Category: Business

Apple has Brexit on Imagination tech

Fruity tax-dodging cargo cult Apple has told British graphics maker Imagination it will stop using its graphics technology in the iPhone and other products with two years’ time.

Imagination had been leaning heavily on Apple lately and depends on it as its biggest customer. It is also unclear what Apple is going to do about its graphics technology.

It looks like Apple is trying to slash costs by bleeding its suppliers. It is widely expected to see interest in its iPhone declining and has been putting the thumbscrews on its suppliers to keep its margins and profits up.

Apple paid Imagination license fees and royalties totalling £60.7 million for the year to the end ofApril 2016, half of its total revenue, and is expected to pay about £65 million pounds for this year, Imagination said.

Imagination said Apple had not presented any evidence to substantiate its assertion that it will no longer need Imagination’s technology, without violating Imagination’s patents, intellectual property and confidential information.

Apple’s notification had triggered talks on alternative commercial arrangements for the current licence and royalty agreement.

US FCC wants to reform big data to help poor telcos

The Republican head of the Federal Communications Commission wants to ease regulatory requirements in the $45 billion business data services market.

This is a win for AT&T, CenturyLink, Verizon but a problem for outfits like Sprint who think prices for business data are too high and backed a plan under President Barack Obama that would have cut prices.

Small businesses, schools, libraries and others rely on business data services, or special-access lines, to transmit large amounts of data quickly, for instance connecting banks to ATM machines or gasoline pump credit card readers. Wireless carriers rely on them for the backhaul of mobile traffic.

Writing in his bog FCC chairman Ajit Pai said the commission will vote April 20 to reform the rule that telecommunications experts say would deregulate the market in most of the country but would retain regulations in some places.

“Where this competition exists, we will relax unnecessary regulation, thereby creating greater incentives for the private sector to invest in next-generation networks. But where competition is still lacking, we’ll preserve regulations necessary to prevent anti-competitive price increases,” Pai said.

However consumer groups such as the Public Knowledge and Consumer Federation of America called Pai’s proposal a “bonanza” for big telecommunications companies that “will drain consumer pocketbooks of tens of billions of dollars per year”.

Under President Barack Obama, the then FCC Chairman Tom Wheeler proposed a reform plan for business data services that aimed to reduce prices paid.

Wheeler wanted to keep and lowering lower price caps using legacy data systems with a one-time 11 percent reduction in prices phased in over three years.

Sprint liked the idea said that thousands of large and small businesses across the country are paying far too much for broadband because of inadequate competition.

Sprint argued:  “A small handful of companies are overcharging the very investors and employers that are critical to our economic growth and are using anticompetitive tactics to ensure that these businesses never have access to competitive alternatives.”

However AT&T argued Wheeler’s plan was “little more than a wealth transfer to companies that have chosen not to invest in last mile fibre infrastructure”.

 

Silver Lake and Broadcom want Toshiba’s flash

Private equity outfit Silver Lake and US chipmaker Broadcom have offered Toshiba Corp about $17.9 billion for its chip unit.

According to the Nikkei Business Daily, 10 bidders have thrown their hats in the ring to buy a stake the NAND flash memory maker.

These include Western Digital which runs a chip plant with Toshiba in Japan, Micron, and South Korean chipmaker SK Hynix and financial investors.

Toshiba wants to make at least $8.93 billion from the sale of part or all the business to cover write-downs at its Westinghouse nuclear unit. It says it expects investors to value its chip operations at about $17.9 billion. This means that the Silver Lake Broadcom offer is close to the asking price.

Toshiba is also asking potential bidders whether they intend to resell their stakes and wants to decide on the sale before a shareholders meeting in June, the Nikkei said, without saying where it obtained the information.

Toshiba shareholders on Thursday agreed to split off its prized chip unit, paving the way for the sale.

 

Apple stops Aussie banks negotiating together for mobile payments

 

Apple has managed to stop banks from banding together to negotiate a better deal for Apple Pay, at least in Australia.

The banks did not want to agree to Apple’s outrageous transaction fees for its mobile banking service and instead wanted to band together to force Apple to agree to something cheaper create something that would not cost them so much.

Apple, of course said no, and complained to the regulator that the banks were ganging up on it.

Australia’s competition watchdog agreed and said that the banks could not work together to introducing their own mobile applications on iPhones and Apple Watches that could be used for contactless payments instead of the Apple Wallet.

Australian Competition and Consumer Commission Chairman (ACCC) Rod Sims said: “If others need to think it through … we’ve at least got something out there which they can kick off from.”

If the four Aussie banks won two-thirds of the nation’s credit card market, would have given them more negotiating power, and could have sparked similar appeals to regulators for access to Apple’s systems in other jurisdictions around the world.

