worse-than-expected net loss of $446 million in the third quarter and a $112.31 million loss in the same quarter of 2012. In short, its troubles have been getting worse for more than two years.
At the end of last year the company named former Taiwan Semiconductor Manufacturing Co sales executive Jason Chen as its new CEO and launched a new initiative to integrate hardware, software and cloud services. It will be a while before the new broom can sweep out two years of doom, so many are expecting more doom to emerge. Acer relied too heavily on making low-end laptops, which weakened its brand, it also missed the shift to mobile.
Acer’s senior executives are taking a 30 per cent voluntary salary cut starting January, the company said in a statement.
Reddit ISO Profits
January 7, 2014 by admin
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Social news hub Reddit enjoyed a major get when it interviewed Barack Obama last year. The big get for 2013 was reaching 90 million unique visitors a month, according to the company, on par with the likes of eBay. This season, even Microsoft co-founder and philanthropist Bill Gates joined its Secret Santa gift exchange.
Now, the self-dubbed “Front Page of the Internet” is going for a milestone it has been trying to reach since its founding in 2005: profitability.
After years of experimenting with paid subscriptions and display advertising, Reddit, with just 28 employees, has begun pouring resources into building an electronic bazaar.
Company executives say they increasingly believe such a venue is the answer to their long search for reliable revenue, complicated in part by their fans’ mistrust of advertising.
If Reddit Gifts, as the burgeoning bazaar is known, brings sustainable profitability, it would mark a turning point for an outfit that has exerted an outsized and sometimes controversial influence on Internet culture yet languished financially.
Reddit estimates over 250,000 items have been purchased over the holiday, mostly as part of the 50 or so mostly geek-oriented Secret Santa gift exchanges – where zombie- or fantasy-themed presents, say, change hands – that users have created.
Although Reddit won’t disclose details about how much money it has made from Reddit Gifts or its overall financial performance, it takes a 15 to 20 percent cut of every purchase.
Usually priced between $10 and $25, the goods reflect Reddit’s young and geeky user base, from collages of cats in steampunk apparel to coffee mugs branded by Imgur.com, a repository of funny Web pictures, to an entire category dedicated to bacon-related products. More than 250 merchants supply gifts curated and “up-voted” by the community, much as articles and links are elevated on the Reddit site itself.
The gift exchange made headlines this month after Gates signed up and surprised a Reddit user by sending her a travel book and a stuffed cow, symbol of the charity he donated to in her name.
The company, which is hoping to position itself as a bona fide shopping destination year-round, estimates that only 14 percent of its marketplace revenue comes from the Christmas-season gift exchange programs.
Yet those sales alone could put Reddit firmly in the black, said Dan McComas, the head of Reddit Gifts. He added that the company may choose to reinvest funds in e-commerce customer service and infrastructure.
Chief Executive Yishan Wong, a former Facebook executive, said Reddit was “kind of” breaking even and denied that pressure was mounting on his team to turn a profit.
Cryptolocker Infects 250K Systems
DELL’s security research team has revealed that a new form of ransomware, dubbed “Cryptolocker” has managed to infect up to 250,000 devices, stealing almost a million dollars in Bitcoins.
“Based on the presented evidence, researchers estimate that 200,000 to 250,000 systems were infected globally in the first 100 days of the CryptoLocker threat,” Dell announced in a Secureworks post.
The firm worked out that if the Cryptolocker ransomware threat actors had sold its 1,216 total Bitcoins (BTC) that they collected from September this year, immediately upon receiving them, they would have earned nearly $380,000.
“If they elected to hold these ransoms, they would be worth nearly $980,000 as of this publication based on the current weighted price of $804/BTC,” Dell said.
Cryptolocker is unique when compared against your average ransomware. Instead of using a custom cryptographic implementation like many other malware families, Cryptolocker uses third-party certified cryptography offered by Microsoft’s CryptoAPI.
“By using a sound implementation and following best practices, the malware authors have created a robust program that is difficult to circumvent,” Dell said.
