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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Corporate America Prefers iPads

Corporate customers who are planning tablet purchases next quarter overwhelmingly picked Apple’s iPad, a research firm said Tuesday.

Of the 1,000 business IT buyers surveyed last month by ChangeWave Research who said they would purchase tablets for their firms in the coming quarter, 84% named the iPad as an intended selection.

That number was more than ten times the nearest competitor and was a record for Apple.

“The percentage reporting they’ll buy Apple iPads has jumped to the highest level of corporate iPad demand ever seen in a ChangeWave survey,” the company said in a blog post.

Apple’s share of future business purchases has never been lower than 77% in any ChangeWave survey, which go back to November 2010.

Just over a fifth of all IT buyers — 22% — confirmed that they would be purchasing tablets for employees in the April-June quarter, ChangeWave said.

While Apple’s stock among corporate buyers rose by seven percentage points from the 77% that tapped the iPad as their preferred device last November, all other tablet makers’ numbers dropped in the most recent survey.
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Google Had Developed Own Currency

Google once contemplated the idea of issuing its own currency, to be called Google Bucks, company Executive Chairman Eric Schmidt said on stage at the Mobile World Congress in Barcelona,Spain on Tuesday.

At the end of his keynote speech, Schmidt hit on a wide array of topics in response to audience questions. “We’ve had various proposals to have our own currency we were going to call Google Bucks,” Schmidt said.

The idea was to implement a “peer-to-peer money” system. However, Google discovered that the concept is illegal in most areas, he said. Governments are typically wary of the potential for money laundering with such proposals.

“Ultimately we decided we didn’t want to get into that because of these issues,” Schmidt said.

He also hinted that Google might be preparing for a battle in China once its acquisition of Motorola is complete.

“Google’s been willing to take on China pretty well,” he said in response to a question about whether Google expected to continue to ignore theft of Motorola intellectual property in China, as Motorola has been doing. The acquisition hasn’t closed yet, Schmidt noted. “We’ve taken a pretty strong position on IP. We are well aware of the issues and we are considering your question,” he said.

Google is still waiting for some government approvals of its proposed acquisition of Motorola.

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Intel Wants To Deliver Cheap Smartphones

Intel has revealed some additional information on the 2012 mobile strategy to its partners and it even shared some pricing guidelines for mobile products.

According to a slide entitled Mobile Landscape in 2012, Intel wants to sell mobile phones powered by its CPUs for as little as $199 to $299. This is where Intel sees a market opportunity for its phones and the prices are surprisingly low.

It also places netbooks in the same price range $199 to $299 while Intel based tablets should float between $399 and $499. Naturally more expensive options are always a reality. Tablets can go up to 12.1 inches and the starting price for these bigger machines should be $299, and in the high end the sky is the limit.

Hybrid notebooks should stay at less than $699 and this is a category where you can twist the display, slide the keyboard or even take the keyboard off from the netbook, or tablet. Think Asus’ Eee Pad Slider, Transformer, this will give you an idea of what to expect, but with x86 support. Phones, netbooks, hybrids and tablets are all based on Atom architecture.

Intel plans to sell laptops starting at $3xx and up. Probably slightly more than $300, but less than $400 is what they have in mind. Top notch notebooks based on Core i7 chips will start at less than $799 and Ultrabooks with 11-inch or larger screens might be coming down to $599 to $699. Of course, high end models will end up a lot pricier.

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Is Apple Taking Work Conditions Seriously?

Apple “takes working conditions very seriously”, the firm’s CEO Tim Cook said at a conference yesterday.

Cook was speaking at a Goldman Sachs technology conference, according to Mac Rumours. He said the company is committed to making sure working conditions are up to standard, and that Apple’s top priority will be to eliminate underage workers. He added, “If we find a supplier that intentionally hires underage labor, it’s a firing offence.”

Cook said, “Apple takes working conditions very seriously, and we have for a very long time. Whether workers are in Europe or Asia or the United States, we care about every worker.”

He added, “I’ve spent a lot of time in factories, personally. Not just as an executive. I worked at a paper mill in Alabama and an aluminium plant in Virginia. Many of our top executives visit factories on a regular basis. We have hundreds of employees based there full time.

“We are very connected to the process and we understand working conditions at a very granular level. I realize that the supply chain is complex and I’m sure that you realise this.

“The issues around it are complex. Our commitment is simple: every worker has the right to a fair and safe work environment, free of discrimination, where they can earn competitive wages and they can voice their concerns freely. Apple’s suppliers must live up to this to do business with Apple.

“No one in our industry is doing more to improve working conditions than Apple. We believe transparency is so very important in this area.”

