Category: Business

Macmillan and Amazon in spat over e-book pricing

Amazon has taken all e-books published by Macmillan off its Kindle e-reader site because of an argument the two companies are having over pricing.

A lass using a Kindle, from Kindle web siteAccording to reports, Macmillan issued a statement yesterday saying that its CEO, John Sargent, had visited Amazon HQ to try and broker new terms and conditions and on his return from that meeting was told that its e-books would only be listed as available through third parties.

Sources indicated that Macmillan had wanted to price its e-book editions at $15 rather than the $9.99 price Amazon wanted to sell them for.

Last week Macmillan became one of the publishing partners for the Apple iPad. Apple has plans to allow publishers to set their own prices for books, and that price is likely to be around $15.

Amazon wants to keep the prices of e-books for the Kindle at $9.99 – and it’s likely this Macmillan-Amazon spat may well spread to other publishers too.

AMD announces departure of unknown director

AMD sent us a note today to make sure we were “aware of an 8-K filing we made this morning announcing that Frank Clegg will not stand for re-election to our board of directors.”

This news failed to peak our attention much, mainly because we had no idea who Frank was, nor why he was leaving. If it had been Robert Palmer standing down, now that would have been news, TechEye’s esteemed editor pointed out. After all, he’s Addicted to Love, Robert Palmer.  

After a bit of Googling, however, it turns out that Mr. Clegg has been on the AMD’s board for three years, after a couple of stints as Microsoft Canada President (From 1991 to 1996 and from 2000 to 2005). And in the interim, Clegg also found time to act as Microsoft’s VP for central US and Canada, from 1996 to 2000.

It would also appear that the 54 year old is very, very rich, a feature not atypical in a board member for any company, even one like AMD which has had a rather bad financial innings in the last few years.

Tersley, we were told Clegg had “made the decision to not stand for re-election.”

So, why is he leaving? Did his wallet get too heavy? Was it a conflict of interest payments?

We put these questions to AMD spokesman, Drew Prairie, but received no response. We assume he was swamped with press inquiries over Mr. Clegg’s most sudden decision to depart. Either that or he was down the pub.

Well, so long Clegg, and thanks for all the chips.

ASML takes a hit

Currently not-so popular maker of lithography systems ASML Holdings has unveiled it’s earnings for the full year 2009. The company saw net sales drop 46 percent from €2.96 billion in 2008 to €1.6 billion. Net profit turned to red ink and fell from €322.4 million to a loss of €150.93 million. The financial meltdown and generally rather poor state of the world economy thus seems to have hit ASML with a baseball bat.

Nonetheless, things aren’t all that dim. While the company’s goal of reaching net sales of €5 billion is still far off, the company has managed to garner a large order backlog for its equipment, far more so than a year earlier. ASML has orders worth €1.85 billion waiting to be rolled out, compared with merely €755 million at the end of 2008. The average selling price (ASP) per system has also risen considerably, according to the company. At the moment, the backlog amounts to 69 systems with an average selling price (ASP) of €28.9 million. End of December 2008, the total system backlog amounted to 41 systems with an ASP of €21.8 million.

ASML will set to profit from the switch to 40nm technology. Demand for ICs made in the 40 nanometre process has risen, leading to orders for older 40nm systems ASML had already written down. ASML still also has enough cash in its pocket, cash and cash equivalents amount to €1.04 billion.

ASML expects foundries and DRAM makers to start investing in new systems, with the pace picking up especially in the second quarter. For the first quarter, ASML sees net sales worth €700 million.

Amazon.com revenue flies up

Everyone’s favourite seller of consumer goods Amazon.com has declared that revenue in the fourth quarter grew by 42% year over year, rising from a miserly $6.7 billion  to $9.52 billion. Amazon’s net profit also grew nicely in the final quarter, from $225 million in 2008 to $384 million in 2009. The kind and loving corporation stated it profited from favourable exchange rates – sans better rates it would have grown merely 37 percent in the quarter.