Conventionally, ransomware prevents victims from using their computers normally and uses social engineering to convince them that failing to follow the malware authors’ instructions will lead to real-world consequences. These consequences, such as owing a fine or facing arrest and prosecution, are presented as being the result of a fabricated indiscretion such as pirating music or downloading illegal pornography.
“Victims of traditional forms of ransomware could ignore the demands and use security software to unlock the system and remove the offending malware,” Dell explained. “Cryptolocker changes this dynamic by aggressively encrypting files on the victim’s system and returning control of the files to the victim only after the ransom is paid.”
Dell said that the earliest samples of Cryptolocker appear to have been released on 5 September this year. However, details about its initial distribution phase are unclear.
“It appears the samples were downloaded from a compromised website located in the United States, either by a version of Cryptolocker that has not been analysed as of this publication, or by a custom downloader created by the same authors,” Dell added.
Dell seems to think that early versions of Cryptolocker were distributed through spam emails targeting business professionals as opposed to home internet users, with the lure often being a ‘consumer complaint’ against the email recipient or their organisation.
Attached to these emails would be a ZIP archive with a random alphabetical filename containing 13 to 17 characters, containing a single executable with the same filename as the ZIP archive but with an EXE extension, so keep your eye out for emails that fit this description.
Can Acer Go High-End?
Most popular for its low-cost laptops, Acer doesn’t really inspire thoughts of premium products. But building high-end hardware could be the Taiwanese vendor’s best chance as it looks for a way to rescue its struggling business.
With consumers flocking to tablets and smartphones, Acer’s once-thriving PC business has been left in the dust. Quarterly financial losses have become routine at the company and its PC shipments declined more sharply in the past year than at any other major vendor, according to IDC.
The grim situation forced CEO J.T. Wang to resign from his post last Tuesday. Acer will also cut 7 percent of its global workforce and has assembled an advisory committee to come up with a new strategy, the company announced.
Bright spots are hard to find. The Wintel model that propelled Acer for years and helped it become the second-largest PC vendor in 2009 has been falling apart amid the demand for mobile gadgets. And Windows 8 and Intel’s Ultrabook strategy have failed to resuscitate the market.
It hasn’t helped that Acer is so reliant on sales to consumers, said IDC analyst Bryan Ma. The entire PC industry has been hurt by tablets, but Dell and Hewlett-Packard have at least managed to find cover selling PCs to businesses, which are still buying them. And Lenovo has capitalized on its position in China, now the world’s largest PC market.
“Acer didn’t really have the commercial PC business to protect themselves. That’s why they were hit harder,” Ma said.
Acer — whether to its benefit or detriment — has instead gained a reputation for low-priced PCs. Even in tablets it has tried to undercut rivals — its Iconia W4, an 8-inch Windows 8.1 tablet, starts at US$329.99, while its Iconia B Android tablet goes for $129.99. The low prices have helped keep the company on consumers’ radar, but at the expense of profits.
One option for Acer is to build a brand as a higher-end PC player. It took a step in that direction last year with the Aspire S7, a Windows laptop with a slender, aluminum chassis that sells for $1,200 and up. That product and its successors have had some success for the company, with sales of 2,000 to 3,000 units per month, said James Wang, an analyst with research firm Canalys.
“I think Acer has started to learn they are able to sell some expensive products,” he said.
Selling higher-end PCs could help stop the bleeding in Acer’s finances, but with the overall PC market still shrinking it’s unlikely to help it expand in any meaningful way. “You can’t really expect vendors in desktops and notebooks to find growth,” Wang said. “You win in the market by not falling in shipments.”
Will Icahn Boot Michael Dell?
Carl Icahn reportedly is drawing up a shortlist of potential Dell CEO replacements for Michael Dell should his bid for the company be successful.
Icahn and Southeastern Asset Management have made a bid to rival that of Michael Dell and Silver Lake Partners in the high stakes fight over Dell and its board. Now it is being reported that Icahn has already started drawing up a list of candidates that he and Southeastern Asset Management will propose as replacements for Michael Dell as CEO of Dell.