This would have given Apple a huge headache as it has been running a divide and conquer system all over the world forcing each bank to negotiate for access to Apple gear individually.  If it had to deal with the Aussie banks as a group they could have simply told it to go forth and multiply.

But the Australian watch dog was concerned that giving the banks bargaining power could reduce competition by forcing Apple to act more like Google which owns the more open Android operating system that allows contactless payments from individual apps.

An Apple spokeswoman said it was a great decision for Australians who wanted the “easiest, most secure and private payment experience possible with Apple Pay”.

It is now thought that Apple will extract a pound of flesh from the banks that dared to oppose it by making them pay more for not doing its bidding early.  Although quite why the banks should even bother with Apple Pay is open to question.

Uber self-driving case takes a dark turn

The US judge overseeing the self-driving car technology case has said that Uber could face an injunction if a key Uber executive does not testify.

Google’s Waymo sued ride services company Uber last month, alleging that its former executive, Anthony Levandowski, downloaded over 14,000 confidential documents before leaving the company to join Uber.

Waymo is seeking a preliminary injunction from the court, which would temporarily stop Uber from using any of the allegedly stolen intellectual property.

Uber, which has said the allegations are baseless, has not yet responded to Waymo’s complaint in court, and has argued that the trade secrets issue should go to arbitration.

But Uber has fallen foul of District Court Judge William Alsup who told Levandowski’s lawyer that his client was in a mess.

Apparently Levandowski is worried his client could face criminal action and would be asserting his Fifth Amendment rights against self-incrimination.

Uber said that it would like to put Levandowski on the stand, because “he has a good story to tell”,  but could not force him. But were the case sent to arbitration, Levandowski might choose to testify, because arbitration proceedings are not public.

“I’m sorry that Levandowski has got his — got himself in a fix. That’s what happens, I guess, when you download 14,000 documents and take them, if he did. But I do not hear anybody denying that,” Alsup said.

Uber’s strategy would be to convince the court that Uber was “not using any of these things” Waymo says he stole.

“That would be a legitimate point,” responded Alsup. “Maybe you can convince me of that.”

But Alsup warned Uber of its difficulty in dodging a preliminary injunction in light of Levandowski’s Fifth Amendment privilege.

“If you think for a moment that I’m going to stay my hand because your guy is taking the Fifth Amendment and not issue a preliminary injunction to shut down that … you’re wrong,” Alsup said.

Blackberry still trying to escape jam

 

Although BlackBerry appears to have succeeded at getting out of the smartphone handsets that hung like an albatross about its neck, the Canadian outfit has a long way to go before it can convince the world its software business is a goer.

The company, which will report fourth-quarter and full-year results on Friday, says it has no major gaps in its software portfolio, thanks to the integration of a string of recent acquisitions.

However, it admits that more work is needed to get those offerings into the healthcare and automotive industries and other sectors that it hopes will power future growth.

While analysts see Blackberry as something different from what it was ten years ago, it has not really convinced businesses that it has products they might want.

Chief Executive Officer John Chen would need a late bump in sales to hit the 30 percent growth in software revenue BlackBerry targeted for its recently completed fiscal year.

BlackBerry’s enterprise-value-to-forward-revenue ratio is 3.14 lower than the roughly 4.5 ratio which  Oracle and Microsoft have. In fact, Blackberry is expected to barely break even in the fourth quarter and likely notch revenue of less than $1.4 billion. In the good old days, Blackberry was taking more than $5.5 billion a quarter.

The redesigned company has gone from selling its own phones with the servers and software that manage them for businesses and governments to securing an array of rival devices and the information that flows to and from them.

The company’s 2015 purchases of Good Technology and WatchDox helped it secure a leading position in the enterprise mobility market, and its QNX industrial operating system is key to its self-driving vehicle ambitions. However, there is tough competition in these and other areas of interest.

Chen, who took over the helm of BlackBerry in late 2013, said in December the company would take another four or five quarters to halt the steady decline in its overall revenue, with software sales growth projected to slow to around 15 percent in the fiscal year that began in March.

EU to decide if companies can stop online sales

 

Europe’s top court will begin a case today to determine whether luxury goods companies can stop retailers from selling their products via marketplaces such as Amazon or eBay.

Owners of luxury brands have been fighting with online retailers for the last decade, arguing that they should have the right to choose who distributes their products to protect their luxury image and exclusivity.

Online platforms dispute this, saying that such restrictive distribution deals are anti-competitive and hurt consumers.

The European Commission is pushing for more cross-border online sales to boost growth and jobs, and catch up with the United States and Asia.