The fourth quarter accounted for the major part of Amazon’s turnover. Punters seem to enjoy buying Christmas presents online, instead of having to stand toe-to-toe in ubercrowded stores, shops and warehouses. At least in this part of Europe, where internet-savvy citizens prefer to stay home and buy via Amazon than to venture forth into streets crowded by hundreds and thousands of tourists visiting the traditional, oh-so pretty Christmas market to get drunk on hot wine punch, wear silly Christmas hats and generate a ruckus rather annoying to mild-mannered, sophisticated humanities students who merely want a nice, warm cup of coffee to warm their hands whilst reading Horkheimer, Adorno, Habermas and the good old French sociologists.

Revenue grew by over $5 billion in the full year, rising from $19.2 billion to $24.5 billion. All in all, Amazon posted a profit of $902 million in 2009, compared to $645  million one year earlier. North America still accounted for over half the sales. Electronics were most in demand in the USA, whereas punters overseas mainly bought books and DVDs from the online retailer.

Jeff Bezos, the clever guy who started Amazon.com, stated that millions of people actually bought Kindles. Apparently six Kindle books are sold for every 10 real books (made of paper), if both editions are available. Amazon refrained stating the actual number of shipped units, or sold digital books.

Australia bans A-cup boobs and young-faced actresses

The forward thinking Australian Classification Board is planning to ban ladies with a less ample bosom from appearing in porno in case a paedophile sees.

Somebody Think of the Children, a blog Down Under focused on moral panic across Oz, pointed us toward the Australian Sex Party’s Fiona Patten who says she’s seen women in their late 20s banned from porno because of their A cup breasts.

The National Classification Code in Australia says that anything that describes or depicts a person who appears to be a child under 18 in a way that is likely to cause offence to a reasonable adult is refused classification.

That means that if you’re 25 but look, say, 17 you’re barred from showing your breasts to the world via Webcam or what have you. Budding “film stars” should start leaving the wrinkle cream on the shelves.

Windows 7 saves Microsoft's bacon

Microsoft says it garnered a revenue of $19.02 billion in its second fiscal quarter. Compared with the same quarter one year earlier, revenue grew by 14 percent. Everyone’s favourite OS maker declared it had managed to sell 60 million Windows 7 licences, apparently making it “the fastest selling operating system in history,” thereby even outpacing Apple fanboys. Hardly surprising, as everyone who didn’t need a new PC or Windows OS refrained from switching to Vista and waited for Windows 7 instead.

Nonetheless, the picture isn’t rosy at all. Microsoft’s Windows & Windows Live unit may have grown revenues from $4.06 billion to $6.9 billion year-over-year, the other units, however, were either flat or contracted. Server & Tools only increased marginally, from $3.75 billion to $3.84 billion, whereas Online Services saw its revenue fall from $609 million. to $581 million. Microsoft Business Division also witnessed revenue march southwards, namely from $4.88 billion to $4.74 billion. Entertainment and Devices also performed poorly. Revenue in the unit fell from $3.25 billion in the second fiscal quarter 2008 to $2.9 billion in 2009.

Seeing the numbers, Microsoft would not have been able to find a growth story anywhere to mask its downfall, as people slowly switch to mobile devices and notebooks not based on Windows software, nor, in most cases, Intel chipsets.

Oracle ditches Sun SMBs, IBM embraces them

The Sun Oracle union is likely to end up targeting only the elite (large enterprises), leaving enough space for IBM – its major competitor – to poach Sun SMBs (small and medium business) customers. Sources close to IBM India told TechEye that an aggressive marketing campaign has been launched to educate Sun SMB customers about the negative impact of the Sun Oracle merger on their businesses.

IBM's CEO, Sam PalmisanoIBM India has started reaching out to Sun customers and leaving no stone unturned to take full advantage of Oracle’s premature and suicidal announcement. Big Blue has now started a campaign called, ‘Don’t let the Sun burn your IT budget’ which will be soon on display at the desks of Sun’s India SMB Customers. IBM has come out with detailed calculations on how IBM can prevent customers from losing millions if they move out of Sun Oracle “unstable” roadmap.

IBM sources said, “IBM didn’t want to go direct on Sun but it’s just the name that has been used by the creative agency. It’s a common industry practice.”