Icahn has previously warned that should his offer for Dell be accepted by the shareholders he would look to not only oust Michael Dell as CEO but replace the firm’s board of directors. Reuters reports that Icahn is casting his net far and wide, including consideration of former HP CEO and current Oracle co-president Mark Hurd.
According to Reuters’ sources Cisco director Michael Capellas, IBM services head Michael Daniels and Oracle’s Hurd are all in the frame, although none of the individuals would confirm having been approached by Icahn.
Michael Dell’s initial plan to buy back the company he founded has met with strong opposition by existing shareholders, some of whom think they are getting shortchanged. According to Michael Dell, the firm’s reorganisation into an enterprise IT vendor will be easier if the company goes private and doesn’t face investor and market scrutiny.
So far Dell’s board is backing Michael Dell’s and Silver Lake Partners’ buyout offer, suggesting that Icahn’s offer is short of cash. However some of Dell’s investors might like the drastic action that Icahn is promising, along with the fact that his offer allows existing shareholders to maintain a diluted stake in the company.
Should Icahn manage to get his takeover offer accepted by Dell’s shareholders, it will set up a sensational return to the PC industry for Hurd and give Dell renewed momentum to compete with HP.
Apple Raising Prices In Japan
June 10, 2013 by admin
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Apple Inc increased prices of iPads and iPods in Japan on Friday, becoming the highest-profile brand to join a growing list of foreign companies asking Japanese consumers to pay more as a weakening yen squeezes profit.
Some U.S. companies have inoculated themselves at least temporarily against the yen’s fall through financial hedging instruments, while others are charging customers more.
The yen has fallen more than 20 percent against the U.S. dollar since mid-November when then-opposition leader Shinzo Abe, who is now prime minister, prescribed a dose of radical monetary easing to reverse years of sliding consumer prices as part of a deflation-fighting policy, dubbed “Abenomics.”
The Bank of Japan, under a new Abe-backed governor, in April promised to inject $1.4 trillion into the economy in less than two years to achieve 2 percent inflation in roughly two years.
Price rises are rare in Japan, which has suffered 15 years of low-grade deflation. A few other foreign brands have also raised prices on products, providing an early sign of inflation for Abe and an indication that these companies feel consumer demand is strong enough to withstand the increases.
Still, price rises would have to spread much more widely, especially to lower-end discretionary goods, to show that Abe’s aggressive policies are helping reinvigorate the economy.
Apple, one of the most visible foreign companies in Japan, raised the price of iPads by up to 13,000 yen ($130) at its local stores. The 64-gigabyte iPad will now cost 69,800 yen, up from 58,800 yen a day ago, an Apple store employee said. The 128-gigabyte model will cost 79,800 yen compared with 66,800 yen.
Apple also upped prices of its iPod music players by as much as 6,000 yen and its iPad Mini by 8,000 yen.
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.
Is Alcatel-Lucent Running Low?
Alcatel-Lucent, which was the combination of Lucent and French network equipment provider Alcatel, has been going through a tough few years as it battles against rivals such as Huawei, Nokia Siemens and Ericsson. Now the firm has reportedly looked to investment bank Goldman Sachs for a loan in return for the firm putting up some of its assets as collateral.
According to Bloomberg’s sources, the amount of the loan has yet to be disclosed and the firm even mooted the prospect of selling assets including its undersea cable and enterprise businesses. The sources said discussions about the sale were still at an early stage and claimed neither asset could fetch more than €1bn, highlighting just how far the firm has fallen in recent years.
Alcatel-Lucent needs to sort out its balance sheet because the firm needs to service more than €2bn debt in the next three years. The company might have to look at its vast patents portfolio, though whether it might sell them or merely license them is not clear at this stage.
With Huawei and ZTE winning business away from European vendors such as Alcatel-Lucent and Nokia Siemens, it is not surprising that the firm is having to take drastic action in order to keep the lights on. However for Alcatel-Lucent it is a embarrassing situation for the firm.