Yesterday, Apple asked the Fair Labor Association (FLA) to conduct audits at Foxconn’s factories in China. In a statement, Apple said that factories in Shenzhen and Chengdu will be audited at its request. Audits have already begun.

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Samsung Plans To Go Low-End

Samsung Electronics Co, the world’s top television maker, has seen TV sales firming up so far this year and plans to launch cheaper TVs, as demand for lower-end models increase, the head of its TV business said on Wednesday.

Demand for lower-end TVs has been increasing in recent months as major South Korean retailers such as E-Mart Co introduced flat-screen models that are as much as 40 percent cheaper through alliances with small local manufacturers.

“As long as there’s demand, we’re open to get into that segment,” Kim Hyun-suk, executive vice president of Samsung’s visual display division, told reporters.

“We’ve been preparing to introduce cheap models and have been studying to optimize production costs and retail prices. Those (cheap) models will be ready for sale in one or two months.”

Samsung, the most profitable TV maker, also introduced on Wednesday its highest-end premium set that it hopes will help boost profitability, as a fragile global economy threatens to sap demand growth this year after no growth in 2010.

The ES8000 model has voice, motion and face recognition functions, as well as 3D and Internet-enabled capabilities. The models, available in sizes of between 46 and 65 inches, will go on sale from this weekend in South Korea before a global launch in March.

Kim said Samsung’s TV sales so far this year have been stronger than a year ago and demand from China remained solid.

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Will Samsung Overtake Apple

Yesterday, DigiTimes released its comprehensive Global Smartphone Industry 2012 forecast report, which entails the total number of global smartphone shipments in 2011 along with estimates of smartphone manufacturer ranking by volume in 2012.

According to the report, global smartphone shipments are projected to top 464 million units in the entirety of 2011, with Apple being the top ranking vendor in terms of shipment volume, followed by Samsung Electronics and Nokia. On the Google Android side of matters, it is expected that Samsung will overtake Apple in 2012 as the “world’s largest smartphone vendor by volume.” In addition, HTC will overtake Nokia for the third-place spot.

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Android Catching iOS

Tablet computers loaded with Google’s Android operating system narrowed the lead of Apple’s iPad on the global market in the fourth quarter, research firm Strategy Analytics said on Thursday.

Global tablet shipments reached an all-time high of 26.8 million units in the fourth quarter, growing 2-1/2 fold from 10.7 million a year earlier, the research firm stated.

“Dozens of Android models distributed across multiple countries by numerous brands such as Amazon, Samsung, Asus and others have been driving volumes,” analyst Neil Mawston said in a statement.

Android’s market share rose to 39 percent from 29 percent a year earlier, while Apple’s share slipped to 58 percent from 68 percent a year before.

The tablet computer market grew 260 percent last year to 66.9 million units as consumers are increasingly buying tablets in preference to netbooks and even entry-level notebooks or desktops.

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Big Blue Still The Patent King

As technology companies start to stockpile patents so that they can see off their rivals IFI Claims Patent Services, a company that maintains global patent databases, has clocked the outfits with the most weapons in any patent war.

More than 224,505 utility patents were awarded in the U.S. last year, jumping two percent over the previous year’s record-breaking tally of 219,614 patents. IBM has always had the most patents, probably because it has been around the longest. The company was granted 6,180 utility patents, up nearly five percent from 2010. Samsung was the number two 4,894 patents, followed by Canon at 2,821 patents, Panasonic with 2,559 and Toshiba with 2,483 utility patents.

Microsoft, which held on to the third spot in 2010, is in the sixth place with 2,311 utility patents granted last year, According to IFI CEO Mike Baycroft global companies, and especially Asian ones, are collecting U.S patents at a dizzying pace, and now Asian firms hold eight of the top 10 slots in the 2011 ranking.

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Ericsson Seeking To Cash In On Patents

As wireless access is added to new types of devices, Ericsson is reorganizing its licensing department in an attempt to generate more revenue from its patents, the company said on Thursday.

The Swedish telecommunication vendor’s CEO Hans Vestberg wants to keep close tabs on the latest developments, and as part of its reorganization Ericsson’s chief intellectual property officer Kasim Alfalahi will now report directly to Vestberg.

The company’s IPR portfolio includes 27,000 granted patents. Today, any vendor that wants to use cellular connectivity in its products needs a license from Ericsson, which is offered under so-called fair, reasonable and non-discriminatory terms.

Licensing patents under those terms should be fairly straightforward. But that isn’t always the case; in the Netherlands Samsung and Apple, as part of their global legal battle, are arguing in court over what fair and reasonable means.

Ericsson has largely stayed out of the telecom legal battles, but announced it had sued ZTE, which then counter-sued, in April last year. The case is still pending, according an Ericsson spokeswoman.

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