Oracle co-CEO Charles Philips has announced that Sun Oracle would go totally direct to large customers only which account for about 1,700 global clients. The number might not be the right tool to scrutinise Philips’s supercilious announcement because local markets, like India’s SMB segment, will now take a stab on business which Oracle could have worked on.

There is no doubt that Oracle is itself on a sticky wicket after buying Sun Microsystems as the former has never batted on the tricky hardware grass where competitors like IBM bowl constant bouncers at its rivals. Sun had a huge SMB base for this product and a steady revenue stream of about three percent which Oracle is going to lose. This announcement doesn’t surprise IBM as Oracle is unfamiliar with the business dynamics of the hardware business, logistics and channels involved and the operating margins.

Oracle has a legacy of laying off workers of the firm they acquire. Well, Sun Microsystems is no exception there. Oracle has already laid off Jonathan Schwartz,  former CEO of Sun Microsystems

Oh! Cut Oracle some slack!!Oracle will be paying him a hefty one-year’s salary of around $11 million as the SEC suggested. How about coming to IBM, Mr. Schwartz?

Well, that’s the song now from IBM, “Don’t let the Sun burn your IT budget”.

I remember Elton John singing: “Don’t let the Sun Go down On Me….”…. Oracle, please learn the lyrics if not the tune.

 

The Apple fanboys hate the iPad

It’s been a fun week in Silicon Valley, especially because of all the wailing and the gnashing of teeth in the Apple Fanboy community, as it gradually dawned on them how much they hate the iPad.

The Fanboys finally woke up and smelled the coffee and realized that Steve Jobs is mortal.

The Apple iPad was an EPIC Fail, they said. It lacked Flash, HDMI, and a bazillion alphabetic permutations of technologies — all missing in action. There’s not even a camera.

The Fanboys’ vitriol took on a distinct misogynist flavor: iPad is a stupid name, they said, it reminded them of women’s’ hygiene products, the MaxiPad iPad. They loved that joke. They Tweeted that joke for days. I found it in my mailbox, on Facebook, and all over the place.

What interested me about the iPad wasn’t its allegorical absorbent qualities, but the A4 processor at the heart of the device.

This is an Apple chip designed by its 150 plus strong engineering team that it acquired nearly two years ago when it bought PA Semi for $278 million.

That was a very astute buy for Apple because it snared some of the top microprocessor chip designers in Silicon Valley. These engineers have stellar pedigrees:

Cnet wrote:

“While at Digital Equipment Corp., [CEO Dan] Dobberpuhl oversaw the development of the Alpha chip for servers and the StrongARM processor for handhelds… Jim Keller, PA Semi’s vice president of engineering, and Pete Bannon, vice president of architecture, worked on the Alpha as well. Keller then went to AMD and helped define the architecture for what became the Opteron…”

EE Times says that Dobberpuhl also led MIPS teams.

“When Apple acquired PA Semi, it had multi-core POWER architecture chips. POWER is what Apple used before jumping to Intel. (And PA Semi had lots of customers in the US Defense industry.)”

Clearly, with such an experienced engineering team Apple could focus on any architecture and it chose ARM.

There’s not much known about the A4 except that it runs at 1GHz, and is optimised to decode high definition video, while using very little power. It’s interesting that Apple snubbed Intel’s Atom family for the iPad. Clearly, there’s more to the eye with the A4 than it seems.

I would bet that there’s some heavy duty DRM within the chip. And that it is essentially an embedded security dongle with its own processing power and graphics co-processor.

Content publishers love DRM and Apple can show them it has the toughest DRM on the planet thanks to the A4.

But with a 150 top salaried engineers Apple will need to keep them busy. What else is next? A multicore A44? An iPhone A1? Most probably. But I can’t see an A4 in Mac desktops or laptops.

What this also means is that Apple is saying that the A4 is something that gives it a competitive advantage, that this is something that couldn’t be done by anything out there on the market. And it’s invested what probably amounts to almost half-a-billion dollars to backup that position. That’s a serious amount of money.

What happens now? Will Microsoft start looking at buying a chip design house? What about Google? Oracle has SPARC. IBM has POWER. Apple has A4. The world is becoming fragmented again. It’s deja vu all over again.