The case before the Luxembourg-based Court of Justice of the European Union (ECJ) concerns German company Coty, a subsidiary of US beauty products maker Coty, which wants to stop a retailer from selling its goods on online marketplaces such as Amazon.

Coty says this breaches its agreement with the retailer which prohibits the sale of its products via third parties. The case originally went to a court in Germany which later asked the ECJ for guidance.

The EU court’s ruling will be crucial because companies are seeking to curb sales of their products online

Lobby group Computer & Communications Industry Association (CCIA), whose members include Amazon, eBay, Facebook, Google, Rakuten and Yahoo, said the problem was broader than just luxury good companies protecting their

CCIA director Jakob Kucharczyk, said: “We do not consider this to be a ‘fight’ with or against luxury brands. This issue is far more relevant because online marketplace bans are imposed with respect to a range of day-to-day, mass market products which makes them anti-competitive and unjustifiable.”

A court adviser is expected to give a non-binding recommendation in about six months, followed by the court judgment a few months later.

Galaxy 8 out today and the Tame Apple Press is terrified

The Tame Apple Press is doing its best to rain on Samsung’s Galaxy 8 parade as early indications suggest that it is going to be far better than what Apple is going to release in October.

Apple’s favourite news agency Reuters  took time out of its busy day to warn users of the dire “fire-prone Note 7” smartphone and demanded to know why the company was not focusing the launch on battery safety rather than concentrating on things like functionality and what the phone does.

It quoted a Los Angeles-based Eric Schiffer, a brand strategy expert and chairman of Reputation Management Consultants saying that highlighting the safety issue at this point will cause the other narrative to be recycled, “so they have elected to suppress and hope”.

To be fair to Samsung, only the Tame Apple Press thinks that the Samsung Galaxy 8 will catch fire. Reuters was finding it hard to dredge up a tame expert who would say that the batteries were a problem. Lewis Larsen, president of Chicago-based battery technology consultancy Lattice Energy said that Samsung had taken measures that should certainly improve battery safety and durability. “These are most definitely not just cosmetic steps ‘for show.'”

But that did not stop Reuters hacks interviewing their word processors to talk about how the new quality measures “can’t guarantee there will be no future problems”.

They even hinted that it did not matter if the failure rate was low at first, in the long term they would catch fire. Of course, they have no way of knowing that and if we were Samsung we would have sued them.

At the heart of the story is that analysts are going on record to say that the S8 will outsell the Galaxy S7, which was Samsung’s best seller in its first year from launch.

Reuters is recommending people not to buy it and to wait a few months to see if it does not catch fire. If people were stupid enough to listen to that advice then it would mean that it would give Apple a chance to release new iPhone as competition.

To put this into perspective, when Reuters covers iPhone launches it bangs on about how anticipated the phone is and focuses on its “game changing” technology, even when the iPhone’s tech has been unchanged for years with incremental changes to the chips, thinning down slightly, and the inconvenient loss of the headphone jack.

SK Hynix in talks to buy Tosh’s memory chip business

South Korean chipmaker SK Hynix is in talks with Japanese financial investors about forming a consortium and jointly bidding for Toshiba’s memory chip business.

According to the Korea Economic Daily which found it difficult to get anyone to talk on the record, SK Hynix, the world’s No. 2 memory chip maker behind Samsung plans to give a preliminary bid for the Toshiba chip business today.

The Japanese firm put up the business for sale because it needs the cash to deal with its $6.3 billion writedown caused by the fact that invested in a bankrupt nuclear unit Westinghouse. Tosh has applied to bankrupt Westinghouse and write off its assets.

Tosh’s memory business has been doing well and would make a good partner for SK Hynix if it can gather together enough readies to buy it.

Scientists discover that “brainstorming” does not work

The idea that a group of people can come up with a cure for cancer by sitting around a white board and coming up with ideas has been rubbished by science.

Brainstorming, which is the tool of managers throughout the world, is believed to come up with solutions to tough business problems.

However now a batch of studies have revealed that people aren’t necessarily more creative in groups than alone, or vice versa, according to numerous studies.

According to a report published in Fast Company, creativity needs people to come together to share ideas and then going off and having a think.

Apparently, our brains’ creative engines are fuelled both by quiet mind-wandering, allowing novel and unexpected connections to form, and by encountering new information, which often comes from other people.

So while shouting around a white board is good for working with others, it misses the point when it comes to quiet thinking. This means that for lots of people, brainstorming is an utter nightmare.

Introverts just feel alienated, and extroverts are not pushed to reflect more deeply on the ideas they’ve batted around amongst themselves.

So when the office manager suggests brainstorming you just know it is not going to come up with anything useful.