[Tom Foremski’s web site is Silicon Valley Watcher]

ARM will win the tablet game

As we hinted at last week on the all-seeing, all knowing TechEye, yesterday’s over-hyped, deified Apple iPad had, not Intel, but ARM inside.

This must have left Intel feeling rather sad and blue, and plotting a comeback, but when we caught up with ARM’s Bob Morris last week, he explained where Intel had really missed the tablet boat and why his firm remained better positioned to lead the transition into this next generation of computing.

Morris confided in us that Intel had finally dropped the term MID, saying “it really comes down to what we’ve been saying from the beginning when they came out with it, which is ‘mobile internet is a feature, not a device’.”

“If you look at an e-reader, if you look at the definition, it has mobile internet in it, even the simplest one like the Kindle has 3G and you’re able to download the book, look at the book, purchase the book and carry out a transaction,” he said.

Intel’s Netbooks and Qualcomm’s smartbooks, he explained, also both had that that capability, but then again, so does an ipod touch, “so I don’t think you can say that ‘now is the year of the MID’ because a lot of this stuff has been evolving for a while.”

“What we’re really seeing,” said Morris, “is that we’re waiving this PC era and going into the next stage of computing.”

Not that this means the PC is about to become defunct, but much in the way the world went from mainframes to PCs two decade or so ago without making the mainframe completely obsolete, “what we’re doing now is that we’re moving to an area where more and more devices that are out there will be connected to the Internet and they do different things for you.”­­

“The tablet will probably redefine what a lot of people want to do,” he went on, noting that it was a lot more suited to quick browsing and a sort of ‘fast-food’ content consumption model more suited to our ridiculously short attention spans these days.

So, will tablets kill the Kindle/e-reader store? “I really don’t know,” was Morris’ response.

“With e-readers, an extremely rapid evolution is occurring, a hyper evolution has been happening over the past six months,” he told us, discussing how screen technology was rapidly changing and how power kept coming further and further down.

“There’s some stuff out there that’s extremely low power, almost like the e-ink that will be able to do updates like you would be able to do for standard screen, so we may be at a point where you may be using something not just as a tablet, but also as your e-reader. There could be blurring that happens here,” he admitted.

But in the long run, Morris conceded “when things settle down, there might only be a couple of classes of different devices out there.”

Morris, obviously a fan of social not-working, told TechEye most people’s lives – and we use the term lightly – today revolved around “tweets and blogs and facebook and things like that.” This, he said, meant people just wanted to open up their device and have it “ready to go.”

“It’s not like, open the thing up, acquire the signal, authenticate, download, and see where things are. You may only have a four or five minute break and you want to see what’s going on,” or watch some pR0n on your fag break.

“Whether it’s a smartbook or a tablet thing, I think you’re going to see those types of things happen,” Morris asserted.  

“People will be able to go to consume their internet or facebook or whatever type of thing that they want to do and they’ll be able to do it in little time slices. They’ll always be updated. That will be the future, whether it will be a tablet or a clam or who knows what, it could even be your e-reader.”

“It may be more of an e-reader than an internet device, but I’d still like to see my Facebook and my twitter feeds,” he concluded. Ahhh, Morris, you consumer of information banality, you. 

War breaks out again between Google Books and Amazon

Amazon let rip with an objection to a revised settlement proposed over Google Books and a monopoly it might hold on digital books.

Amazon said yesterday that the proposed agreement is in violation of the US Copyright Act, and that the settlement would give Google rights that would effectively lead to a monopoly.

And Google doesn’t only have to worry about Amazon and publishers – a Berkeley academic on behalf of a clutch of authors also objected to the settlement, pointing out that the rights of authors and publishers and the procedures for settling disputes could not realistically be handled by the settlement of a class action.

Groups against the settlement have until today to make their objection to the district court.

Whether the judge in charge of the case allows the objections to the revised settlement to stand, there’s a possibility that the US Justice Department may well throw in its oar. It’s already agreed that the proposed settlement raised  questions about copyright that should not really be handled in a class action case.